WP(C) 4023/2011 BEFORE THE HON’BLE JUSTICE MR B.K. SHARMA JUDGEMENT AND ORDER (ORAL) By means of this writ petition, the petitioner has called in question th e work order issued in favour of the respondent No.3 in respect of the Enquiry-C um-Offer No. RGRM 104059/1701736 dated 01.02.2011, pertaining to supply of Alum Ferric to the official respondents. 2. According to the petitioner, which is a registered Company incorporated under the Companies Act, 1956, they are manufacturer of various items including Ammonium Alum, Ferric, Non-ferric etc. Responding to the enquiry-cum-offer dated 01.02.2011, floated by the respondent No.1 i.e. the Indian Oil Corporation Ltd. , for supply of 600 Mt. of Alum Ferric, the petitioner along with the other part icipants quoted their prices and submitted the offer/bid along with the necessar y documents. 3. In paragraph 6 of the writ petition, the petitioner has stated thus :- & & & & & & & & It is pertinent to mention here that the petitioners company had icy that whoever place order / purchase 600 metric tone of Alum Ferric used to g et Rs. 300/- discount on the price and their further quoted price will be Rs. 30 0/- lesser, however, this has no relevancy for the instant tender/offer & & & & & & & &.. 4. In the same paragraph, the petitioner has stated that in pursuance to th e said enquiry-cum-offer, they quoted their price @ Rs. 8,302.34 which includes Excise Duty, Education Cess, VAT and Freight charges. 5. It is the case of the petitioner that the respondent No.3 having quoted its price @ Rs. 8,508.84, as against the petitioner’s quoted rate of Rs. 8,302.3 4, the work should have been allotted to them instead of the respondent No.3. 6. In paragraph 9 of the writ petition, the petitioner has stated about iss uance of the work order in the last part of May, 2011 in favour of the responden t No.3. In paragraph 15 of the writ petition also, the petitioner has stated abo ut the issuance of the work order in the last part of May, 2011 in favour of the respondent No.3. 7. It is on the above ground, the writ petition was filed after 2 (two) mon ths of the work order and to be precise, on 27.7.2011. By an interim order dated 29.9.2011, it was provided that till the returnable date, which was fixed as 4. 11.2011, the respondents No. 1 & 2, should not accept any supply from the respon dent No.3. Against the said interim order, the respondent IOCL, preferred the Wr it Appeal being WA 308/2011, entertaining which, the Division Bench while declin ing to interfere with the interim order, observed that since the matter was unde r consideration of the learned Single Judge, no order was required to be passed in the writ appeal at that stage. However, the matter was fixed for further hear ing on 14.11.2011. It is submitted at the bar that the appeal has been further d eferred facilitating decision by this Court. 8. The matter was first heard on 4.11.2011 and the learned counsel for the parties advanced their elaborate arguments. As the hearing remained inconclusive , further hearing was fixed on 21.11.2011, on which date also the learned counse l for the parties advanced their arguments. They have also made their further su bmissions today. 9. While Mr. J.I. Borbhuiya, learned counsel for the petitioner has submitt ed that because of the higher bid value offered by the respondent No.3, the IOCL ought not to have accepted its bid and instead ought to have accepted the bid o ffered by the petitioner with a lower rate. During the course of argument, he ha s also referred to the calculation made by the petitioner in a separate sheet to show that the bid offered by the petitioner is lower than that of the responden t No.3. 10. Countering the above arguments of Mr. Borbhuiya, learned counsel for the petitioner, both Mr. N. Deka and Mr. R. Dubey, learned counsels representing th e official and private respondents respectively, have submitted that the calcula tion shown by the petitioner being not founded on the reflection made in the ten der documents submitted by the parties is not acceptable. Emphasizing on the sco pe of interference of the writ Court in the matter of awarding of contract in ab sence of any arbitrary exercise of power, both the learned counsel submitted tha t the writ petition is misconceived. 11. I have carefully considered the submissions made by the learned counsel for the parties. I have also considered the entire materials on record. During t he course of hearing of the matter when the learned counsel for the parties were apprised of that on adjudication of the interim prayer, nothing might survive i n the writ petition as the same would touch the respective merits of the parties , they agreed for final disposal of the writ petition. 12. As to what is the contention raised in the writ petition has been noted above. However, the petitioner has developed his case by way of projection touch ing the expertise of the tender committee taking note of merits and demerits of the offers made by the parties, in his rejoinder affidavit, to which the respond ent IOCL has also filed an additional affidavit. 13. In the counter affidavit filed by the IOC Ltd., it has been stated that the price shown to have been quoted by the petitioner, which is Rs. 8,302.34, do es not tally with the price bid actually submitted by the petitioner (Annexure-7 to the writ petition). It has been stated that as per the price bid of the peti tioner, the total amount quoted comes to Rs. 9,323.34 as detailed below :- Basic price per metric Ton 7000.00 Central Excise(CE) 10% of Basic Price 700.00 Education Cess 2% of Central Excise 14.00 Education Cess 1% of Central Excise 7.00 VAT 13.5% of Basic + Central Excise+ Education Cess + Higher Education Cess 1042.34 Freight Charges 8% of Basic price 560.00 Total 9323.34 14. The respondents have stated in their counter affidavit that the enquiry- cum-offer was not a formal two bids tender. The first bid was a techno commercia l bid and not merely a technical bid wherein the bidder was required to give the details of its price bid without actually quoting the price. The petitioner had unilaterally added its own condition that if 100% work is allotted then they wo uld be offering a discount @ 300/- per Mt. on the freight charges. It has furthe r been stated that there is no indication in the techno commercial bid regarding any discount in the freight charges of the price bid. It has also been stated t hat if the aforesaid discount is taken into consideration, the offered price wou ld come down to Rs. 9,023.34. On the other hand, the price quoted by the respond ent No.3 is as under :- Basic Price per metric Ton 5100.00 Packing and Forwarding per metric Ton 40.00 Central Excise Exempted CST 2% 102.80 Freight Charges 3100.00 Total 8432.80 15. The respondents have indicated in their counter affidavit as to how on t he basis of the aforesaid offered prices of the petitioner, the respondent No.3 and another party, further calculations were made to work out the actual cost of the entire work and while doing so, factors like insurance, Assam Entry Tax, ha d to be added to the offered prices. On the basis of such calculation, the respo ndents have shown the price difference between the parties as Rs. 1,84,417/- wit hout considering the conditional discount offered by the petitioner. 16. On the basis of the detailed evaluation of the bids of all the parties, the official respondents found the respondent No. 3’s bid to be the lowest witho ut any ambiguity and accordingly the work order was issued to it vide order date d 3.6.2011. it is the stand of the respondents that after issuance of such work order, sufficient progress was made in the work, till the interim order was pass ed by this Court on 29.9.2011. 17. The respondents in their counter affidavit have emphasized the requireme nt of submitting bids without imposing any condition of their own, without any a mbiguity and the techno commercial bid and price bids are to be identical in all aspects. As the discount offered by the petitioner was a conditional one, the d ecision was taken by the Tender Committee not to accept such a conditional offer of discount on the ground that in the event there is a reduction in the scope o f supply for any reason whatsoever, then such discount will not be applicable an d the petitioner might claim at the enhanced (un-discounted) rate. It was in tha t view of the matter, the tender evaluation Committee which included Officers fr om Materials and Finance Department, was of the opinion that the discount offere d by the petitioner was not acceptable, firstly because the same was nowhere ind icated in the techno commercial bid and secondly as noted above, in case of any reduction in the scope of work after award of the contract, the discount would n ot be applicable and as such, the same could not be taken into consideration. 18. The respondents have further highlighted the above aspect of the matter, which was considered by the tender committee, which is in case of reduction in the scope of supply for any reason, whatsoever, the discount offered by the peti tioner would not be applicable. For example, if the material supplied are of poo r quality or the bidder violates any of the terms and conditions of the tender a nd consequently the work is terminated midway, then the discount will not be eff ective making the respondents liable to pay at the enhanced (undiscounted) rate. It has been stated in the counter affidavit that all these factors weighed the mind of the tender committee, which cannot be said to be arbitrary and or un-rea sonable. 19. In the reply affidavit filed by the petitioner, they have reiterated the ir aforesaid stand in the writ petition. While doing so, they have given their o wn calculation to show that the bid offered by the petitioner is lower than that of the respondent No.3. While making the said calculation, the petitioner has e mphasized on the Govt. Purchase Enlistment Certificate issued by the National Sm all Industries Corporation Ltd. (A Govt. of India Enterprise). 20. During the course of hearing of the writ petition, Mr. Borbhuiya, learne d counsel for the petitioner has submitted that the respondent No.3 does not hav e any such registration and in the event of production of any such certificate, the case of the petitioner will fall through. However, when Mr. Dubey, learned c ounsel for the respondent No.3 instantaneously produced the registration certifi cate, about which there is mention in the additional affidavit filed by the resp ondents, Mr. Borbhuiya, learned counsel for the petitioner submitted that such certificate although may be decisive in the matter of 15% price preference as pe r NSIC but the petitioner will still have its stack in the matter. 21. Although, the petitioner has stated about his quoted rate of Rs. 8,302.3 4 per Mt. but nowhere in the writ petition, the petitioner has explained as to h ow the aforesaid figure has been arrived at. Respondents have categorically deni ed of not taking into consideration the CENVAT benefit resulting in deprivation of the petitioner. On verification of the tender columns, what is found is that the technical bid and price bid should be identical in all respects and the pric e bid would stack only the price. Further the bidder was required to offer firm freight charges and no bidder was permitted to offer flexible freight charges. 22. The detailed calculation based on which the work order was awarded to th e respondent No.3 vis-à-vis the petitioner, as indicated in the additional affid avit filed by the official respondent, is reproduced below :- Assent Chemicals Gautam Udyog Basic (per MT) 7000.00 5100.00 P&F 0.00 40.00 ED 10.30% 721.00 0.00 Sub Total-1 7721.00 5140.00 VAT/CST 13.50% 1042.34 102.80 (2%) Sub Total-2 8763.34 5242.80 Freight 8% 560.00 3100.00 Sub Total-3 9323.34 8342.80 Insurance 0.50% 46.62 41.71 Sub Total-4 9369.95 8384.51 Entry Tax 2% 187.40 167.69 Total 9557.35 8552.20 Cenvat amount 96.78% 697.78 0.00 Net of cenvat 8859.57 8552.20 Total 600 MT 5734410.42 5131332.56 Net of Cenvat 5315740.14 5131322.56 23. As noted above, the petitioner as well as the respondent No.3 are both r egistered under NSIC and accordingly any benefits on this count shall be applica ble to both, and therefore, it will not affect the cost calculation for evaluati on purpose and the assertion made by the petitioner that it alone is entitled to price preference of 15%, is not correct. Further, the petitioner under Clause-7 of the agreed terms and conditions, has mentioned that No transit insurance is required by IOCL as we have own insurance policy but contrary to this, an enqu iry-cum-offer under the head of Transit Insurance, the petitioner mentioned Inc ludes (IOCL Scope) . Clause-7 of the agreed terms and conditions clearly states that Transit insurance will be arranged by IOCL. Confirmed transit insurance is excluded from the quoted price. 24. During the course of hearing, Mr. Borbhuiya, learned counsel for the pet itioner in reference to the notes in the relevant file involving the decision ma king process of the tender Committee referred to the particular note furnished b y the Sr. Manager, which reads as follows :- The discount as mentioned in price bid of M/s. Assent Chemicals, which is not impact on commercial evaluation of tenders. Here there is no condition of split orders in the tenders. Hence, discount has to be considered. Once again, finance may please check priced C/S. 25. The above note was dealt with by the Chief Finance Manager, preceded by the Deputy General Manager, as follows :- Suo-moto discount offered by vendor after Price Bid opening is also to be ignor ed while making Comparative statement . (1) Since the party has accepted for part order, his discount on full quanti ty seems to be conditional. (2) The matter is not split tender. If supply is not required during the cur rency of the contract, the discount may not be extended by the party since it se ems to be conditional. 26. It will have to be borne in mind that though the principle of judicial r eview cannot be denied so far as exercise of contractual powers of Govt. bids ar e concerned, but it is entitled to prevent arbitrariness or favouritism and its exercise in the larger public interest or if the power is exercised for any co- lateral purpose. It is not within the permissible limits of interference for a C ourt, particularly when their has been no allegation of malice or ulterior motiv e and particularly when the Court has not found any malafides or favouritism in the grant of contract in favour of the successful bidder (in this case, the resp ondent No.3). 27. As has been held by the Apex Court in Jagdish Mandal Vs. State of Orissa reported in (2007) 14 SCC 517, before entering any tender or contractual matter s in exercise of power of judicial review, the following questions are required to be kept in mind :- (i) Whether the process adopted or decision made by the authority is mala fi de or intended to favour someone ; Or Whether the process adopted or decision made is so arbitrary and irrational that the court can say : the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached ; (ii) Whether public interest is affected. 28. If the answers to the above are in the negative, there cannot be any int erference under Article 226 of the Constitution of India. In the instant case, n othing could be shown by the petitioner that the decision making process to arri ve at the decision to award the contract to the respondent No.3 is founded on ma la fide or arbitrary exercise of power. It is not for the Court to go to the ari thmetical or mathematical precession as sought to be projected by the petitioner for getting the work order cancelled AND upon cancellation of the same, to issu e the same in favour of the respondent No.3. 29. It is settled law by a series of decisions of the Apex Court that violat ion of Article 14 of the Constitution of India, in the matter of awarding of con tract will have to be established in the touch stone of arbitrariness, unfairnes s or un-reasonableness or in the breach of obligations under public law. In the instant case, nothing of this sort could be projected by the petitioner. 30. In BECIL Vs. Arraycom India Ltd. & Ors reported in (2010) 1 SCC 139, th e Apex Court under somewhat similar circumstances and dealing with the scope of judicial review in the matter of awarding of contract, held that the awarding of the contract being on the basis of reasonable and possible interpretation, the High Court should not have intervened. As in the instant case, in the said cas e also, the respondents were at fault for giving ambiguous proposal. The authori ty dealing with the matter having taken a reasonable and possible interpretation , the Apex Court held that the High Court should not have interfered in the matt er. Needless to say that in administrative matters, scope of judicial review is limited and the same will have to be exercised with judicial restraint as held b y the Apex Court in Tata Cellular Vs. Union of India reported in (1994) 6 SCC 6 51. 31. In the instant case, except the kind of interpretation sought to be proj ected by the petitioner, so as to contend that on a careful consideration of the matter, its bid value was much more attractive than the respondent No.3, nothin g else has been projected towards assailing the decision making process of the r espondents. There is no allegation of any arbitrariness and / or mala fide excis e of power. The manner and method in which the respondents have dealt with the m atter and their projection of the case towards acceptance of the bid offered by the respondent No.3 being reasonable, plausible and being based on possible inte rpretation, this Court will be reluctant to interfere with the impugned decision . 32. For all the aforesaid reasons, I do not find any merit in the writ petit ion and accordingly it is dismissed, leaving the parties to bear their own costs . Consequently, the interim order passed on 29.9.2011, stands vacated.