C. W. P. No. 16274 of 2008 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : C. W. P. No. 16274 of 2008 (O&M) Date of Decision : November 19, 2008. M/s Karnail Singh & Co., Ladwa .... Petitioner Vs. Haryana State Civil Supplies & Marketing Federation Ltd. (HAFED) and others .... Respondents CORAM : HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE L. N. MITTAL * * * Present : Mr. Anil Kshetarpal, Advocate for the petitioner. Mr. S. S. Duhan, Advocate for respondents no.1 and 2. Mr. V. K. Jindal, Advocate for respondent no.3. * * * ADARSH KUMAR GOEL, J. (Oral) : 1. This petition seeks quashing of order dated 04.09.2008 (Annexure P-7) issued by respondent no.2, District Manager, Haryana State Civil Supplies & Marketing Federation Ltd. (HAFED), accepting the tender of respondent no.3 for labour contract for supply of labour at what is known as “07 Years Guarantee godown”. 2. Case set up by the petitioner is that in the tender notice dated C. W. P. No. 16274 of 2008 (O&M) 2 20/21.08.2008 (Annexure P-3), it was stipulated that the tenders which offer rate more than 100% Below the Schedule of Rates (BSOR), are not to be accepted. Thus, tenders which were up to 100% below SOR were eligible to be considered. The petitioner quoted rate 10% BSOR. Respondent no.2, ignoring the petitioner and other eligible tenderers, without assigning any reasons, awarded the contract to respondent no.3. 3. In reply filed on behalf of respondent no.3, reference is made to proceedings of the Committee, constituted for filing the tenders, dated 29.08.2008, wherein decision was taken to accept the rate quoted by respondent no.3. Relevant extract from the said proceedings is as under :- “In the present case, similar is the position, therefore, the committee analyze the above offered rates and reach to the conclusion that rate offered by Paramjeet Singh son of Sh. Darshan Singh, Kurukshetra is 1% below the S.O.R. seems very near to S.O.R. is feasible and workable. Therefore, the committee accept the rate offered by Paramjeet Singh son of Sh. Darshan Singh, Kurukshetra 1% below the S.O.R. and recommend for approval.” 4. In reply of respondents no.1 and 2, it has been stated that the said respondents observed that labour contractors appointed for handling of stocks in guarantee godowns were indulging in malpractices and on that account, a policy was adopted for eligibility only to those contractors who offered rate up to 100% BSOR. Thus, those who quoted rates above or more than 100% BSOR were considered to be ineligible according to C. W. P. No. 16274 of 2008 (O&M) 3 the notice inviting tender. 5. We have heard learned counsel for the parties and perused the record. 6. Question for consideration is whether the impugned decision can be held to be arbitrary or vitiated by procedural unfairness so as to call for interference by this Court. 7. We find that though the Committee, which finalized the tender in question, recorded a finding that rate quoted by respondent no.3, which was 1% BSOR was feasible, there is no discussion whatsoever about other eligible persons including the petitioner. If nearness of BSOR was the only criteria, one of the tenderers i.e. Kulbir Singh tendered at par with BSOR. It cannot be held that there is any application of mind in taking the impugned decision. 8. Learned counsel for respondent no.3, relying upon judgment of Hon'ble Supreme Court in the case of TATA Cellular vs. Union of India (AIR 1996 SC 11), submitted that this Court may not interfere with the decision of respondent no.2 as this Court cannot sit in appeal over the impugned decision. 9. There is no doubt that this Court cannot sit in appeal over a decision of an administrative authority in awarding contract. However, the decision making process must be fair and transparent and free from arbitrariness. In the judgment relied upon by learned counsel for the contesting respondent i.e. TATA Cellular (supra), it was observed :- 110. In F. C. I. v. Kamdhenu Cattle Feed Industries, (1993) I SCC 71 at 76 : (1993 AIR SCW 1509 at p. 1512, para 7), it C. W. P. No. 16274 of 2008 (O&M) 4 was observed thus : "In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to article 14 of the Constitution of which non- arbitrariness is a significant facet. There is no unfettered discretion in public law : A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'." 111. In Sterling Computers Limited v. M/s. M. and N. Publications Limited, (1993) 1 SCC 445 at page 455 : (1993 AIR SCW 683 at p. 690), this Court observed thus : "......... In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognised by courts while dealing with public property. It is not possible for courts to question and adjudicate every decision taken by an authority, because many of the Government undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi- judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in 'bona fide' manner although not strictly following the norms laid down C. W. P. No. 16274 of 2008 (O&M) 5 by the courts, such decisions are upheld on the principle laid down by Justice Holmes, that courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of "play in the joints" to the executive." 112. In Union of India v. Hindustan Development Corporation, (1993) 3 SCC 499 at 515 : (1994 AIR SCW 643 at p. 657), this Court held thus : "....... the Government had the right to either accept or reject the lowest offer but that of course, if done on a policy, should be on some rational and reasonable grounds. In Erusian Equipment and Chemicals Ltd. v. State of W. B.(AIR 1975 SC 266), this Court observed as under (para 17) : "When the Government is trading with the public, 'the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions'. The activities of the Government that a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure." 10. In the present case, it cannot be held that decision of respondent no.2 meets the requirement of fair decision. The said decision does not reflect application of mind to the other bidders, particularly when lowest tenderer has not been selected. The same is, thus, vitiated. 11. In view of above, we quash the impugned order dated 04.09.2008, with liberty to respondent no.2 to take a fresh decision in C. W. P. No. 16274 of 2008 (O&M) 6 accordance with law. (ADARSH KUMAR GOEL) JUDGE November 19, 2008 ( L. N. MITTAL ) monika JUDGE