QQ BEFORE THE HON’BLE HIGH COURT OF CHHATTISGARH AT BILASPUR «x t CGAL PNUMATICS, artnership Firm, registered uder. e Indian Partnrship Act hing rh e av its registered office at N6 ID Hingna Industrial Area, Napur (aharashtra) represented through : the Manager, Abijit Sarkar, aged aout 4 years, sn of Shri Ajit Kr a PETITIONER MEE E a P n [ 5 MC [ ‘ g i h b 3 o uma Srkar, resident of 301 Neel Tarang, patment 9 Amrawati Road, Nagpur, Maharashtra. Bhilai ElercSuply Company Liited, 587 5th Floor Ispat Bhaw Bhilai, istt. Durg, through General Manager Manager, Contract and Servic Bhilai Electrical Supply Compan Limited 587/5th‘loor Ispat Bhawan B/ (Ctsg PETITION UNDER ARTICLE 2267227/O/F THE CONSTITUTION OF IA NDI FOR ISSUANCE OF WRIT IN THE NATURE OF MANDAMUS ” I the Matter of w.P.No. JB % /2003. n Jé M Ar, ctialip m an D . es y /F hilai hhatiarh). @a HIGH COURT OF QLIDICATURE CHHATTIsGARH: EggSPUR 1¢.6.1 SINSLE BENCH’: HON'BLE SHRI LC. BHADOO, J WRIT PETITION NO.1807 % 2003 ORDER POST IT FOR: gmzV07/200 Sd/_ ? L.c.BHADoo i 7 Judge A u‘ T3 HIGH COURT OF JgDICATURE CHHATTISGARH: BILASPUR SINGLE BENCH: HON'B! F'SHRI L.C. BHADOO. g WRIT PEI’ITIO 0.1807 OF 2003 MECGALE PNEUMATLCS VERSUS Bhihi Elec+rionl Supply Company Limi‘l'ed dad anofhar Present: Shri Kishore Bhadur-i, Advocafe for the pefifioner. Dr. N.K. Shukla, Sr. Advoca‘l'e wi‘rh Shri Ayaz Navcd Advocah, for The respandenfs. ORDER” (Passed on 7, m aC of July 2003) By ‘rhis writ pe'ri‘l'ion filed under Article 226/227 of #hg Cons’ri‘rufion of India the pe‘ri'l'ioner, a regisfered Parmeréhip Firm ragis‘rered under 1’he Indian Partnership Ac? under Registration No.NGP/1441/90-91 and engaged in the work of manufacturing, supplying, marketing and distribution of materials for civil, mechanical and constructions, has challenged the decision and action of the respondents for inviting a tender for supply and installation of Scraper conveyer and clinker venture for disposalof ash in the Thermal Power Plant through a Tender Document (Annexure—P/3). (2) The main challenge in this writ petition is Clause (B) of the Qualifying Requirements by which the respondents among others has fixed the eligibility criteria for a tenderer that “the bidder must Rs.72.00 Lahhi / have executed a single contract of value hot less than for supply and insfallafion of scraper- conveyer of capacify not less Than 4 Ton per hour each and clinker grinder of capaciiy n01- less'fhan 10 fon per hour each, for boiler having oupoci‘ry 50 MW or more during - Ins? five years preceding The do‘l’e of NIT (Nofice Inviting Tender)". The con‘reni'ion of ‘rhe pefifioner/Firm is fhaf ‘rhis qualifying requiremenf is arbitrary, unilateral and have been inil'ially pui' To place The peTiTioner ouT of The run. IT has‘been menTioned in 1he ‘peTiTion ThaT The peTiTioner/Firm is engaged in manufacTuring The conveyer sysTem, ash handling sysTem, lime cuTTing .sysTem, waTer TreaTmenT' sysTem and also affluenT TreaTmenT sysTem accessories. The peTiTioner has annual Turn over Rs.1,59,48,723/'- and has Till daTe supplied The maTerials To all measure companies. The lisT showing The measure areas execuTed by The peTiTioner has been filed in'The peTiTion marked as Annexure-P/5. The peTiTioner qualified in every counT and accordingly submiTTed The document The only non- qualifying condiTion so puT for The by The respondenTs was execuTion of single conTracT worTh more Than Rs.72/- lakhs; The peTiTioner/Firm declares ThaT The peTiTioner has execuTed many conTracTs worTh more Than Rs.45/- lakhs. The respondenT so as To ousT The peTiTioner'of The compeTiTion has iniTially puT This clause of execuTing single conTracT worTh Rs.72.00 Lakhs. PuTTing‘ of such clause is noT only unfair buT is also arbiTrary, unreasonable and does noT come wiThin The a'cT for public good or under public inTeresT. The inTenTion of The respondenT is wriT large by such clause and Therefore The said acT is voilaTive of The principles of equal opporTuniTy and amounTing abuse of power by puTTing The clause. The respondenT auThoriTies have commiTTed a breach of rules of naTural jusTice and Thus reached To a conclusion of puTTing such clause wiThouT any usTificaTion, Therefore, The same amounTs To abuse of iTs power. The j / // / / / / 9 pemioner- has soughf for a relief thuf The clause so far as it relafes To fhe execufion of singie comrac‘r worfh Rs.72.00 Lakhs be quashed. . 6 ‘ 3N (3) The refurn has been filed on behalf of The respondents. Is is submif‘l’ed Thu-r apar‘r from The petitioner, nine other confrac'rors made requests for issuance of 1he fender form. Ouf of these nine requests, fhree requests were furned down on The ground 1‘na1' ‘l’hey are no‘r fuifiliing The qualifying requiremenTs. The reques‘l' of oTher Two conTracTors including The peTiTioner was allowed and Tender form was issued wiTh a specific sTipulaTion ThaT They will submiT The papers perTaining To The qualifying requiremenTs before Ten days from The daTe of opening of The Tenders, and Thus Tender forms were issued To » Them wi1+i The condiTion and four conTracTors were found fully eligible To compeTe The Tender. The Tender forms were issued To The conTracTors who have legal inTeresTs in The conTracT on The basis of docTrine of LegiTimaTe ExpecTaTians. NoT only ThaT, if The qualifying requiremenT is reduced To The wishes and likings of The peTiTioner, Then oTher conTracTors who are operaTing in The same field and have made requesTs for issuance of The Tender forms because They are noT fulfilling The qualifying requiremenT would be deprived of Their legal righTs To parTicipaTe in The Tender process. IT is specifically denied ThaTvThis qualifying requiremenT is wiTh inTend To advance some person or To deprive some person To parTicipaTe in ThaT Tender process. The, qualifying requiremenT is puT only in order To ensure ThaT The work To be alloTTed may be compleTed wiThouThindrance by a besT person on a raTe which is mosT suiTed To The respondenTs. Therefore, The conTenTs of paragraph 3 of The wriT peTiTion ThaT The qualifying requiremenT has been made in The Tender wiTh an inTend To monopolize or To prefer one conTracTor over oThers is wrong. The answering respondenT is a JoinT VenTure of STeel AuThoriTy of India LimiTed and Nnfional Thermal Power Corpomfian as s‘ra'red by 111a pefitioner and ‘ro follow The policy of NTPC wi'rh respecf f0 1he com‘mcf functions. If is also submit-red ‘l'ha‘l' 'Hne amounf of ‘Rs.72.00 Lakhs has been calculofed by 'rhe answering’respondenf as 2/3" of 1he' 1'oTal amounf of The comract The 1'ofal amoun‘r is Rs.1,08,000,oo/p of which fhe 2/3” is Rs.72,00 lakhs. The pe‘ri'rion is also liable i0 be dismissed on 1'he ground 1'ha1' The pe'l'liioner is suppressing *he mafer-ial in 1he peli'rion and The pe‘i'ifioner- did nof possess The eligibility qualifications. However, he represenfed that he can submi‘r The some 10 days before fhe da‘l'e of opening of The Tender The requisiTe qualificaTions/documen'rs. On This basis The condiTional Tender form was issued To him. IT is specifically denied ThaT clause of inclusion of qualifying requiremenT (of Rs.72.00/- Lakhs is wiTh an inTend To ousT The peTiTioner of The compeTiTion. IT is made clear ThaT The msumring respondenT is a new Company recenTly incorporoTed as a JoinT VmTure Company comprising wiTh NaTional Thermal Power Corporal-ion LimiTed and STeel AuThoriTy of India LimiTed. The peTiTioner has no conTracT wiTh The answering respondenT in The pasT. There is no maTerial which shows ThaT iT is The peTiTioner To whom The answering respondenT wanTed To exclude and for ThaT This clause is puT. RaTher This clause has been included by The answering respondenT which is adhered by NaTional Thermal Power Corporation LimiTed and iT is an esTablished policy ThaT conTracT musT be given To a person who have experience of compleTing The work which is aT The 2/3” value of The conTracT. \ (4) I have heard Mr. Kishore Bhaduri,learned counsel for The peTiTioner and Dr. N.K. Shukla, 5r. AdvocaTe, for The respondenTs. (5) The main ThrusT of The argumenTs of The learned counsel for The peTiTioner is ThaT fixing of such4eligibiliTy criTeria ThaT The/w / / / / @ / / @ fenderer musf have execufed one work wor‘l’h R's.72/- Lakhs is drbi‘rmry and irra‘rional. He argued fha‘l’ fhe whole work is of Rs.1,08,00,000/- and 'rherefore ‘rhe maximum condition could have been up ‘ro Rs.40/- lakhs. He fried To impress upon The Cour'r, by showing a char? fhoi' in fhe pasf in The year 2001 NTPC issued a, tender inviting bids in which one work of Rs.30/- lacs was fixed as eligibility criteria. Therefore, he argued that the decision is arbitrary. ~44 (6) On the other hand, Dr. N.K. Shukla, Senior Advocate, argued that the condition of one work in the year at the value of Rs.72 lakhs has been fixed by the committee after looking into the nature of the work and in order to get the best contractor and that too at the best rate; so that they are able to execute the work within the stipulated period and with the efficiency. It does not lie in the mouth of the petitioner that without citing the specific allegation against the respondents that how the respondents have particularly introduced this eligibility criteria just to oust the petitioner out of the race and making him ineligible. The respondent company is recently set up as a new company and they have no links with anybody and leveling such unfounded allegation against a company without any foundation or evidence and rhyme or reason is very serious in nature and the Court should not allow such bailed allegation levelled against the respondents without any basis. (7) It is true that the respondent company being a joint venture of Steel Authority of India Limited and NTPC is a public company and its come within the definition of the State as per Article 12 of the Constitution of India. Therefore in the strict sense the public element is attached with the < respondent Company and \i ‘ n :‘\ / [Du ‘rherefore fhe State actions in con'l'r‘actual field when all..ac1'ions of r The Sfm'e are mearrr for public good rand expecfed +0 be'fair and just The Preamble of ‘Hqe ConsfHufion of India resolves 'l'o sewre mall i'rs- V ci+izens justice; soeial, economic and political; and Equality of status and opportunity. 'Ever'y State actionmustbeaimed attachieving this goal. Every holder of a public office by-virtue of which he nets on, behalf of the State or public body is ultimotelyoccountable to the people in whom the sovereignty vests. As such, allpowersso vested in him are meant to be exercised for public. good. and promoting the, .public interest. This isvequally true of all actions‘even in the fields of contract. Thus, every holder of a public'offioe is a trustee whose V highest duty is to the people of the countryuand therefore every .act‘ of the holder of a'public office, irrespective of‘the‘rlabeluclassifying that act, is in discharge of public duty meantuultimately for public good. The Hon'ble Apex court in the case‘ofShI‘-ilekha Vidyorthi Vs. State of U.P. reported in AIR 1991 ISC 537“ observed-'that‘no. doubt, it is true, as indicated .by us earlier, that there is .a presumption of validity of the State action'and‘the burden—ism the person who alleges violation of Article 14 to. prove the assertion. However, where no plausible reason or principle is indicated nor is it discernible and the’impugned State action, 'thereforegappears to be 'ex facie arbitrary, the initial burden to prove thexarbit'rarinessis discharged'shifting ‘onUS on the Stateto jushfy'its'achon"w fair and reasonable. If the State is unable to produce material to justify its. action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged. In Dwarkadas Marfatia’s rose, (AIR 1989 SC 1642) the Courtrheidxthatto oversee, , s the State action for the purpose of ‘satisfying‘that it is‘not vitiated by the vice of arbitrariness and. no mores The wisdom of thetpolicy-or / / f fhe lack of if or 1he desir‘abili‘l'y of a barter alfernn‘rive is no? wi‘thin *he permissibie scope of judicia! reviews in such cases If is'no'r for ‘rhe Cour‘rs to recas'l' me pohcy or 1'o subsm'u're I? wrrh ono'ther whrd'l is conSIder-ed To be more uppropmo‘re once The amok on The ground of arbrrmr-mass Is sucreqsfully repelled by showmg fhof‘fhe oc‘l' which was done, was fa'lr and reosonobh In 1he facts and circumstances of The case. (8) TneHon'ble Apex Cour-fin The caseof Tara ,Collular ‘Vs; Union of India repor?ed in AIR 1996 SC 11 'held tha‘r fhe principles of judicial reviewwould apply To The exercise of comracfualpowris by Governmen'r bodies in order fo preven‘t arbifrariness or favouri‘l'ism However There are inherenT limITa'hons m exerCIse of ThaT power of Judicial reVIew GovernmenT is The guardian of The finances of The STaTe IT is expecTed To proTecT The financial inTeresT of The STaTe The righT To refuse The lowesT or any oTher Tender is always available To The Government BuT, The principles laid down in ArTicle 14Lof The ConsTiTuTion have To be kepT in view whilelaccepTing or refLising a Tender. There can be no quesTion of infringemenfl' of ArTicle 14 if The GovernmenT Tries To geT The besT person or The 'besT quoTaTion‘. The righT To choose cannoT be considered To be an arbiTrary power Of course if The said power is exercised for any collaTeral purpose The exercise of ThaT power Will be sTruck down. The CourT further observed ThaT The duTy of The CourT is To confine iTself To'The quesTion of legaiiTy. ITs concernshould be: (1) wheTher a decision- making ouT’noriTy exreeded iTs powers ? (2) 'commiTTed an error of law; (3) commiTTed a breach of The rules of naTural jusTice; (4) reached a decision which no reasonable Tribunal would have reached; :or (5) abused iTs powers. Therefore, iT is noT’for The CourT To de‘lermine ud'ieTher parTicular policy or parTicular decision Taken in The fulfilmenT/j/ / [06 of thaf policy is fair. I'r is onl cancerned wifh The manner, in which. Those decisions have been ‘l'aken. The‘exfen‘r of‘ihe' du‘l'y‘fo ac‘r fairly will vary from case 1'0 case. Shortly puf, 1'he groundsupon- which on adminis'rmfive uciion is subject 'ro con‘l'rol by judicial review can be classified as under: (i) Illegali'ry: This means the decisionf maker mus? understand correctly fhe low Thai regulafes his decision-making power and musf give effecl' To if. (ii) Irra'rionali'ry, namely Wednesbury unreasonableness. (iii) Procedural impropriety The above are. only fhe broad grounds bu? i‘r does no? rule ouf»addi1'ion of furfher grounds in course of ‘rime. 'The principles deductible relating to scope of judicial review of administrative decisions . and exercise of contractual powers bygovernment bodies are : (1) The modern trend points to judicial restraint in administrative action. (2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it ,will be substituting sits own“, (4) decision, wi‘rhouf The necessary expertise which ifself may be fumble. The ferms of 'rhe invimiion +0 1'ender canno‘r be open 1'0 judicial scrufiny because The invihfions fo Tender is in 'rhe realm of confmc-l'. Nor-maliy speaking 1he decision 1’0 accept the tender or award the contract is reached by process of nego‘ria'l'ions through several Tiers. More often than not, such decisions are made qualitatively by experts. The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts but musty be free from arbitrariness not' affected by bias or actuated by mala fides. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (5) (6) Therefore, in view of the above law laid down by the Apex Court that all the actions of the State are to be presumed to be valid and the burden is on the person who alleges violation of Article 14 to/ / / G 10 prove ‘rhe asserfion fha‘r The acf of the Stafe or public nufhori'l‘y suffers from fhe vice of arbi‘rrar-iness. (9) Similarly, in fhe second decision ‘rhe Apex Cour'r has held fha'r while dealing with the case of arbifmriness, unmsonobleness in ‘rhe maf‘l'er of con'rmc‘rs which are being en‘rer'ed by 'rhe Government are illegal, irra'rional and fhere is procedural improprie‘ry and while looking in'ro These aspec'l’s cer‘rain limifn‘iion has been laid down for judicial review of 1he decision as men‘l'ioned in The earlier par-f of 1’his judgmen‘l' while referring fhe oases decided by 'rhe Hon'ble apex Court. (10) Now in The lighi' of The above decisions we have to examine The facts of fhe presenf case as 1'0 whe'rher 'rhe decision of The respondents to fix the eligibility criteria that the tenderer must have executed one work of Rs.72/- lakhs in a year suffers from vice of arbitrariness, unreasonableness or irrational in the light of the above decisions of the Supreme Court. If we look at the petition of the petitioner the allegation has been levelled by the petitioner that the respondents have put this eligibility criteria so high and strict in order to ensure that the petitioner ousted from the competition and to become ineligible to file his tender. In the petition as well as in the argument the learned counsel appearing for the petitioner could not point out any such specific allegations against the officers of the respondents Company that how they are interested in ousting the petitioner and how they are interested to include some one in the contract. The only thrust of the counsel for the petitioner is that the eligibility criteria is excessive. The whole work is of Rupees one crore eight lacs and fixing the criteria that the tenderer must possess experience of executing a single work in a year of Rs.72 lacs is very > ‘4, 11 high and normally in fhe given si‘fuwions if should no? be more fhan 32 1'0 40 lacs. This is fhe pefifioner's own es+imafe and own Thinking whereas 'rhe responden‘rs have men‘rioned in fhe refurn 'rhof 'rhey have fixed fhis criteria only in order To 9e1- besi person a1' 1'he besi’ rafe. (11) On The o‘rher hand, fhe learned counsel appearing for The responden‘rs argued 1haf This criTeria has been fixed by The High Power CommiTTee aT The iniTial sTage while Taking a decision for inviTing The Tenders for This work in order To achieve The objecTives ThaT by puTTing This condiTion They musT geT The besT Tenderer who is able To execuTe The work wiThin The sTipulaTed Time, efficienTly and up To The expecTed level of The respondenT Company ThaT Too aT The besT raTe. He furTher argued ThaT The ToTal amounT fixed for one work is noT come beyond 2/3” of The whole Tender. Therefore, This cannoT be said To be unreasonable. He furTher argued ThaT The respondenT company is recenTly newly esTablished company and They have no inTeresT or bias in favour or againsT anyone. The decision regarding qualifying requiremenT Taken by four senior officers of The Company has been annexed wiTh The reTurn in which Manager (F&A), Manager (T5), one Senior Manager (C&M) and The oTher is Senior SuperinTendenT: These four highly placed officers in Their wisdom based on Their pasT experience decided This eligibiliTy criTeria. So Their decision To fixe The eligibiliTy criTeria, wiThouT any specific insTance ThaT They have acTed againsT any rules or showing ThaT They have commiTTed any error of law or exceeded Their powers or abused Their powers while Taking such decision by any sTreTch of imaginaTion Their decision cannoT be said To be arbiTrary, unreasonable, irraTional or illogical. As has been held by The Apex CourT in The above quoTed JudgmenTs ThaT The righT To decide The Term of inviTaTion To Tender is noT open To judicial scruTihy. FurTher held ThaT iT is noT for The CourT ”4, T 12 ‘ro defer-mine whether par‘ricular policy or particular decision faken in fhe fulfilmenf of 1'ha1' policy is fair. If is only concerned wi'rh fhe manner in which those decisions have been Taken. The ex‘l'en‘r of ‘l'he dufy 1'0 ac'i' fairly will vary from case To case. Learned counsel appearing for The pefi‘rioner was n01- able f0 poin‘i' out any irra‘rional, arbifrary or procedural impropriefy by which fhe respondents have fixed 1'he eligibility criteria. If we look a? fhe return filed by the respondents shows that even at this eligibility criteria they have been able to get four eligible contractors who are eligible to compete the tender. While dealing with the arguments of the learned counsel we have to see that even after fixing this eligibility criteria number of four contractors are still available in order to have the fair competition among the tenderers so that no one should monopolies and able to get high price. (12) As mentioned above four eligible tenderers have already put in their papers, therefore, the arguments advanced by the learned counsel for the petitioner is devoid of any force. Even if the example cited by the learned counsel for the petitioner that the NTPC in some cases have put the eligibility criteria Rs.30 to 40 lacs of one work in which a total cost of work was Rupees one crore 40 lacs something. Merely on this basis the decision taken by the respondents officers cannot be said as arbitrary as has been mentioned above it depends upon case to case that in the given situation whether the particular decision has been taken irrationally or with an abuse of power or breach of any rules of natural justice is to be seen. (13) In view of the above, I am of the opinion that the petitioner has not been able to successfully advance and impress upon the Court that the decision of the respondents by fixing the eligibility,,// \x i g§ // @ 13 criferia that The nudemr mus'r have execu'red a work in one year of Rs.72 lacs is arbitrary and suffers from The vice of arbifmriness. Therefore, fhe wrif pe‘rifion filed by fhe pefi'h'oner is wifhouf force and The some is liabie 1'0 be dismissed and if is accordingiy dismissed. i Sd/— i L.C.BHADOO ‘ i Judge i r r I A ,, ‘y’gyyo’moos