IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 11..03..2011 Coram: The Honourable Mr.M.Y.EQBAL, CHIEF JUSTICE and The Honourable Mr.Justice T.S.SIVAGNANAM Writ Appeal No. 1544 of 2010 and M.P.Nos. 1 & 2 of 2010 Easun Products of India (P) Ltd., Rep. by its Project Manager, Mr.N.Rajan, 6th Floor, Temple Tower, 476, Anna Salai, Nandanam, Chennai – 35. .. Appellant/ Petitioner vs. 1. The Chairman, Tamil Nadu Electricity Board/TANTRANSCO, 6th Floor, NPKRR Maaligai, 800, Anna Salai, Chennai – 600 002. 2. Director, Transmission Projects, TANTRANSCO, 6th Floor, NPKRR Maaligai, 800, Anna Salai, Chennai – 600 002. .. Respondents/ Respondents Appeal filed under Clause 15 of the Letters Patent against the order passed in W.P.No.13367 of 2010 dated 08.07.2010 on the file of this Court. This Writ Petition presented to this court under Article 226 of the Constitution of India to issue a writ of mandamus Directing the respondents herein not to reject the Bid submitted by the petitioner in respect of Tenders Specification No.T.1580 for supply laying and erection of 110 KV 1 X 630 sq. mm. XLPE Aluminium Cable Feeder for the reason that the petitioner has not satisfied the https://hcservices.ecourts.gov.in/hcservices/ Bid Qualification Requirement of (BQR) of Section III I(a) & (b) of the Tender Specification issued by the respondents and to include the Price Bid of the petitioner in Tender Specification No.T-1580. For Appellant :::: Mr. M.S.Krishnan, Senior Counsel For M/s.K.J.Rebello For Respondents:::: Mr.A.Selvandran J U D G M E N T THE HON’BLE CHIEF JUSTICE This writ appeal is directed against the order passed by the learned single Judge whereby the learned single Judge refused to issue any direction to the respondents not to reject the bid submitted by the petitioner in respect of tenders specification No.T-1580 for supply laying and erection of 110 KV 1 x 630 Sq.mM XLPE Aluminium Cable Feeder. 2. The facts of the case lie in a narrow compass:- Pursuant to the tender called for by the first respondent for supply, laying and erection of 110 KV x 630 Sq.mm XLPE Aluminium Cable Feeder vide tender specification No.T.1580, the petitioner submitted its tender on 22.5.2010 along with the relevant documents under the Bid Qualification Requirements (for short ‘BQR’) . The bids contain two Envelope System of Envelope A and Envelope B. Envelope A should contain technical bid with commercial terms, whereas Envelope B should contain the price bids as per price schedule. 3. One of the bid qualification requirement is that the person, who bids in the tender, should have successfully supplied and completed laying of 110 KV or above rating UG Cable of not less than 6 km during the last five years to the State Electricity Board’s/Power Utilities In India. 4. The petitioner along with the bid documents submitted necessary documents showing that it has not only supplied 110 KV or above rating UG cable of not less than 6 kms, but also successfully completed laying of the same. The petitioner annexed documents in proof of the same. The petitioner has clearly mentioned in its letter that though the distance was mentioned as 0.93 kms in the first page, in the inner page, it was clearly mentioned that 6 kms. of distance were supplied and erected. 5. The petitioner came to understand that the officials of the respondents while recommending the bids to the Board Level Tender Committee, have indicated that the petitioner has not satisfied the https://hcservices.ecourts.gov.in/hcservices/ BQR of Section III Clause 1 (a) & (b). In support of the same, the respondents placed reliance on the letter issued by the Karanataka Power Transmission Corporation Limited to say that the petitioner has not supplied and laid 110 KV cable for a distance of 6 kms, rather it was only 0.93 kms. 6. According to the petitioner, the decision taken by the officials to reject the BQR of the petitioner is against the principles of law and it clearly illustrates that the respondents are not following the fair procedure in evaluating the bid submitted by the petitioner. The contention of the petitioner is that technical bid of the petitioner is rejected and if the evaluation of the price bid of other bidders is carried out, the petitioner would be put to irreparable loss and untold hardship. 7. The respondents filed counter affidavit stating inter alia that the documents produced by the petitioner for qualifying itself as per the BQR shows that the total length works out to 0.93 km x 3 cores x 2 circuits = 5.58 kms, whereas the BQR condition is that the bidders should have successfully completed laying of 100 KV or above rating UG Cable of not less than 6 kms. Thus, the petitioner has not satisfied the BQR Condition 1(b). 8. As regards the last para of the BQR, which states that the offers not satisfying the BQR will be summarily rejected, it is stated by the respondents that copy of the certificate was issued by the Karnataka Power Transmission Corporation Limited only on 28.5.2010 i.e., six days after the date of tender opening, from which it is clear that the length of work carried out by the petitioner was well short of the quantity of 6 kms, as stipulated in clause 1 (b) of BQR. The Board Level Tender Committee, after thoroughly analyzing all the offers made by the six vendors, directed that the price bids of three vendors alone satisfy the conditions of the tender and the same could be opened. 9. The learned single Judge, after considering the facts of the case and the various materials brought on record by the petitioner-appellant, came to the conclusion that the petitioner- appellant did not produce any documents to show that it has satisfied the BQR for supply and erecting 6 kms of cable. Hence, the writ court cannot sit over the decision taken by the respondents and take a different view that the appellant satisfied the requirements of BQR. 10. We have heard the learned counsel appearing for the parties. Learned senior counsel appearing for the appellant assailed the impugned order on the ground that the learned single Judge erred in holding that the appellant has not satisfied the Bid Qualifying Requirements and that the learned single Judge failed to peruse the relevant documents, which, admittedly, show that the appellant has https://hcservices.ecourts.gov.in/hcservices/ satisfied the BQR, and that the learned single Judge did not give a finding on the documents submitted by the appellant, rather placed much reliance upon the statement of the respondents. It is further contended by the learned counsel that the learned single Judge has erroneously held that that the appellant has not pleaded mala fide and arbitrariness. 11. Learned counsel appearing for the appellant has drawn our attention to the different documents issued by the Karnataka Power Transmission Corporation Limited and contended that the appellant satisfied the BQR, which has not been taken into consideration by the learned single Judge. 12. On the other hand, learned counsel appearing for the Electricity Board submitted that the minutes of the Evaluation Committee so referred to by the appellant is merely a recommendation, and is not a decision of the Board. Learned counsel submitted that even the certificate issued by the Karnataka Power Transmission Corporation Limited in favour of the appellant shows that the total length works out to only 5.58 kms, and that the appellant did not complete laying of 100 KV or above, which was the requirement under the tender notice. In the aforesaid premises, the contention of the appellant cannot be accepted. Apart from that, judicial review in tender matters is well settled by the Supreme Court in a catena of decisions. 13. In the case of Tata Cellular vs. Union of India reported in 1994 (6) SCC 651, the principle of Judicial Review in contractual matters has been elaborately discussed. Their Lordships observed: - (para 70, page 675) “70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in 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 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement 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 https://hcservices.ecourts.gov.in/hcservices/ for any collateral purpose the exercise of that power will be struck down.” Their Lordships further held in the said decision that the power of judicial review is not with the merit of the decision in support of which application to judicial review is made, but the decision making process itself. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Unless the selection or rejection is arbitrary or mala fide, the Court will not interfere. 14. A similar view has been taken in the case of Directorate of Education vs. Educomp Datamatics Ltd reported in 2004 (4) SCC 19, wherein their Lordships observed as follows: - (paras 9 & 12, pages 23 & 24) “9. It is well settled now that the courts can scrutinise the award of the contracts by the Government or its agencies in exercise of their powers of judicial review to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular v. Union of India1. After examining the entire case-law the following principles have been deduced: (SCC pp. 687-88, para 94) “94. The principles deducible from the above 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 its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through https://hcservices.ecourts.gov.in/hcservices/ several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play 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 pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” (emphasis supplied) 12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.” 15. In the case of Global Energy Ltd. V. Adani Exports Ltd reported in 2005 (4) SCC 435, the Supreme Court, while dealing with the tender notified by the West Bengal Electricity Board, held that the terms of the invitation to tender are not open to judicial review and the Court cannot whittle down the terms of the tender, unless they are wholly arbitrary, discriminatory or actuated by malice. Their Lordships held: - (para-10, page 441) “10. The principle is, therefore, well settled that the terms of the invitation to tender are https://hcservices.ecourts.gov.in/hcservices/ not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition and allowed the appellants to deposit the earnest money by furnishing a bank guarantee or a bankers’ cheque till three days after the actual date of opening of the tender. The order of the learned Single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench.” 16. The learned single Judge in the impugned order has categorically stated that the appellant has not alleged any mala fide against the respondent in disowning the bid offered by the petitioner-appellant, nor the petitioner-appellant has pleaded that the action of the respondent is arbitrary, tainted with mala fide and irrational. In that view of the matter, there is no question of interference with the decision taken by the respondents in the matter of awarding contract. 17. For the reasons stated above, we do not find any merit in this appeal, which is accordingly dismissed. No costs. Consequently, miscellaneous petitions are closed. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. pv/- Copy to: 1. The Chairman, Tamil Nadu Electricity Board/TANTRANSCO, 6th Floor, NPKRR Maaligai, 800, Anna Salai, Chennai – 600 002. https://hcservices.ecourts.gov.in/hcservices/ 2. Director, Transmission Projects, TANTRANSCO, 6th Floor, NPKRR Maaligai, 800, Anna Salai, Chennai – 600 002. 1 cc to mr.K.J. Rabello, Sr. 17612 1 cc to Mr.A. Selvendran, Sr. 18591 W.A.No. 1544 of 2010 MBS (CO) kk 22/3 https://hcservices.ecourts.gov.in/hcservices/