IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:14.09.2009 CORAM THE HONOURABLE MR. JUSTICE M.M.SUNDRESH W.P. NO.22828 OF 2008 E.Gunasekaran .. Petitioner Versus The Managing Director Pondicherry Co-operative Milk Producers' Union Ltd Kurumampettai Puducherry – 605 009. .. Respondent PRAYER : Petition filed Under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records for the tender proceedings pursuant to notification dated 10.09.2008 on the file of the Pondicherry Co-operative Milk Producers' Union Ltd., Puducherry – 605 609, inviting tenders for engaging vehicle of transport/distribution of milk and milk products to various centres, quash the same and direct the respondent to invite tenders including for Insulted Vehicles. For Petitioner : Ms.S.Hemalatha For Respondent : Mr.Swaminathan Special Government Pleader(Puducherry) O R D E R The petitioner herein has filed the present petition seeking a writ of Certiorarified Mandamus calling for the records of the tender proceedings pursuant to the notification dated 10.09.2008 issued by the respondent herein. 2.The case of the petitioner is that the notification has been issued by the respondent on 10.09.2008 calling for tenders for the distribution of milk through the vehicles. However, in the said notification there is no condition to the effect that the insulated vehicles alone should be used. Therefore, the grievance of the petitioner is that without including the said condition that the insulated vehicles alone should be used for carrying milk the notification is bad in law and therefore, the tender should not be allowed to proceed with. https://hcservices.ecourts.gov.in/hcservices/ 3.A counter affidavit has been filed by the respondent stating that the entire writ petition is misconceived in law and facts. The petitioner and his wife were the successful tenderers for the earlier period having granted three routes each. However they were not able to use the routes which have been allotted to them since they did not have the adequate insulated vehicles. Hence number of opportunities have been given to the petitioner and his wife followed by the show cause notices. Therefore, it is stated in the counter affidavit that having failed to produce sufficient insulated vehicles the petitioner cannot file the present writ petition. Moreover the jurisdiction of this Hon'ble High Court to invoke power under Article 226 of the Constitution of India is very limited since the decision made by the respondent is one of a policy. According to the learned counsel, the decision has been taken to dispense with the insulted vehicles in view of the fact that faster vehicles are used and chilling plants have been constructed thereafter. Therefore, the respondent has thought it fit to remove the said condition since the same is unnecessary and unwarranted. According to the present system, the supplies are made faster and the said decision has been taken in view of the fact that number of routes have been increased. Therefore, the said decision taken based upon the relevant materials cannot be interfered with under Article 226 of the Constitution of India. 4.As rightly contended by the learned counsel for the respondent a decision made by the respondent which is a policy one cannot be interfered unless the same is tainted with mala fides and based upon irrelevant considerations. When the respondent has taken a conscious policy decision and come to the conclusion, the petitioner cannot challenge the same since he is not the person aggrieved. The petitioner cannot insist that a particular condition should be included in the notification as a tender condition. Moreover as seen from the counter affidavit the petitioner himself could not produce sufficient vehicles for the earlier period. In the judgment reported in 2001 (4) CTC 257 [SWAMIDHAS vs. THE CHIEF ENGINEER, NATIONAL HIGHWAYS] the Hon'ble Division Bench was pleased to observed as follows: "3.In contractual matters, the jurisdiction of the High Court under Article 226 of the Constitution of India is very limited. The learned counsel for the petitioners cited the judgment in R.D.Shetty v. International Airport Authority of India, AIR 1979 S.C. 1628 in support of their argument that in Governmental contracts, the power under Article 226 of the Constitution can be exercised if the action of the authorities is arbitrary as such arbitrary action violates the Fundamental Right of Equality guaranteed https://hcservices.ecourts.gov.in/hcservices/ under Article 14 of the Indian Constitution. There cannot be any dispute with regard to the said legal proposition. In all the latter judgments of the Apex Court, the said ratio decidendi has been followed. But the question is whether imposition of the above condition No.5 is arbitrary. We are conscious of the fact that the appellants are being deprived of their rights to bid even at the threshold as they are denied the tender schedules. Keeping that in mind, we proceed further to test the arbitrariness or otherwise of the above condition No.5. 4.Technical report was filed by the second respondent pursuant to the requisition by this Court and we perused the same. It is stated that there are 100 central mixing plants and pavers owned by the individuals/companies, and they are currently in use through out the State. This is not denied. By this, it is made out that the imposition of condition is not made to suit only one or a few individuals. In so far as the technical aspects are concerned, it is stated that this kind of machinery is being used all over India and that in fact, the State of Tamil Nadu is a forerunner in using this machinery ever since early 1960's in Madras city roads, and that the quality of the said works has been good and lasted long. Indisputedly, the laying of roads by using central mixing plants and pavers ensures long term durability and serviceability. It is also stated that by this process the recurring maintenance expenditure is minimised thereby reducing the financial burden to the Government. That apart, the technical specification relating to this user of machinery for laying the superior quality of roads is followed through out India. This was pursuant to the specifications for roads and bridge works issued by M.O.S.T. published by the Indian Roads Congress, which is an apex body in so far as standards and specifications for roads and bridges are concerned. In Clause 504 of the Technical specification, it has been stipulated that 'Bituminous macadam shall be prepared in a Hot Mix Plant of adequate capacity and capable of yielding a mix of proper and uniform quality with thoroughly coated aggregates'. When this was put to the learned counsel for the appellant, they fairly agreed that the machinery which has been specified and https://hcservices.ecourts.gov.in/hcservices/ which is being used, certainly gives a superior quality of roads. Then, the limitation of this Court is narrowed down. Now, the point to be considered is as to whether there is any nexus for imposition of condition of ownership or not. 5.Learned counsel for the appellants submits that there is no nexus for imposition of condition for ownership of machinery even at the threshold, at the time of furnishing the tender schedule and that it is suffice if the readiness and willingness of possession of machinery is shown at the time of entering into contract if the bid is accepted. Mr.V.Prakash, learned counsel, also submits that the length of the road to be laid is only 3 kms. Costing Rs.3,90,000 and the cost of setting up the machinery will be more than the said tender work and that it is not at all feasible and viable for the contractors owning the machinery to execute the above work. That is not the concern of this Court to examine. Whether the acceptance of work and execution thereof is feasible and viable, is the concern of the party who makes a bid. The authority tendering the work is only concerned about the execution and the money payable therefor. In every contract, there will be clauses for due execution of the work and the consequences in default thereof. The laying of public road is important and urgent. Time schedule is three months from the date of awarding of contract. The authorities cannot and need not wait for the contractors like appellants to acquire the machinery by way of lease from other owners. In fact, that is a contingent situation. Even after contract is struck, there is no guarantee that machinery will be provided and if provided, as to the quality and working condition of the machinery. The public work cannot wait, risking such contingencies. As such, the authorities have rightly felt that there should be an imposition of ownership of the machinery, as if such machinery is at the ready disposal of such successful contractor/s they can readily start the work and successfully complete the same within the time schedule. What is more, in view of numerous such contractors owning machinery, by no stretch of imagination can it be said that the imposition of condition No.5 is a tailor-made to suit one or a few individuals. In the https://hcservices.ecourts.gov.in/hcservices/ circumstances, we find that the imposition of condition No.5 has got a nexus with the object to be achieved, and that it is neither arbitrary nor unreasonable and there is no infringement of any Fundamental Right of the appellants. In the circumstances, the complaint of the appellants that they were unreasonably deprived of supply of tender schedules, cannot be countenanced and the writ appeals fail and are accordingly dismissed. No costs. Consequently, C.M.P.s are also dismissed. " 5.The Hon'ble Apex Court in the judgment reported 2004 (3) CTC 295 [DIRECTORATE OF EDUCATION v. EDUCOMP DATAMATICS LTD.] has observed as follows: "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 its 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 India, 1994 (6) SCC 651. After examining the entire case law the following principles have been deduced. "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 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 https://hcservices.ecourts.gov.in/hcservices/ tender or award the contract is reached by process of negotiations through 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. 10.In Air India Limited v. Cochin International Airport Limited, 2000 (2) SCC 617, this Court observed: "The award of a contract, whether it is by a private party or by a public Body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision-making process and interfere if it is found vitated by mala fides, unreasonableness and arbitrariness." https://hcservices.ecourts.gov.in/hcservices/ 11.This principle was again re-stated by this Court in Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation and others, 2000 (5) SCC 287. It was held that the terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the Courts to say whether the conditions prescribed in the tender under consideration were better than the one prescribed in the earlier tender invitations. 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 points 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." 6.The said decision of the Hon'ble Apex Court was also followed by a learned single Judge of the Hon'ble High Court reported in 2005 (4 )CTC 399 [SRI AMMAN ASSOCIATES v. STATE OF TAMIL NADU] wherein the learned single Judge was pleased to hold that the Court should not interfere with the terms of the tender notice unless the same is shown as arbitrary, discriminatory or tainted with mala fides. On a perusal of the above said judgment, this Court is of the opinion that the ratio laid down by the judgment referred above is squarely applicable to the present case. The petitioner has no legal right to insist that a particular condition should be incorporated and the petitioner is also not able to establish any arbitrariness, irregularity or mala fide in a policy decision made by the respondent. https://hcservices.ecourts.gov.in/hcservices/ 7.Under those circumstances, the writ petition is liable to be dismissed. Accordingly, the same is dismissed. No costs. Consequently, connected miscellaneous petitions are closed. Sd/- Asst.Registrar /True Copy/ Sub.Asst.Registrar sri To The Managing Director Pondicherry Co-operative Milk Producers' Union Ltd Kurumampettai Puducherry – 605 009. + 1 cc to Mr.L.Swaminathan,Advocate,SR.46721 W.P. NO.22828 OF 2008 RSY(CO) EM/17.9 https://hcservices.ecourts.gov.in/hcservices/