In the High Court of Judicature at Madras Dated: 12.10..2007 Coram: The Honourable Mr.Justice V.Dhanapalan W.P.Nos.27258, 28827 and 28485 of 2007 and M.P.Nos.1 and 2 of 2007 in 28827 of 2007 & M.P.No.1 of 2007 in W.P.No.27258 of 2007 & M.P.Nos.1 to 4 of 2007 in W.P.No.28485 of 2007 M/s.Garware-Wall Ropes Ltd., Rep. by its Deputy Manager-Fisheries-South, Plot No.11, Block D.1, M.I.D.C., Chinchwad, Pune, Maharashtra. Petitioner in W.P.No.28827 of 2007 vs. 1. The State of Tamil Nadu Rep. by Secretary to Government, Department of Fisheries, Fort St.George, Chennai-600 009. 2. Special Commissioner of Fisheries, Teynampet, Chennai-600 006. 3. Director of Fisheries, Teynampet, Chennai-600 006 Respondents in W.P.No.28827 of 2007 M/s.Kassim Nets, Rep. by its Managing Partner Mr.K.Mohamed Basheer, Thammathu Konam, Erumbukkadu Post, Nagercoil-629 004, Kanyakumari District. Petitioner in both the WPs vs. 1. The Secretary to Government, Department of Animal Husbandry, Dairying and Fisheries, Fort St.George, Chennai-600 009. 2. The Director of Fisheries, Administrative Office Building, Teynampet, Chennai-600 006 Respondents 1 and 2 in W.P.No.27258/2007 and respondents 1 and 3 in W.P.No.28485 of 2007 2. The Special Commissioner of Fisheries, Government of Tamil Nadu, Administrative Office Building, Teynampet, Chennai-600 006. Respondent No.2 in W.P.No.28485 of 2007 For petitioner in W.P.No.28827 of 2007 Mr.R.Muthukumarasamy, Senior Counsel for M/s.R.Suresh Kumar For petitioner in W.P.Nos.27258 and 28485 of 2007 Mr.AL.Somayaji, Senior Counsel for M/s.V.Perumal For respondents Mr.R.Viduthalai, Adv. General, assisted by Mr.A.Edwin Prabhakar,Addl.G.P. Writ Petition No.28827 filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, as stated therein. Writ Petition No.27258 of 2007 filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Mandamus, as stated therein. Writ Petition No.28485 of 2007 filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, as stated therein. ORDER The prayer in Writ Petition No.28827 of 2007 filed by M/s.Garware-Wall Ropes Ltd. is for issuance of a Writ of Certiorarified Mandamus, to call for the records in connection with Re-Tender Notification issued by the respondents dated 21.8.2007 and earlier Tender Notification dated 25.4.2007 and quash the Notification dated 21.8.2007 and consequently direct the respondents to pursue the Tender Notification dated 25.4.2007 in the matter of manufacture and supply of webbings to fishermen affected by Tsunami. 2. According to the petitioner in W.P.No.28827 of 2007, it is a Company registered under the Companies Act, engaged inter-alia in the manufacture and supply of synthetic ropes, twines, yarn, nettings/webbings (including fishing nets), woven fabric and geo-synthetic products. It is a Company which is the third largest manufacturer of synthetic cordage in the world and the largest in India. It has been awarded the Star Export House status by the Ministry of Commerce, Government of India, besides ISO:9001:2000 accreditation. They have not only a strong domestic performance, but are predominant in the field of export market also. The petitioner-Company is specialised in providing application-based specials for fishing, shipping and oil exportation industries. The petitioner has a very big factory with more than 110 machines, which can be put to use for the manufacture and supply of webbings for bulk quantities. 3. The respondents herein have issued a Tender Notification on 21.12.2006 inviting tenders from manufacturers of webbings, who have a capacity of 1250 Metric Tonnes (for short, Metric Tonnes as "MT") of supply to supply 1100 MT of webbings, as per the specification and the terms and conditions referred to in the Tender Notification. In terms of the specifications mentioned in Tender Notification, the successful tenderers were required to supply 1100 MT knotted nylon webbings to the fishermen of the Tamil Nadu. The tenderers were required to pay an EMD of Rs.44 lakhs. 4. The petitioner being a major company, having annual production capacity of more than 1250 MT, submitted their tenders with all the relevant documents and proofs on 4.1.2007. In terms of the tender conditions, the tenders were opened on 8.1.2007. All the tenders submitted before the prescribed time, were verified so as to examine whether they were qualified on technical grounds. The petitioners have all their qualifications and it is understood that the bids were found technically qualified. Thereafter on 7.2.2007, a Committee constituted by the Director of Fisheries, inspected the petitioner's factory so as to ascertain the availability of infrastructural facilities and machineries and also to verify the manufacturing capacity of the petitioner-Company (hereinafter referred to as 'the Company'). The Committee comprised of an official of the Fisheries Survey of India (Government of India) and two State Government officials. On inspection, the Committee was fully satisfied with the manufacturing capacity and the infrastructure of the Company, for the required supply of webbings. Thereafter, on 10.4.2007, the price bids of the Company were opened. According to them, the petitioner-Company was the only Company which was technically qualified. After opening the price bids, the Company was called for negotiations and there were four rounds of negotiations and in which, the price quoted was reduced by the petitioner-Company to some extent. While that being the position, on 13.4.2007, the Tender Awarding Committee rejected the tenders on the ground that there does not exist Bureau of Indian Standards (hereinafter referred to as 'the BIS') for webbings, a condition stipulated in the tender. It is the case of the Company that in this context, while submitting the bid by the petitioner, they had pointed out/clarified on this that the nylon multi filament nettings will be made from the twine conforming to IS-4401. However since there is no BIS Standard for nylon mono filament yarn and nylon mono filament webbings as well as nylon multi filament webbings, these will not be covered by any BIS specifications. 5. Thereafter, a fresh Tender Notification was issued by the respondents on 25.4.2007 for the manufacture and supply of 1100 MT of webbings, and by that Notification, the required capacity of tenderers was reduced to 600 MT as against 1250 MT stipulated in the earlier Tender. The petitioner again submitted their tenders on 28.5.2007 with all relevant documents and proofs, as it was the last date for receipt of the tenders. The respondents opened the technical bids of the tenderers on the said date. After evaluation, samples were called for from the petitioner-Company for technical evaluation and approval. Accordingly, they submitted their samples and on 25.7.2007, an inspection was directed to be carried out by the Committee comprising of official of the Fishers Development Corporation, the District Revenue Officer and an Accounts Officer constituted by the Director of Fisheries. The Company made available to the said Committee all the infrastructural facilities, machineries etc. The Director of Fisheries then called for an informal meeting with the Company on 9.8.2007 and the Company was shocked to know at the said meeting that the report of the Inspection Committee had indicated that the Company's production capacity was shown to be less than 600 MT/p.a. Therefore, the Company addressed to the third respondent on the subject matter on 10.8.2007 clarifying the factual position on production capacity as well as the delivery capacity. It was surprising and ununderstandable as to how the Company which had already been found to have a capacity of more than 1250 MT while evaluating the earlier tender, has suddenly been found to have a capacity of only about 450 MT and therefore, the Company sent a notice on 11.8.2007 requesting the respondents to give them an opportunity to explain regarding their manufacturing capacity. 6. While so, the Company was shocked to know that the respondents have issued a Re-Tender Notification on 21.8.2007 inviting the tenders for supply of the same quantity of 1100 MT of webbings by reducing the production capacity of the tenderers to 100 MT. According to them, the Re-Tender Notification was issued with a reduced capacity from the manufacturers having a capacity of 100 MT, apparently on the premise that there are no manufacturers including the petitioner-Company which has the capacity to manufacture 600 MT webbings, as contained in the earlier Notification. Therefore, the action of the respondents in abandoning the earlier Tender Notification and issuing the Re-Tender Notification is wholly illegal and proceeds on a misconception of facts and law, as also violative of the provisions of the (in short "the Act") and the petitioner, having no other effective alternative remedy, has approached this Court for the above stated relief. 7. The main grounds urged by the petitioner is that the decision of the respondents in coming to the conclusion that the petitioner's annual capacity is less than 600 MT, and therefore do not qualify for the re-tender issued in April 2007, is vitiated by non-application of mind and extraneous consideration. The first Tender Notification in December 2006 has been scrapped on account of a mistake relating to BIS specification. The Re-Tender issued in April 2007 was again for the supply of 1100 MT of webbings, in which the annual capacity of the tenderers was to be 600 MT. When the petitioner is having a capacity of more than 1250 MT in the first tender, it cannot be said to be not possessing the qualification specified in the second tender, but having inspected the factory of the petitioner, the Committee has not sent the details of the inspection or the report had not been furnished to the petitioner. Therefore, the decision of the respondents appears to have been taken on the basis of the report of the said Committee, a copy of which has not been furnished to the petitioner. The decision of the respondents cannot but be construed as arbitrary and irrational. 8. The Re-Tender Notification dated 21.8.2007 is again for the supply of 1100 MT. The production capacity of the tenderers has been reduced to 100 MT. On the facts stated by the petitioner, the fact pertaining to the petitioner's capacity in the impugned Re-Tender Notification, by which the production capacity of the tenderers has been reduced to 100 MT, smacks of irrationality and unreasonableness and there is no reason how with such low production capacity could cater to the annual need of 1100 MT webbings to be supplied to the fishermen affected by the Tsunami. Therefore, the Re-Tender Notification is vitiated by non-application of mind and arbitrariness and violative of Article 14 of the Constitution of India. 9. The decision taken by the respondents on 10.8.2007 is inconsistent with the earlier views of the respondents. Even though there was a representation by the petitioner requesting them for a personal hearing to submit the materials to show their production capacity is more than 1200 MT, which was not taken into consideration and therefore, the inaction on the part of the respondents to consider the same and the decision to issue the Re-Tender Notification, is wholly arbitrary and unreasonable. 10. The right to reject all tenders and call for a re-tender is not an absolute right and the respondents should have valid and justifying reasons to do so. In the petitioner's case, the rejection of the second Tender floated in April 2007 seems to be a wrong premise, as the petitioner was not qualified, which is non-est both on facts and in law. The true decision of the respondents to issue Re- tender Notification deserves to be set aside both for the reason that it is based on non-existent fact and also causing serious prejudice and stigma on the petitioner. 11. For the above reasons, the petitioner has approached for the relief to call for the records in connection with the Re-Tender Notification dated 21.8.2007 and the earlier Tender Notification dated 25.4.2007 and seeking to quash the Re-Tender Notification dated 21.8.2007 and for a consequential direction to the respondents to pursue the Tender Notification dated 25.4.2007 in the matter of manufacture and supply of webbings to fishermen affected by Tsunami. 12. The first respondent has filed a counter affidavit for himself as well as on behalf of the other respondents. On behalf of the first respondent, the Special Commissioner and Secretary to Government, Animal Husbandry, Dairying and Fisheries Department has filed the counter affidavit. The respondents question the maintainability of this Writ Petition in law, as the issue under consideration falls in the realm of contract. According to the respondents, it is settled law that in matters of awarding contract, which is essentially a commercial transaction, the State Government is entitled to choose its own method and arrive at appropriate decision. The Government has the freedom of contract by taking its own decision and the scope of judicial review of such decision- making process is severely circumscribed and restricted, especially when the State has taken the decision to go in for a re-tender motivated by paramount public interest. According to the respondents, the Tsunami which hit the Tamil Nadu coast on 26.12.2004, caused damages to the life and fishing implements of the fishermen in the entire coastal districts of Tamil Nadu. The Government sanctioned various relief schemes as rehabilitation measure to the fishermen community for repairing their nets and for replacing fully damaged/lost fishing implements. About 42,000 fishermen were given relief assistance sanctioned under various Government orders. The Government in G.O.No.532, Revenue Department, dated 14.8.2006, and in Letter No.32132/Revenue, dated 22.11.2006, sanctioned a sum of Rs.110.36 crores for the purchase and supply of following assistance under the Rajiv Gandhi Rehabilitation Package: (i) Nets (webbings) : 1100 MT (ii) Handy Rechargeable Lanterns (iii) Heavy duty bicycles (iv) Life jackets (v) Insulated Ice boxes. Further, the Government, among other things, has allocated a sum of Rs.44 crores out of the total sanction of Rs.110.36 crores for the supply of nets (webbings) to the already benefited Tsunami affected fishermen under the above package. The total loss of nets, due to Tsunami, according to the actual assessment, was 1,100 MTS and it was therefore proposed to purchase and supply 25 Kgs. of Gill Nets worth about Rs.10,000/- to each beneficiary. 13. The Government also in G.O.Ms.No.193, Animal Husbandry, Dairying and Fisheries Department, dated 22.11.2006, issued orders constituting Technical Committees, Scrutinizing Committees, Award Committee for processing the tenders for the above commodities. The Committees constituted for purchase of nets are as follows: Sl.No. Name of the Committee Members of the Committee 1 Tender Technical Committee 1. Spl. Commissioner of Fisheries- Chairman 2. Director of his representative from CIFNET - Member 3. Zonal Director or his representative of FSI, Chennai - Member 4. Joint Director of Fisheries (Marine) Member Secretary 2 Tender Scrutinizing Committee 1. Spl. Commissioner of Fisheries- Chairman 2. Joint Director of Fisheries (Marine, Inland & Research) - Members 3. Accounts Officer (Fisheries)  Member 4. Deputy Director of Fisheries (Marine) - Member Secretary 3 Tender Award Committee 1. Secretary to Government, AHD & F Dept  Chairman 2. Secretary to Government, Finance Department or his/her nominee - Member 3. The Director of Fisheries  Member Secretary The Tender Technical Committee suggested the following specifications for the knotted nylon webbings for the gill nets to be purchased with suitable mesh size:- Knotted Gill Nets (only webbings) approved by BIS with the following specifications: Sl.No. Type of material Twine size Stretched Mesh size in mm 1 Nylon Multifilament 210 d x 1 x 2 30 2 Nylon Monofilament 0.16 mm dia 27 3 Nylon Monofilament 0.16 mm dia 36 4 Nylon Multifilament 210 d x 1 x 2 36 5 Nylon Monofilament 0.23 mm dia 56 6 Nylon Multifilament 210 d x 1 x 3 56 The Committee also recommended that nets with BIS specifications may be purchased. Based on the recommendations of the Committee, tenders for the purchase of all five components mentioned above including the nets were called for. The Tender Notice was published in the leading dailies and the tenders were invited only from the manufacturers of nets (webbings) with a production capacity of not less than 1250 MT/p.a of the above specifications. The EMD for the tender was fixed as Rs.44 lakhs. Two cover system was adopted and the tender document was based on the Act and the Tamil Nadu Transparency in Tenders Rules, 2000 (in short "the Rules"). 14. The last date for receipt of tenders was upto 3.00 p.m. on 4.12.2007. Eleven tenders were purchased and only four tenders were received and respondents have taken all possible steps to process the tender as per the procedure laid down in Tender Transparency Act, 1998 and as per the conditions mentioned in the tender document. The tenders were opened at 4.00 p.m. on 5.1.2007. Only the first cover, viz., technical bid was opened. The technical bids were evaluated by the Tender Scrutinizing Committee on 22.1.2007 and only one tenderer viz. M/s.Garware Wall Ropes Limited was found technically qualified. The other three tenders, namely M/s.Kassim Nets, Nagercoil, M/s.Nirmala Monofil Pvt. Ltd., Coimbatore and M/s.Raj Nylon Exports, Chennai-28, were rejected on technical grounds. 15. It is the further case of the respondents that net manufacturing plant of the petitioner-Company was inspected on 7.2.2007 and based on the recommendations of the Tender Scrutinizing Committee on the evaluation of the Inspection Report, samples of all the webbings of the specifications mentioned in the tender document were obtained from the firm and sent to CIPET for testing on 20.2.2007. The test report on the samples was received from CIPET on 9.3.2007 and the same was evaluated by the Tender Scrutinizing Committee on 12.3.2007. The Committee recommended to conduct breaking load test of the samples as per the BIS specification by CIPET. Test report on breaking load was received from CIPET on 23.3.2007 and the same was evaluated by the Scrutinizing Committee on 3.4.2007 and based on the recommendations of the Committee, the price bid of the technically qualified tenderer was opened on 4.4.2007 and negotiation of rates was done with the tenderer on 10.4.2007. 16. On the recommendations of the Tender Scrutinizing Committee, technical bids and price bids were placed before the Tender Award Committee meeting for taking a decision on 12.4.2007. The Tender Award Committee took note of the information given by the Scientists (Experts) from CIFT, Cochin, CIPET, Chennai, stating that there were no BIS specifications for webbings, unlike twines. However, BIS test procedures are available for both webbings and twines. Since BIS specifications were not prescribed for webbings, the technical requirements under this tender cannot be evaluated. In view of the above facts, the Award Committee asked to go for re-tender. The tender was therefore cancelled and the EMD was returned to the tenderers on 25.4.2007. Thereafter, the Tender Award Committee instructed a re-tender should be called for the purchase of 1100 MT of nets and the same was done with the following modifications:- 1. Tenders were invited from the manufacturers of nets (webbings) only with a production capacity of not less than 600 MT per annum of the specifications mentioned above (The Twine size in Sl.No.5 Nylon Monofilament was changed as 0.24 mm. dia instead of 0.23 mm dia). 2. BIS specifications were given in the tender document as follows: . Nylon webbings should be made up of Nylon twines/monofilament yarn of BIS specifications (i.e) Nylon multifilament (Twine): IS 4401 : 2006 Nylon monofilament : IS 7533 : 2003 . The webbing should be made up of virgin Polyamide (Nylon) twine/yarn. . Recycled raw material (Nylon) should not be used for making webbings. 3. The Tender Scrutinizing Committee recommended to fix the production capacity as 600 MTs/annum in view of the fact that only one responsive bid was received for the first tender in which the production capacity was fixed as 1250 MTs/annum and also considering the uniqueness of the purchase in terms of volume which needs to be supplied within one year. Accordingly, the tender notice dated 25.4.2007 inviting tenders were published in leading dailies and the last date for receipt of tenders was fixed as 3.00 p.m. on 28.5.2007. Totally, three tenders were received as follows: (i) M/s.Garware Wall Ropes Pvt. Ltd., Pune. (ii) M/s.Kassim Nets, Nagercoil. (iii) M/s.Kumaran Fish Nets Private Ltd., Nagercoil. The technical bids were opened at 4.00 p.m. on 28.5.2007 and the manufacturing plants of M/s.Kassim Nets, Nagercoil and M/s.Kumaran Nets, Nagercoil were inspected on 2.6.2007 and 22.6.2007 and the inspection notes and the technical bids were evaluated on 30.5.2007, 11.6.2007 and 22.6.2007. Samples received from the petitioner-Company were sent to CIFT, Cochin on 29.6.2007 for testing to confirm whether it meets BIS specifications. The test report received from CIFT, Cochin on 11.7.2007 confirmed the same. 17. While that being the position, a specific complaint against the production capacity of the petitioner-Company was received, and it was decided by the Tender Scrutinizing Committee on 24.7.2007 to depute a team of officials to inspect as to whether the petitioner-Company has the production capacity of its own for the descriptions of the works as specified in the tender. The petitioner-Company was re-inspected from 25.7.2007 to 28.7.2007. The inspection team found that the petitioner-Company did not possess the capacity claimed in the tender document. Thereafter, the Tender Scrutinizing Committee has evaluated the technical bids, inspection reports of all the tenderers and test reports on the samples of the petitioner-Company. Since no one was found qualified in the evaluation process by the Tender Scrutinizing Committee, the tenders of all the three tenderers including the petitioner-Company's tender, were rejected. 18. The Tender Scrutinizing Committee in its meeting held on 9.8.2007, has made the following recommendations: "1. By experience in the previous two tenders, there were no suitable suppliers even after the reduced production quality of 600 MTs/year as eligibility criteria. 2. 1100 MTs of Nylon webbings have to be distributed to the fishermen within a timeframe of one year. 3. To ensure better participation in tender and going by the previous experience, that there is no suitable manufacturer with the production capacity of 1250 MT/annum and 600 MT/annum, the production capacity may be reduced to 100 MT/annum. 4. The Government may be addressed to permit the third respondent to go for re-tender under fixed rate contract system and to reduce the production capacity to 100 MTs/annum (60% monofilament : 40% multifilament) of webbings of specified description in the tender and also to reduce the time limit to 15 days for inviting tenders, since the tender call is for the third time and all the manufacturers were aware of the supply of webbings to fishermen. Therefore, the Government was addressed on the above lines in the letter No.38116/TPIU/07, dated 9.8.2007 by the third respondent and the Government in Letter No.16926/FSI/2007-1, dated 17.8.2007 permitted the third respondent to go for re-tender under fixed rate contract system and to reduce the time limit to 15 days. Therefore, the tenders were cancelled on 17.8.2007. The petitioner's tender was also cancelled on 17.8.2007-vide third respondent's letter No.55055/P1/2007, dated 17.8.2007 and the EMD of Rs.44 lakhs was returned to the petitioner. As instructed by the Government in Letter No.16926/FSIII/2007-1, dated 17.8.2007 to the third respondent, re-tender II was called for the purchase of 1100 MTs of nets with the following modifications: (i) Nylon webbings should be made up of Nylon twines/monofilament yarn of BIS specifications (i.e). Nylon Multifilament (Twine) : IS 4401:2006 Nylon Monofilament : IS 7533:2003 (ii) The manufacturers shall have their production capacity of webbings in the ratio of 60:40 of monofilament : multifilament respectively. (iii) The webbing should be made up of virgin Polyamide (Nylon) Twine/Yarn. (iv) Recycled raw material (Nylon) should not be used for making webbings. 19. Tender notice inviting re-tenders dated 21.8.2007 was published in the leading dailies and corrigendum was also issued on 23.8.2007. The eligibility criteria for bidders have been prescribed in the tender notice as follows: (a) The bidder shall be a registered manufacturer having a minimum individual annual production capacity of 100 MTs of nylon (Polyamide) nets (Double knotted Nylon webbings) in the ratio of 60% monofilament : 40% multifilament nylon nets (double knotted nylon webbings) of the specified description in the tender schedule and having experience in the production and marketing of the webbings of the specifications described in the tender document for a minimum period of three years. (b) Alliance or agreement of