> " COURT C^ JUDICATURE. CHHATTIS^ARH AT BILASPUR SIN5LE BENCH: HON'BLE SHRI L.C. BHA&OO/J PEHTIONER: '^.••< ^. «' ^; RESPON&ENTS: Wnt Petstlori No.lT84 ©f2003 M/s. Sharda Flour Pvt. Ltd.. C-58/ Sir9ritti Industrid Estate Complex, Bllaspur (€.©.),Through Its Managing birector Dinesh Kumar Bhootda, 5/o Shri D,D. Bhootd-a, R/o Kranti Nagar, BIIa^pur (C.@.) Versus- 1. State of Chhattisgorh, Through th©Secretary, MQhlla Avam Ba! Vikas Vibhag, DK5 Bhavan, Raipur (C.<&.) 2. The Coiiector, Ralgarh, bistt. Rdgarh (C.6.) 3. Ths District Programme Offlcer, Mahila Avam Ba! Vikas Vibhcsg, Raigarh, bistt. Rdgarh (C.©.) 4. The AdditiotiQi Coiiector, Rdgarh, Djstt. Rdgarh (C.©.) POST FOR ORDER ON 25th July, 2003 Sd/- L.C. Bhadoo Judge ® COURT OF JUDIC^WRE. CHHATHS&ARH AT BXLASPUR PETIHONER: Writ Petjtion No. 1784 of 2003 AVs. Sharda Ftour Pvt. Ltd., C-58, Sir9r'itti Industrial Estate Complex, Bl!aspuri (€.©.),Through its M-anaging Director binesh Kumar Bhootda/5/o Shri D.b. Bhootda, R/o Kranti Nagar, Biiaspur (C.©.) ^ RESPONDENTS: <.., 1. State of Chhattisgarh, Through the Secretory, Avam Bal Vikas Vlbhag, &K5 Bhavan, Rdpur (C.©.) 2. Tne Collector, RdgGrh, Distt. Raigarh (C.6.) 3. The bistrict Programme Qfficer, Mahila Avam Bal Vikas Vibho9, RaiQorh, Distt. Raigarh (C.'S.) 4. The Addltional Collector, Raigarh, bistt. Raigarh (G.@.) L -'^ present^ Shrl P. Diwaker, Advocate; Shri Sanjay K. Agrawai, Dy. Advocate ^enerd^ Shrl Ki^hore Bhaduri, Advocate^ For the petitioner For the respondcnts For the liitervener Bgfocs: Hen'bSe Shrl L.C. Bhadoo. J. ORDER (Passed on^.p^Julv. 2003) 1. The of the petitioner In this writ petitlon under Articles 226 <& 227 of the Constltution of India, is agdnst condition No.20 (a) of the notice inviting tenders by respondent No.3 by which abng with other a wndjtlon has prescrlbed In order to become eiigible for the in to the notice Invlting tendere.l @ ^ 2. Conditlon No.20 (a) of the notlce inviting tenders JGys down that the Intending tenderer's firm must subnilt a certiflcate, aiong wlth the tender form, of an Officer of the ©overnment &epartrn€nt/Institution/Undertaking, showing their experience and execution of an order regarding suppiy of thesubstitute nutritlous food of the vo!ue equivaient to 30% of the tender IteiTi which comes to Rs.80,00p00/°jn one year during the last three preceding years. ^ ^ 3. The petitioner/Company has fiied this petitjon with the averments that the petitioner nameiy, AA/s. Sharda Fbur Pvt. Ltd., is one of the most reputed roller flour ml!!^ of the State of Chhattisgarh and is having ali the jatest modern mQchinery'. Tlie present petition has filed through the Managing Director of the firm nameiy, Dinesh KumGr Bhootda. 2 & 3 have invited tenders for suppiy of substitute nutritlous food and as per the tendcr programme, the tender was required to be submitted on 06.06.2003 before 2 p.m. and the was to be opened at 4 p.m. on the day before the District Purchase Comnilttee. By the tender, supply of Doiia required and ft- cer-tain conditions were fixed. The notice inviting tenders and the tender form cre Annexures P-l and Pa2. Jhc petitioner has the experience of producing the product and the firm Is weii equipped with the latest machinery. Tne quality of the product which is produced by the petltioner Is IncompGroble and to the utmost satisfaction of its buyers. The tumGVBr of ths petition^r for th©y^ar ending 3Ft Morch, 2002 wa^ Rs.14,09,33,275/- which has increased substantJQliy in the yeQr 2003 and has to the extent of Rs.20,64,35,593/". A copy of the ccrtificate 05.06,2003 issued by the Chartered Accountant^ of the petitionep is fiied herewith. In the notice jnvlting tenders, one of the conditlons has 'hS 3 ^,. ^ by the respondents in an arbitrary manner to favour some of the groups< The conditlon has put in such Q manner to reduce the corripetjtion and to ensure that choiced persons be with the contract. As per condltjon No.20 (a), a Is havlng an cxperience certiflcate of supplying the substitute nutrjtious food to the tune of Rs.80,00,000/" In any one year durlng thc lost threeprcceding yeQrs, he cannot be permitted to compete. The Imposition of the coi6idition is Qbsolute!y iitega! and arbitrary and the has been put with a motlve to favour particuiar person. This condition ha^ Incorporated in order to nQrrow down the competition and In of this condltion, wlil never get entry In the competition. Tne very object of the ©overnnientIs to ensure supply of quality matcrial and to that the may be fuifllled as agreed by the tenderer. For ensurlng suppiy, the ©overnmentcan take proper security which the ^overnment Is aiready doing. As per the information avdlabie to the petitloner, even his has not forwarded to the finai stage oniy on the ground that the petitioner is unab!e to fuifill condition No.20 (o) of the tender iteni. The petjtioncr quoted a very corapetitive rates probably the iisi those cases which have for^arded to the hlgher authorjties, the rotes are more as compared to the rates of the petitioner. On account of a conditlon, the co$Tipetition wlil be among on!y 3 or 4 and it wili become the monopoSy of certain groups. Therefore, the petitioner is chailenging the arbitrary and malafide approach of the respondents. As per condition No.23 of the document, Annaxure P-l, it mentioned that if the unit is having a certificate of 150-9000, the sanie be given preference as compcred to other units. The petitioner has ^ ' aiready applied for the ISO eertifieate on 12th June, 2003. Respondentfi 2 &, 3 have sought the information of Food LIcense <& Licensee under the Factory Act. the^e Ijcenses are presentiy in of the petitioner and at the time of the fiiing of the tender form a renewd order Is pending before the cotTipetent authority. Therefore, the respondents be directed to conslder his on the of the rates so quoted and on the basis of the ^uppjy of the sampie subject to the finai Qpprovs! of th© by the coiTipetent authority. It Is therefore/ proyed that the respondents be directed to consider the case of the petitioner on merits by excludmg condjtlon No.20 (a) and respondents be directed to forwarid the sampie of the petitloner to the iaboratory at Mumbd. 4, The return hc^ flicd on behalf of the respondents in which they hove mentioned that the petitjoner has rsot fited the certlficate as enumerated in conditlon No.20 of the notice inviting tenders and aiso he did not fuifl!i pre- tender condition Idd in Para 20 of the notice Inviting tenders. The petitloner has faiied to fj!e the va!id iicense under the Factory Act as per condjtion No.20 (b). He has fajted to produce no objection certificate obtdned from the PoIIution Control Board, as per condition No.20 (c). He has fdfed to fi!e livlng and valid Hcense from the Food and Drug^ Department. Since the petitloner did not fuSfilI the crjteria (a), (b), (c) and (d) of condition No20, therefore, he was mt eliglbie to compete with others and his tender form wos not considered further. TTie tender has been finalis^d on 25th Juns, 2003 and th^ eon+rGct for ^upply of sub^titut^ nutrltious food (Ddia) has been given to the quaiified firm. It is subniitted that tender forms recelved, out of the seven forms, the nanies of^^ d") 5 ^r^ ^ three firms were considered and out of the three firms Oiie firm has given the contract after following the due procedure to a quallfied firm, fujfiij QJI the and conditions given in the notice inviting tenders. The petitioner has fifed this petltion wlthout any rhyme or reason, os he not qudify the ternis and condltions of condition No.20 and mGde frivobus and allegations agdnst the State and Its authoritles. It is that 2 & 3 have arbitrar/ conditions in the notice invitlng so as to that one pQrticuiar get the tendcr and the per^on llke the petitioner is deprived from getting the tender. Tne petitioner has registered as a nianufacturer of &alla on 29.05.2003 at Bliaspur in the District Industrial Trade Center, Blic^pyr, which is evident from the permanent registration of the District Industrlal Trade Centcr, 29.05.2003, to the effect that the production hos been ^tarted frGrn 20th AAay, 2003. Ther^fore, it cannot be ^aid that th@ petitioner is a reputed nianufQcturer and suppiier of Daiia. The petitloner has no cxperience in of the food "Da!irfy In any ©overnment &epartment/ Instltute/UndertakJng m any one thc iast three years. It is also denied that condition No.20 has in an orbitrary and to favour of the groups. Ddia is suppiied for children, pregnant i^omen and !actating mothers bebnging to weaker sections of the society, are most vuinerable sectiorss of the society and suffering from mal nourlshment, In compllance of the Hon'ble Supreme Courfs direction. Jhc petitioner had no certiflcate of ISO 9000 on the date of submlssion of the form. Therefore, the petjtion of th@ petitloner Is llable to be 1 (^) 6 ^-^ ^l, ^ ^.,, >,-• ) 5. ^Vs. J.D. Food Product^ Pvt. Ltd., Vlnobo Nagar, BilQ^pur, through Its Director Smt. J. Saiuja, has filed an Intervention appllcatlon snd ^upported the stand of the respondents. 6, I have the lecrned counsel for the parties. 7. Mr. P. DIwaker, for the petitloner argued that conditjosi No.20 (a) by respondents 2 and 3 i^ arbitrary and the amounts to debcrring the petitloner to file the tender and It abo amounts to creating monopoiy In favour of limited pereons. H©further submitted that ia^t year a!so, simiiar conditlon No.17 Imposed and there i^ no rationaSe behind the Jmposltjon of this condltion. Therefore, this action of respondents 2 & 3 Is jilegai and arbitrary. The further submitted that the law on the point is that in the niatter of contract which Is entered by the State ©overnmentwith the private partles, if it Js arbitrary and illegd thcn ^uch actions are subject to the jydiciai revlew of the Courts. 8. In of his argument, the counse! relied upon the Judgment of the Hon'ble Apex Court in the case of ete., Vs, -of reported in Court 1081, In which the Hon'bk Apex Court heid, that the action of the ©overnmentamounts to monopoly. ©overnment Inviting offes^ for advanced purchase only from purchasers during year, who had carried out their obiigotions to thc satj^factjon of the ©overnmentin preference to competltion. 9. In my considered opinjon, on facts, this authority of the Hon'ble Apex Court Is of no to the petltloner as in the present by the impugned in thc notice invitlng tenders no monopojy has becn created in favour of any rather it is an tender. Only ejlgjbillty criterla has been Sald do^n/ 7^ ^-^/ \ •X A-. as per condjtion No.20 (a) of the notice inviting tenders by which ces^taln limit has fixed in order to select the competent contractor ^ho has experlence in the field of supptying of &aIlQ to various ^overnment Departriients/Instltutjons/Undertakings. Jhe other authority reiied by the counsel for the petitioner is in the case of Vs. C@. Ltd, and repbrted in 2 The other declslon relied by the iearned counsei for the petitioner Is in of a Vs. of and reported in 6 SCC 667. 10.0n the other hand, the lecrned counsel for thc respondents argued that conditjon No.20 (a) was Incorporated In order to se!ect experlenced and corppetent firms as the supply of baiia whjch is nieant for children, wotil€nand lactating mothers belongs to i^eaker scctions of the society and are suffering from riiat nourishment. T^erefore, in order to ensure that only the experlenced flrm can the Dalja of a requlred quality, this condition Is laid Tlie respondents were wjthin their right to prescribe the eijgibiljty crlteria for the intending tenderers. Therefore, the actlon of the not suffer from Qi=iy vice of arbjtrarines^ or IrrationQl. The karned counse! further submitted that from conditlon No20 (a), the petitioner on the glven date was not fujfilljng the other conditions of the notlce invitjng tenders which are enumerQted In 20 (b), 20 (c) & 20 (d) and even the petjtjoner flriTi ^as $siot having the certiflcate of 150 and the petitioner flrm ^as totally Inexperienced in the matter of suppiying Daiia os they started productiGn oniy on 20th May, 2003. -^ ^< ^r 11. The iearned counsel for the respondents relied upon the declslon of the Hon'b!s ,4pex Court In the case of M/s. &.J. femandez Vs. State of and reported in 958, and other declsion in the cass of Intemational Ltd. Vs. I.V.R. Constnictlon Ltd. and reported in 1 SCC 492 and also other decjslon In the of Compyters Ltd. Vs. M/s. M & N Pybllealions Ltd. and reported InAIR 1996 SC 51. 12. No^, coming to the law laid by the Hon'ble Apex Court irs the matter of contracts are by the &ov€rnment^ith the private persons, the Hon'bl®Apex Court In the mattsr of Bengs! State Beetrlelty has that ruies and instructjon^ be complled wlth scrupubus!y in order to dJscrJiTiination, arbltrorlness and favorltlsm are contrary to ruie of \wi and constitutionGl VQlues. The relaxation by a State or Its of a rul©or condltion in favour of a partjcuiar bldder, heid, not permissIbSe expres^iy provided for in the rules. Adherence to the rules, heid, l^ the principle to be fojb^ed in the publjc interest. 13. In thc matter of it has by the Hon/bale Court that the ©overnmenfsdecisions regarding of contrQct are to the judicia! review and If the declsion maklng process is shoi^n to be by arbltrarlne^, unreasonab!eness and illegaiity then the Court can the decislon rriaking process as the award of the contract on the decislon. 14. Th©Hon'ble Apex Court In the case of Tata CelluSar vs. Urilon of Indla in SC 11 held the prlnciples ofjudlcjai review would to the exercise of contractual by ©overnmentbodies in order to. ® Q .1?^ 4 .< prevent arbitrariness or fworltism. However, there are Inherent timitatlons in of that of Judiciai review. The ©overnmentis the guardjan of the finances of the State. It is expected to protect the financial interest of the State. Tne duty of the Court is to confine itself to the question of lega!ity. Its concern should be^ (a) whether Q declslon-making authorlty its ^) committed an error of Iwj: (c) committed a breach of the of naturd Justice; (d) reached a declsion which no Trjbund hav'e reached; or (e) its The ground^ cn Qdniinistrative action is subject to control by judicjal can be as under^ I. lileodity^ TTiis the declsion-maker understand correctiy the law that reguiates hls declslon-niakJng and give effect to it. II. Irrationality, Wednesbury unreasonabieness. iil. Procedura! impropriety. The HorYbie Apex Court further held that the principles deductibie reiatlng to of Judicial review of QdmlnJstratlve clecisions and excrcise of contractud powers by ©overnment arei a. Jhc modern trend to judicia! restraint in adminjstrativc action. b. Tlie Court sit as a Court of but mereiy revlew the manner in which the declslon made. c. The Court not have the expertlse to correct the adniJnistrQtive decislon by substituting its declsion, without the necessary expertise which Itself may be fallible. d. The terms of the invjtatlon to tender cannot be open to judjciai scrutiny the invitQtions to tender are in the of contract. c, Tne 6'overnment freedom of contract. (^D 10 ^•% 1:, •< f. Quashing decisions mcy impose heavy administrGtive burden on the administrQtion and lead to increased and unbudgeted expenditure. 15. In the matter of the Hon'ble Apex Court has relied the principles !aid In Tata CeItuJQr's cose. In the case of Computcrs Ltd. (Sypra) the Court held thQt whiie exercising the Judicial in the matter of the S'overnment Contracts the Court cannot act as an appeiSate authority or examine the details of terms of the contract. The prlmary concern of the Court Is to see whether there is any infirmlty in the decision maklng process. In the of Ltd, the Horfble Apex Court held that In arriving at a commerciQl decision, considerations which are of parQmount importance are commerclal consjderatlons. These ba I. Tne price at ^hich the other is wliling to do the work: II. Whether the w services offered are of the requisite speciflcationsj III. Whether the person tendering has the abiljty to deiiver the or services as per speclflcQtions; iv. The abiiity of the tenderer to deliver goods or services o.w to do the work of the requlsite standard and quallty; v. Past experience of the tenderer and whether he has successfully compieted simiJQr work eariler; vi. Tlme which wiii be to deiiver the goods or services: and often vll. The abl!ity of the tenderer to take fol!owaup action, rectify dafects or to give post-contract services. 16. In- the of M/s. &.J. (Sypra) the Hon'ble Apex Court heid that the exper'ience certlflcate given by the prospective tenderer about his worj @ 11 ^ .-, expcrience sufficiency to be decided by authority caiiing the tenders not by the Court. Tendercrs are required to suppiy inter alia documents supporting their work experience and financia! position abng with the application for tender book. Tender can be @xc!uded for considerQtion in fdiure to suppiy the rcquired documents. 17. TTierefore, in of the iaw iaid by the Hon'bie Apex Court in the above decisjoris, the ^overntTient Is at liberty to fix the pre-qualjflcatjon of the tenderer on thelr experlence, flnancjal positlon. As heid in the of Ltd. the ©oyernment can also into consideratloii and fix pre-qudifjcations whether the intending tenders can deiiver the of the requlsite speclfications whether the tenderer is able to detiver the of the tenderer and whether he has successfuliy slmliar work earller and the abillty of the tenderer to take up action. As per the decision In the of Tata Ccllytar/ the terms of the jnvitatlon to tender cannot be to Judicial scrutiny the invjtations to tender is in the reaim of contrcct. 18.In of the !aw, condition No.20 (a) flxedby the respondents is not arbitrary in any manner, the respandents haye speclflcally stated that in of the Supreme Courfs directions the respondents were required to of a requisite quality and standard to the children, women, lactating mother ^ho to weaker sections of the society snd Qre suffering from mal nourishment. Therefore, the respondents fixed the experience eiigibility criteria as the financial capacity of the intending tenderers and the 'Sovernment within its right to flx thls criteria Sooking to the requjrement and QS per the IQW !dd down by thc Hon'bie Apex Court in the of T@t^ .J' CeSluJar, Intemational Ltd. and M/s. &.J. Fernandes (Supra). Not only this, the petjtioncr iws not even eligibie to file the tender because apart from condition No.20 (a)/ at the tinie of filing of the tender documents, he ^as not qua!jfying the other condltions nameiy, condition Nos. 20 (b), 20 (c) and 20 (d). He ^tarted produ£Jn9 baiia r^cently i.e. from 20 May, 2003. 19. Thersfore, the decision of respondents 2 c& 3 not suffer from any vice of arbitrariness and the petitioner has not becn able to prove his stand that the eHglbjjlty criteria as enumerQted In condition No.20 of the notice inviting tenders Is arbitrary or Irrational. 20.In the resuit, this petition has no force. The is !iab!e to bc di^mlssed and It is accordingly, dismlssed. Soma Sd/- L.C. Bhadoo Judge r^ ^ H^ '^.^ •t^