IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated 1.3.2011 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKAR Writ Petition No.4859 of 2011 and M.P.Nos.1 and 2 of 2011 Ravi Enterprises, represented by its Proprietor, R.Mohan, S/o Rathinam, 15-B, New Magazine Road, Vyasarpadi, Chennai-600 039. ... Petitioner -Vs.- 1.The Chairman, Tamil Nadu Electricity Board, TANTRANSCO Limited, 144, Anna Salai, Chennai-600 002. 2.The Chief Engineer/ Transmission, Tamil Nadu Transmission Corporation Limited, 6th Floor, NPKRR Malligai, 144, Anna Salai, Chennai-600 002. ... Respondents Writ Petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, calling for the records of the respondents in respect of Tender No.T 1624 and quash the Financial Requirement prescribed in Clause 6.2.0 of the Tender Condition of the Bid Qualification Requirement. https://hcservices.ecourts.gov.in/hcservices/ For petitioner : Mr.M.Venkatachalapathy, Senior Counsel for Mr.S.T.S.Murthi. For respondents : Mr.A.Selvendran. O R D E R Writ Petition is filed praying to issue a Writ of Certiorarified Mandamus, calling for the records of the respondents in respect of Tender No.T 1624 and quash the Financial Requirement prescribed in Clause 6.2.0 of the Tender Condition of the Bid Qualification Requirement. 2. Mr.A.Selvendran, learned counsel takes notice on behalf of the respondents electricity board. By consent of both the parties, the writ petition is taken up for final disposal. 3. Petitioner, in this case, challenges the clause 6.2.0 of the Tender Condition of the Bid Qualification Requirement which relates to financial requirement of the tender which reads as follows:- "6.2.0. FINANCIAL REQUIREMENT: Annual turnover of the tenderer in any one financial year of the last three financial year, 2007- 08, 2008-09 & 2009-2010 of the firm should be more than Rs.50 Lakh." This is relatable to the respondents Tender Specification No.T- 1624 to be opened on 7.2.2011. The tender is a two cover system consisting of technical bid and financial bid. Petitioner's grievance is that in respect of Tender Specification No.T-1613, relatable to the period 2010, the tenderer's financial requirement was only Rs.20 lakhs. This has been arbitrarily changed to Rs.50 lakhs in the present year thereby denying the petitioner an opportunity in participating the tender. This, according to the petitioner, establishes arbitrariness and, therefore, the Court should interfere and set aside the tender Notification. 4. Sri M.Venkatachalapathy, learned Senior Counsel appearing for the petitioner relied upon the decision of the Apex Court in Jagdish Mandal – vs. - State of Orissa reported in 2007(1) Recent Arbitration Judgment 397(SC) and contended that the present tender specification has been arbitrarily changed to favour one or other person and therefore, prima facie there is material to interfere with the tender Notification. https://hcservices.ecourts.gov.in/hcservices/ 5. Sri A.Selvendran, learned counsel appearing for the respondents states that each year's tender specification is based on the nature of work to be done and the period during which it has to be executed. Various parameters are considered before finalizing the tender under the two cover system. The plea of arbitrariness has no basis. In any event the petitioner has not established as to how the tender Notification is bad only because of the specification which is the domain of the department to decide the nature of work to be done and type of tenderers who will execute the work. 6. Petitioner cannot challenge the Tender Notification, merely, on the ground that he is unable to satisfy the financial requirement clause. The decision relied upon by the learned senior counsel appearing for the petitioner itself refers to the scope of judicial review of administrative decisions and interference in awarding of contracts. The case of Tata Cellular - vs. - Union of India, AIR 1996 SC 11 has been referred to and the scope of judicial review has been summarized in 2007(1) Recent Arbitration Judgment 397(SC) which is hereunder: "Scope of Judicial Review of award of contracts: 18. We may refer to some of the decisions of this Court, which have dealt with the scope of judicial review of award of contracts. 18.1. In Sterling Computers Ltd. vs. M & N Publications Ltd., 1993 (1) SCC 445, this Court observed: "While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process .................. the courts can certainly examine whether ’decision making process’ was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution." 18.2. In Tata Cellular v. Union of India AIR 1996 SC 11, this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus: https://hcservices.ecourts.gov.in/hcservices/ (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 action. 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 ............... 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 facets 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. This Court also noted that there are inherent limitations in the exercise of power of judicial review of contractual powers. This Court also observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14." https://hcservices.ecourts.gov.in/hcservices/ The above said decision will squarely apply to the facts of the present case. 7. In this case, petitioner is not able to show the nature of arbitrariness in the tender specification. Merely because in the previous year, the financial requirement was Rs.20 lakhs and has been enhanced to Rs.50 lakhs in the present year, it cannot be a ground to challenge the Tender Notification as arbitrary. The overall tender package will have to be considered and the decision making authority cannot be found fault in determining bid qualification requirement (BQR) as may be required for a particular project. The Court normally will not go into the terms of the tender conditions as it is in the realm of contract based on the advice of experts and the contingency that requires the floating of the tender. Several factors will have to be considered by the authority while deciding a tender. Further, in this case, it is stated that the technical bid part is already over and the financial bid will be opened today. Merely because one or other tenderer is unable to participate in the tender as he does not meet the bid qualification requirement it cannot be a sole ground to interfere with the tender notification, and hence this Court is not inclined to stall the tender process, moreso on the last date. It clearly establishes lack of bona fides. 8. For all the above reasons, finding no merits, the Writ Petition is dismissed. No costs. Consequently, connected miscellaneous petitions are closed. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. ts To 1.The Chairman, Tamil Nadu Electricity Board, TANTRANSCO Limited, 144, Anna Salai, Chennai-600 002. https://hcservices.ecourts.gov.in/hcservices/ 2.The Chief Engineer/ Transmission, Tamil Nadu Transmission Corporation Limited, 6th Floor, NPKRR Malligai, 144, Anna Salai, Chennai-600 002. 1 cc to M/s. S.T.s. Murthi, Sr. 15143 1 cc to Mr.A. Selvendran, Sr. 15166 W.P.No.4859 of 2011 RV (CO) kk 28/3 https://hcservices.ecourts.gov.in/hcservices/