CW 15037/09 //1// In the High Court of Judicature for Rajasthan Jaipur Bench ** Civil Writ Petition No.15037/2009 ECE Industries Ltd Versus RRVP Ltd & Ors Date of Order ::: 12/05/2010 Hon'ble Mr. Justice Ajay Rastogi Mr. Abhay Kr. Bhandari with Mr. Angad Mirdha, for petitioner Mr. RK Agrawal, for respondents RRVPL Instant petition has been filed basically with the grievance that rejection of petitioner's bid at pre-qualification stage is arbitrary and at the same time, it has further been prayed that respondent-1 be directed to open and consider price bid of petitioner with reference to NIT (TN-2859) impugned herein flouted by respondents. Notices were issued on 30/11/2009. Reply to the writ petition has been filed. Objection has been raised by respondents that for NIT (TN-2859 for supply of 20/25 MVA, 132/33 KV power transformers) impugned herein, out of 26 purchased bid document forms, 17 forms were submitted, which were examined by technical bid evaluation committee in its meeting held on 16/10/2009 (Ann.R/14). As regards tender document of present petitioner Firm, detailed reasons have been recorded by the Committee in para (iv) – on the premise whereof, petitioner-Firm was declared to be disqualified in pre-qualification bid, itself; CW 15037/09 //2// as such there was no occasion available for respondents to open financial bid of the petitioner Firm. Counsel for petitioner submits that conclusion referred to in para (iv) for declaring petitioner-Firm disqualified at pre- qualification stage is unwarranted and as regards the delay having caused in earlier NIT bid, detailed reasons were assigned by petitioner-Firm; in such circumstances, there would be no justification for respondents to declare petitioner-Firm disqualified at pre- qualification stage and what has been observed by the Committee in its report (Ann.$/14) is not supported by any material on record, which requires interference by this Court. What has to be examined, is the decision making process adopted by the Committee in examining tender documents (NIT) and the scheme pursuant to the NIT impugned herein – extract whereof taken note of in para (iv) 9f report (Ann.R/14) read ad infra: “(iv) M/s ECE Industries Limited, Sonepat has supplied 8 Nos. transformers out of ordered quantity 33 Nos. after 6 months of over all delivery schedule, considering the provisions of clause No.1.23 of GCC that if the dispatches are effected by way of road transport, the date of GTR shall be reckoned as the date of delivery for the purpose of CW 15037/09 //3// calculation of penalty for delay in delivery provided that the material is received within 10 days from the date of GTR in respect of dispatches made from outside State. Beyond this period, the date of receipt of material by the consignee at his store(s) shall be the date of delivery. Any equipment is considered to have been delivered only when all the components are delivered in full. The 25% quantity of 33 Nos. transformers works out to 8.25 Nos. which is considered 8 Nos. after rounding off. Therefore, firm is considered default for delay in supply of 25% or more quantity for more than 6 months against existing order. Also the performance of the supplied transforms ordered under TN2769 (after relaxing provision of trial order) is not established for a period of 12 months as on date of technical bid opening in terms of the provisions of the trial order clause of purchase manual. As such firm's offer may not be considered for price bid opening.” Petitioner Firm came out with the justification in regard to the delay having caused in supply of transformers to respondents in its earlier NIT but the fact remains that petitioner-Firm failed to comply with terms & conditions of NIT document for supply of transformers within scheduled delivery period in reference to order of CW 15037/09 //4// supply under TN-2769, even after accepting relaxation provisions of the order. Scope of judicial review in regard to interference in the tenders andAward of contract has been examined by Apex Court in a catena of decisions. In Jagdish Mandal Vs. State of Orissa (2007 (14) SCC 517), Apex Court observed ad infra: “19. Judicial review of administrative action is intended to prevent arbitrari- ness , irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance CW 15037/09 //5// can always seek damages in a civil court.Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/ procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions : i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone. OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.' ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving black- listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in CW 15037/09 //6// action. Scope of judicial review has been further examined by Apex Court in Siemons Public Communication (P) Ltd Vs. Union of India (AIR 2009 SCW 470) and observed ad infra: “33. As was noted in the case of Asia Foundation & Construction Ltd. (supra) though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favoritism and it is exercised in the larger public interest or if it is brought to the notice of the Court that in the matter of award of a contract power has been exercised for any collateral purpose. 34. ... When the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features have to be considered. A contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bonafide and is in public interest, Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake of argument that there is a CW 15037/09 //7// procedural lacuna.”(emphasis added) In view of what has been observed in judgments (supra), scope of judicial review in matters of Tenders/commercial contracts exercised by State or public authorities U/Art.12 of the Constitution cannot be denied but can be interfered if the power has been exercised for collateral purposes; or the action is not free from arbitrariness or affected by bias or actuated by malafides. Thus viewed (supra), taking note of what has been recorded by respondents in its minutes (Ann.R/14) (supra), in the opinion of this Court, respondents have assigned cogent reasons while not opening pre-qualification bid of petitioner-Firm – reference whereof has been made (supra), and this Court does not find any manifest error being committed by respondents in its decision making process for declaring petitioner-Firm disqualified at pre- qualification stage under NIT impugned, which may call for interference. Consequently, writ petition fails and is hereby dismissed. No costs. (Ajay Rastogi), J. K.Khatri/p7/ 15037CW09May12DsNITRRVP.doc