IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TENTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.1159 of 2009 Between: Prithvi Associates, rep. by its Partner, Ashok Soni, Prabhadevi Industries Estates, 2nd Floor of Siddivinayaka Temple, Mumbai. ..... PETITIONER AND 1 The Chief Commercial Manager, 2nd Floor, B. Block, Bus Bhavan, Musheerabad, Hyderabad. 2 The Manager Director, APSRTC, Musheerabad, Hyderabad. 3 M/s. I. Catch Communication India Ltd. rep. by its Director Venkat Sambi Reddy Plot No.865, Road No.45, Jubilee Hills, Hyderabad. .....RESPONDENTS Counsel for the Petitioner:MR.V.V.ANIL KUMAR Counsel for Respondent Nos.1 & 2:MR.K.MADHAVA REDDY(SC FOR APSRTC) Counsel for Respondent No.3: MR. RESU MAHENDER REDDY The Court made the following: ORDER: In this writ petition, the tender process initiated by the Andhra Pradesh State Road Transport Corporation (for short ‘the Corporation’) for appointment of agents for display of advertisements pertaining to Metro Express and Metro Deluxe Buses in Hyderabad City Zone under “Swiss Challenge System”, is called in question. The petitioner is an advertising agency and so is respondent No.3. The Corporation issued notification on 16.01.2009 inviting tenders for the above-mentioned purpose, for which, it has divided the area into two zones, namely, Hyderabad City Zone and Hyderabad Rural Zone. Hyderabad City Zone is further divided into two categories, namely, (1) City Ordinary and Pallevelugu Buses and (2) Metro Express and Metro Deluxe Buses. In respect of the latter category, it has introduced “Swiss Challenge System”. The petitioner questioned the method evolved by the Corporation for Metro Express and Metro Deluxe Buses on the sole ground that no innovative system was evolved by respondent No.3 and therefore, adoption of the said system by the Corporation was intended only to help respondent No.3 to get the contract. In the counter-affidavit filed by respondent No.1, it is inter alia averred that a pre-bid meeting was conducted on 04.12.2008 by the Corporation with various advertising agencies exclusively on the display of advertisements on buses for Hyderabad City Zone; that the petitioner along with other advertising agencies including respondent No.3 attended the said meeting; that after completion of the said meeting, the Corporation requested all the participants to submit their proposals under “Swiss Challenge System” for both the categories by 11.12.2008 and that in response to the said request, proposals were received from four agencies including respondent No.3. As regards the petitioner, it is averred in the counter, it made certain suggestions for clubbing Metro Express, Metro Deluxe and City Ordinary into one group and method of quoting should be in lump sum for all the buses instead of quoting per bus or per square foot. Thereafter, the Corporation analysed the proposals of the four proponents and found the rates offered by respondent No.3 as highest for Swiss Challenge System. It is further averred in the counter-affidavit that the petitioner’s right to submit its own offer under the Swiss Challenge System or to challenge the offer of respondent No.3 by quoting higher rates has never been curtailed. At the hearing, Sri V.V.Anil Kumar, learned counsel for the petitioner reiterated the averments contained in the affidavit and stated that since the method of advertisement proposed by the Corporation is not innovative, there is no need for the Corporation to adopt “Swiss Challenge System” by dividing the City Zone into two categories. He further stated that the Corporation had created a separate category for Metro Express and Metro Deluxe Buses only to ensure that respondent No.3 is awarded with the contract by introducing a new system. The learned counsel placed reliance on the literature downloaded from the Internet on the Swiss Challenge System and particularly, the following portion. “As the name itself suggest Swiss Challenge System is a new bidding process to help private sector initiative in core sector projects. It’s an offer made by the original proponent to the government ensuring his process to be best (in terms of effectiveness including both the factors cost and time) by his initiative as a result of his own innovative approach or on the demand of the government to perform certain task. The Swiss challenge system like the bonus system, further allows third parties to make better offers (challenges) for a project during a designated period with simple objective to discourage frivolous project, or to avoid exaggerated project development costs. Then accordingly, the original proponent gets the right to counter-match any superior offers given by the third party.” The law is settled regarding judicial intervention by the Constitutional Courts with the tender process. Except in cases of irrationality, mala fides and patent arbitrariness, the Courts would not exercise the power of judicial review to scuttle the tender process. While restating the settled legal position, the Supreme Court in Siemens Public Communication Networks Pvt. Ltd. and another v. Union of India and others [1] , on which Sri K.Madhava Reddy, learned Standing Counsel for the Corporation placed reliance, stated in paragraph 14 as under: “The law relating to award of contract by State and public sector corporations was discussed in Air India Ltd. v. Cochin International Airport Ltd {(2000) 2 SCC 617} and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process, the Court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should interfere.” On a consideration of the case in its entirety, I am of the view that the petitioner failed to make out a case for interference of this Court with the tender process. Though a vague plea of mala fides is raised by the petitioner, it has failed to explain the nexus between the Corporation and respondent No.3 and the reason for the Corporation to go out of its way to formulate a new method of awarding the contract in order to help respondent No.3. As held by the Supreme Court in E.P.ROYAPPA v. STATE OF TAMILNADU[2], while it is very easy to make allegations of mala fides, it is difficult to substantiate and prove the same. The petitioner has not filed any material whatsoever to drive home its allegation that the Swiss Challenge System being adopted by the Corporation was intended only to benefit respondent No.3. In my considered opinion, the decision of the Corporation to award contract in favour of respondent No.3 under Swiss Challenge System does not suffer from any illegality, arbitrariness or mala fides warranting interference of this Court under Article 226 of the Constitution of India. For the above-mentioned reasons, the writ petition fails and is accordingly, dismissed. C.V.NAGARJUNA REDDY, J 10th JUNE, 2009. kvni [1] 2009 (1) SCJ 634 [2] AIR 1974 SC 555