IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.12199 of 2010 1. M/S HOLISTICK INDIA LIMITED, A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT HAVING ITS REGISTERED OFFICE AT C-117, SECTOR-II, NOIDA, DISTT-GAUTAM BUDDHA NAGAR, UTTAR PRADESH, PIN CODE-201301, THROUGH ITS CONSTITUTED ATTORNEY , MUKUL AGRAWAL, S/O SHRI SUBHASH CHANDRA AGRAWAL, RESIDENT OF 305, SHILA RESIDENCY, EAST BORING CANAL ROAD, P.S. BUDDHA COLONY, P.O.G.P.O., TOWN & DISTT-PATNA --- PETITIONER Versus 1. THE STATE OF BIHAR , THROUGH THE CHIEF SECRETARY GOVERNMENT OF BIHAR, PATNA 2. THE PRINCIPAL SECRETARY, DEPARTMENT OF MINES & GEOLOGY GOVERNMENT OF BIHAR, VIKAS BHAWAN, PATNA 3. THE JOINT SECRETARY, DEPARTMENT OF MINES & GEOLOGY GOVERNMENT OF BIHAR, VIKAS BHAWAN, PATNA 4. THE DEPUTY SECRETARY, DEPARTMENT OF MINES & GEOLOGY GOVERNMENT OF BIHAR, VIKAS BHAWAN, PATNA 5. THE UNDER SECRETARY, DEPARTMENT OF MINES & GEOLOGY GOVERNMENT OF BIHAR, VIKAS BHAWAN, PATNA 6. M/S HOLOFLEX LTD. 92C/1, SAHAPUR COLONY, BLOCK-J, NEW ALIPORE, KILKATA- 700053-------------------------------------------RESPONDENTS ----------- For the petitioner :Mr.Suraj Samdarshi, Advocate For the respondents 2-5:Mr.P.K.Shahi, Advocate General Mr.J.K.Sinha, AC to G.A.10 For the Mines Dept. :Mr.V.M.K.Sinha, Advocate For the respondent No.6:Mr.Raj Nandan Prasad, Advocate ----- 6. 25.10.2010 Heard learned counsel for the petitioner, learned Advocate General for the State and for the respondent No.6. The petitioner seeks quashing of the tender advertisement dated 12.7.2010 issued by the Department of Mines & Geology, Government of Bihar for supply of hologram to be affixed on mineral transit pass and further 2 for a direction for issuing of fresh tender without changing the terms and conditions of the earlier tender. Earlier a tender had been floated by the said Department for supply of security hologram to be affixed on mineral transit pass in the year 2006. The petitioner company having participated in the same was declared successful and the contract was awarded to it to supply the same. Again on 5.4.2010 fresh tenders were invited from reputed Indian security hologram manufacturers for the master origination, manufacturers for supply of security holograms and the terms and conditions of the tender remained almost the same which were in the previous tender but additional security measures were required, such as D.P.I. being enhanced from 3000 to 6000, and an additional clause for providing samples along with technical and commercial bid with three different art works were required to be produced along with the tender document, one with complete specification and the other with all different 13 mandatory features in separate samples. The petitioner along with respondent No.6 and another firm filed the tender papers in which technical bid was opened on 28.4.2010. The petitioner wrote to the 3 respondent authorities stating that the respondent No.6 does not fulfil all the terms and conditions of the tender upon which by letter dated 7.5.2010 the respondent No.6 M/s. Holoflex Ltd. was directed to clarify the objection raised. Subsequently the tender process was cancelled and a fresh tender notice dated 12.7.2010 was issued. In the said tender notice by clause 4 of the terms and conditions the requirement of experience of five years was reduced to four years, the further requirement regarding bills and invoices as evidence of the machines installed to be appended to the tender documents was also deleted permitting the tenderer to file relevant documents in that regard and further only one sample showing all the 13 specifications together had to be submitted and not separately. Aggrieved by the said changes in the tender conditions the petitioner has approached this Court. Learned counsel for the petitioner submits that only those changes have been made in the tender notice with respect to which the petitioner in his earlier letter had pointed shortcomings in the tender papers of respondent No.6. It is thus submitted by him that the entire attempt of 4 the respondent authorities is to give the benefit to the respondent No.6 in the matter and thus the actions are biased and violative of Article 14 of the Constitution of India. In support of the aforesaid stand learned counsel for the petitioner relies upon a decision of the Supreme Court in the case of Meerut Development Authority vs. Association of Management Studies and another : (2009) 6 SCC 171, in paragraph-26 of which it has been held as follows : “26. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.” Learned counsel also relies upon other similar decisions of the Supreme Court on this point. Learned Advocate General appearing for the State, on the other hand, submits that it is evident from perusal of the earlier tender notice that at two different places the 5 requirement for experience was stated as five years and four years and thus there was a contradiction in the tender notice and in the said circumstance the only alternative before the respondents was to cancel the tender process and go for a fresh tender process. It is urged by him that with respect to the said matter the Technical Committee in its meeting dated 23.6.2010 upon noticing the said contradiction recommended the three changes to be made and the cancellation of the earlier tender and accordingly the fresh tender notice has been issued. It is submitted by learned Advocate General that the changes were necessitated so that there was a wider choice available to the State respondents in the selection of security hologram manufacturer on the basis of the tender process so as to prevent any manipulation in favour of any person. It is contended that the same does not in any way affect the quality of the hologram to be obtained through the tender process and thus it is not open to challenge by the petitioner as it is within the domain of the State respondents to lay down the terms and conditions of the tender. 6 It is urged that so far as the condition of four years experience is concerned the same was also there in one part of the earlier notice inviting tender and thus no objection can be raised by the petitioner in that regard. It is further submitted that so far as the evidence regarding the purchase of machines is concerned the same has not been given up rather the tenderer has been permitted to produce any relevant document to show that the machines had been purchased at a particular time so as to bring him within the requirement of four years experience as per the tender notice. It is also submitted that the requirement of 13 features has not been given up in the fresh tender notice and the only change that has been made is that a single sample is to be produced incorporating the 13 features. It is urged by the learned Advocate General that the award of a tender is essentially a commercial transaction even if it is by the authorities of the State and the considerations for the same are commercial in nature. The only requirement is that the authorities should not act unreasonably or arbitrarily and the courts intervene in the matter of tender only if a larger public interest is involved and not otherwise. In support of the same he relies upon a 7 decision of the Supreme Court in the case of Air India Ltd. vs. Cochin International Airport Ltd. and others : (2000) 2 SCC 617, paragraph-7 of which is quoted below : “7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India, Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, CCE v. Dunlop India Ltd., Tata Cellular v. Union of India, Ramniklal N. Bhutta v. State of Maharashtra and Raunaq International Ltd. v. I.V.R. Construction Ltd. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to 8 all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power 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 intervene.” Learned counsel for the respondent No.6, while adopting the submissions of learned Advocate General, submits that respondent No.6 qualifies in all respects so far as the criteria laid down in the tender notice is concerned, the fresh tender notice does not in any way make any change in the essential criteria of the tender as laid down in the previous tender notice and the changes made are not substantial rather procedural. It is submitted by him that the petitioner is only interested in the exclusion of every other tenderer so that he may alone remain in the field for getting the contract. It is contended by learned counsel that from the various documents brought on the record in the counter affidavit filed on behalf of respondent No.6 it is evident that the respondent No.6 is fully competent in the field of 9 manufacture and supply of security hologram and has successfully competed for the same in various States and Union Territories. On a consideration of the entire facts and circumstances of the case, this Court finds sufficient force in the submission of learned Advocate General. It is true that the three tender conditions that have been changed in the fresh tender notice are those with respect to which the petitioner had raised an objection in the previous tender process but it is also clear that the earlier notice inviting tender contained a contradiction regarding the experience required which was stated as five years at one place and four years at another place; thus the respondent authorities had no choice but to go for a fresh tender. While doing so it was open to them to have fixed either five years experience criteria or four years and if they have decided to go for four years experience, the same cannot be held to be arbitrary and unreasonable and no objection can be raised by the petitioner on that count. So far as the other conditions are concerned, the same do not appear to have made any substantial difference in the tender conditions as admittedly the sample to be 10 produced is required to contain all the 13 features as per the previous notice. The non-supply of separate samples with respect to each of the features cannot be considered as such a matter which vitiates the fresh tender process. Similarly the requirement of the machines being at least four years old has not been given up but the evidence for the same has been broad-based by including any relevant document apart from the bills and invoices. Although it does appear that the tender condition has been changed so as to include the respondent No.6 but there appears to be substance in the submission by learned Advocate General that the main interest of the State respondents was to ensure that there was competition in the field and that the essential requirements have not been given a go-bye. Moreover, the tender conditions have not been changed so as to exclude the petitioner rather to include respondent No.6 who was otherwise qualified even under the previous tender and for the said reason it cannot be said to be unreasonable and arbitrary. In the case of Meerut Development Authority relied upon by learned counsel for the petitioner it has been clearly laid down that the Court 11 may interfere under writ jurisdiction in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. It is evident that the changes made in the fresh tender process do not have the effect of elimination of the petitioner from the tender process. Thus no benefit can be derived by it from the said decision. Thus on a consideration of the entire facts and circumstances of the case, this Court does not find any merit in the writ application. It is, accordingly, dismissed. (Ramesh Kumar Datta,J.) Spal/