Case: M/s. Shobikaa Impex Pvt. Ltd. &amp; Another Vs. Central Medical Services Society &amp; Others

compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;(vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint."22. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd and another, (2005) 6 SCC 138 , it has been held that the State 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 has been 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.23. In Jagdish Mandal v. State of Orissa and others, (2007) 14 SCC 517 , it has been ruled that 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.24. In Union of India and another v. International Trading Co. and another, (2003) 5 SCC 437 , it has been held that the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. It has been further opined that the meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case.25. In Jespar I. Slong v. State of Meghalaya and others, (2004) 11 SCC 485 , this Court stated that fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable.26. Keeping in view the aforesaid authorities, we have to consider whether the High Court has fallen into error by not interfering with the grant of contract in favour of the fourth respondent. As the factual analysis would reveal, the appellant No.1 had not filed an application for grant of registration. It was appellant No.2 who had filed it. Be that as it may, the decision dated 31.03.2015 was taken by the Registration Committee of CIB to approve the registration subject to the condition DAC granting permission for commercialization. That apart, the decision taken by the concerned authority, even if it is put on the website, despite the astute submission of Mr. Singh, would not tantamount to grant of registration certificate. The amendment was made, as we perceive, to clarify the position. We have already stated, even if the amendment was not brought in, the first respondent would have been in a position, by applying objective standards, to treat the appellants bid as non-responsive and non-compliant. The use of the word "must" adds a great degree of certainty to the same; it is a requisite parameter as thought of by the respondent No.1. The tender was floated for purchase which is needed for the nation. The first respondent along with respondent Nos.2 and 3 were taking immense precaution. In such a circumstance, needless to emphasize, public interest is involved. It cannot succumb to private interest. The action on the part of the respondent Nos.1 to 3 cannot be regarded as arbitrary or unreasonable. By no stretch of imagination it can be construed to be an act which is not bonafide or to have been done to favour the fourth respondent. Nothing has been pleaded that the fourth respondent is not eligible or qualified. In our considered opinion, the essential condition of tender being not met with, the tenderer, the appellants herein, were ineligible and the tender was non-responsive. That apart, the amendment was applicable to all. Additionally, the High Court in the first round of litigation had not held that the registration certificate granted on 31.03.2015 would enure to the benefit of the writ petitioners from the date of the decision of the registration authority, and it had rightly not said so. Judged from any angle, we do not perceive any substance in the grounds raised in this appeal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]22. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd and another, (2005) 6 SCC 138 , it has been held that the State 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 has been 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 theprocess, 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.23. In Jagdish Mandal v. State of Orissa and others, (2007) 14 SCC 517 , it has been ruled that 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.24. In Union of India and another v. International Trading Co. and another, (2003) 5 SCC 437 , it has been held that the basic requirement of Article 14 is fairness in action by the State, andin essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. It has been further opined that the meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case.25. In Jespar I. Slong v. State of Meghalaya and others, (2004) 11 SCC 485 , this Court stated that fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable.26. Keeping in view the aforesaid authorities, we have to consider whetherthe High Court has fallen into error by not interfering with the grant of contract in favour of the fourthrespondent. As the factual analysis would reveal, the appellant No.1 had not filed an application for grant of registration. It was appellant No.2 who had filed it. Be that as it may, the decision dated 31.03.2015 was taken by the Registration Committee of CIB to approve the registration subject to the condition DAC granting permission for commercialization. That apart, the decision taken by the concerned authority, even if it is put on the website, despite the astute submission of Mr. Singh, would not tantamount to grant of registration certificate. The amendment was made, as we perceive, to clarify the position. We have already stated, even if the amendment was not brought in, the first respondent would have been in a position, by applying objective standards, to treat the appellants bid ast. The use of the word "must" adds a great degree of certainty to the same; it is a requisite parameter as thought of by the respondent No.1. The tender was floated for purchase which is needed for the nation. The first respondent along with respondent Nos.2 and 3 were taking immense precaution. In such a circumstance, needless to emphasize, public interest is involved. It cannot succumb to private interest. The action on the part of the respondent Nos.1 to 3 cannot be regarded as arbitrary or unreasonable. By no stretch of imagination it can be construed to be an act which is not bonafide or to have been done to favour the fourth respondent. Nothing has been pleaded that the fourth respondent is not eligible or qualified. In our considered opinion, the essential condition of tender being not met with, the tenderer, the appellants herein, were ineligible and the tender wasThat apart, the amendment was applicable to all. Additionally, the High Court in the first round of litigation had not held that the registration certificate granted on 31.03.2015 would enure to the benefit of the writ petitioners from the date of the decision of the registration authority, and it had rightly not said so. Judged from any angle, we do not perceive any substance in the grounds raised in this appeal.