M/s. Laxsan Associates, Bhubaneswar Vs State Of Odisha & Ors

Dr. B.R. Sarangi, J

1. M/s  Laxsan  Associates,  a  partnership firm, has filed this writ petition through its Managing Partner seeking to quash the Annexure-1 dated 06.10.2023, by which it has been communicated that its financial bid has not been considered as its performance relating to deployment of manpower in RTO offices earlier was not satisfactory and it has not deposited statutory dues in respect of manpower supplied.

2. The factual matrix of the case, in brief, is that opposite party no.3-Transport Commissioner, Odisha State Transport Authority invited public tender vide RFP Reference No.LTR No.LXVI-9/23-10547/TC dated 18.07.2023 for “Selection of IT Service provider for executing driving license & registration certificate related services, etc. for office of the Transport Commissioner, Odisha and its sub-ordinate offices for a period of one year”. The mode of submission of proposals was physical. The last date of submission of proposals was 10.08.2023 and opening of technical proposals was 11.08.2023. It was mentioned that date and time of opening of the price proposals will be communicated later to the technically qualified bidders at e-mail ID provided by them. As regards method of selection, it was mentioned as “Least Cost Method (L1 selection).

2.1. The petitioner, having satisfied all the criteria as per RFP, participated in the tender process and the technical evaluation committee selected the bid of the petitioner. In the financial bid, the petitioner was L1 bidder, but, opposite party no.4, vide letter dated 06.10.2023 under Annexure-1, communicated that its financial bid was not considered as its performance relating to deployment of manpower in RTO offices earlier was not satisfactory and it has not deposited statutory dues in respect of manpower supplied.

2.2. Opposite party no.4, vide letter dated 17.01.2023, intimated all the service provider agencies that a meeting will be held on 20.01.2023 at Bhubaneswar stating that the Chief Minister will take a review meeting on the performance of all the manpower service provider agencies providing manpower and requested to attend the meeting. In the said meeting, 18 service provider agencies, including the petitioner, took part. But it was intimated that the performance of the petitioner was not satisfactory. It is submitted that if the petitioner’s performance was not satisfactory relating to the deployment of manpower in RTO Offices earlier, then, while calling the tender on 18.07.2023, this clause should have been included so that in pre-bid meeting the petitioner could have clarified the same. Apart from the same, pursuant to letter dated 06.10.2023, the petitioner clarified that the reason given, that it has not cleared the statutory dues, is not correct and it has cleared all statutory dues in respect of the deployment made in the office and in support of the same it has filed a clearance certificate from the Provident Fund Authority. Therefore, disqualification of the financial bid submitted by the petitioner, as communicated vide letter dated 06.10.2023, cannot be sustained in the eye of law. Hence, this writ petition.

3. Mr. P.C. Nayak, learned counsel appearing for the petitioner contended that the petitioner, having satisfied the requirement of the RFP issued under Annexure-2, participated in the tender process and qualified in the technical evaluation. Thereafter, in the financial bid though it was L1 bidder, its financial bid was not accepted on the flimsy ground that its past performance relating to deployment of manpower in RTO offices was not satisfactory and it has not deposited statutory dues in respect of manpower supplied. It is further contended that while participating in the tender in pre bid meeting if the said question was raised, the petitioner could have clarified the position with regard to past performance relating to deployment of manpower in RTO offices. It is further contended that so far as clearance of statutory dues is concerned, the petitioner has cleared all the EPF and allied dues vide Annexure-5. When there are no statutory dues to be paid by the petitioner, the authority has misconstrued in issuing letter dated 06.10.2023 and rejecting the financial bid of the petitioner. It is further contended that since the letter dated 06.10.2023 under Annexure-1 has been issued without specifying with regard to violation of any condition of the tender, the same cannot be sustained in the eye of law. Thereby, the decision making process of the authority being arbitrary, unreasonable and contrary to the provisions of law, this Court can exercise power of judicial review to prevent arbitrariness and unreasonableness in the decision of the authority concerned. To substantiate his contentions, he has relied upon the judgments in Mohabir Auto Stores v. Indian Oil Corporation, AIR 1990 SC 1031 : (1990) 3 SCC 752; Reliance Energy Ltd. and Anr. v. Maharashtra State Road Development Corpn. Ltd. & Ors, (2007) 8 SCC 1; Adani Gas Limited v. Petroleum and Natural Gas Regulatory Board & Ors., (2020) 4 SCC 529; M/s. D.K. Engineering & Construction v. State of Odisha & Anr., 2016(II) ILR-CUT-515; M/s. Famous Security Services v. State of Odisha, AIR 2021 (Odisha) 57 and Mihan India Ltd. v. GMR Airports Ltd., AIR 2022 SC 2745.

4. Mr. P.P. Mohanty, learned Addl. Government Advocate appearing for the State-opposite party no.1 contended that since the matter relates to opposite parties no.2 to 4 and in order to justify their action they have filed their counter affidavit, opposite party no.1 has not got any effective role to play.

5. Mr. Pravakar Behera, learned Standing Counsel appearing for opposite parties no.2 to 4 vehemently contended that pursuant to the RFP issued by opposite party no.3 under Annexure-2, the bidders submitted their bids and the tender committee made evaluation. After evaluation of qualifying criteria and opening of the financial bid, the tender committee in its meeting held on 07.09.2023, taking into consideration the past unsatisfactory performance of the petitioner as reported by the RTOs, took decision not to consider the proposal/bid of the petitioner. It is further contended that as per clause-6.10, though the petitioner was found qualified in technical bid and in the financial bid it stood first lowest, but, as its performance with regard to execution of the contract in respect of providing manpower services was not satisfactory, pursuant to letter dated 01.02.2023 issued by the RTO, Gajapati and the letter dated 09.03.2023 issued by RTO, Nuapada, its bid was not accepted. Besides, from the appraisal proposal sent to the Government earlier, vide letter dated 03.02.2023, it was ascertained that the past performance of the petitioner was poor. Accordingly, the tender committee decided not to consider the bid of the petitioner. It is further contended that since the petitioner had not paid statutory dues, its bid was also not accepted. Even if the petitioner had quoted lowest price that ipso facto would not give a right that its bid would be accepted. In the above premises, non-acceptance of the bid submitted by the petitioner cannot be termed as arbitrary exercise of power so as to cause interference of this Court in exercise of power under judicial review. Thereby, he seeks for dismissal of the writ petition. To substantiate his contentions he has relied upon the decisions rendered in Raunaq International Ltd. v. IVR Construction Ltd., (1999) 1 SCC 492; Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818 and Bharat Cooking Coal Limited v. AMR Dev Prabha, (2020) 16 SCC 759.

6. This Court heard Mr. P.C. Nayak, learned counsel appearing for the petitioner; Mr. P.P. Mohanty, learned Addl. Government Advocate appearing for the State-opposite party no.1; and Mr. Pravakar Behera, learned Standing Counsel appearing for opposite parties no.2 to 4 in hybrid mode. Pleadings have been exchanged between the parties and with the consent of learned counsel for the parties, the writ petition is being disposed of at the stage of admission.

7. On careful perusal of the records, this Court finds that opposite party no.3 invited tender for “Selection of IT Service provider for executing driving license & registration certificate related services, etc. for office of the Transport Commissioner, Odisha and its sub-ordinate offices for a period of one year”. The relevant provisions of the RFP read thus:-

“6. Instruction To Bidders

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6.1 Preparation of Proposal

Proposals shall include “Technical Proposal” and “Financial Proposal"

The content of proposal should be as below:

I. Cover Page:

• Super scribed with “Selection of IT service provider for executing Driving License & Registration Certificate Related Services, etc. for office of the Transport Commissioner, Odisha and its sub-ordinate offices for a period of one year.” and bidders name and address.

• It shall be included in both the envelops of “Part 1: Technical Proposal” and “ Part 2” :Financial Proposal”.

II. Technical Proposal Develop:

• Super scribed with “Technical Proposal”, RPF Name & Number along with bidder’s name and Due date & time of submission.

• DD for Tender fee ( Mandatory)

• Bid Security Declaration.

• EMD (Mandatory)

• Self- Declaration

• Technical supporting document

• Compliances to the Qualification Criteria

• Service Specification datasheet

• Any other document required as per this RFP.

It is to be noted that the Technical Proposal Envelope shall contain all the documents related to eligibility criteria, terms, and conditions of tender document etc. i.e. complete tender documents except Price Bide part.

The successful bidder needs to provide the bid documents with proper binding and index. The page number should be mentioned clearly against the documents. Failing of these may lead to disqualification.

III. Financial Proposal Envelope:

• The bidders needs to submit the Financial Proposal (Price Bid) as per the given format in Annexure-11.

• It is to be oted that the Financial Proposal Envelope shall contain only Prices and no conditions i.e. deviations/ assumptions /stipulations/ clarifications /comments/ any other request whatsoever. Conditional offers shall be rejected.

6.2. Qualification Criteria

Office of the Transport Commissioner, Odisha shall carry out the technical evaluation for selection of eligible bidder. The bidder should meet the following qualification criteria.

Sl. No.	Basic Requirement	Qualification Criteria	Documents to be Submitted
1.	Legal Entry	The    bidder    should    be:    A company registered  under  the Indian         Companies         Act, 1956/2013 or LLP firm under LLP  provisions 2008, or Partnership   Firm   Should   be registered with GST, or Proprietorship  Firm  Should  be registered with GST	·         Certification   of   incorporation/ Partnership firm and Articles of Association  in  case  of   limited company. ·         Certificate   of   Registration   for GST.
2.	Annual Turnover	The    bidder    must    have    an average    annual   turnover   in India  of  at  least  Rs.7.5  crores during        the        last        three completed financial years ( FY 2019-20,     FY     2020-21,     FY 2021-22)	·         Audited  Financial Statements for  last  3  financial  years  of bidder. ·         Certificate  from  the  Statutory Auditor/  Chartered Accountant  clearly  specifying the  average  annual  turnover of  the bidder for the  specified years.
3.	Experience   of bidder	The      bidder      should      have experience    of     providing     IT support  services  on  man-hour basis  for  minimum  2  projects to       any       Central/       State Government     Department     or Central /State Public Sector Undertakings (PSUs) or any other Government (Central/ State/ PSU/ ULBs/ Smart Cites SPV) in India in last Five (5) years on the due date of proposal submission.	·         Copy of relevant Work Order and ·            Completion Certificate from Authority ·              Ongoing    Similar    Projects with performance Certificate   from   Authority and  the  project  should  be operational   for   more   than two years.
4.	Non- Blacklisted Undertaking	Self-declaration by the bidder confirming that they have not been blacklisted by any Central/State Government Department or Central/State Public Sector Undertakings (PSUs) or any other Government   (Central/ State/PSU/      ULBs/      Smart Cites SPV) Organization in India as on proposal due date.	Self-declaration     by     the     bidder signed        by        the        authorized signatory
5.	Power            of Attorney	Power of Attorney in favour of person who has signed the Tender documents.	On the bidder letter head
6.	Tender Fee	Tender Fees as specified in Bid Data sheet	In shape of  DD  drawn  in favour of Transport Commissioner, Odisha, Cuttack     from     any    rationalized bank.
7.	E.M.D. Fee	E.M.D. Fees as specified in Bid Data sheet	In shape of  DD  drawn  in favour of Transport Commissioner, Odisha, Cuttack     from     any    rationalized Bank.
8.	Mandatory Requirement	· Valid PAN Number · Income Tax Return	Self attested Certificate Copy
9.	ISO Certification	ISO 9001-2022	Self attested valid Certificate Copy
10.	Presence       in Odisha	The    Bidder    must    have    a registered  project  office/office in Odisha in last 5 years	Self  attested  valid  Certificate  copy of Office registration
Complete tender document with each page signed and stamped by bidder.

The bidder must submit all certified and authenticated documentary proof for meeting the qualification criteria and technical qualified bidders shall be considered for opening of their price proposal. Technically qualified bidders have no right to claim for award of the work. Office of the Transport Commissioner, Odisha reserves the right to cancel or award the work at any point of time.

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6.7 Disqualification

Even if the bidder(s) meets the guidelines / terms and conditions as set forth in this RFP document, Office of the Transport Commissioner, Odisha at its discretion, may disqualify any bidder(s) if:

• The bidder has been blacklisted by Office of the Transport Commissioner , Odisha or GoI or any State Government or Central Government or any Government agency / Department in India as on Proposal Submission Due Date; or

• The bidder has made misleading or false representation in the forms, statements and attachments submitted.

• Any attempt by a bidder to obtain confidential information, enter into unlawful agreements with competitors or influence the committee or the Contracting Authority during the process of examining, clarifying, evaluating and comparing Tender shall make the Tender submitted by those Vendors liable for rejection/disqualification.

xxx xxx xxx

6.10 Acceptance / Rejection of Tender

• Office of the Transport Commissioner, Odisha does not bind itself to accept the lowest proposal.

• Office of the Transport Commissioner, Odisha also reserves the right to accept or reject any proposal in part or full without assigning any reason whatsoever.

• Office of the Transport Commissioner, Odisha reserves absolute right to reject any or all the bids at any time solely based on the past unsatisfactory performance by the bidder(s) the opinion/decision of Office of the Transport Commissioner, Odisha regarding the same shall be final and conclusive.

xxx xxx xxx

7. Selection Criteria 7.1 Evaluation Process

The proposals submitted by the bidders will be evaluated on parameters as described in this RFP document. The bidder must get at least 60% of the maximum score i.e. out of total @100 marks, in the evaluation process in order to qualify for opening of the commercial/financial evaluation.

7.2 Evaluation Criteria

Sl. No	Criteria	Parameter	Maximum Mark	Supporting Document	Marking Criteria
A. Company Competency
A1	Company Competency	Minimum five years of experience of the bidder in providing services for any Central/State Government Department or Central/State Public Sector Undertakings (PSUs) or any other Government (Central/ State/ PSU/ ULBs/ Smart Cites SPV) Organization in India as on proposal due date.	5	Work              Order/ Authority Certificate/Agreem ent Copies/ Completion Certificate clearly indicating             the scope of work and year.	· 5 Years: 3 Marks · More than 5 years         and less than  8  years: 4 Marks ·  More than 8 years:         5 Marks
A2	Certificate	ISO 9001:2011-2023	5	Valid    Certification Copy	5 Marks
B. Financial Competency
B1	Average Annual Turnover	Average Annual Turnover of the Bidder during last three Financial Years-2019-20, 2020-21, 2021-22		Bidder               shall submit: ·  Audited statement for last 3 financial years. · Certificate from the Statutory auditor / Independent Chartered Accountant with seal and signature clearly specifying the average  annual  turnover for the specified years
C. Domain Experience Compliance
Sr. No	Criteria	Parameter	Maximum Mark	Supporting Document	Marking Criteria
C1	Relevant experience in similar assignments	The bidder must have executed similar nature of project for any Central/State Government Department or Central/State Public Sector Undertakings (PSUs) or any other Government (Central/ State/ PSU/ ULBs/ Smart Cites SPV) Organization in India as on proposal due date. AND Yearly billing of 2 projects must not be less than 1 Cr together.	40	Work Order/Completion Certificate from Authority. Consolidated Yearly billing   invoices   as per Annexure 8	· 2Similar Projects = 25 Marks ·  For each additional project            5 marks will be awarded subject to maximum     of 15 marks
C2	Relevant experience in Odisha	The Bidder must have experience of working with Odisha Government as on Proposal due date	10	Work Order/Completion Certificate from Authority. Consolidated Yearly billing   invoices   as per Annexure 8	·            1 Project = 6 Marks ·  For each additional project 2 mark will be awarded subject to maximum of 4 marks.

Important Note:

1- The Bidder needs to submit checklist with indexing, failing of which may lead to disqualification.

2- The Bidder must submit all required document with page number and the checklist.

7.3 Financial Bid Evaluation

The Bidders quoting the lowest financial quote (L1) shall be the Preferred Bidder. For avoidance of doubt, it is clarified that in case L1 bidder fails to provide required services within defined time lined, the authority reserves right to invite L2 bidder to provide required services in terms of this RFP.”

8. Pursuant to the aforesaid tender call notice, all total six bidders participated in the tender process, out of which five bidders, including the petitioner, were qualified for having scored more than 60% marks in terms of the RFP and became eligible for opening of financial bid. Accordingly, their financial bids were opened and they were found to have quoted their prices to the following effect:-

	Name of the Bidder	Cost of Man-hour to be charged by the Bidder (In Rupees)
1	M/s. Compuet Lab. Bhubaneswar	Rs. 97.00
2	M/s Laxsan Associates Bhubaneswar	Rs. 77.059
3	M/s R.R. Enterprises, Bhubaneswar	Rs.75.09
4	M/s Care Security & Allied Service, Bhubaneswar	Rs.77.45
5	M/s. Swarnadevi Agency, Cuttack	Rs.16,028.29 (mentioning per month per person)

9. After evaluation of qualifying criteria and opening of financial bids, the tender committee in its meeting held on 07.09.2023 taking into consideration the past unsatisfactory performance of the petitioner, as reported vide letter dated 01.02.2023 issued by the RTO, Gajapati and letter dated 09.03.2023 issued by RTO, Nuapada, took decision not to consider the proposal/bid of the petitioner. Besides, from the appraisal proposal sent to the Government earlier vide letter dated 03.02.2023 it was ascertained that the past performance of the petitioner was poor. Accordingly, the tender committee decided not to consider the bid of the petitioner. The petitioner, being engaged as service provider in seven RTO offices earlier, they reported regarding payment of lowest wages and statutory dues. So far as statutory dues are concerned, reliance has placed by the petitioner on Annexure-5, wherein observation and also remarks have been given to the following effect:-

“OBSERVATION

Establishment could not produce document for the inspection in the stipulated time and requested for time for production of documents. On verification of records produced by the Establishment before the undersigned, it is observed that the Establishment has deposited EPF and allied dues up to the month of June 2023.

REMARK

1-The employer is advised to facilitae the filing of e-nomination by all its employees at the earliest.

2-It is also advised to deposit the EPF and allied dues within the stipulated time to avoid payment of penalty and interest u/s 14B & 7Q of the Act.”

10. On bare reading of the communication made by the EPF Organization to the petitioner, it is made clear that the petitioner was advised to facilitate the finding of e-nomination by all the employees and also advised to deposit EPF and allied dues to be paid under Section-14B and 7Q of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Such instructions were issued, as the petitioner had not deposited the statutory dues and was lacking in its responsibility to comply with the statutory requirements. As a consequence thereof, communication was made to the petitioner vide Annexure-1 dated 06.10.2023 assigning reason as to why its bid was not accepted, even though it was L1 bidder in the process of bidding, keeping in view clause-6.10 of the RFP.

11. It may be noted that in exercise of power of judicial review in respect of contracts entered into on behalf of the State or instrumentality of the State, such as Corporation, the Court prima facie concerns whether there has been any infirmity in the decision making process. In that case, the Court can examine whether the decision making process was reasonable, rationale not arbitrary and not violative of Article-14 of the Constitution of India.

12. In Erussion Equipment and Chemicals Ltd. v. State of West Bengal, AIR 1975 SC 266, the Apex Court held as follows:

“When the Government is trading with the public, ‘the democratic form of Government demands equality and absence of arbitrariness  and  discrimination  in  such transactions’. The activities of the Government  have  a  public  element  and, therefore,  there  should  be  fairness  and equality. The State need not enter into any contract with anyone, but if it does so, it must do  so  fairly  without  discrimination  and without unfair procedure.”

13. In Ramana Dayaram Shetty v. I.A. Authority of India, AIR 1979 SC 1628, the Apex Court held as follows :

“It is true that the Government may enter into a contract with any person but in so doing  the  State  or  its  instrumentalities cannot act arbitrarily. The tenders were to be adjudged on their own intrinsic merits in accordance with the terms and conditions of the tender notice.”

14. In Food Corporation of India v. Kamdhenu Cattle Feed Industries, AIR 1993 SC 1601, the Apex Court held as follows:

“In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant  facet.  There  is  no  unfettered discretion in public law: A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is ‘fairplay in action’.”

15. In Sterling Computers Ltd. v. M & N Publications Ltd. (1993) 1 SCC 445, the apex Court observed as under:-

“18. 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.”

16. In Tata Cellular v. Union of India, (1994) 6 SCC 651 : AIR 1996 SC 11, the apex Court, referring to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, held to the following effect:-

“(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 facts 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.”

The apex Court also noted that there are inherent limitations in the exercise of power of judicial review in contractual matter. As such, it was 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. It was further 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.

17. In Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617, the apex Court, while summarizing the scope of interference as enunciated in several earlier decisions, held as follows:-

“7. … 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 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.”

18. In Master Marine Service (P) Ltd. v. Metcafe & Hodgkinson (P) Ltd, (2005) 6 SCC 138, the apex Court held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favourtism. However, there are inherent limitations in exercise of that power of judicial review.

19. The scope of judicial review has also been taken into consideration elaborately in Jagdish Mandal v. State of Odisha, (2007) 14 SCC 517. In paragraph-22 of the said judgment, the apex Court held as follows:-

“…………..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 blacklisting 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 action.”

Similar  view  has  also  been  reiterated  in Michigan Rubber (India) Limited v. State of Karnatak, (2012) 8 SCC 216 and Maa Binda Express Carrier v. North East Frontier Railway, (2014) 3 SCC 760.

20. In Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited, (2016) 16 SCC 818, the apex Court held that the constitutional courts are concerned with the decision making process. A decision if challenged (the decision having been arrived at through a valid process), the constitutional Courts can interfere if the decision is perverse. However, the constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not substitute its view for that of the administrative authority.

21. In Vidarbha Irrigation Development Corporation v. M/s Anoj Kumar Agarwalla), (2020) 17 SCC 577, the apex Court, in paragraph-16 of the judgment, held as under:-

“16. It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court.”

22. In Bharat Cooking Coal Limited (supra), the apex Court in paragraph-34 of the said judgment held that “it is thus imperative that in addition to arbitrariness, illegality or discrimination under Article 14 or encroachment of freedom under Article 19(1)(g), public interest too is demonstrated before remedy is sought. Although the threshold for the latter need not be high, but it is nevertheless essential to prevent bypassing of civil courts and use of constitution avenues for enforcement of contractual obligations.”

23. In Reliance Energy Ltd. (supra), the apex Court in paragraph-39 of the said judgment held as follows:

“39. In Reliance airport Developers (P) Ltd. v. Airports Authority of India the Division bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of “judicial review” cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms.”

24. In Mihan India Ltd. (supra), the apex Court in paragraphs-43 and 47 of the said judgment held as follows:

 “43. Bare perusal of the above stated case-law in light of the facts of the instant case makes it clear that merely having the power of rejection of bids does not entitle authorities to exercise the said power arbitrarily. While discussing the applicability o f Clauses 2.16.1, 3.3.1 and 3.3.5, it is made clear that in pre-bid procedure prior to acceptance, the bidding process may be annulled otherwise after issuance of LoA, the annulment cannot be done.

47. Analyzing the facts of this case in the light of the judgments in Dinesh engineering (supra) and Shishir Reality (supra), after issuing the LoA in terms of Clause 3.3.5 of RFP and declaring GAL as concessionaire as per Clause 3.3.6, issuing letter of annulment of bidding process on the basis of the meeting of PMIC on 14.10.2019, which directed for re-tendering of the bid, is completely an arbitrary exercise of power, contrary to the provisions of RFP and violative of Article 14 of the Constitution of India.”

25. In Adani Gas Limited (supra), the apex Court in paragraph-56.11 of the said judgment held as follows:

“50.11. This Court is justified in reviewing the process adopted by the Board in evaluating the bids for the ninth round of CGD bidding. It is well settled that judicial review cannot be denied even in contractual matters to prevent arbitrariness.”

26. In view of the above cited law laid down by the apex Court, so far as the power of the Court to interfere with the conditions of tender in exercise of judicial review is concerned, there is no iota of doubt that when there is arbitrariness and unreasonableness in the matter of decision making process by the tendering authority, the Court can interfere. But, here is a case where in adherence to the tender conditions, the tendering authority has exercised its power, more particularly, clause-6.10 which gives power to the tendering authority to reject any or all the bids at any time solely based on the past unsatisfactory performance by the bidders. On the basis of the materials available, the tender committee came to a definite conclusion that past performance of the petitioner was unsatisfactory and, therefore, even if it quoted lowest price, the same cannot be accepted.

27. In Raunaq International Ltd. (supra), the apex Court in paragraph-16 of the said judgment held as follows:-

“16. It is also necessary to remember that price may not always be the sole criterion for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert committee’s special knowledge plays a decisive role in deciding which is the best offer. Price offered is only one of the criteria. The past record of the tenderers, the quality of the goods or services which are offered, assessing such quality on the basis of the past performance of the tenderer, its market reputation and so on, all play an important role in deciding to whom the contract should be awarded. At times, a higher price for a much better quality of work can be legitimately paid in order to secure proper performance of the contract and good quality or work – which is as much in public interest as a low price. The court should not substitute its own decision for the decision of an expert evaluation committee.”

28. In Jagdish Mandal (supra), the apex Court in paragraph-24 of the said judgment held as follows:

“24. …… The committee did not send show- cause notice to the fifth respondent before rejecting the TD passbook and consequently the tender, as Clause 3.5.18 of the Code makes it clear that acceptance of any tender is entirely at the discretion of the accepting authority and no tenderer can require the authority to show cause for rejection of the tender.”

29. Therefore, the bid submitted by the petitioner has been rejected on the ground of non-satisfactory performance in the past relying upon two documents, which have been issued by the RTO, Gajapati and RTO, Nuapada and also due to non-compliance of the requirement by depositing statutory dues.

30. So far as the case of Mihan India Ltd. (supra) is concerned, on which learned counsel for the petitioner has placed reliance, the same is distinguishable from the facts and circumstances of this case, as in the said case direction was given for retendering in arbitrary exercise of power contrary to the provisions of the RFP, which violated Article 14 of the Constitution of India. Therefore, the said ratio cannot have any application to the present case.

31. In view of such position, this Court is of the considered view that rejection of the bid of the petitioner, even though lowest one, is well justified in view of clause-6.10 of the RFP. Therefore, there is no error in the decision making process in rejecting the bid of the petitioner so as to warrant interference of this Court in exercise of the power under judicial review.

32. In the result, therefore, the writ petition merits no consideration and the same is hereby dismissed. There shall be no order as to costs..

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