P.S. Mishra, C.J.@mdashHeard.
A tender notice for purchase of computers has been questioned by the petitioners - respondents on grounds, inter alia, that the conditions that the manufacturer, who may respond to the tender notice, should have at least five years experience in manufacturing the computers, and should have at least a turnover of rupees ten crores per year for preceding three years, are arbitrary and against the Government''s policy to encourage small scale industries.
2. Learned single Judge has accepted the contention and interfered with the said two conditions in the tender notice. Before, however, proceeding to go into the questions - whether the appellant - Corporation, which has a separate legal entity and has issued tender notice, is bound by the Government policy in this behalf or not? and whether the above two conditions, in any manner, infringe any right of the petitioners - respondents or not? - we decided to call for a report from the Chief Secretary of the State. The Chief Secretary has since submitted a report.
3. It transpires from the report that the Government has been purchasing the computers from the Corporation and the Corporation has been constituted to oversee the requirements of the Government and the quality of the computers which are sought to be used in different Government departments and in the agencies of the Government. The Chief Secretary, however, has stated that he may not find himself any justification for the two conditions, but subsequent to the order passed by the learned single Judge, the Corporation has relaxed the said two conditions because of the directors of this Court not to impose any such conditions i.e., the impugned order.
4. A Government Order, issued in the year 1974 with a view to encouraging small scale industries, is cited in support of the policy that before making purchases from any manufacturer outside the State, prior permission of the Government would be taken. We have, however found no reason to extend the said Government policy to a Corporation, which has been created as a legal entity and entrusted with the work by the Government of procuring the best available computers for its services. Coming to the two conditions, we see the grievance of the petitioners - respondent as one intended to suggest that before knowing about the quality of goods and their capacity to supply the number of computers required by the Corporation, they (petitioners) are excluded from the competition with others who have five years manufacturing experience and who have reached a turnover of rupees ten crores per annum or above. True, the conditions aforementioned have the effect of eliminating manufacturers, who may have in their hands quality goods but have not yet reached the experience of five years manufacturing or the turnover per annum of rupees ten crores, but it will be difficult to accept that there is no wisdom at all in putting up such conditions in the tender notice. It has been brought on the record that requirements are urgent and quantity required is huge. It is also suggested that it is necessary to ensure that such bulk supply may not get infested by substandard products and one, who has not reached a turnover of rupees ten crores, may not be able to meet the requirements urgently and one, who has not reached the manufacturing experience of five years, may not be able to have the capacity to produce so many computers and of good quality, which the Corporation has intended to purchase.
5. Courts have interfered, no doubt, on occasions when it is found that any , ''State'' has acted arbitrarily and eliminated any person who has the necessary qualifications for supplying goods or entering into a contract for work. This, the Courts have done, in our view, to eliminate any favours, which ''State'' may extend to some persons and deny to other the opportunity to compete. The instant case, however, in our opinion, is not one in which the Court should find fault with the tender notice conditions aforementioned merely because a small scale industry in the State has chosen to claim that it has the capacity to compete in supply of computers with others, who have rich experience and have reached a turnover of more than rupees ten crores per annum.
6. All that is stated in the impugned judgment, in our opinion, has to be applied, keeping in mind that the purchaser should have the ultimate choice and no seller can put forward a condition that before he or she purchases goods from any other person, his or her (seller''s) case should also be examined along with the case of others. We are of the view that the Court should exercise refrain and accept, as a rule, that freedom of trade and business is not confined to the right of a seller to seek the market, but will extend also to the right of the purchaser to decide from whom to purchase. We have no material on the record to infer that the petitioners - respondents have been intentionally put out of the competition and or that there is any intention to provide favour to manufacturers who qualify under the above said conditions. We find good reasons to interfere with the impugned judgment. The impugned judgment is accordingly set aside. The appellant- corporation, however, shall ensure that it shall not give opportunity to any person to say that substandard computers have been purchased at the cost of the interest of the State when good quality computers are available with the petitioners - respondents.
7. With the observations as above, the appeal is allowed; the impugned judgment is set aside and the writ petition is accordingly dismissed. There shall, however, be no order as to costs.
