C 4 Infrastructure Pvt. Ltd. v. Maharashtra State Road Transport Corporation, Nashik Division

6. In its reply, the respondent nos.[1] to 3 stated that the financial bid of the petitioner-Company was opened on 2nd August 2024 pursuant to an order passed by this Court on 23rd July 2024 and it was found that the rate quoted by the petitioner-Company was below the estimated cost for the tender; 4.11% below the estimated cost. These respondents have taken a stand that the petitioner-Company did not approach the Divisional Engineer between the period 17th February 2024 to 20th February 2024 for her signature over the site-visit report and it was only on 20th February 2024 that it delivered a letter which was entered in the Inward Register kept in the office of the Divisional Engineer. It has been denied that the Divisional Engineer had left the office or avoided signing Annexure-IV. February 2024, the bids submitted by the competing parties were opened and a system generated message was automatically sent to all the bidders from the website “mahatenders.gov.in”. Notwithstanding that, the petitioner-Company was provided one more opportunity vide letter dated 29th February 2024 to produce the Geotagging certificate signed by the Divisional Engineer and the Bank Solvency Certificate within three days but it did not provide the Geotagging site-visit report signed by the Divisional Engineer.

7. The learned counsel appearing for the respondents opposed the writ petition primarily on the ground that the petitioner-Company has no vested right to seek a direction for its participation in the competitive bidding and the factual dispute raised by it cannot be decided in the writ proceeding. Ms. Medha Jondhale, the learned counsel appearing for the respondent-M/s. R. K. Infraconstro Pvt. Ltd. opposed the writ petition and referred to the decision in “Maa wherein the Hon’ble Supreme Court observed as under:- “8. The scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such

AIR SCC 2014 SC 329. commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. So also, the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process.

9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the court which is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest. (See Meerut Development Authority v. Assn. of Management Studies [(2009) 6 SCC 171: (2009) 2 SCC (Civ) 803] and Air India Ltd. v. Cochin International Airport Ltd. [(2000) 2 SCC 617: (2000) 1 SCR 505] )

10. The scope of judicial review in contractual matters was further examined by this Court in Tata Cellular v. Union of India [(1994) 6 SCC 651], Raunaq International Ltd. case and in Jagdish Mandal v. State of Orissa [(2007) 14 SCC 517] besides several other decisions to which we need not refer.

11. In Michigan Rubber (India) Ltd. v. State of Karnataka [(2012) 8 SCC 216] the legal position on the subject was summed up after a comprehensive review and principles of law applicable to the process for judicial review identified in the following words:

23. From the above decisions, the following principles emerge: (a) 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. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) 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. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;

(c) in the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;

(d) certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.

20. 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” and (ii) Whether the public interest is affected. If the answers to the above questions are in the negative, then there should be no interference under Article 226.” (emphasis supplied)”

8. This is an admitted position at the Bar that there were eight participants who had submitted their bids and four of them were declared successful in the technical evaluation. This is well settled that the highest bidder cannot claim a vested right for award of tender in his favor. A tenderer or contractor with a grievance can always seek damages in the civil Court. The interference in a contract matter is permissible only when the decision making process is found actuated with mala fide or the decision of the Employer was intended to favor someone. The report of Geo-tagging prepared by the intending bidder is a condition under the NIT. The “Common Set of Deviations” incorporating the modified conditions were included in the NIT after the pre-bid meeting with the intending bidders. Therefore, the insistence of the Employer seeking compliance with this modified condition cannot be made an issue before the writ Court. Whether the Geo-tagging report itself is sufficient to establish physical site verification by the intending bidder is a technical issue. The Employer which is the author of the tender document is the best person to understand and appreciate its requirement and interpret the tender document. In “N. G. Projects Ltd.”2, the Hon'ble Supreme Court observed that whether a term of contract is essential or not is to be viewed from the perspective of the Employer, and by the Employer. In paragraph no.22 of the judgment, the Hon'ble Supreme Court held as under:- “22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of nonperformance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e. not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was mala fide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder.”

9. The High Court in exercise of its jurisdiction under Article 226 of the Constitution of India cannot enter into a dispute which requires technical expertise. In “Tata Cellular”3, the Hon’ble Supreme Court held that the terms and conditions under the NIT are not open to judicial scrutiny, because more often than not, such decisions are made qualitatively by the experts. The decision in “Afcons is even more instructive. There the Hon’ble Supreme Court observed that the interpretation of the tender document by the Employer of a project may not be acceptable to the Constitutional Court but that by itself is not a reason for interference in the tender matter. The award of tender is a commercial decision but the decision is not always guided by the price considerations. The bid offered by the petitioner-Company below 4.11% the estimated cost is 2 N. G. Projects v. Vinod Kumar Jain & Ors. (2022) 6 SCC 127.

4 Afcons Infrastucture Limited v. Nagpur Metro Rail Corporation Limited & Anr., (2016) 16 SCC 818. not a relevant factor to permit its participation in the tendering process. The dispute raised by the petitioner-Company that the Divisional Engineer was not on duty and she avoided signing Annexure-IV document are such questions of fact in support thereof no evidence has been produced by the petitioner-Company. This also shall be a seriously disputed question of fact that the Divisional Engineer had biased attitude and she avoided to sign Annexure-IV document to eliminate the petitioner-Company from participating in the competitive bidding. There is not even a hint in the entire pleadings in the writ petition as to any animosity or grudge on the part of the Divisional Engineer to adopt such a course of action. There was sufficient time for the intending bidders to comply with the NIT requirements and, in fact, four bids were found responsive in the technical evaluation. In this factual scenario, any interference by the writ Court in the tendering process would be improper.

10. The sanctity of the tendering process and insistence of the Employer to adhere to the NIT conditions should not be diluted. Under Article 226 of the Constitution of India, the writ Court should exercise caution and interfere in the contractual matters only where the decision of the Employer is found illegal or arbitrary or actuated with mala fide. In “Silppi Constructions Contractors”5, the Hon'ble Supreme Court added a word of caution that the Courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. The Hon'ble Supreme Court further reiterated that the Courts must give ‘fair play in joints’ to the government and public sector undertakings in the matters of contract. We may also usefully refer to ‘Jagdish Mandal”6 wherein the Hon'ble Supreme Court observed that attempts by the unsuccessful tenderers

6 Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517. with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade the Courts to interfere by exercising the powers of judicial review, should be resisted. In the present case, we do not see any reason for interference with the decision of the Employer to reject the technical bid submitted by the petitioner-Company.

11. Writ Petition No.10052 of 2024 is bereft of merits and, accordingly, dismissed.

12. In view of dismissal of Writ Petition No.10052 of 2024, Interim Application No.11739 of 2024 does not survive and same is, accordingly, disposed of. [GAUTAM A. ANKHAD, J.] [CHIEF JUSTICE]