Rasoi Canteen & Caterer v. Delhi Tourism & Transportation Development Corporation Limited

13. We have heard learned counsel for the parties and have considered their rival submissions.

14. We are conscious of the fact that the scope of interference in matters of tender is limited. We are also conscious of the fact that the court must examine the decision-making process and not the decision itself. A brief reference to some judicial precedents on the scope of judicial review in tender matters may not be out of place. In the case of Tata Cellular vs. Union of India reported as (1994) 6 SCC 651, the Supreme Court has held as under: "70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down." XXXXX {{"94. The principles deducible from the above are: (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 decision. 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. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. 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."

15. Thereafter in the case of Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited & Anr. reported as (2016) 16 SCC 818, the Supreme Court has held as under:

interfered with. Interference is permissible only if the decision-making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision-making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT- TPL JV in the High Court or before us." XXXXX

16. Following the principles of Tata Cellular (supra) and Afcons Infrastructure Limited (supra) the Supreme Court in Municipal Corporation, Ujjain & Anr. vs. BVG India Limited & Ors. reported as (2018) 5 SCC 462, has further held as under:

into consideration various factors including the basis of non-performance of the bidder; XXXXX “64.3. It is not open to the court to independently evaluate the technical bids and financial bids of the parties as an appellate authority for coming to its conclusion inasmuch as unless the thresholds of mala fides, intention to favour someone or bias, arbitrariness, irrationality or perversity are met, where a decision is taken purely on public interest, the court ordinarily should exercise judicial restraint."

17. Also, in Silppi Constructions Contractors v. Union of India & Anr. reported as 2019 SCC OnLine SC 1133, the Supreme Court has held as under:

discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. "20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."

18. In this case, the bid of the petitioner stood rejected for two reasons, as submitted and discussed in detail above.

19. We find that the petitioner had indeed made a conditional offer by requiring that all cafeteria work should be awarded to the petitioner. While it may be said that the annexure to the financial bid does create some element of confusion, but in our view it was quite clear that the actual tender was with respect to running two kiosks for beverages, snacks and food items for visitors to the Garden of Five Senses, which is seen from a reading of the NIT itself which we reproduce below: "Delhi Tourism & Transportation Development Corporation Ltd. Invites proposals through e-procurement solution from eligible bidders for the following works:- Name & location of work Bid security/EMD Running two kiosks area for Beverages, snacks/food items for the visitors of Garden of Five Senses, Said-ul- Ajaib, M.B.Road, Near Saket, New Delhi- Rs.1,00,000.00 Minimum Reserve Price Rs.2,00,000/- per month Plus Taxes.

20. A reading of the tender document and the terms and conditions shows that the petitioner could not have made a conditional offer. Also, Clause 8 of the tender conditions makes it clear that the bidder is to be responsible for all taxes, whereas the petitioner in the financial bid has quoted Rs.3,72,000/- including tax. Reliance by petitioner on Note 1 of Annexure-II would not support the case of the petitioner since that Note is part of the 'format' of the technical bid itself; and it cannot be read as the bid placed or offer made by the petitioner, which is contained in the tabular provision and which clearly says “including tax”.

21. For the reasons discussed above and also having regard to the fact that the tender already stands awarded, we find no ground to interfere in the matter.

22. The writ petition and the application accordingly stand dismissed. G.S.SISTANI, J ANUP JAIRAM BHAMBHANI, J DECEMBER 17, 2019 j