Jammu & Kashmir High Court
M/S K.P Singh Lau Through Its Proprietor vs Union Of India on 27 December, 2024
Author: Wasim Sadiq Nargal
Bench: Wasim Sadiq Nargal
Sr. No. 142
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on:- 04.12.2024
Pronounced on:- 27.12.2024
Case No. WP(C) 1540/2024
01. M/S K.P Singh Lau Through its proprietor
Kavinder Pal Singh, Aged 57 years
R/O H.No. 84 Sec. No. 05, Trikuta Nagar
Near Zero Size Gym, Jammu 180012.
02. Charanjit Singh, Aged 55 years
S/o Gurbaksh Singh R/O H.No. 157,
Sec-3, Extn. Vasant Vihar
Ward No. 53, Trikuta Nagar,
Jammu 180020 ... Petitioner(s)
V/s
01. Union of India ...Respondent(s)
Through its Secretary
Ministry of Petroleum and Gas, New Delhi.
02. Bharat Petroleum Corporation Limited
Bharat Bhavan, Currimbhoy Road, Road No. 4 & 6, Ballard
Estate, Mumbai-400001 (Opp. Grand Hotel)
through its Chairman-cum- Managing Director
03. Chief General Manager, Bharat Petroleum
Corporation Ltd.Bharat Bhavan, Currimbhoy Road,
Road No. 4 & 6, Bollard Estate,
Mumbai-400001 (Opposite Grand Hotel)
04. Plant Manager, Bharat Petroleum Corporation Ltd.
Rail Head, Narwal, Jammu.
2 WP(C) No. 1540/2024
Coram: HON'BLE MR. JUSTICE WASIM SADIQ NARGAL, JUDGE
JUDGMENT
PRAYER
1. Through the medium of instant petition, the petitioners are invoking writ
jurisdiction of this Court under Article 226 of the Constitution of India and
is seeking the following reliefs:
a) “Writ of certiorari quashing the tender dated
20.03.2024, because the same has been floated
by the official respondents with a mala fide
intention, as the initial tender 01.11.2023, was
cancelled by the official respondents without any
rhyme and reason;
b) Writ of certiorari quashing the tender condition
whereby the vehicles of the petitioner have not
been accepted and blacklisted from the tendering
process as the same is perverse and illegal in the
eyes of law;
c) Writ of mandamus commanding the official
respondents to allow the vehicles of the
petitioners to participate in the tender process
and the condition with regard to the age of the
vehicles may kindly be quashed in the justice
equity and fair play
d) Any other relief, order or direction that the
Hon‟ble Court deems fit may kindly be granted
in favor of the petitioner and against the
respondent in the interest of justice, equity and
fair play.
3 WP(C) No. 1540/2024
2. Before proceeding further in the matter, and to settle the controversy in
question, it is indispensable to give brief resume of the facts of the case,
which, are summarized as under:-
FACTUAL MATRIX OF THE CASE
3. The specific case of the petitioners in the instant petition is that the
petitioners are transporters by profession and owns fleet of trucks and
tankers. In addition to that, the petitioners are performing the contracts of
transportation with several oil companies including the respondents herein.
The nature of business of petitioners is transportation of petroleum
products and LPG gas through the Union Territory of Jammu and Kashmir
as well as in other States.
4. That the respondent-Bharat Petroleum Corporation limited, which is a
public sector undertaking, floated the first notice inviting tender no.
BPCL/RETAIL/POL/BULK/JAMMU/2023-28. The said tender was
floated for the bulk transportation of POL products
(MS/HSD/SKO/ATF/Branded Fuels etc) by the top loading tank lorries
from BPCL, Jammu depot to various location (Depots/ Retail Outlets/
Direct Customers’ etc .) within the State and outside State.
5. It is stated that the date of the tender was fixed from 01.11.2023 to
22.11.2023. Moreover, it was stated that the contract of tender shall be for
a period of five years i.e from 2023-2028. Therefore, for the purpose of
contract, the bids were invited to provide top loading Tank Lorries for the
bulk transportation of POL, and following requirements were made with
respect to the number of top loading Tank Lorries and their indicative
volumes:-
4 WP(C) No. 1540/2024
Details
No. of Tank 12 kl 14 kl 20 kl Total
Lorries 43 176 6 225
Indicative Volumes (KL/ MONTH) shall be;
FDZ: 5200 kl
BFDZ: 16200 KL”
6. It is specific case of the petitioners’ that the petitioner no.1 owns 13 petrol
tankers (Tank Lorries), each having the capacity of 14 kl which were duly
manufactured and registered in the year 2023. Accordingly the petitioner
No.1 has also submitted its bids before the official respondents along with
other necessary documents. The petitioner no. 1 also made a payment of
Rs. 85000/- as Earnest Money Deposit.
7. That pursuant to the E-NIT dated 01.11.2023, the petitioner no.2 also
submitted its bids, and offered five tank lorries. It is pertinent to mention
herein that the petitioner no.2 had submitted its bid under MSE category
and he also undertook to submit all the MSE supporting documents as
specified in the E-NIT. As per the “Micro, Small and Medium Enterprises
Development Act” the reservation to MSE was to be made applicable,
which would be as @25% for MSE bidders out of which 4% was for MSE
SC/ST and 3% for MSE Women. Furthermore the petitioner no.2 deposited
an amount of Rs. 25000/- as Earnest Money Deposit.
8. The aforementioned tender floated vide tender No.
BPCL/RETAIL/POL/BULK/JAMMU/2023-28 published on 01.11.2023,
was cancelled by the respondents on 22.11.2023, without assigning any
cogent reasons.
5 WP(C) No. 1540/2024
9. It is stated that the initial tender was cancelled by the respondents, and
thereafter, a second notice was floated inviting tender (NIT) bearing
reference No. BPCL/RETAIL/POL/BULK/JAMMU/2024-2029 on
18.01.2024, for inviting tenders for transportation of bulk POL products by
top loading tank lorries from BPCL, Jammu Depot to various locations
(depots/ retail outlets/ direct customers, etc) within the State and outside
the State. It is further stated that the tendering process was a two-bid
system through online mode. The date of the second tender floated was
fixed from 18.01.2024 to 20.01.2024 and the contract of the tender was
five years from the date as mentioned in the letter of intent.
10. In the tender dated 18.01.2024, the tank lorry requirements were stated
as:-
Details
No. of Tank 12kl 14kl 20kl Total
Lorries
99 177 7 283
Indicative volumes (KL/MONTH) shall be:
FDZ : 6122 kl
BFDZ: 22653 kl"
11. The second tender floated by the respondents was again cancelled on
08.02.2023, without assigning any reason, in relation to which the
petitioners contended that they were eligible as they had qualified the
essential requisites as stated in the tender. Consequently, after cancellation
of the above mentioned two tender notices, the respondents thereafter
issued another E-NIT bearing No.
BPCL/RETAIL/POL/BULK/JAMMUDEPOT/2024-2029. The said E-NIT
6 WP(C) No. 1540/2024was issued under two bid system for the same purpose as mentioned in the
above said two tenders, the third tender issued was published on
20.03.2024 and the date was fixed from 20.03.2024 to 10.04.2024 and the
term of the tender was fixed for five years from the date mentioned in the
letter of intent.
12. The requirements of the tender was as follows:
Details
No. of Tank 12kl 14kl 20kl Total
Lorries 99 177 7 283
Indicative volumes (KL/MONTH) shall be:
FDZ: 6122 kl
BFDZ: 22653 kl"
13. The further case of the petitioners is that the bids of the petitioners were
rejected on the ground that the fleet of the petitioners did not qualify the
criteria in the descending order as the respondents got the offers from other
successful bidders who have the new fleet of vehicles and consequently,
only four (4) vehicles of the petitioner No. 1 were selected and 13 were
rejected and all the vehicles of petitioner No.2 were rejected.
14. Hence, being aggrieved of the arbitrary action of the respondents, the
petitioners have filed the instant petition.
SUBMISSION ON BEHALF OF THE PETITONERS
15. Learned counsel for the petitioner submits that, the petitioners’ primary
contention revolves around the arbitrary, illegal, discriminatory and mala
fide intention of the respondents which has resulted in the petitioners being
deprived of the reasonable opportunity of participation, outcome of which
7 WP(C) No. 1540/2024has turned up in violating the Articles 14, 19 and 21 of the Constitution of
India.
16. Further, it is the case of the petitioners, that they are aggrieved of
irrational action of the respondents pursuant to various E-NITs, which were
floated consequently, upon cancelling of the E-NITs one after another
without giving any cogent reasons and there has been inordinate delay on
the part of the respondents in deciding the successful bidder. Moreover, the
petitioners have claimed that it is due to the conduct of the respondents
only which has resulted in the disqualification of the tank lorries of the
petitioners on the baseless ground that the same have rendered old, as it
was by the virtue of the descending order (Age wise) that the tank lorries
were to be selected by the respondents for the contract.
17. The learned counsel for the petitioner submits that, the respondents,
Bharat Petroleum Corporation limited a public sector undertaking floated
its earlier two tenders on 01.11.2023 and on 18.01.2024 respectively. So
far as the 1st tender is concerned, petitioner No.1 and 2 submitted their bids
along with all necessary documents. However, the same was cancelled on
22.11.2023, by the respondents without assigning any reason.
18.As far as the 2nd tender is concerned, it is stated that petitioners were
eligible bidders as they possessed the essential requisites as stated in the
tender, but the second tender was again cancelled by the respondents on
08.02.2024, without assigning any reason.
19. The learned counsel for the petitioners submits that thereafter another E-
NIT was issued on 20.03.204. It has been contended by the petitioners that
they were fulfilling all the essential requirements as mentioned in the
8 WP(C) No. 1540/2024tender, despite that the bids of the petitioner in the said tender were
rejected on the ground that the fleet of the petitioners does not qualify the
criteria in the descending order as the respondents have got the offers from
other successful bidders who have new fleet of vehicles.
20. It has also been submitted by the learned counsel for the petitioner that the
last selected vehicle was found to be registered on 07.11.2024 and in the
case of petitioner No.1, only 4 vehicles were selected, and 13 were
rejected, whereas, all the vehicles of petitioner no.2 were rejected.
21. Being aggrieved of the illegal action of the respondents in rejecting the bid
of the petitioners, they have challenged the same, precisely, on the
following grounds:-
(i) That the petitioners have been participating in
the tender since last many decades and the
respondents have rejected the tender on
baseless and frivolous grounds.
(ii) That more than 256 top loading tank lorries
have been blacklisted by the official
respondents because of the sole reason that
tank lorries in descending order have been
selected.
(iii) That the official respondents have been trying
to misuse their official power in order to
award the contracts to certain vested interests
and the same is not only arbitrary in nature
but also prejudicial towards the interest of the
petitioners.
(iv) That the only reason stated for the rejection of
the tank lorries is that the same have rendered
old, but it is pertinent to contend that it is due
to the respondents who have been time and
again delaying the tender process over the
year which is without any sufficient cause and
on this sole ground the vehicles of the
9 WP(C) No. 1540/2024petitioner have been categorized as not
eligible for the participation.
(v) That the only motive of the respondents to
delay the tender process was to grant
considerable period of time to certain vested
interest/ their blue eyed person in order to
prepare their vehicles as per the essential
requisites necessary for carrying out the bulk
transportation of POL products.
(vi) That the respondents delayed the tender
process for more than six months in order to
accommodate their blue eyed persons who
were not prepared technically to participate in
the tendering process. It became clear to the
petitioners that there was conspiracy involved,
when for the third time the tender was floated
and it was for the first time that some new
persons were figured out to be successful
bidders. This makes it clear that the
respondents provided sufficient time to the
blue eyed persons to prepare themselves for
participating in the tender process. It is also
submitted that in case the first tender is
brought to its conclusion the petitioners would
have been successful bidders.
(vii) That it becomes clear from the issuance of
first tender to the third tender dated
20.03.2024, that the respondents have hatched
conspiracy since the very beginning to ensure
that contract is awarded to some particular
persons and the very act of the respondents is
not in consonance with the principle as
enshrined in Article 14 of the Constitution of
India.
(viii) That the cause of action arising out of the
present tender falls within the sphere of
public contract. The respondents being public
functionary are subject to the conditions of
reasonableness and fair play as well as in the
public interest.
(ix) The vehicles of the petitioner have not been
accepted in the tender for the reason they are
10 WP(C) No. 1540/2024not falling within the timeline as proposed in
the notice inviting tender, and such
ineligibility has accrued due to the inordinate
delay on the part of the respondents.
(x) That the course adopted by the respondents in
not accepting the vehicles of the petitioner in
the tender is outside the purview of the
contract and the tender and same is contrary
to the principle of legitimate expectancy. The
respondents being the public functionary are
expected to act fairly in the matter and the
conduct of the respondents in blacklisting the
vehicles in order to give a preferential role to
certain vested interests are violative of Article
14, 19 and 21 of the Constitution of India.
SUBMISSIONS ON BEHALF OF THE RESPONDENTDS
22. Per contra, learned counsel appearing on behalf of the respondents has
pleaded that no fundamental, legal, statutory, contractual or constitutional
right of the petitioners has been infringed and no cause of action has
accrued to the petitioners to file the instant writ petition, since, there are no
averments pleaded in the petition as to how the alleged cause of action has
accrued to the petitioners to invoke the jurisdiction of this Court under
Article 226 of the Constitution of India, therefore the petition deserves
dismissal.
23. Learned counsel appearing on behalf of the respondents has further
submitted that the petitioners after having participated in the selection
process and having failed to be declared as the successful bidders, have
turned around and thrown the challenge on the tendering process floated by
the respondents. It is the specific case of the respondent that the tendering
process has been finalized and the contract stands already allotted to
successful bidders and in the absence of the impleadment of the successful
11 WP(C) No. 1540/2024
bidders to whom the contract stands allotted, the reliefs sought in the writ
petition cannot be granted. The instant petition as such is not maintainable
as the petitioners have challenged the Advertisement Notice and the terms
and conditions of the same after having participated in the same.
24. It has been vehemently contended by the respondents that the allocation of
tank lorries of the successful bidders has been done strictly as per the terms
and conditions of the Tender NIT -15894 document, which was published
by the Central Procurement Organization Wing of the respondent-
corporation and , therefore, petitioners cannot have any grievance against
the selection process and in such circumstance the instant petition do not
warrant any interference by this Court, under Article 226 of the
Constitution of India, as the same is beyond the scope of judicial review
related to award of contracts.
25. It has been pointed out by the respondents that after the conduct of pre-bid
meeting in respect of the first E-NIT No.
BPCL/RETAIL/POL/BULK/JAMMU/2023-2028, a representation was
submitted by the transporters which raised issues with regard to issuance of
the fresh E-NIT. Consequently, another representation came to be filed by
the transporters with regard to the fixation of bench mark rates
accompanied with other issues. On 17.11.2023 the J&K Tank Owners
Association, through its association submitted that the tender rates were not
workable and requested the respondent- Corporation to review all the rates,
otherwise, the transporters will be left with no other option, but to
withdraw TLs from loading at the risk and responsibility of respondent-
Corporation. On 18.11.2023, the transporters gathered outside the depot of
12 WP(C) No. 1540/2024
the respondent-Corporation and did not allow any tank lorry to come
outside the depot and thus, forcefully closed the depot. This issue with
regard to the strike was immediately brought to the notice of the Dy.
Commissioner Jammu, SSP, Jammu, SDPO Jammu City East and the
Inspector of Police.
26. The respondents have further submitted that it was due to the illegal strike
by the prospective bidders/transporters, the respondent-Corporation issued
a notice for extending the date of the tender from 22.11.2023 to
27.11.2023. The efforts were made on behalf of the Corporation, in order
to resolve the issue raised by the transporters as a meeting was convened
between the transporters and BPCL officials, but it did not result in
amicable solution, and the transporters left the meeting threatening that
they will go on strike from 24.11.2023 disrupting the supply of the
petroleum products in J&K and Ladakh. An immediate action was taken by
the respondent-Corporation requesting the Dy. Commissioner Jammu vide
communication dated 23.11.2023 to provide security to the depot of the
Corporation and asked for mediating and resolving the unauthorized strike
by the transporters/ prospective bidders.
27. After the meetings have taken place between the Corporation and the
bidders, and the corporation felt that there was no scope of resolving the
issue and it had become impossible for the respondent-Corporation to go
ahead with the already issued tender process initiated in terms of E-NIT
dated 01.11.2023, they were left with no other option, but to cancel the
same on 27.11.2023 and the said cancellation was communicated to each
of the bidder through system generated e-mail.
13 WP(C) No. 1540/2024
28. It has also been submitted by the counsel appearing on behalf of the
respondents that after the cancellation of the said E-NIT, the payment of
Rs. 85,000/- made by the petitioner No.1 has been refunded and the refund
of Rs. 25,000/- to the petitioner No.2 was under process.
29. It has been further submitted by the respondents that the tendering
committee after taking into consideration the demand of the tankers/ tank
lorries owners cancelled the 1st NIT and consequently floated the 2nd NIT.
Despite the fact that respondents agreed to the demands of the owners of
the tank lorries and despite the fact that the bench mark rate was
comparatively raised and the number of TLs were increased as compared
to those issued under 1st tender notice and as per the demands made by the
bidders/ transporters, the transporters again agitated and protested against
the second tender issued. The J&K Tank Owners Association through its
president submitted a memorandum dated 23.01.2024 against the issuance
of 2nd NIT on 23.01.2024 objecting the BMR rates not being viable and
that the 12KL and 14KL TLs were placed in the same rate level and further
demanded that the tender should be 10% above the IOCL rates and it has
been stated that nothing less than the above mentioned demands were
accepted and in fact the transporters threatened to withdraw their fleet w.e.f
27.01.2024. These facts and circumstances were informed by the
respondent-Corporation to the Deputy Commissioner vide its
communication dated 24.01.2024 and requested for providing security to
the depot and to resolve the unauthorized strike by the transporters.
30. It is the case of the respondents that due to the compelling circumstances
whereby the transporters again went on strike on 27.01.2024, blocking the
14 WP(C) No. 1540/2024
entries of the TLs to the depot, supply of the POL could not be made to the
dealers and most of the petrol pumps remained dry for two days, effecting
the public at large and the respondents were left with no other option but to
cancel the 2nd tender notice as well on 08.02.2024.
31. In reply to one of the averments made by the petitioners, that their vehicles
have been blacklisted, it has been submitted by the respondents that the
selection of the successful bidders has been done by the respondent
corporation in a transparent manner and as per the terms and conditions of
E-NIT dated 20.03.2024 and there is no infirmity in conducting the
selection process by the respondents. As per the requirement of the tender
dated 20.03.2024 against 99 tank lorries of 12 kl, 176 tank lorries of 14 kl
and 7 tank lorries of 20 kl were required as per the advertisement, in
response to which the respondent -Corporation received 122 bidders with
683 fresh tank lorries and 211 chasis booking slips i.e. total of 894 offers.
After technical and commercial bid evaluation only 102 bidders with their
corresponding 667 tank lorry and 114 chasis booking slips offered i.e. total
781 were short listed. Allocation of 283 tank lorries was done based on the
reservation and allocation criterion of NIT in terms of Clause 10.0, 11.0
and 26.0. On the basis of criterion laid down in the E-NIT particularly in
reference to its Clause 26.5(c), the allocation of the tank lorries has been
made to the selected transporters/bidders based on the age limit of their
tank lorries. However, 4 tank lorries out of 17 of petitioner no. 1 were
selected and none of the tank lorries of petitioner no. 2 were selected based
upon the criterion mentioned in Clause 26.5(c) of the E-NIT.
15 WP(C) No. 1540/2024
32. Therefore, learned counsel for the respondents have denied the averments
made by the petitioner that more than 256 top loading tank lorries have
been blacklisted, since the mere non-allocation/selection of tank lorries on
the basis of the criteria laid down in the E-NIT does not amount to
blacklisting of the tank lorries.
33. The respondents have contended that the delay in the finalization of the
tendering process has been on account of circumstances beyond the control
and power of respondent-Corporation and no deliberate or intentional delay
can be attributed to the respondent in the finalization of the tendering
process and the averments of hatching a conspiracy and floating a third
tender in order to select the blue eyed person is without any basis and have
been made only after participating in the tendering process without raising
any objection to the terms and conditions of the unit.
34. Therefore, the respondents have disagreed with the fact that the petitioners
have been denied the right of reasonable opportunity of participating in the
tendering process, in fact, the petitioners have failed to procure the order of
allocation of tender tank lorry after fully participating in the tendering
process and are however estopped from challenging their non-selection on
the basis of terms and conditions set out in the E-NIT.
Legal Analysis
35. Heard learned counsel for the parties and perused the record.
36. In the aforesaid backdrop and having considered the whole spectrum of
arguments and the counter arguments addressed by the learned counsel
appearing for the parties, this court is of the view that the decision in this
petition hinges on determination of the following issues:-
16 WP(C) No. 1540/2024
Issue No.1 What is the scope of judicial review in tender matters?
Issue No. 2 Whether a right is accrued to an ineligible party to challenge the
terms and conditions of the tender and whether the terms and conditions of the
tender can be tailor made at the behest of the party to suit eligibility?
Issue No.3 The scope of interference by a constitutional court in tender
matters involving substantial public interest, and whether the individual
interest has to be given due weightage over and above public interest?
Issue No.4 Whether a party, having participated in the tender process, can
challenge the terms and conditions of the tender?
Issue No.1 What is the scope of judicial review in tender matters?
37. As far as issue no. 1 is concerned, the scope of judicial review in tender
matters is primarily concerned with ensuring that the decision making process of
the authorities is lawful, fair, and reasonable. The law is well settled that the
Constitutional Courts do not sit as appellate authorities to review the merits of
the decisions made by the Government or its agencies but rather focus on the
legality and procedural regularity of the decision making process.
38. In the present case, the primary ground of challenge by the petitioners
revolves around the arbitrary, discriminatory and unreasonable nature of the
eligibility criteria of the impugned tender; in view of which, this Court before
going into the merits of the case, finds it essential to discuss the scope of Judicial
review.
39. With a view to decide the aforesaid question, it would be apt to refer to the
decision of Apex Court rendered in judgement titled, “Tata Celluar v/s Union
of India (1994) 6 SCC 651”, in which the Hon’ble Supreme Court has laid
17 WP(C) No. 1540/2024
down several principles that guide the judicial scrutiny of the administrative
actions involving tenders. In para 94 of the judgement the principles culled out
are as follows:-
(i) “Judicial Restraint , the modern trend points to
judicial restraint in administrative action, meaning
that the courts should be cautious in interfering with
administrative decisions unless there is a clear
violation of law or principles of natural justice
(ii) The court does not function as an appellate body; it
merely reviews the decision- making process rather
than the merits of the decision itself.
(iii) The court lacks the necessary expertise to correct
administrative decisions; thus, they should refrain
from substituting their own decisions for those made
by the administrative bodies.
(iv) The terms of the invitation to tender are 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
(v) The government must have the freedom of contract.
In other words, a fair play in the joints is 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 actual mala fide.
18 WP(C) No. 1540/2024
(vi) Quashing decisions may impose heavy
administrative burden on the administration and
lead to increased and unbudgeted expenditure‟‟
40. Similarly, the decision of the Supreme Court in “Directorate of Education
and ors v. Educomp datamatics Ltd and ors., 2004 (4) SCC 19” reiterates the
said position. The Hon’ble Apex Court in that case was examining a tender
notice, which stipulated a turnover of Rs 20.00 crore as a condition of
eligibility and held that the Government must have a free hand in stipulating
the terms of the tender document and held that it must have reasonable play in
the joints as a concomitant necessary for an administrative body in the
administrative sphere. The Apex Court has been pleased to observe at para-12
as under:-
“12. “It has clearly been held in these decisions that
the terms of the invitation to tender are not open to
judicial scrutiny, the same being in the realm of
contract. That the Government must have a free hand
in setting the terms of the tender. It must have
reasonable play in its joints as a necessary concomitant
for an administrative body in an administrative sphere.
The Courts would interfere with the administrative
policy decision only if it is arbitrary, discriminatory,
mala fide or actuated by bias, it is entitled to pragmatic
adjustments which may be called by the particular
circumstances. The courts do not strike down the terms
of the tender prescribed by the Government because it
feels that some other terms in the tender would have
been fair, wiser or logical. The courts can interfere
only if the policy decision is arbitrary, discriminatory
or mala fide.”
19 WP(C) No. 1540/2024
41. Also, the law with regard to the scope of judicial review in tender matters
has been settled in case titled, BTL EPC Ltd vs. Macawber Beekay Pvt.
Ltd. and ors, rendered by Hon’ble Apex Court in Civil Appeal No.
5968/2023, wherein in para 35 & 48, following has been held:-
“35. it is settled law that in contracts involving complex
technical issues, the Court should exercise restraint in
exercising the power of judicial review. Even if a party
to the contract is „State‟ within the meaning of Article
12 of the Constitution of India and as such is amenable
to the writ jurisdiction of the High Court or the
Supreme Court, the Court should not readily interfere
in commercial or contractual matters. This principle has
been retreated in the recent judgment of this court, in
Tata Motors Ltd v. Best held:-
48.This Court being the guardian of fundamental
rights is duty- bound to interfere when there is
arbitrariness, irrationality, mala fide and bias. However,
this court has cautioned time and again that courts
should exercise a lot of restraint while exercising their
powers of judicial review in contractual or commercial
matters. This court is normally loathe to interfere in
contractual matters unless clear cut case of
arbitrariness or mala fide or bias or irrationality is
made out. One must remember that today many public
sector undertakings compete with the private industry.
The contracts entered between the private parties are
not subject to scrutiny under writ jurisdiction. No doubt,
the bodies which are state within the meaning of Article
12 of the Constitution are bound to act fairly and are
amenable to the writ jurisdiction of superior courts but
this discretionary power must be exercised with great
deal of restrain and caution. The courts must realise
20 WP(C) No. 1540/2024
their limitations and the havoc which needless
interference in commercial matters can cause. In
contracts involving technical issue the courts should be
even more reluctant because most of us in Judges‟ robes
do not have the necessary expertise to adjudicate upon
technical issue beyond our domain. The courts should
not use a magnifying glass while scanning the tenders
and make every small mistake appear like a big
blunder.”
42. Therefore, in view of the settled legal position, it is clear that the scope of
judicial review in tender process is extremely limited, and keeping in view the
law discussed above, it is clear that the Court being the guardian of
fundamental rights is duty bound to interfere when there is a strong foundation
of arbitrariness, irrationality, mala fide and bias. However, in the instant case,
the petitioners have failed to make out a case under the ambit of the above
mentioned principles and in absence of any strong foundation of arbitrariness,
irrationality, mala fide and bias, this Court refrains from showing any
indulgence in the instant matter.
Accordingly, issue No. 1 is decided against the petitioners and in favour
of the respondents
Issue No. 2 :- Whether a right is accrued to an ineligible party to challenge the
terms and conditions of the tender and whether the terms and conditions of the
tender can be tailor made at the behest of the party to suit eligibility?
43. The petitioners have alleged that the eligibility criteria as reflected in the
tender notice i.e, the descending age of the vehicles, and as contended by the
21 WP(C) No. 1540/2024
respondents that the vehicles have rendered old, is without any rationale and
logical basis.
However, after perusing of the record meticulously this Court is of the
view that the said criteria mentioned supra was adhered to for allocation of tank
lorries of the successful bidders, strictly as per the terms and conditions of the
Tender NIT-15894 document, which was published by the Central Procurement
Organisation. As per the clause 26.5 (c) of the E-NIT, the allocation of the (Tank
Lorries) TLs has been made to the successful bidders based on the age of the
tank lorries. It is however to be noted that it is on the basis of the same clause
26.5 (c) that 4 out of 17 offered TLs of petitioner no. 1 have been selected.
Thus, the petitioners cannot blow hot and cold in the same breath as the
petitioners are beneficiary of the said criteria and simultaneously, are estopped
under law to raise any grouse, when the said criteria does not suit their
eligibility, in absence of any prejudice being projected by the petitioners. Thus, it
can safely be concluded that no prejudice has been caused to the petitioners in
view of the aforesaid criteria for which the petitioners are also the beneficiaries
and there is no foundation of mala fide on part of the respondents as such. Even
otherwise, the law has been settled at naught by the Apex Court in authoritative
pronouncements that for the convenience of the parties participating in the tender
process, the terms and conditions of the tender cannot be tailor-made to suit their
eligibility. On the premise that the criteria in the tender notice in which the
petitioner participated without any grouse was not to the liking of petitioners, the
petitioners after having participated in the selection process are stopped under
law to question the same through the medium of the instant petition.
22 WP(C) No. 1540/2024
44. In the context of legal framework surrounding tenders, a party that is
deemed ineligible does not possess the right to challenge the terms and conditions
of a tender later on. The established legal principle is that the terms of the
invitation to the tender are generally not subject to judicial review as they fall
within the realm of contract law. However, limited judicial scrutiny may be
available if it can be demonstrated that the terms were arbitrarily designed or
tailored to favour a specific party, effectively excluding all others from the
bidding process. However, in the instant case, it can be clearly made out that the
bidding process was conducted in fair manner without any illegality, mala fide or
irrationality. In the instant case, the petitioners have failed to make out a case of
interference as this Court do not find that the criteria was irrational, which has
restricted the zone of consideration of all the level playing bidders or the
conditions are so tailor-made to suit the convenience of a particular person with
a view to eliminate all others from participating in the bidding process.
45. Reliance is placed in the judgment rendered by the Apex Court in the case
of Meerut Development Authority vs. Association of Management Studies and
Anr. (2009) 6 SCC 171, the operative part of the judgment is reproduced as under:-.
“26. A tender is an offer. It is something which invites
and is communicated to notify acceptance. Broadly stated it must be
unconditional; must be in proper form, the person by whom a
tender is made must be able to and willing to perform his
obligations. The terms of the invitation to tender cannot be open to
judicial scrutiny because the invitation to tender is in the realm of
contract. However, a limited judicial review may be available in
case where it is established that the terms of the invitation to the
23 WP(C) No. 1540/2024tender were so tailor-made to suit the convenience of any particular
person with a view to eliminate all others from participating in the
bidding process.
“27. The bidders participating in the tender process have no other
right except the right to equality and fair treatment in the matter of
evaluation of competitive bids offered by interested persons in
response to notice inviting tender in a transparent manner and free
from hidden agenda. One cannot challenge the terms and
conditions of the tender except on the above stated ground, the
reason being the terms of the invitation to tender are in the realm of
the contract. No bidder is entitled as a matter of right to insist the
Authority inviting tenders to enter into further negotiations unless
the terms and conditions of notice so provided for such
negotiations.
28. It is so well settled law and needs no restatement at our hands
that disposal of the public property by the state or its
instrumentalities partakes the character of a trust. The methods to
be adopted for disposal of public property must be fair and
transparent providing an opportunity to all the interested persons to
participate in the process.
29. The Authority has the right not to accept the highest bid and
even to prefer a tender other than the highest bidder, if there exists
good and sufficient reasons, such as the highest bid not
representing the market price but there cannot be any doubt that
24 WP(C) No. 1540/2024the Authority‟s action in accepting or refusing the bid must be free
from arbitrariness or favouritism.”
46. Therefore, keeping in view the above mentioned judicial pronouncements,
it is made clear that the scope of judicial review is very limited and is
available in cases, where it is established that the terms of the invitation to
tender were so tailor-made to suit the convenience of any particular person
with a view to eliminate all others from participating in the bidding process.
The perusal of the record in the instant case transpires that the petitioners
being ineligible are precluded from challenging the terms and conditions of
the tender notice after having participated in the same without any demur and
this Court has no hesitation in holding that the conditions of the tender
documents which fall within the realm of contract cannot be tailor made to
suit the convenience of a particular party.
Accordingly, question No. 2 is answered in favour of the respondents
and against the petitioners.
Issue No.3 The scope of interference by a Constitutional court in tender
matters involving substantial public interest, and whether the individual
interest has to be given due weightage over and above public interest?
47. In the context of tender cases, particularly those involving significant public
interest, the scope of interference by the Constitutional court is notably limited.
Courts usually refrain from intervening in the decision making process of
awarding contracts unless there is a clear indication of arbitrariness,
discrimination or mala fide. The guiding principle is that the Court’s role is not
to assess the soundness of the decisions but to ensure that the decision making
25 WP(C) No. 1540/2024
process adheres to law and does not violate principle of fairness. While
individual interests are acknowledged, they must be weighed against the broader
public interest, which is a paramount in specific tender cases. The constitutional
Courts maintain a restrained approach, focusing on the fairness of the process
rather than the outcomes of individual tender.
48. The Apex Court in a Judgment titled Raunaq International ltd. v. I.V.R
1999 SCC (1) 492, has been pleased to observe as under:-
“When a writ petition is filed in the High Court challenging
the award of a contract by a pubic authority or the state, the
court must be satisfied that there is some element of public
interest involved in entertaining such a petition. If, for
example, the dispute is purely between two tenders, the
court must be very careful to see if there is any element of
public interest involved in the litigation. A mere difference
in the prices offered by the two tenders may or may not be
decisive in deciding whether any public interest is involved
in intervening in such a commercial transaction. It is
important to bear in mind that by intervention, the proposed
project may be considerably delay thus escalating the cost
far more than any saving which the court would ultimately
effect in public money by deciding the dispute in favour of
one tenderer or the other tenderer. Therefore, unless the
court is satisfied that there is a substantial amount of public
interest, or the transaction is entered into mala fide, the
court should not intervene under Article 226 in disputes
between two rival tenderers.”
49. In another case, the Hon’ble Apex Court in “Jagdish Mandal v. State of
Orissa, (2007) 14 SCC 517 has been pleased to observe as under:- “
22. Judicial review of administrative action is intended to
prevent arbitrariness, irrationality, unreasonableness, bias
26 WP(C) No. 1540/2024and mala fides. Its purpose is to check whether the choice or
decision is made “lawfully” and not to check whether the
choice or decision is “sound”. 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 stays 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. The tenderer or contractor with a
grievance can always seek damages in a civil court. Attempts
by unsuccessful tenderers 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 courts to interfere by
exercising power of judicial review, should be resisted. Such
interferences, either interim or final, may hold up public
works for years, or delay relief and succour to thousands and
millions and may increase the project cost manifold.
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”;
27 WP(C) No. 1540/2024
(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.”
50. The primary ground which has been urged by the petitioners is that the
respondents have acted with mala fide intention to cancel the tender notices
time and again with a view to confer benefit to their blue eyed persons at the
cost of the petitioners. However, petitioners have not laid down any strong
foundation with regard to the ground of mala fide nor there is any specific
averment in the pleadings and in absence of specific pleadings in this regard,
the ground of mala fide cannot be gone into. Even otherwise, petitioners have
not arrayed any party in the array of respondents against whom such mala
fides have been alleged and thus, the grounds of mala fide cannot be gone into
by this Court in the light of the evasive pleadings or the parties being arrayed
by name. Legal precedents establish that allegations of mala fide must be
specific and demonstrable, and the individual against whom such allegations
are made must be included as parties to the proceedings. This is crucial
because a finding of mala fide is a serious indictment and can have severe
consequences for the individuals involved. It has been time and again
affirmed by the Apex Court in various judgments that without naming the
parties involved, allegations of mala fide lack the necessary foundation to be
considered valid in tender matters.
28 WP(C) No. 1540/2024
51. This Court is fortified with the judgment of the Apex Court in case titled
Midley Minerals India Ltd. v. State of Orrisa 2004(12) SCC 39, in which it has
been observed as under:
“…It is trite that plea of mala fide has to be specific and
demonstrable. Not only this, but the person against whom
the mala fide are alleged must be made a party to the
proceedings and given reasonable opportunity of
hearing.”
52. The Apex court in case tilted Ajit Kumar Nag v. Indian Oil Corporation.
Ltd. (2005) 7 SCC 764 declared that allegations of mala fide need proof of
high degree and that an administrative action is presumed to be bona fide
unless the contrary is satisfactorily established. The court in para 56 has
observed as follows;-
“..it is well settled that the burden of proving mala fide is on
the person making the allegations and the burden is very
heavy. There is every presumption in favour of the
administration that the power has been exercised in bona
fide and in good faith. It is to be remembered that the
allegations of mala fide are often more easily made than
made out and the very seriousness of such allegations
demands proof of high degree of credibility.”
53. In Gulam Mustafa v. State of Maharashtra 1976(1) SCC 800, the Apex
clearly observed that,
“It (mala fide) is the last refuge of a lost litigant.”
In the instant petition, despite the petitioners having alleged mala fide
against the respondent-Corporation, have not arrayed any party-respondent by
name as is essential as per the observations made by the Hon’ble Supreme Court
in the aforesaid judgments.
29 WP(C) No. 1540/2024
54. This court has elaborately dealt with a similar situation in case titled “R6
Technologies Private Limited vs. UT of Jammu & Kashmir and ors WP(C) No.
1347/2024 decided on 05.08.2024, wherein the following observations were
made with regard to the fact, whether individual interest has to be given due
weightage over and above public interest. In para 79 the court has observed as
follows;
“It is no more res integra that the power of the judicial review will
not be permitted to be invoked to protect the private interest at the
cost of the public interest, or to decide a contractual dispute.
Importantly, even if a case for interference is made out, the
Hon‟ble Supreme court has sounded a caveat that the courts
should always keep the larger public interest in mind in order to
decide whether an intervention is called for or not. Only when it
comes to the conclusion that overwhelming public interest
requires interference, the Court should intervene. But insofar as
the present case is concerned, this court is of the view that no
overwhelming public interest is involved, however, the only
interest if any, is private in nature and the reasons do not compel
this court to interfere in the matter which, if be done will be at
the cost of the public interest. Thus, the challenge thrown by the
petitioner to the impugned tender is ill founded and devoid of any
merit.”
55. Thus, according to what has been discussed hereinabove, this court is not
convinced with the fact that public interest is at stake rather it is between the
private participants of the bidding process and is private in nature, also with
regard to the mala fide intention alleged against the respondents- Corporation
since no person has been arrayed as party by name it cannot be borne that the
respondents had the ill- intention against the petitioners. Therefore the said issue
is made out in favour of the respondents and against the petitioners.
30 WP(C) No. 1540/2024
Issue No.4 Whether a party, after having participated in the tender process, is
precluded from challenging the conditions of the tender?
56. In the present case, the petitioners have challenged the terms and conditions
of the tender after having participated in the same. In context of a tender
participation, the legal principle established is that a party who participates in a
tender process cannot subsequently challenge the terms and condition of that
tender. This principle is rooted in the idea that the participation implies
acceptance of the terms and conditions laid out in the tender documents. If a
party has participated without protest, then they are generally estopped from
raising the objections later on. The principle is based on the legal doctrine of
estoppel, which prevents a party from asserting a claim or a right that contradicts
what they have previously stated or agreed to by their actions. This legal
framework ensures fairness and predictability in the tender process, preventing
parties from opportunistically challenging terms and conditions after engaging
and participating in the process.
57. In the instant case, the petitioners have challenged the tender condition
whereby the vehicles of the petitioners have not been accepted. It is pertinent to
mention herein that the petitioners were fully aware of the terms and conditions
of clause 26.5(c) of E-NIT, and both the petitioners were alive to the aforesaid
condition and this was precisely the reason that some of the TLs offered by the
petitioner no.1 were selected and not even a single tank lorry offered by the
petitioner no.2 was selected. Therefore after having participated in the tender
process and taking a chance, the petitioners being ineligible are subsequently,
estopped under law to challenge the same.
31 WP(C) No. 1540/2024
58. The mere non- allocation / selection of the tank lorries on the basis of the
criteria laid down E-NIT is not arbitrary or illegal and same has been done
keeping in view the public interest at large. Therefore, the averments made by
the petitioner is bereft of any merit and liable to be rejected.
This Court is also fortified with the judgment of the Apex Court rendered in the
case titled New Bihar Biri Leaves co. v. State of Bihar (1981) 1 SCC 53. In
para 48 of the Judgement, the Apex Court has been pleased to observe as
follows:-
“It is a fundamental principle of general application that if a
person of his own accord, accepts a contract on a certain terms
and works out the contract, he cannot be allowed to adhere to
and abide by some of the terms and conditions which proved
advantageous to him and repudiate the other terms of the same
contract which might be disadvantageous to him. The maxim is
qui approbate and non reprobate (one who approbates cannot
reprobate). This principle, though originally borrowed from
Scots Law, is now firmly embodied in English Common Law.
According to it, a party to an instrument or transaction cannot
take advantage of one part of a document or transaction and
reject the rest. This is to say, no party can accept and reject the
same instruments or transactions.”
Further the Apex Court in judgment tilted Ramesh Chandra Shah v. Anil Joshi(2013) 11 SCC 309, observed as follows:-
“It is a settled law that a person who consciously
takes part in the process of selection cannot,
thereafter, turn around and question the method of
selection and its outcome.”
59. The rationale behind this approach is to promote fairness, transparency,
and finality in the tender process, preventing frivolous challenges after a party
32 WP(C) No. 1540/2024
has already availed itself of the opportunity to bid. As a result, any challenge
to the terms of the tender post-participation is generally not entertained by the
courts, unless there are exceptional circumstances such as fraud, arbitrariness,
or violation of statutory norms. This position reflects a broader principle of
good faith and due diligence, emphasizing the importance of raising
objections at the appropriate stage rather than delaying or hindering the tender
process by raising challenges thereafter.
60. Therefore, the petitioners at this stage are not allowed to challenge the
terms and conditions of the tender since they have gladly and voluntarily
participated in it and before or during the process they never agitated against
the said terms and conditions which held them ineligible to be successful
bidders. Therefore, the petitioners at this stage cannot challenge the terms and
conditions of the tender notice being ineligible.
Accordingly, issue No. 4 is decided in favour of the respondents and
against the petitioners.
CONCLUSION
61. Thus, in the light of what has been discussed hereinabove, coupled with
the rival submissions of the parties and settled legal position, this Court
observes as under:
(i) The scope of interference by the
Constitutional Courts in tender matters is
minimal and confined to the extent when
there is arbitrariness, irrationality, and
unreasonableness, mala fide or bias.
However , in the present case, the case of the
33 WP(C) No. 1540/2024
petitioners do not fall within these
exceptions carved out in light of the law laid
down in Tata Cellular’s case (Supra) and
followed by the Apex Court in subsequent
judgments. The Hon’ble Apex Court has
even gone to the extent of observing that
even if the case of a party falls within these
parameters, the Court shall refrain from
interfering in case, such interference would
impede public interest. In the aforesaid
backdrop, this Court is not inclined to
interfere in the instant case in absence of
any strong foundation on these exceptions
carved out by the Hon’ble Apex Court.
(ii) This court further holds that the conditions
of the tender cannot be tailor made to suit
the eligibility of a party, who is ineligible in
terms of the tender conditions and such
party has no vested right to challenge the
terms and conditions being ineligible. The
fact that the tender making authority has an
expertise in technical and administrative
field, thus, the respondent- Corporation, is
the best person to frame the terms and
conditions of the tender. The Court having
no expertise cannot direct the tender making
authority to frame the conditions in a way to
suit the eligibility of a particular party who
is being ousted from the consideration zone
by virtue of being ineligible.
(iii) This Court while dealing with the issue no.
3, whether the individual interest has to be
given due weightage over and above public
34 WP(C) No. 1540/2024
interest, holds that while individual interests
in a tender matter such as fairness,
contractual rights and due process are
important and must be safeguarded , they
should not override the public interest.
Public procurement must be conducted in a
manner that serves the public good,
ensuring transparency and efficiency. Public
interest generally takes precedence, in the
context of tender process. Thus public
interest must be prioritized over private
interest. Therefore the Courts are tasked
with ensuring that the decision made by
public authorities align with the broader
goals of public welfare and any interference
must be justified by clear demonstration of
public interest.
(iv) While dealing with the issue that whether a
party who has participated in the tender
process can challenge the terms and
conditions of the said tender, this Court is of
the considered view, that by participating in
the bidding process, the bidder implicitly
agrees to the rules, conditions, and
requirements outlined in the tender
document. Therefore, no opportunity is left
with the party to challenge the same at a
later stage, as he/she accepts the terms and
conditions of the same and waives off his/her
right while being silent during or before
participating in the tender process and the
stand of the Apex Court is clear in various
authoritative pronouncements that once a
35 WP(C) No. 1540/2024
party participates in the tender process
without any grouse/ demur, it is presumed
that he/she is aware of all the terms and
conditions of the said document and
subsequently is estopped under law to
question the same.
62. In view of the above, this Court holds that the challenge of the petitioner
to the impugned notice inviting tender (NIT) is ill founded and the writ
petition is devoid of any merit and is thus, liable to be dismissed.
63. Accordingly, the same is dismissed along with all connected
application(s).
(Wasim Sadiq Nargal)
Judge
Jammu:
27.12.2024
MihulWhether the order is speaking : Yes/No
Whether the order is reportable : Yes/No