Kanyakumar District Contractors Association vs The Superintending Engineer (Highways)

P.D. Dinakaran, J.—The Petitioner seeks a writ of certiorari to call for the records on the file of the Respondent relating to the tender

notification No. 34/99VI dated 4.6.1999 as published in the Dinamalar daily newspaper on 13.6.1999 and to quash the same as illegal,

incompetent and without jurisdiction.

In brief, by a tender notification dated 4.6.1999 which is impugned in the above writ petition, the Respondent herein proposed to award

contract for permanent restoration of the flood damaged roads in Kanyakumari and Tirunelveli districts, while thus inviting tenders for permanent

restoration of flood damaged roads in Kanyakumari and Tirunelveli districts, the Government imposed certain pre conditions for issuing the tender

applications and one of them being that the tenders should own machinery by themselves. Aggrieved by the said condition, the Petitioner is

challenging the impugned notification.

According to Mr. V. Raghavachari learned Counsel for the Petitioner, the pre-condition insisting the contractors that they should own the

machinery by themselves, even at the threshold namely, while issuing the tender applications itself, is arbitrary and unreasonable, it is contended

that when the manual governing the issue of award of contracts, require that the tenderers should have sufficient capital machinery, material etc. to

begin the work promptly and to complete it, the Respondent has no authority to insist that the contractor should own the machineries, by

themselves, under the impugned notification. The learned Counsel for the Petitioner, further placing reliance on the decision in New Horizons

Limited and Another Vs. Union of India (UOI) and Others, contends that the Respondent can only impose reasonable and workable conditions

and therefore, instead of insisting that the contractors should own the machineries by themselves, as a pre condition at the time of issuing the tender

application the Respondent should have issued the tender applications and therefore decide whether the contractor can undertake and implement

the contract with his available machinery and experience. Hence, it is contended that the denial of the tender application, at the threshold is

arbitrary and violative of Article 14 of the Constitution of India.

Per contra, Mr. G. Sankaran, learned Government Advocate, placing reliance an the averments in the counter affidavit, contends that the

impugned pre-condition is incorporated to secure and get confirmed with the sufficiency of the machineries available with the contractor even at the

time of issuing the tender applications to ensure that the contract would be completed within the time schedule. It is also explained by the learned

Government Advocate that if the contractors are permitted to offer their tenders on the basis of leasehold or hired machineries, after the

confirmation of the contract, if they could not get the machineries from the respective lessors ultimately the contract work would get paralysed, as a

result of which, not only the Petitioner and the Respondent, but also the public at large, get affected. Learned Government Advocate, therefore,

contends that only in the interest of the public at large, the impugned condition has been incorporated in the notification.

Mr. G. Sankaran, learned Government Advocate, invited my attention to the decision in Chennai Small and Tiny Industries Association v. State

reported in 1999 (ii) CTC 304, wherein, following a decision of a Division Bench of this Court in W.A. No. 920 of 1997 dated 431.7.1997, this

Court has held that the Government is empowered to impose pre-conditions, by taking the public interest into consideration. Similarly, the learned

Government Advocate also referred a decision of a Division Bench of this Court in S.P. Natarajan and Anr. v. The Chief Engineer, Highways &

Rural Works Department, Chennai-5 and Anr. in W.A. Nos. 202 and 203 of 1999, wherein, by order dated 12.2.1999, the pre-condition relating

to the qualification is upheld.

I have given careful consideration to the submissions of both sides.

In my considered opinion, the law laid down in New Horizons Limited and Another Vs. Union of India (UOI) and Others, that the Government

can insist bona fide, relevant, reasonable and workable conditions is not disputed at all. I am also obliged to refer the principles laid down in Tata

Cellular Vs. Union of India, , which are as follows:

i) The modern trend points to judicial restrain in administrative action.

ii) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.

iii) The Court does not have expertise to correct the administrative decision. In a review of the administrative decision is permitted it will be

substituting its own decision, without the necessary expertise which itself may be fallible.

iv) The terms of the invitation of 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 negotiation through several tiers. More often than not,

such decisions are made qualitatively by experts.

v) 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 facets pointed out above) but must be free from arbitrariness not affected by bias or

actuated by mala fides.

vi) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.

It is therefore well settled that the terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the

realm of contract, and that apart, the Government have a freedom of contract.

I do not think that the impugned condition is arbitrary, unreasonable, irrelevant or irrational, in the light of the principles laid down by the Apex

court held in Tata Cellular Vs. Union of India, testing the impugned condition that the contractors should own the machinery by themselves.

That apart, this Court in S.P. Natarajan and Anr. v. The Chief Engineer, Highways & Rural Works Department, Chennai-5 in W.A. Nos. 202

and 203 of 1999 by order condition of pre-qualification in respect of contract and only on satisfying those pre-conditions, the contractor would be

allowed to take part in the tender proceedings. Similarly, a Division Bench of this Court, by order dated 31.7.1997 in W.A. No. 920 of 1997 held

as follows:

We find no force in the contention of the learned Counsel for the Appellant. Some liberty has to be given to the state or the authorities to choose as

to from which source in their best administrative experience, the required articles should be purchased in the public interest. The mere fact that the

authorities thought that in the best interest of the public and the state that a particular article has to brought from a particular source by resort to

tender, does not take away the right of life of others. No mandamus can issue to the state that they should function in a particular goods, only from

a particular source or debar other sources from participating in the tender especially when no statutory provisions have been violated.

Following the said decision of the Division Bench dated 31.7.1997 in W.A. No. 920 of 1997 Mr. K. Govindarajan. J. in Chennai Small and

Tiny Industries Association v. State imposing precondition to participate in the tender it self is permissible in law, if such conditions are imposed in

the public interest.

With reference to the conditions prescribed in the Highways Manual, referred to by the learned Counsel for the Petitioner, I am of considered

opinion, the condition that the contractor should have sufficient capacity has to be interpreted to mean that he owns sufficient capacity or he

possesses sufficient capacity or he possesses sufficient capacity depending on the facts and circumstances of each case. In the instant case, the

contract work in question has undoubtedly to be completed within a definite and stipulated time or otherwise it would cause great hardship and

inconvenience to the general public. Therefore, the Government in order to complete the contract within the stipulated time schedule and thereby to

avoid hardship to the general public have imposed a pre-condition at the threshold itself, viz. at the time of issue of tender application that the

tenderers should own machineries by themselves because if the tenderers, are permitted to hire the machineries or take the machineries on lease,

the Government cannot be rest assured that the contract work would be completed within the stipulated time schedule and therefore to avoid such

uncertainly such a condition has been introduced at the time of issue of tender application itself.

In the instant case, the impugned contract work, viz, permanent restoration of flood damaged roads in the coastal districts, have to be

completed within the stipulated time, or otherwise, it would cause great public hardship and inconvenience to the general public. If the Petitioners

are permitted to hire or take on lease the machineries required for carrying out the contract work after the award of the contract in their favour and

if any dispute or problem arises between the successful tenderers and the hirers or lessors of the machineries that would ultimately affect not only

the contractors and the Respondent, but the public at large would also be put to great hardship and inconvenience.

Taking into consideration the public interest involved in the matter, I do not see any illegality, irregularity or irrationality, much less, any

arbitrariness, in imposing a precondition that the contractor who intend to offer the tender should own the machinery by themselves.

In the result, the writ petition fails and is therefore dismissed. Consequently, W.M.P. Nos, 14836 and 14837 are also dismissed. No costs.