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Judgment
V. Dhanapalan, J.—Writ Petition No. 36006 of 2007 has been filed, praying for issuance of a writ of certiorari, to call for the records of the
respondent relating to Tender Notification, dated 29.10.2007, issued in Specification No. CE/MTPS/SE/P&A/MM/AEE2/O.T. No. 577/2007-
2008 and quash the same.
Writ Petition No. 36013 of 2007 has been filed, praying for issuance of a writ of certiorari, to call for the records of the respondent relating to
the Tender Notification, dated 06.11.2007, issued in Specification No. CE/MTPS/SE/P&A/MM/AEE2/O.T. No. 584/2007-2008, and quash the
same.
Writ Petition No. 44 of 2008 has been filed, praying for issuance of a writ of certiorarified mandamus, to call for the records of the respondent,
pertaining to the tender for Supply of Broad Gauge Railway Track Materials to Mettur Thermal Power Station, having reference Specification No.
CE/MTPS/SE/P&A/MM/AEE2/O.T. No. 591/2007-2008, dated 28th November, 2007, and quash the same in so far as Clause 4-provisions 1
to 3 of the Bid Qualification Requirement and consequently direct the respondent to call for fresh tenders for the above said project, setting out
reasonable Bid Qualification Requirement commensurate with the project.
Since all these Writ Petitions relate to a common issue, they are being disposed of by a common order.
According to the petitioner, he is the Managing Partner of M/s. R.K. Constructions, which deals with execution of various construction works,
more particularly, laying of railway track works and supply of materials for railway works. The Unit has carried out various works for the Railways
and obtained a certificate of appreciation, by the Department. Further, the Unit is engaged in the business of contracting railway materials for more
than seven years having a turnover of around 10 crores and has recently got the single supply order, dated 22.06.2007, through a tender from
Southern Railway for a proposed supply of railway track materials 50 mm hard granite stone ballast for a total value of Rs. 2,70,00,000/-. While
so, the respondent has issued a Tender Notice on 29.10.2007, calling for sealed tenders for supply of Broad Gauge Railway Track Materials to
Mettur Thermal Power Station. The said tender is two part system with technical bid and price bid. The tender notice stipulates certain conditions
for bid qualification, which are totally arbitrary, illegal and against law inasmuch as the same have been incorporated only to accommodate the
persons with vested interest. Further, no transparency is followed in the tender process which would be evident from the fact that even the list of 5
items required to be supplied has not been furnished nor the list in Annexore II & A is published or furnished to anybody. The irregularity
committed by the respondent in calling for the tenders for a project containing the terms and conditions would cause irreparable loss to the State
exchequer and is gravely prejudicial to public interest by deliberately eliminating competition by imposing arbitrary qualification requirement for
participating in the tender, on account of which the petitioner and similarly placed persons are unable to qualify for the bid. Hence, the entire tender
process is vitiated by malafide only to facilitate or accept the tender from particular individuals. Hence, he has filed these Writ Petitions, for the
relief stated above.
The respondent has filed a counter, stating that 3 kms. Railway Track running from Karumalaikudai to Mettur Thermal Power Station is being
maintained by the Tamil Nadu Electricity Board exclusively for the purpose of transporting coal from Chennai Harbour to Mettur Thermal Power
Station by Railways. The Department of Railways informed that the Railway Track laid during 1980 was badly worn out and damaged and
instructed the Board to rectify the damages and to renew the tracks. As the Department of Railways threatened, to discontinue the service if the
repair works are not attended to immediately, Mettur Thermal Power Station took up the matter with the Board and, on 23.09.2006, the Board
approved the proposal to renew the railway track in a phased manner so as to ensure quality of the railway track for better performance and
safety. The tender notice was issued for supply of Broad Gauge Railway Track Materials and the notice in the Specification Open Tender No.
591/07-08 was published in Daily Newspapers in Tamil Daily Malaimalar on 16.12.2007 and English Business Standard on 15.12.2007 and a
copy was displayed in the Notice Board of the respondent and in TNEB Website, which can be freely downloaded by anybody without paying
any cost, the said tender notice was also published in State Bulletin and the above said procedure was followed in all Open Tenders in two part
system, as per the Tamil Nadu Tender Transparency Act, 1998. Further, another tender bearing No. 571/07-08 was called for without any bid
qualifications and the petitioner had not chosen to participate in that tender and that the petitioner, having no required qualification to participate in
the said tender, has approached this Court with unclean hands.
The contention of the learned Counsel for the petitioner is three folded, viz., (i) the requirement that the tenderer should be a registered supplier
to TNEB or the Indian Railway for the railway track fitting is arbitrary (ii) the requirement that the bidder should have previously supplied the PSC
Sleepers and fitting for a minimum order value not less than Rs. 30.00 lakhs in a single order to TNEB/Indian Railways within the last three years is
illegal, and (iii) the requirement that the bidder should have an Annual Turn Over of not less than Rs. 2.7 Crore in any one of the last three financial
years is mala fide, since no uniform norms are being followed by TNEB in so far as tenders for thermal stations are concerned.
In reply to the said contention, learned Counsel for the respondent would submit that Condition 4 (1) in the Tender Notice, stating that the
tenderer should be a registered supplier to TNEB/Indian Railway for Railway Track fitting and must produce current registration certificate duly
attested is well within the powers of the respondent Board and it is the prerogative of the tender calling authority to impose pre-qualifying condition
in the tender process and, therefore, the petitioner has no right to question the fixing of pre-qualification, as the respondent has got every right and
power to fix the pre-qualifications, to suit the standards and performance of the materials, to be supplied.
In support of his contention, learned Counsel for the respondent has relied upon the following decisions:
(i) Directorate of Education and Others Vs. Educomp Datamatics Ltd. and Others, ;
In the said case, the Apex Court relied upon its earlier decision in Tata Cellular v. Union of India 1994 (6) SCC 651, wherein the point as to the
extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth and certain principles
have been deduced as under:
(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.
(ii) Another decision of the Supreme Court in the case of Global Energy Ltd. and Another Vs. Adani Exports Ltd. and Others, :
The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle
down the terms of a tender as they are m the realm of contract, unless they are wholly arbitrary, discriminatory or actuated by malice....
(iii) Yet another decision of the Supreme Court in the case of Ekta Shakti Foundation Vs. Govt. of NCT of Delhi, :
While exercising the power of judicial review of administrative action, the Court is not the appellate authority and the Constitution does not permit
the Court to direct or advise the executive in matter of policy or to sermonize any matter which under the Constitution lies within the sphere of the
Legislature or the executive, provided these authorities do not transgress their constitutional limits or statutory power. The scope of judicial enquiry
is confined to the question whether the decision taken by the Government is against any statutory provision or is violative of the fundamental rights
of the citizens or is opposed to the provisions of the Constitution. Thus, the position is that even if the decision taken by the Government does not
appear to be agreeable to the Court, it cannot interfere.
Following the principles and the ratio laid down by the Supreme Court in the above decisions, it can be stated herein that the terms and
conditions in the tender are prescribed by the Board bearing in mind the nature of contract and, in such matters, the authority, calling for the tender,
is the best judge to prescribe the terms and conditions of the tender. Further, the terms of the invitation to tender are not open to judicial scrutiny,
the same being in the realm of contract. The Board must have a frea 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 for by the
particular circumstances. The Courts cannot strike down the terms of the tender prescribed by the Government, merely because it feels that some
other terms in the tender would have been fair, wiser or logical. The Board can choose its own method to arrive at a decision. It can fix its own
terms of invitation to tender and that is not open to judicial scrutiny. In addition, in the matter of policy decisions or exercise of discretion by the
Government so long as the infringement of fundamental right is not shown, Courts will have no occasion to interfere and the Court will not and
should not substitute its own judgment for the judgment of the executive in such matters.
Moreover, as rightly contended by the learned Counsel for the respondent, it is the prerogative of the tender calling authority to impose pre-
qualifying condition in the tender process and, therefore, the petitioner has no right to question the fixing of pre-qualification, as the respondent has
got every right and power to fix the pre-qualifications, to suit the standards and performance of the materials, to be produced. Also, while issuing
the Tender Notices, the procedure, contemplated under the Tamil Nadu Tender Transparency Act, 1998, and the rules made thereunder were
followed by the respondent and no hideouts were played. Therefore, the contention of the learned Counsel for the petitioner that with some
oblique motive the eligibility criteria has been stipulated cannot be sustained. As such, the petitioners have not made out any ground, which
warrants interference by this Court with the decision taken by the Board in making the Bid Qualification Requirements mandatory.
For the foregoing reasons, these Writ Petitions foil and they are dismissed. No costs. Consequently, the connected M.P. Nos. 1, 2 and 3 of
2007 in W.P. Nos. 36006 and 36013 of 2007 and M.P. Nos. 1 and 2 of 2008 in W.P. No. 44 of 2008 are closed.