Shimnit Ustsch India Ltd. vs West Bengal Transport Infrastructure Development Corporation Ltd. and Others

V.S. Sirpurkar, C.J.—This appeal is directed against the judgment by the learned Single Judge of this Court dismissing the writ petition filed by the present Appellant. In the said writ petition, the original writ Petitioner/Appellant herein had sought for the writ of mandamus directing to withdraw cancel and/or rescind the notice inviting tender dated 4:10.2005 issued for the purpose of bidding for the manufacture of high security registration plats for motor vehicles. The original writ Petitioner/ Appellant herein had further prayed for rescinding the order dated 27.4.2005 cancelling the notice inviting tender dated 14.7.2003 issued for the same purpose. Thirdly a consequential prayer was made of revalidating the last date for submission of tenders in terms of the notice inviting tender dated 14.7.2003. Amongst other prayers, a declaration was sought in respect of Clauses 1.5.2 to 1.5.6, 2.3.2, 4.14, 2.13.4, 2,30 4.1 and 4.1.2 of the NIT dated 4.10.2005 declaring them as illegal and ultra vires the Central Motor Vehicles (New High Security Registration Plates) Order, 2001 and also further declaring them contradictory to the order passed by the Honourable Supreme Court in a case reported in Association of Registration Plates Vs. Union of India (UOI) and Others, and also further declaring them as malicious; mala fide and bias so also the prayers for interim relief�s were claimed restraining the authorities from proceeding with the NIT dated 4.10.2005.

The learned Single Judge after hearing both the parties� dismissed the said writ petition. During the pendency of the appeal, it was found that there were number of other parties who had besides the original writ Petitioner offered their bids. As such the said parties would have been affected because of the prayer made in the writ petition of cancelling the second NIT dated 4.10.2005 and restoring the tender in pursuance of the 1) Association of Registration Plates Vs. Union of India (UOI) and Others, first NIT date 14.7.2003 in which they had not offered the bids. Therefore, all these parties were directed to be joined as the parties to this appeal and were heard.

Before we take up the appeal for consideration, it would be better to see the factual matrix:

FACTUAL MATRIX

Rule 50 of the Motor Vehicles Rules was amended firstly on 28.3.2001, 24.9.2001 and on 21.1.2003 with effect from 1.1.2004. The basic object behind these amendments was to curb the vehicle thefts which invariably they were used in various types of crimes like murder, dacoity, kidnapping etc. apart from the terrorist activities. The Central Government on the recommendation of Technical Committee had formulated a system of high security registration plates (HSRP for short).

These amendments to Rule 50 specifically provided for the HSRP having the following features:

i) a hot aluminum plate ;

ii) The plate to be suitable for hot stamping and would be a reflective sheet;

iii) letters I''ND in blue colour on the plate ;

iv) Every plate to have hot stamped chromium based hologram;

v) plate on the rear to be fastened with no removable/non-reusable snap-lock fitting system and

vi) There would be a third registration mark. Such registration mark would be a self-reflective chromium-based hologram sticker to be affixed on the windshield of the vehicle.

These features were provided mainly to prevent counterfeiting, to identify the nationality of the vehicle, further to provide a full proof plate having a water mark non-erasable by any mechanical or technical process and to provide, a tamper-proof system for fixing the plate to the body of the vehicle at the back etc. so that the plate could not be changed. It also provided the visibility and identification of the plate from a distance of minimum 200 meters. The sticker affixed to the windshield would instantaneously give away the seven-digit laser code containing the engine number and the chassis number.

After the amendments to Rule 50 and the advent to the New High Security Registration Plates (Amendment) Order 2001, the Ministry of Road Transport and Highways held a meeting dated 4.3.2001 between the representatives of all States and Union Territories for introduction of the new system of registration plates. The minutes of this meeting were circulated by communication dated 6.3.2002 and they contained the guidelines for incorporating necessary conditions in the notice inviting tenders which were to be issued by the various States for the purpose of manufacturing such high security registration plates. Initially the guidelines suggested:

i) the tender document should specify whether the appointment of the manufacturer/vendor was to be for the whole State or certain part of the States ;

ii) the tender document should include the clear terms regarding the bank guarantee;

iii) the tender document would provide a clause regarding a report-back on certain aspects on a periodic and regular basis and iv) the bidder must furnish the proof of past experience/expertise in this area or proof of the same with a collaborator.

In respect of these guidelines, a further communication was made by the Ministry dated 14.6.2002 where-under it was informed that the guidelines which were sent along with the letter dated 6.3.2002 were reviewed and in place of existing para 10, a new para should be read as substituted. Old para was a the effect that the bidder must furnish proof of the past experience/expertise in this area or proof of the same in respect of the collaborator. The new para now substituted was to the effect that the bidder may be asked to provide details about the experience/capability of his collaborator to the satisfaction of State Authorities. In para 2 of this communication, it was specifically informed that the details in old as well as the substituted para 10 were suggestive in nature.

A further clarification was thereafter issued vide a communication No. RT-11028/4/2002-MVL dated 13th November, 2002. In second para of this communication a reference was made to the earlier guidelines dated 6.3.2002 as also the subsequent amendment thereto vide communication dated 14.6.2002. The following two paras are extremely important. They are quoted as under:

As per information made available by the testing agencies, so far five number of vendors, namely, M/s Shimnit Utsch, M/s Real'' Industries, M/s Eastern Saw & Steels and M/s Promuk Hoffman have got the certification from CRRI, New Delhi and M/s Utsav from ARAI Pune. Product of some more vendors are at different stages of testing in the said two testing agencies.

It is further clarified that suggestive guidelines do not stipulate anywhere that the details about experience / capability of bidder/collaborator as contained vide para 10 thereof imply a mandatory requirement of either experience in 5 number of countries or that the tender is required to be valid for a period of 15 Years. On the contrary in the course of the review meeting held on 16.9.2002 by Secretary (RT & H) With all the States/U Ts, it was felt that in case the bids were being initiated for a long period, the question of escalation in prices would arise and in case the contract was for a relatively short period of say three to five years, such demand for escalation clause in the prices would not logically arise.

(Emphasis supplied)

This communication was. in pursuance of a meeting dated. 16.9.2002 held between the officials of the Ministry, representatives of States / Union Territories and the manufacturers. On this backdrop, the first NIT came to be issued. Like the concerned NIT, number of other NITS were issued in various States which came to be challenged in various High Courts and, therefore, the Supreme Court withdrew all the cases to itself and disposed of all the cases vide a judgment reported in Association of Registration Plates Vs. Union of India (UOI) and Others, The main reasons why the first NIT was challenged were the three conditions in that NIT which pertained to the requirement of the tenderer or the bidder having sufficient experience in the field of registration plates and the further requirement of its working at least in five countries for licence plates and in minimum three countries with licence plates having security features worldwide. The bidder shall also require to attach along with the perform necessary credentials from the Government of such countries. This was apart from the further requirement of a bidder furnishing typed approved certificate (TAC for short). The second reason for the challenge was the requirement of the tenderer or bidder having a minimum annual turn over equivalent to INR. 30 crores in the immediately preceding the last year and further 25% of the turn over being from the licence plates business. A certificate duly attested by the chartered Accountant/Bank was a must to be filed along with the tender. The last reason for the challenge was that the contract was to be for a period of 15 years and the Government was to ensure that no second bidder would be approved during the currency of the contract in the State except in case of the termination of the contract. The challenge of the Association was that the three conditions concerning experience and extent of the business contained in the notices inviting tenders were discriminatory and unreasonable. They were tailor-made to sub-serve the business and interest of a class of a manufacturer having foreign collaboration and not others. It was suggested that the said conditions made it mandatory for the bidders to entertain a collaboration with the foreign collaborators and it became a precondition to participate in the bidding process. In short, the conditions were so stringent that they were tailor-made for a very few known companies. The further challenge was no the basis of amended Rule 50. It was suggested that it had an inbuilt safeguard to ensure the technical competence of the prospective manufacturer and have controlled issuance of registration plates. It was contended that the manufacturer could manufacture the said plates only if the said manufacturer had the TAC from one of the autonomous agencies for which the strict compliance with the conditions therefor was required and as such the State Government could not have declared any of the manufacturers as competent or incompetent with respect to their technical Competence.

It was pointed out that such high security registration plates were in prevalence, only in few countries which were much smaller than India, having lesser number of automobiles. The experience regarding such countries could not be relevant consideration particularly when the indigenous manufacturers had the technical capacity to manufacture registration plates on their own by complying with all the standards and norms laid down in Rule 50 without entering into the collaboration with any foreign partner.

The further challenge before the Supreme Court was on the basis of Article 19(1) (g) since the indigenous manufacturers were in reality prohibited to do the business of manufacturing and supplying the high security plates. Still further challenge was that the condition regarding the minimum turn over of the business was only for the purpose of advancing the business interest of the group of companies having foreign links and support. Lastly the challenge was that the condition of period of 15 years was an attempt to create monopoly in favour of one of the private companies and this was against the public interest as it would leave the consumer/vehicle owner to the mercy of a said successful bidder. Such a contract for a long term of 15 years would eliminate the benefit of a competitive market and this would entail like in the prices of the two plates required to be purchased by the vehicle owners.

Since there was a difference of opinion between the two learned Judges of the Supreme Court, the matter was referred to a larger Bench and was disposed of. The Supreme Court dismissed all these writ petitions and maintained the first NIT dated 14.7.2003 which also had the conditions like the one which we have quoted above. The conditions were held to be justified conditions.

The Supreme Court held in para 35 of the judgment that considering the effective implementation of the scheme and further considering the enormous work involved in switching over to new plates within two years for the existing vehicles, a resort to trial and error method by the State would prove hazardous. It was further held in same paragraph that the impugned clauses stipulating that the tenderers must have an experience in the field of registration plates in at least three countries and must have a specific financial capacity of Rs. 40 crores with an annual turnover of at least Rs. 50 crores and a minimum of 15% of turnover of registration plates business, were incorporated to ensure that the selected manufacturer should be technically and financially competent to fulfill the contractual obligations, which had the big magnitude and which required huge investment qualitatively and quantitatively.

In paragraph 36 the Supreme Court observed:

It is true that many indigenous manufacturers are in a position to supply the plates on the basis of technical assistance available in and outside the country. There are many tenderers who possess type approval certificates (TA Cs) but to ensure major quantity of the supply in the initial two years and a periodical supply for new vehicles for a long period, only a manufacturer who is sound both technically and financially, is required.

In paragraph 37, the Supreme Court commented that the technical ''know-how'' for the manufacture of HSRP was available outside India and, therefore, particularly in view of the scheme contemplated in Rule 50 for registration plates is a new experiment for India. The tender conditions encouraging such manufacturers with foreign collaborations cannot be held to be discriminatory to indigenous manufacturers nor could this be held to be a deliberate attempt on the part of State Authorities to eliminate indigenous manufacturers.

In paragraph 38 the Supreme Court further held as under:

In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. Unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, tender conditions are unassailable.

The Supreme Court ultimately found that the tender conditions did not violate the equality clause under Article 14 nor did it encroach on the fundamental rights of the class of intending tenderers under Article 19 of the Constitution. The Supreme Court further observed.

We do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover are intended only to keep indigenous manufacturers out of the field. It is explained that on the date of formulation of scheme in Rule 50 and issuance of guidelines thereunder by the Central Government, there were not many indigenous manufacturers in India, with technical and financial capability to undertake the job of supply of such high undertake the job of supply of such high dimension, on a long-term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates.

The Supreme Court further held that the NlT was open to response by all and did not create a monopoly in favour of any private party.

In paragraph 40, the Supreme Court further stressed upon the high security concept and observed that if there was a single manufacturer, he could be forced to go and serve rural areas with thin vehicular population.

In paragraph 41, the Supreme Court did not find fault with the long period of contract of 15 years considering the huge investment required towards the infrastructure by the selected manufacturer.

The Supreme Court then observed that there was no material on record to infer any mala fide design on the part of the tendering authority and also observed that there were only a few concerns in India having collaboration with foreign parties possessing the expertise. It then held that since the terms of NIT were fixed after joint deliberations between State authorities and intending tenderers, they could not be said to be tailored so as to benefit only a certain identified manufacturers having foreign collaboration and merely because a few manufacturers like the Petitioners did not qualify to submit the tender, the tender conditions could not be held to be discriminatory.

In para 43 the Supreme Court observed:

Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time; no person claim a fundamental right to carry on business with the Government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest.

In the subsequent paragraphs, the Supreme Court did not accept the challenge to the tender conditions on the basis of paragraph 2 of Rule 50(1) (v). It also did not accept the challenge to paragraph 4(x) of the Motor Vehicles Order, 2001. Ultimately the Supreme Court dismissed the writ petition. This judgment was passed on 30th November, 2004. We have deliberately dealt, in details, with the findings of Supreme Court since the main argument of the Appellant is based on these findings.

On the heels of the judgment, however, an order came to by passed by the State Government on 27.4.2005 whereby the NIT dated 14.7.2003 came to be cancelled. The tender process in pursuance of the earlier NIT had not progressed due to the pending litigation including the challenges raised at the Instance of parties including the present writ-Petitioner. Various reasons were given for cancellation of the earlier NIT. They were:

i) that only four numbers of bidders were participated in the tender process ;

ii) that the Supreme Court had held that the concerned State Government are legally competent to determine the terms and conditions for the implementation of the scheme for high security registration plates for motor vehicles;

(iii) that the technical bids submitted by the bidders could not be processed, evaluated and finalised upto the date of the order and even the financial bids could not be opened ;

(iv) that it had come to the notice of the State Government that subsequent to issue of the said NIT, a considerable number of manufacturers of such high security registration plates had obtained the requisite type approval certificates from the institution approved by the Central Government as per the provisions of the Motor Vehicles Act;

(v) that due to passage of time and change in the relevant field on account of coming up good number of duly approved manufacturers and in view of the observations made by the Supreme Court, it was in the greater public interest and also in the interest of the public Safety and security that the terms and conditions of the said NIT should be reviewed and determined afresh. The last paragraph of this communication is worth noting. It is as under:

Now, therefore, the Governor is pleased to direct that the entire tender process so far followed pursuant to the aforesaid Notice inviting Tender (NIT) for supply and fitment of High Security Registration Plates for Motor Vehicles as issued by the West Bengal Transport infrastructure Development Corporation Limited on behalf of the State Government be cancelled and fresh process for inviting such, bids be commenced after due determination of the terms and conditions thereof in the light of what has been stated above. The Government is further pleased to direct that the Bidders (four numbers) who had participated in the previous tender process (as cancelled) be allowed to participate in the new tender process to be initiated hereafter, if they so desire and the Earnest Money Deposit (EMD) made by them be returned forthwith.

it is not disputed that the Petitioner then withdrew its earnest money deposit.

It was only on 4.10.2005 that the fresh NIT was floated by the State of West Bengal. It is an admitted position that the Petitioner in pursuance of this fresh NIT offered its bid by complying with all the formalities including the payment of earnest money deposit and offering the technical as well as the financial bids. However, on the same date, the Petitioner filed the W.P. No. 2083/2005 challenging the second NIT on various grounds. In the same petition, the Petitioner also challenged the order of the State Government dated 27.4.2005 cancelling the earlier tender process initiated in pursuance of the first NIT.

Earlier to this, the Petitioner had moved the court on 11.3.2005 questioning the right of one of the tenderers who participated in the process initiated by the first NIT. Thereafter one of the four tenderers, withdrew from the process. It was at this stage that the State Government cancelled that very tender process. Therefore, that writ petition was disposed of as infructuous on 4.5.2005. It was then that the Petitioner had unconditionally taken the refund of the earnest money deposit in June, 2005. The Second NIT was notified in the month of September, 2005 where under the documents were to be purchased between 4.10.2005 and 20.10.2005 by making a non refundable costs of Rs. 50,000 and the earnest money deposit was of Rs. 25,00,000/-. The tender was to be submitted on 14.10.2005. It seems that the Petitioner then went on to challenge the second NIT.

The basic challenge in the present writ petition was as under:

CHALLENGE BY THE PETITIONER AND THE STAND OF THE RESPONDENTS.

The Petitioner alleged that firstly the order dated 27.4.2005 was vitiated by legal malice and there was no valid reason to cancel the process. The grounds on which the second tender process was challenged were fictitious since there was no change in the conditions existing in 2003 due to the passage of time. It was further alleged that the decision to cancel was taken to favour some one already in the mind of the State Government. It was then suggested that the State Government itself had taken a stand in the earlier litigation which stand was supported by the Petitioner and, therefore, the Petitioner was entitled to legitimately expect that the Petitioners offer in the fist bid would be meaningfully considered. In cancelling the tender process, the State Government had defeated the legitimate expectations of the Petitioner.

It was suggested that some clauses in the first NIT viz. Clause Nos. 1,5.2, 1.5.5. 1.5.6. and 1.5.7 were specifically put in the first NIT to ensure selection of a proper manufacturer who was both technically qualified and financially sound. It was further pointed out that specifically every bidder had to have the experience in four countries either himself or the joint venture. It was then pointed out that Respondent No. 1 in the earlier round of litigation had filed a counter affidavit justifying these stringent clauses before the Supreme Court and thus the State Government had also accepted the necessity of the experience (foreign experience) and the financial soundness for production of HSRP. It was then pointed out that the Supreme Court had ultimately upheld these clauses requiring the foreign experience as also requiring the financial soundness. The Petitioners have extensively relied upon the State Governments affidavit given before the Supreme Court in the earlier round of litigation wherein the first NIT was challenged. On that basis it was pointed out that in the new NIT the experience clauses were changed. The reference was made to clause Nos. 1.5.2 to 1.5.6, 2.3.2, 4.14, 2.13.4, 2.30, 4.1, 4.1.2. It was reiterated that these clauses as they appeared in the first NIT and were approved by the Supreme Court, were completely changed and diluted so that stringent conditions of the previous experience (foreign experience) as also the conditions regarding the financial feasibility were totally deleted. It is pointed out that in the second NIT the only qualification was the holding of the TAC by the manufacturer which by itself could not guarantee the technical ability and the financial feasibility on the part of a bidding manufacturer. Thus it was pointed out that in the wake of the Supreme Court judgment accepting the stringent conditions regarding the past foreign experience and the soundness of the financial capacity, the State Government could not have changed its policy by making a volt-face. This abrupt change in the policy of the State Government which was described as malicious and mala fide was viewed as a breach of Article 14 being an arbitrary exercise on the part of the State Government. Further the writ Petitioner pointed out that the stand taken by the Government in firstly cancelling the first NIT and secondly introducing the second NIT with diluted conditions would amount to direct affront to the Supreme Court judgment which had not only approved the earlier stringent conditions but also justified the same on various grounds including national security, the enormousness of the project and the requirement of the high technical capability. It was pointed out further that the Supreme Court had clearly observed that the stand of the State Government in the earlier writ petition was that the manufacturer should have access to the requisite technology and should be in a position to upgrade, expand and upscale the operation on a continuous and sustainable basis and as such the removal of the stringent conditions and diluting th.3m was obviously an arbitrary exercise without there being any reasons for the same.

As against this, the State Government justified its action on various grounds such as the time which has elapsed since the first NIT, it was pointed out that the indigenous manufacturers also had the capacity to manufacture HSR Ps. It was suggested further that even in the second NIT adequate care was taken to ensure that the best manufacturer suited for the purpose would be selected. A reference was also made to the broadening of the competition area. It is also pointed out that the TAC was available only to such manufacturers who had the capacity both technical as well as financial to produce HSR Ps and since the number of the holders of TACS had increased substantially, It was now feasible not to insist upon the foreign experience as a pre-condition for the manufacturers who offer the bids. Lastly the State a stand was that the Supreme Court judgment could not be said to be the deciding factor as the Supreme Court in the afore-mentioned judgment was only considering the feasibility and, the correctness of the earlier NIT and-the present NIT was not there for consideration. It is then pointed out that the Supreme Court had not anywhere insisted upon the experience clause and had also not further insisted upon the financial ability clause being in a particular manner. It had merely approved all those stringent conditions in the earlier NIT but had no! held that such a clause was compulsory as a condition for the bidders to compete. In short, it was suggested that the Supreme Court judgment could not come in the way of the policy. It is also argued that the change in policy on the part of the State Government had a base of substantial reasons which were both relevant and necessary for such a change. The State Government had before it enough material to change the policy and lastly there were no mala fides in the exercise of the change in the policy. It was also pointed out that even the guidelines provided by the Ministry did not in any manner insist on the experience clause or a financial ability clause and these guidelines were merely suggestive in nature. It was also reiterated that the writ petition was not maintainable as the Petitioner had withdrawn earnest money deposit in the first NIT.

The learned Single Judge took the view that the conditions raised by the Petitioner were vague and speculative in nature. He had that there was nothing to suggest that the grounds disclosed by the State Government while cancelling the first NIT were factually incorrect.

The learned Judge further held that the earlier tender process was cancelled in the greater public interest and there was no question of any legitimate expectations being entertained by the Petitioner. The learned Judge also held the allegations about the malice to be baseless. The learned Judge also did not agree that because of the judgment of the Supreme Court, the second NIT should go as it is contrary to the first NIT. Ultimately the learned Judge came to the conclusion that there was no prohibition in the Supreme Court''s judgment against the change of the policy or diluting of the conditions after reviewing the same. On these grounds, the writ petition came to be dismissed.

In this appeal, Shri Bobde, the learned senior counsel also reiterated the grounds raised in the writ petition and we were also taken extensively through the Supreme Court judgment as also through the conditions of both NI Ts. Shri Bobde compared both the conditions to suggest that in the second NIT the experience clause was completely eliminated and the clause regarding the financial feasibility was substantially diluted. The learned Counsel also argued that this was a highly specialized thing where all and sundry could not be allowed to take part who had no technical capacity, practical experience and more particularly the foreign exposure. The learned Counsel greatly stressed over the need to combat danger of terrorism and pointed out that though the countries mentioned in the first NIT were relatively small countries, they were facing the actual danger of terrorism and, therefore, the experience in respect of the HSRP in those countries was a must for a manufacturer who was to take up that exercise in India for the first time.

Shri Bobde also extensively took us through the aforementioned judgment of the Supreme Court in Association of Registration Plates (cited supra) and relying on various paragraphs contended that it was a law laid down by the Supreme Court and therefore, the State could not have taken up a volt- face on the stringent conditions contained in the first NIT much less without there being any reasons. Shri Bibde suggested that such a volt-face is nothing but an apparent breach of Article 14 as it is both arbitrary and unreasonable.

We were also taken through the affidavit filed by Shri D. Mukherjee before the Supreme Court and the affidavit now filed before us at the instance of the State Government (sworn by same Shri D. Mukherjee). The learned Counsel tried to show that both the affidavits were contradictory in nature.

First against this, the State Government represented by Shri Das, justified of the Single, Judge and was at pains to point out that this was a matter of policy which was well supported by good reasons. Shri Das pointed out that the competition would be widened in the second NIT and that was for the benefit of the State Government, He also pointed out that things had changed drastically in India particularly in the matter of technical amenities and, therefore, the removal of experience clause contained in the first NIT from the second NIT could not be said to be fatal. In this behalf, Shri Das pointed out that there was a scope in the second NIT to show that only such manufacturer would be selected who would be technically competent and financially sound. We were taken through the various clauses of the second NIT.

During the pendency of the appeal, we had directed all other parties who had offered their bids, to be joined as parties and all those bidders were noticed who were represented before us by the learned Counsel Shri Kapoor, Shri Jayanta Mitra, Shri Abhijeet Chatterjee, Shri Dastoor, Smt. N. Patheria and Shri Sen. They were heard extensively. All the learned Counsel supported the judgment and opposed the appeal almost on the similar grounds which we have referred to above. It is on this basis that the following questions fall for consideration in this appeal.

QUESTIONS FOR DECISION

Was the State Government within its rights to cancel the first notice inviting tender and could that decision be termed as arbitrary and in breach of Article 14 of the Constitution ? 1-A, Can that decision be challenged by the Appellant/ Petitioner who had withdrawn and accepted the earnest money deposit offered as a bidder in pursuance of that NIT?

What is the nature of change of conditions in the second NIT and was the WBTIDC within its rights to effect the same particularly in view of the judgment of the Supreme Court in Association of Registration Plates upholding the first NIT ?

2-A. What is the true import of the Supreme Court judgment in Association of Registration Plates ?

Questions 1 & 1-A: We are dealing with these questions jointly. The decision to cancel the earlier tender process was taken on 27.4.2005. We have already given in para 24 the reasons supplied by the State Government to cancel the tender process. The decision was not challenged by the Petitioner for a full period of about six months. The writ petition came to be moved only on 21.11.2005 i.e. seven months after the decision was taken to cancel the first tender process. In pursuance of the decision, the Appellant / Petitioner instead of challenging the decision instantaneously, the Appellant proceeded to take back the earnest money deposit.

It was very strongly argued by the Respondents that the Appellant / Petitioner was hopelessly late in challenging the order dated 27.4.2005. They pointed out that at that stage the Petitioner had already entered the fray and the abrupt decision to cancel the entire tender process could have been challenged in time which was not done and instead the Petitioner chose to wait for the issuance of the second NIT and even after that issuance filed the writ petition only in the last week of November, 2005. It was pointed out that while the basic prayer was the cancellation of the second NIT and the Appellant / Petitioner had prayed for quashing of the cancellation order dated 27.4.2005 only by way of second relief that too after withdrawing the earnest money deposit paid for the first NIT. The contention, therefore, was that there were no bona fides or the locus standi in favour of the Appellant / Petitioner.

As against this, Shri Bobde argued that there was nothing wrong in accepting earnest money deposit and there was also nothing unnatural in waiting for the advent of the second NIT. After all the Petitioner had felt aggrieved because of the dilution of the stringent conditions and had, therefore, chosen to challenge the second NIT and thereby further prayed for the quashing of the cancellation order dated 27.4.2005 as a consequential relief.

The decision to cancel the first NIT was an independent decision. Till then the tender process had progressed substantially inasmuch as all the bidders had offered their bids technically as well as others. The validity of the first NIT was challenged and the Supreme Court had approved of that tender notice or at least had not found fault with the same. In* this backdrop when the entire tender process came to be cancelled, the Appellant/Petitioner would have been well justified in challenging the same in good time without waiting for the second NIT which by itself would be a different subject. After all very substantial claims of the Petitioner were at stake in the first NIT and nothing could have stopped them from challenging the NIT cancellation order on the ground that the reasons therefor were either non-existent or were not relevant and that the exercise was mala fide. Had such petition been filed, then the reasons given by the State Government in the order of cancellation could have been factually tested both in terms of their existence and veracity. However, that was not done and instead the Appellant/Petitioner meekly accepted the cancellation and as if that was not sufficient also withdrew the earnest money deposit. In our opinion, therefore, the challenge to the cancellation order is hopelessly belated and any attempt now to find fault for the reasons given in that order is not justified. In the earlier part of the judgment more particularly in paragraph 24, we have indicated the reasons given by the State Government for the cancellation. We will now test those reasons.

The first reason that only four numbers of bidders had participated in the tender process, was of course a matter of record and at that time as has been found by the learned Single Judge one of the bidders had already withdrawn from the race. The present Appellant/Petitioner had questioned the eligibility of one more bidder to participate in the tender process. Therefore, at that time, for all practical purpose only two bidders were in the fray. The first reason is, therefore, factually correct. We are not here for testing the justifiability of the first reason but are concerned only as to whether the reason existed in fact. The second reason given was also a fact as the Supreme Court had indeed made observations in paragraph 38 which we have quoted in paragraph 16 of this judgment. What is the true import of those observations would be dealt with in the latter part of the judgment. However, the fact of the matter is that such reason was factually available to the State Government who were legally competent to determine the terms and conditions for the implementation of the scheme for HSR Ps. The third reason given was that till that date technical bids could not be processed, evaluated and finalised and even the financial bids could not be opened. In our opinion, even this factual position could not and was not disputed by the Appellant/Petitioner before us or before the learned trial Judge. In this behalf, it must be pointed out that almost two years had elapsed after the first NIT was notified and because of the litigation the bids both technical and financial were not either processed, evaluated and/or finalised till then. Therefore, this reason also must be held to be factually existing. It was then claimed by way of fourth reason that the State Government had come to notice that considerable number of the manufacturers of such HSR Ps had obtained the requisite type approval certificates from the approved institutions as per the provisions of the motor Vehicles Act. Now had the writ petition been filed in time, this claim could have been tested factually. Even during the debate it was not seriously disputed before us that there are substantial number of manufacturers having the type approval certificates. What was argued before us was that having type approval certificates is an insignificant fact for the grant of tender. Now we cannot ignore the essential conditions both in the first NIT as well as in the second NIT whereby the intending bidder had to have the said type approval certificate. If the number of persons having such type approval certificates Was found to have increased substantially, then it cannot be said that it was an insignificant, unconnected or an irrelevant fact. Thus even this reason justified the State Government in favour of the cancellation as one of the few other reasons. Under the settled law, we cannot impregnate, the thought process of the State Government was justified in taking the decision. The judicial review is available only upto the extent to see whether the reasons for decision had some nexus and were relevant for the purpose. It is not for the Court to judge the correctness of the reasons. To that extent the principle of judicial review will not go. Since having a type approval certificate was a must for the manufacturer before offering the bid, the substantial increase in the number of such manufacturers is certainly a relevant fact and we do not find any reason to hold that such fact was insignificant or unconnected or irrelevant for the purpose. Therefore, the State Government was justified even for that reason. Lastly the State Government has given the reason of a greater public interest. This in our opinion, was the most significant reason. Even before us, Shri Das very vociferously canvassed this reason and urged that it was not necessary for the State Government to signify as to how the decision was in the greater public interest and what would be the ramification of that public interest. It was argued before us that undoubtedly the State Government had before it the existing narrow competition for the first NIT. If there was any possibility of increasing the area of competition, that would amount to serve a greater public interest because of the financial implications. Shri Das stated before us that the availability of the more number of manufacturers who because of they having type approve certificates had earned the eligibility to compete with others was undoubtedly a very relevant factor which would have earned more revenue to the State and such would serve greater public interest contemplated under that order. Now all these reasons taken together were neither proved to be factually incorrect nor could be termed as insignificant or irrelevant reasons. Therefore, in our opinion, the Appellant/Petitioner firstly was guilty of laches and secondly it cannot be said that those reasons have been successfully demolished at its instance. If that is so, an inevitable result must follow that the State Government was within its rights in cancelling he first NIT. In this behalf it cannot be forgotten that in clause Nos. 2.3.1.1 and 2.31.2 the decision of the Managing Director, WBTIDC regarding the evaluation, qualification, opening and award of the bid was final and binding on all the bidders and the right was reserved in favour of the Managing Director to reject any or all offers received from the bidders without assigning any reasons.

Shri Bobde tried to justify the late challenge on the ground that at the time when the first NIT was cancelled, he did not have the idea about the tender conditions in the subsequent tender notice and, therefore, there was no occasion for him to challenge the cancellation order. We do not agree. In fact by then the tender process had proceeded. All the tenderers had offered their bids and what remained was only the evaluation of the technical bids which process was going on. At such juncture, if the whole tender process was cancelled giving certain reasons, the Appellant / Petitioner could have challenged it instantaneously that being an independent decision affecting his own interest. We do not see as to how the Appellant/petition was justified in waiting for the second NIT and only seeing the same, reverting back to challenge the cancellation order itself. Since we do not find any fault with the order dated 27.4.2005 on merits and since we are of the opinion that the challenge made after seven months is a belated challenge fatal to the petition, we do not propose to examine the question raised as to whether the withdrawal of the earnest money deposit by the Appellant/Petitioner disentitled him to challenge the order of cancellation. In our opinion, that question becomes superfluous once we do not find any fault with the impugned order on merits. We answer question No. 1 and 1-A accordingly.

Question No. 2. What is the nature of change of conditions in the second NIT and was the WBTIDC within its rights to effect the same particularly in view of the judgment of the Supreme Court in Association of Registration Plates upholding the first NIT?

Question No. 2-A. What is the true import of the Supreme court judgment in "Association of Registration Plats" case?

Shri Bobde, learned senior counsel extensively took us through clauses of the first NIT and compared them with the clauses of the second NIT. For the purpose of convenience we are quoting those clauses in two different tables so that they are immediately available for comparison.

FIRST NIT SECOND NIT

1.2.3. Objective of this bidding process 1.2.3. Objective of this bidding process

Objective of this bidding process is to ensure that such manufacturer is selected by the State to comply to the overall objection of the notification of the Ministry of Road Transport & Highways. Government of India, GSR No. 221 (E) dated 28th Objective of the bidding process is to ensure that such manufacturers are selected by the State to comply to the overall objective of the Notification of the Ministry of Road Transport & Highways.

FIRST NIT SECOND NIT

March 2001 and subsequently S. No. No. 814 (E) dated 22nd August, 2001 and S.O. 1041 ''(E) dated 16th October, 2001 selected manufacturer who has capability and capacity to invest and build necessary infrastructure, so that the scheme becomes operational from the targeted date i.e. 1st January, 2003 as specified by the Ministry of Road Transport & Highways, Government of India. Government of India, GSR No. 221 (E) dated 28th March, 2001 and subsequently S.O. No. 814 (E) dated 22nd August, 2001 and SO 1041 (E) dated 16th October, 2001, selected manufacturers who has capability and capacity to invest and build necessary infrastructure, so that the scheme becomes operational from the targeted date to be intimated by WBTIDC in due course.

Since High Security Registration Plate has been introduced by the Ministry of Road Transport & Highways, as a highly sensitive product for prevention of crimes and involve high security features to prevent counterfeiting and duplication of High Security Registration Plates, it is intended to select a manufacturer who would have necessary experience expertise and exposure to such works and of such complexity in India and/or abroad so that the security objective of the scheme may not be diluted or vitiated, in view of the strictest adherence of High Security features and impose accountability on the successful bidder. Since High Security Registration Plate has been introduced by the Ministry of Road Transport & Highways, as a highly sensitive product for prevention of crimes and involve high security features to prevent counterfeiting and duplication of High Security Registration Plates, it is intended to select manufacturers who would have necessary expertise in such works, so that the security objective of the scheme may not be diluted or vitiated, in view of strictest adherence of High Security features and impose accountability on the successful bidder.

FIRST NIT SECOND NIT

1.5 ELIGIBLE BIDDERS 1.5 ELIGIBLE BIDDERS

1.5.1. This bid is open to only those applicants who have got certification from testing agencies approved by Government of India. 1.5.1. This bid is open to only those applicants who have been issued Type Approval Certification for manufacturing High Security Registration Plates for Motor Vehicles from the testing agencies approved and authorized by the Govt, of India as per Rule 50 of Central Motor Vehicle Rules 1980. No provisional type approval certifications shall be accepted. The type approval certification must be valid on the date of opening of bid.

1.5.2. The bidder must be a company registered under the Companies Act, 1956. The Bidder or the Promoter or any of the members of Joint Venture should have sufficient experience in the field of Registration Plates and should be working in at least five countries for Registration Plates and in a minimum of four countries (necessary credentials from Government Authorities of such countries should be attached) for security licence plates with at least one of the following security features/ specifications (features notified by the Ministry of Road transport and Highways, 1.5.2. The bidder may be and individual a company / SPV/ Joint Venture. In case of a joint venture / SPV / Consortium all partners shall be liable jointly and severally during the bidding process and during the currency of the contract period in accordance with the terms of contract. The bid shall be signed so as to legally bind all partners jointly and severally.

FIRST NIT SECOND NIT

Government of India): i) Laser branded permanent consecutive identification number:

ii) Chromium based hologram.

iii) Chromium based third licence plate Strieker {chromium based hologram).

iv) Hot stamping foil.

v) Snap lock fitting system. 1.5.4. The bidder should have their own manufacturing unit of High Security Registration Plates in India with minimum capacity of supplying at lest one year''s requirement for the State (Documentary evidence of having obtained necessary factory licenses (approval of proposed Factory Plan _ and clearances, statement of capacities for the purpose to be attached duly signed by the authorized representative of the consortium). 1.5.3 - The bidder in case of an individual or single company must have a networth of INR 20 crores to be certified by a Chartered Accountant. The bidder should have a minimum annual turnover of INR crores as per the audited balance sheet 2003-04 or 200405 certified by a Chartered Accountant. 1.5.4 In the case of a consortium / SPV / Joint Venture the partners of the consortium shall meet the financial illegibility criteria as mentioned above in Clause

1.5.5. The bidders or the joint venture partners together must have a minimum net worth equivalent to INR 50 Crores (Bankd Solvency. Certificate to be produced as mentioned in Clause No. 2.37) 1.5.3. As regards the technical criteria of possessing the type approval from authorized agencies any of the partners must possess the same. The consortium / SPV/ Joint Venture must be through a registered deed.

1.5.6. The Bidders or the joint venture partners together must have a minimum annual turnover equivalent to INR 50 Crores during preceding financial Year i.e. 2002-2003, 25% of this amount should have from the High Security Registration Plate business. Necessary certificate from chartered Accountant should be attached. 1.5.5. The lead partner must have 40% (forty Percent) of the total financial stake in the joint venture / SPV / Consortium maximum 3 (three) partners will be allowed to form the joint venture / SPV/ consortium. The partner satisfying the technical eligibility criteria must have at least 30% (thirty percent) of the total financial stake in the joint venture / SPV / Consortium.

1.5.7. The Bidders must have obtained " Approval Certificate" from the test agencies CRRI, ARAL or VRDE for the High Security Registration Plate as per the Gazette notification referred to above and the certificate must be valid on the date of opening of Bid. 1.5.8. The Bidder must provide complete sets of samples of High Security Registration Plates each type and each colour as per specification covering the entire alphabets from A to Z and numerals from 0 to 9 along with the bid documents in separate envelope marked and sealed. The sample of HSEP shall store all security 1.5.6 The bidders, their suppliers, contractors, partners etc. must not have any criminal antecedents and must not have been involved in any economic offences or conducted any criminal offences

features specified in official FIRST NIT

FIRST NIT

gazette notifications issued by the Government of India time to time. 1.5.9. The Bidder must provide pre-qualification field performance warranty for the High Security Registration Plates from manufacturer or reflective sheet for a minimum period of 5 years.

4.1 PERIOD OF CONTRACT 4.1.1. PERIOD OF CONTRACT & METHOD OF SELECTION.

The contract will be for a period of fifteen years commencing from the date of commencement of the scheme. A detailed agreement shall be entered into between the successful bidder and WBTIDC for a period of fifteen years. The contract will be for a period of ten years commencing from the date of commencement of the scheme. The agreement shall be entered into between the successful bider and WBTIDC for a period of ten years.

45.1 We have deliberately quoted above clauses at one place to enable an instantaneous comparison. In respect of Clause 1.2.3. dealing with the objective of this bidding process, there is no change in the first part of the objectives. However, in the second part of the objectives, the major difference which is to be found out is in the last sentence.

While in the first NIT the intended manufacturer is expected to have necessary experience, expertise and exposure to such works in India and/or abroad. The words experience and exposure are completely deleted in the second NIT and so also the words India and/or abroad are also absent in the second NIT. According to Shri Bobde and rightly the objectives in the second NIT do not suggest that the intended manufacturers should have experience and exposure of such works and of such complexity in India and / or abroad. Instead it is now sufficient for the intended. Manufacturer to have necessary expertise in such work.

Clauses 1.5.1 and 1.5.2 in the first NIT are comparable to para 1.5.1 in the second NIT. In that the certification from testing agencies i.e. type approval certification is common to both. However, while in the first NIT the bidder must be a company. In the second NIT the bidder could be an individual/ a company / SPV / Joint Venture. It is more particularly provided in the second NIT that in case of a joint venture / SPV /Consortium all partners shall be liable jointly and severally during the bidding process as also during the currency of the contract period. This terminology is comparable to Clause 1.5.3 of the first NIT. However, Shri Bobde very significantly points out that the major condition in Clause 1.5.2 of the first NIT is that the bidder or the Promoter or any of the members of the Joint Venture should have sufficient experience in the field of registration plates and should be working in a least five countries for registration plates and in a minimum of four countries for security licence plates with at least one of the following security features/specifications of the five features given in the clause. Shri Bobde points out that such experience in the registration plates in five countries and the experience of such a concern in working in four countries in one of the five features for which the necessary credentials from the Government authorities of such foreign countries were bound to be attached, significantly and completely absent in the second NIT in Clause 1.5.2. Shri Bobde, therefore, points out that in the second NIT, the Respondent has completely done away with the experience clause as also the exposure aspect in foreign countries and instead the whole stress is now on such companies or even the individuals who have type approval certification. He, therefore, points out that while in the first NIT vide Clause 1.5.4, the bidders had to have their own manufacturing unit of high security registration plates in India with a minimum capacity of supplying at least one years requirement for the State ) documentary evidence of which had to be submitted) is also totally deleted in the second NIT. Thirdly it is pointed out that the minimum net worth of the bidder in the first NlT was equivalent to INR 50 crores, the same is reduced to 20 crores. Lastly he points out that out of total turnover of INR 50 crores in the preceding year, 25% of the amount had to be from the high security registration plates in the first NIT vide Clause 1.5.6 whereas this condition has been completely deleted in the second NIT and as such the necessity of the experience of the business of the manufacture of HSR Ps as also the financial capability of the manufacturers have not only been diluted but significantly deleted. Instead in the second NIT only one significant clause has been added that the bidders, their suppliers, contractors, partners etc. must not have any criminal antecedents and must not have been involved in any economic offences. According to Shri Bobde, now it is not even necessary for a bidder to provide complete set of samples as was required in the first NIT vide Clause 1.5.8 nor is it now required for the bidder to provide pre-qualification field performance warranty for a minimum period of five years. Lastly the learned Counsel points out that in place of 15 years of contract, now the contract has been reduced to 10 years in the second NIT. According to the learned Counsel all these changes are not only fatal to the second NIT but they amount to an unprincipled compromise with the security of the State. The learned Counsel says that there are absolutely no reasons for the abrupt change in these policies and, therefore, this change in the policy decision is arbitrary and is hit by Article 14 of the Constitution of India. The learned Counsel buttresses is argument further by pointing out that there is virtually no test now to adjudge the technical aspect of prospective manufacturer which raises the suspicion regarding the very bona fides of the Respondent. He points out that in the judgment of the Supreme Court the whole stress was given on the aspect of the experience, exposure and expertise of the prospective manufacturer and in doing so the Supreme Court had before it the security of the State, enormousness of the business, the tremendous technical capability required for this manufacture which factors have been completely ignored in the second NIT. The learned Counsel, therefore, says that particularly on the backdrop of the Supreme Court judgment in which the State of West Bengal had vociferously justified the stringent conditions of experience in the foreign countries and the financial capability of he manufacturers, the Respondent could not now take a somersault and do away totally with these conditions so that the field of competition could be made for all and sundry and even to those who had nothing to do with the HRSP business. We were taken through the observations of the Supreme Court which we have deliberately quoted in the earlier part of the judgment and more particularly in paragraphs 14 to 23. The learned Counsel heavily relied upon those observation and pointed out that those observations were law declared under Article 141 of the Constitution and, therefore, could not be tinkered with within an insignificant period of one year. According to the learned Counsel, therefore, the second NIT was bound to be quashed and the first NIT was bound to be restored.

As against this, the learned Counsel appearing for the Respondents and more particularly for the other bidders argued that there was nothing wrong in changing the conditions of the tender notice which could be changed by the WBTIDC which was well within the powers of the WBTIDC. The learned Counsel urged that the change in the eligibility conditions and doing away with the experience clause or diluting the financial liability clause was more or less a matter of the policy. The Supreme Court had time and again permitted the change in the policy provided such change was not arbitrary and well justified by the supportable reasons. It was urged that most of the other competitors had developed the technical know-how in the matter of production of HSRP and had also the advantage of the foreign collaborations. Substantial contentions were raised before us signifying the importance of having a permanent type approval certificate for which itself rigorous tests were made applicable and such certificates were also produced before us to buttress the contention that the grant of type approval certificate was not an insignificant fact. As regards the deletion of the experience clause, the learned Counsel pointed out that after the first communication regarding earlier guidelines dated 6.3.2002, the Government of India itself had watered down the requirement regarding the NIT. The learned Counsel contended that in the subsequent communication dated 14.6.2002, the guidelines were only described as suggestive while in the subsequent communication No. RT-11028/4/2002 MVL dated 13.11.2002 if was specifically pointed out that while only four manufacturers had the type approval certificates, some others were in the process of being granted that certificate. The learned Counsel pointed out that thereafter three years period had elapsed and all the competing manufacturers had been able to get the type approval certificates which required very rigorous standards to be complied with. It is further pointed out in the very same, letter that it was clarified very clearly that the guidelines did not stipulate that the earlier conditions of experience regarding the working in the foreign country was a mandatory requirement. A letter dated 134.11. 2002 was heavily pressed into service, substantial portion of which we have already quoted in paragraph 8 of this judgment. Lastly it was contended that the Supreme Court judgment cited supra could not be said to be a "law declared" on the question of the essential conditions in the tender notice. It was submitted that in that decision the Supreme Court was merely testing the conditions as were appearing in the first tender notice and had only approved of the same for which the necessary and relevant factors were taken into consideration. However, even in that judgment the Supreme Court had signified the right of the State Government to provide conditions for the tender as per its own choice. Again the present conditions were not tested by the Supreme Court particularly in view of the changed factual scenario and, therefore, the judgment could not come in the way of the Respondents either to change the policy or to provide the conditions without the experience clause and with a substantially reduced financial capability clause. Ultimately the learned Counsel argued that there were enough safeguards provided even in the conditions of the second NIT which would stand the test of reasonableness under Article 14 and which had the direct nexus with the object of the tender.

The comparative table would ultimately show that the foreign experience clause has been deleted and a necessary change has been made for that purpose even in the objective of bidding process. In the Clause 1.2.3. of both the NITS the factors of capability and capacity to invest and build necessary infrastructure have been referred to in the second part of that clause. However, while in the first NIT the intended manufacturer was to have experience, expertise and exposure in India and abroad. In the second NIT the words experience and exposure are deleted while retaining the word expertise The object of the security objective of the scheme not being diluted, is also retained as it is in the second NIT. This undoubtedly suggests that the Respondent did have in their mind the aspect of security of the State. In this behalf, Shri Bobde argued that there was necessity to have the foreign experience particularly of the countries which were suffering of the terrorism and the Supreme Court had also made a pointed reference to the aspect of security in paragraph 40. We have very closely examined the judgment of the Supreme Court for this aspect of terrorism and the necessity of experience in foreign countries expressed in the Supreme Court judgment, more particularly in paragraphs 35 to 44, we do not find any specific observations made that for combating the aspect of terrorism the HSR Ps should be manufactured only by those who have the foreign experience. In paragraph 35 the Supreme Court had approved of that experience as also the financial capability clause only to ensure that the manufacturers would be technically and financially competent to fulfill the contractual obligations. In the subsequent paragraphs also, there is no reference made to this aspect of the foreign experience being necessary for combating the terrorism. The Supreme Court only found in paragraph 35 and onwards that such provision in the first NIT regarding the foreign collaborations could not be held to be a deliberate attempt on the part of the State authorities to eliminate indigenous manufacturers or it could not be said that the clause requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover were intended only to keep indigenous manufacturers out of the field. Again there is a specific reference in para 38 that on that date i.e. on the date of formulation of the scheme (which was in 2001) there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimensions on a long term basis and in a manner to ensure safety and security. It cannot, therefore, be said that the Supreme Court insisted upon the foreign experience and a particular type of financial capability in all such contracts. It only approved of those clauses in the first NIT considering the requirement of high technical and financial capabilities. If those objects can be achieved even without providing specifically in the tender conditions, we think no fault could be found on the part of the Respondent to delete those clauses of experience and to dilute that clauses regarding the financial capabilities to a certain extent. We do not think that the Supreme Court directed putting of certain conditions regarding the foreign experience. That is not the import of the Supreme Court judgment. Therefore, this judgment cannot be said to be a law declared in the matter of putting certain tender conditions in the NIT.

We were taken through the basic decision of the House of Lords In Quinn v. Leathern reported in 1901 AC 495 and the subsequent judgments followed by the Supreme Court in that behalf like Sreenivasa General Traders and Others Vs. State of Andhra Pradesh and Others, and Amar Nath Om Prakash and Others Vs. State of Punjab and Others, In M/s Amar Nath Om Prakash''s case cited supra, the following observations are made:

It was said, with utmost respect these observations of the learned judge are not to be read as Euclid s theorems not as provisions of the statute. These observations must be read in the context in which they appear. We consider it proper to say, as we have already said in other cases, that judgments of courts are not be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes: their words are not to be interpreted as statutes.

Considering the principles involved, we are convinced that the aforementioned judgment of the 2) 1901 AG 495 3) Sreenivasa General Traders and Others Vs. State of Andhra Pradesh and Others, Supreme Court could not be read so as to lay down the imperative conditions in the tender notice of the kind which we are considering.

It is true that the Supreme court scoffed at trial-and-error method and insisted upon getting the right and the most competent person. It also approved of clauses providing for experience and sound financial and technical capacity and also held that the relevant terms and conditions so formulated in the first NIT were for adjudging the capability of the particular tenderer. However, it cannot be said that the Supreme Court had anywhere held that it was imperative on the part of the State authorities to put the conditions regarding the foreign experience. We must, therefore, reject the arguments of Shri Bobde that in deleting the clause of foreign experience or working in the foreign countries, the Respondent has flouted the law laid down by the Supreme Court in any manner. A conjoint reading of paragraphs 35 to 44 does not in any manner suggest any such law declared in respect of the tender conditions. What has been observed is regarding the clauses in the first NIT regarding the foreign experience and the financial capability not being malicious or actuated with legal mala fides to keep the indigenous manufacturers out of the field.

In this back-ground we cannot forget the specific stand taken by the Central Ministry vide its letter dated 13.11.2002 wherein it has been reiterated that the conditions regarding the foreign experience or a particular financial capacity are not imperative in so far as tender notices are concerned. Much part of the debate was devoted to these conditions and more particularly to the guidelines dated 6.3.2002. But was cannot forget and ignore the subsequent dilution of those guidelines regarding the experience clause being there in the tender notice. True such clause was a must as per the communication dated 6.3.2002 but in the subsequent letter dated 14.6,2002 those guidelines were merely portrayed as being suggestive and lastly by the letter dated 13.11.2002 to which we have made specific reference in para 8 of this judgment, two substantial facts were noted. Firstly, it was noted that there were number of other manufacturers coming up and were being armed with type approval certificates and secondly and more importantly that foreign experience clause in the tender conditions was not made imperative in NIT. Now if this was the cause, could the Respondent be put in dock for changing its policy and thereby deleting the foreign experience clause and diluting the financial capacity to a little extent. For that purpose Shri Kapoor heavily relied on Supreme Court decision in the case of Directorate of Education and Ors. v. Educomp Datamatics Ltd. and Ors. reported in (2004) 4 Supreme Court Cases 19. In this case the question which fell for the Supreme Court''s consideration was regarding the extent of judicial review permissible in exercise of jurisdiction under Article 226 of the Constitution to the terms of tender prescribing eligibility criteria. The further question which was for consideration was whether the High Court could change the terms incorporated in the tender notice on the ground of its being inappropriate and that the objective would be better served by adopting different eligibility criteria. After restating the principles laid down in the case of Tata Cellular Vs. Union of India, as also in Air India Ltd. Vs. Cochin Int., Airport Ltd. and Others, and M/s. Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Others, , the Supreme Court held that the terms of the invitation to tender are not open to judicial scrutiny, the same being 5) Directorate of Education and Others Vs. Educomp Datamatics Ltd. and Others, ) Tata Cellular Vs. Union of India, ) Air India Ltd. Vs. Cochin Int., Airport Ltd. and Others, ) M/s. Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Others, in the realm of contract. The Supreme Court further observed that the Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias, that the State 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 because if feels that some other terms in the tender would have been fair, wiser or logical. Relying on these decisions heavily, Shri Kapoor urges that here was a case where particularly because of the elapse of three years time and particularly because the State authorities had found that there were number of other manufacturers who had become eligible because of they obtaining the type approval certificates, the State was well justified in providing new tender conditions and in that no mala fides should be seen on the part of the State and the Petitioners at any rate could not insist upon a particular condition regarding the foreign experience or a particular type of financial capacity. As regards the change in policy, Shri Kapoor relied upon the decision in the case of Union of India (UOI) and Another Vs. International Trading Co. and Another, where the Supreme Court was considering the similar issue. Our attention was invited at the observations in paragraph 15 which are to the following effect:

While the discretion to change the policy in exercise of the executive power, when not trammeled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. 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. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason. Not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.

(Emphasis supplied)

In paragraph 17 of the same judgment the Supreme Court observed:

The Courts as observed in G.B. Mahajan v. Jalgaon Manucipal Council are kept out of the lush field of administrative policy except where a policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates or where a decision made, in purported exercise of power is such that a repository of the power acting reasonably and in good faith could not have made it. But there has to be a word of caution. Something overwhelming must appear before the court will intervene That is and ought to be a difficult onus for an applicant to discharge. The courts'' are not very good at formulating or evaluating policy. Sometimes when the courts have intervened on policy grounds the courts'' view of the range of policies open under the statute or of what is unreasonable policy has not got 9) M/s. Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Others, public acceptance. On the contrary, courts views of policy have been subjected to stringent criticism.

(Emphasis supplied)

54.1. As regards the principle of reasonableness, the Supreme Court in Bannari Amman Sugars Ltd. Vs. Commercial Tax Officer and Others, , has relied on the observations made by Prof. H.W.R. Wade in Administrative Law, 6th Edition and has held:

As Professor wade points out (in Administrative Law by H.W.R. Wade, 6th Edn.) there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable the reasonableness in Administrative law must, therefore, distinguish between proper course and improper abuse of power. Nor is the test the court''s own standard of reasonableness as it might conceive it in a given situation. The point to note is that the thing is not unreasonable in the legal sense merely because the court thinks it to be unwise.

Now, applying this principle to the present fact it cannot be said that the change in the policy in this case was so unreasonable as to shock the conscience of the Court. In fact, what is reiterated that due to elapse of thee years the technical capacity of the manufacturer in India had tremendously increased. We were taken through the various type approval certificates obtained by the competing bidders to show that practically all the bidders had the tremendous experience of manufacture of HSRP. There was undoubtedly some criticism by the Petitioners that some of the companies were not exclusively in the business of the manufacture of the registration plates but were engaged in food industry, fishing industry etc. We cannot, however, ignore the fact that all these bidders have 9) M/s. Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Others, been granted the type approval certificates for the manufacture of registration plates of the required nature. Again we are convinced that the grant of those certificates by the approved agencies of Government of India would speak volumes in favour of their technical abilities.

The Petitioner has not been able to suggest that the decision to change in the tender conditions has been actuated with legal malice or mala or mala fides or that any particular manufacturer was being tried to be favored. There is no such material brought on record. What was pressed in service was the apparently contradictory affidavits given before the Supreme Court and this Court. We are convinced that there are no apparent contradictions in these affidavits. What was being done before the Supreme Court was the justification of the stringent tender conditions which were felt necessary in the circumstances then prevailing, like the absence of the indigenous manufacturers, the non-development of the technical capabilities etc. However, with the advent of the technical capabilities by elapse of time and with the increase in number of manufacturers having capability of manufacturing such HSR Ps which fact has been vouchsafed by the type approval certificates granted in their favour, if the State Government changed the tender conditions, that, in our opinion, would not by itself be fatal to the tender notice. After all as has been reiterated in the earlier Supreme Court decision, the Petitioner could not insist upon a particular condition of experience in the foreign countries. He could not have insisted upon the Court s rewriting those conditions merely because the tender conditions of the first NIT did have those tender conditions. Under the principle of judicial review, the Supreme Court has certainly refused to rewrite or to quash such conditions unless they were found to be arbitrary. Here is a case where the State Government had given a clear cut picture regarding the reasons for which it had cancelled the first NIT which remained unchallenged at the instance of the Petitioner who went to the extent of even withdrawing his earnest money deposit and found no fault with the earlier order dated 27.4.2005. How could he then find fault with the tender conditions of the second NIT merely because the area of competition was widened ? In short, the attempt on the part of the writ Petitioner is to restrict that area and to exclude from the competition the other indigenous manufacturers whose technical ability is now vouchsafed because of the type approval certificate that they now possess but did not possess at the time of the first NIT. We feel on this count alone, the Petitioner could be non-suited and was rightly non-suited by the learned Single Judge.

Sri Jayanta Mitra, the learned Senior Advocate, appearing on behalf of one of the Respondents also heavily relied on the decision in Bannari Amman (cited supra). He also relied on the principles reiterated by the Supreme Court in Global Energy Ltd. and Another Vs. Adani Exports Ltd. and Others, . more particularly in paragraphs 9 and 10 there of. We have already discussed those principles earlier.

57.1. The further argument of the learned Senior counsel was based on the decision reported in Director of Settlements, Andhra Pradesh and Others Vs. M.R. Apparao and Another, .) and more particularly, the observation in paragraph 17 thereof. The Supreme Court has reiterated that one of the conditions for exercising powers under Article 226 for issuance of mandamus is that the Court must come to the conclusion that the aggrieved person has a legal right and that such right has been infringed. The learned Counsel reiterated that it cannot be said that Petitioner''s any right had been (11) Global Energy Ltd. and Another Vs. Adani Exports Ltd. and Others, breached merely because the tender conditions were changed. It was pointed out that those tender conditions wee changed for all and even the Petitioner could have and has, in fact, taken part in the tender by offering the bid. The learned senior counsel argues the merely because the area of competition was increased by changing the conditions, it could not be said that any legal right of the Petitioner was infringed or that the Petitioner had suffered in any manner. Once it is held that there was no breach of Article 14 in changing the conditions, there would be no question of the Petitioner enjoying any right or any right of the Petitioner being infringed thereby. We have already explained that it is not for the Petitioner to suggest as to what should be the tender conditions. Further it is not for the Court also to write the tender conditions. We therefore, are of the clear opinion. That it could not be said that the Petitioner''s any right was infringed because of the change in the tender conditions. We cannot, at this juncture, ignore the fact that the Petitioner, while challenging the change of tender conditions has also chosen to take part by offering his bid in pursuance of the changed tender conditions.

Sri Abhijit Chatterjee and Sri Sen, appearing for the Respondents, have adopted the argument of Sri Kapoor and Sri Mitra and have reiterated that, in fact, the Petitioner had no locus standi to challenge the changed tender conditions. They also reiterated the argument that the Petitioner could not insist upon any particular tender condition. They also reiterated that even if they was a dilution first in the tender conditions, that was uniformly applicable and the Petitioner had, in fact, taken part in the Second NIT.

58.1. Sri Dastoor and Smt. Nadira patheria also supported the change and argued that the change was justified and could not be challenged at least by the Petitioner.

After hearing all the counsel, we are of the clear opinion that though the conditions of the tender were changed, it was within the powers of the Respondent to change the same and even if there was a change in the policy, the said change was not actuated by malice or could not be termed to be arbitrary. We are also of the clear opinion that the Supreme Court judgment cannot be read in a way the Petitioner wants us to read and it cannot be said that the Supreme Court had itself insisted upon the strict conditions in the first NIT or that, those conditions could be said to be imperative. For this reason, we answer the second question accordingly in favour of the Respondent and against the Petitioner.

No other contention for consideration was advanced by the parties.

In the result, we hold that the appeal has no merits and would dismiss the same, but under the circumstances, without any costs.

Soumitra Sen, J.

I agree.

At this stage, learned Counsel seeks the stay of operation of the judgment so that the interim order which was passed during the pendency of the appeal continues to operate. The matter is an old one and the tendering process has already started, in that view, we do not wish to stay operation of the judgment. The request is, therefore, refused.