2021 (4) TMI 1326 - SC - Indian Laws

Tender Call Notice inviting tender from eligible registered diet preparation and catering firms/suppliers etc. having a valid labour licence and a food licence with a minimum of three years of relevant experience - field of preparation and distribution of therapeutic and non-therapeutic diet to government or private health institutions having a minimum of 200 beds for the year 2019-2020 - HELD THAT - What is clear is that the authority concerned read its own TCN to refer to the licence to be submitted by bidders as the labour licence under the Contract Labour Act - Sub-clauses (20) and (21) of Tender document in particular, make it clear that the staff employed would be employed by the agency as contract labour, the agency being responsible to make alternative arrangements in cases where their staff goes on strike. This Court has repeatedly held that judicial review in these matters is equivalent to judicial restraint in these matters. What is reviewed is not the decision itself but the manner in which it was made. The writ court does not have the expertise to correct such decisions by substituting its own decision for the decision of the authority - The High Court has not adverted to any of the decisions, and in second-guessing the authority s requirement of a licence under the Contract Labour Act, has clearly overstepped the bounds of judicial review in such matters. In any case, a registration certificate under Section 4 of the Orissa Act cannot possibly be the equivalent of a valid labour licence issued by the labour department. The requirement of the Section 1(4) of Contract Labour Act, that its applicability be extended only to establishments in which there are 20 or more workmen can be done away with by the appropriate government under the proviso, making it clear that this is not an inflexible requirement. In any case, the acceptance of such argument would amount to second-guessing the authority s interpretation of its own TCN which, as has been stated hereinabove, cannot be so second-guessed unless it is arbitrary, perverse or mala fide. Thus, except for an incantation of the expression mala fide, no mala fide has in fact been made out on the facts of this case - appeal allowed.

Summary

Issues Involved:
1. Validity of the requirement for a labour licence under the Contract Labour (Regulation and Abolition) Act, 1970.
2. Satisfaction of the three years’ experience requirement.
3. Allegation of mala fide action by the authorities.
4. Jurisdiction and limits of judicial review by the High Court.

Detailed Analysis:

1. Validity of the Requirement for a Labour Licence:
The Tender Call Notice (TCN) issued by the Office of the Superintendent, SCB Medical College and Hospital, required bidders to have a valid labour licence. The High Court interpreted this requirement as not mandating a licence under the Contract Labour (Regulation and Abolition) Act, 1970, but rather under the Odisha Shops and Commercial Establishments Act. However, the Supreme Court found that the authority's interpretation of its own tender documents, which required a licence under the Contract Labour Act, was correct. The Court emphasized that judicial review should not second-guess the authority's interpretation unless it is arbitrary, perverse, or mala fide.

2. Satisfaction of the Three Years’ Experience Requirement:
The TCN required bidders to have a minimum of three years’ experience in diet preparation and supply. The High Court accepted the experience certificate provided by Respondent No.1, which had a gap period, as sufficient. However, the Supreme Court held that the authority's decision to disqualify Respondent No.1 based on the gap in the experience certificate was reasonable and should not have been interfered with by the High Court.

3. Allegation of Mala Fide Action:
Respondent No.1 alleged that the authorities acted with mala fide intentions by disqualifying its bid to favor another bidder. The High Court found the actions of the authorities to be mala fide and quashed the work order granted to the Appellant. The Supreme Court, however, found that the plea of mala fide was not substantiated by evidence and that the High Court's characterization of the authority's actions as mala fide was questionable.

4. Jurisdiction and Limits of Judicial Review:
The Supreme Court reiterated the principles of judicial restraint in administrative actions, emphasizing that courts should not substitute their own decisions for those of the authorities. The Court referred to established precedents, including Tata Cellular v. Union of India and Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., which underscore the need for courts to defer to the expertise and interpretation of the tendering authority unless there is clear evidence of arbitrariness, perversity, or mala fide.

Conclusion:
The Supreme Court set aside the High Court’s judgment, reinstating the Appellant to complete performance under the agreement dated 27.11.2020. The Court held that the High Court overstepped its bounds of judicial review by second-guessing the authority's interpretation of the TCN and by characterizing the authority's actions as mala fide without sufficient evidence. The appeals were allowed, and the Appellant was directed to be reinstated within one week from the date of the judgment.