9911796707
TMI Blog2004 (3) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier tender notice would serve the purpose sought to be achieved better than the terms of tender notice under consideration and order change in them, unless it is of the opinion that the terms were either arbitrary or discriminatory or actuated by malice. The provision of the terms inviting tenders from firms having a turnover of more than ₹ 20 crores has not been shown to be either arbitrary or discriminatory or actuated by malice. This apart SSI having a turnover of more than ₹ 20 crores was the lowest bidder. Faced with the situation that the bids given by the respondents were not competitive with the bid given by SSI Limited, learned counsel for the respondents contended that because of the fall in price in the computer hardware and lowering of duty on the imports of the computers or its components the government should invite fresh bids. It is not for us to comment as to what course is to be adopted by the appellants, in the changed circumstances attributable to lapse of time. It is for them to decide whether to continue with the tenders already floated, if nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to take up the entire project. The other seven tenderers agreed to lower their prices to bring it at par with the rate of the lowest tenderer. Thus the contract had to be distributed amongst eight parties, i.e., 35 schools each to seven parties and 28 to one party. For the final phase of 2002-2003 the tenders were called for all the 748 schools. The cost of project was approximately ₹ 100 crores. Because of the difficulty faced in the earlier years that the lowest tenderers were not able to implement the entire project, the government took a policy decision to deal with one company having financial capacity to take up such a project instead of dealing with a number of small companies which were unable to take up the entire project individually. Accordingly, Government took a decision to invite tenders from firms having a turnover of ₹ 20 crores or more for the last three financial years ending with 31.3.2002. The decision was taken to provide quality education which was the top priority of the department as it was felt that it would be easier for the department to deal with one company which is well managed and not seven or eight who individually are not in a position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locutory Application Nos. 1 to 5 of 2003 were filed for placing these facts on record. Facts which emerged from the opening of the bids were that the four companies having a turnover of ₹ 20 crores or above participated in the tender and M/s SSI Limited with a turnover of more than ₹ 20 crores was the lowest amongst them. Shri Kirit N Raval, learned Solicitor General of India appearing for the appellants contended that the terms of tender prescribing the eligibility criteria are not subject to judicial review in view of a number of decisions of this Court. That the High Court while exercising jurisdiction under Article 226 of the Constitution does not sit as a Court of Appeal, it merely reviews the manner in which the decision has been taken. It was well settled that the Courts in exercise of jurisdiction under Article 226 do not transgress into the field of policy decisions taken by the government. As against this, the learned counsel appearing for the respondents supported the impugned judgment and the reasons recorded therein. Faced with the situation that SSI Ltd. having a turnover of more than 20 crores was the lowest tenderer and capable of taking up the entire pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State 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. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. [Emphasis supplied] This principle was again re-stated by this Court in Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity to participate in the tender particularly in view of the past experience. We do not agree with the view taken by the High Court that the term providing a turnover of at least ₹ 20 crores did not have a nexus with either the increase in the number of schools or the quality of education to be provided. Because of the increase in the number of schools the hardware cost itself went upto ₹ 40-50 crores. The total cost of the project was more than 100 crores. A company having a turnover of ₹ 2 crores may not have the financial viability to implement such a project. As a matter of policy government took a conscious decision to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies which is a relevant consideration while awarding such a big project. Moreover, it was for the authority to set the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. While exercising the power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier ten ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
