# Jaiswal Canteen(A) & Anr v. State of U.P. & Ors

- **Citation:** (2020) 2 ILRA 1118
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-02-14
- **Case number:** Misc. Bench No. 4902 of 2019
- **Bench:** Anil Kumar, Saurabh Lavania
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/jaiswal-canteen-a-anr-v-state-of-u-p-ors-45626
- **Pages:** 19

## Headnote

Petitioners-challenging-order
dated
01.12.2018-declaring resp.6-as lowest bidder
&consequential work order in f/o resp.6-on the
ground of-awarding the work in questioncontrary to-terms & condition of e-tender-work
awarded-on the basis of experience certificateupon verification-an agreement also executedpetitioner-least competent-even if-the award is
cancelled-it won't fall in the lap of petitionerPetition Dismissed.
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1119
B. Held, question which was canvassed
before the High Court and which has
been pressed before us relates to the
merits of the nominations made to the
reserved seats. It seems to us that the
appellants do not have any right to
challenge the nominations made by the
Central
Government.
They
do
not
compete for the reserved seats and have
no
locus
standi
in
the
matter
of
nomination
to
such
seats.
The
assumption
that
if
nominations
to
reserved seats are not in accordance
with the rules all such seats as have not
been properly filled up would be thrown
open to the general pool is wholly
unfounded." Needless to say that the
respondent
no.
6
is
providing
the
services
to
the
Institute
and
an
agreement in regard to providing the
services has also been executed on
31.03.2019. For the foregoing reasons,
the writ petition for the reliefs sought
lack merit and accordingly dismissed.

Writ Petition dismissed. (E-8)

List of cases cited:-

## Text

_Characters 0–39,876 of 59,501. This is a partial read: ask again with offset=39876 for what follows._

1118 INDIAN LAW REPORTS ALLAHABAD SERIES
information given clearly mentions the
commission of a cognizable offence, there
is no other option but to register an FIR
forthwith. Other considerations are not
relevant at the stage of registration of FIR,
such as, whether the information is falsely
given, whether the information is genuine,
whether the information is credible, etc.
These are the issues that have to be
verified during the investigation of the
FIR. At the stage of registration of FIR,
what is to be seen is merely whether the
information given ex facie discloses the
commission of a cognizable offence. If,
after investigation, the information given
is found to be false, there is always an
option to prosecute the complainant for
filing a false FIR."

22. A close scrutiny of the aforesaid
judgments leads to the conclusion that a
preliminary inquiry is permissible before the
lodging of a first information report.

23. Moreover, Government Orders dated
30.10.2006
and
23.06.2015
issued
by
Government of Uttar Pradesh empower the
Economic Offences Wing to make inquiries
into the matters relating to Economic Offences
Wing.

24. In the instant case, on receipt of a
complaint against the petitioner, Economic
Offences Wing issued a letter dated 21st
January, 2013 to the petitioner, another letter
dated 20th February, 2013 (annexure-1 to the
writ petition) was sent to the petitioner to
appear within one week and submit his reply.
The petitioner instead of appearing in the
office of Economic Offences Wing or filing
reply to the queries made by them, file the
present petition.

25. We are of the considered opinion that
the Economic Offences Wing has taken
recourse to a preliminary inquiry which is
inconsonance with the decision in Lalita
Kumari's case (supra). We do not find any
illegality in the impugned notice dated 20th
February, 2013.

26. In the light of aforesaid discussion,
we are of the view that the writ petition is
without any merit, same deserves to be
dismissed and the same is hereby dismissed.

27. Interim application(s), if any, stands
disposed of.
----------
(2020)02ILR A1118

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 14.02.2020

BEFORE

THE HON'BLE ANIL KUMAR, J.
THE HON'BLE SAURABH LAVANIA, J.

Misc. Bench No. 4902 of 2019

Jaiswal Canteen(A) & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Mohd. Mansoor, Mohammad Danish

Counsel for the Respondents:
C.S.C., Dinesh Kumar Singh, I.P. Singh,
Ramendra Kumar Yadav, Sanjay Bhasin,
Sunil Sharma

A.
Petitioners-challenging-order
dated
01.12.2018-declaring resp.6-as lowest bidder
&consequential work order in f/o resp.6-on the
ground of-awarding the work in questioncontrary to-terms & condition of e-tender-work
awarded-on the basis of experience certificateupon verification-an agreement also executedpetitioner-least competent-even if-the award is
cancelled-it won't fall in the lap of petitionerPetition Dismissed.
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1119
B. Held, question which was canvassed
before the High Court and which has
been pressed before us relates to the
merits of the nominations made to the
reserved seats. It seems to us that the
appellants do not have any right to
challenge the nominations made by the
Central
Government.
They
do
not
compete for the reserved seats and have
no
locus
standi
in
the
matter
of
nomination
to
such
seats.
The
assumption
that
if
nominations
to
reserved seats are not in accordance
with the rules all such seats as have not
been properly filled up would be thrown
open to the general pool is wholly
unfounded." Needless to say that the
respondent
no.
6
is
providing
the
services
to
the
Institute
and
an
agreement in regard to providing the
services has also been executed on
31.03.2019. For the foregoing reasons,
the writ petition for the reliefs sought
lack merit and accordingly dismissed.

Writ Petition dismissed. (E-8)

List of cases cited:-

1. Jagdish Mandal vs State of Orissa &
Others, (2007) 14 SCC 517

2. Sterling Computers Ltd vs. M & N
Publications Ltd [1993 (1) SCC 445]

3. Tata Cellular v. Union of India [AIR
1996 SC 11]

4. Raunaq Internationa Ltd. vs. I.V.R.
Construction Ltd. [1999 (1) SCC 492]

5. Air India Ltd vs. Cochin International
Airport Ltd [2000 (2) SCC 617]

6. Association of Registration Plates vs
Union of India [2005 (1) SCC 679]

7. B.S.N. Joshi v. Nair Coal Services Ltd
[2006 (11) SCALE 526]

8. Civil Appeal No. 1050 of 2019 arising
out
of
SLP(C)
No.
27818
of
2018
Vidarbha
Irrigation
Development
Corporation vs M/s Anoj Kumar Garwala

9. Bakshi Security and Personnel Services Pvt.
Ltd. v. Devkishan Computed Pvt. Ltd. and Ors.,
(2016) 8 SCC 446

10. Ganesh Engg. Works [Poddar Steel Corpn.
v. Ganesh Engg. Works, (1991) 3 SCC 273]

11. Afcons Infrastructure Ltd v. Nagpur Metro
Rail Corpn. Ltd, (2016) 16 SCC 818

12. Ramana Dayaram Shetty v. International
Airport Authority of India [Ramana Dayaram
Shetty v. International Airport Authority of
India, (1979) 3 SCC 489]

13. Sobhikaa Impex (P) Ltd & another vs
Central Medical Services Society (2016) 16 SCC
233

14. Master Marine Services (P) Ltd. v. Metcalfe
& Hodgkinson (P) Ltd and another

15. Jagdish Mandal v. State of Orissa and
others

16. Union of India and another v. International
Trading Co. and another

17. Civil Appeal No. 3588 of 2019 (arising out
of SLP(C) No. 46 of 2019) Caretel Infotech Ltd
vs Hindustan Petroleum Corporation Ltd &
Others

18. Bihar State Financial Corporation & Others
vs Chemicot India (P) Ltd & Others (2006) 7
SCC 293

19. Dr. N. C. Singhal Vs. Union of India,(1980)
3 SCC 29

20. Chitra Ghosh Vs. Union of India, (1969) 2
SCC 228

(Delivered by Hon'ble Saurabh Lavania,
J.)

1. Heard Shri Mohd. Mansoor,
learned counsel for petitioners, learned
1120 INDIAN LAW REPORTS ALLAHABAD SERIES
State Counsel, learned counsel appearing
for respondents no. 2 to 5 and Shri Sanjay
Bhasin, Senior Advocate, assisted by Shri
Sunil Sharma, appearing on behalf of
respondent no. 6.

2. By means of present writ petition
the petitioners has prayed for quashing of
order
dated
01.12.2018
by
which
respondent no. 6, M/s Hotel Rajasthan was
declared as lowest bidder for providing
Patient Kitchen and Dietary Services in
Sanjay Gandhi Post Graduate Institute of
Medical
Sciences,
Lucknow
and
consequential
work
order
dated
01.12.2018, as contained in Annexure No.
1 to writ petition, issued in favour of
respondent no. 6- M/s Hotel Rajasthan.

3. Shri Mohd. Mansoor, learned
counsel for petitioners submits that the
Director of Sanjay Gandhi Post Graduate
Institute of Medical Sciences, Lucknow
(hereinafter referred as 'Institute') on
28.09.2018 invited e-tender for ''Patient
Kitchen and Dietary Services'. The said etender was in two parts, Technical Bid and
Financial
Bid.
Subsequently,
on
18.10.2018 and 14.11.2018 corrigendums
were also issued. In response to the same
the petitioners along with following firms
submitted tender bid:

1)
M/s
Mohani
Caterers,
Ahmedabad.

2). M/s Buddha India Hotels
Pvt Ltd, Lucknow.

3).
M/s
Capri
Hospitality
Services Pvt Ltd, Indore.

4).
M/s
Vrindavan
Enterprises, Gorakhpur.

5).
M/s
Hotel
Rajsthan,
Khagaria.

6).
M/s
Amrit
Foods,
Lucknow.

3.1 Subsequently by means of
impugned
order
dated
01.12.2018
(annexed as Annexure no. 1) tender in
regard to ''Patient Kitchen and Dietary
Services' in the 'Institute' has been
awarded to respondent no. 6-

M/s Hotel Rajasthan, for an
amount of Rs 7,19,82,470.12/- by the
respondent 'Institute'.

3.2 The quotation submitted by
various parties against the aforesaid etender is reproduced as under:

Price
comparis
onkitchenAdv/NIT
no.
I53/Contra
ct/201819

Sheet1
S
l.
N
o.
D
i
e
t
No.
of
Proj
ecte
d
Diet
s
Price quoted by bidders

M/s
Moh
ani
Cate
rers,
Ahm
edab
ad
M/s
Bud
dha
India
Hote
ls
Pvt
Ltd
Luck
now
M
/s
C
a
p
ri
H
o
s
pi
ta
li
ty
S
er
M
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Vr
in
da
va
n
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nt
er
pr
is
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G
or
M
/s
H
ot
el
Ra
jas
th
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ha
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Bi
M
/s
J
ai
s
w
al
C
a
nt
e
e
n
(
A
M/
s
A
mri
t
Fo
ods
,
Lu
ck
no
w
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1121
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1122 INDIAN LAW REPORTS ALLAHABAD SERIES
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R
e
m
a
r
k
s

Reje
cted
in
purs
u
ance
to
claus
e no.
5 of
Corr
igen
dum
date
d
18/2
0.10.
2018
Reje
cted
in
purs
uanc
e to
claus
e no.
5 of
Corr
igen
dum
date
d
18/2
0.10.
2018
L
-
1
(
T
ie
w
it
h
bi
d
d
er
s
at
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ol
u
L1
(T
ie
wi
th
bi
dd
er
s
at
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m
n
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. 5
&
L1
(T
ie
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th
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m
n
no
. 5
&
L
-
2
L2
m
n
n
o.
6
&
7
)
7) 6)

4. Shri Mohd. Mansoor, learned
counsel for petitioners while challenging
the impugned order submitted that the
action on part of the official respondents
i.e. authorities of the ''Institute' thereby
accepting the tender and awarding the
work in question in favour of respondent
no. 6 is contrary to terms and conditions
of the e-tender and requires interference
by this Court.

5. Elaborating his arguments he
submits that Clause 3 of Section II of
the bid ''Instruction for Technical &
Financial Bid', which is a part of etender, provides rejection of bid in
certain
contingencies.
Under
SubClause ''d' of Clause ''3' it is mentioned
that the bid shall be rejected if
authenticity of any of the supporting
document is found to be fabricated and
in
the
instant
case
the
bid
of
respondent no. 6 ought to have been
rejected under Clause 3(d) of bid
documents on account of reasons that:

(i) With tender documents
respondent no. 6 submitted experience
certificate dated 26.11.2018 issued by
Hind Institute of Medical Sciences,
however the said experience certificate
is a forged document and in this regard
he submitted that the Chairperson of
Management
Committee
of
Hind
Institute of Medical Sciences has sent a
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1123
letter
stating
therein
that
no
such
certificate was issued in favour of the
respondent no. 6.

(ii) Respondent no. 6 in support
of his bid also submitted experience
certificate dated 27.11.2018 issued by the
Nova
Hospitals
Limited,
Lucknow.
However, on enquiry, Dr. Pancham Singh,
one of the authorities of the Nova
Hospitals Limited, Lucknow clarified that
M/s Hotel Rajasthan has provided dietary
services on our verbal instructions to
patients on chargeable basis but there was
no written Agreement/MoU with M/s
Hotel Rajasthan.

(iii) Respondent no. 6 also
submitted experience certificate dated
19.11.2018 issued by Awadh Hospital and
Heart Center, Lucknow and later on the
said hospital clarified that the certificate
dated 19.11.2018 which was issued in
favour of the respondent no. 6 is to the fact
that respondent no. 6 has provided services
to patients on chargeable basis but there
was no written Agreement/Contract with
M/s Hotel Rajasthan.

6. Shri Mohd. Mansoor, learned
counsel for petitioners further submits that
as per Section II of the bid ''Instruction for
Technical & Financial Bid', which is a part
of e-tender, under Sub-Clause ''h' of
Clause ''3' it is mentioned that the bid shall
be rejected if the bid is found to be
conditional and the bid of respondent no.
6, being conditional, ought to have been
rejected and the same was not done by the
''Institute' which is in violation of term of
tender document. In this regard he has
placed reliance on the note made by
respondent no. 6 in the Price Bid/Financial
Bid (Annexure 6 to the writ petition)
which reads as under:

"In column No. 4 (Quoted
Amount of Overhead Expenses) our price
0 (Zero) is not accepted. Our price for
column No.4 will change to 0.01(one
paisa) as we have not received any
communication regarding our query for
the same mailed on 28.11.2018. The
contract value will change accordingly."

7. Learned counsel for petitioners
further submitted that as per Clause ''2' of
the corrigendum issued by the ''Institute'
(which is annexed as Annexure no. 4 to
the petition) says that ''The price in the
''Price Bid / Financial Bid', uploaded
through corrigendum dated 18.10.2018
/20.10.2018 shall be quoted in Indian
Rupees (INR) and its lowest unit shall be
paisa'. However in the present case
respondent no. 6 has quoted ''zero'. Thus
violated the condition and accordingly,
also, the bid of respondent no. 6 ought to
have been rejected, however in utter
violation of terms of tenter it has accepted.

8. Learned counsel for petitioners
further submitted that clause ''7' of the
Corrigendum/Clarifications to NIT/Adv.
No. I-53/Contract/2018-19 for ''Patient
Kitchen and Dietary Service' says that:

''Overhead
expenses
shall
include fuel/gas, utensils, disposables,
equipments and administrative charge
and/or any other charge required to
prepare diet as per specification, given in
tender document or by the Institute.'

8.1 However, the respondent no.
6 in his tender towards ''overhead
expenses' has mentioned ''zero', whereas
the petitioner has mentioned Rs. 0.1/- and
even then the tender respondent no. 6 has
been accepted.
1124 INDIAN LAW REPORTS ALLAHABAD SERIES

9. Lastly learned counsel for
petitioners
argued
that
the
Tax
Identification Number (TIN) which was
mentioned by petitioners was canceled for
the period 06.07.2011 to 2014 and during
the said period no commercial transaction
was made by respondent no. 6.

10. In support of his case, learned
counsel for petitioners placed reliance on
the law laid down by the Hon'ble Apex
Court in the case of Jagdish Mandal vs
State of Orissa & Others, (2007) 14 SCC
517, relevant part of which is as under:

'21. We may refer to some of the
decisions of this Court, which have dealt
with the scope of judicial review of award
of contracts.

21.1) In Sterling Computers Ltd
vs. M & N Publications Ltd [1993 (1) SCC
445], this Court observed :

"While exercising the power of
judicial review, in respect of contracts
entered into on behalf of the State, the
court is concerned primarily as to whether
there has been any infirmity in the
decision making process the courts can
certainly
examine
whether
'decision
making process' was reasonable, rational,
not arbitrary and violative of Article 14 of
the Constitution."

21.2) In Tata Cellular v. Union
of India [AIR 1996 SC 11], this Court
referred to the limitations relating to the
scope of judicial review of administrative
decisions and exercise of powers in
awarding contracts, thus :

(1) The modern trend points to
judicial restraint in administrative action.

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

(3) The Court does not have the
expertise to correct the administrative
action. If a review of the administrative
decision is permitted it will be substituting
its own decision, without the necessary
expertise which itself may be fallible.

(4) The terms of the invitation to
tender cannot be open to judicial scrutiny
because the invitation to tender is in the
realm of contract. More often than not,
such decisions are made qualitatively by
experts.

(5) The Government must have
freedom of contract. In other words, a
fairplay in the joints is a necessary
concomitant for an administrative body
functioning in an administrative sphere or
quasi-administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facets
pointed out above) but must be free from
arbitrariness not affected by bias or
actuated by mala fides.

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

This Court also noted that there
are inherent limitations in the exercise of
power of judicial review of contractual
powers. This Court also observed that the
duty to act fairly will vary in extent,
depending upon the nature of cases, to
which the said principle is sought to be
applied. This Court held that the State has
the right to refuse the lowest or any other
tender, provided it tries to get the best
person or the best quotation, and the
power to choose is not exercised for any
collateral purpose or in infringement of
Article 14.

21.3) In Raunaq Internationa
Ltd. vs. I.V.R. Construction Ltd. [1999 (1)
SCC 492], this Court dealt with the matter
in some detail. This Court held : "The
award of a contract, whether it is by a
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1125
private party or by a public body or the
State,
is
essentially
a
commercial
transaction. In arriving at a commercial
decision considerations which are of
paramount importance are commercial
considerations. These would be : (1) The
price at which the other side is willing to
do the work; (2) Whether the goods or
services offered are of the requisite
specifications; (3) Whether the person
tendering has the ability to deliver the
goods or services as per specifications.
When large works contracts involving
engagement of substantial manpower or
requiring specific skills are to be offered,
the financial ability of the tenderer to fulfil
the requirements of the job is also
important; (4) the ability of the tenderer to
deliver goods or services or to do the work
of the requisite standard and quality; (5)
past experience of the tenderer, and
whether he has successfully completed
similar work earlier; (6) time which will
be taken to deliver the goods or services;
and often (7) the ability of the tenderer to
take follow up action, rectify defects or to
give post contract services. Even when the
State or a public body enters into a
commercial transaction, considerations
which would prevail in its decision to
award the contract to a given party would
be the same. However, because the State
or a public body or an agency of the State
enters into such a contract, there could be,
in a given case, an element of public law
or public interest involved even in such a
commercial transaction.

What are these elements of
public interest? (1) Public money would be
expended for the purposes of the contract;
(2) The goods or services which are being
commissioned could be for a public
purpose, such as, construction of roads,
public buildings, power plants or other
public utilities. (3) The public would be
directly interested in the timely fulfilment
of the contract so that the services become
available to the public expeditiously. (4)
The public would also be interested in the
quality of the work undertaken or goods
supplied by the tenderer. Poor quality of
work or goods can lead to tremendous
public hardship and substantial financial
outlay either in correcting mistakes or in
rectifying defects or even at times in redoing the entire work - thus involving
larger outlays or public money and
delaying the availability of services,
facilities or goods, e.g. A delay in
commissioning a power project, as in the
present case, could lead to power
shortages,
retardation
of
industrial
development, hardship to the general
public and substantial cost escalation.
When a writ petition is filed in the High
court challenging the award of a contract
by a public authority or the State, the
court must be satisfied that there is some
element of public interest involved in
entertaining such a petition. If, for
example, the dispute is purely between two
tenderers, the court must be very careful to
see if there is any element of public
interest involved in the litigation. A mere
difference in the prices offered by the two
tenderers may or may not be decisive in
deciding whether any public interest is
involved
in
intervening
in
such
a
commercial transaction. It is important to
bear in mind that by court intervention, the
proposed project may be considerably
delayed thus escalating the cost far more
than any saving which the court would
ultimately effect in public money by
deciding the dispute in favour of one
tenderer or the other tenderer. Therefore,
unless the court is satisfied that there is a
substantial amount of public interest, or
the transaction is entered into mala fide,
the court should not intervene under
1126 INDIAN LAW REPORTS ALLAHABAD SERIES
Article 226 in disputes between two rival
tenderers."

21.4) In Air India Ltd vs. Cochin
International Airport Ltd [2000 (2) SCC
617], this Court summarized the scope of
interference as enunciated in several
earlier decisions thus :

"The award of a contract,
whether it is by a private party or by a
public 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, 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. The
State, its corporations, instrumentalities
and agencies have the public duty to be
fair to all concerned. Even when some
defect is found in the decision-making
process the court must exercise its
discretionary power under Article 226
with great caution and should exercise it
only in furtherance of public interest and
not merely on the making out of a legal
point. The court should always keep the
larger public interest in mind in order to
decide hether its intervention is called for
or not. Only when it comes to a conclusion
that overwhelming public interest requires
interference, the court should intervene."
[Emphasis supplied]

21.5)
In
Association
of
Registration Plates vs Union of India
[2005 (1) SCC 679], this Court held:

"..Article 14 of the Constitution
prohibits government from arbitrarily
choosing a contractor at its will and
pleasure. It has to act reasonably, fairly
and in public interest in awarding
contracts. At the same time, no person can
claim a fundamental right to carry in
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. ..."

21.6) In B.S.N. Joshi v. Nair
Coal Services Ltd [2006 (11) SCALE 526],
this Court observed :

"It may be true that a contract
need not be given to the lowest tenderer
but it is equally true that the employer is
the
best
judge
therefor;
the
same
ordinarily being within its domain, court's
interference in such matter should be
minimal. The High Court's jurisdiction in
such matters being limited in a case of this
nature, the Court should normally exercise
judicial restraint unless illegality or
arbitrariness on the part of the employer is
apparent on the face of the record."

22.
Judicial
review
of
administrative action is intended to
prevent
arbitrariness,
irrationality,
unreasonableness, bias and malafides. Its
purpose is to check whether choice or
decision is made 'lawfully' and not to
check whether choice or decision is
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1127
'sound'. When the power of judicial review
is invoked in matters relating to tenders or
award
of
contracts,
certain
special
features should be borne in mind. A
contract is a commercial transaction.
Evaluating
tenders
and
awarding
contracts
are
essentially
commercial
functions. Principles of equity and natural
justice stay at a distance. If the decision
relating to award of contract is bona fide
and is in public interest, courts will not, in
exercise of power of judicial review,
interfere even if a procedural aberration
or error in assessment or prejudice to a
tenderer, is made out. The power of
judicial review will not be permitted to be
invoked to protect private interest at the
cost of public interest, or to decide
contractual disputes. The tenderer or
contractor with a grievance can always
seek damages in a civil court. Attempts by
unsuccessful tenderers with imaginary
grievances, wounded pride and business
rivalry, to make mountains out of molehills
of some technical/procedural violation or
some prejudice to self, and persuade
courts to interfere by exercising power of
judicial review, should be resisted. Such
interferences, either interim or final, may
hold up public works for years, or delay
relief and succour to thousands and
millions and may increase the project cost
manifold. Therefore, a court before
interfering
in
tender
or
contractual
matters in exercise of power of judicial
review, should pose to itself the following
questions :

i) Whether the process adopted
or decision made by the authority is mala
fide or intended to favour someone.

OR Whether the process adopted
or decision made is so arbitrary and
irrational that the court can say : 'the
decision is such that no responsible
authority
acting
reasonably
and
in
accordance with relevant law could have
reached.'

ii) Whether public interest is
affected.

If the answers are in the
negative, there should be no interference
under Article 226. Cases involving blacklisting
or
imposition
of
penal
consequences on a tenderer/contractor or
distribution of state largesse (allotment of
sites/shops, grant of licences, dealerships
and franchises) stand on a different
footing as they may require a higher
degree of fairness in action.'

10. Learned counsel for petitioners
also placed reliance on law laid down by
the Hon'ble Apex Court in judgment dated
23.01.2019 passed in Civil Appeal No.
1050 of 2019 arising out of SLP(C) No.
27818
of
2018
Vidarbha
Irrigation
Development Corporation vs M/s Anoj
Kumar Garwala, relevant part of which is
as under:

''10. We may now come to
Clause 2.35 which makes it clear that a
substantially responsive bid is one which
conforms to all terms, conditions and
specifications
without
any
material
deviation. Inter alia, a material deviation
is one which limits, in any substantial way,
or is inconsistent with the bidding
documents or the employer's rights or
bidder's obligations under the Contract. It
cannot be gainsaid that a bank guarantee,
which is for a period of six months and not
for a period of 40 months, would not only
be directly inconsistent with the bidding
documents but would also be contrary to
the employers' right to a bank guarantee
for a longer period. This being the case,
since a material deviation from the terms
and conditions of the tender document was
made by Respondent No. 2, when it
1128 INDIAN LAW REPORTS ALLAHABAD SERIES
furnished a bank guarantee for only six
months initially, it would be clear that
such bid would have to be considered as
not substantially responsive and ought to
have been rejected by the employer.
Clause 2.35.2 also makes it clear that such
a bid would have to be rejected outrightly
and may not be subsequently made
responsive by correction.

13. The law on the subject is well
settled. In Bakshi Security and Personnel
Services Pvt. Ltd. v. Devkishan Computed
Pvt. Ltd. and Ors., (2016) 8 SCC 446, this
Court held:

"14. The law is settled that an
essential condition of a tender has to be
strictly complied with. In Poddar Steel
Corpn. v. 12 Ganesh Engg. Works
[Poddar Steel Corpn. v. Ganesh Engg.
Works, (1991) 3 SCC 273] this Court held
as under: (SCC p. 276, para 6)

"6. ... The requirements in a
tender notice can be classified into two
categories-those which lay down the
essential conditions of eligibility and the
others which are merely ancillary or
subsidiary with the main object to be
achieved by the condition. In the first case
the authority issuing the tender may be
required to enforce them rigidly. In the
other cases it must be open to the authority
to deviate from and not to insist upon the
strict literal compliance of the condition in
appropriate cases."

15. Similarly in B.S.N. Joshi &
Sons Ltd. v. Nair Coal Services Ltd.
[B.S.N. Joshi & Sons Ltd. v. Nair Coal
Services Ltd., (2006) 11 SCC 548] this
Court held as under: (SCC pp. 571-72,
para 66)

"(i)
if
there
are
essential
conditions, the same must be adhered to;

(ii) if there is no power of
general relaxation, ordinarily the same
shall not be exercised and the principle of
strict compliance would be applied where
it is possible for all the parties to comply
with all such conditions fully;

(iii) if, however, a deviation is
made in relation to all the parties in
regard
to
any
of
such
conditions,
ordinarily again a power of relaxation
may be held to be existing;

(iv) the parties who have taken
the benefit of such relaxation should not
ordinarily be allowed to take a different
stand in relation to compliance with
another
part
of
tender
contract,
particularly when he was also not in a
position to comply with all the conditions
of tender fully, unless the court otherwise
finds relaxation of a condition which being
essential in nature could not be relaxed
and thus the same was wholly illegal and
without jurisdiction;

(v) when a decision is taken by
the
appropriate
authority
upon due
consideration of the tender document
submitted by all the tenderers on their own
merits and if it is ultimately found that
successful bidders had in fact substantially
complied with the purport and object for
which essential conditions were laid down,
the same may not ordinarily be interfered
with;..."

16. We also agree with the
contention of Shri Raval that the writ
jurisdiction cannot be utilised to make a
fresh bargain between parties.

14) However, learned counsel
appearing on behalf of the appellant
strongly relied upon Afcons Infrastructure
Ltd v. Nagpur Metro Rail Corpn. Ltd,
(2016) 16 SCC 818, and paragraphs 14
and 15 in particular, which state:

"14. We must reiterate the words
of caution that this Court has stated right
from the time when Ramana Dayaram
Shetty v. International Airport Authority of
India
[Ramana
Dayaram
Shetty
v.
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1129
International Airport Authority of India,
(1979) 3 SCC 489] was decided almost 40
years ago, namely, that the words used in
the tender documents cannot be ignored or
treated as redundant or superfluous -- they
must be given meaning and their necessary
significance. In this context, the use of the
word "metro" in Clause 4.2(a) of Section
III
of
the
bid
documents
and
its
connotation in ordinary parlance cannot
be overlooked.

15. We may add that the owner or
the employer of a project, having authored the
tender documents, is the best person to
understand and appreciate its requirements
and interpret its documents. The constitutional
courts must defer to this understanding and
appreciation of the tender documents, unless
there is mala fide or perversity in the
understanding or appreciation or in the
application of the terms of the tender
conditions. It is possible that the owner or
employer of a project may give an
interpretation to the tender documents that is
not acceptable to the constitutional courts but
that by itself is not a reason for interfering with
the interpretation given."

15) It is clear even on a reading of
this judgment that the words used in the tender
document cannot be ignored or treated as
redundant or superfluous - they must be given
meaning and their necessary significance.
Given the fact that in the present case, an
essential tender condition which had to be
strictly complied with was not so complied
with, the appellant would have no power to
condone lack of such strict compliance. Any
such condonation, as has been done in the
present case, would amount to perversity in the
understanding or appreciation of the terms of
the tender conditions, which must be interfered
with by a constitutional court."

11. Reliance has also been placed on the
law laid down by Hon'ble Apex Court in the
case of Sobhikaa Impex (P) Ltd & another vs
Central Medical Services Society (2016) 16
SCC 233, relevant part of which is as under:

"19. The thrust of the matter is
whether the decision by the Registration
Committee by itself can be regarded as
grant of registration certificate. It is
luminescent that its decision to grant
registration
certificate
is
subject
to
conditions. Apart from that, it had not
granted any certificate but only a decision
was taken. There is a clear distinction
between a decision taken and the decision
acted upon or given effect to. Therefore,
the appellant cannot claim benefit of the
said decision. The appellants cannot lay
stress on clause 5.4.1 to avail the benefit
of treating itself as a responsive bidder. As
far
as
Instructions
to
Bidders
is
concerned, the initial clause was that the
bidder must be registered under CIB under
the Act and the documentary evidence in
this regard shall be submitted along with
the bid. Amendment elaborating the same
postulates that the registration certificate
shall be submitted along with the bid at the
time of opening of the tender and if it is
not done, the bid shall be held as nonresponsive. A submission is advanced by
the
first
respondent
that
it
is
a
clarificatory
condition.
As
we
have
already
opined,
decision
by
the
Registration
Committee
of
CIB
to
provisionally approve registration does
not amount to registration by itself with
the CIB. So the condition, as such, was not
satisfied under the unamended stipulation.
The amended clause only provides about
the consequence thereof. It can be stated
without any shadow of doubt that even if
clause 6 would not have been amended,
the first respondent, on the ground of nonproduction of the registration certificate,
would have been legally justified to reject
1130 INDIAN LAW REPORTS ALLAHABAD SERIES
the bid. It is an essential condition
incorporated
in
the
Instructions
to
Bidders. In this context, we may profitably
refer to the authority in B.S.N. Joshi &
Sons Ltd. v. Nair Coal Services Ltd. and
others where a two-Judge Bench, after
referring to series of judgments has culled
out the following principles:-

"(i) if there are essential conditions,
the same must be adhered to;

(ii) if there is no power of general
relaxation, ordinarily the same shall not be
exercised
and
the
principle
of
strict
compliance would be applied where it is
possible for all the parties to comply with all
such conditions fully;

(iii) if, however, a deviation is made
in relation to all the parties in regard to any of
such conditions, ordinarily again a power of
relaxation may be held to be existing;

(iv) the parties who have taken the
benefit of such relaxation should not ordinarily
be allowed to take a different stand in relation
to compliance with another part of tender
contract, particularly when he was also not in
a position to comply with all the conditions of
tender fully, unless the court otherwise finds
relaxation of a condition which being essential
in nature could not be relaxed and thus the
same was wholly illegal and without
jurisdiction;

(v) when a decision is taken by the
appropriate authority upon due consideration
of the tender document submitted by all the
tenderers on their own merits and it it is
ultimately found that successful bidders had in
fact substantially complied with the purport
and object for which essential conditions were
laid down, the same may not ordinarily be
interfered with;

(vi) the contractors cannot form a
cartel. If despite the same, their bids are
considered and they are given an offer to
match with the rates quoted by the lowest
tenderer, public interest would be given
priority;

(vii) where a decision has been
taken purely on public interest, the court
ordinarily should exercise judicial restraint."

20. In Master Marine Services
(P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd
and another, it has been held that the State
can choose its own method to arrive at a
decision and it is free to grant any
relaxation for bona fide reasons, if the
tender conditions permit such a relaxation.
It has been further held that the State, its
corporations,
instrumentalities
and
agencies have the public duty to be fair to
all concerned. Even when some defect is
found in the decision-making process, the
court must exercise its discretionary
powers under Article 226 with great
caution and should exercise it only in
furtherance of public interest and not
merely on the making out of a legal point.

21. In Jagdish Mandal v. State of
Orissa and others, it has been ruled that
when the power of judicial review is
invoked in matters relating to tenders or
award
of
contracts,
certain
special
features should be borne in mind. A
contract is a commercial transaction.
Evaluating
tenders
and
awarding
contracts
are
essentially
commercial
functions. Principles of equity and natural
justice stay at a distance. If the decision
relating to award of contract is bona fide
and is in public interest, courts will not, in
exercise of power of judicial review,
interfere even if a procedural aberration
or error in assessment or prejudice to a
tenderer, is made out. The power of
judicial review will not be permitted to be
invoked to protect private interest at the
cost of public interest, or to decide
contractual disputes.

22. In Union of India and
another v. International Trading Co. and
2 All. Jaiswal Canteen(A) & Anr. Vs. State of U.P. & Ors.
1131
another, it has been held that 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. It has been further
opined that 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.

23. In Jespar I. Slong v.