# Punjab Homeopathic Pharmacy & Ors v. Union of India & Ors

- **Citation:** Misc. Bench No. 4345 of 2020
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-02-18
- **Case number:** Misc. Bench No. 4345 of 2020
- **Bench:** Munishwar Nath Bhandari, Manish Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/punjab-homeopathic-pharmacy-ors-v-union-of-india-ors-46301
- **Pages:** 10

## Headnote

Law-Tender
for
procurement
of
medicines under Ayush Mission-eligibility
criteria-average turnover of Rs. 5 Crore in
last three years with total turnover of Rs,
15 Crore-condition of minimum turnover
existed prior- and depend on volume of
procurement and other requirements-no
malafide proved- W.P. dismissed.

Held, It is not a case where there is overnight
change in the condition of the Tender rather in
the last year also, the condition of minimum
turnover was existing though the prior turnover
required was of Rs. 9 crore. The minimum
turnover criteria depend on the volume of
procurement
and
other
requirements.
Interference therein be made if mala fide exists
to favour someone. We have already expressed
our opinion on the aforesaid. A case of mala fide
or favour is not made out. (para 38) (E-9)

Cases Cited:

## Text

3-5 All. Punjab Homeopathic Pharmacy & Ors. Vs. Union of India & Ors.
1121
----------
(2020)03-05ILR A1121
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 18.02.2020

BEFORE

THE HON'BLE MUNISHWAR NATH
BHANDARI, J.
THE HON'BLE MANISH KUMAR, J.

Misc. Bench No. 4345 of 2020

Punjab Homeopathic Pharmacy & Ors.
 ...Petitioners
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Shankar Dayal Jaiswal, Rohit Jaiswal

Counsel for the Respondents:
C.S.C., A.S.G.I., Savitra Vardhan Singh,
Shobhit Mohan Shukla

Civil
Law-Tender
for
procurement
of
medicines under Ayush Mission-eligibility
criteria-average turnover of Rs. 5 Crore in
last three years with total turnover of Rs,
15 Crore-condition of minimum turnover
existed prior- and depend on volume of
procurement and other requirements-no
malafide proved- W.P. dismissed.

Held, It is not a case where there is overnight
change in the condition of the Tender rather in
the last year also, the condition of minimum
turnover was existing though the prior turnover
required was of Rs. 9 crore. The minimum
turnover criteria depend on the volume of
procurement
and
other
requirements.
Interference therein be made if mala fide exists
to favour someone. We have already expressed
our opinion on the aforesaid. A case of mala fide
or favour is not made out. (para 38) (E-9)

Cases Cited:

1. Maa Binda Express Carrier & anr. vs. NorthEast Frontier Railway & ors. (2014) 3 SCC 760.
2.Michigan Rubber (India) Ltd. vs. St. of
Karnataka & ors. (2012) 8 SCC 216

3. Tata Cellular vs. U.O.i. 1994 (6) SCC 651

4.U.O.I. (Uoi) & anr. vs International Trading
Co.: 2003 5 SCC 437

(Delivered by Hon'ble Munishwar Nath Bhandari, J,
Hon'ble Manish Kumar, J.)

1. Heard Sri Prashant Chandra, Senior
Advocate appearing on behalf of the
petitioner, Sri Savitra Vardhan Singh,
learned counsel for opposite party nos. 1 &
2, Sri Shobhit Mohan Shukla, learned
counsel for the opposite party no. 4 and
learned standing counsel for the State.

2. By this writ petition, a challenge is
made to Clause 46(4) of the Tender
Specification dated 16.01.2020.

3. It is a case where side opposite
floated tender to procure the medicines
under Ayush Mission. The tender was
floated on 16.01.2020 containing certain
terms and conditions. A challenge to
Clause 46 (4) of the Tender has been made,
as it requires average turnover of 5 crore in
last three years with total turnover of Rs. 15
crore in the year 2016-17, 2017-18 & 201819.

4. Challenge to the eligibility
condition is on requirement of the prior
turnover. It is mainly in reference to the
Government order dated 10.03.2016 under
para 16 of the Public Procurement Policy
for Micro and Small Enterprises order of
2012 (in short 'the order of 2012'). It was to
relax the condition of prior experience and
prior turnover criteria. A reference of Para
4 of the said order has been given to show a
direction
to
the
Central
Ministries/Departments/Public
Sector
1122 INDIAN LAW REPORTS ALLAHABAD SERIES
Undertakings to relax the requirement of
prior turnover and prior experience subject
to procurement of quality material with
technical specifications.

5. It is submitted that the conditions
of prior turnover is in ignorance of the
Government Order dated 10.03.2016 under
para 16 of the order of 2012. Para 16
permits
Government
to
remove
the
difficulties for procurement of goods and
services from Micro and Small Enterprises.
The respondents should not have kept the
requirement of prior turnover, as it
otherwise reduces competitions.

6. Coming to the facts of this case, it
is submitted that by virtue of Clause 46(4)
of the Tender, there would be no
competition as only one enterprise would
be eligible to get contract. It is for the
reason that after the tender notice, only
three enterprises participated therein out of
which one is petitioner not confirming to
the requirement of minimum turnover
criteria. Out of two others, one Kerala State
Homoeopathic
Co-operative
Pharmacy
would also be eliminated having been
blacklisted. It would leave only one
Company namely M/s. Goa Antibiotics and
Pharmaceuticals Limited. The aforesaid is
not only contrary to the Government Order
dated
10.03.2016
but
to
eliminate
competition at the cost of public exchequer.

7. In view of above, a challenge to
tender condition has been made. No
purpose is sought to be achieved by putting
condition of prior turnover in procurement
of drugs under the Ayush Mission. A
reference of Ayush Mission has also been
given. It has been introduced by the
Government of India to purchase Drugs.
The Scheme introduced by the Government
of India does not provide a condition of
prior turnover for procurement of the drugs.
Accordingly, the procurement agency could
not have put a condition de hors the
Scheme of the Government of India. The
entire
funding
is
by
the
Central
Government thus the State Ayush Society
Mission had no authority to act contrary to
the Scheme.

8. The complete framework for the
implementation of Ayush Mission has been
given. The procurement of drugs has to be
made from M/s. IMPC or a Public Sector
Undertaking or pharmacies under the State
or the co-operative Societies manufacturing
quality drugs. Emphasis of the procurement
agency should have been on the purchase
of quality drugs than prior turnover
eliminating competition.

9. Reference of the Government
Procurement Policy has also been given.
Therein also, no direction exist for a
condition of prior minimum turnover. The
condition laid down by the opposite party
no. 4 is thus arbitrary and otherwise suffers
from mala fide, as it intend to favour only
one party leaving others. In the light of
aforesaid, prayer is to set aside clause 46(4)
of the Tender with a direction to the
opposite parties to consider the bid given
by the petitioner and if it is competitive,
allow the supply of the drugs.

10. To substantiate the argument,
learned counsel for the petitioner has made
a reference of the judgment of the Apex
Court in the case of Maa Binda Express
Carrier and Another vs. North-East
Frontier Railway and Others: (2014) 3
SCC 760. A specific reference of para 8 &
11 of the aforesaid judgment has been
given. A further reference of the judgment
of the Apex Court in the case of Michigan
Rubber (India) Limited vs. State of
3-5 All. Punjab Homeopathic Pharmacy & Ors. Vs. Union of India & Ors.
1123
Karnataka and Others: (2012) 8 SCC 216
has been given. Para 11, 12, 13 & 24 has
been referred.

11. Learned counsel appearing for
side opposite has contested the writ
petition. It is submitted that the condition
of prior turnover under Clause 46(4) has
not been introduced for the first time but it
was existing in the previous Tender also.
The condition aforesaid was challenged
earlier
also.
The
writ
petition
was
dismissed as rendered infructuous. The
issue has no merit as condition of minimum
turnover is to ensure supply of Drugs worth
Rs. 15 crore (approx.) in this year.

12. To clarify the aforesaid, learned
counsel has given an illustration. It is
submitted that if the minimum turnover
criteria is eliminated, the bids would be
given without showing the capacity to
supply the drugs. An establishment having
a turnover of Rs. 50 lakh in a year may
remain successful in the bid and if the
purchase order is issued thereupon, the
supply of Drugs worth Rs. 15 crore in a
year would not be possible. The criteria of
minimum turnover is to ensure supply of
the volume of drugs for which the Tender
is floated. It is not to eliminate the
petitioner or to favour someone.

13. The bidders in this case are non
else but the Public Sector Undertakings
only and not a Private Enterprise. The
opposite parties cannot have a reason to
eliminate
any
of
the
Public
Sector
Undertaking because supply under the
Ayush Mission has been emphasized
through IMPC, Public Sector Undertaking
or Pharmacies under the State Government
and
the
Co-operative
Societies
manufacturing drugs in their own Unit
having Good Manufacturing Practices
(GMP) compliances. The participation
pursuant to Tender is of non else but of
Public Sector Undertakings which include
even the petitioner. Thus the allegation of
elimination with a view to favour someone
is for sake of it.

14. It is further stated that jurisdiction
of this Court to review conditions of the
Tender is limited in view of the judgment
of the Apex Court in the case of Tata
Cellular vs. Union of India: 1994 (6) SCC
651. The court cannot sit as court of appeal
on the terms and conditions of the Tender.
It cannot even review terms and conditions
of Tender. The interference is limited to the
cases of mala fide or arbitrariness.
Aforesaid grounds are not attracted in this
case. The prayer is accordingly to dismiss
the writ petition.

15. We have considered the rival
submission of the parties and perused the
record.

16. By this writ petition, a challenge
is made to clause 46(4) of the Tender. For
ready reference, the aforesaid clause is
quoted hereunder:-

"लवगत तीन वषो (2016-17, 201718, 2018-19) में होम्योपैलथक औषलियोुं लनमाुता
िमों का औसतन टनु ओवर रुo 5 करोड़
न्यूनतम हो, अथातु गत तीन वषों का सिल टनु
ओवर रुo 1 5 करोड़ हो I"

17. The clause quoted above requires
minimum average turnover of Rs. 5 crore
in three years with gross turnover of Rs. 15
crore in the year i.e. 2016-17, 2017-18,
2018-19. The condition aforesaid has been
kept for procurement of drugs worth Rs. 15
crore in this year. The challenge to Clause
46(4) of the Tender has been made firstly
1124 INDIAN LAW REPORTS ALLAHABAD SERIES
in reference to the Government order dated
10.03.2016, which has been issued under
para 16 of the order of 2012. Para 4 of the
order is quoted below for ready reference:-

"(4) In exercise of Para 16 of
Public Procurement Policy for Micro and
Small Enterprises Order 2012, it is
clarified
that
all
Central
Ministries/Departments/Central
Public
Sector Undertakings may relax condition of
prior turnover and prior experience with
respect to Micro and Small Enterprises in
all public procurements subject to meeting
of quality and technical specifications."

18. The para quoted above gives discretion to
the Central Ministries/Departments/Central Public
Sector Undertakings to relax the condition of prior
turnover and prior experience. It is for the Micro and
Small Enterprises in all the public procurements. It is
not in dispute that the procurement of drugs in this
case is under a Scheme floated by the Government
of India namely National Ayush Mission. It is even
funded by the Central Government, thus it is for
public procurement.

19. In the light of the aforesaid, the order
of 2012 and the Government order dated
10.03.2016 would apply. The question would
however be as to whether the order dated
10.03.2016 gives a mandate to relax the
condition of prior turnover and prior experience
in all the public procurement. We find use of
the word 'may' in para 4 and thereby a
discretion has been given in public procurement
to relax the condition of prior turnover.

20. It is urged by the learned counsel for
the petitioner to read the word 'may' as 'shall' in
the facts and circumstances of this case.

21. We have considered the aforesaid
submission but unable to accept it. The word
'may' cannot be read as 'shall' as the order dated
10.03.2016 was not issued to restrain condition
of
minimum
turnover
criteria
in
all
circumstances. The order dated 10.03.2016 was
issued in pursuance to Para 16 of the order of
2012 which is quoted hereinbelow for ready
reference:-

"16. Removal of difficulty. % Any
difficulties experienced during the course of
implementation of the above policy shall be
clarified by Ministry of Micro, Small and
Medium Enterprises through suitable Press
releases which would be kept on the public
domain."

22. Para 16 of the order of 2012 is to take
care of the difficulties. The procurement from
Micro and Small Enterprises with condition of
prior experience or prior turnover criteria has
not been taken away in all the cases but a liberty
is given to eliminate the condition which can be
in an appropriate case. It can be where
procurement may not have nexus with the
turnover.

23. In the light of aforesaid, challenge
to clause 46(4) of the Tender cannot be
accepted in reference to the order dated
10.03.2016.

24. The other issue raised by learned
counsel for the petitioner is in reference to
the procurement under the Ayush Mission.
A reference of the Scheme introduced by
the Government of India has been given. It
is to emphasize that a condition does not
exist
for
prior
turnover
criteria
in
procurement of drugs under the said
Mission.

25. The contest to the argument has
been made by learned standing counsel
appearing for opposite party no. 4. He
submits that the Scheme does not lay down
terms and conditions of the Tender. It only
3-5 All. Punjab Homeopathic Pharmacy & Ors. Vs. Union of India & Ors.
1125
gives guidelines as to how the Scheme is to
be implemented. In the light of the
aforesaid, procurement under the Ayush
Mission is made after formulating terms
and conditions of the agreement. It is not
only to ensure procurement of drugs but the
quality to benefit the public.

26. We find that the Manual for
Procurement
of
Drugs
under
Ayush
Mission does not provide terms and
conditions of the Tender. It has given
general guidelines of the Scheme. The
terms and conditions of Tender is to be
formulated by the procurement agency.
Accordingly, challenge to clause 46 (4) of
the Tender cannot be accepted in reference
to the Manual for Procurement of Drugs
under Ayush Mission.

27. It cannot be accepted even in the
light of the Manual for Procurement of
Goods 2017. The Government of India,
Ministry
of
Finance,
Department
of
Expenditure has issued the Manual for
Procurement of Goods. It has a reference
for procurement of the goods from micro
and small enterprises. The clause in regard
to procurement of material for small and
micro enterprises is similar to what exists
in the order dated 10.03.2016. The word
'may' has been used therein also. Condition
of prior turnover and prior experience has
been
left
at
the
discretion
of
the
Procurement Agency. Clause 1.10.4 (ix) is
quoted hereunder for ready reference:-

"(ix) Ministry of MSME have
clarified
that
alll
Central
Ministries/Departments/Central
Public
Sector Undertakings may relax condition of
prior turnover and prior experience with
respect to Micro and Small Enterprises in
all public procurements subject to meeting
of quality and technical specifications."

28. If the comparison of the language
of Clause quoted above is made with the
order dated 10.03.2016, it would show use
of same language, as exist in the order
dated 10.03.2016 thus, the policy of 2017
does not incorporate a different condition
than what exist under the Government
order dated 10.03.2016. The word 'may' has
been used even in the policy of 2017.

29. Now we may refer to the factual
aspect raised by learned counsel for the
petitioner. An allegation to eliminate
competition
has
been
made
because
pursuant to the tender, only three bids have
been received. It is stated that the petitioner
may be ousted on account of condition of
prior turnover and another Public Sector
Undertaking
i.e.
Kerala
State
Homoeopathic
Co-operative
Pharmacy
having been blacklisted would also be
ousted leaving only one Public Sector
Undertaking. The condition is otherwise
said to be tailor made.

30. We find that the condition of
minimum turnover was incorporated in the
Tender without knowing turnover of
different Public Sector Undertakings and
Co-operative societies so as to eliminate
one or other undertaking. It is not a case
where a favour is extended with preconceived notion to benefit any Private
Enterprise. The bid pursuant to the Tender
has been given only by Public Sector
Enterprises of different States.

31. It is otherwise a fact that the
clause 46(4) of the Tender cannot be said to
be tailor made. It is looking to the volume
of the drugs to be procured in a year. It is
of Rs. 15 crore (approx) and for that if the
side opposite has insisted for prior turnover
of minimum 5 crore in average with 15
crore in last three years, it cannot be said to
1126 INDIAN LAW REPORTS ALLAHABAD SERIES
be a tailor made condition. The capacity of
the bidder is required to be taken into
consideration to ensure supply, thereby we
cannot accept the submission of learned
counsel for the petitioner for challenge to
the Clause 46(4) on the aforesaid ground. If
a bidder is having turnover of Rs. 50 lakh
or even one crore in a year, whether he
would be in a capacity to supply drugs
worth Rs. 15 crore on remaining successful
in the Tender. All these issues remain in the
realm of the procurement agencies and not
open for review by the Court exercising
jurisdiction under Article 226 of the
Constitution of India.

32. The allegation of mala fide is also
looked into. It is always easy to make
allegation of mala fide then to prove it. The
condition of prior turnover was inserted
without having knowledge of the bidders
thus question of mala fide does not arise. It
may be unfortunate that out of many
eligible Public Sector Enterprises, only
three have participated in the Tender but
merely for that reason, it cannot be said that
conditions of Tender suffers from mala fide
rather we find the condition to be
reasonable. It is to ensure supply of drugs
worth Rs. 15 crore. No reason of mala fide
has been given by the petitioner other than
eliminating the competitors. No bias
against the petitioner has been shown.

33. In the light of the facts given
above, we are unable to accept the
allegation of mala fide so as to cause
interference in Clause 16(4) of the Tender.

34. We may now refer to the
judgment cited by learned counsel for the
petitioner. It is in the case of Maa Binda
Express Carrier (supra). The Apex Court
has taken note of the limited jurisdiction of
the Court in the contractual matters and
even in the condition of Tender. Para 8 &
11 of the said judgment have been referred
by learned counsel for the petitioner and
are quoted hereunder for ready reference:-

"8. The scope of judicial
review in matters relating to award of
contract
by
the
State
and
its
instrumentalities is settled by a long
line of decisions of this Court. While
these decisions clearly recognize that
power exercised by the Government and
its
instrumentalities
in
regard
to
allotment of contract is subject to
judicial review at the instance of an
aggrieved party, submission of a tender
in response to a notice inviting such
tenders is no more than making an offer
which the State or its agencies are
under no obligation to accept. The
bidders participating in the tender
process cannot, therefore, insist that
their tenders should be accepted simply
because a given tender is the highest or
lowest depending upon whether the
contract is for sale of public property
or for execution of works on behalf of
the Government. All that participating
bidders are entitled to is a fair, equal
and non-discriminatory treatment in the
matter of evaluation of their tenders. It
is also fairly well-settled that award of
a contract is essentially a commercial
transaction which must be determined
on the basis of consideration that are
relevant to such commercial decision.
This implies that terms subject to which
tenders are invited are not open to the
judicial scrutiny unless it is found that
the same have been tailor made to
benefit any particular tenderer or class
of tenderers. So also the authority
inviting
tenders
can
enter
into
negotiations or grant relaxation for
bona fide and cogent reasons provided
3-5 All. Punjab Homeopathic Pharmacy & Ors. Vs. Union of India & Ors.
1127
such relaxation is permissible under the
terms governing the tender process.

11. In Michigan Rubber (India)
Ltd. v. State of Karnataka and Ors. (2012)
8 SCC 216 the legal position on the subject
was summed up after a comprehensive
review and principles of law applicable to
the process for judicial review identified in
the following words:

"19. From the above decisions,
the following principles emerge:

(a) 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.
These actions are amenable to the judicial
review only to the extent that the State must
act validly for a discernible reason and not
whimsically for any ulterior purpose. If the
State
acts
within
the
bounds
of
reasonableness, it would be legitimate to
take
into
consideration
the
national
priorities;

(b) fixation of a value of the
tender is entirely within the purview of the
executive and courts hardly have any role
to play in this process except for striking
down such action of the executive as is
proved to be arbitrary or unreasonable. If
the Government acts in conformity with
certain healthy standards and norms such
as awarding of contracts by inviting
tenders,
in
those
circumstances,
the
interference by Courts is very limited;

(c) In the matter of formulating
conditions of a tender document and
awarding a contract, 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, interference
by Courts is not warranted;

(d) Certain preconditions or
qualifications for tenders have to be laid
down to ensure that the contractor has the
capacity and the resources to successfully
execute the work; and

(e)
If
the
State
or
its
instrumentalities act reasonably, fairly and
in public interest in awarding contract,
here again, interference by Court is very
restrictive since no person can claim
fundamental right to carry on business with
the Government.

20. 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"; and

(ii) Whether the public interest is
affected. If the answers to the above
questions are in negative, then there should
be no interference under Article 226."
(emphasis supplied)

35. Para 8 makes it clear that
condition of Tender is not open to judicial
scrutiny unless it is found to be tailor made.
At the end of para 11, a reference of the
earlier judgment has been given to show as
to when interference in the Tender
condition can be made. It is when it suffers
from mala fide or intend to favour
someone. The case in hand is not covered
by the aforesaid judgment. The condition
under challenge is neither suffering from
mala fide nor it is tailor made to favour
someone.

36. Another judgment cited by
learned counsel for the petitioner is in the
1128 INDIAN LAW REPORTS ALLAHABAD SERIES
case of Michigan Rubber (India) Ltd.
(supra). Para 11, 12, 13 & 24 have been
referred and are quoted hereunder for ready
reference:-

"11. In Tata Cellular vs. Union of
India, (1994) 6 SCC 651, this Court
emphasised the need to find a right balance
between administrative discretion to decide
the matters on the one hand, and the need
to remedy any unfairness on the other, and
observed:

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

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

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

(4) The terms of the invitation to
tender cannot be open to judicial scrutiny
because the invitation to tender is in the
realm of contract. ... (5) The Government
must have freedom of contract. In other
words, a fair play in the joints is a
necessary
concomitant
for
an
administrative body functioning in an
administrative
sphere
or
quasi-
administrative
sphere.
However,
the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facts
pointed out above) but must be free from
arbitrariness not affected by bias or
actuated by mala fides.

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

12) In Raunaq International Ltd.
vs. I.V.R. Construction Ltd. & Ors. (1999)
1 SCC 492, this Court reiterated the
principle governing the process of judicial
review and held that the writ court would
not
be
justified
in
interfering
with
commercial transactions in which the State
is one of the parties except where there is
substantial public interest involved and in
cases where the transaction is mala fide.

13) In Union of India & Anr. vs.
International Trading Co. & Anr., (2003) 5
SCC
437,
this
Court,
in
similar
circumstances, held as under:

"15. While the discretion to
change the policy in exercise of the
executive power, when not trammelled 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 nonarbitrariness 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
3-5 All. Punjab Homeopathic Pharmacy & Ors. Vs. Union of India & Ors.
1129
so, does it really satisfy the test of
reasonableness.

16. Where a particular mode is
prescribed for doing an act and there is no
impediment in adopting the procedure, the
deviation to act in a different manner which
does not disclose any discernible principle
which is reasonable itself shall be labelled
as arbitrary. Every State action must be
informed by reason and it follows that an
act uninformed by reason is per se
arbitrary.

22. If the State acts within the
bounds of reasonableness, it would be
legitimate to take into consideration the
national priorities and adopt trade policies.
As noted above, the ultimate test is whether
on the touchstone of reasonableness the
policy decision comes out unscathed.

23. Reasonableness of restriction
is to be determined in an objective manner
and from the standpoint of interests of the
general public and not from the standpoint
of the interests of persons upon whom the
restrictions have been imposed or upon
abstract consideration. A restriction cannot
be said to be unreasonable merely because
in a given case, it operates harshly. In
determining
whether
there
is
any
unfairness involved; the nature of the right
alleged to have been infringed, the
underlying purpose of the restriction
imposed, the extent and urgency of the evil
sought to be remedied thereby, the
disproportion
of
the
imposition,
the
prevailing condition at the relevant time,
enter
into
judicial
verdict.
The
reasonableness
of
the
legitimate
expectation has to be determined with
respect to the circumstances relating to the
trade or business in question. Canalisation
of a particular business in favour of even a
specified individual is reasonable where
the interests of the country are concerned
or where the business affects the economy
of the country.

24. 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."

37. In para 11 of the judgment quoted
above, the Apex Court has made a
reference in the case of Tata Cellular vs.
Union of India, (1994) 6 SCC 651. In the
said case, certain restrictions have been
imposed on the Courts to cause interference
in the conditions of Tender.

38. A reference of the judgment in the
case of Union Of India (Uoi) And Anr. vs
International Trading Co.: 2003 5 SCC
437 would also be relevant on the facts of
this case. It is not a case where there is
overnight change in the condition of the
Tender rather in the last year also, the
condition of minimum turnover
was
existing though the prior turnover required
was of Rs. 9 crore. The minimum turnover
criteria
depend
on
the
volume
of
procurement
and
other
requirements.
Interference therein be made if mala fide
exists to favour someone. We have already
expressed our opinion on the aforesaid. A
case of mala fide or favour is not made out.
1130 INDIAN LAW REPORTS ALLAHABAD SERIES

39. In view of above, writ petition
fails and is dismissed.
----------
(2020)03-05ILR A1130
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 04.03.2020

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA,
J.

Misc. Single No. 6548 of 2010
&
Misc. Single No. 4074 of 2010

Superintending Engineer, Faizabad Circle
& Ors. ...Petitioners
Versus
Presiding Officer, Labour Court, U.P.,
Faizabad & Ors. ...Respondents

Counsel for the Petitioners:
Standing Counsel

Counsel for the Respondents:
C.S.C., Kailash Nath Tewari, Y.S. Lohit

Civil Law-Industrial Dispute-Government
Departments -Public Work Departmentexcluded from definition of industryimpugned
award
did
not
considered
preliminary objection of maintainabilityquashed-W.P. allowed.

Held, Since in the judgment rendered in
Bangalore Water Supply case (supra), the
majority
opinion
excluded
Government
departments which may otherwise be covered
by the expansive definition of 'industry' given in
Paragraph
140
to
143,
if
there
are
constitutionally
and
competently
enacted
legislative provisions, governing such activities
as undertaken by such Departments; the Public
Works 16 Department stands excluded from the
expansive definition of 'industry' as given by the
Bangalore Water Supply and Sewerage Board
case (supra). (para 22) (E-9)

Cases cited:
1. Writ Petition No.4382 (SS) of 2001: St. of
U.P. & ors. Vs. Harish Chandra, decided on
31.7.2015

2. St. of Mah. & anr Vs. Sarva Shramik Sangh,
Sangli & ors., 2013 (16) SSC 16

3. Bangalore Water Supply and Sewerage Board
Vs. A. Rajappa (1978) 2 SCC 213 (Relied
upon)

4. State of U.P. Vs Jai Bir Singh, (2005) 5 SCC 1

5. Writ Petition No.6910 (MS) of 2002:
Superintending
Engineer
Provincial
Division
P.W.D. Barabanki Vs Presiding Officer, Labour
Court, Lucknow decided on 20.3.2017

6. Sant Kumar Dubey Vs. Presiding Officer,
Industrial Tribunal (IV), Uttar Pradesh, Agra &
ors., 1997 Labour and Industrial Cases 777

7.St. of U.P. & ors., Vs. Deep Chandra and
others (2004) 1 UPLBEC 816

8. U.O.I. & ors. Vs. Ranbir Singh Rathore & ors.,
(2006) 11 SCC 696

9.N.H.A.I. Vs. Ganga Enterprises & anr., (2003)
7 SCC 410

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

1. Heard learned counsel for the
petitioners and learned counsel for the
respondents.

2. These writ petitions have been
taken up together by this Court as they
relate to the question whether an Industrial
Adjudication
case
could
have
been
entertained by the Labour Court on
reference being made to it regarding daily
wage workmen engaged by the Public
Works Department on muster roll and
whether the Public Works Department of
the State of U.P. can be considered to be an
industry under the Industrial Disputes Act.