# SHIMNIT UTSCH INDIA PVT. LTD. & ANR v. ·WEST BENGAL TRANSPORT INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. & ORS

- **Citation:** [2010] 6 S.C.R. 1110
- **Court:** Supreme Court of India
- **Decided:** 2010-05-12
- **Case number:** Civil Appeal No. 4441 of 2010
- **Bench:** R.V. Raveendran, R.M. Lodha, C.K. Prasad
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/shimnit-utsch-india-pvt-ltd-anr-v-west-bengal-transport-infrastructure-26812
- **Pages:** 41

## Headnote

C
Government policy - Alteration/change in policy -
Permissibility - Judicial intervention - Scope of - Held: The
government has a discretion to adopt a different policy or alter
or change its policy calculated to serve public interest and
make it more effective - Where the circumstances changed
D in some material respects, departure from the earlier policy
cannot be held to be legally flawed, particularly when there is
no challenge to the changed policy on the ground of
Wednesbury reasonableness or principle of legitimate
expectation or arbitrariness or irrationality- Administrative law
E -
Principle of legitimate expectation -
Wednesbury
reasonableness - Judicial review.
Government contract - Contract for manufacture and
supply of High Security Registration Plates (HSRP) for motor
vehicles - Notices Inviting Tenders (N/Ts) issued by various
F States for award of contract - In Association of Registration
Plates's case*, conditions of experience in the field of
registration plates in foreign countries and a minimum annual
turnover from such business were upheld as essential
conditions in the NIT - Whether in the light of this decision, it
G was necessary for the State Governments to continue with
these conditions or it was permissible for them to do away with
such conditions - Held: The decision in Association of
Registration Plates* did not create any impediment for the
States to alter or modify the conditions in the NIT if the
H
1110
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1111
INFRASTRUCTURE DEVE. CORPN. LTD.
circumstances changed in material respects by lapse of time
A
- Though the State or its tendering authority is bound to give
effect to essential conditions of eligibility stated in a tender
document and is not entitled to waive such conditions but that
does not take away its administrative discretion to cancel the
entire tender process in public• interest provided such action
B
is not actuated with ulterior motive or is otherwise not vitiated
by any vice of arbitrariness or irrationality or in violation of
some statutory provisions - It is always open to the State to
give effect to new policy which it wished to pursue keeping in
view 'overriding public interest' and subject to principles of c
Wednesbury reasonableness -
Central Motor Vehicles
Rules, 1989 - r.50 - Motor Vehicles (New High Security
Registration Plates) Order, 2001 - Motor Vehicles (New High
Security Registration Plates) [Amendment] Order, 2001.
In Association of Registration Plates's case*,. the
D
conditions of experience in the field of registration plates
in the foreign countries and a minimum annual turnover
from such business were upheld by this .Court as
essential conditions in the Notices Inviting Tenders (NIT)
for award of contract for manufacture and supply of High
E
Security Registration Plates (HSRP) for motor vehicles.
Except West Bengal and Orissa, all other States
followed the essential conditions approved by this Court
in the case of Association of Registration Plates*. The
said two States issued fresh NITs (second NITs) for
manufacture and supply of HSRP in respect of motor
vehicles, in which conditions pertaining to experience in
foreign countries and the minimum prescribed turhover
from such business were done away with.
Before this Court, it was contended by the appellant
that in Association of Registration Plates*, after
considering the scheme of HSRP including the
guidelines issued by the Central Government and the
conditions in the NIT pertaining to experience in the
G
H
1112
SUPREME COURT REPORTS
[2010] 6 S.C.R.
A foreign countries and the turnover from the said
business, the Supreme Court had held that these are
essential conditions of the tender aimed to ensure that
the manufacturer selected would be technically and
financially competent to fulfill the contractual obligations
B keeping in view the magnitude of the job and the huge
investment required in the project. It was further
contended that these conditions, having got the

## Text

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A
B
[2010] 6 S.C.R. 1110
SHIMNIT UTSCH INDIA PVT. LTD. & ANR.
v.
·WEST BENGAL TRANSPORT INFRASTRUCTURE
DEVELOPMENT CORPORATION LTD. & ORS.
(Civil Appeal No. 4441 of 2010)
MAY 12, 2010
[R.V. RAVEENDRAN, R.M. LODHA AND
C.K. PRASAD, JJ.]
C
Government policy - Alteration/change in policy -
Permissibility - Judicial intervention - Scope of - Held: The
government has a discretion to adopt a different policy or alter
or change its policy calculated to serve public interest and
make it more effective - Where the circumstances changed
D in some material respects, departure from the earlier policy
cannot be held to be legally flawed, particularly when there is
no challenge to the changed policy on the ground of
Wednesbury reasonableness or principle of legitimate
expectation or arbitrariness or irrationality- Administrative law
E -
Principle of legitimate expectation -
Wednesbury
reasonableness - Judicial review.
Government contract - Contract for manufacture and
supply of High Security Registration Plates (HSRP) for motor
vehicles - Notices Inviting Tenders (N/Ts) issued by various
F States for award of contract - In Association of Registration
Plates's case*, conditions of experience in the field of
registration plates in foreign countries and a minimum annual
turnover from such business were upheld as essential
conditions in the NIT - Whether in the light of this decision, it
G was necessary for the State Governments to continue with
these conditions or it was permissible for them to do away with
such conditions - Held: The decision in Association of
Registration Plates* did not create any impediment for the
States to alter or modify the conditions in the NIT if the
H
1110
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1111
INFRASTRUCTURE DEVE. CORPN. LTD.
circumstances changed in material respects by lapse of time
A
- Though the State or its tendering authority is bound to give
effect to essential conditions of eligibility stated in a tender
document and is not entitled to waive such conditions but that
does not take away its administrative discretion to cancel the
entire tender process in public• interest provided such action
B
is not actuated with ulterior motive or is otherwise not vitiated
by any vice of arbitrariness or irrationality or in violation of
some statutory provisions - It is always open to the State to
give effect to new policy which it wished to pursue keeping in
view 'overriding public interest' and subject to principles of c
Wednesbury reasonableness -
Central Motor Vehicles
Rules, 1989 - r.50 - Motor Vehicles (New High Security
Registration Plates) Order, 2001 - Motor Vehicles (New High
Security Registration Plates) [Amendment] Order, 2001.
In Association of Registration Plates's case*,. the
D
conditions of experience in the field of registration plates
in the foreign countries and a minimum annual turnover
from such business were upheld by this .Court as
essential conditions in the Notices Inviting Tenders (NIT)
for award of contract for manufacture and supply of High
E
Security Registration Plates (HSRP) for motor vehicles.
Except West Bengal and Orissa, all other States
followed the essential conditions approved by this Court
in the case of Association of Registration Plates*. The
said two States issued fresh NITs (second NITs) for
manufacture and supply of HSRP in respect of motor
vehicles, in which conditions pertaining to experience in
foreign countries and the minimum prescribed turhover
from such business were done away with.
Before this Court, it was contended by the appellant
that in Association of Registration Plates*, after
considering the scheme of HSRP including the
guidelines issued by the Central Government and the
conditions in the NIT pertaining to experience in the
G
H
1112
SUPREME COURT REPORTS
[2010] 6 S.C.R.
A foreign countries and the turnover from the said
business, the Supreme Court had held that these are
essential conditions of the tender aimed to ensure that
the manufacturer selected would be technically and
financially competent to fulfill the contractual obligations
B keeping in view the magnitude of the job and the huge
investment required in the project. It was further
contended that these conditions, having got the seal of
approval from the Supreme Court, could not have been
done away with in second NIT, and if for any reason the
C State Government thought of cancelling the first NIT and
decided to issue fresh NIT dispensing with the
conditions of experience in foreign countries and
prescribed minimum turnover from such business, they
ought to have approached this Court for an appropriate
0 direction.
The question that arose for consideration in the
present appeals was, whether after the decision of this
Court in Association of Registration Plates*, it was
necessary for the State Governments to continue with
E these conditions or it was permissible for them to do
away with such conditions.
Dismissing the appeals, the Court
HELD: 1. Once a particular matter relating to
F conditions in NIT has been finally decided by the highest
Court, the State Government, which was party to the
litigation, ought to have proceeded accordingly but, in a
case such as the present one, where the circumstances
changed in some material respects, departure from the
G earlier policy cannot be held to be legally flawed,
particularly when there is no challenge to the changed
policy reflected in second NIT on the ground of
Wednesbury reasonableness or principle of legitimate
expectation or arbitrariness or irrationality. In the present
H
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1113
INFRASTRUCTURE DEVE. CORPN. LTD.
case, the High Court had recorded a finding that reasons
A
stated by the State Government for departure from the
conditions in the first NIT did exist and accepted the
contention of the State Government that by increasing the
area of competition, greater public interest would be subserved because of financial implications. The
B
government policy can be changed with changing
circumstances and only on the ground of change, such
policy would not be vitiated. The government has a
discretion to adopt a different policy or alter or change
its policy calculated to serve public interest and make it c
more effective. Choice in the balancing of the pros and
cons relevant to the change in policy lies with the
authority. But like any discretion exercisable by the
government or public authority, change in policy must be
in conformity with Wednesbi.Jry reasonableness and free
D
from arbitrariness, irrationality, bias and malice. [Para 46]
[1144-8-G]
1.2. The judgment of this Court in Association of
Registration Plates* cannot be read as prescribing the
conditions in NIT for manufacture and supply of HSRP.
E
Rather this Court examined legality and justification of the
impugned conditions within the permissible parameters
of judicial review and recognized the right of the States
in formulating tender conditions. There is no justification
in denying the State authorities latitude for departu're
F.
from the conditions of the NIT that came up. for
consideration before this Court in larger public interest
to broaden the base of competitive bidding due to lapse
of time and substantial increase in the number' of
persons having Type of Approval Certificates (TAC) from
G
the approved institutes without compromising on the
quality and specifications of HSRP as set out in Rule 50
of the Central Motor Vehicle Rules, 1989; the Motor
Vehicles (New High Security Registration Plates) Order,
2001 and the Motor Vehicles (New High Security· H
1114
SUPREME COURT REPORTS
[2010] 6 S.C.R.
A Registration Plates) [Amendment] Order, 2001. [Para 47]
[1145-E-H]
1.3. In the case of Association of Registration Plates*,
this Court did not find any fault with the controversial
8 conditions in the NIT and overruled all objections raised
by the petitioners therein in challenge to those
conditions. The impugned conditions of NIT in that group
of cases were not held to be arbitrary, discriminatory or
irrational nor amounted to creation of any monopoly as
alleged. The declaration of law by this Court in Association
C of Registration Plates* is that in the matter of formulating
conditions for a contract of the nature of ensuring supply
of HSRP, greater latitude needs to be accorded to the
State authorities. It is difficult to hold that by virtue of that
judgment the impugned conditions were frozen for all
D times to come and the States were obliged to persist with
these conditions and could not alter them in larger
interest of the public. The decision in Association of
Registration Plates* did not create any impediment for the
States to alter or modify the conditions in the NIT if the
E circumstances changed in material respects by lapse of
time. [Para 50] [1147-B-E]
1.4. As regards the State of West Bengal, the bids
pursuant to the second NIT were evaluated by West
F Bengal
Transport
Infrastructure
Development
Corporation Limited (WBTIDCL). The lowest bid per
HSRP unit for a vehicle was Rs. 469/- while the offer made
by appellant was of about Rs. 1200/-. Such a huge
difference in the rate per HSRP unit shows that the action
G of the State Government in doing away with the
conditions of experience in foreign countries and
prescribed turnover from such business has been in
larger public interest without compromising on safety,
security and quality or sustainable capacity. As regards
the State of Orissa, it is an admitted position that the first
H
SHIMNIT UTSCH INDIA PVT: LTD. v. W:B. TPT
1115
INFRASTRUCTURE DEVE. CORPN. LTD.
NIT issued inviting bids for. the manufacture and suppty. A
of HSRP in respect of the existing motor vehicles and
vehicles to be registered in the State of Orissa was not
taken to logical conclusion and a fresh NIT was issued
on BOO basis. In that NIT, inter alia, eligibiiity criteria has
been provided that bidder should have experience of B
working inthe field of HSRP having used the security
features as mentioned· in Ru le 50 of 1989. Rules. However,
NIT does not insist on conditions like experience in the
foreign countries and minimum prescribed turnover from .
the said business. No case for< judicial review or. c
intervention is made out in the said NIT. [Paras 52 and.
55] [1149-B•C; 1150-C.~E]
.,
1.5. It is true that the State or its tendering authority
is bound to give effect to essential conditions of eligibility
stated in a tender document and is not entitled to waive
D ·
such conditions but that does not take away its
administrative discretion to cancel .the entire tender
process in public interest provided such action is not
actuated with ulterior motive or is otherwise not vitiated
by any vice of arbitrariness or irrationality or in violation
E
of some statutory provisions. It is always open to the
State to give effect to new policy which it wished to
pursue keeping in view 'overriding. public interest' and .
subject to principles of Wednesbury reasonableness.
[Para 541 [1149-F-Hl,
F
· ...
*Association of Registration Plates . v. Union of India and
Ors. (2005) 1 SCC 679, explained...
.
Real Mazon India Ltd. v. State df Assam and Ors. 2008
(1) GLT 1020, disapproved .. ·
G
.. ·.
..
'
. . .
.
Mohd. Fida Karim andAnr. v. State of Bihar & Ors. (1992)
2 SCC 631; Sterling Computers Limited v. Mis. M and N
Publications Limited and Ors. (1993) 1 SCC 445; ·Tata·
Cellular v. Union of India (1994) 6 SCC 651; Raunaq
H
...
1115
SUPREME COURT REPORTS
[2010] 6 S.C.R.
A International Ltd. v. I. V.R. Construction Ltd. & Ors. (1999) 1
SCC 492; Punjab Communications Ltd. v. Union of India &
Ors. (1999) 4 SCC 727; Monarch Infrastructure (P) Ltd. v.
Commissioner., Ulhasnagar Municipal Corporation & Ors.
(2000) 5 SCC 287; Union of India and Anr. v. lnt.emational
B Trading Co. and Anr. (2003) 5 SCC 437; Directorate of
Education and Ors. v. Educomp Datamatics Ltd. and Ors.
(2004) 4 SCC 19; Bannari Amman Sugars Ltd. v.
Commercial Tax Officer & Ors. (2005) 1 SCC 625; Global
Energy Limited & Anr. v. Adani Exports Ltd. and Ors. (2005)
C 4 SCC 435; Master Marine Services (P) Ltd. v. Metcalfe &
Hodgkinson (P) Ltd. & Anr. (2005) 6 SCC 138 and S. Nagaraj
& Ors. v. State of Karnataka & Anr. 1993 Suppl. (4) SCC 595,
referred to.
Hughes v. Deptt. of Health and Social Security 1985 AC
D 776; State of New South Wales v. Quin 1990 64 ALJR 327
and State for Transport, Ex parte Richmond upon Thames
London Borough Council & Ors. (1994) 1 All E.R. 577,
referred to.
E
F
G
H
Case Law Reference:
(2005) 1 sec 679
1985 AC 776
1990 64 ALJR 327
(1994) 1 All E.R. 577
(1992) 2 sec 631
(1993) 1 sec 445
(1994) 6 sec 651
(1999) 1 sec 492
(1999) 4 sec 121
explained
referred to
referred to
referred to
referred to
referred to
referred to
referred to
referred to
Para 3
Para 32
Para 33
Para 34
Para 35
Para 36
Para 37
Para 38
Para 39
,...
,:. :.
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1117
INFRASTRUCTURE DEVE. CORPN. LTD.
(2000) 5 sec 287
referred to
Para 40
A
(2003) 5 sec 437
referred to
· · .. Para 41
(2004) 4 sec 19
referred to
Para 42
(2005) 1 sec 625
referred to
Para 43
B
(2005) 4 sec 435
referred to
Para 44
(2005) s sec 138
referred to
Para 45
1993 Suppl. (4) SCC 595 referred to
Para 48 c
2008 (1) GLT 1020
disapprove~
Para 54
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4441 of 2010.
From the Judgment and order dated 27.06.2006 of the D
High Court at Calcutta in APOT No. 84 of 2006, GA No. 545
of 2006 & WP No. 2083 of 2005.
WITH
C.A. No. 4442 of 2010.
E
F.S. Nariman, R.F. Nariman, Bhaskar Raj Pradhan,
Arunabh Chowdhury, Anupam Lal Das, Ruby Singh Ahuja,
Raktim Gogoi, Arpit Gupta and Sunil Fernandes, for the
Appellant.
F
Shyam Divan, S.K. Bazaria, S. Ganesh, L · Nageswara
Rao, S. Udaya Kumar Sagar, Bina Madhavan (for Lawyer's Knit
& Co.), S. Kirpal, Bijoy Kumar Jain, AK. Jain, P. Jain, Jagjit
Singh Chhabra, Bijan Kumar Ghosh, Manik Das, Manash Das,
Dr. Kailash Chand, Avijit Bhattacharjee, Bikas Kargupta,
G
Shibashish Misra, Joydeep Pal, Praneet Pranav, Ashok
Panigrahi, Satya Mitra Garg ans Y. Mohanty, for the
. Respondent.,
H
1118
SUPREME COURT REPORTS
[2010] 6 S.C.R.
A
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. Leave granted.
2. Of the two appeals by special leave, one has been
preferred by Shimnit Utsch India Private Limited (for short,
B 'Shimnit') being aggrieved by the judgment dated June 27,
2006 of the Calcutta High Court whereby the Division Bench
dismissed their appeal and affirmed the order dated February
20, 2006 of the Single Judge dismissing their writ petition and
the other at the instance of Mis Tohnjes Eastern Security
C Technologies Private Limited (for ·short, 'Tonnjes') challenging
the order dated March 23, 2010 whereby the Division Bench
of Orissa High Court dismissed· their writ petition. ·
The Issue
3. The common question that arises for consideration in
D the two appeals is, whether after decision of this Court in
Association of Registration Plates v. Union of India and Ors1.
wherein the conditions provided for experience in the field of
registration plates in the foreign countries and a minimum
annual turnover from such business were upheld as essential
E conditions in the Notices Inviting Tenders (NIT) for award of
contract for manufacture and supply of High Security
Registration Plates (HSRP) for motor vehicles, it is necessary
for the State Governments to continue with these conditions or
it is permissible for them to do away with such conditions.
F Factual and legal background in Association of
Registration Plates
4. The Motor Vehicles Act, 1988 (for short, '1988 Act')
came into force on July 1, 1989. Chapter -IV thereof deals with
G registration of motor vehicles as defined in Section 2(28). Subsection (6) of Section 41 provides that the registering authority
shall assign to the vehicle, for display thereon, a distinguishing
mark (registration mark) consisting of one of the groups of such
of those letters and followed by such letters and figures as are
H 1.
(2005} 1 sec 679.
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B~ TPT
1119
INFRASTRUCTURE DEVE. CORPN. LTD. [R.M. LODHA, J.]
allotted to the State by the Central Government from time to
A
time by notification in the Official Gazette. Pursuant thereto a
Notification came to be issued by the Central Government on
July 1, 1989 allocating group of letters to various States. The
Central Motor Vehicles Rules, 1989 [for short, '1989 Rules')
were framed by the Central Government in exercise of its
B
powers under Section 64 and other relevant provisions of 1988
Act. Rule 50 of 1989 Rules provides for form and manner of
display of registration marks on the motor vehicles. The said
Rule 50 has been amended from time to time and new system
of HSRP thereunder is now to come into effect from June 1, c
2010.
5. Under sub-section (3) of Section 109,of 1988 Act, the
Central Government issued Motor Vehicles (N'ew High Security
Registration Plates) Order, 2001 (for short, '0.rder, 2001'). On
October 16, 2001, the Central Government further issued Motor
D
Vehicles [New High Security Registration Plates (Amendment)]
Order, 2001 (for short, 'Amendment Order, 2001 '). Amendment
Order, 2001 provided for certain standards in respect of the
new system of HSRP for motor vehicles and the process used
by a manufacturer or vendor for manufacturing or supplying such
E
plates.
·
6. On March 6, 2002, a communication laying down
guidelines for incorporating necessary conditions in the NIT to
be issued by the various States and Union Territories (UTs) was
circulated by the Central Government to all States and UTs. The
F
guidelines, inter alia, provided; (i) the tender document would
specify whether the appointment of the vendor is for the. whole
State or for certain parts; (ii) the tender document would speCify ·
the terms of the bank guarantee; (iii) the tender document would
require a report back on certain aspects on 'a periodic and
G
regular basis' and (iv) the bidder must furnish proof of past
experience/expertise in this area or proof of the same with the
collaborator. By further communication dated June 14, 2002 the
aforenoticed NIT guidelines were modified by the Central
_Government and it was suggested that the bidders may be
H
1120
SUPREME COURT REPORTS
[2010] 6 S.C.R.
A asked to provide details about the experience/capability of its
collaborator to the satisfaction of the State authorities. By
another communication dated November 13, 2002, the Central
Government clarified to the States and UTs that the guidelines
are suggestive in nature and left the discretion to the States
B and UTs in the matter of issuing NIT but reiterated security
concern.
7. In the light of the guidelines suggested by the Central
Government, several States/UTs issued NIT which, inter alia,
included conditions, namely, (i) experience in the field of
C registration plates i.e., bidder should be working at least in five
countries for licence plates and in a minimum of three countries
with licence plates having security features worldwide; (ii) the
bidder must have had a minimum annual turnover equivalent
to INR 30 crores immediately preceding last year; at least 25%
D of this turnover must be from the licence plate business and (iii)
the contract will be for a period of 15 years.
8. The NIT containing the aforenoticed conditions issued
by several States led to filing of writ petitions before various
High Courts. Few writ petitions were filed directly before this
E Court. Since the controversy was common, writ petitions filed
before High Courts were transferred to this Court and taken up
along with writ petition filed by Association of Registration
Plates1. It was argued on behalf of the petitioners before this
Court that these conditions in NIT have been tailored to favour
F companies having foreign collaboration and aimed at excluding
indigenous manufacturers from the tender process; there are
not more than one or two companies that could satisfy the
stringent eligibility conditions laid down in NIT; Indian
manufacturers are fully competent to be involved for the
G implementation of the scheme of HSRP but the condition
concerning experience in foreign countries has obviated any
chance of their participating in the bidding process; fixing high
turnover from such business is only for the purpose of advancing
the business interest of a group of companies having foreign
H links and support and that it is impossible for any indigenous
SHIMNIT UTSCH INDIA PVT. L TO. v. W.B. TPT .
1121
INFRASTRUCTURE DEVE. CORPN. LTD. [RM. LODHA, J.]
manufacturer of security plates to have a turnover .of
A
approximately 12.5 crores from the HSRP which are sought to
be introduced in India for the first time and the implementation
of the project has not yet started in any of the States.
9. The States who had issued NIT defended the impugned
tender conditions before this Court. Insofar as the State of West
8
Bengal is concerned, a counter affidavit was filed through West
Bengal Transport Infrastructure Development Corp9ration Ltd.
(WBTIDCL). It was stated in the counter affidavit that impugned
conditions in NIT are intended to achieve the high objective of
public safety involved in the implementation of HSRP. The
C
relevant averments in the counter affidavit are reproduced below
" ......... The State Governments realizing the importance
of the project came out with various conditions in the
Tender which are primarily related to seeing the
0
experience and the capacity of the manufacturer to
undertake such a huge task concerning the manufacturing
and supp.ly of HSRPs in the State. The State Government
therefore came out with conditions to insure that the
· manufacturer who supplied the HSRPs in the State is not
fly-by-night operator but is personally experienced enough
E
and capable enough to carry out such an activity ....... .
. . . . . . . . . . . . . . . The power therefore is wide enough to include
aspects, which may not have been provided specifically
elsewhere in the Act. The Central Government is well within
its powers to prescribe the fact that the State Government
has the power to select the manufacturer of HSRPs as it
F
is State Government which understood its specific
requirements and needs and has to be satisfied about the
competence of the manufacturer that whom it has to work
jointly in order to ensure that the objective b~hind the
G
HSRPs scheme is not deviated. In the absence of si.Jch a
provision the whole scheme of HSRPs which means
towards achieving public safety and security by ensuring
that there is issuing control and supervision ofHSRPs by
H
A
B
c
D
E
F
G
H
1122
SUPREME COURT REPORTS
[2010] 6 S.C.R.
the State Government will get deviated .
.. .. .. .. .. .. The State under the Tender wishes to choose a
person who is already worked in connection with HSRPs
rather than chose a person who merely claims that it can
deliver. Surely in a project of such a large scale concerning
public safety and security the State cannot be justified to
employ the hit and trial method .
.. .. .. .. .. .. . The objective by no means can be lost of or
given an improper degree of attention. The objective is to
ensure highest levels of public safety and security
established in the wake of the uncertain times that people
are subject to these days. Consequently, the introduction
of HSRPs mandates adherence to highest standards both
in supply of manufacturing quality of products, required
supply of the quantity of the project and above al mandates
coordination with the State will have the general control
and supervision over the issuance of these number plates.
The fact is mentioned are by no means exhaustive but are
only given to illustrate the basis tenets of the whole
business of HSRPs. The State Government by no means
can adopt a hit and trial method in a project of such a vast
nature. It has been no necessarily ensured that the
manufacturer is selected by a fair, competitive and
transparent means of selection, which is the Tender
process. The selection necessarily has to happen amongst
the TAC holders. The State Government has to be
· satisfied to the extent to leaving no scope of doubt with
regard to the expertise and capability of the selected
manufacturer of HSRPs the State Government has to be
satisfied that the company concerned will be able to meet
the requirement both on the qualitative and quantitative
basis and in bare commercial terms the company chosen
is the best company amongst the TAC holders. The
scheme envisages constant cooperation and coordination
amongst the supplier and the State. Any brake at any point
of time in the system as envisaged will deviate the
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1123
INFRASTRUCTU~E DEVE. CORPN. LTD. [RM. LODHA, J.)
objective which is sought to be achieved. It is in this
A
background that the challenge/grievances of the petitioner
must be viewed."
Decision in Association of Registration Plates
10. This Court dismissed the entire group of writ petitions s
on November 30, 2004, .The tender conditions relating to
experience in foreign countries, prescribed percentage of
turnover from such business and term of 15 years were not held
·to be arbitrary, discriminatory or mala fide; rather these
conditions were held in public interest. This Court observed : c
The State as an implementing authority has to
ensure that the scheme of HSRPs is effectively
implemented. Keeping in view the enormous work
involved inswitching over to new plates within two
years for existing vehicles, resort to "trial-and-error" o
method.would prove hazardous.
The State Government's right to get the right and
most competent person cannot be questioned.
The State G''overnment has to eliminate
· manufacturers who have developed recently just to
enter into the new field.
The insistence of the State to search for an
experienced manufacturer with sound financial and
E
technical capacity cannot be misunderstood.
F
The terms and conditions in N!Ts are so formulated
to enable the State to adjudge the capability of a
particular tenderer who can provide a fail-safe and
sustainable delivery capacity.
G
Only such tenderer has to be selected who can take
responsibility for marketing, servicing and providing
continuously the specified plates for Vehicles in
large numbers, firstly in the initial two years, and
annually in the next 13years.
·
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(2010) 6 S.C.R.
A
Capacity and capability are the two most relevant
criteria for framing suitable conditions of any
notices inviting tenders and the conditions of
experience and turnover incorporated as essential
conditions are to ensure that the manufacturer
B
selected would be technically and financially
competent to fulfill the contractual obligations,
which, looking to the magnitude of the job, requires
huge investment qualitatively and quantitatively.
c
facts post 30.11.2004
(A) West Bengal
11. After the decision of this Court in Association of
Registration Plates1 on November 30, 2004, the Government
of West Bengal evaluated the bids already submitted in
D accordance with the NIT and the bid of Shimnit was.cleared at
the prequalification stage. One M/s. Pramuk Hoffman
International Ltd., ('Promuk' for short) was also declared
qualified. Shimnit challenged the pre-qualification of Promuk by
filing a writ petition (468/2005) before Calcutta High Court on
E the ground that they did not have requisite international
experience. On March 11, 2005, the Single Judge of Calcutta
High Court by an interim order stayed the finalization of tender.
12. On April 27, 2005, however, the Government of West
Bengal (Transport Department) issued a Notification canceling
F its NIT for supply and fitment of HSRP for motor vehicles issued
earlier. The said Notification reads as follows :
G
H
"Government of West Bengal
Transport Department
Writers' Building
No. 2672 WT/3M-56/2003 PL Ill Dated 27.04.2005
NOTIFICATION
WHEREAS Notice Inviting Tender (NIT) was issued and
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1125
INFRASTRUCTURE DEVE. CORPN. LTD. [R.M. LODHA, J.]
published in various newspapers on 03.07.2003 &
A
04.7.2003 respectively, fixing 06.08.2003 as the last date
for submission of such \ender papers for supply and.
fitment of High Security Registration Plates for Motor
Vehicles, by the West Bengal Transport Infrastructure
Development Corporation Limited (A Government of West
B
Bengal Undertaking) on behalf of the Government of West
Bengal under instructions from the Transport Department;
AND WHEREAS only 4 (four) nos. of Bidders participated
in the said tender process which was subsequently stayed
as per orders of the Hon'ble Supreme Court in Writ
C
Petition (Civil) No. 41 of 2003 and the other connected
cases;
AND WHEREAS the Hon'ble Supreme Court of India by
an order dated 30.11.2004 disposed of the said Writ
Petition (Civil) No. 41 of 2003 and other connected cases
D
with certain observations, holding inter alia, that the
concerned State Governments are legally competent to
determine the terms and conditions for implementation of
the scheme for High Security Registration Plates for Motor
Vehicles in conformity with the provisions of the Motor
Vehicles Act, 1989 and Rules framed thereudner;
AND WHEREAS the Technical Bids submitted by those
Bidders could not yet be processed, evaluated and
finalized and whereas due to such non-evaluation of the
Technical Bids the Financial Bids as submitted by those
Bidders could not also be opened.
AND WHEREAS it has come to the notice of the State
Government *~μt subsequent to issue of the said NIT a
consider~_,9,!e number of Manufactures of such High
Security R?!§istration Plates have obtained the requisite
Type Approval Certificates from the Institution approved by
the Central Government as per provisions of the Motor
Vehicles Act, 1989 and Rules framed thereunder;
E
F
G
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A
B
c
0
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SUPREME COURT REPORTS
[2010] 6 S.C.R
AND WHEREAS due passage of time and consequent
change in the relevant field due to coming up of a very
good number of duly approved manufacturers as aforesaid
and keeping in view the observations of the Hon'ble
Supreme Court of India in Writ Petition (Civil) No. 41 of
2003 and other connected cases as stated hereinabove,
the Governor deems it fit that in greater public interest and
also in the interest of public safety & security the terms and
conditions of the said Notice Inviting Tenders (NIT) for
supply and fitment of High Security Registration Plates for
Motor Vehicles be reviewed and determined afresh.
NOW, THEREFORE, the Governor is pleased to direct
that the entire tender process so far followed pursuant to
the aforesaid Notice Inviting Tenders (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 herein above. The Governor
is further pleased to direct that the Bidders (four numbers)
who had participated in the previous tender process to be
initiated hereafter, if they so desire and the Earnest Money
Deposit (EMO) made by them be returned forthwith.
This order shall come into effect immediately.
By Order of the Governor.
Sd/-
G
Sumantra Choudhury,
Principal Secretary,
to the Government of West Bengal."
13. Shimnit was also informed by WBTIDCL vide
communication dated April 27, 2005 that the bidding process
H
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1127
INFRASTRUCTURE DEVE. CORPN. LTD. [R.M. LODHA, J.]
in terms of earlier NIT has been cancelled and requested them
A
to collect the refund of their earnest money.
14. On October 4, 2005, a fresh NIT (hereinafter referred
to as 'second NIT') came to be issued by WBTIDCL for
manufacture and supply of HSRP, inter alia, to the following
effect:
B
"BID
FOR
NOTICE
INVITING BIDS FOR HIGH SECURITY REGISTRATION
PLATES
The Transport Department, Government of West Bengal
c
has decided to implement through WBTIDC Ltd. the
revised Rule 50 of Central Motor Vehicle Rules, 1989 as
D
modified by the Government of India, Ministry of Roads,
Transport and Highway vide Notification issued from time
to time for implementation of High Security Registration for
all existing registered vehicles and also new vehicles to
be registered in West Bengal for a period of 1 O years.
E
Now, on behalf of the Transport Department, Government
of West Bengal, The Managing Director/West Bengal
Transport Infrastructure Development Corporation Limited
(WBTIDC), invites bids for selection of eligible bidders
having Type Approval from authorized agencies of
F
Government of India and adequate financial resources to
undertake the production of High Security Regulation
Plates in conformity with the specifications. A panel of
Bidders will be finally selected to implement and operate
in two designated zones of the States on Build, Operate
G
and Transport (BOT) basis.
The intending Bidders which may be single firm, Joint
Venture or a Consortium should have in addition to above
a minimum annual average Turnover of Rs. 50 crores and
H
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SUPREME COURT REPORTS
[2010] 6 S.C.R.
net worth of Rs. 20 crores as per audit balance sheet of
2003-04.
Bid documents containing detail scope of work and other
terms and conditions may be purchased from the office of
the Managing Director, WBTIDC, between 04.10.2005 and
20.10.2005 both days inclusive during office hours, but
excluding holidays, by paying a non-refundable cost of the
same amount of Rs. 50,000/- (Rupees Fifty Thousand only)
for each set of two copies of Bid Documents, in the form
of Demand Draft drawn in favour of "West Bengal
Transport Infrastructure Development Corporation Ltd."
payable in Kolkata.
Bid must be accompanied with the Earnest Money Deposit
(EMO) of Rs. 25,00,000/- (Rupees Twenty five lacs only)
in the form as specified in bid documents. No exemption
certificate in this regard will be accepted.
Bids completed in all respect must be submitted in a
sealed cover super scribed Bid for HSRP, WB at the office
of the Managing Director, WBTIDC Ltd. on or before 14.00
hrs on 14.11 .. 2005 and will be opened as per schedule
indicated in the Bid Document. In case the date of
receiving the Bids happens to be a holiday, bids will be
received on the next working day.
WBTIDC Ltd. reserves the right to reject any or all bids or
annual bidding process without assigning any reason,
thereof .......... "
15. In the second NIT, clauses pertaining to experience in
the foreign countries and the minimum prescribed turnover from
such business were done away with; the period was also
G reduced from 15 years to 1 O years.
H
16. Pursuant to the second NIT, Shimnit submitted its
tender on November 21, 2005 and simultaneously filed a writ
petition before Calcutta High Court challenging the conditions
of second NIT, principally on the ground that the essential
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1129
INFRASTRUCTURE DEVE. CORPN. LTD. [RM. L,ODHA, J.]
conditions pertaining to experience in foreign countries and the
A
prescribed turnover from such business having been approved
by the Supreme Court could not have been done away with.
Shimnit also prayed for interim order during the pendency of
writ petition. The controversy relating thereto reached this Court
and by an order dated January 5, 2006, this Court while
B
disposing of SLPs direGted that the interim order that contract
shall not be awarded tJntil further orders will continue to operate
till the matter is decided by the Single Judge. The Single Judge
by his judgment dated February 20, 2006 dismissed Shimnit's
writ petition. An intra court appeal was preferred by Shimnit c
before the Division Bench in which the interim order of status
quo was passed. The Division Bench ultimately dismissed the
intra court appeal vide judgment dated June 27, 2006 giving
rise to the present appeal by special leave.
(8) Orissa
17. On April 11, 2007, the Government of Orissa issued
NIT inviting bids for the manufacture and supply of HSRP in
respect of the existing motor vehicles and the vehicles to be
registered in the State of Orissa. The eligibility criteria provided
therein did not contain conditions like experience in the foreign
countries and minimum_prescribed turnover from the said
business, although, the tender document did lay down that
bidder should have experience of working in the field of HSRP
having used the security features as mentioned in Rule 50 of
1989 Rules.
18. After issuance of NIT dated April 11, 2007, Tonnjes
submitted representations to the Government of Orissa on May
D
E
F
9, 2007 and May 15, 2007 requesting for amendment/
modification of the tender conditions so as to bring it in
G
conformity with the conditions approved by this Court in
Association of Registration Plates1.
19. On May 16, 2007, a Corrigendum-Ill was issued by the
Transport Commissioner-cum-Chairman, State Transport
Authority, Government of Orissa extending the due date beyond
H
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SUPREME COURT REPORTS
[2010] 6 S.C.R.
A
May 24, 2007. It is the case of Tonnjes that no further steps were
taken by the Government of Orissa in pursuance of the said NIT.
20. On July 6, 2009, a fresh NIT was issued by the
Government of Orissa for manufacture, distribution and
affixation of HSRP at a Build Own Operate (BOO) basis.
B Tonnjes again made a representation to the Government of
Orissa for bringing the terms and conditions of the fresh NIT in
conformity with the decision of this Court in Association of
Registration Plates1. When nothing was heard from the
Government of Orissa, Tonnjes filed a writ petition before the
C Orissa High Court for quashing that NIT. The High Court, by way
of an interim order, directed that the bids pursuant to the said
NIT may be permitted to be filed by the bidders as per the
tender rules but no further action shall be taken without leave
of the Court.
D
21. The Division Bench of the Orissa High Court heard the
arguments and by its judgment dated March 23, 2010
dismissed the writ petition filed by Tonnjes.
Writ Petition (Pill by Maninderjit Singh Bitta
E
22. One Maninderjit Singh Bitta filed a writ petition before
this Court in public interest seeking implementation of the
judgment by this Court in Association of Registration Plates1.
It was urged that though in the aforesaid judgment norms were
fixed and the desirability of having HSRP has been highlighted
F
but nothing concrete has been done by the States and UTs.
G
H
This Court disposed of writ petition on May 8, 2008 and gave
time of six months to States and UTs to take decision as to
whether there is need for giving effect to the amended Rule 50
and the scheme of HSRP and the modalities to be followed.
23. Maninderjit Singh Bitta filed an Interlocutory Application
No. 5 before this Court seeking clarification of the order dated
May 8, 2008. The said application was disposed of by this
Court on May 5, 2009 by the following order :
"It is made clear that there was no discretion given to the
SHIMNIT UTSCH INDIA PVT. LTD. v. W.B. TPT
1131
INFRASTRUCTURE DEVE. CORPN. LTD. [RM. LODHA, J.]
States/UTs not to give effect to the amended Rule 50 and
A
the claim of HSRP and the modalities to be followed. It is
stated by learned counsel for the petitioner that in some
cases no action has been taken by the concerned States
and the UTs within the period of six months as was given.
Needless to say that if same is the position, the directions
8
shall be carried out immediately and not later than three
months from today."
24. On August 26, 2009, the Government of India, Ministry
of Road Transport and Highways addressed a letter to the
States and UTs requesting them to take all necessary steps
C
for implementation of HSRP scheme by the end of 2009. In the
.