1998 Supreme(Bom) 353

IN THE HIGH COURT OF BOMBAY
A.V. Savant S. Radhakrishnan, JJ.
Kanchi Fleet Movers ..... Petitioner.

Versus
The Collector of Solapur others .... Respondents.
Writ Petition No. 3196 of 1997, decided on 9-7-1998.
Advocates appeared:
A.A. Kumbhakoni with A.B. Borkar, for the petitioner.
V.V. Pai, A.G.P., for the respondent Nos. 1, 2, 3 5.
D.B. Bhosale, for respondent No. 4. .

Headnote:Articles 14 and 226-Contract Act, 1872, Section 10-Guidelines for contract-Granting of-If existing contractor accepts the lowest rate and his work record of earlier work is also found to be satisfactory he can be granted the tender, without negotiating with other tenders.- The Apex Court of the judgment in Kasturi Lal s case AIR 1980 SC 1992, if there are considerations which render it reasonable and in public interest, the Government can choose a particular contractor in the matter of carrying out a welfare scheme. Similarly, as held in Vijay Bahadur Singhs case AIR 1982 SC 1234, it is obvious that the Government has the power to refuse or accept a circular bid. There may a variety of good and sufficient reasons, Government change or revise its policy from time to time even subsequent to the auction and before its confirmation.

       Merely because the petitioner may have been willing to negotiate for a lesser rate, it was not obligatory on the Government to negative (sic negotiate) and allot the contract to him. Admittedly, the petitioner had no experience of transporting rice, as against which, the fourth respondent was experienced in the past two years. The possibility of a contractor obtaining a contract at a lesser rate, for transport of rice, and then bargaining for revision of rate has been specifically referred in the guidelines of 6th March, 1997. There may be a case where the person who gave a lesser rate, may indulge either in corruption or in distribution of substandard food-grains or in misappropriation.

       In affidavit, it is categorically stated that having regard to the performance of the fourth respondent in the previous year and the fact that he was willing to carry out the contract at the rate lower than the rate for the previous (namely Rs. 95/- per quintal for the year 1997-98 as against Rs. WI/per quintal for the year 1996-97), it was really unnecessary to even call for the limited tenders. As per the policy guideline (B), the work could have been straightaway allotted to the fourth respondent.

       Article 226-Allotment of Contract by Government to petitioner-Rice distribution to school children by tender-Tender at lowest rate-Best performance maintained in previous year-Renewal of Contract by Government depriving opportunity other distributor not illegal.-It was not obligatory for the authority concerned to give an opportunity to all those who had submitted the tenders to negotiate the rate at which work was to be done. As held earlier the fourth respondent had executed the work in the previous year at Rs. 101/- per quintal. There were no complaints against him. The minor lapse on his part was satisfactorily explained by him. He had the necessary infrastructure and man power as also the experience to do the job. There was nothing to doubt his credibility and reliability. Hence all the criteria laid down in the guide lines were satisfied by him. He was willing to do the work at the lesser rate of Rs. 95/- per quintal despite the rate of inflation being 7 to 10% per year. If, therefore, the facts of the case do not attract clause (c) of the guidelines.

       Articles 226 and 14-Contract Act, 1872, Section 10-Scope of judicial review-In administrative matters scope of judicial review is limited to the cases of correcting the decision making procedure, whereas all details are left to be dealt with by expert committees, scope of judicial review is limited to findings of breach of law, abuse of power or procedural deficiency.- The Apex Court, on a review of the English, American and Indian decisions on the subject, laid down the proposition that while the State action must be in consonance with the principles underlying Article 14 of the Constitution, it is only the decision making process, and not the merits of the decision, which is reviewable, as the Court does not sit as an Appellate Court while exercising the power of judicial review. The Court cannot interfere with the Governments freedom of contract. Invitation of tender and refusal of any tender are policy matters and the courts cannot interfere with the Governments freedom of contract where the decision is not vitiated by arbitrariness, unfairness, illegality, irrationality or Wednesbury unreasonableness i.e. to say when the decision is not such as no reasonable persons, on proper application of mind, could take. It has further been laid down that where there is no procedural impropriety, the test is whether the wrong is of such a nature as to require intervention, but at the same time, the Court would not substitute its own opinion of that of the experts. The Court can only set right the decision making process.

       The Apex Court observed that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it is clearly stated that there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State and it is expected to protect the financial interest of the State. There can be no question of infringement of Article 14 if Government tries to get the best person or the" best quotation. The right to choose cannot be considered to be an arbitrary power.

       The Apex Court has laid down that duty of the Court was to confine itself to the question of legality. Its concern should be whether the decision making authority (i) exceeded its powers; (ii) committed an error of law; (iii) committed a breach of the rules of natural justice; (iv) reached a decision which no reasonable tribunal would have reached or (v) abused its powers. The Court observed that shortly put, the grounds upon which an administrative action was subject to control by judicial review could be classified as under

       (i) Illegality ; (ii) Irrationality, namely, Wednesbury unreasonableness, and (iii) Procedural impropriety.

       Bearing in mind the above legal position and in particular, the limitations on the powers of judicial review, only on the ground of illegality, or procedural impropriety and the fact that Court does not sit as a Court of appeal, nor does it have the necessary expertise to correct the administrative decision, Court will examine the decision making process in the present case.

       In the preceding year, in some districts, there were irregularities committed by some contractors and Government had to face the criticism. Hence, it was decided that, before allotting the contract for the year 1997-98, care should be taken to ensure (i) Credibility and reliability of the contractor, (ii) financial capacity, man power and infrastructure available with the contractor and (iii) experience of transporting food grains in the recent past. Having indicated this approach, the guidelines have been laid down for the year 1997-98.

       Guideline (B) is to the effect that, if for the year 1996-97, the rate was less than Rs. 115/- per quintal, and if it was not certain as to whether the rate for 1997-98 will be Rs. 115/- per quintal, then instead of inviting the tenders, the Additional Collector would be competent to decide the agency for transport. However, the work of the existing contractor should be satisfactory and there should be no complaints against him. Further, if the existing contractor, (meaning thereby the contractor who had done the work for the academic year 1996-97) was willing to do the work of transportation at the same rate, as in the past, then he should be given the contract for the year 199798 and this was within the competence of the Additional Collector. Court must immediately mention here that, as far as the fourth respondent is concerned, for the academic year 1996-97 (namely the preceding year, since Court is concerned with academic year 1997-98) he was transporting the rice at the rate of Rs. 101 / - per quintal. There were no serious complaints against him. Serious complaints are characterised under 3 heads viz; (i) corruption, (ii) supplying sub-standard rice and (iii) misappropriation. This is clear from the letter dated 21st June, 1997 to which Court will refer a little later. It must, however, be mentioned that there was a complaint against the fourth respondent that there was delay in observing the delivery schedule in a particular sector. The fourth respondent had given his explanation that the delay in observing the delivery schedule in a particular sector was on account of heavy rain fall. This explanation had been found to be satisfactory and the fourth respondent was allowed to operate the scheme. It is not as if any frivolous complaint would dis-entitle the contractor from continuing the contract. It is only serious complaints of either (i) corruption, (ii) supplying sub-standard rice or (iii) mis-appropriation which were to dis-entitle the contractor from getting the renewal for the next year. This is clear from the letter dated 21st June, 1997 issued by the Secretary Food and Civil Supplies Department and the affidavits in reply filed before Court. In view of Court, guideline (B) would, therefore, clearly apply to the case of the fourth respondent because for the proceeding year, namely academic year 1996-97, the work was allotted to him at the rate of Rs. 101/ - per quintal. There were no complaints against him. On the contrary, there is a certificate on record which is issued by the Additional Collector himself on 1st February, 1997 that the fourth respondent had done the work of transportation of rice for the years 1995-96 and 1996-97at the rate of Rs. 101/- per quintal and that his work was satisfactory.

       The first affidavit dated 4th August, 1997 is by the Additional Collector, respondent No.2. In para 2 of the said affidavit there is a reference to the guidelines dated 6th March, 1997 and the fact that if the work of the contractor appointed for the year 1996-97 was satisfactory and if he was ready to continue the contract during the year 1997-98, at the same rate, the contract should be awarded to him. It may be recalled that under the impugned order dated 5th July, 1997 the work was allotted to the fourth respondent at the lowest rate namely Rs. 95/- per quintal. This Court had, on 5th August, 1997, set aside the order dated 5th July, 1997 and directed that the work should be allotted to the petitioner. Against the order dated 5th August, 1997, the fourth respondent moved the Apex Court. The order passed by this Court was set aside on 24th October, 1997. The matter was remanded to this Court for deciding the above mentioned questions of law and, in the meanwhile, it was directed that the fourth respondent will continue to implement the scheme of transport of the rice. As against the rate of Rs. 101/- per quintal for the year 1995-96 and 199798 the fourth respondent was carrying on the work at the rate of Rs. 95/- per quintal for the year 1997-98. There were no complaints of either corruption or supply of substandard foodgrains or misappropriation against him. The delay in delivery schedule on account of heavy rain fall in some sector was satisfactorily explained by him. His work was certified to be satisfactory and hence the contract was allotted to him.

       Section 1-Transport of Rice from FCI Godown to Primary School -Contract allotment for District Solapur-Receipt of contract to another respondent-Challenged-Award of contract in breach of guidelines-Agreement to work by 4th respondent at Rs. 95/- per quintal after talk-Denial of opportunity to petitioner-Discussion by Apex Court guidelines.-In the view that court has taken, allotment of the contract to the fourth respondent for the transport of the rice for the Academic Year 1997-98 must be held to be valid. In court view, the said contract is not vitiated by earlier arbitrariness or unfairness. In view of court answer to the two questions that were framed by court decision, there is no breach of the provisions of Article 14 of the Constitution of India. No case is, therefore, made out for intervention in this writ petition.