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1995 Supreme(Raj) 588

High Court Of Rajasthan
Judgename : B.R. Arora,P.C. Jain
Deepak Builders - Appellant
Versus
State of Rajasthan - Respondent
Civil Special Appeal No. 770 of 1995
Decided On : 11/08/1995

Advocates Appeared:
Vineet Kothari, for the Appellant
B.C. Mehta and D.C. Mehta, for the Respondents

Judicial review is not barred in contractual matters, and the State or its instrumentality cannot be relieved from its obligation to act fairly and justly on the pretext that the dispute falls within the domain of contractual obligations.

Headnote:

TENDER - PRE-QUALIFICATION - JUDICIAL REVIEW - SCOPE - ARBITRARINESS - PRINCIPLES OF NATURAL JUSTICE - DISCRIMINATION - CONTRACTUAL MATTERS - ADMINISTRATIVE DECISION - FAIRNESS - ARTICLE 14 - CONSTITUTION OF INDIA.

Fact of the Case:

The appellant, a contractor, challenged the decision of the respondents not allowing it to participate in submitting the tender for a pre-qualification bid for a project. The appellant argued that the condition of five years' experience in similar work was not mentioned in the notice inviting bids, that it was not given an opportunity of hearing before short-listing, and that the respondents acted arbitrarily and discriminatorily by allowing another applicant, M/s. B.D.S. Associates, to participate in the tenders despite not having the requisite experience.

Finding of the Court:

The court held that the judicial review is not barred in contractual matters and that the State or its instrumentality cannot be relieved from its obligation to act fairly and justly on the pretext that the dispute falls within the domain of contractual obligations. The court further held that the condition of five years' experience was mentioned in the tender documents and that the decision to short-list the tenderers on the basis of this condition was not arbitrary or unreasonable. The court also held that the principles of natural justice were not violated as the Committee considered the applications on the basis of the material supplied by the tenderers themselves and that there was no necessity of giving personal hearing to each tenderer at the stage of short-listing. Finally, the court held that the appellant could not challenge the inclusion of M/s. B.D.S. Associates in the list of eligible tenderers as it had not made this firm a party to the writ petition.

Issues: 1. Whether judicial review is barred in contractual matters? 2. Whether the condition of five years' experience in similar work was mentioned in the notice inviting bids? 3. Whether the decision to short-list the tenderers on the basis of the condition of five years' experience was arbitrary or unreasonable? 4. Whether the principles of natural justice were violated by not giving the appellant an opportunity of hearing before short-listing? 5. Whether the respondents acted arbitrarily and discriminatorily by allowing M/s. B.D.S. Associates to participate in the tenders despite not having the requisite experience?

Ratio Decidendi: 1. Judicial review is not barred in contractual matters, and the State or its instrumentality cannot be relieved from its obligation to act fairly and justly on the pretext that the dispute falls within the domain of contractual obligations. 2. The condition of five years' experience in similar work was mentioned in the tender documents. 3. The decision to short-list the tenderers on the basis of the condition of five years' experience was not arbitrary or unreasonable. 4. The principles of natural justice were not violated as the Committee considered the applications on the basis of the material supplied by the tenderers themselves and that there was no necessity of giving personal hearing to each tenderer at the stage of short-listing. 5. The appellant could not challenge the inclusion of M/s. B.D.S. Associates in the list of eligible tenderers as it had not made this firm a party to the writ petition.

Final Decision: The court dismissed the appeal with costs.

Judgment

B.R. Arora, J.-This appeal is directed against the Judgment dated 19-10-1995, passed by the learned single Judge, by which the learned single Judge dismissed the writ petition filed by the petitioner-appellant and held that the decision taken by the respondents is only on the administrative side and involves technicalities of the matter and no vested rights of the petitioner stand infringed by the action of the respondents.

2. Bids for contract of pre-qualification were invited by the Irrigation Department of the Government of Rajasthan for earth-work of main Earthen Dam from RD 355 to 595-M including pitching and rock toe and the construction of Head out-let sluice of Mewara Minor Irrigation Project constructed across Majam river about 35 kilometres from Dungarpur near Mewara village (district Dungarpur). The parties interested in the contract were asked to apply for pre-qualification in the manner set-out in the Tender form. It was, also, mentioned in the Tender Form that the tender will be issued subsequently only to those parties selected by the competent authority as having necessary qualification suitability to perform the contract(s) satisfactorily. The last date for submission of the pre-qualification tender documents was 7-10-1995 and 10-10-1995 was the date fixed for taking decision for short-listing the tenderers. 19 tenderers including the petitioner-appellant participated in the Pre-qualification bid for this Project and submitted their pre-qualification tender documents. The Committee constituted for the assessment of the pre-qualification of the tenderers and for short-listing the

applications, in its meeting held on 10-10-1995, assessed the qualification of all the 19 tenderers taking into consideration their comparative statement and examining the relevant documents of the individual party and found only ten tenderers as qualified tenderers and rejected the cases of the other nine tenderers. The case of the appellant-petitioner was also considered and the petitioner-appellant was found disqualified for want of sufficient experience in the work of similar nature. Since the appellant-petitioner did not qualify the pre-tender offer and was not found eligible for submitting the tender for the work, it, therefore, preferred the writ petition before this Court challenging the action of the respondents not allowing it to participate in submitting the tender. The writ petition, filed by the petitioner-appellant, was contested by the respondents and the same was dismissed by the learned single Judge by his Judgment dated 19-10-1995. It is against this Judgment that the petitioner-appellant has preferred this special appeal.

3. It is contended by the learned Counsel for the appellant that (i) while inviting pre-qualification tender documents, there was no condition in the notice that the applicant must have to its credit five years’ experience of the work of similar nature and, therefore, later on this condition cannot be applied while short listing the applications; (ii) the principles of natural justice have been flouted and the appellant was not given any opportunity to plead its case at the time of short-listing the bids for contract; and (iii) the respondents acted arbitrarily while short-listing the bids for contract and the petitioner-appellant has been discriminated and has not been allowed to participate in submitting the tenders for the work while M/s. B.D.S. Associates, which, also had no experience of five years to its credit in the line and which was found ineligible at the initial stage, has been permitted to participate in submitting the tender. This clearly shows that there is complete non-application of mind by the Committee while short-listing the tenderers. It has also been contended by the learned Counsel for the appellant that in the contractual matter, where the administrative authority acts arbitrarily and unreasonably then their decisions are amendable to judicial review and the writ jur












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