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2018 Supreme(Raj) 1577

IN THE HIGH COURT OF RAJASTHAN AT JAIPUR BENCH
MOHAMMAD RAFIQ, GOVERDHAN BARDHAR, JJ.
Rajasthan State Warehousing Corporation and Ors - Appellant
Versus
Shree Shubham Logistics Limited and Ors - Respondent
D.B. Special Appeal (Writ) No. 1153, 1154, 1155, 1156, 1268 of 2018 in S.B. Civil Writ Petition No. 17412, 17725, 17412, 17725 of 2018, S.B. Civil Misc. Writ Petition No. 17725 of 2018
Decided On : 29-11-2018

Advocates:
Advocate Appeared:
For the Appellant : Rajendra Prasad, A.A.G. assisted by Alankrita Sharma, Madhusudan Singh Rajpurohit and Karan Tibrewal
For the Respondent: Sudhir Gupta, Senior Counsel assisted by Harsh Sahu, Vikas Mishra, Umang Gupta, Shweta Chauhan, Tanuj Gupta, Anukriti Jain and Aditi Khandelwal

Headnote:

Constitution of India – Articles 14, 19(1)(g) and 21 – Order of single judge by quashing Notice Inviting Bid and direction to issue fresh notice inviting bid – Imposition of condition for eligibility criteria have no nexus with the aim of tender and have been purposely inserted to ensure that all the competitors of Star Agri are disqualified – Held, If prospective bidder is denied participation only because it does not have its personally owned warehouses in Rajasthan, the same would amount to exclusion by default and would thus be arbitrary condition as it seeks to deny participation – Ordered accordingly (Para 48, 49)

Facts of the Case:

Order of single judge by quashing Notice Inviting Bid and direction to issue fresh notice inviting bid – Imposition of condition for eligibility criteria have no nexus with the aim of tender and have been purposely inserted to ensure that all the competitors of Star Agri are disqualified.

Finding of Court:

If prospective bidder is denied participation only because it does not have its personally owned warehouses in Rajasthan, the same would amount to exclusion by default and would thus be arbitrary condition as it seeks to deny participation.

Result: Ordered accordingly

JUDGMENT :

MOHAMMAD RAFIQ, J.

1. All these appeals are directed against the common judgment dated 30.08.2018 whereby the learned Single Judge of this Court allowed the writ petitions filed by Shree Shubham Logistics Limited (for short 'Shree Shubham Logistics') and Origo Commodities India Private Limited (for short 'Origo Commodities') by quashing Notice Inviting Bid (for short 'the NIB') dated 11.07.2008 issued by Rajasthan State Warehousing Corporation (for short 'RSWC') with the direction to issue fresh notice inviting bid in consonance with the Rajasthan Transparency in Public Procurement Act, 2012 (for short 'the RTPP Act'). Appeals No. 1153/2018 and 1154/2018 have been filed by RSWC, Appeals No. 1155/2018 and 1156/2018 have been filed by M/s. Star Agri Warehousing & Collateral Management Limited (for short 'Star Agri') which was impleaded as respondent in both the writ petitions. Appeal No. 1268/2018 has been filed by Origo Commodities to the extent of challenge made by it to Clause 5(5)(v) of the NIB was rejected in the aforementioned judgment by the learned Single Judge.

2. RSWC floated a tender for managing and operating its 33 warehouses located in different parts of the State under Public Private Participation (PPP) Mode on 11.07.2018. Last date and time for submission of the bid was on 14.08.2018 up to 6.00 P.M. RSWC issued a corrigendum on 12.07.2018 to rectify certain inadvertent typographical mistakes in the NIB. Precise case set up in the writ petition by Origo Commodities was that eligibility criteria introduced by RSWC favoured only Star Agri for the reasons of mala fides. Such eligibility criteria have no nexus with the aim of the tender and have been purposely inserted to ensure that all the competitors of Star Agri are disqualified. They have been cherry picked/tailor made to ensure that only Star Agri fulfills all the conditions. The action of the respondent-RSWC in doing so is arbitrary inasmuch as discriminatory being violative of Articles 14, 19(1)(g) and 21 of the Constitution of India. It also violates Sections 4 and 6 of the RTPP Act and various provisions of Rajasthan Transparency in Public Procurement Rules, 2013 (for short 'the RTPP Rules'). Similar writ petition on substantially similar grounds was filed by Shree Shubham Logistics. Challenge in particular was made by Shree Shubham Logistics and Origo Commodities to Clause 5(3), 5(5)(i), 5(5)(iv), 5(5)(v), 5(5)(vi) of the NIB. In addition, challenge to Clause 17(vii) of the NIB, which disqualified an existing service provider, was also made by Shree Shubham Logistics. RSWC contested the writ petitions denying allegations of mala fides and arbitrariness and sought to justify various clauses of the NIB. Star Agri also contested the writ petitions by filing counter affidavit and denied the allegation that conditions have been tailor made to suit it. The learned Single Judge by the impugned judgment upheld the challenge to all other conditions, which he declared ultra vires to Article 14 and 19(1)(g) of the Constitution of India, except those in Clause 5(3) and 5(5)(v).

3. Mr. Rajendra Prasad, learned Additional Advocate General and Mr. Ajeet Kumar Sharma, learned Senior Counsel appearing on behalf of RSWC contended that scope of the work under the tender, apart from management and operation of the warehouses, also includes procurement of agri and non-agri commodities so as to develop an efficient warehousing system. Work is to be awarded for 10 long years. Clause 15 of the NIB deals with the work and responsibilities of the service provider. Reference is made to sub-clauses (vi), (vii), (viii) and especially to sub-clause (xi) of the NIB, which requires the service provider also to undertake and manage entire procurement activities jointly with RSWC for the Government/Corporation/Private parties. The condition of Private Sub e-Market licence was inducted so as to make the current warehouses as a trading hub for facilities of the farmers. The current APM

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