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2011 Supreme(Mad) 1082
High Court of Judicature at Madras
R. SUDHAKAR
Ravi Enterprises, represented by its Proprietor, R. Mohan
Versus
The Chairman, Tamil Nadu Electricity Board, Chennai & Another
Writ Petition No.4859 of 2011 & M.P.Nos.1 & 2 of 2011
Decided on : 01-03-2011
For the Petitioner:M. Venkatachalapathy, Senior Counsel for S.T.S. Murthi, Advocate. For the Respondents:A. Selvendran, Advocate.
The authority has discretion in determining bid qualification requirement, and the court will not interfere with the tender notification based solely on the financial requirement.
Headnote:
Tender Requirement - Financial Requirement - 6.2.0 of Tender Condition - 2007-08, 2008-09 & 2009-2010 - The court discussed the financial requirement clause of the tender condition and its arbitrary change, referencing the decision of the Apex Court in Jagdish Mandal v. State of Orissa and the scope of judicial review of award of contracts as summarized in Tata Cellular v. Union of India. The court emphasized the authority's discretion in determining bid qualification requirement and the lack of grounds to interfere with the tender notification based solely on the financial requirement.
Fact of the Case:
The petitioner challenges the financial requirement clause of the tender condition, alleging arbitrariness in its change from Rs.20 lakhs to Rs.50 lakhs, denying the petitioner an opportunity to participate in the tender.
Finding of the Court:
The court found no merit in the petitioner's claim of arbitrariness and lack of grounds to interfere with the tender notification based solely on the financial requirement.
Issues: Arbitrariness in the change of financial requirement clause and the petitioner's challenge to the tender notification.
Ratio Decidendi: The court emphasized the authority's discretion in determining bid qualification requirement and the lack of grounds to interfere with the tender notification based solely on the financial requirement.
Final Decision: The Writ Petition is dismissed with no costs, and connected miscellaneous petitions are closed.
1. Writ Petition is filed praying to issue a Writ of Certiorarified Mandamus, calling for the records of the respondents in respect of Tender No.T 1624 and quash the Financial Requirement prescribed in Clause 6.2.0 of the Tender Condition of the Bid Qualification Requirement.
2. Mr.A.Selvendran, learned counsel takes notice on behalf of the respondents electricity board. By consent of both the parties, the writ petition is taken up for final disposal.
3. Petitioner, in this case, challenges the clause 6.2.0 of the Tender Condition of the Bid Qualification Requirement which relates to financial requirement of the tender which reads as follows:-
"6.2.0. FINANCIAL REQUIREMENT: Annual turnover of the tenderer in any one financial year of the last three financial year, 2007-08, 2008-09 & 2009-2010 of the firm should be more than Rs.50 Lakh."
This is relatable to the respondents Tender Specification No.T-1624 to be opened on 7.2.2011. The tender is a two cover system consisting of technical bid and financial bid. Petitioner's grievance is that in respect of Tender Specification No.T-1613, relatable to the period 2010, the tenderer's financial requirement was only Rs.20 lakhs. This has been arbitrarily changed to Rs.50 lakhs in the present year thereby denying the petitioner an opportunity in participating the tender. This, according to the petitioner, establishes arbitrariness and, therefore, the Court should interfere and set aside the tender Notification.
4. Sri M.Venkatachalapathy, learned Senior Counsel appearing for the petitioner relied upon the decision of the Apex Court in Jagdish Mandal – vs. - State of Orissa reported in 2007(1) Recent Arbitration Judgment 397(SC) and contended that the present tender specification has been arbitrarily changed to favour one or other person and therefore, prima facie there is material to interfere with the tender Notification.
5. Sri A.Selvendran, learned counsel appearing for the respondents states that each year's tender specification is based on the nature of work to be done and the period during which it has to be executed. Various parameters are considered before finalizing the tender under the two cover system. The plea of arbitrariness has no basis. In any event the petitioner has not established as to how the tender Notification is bad only because of the specification which is the domain of the department to decide the nature of work to be done and type of tenderers who will execute the work.
6. Petitioner cannot challenge the Tender Notification, merely, on the ground that he is unable to satisfy the financial requirement clause. The decision relied upon by the learned senior counsel appearing for the petitioner itself refers to the scope of judicial review of administrative decisions and interference in awarding of contracts. The case of Tata Cellular - vs. - Union of India, AIR 1996 SC 11 has been referred to and the scope of judicial review has been summarized in 2007(1) Recent Arbitration Judgment 397(SC) which is hereunder:
"Scope of Judicial Review of award of contracts:
18. We may refer to some of the decisions of this Court, which have dealt with the scope of judicial review of award of contracts.
18.1. In Sterling Computers Ltd. vs. M & N Publications Ltd., 1993 (1) SCC 445, this Court observed:
"While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process .................. the courts can certainly examine whether ’decision making process’ was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution."
18.2. In Tata Cellular v. Union of India AIR 1996 SC 11, this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus:
(1) The modern trend points to judicial restraint in administrative action.
(2
