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2012 Supreme(MP) 262
2012(3) JLJ 200
S.K. Gangele and Brij Kishore Dube, JJ.
Real Mazon India Ltd. (M/s.) v. State of M.P.
Writ Petition No.311 of 2012 (Gwalior); Decided on 30.4.2012.
Sunil Fernandez and Mahesh Goyal for petitioner;
M.P.S. Raghuvanshi, Additional Advocate General for respondents No.1 and 2;
K.N. Gupta with Nitin Agrawal and R.S. Dhakad for respondent No.3.
Headnote:Contract -- contractual matters -- cannot be interfered with unless the action of the State or instrumentality of the State arbitrary,illegal or mala fide.
Held : In the present case, in the bid document, it was a condition that if the applicant is a Joint Venture, then the type approval certificate must be in the name of Lead Member of Joint Venture. Admittedly, the certificate submitted by the petitioner-Company was not in in the name of Lead Member i.e. M/s. CBM Industries Limited of Joint Venture. The CRISIL evaluated the technical bid of the petitioner-Company and rejected it. In our opinion, the decision taken by the Department cannot be said to be arbitrary, illegal or mala fide. Contrary to this, the decision is based on the basis of findings recorded by the CRISIL, an agency which has expertise in this field and also it is in conformity with the terms and conditions of tender document.
From the aforesaid decision of Hon‘ble Supreme Court it is clear that the interference in contractual matters can only be called for, if the action of the State or instrumentality of the State is arbitrary, illegal or mala fide. In our opinion, in the facts of the present case, the action is neither arbitrary nor mala fide. Hence, there is no merit in this petition. (2010)10 SCC 157, (2010)10 SCC 388 and AIR 2009 SC 218 followed. (1995)1 SCC 478 distinguished.
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Gangele, J. -- 1. The petitioner has filed this petition against a direction/communication dated 4.1.2012 of the State of Madhya Pradesh, whereby, the petitioner-Company has been disqualified on the ground that the petitioner’s Joint Venture Company did not satisfy the technical capacity criteria.
2. On 7.10.2011, the State of Madhya Pradesh through Transport Department issued request for a proposal for implementtion of High Security Registration Plate (in short “HSRP”) for vehicles registered in Madhya Pradesh from the interested bidders for the purpose of HSRP Scheme in the State of Madhya Pradesh. The petitioner-Company submitted its bid, thereafter, vide decision dated 4.1.2011, the bid of the petitioner-Company was rejected on the ground that it did not comply the minimum eligibility criteria for the captioned project, hence, the petitioner-Company was not short listed for further process. The petitioner-Company pleaded that the decision of the Transport Department is arbitrary and illegal and the petitioner-Company had fulfilled all the requisite technical criteria fixed for the purpose of grant of contract.
3. The Central Road Research Institute issued a certificate in regard to approval for High Security Registration Plate Manufacturer to M/s. Real Industries Limited, 34, Rama Road, New Delhi. Photocopy of the certificate dated 22nd May, 2002 has been filed as Annexure P-2 along with the petition. Subsequently, an addendum was issued in the name of M/s. Real Mazon India Limited, New Delhi consequent to change in the name of M/s. Real Industries Limited, New Delhi. The aforesaid certificate was issued in regard to approval for High Security Registration Plate Manufacturer, photocopy of the certificate dated 10th January, 2003 has been filed as Annexure P-3.
4. M/s. Mazon BV of Netherlands formed a Joint Venture with M/s. CBM Industries Ltd. of New Delohi for catering to Indian High Security Registration Plates Market. The petitioner-Company submitted its bid as Joint Venture with M/s. CBM Industries Limited. A Joint Bidding Agreement along with the bid was also submitted. It was mentioned in the Joint Bidding Agreement that the first party i.e. M/s. CBM Industries Limited shall be the ‘Lead Member’ of the Joint Venture and shall have the power of attorney from all parties for conducting all business and it would have 74% shareholding and the second party would have 26% shareholding in the Special Purpose Vehicle (in short ‘SPV’).
5. In accordance the minimum eligibility criteria fixed by the Transport Department for the purpose of selection of a service provider for implementation of HSRP in the vehicles registered in the State of Madhya Pradesh, if a bidder is a Joint Venture, then the Lead Member shall attach copy of a valid type approval certificate and type of High Security Registration Plates from one of the Test Agencies. The relevant condition of clause 7.2.2 of eligibility criteria of Bidding Agreement in regard to technical capacity is as under :
“7.2.2 A. Technical Capacity. -- For demonstrating technical capacity, the applicant shall have :
Obtained type approval certificate from the test agencies for the High Security Registration Plates as per the rule 126 of Central Motor Vehicles Rules, 1989 and the certificate must be valid as on Bid Due Date.”
6. The bid submitted by the petitioner-Company was examined by CRISIL (Risk and Infrastructure Solutions Limited) for the purpose of selection of a service provider in regard to High Security Registration Plates for vehicles registered in State of Madhya Pradesh and CRISIL has recorded the following findings :
“3.5 Read Mazon India Limited. -- The following table provides the details with respect to the Constitution and Composition of the Bidder :
S.No. Name of Constitution Country JV Certificate of Meets Bidder compo- incorporation Eligibility sition of Corporate Criteria
