High Court of KeralaSingle JudgeWrit petition allowed to the extent of declarin...

Everest Instruments Pvt Ltd v State of Kerala and Ors.

Case / Petition Number:WP(C).No.1707 OF 2021(K)

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • P. V. ASHA
Judgment Date
2021-02-22
Court Decision / Holding
Clause 22 of Ext.P2 is arbitrary. The 2nd respondent shall not pursue Ext.P1 notice inviting tender until Clause 22 is revised to align with Ext.P4 or otherwise reassessed in a fair, reasonable, non-discriminatory manner. The writ petition is allowed to that extent.
Final Disposition
Writ petition allowed to the extent of declaring Clause 22 arbitrary and directing revision of Clause 22 before inviting a fresh tender; petition allowed in part; Tender process to be remade in line with Ext.P4 or with revised terms responsive to public interest and fair play in procurement.

Parties to the Case

Appellants / Petitioners

  • EVEREST INSTRUMENTS PVT LTD

Respondents

  • State of Kerala represented by Secretary, Department of Dairy Development, Govt. Secretariat, Thiruvananthapuram-695001
  • The Managing Director, Thiruvananthapuram Regional Cooperative Milk Producers Union Ltd, KSHEERA BHAVAN, Pattom, Thiruvananthapuram-685004

Legal Representation & Advocates

Counsels for Petitioners

  • • Sri. V. John Mani
  • • Shri. S. Jayan
  • • Shri. Varghese Sabu
  • • Smt. Gayathri Menon

Counsels for Respondents

  • • Smt. Latha Anand

Case Synopsis & Summary

The petitioner Everest Instruments Pvt Ltd challenges Clause 22 of Ext.P2 (a special terms and conditions and technical specification) in Ext.P1 NIT for an online tender to supply, install, test and commission FTIR-based Milk Analyser under the NPDD Scheme for dairies at Thiruvananthapuram, Kollam and Pathanamthitta. Clause 22 prescribes that a vendor must have supplied a minimum of 15 equipment per year in the last three calendar years, with at least 10 instruments supplied to any Government/Co-operative federations in India in a year, and must provide certificates of satisfactory performance for at least one year from at least 10 such federations. The petitioner contends Ext.P4 (Ministry of Fisheries, Animal Husbandry & Dairying, 2019) prescribes generic technical specifications for laboratory equipment under the National Programme for Dairy Development, and that Clause 22 is tailored to exclude Everest in favor of M/s. Indifoss Analytical Private Limited, the only other authorised dealer. It is argued that Everest was L1 in a prior tender but the process was cancelled; Ext.P12-15 documents show Everest’s broad capability and state-level procurement activity. The respondents defend Clause 22 as necessary to ensure quality, after-sales support, and reliability given the high-precision equipment. The court recognises the government’s public interest and the need for independent assessment of technical specifications but holds Clause 22 arbitrary, directing revision before any fresh tender. The petition is allowed to that extent, with a direction to revise Clause 22 in Ext.P2 before inviting a new tender.

Provisions of Law Cited

Article 226 of the Constitution of IndiaArticle 14 of the Constitution of India

Legal Doctrines & Maxims

  • Fair play in the joints
  • Wednesbury principle of reasonableness
  • Judicial restraint in administrative action
  • Mala fides/arbitrariness/unreasonableness

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that Clause 22 imposes an onerous qualification bar by demanding 15 installations per year for the past three years, with ten to Govt./Co-operative federations, and demands performance certificates for over a year from these federations. This criterion, introduced after Ext.P4 (Oct 2019) and in alignment with KCMMF’s Annexure R2(c), appears tailored to preclude Everest (the sole other authorized retailer) and thus defeats the principles of fair play, competitive bidding, and public interest. The petitioner argues these specifications are not mandated by central guidelines and violate the generic laboratory equipment standards, as Ext.P4 suggests. Efforts to demonstrate that prior tenders’ L1 status was subsequently cancelled for administrative and technical reasons reinforce the perception of mala fides and arbitrariness. The Court is urged to grant relief by quashing Clause 22 or directing a fresh tender aligned with Ext.P4, ensuring impartiality and adherence to due process.

Contentions of Respondents

Respondents defend Clause 22 as a technical qualification criteria necessary to ensure a proven track record, quality, and after-sales service for high-precision milk analysers. They contend that Ext.P4 provides generic guidelines, and State implementing agencies have the discretion to finalise terms in line with local needs and after considering certification from KCMMF. The tender process is inherently technical and specialized; judicial review should be restrained (Air India Ltd. v. Cochin Int’l Airport Ltd., Tata Cellular v. UOI). They argue there is no proven mala fides, and the modifications from four installations to ‘few installations’ reflect evolving, reasonable procurement considerations. The 2020 tender’s L1 bid being a different context does not imply illegality; rather, the authority must be allowed to account for public interest, quality assurance, and market realities without judicial micromanagement.

Cited Precedents (9)

Case NameCitationTreatmentExplanation
State of Jharkhand v. CWE-SOMA Consortium2016 (14) SCC 172PositiveCited to illustrate that courts may intervene in tender decisions where actions are mala fide, unreasonable, or arbitrary; supports judicial review of tender processes.
Maa Binda Express Carrier v. North-East Frontier Railway2014 (3) SCC 760DistinguishedHeld that qualifying criteria are not open to judicial scrutiny unless tailor-made to benefit a particular tenderer; present clause 22 is tailored to exclude the petitioner, thus distinguished.
Michigan Rubber (India) Ltd. v. State of Karnataka2012 (8) SCC 216PositiveSets out principles of fairness, non-arbitrariness, and limited court interference in tender decisions; used to underpin limited judicial review.
Raunaq International Ltd. v. IVR Construction Ltd1999 (1) SCC 492PositiveExplains that interference is permissible when public interest is affected or mala fides exist; supports cautious intervention.
Silpi Constructions Contractors v. Union of India2019 (11) SCALE 592PositiveReiterates restraint in judicial review in contracts with technical issues, requiring fairness and safeguarding public exchequer; used to frame approach.
Tata Cellular v. Union of India1994 (6) SCC 651PositiveDelineates judicial review parameters for administrative/contractual actions; emphasizes non-arbitrariness and public interest checks.
Air India Ltd. v. Cochin International Airport Ltd2000 (2) SCC 617PositiveAffirms that public authorities should adhere to norms and may be reviewed for mala fides/arbitrariness.
Meerut Development Authority v. Assn. of Management Studies—Mentioned OnlyReferenced as part of general jurisprudence on public interest and fair bidding; not centrally applied here.
Meerut Development Authority v. Assn. of Management Studies & Air India Ltd. v. Cochin International Airport Ltd—Mentioned OnlyCited to illustrate principles of fair bidding and judicial restraint; not the primary basis for decision.

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Extracted Judgment Text

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WP(C).No.1707 OF 2021(K) 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **MONDAY, THE 22ND DAY OF FEBRUARY 2021 / 3RD PHALGUNA, 1942** ## **WP(C).No.1707 OF 2021(K)** ## **PETITIONER/S:** **EVEREST INSTRUMENTS PVT LTD COMPANY WITH REGISTERED OFFICE AT D-902, GANESH MERIDIAN,OPP GUJARATH HIGH COURT, S.G.HIGHWAY,SOLA,AHMEDABAD,3800060,REPRESENTED BY ITS MANAGER ADMINISTRATION E.CHANDRASEKHARAN NAIR,S/O VELAYUDHAN NAIR,RESIDING AT CHANDRAGIRI,EARATHE HOUSE, BLOCK ROAD,KANIPPAYYUR,THRISSUR,KERALA-680517.** **BY ADVS. SRI.V.JOHN MANI SHRI.S.JAYANT SHRI.VARGHESE SABU SMT.GAYATHRI MENON** ## **RESPONDENT/S:** **1 STATE OF KERALA REPRESENTED BY SECRETARY,DEPARTMENT OF DAIRY DEVELOPMENT,GOVT.SECRETARIAT, THIRUVANANTHAPURAM-695001. 2 THE MANAGING DIRECTOR, THIRUVANANTHAPURAM REGIONAL CO.OPERATIVE MILK PRODUCERS UNION LTD,KSHEERA BHAVAN, PATTOM,THIRUVANANTHAPURAM-685004.** **R2 BY ADV. SMT.LATHA ANAND** **OTHER PRESENT:** **SMT.PRINCY XAVIER, GP** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C).No.1707 OF 2021(K) 2 ## **JUDGMENT** Dated this the 22[nd] day of February 2021 The petitioner challenges Clause 22 of Ext.P2 - special terms and conditions and specification for milk analyser in Ext.P1 notice inviting tender (NIT), alleging that the conditions prescribed in the said clause would disable it from participating in the tender process. 2. The 2[nd] respondent invited on-line bids from reputed manufacturers/authorised dealers, for the supply, installation, testing and commissioning of FTIR based Milk Analyser at Thiruvananthapuram, Kollam and Pathanamthitta dairies under NPDD Scheme. The date for submission of e-tender was from 06.01.2021 to 15.01.2021. The qualification for a tenderer specified in Clause 22 of Ext.P2 is that the vendor should have supplied minimum 15 equipment each of the three preceding years out of which at least 10 each should have been supplied to any Govt./Co-operative WP(C).No.1707 OF 2021(K) 3 federations in India in a year and apart from that the vendor must provide proof/certificates towards its satisfactory performance over at least one year from 10 Govt./Cooperative federations etc. 3. The petitioner claims that the said specification is contrary to the technical specifications prescribed by the Ministry of Fisheries, Animal Husbandry & Dairying in respect of laboratory equipment for implementation of quality milk programme under national programme for dairy development, notified in Ext.P4 letter dated 03.10.2019 and that the specifications are fixed in such a manner to disable the petitioner from participating the tender proceedings and to enable the award of contract to the M/s.Indifoss Analytical Private Limited. It is stated that apart from the petitioner, the only authorised dealer in Milk Analysers all over India, is M/s.Indifoss Analytical Private Limited. It is stated that in the year 2020 also the 2[nd] respondent had invited tenders for the very same purpose and after the technical evaluation, the only qualified tenderers were the petitioner and M/s.Indifoss. Though the petitioner WP(C).No.1707 OF 2021(K) 4 was the L1, the said tender was cancelled as per Ext.P7 notification dated 24.09.2020, on administrative and technical reasons. It is stated that there was a difference of Rs.10 lakhs between the bid of the petitioner and that of M/s.Indifoss. Though the last date for submission of tender was initially fixed as 15.01.2021, that has been extended. The Writ Petition is filed in the said circumstances challenging Clause 22 of Ext.P2 and for a direction to the 2[nd] respondent to invite fresh tender in tune with the specifications in ExtP4. 4. The 2[nd] respondent has filed a statement, producing Annexure R2(d) technical specifications in the tender notice issued on 20.02.2020 for the very same equipment, where the the specification in Clause 22 was that the vendor should have at least 4 installations in major dairies/laboratories and should have demonstrated satisfactory performance of the equipment to the concerned stake holders. It is stated that the technical conditions were later modified from 4 installations to a few installations. For the previous year, the petitioner as well as M/s.Indifoss WP(C).No.1707 OF 2021(K) 5 were found technically qualified. Being the lowest bidder, the petitioner was invited for a live demonstration of the equipment. Producing Annexure R2(e) and (f) minutes dated 17.03.2020, it is stated that the petitioner had supplied only one machine previously in India, that too, to a private firm in Uttar Pradesh. It is stated that no credentials could be obtained as to the satisfactory operation of the equipment. After demonstration, the technical committee, decided to assess the performance of the equipment of L2 bidder. It is stated that M/s Ernakulam Regional milk producers union and M/s.Malabar regional milk producers union had rejected the bid submitted by the petitioner during the technical evaluation and the petitioner was informed of the same accordingly. It was thereafter decided to cancel the tender. Ext.P1 NIT was issued thereafter. It is stated that the specifications in Ext.P2 are fixed following the technical specifications suggested by the Kerala Co-operative Milk Marketing Federation (KCMMF), which is the apex society of the 2[nd] respondent and which is the implementing agency of the project, in their letter WP(C).No.1707 OF 2021(K) 6 Annexure R2(c) dated 05.08.2019; it is stated that the impugned specifications are incorporated to see that the respondent is getting a quality product from a supplier with a proven track record. It is further stated that the respondent would not be in a position to verify the performance of the equipment over a prolonged period of time, if it had chosen to consider the installation only for the previous year. It is stated that the equipment is highly precise and uses sophisticated technology and that the respondent has to ensure adequate after sales support; moreover, the equipment is to be used for analysis of milk and milk products, adulteration, screening and quality determination of raw, intermediate and processed milk including cream, whey, yogurt and ice cream mixes. The impact on the quality of the milk and milk products supplied to consumers all over the State depends on the performance of the equipment. Therefore, adequate experience in supplying quality equipment and after sales service has to be ensured, as it would affect the health and well being of the consumers. It is further stated that the conditions specified in Ext.P4 WP(C).No.1707 OF 2021(K) 7 are only generic in nature; Government of India had as per Annexure R2(a) letter dated 29.11.2019, clarified that Ext.P4 letter was only indicative and that the State level implementing agencies would be free to finalise the terms and conditions. It is stated that the DHAD also had as per Annexure R2(b) email dated 30.12.2020, clarified the same and informed that it is for the State implementing agencies to take decisions on the procurement of materials keeping in view the aspects of quality, cost and timely implementation of the projects. 5. The petitioner has filed a reply affidavit producing Ext.P11 order issued by the Government of Kerala, referring to CVC guidelines barring acceptance of single tenders. It is stated that the petitioner company is the pioneer in FTIR technology having more than ten years' experience outside India; it extended its service in India only recently and it could successfully install the milk analysers across India. It is stated that as per Ext.P12 reply petitioner had clarified the defects/short falls noted in Annexure R2(f) minutes. It is stated that Annexure R2(c) WP(C).No.1707 OF 2021(K) 8 communication does not provide that the bidder should have installed minimum 15 instruments within the last 3 calendar years, out of which, ten should be to Government/Co-operative federations. Producing Ext.P13 series of performance certificates received from various State Co-operative milk producers unions in various States and Ext.P14 series of certificates from various developed countries it is stated that the milk analyser supplied by the petitioner is accepted by all concerned. It is further stated that M/s. Indifoss was a competitive bidder in all the tender proceedings along with the petitioner in various States and the purchase orders were issued to the petitioner only. 6. Heard the learned Counsel on both sides. The learned counsel for the petitioner relied on the judgments in _**State of Jharkhand v. CWE-SOMA Consortium**_ : (2016) 14 SCC 172, _**Maa Binda Express Carrier v. North-East Frontier Railway**_ : (2014) 3 SCC 760, etc. and argued that the tender condition in clause 22 requires interference by this Court. On the other hand, the learned Standing Counsel for the 2[nd] respondent relying on the judgments in _Michigan Rubber (India)_ WP(C).No.1707 OF 2021(K) 9 _Ltd. v. State of Karnataka_ : (2012)8 SCC 216, _Raunaq International Ltd. v. I.V.R. Construction Ltd_ : (1999) 1 SCC 492 and _**Silppi Constructions Contractors v. Union of India and others: 2019 (11) SCALE 592 : 2019**_ _**KHC 6912**_ , argued that interference under Article 226 of the Constitution of India is unwarranted in the matter of specification of technical qualifications in the tender and what shall be the specifications required for a tenderer to carry out the work shall be left to the tender inviting authority. Having considered the contentions on both sides it is found necessary to have a look at Ext.P4, as the contention of the petitioner is that clause 22 of Ext.P2 is in violation of it. Ext.P4 is a letter issued by the Government of India on 03.10.2019, enclosing the technical specifications received from NDDB of the equipment mentioned therein which includes FTIR technology based Milk Analyser also. It provides for different technical requirements, minimum performance criteria, etc. of the equipment, the tests which are required for milk and milk products, etc. Clause 22 of Ext.P4 letter provides as follows: WP(C).No.1707 OF 2021(K) 10 _“The vendor should have a few installations in major dairies/laboratories of the country and has demonstrated satisfactory performance_ of the equipment to the concerned stakeholders.” 7. It is relevant to note that in the first NIT which was issued on 20.02.2020, immediately after the issuance of Ext.P4 letter, the specifications in clause 22 of Annexure R2(d) was the following: _“The vendor should have at least four installations in major dairies/laboratories of the country and has demonstrated satisfactory performance of the equipment of the concerned stakeholders.”_ It is stated that `four installations' was modified as “few installations” later, apparently in tune with Ext.P4 letter. The contention of the 2[nd] respondent is that the new qualifying criteria in Clause 22 of Ext.P2 is stipulated in view of Ext.R2(c) technical specifications suggested by their implementing agency viz. Kerala Co-operative Milk Marketing Federation (KCMMF), in Clause J of Annexure R2(c), which read as follows: _“J. Vendor should have supplied minimum 15 equipment per year in last three calender years, in which minimum 10 instruments should have been supplied to any Govt/Co-operative federations in India in a_ WP(C).No.1707 OF 2021(K) 11 _calender year.”_ It is pertinent to note that Annexure R2(c) was issued on 05.08.2019 before Ext.P4 letter of Government of India was issued on 3.10.2019. When Annexure R2(d) was issued on 20.02.2020 with specifications in tune with Ext.P4 letter, Clause J of Annexure R2(c) was available. Clause 22 of Ext.P2 tender notified in 2021 reads as follows: _“22. The vendor should have supplied minimum 15 equipment per year in last three calender years, in which minimum 10 instruments should have been supplied to any Govt./Cooperative federations in India in a calendar year. The vendor must provide proof/certificates to show the equipment has performed satisfactory over at least one year from 10 Govt./Cooperative federations etc.”_ In this context it is relevant to note that even in Annexure R2(C) communication of the implementing agency, there is no requirement to produce performance certificates over one year from 10 Govt./Co-operative federations. From the bids received pursuant to Exts.P1 and P2, the 2[nd] respondent is very well aware of the fact that the petitioner started its business in India only in the year 2020 and that the petitioner would not WP(C).No.1707 OF 2021(K) 12 have supplied the requisite instruments in the last three calender years as stipulated and to produce performance certificates for more than one year from the govt/cooperative federation. 8. Admittedly the petitioner and M/s.Indifoss were the only two qualified tenderers in the previous tender when the petitioner was L1. Though the respondents rely on the Annexure R2(e)and (f) minutes of demonstration, the petitioner has produced Ext.P12 clarification furnished to them. It appears that there was no further consideration based on Ext.P12. The respondents have explained the sophisticated nature of the instrument and the public interest involved in testing milk and milk products, in order to justify the revised specifications in Ext.P2. It cannot be said that the Government of India is not concerned about the importance in analysing the milk and milk products, while issuing Ext.P4 letter. From Ext.P15 series it can be seen that the petitioner had been the selected bidder in the competitive bids between the petitioner and Indifoss held in various months between February, 2020 and December, 2020 in the States Odisha, Madhya WP(C).No.1707 OF 2021(K) 13 Pradesh, Gujarat, Rajasthan, West Bengal, Puducherry and Andhra Pradesh, in the gem platform of the Government of India/e-procurements systems of the Government. It is relevant to note Ext.P13 series of performance certificates issued from various milk producers societies of those States and Ext.P14 series of performance certificates issued to the petitioner from outside India. The standard and quality of the milk and milk products to be maintained and tested cannot be different in other States where the petitioner was the successful bidder. 9. As there is no dispute over the contention of the petitioner that the only authorised dealers in the particular milk analyser are the petitioner and M/s.Indifoss, there is every reason for this Court to come to a conclusion that the specifications are tailor-made to suit the other authorised dealer and to exclude the petitioner from the field. Having regard to the difference in the financial bid in the previous tender and the performance certificates produced by the petitioner pursuant to the bids covered by Ext.P15 series, the alleged public interest in revising the WP(C).No.1707 OF 2021(K) 14 specifications is doubtful. 10. Though it is settled law that the tendering authority is the best person to specify the qualifying criteria in accordance with its requirements and also that judicial review in matters relating to tenders, tender conditions, contracts and commercial transactions are very limited and that there cannot be any objection that specifications over and above the minimum requirements can be prescribed when public interest is attempted to be sacrificed in this manner to keep a particular tenderer away from the venue, this Court can definitely step in under Article 226 of the Constitution of India. In _**Air India Ltd. v. Cochin International Airport Ltd:, (2000) 2 SCC 617**_ **,** while cautioning the requirement of judicial restraint in commercial transactions, including tenders and tender conditions, the Apex Court has also held that the State and the instrumentalities under it have the public duty to be fair to all concerned and are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. It was held that though its decision is not amenable to WP(C).No.1707 OF 2021(K) 15 judicial review, the court can examine the decisionmaking process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. This position is reiterated time and again. The very same dicta is laid down in the judgment in _**CWE-SOMA**_ _**Consortium**_ 's case relied on by the learned Counsel for the petitioner. In that case the interference by the High Court was found unwarranted. It was found that the State had taken the decision to cancel the tender and to invite fresh tender due to lack of adequate competition and it was found that the decision of the Government was bonafide. It was held that the primary concern of the court, while exercising judicial review in the matter of Government contracts, is to see whether there is any infirmity in the decision-making process or whether it is vitiated by mala fides, unreasonableness or arbitrariness. ## 11. In the judgment in _**Maa Binda Express Carrier's**_ _**case, relied on by Sri. Jayant,**_ it was held that qualifying criteria in tender notices are not open to judicial scrutiny unless it is found that the same have WP(C).No.1707 OF 2021(K) 16 been tailor-made to benefit any particular tenderer or class of tenderers. Para 9 reads as follows: _“9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the court which is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest. (See Meerut Development Authority v. Assn. of Management Studies and Air India Ltd. v. Cochin International Airport Ltd.)_ Though the 2[nd] respondent is free to effect modification in the tender specifications when it issued a fresh NIT in Ext.P2 and the Govt. of India has informed that the specifications in Ext.P4 are only generic in nature, the 2[nd] respondent can do it only in public interest, while inviting a subsequent tender 12. In the judgment in _**Michigan Rubber (India)**_ _**Ltd.**_ 's case, relied on by the Standing Counsel, the Apex Court held as follows in para 23: _“23. From the above decisions, the following principles emerge:_ _(a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take_ WP(C).No.1707 OF 2021(K) 17 _into consideration the national priorities;_ _(b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;_ _(c)_ _**in the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;**_ _(d) certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and_ _(e) if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government._ _20. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:_ _(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: ‘the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached’? and_ _(ii) Whether the public interest is affected?_ _If the answers to the above questions are in the negative, then there should be no interference under Article 226.”_ ## 13. In _**Raunaq International Ltd**_ 's case, relied on WP(C).No.1707 OF 2021(K) 18 by the learned Standing Counsel, the Apex Court held that unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers. In _**Silppi Constructions Contractor** s' case (supra) relied on by the learned Standing Counsel,_ after a meticulous analysis of a series of judgments on this issue, the Apex Court reiterated that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters and in contracts involving technical issues, the courts should be even more reluctant because the courts do not have the necessary expertise to adjudicate upon technical issues; the courts must give "fair play in the joints" to the Government and public sector undertakings in matters of contract; Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. However, it was also held that being the guardian of fundamental rights it is duty of the court to interfere when there is arbitrariness, irrationality, _mala fides_ WP(C).No.1707 OF 2021(K) 19 and bias and that the State and the instrumentalities under it within the meaning of Art.12 of the Constitution are bound to act fairly. 14. Though the specifications involved in the present tender are technical and this Court does not have the expertise over these matters, when the action of the tender inviting authority is seen arbitrary with ulterior motives, this Court can definitely interfere. 15. In _**Tata Cellular v. Union of India, (1994) 6**_ _**SCC 651**_ **,** the Apex Court, delineated the parameters for judicial review in contractual matters in para.94 as follows: _**94.** The principles deducible from the above are:_ - _(1) The modern trend points to judicial restraint in administrative action._ - _(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made._ - _(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible._ - _(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to_ WP(C).No.1707 OF 2021(K) 20 _tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts._ - _(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasiadministrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides._ - _(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure._ _(emphasis supplied)_ Interference by this Court in such matters would be necessary in order to prevent arbitrariness. Though there can be no question of infringement of Article 14 in a case where the 2[nd] respondent tries to get the best person or the best quotation and best instrument in the interest of public and the right to choose cannot be considered to be an arbitrary power, if the said power is exercised for any collateral purpose the exercise of WP(C).No.1707 OF 2021(K) 21 that power has to be interfered with. 16. The circumstances of this case would indicate that the condition no.22, is framed in such a manner to avoid the petitioner in a case where there are only two dealers to submit their bids. 17. Therefore, it is declared that the specifications in Clause 22 of Ext.P2 are arbitrary. The 2[nd] respondent shall not pursue Ext.P1 notice inviting tender except after revising clause 22 of Ext.P2 tender conditions. The Writ petition is allowed to the above extent. ## **Sd/-** **P.V.ASHA** DM **JUDGE** WP(C).No.1707 OF 2021(K) 22 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF NOTICE INVITING TENDER ISSUED BY THE 2ND RESPONDENT EXHIBIT P2 A TRUE COPY OF SPECIAL TERMS AND CONDITIONS AND TECHNICAL SPECIFICATION FOR MILK ANALYZER SPECIFIED AS PER EXHIBIT P1 TENDER EXHIBIT P3 A TRUE COPY OF GENERAL TERMS AND CONDITIONS ISSUED ALONG WITH EXHIBIT P1 TENDER EXHIBIT P4 TRUE COPY OF NOTIFICATION F.NO-4-09/2019-DP ISSUED BY MINISTRY OF FISHERIES,ANIMAL HUSBANDRY & DAIRYING DATED 03.10.2019 EXHIBIT P5 TRUE COPY OF REPRESENTATATION SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 07.01.2021 EXHIBIT P6 TRUE COPY OF TENDER EVALUATION REPORT SUBMITTED BY 2ND RESPONDENT DATED 06.03.2020 EXHIBIT P7 TRUE COPY OF CANCELLATION CORRIGENDUM ISSUED BY 2ND RESPONDENT DATED 24.09.2020 EXHIBIT P8 TRUE COPY OF CORRIGENDUM ISSUED BY 2ND RESPONDENT DATED 13.01.2021 EXHIBIT P9 TRUE COPY OF RESOLUTION PASSED BY PETITIONER AT THE MEETING OF THE BOARD OF DIRECTORS HELD ON 18.01.2021. EXHIBIT P10 A TRUE COPY OF THE PURCHASE ORDER ISSUED FROM VARIOUS UNIONS IN INDIA TO PETITIONER'S COMPANY. EXHIBIT P11 TRUE COPY OF G.O.(P) NO.324/2015/FIN ISSUED BY FINANCE (IND &PW-B) DEPARTMENT DT.30.07.15 OF GOVERNMENT OF KERALA EXHIBIT P12 TRUE COPY OF CLARIFICATION REPLY SUBMITTED BY PETITIONER BEFORE THE 2ND RESPONDENT DT.18.03.2020 EXHIBIT P13 TRUE COPY OF THE PERFORMANCE CERTIFICATE ISSUED TO PETITIONER FROM VARIOUS STATE COOPRATIVE MILK PRODUCER'S UNION EXHIBIT P14 TRUE COPY OF PERFORMANCE CERTIFICATE ISSUED TO PETITIONER FROM DIFFERENT DIARY COOPERATIONS OF WORLD** WP(C).No.1707 OF 2021(K) 23 **EXHIBIT P15 TRUE COPY OF BID DETAILS OF ODISHA STATE COOPERATIVE MILK PRODUCERS FEDERATION EXHIBIT P15A TRUE COPY OF BID DETAILS OF MADHYA PRADESH STATE CO-OPERATIVE DAIRY FEDERATION LTD EXHIBIT P15B TRUE COPY OF BID DETAILS OF DIRECTORATE OF ANIMAL HUSBANDRY, GUJARAT EXHIBIT P15C TRUE COPY OF BID DETAILS OF RAJASTHAN COOPERATIVE DAIRY FEDERATION EXHIBIT P15D TRUE COPY OF BID DETAILS OF BHAGIRATHI COOPERATIVE MILK PRODUCERS UNION LIMITED EXHIBIT P15E TRUE COPY OF BID DETAILS OF DISTRICT MAGISTRATE NADIA, WEST BENGAL EXHIBIT P15F TRUE COPY OF BID DETAILS OF COOPERATIVE DEPARTMENT PONLAIT, PUDUCHERRY EXHIBIT P15G TRU COPY OF BID DETAILS OF ANDHRA PRADESH DAIRY RESPONDENTS' EXHIBITS ANNEX.R2A TRUE COPY OF THE LETTER DT.29.11.19 ISSUED BY THE DEPARTMENT OF ANIMAL HUSBANDRY & DAIRYING ANNEX.R2B TRUE COPY OF THE E-MAIL DT.30.12.2020 ISSUED BY THE DEPARTMENT OF ANIMAL HUSBANDRY & DAIRYING ANNEX.R2C TRUE COPY OF THE LETTER DT.05.08.19 ISSUED BY TEH KCMMF ANNEX.R2D TRUE COPY OF THE TECHNICAL SPECIFICATION OF BID REF.NO.599/TRU/PC/2019 ANNEX.R2E THE MINUTES OF THE DEMONSTRATION DT.17.3.2020 ANNEX.R2F TRUE COPY OF THE MINUTES OF THE MEETING OF THE COMMITTEE DT.17.03.2020**