ORDER
Fakhruddin, J.
1. By this writ petition filed under Art. 226/227 of the Constitution of India, petitioner, prays for issuance of a writ in the nature of mandamus or any other appropriate form of direction/order restraining the respondents Nos. 1 to 17 from issuing work/purchase orders to respondents No. 32 to 35. Further prayer of the petitioner is to the effect that respondents No. 1 to 31 be commanded to implement the clause of earnest money exemption to Small Scale Industrial Unit of Chhattisgarh State as per the Clause 4.7 of Chhattisgarh State Store Purchase Rule 2002. Petitioner has also further prayed that tender of the petitioner be opened as the same has not been opened.
2. The petitioner is a manufacturer of Daliya and ready-to-eat food. It is a Small Scale Industrial Unit duly registered. Copy of the certificate of the registration has been filed vide Annexures P-29 & P-30, As such. it has been established and is working at Raipur. It is submitted that respondent No.2 published an advertisement on 4-4-2003 (Annexure P-1) in Hindi dally Navbharat inviting tenders for 2003-2004 for supply of ready-to-eat food in various Anganwadi Centers mentioning therein that the tenderers should deposit Rs.300/- for purchase of tender form. It is also stated that the petitioner deposited the said amount for purchase and obtained the tender from vide Annexure P-2. It is also submitted that after fulfilling the formalities, he submitted the tender form duly filled to respondent No.3 on 7-5-2003 at Raipur. It is also submitted that similar advertisements were issued inviting tenders for supply of ready-to-eat food to various districts. In response to the advertisement published in Nav Bharat for the districts of Mahasamund, Durg, Rajanandgaon, Kanker, Jagadalpur, Dantewara, Bilaspur and Raipur, petitioner obtained tender forms and those were submitted before the respective authorities between 8-5-2003 to 31-5-2003. Copies of those advertisements have been filed vide Annexure P-l to P-35. It is submitted that these tenders were made opened in 2003 and the petitioner was informed vide letter dated 28-5-2003 (Pg. No. 144) that the petitioner's tender was not considered for non-deposit of security amount. The contents of the Letter dated 28-5-2003 is quoted below:
^^izfr]
eatw ,xzks izkbosV fyfeVsM
jk;iqj foosdk uxj
fo'k;%& fnukad 3&5&2003 dsfufonk ds laca/k esa A
lanHkZ%& vkidk i-d-@4@,u- ,Q-&19]fnukad 23&5&2003 A
fo'k;karxZr lanfHkZr i= dsek/;e ls fnukad 8&5&2003 ds fufonk ds laca/k esa vkids }kjk fufonk izi=dfMdk 18 ds vuqlkj vekur jkf'k 5]00]000@& tek ugh djus ij ; lfefr }kjkvkidh fufonk ij fopkj ugh fd;k x;k A
lwpukFkZ A
lgh@&
ftyk efgyk ,oa cky fodkl vf/kdkjh
ftyk& egkleqan] N- x**
3. Counsel for the petitioner submitted that the tender form was in folder form. The Chhattisgarh Store Purchase Rules 2002 have been framed by the State in its Executive Powers and they were notified in the official gazette on 15-1-2003 (Annexure P-38), which have been made applicable w.e.f. 1-12-2002. The petitioner submits that he had approached the industries Department and had written a letter on 5-5-2003 to the General Manager, DIC, Raipur, for issuance of a competency certificate. The said letter has been received by the DIC Raipur on the same day. The contents of the said letter are quoted below :
'To
The General Manager
D. I. C., Raipur
Sub :- Application for issue of competency Certificate Dear Sir,
We hereby applying for issue of Competency Certificate for participating tender floated by the Department of Women & child Development, Chhattisgarh, and, competency certificate is required for getting exemption from deposit of earnest money while participating tender as per para 4.7 of Chhattisgarh Government's Bhandar Kray Niyam 2002.
You are requested to please issue the same and oblige.
Your favourable action will be highly appreciated.
Thanking you,
For Manju Agro Pvt. Ltd.,
Sd/-
(Authorised signatory).'
4. On this letter reproduced above, the General Manager, DIC, informed the petitioner that the provision to issue the desired certificate has been abolished by the then State of Madhya Pradesh on 11-8-1999 and the State of Chhattisgarh has not issued any guidelines to issue the certificate. As such, the certificate of registration issued by the office of General Manager, DIC will be sufficient. It is apt to reproduce the entire letter dated 5-5-2003, which reads as under :
^^izfr]
esllZ & eatw ,xzks izk- fy-
vkS|ksfxd {ks= & Hkuiqjh]
jk;iqj N- x- A
fo'k; %& l{kerk izek.k&i;=iznk; ckcr A
lanHkZ %& vkidk i= fnukad5&5&2003
egksn;]
i;k lanfHkZr i= ds voyksdu dkd'V djsa A ftlds vUrxZr vkids }kjk 'kkldh; ; dk;Ze esa Hkkx ysus gsrq /kjksgjdh jkf'k esa NqV laca/kh l{kerk izek.k i= iznk; ckcr fuosnu fd;k x;k gS A
mDr lanHkZ esa l`ftr fd;ktkrk gS fd rRdkyhu e- iz- 'kklu] okf.kT; ,oa m|ksx foHkkx] Hkksiky ds i= fnukad11&8&1999 ds }kjk vkids }kjk okafNr l{kerk izek.k&i;= tkjh fd;s tkusdk izko/kku dj fn;k x;k gS A mlds i'pkr Nkhlx<+ 'kklu }kjk orZeku esal{kerk izek.k&i;= tkjh djus gsrq dksbZ fn'kk funsZ'k tkjh ugh fd;k x;k gS AmDr lanHkZ esa bl dk;kZy; }kjk tkjh bdkbZ dk LFkkbZ iath;u izek.k&i;= i;kZIrgS A
vr% ,slh fLFkfr eas vkids }kjkokafNr l{kerk izek.k&i;= tkjh fd;k tkuk laHko ugha gksxk A
Hkonh;
egkizca/kd
ftyk O;kikj ,oa m|ksx dsUnz
jk;iqj N- x-**
5. It is submitted that this letter dated (reproduced above) was filed alongwith the tender. This document has been issued on behalf of the State of Chhattisgarh by General Manager. DIC. Shri Praveen Shukia, General Manager, DIC, also appeared during the course of hearing and submitted that he had issued the document. This person is the member of the Purchase Committee, Annexure R-2 shows that the matter was considered before the Purchase Committee and the said certificate /document was not acted upon. On the other hand, it was stated in paragraphs 3, 4, 5 & 6 of the Annexure R-2 as follows ;
^^3- fufonk 'krZ ds vuqlkj lfefr }kjk loZizFkefufonk izi= Hkkx ^^v**@ vekur jkf'k ls lacaf/kr@ fyQkQk [kksyk x;k A lfefr usik;k fd lw;kZ lkekftd tu dU;k.k lfefr] jk;iqj] vuqie ik= m|ksx jk;iqj] vxzokyb.MLVht txnyiqj ,oa ekW 'kkjnk QwMl~ xzsu epsZUV dkadsj }kjk vekur jkf'kizLrqr ugh dh xbZ gS rFkk eatw ,xzks izk;osV fyfeVsM jk;iqj }kjk vekur jkf'kizLrqr u djrs gq;s NRrhlx<+ 'kklu Hk.Mkj ; fu;e 2002 dh dfMdk 4-7 dk mYys[kfd;k x;k gS rFkk ek= Jh th efgyk lgdkjh fMikVZesaVy LVkslZ jk;iqj o ckykthbUVjizk;lst jktukanxko }kjk fufonk 'krZ ds vuqlkj okafNr jkf'k ds cSad MkVizLrqr fd;s x;s gS A
4- mijksDr fLFkfr dks ns[krs gq;slfefr }kjk eatw ,xzks izk;osV fyfeVsM jk;iqj }kjk mYysf[kr Hk.Mkj ; fu;e dslaca/k es lfefr ds lnL; egkizca/kd] ftyk m|ksx ,oa O;kikj dsUnz jk;iqj ls fopkjfoe'kZ fd;k x;k A rRlaca/k esa muds }kjk voxr djk;k x;k fd orZeku es m|ksxfoHkkx }kjk l{kerk izek.k&i;= tkjh ugh fd;s tk jgs gaS bl vk'k; dk i= eatw ,xzksizk- fy- jk;iqj dks m|ksx foHkkx }kjk tkjh fd;k x;k gS A Hk.Mkj ; fu;e 2002 dsvuqlkj l{kerk izek.k&i;= izkIr bdkb;ksa dks gh vekur jkf'k esa NwV dh ik=rkvkrh gS A rFkk QeZ }kjk mYysf[kr fu;e ds vuqlkj l{kerk izek.k&i;= izLrqr djusij gh NwV nsus dk izko/kku y?kq m|ksx fu;e ds lkFk jsV dkUVsDV lEiUu djus dhfLFkfr esa gS] vr% lfefr }kjk fu.kZ; fy;k x;k fd fufonk 'krZ dh dfMdk 17@N@esa Li'V ys[k gS fd fufonkdkj dks jkf'k 16]00]00000 :- 'kkldh; [ktkus@mi[ktkus vFkok Hkkjrh; LVsV cSad ;k vuqlqfpr cSad ds cSad MkV tks ftyk dk;Zevf/kdkjh] efgyk ,oa cky fodkl foHkkx jk;iqj ds uke ns; gks vekur jkf'k ds :i esaizLrqr djuk gksxk A vr% ,slh fLFkfr esa eatw ,xzks izk- fy- jk;iqj dks vekukrjkf'k ds laca/k eas dksbZ NwV fn;k tkuk fu;ekuqdwy ugh gS A rFkk fufonk 'krZ dhdfMdk 12 ds vuqlkj ek= Jh th efgyk lgdkjh fMikVZesUVy jk;iqj ,oa ckykthbUVjizkbtsl jktukanxkao }kjk gh fufonk izi= Hkkx ^^v** eas okafNr vekur jkf'k lslacaf/kr cSad MkV yxk;s x;s gS A vr% dsoy bu QeksZ }kjk izLrqr fufonk izi=Hkkx ^^c** ls lacaf/kr fyQkQs [kksys tk;s A
5 lfefr }kjk Jh th efgyk lgdkjh fMikVZesUVyLVkslZ] jk;iqj o ckykth bUVjizkbtsl jktukanxko }kjk izLrqr fufonk izi= Hkkx^^c** ds fyQkQs [kksys x;s rFkk muds }kjk izLrqr nLrkostksa o tkudkjh dksmifLFkfr fufonkdkjksa@ muds izfrfuf/k;ka dks i '85. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State, it is expected to pro-led, the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But (he principles laid down in Articles 14 of 11 if Constitution have to be kept, in while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. 86. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. 89. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercise to rein in any unbridled executive functioning. The restrain has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the Court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action. 90. Judicial review is concerned with reviewing not the merits of the decision in support of which the application of judicial review is made. but the decision making process itself. 93. The duty of the Court is to confine itself to the question of legality. Its concern should be : 1. Whether a decision making authority exceeded its powers? 2. committed an error of law; 3. committed a breach of the rules of natural justice; 4. reached a decision which no reasonable Tribunal would have reached; or 5. abused its powers, 94, Therefore, it is not for the Court to determine whether particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with She manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put the grounds upon which an administrative action is subject to control by judicial review can be classified as under (i) Illegality : This means the decision maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesday unreasonableness. (iii) Procedural impropriety. 95. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of the State for the Home Department ex parte Brind, (1991) 1 AC 696, Lord Diplock referes specifically to one development namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the Court should, consider whether something has gone wrong of a nature and degree which requires its intervention. A plain reading of the above paragraphs shows that the Court is required to consider as to whether a decision making authority exceeded its power; or Committed an error of law; or Committed a breach of the rules of natural justice; or reached a decision which no. reasonable tribunal would have reached; or the decision making authority abused its powers. It is no doubt true that it is for the Court to determine whether a particular policy or a particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of duty to act fairly will vary from case to case. The decision maker must understand correctly the law that regulates his decision making power and must give effect to it. While making decision, the authority should also understand about the rationality; reasonableness and Procedural property. 13. In view of the judgment of the Supreme Court, the above are the only broad grounds but they do not rule the condition or further ground in course of time. Here in the instant case. the petitioner had made an application on 5-5-2003. They had also allowed the document of State of Madhaya Pradesh dated 11-8-1999 and that was there before DIC and taking all the factors into consideration, the certificate was issued. That is sufficient for the in-charge and it cannot be said that he misunderstood the letter. It is not the case that the letter/order of the M. P. Government was not before the authority. If there is an authority in respect of all those issues and virtually there is a letter to that effect in such a case the certificate granted would suffice and the petitioner acting on that submitted those certificates and it cannot be said that his petitioner is at fault. Nevertheless, one thing is clear that the decision maker itself is doubtful and more so particularly when one of the Member of the Purchase committee is the General Manager of DIC. So there is an illegality in the case. The decision maker under confusion was not understood the law that regulates the decision making power or that has been done. It is not reflected that he was confused. He gave a definite statement in writing that this is sufficient. 14. The facts and circumstances emerged from the record go to show that while taking decision, illegality has been committed, irrationality has writ large and there is procedural impropriety as well. Even one ground is sufficient whereas in the instance case if the decision is taken from any angle, the petitioner's case has not been dealt with in accordance with law. 15. Shri Tankha, learned counsel for the petitioner further relies upon a principle that 'what you profess must follow'. He submits that herein the instant case. the State professes but does not wish to follow. Shri Tankha, also submitted that the State's behaviour must be a model behaviour especially when the benevolent schemes are monitored by the Apex Court. 16. Shri Tankha, learned counsel for the petitioner, further submitted that they are conscious of the fact that the supplies in any manner should be the best quality to meet the expectations of the public at large and this should be uninterrupted, but nevertheless the petitioner should not be deprived of the opportunity of participation, therefore, he moulded to this extent and they should be considered. He submits that their case should be considered afresh and whatever technicalities or procedural requirements are there, they will be fulfilled. He further submitted that if he is deprived of this time, then he will be deprived of for ever as the question would arise that he may not be experienced. Therefore, taking this in view Shri Tankha, counsel for the petitioner further placed reliance on a decision reported in AIR 1979 SC 1628 (Ramana Dayaram Shetty v. The International Airport, Authority of India). Paragraphs 11, 12 and 13 of the said judgment is quoted below : '11. Today the Government, in a welfare State is the regulator and dispenser of special services and provider of a large number of benefits, including jobs contracts, licences, quotas, mineral rights etc. The Government pours forth wealth, money, benefits, services, contracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They comprise social security benefits, cash grants for political sufferers and the whole scheme of State and local welfare. Then again, thousands of people are employed in the State and the Central Government and local authorities. Licences are required before one can engage in many kinds of businesses or work. The power of giving licences means power to withhold them and this gives control to the Government or to the agents of Government on the lives of many people. Many individuals and many more businesses enjoy largess in the form of Government contracts. These contracts often resemble subsidies. It is virtually impossible to lose money on them and many enterprises are set up primarily to do business with Government. Government owns and controls hundreds of acres of public land valuable for mining and other purposes. These resources are available for utilization by private corporations and individuals by way of lease or licence. All these mean growth in the Government largess and with the increasing magnitude and range of Governmental functions as we move closer to a welfare State, more and more of our wealth consists of these new forms. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. But on that account, can it be said that they do not enjoy any legal protection Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure Is the position of the Government in this respect the same as that of a private giver? We do not think so. The law has not been slow to recognize the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognized as rights while others have been given legal protection not only by forging procedural safeguards but also by confining /structuring and checking Government discretion in the matter of grant of such largess. The discretion of the Government has been held to be not unlimited in that the Government cannot give or withhold largess in its arbitrary discretion or at its sweet will. It is insisted, as pointed out by Professor Reich in an especially stimulating article on 'The new Property' in 73 Yale Law Journal 733, 'that Government action be based on unauthorized'. The Government cannot be permitted to say that it will give Jobs or enter into contract or issue quotas or licences only in favour of those having grey hair or belonging to a particular political party or professing a particular political party or professing a particular religious faith. The Government is still the Government when it acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual. 12. We agree with the observations of Mathew, J., in V. Punnan Thomas v. State of Kerala AIR 1969 Kerala 81 (FB) that; 'The Government, is not and should not be as free as an individual in selecting the recipients for its largess. Whatever its activity, the Government is still the Government and will be subject to restraints, inherent in its portion in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal'. The same point was made by this Court in Erusian Equipment and Chemicals Ltd. v. State of West Bengal (1975) 2 SCR 674 : AIR 1975 SC 266 where the question was whether black-listing of a person without giving him an opportunity to be heard was bad Ray, C. J., speaking on behalf of himself and his colleagues on the Bench pointed out that blacklisting of a person not only affects his reputation which is in Poundian terms an interest both of personality and substance, but also denies him equality in the matter of entering into contract with the Government and it cannot, therefore, be supported without fair hearing. It was argued for the Government that no person has a, right to enter into contractual relationship with the Government and the Government, like any other private individual, has the absolute right to enter into contract with any one it pleases. But the Court, speaking through the learned Chief Justice, respondent that the Government is not like a private individual who can pick and choose the person with whom it will deal, but the Government is still a Government when it enters into contract or when it is administering largess and it cannot, without adequate reason. exclude any person from dealing with it or take away largess arbitrarily. The learned Chief Justice said that when the Government is trading with the public, 'the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions....... The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.' This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act. arbitrarily at its sweetwill and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it cannot be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. 13. Now, it is obvious that the Government which represents the executive authority of the State, may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of juridical persons to carry out its functions. In the early days, when the Government had limited functions, it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge Governmental functions, which were of traditional vintage, But as the tasks of the Government multiplied with the advent of the welfare State, it began to be increasingly felt that the frame work of civil service was not sufficient to handle the new tasks which were often of specialized and highly technical character, The inadequacy of the civil service to deal with these new problems came to be realized and it became necessary to forge a new instrumentality or administrative device for handling these new problems. It was in these circumstances and with a view to supplying this administrative need that the public corporation came into being as the third arm of the Government: As early as 1819 the Supreme Court of the United States in Mac Culloch v. Maryland, (1816-19) 4 Wheat 316 held that the congress has power to charter corporations as incidental to or in aid of Governmental functions and as pointed out by Mathew, J. in Sukhdev v. Bhagat Ram, (1975) 3SCR619:AIR1975SC 1331), such federal corporations would ex-hypothesis be agencies of the Government. In Great Britain too, the policy of public administration through separate corporations was gradually evolved and the conduct of basic industries through giant corporations has now become a permanent feature of public life. So far as India is concerned, the genesis of the emergence of corporations as instrumentalities or agencies of Government is to be found in the Government of India Resolution on Industrial Policy dated 6th April. 1948 where it was stated inter alia that 'management of State enterprise will as a rule be through the statutory control of the Central Government who will assume such powers as may be necessary to ensure this'. It was in pursuance of the policy envisaged in this and subsequent resolutions on Industrial Policy that corporations were created by Government for setting up and management of public enterprises and carrying out other pubic functions. Ordinarily these functions could have been carried out by Government departmentally through its service personnel, but the Instrumentality or agency of the corporations was resorted to in these cases having regard to the nature of the task to be performed. The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the Held of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities. If Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through the instrumentality or agency of corporations should equally be subject to the same limitations. But the question is how to determine whether a corporation is acting as instrumentality or agency of Government, it is a question not entirely free from difficulty. 17. In view of the above discussions. Dr. Shukla, learned Additional Advocate General submitted that since tenders of the petitioner have not been opened, they will be opened and if the petitioner's offers are found reasonable comparing to others, they shall be dealt with strictly in accordance with law. Dr. N. K. Shukla, also submitted that they would follow the procedural requirements and whatever technicalities are there they will be completed. 18. Shri B. P. Sharma. counsel for respondent No, 35 pointed out that apart from opening the envelopes,, the samples submitted by the petitioner are to be tested. Shri Tankha submits that the samples have been submitted much earlier and now these samples may become stale, Shri Tankha submits that they will submit the fresh samples for their testing, if desired. 19. In view of what has been stated above, so far as the prayer for opening of the petitioner's tenders are concerned, tills petition is allowed. The tenders will now be opened and if the offers of the petitioner are found reasonable comparing to others, the case of the petitioner shall be considered strictly in accordance with law. State/Respondents will do the, needful including seeking fresh samples from the petitioner for testing. It is also directed that all the procedural requirements & technicalities including opening the petitioner's tenders will be completed by the parties within 3 weeks.