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Optel Telecommunications Ltd. Vs. Union of India and Others - Court Judgment

SooperKanoon Citation
SubjectCommercial
CourtMadhya Pradesh High Court
Decided On
Case NumberLetters Patent Appeal Nos. 209, 210 and 211 of 2000
Judge
Reported inAIR2001MP161; 2001(2)MPHT393; 2001(2)MPLJ277
ActsConstitution of India - Articles 14, 19 and 226; ; Educational Orders
AppellantOptel Telecommunications Ltd.
RespondentUnion of India and Others
Appellant Advocate Shri V.K. Tankha, Advocate General and ;Shri Shobhit Aditya, Adv.;Shri Rajiv Nayyer, ;Shri Ravindra Shrivastava and ;Shri Sukesh Mukherjee, Sr. Advs.
Respondent AdvocateShri Mukul Rahtogi, Addl. Solicitor General and ;Shri O.P. Namdeo, C.G.S.C.
DispositionLetters patent appeals dismissed
Excerpt:
commercial - tender - amendment - appellant was company engaged in business of manufacture optical fibre cables - appellant supplied 95% production to government department - respondent floated open tenders for supply of cables - delivery rating formula has been changed by amendment after issuance of tenders - appellant aggrieved by amendment in tenders - appellant filed petitions before single bench - petitions dismissed - hence, present letter patent appeal - held, amendment in bid documents was taken place before submitting of tender by anybody - after amendment opening date of tender postponed to enable every one to submit tender - amendment was known to every one before participation in tender - appellants also submitted his tender under changed criteria - hence, letter patent.....orderbhawani singh, c.j.1. these letters patent appeals (l.p.a. no. 209/2000, optel telecommunications limited v. union of india and others, l.p.a. no. 210/2000, optel telecommunications limited v. union of india and others and l.p.a. no. 211/2000, optel telecommunications limited v. union of india and others) are directed against order of the learned single judge dated august 4, 2000 dismissing the three writ petition nos. 3406/2000, 3407/2000 and 3408/2000, filed by the appellant/petitioner.2. petitioner optel telecommunications limited is subsidiary of the m.p. state electronics development corporation, an undertaking of the government of madhya pradesh, registered under the indian companies act, 1956 with registered office at e-1, new industrial area, phase ii, mandideep (raisen). it.....
Judgment:
ORDER

Bhawani Singh, C.J.

1. These Letters Patent Appeals (L.P.A. No. 209/2000, Optel Telecommunications Limited v. Union of India and others, L.P.A. No. 210/2000, Optel Telecommunications Limited v. Union of India and others and L.P.A. No. 211/2000, Optel Telecommunications Limited v. Union of India and others) are directed against order of the learned Single Judge dated August 4, 2000 dismissing the three Writ Petition Nos. 3406/2000, 3407/2000 and 3408/2000, filed by the appellant/petitioner.

2. Petitioner Optel Telecommunications Limited is subsidiary of the M.P. State Electronics Development Corporation, an Undertaking of the Government of Madhya Pradesh, registered under the Indian Companies Act, 1956 with registered office at E-1, New Industrial Area, Phase II, Mandideep (Raisen). It manufactures optical fibre cables, Polythene Insulated Jelly Filled Cables and related accessories. Manufacturing of Optical Fibre Cables started in 1989 and it is a major supplier to various Government Departments including the Department of Telecommunications and other organisations. Optical cables of various sizes produced by it are consumed by the Department of Telecommunications to the extent of 95% of the production.

3. Department of Telecommunications (hereafter DOT) floated open tenders for procurement of Optical Fibre Cables of different sizes/varieties on different dates. For supply of 56000 Kms of 12-F Optical Fibre Cables, lender notice was issued on January 28, 2000. The last date of issue of tender document was 24-3-2000 till 10.30 hours and was to be opened on the same day at 11.00 hours. By notice dated 21-3-2000, the date of opening of tender was postponed to 10-4-2000 at 11.00 hours. By amendment dated 28-3-2000, delivery rating formula has been changed - W.P. No. 3406 of 2000. Tender notice for supply of 9000 kms of 24-F Optical Fibre Cable was issued on 7-1-2000. Last date for issue of tender was 14-3-2000 till 10.30 hours and the tenders were to be opened on the same day at 11.00 hours. However, by notice dated 10-3-2000 the date of opening of tender was postponed to 29-3-2000. The mode of calculation of delivery rating was similar to the lenders issued earlier. By amendment dated 23-3-2000, delivery rating formula has been changed - W.P. No. 3407 of 2000. By another tender notice for supply of 403 lac kms of Polythene Insulated Jelly Filled Cables was issued on 4-2-2000. The last date of receipt of tender was March 30, 2000 at 10.30 hours. It was to beopened on the same day at 11.00 hours. By amendment dated 23-3-2000 the delivery rating formula has been changed. Challenge to delivery rating formula is common to the other writ petitions - W.P. No. 3408 of 2000.

4. The DOT issued an amendment F. No. 11-03/2000-MMT (SW) dated 23-3-2000 making certain major modifications in the tender conditions with a view to favour some new entrants. These new entrants are extended undue favour with a view to eliminate the Companies which have been serving the respondents for the past many years as against the new entrants who were receiving educational orders for approximately 10 to 50 kms. By the amendment, the DOT changed the condition of Clause No. 17.3.6 of Section IV of the bid document providing concession which could benefit them. As per original terms and conditions of the tender documents, certain companies with lower vendor rating gained better position by the amendment by award of higher delivery rating. By this change, the petitioner was given low delivery rating as compared to the new companies. The entire action favouring the new entrants is arbitrary and smacks of malafides since change in the tender conditions after accepting the tender documents with a view to favour the new entrants is illegal, arbitrary and violative of Arts. 14 and 19 of the Constitution of India. Change in the original tender document favouring new entrants with no background or knowledge about the optical fibre cable is not in public interest having caused loss to the exchequer. The petitioner protested against the amendment through representation, however, with no result. The petitioner is likely to face undue hardship and may be forced to close down its operations, rendering around 600 employees jobless.

5. What is stated in the counter affidavit is that the writ petitions are not maintainable since the petitioner has an equally efficacious and alternative remedy available to them under the Special Tender No. MM/OF/121999/ 000189 dated 7-1-2000 to the terms of which the petitioner/appellant agreed unequivocally and unreservedly including the arbitration agreement in Clause 20 of Section III. The petitions have been filed belatedly, as an after-thought, once availing the change of submitting bids. By the impugned notification dated 23-3-2000 amending the formula for calculation of delivery rating for new entrants/tenderers in the special tender was done at a time when no bid had been received by the respondents and prospective bidders had sufficient time to prepare their bids in light of the said amendment. The petitioner did not protest against the said amendment at the relevant time and entered bid without any reservation to the amendment. In case the petitioner was affected by the impugned notification, he should have assailed the same before offering the bid without waiting for the finalisation of the vendor rating of the bidders which determines the allocations and quantity. Conduct reveals oblique motive to scuttle the tender process after realisation that it would not be allotted to it with the desired bid quantity.

6. Notification dated 23-3-2000 was issued after careful scrutiny and evaluation by the DOT approved by the Telecom Commission, the apex decision making body of the respondent Union of India when it came to the conclusion that the existing formula was unfair and discriminatory to the new entrants/vendors who were competitively bidding for the first time. Therefore,the action was taken to redress the imbalance in exercise of rights and powers under Clause 6 of Section II (Instructions to Bidders) of tender document. The tenderers had sufficient time to prepare their bids in the light of amendment and the petitioner Company submitted the bid on 31 -3-2000, the last date of submission of tender. It was the policy decision taken by experts in the field, therefore, this Court may not sit as a Court of appeal over the policy or the eligibility requirement or other details of the tender.

7. Clause 17.3.6 of Section IV of tender document before amendment was as under :--

'The following empirical formula will be used to calculate the DRfor Educational Orders: 1/Rc 1/Ra 1/RbWhere Ra = Average Delivery Rating of IndustryRb = Actual DR for the concerned new vendor with Educational Order, andRc = Corrected DR.'

After amendment, this clause has been changed to the following effect:--

'In case of vendors who have executed only Educational Orders, a Delivery Rating equal to Average Industrial Rating or Delivery Rating earned by them in Educational Orders whichever is less will be given.'

The petitioner has challenged the amendment to Clause 17.3.6 of Section Ivin these writ petitions.

8. Shri V.K. Tankha, learned senior counsel for the petitioner contended that respondents effected amendment to the tender document contained in Clause 17.3.6 of Section IV of the Rules after the game had started. This was done at the behest of new entrants, who influenced the respondents in taking the decision, with the result the petitioner has been knocked off the game arbitrarily and vindictively. This has resulted in grave loss to the petitioner, hundreds of labourers and the exchequer. Learned senior counsel placed reliance on J.T. 2000 (6) SC 491 (M/s, Monarch Infrastructure (P) Limited v. Commissioner, Ulhasnagar Municipal Corporation and others) to bring home the point that the Court is competent to interfere in this matter since the action of the respondents is arbitrary and contrary to public interest. More so, the tender conditions were changed when process had started.

9. Shri Mukund Rohtagi, learned Additional Solicitor General for some respondents and S/Shri Rajendra Nayyar, Ravindra Shrivastava, Sukesh Mukherjee, Senior Advocates for others contended that the rules of the game were not changed in the midst. The amendment was carried out before tenderers had offered the tenders. There is proper justification for limited amendment made to the terms and conditions of the tender and the same is neither contrary to statutory provisions nor arbitrary nor resulting in loss to the exchequer. The original formula was unjust and new entrants could not get, though best, as compared to the petitioner monopolising the supplies hitherto before despite dismal performance. Amendment would facilitatelarger number of bidders to participate in the tender process instead of a fewmonopolising the supplies worth crores of rupees. Allegations of victimisation,arbitrariness and lack of bona fides have been denied. It was also contendedthat the petitioner is estopped from assailing the amendment after havingparticipated in the bid. In support of the submissions, reliance is placed on(1994) 6 SCC 651 (Tata Cellular v. Union of India), (1999) 1 SCC 492(Raunaq International Limited v. I.V.R. Construction Limited), (2000) 2 SCC617 (AIR India Limited v. Cochin International Airport Limited and another)and Om Prakash Shukla v. Akhilesh Kumar Shukla and others, (1986) Suppt. SCC 285. S/Shri Rajiv Nayyar, Sukesh Mukherjee and Ravindra Shrivastva,learned Senior Advocates submitted that existing formula was completelydisadvantageous to the new-comers since it was monopolistic. Further, theysubmitted that prospective bidders ought to have been put at equal footing bythe Slate which has been achieved by the amendment. Further there is nofoundation in the petition about malafides and allegation as to creation ofsmall companies by big companies for monopolising trade is unsustainable.

10. In Tata Cellular (supra), the Apex Court said in Paragraph 70 that:

'70. It can not be denied that the principles of judicial review wouldapply to the exercise of contractual powers by Government bodiesin order to prevent arbitrariness or favouritism. However, it mustbe clearly stated that there arc inherent limitations in exercise ofthat power of judicial review. Government is the guardian of thefinances of the State. It is expected to protect the financial interestof the State. The right to refuse the lowest or any other lender isalways available to the Government. But, the principles laid downin Art. 14 of the Constitution have to be kept in view while acceptingor refusing a lender. There can be no question of infringement ofArt. 14 if the Government tries to get the best person or the bestquotation. The right to choose can not be considered to be anarbitrary power. Of course, if the said power is exercised for anycollateral purpose the exercise of that power will be struck down.'

Further, in Paragraphs 91 to 93, the Apex Court observed that:

'91. In Food Corporation of India v. Kamdhenu Cattle Fields Industries, it was observed thus : (SCC page 76, para 7)

'In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Art. 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law : A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fair play in action'.' 92. In Sterling Computers Limited v. M & N Publications Ltd., this Court observed thus : (SCC page 455, para 12)

'In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognised by Courts while dealing with public property. It is notpossible for Courts to question and adjudicate every decision taken by an authority, because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding con tracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the Courts, such decisions are upheld on the principle laid down by Justice Holmes, that Courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of 'play in the joints' to the executive.' 93. In Union of India v. Hindustan Development Corporation, this Court held thus : (SCC page 515, para 9)

'..... the Government had the right to either accept or rejectthe lowest offer but that of course, if done on a policy, should be on some rational and reasonable grounds. In Erusian Equipment & Chemicals Ltd. v. State of W.B., this Court observed as under : (SCC page 75, para 17)

'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 Stale need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure'.'

Again, in Paragraph 94, the Apex Court deduced certain principles fromvarious decisions on the question :

'94. The principles deducible from the above arc :

(1) The modern trend points to judicial restrain 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 can not be open to judicial scrutiny because the invitation to 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 quasi-administrative 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 malafides.

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.

.....'

Finally in Raunaq International Limited (supra), the Apex Court held inParagraph 9 that:--

'9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance arc commercial considerations. These would be:

(1) the price at which the other side is willing to do the work;

(2) whether the goods or services offered are of the requisite specifications;

(3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important;

(4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality;

(5) past experience of the tenderer and whether he has successfully completed similar work earlier;

(6) time which will be taken to deliver the goods or services; and often

(7) the ability of the tenderer to take follow-up action, rectify defects or to give post-contract services.

Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.'

Dealing with the question of entertaining writ petitions challenging award of contract by a public authority or the State, the Court said in Paragraphs 11, 12 and 13 that:

'11. When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the Court must be satisfied that there is some clement of public interest involved inentertaining such a petition. If, for example, the dispute is purely between two tenderers, the Court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by Court intervention, the proposed project may be considerably delayed, thus escalating the cost for more than any saving which the Court could ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the Court is satisfied that there is a substantial amount of public interest or the transaction is entered into malafide, the Court should not intervene under Art. 226 in disputes between two rival tenderers.

12. When a petition is filed as a Public Interest Litigation challenging the award of a contract by the State or any public body to a particular tenderer, the Court must satisfy itself that the party which has brought the litigation is litigating bona fide for public good. The public interest litigation should not be merely a cloak for attaining private ends of a third party or of the party bringing the petition. The Court can examine the previous record of public service rendered by the organisation bringing public interest litigation. Even when a public interest litigation is entertained, the Court must be careful to weigh conflicting public interest before intervening. Intervention by the Court may ultimately result in delay in the execution of the project. The obvious consequence of such delay is price escalation. If any re-tendering is prescribed, cost of the project can escalate substantially. What is more important is that ultimately the public would have to pay much higher price in the form of delay in the commissioning of the project and the consequent delay in the contemplated public service becoming available to the public. If it is a power project which is thus delayed, the public may lose substantially because of shortage in electricity supply and the consequent obstruction in industrial development. If the project is for the construction of a road, or an irrigation canal, the delay in transportation facility becoming available or the delay in water supply for agriculture being available, can be a substantial set back to the country's economic development. Where the decision has been taken bona fide and a choice has been exercised on legitimate considerations and not arbitrarily, there is no reason why the Court should entertain a petition under Art. 226.

13. Hence, before entertaining a writ petition and passing any interim orders in such petitions, the Court must carefully weigh conflicting public interests. Only when it comes to a conclusion that there is an overwhelming public interest in entertaining the petition, the Court should intervene.'

Again in Paragraphs 15 and 16, Court said that-

'15. Where the decision making process has been structured and the tender conditions set out the requirements, the Court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the Court should hesitate to intervene.

16. It is also necessary to remember that price may not always be the sole criterian for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert committee's special knowledge plays a decisive roll in deciding which is the best offer. Price offered is only one of the criteria. The past record of the tenderers, the quality of the goods or services which are offered, assessing such quality on the basis of the past performance of the tenderer, its market reputation and so on, all play an important roll in deciding to whom the contract should be awarded. At times, a higher price for a much better quality of work can be legitimately paid in order to secure proper performance of the contract and good quality of work which is as much in public interest as a low price. The Court should not substitute its own decision for the decision of an expert evaluation committee.'

Finally in Paragraphs 26 and 27, the Court held:

'26. In the present case, it was submitted that the terms and conditions of the tender specified requisite qualifying criteria before a person could offer a tender. The criteria which were so laid down could not have been relaxed because such a relaxation results in a denial of opportunity to others. In support, the respondents relied upon Ramana Dayaram Shetty v. International Airport Authority of India. In that case, the Court had held judicial review as a check on the exercise of arbitrary powers by the State and as a check on its power to grant largess. The Court also observed that when the exercise of discretion is structured in terms of the tenders which have been invited, the discretion must be exercised in accordance with the norms so laid down. The same view has been taken by this Court in Premium Granites v. State of TN, where this Court observed that where rational non-discriminatory norms have been laid down for granting of tenders, a departure from such norms can only be made on valid principles. These principles enunciated by this Court are unexceptional.

27. In the present case, however, the relaxation was permissible under the terms of the tender. The relaxation which the Board has granted to M/s. Raunaq International Limited is on valid principles looking at the expertise of the tenderer and his past experience, although it does not exactly tally with the prescribed criteria. What is more relevant, M/s. I.V.R. Construction Limited who have challenged this award of tender themselves do not fulfil the requisite criteria. They do not possess the prescribed experience, qualifica-tion. Therefore, any judicial relief at the instance of a party which does not fulfil the requisite criteria seems to be misplaced. Even if the criteria can be relaxed both for M/s. Raunaq International Limited and M/s. I.V.R. Construction Limited, it is clear that the offer of M/s. Raunaq International Limited is lower and it is on this ground that the Board has accepted the offer of M/s. Raunaq International Limited. We fail to see how the award of tender can be stayed at the instance of a party which does not fulfil the requisite criteria itself and whose offer is higher than the offer which has been accepted. It is also obvious that by stopping the performance of the contract so awarded, there is a major detriment to the public because the construction of two Thermal Power Units, each of 210 MW, is held up on account of this dispute. Shortages of power have become notorious. They also seriously affect industrial development and the resulting job opportunities for a large number of people. In the present case, there is no over-whelming public interest in stopping the project. There is no allegation whatsoever of any malafides or collateral reasons for granting the contract to M/s. Raunaq International Limited.'

11. In AIR India Limited (supra), the Apex Court in Paragraph 7 said that-

'7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decisions of this Court in Ramana Dayaram Shetty v. International Airport Authority of. India, Fertiliser Corporation Kamgar Union (registered) v. Union of India, CCE v. Dunlop India Limited, Tata Cellular v. Union of India, Ramniklal N. Bhutta v. State of Maharashtra and Raunaq International Limited v. I. V.R. Construction Limited. The award of a contract whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are paramount are commercial considerations. The Slate can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations, before finally deciding to accept one of the offers made to it. Price need not always be the sole criterian for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and can not depart from them arbitrarily. Though said decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by malafides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to allconcerned. Even when some defect is found in the decision making process, the Court must exercise its discretionary power under Art. 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether the intervention is called for or not. Only when it comes to a conclusion that over-whelming public interest requires interference, the Court should intervene.'

12. Having referred to the important decisions of the Apex Court, we advert to the merits of the present appeals.

Clause 6 of the bid document provides for 'Amendment of Bid Documents'. It envisages as under:--

'6. Amendment of Bid Documents.-

6.1 At any time, prior to the date for submission of bids, the purchaser may, for any reason, whether at its own initiative or in response to a clarification requested by a prospective Bidder, modify the bid documents by amendments.

6.2 The amendments shall be notified in writing or by TELEX or FAX to all prospective bidders on the address intimated at the time of purchase of bid document from the purchaser and these amendments will be binding on them.

6.3 In order to afford prospective bidders reasonable time to take the amendments into account in preparing their bids, the purchaser may, at its discretion, extend the deadline for the submission of bids suitably.'

Therefore, in view of Clause 6 of the Bid document, the respondents could at any time prior to the date of submission of bids make amendment of a bid document either of its own or in response to clarification requested by a prospective bidder but the amendment so made has to be notified in writing or by TELEX or FAX to the prospective bidders on the address intimated at the time of purchase of bid document and these amendments are binding on them and with a view to afford the prospective bidders reasonable lime to take the amendments into account in preparing their bids, the purchaser can at its discretion extend the dead line for the submission of bids suitably.

12A. The respondents considered representations by interested parties and took decision at the highest level before making the amendments to the bid document. These were intimated to prospective bidders. To facilitate them in preparing their bids after taking into consideration the amendments, time as extended. Power to make amendment is there in the bid documents. It has been exercised on representations by parties. Result of amendment is that it has enlarged the scope for participation by more bidders. Amendment has taken place before any of the bidders had submitted the bid documents. It was uniformly applicable to all bidders. With this background, it is difficult to hold that amendment was carried out with a view to eliminate the petitioner and benefit the new bidders.

13. The respondents have pointed out that the original formula wasunjust. New entrants could not participate, otherwise better as compared to the petitioner. The result of the amendment is participation by larger number of bidders thereby getting the best for execution of the projects. The award of contract by a private party or by a public body or State is essentially a commercial transaction. While arriving at a decision, the paramount considerations are commercial. The State can choose its own method to fix terms and conditions and take decision in that regard. Unless the decision is arbitrary, malafide and against public interest, judicial scrutiny is not possible. Court can not examine the merits of the decision. It can examine the decision making process to see whether it is afflicted by arbitrariness, discrimination, violation of norms, standards and procedures laid down in this regard with a view to eliminate one against the other. If the power has been exercised for collateral purpose, it can be annulled since all State actions must conform to Art. 14 of the Constitution of India of which non-arbitrariness is a fundamental facet. State is expected to exercise the powers vested in it fairly, reasonably and for public good though some discretion 'play in the joints' has to be given to it. However, where decision has been taken on legitimate considerations and not arbitrarily, there is little scope for interference by Court. There may be a case of overwhelming public interest where Court may think to intervene but where decision has been taken for bona fide considerations, Court may not interfere even if the same does not strictly answer the requirement of procedure provided the changed criteria is uniformly applied to all.

14. From explanation of the respondents, we are not in a position to read malafide intention on their part to eliminate the petitioner from the tenders. Therefore, contention of Shri Tankha, learned senior counsel that criteria evolved by the amendment was tailor-made to suit new bidders and knock off the petitioner from the ring resulting in closure of industry, rendering hundreds of workers jobless, can not be accepted. The amendment in the bid documents was effected before anybody had offered the tender. After amendment, tender opening date was postponed to enable every one to submit tender. Thus, rule of the game was not changed in between but was known to every one before participation in the tenders. Decision in M/s. Monarch Infrastructure (P) Limited's (supra) turns on different facts. In that case, deletion of Clause 6 (a) of the tender book took place after offers were received and the Court took the view that terms of the tender having been deleted after the players had entered into the arena, it was like changing the rules of the game after it had begun. In the present case, amendment to bid documents was effected before receipt of tenders to enable the tenderers to apprise themselves with the changed criteria and time for submission of tenders was extended. The petitioner also submitted tenders under the changed criteria on 31-3-2000, the last date for submission of tenders.

15. It is paramount public interest that projects relating to public utility services are assigned and completed in time since delay in execution thereof would inevitably result in loss to public and enormous escalation in expenditure. Entirely fresh exercise would result in substantial set back to the march towards development in the field of telecommunications apart from loss to the public.

16. Shri Rohtagi, learned Additional Solicitor General contended that the petitioner is estopped from challenging the amendment after having participated in the bid with eyes open. Reliance is placed on 1986 Suppl. SCC 285. Shri V.K. Tankha, learned Senior Counsel for the petitioner submitted that it could not challenge the amendment at initial stage since the petitioner was not in know of consequence as to a higher delivery rating of the bidders and the amendment was challenged when petitioner came to know about it. Having held that the respondents could legally and legitimately amend the bid document, in the facts and circumstances of this case, it is not necessary to examine this question.

17. Lastly, Shri Tankha, learned senior counsel submitted that representation of the petitioner is pending consideration with the respondents and they should be directed to decide the same compassionately so that the petitioner does not suffer closure and large number of labourers rendered jobless. Learned Additional Solicitor General submitted that in case the representation is found having merit, certainly, benefit would be extended to the petitioner out of 20% supply available with the Central Government in addition to the work allotted as per tenders since the Central Government has no bias against the petitioner. We appreciate the stand taken by the learned Additional Solicitor General. Let the representation be decided within a month.

No other submission was advanced by learned counsel for parties.

18. What emerges out of the aforesaid discussion is that there is no merit in these appeals and they are dismissed. Parties are, however, left to bear their respective costs.

19. Letters Patent Appeals dismissed.


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