IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:
10. / 01 / 2013 CORAM THE HONOURABLE MR.JUSTICE D.HARIPARANTHAMAN W.P.NOS.32302, 30303 AND 3274.OF 201.AND CONNECTED MISCELLANEOUS PETITIONS W.P. NO.32302 / 2012 -------------------- R.Chinnusamy .. Petitioner Vs.
1. The State of Tamil Nadu Rep. by its Principal Secretary to Government Social Welfare and Nutritious Meal Programme Department Fort St. George, Chenna”
009.
2. The Principal Secretary / Special Commissioner Integrated Child Development Scheme Pammal Nallathambi Street, Tharaman”
113.
3. M/s.Rajam Poultry Farm Rep. by its Sole Proprietor S.Saravana Kumar (R3 impleaded as per order dated 07.12.2012 in M.P.Nos.3, 3 / 2012 in W.P.Nos.32302 & 32303 / 2012) 4. M/s.Arogya Food Ltd., Rep. by its Deputy General Manager Mr.Sabari Ganesh (R4 impleaded as per order dated 19.12.2012 in M.P.No.4/2012 in W.P.No.32302 / 2012) 5. M/s.Fair Deal Food Ventures Pvt. Ltd., Rep. by its Deputy General Manager J.Luke Razario Joe (R5 impleaded as per order dated 19.12.2012 in M.P.No.5/2012 in W.P.No.32302 / 2012) .. Respondents PRAYER: Writ petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorari, to call for the records comprised in G.O.Ms.No.264, Social Welfare and Nutritious Meal Programme (NMP.3) Department, dated 17.10.2012 on the file of the first respondent and the consequential tender notification No.3566/ROC/NMP/2012, dated "nil" on the file of the second respondent, quash the same. For Petitioner : Mr.R.Krishnamurthy Senior Counsel for Mr.R.Karthikeyan For Respondent-1 : Mr.A.Navaneethakrishnan Advocate General Assisted by Mr.M.C.Swamy Special Government Pleader For Respondent-2 : Mr.P.H.Aravind Pandian Additional Advocate General Assisted by Mr.S.Gunasekaran Government Advocate For Respondent-3 : Mr.Balan Haridas For Respondent-4 : Mr.N.G.R.Prasad for Mrs.Lesi Saravanan For Respondent-5 : Mr.A.L.Somaiyaji Senior Counsel for Mr.E.K.Kumaresan W.P. NO.32303 / 2012 -------------------- V.Nachimuthu .. Petitioner Vs.
1. The State of Tamil Nadu Rep. by its Principal Secretary to Government Social Welfare and Nutritious Meal Programme Department Fort St. George, Chenna”
009.
2. The Principal Secretary / Special Commissioner Integrated Child Development Scheme Pammal Nallathambi Street, Tharaman”
113.
3. M/s.Rajam Poultry Farm Rep. by its Sole Proprietor S.Saravana Kumar (R3 impleaded as per order dated 07.12.2012 in M.P.Nos.3, 3 / 2012 in W.P.Nos.32302 & 32303 / 2012) 4. M/s.Arogya Food Ltd., Rep. by its Deputy General Manager Mr.Sabari Ganesh (R4 impleaded as per order dated 19.12.2012 in M.P.No.4/2012 in W.P.No.32303 / 2012) 5. M/s.Fair Deal Food Ventures Pvt. Ltd., Rep. by its Deputy General Manager J.Luke Razario Joe (R5 impleaded as per order dated 19.12.2012 in M.P.No.5/2012 in W.P.No.32303 / 2012) .. Respondents PRAYER: Writ petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorari, to call for the records comprised in G.O.Ms.No.264, Social Welfare and Nutritious Meal Programme (NMP.3) Department, dated 17.10.2012 on the file of the first respondent and the consequential tender notification No.3566/ROC/NMP/2012, dated "nil" on the file of the second respondent, quash the same. For Petitioner : Mr.R.Muthukumaraswamy Senior Counsel for Mr.R.Karthikeyan For Respondent-1 : Mr.A.Navaneethakrishnan Advocate General Assisted by Mr.M.C.Swamy Special Government Pleader For Respondent-2 : Mr.P.H.Aravind Pandian Additional Advocate General Assisted by Mr.S.Gunasekaran Government Advocate For Respondent-3 : Mr.Balan Haridas For Respondent-4 : Mr.N.G.R.Prasad for Mrs.Lesi Saravanan For Respondent-5 : Mr.A.L.Somaiyaji Senior Counsel for Mr.E.K.Kumaresan W.P. NO.32741 / 2012 -------------------- V.Muthu .. Petitioner Vs.
1. The State of Tamil Nadu Rep. by its Principal Secretary to Government Social Welfare and Nutritious Meal Programme Department Fort St. George, Chenna”
009.
2. The Principal Secretary / Special Commissioner Integrated Child Development Scheme Pammal Nallathambi Street, Tharaman”
113.
3. M/s.Fair Deal Food Ventures Pvt. Ltd., Rep. by its Deputy General Manager J.Luke Razario Joe (R3 impleaded as per order dated 19.12.2012 in M.P.No.3/2012 in W.P.No.32741 / 2012) .. Respondents PRAYER: Writ petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus, to call for the records in G.O.Ms.No.264, Social Welfare and Nutritious Meal Programme (NMP.3) Department, dated 17.10.2012 of the first respondent and consequential tender notification No.3566/ROC/NMP/2012 dated nil of the second respondent and quash the same and consequently direct the respondents to float Block wise monthly tender for procurement of Eggs under the Nutritious Meal Programme in the interest of small farmers. For Petitioner : Mr.S.Srinivasan For Respondent-1 : Mr.A.Navaneethakrishnan Advocate General Assisted by Mr.M.C.Swamy Special Government Pleader For Respondent-2 : Mr.P.H.Aravind Pandian Additional Advocate General Assisted by Mr.S.Gunasekaran Government Advocate For Respondent-3 : Mr.A.L.Somaiyaji Senior Counsel for Mr.E.K.Kumaresan COMMON ORDER All these three writ petitions seek to quash the Government Order in G.O.(Ms)No.264, Social Welfare and Nutritious Meal Programme Department, dated 17.10.2012. All the petitioners are said to own Poultry Farms. 2.In the impugned Government Order, the Government reintroduced the State Level Tender System for procurement of Eggs under Puratchi Thalaivar M.G.R. Nutritious Meal Programme and under Integrated Child Development Services Scheme. 3.Prior to the said Government Order, Eggs were procured District- wise, on monthly basis, by calling for tenders for procurement of Eggs to the aforesaid Nutritious Meal Programme / Scheme. The impugned order provides for State-wise procurement and also on annual basis. 4.The Government Order contemplates procurement of "AGMARK" quality Eggs. The Government Order also has fixed the contract period for supply of Eggs as one year. The District Collectors concerned will be monitoring the supply and quality of Eggs and they will be assisted by the District Level Monitoring Committee and Block Level Committee. The composition of District Level Monitoring Committee and Block Level Committee are stated in the Government Order. The Government Order also contemplates that Rule 31 of the Tamil Nadu Transparency in Tenders Rules, 2000 shall be followed, as it may not be possible for a single tenderer to supply the entire quantity at the State level. 5.The Government Order contemplates a Tender Committee under the Chairmanship of Principal Secretary / Special Commissioner, Integrated Child Development Services Scheme and the Committee Members are the Director of Social Welfare and representative of Finance Department, Animal Husbandry Department, Chief Accounts Officer of the Office of Directorate of Social Welfare / Integrated Child Development Services Scheme. 6.Based on the Government Order, tenders were called for in Tender Notification No.3566/NMP/2012 dated nil for supply of 60 Lakhs Eggs per day, as per "Agmark" specification, for a period of one year to the Nutritious Meal Programme / Scheme. The conditions as stipulated in the tender notification are as follows: (i)The tenderer also should be a producer or supplier of Eggs as per "Agmark" specifications. (ii)The tenderer should possess "Agmark" specification for Eggs at any date before the publication of tender. (iii)The tenderer should supply atleast 60% of the tendered quantity as per "Agmark" specifications. (iv)The tenderer should have minimum 7 years of experience in supplying Eggs or any other food material to any Department of Government. (v)The tenderer should have executed a contract with any Department of the Government for having supplied Eggs or any other food material as per specifications, for a value not less than Rs.90 Crores. (vi)The tenderer should also have satisfactorily executed a contract with any Department of the Government for having delivered Eggs or any other food material for a minimum of 200 delivery points every month during the preceding three months. (vii)The average annual turn over of Eggs or any other food material should not be less than Rs.75 Crores per annum. (viii)The tenderer should have submitted the tender forms in two parts. Part I cover should contain technical bid and a demand draft for Rs.3 Crores as Earnest Money Deposit (EMD) and also a Demand Draft for Rs.21,000/- towards cost of application. Part II cover should contain price bid. (ix)The tenderer should quote for any quantity not less than 60% of the tender quantity, otherwise, the tender application will be summarily rejected. (x)The tenders would be opened on 10.12.2012. After evaluation of technical bid, the price bid shall be opened. (xi)The tenderer who has quoted the lowest rate, shall be declared as L-1 tenderer. The successful tenderer has to supply Eggs, at the same rate, for a period of one year. (xii)If the L-1 rate is found to be excessive, negotiation will be conducted with the tenderer in order to secure the best possible procurement price. It is not binding on the part of the competent authority to accept the lowest or any other tender. (xiii)The successful tenderer should remit Security Deposit equivalent to 3% of the contract value subject to the maximum of Rs.9 Crores inclusive of EMD. The Security Deposit along with EMD will be refunded to the tenderer, only after satisfactory performance of contract. (xiv)The monthly indent and the supply should be done twice a week, as per the supply schedule given in the Annexure-IV. (xv)The Director of Social Welfare shall, without prejudice to its other remedies under the contract, deduct from the contract price, as liquidated damages, a sum equivalent to the percentage at the rate of 5% per month of the value of undelivered portion of Eggs as per the schedule of requirements, if the supplier fails to deliver any or all of the goods specified in the contract. Further, once such deductions reaches a maximum of 6% of the contract value, the contract will also be terminated and the security deposit will be forfeited to the extent of loss caused to the Department, if there are frequent interruptions in the supply and if there are delay in supply. 7.According to the petitioners, the impugned Government Order and the tender conditions are unreasonable and arbitrary. 8.In all these writ petitions, the first respondent is the Government and the second respondent is the Principal Secretary / Special Commissioner, Integrated Child Development Scheme. They filed counter affidavits in all these writ petitions, refuting the allegations. The counter affidavits dealt with the entire issue in detail, as to why the Government switched over to annual procurement at State Level, instead of monthly procurement at District Level. It is stated therein that the Accountant General has also brought to the notice of the Government the issue of huge expenditure incurred by Government towards issue of multiple advertisements for issuing district-wise tender for all districts. Further, it is stated that the policy of the Government cannot be questioned in the matter of procurement of Eggs. 9.The third respondent viz. M/s.Rajam Poultry Farm, Namakkal, the fourth respondent viz. M/s.Arogya Food Ltd., Chennai and the fifth respondent viz. M/s.Fair Deal Food Ventures Pvt. Ltd., Chennai, got impleaded in both the writ petitions in W.P.Nos.32302 and 32303 of 2012. The fifth respondent, who was impleaded in W.P.Nos.32302 and 32303 of 2012 got impleaded as third respondent in W.P.No.32741 of 2012. They filed counter affidavits supporting the impugned Government Order and the tender conditions. 10.Heard the submissions made on either side. 11.Mr.R.Krishnamurthy, learned Senior Counsel appearing for the petitioner in W.P.No.32302 of 2012 submitted that the impugned Government Order has introduced "Agmark" specification as eligibility criteria, as the first time, for the procurement of Eggs. The same is totally not necessary, as the procurement has been done without such specification for decades. He has taken serious objection for the same. The learned Senior Counsel has strenuously contended that the changing of the procurement system from District Level to State Level would lead to monopoly in the Egg trade and therefore, the impugned Government Order and the consequential tender notification shall be set aside. The learned Senior Counsel submitted that the Traders in other food materials are brought in the tender notification as eligible persons. He has taken serious objection for qualifying the Traders in food materials, other than Eggs. He has also taken serious objection for fixing the annual turn over of Eggs or any other food material at Rs.75 Crores per annum and also requiring the tenderer to furnish Rs.3 Crores as EMD. According to him, these onerous conditions are deliberately prescribed, so as to award contract to a person of the choice of the authority. The learned Senior Counsel submitted that the policy of the Government failed to satisfy the test of reasonableness. The change of policy that was made in the impugned Government Order is totally arbitrary and was made with an ulterior motive to favour someone in their mind and to restrict the scope of participation. The policy was faulted on the grounds of unreasonableness, arbitrariness, unfairness and malafides. He has relied on the following judgment in support of his submission: (i) RELIANCE ENERGY LTD. AND ANOTHER VS. MAHARASHTRA STATE ROAD DEVELOPMENT CORPORATION LTD. AND OTHERS [2007 (8) SCC 1.12.Mr.K.Muthukumaraswamy, learned Senior Counsel for the petitioner in W.P.No.32303 of 2012, submitted that the procurement of Eggs at State Level from District Level and also on annual basis from monthly basis, are totally arbitrary. According to him, the rates of Eggs are changing every month and also the rates are different for different areas and therefore, fair procurement of Eggs would only be on monthly basis, at District Level. Since the impugned Government Order has brought change in the monthly procurement to annual procurement, that too on State-wise, the same is liable to be set aside. 13.Mr.S.Srinivasan, learned counsel for the petitioner in W.P.No.32741 of 2012, submitted that the impugned Government Order causes serious hardship to the Poultry Farmers and they could never meet the onerous eligibility conditions as prescribed in the impugned Government Order and the tender notification. According to him, since the supply of Eggs are at the Block Level and at various destination points, the procurement shall be done at the Block Level so as to facilitate the Farmers to participate in the tender process. He was not agreeable even with the District level procurement. He sought to quash the impugned order. 14.On the other hand, the learned Advocate General as well as the learned Additional Advocate General sought to sustain the impugned Government Order by submitting that it was the policy decision of the Government to revert to State wide annual tender basis, after taking into account the various aspects. They submitted that monthly tender resulted in huge expenses, by way of advertisement and also there was loss of man power. The Government want to supply quality Eggs by prescribing "Agmark" eggs and there is nothing wrong in ensuring quality, particularly when the purpose is to feed the poor children and the same cannot be questioned by the petitioners. The tender conditions cannot be termed as arbitrary and they sought for dismissal of the writ petitions. The learned Advocate General and the learned Additional Advocate General submitted that the judicial review on the realm of contract is very limited and the Honourable Supreme Court and this Court have taken consistent view in not interfering in the tender process, unless the terms are so arbitrary, warranting interference. They relied on the following judgment:- (i) BALCO EMPLOYEES' UNION VS. UNION OF INDIA AND OTHERS [2002 (2) SCC 333.15.The learned counsels for the impleaded respondents made submissions on the same lines, as that of the learned Advocate General and learned Additional Advocate General and they relied on the following judgments: (i) MICHIGAN RUBBER (INDIA) LIMITED VS. STATE OF KARNATAKA AND OTHERS [2012 (8) SCC 216.(ii) ASSOCIATION OF REGISTRATION PLATES VS. UNION OF INDIA AND OTHERS [2005 (1) SCC 679.(iii) DIRECTORATE OF EDUCATION AND OTHERS VS. EDUCOMP DATAMATICS LTD. AND OTHERS [2004 (4) SCC 19]. 16.I have considered the submissions made on either side and perused the materials available on record. 17.The Nutritious Meal Programme / Scheme is a celebrated Scheme in Tamil Nadu benefiting so many lakhs of school going poor children. The scheme was originally introduced in 1923 in Madras Corporation. The popular Nutritious Meal Programme was introduced in 1982 with the clear objective of increasing the enrollment in school and also to increase the nutrition value among school children. 18.Further, supply of Egg was introduced in the Scheme in 1989 at a moderate scale of one Egg per two weeks, which was raised to one Egg per week and two Eggs per week and subsequently, 5 Eggs per week from the year 2010. 19.Eggs for this purpose were procured from Egg Traders, through open tenders, on monthly wise, quarterly wise and yearly wise at various points of time. That is, procurement was also done on yearly basis. Therefore, the petitioners cannot have any objection for procurement of Eggs through annual tender system. Likewise, the tender was based on District wise and also at times, on State wide basis. As per the figures given by the Government, the total beneficiaries are 61,75,460 children. Therefore, the Government Order / impugned notification is for procurement of 60 Lakhs Eggs per day. The supply has to be made twice a week by the successful tenderer and the indent will be made on monthly wise. The delivery points are 590 NMP centres under the control of Directorate of Social Welfare and 1342 Anganwadi centres under the control of Commissionerate of Integrated Child Development Services Scheme, in Chennai alone. In each District, there are supply points at Block Level. As stated above, since earlier Eggs were procured on annual tender basis as well as on State wide basis, the same cannot be termed as arbitrary. The same was already a practice. Hence, terming the State-wide Annual Tender as arbitrary is not acceptable to me. In any event, it is the policy of the Government that cannot be interfered with, when the same is not arbitrary. The objection of the petitioners for procurement of "Agmark" Eggs are also not well founded. Since the supply of Eggs is for school going children, the procurement of "Agmark" quality Eggs cannot be faulted. It is not the case of the petitioners that "Agmark" quality Eggs are not available. 20.The impugned Government Order contemplates procurement of quality Eggs. In this regard, para 8(II) of the Government Order, is extracted hereunder: "8(II) With a view to procure good quality eggs, appropriate Indian standards with numbers may be incorporated in the technical specifications of product so as to comply with the provisions of Rule 13(2)(b) of TIT Act, 1998 and Rules, 2000. The procurement of quality eggs should be ensured by specifying procurement of only "AGMARK" Quality eggs in the technical specifications of tender document." 21.The learned Senior Counsel for the petitioner in W.P.No.32303 of 2012 submitted that there are fluctuations in the prices of the Eggs in the day today market and the price is also depending upon the area. Therefore, procurement of Eggs through annual tender basis would be illogical. I am not able to appreciate the same, as the Government Order contemplates arriving of average price in the past 20 years and the details are also stated in para 6(iii) of the Government Order. 22.The attack of the petitioners on the other conditions of tender also is not sustainable. The grievance of the petitioners is that the traders in other food materials are permitted to participate in the tender. Further, fixation of Rs.3 Crores as EMD is exorbitant. The eligible turn over to participate in the tender was fixed at a minimum of Rs.75 Crores. According to the petitioners, all these fixations are to favour somebody in the minds of the authority. 23.Firstly, when the procurement is for 60 Lakhs Eggs per day, the tender condition shall also will certainly have bearing with such procurement. Therefore, I do not find any arbitrariness in fixing Rs.3 Crores as EMD and also annual turn of Eggs or other food materials at Rs.75 Crores. 24.Secondly, the allegation is that the said onerous fixations are meant to favour someone in the minds of the authority. The allegations are made without giving any particulars. Such vague allegations have no basis / proof. This Court has no other option except to reject those vague allegations. 25.The next contention of the petitioners that the State Wide tender would result in monopoly in Egg trade also has no basis. The supplier is chosen by a selection process through tender system and the same cannot be found fault with. It is a different matter if the Government has chosen to appoint somebody of their choice whimsically, then the same can be questioned. Here, the Government want to select a supplier, by calling for tenders, as per the Tamil Nadu Transparency in Tenders Rules, 2000, and hence, the petitioners are not correct in finding fault with the same. In fact, the Government Order also makes it clear that it was not possible for a single tenderer to supply entire quantity at State Level. Therefore, the Government thought of applying Rule 31 of the Tamil Nadu Transparency in Tenders Rules, 2000. 26.The learned Advocate General and the learned Additional Advocate General have made a categorical statement that the Government could have more than one supplier selected in the tender process. 27.The Honourable Supreme Court has held in clear terms that the Courts cannot interfere in the contractual matters and there is only limited scope of judicial review in the realm of contract. 28.Mr.R.Krishnamurthy, learned Senior Counsel appearing for the petitioner in W.P.No.32302 of 2012 has relied on a judgment of the Supreme Court in RELIANCE ENERGY LTD. AND ANOTHER VS. MAHARASHTRA STATE ROAD DEVELOPMENT CORPORATION LTD. AND OTHERS [2007 (8) SCC 1.and submitted that the Supreme Court held that the State policy, even in contractual matters, shall satisfy the test of reasonableness, otherwise, the policy decision would be unconstitutional. 29.There cannot be any quarrel over the proposition laid down in the said judgment as stated by the learned Senior Counsel for the petitioner in W.P.No.32302 of 2012. But the said judgment cannot render any assistance to the petitioners. In that case, the State of Maharashtra floated a global tender for completing Mumbai Trans Harbour Link between Mumbai and Navi Mumbai. The appellants therein, namely, Reliance Energy Ltd., and Hyundai Engineering and Construction Company Ltd., a company incorporated in Korea, formed a consortium and they participated in the tender process. One of the tender conditions was relating to the assessment of financial capacity, based on the financial statements of three financial years. One of the criteria laid down was that the consortium should have Net Cash Profit (NCP) of Rs.200 Crores. The appellants therein stood excluded from the second stage of bidding process due to the methodology adopted by the authority in the calculation of Net Cash Profit. This was questioned before the Bombay High Court and the Bombay High Court dismissed the writ petition. The matter was taken to the Supreme Court. The Supreme Court held that the State had not specified the accounting norms with clarity, for calculation of Net Cash Profit and this had led to confusion and uncertainty, leading ultimately to the disqualification of the appellants from the bidding process. The important recognised accounting norm for calculating profits had been kept out, without any reason and therefore, the decision to exclude the appellants on that basis is arbitrary, whimsical and unreasonable. The Supreme Court also held that in order to provide certainty, the norms / standards specified should be clear and if there is vagueness or subjectivity in the norms specified, the same may result in discriminatory treatment. In this regard, it is relevant to extract para 38 of the said judgment, which reads as follows: "38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This legal certainty is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of level playing field." In the said circumstances, the Supreme Court allowed the appeal holding that the appellants were erroneously excluded from the second stage of bidding process. 30.It is not the case of the petitioners herein that there is vague and unclear terms in the impugned Government Order calling for tender. On the other hand, their contention is that exorbitant EMD was prescribed and higher amount of turn over was fixed as eligibility condition. Therefore, the aforesaid judgment of the Supreme Court relied on by the learned Senior Counsel for the petitioner in W.P.No.32302 of 2012 is of no use to the petitioners. 31.The learned Advocate General and the learned Additional Advocate General has relied on a judgment of the Supreme Court in BALCO EMPLOYEES' UNION VS. UNION OF INDIA AND OTHERS [2002 (2) SCC 333.and submitted that the policy decision of the State cannot be normally interfered with and unless the decision is contrary to any statutory provision or the Constitution, the Courts cannot examine relative merits of different economic policies. In this regard, paras 46 and 92 of the said judgment are extracted hereunder: "46. It is evident from the above that it is neither within the domain of the courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical.
92. In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the court." 32.In my view, the aforesaid judgment, relied on by the learned Advocate General and learned Additional Advocate General, squarely applies to the case on hand. This Court cannot interfere with the policy decision of the Government, for a State-wise tender, on annual basis. 33.Further, the learned counsels appearing for the impleaded respondents have relied on the judgment of the Supreme Court in DIRECTORATE OF EDUCATION AND OTHERS VS. EDUCOMP DATAMATICS LTD. AND OTHERS [2004 (4) SCC 19.and submitted that the terms of the tender prescribing eligibility criteria cannot be normally interfered with, unless the terms are totally arbitrary. In the said case, the Directorate of Education, Government of Delhi, took up 115 schools for imparting computer education for the year 2000-2001. Tenders were called from the firms having turn over of Rs.2 Crores. The total contract was for a sum of Rs.14.62 Crores. The successful lowest tenderer was not in a position to carry out the project in 115 schools. Hence, the contract was divided among four parties. In the next year viz. 2001-2002, again tenders were invited from the firms having a turn over of Rs.2 Crores for imparting computer education in 275 schools. This time, the total cost of the project was Rs.30 Crores. Here again, the lowest tenderer was not in a position to take up the entire project and the project was given to seven others also. While so, in the year 2002-2003, 748 schools were to be covered and the project cost was to the tune of Rs.100 crores. This time, the competent authority fixed the eligibility condition of turn over as Rs.20 Crores. The fixation of Rs.20 Crores was challenged before the Delhi High Court. The Delhi High Court allowed the writ petition. Thereafter, the matter was taken to the Supreme Court. The Supreme Court has held that the Courts cannot interfere with the terms of the tender and thus, allowed the appeal and set aside the order of the Delhi High Court. In this regard, para 12 and the relevant passage in 13 of the said judgment are extracted hereunder: "12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide. 13........... We do not agree with the view taken by the High Court that the term providing a turnover of at least Rs 20 crores did not have a nexus with either the increase in the number of schools or the quality of education to be provided. ....................... As a matter of policy the Government took a conscious decision to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies which is a relevant consideration while awarding such a big project. Moreover, it was for the authority to set the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice................" Therefore, I am of the view that the said judgment is an answer to the points raised by the writ petitioners herein, questioning the tender conditions. 34.The learned counsels appearing for the impleaded respondents have also relied on the judgment of the Supreme Court in ASSOCIATION OF REGISTRATION PLATES VS. UNION OF INDIA AND OTHERS [2005 (1) SCC 679.and submitted that the allegation made by the learned Senior Counsel for the petitioner that the State-wide procurement of Eggs would lead to monopoly in the Egg trade, has no substance, in view of the aforesaid judgment. It was a case relating to notices inviting tenders for supply of High Security Registration Plates for motor vehicles. The main grievance of the petitioner therein was that the notices inviting tenders contained conditions to favour companies having foreign collaboration. The grievance of the petitioner therein was that entrusting the work of supply of high security registration plates to a single licence plates manufacturer in a State for a period of 15 years would create monopoly in favour of selected bidders to the complete exclusion of all others in the field. That is, their contention is that the action of the State would create monopoly in favour of few parties. The said contention was rejected by the Supreme Court. In this regard, paras 39 and 44 of the said judgment are extracted hereunder: "39. The notice inviting tender is open to response by all and even if one single manufacturer is ultimately selected for a region or State, it cannot be said that the State has created a monopoly of business in favour of a private party. Rule 50 permits the RTOs concerned themselves to implement the policy or to get it implemented through a selected approved manufacturer.
44. The grievance that the terms of notice inviting tenders in the present case virtually create a monopoly in favour of parties having foreign collaborations, is without substance. Selection of a competent contractor for assigning job of supply of a sophisticated article through an open-tender procedure, is not an act of creating monopoly, as is sought to be suggested on behalf of the petitioners. What has been argued is that the terms of the notices inviting tenders deliberately exclude domestic manufacturers and new entrepreneurs in the field. In the absence of any indication from the record that the terms and conditions were tailor-made to promote parties with foreign collaborations and to exclude indigenous manufacturers, judicial interference is uncalled for." 35.The learned counsels appearing for the impleaded respondents have also relied on the judgment of the Supreme Court in MICHIGAN RUBBER (INDIA) LIMITED VS. STATE OF KARNATAKA AND OTHERS [2012 (8) SCC 216.and submitted that in the said case, the Supreme Court considered various judgments on the issue and laid down that the Courts cannot interfere with the eligibility conditions prescribed in the tender applications. In that case, Karnataka State Road Transport Corporation floated a tender for supply of tyres, tubes and flaps, prescribing certain pre-qualification criteria. The pre-qualification criteria was questioned before the Karnataka High Court. The Karnataka High Court rejected the writ petition and the matter was taken to the Supreme Court. The Supreme Court dismissed the appeal. While dismissing the appeal, the Supreme Court held that the scope and approach to be adopted in the process of judicial review in these types of cases, have been settled by a long line of decisions. In this regard, paras 10 and 23 of the said judgment are extracted hereunder: "10.This Court, in a series of decisions, considered similar conditions incorporated in the tender documents and also the scope and judicial review of administrative actions. The scope and the approach to be adopted in the process of such review have been settled by a long line of decisions of this Court. Since the principle of law is settled and well recognised by now, we may refer to some of the decisions only to recapitulate the relevant tests applicable and approach of this Court in such matters. 23.From the above decisions, the following principles emerge: (a) .................. (b) Fixation of a value of the tender is entirely within the purview of the executive and the 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) ..........
24. 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." 36.Applying the aforesaid principles, I am of the view that the petitioners cannot question the pre-qualification criteria fixed in the tender application. 37.The learned Senior Counsel appearing for M/s.Fair Deal Food Ventures Pvt. Ltd., also relied on a judgment of the Supreme Court in GLOBAL ENERGY LTD. AND ANOTHER VS. M/S.ADANI EXPORTS LTD., AND OTHERS [AIR 200.SC 2653.and the relevant passage from para 10 of the said judgment is extracted hereunder: "10.The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. ..............." 38.For all the aforesaid reasons, all these writ petitions fail and the same stand dismissed. No costs. Consequently, connected miscellaneous petitions are closed. TK To 1. The Principal Secretary to Government Government of Tamil Nadu Social Welfare and Nutritious Meal Programme Department Fort St. George, Chenna”
009.
2. The Principal Secretary / Special Commissioner Integrated Child Development Scheme Pammal Nallathambi Street, Tharaman”
11.