Jai Balaji Industries Limited, Kolkata and another v Union of India, Service and others
Gauhati High Court
28 January 2011
The Order of the Court was as follows :
1. The challenge in this writ petition is to the Cls. 2.3.2(1), 2.3.2(2), 2.4.1(a), 2.4.1(c) and 2.4.2(a) in the Notice Inviting Tender (NIT) bearing No. PIU/JICA/GHTY/13(8a)/2010/40 and PIU/JICA/GHTY/ 13(8b)/2010, dated 2.9.2010, Annexure P 4A to the writ petition, for bid for package 8a (International Competitive Bidding) and for bid for package 8b (International Competitive Bidding) respectively.
2. As agreed to by the learned Counsel for the parties and in terms of the earlier order of this Court as well as considering the nature of the prayer of the petitioners and the question involved, this writ petition is taken up for disposal at the admission stage itself as ordered by this Court.
3. Initially, the writ petition was filed against the respondent No. 1 to 6. Later on, the respondent No. 7 to 9 were brought on record in pursuance of the order of this court dated 23.11.2010.
4. Heard Mr. S.K. Kapoor, learned senior Counsel assisted by Mr. K.R. Surana, learned Counsel appearing for the petitioners. Also heard Mr. K.M. Mazumder, learned Counsel for the Respondent No.1 and 2, Mr. N. Dutta and Mrs. M. Hazarika, learned senor Counsel assisted by Ms. A. Ajitsaria, learned Counsel for the respondents 3 to 6, Mr. Jayanta Mitra, learned senior Counsel assisted by Mr. Padam Khaitan, Mr. K.K. Dutta, Mr. Sanjib Roy, learned Counsel for the respondent No.7, Mr. U. Bhuyan, learned senior counsel assisted by Mrs. A. Verma and Mr. A. Hazarika and Mr. Uday Shekhar Roy Choudhury, learned Counsel for the respondent No.8. and Mr. A.K. Bhattacharjee, learned senior Counsel assisted by Mr. A.K. Choudhury, learned Counsel and Mr. Diganta Lahkar for the respondent No. 9.
Pleaded case of the parties
5. The brief facts of the case needed to be discussed are as under:
Notices inviting tender dated 2.9.2010 for biding for Package 8a and 8b respectively were issued by the Respondent No.5, the Chief Executive Officer of respondent No. 4, the Guwahati Metropolitan Development Authority, (GMDA) a statutory body corporate, inviting sealed bid from eligible source countries for procurement of supply, delivery and stacking of ductile iron pipes (item rate contract), ISI marked class K9 conforming to IS 8329: 2000 or equivalent international standard (hereinafter referred to as package 8a) and for procurement of supply, delivery and stacking of ductile iron pipes (item rate contract), ISI marked class K9 conforming to IS8329:2000 or equivalent international standard, (hereinafter referred to as Package 8b) respectively. Pursuant to and in furtherance of the said notices inviting tender, the writ petitioner, a company registered under the Companies Act, 1956, namely, Jai Balaji Sponge Ltd, an organization producing steel materials like world class ductile iron pipe and having all necessary licenses and permits for manufacturing such ductile iron pipes both K7 and K9 classes of diameter ranging from 100 mm to 1000mm with present production capacity above 6000 M.T of ductile iron pipes per month and being a holder of an appropriate license granted by the Bureau of Indian Standards (hereinafter referred to BIS) for manufacturing ductile iron pipes, (for short DI pipe) purchased the bidding documents from the office of the respondent No.5, the Chief Executive Officer, Guwahati Metropolitan Development Authority (for short GMDA), Guwahati, Assam. Like the petitioner, (1) the Tata Metalic Kubota Pipes Ltd, (2) Jindal Saw Ltd, the respondent no. 8 herein, (3) Brahmaputra Infrastructure Ltd, (4) Electrosteel Castings Limited, the respondent No. 7 herein, (5) Electrotherm (India) Ltd. and (6) Lanco Industries Ltd, the respondent No.9 herein also purchased the bidding documents and the petitioners along with others appeared in the pre-bid discussion. But ultimately as the petitioner was not able to show the average annual production turnover for five years and receipt of certificate payment up to 1900 million for five years as well as minimum average production turnover in terms of length of 5 lacs meters of all sizes for at least one year and was not having five years general production experience in manufacturing and producing of DI pipes and was further unable to show performance experience in the shape of ” proving track record” of good performance of DI pipes for last three years stipulated by the guidelines, they became absolutely ineligible, disqualified and excluded from participating in the tender process.
6. The petitioner in Para-14 of the writ petition pleaded, inter alia, that if every public institution in the world were to stipulate the existence of five years of supply and certification history as a qualifying criterion for a market player, no new market player would be able to forge any ground in the domestic or international market and axiomatically no new market player would ever be born. Accordingly, for the sake of healthy competition, it is necessary that only relevant criteria are engrafted into the roster of qualifying conditions for participation in a tender involving mere supply of material , more so when India is presently reeling under a huge supply-demand gap of ductile iron pipes.
7. In Paragraph- 19 of the writ petition, the petitioner pleaded that similar tender floated by diverse public authorities involving supply of D.I pipes of stipulated quality and specifications clearly show that eligibility conditions pertaining to antiquity of manufacturing process or antiquity of subsistence of standard organizations license are irrelevant for the purpose of job of mere supply. On obtaining information regarding the similar tenders floated by various States, in none of those tenders, there remained any eligibility criterion or stipulation pertaining to antiquity of manufacturing process or antiquity of the subsistence of license granted by the BIS.
8. It is further pleaded by the petitioners in the writ petition that by introducing the impugned clauses in the tender process, the respondent GMDA excluded the writ petitioner No.1 from the competition in the tender process though it has all requisite qualification as well as license issued by the BIS and able to produce the DI pipes of all sizes as per IS 8329:2000 as required and necessary for participating in the tender process. According to the petitioners, excluding it from competition in the tender process is grossly arbitrary, unfair and biased and based on wholly unreasonable ground. Not only that, due to exclusion of the petitioners from the competition of the tender process, the GMDA violated the Constitutional right of the petitioners as protected by Art. 19 of the Constitutionand also denied the equal protection and opportunity and as such, violated the fundamental rights of the petitioners as protected u/arts. 14 and 19 of theConstitution. Not only that, the respondents also violated the rights of the petitioners u/art. 21 and 300A as protected thereunder.
9. While replying by filing the affidavit to the affidavit in opposition filed by the respondents 3,4 and 6, the petitioners denied the contention of the respondents, inter alia, that JICA is a necessary or proper party for deciding the instant writ petition or that the writ petition is bad for non-joinder of JICA, as alleged or sought to be alleged. However, ultimately, the writ petitioners pleaded therein that in the event this Court is pleased to hold that the presence of JICA is necessary for an effectual adjudication of the issue involved in the instant writ petition, the Court may be pleased to add JICA as respondent in the writ petition. It is further pleaded that though the reference has been made to a loan agreement executed on 31.3.2009 between the JICA and the President of India, but the GMDA denied to disclose about the loan Agreement in the instant writ petition. The petitioner also denied that the bid documents for contract Page- 8a and 8b were prepared in terms of the JICA sample documents and guidelines as contended in the affidavit in opposition.
Further contention therein is that in view of the objection raised by the petitioner regarding the vagueness in the clauses relating to type test, cement lining smoothness test and portability test etc., the respondents GMDA subsequently deleted all these three clauses and those deletion were done without prior consent of the JICA and unilaterally. Not only that, apart from the aforesaid deletion, the GMDA also without prior consent of JICA, unilaterally reduced the eligibility clause relating to average turn over as well as qualifying length. In writ petition, though there was no pleading regarding to Competitive Law, but in Paragraph-10 of the affidavit in reply, a new plea has been taken for guiding condition made in the writ petition, inter alia, that in pursuit of globalization, it is always necessary that a particular market should be geared to face the steepest competition from within the country and outside. The State and/or any authority u/art. 12 of the Constitution of India is under an obligation to ensure that there is free and fair competition in India and to forbear from any device or mechanism which may cause an appreciable adverse effect on competition. The right to free and fair competition is an integral part of the fundamental freedom as contemplated by the provisions of Art. 19(1)(g) of the Constitution of India. The elimination of all players save and except two players, as has been in the instant case, shall definitely directly and/or indirectly determine the sale price of the subject pipes and there is strong likelihood of the same directly or indirectly resulting in bid rigging or collusive bidding either for the purpose of siphoning off public funds by fixing high price or by fixing a predatory price for the purpose of totally eliminating other contenders from the market.
10. All the respondents in the writ petition have appeared at this stage, but except the respondents 3,4 and 6, none has filed affidavit in opposition. When the matter was taken up, the learned Counsel for the respondents 7 to 9 submitted that the private respondents i.e. the respondents 7 to 9 would not file any affidavit in opposition and they would rely upon the contention made by the respondents 3,4 & 6 in their affidavit in opposition for making out their case.
11. The respondent No. 3, 4 and 6 before countering the contention made in the writ petition in their affidavit painted a facial matrix on certain facts which is necessary for determining the face value of the NIT in question. These are as follows: That the drinking water crisis tops the list of civic woes in the Guwahati city as many areas are yet to be covered by any water supply scheme. The Guwahati Municipal Corporation (GMC), the Assam Urban Water Supply, the Sewerage Board and the Public Health Engineering (PHE) Department together supply drinking water to around 30 percent population in the city and the current public piped water supply within Guwahati covers only about 30% of the city area, mostly in south Central zone. Not only that even within this area due to the degraded water treatment plants and the high water leakage rate i.e. around 38% in 2008, the provision of water at individual households is limited to 2 to 4 hours a day. Those citizens without access to piped water supply rely on ground water, but the water quality is not appropriate for drinking with high level of dissolved solids and iron contents with fluoride contamination. As estimated, the current population is expected to be more than double and triple by 2025 and 2040, respectively and due to rapid growth of urban population and economy, the gap between water demand and water supply has been widening. On the contrary, the city being situated on the bank of Brahmaputra river, which is one of the major rivers in India, has advantage of having huge water sources available. Therefore, providing treated surface water to every citizen is a long due and very much essential. Keeping in mind the next twenty years, a master plan for Guwahati Metropolitan Area 2025 sets the target that the 100% houses will be supplied with piped filtered water by the year 2025. In this back ground, the water supply scheme has been conceived and it has assumed immense importance in the very survival of the citizens of Guwahati and a project is being prepared for the said purpose. Any delay for implementation of the project would cause untold and irreparable harm to the lives of the citizens which will get compounded with each passing day.
12. For fulfilment of the project as aforesaid, there was exchange of note between the Government of India and the Government of Japan concerning Japanese loan for promoting economic stabilization and development efforts of India. Like the Guwahati Water Supply project, some other projects were also prepared by other States. As per the said Notes, loan would be extended in accordance with the relevant laws of Japan to the Government of India by the Japan International Cooperation Agency (JICA), which is an independent Govt. Agency of Government of Japan that coordinates the Official Development Assistance (ODA) for the Government of Japan which currently extend loan for developing countries for the purpose of implementing their projects like the Guwahati Water Supply Project. The loan would be made available to cover payments made by the Indian Executing Agencies for implementing the project and the Government of India will ensure that the products and/or services are procured in accordance with the guidelines of procurement of JICA. As per the exchange of notes a sum of 29453 million yen was allocated for the Guwahati Water Supply Project and the disbursement period was four years after the date of coming into force of relevant loan agreement which would be concluded after the JICA is satisfied about the feasibility including the environment consideration of the project.
13. In the light of the contents of the exchange of notes as stated supra, the Loan Agreement between the JICA and the President of India was signed on 31.3.2009 with certain stipulation made thereunder.
14. S. 4 (1) of the Loan Agreement provides that the borrower shall authorize the GMDA for implementation of the project and S. 4(2) of the said agreement also provides that the borrower shall cause the GMDA to employ consultants for the implementation. As per Schedule 4 of the Loan Agreement, procurement of all goods and services except consulting services to be financed out of the proceeds of the loan shall be in accordance with the guidelines for procurement under JBIC ODA loans dated October, 1999 and employment of consultant to be financed out of the proceeds of the loan, shall be in accordance with the guidelines for employment of consultants under JBIC ODA loans dated October 1999. Under the aforesaid Loan Agreement, the contract value estimated to be not less than 500 million Japanese yen, if the borrower wishes to adopt procurement procedure other than the International competitive bidding, a request for review has to be submitted to JICA and JICA shall inform of concurrence by means of a notice regarding procurement methods. In terms of the Schedule 4 aforementioned, for pre-qualification in case of contract, the estimated value of which is not less than 500 million Japanese yen, after the pre-qualified firms have been selected, the same has to be submitted to JICA for its review and concurrence with a report on the selection process supported by reasons thereon for the choice made, attaching all relevant documents together with a request for a review of the results of the pre qualification. The borrower is also to submit to JICA for JICA’s reference such other documents which the JICA may request. When JICA has no objection to the said documents, JICA shall inform the borrower accordingly by means of a Notice regarding result of pre-qualification.
15. Before sending a notice of award to the successful bidder, the borrower shall submit to JICA, for their review and concurrence, the analysis of bids and proposal for award, together with a request for review of analysis of bids and proposal for award and further submit for JICA’s reference, such other documents related to the award as JICA may request. When JICA has no objection to the said documents, JICA shall inform the borrower regarding analysis of bids and proposal for award.
16. If the borrower wishes to reject all bids or to negotiate with the lowest evaluated bidder with a view to obtaining a satisfactory contract, the borrower shall inform JICA of its reasons, requesting prior review and concurrence. When JICA has no objection it shall inform the borrower of its concurrence. In the case of a re-bidding, all subsequent procedures shall be substantially in accordance with the procedures as enumerated before.
17. In the Agreement between the Union of India and the JICA, it is further provided that with regard to any contract the value of which is estimated to be not less than three billion Japanese Yen, in addition all the procedures stipulated thereunder, some steps are to be taken. These are:
(i) Before advertisement and/or notification of pre-qualification, the borrower shall submit to JICA for review and concurrence, the pre-qualification evaluation criteria, together with a request for review of pre-qualification evaluation criteria. JICA reserves the right to request the borrower to submit documents relevant to pre-qualification for JICA’s reference. When JICA has no objection to the said criteria, they shall inform the borrower regarding pre- qualification evaluation criteria. Any important modification by the borrower of the said criteria shall require the prior written concurrence of JICA thereto.
(ii) Before inviting bids, the borrower shall submit to JICA for JICA’s review and concurrence the notices and instructions to bidders, bid form, proposed draft contracts, specifications, drawings and all other documents relating to bidding, together with a request for review of tender documents. JICA reserves the right to request the borrower to submit documents related to the tender for JICA’s reference. When JICA has no objection to the said documents, JICA shall inform the borrower. Any important modifications by the borrower of the said documents shall require the prior written concurrence of JICA thereto.
(iii) When the two envelops bidding procedure is adopted, the borrower shall before opening price proposals, submit to JICA, for JICA’s review and concurrence, the analysis of technical proposals, together with a request for review and such relevant documents as JICA may request. When JICA has no objection, JICA shall inform the borrower regarding analysis of technical proposals.
18. It is further pleaded in the affidavit in opposition submitted by the respondent No. 3, 4 and 6 that the entire water supply project is divided into nine contract package. The summary of the contract package and the contract wise progress of the main water supply facility are as under:
| Contract Package No. | Scope Original Actual/Planned | Remarks/Status | ||||
| Start | Completion | Start | Completion | |||
| C#01 | North Zone Intake facilities, Raw water pumps & Rising Mains, WTP (38MLD), Clear Water Pumps & Rising Main, & Service Reservoir (1no.) including setting of water Testing Laboratory | Jan-2012 | Mar-2014 | Jan-2011 | May-2013 | Bid documents issued to 9 pre-qualified bidders on 20 August 2010 Bids are due on 08 November 2010 |
| C#02 | North Zone-Installation of Distribution network except procurement of DI pipes | Jan-2012 | Mar-2015 | Apr-2011 | Apr-2013 | PQ notice issued on 13 October 2010 Bid document is expected to be issued to pre-qualified bidders on 18 December 2010 |
| C#03 | South Central Intake facilities, Raw Water Pumps & Rising Mains, WTP (200 MLD) & Clear Water Sump and Pumps including setting of Water Testing Laboratory and new Jal Board office | Jan-2012 | Mar-2014 | Jan-2011 | Oct-2013 | Bid documents issued to 7 pre-qualified bidders on 20 August 2010 Bids are due on 08 November 2010 |
| C#04 | South Central Zone Transmission Mains (27.139 km Gravity Main, 5.18 km Pressure Maims), Reservoirs (1MBR, 6 Service Reservoirs, 3 Sub-zone Reservoirs with access roads) and booster pumps in Narakasur | Jan-2012 | Mar-2013 | Feb-2011 | Aug- 2013 | Bid documents issued to 6 pre-qualified bidders on 18 October 2010. Bids are due on 03 December 2010 |
| C#05 | South Central Zone-Installation of Distribution network in Ramsa Hill & Amiya Nagar Distribution Areas except procurement of DI pipes | Jan-2012 | Mar-2015 | Apr- 2011 | Oct-2013 | PQ notice issued on 13 October 2010 Bid document is expected to be issued to pre-qualified bidders on 18 December 2010 |
| C#6 | South Central Zone-Installation of Distribution Pipes in Geeta Nagar & Lechu Bagan Distribution Areas except procurement of DI pipes | Jan-2012 | Mar-2015 | May- 2011 | May-2014 | PQ notice issued on 13 October 2010 Bid document is expected to be issued to pre-qualified bidders on 31 December 2010 |
| C#7 | South Central Zone-Installation of Distribution Pipes in Narakasur & Sonaighuli Distribution Areas except procurement of DI pipes | Jan-2012 | Mar-2015 | May- 2011 | Oct-2014 | PQ notice issued on 13 October 2010 Bid document is expected to be issued to pre-qualified bidders on 18 January 2011 |
| C#8a & C#08b | Procurement of DI pipes for Distribution Area (about 1000 km) | Jan- 2012 | Mar-2015 | Dec-2010 | Jun-2013 | Tender notice issued on 02 September 2010 Bids are due on 02 November 2010 |
19. The further case of the respondents is that under the terms and conditions of the loan Agreement, the bid documents for contract package No. 8a and 8b, the contract package of the Water Supply Project for procurement of DI pipes which is the subject matter of the instant writ petition , were prepared in terms of the relevant JICA sample documents and guidelines, the draft bid documents were forwarded to the Chief Representative of the JICA India office for the perusal and concurrence of JICA, as evident from Annexure-B to the affidavit in opposition.
20. On 18.8.2010, the Chief Representative of JICA informed the Chief Executive Officer, GMDA, the respondent No.6 herein, requesting the GMDA to incorporate the recommendation, mentioned, inter alia, the analysis on compliance with JICA procurement guidelines and analysis on evaluation criteria and submit a compliance report along with a revised bid documents to the said Chief Representative of JICA.
21. In response to the aforesaid letter dated 18.8.2010, the OSD & Contract Manager, PIU for JICA funded Guwahati Water Supply Project, submitted the draft bid documents vide his letter dated 27.8.2010, Annexure-D to the affidavit in opposition. Thereafter, the concurrence of the bid documents was granted by the JICA vide its letter dated 1.9.2010 wherein it is mentioned , inter alia, in accordance with Schedule 4, S. 3(2)(b) of the Loan Agreement No. ID-P 201 dated March 31, 2009 between Japan International Cooperation Agency and the President of India that they have no objection to the bid documents as proposed by GMDA for the contract package mentioned therein subject to GMDA allowing for sixty days time for submission of bids.
22. It has been further stated that in accordance with the Loan Agreement, prior to opening of the price proposals, GMDA was requested to submit the results of the evaluation of the Initial filter and technical bids to JICA for concurrence.
23. On 2.9.2010, the OSD & Contract Manager, JICA funded Guwahati Water Supply Project requested the M/s Vibgyor Media Solutions Pvt. Ltd. Guwahati for publishing advertisement regarding invitation for bid for package 8a for JICA funded water supply project and the same was published in “The Economic Times” (New Delhi, Mumbai and Kolkata edition) and ” The Assam Tribune” in the issue dated 3.9.2010. In this Notice Inviting bids, it was provided that a pre-bid meeting with the bidders shall be held in the office of the Chief Executive Officer, Guwahati Metropolitan Development Authority, Guwahati on 2.9.2010 at 15:00 hours and the bidders interested to participate were advised to attend the pre-bid meeting before submission of bid.
24. Accordingly, pre-bid meeting was attended by seven bidders, namely, (i) Jindal Saw Ltd. (ii) Jai Balaji Industries Ltd. (iii) Tata Metallic Kubota Pipes Ltd. (iv) Brahmaputra Infrastructure Ltd. (v) Electrosteel Castings Ltd. (vi) Electrotherm (India) Ltd (vii) Lanco Industries Ltd. The queries and the issues raised by the writ petitioner in the present writ petition were also raised by the writ petitioner in the pre-bid meeting. The queries of the bidders and responses of the GMDA to the queries and the amendments to the bidding documents by way of addendum were all submitted by the GMDA to JICA for its perusal and concurrence by its letter dated 4.10.2010, Annexure-G to the affidavit in opposition.
25. When the eligibility Clause regarding the average turnover of INR 3000 million as provided in Cl. 2.3.2(1) of the bid document was reduced to INR 1900 million and the qualifying length of 10 lac meter as provided for in 2.3.2(2) of the bid document was reduced to 5 lacs meter in terms of the sample bid documents and in terms thereof, the JICA by its letter dated 6.10.2010 granted it’s no objection to the said amendments as proposed by GMDA to contract No. 8a and 8b.
26. Upon receipt of such concurrence, the bid document was put to circulation. Accordingly, bid documents were issued to all the aforementioned seven parties and only four parties, namely, (i) Lanco Industries Ltd., (ii) jindal Saw Ltd., (iii) Electrosteel Castings Limited, (iv) Electrotherm (India) Ltd submitted their bids. The bids were opened on 2.11.2010 and the report of initial filter which was assessed by the Project Management Consultant, the analysis of technical proposals by the Project Management Consultant, together with a request for review of the Analysis of Technical Proposals have been forwarded to JICA for its perusal and concurrence. Only after receiving concurrence of JICA on the initial filter and technical bids, the financial bids would be open.
27. The further case of the respondents 3,4 and 6 is that the present writ petition is not maintainable and the same is bad for non-joinder of necessary parties, like the JICA, which funded for the Guwahati Water Project on certain terms and conditions and no steps whatsoever can be taken without the concurrence of JICA and the said project is to be implemented solely on terms of JICA.
28. In order to avail the loans, terms and conditions provided for in the Loan Agreement and the procurement guidelines of JICA has to be followed in letter and spirit. The JICA is not only the mere provider of funds, but it has most important role to play as one of the player in the implementation of the project and selection of bidders and the JICA exercises close watch over the entire project including the procurement process and if the same is not in accordance with the procurement guidelines, the JICA may refuse to provide the loan for that purpose. JICA having been empowered to exercise the power of review and concurrence over the whole project, JICA is the most vital player and integral part of the project. In absence of JICA, no contract can be completed. Therefore, for non-impleadment of JICA as a party in the writ proceeding, the writ petition itself is liable to be dismissed on that count alone.
29. Another plea of the respondents 3,4 and 6 is that the writ petitioners participated in the pre-bid meeting held on 18.9.2010, but denied the allegations of the petitioners, inter alia, that certain relaxations were made in Cl. 2.3.2(1) and 2.3.2(2) of the tender document in order to let in a particular domestic player who would have otherwise been ineligible. Such allegations of the petitioners are absolutely incorrect, imaginary and baseless.
30. The subject of the tender is for manufacture and supply of DI pipes of given specification and standard by a successful tenderer and not merely for procuring DI pipes of the given specification and standard by a successful tenderer from any source and effecting supply like that of a Carrying and Forwarding Agent. It is the manufacturer of DI pipes who is called upon to execute the tender of supply of DI pipes. Hence the contention of the petitioners that the tender is for the purpose of mere supply of DI pipes of the given specification is not correct.
31. The respondents 3, 4 and 6 in their affidavit in opposition also stated that the instant contract is not only confined to the quality and standard but also with the quantity of the pipes to be supplied within a span of 30 months. In the instant case, the contract pipes of 100mm to 600mm diameter of various length aggregating to approximately 1000 km of the requisite standard and quality is required and in the tender of such nature, the competence and capacity to produce such huge quantity of class K9 DI pipes plays a very vital and important role and this can only be judged by taking into consideration the past performance of the tenderer over the last few proximate years.
32. The further contention of the said respondents is that Cl. 4.2.1 of the Bid documents provides that a bidder should have a certificate issued by the BIS or equivalent international standard operating for a minimum period of 5 years to manufacture/produce DI pipes of diameter 100 mm to 600 mm class K as per ISI 8329.2000 or equivalent international standard. The order dated 30.10.2009 read with this Clause would clearly show that any international bidder with a valid international and subsisting certificate can bid, provided he obtains a BIS certificate from the BIS prior to bidding. Therefore, the contention of the petitioner, inter alia, that the impugned Clauses of tender a primary disqualifying factor both in the domestic as well as the international market are incorrect.
33. The respondents 3, 4 and 6 further stated in their affidavit that the writ petitioners tried to canvass their private interest over the greater public interest by contending that the requirement of five years experience is irrelevant and is used only as a mechanism to disqualify the players like the petitioners from the tender process which are not correct. But the fact remains that the past experience in production of DI pipes is essential to ensure that the prospective bidders have proven track record and capability to manufacture quality pipe consistently in the past and also capable to ensure proper, smooth and timely delivery of DI pipes during the contract period to maintain public interest as well as the condition imposed by funding authority JICA and this is not for the first time the respondents GMDA incorporated the eligibility criteria in the bid documents. They have also placed instances of various authority, like GMDA, eligibility criteria were stipulated in the bid documents of various states stipulated similar eligibility criteria in the bid document, those authorities are Kerala Water Authority, Kolkata Metropolitan Development Authority, Government of Rajasthan PHED, Chandernagore Municipal Corporation, Hoogly, Govt. of West Bengal, Asansol Durgapur Development Authority, Tripura, Meghalaya PHE, Kolkata Municipal Corporation, Assam Urban Water Supply & Sewerage Board, Arunachal Pradesh (Public Health Engineering Department), State Trading Corporation of Sikkim, Asansol Municipal Corporation, JNNURM Scheme for Water supply at Agartala, Mahestala Municipality details of those conditions are appeared in para 18 of the affidavit in opposition.
34. The next contention of the aforesaid respondent 3,4 and 6 in their counter is that the legal position is by this time settled that the terms of tender being contractual in nature, the authority who invites tender is empowered to frame its own terms and conditions and a tenderer has no right to ask for a specific condition according to his suitability and also has no right to change the said terms and conditions on the plea of unreasonableness, irrationalness and arbitrariness when the same does not suit it on the ground of freedom to carry on its right to business. Right to business is also not unqualified, as it would be evident from Art. 19(6) of the Constitution.
Questions arise for consideration:
35. In the instant case, the questions arise for consideration are whether the writ petition is maintainable on the ground of availability of alternative, efficacious and adequate statutory forum; non impleadment of necessary party whose rights would be directly affected by the order which is sought to be obtained; whether the condition in the bid documents relating to average annual production turnover for five years as well as requirement of certified payments up to Rs. 1900 million for five years and minimum average production turn over in terms of length of 5 lakh meters for all sizes of DI pipes for at least one year is unreasonable and irrational; whether the aforesaid conditions are unwarranted and/or illegal and for creating monopoly in favour of any particular bidder in view of the provisions of S. 3 and S. 4 of the Competition Act ?
Submission of the Counsel of the rival parties
36. Mr. Kapoor at the beginning of his argument would contend that though the tender in question is global in nature, but no players from the outside country participated in the game and only nine national players obtained the bid documents and out of them, six players including the petitioners admittedly participated in the pre-bid discussion and after the said discussion, the purchaser GMDA amended the clauses in the bid documents, inter alia, reduced the annual production turnover of INR 3000 million or equivalent in Japanese Yen calculated to INR 1900 million and the qualifying length of 10 lacs m to 5 lacs m, but the production period with last five years and performance experience as mentioned in Cl. 2.4.2 wherein it is mentioned that bidder should demonstrate to have proven track record of good performance of D.I. pipes for last three years as per IS 8329:2000 or equivalent international standards, remain unchanged.
37. While referring to Cls. 2.3.2, 2.4.1 and 2.4.2 of the bid documents, Mr. Kapoor contends that the conditions of five years production experience with proven track record of good performance of D.I. Pipes for last three years as per IS 8329:2000 or equivalent international standard are wholly unreasonable and unfair as those conditions were included in the bid documents only to exclude the new entrepreneurs like the petitioners whose turnover was less than 3000 million and who do not have production experience for last five years.
38. He further contended that for excluding the players like the petitioner, no reason has been assigned either in the bid documents i.e. NIT or in the affidavit in opposition filed by the respondents GMDA or the State respondents. Reduction of quantity and length at the pre-bid discussion can be said to have been made capriciously and whimsically only to accommodate the respondent No.9, Lanco Industries Ltd, as the said respondent was not initially qualified to fulfill the conditions of the un-amended clause of the NIT, the learned Counsel contended. His further contention was to subsequent change of the terms in the experience clause, which is according to him, prima facie, discriminatory and unreasonable, thus violative of Art. 14 of the Constitution of India, and, as such, the terms relating to experience needed to be quashed.
39. He again submitted that when the purchaser can reduce the original terms relating to the production turnover and the experience, then it can be presumed that it may have the power to reduce the condition. Those terms are not essential criteria, but a general criteria for the bid and more so, the purchaser should not see the past experience of a player and it should see whether the DI pipes which will be used in the water project is as per IS 8329:2000 and there is no dispute that the petitioners are producing the pipes for which bid is invited, he contended.
40. His another contention, inter alia, is that there is also no dispute about the production capacity of the petitioners as the petitioners have the capacity to produce 2100 M.T per month and it is also not the case of the respondent GMDA that the quality of the DI pipes produced by the petitioner is not upto the mark. Hence, it can be said that the petitioner is a competent player for supply of tender materials for which notice has been invited.
41. He further contended that Cl. 2.4.1(a)(c) is also not clear whether a player having BIS license require minimum five years experience for manufacturing/producing DI pipes of diameter 100mm to 600mm class K9 as per IS 8329:2000 or equivalent international standards, at least 5 years from date of issue of such license.
42. According to the learned Counsel, such clause creates confusion amongst the players who intended to participate in the bid in question. Not only that, in Cl. 2.4.1, the purchasers intended to get a player having experience of five years license issued by BIS or as per IS 8329:2000 standard and in Clause-2.4.2 , it is stated that the bidders should demonstrate to have a proven track record of good performance of DI pipes for last three years as per IS 8329:2000 or equivalent international standard. Therefore, issuance authority of NIT also were not clear what is the actual requirement and thus those clauses are also ambiguous. He further contended that GMDA require for the water project in question about 5 lacs DI pipes within two months and the petitioners are in a position to supply that quantity of pipes before the period of twenty months as the petitioners have been producing 6000 M.T D.I pipes in every month.
43. Mr. Kapoor referring to the Cl. 11.1 of the bid documents also submits that Cl. 11.1 empowers the authority to amend the bid documents as it is stated in the said clause that at any time prior to the deadline for submission 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 Bidding documents by issuing addendum. Not only that, in Cl. 11.2, it is further noted that the addendum shall be part of the bidding documents, pursuant to Cl. 9.1, and shall be communicated in writing or by fax to all prospective bidders who have received the Bidding documents, and will be binding on them. Therefore, even there was scope of amendment of the retrospective clauses which are impugned in the instant writ petition for amendment to save the public exchequer, but the authority did not do that only for making provisions for player private respondents though the respondent No.9 was initially not eligible for participation in the game. Thus GMDA authority with an oblique motive declined to amend the impugned clauses of the bid documents only to exclude the player- petitioners and other similarly situated players and company from the competition which is wholly unfair and unreasonable in view of Sub-S. (1) of S. 3 of the Competition Act, 2002.
44. According to him, after the pre-bid meeting, the petitioners made representation for allowing the petitioners for participating in the tender process after exclusion of the conditions in the bid documents, but non-consideration of the prayer and debarring the petitioners from participating in the competition only on the ground of non-fulfillment of the terms of experience clause is nothing but deprivation of legitimate expectation of the petitioner. Not only that the same is also unfair irrational, arbitrary and contrary to the Wednesbury’s principle of unreasonableness.
45. In support of his aforesaid contention, he placed reliance upon the decision of the Apex Court in the case of Shimnit Utsch India Private Limited and another Vs. West Bengal Transport Infrastructure Development Corporation Ltd. and others, (2010) 6 SCC 303 2010 Indlaw SC 389 wherein the Apex Court while examining the terms and conditions of the tender whether those were valid or not, noted that the facts may vary from case to case, but the right to judicial review of tender conditions relating to a contract has been applied and is undeniable.
46. He further contended that GMDA being an ‘enterprise’ while acquiring DI pipes through a contract having dominant position indirectly imposing unfair and discriminatory conditions in purchase proceeding excluded the petitioner and similarly situated players from the competition in the market area of DI pipes and thus the said contract of the GMDA is nothing but an abuse of dominant position for which itself the impugned clauses are liable to be struck down and the petitioners should be allowed to participate in the tender process. More so, due to exclusion of the petitioner as a player from the game , the respondent GMDA authority deprived the petitioners and persons working under the petitioner No.1, their right to life as laid down by the Constitution makers u/art. 21 of theConstitution as right to life includes also right to equal opportunity. Not only that the Apex Court also in I.R Coelhi Vs. The State of T.N., (2007) 2 SCC 1 2007 Indlaw SC 12 noted that Art. 21 and 14 are heart of the chapter of fundamental rights and they cover various aspect of life.
47. Mr. Kapoor further contended that in case of supply of materials like DI pipes, there should not be any experience criteria for participation in the bid as the same has no connection with the quality of the materials and even if the terms are incorporated in the bid documents like the impugned Clauses, then the same cannot be treated as an essential criteria, rather the same has to be treated as a general criteria and it is a settled law that the general criteria can be altered at any time in the interest of public finance as well as public interest. In the instant case also, the present petitioner is in a position to supply the DI pipes at a lesser cost than the other private respondents.
48. He further urges that applying the doctrine of equal opportunity to the intended players for participation in the bid , it was the duty of the GMDA authority to follow the doctrine of level playing field as the same is an important concept while construed the Art. 19(1)(g) of the Constitution by the Constitution makers. According to him, when Art. 19(1)(g) concepts the fundamental right to carry on business to a company, the said company is entitled to invoke the said doctrine of level playing field and at this era, the globalization competition is an important factor which is to be kept in mind by the purchaser/tender inviting authority. Due to non-consideration of the aforesaid doctrine of level playing field, the petitioner’s though equally placed bidders in the field of production of DI pipes excluded from the competition which violates the right of the petitioners under Art. 19(1)(g) and Art. 21 of the of the Constitution as the whole action of the respondents tendering authority is denying the opportunity of competing in the tender process. One of the players, the respondent No.9, was not eligible prior to pre-bid meeting and in the pre-bid meeting, the authority reduced the conditions relating to turn over and length. Consequently, the said respondents became eligible when the GMDA authority reduced the condition in the bid clauses. Therefore, the petitioners also may be allowed to participate in the tender process reducing the past experience as impugned in the instant writ petition.
49. In support of his aforesaid contention, he relied upon the case of Reliance Energy Ltd. and another Vs. Maharashtra State Road Development Corpn. Ltd. and others, (2007) 8 SCC 1 2007 Indlaw SC 1544, particularly para-36,37 and 38 of the said report. According to him, this is the only case where the Apex Court discussed about the Competition Law. It would be useful for this Court if the aforesaid Para-36 to 38 of the said reports are reproduced herein. Accordingly, the same is reproduced hereunder:
“36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by Constitutional principles which govern the proper exercise of public power in a democracy Art. 14 of the Constitution embodies the principle of “non-discrimination”. However, it s not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Art. 21 of the Constitution. The said Art. 21 refers to “right to life”. It includes “opportunity”. In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelhi v. State of T.N, (2007) 2 SCC 1 2007 Indlaw SC 12, Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life, “Level playing field” is an important concept while construing Art. 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Art. 19(1)(g) confers fundamental right to carry on business to a company, it s entitled to invoke the said doctrine of “level playing field”. We may clarify that this doctrine is, however, subject to public interest. In the world of globalization, competition is an important factor to be kept in mind. The doctrine of “level playing held is an important doctrine which is embodied in Art. 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. “Globalization”, in essence, is liberalization of trade. Today India has dismantled license raj. The economic reforms introduced after 992 have brought in the concept of “globalization”. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of “level playing field” embodies in Art. 19(1)(g). Time has come, therefore, to say that Art. 14 which refers to the principle of “equality” should not be read as a stand alone item but it should be read in conjunction with Art. 2 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforesaid doctrine of “level playing field”. According to Lord Goldsmith, commitment to the “rule of law” is the heart of parliamentary democracy. One of the important elements of the “rule of law” is legal certainty. Art. 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of “reasonableness”, then such an act or decision would be unConstitutional.
37. In Union of India v. International Trading Co. (2003) 5 SCC 437 2003 Indlaw SC 472, the Division Bench of this Court speaking through Pasayat, J. had held: P (SCC p.445, paras 14-15).
“14. It is trite law that Art. 14 of the Constitution applies also to matters of government policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unConstitutional.
15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Art. 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wife sweep of Art. 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basis requirement of Art. 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.”
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”.
50. Mr. Kapoor while supporting the case of the petitioners, mainly focused on the following legal points. While he was elaborating the aforesaid points, he contended that in view of the provisions of Competition Act, 2002, particularly, the provisions of S. 3 and 4 of the said Act which has been given effect to in the year 2009, the Court has the power to strike down the conditions as impugned in this case on the ground that the said conditions are not only arbitrary, unfair, unreasonable, fanciful and contrary to the provisions of Article 14, 19, 21 and 300A of the Constitution, but those conditions are also void being contrary to the provisions of S. 3 and S. 4 of the Competition Act as those terms are anti-competitive and in abuse of dominant position, respectively.
51. In support of his aforesaid contention, Mr. Kapoor took this Court through an English decision rendered by the House of Lords in Garden Cottage Foods Ltd Vs. Milk Marketing Board, [1984] 1 A.C. 130 wherein the House of Lords took note of Art. 85 and 86 which is para-materia to S. 3 and 4 of the Competitive Act and held that a breach of duty imposed by art. 86 not to abuse a dominant position in the common market or in a substantial part of it, can thus be categorized in English law as a breach of statutory duty that is imposed not only for the purpose of promoting the general economic prosperity of the common market but also for the benefit of private individuals to whom loss or damage is caused by a breach of that duty.
52. Referring to the aforesaid views of the House of Lords, he again contended that House of Lords further held that the rights given by the provisions regarding abuse of dominant position were not affected by the negative form of the prohibition of all kinds of conduct and were equal to the positive form of an obligation to do all acts.
53. He further contended that the statute imposes a statutory duty not to make anti competitive agreements. The statute also imposes a statutory duty not to abuse a dominant position which are equivalent to personal right vested in individual which can be enforced and also are in the public interest or for the common good and are to be considered for the general economic prosperity of the public the same being now law in India and the Government and its instrumentalities which are enterprises are bound to apply for complying the same uniformly in all their transactions.
54. He further contended that on repealing the Monopolies and Restrictive Trade Practices Act, 1969 which contained some provisions regarding monopolistic trade practices and restrictive trade practices the Legislature enacted the Competition Act. According to him, the restrictive trade practice was defined, inter alia, as a practice which may have the effect of restricting competition in any manner. His further contention is that while dealing with the definition in the context of MRTP Act, the Supreme Court in Mahindra & Mahindra Ltd. Vs. Union of India, AIR 1979 SC 798 1979 Indlaw SC 155 held that in such case, the enquiry has to be made whether the practice has the effect of preventing distorting or restricting competition. The Supreme Court further said that the enquiry must depend on the existing constellation of economic facts and circumstances relating to the particular trade. The peculiar facts and features of the trade would be very much relevant in determining whether a particular trade practice has the actual or probable effect of diminishing or preventing competition.
55. He further contended that the test of reasonableness which pervades the Constitutional scheme, particularly, with reference to Article 14, 19 and 21 was also considered by the Apex Court in Union of India and ors Vs. Hindustan Development Corporation and ors, (1993) 3 SCC 499 1993 Indlaw SC 1085 wherein the Apex Court considered whether the policy of the Government in the matter of fixation of price and in allotment of the largess from the point of view of prohibiting monopolistic tendencies and encouraging healthy competition among the units, is in any manner unreasonable or arbitrary and took note of a passage in American Jurisprudence, 2d Vol. 54 pages 668-669 which reads thus:
“2.Constitutionality:
The Sherman Act (15 USC $$1-7) is a Constitutional exercise of the commerce power. Its general language does not render it invalid as an unConstitutional delegation of legislative power to the courts or as an unConstitutionally vague criminal statute. Its application to a monopolistic association of newspaper publishers does not abridge freedom of the press; nor does its application to the continuance, after its enactment, of a contract made previously subject it to attack as ex post facto legislation.”
56. In the said judgment, the Apex Court while applying the principle from the American decision as referred to therein, held that the Government while entering into contracts or issuing quotas is expected not to act like a private individual but should act in conformity with certain healthy standards and norms. Such actions should not be arbitrary, irrational or irrelevant. In the matter of awarding contracts inviting tenders is considered to be one of the fairways. If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory.
57. Referring to the above observations of the Apex Court, Mr. Kapoor submits that test in this case should be only reasonableness and reasonableness. If the Court on perusal of the record considers the action of the tendering authority not arbitrary, irrational, irrelevant or discriminatory, then obviously the petitioners have no case. If the action of the respondents authority is violative of principle of reasonableness and contrary to the provisions of S. 3 and 4 of the Act, then the petitioners are entitled to get relief as sought for.
58. Mr. Dutta, learned Counsel for the respondents 3 to 6 while countering the contention of Mr. Kapoor at the very first instance tried to oust the petitioners from the arena of the Court raising the question of maintainability of the writ petition on the ground that the writ petitioners knows well that JICA is one of the principal necessary party in the game of contract as it is financing the Guwahati Water Supply Project on the basis of an Agreement between the Union of India through the President of India and unless the terms approved by JICA would remain in the bid documents, the JICA would stop financing the said project and consequent thereto GMDA shall not be able to execute the said project and as a result there would be no other alternative before the GMDA authority except to annul/cancel the NIT, the terms of which is under challenge. More so, the people residing within the Guwahati Municipal Area at large will suffer. He further submitted that if in absence of JICA, the Court allow GMDA respondents to change the terms and conditions as impugned, then also GMDA cannot change the same in view of the aforesaid Agreement between the Union of India and JICA. He further contended that relating to the involvement of JICA for the proposed contract, the petitioners were well aware as the they participated in the pre-bid discussion after purchasing the bid documents and in the first page of the bid documents, it is specifically mentioned about the Guwahati Water Supply Project JICA ODA Loan No.ID-P 201. Not only that in the bid documents also it is noted that the Government of India received ODA loan from JICA amounting to Rs.29453 million yen towards the cost of Guwahati Water Supply Project and intends to apply the part of proceeds of the loan to payments under the contract for procurement of supply, delivery and stacking of DI pipes (item rate contract) ISI marked class K9 conforming to IS 8329:2000 etc. and for such non-impleadment of JICA itself is a ground for dismissing the writ petition.
59. He further contends that it would not be proper for the Court to entertain the instant writ petition when the Competition Act itself prescribes an efficacious and adequate alternative remedy for deciding the dispute which would be evident from the provisions of alternative statutory remedy, Section 7, 8 and 9 of the Act, from which it would appear that the law making authority suggested for establishment of commission, namely, Competition Commission of India and Ss. 18 and 19 of the Act deal with the duties , powers and functions of the Commission wherein it is specifically stated that it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of the consumers and ensure freedom of trade carried on by other participants, in markets in India. Not only that the commission has also been given power to enquire into any alleged contravention of the provisions contained in Sub-S. (1) of S. 3 and Sub-S. (1) of S. 4 either on its own motion or on receipt of any information in such manner and accompanied by such fee as may be determined by regulations from any person, consumer or their association or trade association or a reference made to it by the Central Government or a State Government or statutory authority. He further stated that the statute not only provided original jurisdiction, but also provided an appellate jurisdiction u/s. 53(A) of the Act wherein it is suggested for establishment of an appellate Tribunal to be known as Competition Appellate Tribunal. According to the learned Counsel, in view of the above prescription of the statute also the present writ petition is not maintainable.
60. He further urges that if the petitioners are of the opinion that the action of the GMDA causes an appreciable adverse affect on competition between the petitioners and the private respondents due to alleged anti-competition terms in the bid document and/or abused dominant position which affects the right of the petitioner, then they can approach the statutory authority under the Competition Act.
61. He again urges that when self contained statute prescribes specific forum and procedure for a dispute relating to contravention of the provisions therein, then Writ Court should be restrained from exercising its jurisdiction of judicial review u/art. 226 of the Constitution. The Court can only exercise its power of judicial review when the alternative remedy is not adequate and efficacious one. But in the instant case, the procedure prescribed in the statute for deciding the issue whether the respondents in any way contravened the provisions of S. 3 and 4 of the Act is efficacious and adequate one. He further contends that the statute Competition Act provides to decide the original dispute relating to anti- competitive agreement and abusing dominant position.
62. Mr. Dutta while answering to the question of Mr. Kapoor relating to the modification and/or challenge by way of amendment of the bidding documents by the respondents GMDA strenuously contend that purchaser notice inviting authority has inherent right to change the terms of the tender documents at any stage either before the date of dropping tender by the player of the game and in support of his aforesaid contention, he placed reliance on a judgment of the Apex Court in Optel Telecommunication Ltd. Vs. Union of India & ors, AIR 2001 MP 161 2000 Indlaw MP 184. More so, if the decision has been taken in the public interest, then the Court should not interfere with the same. He also refutes the contention of Mr. Kapoor, inter alia, that no reason has been given for inserting the terms relating to the experience in the bid documents as unsustainable and contrary to the record, as it would appear in Para-18 of the affidavit in opposition that it has been specifically stated that the clauses of the tender impugned in the instant petition, through which the authority has sought to ensure itself about the capability of the tenderer through its past experience, etc. are all relevant, rational and reasonable clauses and the same are not arbitrary or discriminatory and the said clauses have been incorporated as per the guidelines given by the JICA and in the greater interest of the project and to serve the public interest.
63. He further contended that incorporation of certain terms like Cl. 2.3.2, 2.4.1 and 2.4.2 in a tender documents is within the wisdom of the purchaser notice inviting authority as the said authority while preparing the bid documents are supposed to consider the various factors viz earlier experience, financial capacity, production turnover of the materials of the bidders and in the instant case, the GMDA took the decision consciously for incorporating the terms impugned as the bid in question is relating to water project for supplying pure hygienic water to the citizen residing within the jurisdiction of the Guwahati Municipal Corporation and by this time in a catena of decisions, the Apex Court held that contract being essential commercial transaction and terms incorporated in the bid documents being within the domain of the notice inviting authority i.e. the purchaser like petitioner, the Court should not interfere with and struck down the terms contained therein exercising its jurisdiction of judicial review as prescribed u/art. 226 of the Constitution. The Apex Court also in its various decision stated that the Court is not the authority to set the terms of the tender as it thinks for it is the purchaser who is the best judge to decide as to how and in what manner they will set out the terms of the tender documents, he contended. He further contended that terms of the tender are not open to the judicial scrutiny, the same being administrative policy decision of the notice inviting authority and in the realm of the contract. In support of his contention, he relied upon the decisions of the Apex Court in the case of (1) Air India Ltd Vs. Cochin International Airport Ltd. & others (2000) 2 SCC 617 2000 Indlaw SC 7, particularly para-7, (2) Directorate of Education and ors Vs. Educomp Datamatics Ltd. & ors (2004) 4 SCC 19 2004 Indlaw SC 194, particularly para- 12, 13 and 14, (3) Rajasthan Housing Board and another Vs. G.S. Investments and another (2007)1 SCC 477 2006 Indlaw SC 729, particularly para-11, (4) State of NCT of Delhi & anr Vs. Sanjeev alias Bittoo (2005) 5 SCC 181 2005 Indlaw SC 257 and (5) M/s B.S.N. Joshi & sons Vs. Nair Coal Services Ltd. & ors, AIR 2007 SC 437 2006 Indlaw SC 1426, particularly para-68, (6) Tata Cellular Vs. Union of India, (1994) 6 SCC 651: AIR 1996 SC 11 1994 Indlaw SC 17.
64. While placing reliance on the aforesaid decisions of the Apex Court, Mr. Dutta in his usual fairness submits that judicial review in contractual matter is not totally prohibited being the writ court is exercising its plenary power but the same is permissible when the action of the notice inviting authority is wholly unfair, unreasonable and illegal, more so, contrary to the public interest. In the instant case, the terms and conditions which are impugned in the instant writ petition were incorporated by the respondent-authority is outside the judicial review being the conditions imposed in the bid documents are neither arbitrary nor mala fide and with bad faith.
65. Again while he was responding to the submission of Mr. Kapoor that the funding authority, JICA cannot put any condition for the loanee GMDA like the impugned conditions in the tender documents being those are unreasonable and unfair conditions like the impugned clauses in the bid documents to oust the new entrepreneur as a player from the game, would contend that the creditor-authority funding for the project has the right to put any conditions whatsoever they like subject to the same is accepted by the borrower-loanee who is receiving the fund for a project. In the instant case, the Union of India through its President agreed to the conditions put by the funding authority JICA for fulfillment of various project including the project in question. In support of his aforesaid contention, he placed reliance on the case of Asia Foundation & Construction Ltd. Vs. Trafalgar House Construction (I) Ltd. and others, (1997) 1 SCC 738 1996 Indlaw SC 1491, particularly Para-9 of the said case, wherein the Apex Court held that it is difficult for the country to go ahead with such high cost projects unless the financial institutions like the World Bank or the Asian Development Bank grant loan or subsidy, as the case may be and also considered that the financial authority has the power to interfere at the time of making bid documents and put their own conditions for protecting the financial interest of them.
66. While referring the aforesaid law report, Mr. Dutta also contends that contract with JICA has to be given importance on the ground that if its conditions are not accepted, then they would not finance. Consequent thereto, the GMDA cannot be in a position to execute the project in question. In the result, the people at large will suffer and the Court cannot allow the writ petition of the petitioners for their personal interest at the cost of public interest.
67. The learned Counsel for the respondents while countering the contention of Mr. Kapoor, that putting clauses in the bid documents by GMDA, due to which the petitioner players are going to be excluded from the game, is not only unreasonable and unfair, rather they are anti-competitive clauses and abusing dominant position in contravention of Sub- S. (1) of S. 3 and Sub-S. (1) of S. 4 of the Act, would contend that none of these provisions are applicable in the case in hand as the respondents GMDA has not yet entered into any agreement in respect of production, supply and distribution which causes or likely to cause appreciable adverse affect on competition and an agreement is a sine qua non for application of S. 3 of the Act. As it appears from Chapter-4 of the Act respectively that provisions of Competition Act come into play only after an agreement has been entered into and in support of his aforesaid contention, he placed reliance of a decision of the Madras High Court in P.G. Narayanan Vs. the Union of India, rep. by the Secretary, Ministry of Information and Broadcasting and ors. (2005) 3 MLJ 210 wherein a Division Bench of Madras High Court dealt with the Competition law in a public interest litigation and discussed about S. 3 of the Act though the same did not come in force.
68. He further contended that the State respondents and the respondents GMDA would not come within the meaning of enterprise while the said authority exercising its sovereign function dealing with water supply as the supply of water to the citizen is one of the important sovereign function of the Government. Not only that the GMDA being the purchaser of the DI pipe for the water project is not a bidder either against the petitioner or the private respondents, rather a consumer and the object of the Competition Act is to protect the interest of the consumer. Being consumer GMDA will purchase DI pipes from the successful players in the bid to provide best quality water to the citizens of the Guwahati who are residing in the Guwahati Municipal area, there is no question of earning profit by GMDA or the State purchasing DI pipes for the proposed water project like a profit oriented institution unlike a private company who are producing mineral water, as the only motive of the State respondents is to provide pure hygienic water to the people at large. In support of his aforesaid contention, he relied upon a decision of this Court in the case of East Line Projects Pvt. Ltd. vs. Dr. B. Borooah Cancer Institute Guwahati and others, AIR 2005 Gauhati 5.
69. Mr. Mitra, learned senior Counsel appearing for the respondent No. 7 while adopting the submission made by Mr. Dutta, learned Sr. Counsel for the respondents 3 to 6, would contend that the terms and conditions in the bid documents as impugned in the instant writ petition are without any ambiguity, rather fully clear and understandable to the bidders willing to participate in the tender process and the petitioners after purchase of the bid documents, admittedly, participated in the pre-bid discussion knowing consequence of terms and conditions in the bid documents and now cannot question the legality of those clauses on the ground of alleged unreasonableness, arbitrariness and illegality. He further contends that the petitioners have understood the condition of experience for a minimum period of five years to manufacture/produce DI pipes of the diameter as mentioned in the tender documents. As the same do not suit to them, even after reducement of average turnover of INR-3000 million to INR 1900 million and the qualifying length of 10 lakh meter to 5 lakh meter, they challenge those clauses which is not permissible under law. Once a person participated in the pre-bid discussion and after discussion, the authority somehow reduced the conditions which are not only reasonable and bona fide, but also for public interest, the same is not open to challenge.
70. He further contended that selection of one manufacturer through a process of competition is not creation of any monopoly in violation of Art. 19(1)(g) of theConstitution read with Clause- 6. He again submitted that when a huge investment is involved in a project, the purchaser of materials has the right to see the infrastructure of the manufacturer, relating to production of such materials and turn over. According to him, the allegations regarding mala fide does not on the part of the tendering authority to favour a particular party is not enough that has to be proved by way of material documents which is absent in the pleadings of the writ petitioner. In relating to the clause on production and turnover, he contended that the terms of tender prescribing quantum of turnover of the business of manufacturer is only to ensure the supply of DI pipes as number of DI pipe manufacturer is limited either in the country or internationally. His another contention is that it is always the tendering authority has the power to insert pre-condition or notification for tenderer to ensure that the contractor has the capacity and resources to successfully execute the work. In support of his aforesaid contention, he placed reliance on a decision of the Apex Court in the case of Association of Registration Plates Vs. Union of India and Ors (2005) 1 SCC 679 2004 Indlaw SC 1031.
71. Mr. Mitra also pointed out from the record that the petitioner No. 1 started manufacturing of DI pipes only in the month of September, 2010 and thus not at all matches with the experience of other private respondents. His another contention was that the Cl. 2.4.1 and 2.4.2 i.e. relating to general production experience and performance experience respectively are only for choice of best player in the game and GMDA being the purchaser of DI pipes has the right to incorporate the experience clause in the bid documents. His another contention was that the tendering authority did not commit any wrong by way of amending the tender documents and reducing the average turnover from INR 3000 million to INR 1900 million and the quality of length from 10 lacs meter to 5 lacs meter. The reducement was made to cure mathematical error and from the documents relating to such amendment, it would appear that there is no ambiguity and when a document subsequently amended, is clear, then the same should not be interfered with, he further contended. In support of his aforesaid contention, he placed reliance on the decision of Godhra Electricity Co. Ltd. and anr Vs. State of Gujrat and another, AIR 1974 SC 32 1974 Indlaw SC 253.
72. Referring to Para-11 and 15 of the counter, he contended that the tendering authority has clearly stated therein that in the name of mere competition, the contract cannot be made open to all and sundry and in the contract of such nature which is time bound and involved procurement of huge quantity of pipes, it is necessary to have such eligibility criteria so that only those capable of delivering DI pipes are brought into fray of competition as larger competition always does not ensure lower costs. He further contended that whether the tendering authority wants quality products in a reduced rate or higher rate is with them as they are the best judge to decide what quality of materials they will purchase and intending tenderer has no right to raise those question regarding the applicability of S. 3 and 4 of the Act. While adopting the submissions of Mr. Dutta, he contended that the Competition Act, 2002 has been enacted by the Legislature to provide more benefit to the purchaser and further to ensure fair competition in the country by prohibiting trade practices which cause adverse affect on the competition in the market and while any personal company like the petitioners is aggrieved due to anti-competitive agreement or abuse of dominant position, then the remedy is not writ court, rather the Competition Commission of India (CCI) as would be evident from Chapter-3 and 4 of the Act, particularly, S. 18 and 19 wherein the duties of the commission is prescribed as well as power vested on it, to enquire into alleged contravention of provisions contained in Sub-S. (1) of S. 3 and Sub- S. (1) of S. 4.
73. He further contended that the tendering authority has inherent power to choose its method to fix the terms and conditions and take its individual records, and when the tendering authority tried to get the best persons or the best quotation, then the right to choice of the tendering authority cannot be considered to be arbitrary. He further contended that when the decision has been taken by a tendering authority for bona fide consideration and public interest, then the Court should be restrained from exercising its review jurisdiction. In support of his aforesaid contention, he placed reliance on a decision of a Division Bench of Madhya Pradesh High Court in Optel Telecommunications Ltd 2000 Indlaw MP 184. (supra) particularly, paragraph 13, 14 and 15 of the said report.
74. While referring to the aforesaid case, he also urges, inter alia, that when the writ petitioner participated in a decision making process like the pre-bid meeting, he cannot now challenge the impugned clauses in the bid documents relating to terms and experience as the decision making process was fully transparent. He finally contended that it is a settled law that in a contractual matter, limited judicial review is permissible. It is not a case where the terms of invitation of tender were tailored-made to oust any particular person with a view to eliminate from participating in the bidding process. The facts remain that the tendering authority allowed the petitioners to participate in the pre-bid discussion and treated equally with others including the private respondents and once participated in the pre-bid tender process which resulted the subsequent reducement of conditions to certain extent, the writ petitioners are not entitled to insist the tendering authority to enter into further negotiation only to provide the petitioner to be a player in the game. In support of his aforesaid contention, he placed reliance of Meerut Development Authority vs. Association of Management Studies and another (2009) 6 SCC 171 2009 Indlaw SC 527.
75. Mr. Bhattacharjee, learned senior Counsel for the respondent No.8 adopting the submission of Mr. Dutta, learned Counsel for the respondent-GMDA and Mr. Mitra, learned senior Counsel for the respondent No.7 would contend that Article -14 of the Constitution can be applicable between the equals, not in case of unequal and the present petitioner is in no way equal to the private respondents being the petitioner has got license and started its business in producing the D.I pipes in the month of September, 2010 whereas the private respondents are in the field of game for many years past.
76. He further contended that though the petitioners have no capability to play in the game for supply of DI pipes, they are still arguing for lifting the conditions prescribed for participation in the game. Mr. Bhattacharjee also submits that the same reliefs which have been sought for in the present writ petition, had also been sought for in a public interest litigation being W.P (C) 89 of 2000 (Principal Bench) and the Division Bench of this Court did not interfere with the terms and contract as mentioned in the bid documents. Referring to Annexure-H to the affidavit in opposition filed by the respondent-GMDA, he contended that JICA through its chief representative informed the GMDA that JICA has no objection to the amendment as proposed by GMDA for the contract package. Therefore, it cannot be said that the subsequent amendment of the Clauses relating to the experience as amended was only to allow the respondent No.9 in the game, and even for the argument sake, if the contention of the petitioners is accepted, then also JICA is not made party on approval of whom, the conditions were amended and who is funding the project and for that also, the writ petition is liable to be dismissed.
77. Mr. Bhuiyan, learned Counsel for the respondent No.8 adopting the submissions of the learned Counsel for the other respondents declined to make any submission on facts and contended that the writ petition should be dismissed at the threshold as the petitioner neither has the right to challenge the terms and conditions nor have they any right to attack the clauses of the bid documents referring to the provisions of Competition Act as the Competition Act has no application in the instant case being the tendering authority is a purchaser.
78. Referring to the submission made on behalf of the respondents, Mr. Kapoor reiterated his contention as stated supra and further submitted that ordinarily the terms of the notice inviting Tender/bidding documents are subject to limited judicial review and the terms can be interfered with by the writ court when either the said term is per se illegal i.e. contrary to any provision of statutory, Constitutional or general law of India or the terms are arbitrary, irrational, irrelevant or unreasonable on the touchstone of Wednesbury’s unreasonableness and if the terms do not have any rational nexus with the object sought to be achieved. He also reminded this Court that in case after case, the Court while recommending caution, have flatly declined to abjure or renounce jurisdiction to examine the terms and conditions and have examined the factual circumstances to see whether they complied with the norms laid down.
Referring to Para 70 and 94 of the judgment of the Apex Court in Tata Cellular Vs. Union of India, (1994) 6 SCC 651 1994 Indlaw SC 17, and in the case of Raunaq International Ltd. Vs. I.V.R Construction Ltd. & ors, (1999) 1 SCC 492 1998 Indlaw SC 1819, Air India Ltd. Vs. Cochin International Airport Ltd. & ors (2000) 2 SCC 617 2000 Indlaw SC 7, Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and ors (2000) 5 SCC 287 2000 Indlaw SC 2846 and other cases, he contended that the principle of reasonableness have been repeatedly laid down by the Apex Court and taking this Court in Directorate of Education and ors Vs. Educomp Datamatics Ltd. and ors, (2004) 4 SCC 19 2004 Indlaw SC 194, Mr. Kapoor contended that though the terms of invitation of the tender are not open to the judicial scrutiny as the same being in the realm of contract, but it was held that that the Court can interfere with the administration policy decision only if the said decision is arbitrary, discriminatory or mala fide. Therefore, it would be proper for this Court if, while going through the terms and conditions, this Court finds the same are arbitrary, unreasonable and discriminatory and mala fide, and also contrary to the provisions of S. 3(1) and S. 4 of the Competition Act, then the Court should exercise its power of judicial review for striking down the clauses impugned in this writ petition.
79. While asking for striking down the impugned clauses of the bid document he also relied upon the case of Association of Registration Plates Vs. Union of India & ors (2004) 5 SCC 364 2004 Indlaw SC 460, Association of Registration Plates Vs. Union of India & ors, (2005) 1 SCC 679 2004 Indlaw SC 1031 and Shimnit Utsch India Private Ltd. & anr Vs. West Bengal Transport Infrastructure Development Corporation Ltd. & ors, (2010) 6 SCC 303 2010 Indlaw SC 389, wherein the Apex Court examined the terms of the tender whether they were invalid or not and also noted that opinion on the facts may vary, but the right of review to tender conditions has been applied and is undeniable. Referring to the aforesaid cases, Mr. Kapoor contended that the terms mentioned in the impugned clauses of the bid documents are per se illegal being contrary to the doctrine of equality enshrined under Art. 14 and doctrine of opportunity enshrined u/art. 21 of theConstitution and further more contrary to the provisions of S. 3 and 4 of the Competition Act, 2002 as amended. More particularly, the terms made in the impugned clauses are void as the respondents GMDA is going to enter into an agreement in contravention of Sub-S. (1) of S. 3 and also abused its dominant position by way of imposing unfair and discriminatory conditions while going to purchase DI pipes and denied the petitioner’s case to the DI pipes market which is the subject matter of the contract and for such action of respondent-authority the impugned clauses are illegal and required to be interfered with. Mr. Kapoor while responding to the submission of the respondents on Competition Act would contend that PG Narayanan (Supra) cannot be treated as a precedent as while the said case was decided at that time the provisions of S. 3 and S. 4 of the Competition Act were not given effect to and according to him, the said decision is per incurium.
80. Reacting to the production of records relating to the water project in question including the records of agreement between the Union of India and JICA inclusive of the conditions therein, as requested by this Court, Mr. Kapoor would contend that the record produced before this Court cannot be used unless the copy of the same is provided to the petitioners. He further contended that unless the petitioners are allowed to have a look at the documents produced, the Court cannot look into the documents produced behind the back of the party. In support of his aforesaid contention he relied upon a decision rendered by His Lordship Justice Sabysachi Mukherjee of Calcutta High Court, sitting in a Division Bench, as he then was, in Hindustan Motors Limited and Ors V. TN Coal and Ors., 1971 CLJ 181 wherein the Court held, inter alia, “In fairness to Mr. Roy Choudhury however, we must point out that the offered make all necessary disclosures to us provided the appellants are not allowed to have a look at the documents disclosed. This we were not prepared to do. We did not think it proper to use materials behind the back of one of the parties we thought that would be clearly contrary to the rules of natural justice.”
81. The reference of Mr. Kapoor in Hindustan Motors Ltd. (supra) has no application in the instant case so far looking of the documents are concerned. In the said case their lordships considered relating to conduct of search in various premises of the petitioner-company by the enforcement authority, particularly the Assistant Director of Enforcement in the Ministry of Finance, government of India issued various search warrants and on his authorization the respondents-enforcement officers and also considered the S. 19(d) of the Foreign Exchange Act, 1947 which gives power to the enforcement authority to search any secret place where the searching authority has a reason to belief that the documents is necessary for his opinion will be useful for any relevant proceeding, and while examining the facts and issues involved in that case their Lordships rightly did not allow to see the documents as that would be adverse to the petitioner therein. More so, that was a case relating to search and seizures of the documents and consequent there to a penal offence cannot be treated at par with a writ proceeding. But obviously the Court should not take note of the documents without providing an opportunity to the other side if those documents would adversely affect the interest of the party.
82. In Hindustan Motors Ltd. (supra) the appellant therein though placed the record before the appellate authority but did not allow the appellant therein to have a look at those documents. This is not the case herein. Rather this Court provided an opportunity to the writ petition to have a look at the documents produced before the Court. But the petitioner declined to see the same. However, for fairness it would be proper that even though this Court perused some records, but not to make any observation on those records as that is not necessary on the ground that regarding those documents particularly the clause of agreement has already been disclosed by the respondent-GMDA in their affidavit-in-opposition.
Findings of the Court:-
83. On proper scrutiny of the pleadings of the rival parties, it is the admitted position that the subject of the tender/bids are global in nature which is supposed to be finalized by a process of global competitive bidding. It is also admitted fact that the Government of India received an ODA loan from Japan International Cooperation Agency (JICA) in the amount of 29453 million yen towards the cost of Guwahati Water Supply Project, and intended to apply the part of proceeds of the loan to payments under the contract for procurement of supply, delivery & stacking of Ductile Iron Pipe (item rate contract) ISI marked class K9 conforming to IS 8329:2000 or equivalent international standard and the disbursement of an ODA Loan by JICA will be subject, in all respects, to the terms and conditions of the Loan Agreement, including the disbursement procedures and the guidelines for procurement under JICA ODA Loans. Not only that no party other than the Government of India shall derive any rights from the Loan Agreement or have any claim to loan proceeds. Further, the bid in question has two parts- one is technical bid and another is financial bid. The present writ petitioners along with six other players participated in the pre-bid discussion and after pre-bid discussion; the respondents authorities also relaxed certain conditions regarding the annual production turnover as well as qualifying length of 10 lac meters to 5 lac meters. To appreciate the submission of the learned Counsel of the rival parties, it would be proper to reproduce the experience clauses impugned in the writ petition. Accordingly the same is reproduced hereunder:
2.3.2 Average Annual Production turnover
1) Minimum average annual production turnover as prime Bidder of INR 3000 (three thousands) Million, or equivalent in Japanese Yen calculated as total certified payments received for supplies and Contracts in progress or completed, supplied and/or installed (as per IS 8329:2000 or equivalent intenational standards Ductile Iron pipes) within the last 5 (five ) years and
2) Minimum annual production turnover of Ductile Iron K9 Pipes in terms of length of 1000000 (Ten lakh) meters of all sizes from 100 to 600mm in any one of last 5 (five) years as per IS 8329:2000 or equivalent international standards.
2.4.1 General Production Experience
a) Should demonstrate to have a license issued by Bureau of Indian Standards (BIS) or equivalent International Standard operating for a minimum 5 years to manufacture/produce DI Pipes of diameter 100mm to 600mm class K9 as per IS 8329:2000 or equivalent international Standards.
c) Should demonstrate experience in manufacturing and production of D.I. pipes of Diameter 100mm to 600mm class K9 as per IS 8329:2000 or equivalent International Standards, at least 5 years from date of issue of such license.
2.4.2 Performance Experience
a) Should demonstrate to have proven track record of good performance of D.I. Pipes for last 3 (three) years as per IS 8329:2000 or equivalent International Standards. It should be supported by the clients.
84. The contention raised by the parties either in pleadings or in submission may be right or wrong, but for that the Court cannot avoid its responsibility and duty of deciding a matter while deciding an issue before it in its proper perspective. The duty of the Court is to satisfy the justice seeker by analyzing the question raised before it by reasons being reasons and reasons are only justice. Justice not only has to be done, but it has to be shown also. How the Court would show that it is doing justice unless the it discusses the point raised by the learned Counsel of the rival parties in the proceeding. In the instant case, Mr. Kapoor has raised his voice alleging unreasonable, arbitrary and discriminatory action of the tendering authority, particularly the terms in the bidding documents as stated supra. Those terms are also contrary to the provisions of S. 3 (1) and S. 4(1) of the Competition Act. It is necessary to reproduce the same. Accordingly, those are reproduced as the same would be profitable for discussion on submission of the learned of the parties.
“3. Anti-competitive agreements-
(1) No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services which causes or is likely to cause an appreciable adverse effect on competition within India.
(2) Any agreement entered into in contravention of the provisions contained in sub-s. (1) shall be void.
(3) Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which-
(a) Directly or indirectly determines purchase or sale prices;
(b) Limits or controls production, supply, markets, technical development, investment or provision of services;
(c) Shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way;
(d) Directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition:
Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services.
Explanation – For the purposes of this sub-section, “bid rigging” means any agreement, between enterprises or persons referred to in sub-s. (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding.
4. Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services including –
(a) tie-in arrangement;
(b) exclusive supply agreement;
(c) exclusive distribution agreement;
(d) refusal to deal;
(e) resale price maintenance,
Shall be an agreement in contravention of sub-s. (1) if such agreement causes or is likely to cause an appreciable adverse effect on competition in India.
Explanation-for the purposes of this sub-section,-
(a) “tie-in arrangements” includes any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods;
(b) “exclusive supply arrangement” includes any agreement restricting in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person;
(c) “exclusive distribution agreement” includes any agreement to limit, restrict or withhold the output or supply of any goods or allocate any area or market for the disposal or sale of the goods;
(d) “refusal to deal” includes any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought;
(e) “resale price maintenance” includes any agreement to sell goods on conditions that the prices to be charges on the resale by the purchases shall be the prices stipulated by the seller unless it is clearly stated that ;prices lower than those prices may be charged.
5. Nothing contained in this section shall restrict-
(i) the right of any person to restrain any infringement or, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under:
(a) the Copyright Act, 1957 (14 of 1957)
(b) the Patents Act, 1970 (39 of 1970)
(c) the Trade and merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999)
(d) Geographical Indications of goods (Registration and Protection) Act, 1999 (48 of 1999)
(e) the Designs Act, 2000 (16 of 2000)
(f) the Semi-conductor Integrated Circuits layout-Design Act, 2000 (37 of 2000)
(ii) the right of any person to export goods from India to the ext to which the agreement relates exclusives to the production, supply, distribution or control of goods or provision of services for such export.
Prohibition of abuse of dominant position.
4. Abuse of dominant position-
(1) No enterprise shall abuse its dominant position”.
(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise,-
(a) directly or indirectly, imposes unfair or discriminatory-
(i) condition in purchase or sale of goods or services; or
(ii) price in purchase or sale (including predatory price) of goods or service; or
Explanation- For the purpose of this clause, the unfair or discriminatory condition in purchase or sale of goods or services referred to in sub-cl. (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-cl. (ii) shall not include such discriminatory conditions or prices which may be adopted to meet the competition; or
(b) limits or restricts-
(i) production of goods or provision of services or market therefore; Or
(ii) technical or scientific development relating to goods or services to the prejudice of consumers; or
(c) indulges in practice or practices resulting in denial of market access; Or
(d) Makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or
(e) Uses its dominant position in one relevant market to enter into, or protect, other relevant market.
Explanation – For the purposes of this section, the expression-
(a) “dominant position” means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it ot
(i) Operate independently of competitive forces prevailing in the relevant market; or
(ii) Affect its competitors or consumers or the relevant market in its favour;
(b) “predatory price” means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.”
On Judicial Review:-
85. In a writ proceeding, the Court would not certainly act as an appellate authority over the decision of administrative/executive authority who invited tender for a contract keeping in mind the interest of the purchaser invitee as well as public at large, unless in the decision making process, there is some wrong or decision is wholly unfair, unreasonable and contrary to the provisions of law. More so, it would also not be proper for the Court to interfere with the administrative/ executive action only on an allegation made against the decision of the said authority. In a writ proceeding, function of the writ court is like an umpire in a game of cricket who has to see both the players play their respective game as noted in Asia Foundation & Construction Ltd. Vs. Trafalgar House Construction (I) Ltd. & ors (1997) 1 SCC 738 1996 Indlaw SC 1491.
86. Before dealing with the correctness or otherwise of the submission of the rival parties made before this Court, on the issue of maintainability of the writ petition on the ground of non-joinder of necessary parties and of alternative remedy available under the statute, it would be proper for this Court to survey the law reports referred by them either on the point of the terms and condition included in the bid documents as impugned on the ground of reasonableness or unreasonableness or relating to provisions of Competition Act.
87. In Tata Cellular 1994 Indlaw SC 17 (Supra) when the Apex Court considered what are the requirements of tender and the principles of judicial review in a contractual matter also took note of the fact that on examination of the entire case law cited before their lordships of the Apex Court, their Lordships laid down the following principles which are as follows: –
“94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely review the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to the 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 mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles.”
(Emphasis supplied)
88. As Mr. Kapoor has referred upon para 70 of the aforesaid judgment wherein the Apex Court noted, “it cannot be denied that the principle of judicial review to the exercise of contractual powers on the government bids 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 protect the financial interest of the State. The right to refuse the lowest or any tender is always available to the government. But the principles laid down in Art. 14 of theConstitution have to be kept in view while accepting or refusing the tender. There can be no question of infringement of Art. 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.”
89. In Tata Cellular 1994 Indlaw SC 17 (Supra) while the Apex Court considered the parameter of judicial review also took note of the principle of Wednesbury unreasonableness and discussed in detail which would be evident from para 78, 79 and 80 of the said decision. As that would be profitable for this Court to come to a proper conclusion, the same are reproduced herein under:-
“78. What is the charming principle of Wednesbury unreasonableness? Is it a magical formula? In R. V. Askew29 , Lord Masnfiled considered the question whether mandamus should be granted against the College of Physicians. He expressed the relevant principles in two eloquent sentences. They gained greater value two centuries later:
“It is true, that the judgment and discretion of determining upon this skill, ability, learning and sufficiency to exercise and practice this profession is trusted to the College of Physicians and this Court will not take it from them, nor interrupt them in the due and proper exercise of it. But their conduct in the exercise of this trust thus committed to them ought to be fair, candid and unprejudiced; not arbitrary, capricious, or biased; must less, warped by resentment, or personal dislike.”
79. To quote again, Michael Supperstone and James Goudie; in their work Judicial Review (1992 Edn.) it is observed at PP. 119 to 121 as under:
“The assertion of a claim to examine the reasonableness been done by a public authority inevitably led to differences of judicial opinion as to the circumstances in which the court should intervene. These differences in opinion were resolved in two landmark cases which confined the circumstances for intervention to narrow limits. In Kruse v. Johnson 30 a specially constituted divisional court had to consider the validity of a bye-law made by a local authority. In the leading judgment of Lord Russell of Killowen, CJ, the approach to be adopted by the court was set out. Such bye-laws ought to be ‘benevolently’ interpreted, and credit ought to be given to those who have to administer them that they would be reasonably administered. They could be held invalid if unreasonable: Where for instance bye-laws were found to be partial and unequal in their operation as between different classes, if they were manifestly unjust, if they disclosed bad faith, or if they involved such oppressive or gratuitous interference with the rights of citizens as could find no justification in the minds of reasonable men. Lord Russell emphasized that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or convenient.
In 1947 the Court of Appeal confirmed a similar approach for the review of executive discretion generally in Associated Provincial Picture Houses Ltd. V. Wednesbury Corpn.. This case was concerned with a complaint by the owners of a cinema in Wednesbury that it was unreasonable of the local authority to license performances on Sunday only subject to a condition that ‘no children under the age of 15 years shall be admitted to any entertainment whether accompanied by an adult or not’. In an extempore judgment, Lord Greene, M.R. drew attention to the fact that the word ‘unreasonable’ had often been used in a sense which comprehended different grounds of review. (At p. 229, where it was said that the dismissal of a teacher for having red hair (cited by Warrington, L.J. in Short v. Poole Corpn., as a example of a ‘frivolous and foolish reason’) was, in another sense, taking into consideration extraneous matters, and might be so unreasonable that it could almost be described as being done in bad faith; see also R.V. tower hamlets London borough Council ex p Chetnik Developments Ltd.33 (Chapter 4, p. 73, supra). He summarized the principles as follows:
‘The Court is entitled to investigate the action of the local authority with a view to seeking whether or not they have taken into account matters which they ought not to have taken into account, or, conversely, have refused to take into account or neglected to take into account matter which ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could even have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, an concerned only, to see whether the local authority has contravened the law by acting in excess of the power which parliament has confided in them.’ This summary by Lord Greene has been applied in countless subsequent cases.
“The modern statement of the principle is found in a passage in the speech of Lord Diplock in Council of Civil Service Unions v. Minister for Civil Service:
‘By “irrationality” I mean what can now be succinctly referred to as “Wednesbury unreasonableness”. (Associated Provincial Picture Houses Ltd. V. Wednesbury Corpn.) It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at.’”
80. At this stage, The Supreme Court Practice, 1993, vol.1, pp. 849-850, may be quoted:
“4. Wednesbury Princple.-A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself in the relevant law and acting reasonably could have reached it. (Associated Provincial Picture Houses Ltd. V. Wednesbury Corpn., per Lord Greene, M.R.)”
90. In Raunaq International 1998 Indlaw SC 1819 (supra) the Apex Court noted that the awarding of contract is essentially a commercial transaction whether the said contract is by a private party or by a public body or by the State. The Apex Court also considered in arriving at a commercial decision what should be the considerations of paramount importance. In paragraph 9 of the aforesaid case as Mr. Dutta referring the said paragraph that in a commercial transaction the ability of the tenderer and the past experience are most important feature. Unless the tenderer has successfully completed similar work earlier then how and what for the tendering authority would rely upon such a tenderer who is lacking with past experience in the commercial filed of tender materials. In view of the above, para 9 of the aforesaid judgment is reproduced herein under.
“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 are commercial considerations, there 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 fulfill 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, as there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.”
(Emphasis supplied)
91. In para 10 of the said judgment the Apex Court also discussed about the elements of public interest. According to the Apex Court, 1. public money which would be expanded for the purposes of the contract, 2. The acts or services which are being commissioned could be for a public purpose such as construction of roads, public buildings, power plants or other public utilities. 3. The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. 4. The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work-thus involving larger outlays of public money and delaying the availability of services, facilities or goods, e.g., a delay in commissioning a power project.
92. In para 16 of Raunaq International 1998 Indlaw SC 1819 (supra) again the Apex Court held that price may not always be the sole criterion for awarding a contract. According to the Apex court it is the expert committee having the special knowledge to decide which is the best offer. Price offered in a bid is only one of the criteria. In the said paragraph, the Apex Court also stated, inter alia, “the past record of the tenderers, the quality of the goods, services which are offered, assessing such quality on the basis of past performance of the tenderers, its market reputation and so on, all play an important role 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.” (emphasis supplied).
93. In the instant case also, the Expert Committee prepared the tender documents for purchasing of DI Pipes which will be used in the proposed water project by the respondent- GMDA to supply pure hygienic drinking water to the people residing within the area of the Guwahati Municipal Corporation, it would not be off the track on the part of the Court to say that getting access of pure hygienic drinking water is the right fundamental to life and the State is duty bound to provide the same to its citizen and in this case when the State is trying to provide the pure hygienic drinking water to its citizens through the GMDA, funding by creditor JICA they cannot be asked to compromise with the terms and conditions in the bid document. The aforesaid views of this Court get support from the decision the Apex Court in AP Pollution Control Board II Vs. Prof. MV Nayudu and Ors., reported in (2001) 2 SCC 62 2000 Indlaw SC 2748 wherein the Apex Court held that the right of access to drinking water is fundamental to life and there is a duty on the state u/art. 21 to provide clean drinking water to its citizen.
94. In Air India 2000 Indlaw SC 7 (supra) the Apex Court taking note of Tata Cellular 1994 Indlaw SC 17 (Supra) and Raunaq International 1998 Indlaw SC 1819(Supra) as well as other decisions rendered by the Apex Court prior to Tata Cellular noted “In arriving at a commercial decision considerations which are paramount are commercial considerations. The State 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.” (Emphasis supplied)
95. No doubt in the said decision also the Court held that the decision of the tender authority is not amenable to judicial review but the court can examine the decision making process and interfere if it is found vitiated by mala fide, unreasonableness and arbitrariness and even when some defect is found in the decision making process, the Court must exercise its discretionary power u/art. 226 with great caution and should exercise it only in furtherance of the public interest and not merely in making out a legal point. (emphasis supplied).
96. The Apex Court also reminded us that the Court should always keep the public interest in mind to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires its interference, then only the Court should interfere. Therefore, according to this Court, in Air India the Court proceeded one step forward more than the earlier decisions of the Court particularly relating to public interest.
97. As understood by this Court, there is no doubt that the Apex Court in neither of the cases held that the court has no power to exercise its power of judicial review in a given case where the decision making process in a tender is either arbitrary or unreasonable and mala fide, subject to the said decision is against the public interest but when the tendering authority took the decision for protecting the public interest then the Court should restrain itself from intervening.
98. In Asia Foundation and Construction Ltd 1996 Indlaw SC 1491. (supra) the Court again considered the parameter of judicial review and the public interest in a government contract wherein the Apex Court also took note of Tata Cellular1994 Indlaw SC 17 (Supra). While considering the parameter of judicial review noted that principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned. It is intended to prevent arbitrariness and favoritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose.
99. In para 9 of the said judgment it is noted inter alia, “It is well-known that it is difficult for the country to go ahead with such high Cost projects unless the financial institutions like the World Bank or the Asian Development Bank grant loan or subsidy, as the case may be. When such financial institutions grant such huge loans they always insist that any project for which loan has been sanctioned must be carried out in accordance with the specification and within the scheduled time and procedure for granting the award must be duly adhered to.”
100. In para 11 of the said judgment the Apex Court categorically stated that
“the terms provide for modification or corrections even after a specified date and further coming to the conclusion that the respondent No. 1 being the lowest bidder there was no reason for the Port Trust to award the contract in favour of the appellant. We cannot lose sight of the fact of escalation of cost in such project on account of delay and the time involved and further in a coordinated project like this, if one component is not worked out the entire project gets delayed and the enormous cost on that score if rebidding is done. The High Court has totally lost sight of this fact while directing the rebidding. In our considered opinion, the direction of rebidding in the facts and circumstnaces of the present case instead of being in the public interest would be grossly detrimental to the public interest.” (Emphasis Supplied)
101. In the instant case also, it is the admitted position even from the bid documents as well as the affidavit in opposition of the respondent-State and GMDA that the water project in question is taken over by those respondents taking financial assistance from the JICA on certain condition including the conditions that the terms of the bid documents has to be approved by them and within a particular time the work of project has to be completed. Like the Asian Development Bank, JICA is also insisting upon the GMDA to abide by their conditions as mentioned in the agreement between the Union of India through the President of India and the JICA as it is funding the project. According to this Court, the decision of the Apex Court in Asia Foundation and Construction Ltd 1996 Indlaw SC 1491. (Supra) would be more helpful to come to a proper conclusion over the dispute between the parties particularly regarding the reducement or relaxation of the terms relating to the turn over or the length of pipe and the condition imposed by JICA. When an authority is funding to any person or institution for a project or work then the said authority has obviously the power to impose condition to protect its finance.
102. Though this Court has already noted the decision of the Apex Court in Directorate of Education and ors 2004 Indlaw SC 194. (Supra) but at the cost of repetition the court is again noting inter alia,
“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 or mala fide or actuated by bias.” (emphasis supplied)
103. The Apex Court also reminded us that the courts cannot strike down the terms of the tender prescribed by the government and its authorities because it feels that some other terms in the tender would have been fair, wiser or logical. It is again reiterated that the courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide. Meaning thereby, according to this court, the court has no power to rewrite the tender documents when the purchaser decided to purchase some materials either for its own use or for a public project on certain conditions and terms as suits him. Seller has no right to ask the purchaser for modification of the terms as suits to the seller. In the instant case, the debate started after previous discussion when the tendering authority relaxed to some extent the tender clauses relating to turn over as well as length of the pipe without modifying the past experience for five years. The petitioner company admittedly appeared in the pre-bid discussion and while participating there insisted for relaxation of the conditions as stated in the original bid documents and when the result of the previous discussion does not suits the petitioner company they impugned the clauses as stated supra on the grounds of arbitrariness and mala fide as alleged in the petition and though not stated in the writ petition but for the first time subsequently in the rejoinder raised the question regarding the legality of the terms and conditions as the same is allegedly in violation of provisions of S. 3 and 4 of the Competition Act. From the pleadings and the submission of the learned counsel for the petitioner again a question arises whether the tender in question is a statutory tender or a mere contract in public realm and whether the respondent-GMDA is a mere purchaser/consumer or an enterprise as stated in the Competition Act which this Court would discuss later on after reference of relevant paragraphs of the remaining law reports cited by the parties.
104. In para 57 of M/S BSN Joshi and Sons Ltd2006 Indlaw SC 1426. (supra) while the Apex Court noted “the contract need not be given to the lowest tenderer but it is actually true that the employer is the best judge there for; the same ordinarily being within its domain, court’s interference in such a matter should be minimal. The High Court’s jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record.” Taking note of its earlier decision in Master marine Services (P) Ltd Vs Metcalfe & Hodgkinson (P) Ltd and Anr., (2005) 6 SCC 138 2005 Indlaw SC 293 as well as the decision in Poddar Steel Corporation V. Ganesh Engineering Works and Others, (1991) 3 SCC 273 1991 Indlaw SC 1002 in para 68 of the judgment Apex Court noted that “we are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under:
(i) If there are essential conditions, the same must be adhered to;
(ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
(iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing
(iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise find relaxation of a conditions which being essential in a nature could not be relaxed and thus the same was wholly illegal and without jurisdiction.
(v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object of which essential conditions were laid down, the same may not ordinarily be interfered with.
(vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority.
(vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint. (emphasis supplied)
105. In Rajasthan Housing Board and Anr2006 Indlaw SC 729, (supra) the Apex Court taking note of the decision in Master marine Services (P) Ltd 2005 Indlaw SC 293 (supra) where in the case of Tata Cellular 1994 Indlaw SC 17 (supra) has also been taken note of, stated in para 11 that even if some defect was found in the ultimate decision resulting in cancellation of the auction, the Court should exercise its discretionary power u/art. 226 of the Constitution with great care and caution and should exercise it only in furtherance of public interest. The court should always keep the larger public interest in mind in order to decide whether it should interfere with the decision of the authority” (emphasis supplied).
106. In Association of Registration Plates (2004) 5 SCC 364 (supra) 2004 Indlaw SC 460 the writ petitioners therein challenged the condition imposed in the Notice Inviting Tenders issued by various State Governments for supply of High Security Registration Plates and while deciding the said issue, His Lordship GP Mathur J, as he then was, in para 16 of the said case noted, inter alia, that in view of Art. 19 (6)(ii) the carrying of any trade, business, industry or service by the State, would not be questionable on the ground that it infringes the right guaranteed by Art. 19(1)(g) even though by law the State excludes citizens, wholly or partially, from the trade or business entered upon by the State. The State is, therefore, free to create a monopoly in favour of itself.
107. In paragraph 21 of the aforesaid judgment Association of Registration Plates (supra) his Lordship noted that any clause in NIT which requires that the tenderer or bidder or joint- venture partner should have a turnover of Rs. 50 Crores in the immediately preceding last year and at least 25 per cent of this turnover must be from the license plates business, inevitably means that it would be a foreign company. HSVRPs having not been introduced in India so far, it is obvious that no Indian company can have a turnover of that magnitude in the preceding year. The clear impact of this condition is that all Indian companies must be ousted even though they may be technically competent to manufacture HSVRP and have the requisite approval from the body or agencies mentioned in the second para of cl. (v) of sub-rule (1) of Rule 50 of the Rules.
108. In paragraph 22 of the judgment of Association of Registration Plates (supra), His Lordship further noted that “experience of supplying HSVRP in these countries is hardly a guarantee of the quality of the products supplied. When India is capable of making the most sophisticated missiles and rockets, and passenger cars manufactured in India are being exported to highly advanced countries of Western Europe like UK and Germany, and commercial vehicles to many countries all over the world, facing stiff competition, it does not at all appeal to reason that to ensure quality of the product, experience in three to five other countries (which would be amongst those described earlier) should be necessary. Similarly, the condition in NITs regarding a particular quantum of turnover in number plates business in the immediately preceding year cannot be met by any product (number plates) is being introduced in the country for the first time. It can be met only by those whose joint-venture partner is a foreign company and is already dealing with such type of license plates. This condition again has the effect of completely ousting Indian companies. The Government of India, Ministry of Road Transport and Highways had sent a letter dated 13-11-2002 to the Secretaries/Commissioners (transport) of all States wherein it was clearly mentioned that earlier guidelines circulated on 06.03.2002 and 14.06.2002 were merely suggestive in nature and they did not stipulate details about experience/capacity of bidders/collaborators. It was also mentioned therein that experience in 5 countries in not a mandatory requirement. This letter has been completely ignored while laying down the eligibility criteria”. Ultimately His Lordship quashed the eligibility criteria mentioned in the NIT issued by the various State governments regarding turnover of Rs. 50 Crores in the immediately preceding last year and at least 25 per cent of this turnover must be from the licence plates business.
109. But His Lordship, Chief Justice S Rajendrababu, the presiding judge of the Bench, dis- agreed with the views of His Lordship Justice Mathur and ultimately on reference the matter was placed before the larger Bench consisting of their Lordships Mr. Justice YK Sabarwal, Mr. Justice DN Dharmadhikari and Mr. Justice Tarun Chatterjee, as they then were, and on behalf of the Bench the decision was given by His Lordship Justice Dharmadhikari. The larger Bench did not agree with the views of his Lordship Justice Mathur, the then. The larger Bench held that none of the impugned clauses in the NIT can be held to be arbitrary or discriminatory and that would be evident from para 41 of the Association of Registration Plates Vs Union of India and Ors., (2005) 1 SCC 679 2004 Indlaw SC 1031. The said paragraph 41 is reproduced hereunder:-
“41. ……………. There would be a huge investment required towards the infrastructure by the selected manufacturer and the major return would be expected in initial period of two years although he would be bound down to render his services for future vehicles periodically for a long period. Looking to the huge investment required and the nature of the job which is most sophisticated, requiring network and infrastructure, a long-term contract, if thought viable and feasible, cannot be faulted by the court. If there are two alternatives available of giving a short-term or a long-term contract, it is not for the court to suggest that the short- term contract should be given. On the subject on business management, expertise is available with the State authorities. The policy has been chalked out and the tender conditions have been formulated after joint deliberations between authorities of the State and the intending manufacturers. A contract providing for technical expertise, financial capability and experience qualifications with a long term of 15 years would serve the dual purpose of attracting sound parties to stake their money in undertaking the job of supply and safeguard the public interest by ensuring that for a long period the work of affixation of security plates would continue uninterrupted in fulfillment of the object of the scheme contained in Rule 50. Our considered opinion, therefore, is that none of the impugned clauses in the tender conditions can be held to be arbitrary or discriminatory deserving their striking down as prayed for on behalf of the petitioners.”
(Emphasis Supplied)
In view of the decision of the larger Bench, the judgment of Justice Mathur cannot be treated as a precedent though his Lordship expressed his views regarding monopoly as taken into consideration in competition law, but we have to be guided by the subsequent decision of the larger bench wherein the terms prescribed in NIT of that case were upheld.
110. In Shimnit Utsch India Private Limited 2010 Indlaw SC 389 (supra) as referred and relied on by Mr. Kapoor, it is nowhere stated that the notice inviting authority has no right to include a clause in the bid documents like past experience, turn over of production to see the capability of the intended bidder; rather the Apex Court in para 53 of the said judgment while referring to the case of Association of Registration Plates (Supra) noted that “while maintaining the State Government’s right to get the right and most competent person, it was held that in the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring the supply of HSRP, greater latitude is required to be conceded to the State authorities and unless the action of the tendering authority is found to be malicious and a misuse of statutory powers, tender conditions are unassailable.” The aforesaid case came up before the Apex Court to consider the common question that arose for consideration, inter alia, that whether after decision of the Apex Court in Association of Registration Plates Vs Union of India and Ors., (2005) 1 SCC 679 2004 Indlaw SC 1031 wherein the conditions provide for experience in the filed of Registration Plates in the foreign countries and a minimum annual turn over from such companies were held as essential conditions in the Notices Inviting Tenders (NIT) for award of contract to manufacture and supply of High Security Registration Plates (HSRP) for motor vehicles, it is necessary for the State Government to continue with these conditions or it is permissible for them to do away with such conditions and ultimately the Apex Court considering the challenging circumstances allowed the State government to do away with the conditions which was upheld by the Apex Court in its earlier decision in (2005) 1 SCC 679 (Association of Registration Plates 2004 Indlaw SC 1031) (Supra) and in the said judgment the Apex Court nowhere disapproved its earlier decision in Association of Registration Plates (supra) delivered by his lordship Justice Dharmadhikari, the then, on behalf of the larger bench. The unreasonableness of restriction is to be determined by a Court in a objective manner and from the stand point of interest of the general public and not from the stand point of the interest of the persons upon whom the restrictions have been imposed or upon abstract conditions. When the purchaser put restrictions to over come by the intending bidder to save the interest of the purchaser that cannot be always treated as unreasonable merely because those restrictions are hardship in nature. Court has to see whether there is any unfairness involved and the right of any citizen or company has been allowed to be infringed. The Apex Court also stated that the canalization of a particular business in favour of specified individual is reasonable where the interest of the country is concerned or where the business affects the economy of the country. In the instant case, the GMDA even did not try to canalize the business in favour of a particular company or individual. Rather the GMDA included the terms and conditions in the bid documents to protect the public interest. For review, the manner in which the decision was made by GMDA cannot be said to be unreasonable, arbitrary and discriminatory. More so, in paragraph 50 of the Shimnit Utsch India Private Limited 2010 Indlaw SC 389 (supra) it is stated inter alia, that “of the four bidders, who initially participated in the tender process, one withdrew and as regards Promuk, an objection was raised by Shimnit about their eligibility. Shimnit approached the Calcutta High Court and obtained an interim order from the Single Judge that tender process shall not be finalized. As a matter of fact, due to litigation no substantial progress took place for two years in finalization of process for which NIT was issued in July, 2003 and practically two bidders in the entire tender process remained in fray. In interregnum, considerable number of indigenous manufacturers obtained the requisite TAC from the approved institutions as per the provisions of the 1988 Act and thereby acquired capacity and ability to manufacture HSRP.” Keeping in mind the aforesaid facts, the Apex Court allowed the State to change the conditions as imposed by it earlier so that more competitors could participate and supply of HSRP should not be delayed. The facts of the case in hand are totally different from the case of Shimnit Utsch India Private Limited 2010 Indlaw SC 389 (supra).
111. From the fact of Shimnit Utsch India Private Limited 2010 Indlaw SC 389 (supra) it would also be evident that it was the State who wanted to change the terms and conditions as put by them earlier considering the fact that in duration of time who were not competent earlier to participate in the tender due to the terms and conditions therein, but subsequently attained the ability to manufacture HSRP. It was the State who withdrew the terms and conditions. Court did not ask the State to withdraw the same. Rather the Court put the seal on its terms and conditions, in the case of Association of Registration Plates (supra) and Shimnit Utsch India Private Limited 2010 Indlaw SC 389 (supra) at the same time allowed the State to proceed with its change policy keeping in mind that in the interregnum indigenous manufacturers acquired/obtained requisite TAC from the approved institutions. Therefore, this Court is unable to accept the submission of Mr. Kapoor, for the argument of Mr. Kapoor is misplaced and the said decision has no application in the instant case.
112. In Optel Telecommunication Ltd 2000 Indlaw MP 184. (supra) the Division of the MP High Court while considering the question relating to amendment of bid documents subsequent to the issuance of tender notice and before opening of the tender noted, inter alia, “thus the respondents considered representations by interest 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 was 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 old that amendment was carried out with a view to eliminate the petitioner and benefit the new bidders.” (emphasis supplied).
113. In the said judgment their lordships of the MP High Court also restated the law laid down by the Apex Court, inter alia, “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, mala fide and against public interest, judicial scrutiny is not possible. Court cannot 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 by 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” have 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.” In the said case also, like the case in hand, amendment of bid documents was held before any of the bidders had submitted the bid documents. It was uniformly applicable to all bidders. With this background it cannot be said that amendment was carried out with a view to eliminate the petitioner and benefit the new bidders.
114. Upon going through the aforesaid submission and considering the submission of Mr. Dutta as well as Mr. Mitra this Court is of the opinion that in the aforesaid case there was a clause for amendment of the bid document particularly cl. 6 which is as under: –
“6. AMENDMENT OF BID DOCUEMTNS:
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 form 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.”
Like the cl. 11 of the bid documents which is as under: –
11. Amendment of Bidding Documents.
11.1 At any time prior to the deadline 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 Bidding Documents by issuing addendum.
11.2 The addendum shall be part of the Bidding Documents, pursuant to Cl. 9.1, and shall be communicate in writing or by fax to all prospective bidders who have received the Bidding Documents, and will be bidding on them.
11.3 In order to afford prospective bidders reasonable time in which to take the addendum into account in preparing their Bids, the Purchaser may, at its discretion, extend the deadline for the submission of Bids in accordance with Cl. 24.”
115. On proper scrutiny, Cl. 6 of the bid documents of the aforesaid case and Cl. 11 of the bid documents of the case in hand are almost parimateria and the said decision is more helpful to come to a logical decision by this Court regarding the power of amendment of bid documents by the Notice Inviting Authority. According to this Court, even when there is no specific clause for amendment of bid documents then also the Notice Inviting Authority has the inherent power to amend the bid documents prior to submission of bid documents by the intending bidders subject to that such amendment is applicable uniformly to all the bidders and not to eliminate any particular intending bidder. It appears from the record that in the instant case the notice inviting authority amended the bid documents after pre-bid discussion of the intending bidders wherein the petitioner company also participated. Amendment of bid documents is not permissible after the submission of the bids by the intending bidders as that would prejudice the stand taken by them in their bids. Whether the tendering authority would further amend the bid documents subsequent to the earlier amendment to provide an opportunity to the petitioner-company for participating in the bid is up to the notice inviting authority, they being the purchaser of the materials like DI Pipes for the purpose of the water project. Court cannot direct the respondent-tendering authority to amend its bid documents for providing opportunity to any of the intending bidders including the petitioner-company as that is within their domain. The power of Court is very limited in a contractual matter in view of the law laid down by the Apex Court, as stated supra. Court can only interfere in a contractual matter when the notice inviting authority acted either arbitrarily, unreasonably or discriminatorily with an intention to eliminate any particular intending bidder; as that would be evident from the decision of the Apex Court in Monarch Infrastructure (P) Ltd 2000 Indlaw SC 2846 (supra) but the fact of the case in hand is totally different from the case of Monarch Infrastructure (P) Ltd 2000 Indlaw SC 2846 (supra).
116. In Monarch Infrastructure (P) Ltd 2000 Indlaw SC 2846 (supra) questions that arose for consideration before the Apex Court were:-
(i) Whether the High Court is justified in setting aside the award of contract in favour of Monarch Infrastructure (P) Ltd.;
(ii) Whether the direction for a fresh process of tender instead of awarding the contract in favour of Konark Infrastructure (P) Ltd. is justified in the facts and circumstances of the case; and
(iii) the effect of the steps taken now by the Municipal Corporation to call for fresh tenders. While deciding the aforesaid questions, the Apex Court noted, inter alia, “there have been several decisions rendered by this Court on the question of tender process, the award of contract and have evolved several principles in regard to the same. Ultimately what prevails with the courts in these matters is that while public interest is paramount there should be no arbitrariness in the matter of award of contract and all participants in the tender process should be treated alike. We may sum up the legal position thus:
(i) The Government is free to enter into any contract with citizens but the court may interfere where it acts arbitrarily or contrary to public interest.
(ii) The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly situated.
(iii) It is open to the Government to reject even the highest bid at a tender where such rejection is not arbitrary or unreasonable or such rejecting is in public interest for valid and good reasons.”
117. Not only that, the Apex Court while answering the question (iii) noted that, “new terms and conditions have been prescribed apparently bearing in mind the nature of contract, which is only collection of octroi as an agent and depositing the same with the Corporation. In addition, earnest money and the performance of bank guarantee are insisted upon; collection of octroi has to be made on day-to-day basis and payment must be made on a weekly basis entailing, in case of default, cancellation of the contract. We cannot say whether these conditions are better than what were prescribed earlier for in such matters the authority calling for tenders is the best judge.”
118. Therefore, from the aforementioned statements of the Apex Court this Court has no hesitation to hold that it is the authority calling for tenders is the best judge to decide whether they would amend the bid documents either for their own interest or for the public interest and it appears from the record that in the instant case the authority calling for tenders, i.e. GMDA has amended the tender documents not for eliminating the petitioner-company but for public interest. In view of the above, the case of Monarch Infrastructure (P) Ltd. has no application in the instant case.
119. In Meerut Development Authority 2009 Indlaw SC 527 (supra) while their lordships considering the issues, inter alia,
(i) what is the nature of rights of a bidder participating in the tender process;
(ii) the scope of judicial review in contractual matters;
(iii) whether the decision of the Authority is vitiated by any arbitrariness and therefore hit by Art. 14 of the Constitution of India; and
(iv) whether the decision is not in public interest; their lordships noted inter alia, “A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.” Their lordships further noted, “the bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the abovestated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.”
120. By this time it is a settled position that the Court would be slow to interfere with an administrative action/policy matter of the State or its instrumentality unless the decision taken by the said authority is tainted or illegal or irrational and/or mala fide and in bad faith.
121. It is well known that reasonable means what a reasonable man thinks. But always the man may not think reasonably. According to this Court, reasonable means what the Court thinks reasonable as the Court cannot think unreasonably as reasonable thinking is part of the duty of the Court while rendering justice to the justice seeker who approaches the Court as an institution but not as an individual judge.
122. The meaning of the word ” reasonable” has also been considered by the Apex Court in Municipal Corpn. of Delhi Vs. Jagan Nath Ashok Kumar, (1987) 4 SCC 497 1987 Indlaw SC 28409 wherein it is stated that ” it would be unreasonable to expect an exact definition of the word ” reasonable”. Reasons varies in its conclusion according to the idiosyncrasy of the individual, and the times and circumstances in which he thinks. The reasoning which build up the old scholastic logic sounds now like the jingling of a child’s toy. But mankind must be satisfied with the reasonableness within reach; and in cases not covered by authority, the verdict of a jury or the decision of a judge sitting as a jury usually determines what is ” reasonable” in each particular case. The word “reasonable” has in law prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. Again the Apex Court in Collector Vs. P. Mangamma, (2003) 4 SCC 488 2003 Indlaw SC 212, restated the word ” reasonable” and while restating the same, in addition stated that ” it is impossible a priori to state what is reasonable as such in all cases. You must have the particular facts of each case established before you can ascertain what is reasonable under the circumstances. Therefore, the reasonableness of an action also vary, man to man, time to time, fact to fact of the case, as the same is not static. What is reasonable to “X” may not be reasonable to “Y”. Therefore, the views of this Court that reasonable means what the Court thinks sitting in a Bench while determining an issue is reasonable as stated supra get support from the decision of the Apex Court as stated supra.
123. In the instant case upon going through the impugned clauses of the bid document, wherein the terms relating to past experience like the turn over and the length is incorporated for the public interest so that the bidders who are not capable and have no past experience regarding the material like DI Pipe be excluded from the game, cannot be said unreasonable or discriminatory since the tendering authority is not excluding the present petitioner company but the exclusion is to a certain class for the public interest and to confirm the funding from JICA, the creditor funding authority. Hence, the exclusion of that class cannot be said discriminatory or unreasonable amounting to violation of Art. 14 as the said exclusion is for the purpose of public good. In support of the aforesaid proposition, this Court would take the privilege of referring to a decision of Privy Council in Mercury Energy Ltd. AND Electricity Corporation of New Zealand Ltd., [1994] W.L.R. 521-2 an appeal from the Court of Appeal of New Zealand wherein the Privy Council decided the question whether proceedings for judicial review will lie against a New Zealand State Enterprise and if a remedy by way of judicial review is obtainable against a State Enterprise, then whether the plaintiff should be allowed to proceed in the said proceeding with his claim. While answering the aforesaid question upon taking note of the pleading of the plaintiff, inter alia, that in reaching that decision, the defendant, given the terms of contractual arrangements and having regard to the defendants; active monopoly position, acted “(a) unreasonably; and/or (b) in breach of good faith, and/or from improper motives and/or with ulterior objects (nobly, a desire to increase prices to the plaintiff above, ‘fair and reasonable levels); and/or (c) in breach of its express statutory duty in terms of S. 4(i)(c), State Owned Enterprises Act, 1986…………….”, the Privy Council ultimately held that “it was for the defendant to determine whether its principle objective would be best served by allowed the contractual arrangements to continue or by terminating the contractual agreements. The general and vague assertion of impropriety in paragraph 32 is not supported by any reference to a single alleged fact.” It is also noted by the Privy Council, that “it does not seem likely that a decision by a State Enterprise to enter into or determine a commercial contract to supply goods or services would ever be the subject of judicial review in the absence of fraud, corruption or bad faith. Bad faith increases in prices whether by State owned or Private Monopolies or by powerful traders may be subjected to voluntary or common law or legislative control or may be uncontrolled. Where a State Enterprise is concerned, the shareholding ministers may exercise powers to ensure directly or indirectly that there are not price increases which the ministers regard as excessive. In the instant case also, the present petitioners challenge the clauses in the bid document relating to past experience of the intended bidder on specific turn over of production of DI Pipes and length on the ground of unreasonable, irrationality and discrimination read with provisions of S. 3 relating to anti-competitive agreement and S. 4 relating to abuse of dominant position. Therefore, the instant case is more helpful for deciding the issue involved in this case, particularly, taking note of their Lordships’ views in the case of Electricity Corporation (supra), inter alia, that a decision by a State Enterprise to enter into or determine a commercial contract to supply goods or services would ever be the subject of judicial review in the absence of fraud, corruption or bad faith.
124. Now let us examine what is the meaning of bad faith, in Latin which is known as Mala fides, and what is the meaning of fraud? Bad faith is a legal concept in which a malicious or bad motive on the part of a party in a lis undermines their case, which effects ability to maintain causes of action and obtain legal remedies. We can say that Court not only look s at the legal rights of the parties in a lis on transaction; it also look behind the activity, at the parties’ motive in attempting to obtain the court’s assistance. If a court feels that these motives effectively abuse the law or the power or the court, it will generally deny eligibility for a legal remedy to which a party would otherwise be entitled. In State of Bihar and Anr. Vs. PP Sharma, IAS and Anr., (1992) Supp (1) SCC 222 1991 Indlaw SC 1053, their Lordship also dealt with the words ‘Mala fides’. In view of their Lordships, mala fides means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose, which would be evident from Para-50 of the aforesaid decision of the Apex Court. The para-50 of the said judgment is reproduced hereunder:
“50. Mala fides means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose. The administrative action must be said to be done in good faith, if it is in fact done honestly, whether it is done negligently or not. An act done honestly is deemed to have been done in good faith. An administrative authority must, therefore, act in a bona fide manner and should never act for an improper motive or ulterior purposes or contrary to the requirements of the statute, or the basis of the circumstances contemplated by law, or improperly exercised discretion to achieve some ulterior purpose. The determination of a plea of mala fide involves two questions, namely (i) whether there is a personal bias or an oblique motive, and (ii) whether the administrative action is contrary to the objects, requirements and conditions of a valid exercise of administrative power.”
The Apex Court also in the said judgment stated, inter alia, that action taken must, therefore, be proved to have been made mala fide for such considerations. Mere assertion or a vague or bald statement is not sufficient. It must be demonstrated either by admitted or proved facts and circumstances obtainable in a given case.
125. The word “fraud” in Black’s Legal Dictionary is defined as an international perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegation or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury’s Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. S. 17 of the Contract Act defines fraud as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it was false. [See Shrisht Dhawan (Smt.) v. M/s Shaw Bros., (1992) 1 SCC 534 1991 Indlaw SC 422.]
126. In the aforesaid judgment of Shrisht Dhawan (Smt), their Lordships taking note of a leading English case, namely, …… noted what constitutes fraud as was described in the aforesaid English case. “Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false.” Therefore, from the aforesaid discussion of the Apex Court, it can be easily said that fraud is nothing but a dishonest intention of a person to deceive another.
127. Therefore, it can be easily said that judicial review is permissible in a commercial contract matter against the State and its instrumentality and the plea of unreasonableness, irrationality and discrimination is not enough, the plea of fraud, corruption or bad faith is sine qua non as reasonableness may differ from man to man, institution to institution but the fraud and corruption depends upon the act of the authority or institution like in a contractual matter. In the instant case, there is no pleading of fraud, corruption or bad faith against any particular officer of either respondent-State or the respondents-GMDA. Mere assertion or a vague or bald statement allegation is not sufficient, it has to be demonstrated and proved. Admittedly there is nothing on records that with an intention to eliminate the petitioner-company the respondent-GMDA included the terms impugned in the bid documents. Therefore, it cannot be said that the action of the official respondents are unreasonable, irrational and for bad faith and these are hit by the provisions of Art. 14 of the Constitution.
On applicability of the provisions of Competition Act:-
128. As one of the main contentions of the petitioner, inter alia, that the conditions put in the clauses of the bid documents are unreasonable, irrational and hit by Art. 14 of the Constitution fails, only remains the question as to whether the terms included in the bid documents are suffering from illegality as alleged to be contrary to the provisions of S. 3 and 4 of the Competition Act. Therefore, it would be injustice to the petitioners to send them back to the forum prescribed in the Competition Act, for deciding the dispute relating to sub- s. (1) of S. 3 as well as sub-s. (1) of S. 4 of the Competition Act without answering the question raised by them. As Mr. Kapoor alleges inter alia, that the terms and conditions as provided in the bid documents, which are under challenge, are hit by the provisions of sub-s. (1) of S. 3 and sub-s. (1) of S. 4 of the Competition Act and the terms are alleged to be illegal being contrary to the provisions of theCompetition Act, hence such question requires to be discussed first before discussing the question of availability of alternative remedy prescribed by the said Act, as well as maintainability of the writ petition on the ground of non-impleadment of necessary and proper party as contended by Mr. Dutta and Mr. Mitra.
129. As the Competition Act has been given effect recently in the year 2009 and acts contemporary to the laws like the Enterprises Act, 2002 of the United Kingdom and also the provisions of the Act are para materia to the Act of Enterprises Act, 2002, it would be proper for this Court to carefully examine S. 3 and 4 of the Competition Act.
130. Now let us examine what was the intention of the legislature for enacting the law like Competition Act. Upon going through the scheme of the Competition Act, it appears that the intention of the legislature was to limit the rule of the market power by any individual manufacturer or industry and also to control the monopoly over price sought with the economic efficiency in the society and the quality of the product may not be affected. In another way, we can say that the primarily purpose of the Competition law is to avoid/restrict those situations where the activities of one individual firm or a Cartel between two parties lead to affect the free market system and to achieve the said object and to decide the dispute relating to competition law the legislature prescribed for establishment of a commission namely, Competition Commission of India (for short, ‘CCI’) as would be evident from chapter 3 of the said Act and chapter 4 of the said Act deals with duties power and function of the CCI particularly, the object of inserting S. 19 by the legislature is to entrust the power with the Commission for inquiring into any alleged contravention of the provisions contained in sub- s. (1) of S. 3 or sub-s. (1) of S. 4 of the Act. Not only that, the CCI is also given power u/s. 64 for framing regulations namely, Competition Commission of India (Regulations), 2009 (for short, ‘Regulations’)
131. As sub-s. (1) of S. 4 is parimateria to the provisions of Art. 86 of EEC, as it appears from Garden Cottage Foods Ltd (supra), as referred to by Mr. Kapoor, it would be proper to first deal with the decision of Garden Cottage Foods Ltd (supra), decided by their Lordships, of the House of Lords. In Garden Cottage Foods Ltd (supra), the plaintiffs of that case brought an action claiming, inter alia, an injunction restraining the defendants from withholding supplies of butter from the plaintiffs or other vise refusing to maintain normal business relations with them, contrary to Art. 86 of the EEC Treaty wherein they applied for an interlocutory injunction in the same terms and their lordships of the House of Lords tired a question regarding dominant position in a substantial part of a common market. Art. 86 of the EEC is almost parimateria to the S. 4 of the Competition Act. Parker J. when considering the action claimed by the plaintiffs in Garden Cottage Foods Ltd (supra), held that there was a serious question to be tried on whether the defendants had a dominant position in a substantial part of common market which they are abusing but refused the application on the ground, inter alia, that the plaintiffs would be adequately compensated by the damages if they succeeded in the action. On appeal by the plaintiffs, the Court of appeal, expressed doubts whether the damages would be recoverable by the plaintiffs in the event of their success and allowed the appeal granted interlocutory injunction and the defendants preferred appeal, which was ultimately allowed by their lordships of the House of Lords. There is no quarrelling with the proposition laid down by their lordships, inter alia, that produce direct effects in relation between individual and create direct rights in respect of individuals concerned which the Courts must protect, and also the proposition that a breach of duty imposed by the Art. 86 not to abuse a dominant position in a common market or in a substantial part of it, can thus be categorized in English Law as a breach of statutory duty that is imposed not only for the purpose of promoting the general economic prosperity of the common market but also for the benefit of private individuals to whom loss or damage is caused by a breach of that duty.
132. Question arose whether in that case their lordships decided the abuse of dominant position of the defendant therein or not and also whether their lordships in the said judgment anywhere said that the dominant position can be decided without taking any evidence being the competition law is nothing but a new form of tortuous liability on the part of one of the parties in a dispute, particularly, party or enterprise or a group of enterprises which has a dominant position in the relevant market. In the instant case, dominant market is a market of DI pipe and neither the respondent-GMDA nor the State respondents have any dominant position in the relevant market being they are neither producing nor buying DI Pipes for business; rather they are only purchasers/consumers. The Competition law is enacted to protect the right of the consumers and the consumers have no role to play in the relevant market of the DI pipes, particularly when the competition is between the producer of the relevant products in the market. The word relevant market is defined in the Competition Act in cl. (r) of S. 2 of theCompetition Act wherein it is stated that relevant market is the market which may be determined by the Commission with reference to the relevant product market or the relevant geographic market or with reference to both the markets. Cl. (t) of S. 2 defines the word relevant product market which means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use.
The word enterprise is defined in cl. (h) of S. 2 of the Competition Act, which is as under:-
“(h) “enterprise” means a person or a department of the Government, who or which is, or has been engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control or articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space.
Explanation.-For the purposes of this clause,-
(a) “activity” includes profession or occupation;
(b) “article” includes a new article and “service” includes a new service;
(c) “unit” or “division”, in relation to an enterprise, includes –
(i) a plant or factory established for the production, storage, supply, distribution, acquisition or control of any article or goods;
(ii) any branch or office established for the provision of any service;”
133. From the meaning of enterprise it appears that the person or a department of government has to be engaged in the occupation relating to the production, storage, supply, distribution, acquisition or control of articles of goods and not only that they have to be in the business of acquiring the products and the enterprise does not include any activity of the government relatable to the sovereign functions of it including all activities carried on by the departments of the Central government dealing with atomic energy, currency , defence and space. According to this Court, supply of water to the citizen is not the sovereign function of the government as contended by Mr. Dutta. That could be considered as a public duty of the government to protect the fundamental rights of its citizens being right to get pure and hygienic water is a fundamental right of a citizen. According to this Court, GMDA being neither producing DI Pipes nor in the business, even not involved in any activity in the DI Pipe market, rather a consumer/purchaser, not controlling the price of DI pipes in the market, has no dominant position in the market and unless a dominant position is there question of abusing such position does not arise. When GMDA is not controlling the market, as alleged by the petitioner, as its monopoly or creating monopoly in favour of anybody, it cannot be said that GMDA even abused its position, hence sub-s. (1) of S. 4 of the Competition Act has no application in the case in hand.
134. In East Line Projects Pvt. Ltd. (supra), a coordinate Bench of this Court while deciding four writ petitions wherein the notice inviting tender issued by Dr. B Boorah Cancer Institute was challenged therein, had an opportunity to consider the cls. 10 and 19 of the said NIT along with others. Cls. 10 and 19 are reproduced herein:-
“10. The tenderer should submit their credential along with the tender consisting of the following:-
(i) Certificate of previous experience of similar job.
(ii) Certificate regarding financial capacity from Bank concerned. (iii) Drug License issued by the competent authority.
19. That the tenderer will be required to quote the minimum percentage of profits on distributor’s price of medicine and other items to be charged separately for (a) Chemotherapy Medicines, (b) General Medicines, and (c) other medical items (like surgical items etc.). However, allotment of the work will be determined mainly on the basis of the prices of Chemotherapy Medicines (Oncology Products).”
Some of the petitioners therein challenged the terms of the tender being violative of Competition Act, 2002. While deciding that issue this Court taking into consideration the process on the ground that the NIT neither suffers from vagueness as the institute has not disclosed the size or area of the pharmacy and the stipulation fixing rent at Rs. 30,000/- p.m. without mentioning the area to be given to the successful tenderer and being the NIT was vague and uncertain and also raised the question of abuse of dominant position which will be violative of the provisions of the Competition Act, 2002. A coordinate Bench of this Court while deciding the cases took note of the object of Competition Act, 2002 as referred to by one of the learned counsel appearing therein which reads as follows:- “An Act to provide, keeping in view of the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets in India, and for matters connected therewith or incidental thereto.”
135. Upon going through the provisions of Competition Act, a coordinate Bench of this Court, noted inter alia, “considering the avowed object for which the pharmacy is going to be established, we hold that the provisions of the Competition Act, 2002 does not apply in the matter of establishment of a pharmacy or sale of medicines at a Pharmacy to be established by the Institute” and taking note of the law laid down by the Apex Court on the scope and ambit of the judicial review in a catena of decisions ultimately held that there is no infirmity or illegality in the entire tender processes. There is transparency in the matter and the decision has been taken by the concerned authorities in the larger interest of the cancer patients for whom the institution is meant. While the coordinate Bench of this Court decided the applicability of sub-s. (1) of S. 4 of the Competition Act, at that time also the said provision was not given effect to. Therefore, it can be easily said by a counsel like Mr. Kapoor, as he raised his voice regarding the decision of Madras High Court, that the case of coordinate Bench is also not applicable but according to this Court the aforesaid decision may not be much more helpful for this Court to get full light to examine the provisions of sub-s. (1) of S. 4 but obviously get some help of twilight being at that time also the law relating to Competition Act was not given effect to. In the said case also the Court considered the terms of the NIT challenged on vagueness and uncertainty, what in the instant case the petitioner has raised. Therefore, on that count also this decision is, if not much helpful, but obviously to some extent helpful and applicable.
136. In a recent decision, the Apex Court in Competition Commission of India Vs. Steel Authority of India ltd. (2010) 10 SCC 744 2010 Indlaw SC 737 while dealing with various provisions of the Competition Act including the object and reasons also dealt with establishment of powers and functions of the CCI and to the extent also discussed regarding provision of S. 3 and 4 read with S. 16 and S. 19 of the Act. Therefore the said decision will be helpful though in the said decision their lordships did not go for any detailed discussion on S. 3 and 4 as that was not the subject matter for consideration before the Court. Subject matter for consideration before their lordships was that one Jindal Steel & Powers Ltd. being the ‘informant’ invoked the provisions of S. 19 read with S. 26(1) of the Act by providing information to the CCI alleging that M.S Steel Authority of India ltd. (for short, ‘SAIL’) had, inter alia, entered into an exclusive supply agreement with Indian Railways for supply of rails. SAIL, thus, was alleged to have abused its dominant position in the market and deprived others of fair competition and therefore, acted contrary to sub-s. (1) of S. 3 and sub-s. (1) of S. 4 i.e. anticompetitive agreement and abuse of dominant position, respectively. Having received the aforesaid information from the informant therein, it was considered in its meeting by the CCI on 27.10.2008 on which date the matter was deferred at the request of the informant for furnishing additional information. During the course of hearing, it was also brought to the notice of the Commission that a Writ petition filed by the informant against the Ministry of Railways was also pending in the High Court of Delhi. Taking note of the facts vide order dated 10.11.2009 the Commission directed the informant to file an affidavit with respect to the information furnished by it and also directed SAIL to submit its comments in respect of the information receive by the Commission within two weeks from the date of the said meeting and the matter was adjourned till 08.12.2009. On 19.11.2009 a notice was issued to SAIL enclosing all information submitted by the informant. On 08.12.2009 when the matter was taken up for consideration by the Commission for taking on record the affidavit filed by the informant on 30.11.2009 in terms of its earlier order, SAIL requested for extension of six weeks time to file its comments. Finding no justification in the request of SAIL the Commission vide its order dated 08.12.2009 declined the prayer for extension of time. As the CCI was of considered opinion that a prima facie case against SAIL existed the Commission directed the Director General, appointed u/s. 16(1) of the Act, to make investigation into the matter in terms of S. 26(1) of the Act and the Commission also granted liberty to SAIL to file its views and comments before the Director General, during the course of investigation. Despite the order of CCI, SAIL filed an interim reply before the Commission along with an application that it may be heard before any interim order is passed by the Commission in the proceeding. On 22.12.2009 the Commission only reiterated its earlier directions made to the Director General for investigation and granted liberty to SAIL to file its reply before the Director General. Correctness of the order dated 18.12.2009 was challenged by SAIL before the Competition Appellate Tribunal. CCI filed an application on 28.01.2010 before the Tribunal seeking impleadment in the appeal filed by SAIL and also filed an application for vacation of the interim orders which had been issued by the Tribunal on 11.01.2010 in favour of SAIL staying the further proceedings before the Director General in furtherance of the direction of the Commission dated 08.12.2009. The tribunal in its order dated 15.02.2010 dismissed the application of the CCI for impleadment being the Commission was neither a necessary nor a proper party in the appellate proceedings before the Tribunal and resultantly the application for vacation of stay was also dismissed and also held that the appeal preferred by SAIL is maintainable and ultimately set aside the order of the Commission and recorded the finding that there was violation of the principles of natural justice. The order of the Tribunal dated 15.02.2010 was impugned by the Commission before the Apex Court in the appeal wherein the Apex Court dealt with the provisions of the Competitive Act as sated supra and ultimately, allowed the appeal of the CCI wherein the Apex Court also noted inter alia, that “the scheme of the Act and the Regulations framed there under clearly demonstrate the legislative intent that the investigations and inquires under the provisions of the Act should be concluded as expeditiously as possible. The various provisions and the Regulations, particularly Regulations 15 and 16, direct conclusion on the investigation/inquiry or proceeding within a “reasonable time”. The concept of “reasonable time” thus has to be construed meaningfully, keeping in view the object of the Act and the larger interest of the domestic and the international trade.”
137. The Apex Court further noted in Competition Commission of India, inter alia, “in our considered view the scheme and essence of the Act and the Regulations are clearly suggestive of speedy and expeditious disposal of the matters. Thus, it will be desirable that the competent authority frames regulations providing definite time-frame for completion of investigation, inquiry and final disposal of the matters pending before the Commission. Till such regulations are framed, the period specified by us supra shall remain in force and we expect all the authorities concerned to adhere to the period specified.” (Emphasis supplied).
138. Upon going through the provisions of Competition Act and the decision of the Apex Court in Competition Commission of India2010 Indlaw SC 737 (supra), this Court has no other option except to hold that a specific mechanism has been prescribed by the legislature for deciding the issue raised by a person being aggrieved for violation of sub-s. (1) of S. 3 and sub- s. (1) S. 4 by establishing CCI, as prescribed u/ss. 7 and 8 of the Act, and exercising power under S. 16 of the Act, appointed the Director General, who would investigate and submit the report to the Commission and the Commission being an expert body will decide the issue taking evidence as required. More so, from Chapter VIIIA wherein provisions of Section 53A to 53U are there and those provisions are relating to Appellate Tribunals and appeal to Supreme Court, provisions of Section 53B is for an appeal to the appellate tribunal from an order of the CCI. Therefore, it can be easily held by this Court that the petitioner approached this Court to decide a relief sought for to which an alternative, efficacious and adequate statutory remedy is available. As it is well settled, that where a particular statute has prescribed a self-contained machinery for determination of questions arising under the enactment, the statutory remedies provided therein must be availed of and recourse should not be ordinarily allowed to be taken to writ jurisdiction.
139. Now let us see whether the terms and conditions as impugned have come within the purview of sub-s. (1) of S. 3 of the Competitive Act. The provisions of S. 3 impose a bar on enterprise or association of enterprises or person or association of persons from entering into an agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services which would obviously affect competition within India. Therefore, it can be easily said that to attract sub-s. (1) of S. 3 the primary requirement is an agreement and in the instant case admittedly neither the respondent-GMDA nor the respondent-State entered into any agreement with anybody. Therefore, contraventions of sub-s. (1) of S. 3 does not arise at all. The above views of this Court get support from the decision of Madras High Court in PG Narayanan Vs. The Union of India, rep. by the Secretary, Ministry of Information and Broadcasting and Ors. Though when their lordships decided the matter the Competition Act was not in force but as the question came up before their lordships in a Public Interest Litigation, question arose regarding the applicability of the Competition Act, for the writ petitioner of that case questioned regarding the issuance of a license in violation of Art. 38 and 39(C) of the Constitution and in not following the rule of law in the processing of the application for license in view of the presence of the minister for communications and information Technology who is the brother of the person at the helm of the Sun TV Network Companies and there is a chance of being influenced, the entire process is vitiated by mala fide and bias and also the application of license being considered violating the provisions of Companies Act, 2002, the license required to be rejected.
140. While deciding the issue, their lordships of the Madras High Court specifically said that the Competition Act is not relevant for deciding the case being the said Act has not come into force or at least the relevant portion, i.e. s. 3 which deals with anti-competitive agreement has not come into force then the licensing authority need not refer to the provision of Competition Act before considering the issue of grant of license but at the same time their lordships examined S. 3 as if the same was given effect to and held inter alia, that “if the Competition Act has come into force, then the duties, powers and functions of the Competition Commission as laid down in chapter 4 of the Act would show that for the contravention of the provisions of the Act, inquiry will be made by the competitive Commission on receipt of a complaint or on a reference made to it by the Central Government or the State Government or a statutory authority with regard to an agreement. Therefore, the provisions of the Competition Act come into play only after an agreement has been entered into, and this agreement is entered into, as seen from the guidelines for grant of license only after the clearances are obtained and the applicant pays the entire fee and furnishes the bank guarantee. Therefore, it is only after the licensing agreement is entered into, that the provisions of the Competition Act will come into play and that stage has not been reached in this case. Therefore, in either case, the Competition Act has no application.” While recording the submission of Mr. Kapoor, it has already been recorded that according to Mr. Kapoor the decision of the Madras High Court is not applicable and binding on this Court being the Competition Act was not in force and same is per incurium, it would be improper on the part of this Court not to answer the point raised by Mr. Kapoor on per incurium.
On per incurium
141. Even in the case of Garden Cottage Foods Ltd. (supra) per incurium is discussed wherein it is held inter alia, that “difficulties of estimation, however, were not the ground on which the Court of Appeal overruled the judge’s opinion that damages would be an adequate remedy. Neither Lord Denning M.R. nor Sir Sebag Shaw made any mention of this topic; nor does a passing reference by May L.J. at p. 1126 to possible difficulties of assessment of the proper measure of damages “in cases such as this,” without any reference to the special characteristics of the company’s business to which I have just drawn attention, appear to play a significant role in his ratio decidendi. It was for an entirely different reason that the Court of Appeal rejected the view of the learned judge that damages would provide an adequate remedy.
142. Therefore, it can be said that certain facts though available on record and required to be discussed but on ignorance or carelessness without discussing those issues the matter is decided or even when the law laid down on an issue on an earlier point of time require to be referred and discussed treating the same as a precedent but on ignorance or carelessness not discussed and noted the same and a law contrary to the law laid down earlier is passed, then it is to be considered as per incurium.
143. In other way, we can say per incurium means something determined through want of care. The Law Lexicon points out that the expression connotes an order obviously made through some mistake or under some misapprehension a decision or a dictum of a judge which clearly is the result of some material oversight. It would be improper on the part of this Court not to take note of some of the decisions of the Apex Court wherein it discussed about per incurium. In Mamleshwar Prasad V. Kanhaiya Lal, (1975) 2 SCC 232 1975 Indlaw SC 415 their lordships discussed about the doctrine of per incurium which would be evident from paragraph 7 and 8 of the said decision. Paragraph 7 and 8 of the said decision are reproduced herein under for better appreciation.
“7. Certainty of the law, consistency of rulings and comity of courts – all flowering from the same principle – converge to the conclusion that a decision once rendered must later bind like cases. We do not intend to detract from the rule that, in exceptional instances, where by obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have the sway of binding precedents. It should be a glaring case, an obtrusive omission. No such situation presents itself here and we do not embark on the principle of judgment per incuriam.
8. Finally it remains to be noticed that a prior decision of this Court on identical facts and law binds the Court on the same points in a later case. Here we have a decision admittedly rendered on facts and law, indistinguishably identical, and that ruling must bind.”
Again in the case of AR Antulay V. RS Nayak, (1998) 2 SCC 602 1988 Indlaw SC 467 their lordships discussed about per incuriam. The doctrine of per incuriam has again been dealt with by the Apex Court in the case of State of UP and Another V. Synthetics and Chemicals Ltd. and Anr., (1991) 4 SCC 139 1991 Indlaw SC 702 which is as under:-
“Incuria’ literally means ‘carelessness’. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The ‘quotable in law’ is avoided and ignored if it is rendered, ‘in ignoratium of a statute or other binding authority’. (Young v. Bristol Aeroplance Col Ltd.) Same has been accepted, approved and adopted by this Court while interpreting Art. 141 of the Constitution which embodies the doctrine of precedents as a matter of law.”
The aforesaid principle of doctrine of per incuriam has been again restated by the Apex Court in the case of Furest Day Lawson Ltd. V. Jindal Exports Ltd., (2001) 6 SCC 356 2001 Indlaw SC 307. A coordinate Bench of this Court also took note of Synthetics and Chemicals Ltd. and Anr 1991 Indlaw SC 702 (supra) in the case of State of Manipur & Ors., Vs. Arambam Kameshwar Singh, 2004 (2) GLT 718, while discussing about per incurium. This Court again stops itself there so far rules of doctrine of per incurium is concerned as given in Nirmal Jeet Kaur V. State of MP and Anr., (2004) 7 SCC 558 2004 Indlaw SC 693. The Apex Court in paragraph 21 of the said decision restated the law relating to per incuriam taking note of Synthetics and Chemicals Ltd. and Anr 1991 Indlaw SC 702., (supra) which will be evident from paragraph 21 of the said decision. The Apex Cout again restated the said doctrine in paragraph 11 of Mayuram Subramanian Srinivasan V. CBI, (2006) 5 SCC 752 2006 Indlaw SC 803.
144. Now let us examine wither the doctrine of per incuriam is applicable in the case of PG Narayanan (supra) or not? In PG Narayanan (supra), their lordships of the Madras High Court while dealing with the matter only explained and observed when S. 3 would be attracted if the Act is really given effect to. There is no doubt that this Court is not bound by the decision of the Madras High court but at the same time it is the duty of the Court that when other Courts decided some matters giving reasons, it would be proper for another Court to appreciate those reasons and if that helps the court to decide a matter, then that should be accepted for rendering justice to the justice seeker. As in the instant case, the decision of the Madras High Court is helpful, for a decision in the case in hand, this Court is taking aid from the said decision for holding that entering into an agreement is sine qua non for attracting sub-s. (1) of S. 3 of theCompetition Act, particularly in a contractual matters in hand. In the instant case fact remains neither the GMDA nor the State entered into any agreement. Therefore, arguments of Mr. Kapoor on Doctrine of per incurium is also mis- placed.
145. Therefore, according to this court the contention of Mr. Dutta and Mr. Mitra that for attracting the provisions of sub-s. (1) of S. 3 of the Competition Act, agreement is sine qua non and such agreement is not their in the instant case, being so the Competition Act has no application, has some force and this Court is unable to accept the submission of Mr. Kapoor that the terms and conditions as impugned are illegal being violative of sub-s. (1) of S. 3 and sub-s. (1) of S. 4 of the Competition Act.
On alternative remedy
146. In Competition Commission of India, despite the existence of an alternative remedy the Apex Court noted, that it is within the jurisdiction of the High Court to grant, in appropriate case, relief u/art. 226. Therefore, it is the High Court who has to decide whether it will exercise its discretion for granting relief sought for or it would send back the matter to the statutory authority like CCI, an expert body with whom all the power vests to decide the issue like the issue involved in the case.
147. A coordinate Bench of this Court discussed about the principle of alternative remedy in details in Food Corporation of India Vs. State of Arunachal Pradesh, 2009 (4) GLT 7 in paragraph 81, 82, 83 and 84, which are as follows:-
“81. Having held that the powers of judicial review conferred on the High Court u/art. 226 and of supervision u/art. 227 form pat of basic structure of theConstitution, let me, now, turn to the question as to whether the existence of alternate remedy is an absolute bar to the exercise of the powers so conferred on the High Court. While dealing with their aspect of the matter, it is imperative to note that the proposition of law is well settled that where a particular statute provides a self-contained machinery for determination of questions arising under the enactment, the statutory remedies provided therein must be availed of and recourse should not be, ordinarily, allowed to be taken to writ jurisdiction. This rule was stated with great clarity by Willes, J, in Wolverhampton New Water Works Co. Vs. Hawkesfor, (1859) 6 CBNS 336 at P. 356. The rule so laid down by Willes, J, was approved by the House of Lords in Neville Vs. London Express Newspaper Ltd., [1919] A.C. 368 and was reaffirmed by the Privy Council in Attorney General of Trinidad and Tobago Vs. Gordon Grant and Co. [1935] A.C. 532 and Secretary of State Vs. Mask and Co. AIR 1940 PC 105 1940 Indlaw PC 23.
82. While considering the above proposition, it is equally important to bear in mind that the principle treating the existence of alternate remedy as a bar to the exercise of jurisdiction u/arts. 226 and/or 227 has been a rule of self-imposed restriction, a rule of policy, convenience and discretion rather than a rule of law. Though the Constitution (42nd Amendment) Act, 1976, had placed a bar on the High Court’s jurisdiction to entertain certain petitions if any other remedy for redress was provided by or under any other law, the Constitution (44th Amendment) Act, 1978, has removed this restriction. The fall out of this removal further strengthens the principle that there is no rule of law completely barring exercise of jurisdiction u/arts. 226 and/or 227 merely because there exists an alternative remedy, though the fact remains that to the exercise of powers u/arts. 226 and 227, existence of alternative remedy has been treated by the Courts as a self-imposed restriction, albeit, of a limited nature.
83. In Thansingh Nathmal Vs. Superintendent of Taxes, AIR 1964 SC 1419 1964 Indlaw SC 115, the Court, while considering the scope of Art. 226 in a case, wherein alternative remedy had existed, observed as under:
‘the jurisdiction of the High Court u/art. 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restriction…… But the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain well imposed limitations. Resort to that jurisdiction is not intended as an alternative remedy of relief, which may be obtained in a suit or other mode prescribed by the statute. Ordinarily, the Court will not entertain a petition for a writ u/art. 226 where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy……………………….. The High Court does not, therefore, act as a Court of Appeal against the decision of a Court or Tribunal to correct errors of facts and does not, by assuming jurisdiction under Article 226, trench upon an alternative remedy provided by a statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal or even itself in another jurisdiction for obtaining redress in the matter provided by a statute, the High Court, normally, will not permit by entertaining u/art. 226 of the Constitution the machinery created by the statute to be bypassed and leave the party applying to it to seek resort to that machinery so set up.’
84. The rule requiring exhaustion of statutory remedies before the grant of writ had nothing to do with the jurisdiction of the Court it was a rule of policy, convenience and discretion rather than a rule of law. Despite the existence of an alternative remedy, it is within the jurisdiction of and discretion of the High Court to grant, in an appropriate case, relief under this Article.(See Collector of Monghyr Vs. Keshav Prasad, AIR 1962 SC 1694 : 1963 (1) SCR 981962 Indlaw SC 371; Zila Parishad, Moradabad Vs. Kundan Sugar Mill, AIR 1968 SC 98: 1968 (1) SCR 1 1967 Indlaw SC 391; Collector of Customs Vs. A.C. Vava, AIR 1968 SC 13: 1968 (1) SCR 82 1967 Indlaw SC 243; Union of India Vs. T.R. Verma, AIR 1957 SC 882: 1958 SCR 499 1957 Indlaw SC 80; N.T. Veluswami Vs. Raja Nainar, Air 1959 SC 422: 1959 Supp (1) SCR 623 1958 Indlaw SC 90 and MGA Brothers Vs. Shantilal, Air 1966 SC 197: 1966 (1) SCR 284 1965 Indlaw SC 160). [See also Calcutta Discount Co. Ltd. Vs. Income-Tax Officer, Companies District I, Calcutta AIR 1961 SC 372 1960 Indlaw SC 132, Wazir Chand & Anr. Vs. State of Himachal Pradesh & Ors. Air 1954 SC 415 1954 Indlaw SC 34, and Assistant Collector of Central Excise, Calcutta Vs. National Tobacco Co. Ltd. Air 1972 SC 25631972 Indlaw SC 716].”
The coordinate Bench also taking note of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and Ors., reported in (1998) 8 SCC 1 1998 Indlaw SC 13held that having regard to the facts of the case, it is the High Court which is to decide whether it will exercise the power vested on it u/art. 226 of theConstitution or not.
On necessary and proper party in a proceeding
148. In Competition Commission of India2010 Indlaw SC 737 (Supra) the Apex Court while considering whether the appellant-CCI was a necessary party before the Competition Appellate Tribunal had also discussed about Order 1 Rule 10 of Civil Procedure Code in para 108 of the said decision, wherein their lordships stated, inter alia, “In light of the above statutory provisions, let us examine the schemes under the general principles as well. The provisions of order 1 Rule 10 of the Code of Civil Procedure control the parties to the proceedings and the addition or deletion thereof. Wide discretion is vested in the court/appropriate forum in regard to impleadment of necessary and proper parties to the proceedings. Of course, such discretion has to be exercised in accordance with provisions of law and the principles enunciated by various judicial pronouncements. The consideration before the court, while determining such a question, is whether the said party is a necessary or a proper party and its presence before the court is essential for complete and effective adjudication of the subject matter, inter alia, it should also be kept in mind that multiplicity of litigation is to be avoided and that the necessary or proper party should not be left out from the proceedings, particularly, before the tribunal or the forum”. Not only that, the Apex Court also took note of para 7 of Udit Narain Singh Malpaharia V. Board of Revenue, AIR 1963 SC 786 1962 Indlaw SC 479 which is as under:-
“7. To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled: it is enough if we state the principle. A necessary party is one without whom no order can be made effectively; a proper party is one in who absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding.”
149. In the said judgment their lordships also said that there is another way to examine the matter relating to necessary party and noted inter alia, “if the proceeding cannot be concluded completely and effectively in absence of a party, that party should be normally impleaded as a party before the court, of course, subject to other restrictions in law. While non-joinder of necessary parties may prove fatal, the non-joinder of proper parties may not be fatal to the proceedings, but would certainly adversely affect interest of justice and complete adjudication of the proceedings before the appropriate forum.”
150. In the said judgment the Apex Court again taking note of Ramesh Hirachand Kundanmal v. Municipal Corpn. of Greater Bombay, (1992) 2 SCC 524 1992 Indlaw SC 964 noted that, even if an applicant fails to join a party the court has the discretion to direct joining of such party as the question of impleadment has to be decided on the touchstone of Order 1 Rule 10 which provides that a necessary or proper party may be added.
151. In the instant case, though the petitioner was provided with an opportunity to add JICA, the funding authority, as a party but the petitioner at the time of the hearing did not do so but in its written argument left the matter to the Court for adding JICA as a party. Though JICA is a necessary and proper party, the Court has already heard the matter on merit in absence of JICA and considered that even if JICA is made a party at this stage, then also the decision on merit would not change. Therefore, the court thinks it fit to decide the matter even in absence of JICA.
152. The law relating to impleadment of necessary party whose right would be affected if the relief sought for in the writ petition is granted has been discussed by the Apex Court in the case of Udit Naraian Singh Malpahariya v. Board of Revenue (Bihar) and ors. AIR 1963 SC 786 1962 Indlaw SC 479 wherein the Apex Court noted that a person, whose rioghts are directly affected by an order, which is sought to be obtained, as a necessary party and an order against such person cannot be passed behind his back and the aforesaid principle laid down by the Apex Court in Udit Narayan Singh Malpahariya 1962 Indlaw SC 479 (supra) is open and subsequently widened in the case of Prabod Verma and ors. V. State of UP and Ors., AIR 1985 SC 167 1984 Indlaw SC 175 and the aforesaid decision of the Apex Court has been noted by a Division Bench of this Court in Tractor and Farm Equipment Ltd. v. Secretary to the Government of Assam, Dept of Agriculture and ors. reported in (2004) 2 GLR 56 2004 Indlaw GUW 68 wherein the issues fell for decision before the Division Bench were as follows:- What is the law regarding immunity from judicial process in India? Is the immunity, in India, given to foreign sovereign diplomats, etc., including international organization, associations, or bodies involved in foreign sovereign unrestricted and unqualified? Is it, in any way, different from what the law, in this regard, in England is, though we have largely followed the Anglo- Saxon principles of law? Is it essential for being impleaded in a proceeding u/art. 226 of the Constitution of India that the person sought to the impleaded as a party is a person or authority or State within the meaning of Article 226? Can a writ application be maintained, wherein it seeks, in effect, relief against a person, who is not a State, authority or person within the meaning of Art. 226 or against a person, who is immune to the judicial process in India? Does art. 12 impose any limitation upon, or circumscribes the scope of, even the powers of the High Court under Article 226? Is the International Development Association, which is an organ of the World Bank amenable to writ jurisdiction u/art. 226.
153. In the aforesaid case of Contractor and Farm Equipment Ltd 2004 Indlaw GUW 68. (supra) a writ petition was filed by the petitioner therein, which was dismissed by the learned Single Judge vide order dated 27.10.2003 passed in WP(C) 5620/2003 holding that the World Bank is a necessary party and since the writ petitioner has insisted on not making the World Bank a party to the petitioner, the writ petition cannot proceed and must fail. Against the said order of the learned Single Judge, the appeal came up before the Division Bench and the Division Bench in para 29 of the said report held that the concept of necessary parties in a purely civil suit and a writ petition cannot be one and the same. Rather the scope of necessary party in a writ petition will be much wider than in the civil suits. The Division Bench took pain of taking note of various decisions and ultimately dismissed the appeal holding that the International Development Association, (for short, ‘IDA’) popularly known as World Bank being a party under the tripartite agreement for the project for which the contract was awarded for supply of 449 tractors to the Agricultural Department, Government of Assam to be procured by the Government on fund being made available to it, on credit, by the International Development Association for the benefit of group of small and marginal farmers of the State of Assam, to whom these tractors were to be distributed through the Field Management Committee, committees with farmers, is a necessary party and in absence of IDA the writ petition cannot be decided and ultimately dismissed the appeal.
154. In the instant case also, admittedly, there was an agreement between the Union of India and JICA as well as GMDA regarding the project in question for which NIT was issued and the petitioner purchased the bid documents and thereafter participated in the pre-bid discussion, consequently being ineligible, excluded from the tender process as bidder, challenged the experience clause in the NIT which was incorporated by the GMDA as approved by JICA being the funding authority, filed the writ petition without impleading JICA, though JICA is not only a necessary party, being financing the project has an interest over the matter of project and if the project for any reason is not completed then the fund which is provided to GMDA though the Union of India would not be utilized and consequent thereto the interest of JICA would be affected and JICA is not immune to any proceeding in India being they have their own establishment within India. Therefore, on the above score of non-impleadment of JICA as a party, the writ petition is not maintainable.
Conclusion
155. For the foregoing discussions and reasons given herein above, the writ petition is devoid of merit and in the result the same is dismissed. Interim order passed on 8.11.2010, subsequently extended, stands vacated.
No order as to costs.
