JUDGMENT
S.B. Sinha, C.J.
1. These LPAs arise out of a judgment and order dated 22.2.2002 passed by a learned Single Judge of this Court in Civil Writ Petition No. 4955/01 whereby and whereunder the writ petition filed by the appellant herein was dismissed. The basic fact of the matter is not in dispute. The appellant herein is a company incorporated under the Companies Act and is engaged in the business of construction of hotels, buildings, offices, factories, roads, tramways, and hospitals etc. It entered into an agreement which was a joint venture agreement with Tarmat Infrastructural Engineering Pvt. Ltd. for bidding on the tender issued by National Highways Authority of India. In October, 2000, Highways Authority invited pre-qualification (PQ) applications for packages III and IV from prospective bidders. The value of package III was estimated at Rs. 205 crores and value of package IV was estimated to be Rs. 208 crores, which meant that in order to qualify for both the packages the bidder must have the pre-qualification limit of Rs. 413 crores.
2. The first respondent, National Highways Authority of India, issued a tender, inter alia, in respect of civil works for widening of 5 lane and strengthening of the existing 2 lane carriageway of Udaipur-Ratanpur-Gandhinagar National Highway No. 8 for two packages, known as packages III and IV the material portion whereof is as under:
“National Highways Authority of India (NHAI) has been mandated to
implement the National Highways Development Projects (NHDP) which includes the Golden Quadrilateral and North-South and. East-West Corridors. Udaipur-Katanpur-Gandhinagar Section of NH-8 is a part of Golden Quadrilateral.
(Package-Ill, 4 laning of KM 388, 400 to Km 443.000 of Ratanpur to Himmatnagar Section of NH-8
205 CRORES
Package-IV : 4 laning of Km 443.000 to Km. 495.000 of Himmatnagar to Gandhinagar Section of NH-8
208 crores.
3. The appellant as also respondent No. 2 submitted their tenders for both the packages. The relevant clauses of the instructions to the applicants are as follows:
“1.5. Applications may be made to pre-qualify for any one or more of the above projects. To qualify for more than one contract, the applicant must demonstrate having experience and resources to meet the aggregate of the qualification criteria for each project.
2.4. Failure to provide information which is essential for the evaluation of the applicant’s qualifications or failure to provide timely clarification or substantiation of the information supplied may result in disqualification of the applicant.
3.1. Pre-qualification will be based on applicants meeting all the following minimum pass/fail criteria regarding their general and particular experience, financial position, personnel and equipment capabilities and other relevant information as demonstrated by the applicant’s responses in the forms attached to the Letter of Application. Additional requirements for Joint Ventures are given in para 4 below. The qualifications, capacity and resources of proposed sub-contractors will not be taken into account in determining the applicant’s compliance with the qualifying criteria.
3.1.1. To qualify for more than one contract, the applicant must demonstrate having experience and resources sufficient to meet the aggregate of qualification criteria for each contract.”
4. Base year and the escalation for the said projects were to be taken as 1999-2000. The construction experience required therefore was stated in Clauses 3.3.1 and 3.3.2. The paying capacity of the bidders of the pre-qualified bidders was to be assessed. The bidders to be eligible were required to have the capacity of total estimated cost as indicated in the pre-qualification document which is contained in Annexure-A thereto.
5. In the aforementioned instructions a clause relevant to material changes was inserted which in the following terms;
“Applicants and those subsequently pre-qualified for conditionally pre-qualified shall inform the employer of any material change in information that might affect their qualification status. Bidders shall be required to update key pre-qualification information at the time of bidding. Prior to award of con tract the lowest evaluated bidder will be required to confirm its continued qualified status in a post-qualification review process.
6. Various forms have been annexed with the said documents prominent among them are application in Forms 2A and 3, 3A. Form 2A relates to joint venture summary. Form-3 relates to construction experience record and Form 3 A deals with construction of similar nature and complexity. The second respondent herein submitted tender in relation to both the aforementioned packages, which were:
Package-Ill : 4 laning of KM 388.400 to Km 443.000 of Ratanpur to Himmatnagar Section of NH-8
205 Crores
Package-IV : 4 laning of Km 443.000 to Km 495.000 of Himmatnagar to Gandhinagar Section ofNH-8
208 Crores.
7. An application could be made for pre-qualification of any of the projects. To qualify for one of the projects the bidder was required to demonstrate that it has resources and experience to meet the criteria laid down therefore for each project.
8. It is not in dispute that with a view to qualify for bidding in both the projects a bidder must have previously executed works of at least 40% of the total cost for the project which would amount to Rs. 103 crores. It is also not in dispute that tenders of only those bidders who could qualify in pre-qualification bid were to be considered for technical bid and financial bid. Parties, therefore, were also required to fill up the bid documents. Section 1 of the said document comprises of instructions to bidders. Clause 3 provides for minimum eligibility criteria. Clause 4 provides for qualification of the bidder. Clauses 4.1(b) and 4.2(vii) which are material for the purpose of disposal of the appeals are as under:
“4.1 To be qualified for award of contract, bidders shall:
(a) x x x x x (b) have adequate experience, financial capacity and technical capability to undertake the contract, confirmation of these matters may involve the updating, verification and reassessment of the information which may previously have been considered during pre-qualification and an assessment of bidder's proposals regarding work methods, scheduling and resourcing which shall be provided in sufficient detail to confirm the bidder's capability to complete the works in accordance with the specification and the time for completion." "4.2(vii) any other information/details furnished at the time of pre-qualification which requires to be updated." 9. Para 12 of the said document specifies that the documents comprising the bid and all correspondences and documents related to the bid exchanged by the bidder would constitute the bidder's offer. 10. Para 12.1.3 specify the nature of document required to accompany the bid documents. Para 31.1 lays down criteria for awarding contract in the following terms:
“31.1 Criteria for Award of contract.–Subject to Clause 30 hereof, the employer will award the contract to the bidder whose bid has been determined to be substantially responsive and who has offered the lowest evaluated bid price pursuant to Clause 30 hereof provided that such bidder has been determined to be (i) eligible in accordance with the provisions of Clause 3 and (ii) qualified in accordance with the provisions of Clause 4.”
11. Notice inviting tenders for pre-qualification was issued in October, 2000 and the second respondent herein submitted its tender of pre-qualification bid on 23.11.2000. It was evaluated on 20.12,2000.
12. Fifty-five proposals were received out of which fifty bidders, including the appellant and the second respondent were declared qualified. It has been contended that the evaluation committee had also awarded scores in relation thereto; pursuant whereto respondent No. 2 received 319 points and was found to be eligible for both the packages. The appellant scored 252 points and was also found eligible for both the packages.
13. Parties were intimated about their pre-qualification. So far as second respondent is concerned he was informed thereabout by the Highway Authorities by their letter dated 1.1.2001.
14. Only with its technical bid the appellant supplied Form 3A in relation to a contract known as “North-South Interurban Expressway, Malaysia” (hereinafter referred to as Malaysian contract). Together therewith it had filed various documents to show that the contract was an on-going one despite the fact that the said contract was coming to an end on 31.3.1994. However it appears that final certificate of completion of the said contract was given on 21.8.1995. The value of the said contract was Rs. 2,225,810.34 Malaysian Ringgets (at that time value of Indian currency was 1:10).
15. Financial bid was opened on 1.3.2001. However, as there existed certain disputes as to whether Malaysian contract by the second respondent was to be taken into consideration discussions took place between the representative of the first respondent and the second respondent pursuant whereto information had been furnished by the second respondent vide letter dated 2.3.2001 wherewith details of completed contract of Malaysian contract were furnished. Details of similar nature of contracts over the last five years were also supplied in Form 4A by IRB Ltd.
16. The respondent No. 1 received another communication from the second
respondent in terms of letter dated 9.3.2001 wherewith the following documents were annexed:
“1. Working done by us regarding pre-qualification for both the packages (total 3 pages)
2. Details regarding North-South Interurban Toll Express way-Jauvi to Alor Pangse (Package-6133) from our joint Venture Partner Mudajaya Corporation Herhad Along with the payment certificate etc. complete (total 11 pages.)”
17. Form 3A was also annexed therewith wherein date of completion was mentioned as January, 1994 and the hand written portion namely “Actual August, 1995” was not stated therein. However, some other documents showing that the said contract was an on-going one were annexed therewith.
18. It is not in dispute that the partner of the second respondent by their letter dated 17.3.2001 stated that the said Malaysian contract was substantially completed in March, 1994. The bid documents were considered by the evaluation committee in its meeting dated 19.3.2000 wherein it was resolved:
“While evaluating the price bids for the award of work for the two packages . Committee noted that M/s. Mudajaya IRB (JV) had qualification limit at Rs. 319 crores in accordance with their pre-qualification. Therefore, it was found that they would not meet the qualifying criteria for award of more than one contract in accordance with Clause 3.1.1 of the pre-qualification document. (On the basis that Malaysian contract could be included)”.
19. The said finding was arrived at upon taking into consideration the Malaysian contract also. On the said finding the committee recommended that the work for package III be awarded to the second respondent and work for package IV be awarded to the appellant. However, the second respondent took the matter again with the first respondent and by reason of its letter dated 21.3.2001 legal position in respect thereof was sought to be clarified. Together with the said letter again those documents which formed part of the technical bid had been annexed with a view to show that in view of the fact that actual date of completion was August, 1995, the said contract should have been taken into consideration for the purpose of arriving at a finding that the second respondent was qualified to bid for both the packages.
20. It appears that there existed a further dispute having regard to the fact that financial year in Malaysia was calendar year, and thus, whether the said fact should be taken into consideration for the purpose of considering the date of completion of contract or not. It is also not in dispute that the matter was considered at different levels by the first respondent and even the opinion of the Solicitor General was obtained, whereupon the contract was awarded in favor of the second respondent.
21. The appellant herein filed the writ petition questioning the grant of the said contract to respondent No. 2 inter alia, on the ground that the second respondent had not disclosed its Malaysian contract at the pre-qualification stage and was not entitled to include the same subsequently. The appellant herein further annexed
with the writ petition almost entire records maintained by the first respondent relating to the said contract. Along with it the appellant also annexed several pages of the preparatory note and described the same as part of the minutes.
22. Before the learned Single Judge a contention was raised that the writ petitioner was guilty of suppression of facts and had not approached this Court with clean hands. Learned Single Judge by reason of the impugned judgment observed that the writ petitioner had relied upon copies of some documents from the record of the first respondent without disclosing their source. It further opined that the said documents were improperly and illegally obtained with the help of some unscrupulous employees of the first respondent. Learned Single Judge recorded a concession of the Counsel for the petitioner that the documents which were annexed at pages 56 to 60 were not copies of the minutes of the meeting of the Committee and the same were wrongly filed. Learned Single Judge noticed that the respondents themselves filed several documents Along with the counter affidavit which formed part of the said records and the genuineness or relevancy thereof was not in dispute. Before the learned Single Judge a decision of the Division Bench in Surgical Electronics and Anr. v. UOI and Ors., , was cited. Learned Single Judge, however, having regard to the decision of the Apex Court in Megraj Patodia v. R.K. Birla, and Pushpadevi M. Jatia v. M.L. Wadhavan, Additional Secretary,Government of India and Ors., 1987 SC 1748,held that:
“It is clear from the law as enunciated in the above cited judgment that the evidence which has been obtained by improper and illegal means would not become inadmissible in each and every circumstance. In a civil suit or proceedings also if improperly or illegally procured evidence is found relevant it could be taken into consideration for adjudicating an issue involved but there are exceptions. But if the admission of such an evidence will have prejudicial effect which surpass the evidential value the Court may exclude it. The life and liberty of a citizen the larger public interest of the interest of the State may be more important than the question to exclude the documents on the ground that it had been obtained illegally or improperly. But where a private party in order to take avenge or to wreck vengeance upon his opponents uses an- improperly or illegally procured document from the Government record and the Court had discretion to grant the relief claimed, the Court may in appropriate cases decline to allow the party to use such an evidence.”
23. However, the learned Single Judge refused to exercise its discretionary jurisdiction under Article 226 of the Constitution in favor of the writ petitioner -appellant holding:
“…But a part of the document filed and relied upon by the petitioner is concededly not genuine. The petitioner wanted to use it in support of its case and has vouchsafed its veracity on affidavit. The petitioner approached the Court for grant of a discretionary relief basing its case on a false document. The petitioner wanted to take advantage of unfair means for getting a
discretionary order from the Court. For this reason it has to be held that it is one of such cases where it will be unfair and unjust to allow the petitioner to use those documents to his advantage which it got by unfair means and which are not genuine.”
24. Despite the same the learned Single Judge considered the merit of the matter and, upon considering several decisions of the Apex Court as also of this Court inter alia held that the second respondent submitted totally new informations about the Malaysian project and consequently the respondent No.1 accepted totally new information from the second respondent in violation of the bid documents. It was held:
“It has contravened the various clauses of the PO document and bid document. Therefore, the process which led to the decision of acceptance of tender of respondent No. 2 in respect of package IV is illegal and arbitrary. The administrative actions of the State or its authority had to be fair and just and free from discrimination and arbitrariness. The decision making process in the instant case is vitiated. Therefore the decision of respondent No. 1 NHAI to award tender of package IC to respondent No. 2 cannot be upheld.”
25. However, the writ petition was dismissed accepting the preliminary submission of the respondents as mentioned above.
26. The appellant has preferred LPA 204/2002 questioning that part of the judgment whereby it refused to exercise its jurisdiction on the ground that it had approached this Court with unclean hands. M/s. Mudajaya-IRB has also filed a Letters Patent Appeal being L.P.A. 252 of 2002 wherein it has questioned the findings of learned Single Judge on the merit of the case.
27. Mr. Chidambaram, the learned Senior Counsel appearing for the appellant would submit that the learned Single Judge committed a serious error in dismissing the writ petition despite deciding the issue on merits in favor of the appellant only on the ground of filing of some documents, although the same were not very relevant for a just decision in the matter nor any wrongful benefit was gained by the appellant thereby. Learned Counsel would contend that pages 46 to 50 of the writ petition contained only certain clarificatory notes which were prepared probably for the members of the evaluation committee and were inadvertently described by the appellant as part of the minutes of the meeting. It was submitted that the appellant in its rejoinder clarified its stand stating that a mistake occurred in describing the said documents as part of the minutes of the meeting. Learned Counsel would urge that the said documents were not relevant for decision of the case and none of the parties to the Us as also the learned Single Judge relied thereupon. Counsel would further contend that decision of the Division Bench of this Court in Surgical’s case (supra), is contrary to the binding precedent of the Apex Court in Megraj Patodia v. R.K. Birla (supra), and State of U.P. v. Civil Judge, Nanital, 1987 SC 17, which were not taken into consideration. It was argued that keeping in view the aforementioned decisions of the Apex Court. It must be held that the source of the said documents is not relevant. It any event, having regard to the fact that the even the respondent had filed substantial part of the entire record, the source of the said documents became irrelevant.
28. Learned Counsel drew our attention to the prayers made in the writ petition and submitted that whereas prayers 1,4,5 had been granted in favor of the appellant, only prayer 3 had been denied. Our attention has also been drawn to the pleadings of the parties in this regard.
29. The learned Additional Solicitor General appearing on behalf of the first respondent, on the other hand, would submit that the learned Single Judge erred in entering into the merit of the matter. According to the learned Counsel, the writ petitioner had not only filed non-existent documents on record, but also filed official nothings and reports of the evaluation committee which were meant for internal use. Counsel contends that although the writ petitioner was in possession of the entire records kept in the office of the first respondent but despite the same it filed only a part thereof, viz. those office nothings which suited it and intentionally did not file the minutes of the most crucial meeting dated 27.6.2001 of NHAI which recorded in details the discussions and the reasons for awarding the contract to the second respondent. Thus, according to the learned Counsel for the appellant has approached this Court with unclean hands with clear motive to take advantage of non-existent documents filed by it. He would further contend that this Court in exercise of its jurisdiction of judicial review would not interfere with an award of a contract unless the same involves public interest. According to the learned Counsel, disputes having arisen as to whether the aforementioned Malaysian contract of the respondent could be taken into consideration and furthermore whether for the said purpose financial year should be construed to be a calendar year as observed in Malaysia or in India, clarifications well sought from the respondent No. 2. Counsel would submit that despite the fact that at one stage the Evaluation Committee had rejected the offer of the second respondent, a special group was constituted to go into the matter in details, keeping in view the fact that the tender submitted by the second respondent was the lowest and the said group upon consideration of the entire record had arrived at a finding that the Malaysian contract was an on-going contract and in that view of the matter the same could not have been excluded from consideration for awarding the contract in relation to the IV package.
30. He would further urge that the matter was placed before the Competent Authority of the first respondent which considered all the materials and came to the conclusion that the stand of the second respondent was correct but despite the same the contract was offered subject to the opinion of the Solicitor General of India which would clearly show that the authorities had not only maintained transparency but its fairness of action is apparent on the face of the record.
31. In support of this contention, learned Counsel has strongly relied upon Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors., and Air India Ltd. v. Cochin International, .
32. Mr. Gopal Subramaniam, appearing for the respondent No. 2, however, addressed us on the merit of the matter submitting that he would not press for dismissal of the writ petition on the ground of the writ petitioner’s approaching this Court with unclean hands. The learned Counsel relying on or on the basis of the
averments in the counter affidavit would contend that his client had substantially complied with the conditions of the bids by disclosing the Malaysian contract in the chart appended at the PQ stage. Counsel would submit that it is one thing to say that the contract was substantially completed in January/1994 but it is another thing to say that it was actually completed in August, 1995. According to the learned Counsel various clauses in the tender documents would clearly show that the same postulate clarification at the subsequent stage and if the second respondent with a view to clear the doubts in the mind of the authorities of the first respondents had filed certain documents which were clarificatory in nature, the ultimate opinion of the Competent Authority cannot be held to be assailable on that ground. According to the learned Counsel as the documents brought on records would clearly suggest that the Malaysian contract was an on-going on even after 1.4.1994 inasmuch as the execution thereof had not entirely been completed, it cannot be said that the document in question had been brought on record subsequently or any manipulation was done in relation thereto. It was urged that the Single Judge committed a serious error of fact so far as it held that Form 3A was not part of the PQ documents in respect of its experience in Malaysian project and the same was not supplied to the first respondent even with technical bid submitted in February, 2001. Counsel would contend that finding of the learned Single Judge being based on the said factual error and thus must be held to be bad in law. Learned Counsel would contend that documents in question were contemporaneous in nature and the authorities of the first respondent having adopted a fair procedure, the learned Single Judge was not correct in holding that the award of contract was vitiated in view.
33. Mr. Chidambaram, in reply contended that it stands admitted from the pleadings that Form No. 3A in relation to Malaysian contract had not been filed by respondent No. 2 at the time of submitting pre-qualification bid, whereas the first respondent stated that it was so filed. Learned Counsel would contend that on a plain reading of the clause relating to material changes would lead to the conclusion that no fresh material could be placed on record but updation of the existing material only was permissible. In other words, the learned Counsel would submit the bidder is not permitted to say at the second stage of bid that he forgot to mention the material facts at PQ stage and would be allowed to furnish the said information at a later stage as the same is impermissible in law. Learned Counsel would contend that various forms were required to be filled up fur various purposes. Counsel would submit that filing of Form 2A at the PQ stage would not subserve the purpose of filing Form 3 A which was to be filed in relation to each of the contracts undertaken by the bidder. From 3A, he would urge was not filed in relation to Malaysian contract at PQ stage, and thus, it must be held that the authority was of the opinion that the said contract having come to an end on 1.1.1994 the same cannot be taken into consideration for the purpose of the awarding of the contract in its favor as, the said work was executed 6 years prior thereto. Drawing our attention to Form 2A Counsel would submit that therein no column exists wherein the factum of ongoing Malaysian contract would be disclosed as the same related to a joint venture contracts only.
34. According to the Counsel in view of the admitted position, if the first
question is answered in favor of the appellant, second question need not be gone
into.
35. Learned Counsel had drawn our attention to paras 26.1 and 27.2 and submitted that in terms thereof the respondent No. 2 was not entitled to submit any new document in terms whereof there could be material deviation from the original offer.
36. Our attention, in this connection, has been drawn to letter dated 9.3.2001. According to the learned Counsel only at that time the respondent No. 2 filed Form 3A for the first time. The learned Counsel contended that it would appear from the letter dated 31.1.1994 that the whole of the work was substantially completed on 16.1.1994. It was not stated therein, according to the Counsel, that major part or substantial part was left. The subsequent certificate of the Engineer dated 31.3.1994 was almost on identical terms. Having regard to the materials on record, Mr. Chidambaram, would agree that in a contract of this nature the bidder is not permitted to make any material change. Reliance has been placed on AIR India Ltd. ‘$ case (supra). In any event, the learned Counsel would contend that once the learned Single Judge had arrived at a finding of fact, the Appellate Court would be loathe to interfere with it unless it is found to be perverse. Mr. Chidambaram would contend that in any event the first respondent could not change the rule of the game. In support of the said contention reliance has been placed in Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd., , and Monarch Infrastructure (P) Ltd. v. Commissioner U.M.C., .
37. Having regard to the rival contentions as noticed hereinbefore the principal questions for consideration in this appeal which arise would be:
(1) Whether grant of contract in favor of respondent No. 1 was in accordance with the terms and conditions of the bid document?
(2) Whether the learned Single Judge was correct in dismissing the writ petition on the ground that the petitioner has not approached this Court with clean hands :
Re: Question No. 1
38. From the pleadings of the parties as broadly stated hereinbefore the controversy revolves round interpretation of some of the important clauses of the tender documents. Bid of the bidders was to be considered at different stages. The first being the pre-qualification stage. The second being technical bid and third being the financial hid. The implementation of the National Highway Development Projects included the Golden Quadrilateral and North-South and East-West Corridors, the estimated cost whereof was 2100 crores. Estimated cost of package IV i.e. 4 laning of KM 443.000 to KM 495.000 of Himmatnagar to Gandhinagar Section of NH 8 was Rs. 208 crores.
39. The construction experience as contained in Clause 3.3.2 required that the applicant is required to provide evidence that it has successful experience of completing or on-going project within the last six years and at least one contract
would pertain to highways road and or bridge works, airport runway being of size of at least 50% of the value of the contract(s) applied for. Clause 3.3.1 provides for construction experience wherefor the applicant was required to produce evidence that it had been actively engaged in the civil works/construction business during the last five years in the role of prime contractor/partner in joint venture or subcontractor and had generated a minimum average annual construction turnover during the last five years equivalent to 50% of the value of the contract(s) applied for.
40. Thus at the PQ stage itself evidence of general construction and experience were required to be filed by the bidders. It is not in dispute that together with the tender documents, informations/evidences were required to be filed in various forms. It is also not in dispute that the tenderers were also required to file evidence showing experience in relation to each construction activity undertaken by them in Form 3A. Indisputably Form 3A in respect of Malaysian contract had not been filed by the 2nd respondent along with the bid documents. What was furnished was a chart which is at page 173 of the paperbook. The said chart shows a number of completed projects of roads and bridges. The said chart, inter alia, contains the following data:
Project
ContractValue
Value Responsible
Contract Period
Date of possession.
Date of completion Original/Actual
Client
Consultant
North-south
Interurban Toll
Expressway Javi
to AJor Pongsu
1405
140.5
125 weeks
Aug 91
Jan 9
Date is Missing
PLUS
J.R (Sea) Sdn Bhd
North-south
Interurban Toll
Expressway
Gopang to Shpang Pulal Package 8A2)
73.3
73.3
104 weeks
June 91
June 93
21 May 93
PLUS
Tahir Wong & Zaldun
Bridge over Sg
Keuk Qua
Musang
7.6
7.6
22 months
Nov 81
Aug 83
9 Nov 83 (approved extension
Jebsian Karja Raya
41. Respondent No. 2 wherever found variation of the actual date of completion from the original date of completion mentioned the same specifically in the said chart. In relation to Malaysian contract and some other contracts, however, it did not do. Even in relation to his contract relating to packages III it was stated that although the date of completion-originally was pre 1993, proof in relation to it had been filed up to June, 1993.
42. It is also not in dispute that informations as regards the contract in question as are required in Form 3A had not been filed. We may place on record that the petitioner and respondent No. 2 qualified at the stage both for packages III and IV, The same, however, could not and cannot mean that respondent No. 2 had been
found qualified for both the packages together. They were found to pass the PQ tests correctly both in respect of packages III and IV independently having regard to the requirements therefore. The mere fact that respondent No. 2 did not file Form 3A, although it was aware of the requirement thereof is a clear indicator of the fact that even according to it having regard to the terms of the notice inviting tender it could not have referred thereto as the same was completed in January, 1994 i.e. beyond the specified period. As indicated hereinbefore a contention is sought to be raised, which ultimately found favor with the authorities of the first respondent, that the project was an on-going one. However, from the chart as noticed hereinbefore it would be evident that the same only related to the completed project.
43. The said chart not only refers to the contracts which were completed in May, 1985, December, 1986, December, 1987, July, 1993 but also prior thereto. The said chart was not filed by way of evidence that respondent No. 2 had actually completed or had on-going projects after 1.3.1994 but only with a view to show the number of contracts it had undertaken and successfully completed. It would bear repetition to state that the said chart was not meant to be produced by way of evidence within the meaning of Clause 3.1.1.
44. The said chart, therefore, in our considered opinion having regard to the requirements of tender documents cannot be said to be in compliance therewith.
45. The question as to whether from 3A furnished by the second respondent could be accepted at a later stage is the core question involved in this appeal. Clause 4.1 provides for qualification of the bidder where for bidder must have, (1) adequate experience, (2) financial capacity (3) technical capability to undertake the contract. Thus, furnishing of proof in relation to the matters stated above was a condition precedent. Only the confirmation of such evidence would involve updating of qualification and reassessment of opinion which might have previously been considered during pre-qualification. Thus, in the event no evidence was produced to show that the bidders either have adequate qualification or financial capacity at the PQ stage, the question of updation thereof would at the subsequent stage would not arise. Clause 4.2 whereupon Mr. Gopal Subramaniam had placed strong reliance merely provides for updation of information which has already been submitted with this tender. Thus, if no information was submitted the question of its updation would not arise.
46. Clause 7 of para 4.2 which refers to any other information submitted at the time of pre-qualification, which requires to be updated must have a direct nexus with the information which has already been furnished and the same does not postulate filing of any fresh information.
47. We may notice that even Clause 26 enables an employer to ask any bidder for clarification of his bid including break- up of unit rates. What could be corrected in terms thereof is arithmetic error discovered by the employer in terms of Clause 28.
48. Whereas Clause 26.1 enables the employer to seek clarification, no such clarification can be supplied by the bidder of its own, subject of course to bringing any additional information to the notice of the employer.
49. Clause 27 clearly postulates that material deviation is one which affects in any substantial way the scope, quality or performance of the work. Thus, if in terms of the document supplied by respondent No. 2 at the PQ stage Form 3A was not submitted/ the question of such information which would be additional in nature could not have been furnished and the same would undoubtedly amount to material deviation.
50. It may be noticed that documents exchanged between the parties would constitute the bidders’ offer.
51. Clause 12.1.1, specifies as to what documents are required to be mentioned in the bid. Clause (c) thereof states all forms as contained in the Forms specified therein would form part of the pre-qualification documents furnished by the bidder. Forms 1 to 10 would therefore include Form 3A. Thus Form 3A was required to be filed but the same has not been filed at the pre-qualification stage. No further form in 3A thus could be filed at a later stage by way of clarification or otherwise. In other words, the bidder could not have introduced any new form. Clause 8 provides for contents of the bid documents which were to be in four volumes. Clause 12.4 states that all documents contained in the four volumes as described in Clause 8 hereof shall be deemed to have been incorporated in the bid for the works.
52. All clauses in a contract must be read as a whole. Documents not filed at pre-qualification stage which would determine the eligibility of bidder in our considered opinion cannot be filed at a later stage. Furnishing of any further information later on is necessarily forbidden.
53. On an analysis of the aforesaid clauses of the notice inviting tender, we are of the opinion that for fulfillling the qualification criteria the value of work done by the bidder in the last five years it was incumbent upon the respondent No. 2 to file such document at the pre-qualification stage itself so as to satisfy the Purchaser that it had completed the contract of the specified value which is 40% of the total value thereof within six years prior thereto, taking 1999-2000 as the base year.
54. What would be the material change within the meaning of the NIT will also have to be considered having regard to Clause 7 of the bid document.
55. In West Bengal State Electricity Board v. Patel Engineering Co. Ltd. and Ors., reported in I (2001) SLT 534-1 (2001) CLT 103 (SC)=2001 (2) SCC 451, the Apex Court held :
“In the instant case, we have also noted that the mistakes in the bid documents of respondents 1 to 4 even though caused on account of faulty functioning of computer, could have been discovered and notified by the said respondents with exercise of ordinary care and diligence. Here, the mistakes remained in the documents due to gross negligence in not checking the same before the submission of bid. Further Clauses 24 and 27 of the IIB permit modification or withdrawal of bids after bid submission but before the deadline for submissions of the bids and not thereafter. And equity follows the law. Having submitted the bid they did not promptly act in discovering the errors and informing the same to the appellant. Though letters were written on 25.10.1999, and 17.12.1999
yet the real nature of errors/mistakes and corrections sought were not pointed out till 23.12.1999 when representation was made after interim direction of the High Court was given on 21.12.1999. Indeed it appears to us that they improved their claim in the representation. In our view the said respondents are not entitled to rectification of mistakes/error for being considered along with the other bidders.”
56. Furthermore it is not in dispute that the respondents 1 and 2 themselves proceeded on the basis that for the purpose of awarding contract, the Malaysian contract of respondent No. 2 cannot be taken into account. However, as would appear from the letter of respondent No. 1 dated 5.1.2001 that the pre-qualification for packages III and IV was subject to conditions laid down therein. Yet again respondent No. 1 in its letter dated 5.1.2001 only asked the qualified applicant to notify immediately any change taking place subsequent to their qualification which would affect their pre-qualification which would mean that such changes must have occurred after pre-qualification document had been filed. Parties filed pre-qualification documents only in October, 2000. Much prior thereto i.e. in August, 1995 the Malaysian contract was said to have concluded. It was categorically stated that qualified applicants should demonstrate their capacity at the time of filing of tender did exist for the intended works in accordance with the pre-qualification document and not before the technical bid is filed. The entire emphasis, therefore, was on pre-qualification documents and no other. Yet again in its letter dated 20.2.2001 the respondent No. 1 informed the second respondent that ‘first cover would have written technical proposal on its top’ and would contain the following information;
“With reference to submission of bids as above, in accordance with Clauses 12, 20 arid 24 of Vol-1, it may please be ensured that the bids are submitted under two separate covers, both sealed properly. The first cover would have written “technical proposal’ on its top and would contain following information:
(i) Earnest money in accordance with Clause 16 of Vol. 1; (ii) Power of attorney;
(iii) Copies of Forms 1 to 10 of the pre-qualification document furnished by the bidder at the time of pre-qualification, letter of approval of pre-qualification and statement of changes which may have occurred since pre-qualification as mentioned in Clause 4 of Vol. 1.”
57. This again goes to show that it was incumbent upon that second respondent to fill up all the required forms which were to be submitted with pre-qualification document. The Committee in its meeting dated 19.3.2001 was also of the opinion that package III work should be awarded to respondent No. 2 whereas the award in respect of package IV should be awarded in favor of the petitioner.
58. While evaluating the price bids for the award of work for the two packages, the Committee noted that M/s. Mudajaya IRB (JV) had qualification limit at Rs. 319 crores in accordance with their pre-qualification bid. Therefore, it was found that they would not meet the qualifying criteria for award of more than one contract in
accordance with Clause 3.1.1 of the pre-qualification document. (On the basis that Malaysian contract could be included).
59. The respondent No. 1 did not exercise its jurisdiction to have any clarification as provided for. No material has been brought on record to show that the respondent No. 1 exercised its discretionary power for further information. Vide letter of the second respondent dated 2.3.2001, wherein the attention of Mr. P.C. Arya was drawn, certain information was furnished as allegedly required by the first respondent. The said latter does not refer to any written request made by the first respondent nor does it show as to whether the said Mr. P.C. Arya was authorised therefore. Even in that letter only the chart as referred to hereinbefore has been annexed and therewith also details of similar nature of works undertaken by the bidder over the last five years in Form 4A only had been annexed. We may notice that whereas Form 2A refers to joint venture summary, Form 3A refers to details of contract of similar nature and complexity. The said forms, therefore, were required to be filled up for different purposes. Thus, the material which was required to be furnished was not in substantial compliance of the requirements which could be done only by filing the information in Form 3A. The respondent No. 2’s contention, that it fulfillled the requirements of the terms, so far as the Malaysian contract is concerned, even in terms of letter dated 20.5.2001 cannot be accepted.
60. A dispute has arisen as to whether Form 3A in respect of the project was enclosed. Respondent No. 1 in its counter stated:
“9. That is is submitted in this regard that respondent No. 2 in the documents filed along with pre-qualification had shown the date of substantial completion of project as January, 1994. However, at the time of filing of technical bid as required by answering respondent vide his letter dated February 20, 2001. Respondent No. 2 filed Form 3A where actual completion was stated to have taken place in August, 1995.”
Whereas respondent No. 2 in its counter affidavit stated:
“5. I further state that accordingly the respondent No. 2 submitted its technical bid and financial bid on 26.2.2001. This included information regarding the project (6-B3 North-South Interurban Expressway Javi to Alor Pongsu Project in Form 3A wherein it was mentioned that the project was scheduled to be completed in January, 1994 and actually completed in August, 1995. I say that the statement that the project was actually completed in August, 1995 is correct and it is supported by documentary and contemporaneous evidence. I therefore state that mention of the words Actual August, 1995 does not change or alter of the original bid document. The Form A3 is only explanatory in nature.”
61. Thus there exists an apparent conflict. It is not stated that Form 3A itself was submitted. It is accepted by respondent No. 1, that form 3A was filed at the stage of submission of technical bid.
62. Respondent No. 1 in its counter further alleged:
“29. That the contents of para 8 of the petition are wrong and false besides
being misleading. The allegations made in para under reply are based on spiteful motives of the petitioner who wants to get the contract for package IV by any means. It is denied that any tampering of document was done or allowed to be done in the documents submitted by respondent No. 2 with answering respondent. It is clarified that at the time of filing of technical bid respondent No. 2 filed fresh Form 3A and row 9 of the said form the words “Actual August, 1995″ were written in hand. Clause 4.2 of Vol 1 of the bidding document may be noted in this regard…..”
” Evidently therefore respondent No. 2 had right to update any such information which was given along with the pre-qualification application. Such updation and consideration thereof would not defeat the object of pre-qualification criteria nor would be same amount to violation of the rules laid down by answering respondent as alleged or at all. This has been confirmed by the learned Selicitor General of India also. The petitioner’s concern about successful completion of project in appropriate time and manner are nothing but sham excuses aimed at gaining sympathy of this Hon’ble Court.”
“40. That the contents of para 19 of the petition are not disputed to the extent that respondent No. 2 made another representation to answering respondent vide its letter dated 21.3.2001, it is however denied that contrary to the documents submitted and statements made the respondent No. 2 vide its aforesaid representation claimed for the first time that project was completed in August, 1995. As a matter of fact the hand written additions were made by the respondent 2 in the copy of the Form 3A submitted by it at the time of filing of technical bid. Allegations in this regard are motivated and have been made in support of illegal contentions of the petitioner.”
The said statements were purportedly made to show that in Form 3A date of completion was shown as August, 1995 in the technical bid. The second respondent does not say so. These assertions have been considered by the learned Single Judge and having had the benefit of looking at the entire records had disbelieved the said contention. The said findings of fact cannot be said to be entirely wrong warranting interference by this Court under clause of the Letters Patent.
63. Respondent No. 2 in its counter affidavit also mentioned that no new material had been placed on records. It is categorical in its assumption that the words actual completion in August, 1995 had not been mentioned therein. In the aforementioned context respondent No. 2’s letter dated 9.3.2001, which the petitioner has alleged in Form 3A had been annexed, for the first time may be noticed in the said letter it was stated :
“1. Working done by us regarding pre-qualification for both the packages (total 3 pages).
2. Details regarding North-South Interurban toll Expressway – Jauvi to Alor Pangse (Package-6B3) from our Joint Venture Partner Mudajaya Corporation Berhad Along with the payment certificate etc. complete (total 11 pages).”
64. Yet again in the purported Form 3A which was annexed there with the date of award was stated to be 24.8.91 and date of completion was shown as January, 3, 1994 and the period therefore was mentioned two years 4 months. The written portion does not figure therein.
65. If the period of completion of contract was 2 years four months as on 24.8.1991, and the contract was actually completed in August, 1995 necessary correction as regard the period as mentioned in Clause 10 thereof should have been made. It has not been done. When a bid of this nature is submitted, it is expected that all care and caution shall be taken. In these days it is wholly unexpected that correction would be made by hand only in one of the documents and the same would not be reflected in the subsequent parts thereof or at the subsequent stage. The conduct of the 2nd respondent clearly shows that it proceeded on the basis that it was completed in January, 1994 and not in August, 1995. The certificate also shows that the whole of it was completed. The whole of the work was substantially completed on 16.1.1994. The list of works which were to be completed prior to 31.3.1994. This letter has not been referred to in the counter-affidavit of either of the respondents. Yet again the second respondent in its letter dated 17.3.2001 states:
“We wish to kindly advise that our financial year has and always been from January to December. The project titled 683 North-South Interurban Expressway Alor Pongsu to Jauvi was substantially completed by us in March, 1994 and we request your kind understanding that this be considered in the evaluation criteria for projects completed within the last six years using year 1999 as the base line.”
66. This in our opinion cannot be glossed over inasmuch as therein it had been contended that the project was completed in March, 1994 and as such should have been included in the projects having been completed within six years from 1991. It is difficult to accept that in fact the respondent No. 2 had filed Form 3A in relation to Malaysian project on 3.2.1991 showing completion date as August, 2001. The said letter was filed after the completion was shown in March, 1994 and after the committee arrived at a decision on 19.3.2001. It appears again a discussion ensued which resulted in respondent No. 2’s addressing to the members of the committee on 21.3.2001 wherein it was reiterated Malaysian project was completed in August, 1995. Furthermore, there is an apparent conflict between the hand written portion and the certificate of the engineer. So no clarification was or could be furnished in consonance with the terms and conditions of the bid. It could not have been done. A clarification could not be given after the committee has arrived at a decision. We may further notice that in the minutes of the meeting on 5.6.2001 convened to consider the additional documents filed by respondent No. 2, the committee was of the opinion :
“2. The facts of the case were brought out in the meeting by Shri P.C. Arya, Dy. GM (pi)-II stating that response to NHAI letter No. NHAI/13012/7/97-pi DATED 31.5.2001 (COPY ENCLOSED) M/s. Mudajaya-IRB (JV) had submitted his letter No. M/15/NHAI/URGS/Fkg/III and IV dated 11.6.2001 along with documents as evidence for clarifying the position regarding the completion
date of the project. All the six documents listed below are considered, examined and evaluated by the Committee as under.
1.
Daily work records mentioning the details of men and equipment present on site for undertaking the project work
The documents relate to minor items of work i.e. cutting the existing pavement, scarifying etc. which may be for maintenance activities and for removal of defects during the defect liability period and cannot be considered as main items of work
2.
Original copy of letter from client inviting to quote for construction of a bridge over Sg. Kecil
This is only a letter showing intention of the client for getting a variation item to be carried out to the agency which is a minor structure and which can always be asked for even after substantial completion of work.
3.
Copy of the booklet regarding final measurement of the bridge structures over Sg Kecil
This document gives details of measurement carried out under the variation at item No. 2 above after the substantial completion of the work for filing item only.
4.
Original copy of Subcontractors monthly statement
This is document which is a sub contractors monthly statement of small value of 20927.24 RM which cannot be considered a major activity
5.
Copy of statement of final accounts
Final accounts of works are prepared only after while work completion and includes all various etc. the same cannot be considered on the date for extending the civil works completion
6.
Original copy of letter issued by the Client for the work of North-South Expressway Package 6B3, Jawi to Alor Pongsu
The same client/Engineer earlier had issued a substantial completion certificate on 16.1. 1994 (copy enclosed). The engineers final certificate of payment for the work was issued on 21.8.1995.
No. Plus/6B3/MC/C61/91
The letter dated 29.5.2001 cannot be considered as showing the date of completion of the works as 21.8.1995.
67. Appellant has placed on records a copy of the website of Mudajaya Pembangunan Langkawi Joint Venture wherein also the date of of completion of the contract had been shown as January, 1994. The said website shows the same material, which were furnished by way of a chart along with pre-qualification document. Only on 29.5.2001 Mudajaya Pembangunan employer of respondent No. 2 wrote to respondent No. 1 which has been noticed hereinbefore. It is interesting to note that on 31.2.2001 certain clarifications were asked for from respondent No. 2 wherein again no reference was made to its earlier letter dated 2.3.2001. In this letter it is alleged:
“For your information the above contract was awarded to Mudajaya Pembangunan Langkawi Joint Venture in August, 1991 as part of the construction of the North South Expressway.
Completion August, 1995 Certificate 21.8.1995 Payment made 20.10.1995″
68. By reason of the said letter only explanation was sought for. It was, therefore, not necessary to show that the project was completed after 1.4.1994. Having regard to the terms and conditions of the bid such a clarification could not have been called for. As indicated hereinbefore, even this document, submitted by respondent No. 2 by way of clarification, had been taken into consideration by the Committee on 15.6.2001. It is, thus, evident that the first respondent had taken into consideration certain facts which in view of the terms and conditions of the tender, it could not do.
69. It has not been disputed that the bids of all others have been considered by the Evaluation Committee. The Evaluation Committee rejected the bid of respondent No. 2. However, curiously, throwing all norms to the wind, the respondent No. 1 constituted a group headed by its Chairman suo motu which is not the procedure adopted in the case of others. No reason has been assigned as to what prompted respondent No. 1 to change the rule of the game. Similar benefits, thus, had not been given to any one including the appellant herein.
70. It may be true the Court while deciding a case of this nature must have public interest in mind. But would public interest be a bar to exercise power of judicial review whence on a misconstruction and misinterpretation of essential conditions of the tender, the respondent No. 1 awarded the contract in favor of respondent No. 2 which it was not entitled to do? Would public interest mean that such acts are the part of the 1st respondent should be glossed over only because the offer of respondent No. 2 is the lowest? Answers to the said question must be rendered in negative.
71. In Ramana Dayaram Shetty v. International Airport Authority of India and Ors., , law is stated in the following terms:
“The test of eligibility laid down was an objective test and not a subjective one. What the condition of eligibility required was that the person submitting a tender must have 5 years’ experience of running a and Class hotel as this would ensure by an objective test that he was capable of running a IInd Class restaurant and it should not be left to respondent 1 to decide in its subjective discretion that the person tendering was capable of running such a restaurant. If, therefore, a person submitting a tender did not have at least 5 years’ experience of running a IInd Class hotel he was not eligible to submit the tender and it would not avail him to say that though he did not satisfy this condition, he was otherwise capable of running a IInd Class restaurant and should, therefore, be considered.”
It was further observed:
“Now, there can he no doubt that what paragraph (1) of the notice prescribed was a condition of eligibility which was required to be satisfied by every person submitting a tender. The condition of eligibility was that the person submitting a tender must be conducting or running a registered IInd Class hotel or restaurant and he must have at least 5 years’ experience as such and if he did not satisfy this condition of eligibility, his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by respondent 1 and since the respondents 4 did not satisfy this standard of norm, it was not competent to respondent 1 to entertain the tender of respondent 4. It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. Thus rule was enunciated by Mr. Justice Frankfurter in Viterali v. Saton, reported in 359 U.S. Law Ed. (Second series) 1912, where the learned Judge said;
An executive agency must be rigorously held to the standards by which it professes its action to be judged…..Accordingly/if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed…. This judicially evolved rule of administrative law is how firmly established and, it I may add, rightly so. He that takes the procedural sword shall perish with the sword.”
72. In Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors. (supra), it was observed:
“25. Therefore, when such a stay order is obtained at the instance of a private party or even at the instance of a body litigating in public interest, any interim order which stops the project from proceeding further must provide for the reimbursement of costs to the public in case ultimately the litigation started by such an individual or body fails. The public-must be compensated both for the delay in implementation of the project and the cost escalation resulting from such delay. Unless an adequate provision is made for this in the interim order, the interim order may prove counterproductive.
26. In the present case, it was submitted that the terms and conditions of the tender specified the requisite qualifying criteria before a person could offer a tender. The criteria which were so laid down could not have been relaxed because such a relaxation results in a denial of opportunity to others. In support, the respondents relied upon Ramana Dayaram Shetty v. International Airport Authority of India. In that case, the Court had held judicial review as a check oh the exercise of arbitrary powers by the State and as a check on its power to grant largess. The Court also observed that when the exercise of discretion is structured in terms of the tenders which have been invited, the discretion must be exercised in accordance with the norms so laid down. The same view has been taken by this Court in Premium Granites v. State of T.N., where this Court observed that where rational non-discriminatory norms have been laid down for granting of tenders, a departure from such norms can only be made on valid principles. These principles enunciated by this Court are unexceptional.”
73. In Tata Cellular v. Union of India, , the law is stated in the following terms:
“(1) The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a Court of Appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to 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 or 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". 74. However, the Apex Court itself opined while considering the case in West Bengal Electricity Board (supra).
“In the instant case, we have also noted the mistakes in the bid documents of respondents 1 to 4, even through caused on account of faulty functioning of computer, could have been discovered and notified by the said respondents with exercise of ordinary care and diligence. Here, the mistakes remained in the documents due to gross negligence in not checking the same before the submission of bid. Further Clauses 24 and 27 of the ITR permit modification or withdrawal of bids after bid submission but before the deadline for submissions of the bids and not thereafter. And equity follows the law. Having submitted the bid they did not promptly act in discovering the errors and informing the same to the appellant. Though letters were written on 25.10.1999 and 17.12.1999 yet the real nature of errors/mistakes and corrections sought were not pointed out till 23.12.1999 when representation was made after interim direction of the High Court was given on 21.12.1999. Indeed it appears to us that they improved their claim in the representation. In our view the said respondents are not entitled to rectification of mistakes/error for being considered along with the other bidders.”
75. The said question has also been considered by the Monarch Infrastructure (P) Ltd. v. Commissioner Ulhasnagnr Municipal Corporation and Ors. (supra):
“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 situate.
(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 rejection is in public interest for valid and goods reasons”.
76. Yet again in Sterling Computers Limited v. MSN Publications Limited and Anr., , it has been held :
“That is why the Courts have impressed that even in contractual matters the public authority should not have unfettered discretion. In contracts having commercial element some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognised by Courts while dealing with public property. It is not possible for Courts to question and adjudicate every decision taken by an authority, because many of the Government undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bonafide manner although not strictly following the norms laid down by the Courts such decisions are upheld on the principle laid down by Justice Holmes that Court while judging the constitutional validity of executive decisions must grant certain measure of freedom of play in the joints to the executive.
But in normal course some rules must exist to regulate the selection of persons for awarding contracts. In such matters always a defense cannot be entertained that contract has been awarded without observing the well settled norm and rules prescribed on basis of the doctrine of executive necessity. The norms and procedures prescribed by ? Government and indicated by Courts have to be more strictly followed while awarding contracts which have along with a commercial element a public purpose as in the present case the publication of directories by the MTNL is not just a commercial venture; the primary object is to provide service to the people.
The action or the procedure adopted by the authorities which can be held to be State within the meaning of Article 12 of the constitution, while awarding contracts in respect of properties belonging to the State can be judged and tested in the light of Article 14 of the Constitution is settled by the judgment of the Court in the cases of Ramana Dayaram Shetty v. International Airport Authority of India; Kasturi Lal Lakshmi Reddy v. State of J&K; Fertilizer Corpn. Kamagar Union (Regd.); Sindri v. Union of India Ram; and Shyam Co. v. State of Haryana; Haji TM Hassan Rawthar v. Kerala Financial Corporation ; Mahabir Auto Stores v. Indian Oil Corpn.; and Shrilckha Vidyarthi v. State of U.P. It has been said by this Court in Kasturi Lal:
“It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State such an action would be both unreasonable and contrary to public interest. The Government therefore cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can
be obtained for it, unless of course there are other considerations which render it reasonable and in public interest do so.”
77. In Air India Ltd. v. Cochin International Airport Ltd. and Ors. (supra), it was held :
“It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit, such a relaxation. It may not accept the offer even through it happens to be the highest or the lowest. But the State, its Corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala-fides, unreasonness and arbitrariness. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference the Court should intervene.”
78. In the instant case there does not exist any clause of relaxation. As noticed hereinbefore, respondent No. 1 has failed to adhere to the norms and procedure laid down by them. There had, thus, been departure from the standard set up by the respondent No. 1, itself.
79. Public interest, in the opinion, of this Court would bring within its umbrage an exercise of power which is beyond the competence of authorities. In view of our findings aforementioned it is not necessary to notice other decisions cited at the bar which do not depart from the principles as noticed hereinbefore.
Re: Question No. 2 :
80. This bring us to the second question. The writ petitioner may be guilty of bringing on record part of the documents which were meant for internal use. It may also be guilty of referring certain pages which were notes as part of the minutes. It clarified its stand in the rejoinder. The learned Single Judge did not follow the decision of the Division Bench of this Court in Surgical Electronics (supra), in its entirety having regard to the earlier decision of the Apex Court.
81. In Moody v. Cox, reported in 1917 (2) Ch 71; it was held:
Moody has given those bribes prevents him from getting any relief in a Court of Enquiry. The first consequence of his having offered the bribes is that the vendors could have rescinded the contract. But they were not bound to do so. They had the right to say “No, we are well satisfied with the contract; it is a very
good one for us; we affirm it”. The proposition put forward by Counsel for the
defendants is: “It does not matter that the contract has been affirmed; you still
can claim no relief of any equitable character in regard to that contract because
you gave a bribe in respect of it. If there is a mistake in the contract, you cannot
rectify it, if you desire to rescind the contract, you cannot rescind it, for that is,
equitable relief. With some doubt they said: “We do not think you can get an
injunction to have the contract performed, though the other side have
affirmed it, because an injunction may be equitable remedy.” When one asks
on what principle this is supposed to be based one receives in answer the
maxim that any one coming to equity must come with clean hands. I think the
expression” clean hands” is used more often in the text books than it is in the
judgments, though it is occasionally used in the judgments, but I was very
much surprised to hear that when a contract, obtained by the giving of a bribe,
had been affirmed by the person who had a primary right to affirm it, not being
an illegal contract, the Courts of equity could be so scrupulous that they would refuse
any relief not connected at ail with the bribe. I was glad to find that it was not the
case, because I think it is quite clear that the passage in Dering v. Earl of
Winchelsea, 1 Cox, 318, which has been referred to shows that equity will not
apply the principle about clean hands unless the depravity, the dirt in question on the
hand, has an immediate and necessary relation to the equity sued for. In this case the
bribe has no immediate relation to rectification, if rectification were asked, or
to rescission in connection with a matter not in any way connected with the
bribe. Therefore that point, which was argued with great strenubusness by
Counsel for the defendant. Hatt, appears to me to fail, and we have to consider
the merits of the case.
82. In Halsbury’s Laws of England Vol. 16: the law is stated in the following lines:
“1303. He who seeks equity must do equity. In granting relief peculiar to its own jurisdiction a Court of equity acts upon the rule that he who seeks equity must do equity [“The principle of this Court is not to give relief to those who will not do equity” : Davis v. Duke of Marlborough, (1819) 2 Swan 108 at 157, per Lord Eldon LC; see Portsea Island Building Society v. Barclay, (1895) 2 Ch 298 at 308, CA. In Chappell v. Times Newspapers Ltd., (1975) 2 All ER 233, (1975) 1 WLR 482, CA, the plaintiffs were refused injunctions to prevent the termination of their contracts of employment because they themselves failed to establish that they intended to act equitably in relation to those contracts]. By this it is not meant that the Court can impose arbitrary conditions upon a plaintiff simply because he stands in that position on the record [Hanson v. Keating, (1844) 4 Hare 1 at 6]. The rule means that a mean who comes to seek the aid of a Court of equity to enforce a claim must be prepared to submit in such proceedings to any directions which the known principles of a Court of equity may make it proper to give [Calvin v. Hartwell. (1837) 5 C1 & Fin 484 at 522; see Shish v. Foster, (1748) 1 Ves. Sen. 88]; he must do justice as to the matters in respect of which the assistance of equity is asked. In a Court of taw it is otherwise; when the plaintiff is found to be entitled to judgment, the law must take its course; no terms can be imposed.
1305. He who comes into equity must come with clean hands. A Court of equity refuses relief to a plaintiff whose conduct in regard to the subject matter of the litigation has been improper. This was formerly expressed by the maxim “he who has committed inequity shall not have equity” and relief was refused where a transaction was based on the plaintiff’s fraud or misrepresentation, or where the plaintiff sought to enforce a security improperly, obtained, or where he claimed a remedy for a breach of trust which he had himself procured and whereby he had obtained money. Later it was said that the plaintiff in equity must come with perfect propriety of conduct, or with clean hands. In application of the principle a person will not be allowed to assert his title to property which he has dealt with so as to defeat his creditors or evade tax, for he may not maintain an action by setting up his own fraudulent design.
The maxim does not, however, mean that equity strikes at depravity in a general way; the cleanliness required is to be judged in relation to the relief sought, and the conduct complained of must have an immediate and necessary relation to the equity sued for; it must be depravity in a legal as well as in a moral sense. Thus, fraud on the part of the minor deprives him of his right to equitable relief notwithstanding his disability. Where the transaction is itself unlawful it is not necessary to have recourse to this principle. In equity, just as at law, no suit lies in general in respect of an illegal transaction, but this is on the ground of its illegality, not by reason of the plaintiff’s demerits.”
83. We have noticed earlier the findings of the learned Single Judge wherein the decision of the Apex Court in Megraj Patodia (supra); and Pushpadin M. Jatia (supra), have been noticed. The said decision of the Apex Court apply in this case.
84. In any case having regard to the fact that the learned Single Judge went into the merit of the matter, heard the parties at great length, scanned the record produced by the respondent with a view to arrive at a decision on merits, we are of the opinion that the writ petition ought not to have been dismissed on this ground alone.
85. The question which now arises is as to what relief can be granted in the instant case. A writ of or in the nature of mandamus as has been sought for by the petitioner, in our opinion, cannot be issued.
86. The first respondent having regard to the facts and circumstances of the case may like to consider the matter afresh or having regard to its past experience may call for a limited tender. We, therefore, are of the opinion that the writ petitioner is not entitled to issuance of a writ of or in the nature of mandamus directing the first respondent to grant the contract in its favor. We direct accordingly.
87. L.P.A.. 204 of 2002 is allowed to the extent mentioned hereinbefore and L.P.A. 252 of 2002 is dismissed. Parties are directed to pay or bear their own costs throughout