JUDGMENT
A.K. Sikri, J.
1. The petitioner in this case is aggrieved by the eligibility conditions No.1(b) stipulated in NIT No.6 (2002-2003). By this NIT, tenders are invited for P/L and Jointing Sagarpur Trunk Sewer (500-1800mm dia) NP3 Class RCC Pipes for Palam Group of Colonies. The estimated cost of the work is Rs. 5,09,16.861. Para-1 of the aforesaid NIT stipulates three conditions which are required if fulfillled by intending contractor before he becomes eligible to apply. This para reads as under:
“(a) Should have satisfactorily completed works of providing and laying of sewer lines of 500mm dia and above costing Rs. 50 lacs or above during the last seven years.
(b) Should have average annual financial turnover or Rs. 250 lacs of Civil Construction work during the last three years.
(c) Should have a solvency of Rs. 500 lacs.”
2. As mentioned above, the petitioner has challenged Condition No.1 (b) as per which contractor should have average annual financial turnover of Rs. 250 lacs of civil construction work during the last three years.
3. The factual background leading to the filing of this petition by the petitioner may be recapitulated in the first instance. As per the petitioner it is a registered Class-1 contractor with Delhi Municipal Corporation since 1980 and now with the respondent-Delhi Jal Board which is an autonomous body created by Government of Delhi in the year 1998. Being Class-1 contractor, it is the case of the petitioner that it is entitled to bid for tender of any amount. This registration of petitioner being Class-1 contractor was given by the respondents vide Communication dated 22.11.2000 and is valid up to 31st January, 2003.
4. It is averred in the petition that the total works executed by the petitioner since 1990 are of the value of more than Rs. 25 crores taking into consideration only the labour rates. If value of material is also included, the total contracts executed by the petitioner would be more than Rs. 75 crores.
5. In the NIT No. (2002-2003) issued by the respondent No.1, Condition No.1 (b) stipulating that tenderer to be eligible should have average annual financial turnover of Rs. 250 lacs of civil construction work during the last three years makes the petitioner ineligible. The petitioner has, therefore, challenged this condition as malafide which according to it is incorporated with sole motive to disqualify it and other established contractors for the purpose of issuing tender to favored persons. The petitioner in this respect has even averred in para 11 of the petition that the respondents are bent upon obliging M/s Subhash Pipes Limited, Indian Hume Pipes and Pragati, Vichitra concrete Pipes etc. even when their earlier record of performance has not been satisfactory.
6. Mr. P.N. Lekhi, learned senior counsel appearing for the petitioner in support of petitioner’s plea submitted in the first instance that although the allegations of malafides were specifically made in the writ petition, there was no denial thereof in the counter affidavit filed by the respondents. he referred to these allegations contained in paras 8, 11 and 15 of the writ petition and emphasised that there was no reply to any of these paras. His submission was that there being no denial or evasive/vague denial of the allegations of malafides these allegations should be treated as correct and the petitioner was entitled to relief on this ground for which he placed reliance on the following decisions of the Supreme Court:-
1. Messrs. Ghaio Mal & Sons v. State of Delhi and Ors. (Para 6)
“Para 6: The principal question urged before us, as before the High Court, is whether the Chief Commissioner of Delhi made any order under Rule 1 of Ch. 5 of the Delhi Liquor License Rules, 1935. It is significant that although the Chief Minister, the Excise Commissioner, the Secretary of Delhi State, the Under Secretary, Finance, and the Chief Commissioner have been imp leaded in the present proceedings as respondents Nos.2, 3, 3A, 3B and 4 respectively and although they or at least some of them could have deposed to the material facts of their own personal knowledge, none of them ventured to file an affidavit dealing with the categorical statement of the appellants that no order had at any time been made by the Chief Commissioner for granting the L-2 license to Messrs. Gainda Mall Hem Raj or rejecting the appellants’ application. Instead of adopting the simple and straightforward way these respondents have taken recourse to putting up the Finance Secretary to give obviously evasive replies which are wholly unconvincing. It is needless to say that the adoption of such dubious devides is not calculated to produce a favorable impression on the mind of the court as to the good faith of the authorities concerned in the matter. We must also point out that when a superior court issues a rule on an application for certiorari it is incumbent on the inferior court or the quasi-judicial body, to whom the rule is addressed, to produce the entire records before the court along with its return. The whole object of a writ of certiorari is to bring up the records of the inferior court or other quasi-judicial body for examination by the Superior Court so that the latter may be satisfied that the inferior court or the quasi-judicial body has not gone beyond its jurisdiction and has exercised its jurisdiction within the limits fixed by the law. Non-production of the records completely defeats the purpose for which such writs are issued, as it did in the present case before the High Court. We strongly deprecate this attempt on the part of the official respondents to by-pass the court. We are bound to observe that the facts appearing on the records before us disclose a state of affairs which does not reflect any credit on the administration of the erstwhile State of Delhi. We must, however, say, in fairness to the learned solicitor General, that he promptly produced the entire records before the during the hearing of this appeal.”
2. Bharat Singh and Ors. v. State of Haryana :
“Para 13: As has been already noticed, although the point as to profiteering by the State was pleaded in the writ petitions point of law, there was no reference to any material in support thereof nor was the point argued at the hearing of the writ petitions. Before us also, no particulars and no facts have been given in the special leave petitions or in the writ petitions or in any affidavit, but the point has been sought to be substantiated at the time of hearing by referring to certain facts stated in the said application by HSIDC. In our opinion, when a point which is ostensibly a point of law is required to be sustained by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence, which must appear from the writ petition and if he is the respondent, from the counter-affidavit. If the facts are not pleaded or the evidence in support of such facts is not annexed to the writ petition or to the counter-affidavit, as the case may be, the court will not entertain the point. In this context, it will not be out of place to point out that in this regard there is a distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter-affidavit. While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter-affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. So, the point that has been raised before us by the appellants is not entertainable. But, in spite of that, we have entertained it to show that it is devoid of any merit.”
3. British India Corporation Ltd. and Ors. v. The Industrial Tribunal, Punjab and Anr. :
“Para 13: Now, so far as the plaintiffs are concerned, the facts are that they made no deposits with the Government, and their names were not in the list of traders for whom the Government imported the goods. They had direct dealing only with the defendants and sent their requirements to them. The defendants would in their application to the Government include what the plaintiffs required as well as what they themselves required and make the necessary deposits for all the goods. But all that would stand only in their name. Though it would be possible to ascertain by reference to the correspondence between the parties which of the orders placed by the defendants with the Government related to the requirements of the plaintiffs, so far as the Government itself was concerned it knew only of the defendants as importers, and it was in their name that it would endorse the shipping documents, and it was only when the defendants in their turn endorsed the same to them that the plaintiffs would get title to the goods, and the evidence of Mr. Leach makes it clear that this had not been done, as regards the shipments with which the suit is concerned. This is what he says in this deposition.
“The goods were shipped all to the order of the Government of India….Separate documents were drawn up in respect of the consignments which were to be supplied to each of the trader according to his requirement submitted to Government. The traders who submitted their requirements cleared the goods by paying the amount of the bills…The Government did not make any allocation to me. I depended on the defendants for obtaining my requirements from the Government. I did not make any cash deposit as required of the dealer. I made to deposit with the Government in respect of the quantity which I wanted. The entire deposit was made with the Government by the defendants even in respect of my requirements…The defendants endorsed over the documents in my favor for goods which were meant for me…Excepting for the admitted portions the documents for remaining part of P.L. 1004 to 1007 were not handed over to me or endorsed in my favor, except to the extent to which the goods were delivered”.
The evidence of Sir John Burder for the defendants was “the shipping documents were received in the name of the defendants.” It is thus clearly established that with reference to the goods comprised in P.L. 1004 to 1007 which formed the subject-matter of the suit, the shipping documents had not been made out in the name of the plaintiffs, nor had the defendants in whose names they were taken, endorsed the same to them. That being so, unless the plaintiffs established their agents, they would not have title to them and the claim for damages on the basis of conversion must fail.”
4. D.D. Suri v. A.K. Barren and Ors. :
“Para 6: We are wholly unable to understand how in the presence of all the allegations which had been made in the petition including those of mala fides by a senior member of the Indian Administrative Service against other senior Officers and the State Government the High Court was justified in dismissing the petition in liming by just writing the word “dismissed”. The High Court did not even call for affidavits in reply to the allegations contained in the petition. This Court has repeatedly laid down (see Gianchand v. State of Haryana, Civil Appeal No. 64 of 1970, D/-21-8-1970 (SC) following Ram Saran Dass v. State of Punjab, Civil Appeal No. 36 of 1963, D/- 16-9-1963 (SC)) that in such circumstances the High Court ought to call upon the respondents to make a return and then consider whether allegations have been proved or not. If it is found that the appellant has made reckless allegations which are not founded on facts it would be in the fitness of things to take suitable action against him. But if on the other hand it is found that there is substance in his allegations there is not reason why the High Court should not grant him the necessary relief if a proper case is made out for doing so. It is quite possible that in a given case the proper course for a writ petitioner should be to seek relief by way of a suit if there are several disputed questions of fact but all these matters can be decided only if the petition is admitted and it is heared after the return has been filed by the respondents.”
7. He also referred to 28th Law Edition, 2nd Series, 136 and Jaichand Lal Sethia v. The State of West Bengal and Ors. reported in AIR 1968 SC 483 .
8. The law laid down in the aforesaid judgments needs no emphasis and is abundantly clear. However, the reliance upon these judgments is of no avail to the petitioner as the entire submission is based on factually incorrect premise. The perusal of the counter affidavit would show that the allegations of malafides are emphatically denied. No doubt, the respondents, in their counter affidavit, have not given parawise reply but reading of the entire counter affidavit clearly shows that all material allegations contained in the petition are duly traversed including those of malafides. The allegations of malafides are denied specifically in para 15 which reads:
“It is totally false, incorrect and is vehemently denied that the decision to enhance the condition 1(b) requiring the annual turnover to the tune of Rs. 250 lacs was done for any malafide purpose. It is false, incorrect and denied that the same was done to disqualify the petitioner or any other established contractor for the purpose of issuance of tenders to any favored persons. It is also wholly incorrect and misconceived that the condition of civil construction work is irrelevant to the work of laying pipes.
It is important to note that similar conditions had been imposed even in NIT No. 4 (2002-03). The petitioner had fully accepted the relevance and considerations thereof and had submitted the application but had failed to qualify in the aid tender. The petitioner is estopped from challenging the relevance of the condition for this reason alone.
9. Further, the allegation that the Condition No.1 (b) was introduced to help the competing contractors is dealt with in para 16 of the counter affidavit by stating:
“Para 16: The respondent also vehemently denies the allegations that the Condition 1(b) had been enhanced at the instance of any competing contractors or to favor such contractors who are not registered with the Delhi Jal Board. There is no intention to exclude the petitioner or any other similarly placed contractors.”
10. We may further note that in paras 19, 20, and 22 of the counter affidavit, the respondents denied the allegation to the effect that the condition was put to favor third parties including Indian Hume Pipe company etc. It is further stated that two of the firms whose names have been mentioned by the petitioner had not even submitted applications for tenders pursuant to the NITs issued. This itself would expose the falsity of the allegations made by the petitioner.
11. We further find that in paras 19 and 21 of the counter affidavit the respondents have relied upon the records of the Delhi Jal Board in respect of the work in question which also detailed the reasons for inclusion of the said conditions. Even the record was made available to us for our perusal to which we shall refer to at the appropriate stage. In view of this factual position, it cannot be said that the allegations of malafides are not refuted. In fact as noted above, there is not only specific denial but the respondents have been amply clarified the position in this respect.
12. It was next contended by the learned senior counsel for the petitioner that the respondents were acting against public interest and the conditions were changed from time to time with malafide intentions. Elaborating this submission, it was argued that the respondents had, in the first instance, issued NIT No.4 (2002-03) in which condition No. 1(b) stipulated average annual financial turnover at Rs. 150 lacs of civil construction work during last three years. This tender was withdrawn and the tender in question, namely, NIT No.6 (2002-03) was issued enhancing the average annual financial turnover to Rs. 250 lacs from Rs. 150 lacs. It was the submission of the learned senior counsel that in fact the conditions in respect of same work were repeatedly changed inasmuch as first tender in respect of this work was issued vide NIT No.4 (2001-02). Thereafter NIT No.9 (2001-02) was issued in respect of the same work changing the conditions incorporated earlier. Still the said NIT was scrapped and NIT No.4 (2002-03) was issued. Again the respondents did not act on this tender and changed the conditions once again and NIT No.6 (2002-03) was issued.
13. To appreciate this contention, we may have to take into account the nature of the work involved and the background in which the eligibility conditions were imposed. The work in question relates to purchase/laying of and jointing of Sagarpur Trunk Sewer (500-1800 mm dia) NP 3 class RCC pipes for Palam Grou of Colonies by open cut conventional method or by trenchless technology.
14. It is explained in the counter affidavit that for the first time when offers were invited vide NIT No.4 (2001-02) the work included re-construction of road and the estimated cost of projected was Rs. 6,95,16,520/-. Although the tenders were invited, however, the Lt. Governor ordered that road restoration work would be carried on by the road owning agency and, therefore, this work should be excluded from the scope of work. This led to withdrawal of this tender and issuance of NIT No.9 (2001-02) on 20th September, 2001 which was issued with the reduced scope of work after excluding the work relating to road restoration. 11 firms submitted their applications for issuance of tender forms but only 4 firms had qualified. The petitioner had not qualified even on that occasion. Out of the 4 firms who had pre-qualified for issuance of tender documents, only 2 had purchased the tender documents and only one had submitted its tender. Since there was only one tender, decision was taken to invite fresh tenders on reconsideration of the parameters for issuance of tender for better competition and to increase the area of competition to enable more firms to apply. In this context decision was taken to lay down the following eligibility conditions:
“1 (a) Should have satisfactorily completed of three works of providing and lying trunk/peripherial sewer lines each costing Rs. 200 lakhs or two similar work of aggregate cost not less than 600 lakhs during the last seven years.
(b) Should have average annual financial turnover of Rs. 150 lakhs of civil construction work during the last three years.”
15. NIT No. 4 (2002-03) was issued with the aforesaid conditions. This time 6 parties including the petitioner submitted applications for issuance of the tender documents. Only 2 qualified for issuance of tender and the name of the petitioner was not included therein. However, again, it was decided not to consider a single tender inasmuch as it was neither financially nor technically in the interest of the respondents. This experience led to reconsideration of the matter and what was decided now is contained in para 12 of the counter affidavit which makes the following reading:
“Para 12: That the matter was considered in the Delhi Jal Board. It was decided to reconsider the qualifying criterion to ensure healthy competition and encourage capable contractor to come forward for the execution of the work. While relaxing the value of the works, it was necessary to ensure financial capability of the firm submitting the applications. The work in the instant case envisages an estimated cost of over Rs. 5 crores and the work is to be completed within a period of two years. Since the work related to provision and laying of sewer lines of 500 mm dia it was proposed to reduce the value of the work in terms of the experience with requisites for eligibility while at the same time, the application was required to show financial capacity and capability of executing the work.
Therefore, after fully considering the matter, fresh tenders were invited pursuant to NIT No. 6 (2002-03) dated 20th August, 2002. The tenders were to be submitted on the 20th September, 2002. The eligibility conditions, inter alia, are the following:
“1 (a) Should have satisfactorily completed works of providing and laying of sewer lines of 500 mm dia and above costing Rs. 50 lakhs or above during the last seven years.
(b) Should have average annual financial turnover of Rs. 250 lakhs of civil construction work during the last three years.”
Both these conditions were necessary to ensure both technical as well as financial capacity and capability of the bidders keeping in view the nature of the work executed.”
16. Justifying the imposition of the aforesaid condition, it is stated that the work includes provision and laying of sewer lines and is to be executed on an estimated cost of Rs. 5 crores.
17. In order to verify the aforesaid stand, we have even perused the records. We note that before formulating the aforesaid conditions, there were thorough deliberations of the Committee and keeping in view the nature and magnitude of the work involved and also to encourage competition, the eligibility conditions were laid down by the Committee.
18. We also find force in the submission of Ms. Gita Mittal, learned counsel appearing for the Delhi Jal Board when she contends that while laying down the aforesaid Conditions 1(a) and 1(b), both were to be read together. The petitioner had no grievance with regard to relaxation of Condition No.1(a) as it suits the petitioner and it was challenging Condition No.1 (b) only. It was not permissible for the petitioner to pick and choose as a ground to challenge the composite decision taken by the Delhi Jal Board with regard to eligibility conditions in NIT after considering the matter in its entirety.
19. In Tata Cellular v. Union of India which is elaborate and lucid commentary relating to law on this subject and the Supreme Court, after a detailed discussion, summarised the law by laying down the following propositions:
“(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 fairplay 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 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.”
20. The principle stated at S.No.(4) above is a complete answer to the submission of the petitioner. Once it is found that the introduction of the aforesaid eligibility condition was not inserted arbitrarily or malafide and once this court comes to the conclusion that the said condition has reasonable nexus with the work in question and rationale behind it, that would be an end to the exercise of judicial review required to be taken in such matters. The court cannot substitute its own wisdom or lay down the terms on which the respondents want to invite tenders. That is in the realm of contract and it is for the employer to fix necessary parameters and lay down eligibility conditions. We are of the opinion that there is no arbitrariness in the decision making process and it meets the test of wednesbury principle of reasonableness. We may also take support from the following observations of the Supreme Court in the case of AIR India Ltd. v. Cochin International Airport Ltd. and Ors.:
“It can fix its own terms of invitation to tender and that is no open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offer 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 though it happends 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 malafides, unreasonableness 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 ind 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.”
21. Ms. Gita Mittal referred to the Constitution Bench judgment of the Apex Court in the case of Fertilizer Corporation Kamgar Union (Regd.) Sindri and Ors. v. Union of India and Ors. which defines the scope of judicial review in such matters. Krishna Iyer, J in his separate but concurring judgment for himself and on behalf of Bhagwati, J., made the following pertinent observations:
“…We certainly agree that judicial interference with the administration cannot be meticulous in our Montesquien system of separation of powers. The court cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded. if the Directorate of a Government company has acted fairly, even if it has faltered in its wisdom, the court cannot, as a super-auditor, take the Board of Directors to task. This function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration.”
22. As we do not find any procedural impropriety or irrationality or arbitrariness in the decision making process, that is, in the process of laying down the aforesaid condition, which is a relevant condition, this contention of the petitioner is also liable to be rejected. Mr. Lekhi may have made passionate plea against the introduction of the aforesaid conditions alleging that it was curbing competition by excluding persons like the petitioner. However, we have to examine the matter dispassionately and in accordance with the well established principles. Having examined the matter i the light of principles laid down in the aforesaid judgments, we are of the opinion that there is no force in this contention either.
23. A faint attempt was made to contend that in any case the petitioner was eligible to submit its bid, notwithstanding Clause 1(b) of the tender conditions, in view of the fact that it was a Class-I contractor and therefore, eligible to tender for unlimited value. This plea is to be noted to be rejected, having regard to the nature of work involved. As already pointed out above, the work in question is related to purchase/laying of and jointing of Sagarpur Trunk Sewer (500-1800 mm dia) NP 3 class RCC pipes for Palam Group of Colonies by open cut conventional method or by trenchless technology. Keeping in mind this consideration, the experience of the intending bidder for undertaking the civil construction work becomes relevant. The petitioner has been undertaking the work for laying civil pipes and water pipes. Keeping in view its satisfactory performance in such kinds of work, it has been empanelled as Class-I contractor and for this kind of work it would be eligible to submit its tender irrespective of the value of the work. However, the present work is not simply work for laying sewerage pipes and water pipes. Thus it is but necessary for the person like the petitioner, who may be class-I contractor, to fulfill this condition as well and cannot claim immunity there from. It is stated at the cost of repetition that the respondents are the best judge to formulate and lay down such conditions having regard to the nature and quantum of work involved.
24. No other submission was advanced. We, therefore, hold that Condition No. 1(b) is valid. As the petitioner does not fulfill this condition, it is not eligible to tender and was rightly denied the participation. The writ petition is thus devoid of any merit and is accordingly dismissed with cost quantified at Rs. 10,000/-. Rules stands discharged and all interim orders are hereby vacated.