{"id":160992,"date":"2002-08-19T00:00:00","date_gmt":"2002-08-18T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/pes-installation-pvt-ltd-vs-the-all-india-institute-of-medical-on-19-august-2002"},"modified":"2015-11-29T23:58:34","modified_gmt":"2015-11-29T18:28:34","slug":"pes-installation-pvt-ltd-vs-the-all-india-institute-of-medical-on-19-august-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/pes-installation-pvt-ltd-vs-the-all-india-institute-of-medical-on-19-august-2002","title":{"rendered":"Pes Installation (Pvt.) Ltd. vs The All India Institute Of Medical … on 19 August, 2002"},"content":{"rendered":"
Delhi High Court<\/div>\n
Pes Installation (Pvt.) Ltd. vs The All India Institute Of Medical … on 19 August, 2002<\/div>\n
Author: A Sikri<\/div>\n
Bench: S Sinha, A Sikri<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
 A.K. Sikri, J.<\/p>\n
1. By way of this writ petition, the petitioner
\nhas challenged the decision of the respondent No. 1,
\ni.e., the All India Institute Institute of Medical Sciences in
\ncancelling the tender exercise initiated by it in
\nFebruary, 2000. It is alleged in the writ petition
\nthat in the first instance a decision was taken by the
\ncompetent authority to award the contract to the
\npetitioner. However, at the instance of the respondent
\nNo. 2 and under political pressure, the respondent No. 1
\ncancelled the said tender process and decided to invite
\nfresh tender.\n<\/p>\n
2. The factual matrix may first be taken note of:\n<\/p>\n
3. It is alleged in the writ petition that
\nalthough the respondent No. 1 is one of the most
\nprestigious Institutes in the field of medical sciences
\nand research, it has the most obsolete and unsafe life
\nsaving system of medical gases. These costly gases
\nworth lacs of rupees go waste due to leakage and worn
\nout system which is in existence at present. It was
\nfor this reason that the respondent No. 1 decided to
\npurchase the new medical gas pipeline system in the
\nhospital.\n<\/p>\n
4. For this purpose the respondent No. 1 issued,
\non 10th February, 2000 pre-tender notice bearing
\nNo. F13-42\/Hospital which was published in various
\nnewspapers. Another advertisement to the same effect
\nwas also published in the newspapers on 21st February,
\n2002. Various parties including the petitioner
\nsubmitted their tenders. Technical bids were opened in
\npresence of bidders on 23rd March, 2000. Thereafter,
\ntechnical presentation was given by the bidders last
\ndate for which was 25th March, 2000. After undergoing
\nthis drill, the respondent No. 1 shortlisted the bidders
\nwhich included the petitioner as well. Fax messages
\nwere sent to the shortlisted bidders that their
\ncommercial bids would be opened on 31st March, 2000
\nwhich were opened on that date. Five parties had
\nsubmitted their bids and after scrutinising the
\ntechnical bids, the petitioner and respondent No. 2 were
\nshortlisted.\n<\/p>\n
5. As it transpires, the bid of the respondent
\nNo. 2 was the lowest although the petitioner was second
\nlowest; the difference between the prices quoted by
\nthe petitioner and the respondent No. 2 was over Rs. 1.30
\ncrores. Be as it may, the two bids were considered by
\nthe Committee constituted for this purpose. Before
\nundertaking the final exercise, the two shortlisted
\nbidders were asked to submit various clarifications
\nwhich they did. The petitioner states that on 11th
\nApril, 2000 it submitted a letter pointing out the
\ncomparative prices and technical feasibility of the
\noffer made by it vis-a-vis the offer of the respondent
\nNo. 2. It was followed by another letter dated 15th
\nApril, 2000 informing the respondent No. 1 about the
\nfinancial and technical soundness of the petitioner.
\nThereafter on 15th May, 2000 the petitioner was called
\nfor final negotiation when it also offered a final
\ndiscount of 20% of the prices which was accepted by
\nthe Experts Committee and the proposal in favor of the
\npetitioner was forwarded for the Director’s approval
\nwhich was also ultimately given. The case of the
\npetitioner is that although the decision was taken by
\nthe respondent No. 1 to award the contract to the
\npetitioner and the petitioner was waiting for an order
\nto be placed upon it, this was not done. When inspite
\nof various visits of the petitioner to the respondent
\nNo. 1 is failed go get response, the petitioner was
\nconstrained to file a writ petition being CWP
\nNo. 426\/2001 in this court on 16th January, 2001.
\nHowever, when this petition came up for hearing on 19th
\nJanuary, 2001 the petitioner came to know only in the
\ncourt from the statement of the counsel for the
\nrespondent No. 1 that the entire tender process had
\nalready been cancelled and a decision to this effect
\nwas taken in December, 2000. The petitioner, in these
\ncircumstances, withdrew the said writ petition with
\nliberty to challenge the cancelling order. It gave
\nlegal notice on 20th January, 2001 upon the respondent
\nNo. 1 calling upon it to supply a copy of order passed
\nin December, 2000 cancelling the tender process but as
\nno reply was received the petitioner filed the present
\nwrit petition. The prayer in this writ petition is to
\nthe following effect:\n<\/p>\n
1. Issue a writ in the nature of certiorari,
\nquashing the decision of the respondent No. 1<\/span>
\ntaken in December, 2000 to cancel the entire
\ntender exercise for supply, installation,
\ncommissioning, operation and maintenance of
\nNew Medical Gas Pipe Line System in the
\nHospital;\n<\/p>\n
2. Direct the respondent No. 1 to award the
\ncontract to the petitioner in terms of the
\nreport of the Experts Committee, as approved
\nby the Director, and as conveyed to the
\npetitioners early in the month of May, 2000 on
\nthe basis of the earlier tender exercise
\ninitiated in the month of February\/March,
\n2000;\n<\/p>\n
3. Issue a writ in the nature of prohibition
\nrestraining the respondent No. 1 from calling
\nfrom fresh tenders for supply, installation,
\ncommissioning, operation and maintenance of
\nNew Medical Gas Pipe Line System in the
\nHospital.\n<\/p>\n
4. All the cost of the writ petition.\n<\/p>\n
6. The respondent No. 1 has filed counter
\naffidavit explaining the circumstances which compelled
\nit to cancel the earlier tender. It is admitted in the
\ncounter affidavit that after evaluation of the
\ntechnical bids only two bidders were shortlisted,
\nnamely, the petitioner and the respondent No. 2. There
\nis no dispute about the financial bid of the two
\nbidders and the fact that the price quoted by the
\nrespondent No. 2 was lesser by Rs. 1.30 crores over the
\nprice quoted by the petitioner. It also stands
\nadmitted in the counter affidavit that notwithstanding
\nthe lowest price quoted by the respondent No. 2 the
\nTender Committee did not consider it appropriate to
\naward the contract to the respondent No. 2 as it was
\nfound that the respondent No. 2 had quoted the items
\nfrom difference sources and of different makes whereas
\nthe petitioner was providing the items from one
\nsource\/make and that the process of quoting the items
\nfrom different sources and different makes was found to
\nbe contrary to the tender conditions and thus liable to
\nbe rejected outright. The counter affidavit further
\nstates that when Tender Committee was still considering
\nand processing the quotation of the petitioner, it came
\nto light that there are few prima facie flaws\/lacunaes
\nin the tender submitted by the petitioner as well.
\nThese flaws\/lacunaes were non-furnishing of the papers
\nrelating to the DGS&D registration, quotation of price,
\nwithout indicating the custom, excise and sales tax
\ncomponents. The stand of the respondent No. 1 in the
\ncounter affidavit, further, is that a closer scrutiny
\ninto the matter also revealed that there were certain
\nprima facie flaws\/lacunaes in the formulation of the
\ntender specification and it was found that the time for
\nsurvey, preparation of the bids etc. was not adequate
\nkeeping in view the magnitude of the project. The
\ntender conditions were found to have been prepared
\nwithout thorough assessment of the present need
\nstructure and the future expansion programme of the
\nrespondent No. 1. In these circumstances, the
\nrespondent No. 1 decided to obtain further details with
\nregard to technical specifications of the system and to
\nretender the same after formulating the comprehensive
\ntechnical specifications. Therefore, according to the
\nrespondent No. 1, a conscious decision was taken to
\ncancel the present tender. It is accordingly submitted
\nthat as no decision was taken and\/or communicated by
\nthe competent authority accepting the offer of the
\npetitioner, no right was created in its favor. The
\ndecision taken to cancel the tender was bona fide and
\nthe discretion exercised by the respondent No. 1 in this
\nrespect is proper and in any case does not violate any
\nof the rights of the petitioner in any manner.
\nHighlighting these averments in the counter affidavit,
\nthe learned counsel for the respondent No. 1 pressed for
\ndismissal of the writ petition.\n<\/p>\n
7. The neat submission of the learned counsel for
\nthe petitioner was that in fact a decision was taken by
\nthe competent authority to award the contract in favor
\nof the petitioner. As a sequatter thereto, the
\npetitioner would have even received the order in the
\nnormal course. However, political pressure was put on
\nthe respondent No. 1 at the instance of the respondent
\nNo. 2 and in view of the letter of a Member of
\nParliament canvassing the opinion of the respondent
\nNo. 2, the respondent No. 1 with oblique motives and in
\nan arbitrary and unreasonable manner decided to cancel
\nthe tender process. Otherwise, according to the
\nlearned counsel, there was no reason not to award the
\ncontract to the petitioner after decision to this
\neffect had been taken by the respondent No. 1 in its
\nmeeting held on 12th July, 2000. He submitted that the
\ncourt in this case had earlier passed order directing
\nthe respondent No. 1 to produce the records and perusal
\nof the court would confirm the submissions of the
\npetitioner.\n<\/p>\n
8. Mr. Mukul Gupta, learned counsel appearing for
\nthe respondent No. 1 also relied upon the records in
\nsupport of his submission that it was a bona fide act
\non the part of the respondent No. 1 to cancel the tender
\nprocess after finding certain lacunae and infirmities
\nin the tender documents, to avoid any litigation. He
\nproduced the records for our perusal as well.\n<\/p>\n
9. Records reveal that a meeting was held under
\nthe Chairmanship of the Director, AIIMS on 19th July,
\n2000 for considering the tenders of the two shortlisted
\nparties. The Committee, finding some flaws in the
\nfinancial bid submitted by the respondent No. 2, M\/s
\nUsha Draggers, decided to ignore the offer of the
\nrespondent No. 2 and found that the system offered by
\nthe petitioner would be more suitable for AIIMS. The
\nminutes of the meeting held on 10th July, 2000 are
\nrecorded on 12th July, 2000 and the relevant portion of
\nthese minutes makes the following reading:\n<\/p>\n
  “On going through the financial bids, it
\nwas noted that M\/s Usha Drager has quoted
\nthe items from different sources of
\ndifferent make, and several items quoted
\nin the financial bid are not as mentioned
\nin the technical bid. While on the other
\nhand M\/s PES has quoted all the items
\nfrom a single source conforming to
\nacceptable European and American
\nStandards. The shortfalls between
\ntechnical bid and financial bid quoted by
\nM\/s Usha Drager were also discussed. On
\ncomparing the price of the system quoted
\nby these firms, it was noted that though
\nM\/s Usha Dragger’s system is cheaper but
\nconsidering the fact that M\/s Usha
\nDragger had quoted differently in
\ntechnical & financial bids, the items
\nquoted were from different sources of
\ndifferent make and not conforming to
\nacceptable standards, it was decided the
\nmaterial and its quality offered is not
\ncomparable with the system quoted by M\/s
\nPES Installation, and in order to get the
\nbest manifold & pipeline system, the
\noffer of M\/s PES Installation best suits
\nthe Institute, being of international
\nquality and material from single source
\nand it was unanimously decided that
\nthough the system quoted by M\/s Usha
\nDragger may be cheaper cost-wise but
\nlooking into the quality of the system
\nquoted by M\/s PES Installations, is most
\nsuitable for AIIMS.”\n<\/p>\n
10. It may be mentioned at this stage that later
\npart of the minutes also records that representative of
\nthe respondent No. 2 had already met the Director and
\nexpressed his discount regarding the likelihood of
\nhis company not getting the order. Another firm M\/s
\nDatex Ohmeda whose technical bid was not consider had
\nalso made a complaint to another member of the
\nCommittee, namely, Prof. R.K. Pandhi. Accordingly, it
\nwas felt that keeping in view the magnitude of the
\nwork, there was a likelihood that more such complaints
\nmay be lodged and after a detailed discussion it was
\ndecided that all the documents should be sent to the
\nLegal Adviser and a written advice regarding the whole
\nissue should be taken.\n<\/p>\n
11. It appears that the legal opinion was
\nthereafter taken. An official put a note in the file
\nstating that in view of the observations made by the
\nStanding Counsel file be put up before the Committee to
\ntake final decision. Thereafter while putting his
\nremarks that it may be done in next few days he also
\nmade the following query:\n<\/p>\n
 “if there is any scope of criticism in
\nthe light of SLC (Standing Legal Counsel)
\nrecommendation we may retender the entire
\nsystem.”\n<\/p>\n
12. Thereafter indepth tender specification in
\nrespect of supply and installation of the gas pipeline
\nsystem was undertaken and some major flaws\/lacunaes
\ndetected right from the stage when the tender
\nspecifications were formulated. Note dated 30th
\nNovember, 2000 pointing out such flaws makes the
\nfollowing reading:\n<\/p>\n
“May like to see remarks of MS on pre
\npage. The specifications in respect of
\nthe supply and installation of the gas
\npipeline system have been examined and
\nsome major flaws\/lacunaes have been
\ndetected right from the stage when the
\ntender specifications were formulated.\n<\/p>\n
The time allocated for survey,
\npreparation of bids etc. was certainly
\nnot adequate compared to the size and
\nmagnitude of the project. One would have
\nsupposed that in a case like this even
\nbefore the tender process was initiated
\nefforts would have been made to make a
\nthorough assessment of the present need
\nstructure and also requirements related
\nto the Institute’s further expansion
\nplans. In this case some of the actual
\nvital requirements of the system, for
\ninstance oxygen outlets at the location
\nthe parties are taken for
\ndiagnostic\/therapeutic purposes, degree
\nof use of each outlet etc. has not been
\nclearly worked out. One would have also
\npresumed that the requirement of
\nproviding a spare pipeline system
\nextending from the central supply site
\narea to the possible sites of future
\nexpansion would be taken care of, but
\nthis has not been done. The Central
\nsupply which includes facilities for
\nstorage of gas, central system for
\ndelivery of gas, alarms and safety
\ndevices has also not been clearly
\nspecified. The number of cylinders
\nrequired in both the banks and their
\nemergency reserves seem to be also
\nunder-quoted and at best hypothetical
\nbecause the exact numbers can only be
\nquoted and after ascertaining the degree
\nof oxygen use at different outlets.\n<\/p>\n
After from technical flaws it is amazing
\nthat for an order of such magnitude
\ncertain vital store related aspects were
\noverlooked by the ASO\/SO. Some major
\nprocedural lacunaes in this regard are
\nbeing listed below:\n<\/p>\n
1. The selected firm PES has not
\nfurnished papers related to its
\nregistration with DGS&D.\n<\/p>\n
2. No effort has been made in the tender
\ndocument to ask the firms to quote the
\nrates and amounts of duties like custom,
\nexcise, sales tax. This should have been
\ntaken into account given the fact that
\nAIIMS is registered with the department
\nof Scientific and Industrial Research and
\nhence stands eligible for exemption on
\naccount of custom duties, excise duties,
\nand sales tax.\n<\/p>\n
3. As per Clause 19 the supplier shall
\ntest each equipment after installation at
\nsite. A provision for a similar
\ninspection by someone at the appropriate
\nlevel from AIIMS should have been kept in
\nthe tender. There was also a need to
\nintroduce a penalty clause for casualty
\nif the same occurs due to a fault in the
\nsystem.\n<\/p>\n
After from the anomalies pointed out
\nabove the fact of the matter is that even
\nthough Usha Drager the (representing
\nfirm) was rejected on what could grounds
\nbe taken as hardcore technical grounds it
\nwas L1 and the difference between it and
\nPES (the shortlisted firm) was of an
\namount (no less than Rs. 1.30 crores.
\nAfter being selected on technical grounds
\nthe firm was rejected on rounds that it
\nwas supplying equipment from different
\nsources ostensibly not compatible with
\neach other. It is amazing how a crucial
\nissue like the bench marking of standards
\nwas ignored when the technical selection
\nwas being made. The fact that the Usha
\nDrager representative was not able to
\nconvince the committee regarding the
\nafter sales service has also been cited
\nas a ground for rejection. Such grounds
\nhowever are really shaky and can be
\neasily avoided by making an effort to
\ninterface with appropriate persons at a
\nhigher level.\n<\/p>\n
In view of the facts underscored above
\nand also the representation received from
\nUsha Drager\/Lok Sabha MP\/and, office of
\nthe President and, the imminent
\npossibility of cross examination by the
\nCVC, one would tend to agree with the
\nMedical Superintendent’s suggestion that
\nwe might need to re-tender the entire
\nsystem. But before such a decision is
\ntaken and, in order to rule out any
\nerrors of judgment on our part and also
\nsince the entire discourse and grounds of
\nrejection of L1 were highly technical, we
\ncould seek the advice (confidentially) of
\ntwo external unbiased (technical) experts
\nAlong with a representative of the JS\/FA.\n<\/p>\n
Before this case is put up for decision
\nour Standing legal counsel may also like
\nto study my note, and offer his
\ncomments.”\n<\/p>\n
13. The matter was again sent to the Legal Adviser
\nwho opined, quoting the judgment of the Supreme Court
\nin  Tata Cellular v. Union of India<\/a> , as under:\n<\/p>\n
 “In case on review, it has been pointed
\nout that the entire process or the terms
\nof tender appears to be tailormade, or
\ntainted, the law does not present AIIMS
\nto cancel the earlier tender and invite
\nthe fresh one. But before doing so, it
\nwould be appropriate that the entire
\nprocess is scrutinised by a Committee of
\ntwo\/three emminent\/senior persons and
\nappropriate decision taken. One thing
\nmore has to be kept in mind that in all
\ncontracts of huge amounts, allegations
\nand counter allegations are bound to be
\nthere and therefore, proposed action
\nshould be taken swiftly.”\n<\/p>\n
14. On the basis of the aforesaid opinion, the
\nDirector of AIIMs constituted a Committee consisting of
\nProf. H.S. Dash, Head of Department of Neuro-anaesthesia,
\nDr. Pawar, Additional Professor of anaesthesia and
\nDr. Bhattacharjee, Prof and Head of Anaesthesia UCMS.\n<\/p>\n
15. Thereafter a decision was taken to scrap the
\ntender process and invite fresh tender after removing
\nthe technical snags\/lacunaes that had occurred in
\nearlier tender.\n<\/p>\n
16. Mr. Mukul Gupta, learned counsel appearing for
\nthe respondent No. 1, at the time of arguments, pointed
\nout that fresh notice inviting tender had since been
\npublished in the newspapers on 20th July, 2002 and
\nlearning from the past experience, care is taken to
\nensure that specifications for the system to be
\npurchased are properly mentioned.\n<\/p>\n
17. The aforesaid narration of facts as culled out
\nfrom the record surfaces the following salient aspects:\n<\/p>\n
 1. No doubt the minutes dated 12th July, 2000
\nof the meeting held on 10th July, 2000 show that the
\nspecial Committee constituted for finalising the
\npurchase of the system in question rejecting the bid of
\nthe respondent No. 2 and decided that the system offered
\nby the petitioner would be more suitably for AIIMS.
\nHowever, final decision was not taken in this respect
\nand it was decided to take legal opinion in the first
\ninstance. The learned counsel for the petitioner,
\ntherefore, is not correct in his submission that final
\ndecision was taken to award the contract in question.\n<\/p>\n
2. After the opinion of the Standing Counsel
\nthe matter was re-examined and at that stage it was
\nfound that there were some major flaws\/lacunaes in the
\nspecifications mentioned in the tenders in respect of
\nthe system which was to be purchased by the respondent
\nNo. 1. It came to the notice that there were technical
\nas well as procedure flaws in the tender.\n<\/p>\n
3. In the meantime, the Ministry of Health
\nand Family Welfare as well as Vigilance Department had
\nalso taken up the issue with the respondent No. 1 and
\nafter taking all the aspects into consideration, the
\nrespondent No. 1 decided to cancel the tender in
\nquestion with decision to re-tender.\n<\/p>\n
18. In the aforesaid circumstances, it cannot be
\nsaid that the decision taken was arbitrary or
\nirrational so as to attract the Wednesbury’s principles
\nof unreasonableness or wrath of Article 14 of the
\nConstitution of India.\n<\/p>\n
19. The entire case of the petitioner was founded
\non the allegation that a final decision had been taken
\nto award the contract to it which decision was
\ncancelled because of political pressure put up on the
\nrespondent No. 1 at the instance of the respondent No. 2.
\nIt has already been noticed above that no such final
\ndecision was taken to award the contract in favor of
\nthe petitioner. So far as allegation of political
\npressure is concerned, the same also does not appear to
\nbe wholly correct. No doubt on the representation of
\nthe respondent No. 2, one Member of Parliament had
\nwritten to the Minister of State, Ministry of Health
\nand Family Welfare, Government of India for looking
\ninto the matter and exclusion of the respondent No. 2.
\nNo doubt the Ministry had also asked for the comments
\nof the respondent No. 1 on the representation of the
\nrespondent No. 2 as well as the said Member of
\nParliament. However, it was stressed in the said
\nrepresentation that the respondent No. 2 was wrongly
\nexcluded and the contract should have been awarded to
\nthe respondent No. 2. This was not agreed to by the
\nrespondent No. 1 which instead decided to cancel the
\ncontract because of the reason mentioned above. It
\nwould be interesting to note that after the
\ncancellation of the contract and when the intimation to
\nthat effect was sent to the Ministry vide letter dated
\n15th December, 2000 the Ministry sent another letter
\n10th January, 2001 to the respondent No. 1 questioning
\nthe cancellation of the tender stating that the report
\nwas sought in the matter as to how the respondent No. 2
\nwas rejected when its bid was the lowest. Accordingly,
\nthe respondent No. 1 was asked to give the precise
\nreasons for cancellation of tender. Reply of AIIMS to
\nthis letter provides for complete answer to the
\nallegation of the petitioner regarding alleged
\npolitical pressure. In reply, vide letter dated 16th
\nJanuary, 2001 the respondent No. 1, inter alia,
\nexplained the position in the following manner:\n<\/p>\n
 “Kindly refer to your letter
\nNo. V.16020\/41\/2000-ME. Desk I dated 10th
\nJanuary, 2001 eliciting the reasons for
\ncancelling the tender related to the
\nsupply, installation, commissioning,
\noperation and maintenance of the medical
\ngases pipeline system.\n<\/p>\n
Even though it is true that M\/s Usha
\nDrager was initially found to be
\ntechnically competent, however, once the
\nfinancial bid was opened, it was observed
\nthat the company had quoted items from
\ndifferent sources and or different makes
\nand that several items quoted in the
\nfinancial bid were different from those
\nmentioned in the technical bid. The
\ncompany had not only committed the grave
\nand deliberate error or quoting
\ndifferently in the technical and
\nfinancial bid, the items quoted in the
\nfinancial bid were not as per the
\nacceptable international standards. The
\nMinister of Health and Family
\nWelfare\/President of the Institute was
\nkept informed about the specific reasons
\nfor the rejection of M\/s Usha Drager vide
\nmy letter No. F.Vig\/2\/295\/2000 dated
\nAugust 19th 2000.\n<\/p>\n
The cancellation of the tender was
\nnecessitated by the fact that even though
\nthe ground of rejection of M\/s Usha
\nDrager was based on hardcore technical
\nfacts the difference of price quoted
\nbetween Usha Drager and the other short
\nlisted firm was of a sizeable amount.
\nThe Institute was cornered into a
\nsituation where despite the deliberate
\nand, malafide attempt by Usha Drager to
\nmislead the high powered technical
\ncommittee set up to assess the technical
\nbids, CVC guidelines had to be followed,
\nand, the tender had to be cancelled.”\n<\/p>\n
20. This amply shows that even the concerned
\nMember of Parliament or the respondent No. 2 did not
\nwant cancellation of the tender and rather wanted the
\naward of tender in favor of the respondent No. 2.
\nHowever, the respondent No. 1 still justified its
\ndecision to reject the bid of the respondent No. 2 and
\nalso explained the circumstances under which the entire
\nprocess had to be cancelled. Therefore, it cannot be
\nsaid that the cancellation of the tender process was
\nunder political pressure. The alleged political
\npressure, if any, was for award of contract in favor
\nof the respondent No. 2 and not to cancel the tender.
\nConsequently this submission of the petitioner also is
\nof no avail to it. The scope of judicial review in
\nsuch matters is limited and law is now crystalised in
\nview of several decisions of the Supreme Court.\n<\/p>\n
21. In Tata Cellular v. Union of India, the<\/a> law
\nis stated in the following terms:\n<\/p>\n
“(1) The modern trend points to judicial
\nrestraint in administrative action.\n<\/p>\n
(2) The court does not sit as a court of
\nappeal but merely reviews the manner in
\nwhich the decision was made.\n<\/p>\n
(3) The Court does not have the expertise
\nto correct the administrative decision.
\nIf a review of the administrative
\ndecision is permitted it will be
\nsubstituting its own decision, without
\nthe necessary expertise which itself may
\nbe fallible.\n<\/p>\n
(4) The terms of the invitation to tender
\ncannot be open to judicial scrutiny
\nbecause the invitation to tender is in
\nthe realm of contract. Normally
\nspeaking, the decision to accept the
\ntender or award the contract is reached
\nby process of negotiations through
\nseveral tiers. More often than not, such
\ndecisions are made qualitatively by
\nexperts.\n<\/p>\n
(5) The Government must have freedom of
\ncontract. In other words, a fairplay in
\nthe joints is a necessary concomitant for
\nan administrative body functioning in an
\nadministrative sphere or
\nquasi-administrative sphere. However,
\nthe decision must not only be tested by
\nthe application of Wednesbury principle
\nof reasonableness (including its other
\nfacts but must be free from arbitrariness
\nnot affected by bias or actuated by mala
\nfides.\n<\/p>\n
(6) Quashing decisions may impose heavy
\nadministrative burden on the
\nadministration and lead to increased and
\nunbudgeted expenditure.”\n<\/p>\n
22. In the same judgment, the Supreme Court also
\nobserved:\n<\/p>\n
  “The principles of judicial review would
\napply to the exercises of contractual
\npowers by government bodies in order to
\nprevent arbitrariness or favoritism.
\nHowever, there are inherent limitations
\nin exercise of that powers of judicial
\nreview, Government is the guardian of the
\nfinances of the State. It is expected to
\nprotect the financial interest of the
\nState. The right to refuse the lowest or
\nany other tender is always available to
\nthe Government. But the principles laid
\ndown in Article 14 of the Constitution
\nhave to be kept in view while accepting
\nor refusing a tender. There can be no
\nquestion of infringement of Article 14, if
\nthe Government tries to get the best
\nperson or the best quotation. The right
\nto choose cannot be considered to be an
\narbitrary power. Of course, if the said
\npower is exercised for any collateral
\npurpose, the exercise of that power will
\nbe struck down.”\n<\/p>\n
23. In  Air India Ltd. v. Cochin International
\nAirport Ltd. and Ors.,<\/a>
\nit was held:\n<\/p>\n
 “It can fix its own terms of invitation
\nto tender and that is no open to judicial
\nscrutiny. It can enter into negotiations
\nbefore finally deciding to accept one of
\nthe offers made to it. Price need not
\nalways be the sole criterion for awarding
\na contract. It is free to grant any
\nrelaxation, for bona fide reasons, if the
\ntender conditions permit, such a
\nrelaxation. It may not accept the offer
\neven though it happens to be the highest
\nor the lowest. But the State, its
\nCorporations, instrumentalities and
\nagencies are bound to adhere to the
\nnorms, standards and procedures laid down
\nby them and cannot depart from them
\narbitrarily. Though that decision is not
\namenable to judicial review, the court
\ncan examine the decision making process
\nand interfere if it is found vitiated by
\nmalafides, unreasonableness and
\narbitrariness. The State, its
\ncorporations, instrumentalities and
\nagencies have the public duty to be fair
\nto all concerned. Even when some defect
\nis found in the decision making process
\nthe court must exercise its discretionary
\npower under Article 226 with great
\ncaution and should exercise it only in
\nfurtherance of public interest and not
\nmerely on the making out of a legal
\npoint. The court should always keep the
\nlarger public interest in mind in order
\nto decide whether its intervention is
\ncalled for or not. Only when it comes to
\na conclusion that overwhelming public
\ninterest requires interference the court
\nshould intervene.”\n<\/p>\n
24. Keeping in view the aforesaid principles laid
\ndown by the Supreme Court in various pronouncements, we
\nare of the opinion that there is no merit in this writ
\npetition which is dismissed accordingly.\n<\/p>\n
25. However, before concluding, we may mention
\nthat the petitioner has been put to some hardships
\nbecause of the fault of the respondent No. 1 itself in
\nnot taking proper care while floating the tender in
\nquestion and leaving many flaws in the same. The
\nexpectation of the petitioner to get the award, after
\nonly two bidders were shortlisted and after bid of the
\nrespondent No. 2 was rejected, may be justified to some
\nextent. It can also not be disputed that the
\nrespondent No. 1 started re-examining the matter only
\nafter complaint was received at the instance of the
\nrespondent No. 2. May be, the respondent No. 1 did not
\nfind any merit in representation of the respondent No. 2
\nand in the process found the loopholes in the technical
\nprocedural specifications for which notice inviting
\ntender was sent. May be, the respondent No. 1 thought
\nit proper to have technically viable medical gas
\npipeline system and for this purpose was justified in
\ncancelling the tender and floated fresh tender after
\nincorporating proper specifications and procedural
\nsafeguards. But the fact remains that not only it has
\nresulted in delay in getting the system which is
\nurgently needed by the AIIMS, even the petitioner is
\nput to much inconvenience thereby. We, therefore, hope
\nthat AIIMS shall be wiser after this horrowing
\nexperience and avoidable drill and conduct itself with
\nmore maturity and dexterity.\n<\/p>\n
26. The writ petition is dismissed with aforesaid
\nobservations leaving the parties to bear their own
\ncosts.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Pes Installation (Pvt.) Ltd. vs The All India Institute Of Medical … on 19 August, 2002 Author: A Sikri Bench: S Sinha, A Sikri JUDGMENT A.K. Sikri, J. 1. By way of this writ petition, the petitioner has challenged the decision of the respondent No. 1, i.e., the All India Institute Institute […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-160992","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nPes Installation (Pvt.) 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