In Jal Mahal Resorts (P) Ltd. v. K.P. Sharma (2014) 8 SCC 804, the Supreme Court has quoted with approval B.S.N. Joshi & Sons Ltd. It has held that when there is substantial compliance with the terms of tender, the Government is entitled to waive any non-essential term in the tender for the bona fide reasons and in public interest. To conclude, the Court has held that if there were no mala fides in the decision-making process, literal compliance cannot be insisted upon. {Para 51}
IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NOS.1114 of 2016 & 718 of 2018
Dr. R. Venkatesh V/s State of Goa,
Coram:- DAMA SESHADRI NAIDU &
NUTAN D. SARDESSAI, JJ.
Date:- 5th MARCH 2020
ORAL JUDGMENT: (Per Dama Seshadri Naidu, J.)
Citation: 2021(1) MHLJ 105
Introduction:
The Government invites bids for establishing dialysis centres in
the State of Goa. It fixes certain eligibility criteria for the bidders. An
existing operator under the previous notification finds himself
ineligible because of the new conditions. He assails the tender
notification as tailor made with the objective of keeping him out of the
reckoning and of helping a chosen candidate. He also complains that
the Government has not complied with the Guidelines governing the
government tenders.
Do these objections sustain themselves?
Facts:
2. One public spirited person filed PIL Writ Petition
No.359/2007 thirteen years ago. He espoused the public cause on the
premise that the Government-run hospitals were in a deplorable
condition. So he wanted judicial intervention. Pending that writ
petition, to support his contentions, the petitioner in PIL WP
No.359/2007 secured and filed a third party’s affidavit. That affidavit
affirms the allegations in the writ petition. That third party—Dr. R.
Venkatesh—is the petitioner before us. He, in fact, filed two writ
petitions: WP No.1114/2016 and WP No.718/2018.
3. The first Writ Petition—PIL WP No.359/2007—concerns
larger public issues, and this Court has already appointed a learned
senior counsel as the amicus curiae to assist the Court. We reckon that
Writ Petition needs separate adjudication. Therefore, in this disposition,
it is not touched.
4. Dr. R. Venkatesh, who gave his affidavit in PIL WP
No.359/2007, has his own private grievances. Those grievances have
engendered these two writ petitions. Having heard the respective
counsel for the parties extensively, we propose to dispose of both these
Writ Petitions—WP No.s1114/2016 and 718/2018—through this
common judgment.
WP No.1114 of 2016:
5. We may set out in brief the factual background that has led
Dr. Venkatesh to file this writ petition. In 2004, the Government
decided to run a dedicated dialysis centre as a pilot project. Then, it
assigned that task to Dr. Venkatesh, who is a qualified doctor. In 2007,
he was asked to run another centre, too. He is said to have run both the
dialysis centers successfully till 2012. Then in 2013, the Government
decided to open those centres across the State. For that it floated a
tender.
6. According to Dr. Venkatesh, until 2012 he ran both the dialysis
4 WP Nos.1114 of 2016
& 718 of 2018
centres successfully, and the officials concerned had no grievance. But
in 2012 Dr. Venkatesh gave an affidavit to support the PIL Writ
Petition No.359/2007. Then, that spelt trouble to Dr. Venkatesh. The
officials went on a rampage, creating many troubles to him. Besides,
the Government issued a fresh tender notification, calling for bids for
operating the dialysis centres in all hospitals, including those Dr.
Venkatesh had been running.
7. In this writ petition, Dr. Venkatesh wants the Court to quash
the tender notification, dated 31 October 2016, published in local
newspapers on 2 November 2016 and to stay the impugned tender
notification until the writ is decided.
WP No.718/2018:
8. In one breath, Dr. Venkatesh has pleaded that the contract he
had with the Government in 2007 specified no time limit for the centres
he had established. In another breath, he complains that the tender
notification flouts the norms fixed by the Government, including the
CVC. Pending WP No.1114/2016, he has filed the second one: WP
No.718/2018. In this writ petition, Dr. Venkatesh narrates the
harassment and the violence the officials have subjected him to, in the
wake of his support to the public cause in PIL Writ Petition
No.359/2007. In this writ petition he seeks these reliefs: To direct the
authorities to immediately restore the electricity to the petitioner’s
5 WP Nos.1114 of 2016
& 718 of 2018
dialysis unit; to order judicial inquiry into the fire incident at the
dialysis unit and to reconnect the inverter for the dialysis unit; to direct
the Government to pay Rs.25 lakh to the petitioner for the lost
consumables and medicines in the fire; to direct the officials concerned
to deploy necessary security personnel for ensuring the safety of the
dialysis patients, the staff, and the equipment/consumables.
Submissions:
Petitioner:
9. In the above factual matrix, Ms. G. Singh, the learned Senior
Counsel, has essentially raised these aspects: (i) the tender notification
violates the norms fixed for floating the government tenders; (ii) the
Government has fixed the turnover in the tender notification only to
ensure that Dr. Venkatesh would be disqualified; it is said to be a tailormade
criterion; (iii) the Government floated the tender when the
contract with Dr. Venkatesh was subsisting, and that was without
notice to him; (iv) the impugned tender notification does not contain
the full Schedule I, as the 2005 tender notification did; with this change,
many essential items are left out, and they have to be purchased from
outside; (v) the left out essential items like Erithropoietin and iron
sucrose injections, as well as CAPD fluids, add to the poor patients’
costs; (vi) Goan Government Hospitals have been fully equipped to
treat all the dialysis needs; the floating of tender is a wasteful exercise;
6 WP Nos.1114 of 2016
& 718 of 2018
(vii) and that there was no pre-bid meet.
10. Indeed, the learned Senior Council has also elaborated on the
mala fides supposedly displayed by the officials. But no official has been
arrayed eo nominee to the writ petition. So we need not labour on that
aspect.
11. To support her contention, the learned Senior Counsel has
relied on Maa Binda Express Carrier & Anr. v. North-East Frontier
Railway & Ors.1, Michigan Rubber (India) Ltd. v. State of Karnataka &
Ors.2 Raunaq International Ltd. v. I.V.R. Construction Ltd. & Ors.3
Respondents:
12. Shri Devidas J. Pangam, the learned Advocate General, has
first clarified on the aspect of the price, that is the burden on the
dialysis patient. According to him, the injection Dr. Venkatesh has been
harping on is anyway provided to all the patients under Mediclaim
scheme—free of cost. Its cost, thus, is not a factor to be reckoned.
About the alleged violation of the norms for the tender notification, he
has submitted that there is no violation. At any rate, the learned
Advocate General stresses that the CVC circular applies only to
consultants. In the alternative, he has submitted that the circulars are
mere guidelines; they are directory. In this context, the learned
1(2014) 3 SCC 760
2(2012) 8 SCC 216
3(1999) 1 SCC 492
7 WP Nos.1114 of 2016
& 718 of 2018
Advocate General has invoked the doctrine of substantial compliance.
13. The learned Advocate General has submitted that initially the
tender notification was issued and kept in the public domain. There was
a pre-bid meeting, too. Later, the Government realised that it had not
published the tender in the newspapers as required. Then, it cancelled
the earlier notification and, within a week, that is on 31.10.2016, issued
a fresh tender notification. It was only a technical compliance. At any
rate, as no new bidder came forward, the Government continued with
the pre-bid meeting under the previous notification. Thus, the Advocate
General insists there is no violation; if there were any, they were minor
and inconsequential. The tender, according to the learned Advocate
General, represents public interest.
14. Shri Pangam has denied that the Government has issued a
tailor-made tender notification to exclude Dr. Venkatesh. He has
submitted that the CVC guidelines themselves provided for the
minimum turnover criterion. About the judicial intervention in
contractual matters, the learned Advocate General has relied on
Municipal Corporation, Ujjain v. BVG India Limited,4 Directorate of
Education v. Educomp Datamatics Ltd.5 Jitesh Ghewarchand Jain v. State
4(2018) 5 SCC 462
5AIR 2004 SC 1962
8 WP Nos.1114 of 2016
& 718 of 2018
of Goa,6 and Mega Enterprises v. State of Maharashtra.7
15. Shri Pangam then has drawn our attention to the schedule.
According to him, the notification under which the petitioner
established the dialysis centres and the impugned notification contained
the same Schedule. He has also submitted that pending the Writ
Petition the government finalized the tender and awarded the contract
to the third respondent. But the petitioner has not chosen to challenge
that award of the contract to the third respondent, at least by
amending this writ petition.
Reply:
16. In reply, Ms. Singh, the learned Senior Counsel for the
petitioner, has again elaborated on the services extended by Dr.
Venkatesh and the discrimination the Government is said to have meted
out to him. According to her, the CVC guidelines are essential, and
their non-compliance vitiates the tender notification. So, Ms. Singh
urges this Court to allow the Writ Petition.
Discussion:
17. The facts are not in dispute. In 2004, the Goan Government
wanted to establish a dialysis centre through qualified third parties. It
was to supplement the services rendered by the Government hospitals.
That third-party operator would be compensated for the services he
6MANU/MH/2664/2019
7AIR 2007 Bom 156
9 WP Nos.1114 of 2016
& 718 of 2018
extended. In 2004, experimentally, it chose Dr. Venkatesh and asked
him to run one dialysis centre. So he established a centre and started
running it successfully. Later, in 2005, the Government floated a tender
to open another dialysis centre. In 2007, Dr. Venkatesh secured the
second centre too.
18. In 2007, one public spirited person filed PIL WP
No.359/2007. And in 2012, Dr. Venkatesh gave him an affidavit
attesting to the facts alleged in that PIL. So Dr. Venkatesh claims that
ever since the day he had given the affidavit, the health officials have
been harassing him. Of course, that alleged harassment has led to Dr.
Venkatesh’s filing WP No.718/2018. But before that, in 2016, the
Government floated a tender calling for bids from qualified, interested
persons to run dialysis centres accross the State of Goa. The tender
traces its origin to the National Health Mission Programme for
Dialysis issued by the Ministry of Health and Family Welfare,
Government of India. It was under the National Health Mission.
19. In WP No.1114/2016, Dr. Venkatesh alleges that the
Government issued this notification to shut him out of the business,
though his contract has still been subsisting. Besides, he alleges
procedural violations in the Government’s issuing the notification.
20. In the light of those allegations, let us examine these issues:
(1) What is the scope of judicial intervention in non-statutory
contractual matters?
10 WP Nos.1114 of 2016
& 718 of 2018
(2) Has the Government issued the tender notification,
dt.31.10.2016, tailor-made to disqualify Dr. Venkatesh or to
favour a chosen contractor?
(3) Has the Government violated the guidelines governing the
award of public contracts?
Issue No.1: Judicial Intervention in non-statutory contractual
matters:
21. Indeed, Dr. Venkatesh has been, at the Government’s
invitation, running two dialysis centres at the Government Hospitals:
one from 2004, without a tender notification; the other from 2007,
under a 2005-tender notification. Later, the Government came out with
a fresh tender notification. That was in 2016. True, the contract the
Government entered into with Dr. Venkatesh specified no time frame.
At the same time, the petitioner too has not insisted that his contract
with the Government is perpetual.
22. To that extent, we need not revisit the issue. We take that the
Government has issued the tender notification legitimately calling for
fresh bid for running dialysis centres across the State including the
hospitals where the petitioner has been running the centre. The focal
point could be only on whether the notification has answered the legal
requirement or complied with those requirements. To begin with, Dr.
Venkatesh never participated in the tender process because he could not
meet the turnover criterion. In the above context, we should examine to
11 WP Nos.1114 of 2016
& 718 of 2018
what extent this Court can judicially review the tender process.
23. In BVG India Limited, quoting with approval its earlier
pronouncements, the Supreme Court has held that while exercising the
powers of judicial review over the contracts the State has entered into,
the Court is concerned primarily with whether there has been any
infirmity in the “decision making process.” That is, the purpose of
judicial review is to ensure that the individual receives fair treatment
but not to ensure that the authority, after according fair treatment,
awarded the contract correctly as was perceived by the Court. With its
inherent limitations, the Court can only examine whether the “decisionmaking
process” was reasonable, rational, and non-violative of Article
14 of the Constitution.
24. In B.S.N. Joshi and Sons Ltd. v. Nair Coal Services Ltd.8, the
Supreme Court has summarised the scope of judicial review and the
interference of superior courts in the matters of awarding contracts. It
has, first, acknowledged the expansive role of the superior courts in
judicial review. Then, it has enumerated the principles of judicial
intervention:
(i) if there are essential conditions, the same must be adhered to;
(ii) if there is no power of general relaxation, ordinarily the same
shall not be exercised and the principle of strict compliance would
be applied where it is possible for all the parties to comply with all
such conditions fully;
8JT 2006 (10) SC 131
12 WP Nos.1114 of 2016
& 718 of 2018
(iii) if, however, a deviation is made in relation to all the parties in
regard to any of such conditions, ordinarily again a power of
relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation
should not ordinarily be allowed to take a different stand in relation
to compliance with another part of tender contract, particularly
when he was also not in a position to comply with all the
conditions of tender fully, unless the court otherwise finds
relaxation of a condition which being essential in nature could not
be relaxed and thus the same was wholly illegal and without
jurisdiction;
(v) when a decision is taken by the appropriate authority upon due
consideration of the tender document submitted by all the
tenderers on their own merits and if it is ultimately found that
successful bidders had in fact substantially complied with the
purport and object for which essential conditions were laid down,
the same may not ordinarily be interfered with;
(vi) the contractors cannot form a cartel. If despite the same, their
bids are considered and they are given an offer to match with the
rates quoted by the lowest tenderer, public interest would be given
priority;
(vii) where a decision has been taken purely on public interest, the
court ordinarily should exercise judicial restraint.”9
25. In Maa Binda Express Carrier, the respondent Railways floated
tenders and invited bids for leasing out space (parcel van). But, later, it
cancelled the tender notification. It was on the premise that the tender
forms contained no terms. Besides, even the “all-important penalty
clause”, too, had been missing. When one bidder assailed the
cancellation, the Supreme Court has held that in awarding contracts,
the Government and its agencies should always act reasonably and
fairly. To that extent the tenderer has an enforceable right. That is, the
9As quoted in BVG India Limited
13 WP Nos.1114 of 2016
& 718 of 2018
Court is competent to examine whether the aggrieved party has been
treated unfairly or discriminated against, to the detriment of public
interest.
26. In Michigan Rubber (India) Ltd., the Supreme Court has held
that, to judicially review the tender or contractual matters, the Court
should pose to itself these questions: (i) Is the process adopted or
decision made by the authority is mala fide or intended to favour
someone; or is it so arbitrary and irrational that the court can say that
"the decision is such that no responsible authority acting reasonably
and in accordance with relevant law could have reached" it?; and (ii) is
the public interest affected? If the answers to the above questions are in
the negative, then there should be no interference under Article 226.
27. In Raunaq International, the Supreme Court stresses that
when a writ petition is filed in the High Court challenging the award
of a contract by a public authority or the State, the Court must be
satisfied there is some element of public interest involved in its
entertaining that writ petition. It has stressed that if the decision has
been taken bona fide and a choice has been exercised on legitimate
considerations and not arbitrarily, the Court should not entertain a
petition under Article 226. That is, the Court must carefully weigh
conflicting public interests.
28. According to Raunaq International, if there is an allegation of
14 WP Nos.1114 of 2016
& 718 of 2018
mala fides or an allegation that the contract has been entered into for
collateral purposes, and if the court is satisfied on the material before it,
only then will the allegation need further examination. And then the
court could entertain the writ petition. Raunaq International, however,
stresses on the inadvisability of interim stays in the contractual
disputes.
29. To conclude, we may note that (i) essential tender conditions
must be adhered to; (ii) relaxation is permissible if the offeror has such
power; (iii) if there is a deviation, it must be across the board, to the
benefit of all concerned; (iv) if the authorities find that the bidder has
substantially complied with the essential tender conditions, the
rejection of the offer is unwarranted; and (v) in the award of the
contract and in the judicial scrutiny of those awarded contracts, public
interest must be the prime factor.
Issue No.2:
Has the Government issued the tender notification, dt.31.10.2016,
tailor-made to disqualify Dr. Venkatesh or to favour a chosen contractor?
30. One of the tender conditions is that “the principal
bidder/lead partner shall have an average turnover of Rs.10.00 crores
per annum in last three financial years. According to Dr. Venkatesh, the
2005-notification had an eligibility criterion of five-year experience,
with no turnover condition attached to it. In this context, he stresses
15 WP Nos.1114 of 2016
& 718 of 2018
that no bidder in a small state like Goa could ever meet the turnover
criterion. Besides, he stresses that the reduced period of experience has
been brought in only to suit “certain contenders.”
31. In fact, the National Health Mission has issued draft “Tender
Enquiry Document for Provision of Dialysis Facility at District
Hospital” to be adopted by the Department of Health & Family
Welfare of every State Government. Condition 8 of the Eligibility
Criteria speaks of the 10-crore turnover. First, we will deal with the
turn-over criterion. Indisputably, the National Health Mission’s draft
guidelines do contain that eligibility criterion. Dr. Venkatesh argues
that a huge state like Uttar Pradesh has brought the turn-over criterion
to four or five crores. So a small state like Goa ought not to have gone
ahead with the eligibility criterion unaltered; it ought to have scaled
down. Let us accept that the State of Goa could have—even ought to
have—brought it down. That said, law does not concern itself with
what ought to be; it concerns itself with what should be and what must
not be. Law speaks of prohibitions, not of possibilities. Possibilities are
policy prerogatives, and prohibitions are legal imperatives.
32. So long as law does not prohibit the State from choosing one
of many alternatives as an eligibility norm, Courts cannot interfere
with the State’s discretion. The only limit on that discretion is that the
administrative action must not have been actuated by mala fides. Here,
16 WP Nos.1114 of 2016
& 718 of 2018
we see none. Policy decisions, trite to note, are immune from judicial
scrutiny save under exceptional circumstances. The same reasoning
applies to the State’s reducing the experience period from five years to
three years.
33. Nexus test is not an iron-clad constitutional theory even in
the sphere of equality or non-arbitrariness, the twin facets of Article
14 of the Constitution. Any fanatical adherence to this malleable theory
may stifle policy experimentation and, even, growth. In Comparative
Constitutional Law10, Prof. Mahendra P. Singh quotes from Professor
Tripathi’s Telang Lectures on the nexus theory. According to Prof.
Tripathi, the nexus test is not at all suited for the situation where the
statute indicates the policy or purpose to be fulfilled and also the special
treatment to be given to the selected persons or things, but leaves it to
the executive to make the actual selection of the persons or things in
fulfillment of the legislative policy. Equally, he says, the nexus test is
not suited to one person statutes or to statutes where “the legislature
may give a broad indication of the kind of cases to be subjected to the
differential treatment,” or to statutes which leave the executive “entirely
free to pick and choose individuals towards the fulfillment of the policy.
34. In Educomp Datamatics Ltd., the Supreme Court has reiterated
what it has held in Monarch Infrastructure (P) Ltd. v. Commissioner,
10EBC., 2nd Ed., Pp.783-84
17 WP Nos.1114 of 2016
& 718 of 2018
Ulhasnagar Municipal Corporation11. The Government prescribes terms
in the tender, bearing in mind the nature of contract. In the contractual
matters, the authority calling for the tender is the best judge. It is not
for the courts to say whether the conditions prescribed in the tender are
better than the ones prescribed in the earlier tender invitations. That is,
the terms of the tender are not open to judicial scrutiny, for they are in
the contractual realm. So the government must have a free hand in
setting the terms of the tender; it must have a reasonable play in its
decisional joints as a necessary concomitant in its administrative
sphere. Then, it stresses that the courts would interfere with the
administrative policy decision only if it is arbitrary, discriminatory,
mala fide or actuated by bias.
35. In S.S. & Co. v. Orissa Mining Corpn. Ltd.12, the Supreme Court
has held that the Government [in that case, the Corporation] is the
best judge of its interests and needs. And it is always open to it to
suitably modify or change the eligibility criteria so as to best serve its
purposes. Whenever a change is introduced in the eligibility criteria
either by introducing some new conditions or restricting or altogether
doing away with certain previous concessions, it might hurt the
interests of someone or the other, but only for that reason the
change(s) made in the eligibility criteria cannot be labelled as mala fide.
11JT 2000 (6) SC 560
12(2008) 5 SCC 772
18 WP Nos.1114 of 2016
& 718 of 2018
36. Monarch Infrastructure emphasises that the Government may
have pragmatic adjustments which may be called for by the particular
circumstances. The courts cannot strike down the terms of the tender
prescribed by the government because it feels that some other terms in
the tender would have been fairer, wiser, or more logical.
37. In Jitesh Ghewarchand Jain13, the basic challenge was about the
terms of the tender to run a medical store on contract basis at the Goa
Medical College. The petitioners have alleged that the Government
stipulated the terms relating to experience and annual turnover only to
kill competition and render ineligible several persons or entities
otherwise eligible. After referring to the precedential position, a learned
Division Bench of this Court has held that the tender “conditions, per
se, do not suggest that they have no nexus whatsoever with the
requirement of establishing a medical store at the GMC complex.”
Eventually, Jitesh Ghewarchand Jain has considered all the aspects and
held that the requirement of 5 years’ experience or of annual turnover
of 50 crores was neither arbitrary nor unreasonable. According to it,
given the limited scope of interference, the petitioners have not made
out any case for the Court to strike down the tender conditions.
38. In Tata Cellular v. Union of India14, the Supreme Court has
held that judicial quest in administrative matters is to find the right
13WP Nos.170 & 483 of 2018, decided on 16th September 2019.
14(1994) 6 SCC 651
19 WP Nos.1114 of 2016
& 718 of 2018
balance between the administrative discretion to decide matters
whether contractual or political or issues of social policy; “thus they are
not essentially justifiable and the need to remedy any unfairness. Such
an unfairness is set right by judicial review.” According to Tata Cellular,
it is not for the Court to determine whether a particular policy or
particular decision taken to fulfil that policy is fair. The Court is only
concerned with the way those decisions have been taken. The extent of
the duty to act fairly will vary from case to case, though.
39. Tata Cellular, in the end, quotes with approval Prof. Wades to
reiterate that “the doctrine that powers must be exercised reasonably
has to be reconciled with the no less important doctrine that the court
must not usurp the discretion of the public authority which Parliament
appointed to take the decision.” Within the bounds of legal
reasonableness is the area in which the deciding authority has
genuinely free discretion. Decisions which are extravagant or capricious
cannot be legitimate, But if the decision is within the confines of
reasonableness, it is no part of the court's function to look further into
its merits. Finally it holds that "with the question whether a particular
policy is wise or foolish the court is not concerned; it can only interfere
if to pursue it is beyond the powers of the authority."
Tailor-Made Conditions:
40. In Mega Enterprises, one of the arguments was that the
20 WP Nos.1114 of 2016
& 718 of 2018
tender condition was tailor-made; it was to suit only the fourth
respondent. The condition now incorporated was not found in the
previous years. Then, a learned Division Bench of this Court accepted
that the tender notifications of the previous years did not contain the
impugned condition. But it has held that “this year the authorities, in
their wisdom, thought it fit to impose certain eligibility conditions.”
And merely because the fourth respondent “happens to be one who is
eligible, it cannot be urged before [the Court] that this is a condition
which is a tailor-made condition to suit” only the fourth respondent.
According to it, the allegations of malice or mala fides are extremely
weak, and the impugned condition could not be struck down based on
the mere pleadings.
41. Further, in Maa Binda Express Carrier the Supreme Court has
held that the participating bidders are entitled to only a fair, equal, and
non-discriminatory treatment in the matter of evaluation of their
tenders. Besides, as fairly well-settled, awarding a contract is essentially
a commercial transaction which must be determined based on the
considerations relevant to that commercial decision. That is, the tender
conditions “are not open to the judicial scrutiny unless it is found that
the same have been tailor made to benefit any particular tenderer or
class of tenderers.” Indeed, Maa Binda Express Carrier, relied on by the
petitioner, also stresses that “the authority inviting tenders can enter
21 WP Nos.1114 of 2016
& 718 of 2018
into negotiations or grant relaxation for bona fide and cogent reasons
provided such relaxation is permissible under the terms governing the
tender process.”
42. So, here too, on facts, we cannot but hold that the conditions
have not been tailormade to oust Dr. Venkatesh or to favour a third
party.
Issue No.3:
(c) Has the Government violated the guidelines governing the award of public
contracts?
43. Dr. Venkatesh has maintained that the officials have violated
many a tender norm, a case in point being not adhering to pre-bid
consultation. He has also pointed out that the Annexure to the tender
document left out certain items which, ultimately, add to the patient’s
financial burden. For the Court to address them, Dr. Venkatesh must
have been the aggrieved person. That is, he must have been otherwise
eligible to be a bidder and these violations must have affected his
prospects as a bidder.
44. That said, evidently, Dr. Venkatesh has not met one of the
eligibility criteria: the turnover norm. So the rest of contentions, say
about the procedural violations, remain outside the reckoning for him.
He lacks the standing on that count.
45. S.S. & Co. v. Orissa Mining Corpn. Ltd.15, two appellants
15(2008) 5 SCC 772
22 WP Nos.1114 of 2016
& 718 of 2018
questioned two different clauses of the eligibility criteria in the tender
notification. They alleged that those two clauses were designed to
exclude them from consideration. When the matter reached the
Supreme Court, it has noted that the appellants did not satisfy the
eligibility criteria regarding experience even in terms of the
unamended Clause. Had the appellants been qualified in terms of the
unamended clause and faced exclusion only because of the amended
clauses, it might have been open for them to assail the amendment. But
that was not so. Therefore, all arguments either based on the alleged
mala fides or on the substance of the amendment lose their relevance.
46. True, even a stranger or an qualified person, as was held in
R.D.Shetty v. International Airports Authority of India16, could have had
the standing to question the tender conditions. But what has been
questioned must have disabled that person from participating in the bid.
Sans what has been assailed, if the person still remains unqualified,
unless the challenge is pro bono publico, the Court will not entertain his
plea on the grounds of standing. Relaxed and expansive as the concept
of standing in public law remedy is, it still has some role to play. In R.
D. Shetty the appellant pointed out that the eligibility criteria were
relaxed later. Had he known that, he too would have applied. That is
how he claimed the violation of right to equality.
16AIR 1979 SC 1628
23 WP Nos.1114 of 2016
& 718 of 2018
47. Yet let us examine whether the respondents have violated the
tender conditions or have breached the procedural parameters. First,
Dr. Venkatesh insists there was no pre-bid meeting. According to him,
CVC guidelines do make it mandatory. First, this plea, as we have noted
earlier, remains unavailable for Dr. Venkatesh. That said, let us see the
explanation the respondents provided on that count. Initially the
respondent officials issued the tender notification and received bids in
response. True, Dr. Venkatesh did not give his bid, for he was
unqualified. Among the three bidders, there was a pre-bid meeting.
Later, the Government realised that it had not published the tender in
the newspapers as required. Then, it cancelled the earlier notification
and, within a week, that is on 31.10.2016, issued a fresh tender
notification. It was only a technical compliance. At any rate, as no new
bidder came forward, the Government continued with the pre-bid
meeting under the previous notification. Thus, the respondents insist
there was no violation. If there were any, it was minor and
inconsequential. The tender, according to them, represents public
interest.
The Doctrine of Substantial Compliance:
48. At the forefront, we must accept that the doctrine of
substantial compliance, an equity principle, applies only in the
contractual sphere; it does not dispense with statutory requirements.
24 WP Nos.1114 of 2016
& 718 of 2018
True, even contracts are, usually, governed by statutory stipulations.
That said, no statute expects rigid, literal compliance as if the people
were automatons tasked to comply with the legislative or
administrative mandate to a T, so to say. No statute is impenetrable; it
has its own crevices. Every statute allows a play in the joints. Law is no
ritual to shut out all discretion; it is a matter of interpretation,
understanding, and application—purpose oriented. For this reason, the
courts have maintained a dichotomy of the statutory compliance:
essential and inessential observances.
49. In Montecarlo Ltd. v. NTPC Ltd.17, the Supreme Court has
extracted a part of the tender notification that concerns the Techno-
Commercial Proposals. Those proposals very succinctly summarise
what amounts to a material deviation from a tender condition: a
deviation (i) that affects in any substantial way the scope, quality, or
performance of the contract; (ii) that limits in any substantial way,
inconsistent with the bidding documents, the Owner's rights or the
successful Bidder's obligations under the contract; or (iii) whose
rectification would unfairly affect the competitive position of other
bidders who are presenting substantially responsive Proposals. This
enumeration puts in perspective what is or is not substantial
compliance.
50. In B.S.N. Joshi & Sons Ltd., a special committee was
17JT 2016 (10) SC 229
25 WP Nos.1114 of 2016
& 718 of 2018
constituted to scrutinise the tender document submitted by all the
bidders. The Scrutiny Committee recorded that the appellant
substantially complied with all the essential conditions. As we have
already noted, the Supreme Court has held that when an appropriate
authority decides after considering the tender document submitted by
all the tenderers and ultimately finds that the successful bidders have,
in fact, “substantially complied with the purport and object for which
the essential conditions were laid down, the same may not ordinarily be
interfered with.”
51. In Jal Mahal Resorts (P) Ltd. v. K.P. Sharma (2014) 8 SCC 804, the Supreme Court has quoted with approval B.S.N. Joshi & Sons Ltd. It has held that when there is substantial compliance with the terms of tender, the Government is entitled to waive any non-essential term in the tender for the bona fide reasons and in public interest. To conclude, the Court has held that if there were no mala fides in the decision-making process, literal compliance cannot be insisted upon.
The Fringe Objections:
52. Indeed, Dr. Venkatesh has been providing the dialysis along
with a particular injection to the patients. Now the impugned tender, he
insists, does not include that injection, though there has been little
variation in the price quoted. That means, the services under the new
tender would be costlier or more burdensome to the patient. But the
respondent officials maintain that the State supplies that injection free
of cost to whoever needs it. So, first, Dr. Venkatesh is not right in
contending that he has been providing it at his own costs, but not the
successful bidder under the impugned tender. Second, no patient suffers
any burden for the entire treatment, including the injection, is free.
53. Dr. Venkatesh also insists that the schedule to the tender
notification has left out certain items of treatment. So the contractor is
not tasked to supply them; then, either the Government or the patient
bears the brunt. Again, the respondents counter this plea. They
maintain that the items, if any, not listed in the Schedule do not add to
the cost factor; they are, like the injection, are freely supplied.
54. Viewed from any perspective, we fail to find substance in Dr.
Venkatesh’s objections to the tender notification. So we dismiss the writ
petition.
WP No.718 of 2018:
55. Indeed, in this Writ Petition the allegations are grave. The
petitioner, a doctor, successfully running the dialysis centres for years,
accuses the officials of violence and vandalism—even arson. The
learned Senior Counsel for the petitioner informs the Court that though
the crime has been registered, even the Police have not been diligent
enough to bring to book the culprits of the crime. We must say the
allegations are disturbing.
56. The learned Advocate General, on the other hand, has put the
blame on Dr. Venkatesh. According to him, it is Dr. Ventesh that
indulged in violence. When queried about the injuries Dr. Venkatesh
sustained and his, it seems, hospitalisation with broken bones, the
learned Advocate General clarifies that in a commotion the Doctor
tripped, fell, and sustained injuries. Sad, whatever be the explanation.
57. That said, the Writ petition confines itself to the relief of
restoration of power supply and other amenities, besides compensation,
perhaps as a matter of constitutional tort, for the loss and suffering the
officials allegedly inflicted on him. Therefore, we cannot take
cognizance of the allegations the learned Senior Counsel for the
petitioner set out before us. Given the decision we have rendered a WP
No.1114 of 2016, this Writ petition requires no separate adjudication.
Suffice it to say that the petitioner may approach an appropriate forum
and establish his claim for compensation if legally advised. Besides, if
the petitioner has already registered a crime, we are sure, and anyway
urge, the Police and the connected officials to act promptly.
Result:
58. We dismiss the Writ Petition No.1114 of 2016 as devoid of
any merit; we close the Writ Petition No.718 of 2018 as having become
inconsequential because of the decision in Writ Petition No.1114 of
2016.
No order on costs.
NUTAN D. SARDESSAI, J. DAMA SESHADRI NAIDU, J.
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