Thursday 6 May 2021

Whether the government can waive non-essential term in the tender if there is substantial compliance with tender terms?

 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}


WRIT PETITION NOS.1114 of 2016 & 718 of 2018

Dr. R. Venkatesh  V/s  State of Goa,



Date:- 5th MARCH 2020

ORAL JUDGMENT: (Per Dama Seshadri Naidu, J.)

Citation: 2021(1) MHLJ 105


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?


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


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.



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


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


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.


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.


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


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


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


(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


(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


(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


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


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


Issue No.3:

(c) Has the Government violated the guidelines governing the award of public


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


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


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


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.


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


No order on costs.


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