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Judgment
Prabha Sridevan, J.—Heard learned Counsel for the petitioner and respondents.
The writ petitioner is an Association of contractors who hire vehicles for the Electricity Board. The petitioner is aggrieved that he was not
awarded the tender for supplying of vehicle on hire to the Electricity Board for the year 2005-2006. Five companies applied for tenders. They are,
respondents 4 to 6, the petitioner and one another person who is not before this Court. Respondents 4 to 6 were awarded the tender.
The grievance of the petitioner is that the fourth respondent has been awarded the tender though its performance was noted to be poor by the
Divisional Engineer Tondiarpet; likewise, the 5th respondent was awarded the tender, though it owns no vehicles and it has got the tender as a
partner; and 5th respondent is even now claiming bills as ""proprietors"". As regards the 6th respondent, according to the petitioner, their
performance is also considered to be poor and the public has also made complaints against it. According to the petitioner, by accepting the tender
at the rate of Rs. 700/- per day for 24 hours, there will be loss to the Electricity Board to the extent of Rs. 73,44,000/- for two years. According
to the petitioner, the tender was accepted directly without any negotiation with other contractors and therefore the award is liable to be quashed.
It is also alleged by the petitioner that respondents 4 to 6, who were awarded the contract, had not produced the Service Tax Certificates.
Income Tax Clearance Certificates and PAN Cards as stipulated in the tender conditions. The petitioner also alleges that the tender conditions
were modified to suit the convenience of respondents 4 to 6 and the time limit was also extended to favour respondents 4 to 6. Learned Counsel
for the petitioner would submit that for all these reasons, the award of the tender in favour of respondents 4 to 6 must be quashed.
Learned standing counsel appearing on behalf of respondents 1 to 3/ Electricity Board filed his counter and submitted that on a comparison of
the rates quoted by the five companies , the tender was awarded to respondents 4 to 6, because they had quoted the lowest price and have
satisfied the bid qualification required as regards pervious experience. Learned Counsel further submitted that the performance of all the firms was
assessed on the basis of the Field Officers'' report and only thereafter the tender was awarded.
As regards the allegation that the assessment of the 4th respondent, whose performance was poor has been ignored, it was submitted that by
the letter dated 21.04.2006, the Superintending Engineer/CEDC/North had stated that though the Executive Engineer/O & M Tondiarpet had
certified that the 4th respondent''s performance was unsatisfactory, there were no records to support the same. On the other hand, the Executive
Engineer/O&M, /Vysarpadi assessed the performance of the 4th respondent as satisfactory and has also given satisfactory report regarding the
same. As regards the 5th respondent, the Field Officers had found the performance of the 5th respondent satisfactory. The allegation that the 5th
respondent does not own any vehicle is denied. The tender rate at Rs. 700 per day was accepted only after ensuring its reasonableness and as
such, there is no loss to the Board. The petitioner had offered a rate Rs. 1100/- per day, which is higher than what the successful tenderers had
offered. The allegation that the Board will lose a sum of Rs. 74,46,000/-for a period of two years, which is the period of the tender, is denied.
Records in this case were produced today. It is seen therefrom that while short listing the tenders, the members of the petitioner Association
have been taken in the zone of consideration. The Superintending Engineer had given his remarks with regard to each of the operators in the north
region circle as satisfactory. The 5th respondent figures in this report as also three of the members of the petitioner/Association. Similarly, the
Additional Chief Engineer, Chennai Development Circle had assessed the performance report of the three of the members of the
petitioner/Association and found it satisfactory. By letter dated 06.04.2006, the Superintending Engineer, CEDC/North has given a satisfactory
report for respondents 5 and 6 and two other members of the petitioner/Association.
The hire charges stated by each tenderers shows that while the petitioner has quoted Rs. 1100/- per day, respondents 4 to 6 have quoted Rs.
700/- per day. As regards the performance factor, while respondents 4 to 6 offer 9 kms per litre, as regards the petitioner it is 8 kms. per litre. The
5th respondent has filed a xerox copy of the registration of their firm with the Registrar of Firms, the PAN card etc. Each of the applicants has
enclosed the required documents along with their applications and it is submitted by the learned Counsel for respondents 4 to 6 that without these,
the tenders would not have been considered at all. As regards the service tax, in order to receive the amount every month, every hirer should
produce the required documentary proof and the service tax registration number. So, the furnishing of these details would come only after the
tender has been awarded.
The scope of interference of this Court under Article 226 of Constitution of India in such matters is very limited. When the dispute is between
rival tenderers, the court should not interfere under Article 226 when there is substantial public interest or transaction is entered into mala fide. The
Supreme Court in the decision reported in Raunaq International Limited Vs. I.V.R. Construction Ltd. and Others, has observed as follows:
The same considerations must weigh with the Court when interim orders are passed in such petitions. The party at whose instance interim orders
are obtained has to be made accountable for the consequences of the interim order. The interim order could delay the project, jettison finely
worked financial arrangements and escalate costs. Hence the petitioner asking for interim orders in appropriate cases should be asked to provide
security for any increase in cost as a result of such delay or any damages suffered by the opposite party in consequence of an interim order.
Otherwise public detriment may outweigh public benefit in granting such interim orders. Stay order or injunction order, if issued, must be moulded
to provide for restitution.
Similarly, the Supreme Court in the decision reported in New Horizons Limited and Another Vs. Union of India (UOI) and Others, has held as
follows:
Wednesbury principle of reasonableness"" to which reference has been made in principle (5) aforementioned is contained in associated Provincial
Picture Houses Ltd. v. Wednesbury Corporation. In that case Lord Greene, M.R. has held that a decision of a public authority will be liable to be
quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no
authority properly directing itself on the relevant law and acting reasonably could have reached it. In Tata Cellular s this Court, has mentioned two
other facets of irrationality:
1) It is open to the court to review the decision-maker''s evaluation of the facts. The Court will intervene where the facts taken as a whole could
not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision
the other way, cannot be upheld.
2) A decision would be regarded as unreasonable if it is partial and unequal in its operation as between different classes.
The tender has been awarded for contract of vehicles for the FOC Centres after verifying the original documents and the tenderers are also
operating the vehicles only for the Board in pursuance of the award. Seen from this perspective and tested by the principles laid down in the
decisions above, it is very difficult to see any irregularity in the impugned action. None of the defects pointed out by the learned Counsel for the
petitioner are sustainable. The successful tenderers are all income tax assesses and they have agreed to abide by all the conditions subject to which
the tenders will be awarded and they have quoted a low price. It is seen that Field Officers of the Board have gone and assessed the performance
of each contractor and it is only thereafter that , the award has been finalised. It is seen from the counter that the vehicles have also been produced
before the committee which has finalised the award of tenders. The decision satisfies the standard of reasonableness. There is no scope for
interference by this Court. Hence, the writ petition is dismissed. Conseqeuntly, connected M.P. Is also dismissed.