1 2025:CGHC:15873-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 1745 of 2025 M/s Surguja Bricks Industries Company Having Its Registered Office At Gurudwara Road, Bishrampur, District - Surajpur, Through Its Sole Proprietor Shri Babulal Agrawal ... Petitioner(s) versus 1 - State of Chhattisgarh Through The Secretary, Public Works Department, Mantralaya, Mahanadi Bhawan, Naya Raipur, District - Raipur (C.G.) 2 - Engineer-In-Chief Public Works Department, Nava Raipur, Atal Nagar (C.G.) 3 - Chief Engineer (Central Tender Cell) Office of The Engineer-In-Chief, Public Works Department, Nava Raipur, Atal Nagar, District - Raipur (C.G.) 4 - Chief Engineer Public Works Department, Surguja Zone, Ambikapur, District - Surguja (C.G.) 5 - Superintending Engineer Public Works Department, Surguja Circle, Ambikapur, District - Surguja (C.G.) 6- Executive Engineer Public Works Department, Division Manendragarh, District - Manendragarh (C.G.) ... Respondent(s) _________________________________________________________ For Petitioner : Mr. Harsh Wardhan Agrawal, Advocate For Respondents/State : Mr. Prafull N. Bharat, Advocate General along with Mr. Shashank Thakur, Additional Advocate General Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Arvind Kumar Verma , Judge Order on Board ROHIT KUMAR CHANDRA Digitally signed by ROHIT KUMAR CHANDRA 2 Per Ramesh Sinha , Chief Justice 04 . 04 .202 5 1. Heard Mr. Harsh Wardhan Agrawal, learned counsel for the petitioner. Also heard Mr. Prafull N. Bharat, learned Advocate General along with Mr. Shashank Thakur, learned Deputy Advocate General, appearing for the State / respondents. 2. The present writ petition has been filed by the petitioner under Article 226 of the Constitution of India seeking following reliefs : “10.1 That, the Hon'ble Court may kindly be pleased to call for the entire records in respect of the grievance of the Petitioner kept in the possession of the Respondents, for its kind perusal. 10.2 That, this Hon'ble Court may kindly be pleased to quash and set aside the impugned letter dated 19.03.2025 (ANNEXURE - P/7) issued by respondent No. 4 and declare the same to be illegal and non-est in the eye of law. 10.3 That, this Hon'ble Court may kindly be pleased to direct the respondents to consider the petitioner herein eligible for the tender and proceed ahead with opening of financial bid of the petitioner and thereafter proceed in accordance with law. 10.4 That, the Hon'ble Court may kindly be pleased to grant any other relief which the Hon'ble Court deems fit and proper in the facts and circumstances of the present case. 10.5 That, the Hon'ble Court may kindly be pleased to grant cost of the petition to the Petitioner.” 3 3. Brief facts of the case are that the respondent No. 3 issued tender notice (First Call) NIT No. 246/TC/24-25 dated 08.01.2025 (wrongly mentioned as NIT No. 334/TC/22-23 dated 09.12.2022 in the writ petition) for the work of "Construction of Road From Gram Ramgarh to Gram Kotadol Length 27.20 Km, District: Korea (C.G.) Work Code- W25598" for Rs. 4521.56 Lacs for a period of 12 months. Pursuant to the said notice inviting tender, the petitioner applied for the said tender in the online portal of the respondent-PWD and submitted all his documents. The respondent No.4 issued a letter dated 03.03.2025 to the petitioner alleging that the bid submitted by the petitioner is not proper and not in accordance with the terms and conditions of the tender as the petitioner has submitted the experience of joint venture and the other experience is of less value, which is not fulfilling the qualification criteria prescribed in the tender. Thereafter, vide the said letter, the petitioner was called upon to submit his explanation else, the petitioner would be declared disqualified from the tender process. The petitioner submitted his detailed reply vide its letter dated 05.03.2025 before the respondent No. 4. After submission of reply by the petitioner, the respondent No.4 issued another letter on 17.03.2025, alleging that the petitioner has not submitted Annexure-2 in proper format as per the terms of the NIT. The petitioner again by way of its reply dated 19.03.2025 pointed out to the respondent No. 4 that the petitioner has duly submitted all details and information as required under the NIT. 4 However, vide impugned letter dated 19.03.2025, the respondent no.4 has declared the petitioner disqualified on the earlier ground regarding the experience of joint venture. Hence, this petition. 4. Learned counsel for the petitioner submitted that the impugned letter dated 19.03.2025 issued by the respondent No.4 disqualifying the petitioner from the tender process is illegal, arbitrary, unreasonable as it is settled principle of law that the experience and credential of a joint venture is liable to be equally distributed among the members of the joint venture as per the terms of the joint venture agreement. In the present case, the petitioner is duly entitled for 49% of the experience of the joint venture individually. He further submitted that the impugned letter fails to disclose proper reasons and is a non-speaking order, therefore, is vitiated in the eyes of law, and as such, the same is liable to be quashed. 5. On the other hand, learned Advocate General opposed the aforesaid submission and submitted that as per the qualification criteria of the NIT in question, to qualify for award of the Contract, each Prime contractor in the same name and style (tenderer), in its name must have in the last five years achieved in “any one financial year” a financial turnover of construction work of at least 60% of the probable amount of contract for which bid has been invited, but the petitioner has submitted his tender in the name of M/s Surguja Bricks Industries Company, whereas he has submitted the experience certificate of joint venture having its 1st 5 partner as M/s Poddar (MP) 51% and 2nd partner as M/s Surguja Bricks Industries SBI 49%, therefore, the petitioner was issued show-cause vide letter dated 03.03.2025, but, when satisfactory reply was not submitted by the petitioner, vide impugned letter dated 19.03.2025, he was declared disqualified. He further submitted that as there is no illegality or infirmity in disqualifying the petitioner, as such, the instant petition is liable to be dismissed. 6. We have heard learned counsel for the parties and perused the materials appended with the writ petition. 7. From perusal of the prayers and pleadings made in the writ petition, further taking into consideration, the rival submissions advanced by learned counsel for the parties and the qualification criteria of the NIT in question, it transpires that to qualify for award of the Contract, each Prime contractor in the same name and style (tenderer), in its name must have in the last five years achieved in “any one financial year” a financial turnover of construction work of at least 60% of the probable amount of contract for which bid has been invited, but the petitioner has submitted his tender in the name of M/s Surguja Bricks Industries Company, whereas he has submitted the experience certificate of joint venture having its 1st partner as M/s Poddar (MP) 51% and 2nd partner as M/s Surguja Bricks Industries SBI 49%, therefore, the petitioner was issued show-cause vide letter dated 03.03.2025, but, when satisfactory reply was not submitted by the 6 petitioner, vide impugned letter dated 19.03.2025, he was declared disqualified. 8. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.1, the Hon’ble Supreme Court has observed that the owner or the employer of a project having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. 9. In N.G. Projects Ltd. v. Vinod Kumar Jain2,, the Apex Court has observed as under: “22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non- performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e., not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was malafide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder. 23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with 1 (2016) 16 SCC 818 2 (2022) 6 SCC 127 7 magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work.” 10. Recently, the Apex Court, in the matter of Banshidhar Construction Pvt. Ltd. v. Bharat Coking Coal Ltd. & Others, {Civil Appeal No. 11005 of 2024, decided on 04.10.2024}, taking note of the decisions rendered in various other celebrated judgments, observed as under: “21. There cannot be any disagreement to the legal proposition propounded in catena of decisions of this Court relied upon by the learned counsels for the Respondents to the effect that the Court does not sit as a Court of Appeal in the matter of award of contracts and it merely reviews the manner in which the decision was made; and that the Government and its instrumentalities must have a freedom of entering into the contracts. However, it is equally well settled that the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. Right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that no bias, favouritism or arbitrariness are shown during the bidding process and that the entire bidding process is carried out in absolutely transparent manner. 8 22. At this juncture, we may reiterate the well-established tenets of law pertaining to the scope of judicial intervention in Government Contracts. 23. In Sterling Computers Limited v. M/s. M & N Publications Limited and Others3, this Court while dealing with the scope of judicial review of award of contracts held: - “18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the “decision making process”. In this connection reference may be made to the case of Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] where it was said that: (p. 144a) “The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court.” By way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time as was said by the House of Lords in the aforesaid case, Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] the courts can certainly examine whether “decision-making process” was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.” 24. In Tata Cellular vs. Union of India4, this Court had laid down certain principles for the judicial review of administrative action. “94. The principles deducible from the above are: 3 (1993) 1 SCC 445 4 (1994) 6 SCC 651 9 (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles.” 25. It has also been held in ABL International Limited and Another vs. Export Credit Guarantee Corporation of India Limited and Others5, as under: - “53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and 5 (2004) 3 SCC 553 10 unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution.” 26. In Jagdish Mandal vs. State of Orissa and Others6, this Court after discussing number of judgments laid down two tests to determine the extent of judicial interference in tender matters. They are: - “22. (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached;” (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” 27. In Mihan India Ltd. vs. GMR Airports Ltd. and Others7, while observing that the government contracts granted by the government bodies must uphold fairness, equality and rule of law while dealing with the contractual matters, it was observed in Para 50 as under: - “50. In view of the above, it is apparent that in government contracts, if granted by the government bodies, it is expected to uphold fairness, equality and rule of law while dealing with contractual matters. Right to equality under Article 14 of the Constitution of India abhors arbitrariness. The transparent bidding process is favoured by the Court to ensure that constitutional requirements are satisfied. It is said that the constitutional guarantee 6 (2007) 14 SCC 517 7 (2022) SCC OnLine SC 574 11 as provided under Article 14 of the Constitution of India demands the State to act in a fair and reasonable manner unless public interest demands otherwise. It is expedient that the degree of compromise of any private legitimate interest must correspond proportionately to the public interest.” 28. It was sought to be submitted by the learned Counsels for the Respondents relying upon the observations made in Central Coalfields Limited and Another vs. SLL-SML (Joint Venture Consortium) and Others8, that whether a term of NIT is essential or not is a decision taken by the employer which should be respected. However, in the said judgment also it is observed that if the employer has exercised the inherent authority to deviate from the essential term, such deviation has to be made applicable to all the bidders and potential bidders. It was observed in Para 47 and 48 as under:- “47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but alsofrom the point of view of the employer. As held in Ramana Dayaram Shetty [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] the terms of NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular [Tata Cellular v. Union of India, (1994) 6 SCC 651] there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision “that no responsible authority acting reasonably and in accordance with relevant law could have reached” as held in Jagdish Mandal [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] followed in Michigan Rubber [Michigan Rubber 8 (2016) 8 SCC 622 12 (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216]. 48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty [Ramana Dayaram Shetty v.International Airport Authority of India, (1979) 3 SCC 489] . However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot.” 11. This Court cannot go into the niceties of the conditions stipulated by the authority issuing the NIT, but can only examine whether the process adopted by the said authority is malafide or intended to favour someone or whether the process adopted or decision made is so arbitrary or irrational that the Court may arrive at a finding that the decision is such that no responsible authority acting reasonable and in accordance with the relevant law could have reached and further whether the public interest is affected by such action. In the present case, we do not find any such situation in existence and as such, this Court does not find any merit in this petition and the petitioner is not entitled to any relief as claimed. 13 12. Accordingly, the instant writ petition is dismissed. No order as to costs. Sd/- Sd/- (Arvind Kumar Verma) (Ramesh Sinha) Judge Chief Justice Chandra