1 2025:CGHC:22358-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2689 of 2025 RKTC Infratech Limited Registered Office At Hig- 7 Behind Madan Complex, Shakar Nagar. Sector- 2 Raipur (C.G.) 492007 Through Its Authorized Signatory Subhash Singhal S/o Shri Satyanarayan Agrawal Aged About 65, Years R/o L- 16, Swarnabhoomi, Raipur - 492001 (C.G.) ... Petitioner(s) versus 1 - South Eastern Coalfields Limited Through The Chairman Cum Managing Director SECL Bhawan Seepat Road Bilaspur (C.G.) - 495006 2 - The General Manager (CMC) South Eastern Coalfields Limited, SECL Bhawan Seepat Road Bilaspur (C.G.) - 495006 3 - M/s Vinay Kumar Upadhyay, Through Its Proprietor, Having Registered Office At Ward No. 39, Duman Hill Colliery, Sonwani, Hospital Chirmiri, Koriya Chhattisgarh – 497559 4 - Union of India Through The Secretary, Ministry of Micro Small And Medium Enterprises Udyog Bhawan, Rafi Marg , New Delhi - 1110011 ... Respondent(s) For Petitioner(s) : Mr. Kshitij Sharma, Advocate For Respondent-SECL For Respondent-UOI : : Mr. Pankaj Singh, Advocate Ms. Shweta Rai holding brief of Mr. Ramakant Mishra, Dy. Solicitor General Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Rakesh Mohan Pandey , Judge Order on Board Per Ramesh Sinha , Chief Justice 27 . 05 .202 5 1. Heard Mr. Kshitij Sharma, learned counsel for the petitioner. Also heard Mr. Pankaj Singh, learned counsel, appearing for ROHIT KUMAR CHANDRA Digitally signed by ROHIT KUMAR CHANDRA 2 respondents-SECL and Ms. Shweta Rai holding brief of Mr. Ramakant Mishra, learned Deputy Solicitor General, appearing for the respondent-UOI. 2. The present writ petition has been filed by the petitioner with the following prayers: “10.1) The Hon'ble Court may kindly be pleased to issue such writ /order / direction quashing and setting aside the impugned order-dated 15.05.2025 (Annexure P7) passed by the Respondent Authorities; and 10.2) The Hon'ble Court may kindly be pleased to issue such writ /order / direction revoking the illegal counter offer and price matching benefit made by Respondent No. 2 to Respondent No. 3; and 10.3) The Hon'ble Court may kindly be pleased to issue such writ /orders/direction directing the Respondent No. 2 to act lawfully and award the contract to the Petitioner; and 10.4) The Hon'ble Court may kindly be pleased to issue an appropriate writ / order quashing the Letter of Award in favour of the Respondent No. 3, in case the Letter of Award has been issued and 10.5) Cost of the petition may also be granted to the Petitioner; and 10.6) Any other relief, which this Hon'ble Court deems fit and proper, may also kindly be granted to the petitioner, in the interest of justice.” 3. Brief facts of the case are that the Respondent No. 1 through the Respondent No. 2 herein issued an E-Tender Notice being NIT No.SECL/ BSP/ CMC/ SRPL-COMP/ e-T/24-25/ GeM/14 dated 3 06.12.2024 ("NIT") inviting tenders for coal mining operations, including excavation, overburden removal, transportation and other allied site works. The scope of work as per the NIT includes hiring of Tippers, Excavators, and Surface Miners, as well as the construction and maintenance of Haul Roads, along with other related site operations. The aforesaid tenders were invited on a Two-Part basis, requiring Technical and Financial evaluation as per the terms enumerated in the NIT. Pursuant to the NIT, the Petitioner herein submitted its bid in accordance and compliance with the terms and conditions detailed out therein. Subsequently, the Petitioner emerged as the lowest qualified ("L1") eligible bidder after qualifying the due Technical and Financial evaluation. Consequently, by virtue of emerging as the L1 bidder, Petitioner had a legitimate expectation based on fairness and adherence to terms of the NIT of being awarded the contract. However, it has came to the notice of the Petitioner that instead of awarding the contract to the Petitioner company, the Respondent No.1 has instead extended a price matching benefit by making a counter- offer to the Respondent No. 3 company, who had emerged as the L2 qualified bidder, to match the Petitioner's offer in purported implementation of the Public Procurement Policy for MSEs Order, 2012 (for short, ‘2012 MSE Policy’). Being aggrieved by the same, the Petitioner submitted a complaint before respondent No.2 and in the meanwhile, he has also filed a writ petition before this Court which was registered as WPC No. 2633 of 2025 and since the 4 representation of the Petitioner has already been rejected by the respondent No.2 on 15.05.2025 and considering the fact that the Petitioner has not challenged the said rejection order dated 15.05.2025, the said writ petition was dismissed as withdrawn vide order dated 20.05.2025 with liberty to file afresh petition challenging the rejection order dated 15.05.2025. Hence, the present petition has been by the Petitioner with aforementioned prayers. 4. Learned counsel for the petitioner would submit that the current contract is a composite contract and it includes construction and maintenance work and since it provides for hiring of goods as well as rendering of services by the bidder, bringing it squarely within the meaning of a ‘Works Contract”. He would further submit that respondent authorities vide impugned order dated 15.05.2025 have rejected the representation of the petitioner and have held that the work in question is a ‘Service Contract’ and not a ‘Works Contract’. It is submitted that the impugned order dated 15.05.2025 has been passed in contravention of the settled law that works in question are essentially "earth work" and are in the nature of a works contract, since "earth work" involved engineering and processing. Further, excavation, extraction, and processing of coal is also in the nature of a works contract since it enhances the capital value of an asset, i.e., the coal mineral in the present case. The bidder is also paid upon the quantum of asset it excavates and not for the services it is purportedly providing. The current 5 contract does not strictly provide for procurement of goods produced or services rendered by the MSE bidder. Hence, any application of the 2012 MSE Policy to the current contract would defeat the very purpose behind the Policy as well as the MSME Act. 5. On the other hand, learned counsel appearing for the respondents-SECL opposes the aforesaid submission and submitted that the NIT No. GeM/141 was advertised only as a ‘Service’, in ‘Non-Splitable Category’, and not as a ‘Work’. He further submitted that the petitioner has participated in the tender process, submitted his offer/bid and stood as L1, by treating it as a "Service" only and not as a "Work", Suddenly raising a hue and cry that his quoted price, being L1, was offered to MSME does not stand to any reason. The price quoted was for transporting from one place to other place, digging a certain quantity of coal on per MT basis, Shifting OB per volume basis. This activity does not create any asset anywhere and from any definition of "works" it does not qualify and hence it has to be and has been treated, rightly, as a "service" from the beginning of the tender process. 6. We have heard learned counsel for the parties and perused the impugned order and the material available on record. 7. From perusal of the impugned order, it transpires that the NIT No. GeM/141 was advertised only as a ‘Service’, in ‘Non-Splitable Category’, and not as a ‘Work’. The petitioner has participated in the tender process, submitted his offer/bid and stood as L1, by 6 treating it as a "Service" only and not as a "Work", Suddenly raising a hue and cry that his quoted price, being L1, was offered to MSME does not stand to any reason. The price quoted was for transporting from one place to other place, digging a certain quantity of coal on per MT basis, Shifting OB per volume basis. This activity does not create any asset anywhere and from any definition of "works" it does not qualify and hence it has to be and has been treated, rightly, as a "service" from the beginning of the tender process. 8. The law with respect to interference in tender matters is limited to certain extent as has been considered by the Hon'ble Supreme Court in large number of cases including in the case of Tata Motors Limited vs Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and others1 wherein the Hon’ble Supreme Court has considered the factum of interference in the tender matters and has held as under: "48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector 1 2023 SCC OnLine SC 671 7 undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and ublic sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer." 9. Recently, the Hon’ble Supreme 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 8 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. 10. 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 vs. M/s. M & N Publications Limited and Others2, 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 2 (1993) 1 SCC 445 9 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 India3, this Court had laid down certain priniciples for the judicial review of administrative action. “94. The principles deducible from the above are: (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 3 (1994) 6 SCC 651 10 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 Others4, 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 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 Others5, 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 Others6, 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 4 (2004) 3 SCC 553 5 (2007) 14 SCC 517 6 (2022) SCC OnLine SC 574 11 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 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 Others7, 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 7 (2016) 8 SCC 622 12 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 (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 thatdecision 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. Considering the submissions made by learned counsel appearing for the parties and applying the principle of law laid down by the Hon’ble Supreme Court in the above-stated judgments (supra), we do not find any scope for interference in this writ petition. 12. Accordingly, the writ petition being devoid of merit is liable to be and is hereby dismissed. No cost(s). Sd/- Sd/- (Rakesh Mohan Pandey) (Ramesh Sinha) Judge Chief Justice Chandra