TMI Blog1998 (12) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... past two years as reckoned on the date set for opening of the bid. Further, the bidder should have minimum turnover of ₹ 7.5 crores per annum for the last 3 consecutive years. Under clause 1.4 of the qualifying criteria, it was provided : Notwithstanding anything stated above the Owner reserves the right to assess the Bidders' capability and capacity to perform, should the circumstances warrant such an assessment in the overall interest of the owner.' Pursuant to the invitation, the appellant-Maharashtra State Electricity Board received tenders from eleven bidders including M/s. IVR Construction Ltd. and M/s Raunaq International Ltd., who are the two contestants before us. After screening of the bids a note was submitted by the Technical Director of the Maharashtra State Electricity Board for the consideration of the Board of Directors. The note stated that out of the offers received, four offers were from tenderers who qualified as per the qualifying criteria. M/s IVR Construction Ltd., Hyderabad was stated to be one of the four such offerers. The note also mentioned that two offerers which included M/s Raunaq International Ltd., though not meeting the qualif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch work which is prescribed under the qualifying criteria. Their total experience; is of less than a year. Therefore, looking to the fact that relaxation of criteria would have been required in respect of M/s IVR Construction Ltd. also and in view of the fact that the offer of M/s Raunaq International Ltd. is the lowest, if the Board has accepted the offer of M/s Raunaq International Ltd. after weighing their requirements against the qualifications of the two competing bidders, we fail to see how the High Court could have intervened and stayed the operation of the award of contract to M/s Raunaq International Ltd. This is not a case where any mala fides have been alleged against any member of the Board. Nor is there any allegation of any collateral motive for awarding the contract to M/s Raunaq International Ltd. The only ground of challenge in the writ petition filed by M/s IVR Construction Ltd. is that M/s. Raunaq International did not fulfil the qualifying criterion of having laid such pipeline for a distance of 3 kms. But the challenger- M/s IVR Construction Ltd. also does not fulfil the qualifying criterion. In these circumstances, we fail to see any basis for passing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f services, facilities or goods. e.g. A delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. 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 that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court Would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the material before it, that the allegation needs further examination, the court would be entitled to entertain the petition. But even here, the court must weigh the consequences in balance before granting interim orders. Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decisions is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene. It is also necessary to remember that price may not always be the sole criterion for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert committee's special knowledge plays a decisive role in deciding which is the best offer. Price offered is only one of the criteria. The past record of the tenderers, the quality of the goods or services which are offered, assessing such quality on the basis of the past performance of the tenderer, its market reputation and so on, all pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide for restitution; A somewhat different approach may be required in the cases of award of a contract by the Government for the purchase of times for its use. Judicial review would be permissible only on the established grounds for such review including mala fides, arbitrariness or unreasonableness of the Wendensbury variety. Balance of convenience would play a major role in moulded interim relief. There is a third variety of transactions entered into by the Government which come up for consideration before the courts, This is where the Government grants licences or permissions for a fee or consideration to private parties, enabling them to commercially exploit such a licence or permission. The principles of judicial review are no different in such a case. However, grant of stay or injunction in such cases may or may not result in prejudice to the public revenue, depending on the facts of the case. At times granting of a licence or permission may cause public harm e.g. in the case of damage to the ecology. Interim orders will have to be mouled in such cases on a consideration of all relevant factors, providing for restitution where required in public interest. It is unfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. (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 or quasi-administrative sphere. However, the decision can be tested by the application of the Wednesbury principle of reasonableness and the decision should 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 arid unbudgeted expenditure. The same view has been reiterated in Asia Foundation Construction Ltd v. Trafalgar House Construction (I) Ltd and Ors., [1997] 1 SCC 738, the court observing that judicial review of contractual transactions by Government bodies i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance of a body litigating in public interest, any interim order which stops the project from proceeding further, must provide for the reimbursement of costs to the public in case ultimately the litigation started by such an individual or body fails. The public must be compensated both for the delay in implementation of the project and the cost escalation resulting from such delay. Unless an adequate provision is made for this in the interim order, the interim order may prove counter- productive, In the present case it was submitted that the terms and conditions of the tender specified the requisite qualifying criteria before a person could offer a tender. The criteria which were so laid down could not have been relaxed because such a relaxation results in a denial of opportunity to others. In support, the respondents relied Upon Ramana Dayaram Shetty v. International Airport Authority of India and Ors., [1997] 3 SCC 489. In that case the Court had held judicial review as a check on the exercise of arbitrary powers by the State and as a check on its power to grant largess. the Court also observed that When the exercise of discretion is structured in terms of the tenders which have ..... 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