Dismissed

Ltc Commercial Company Private Limited v. Rajasthan State Warehousing Corporation (a Government Undertaking)

Rajasthan HC19 May 2020CW/5543/2020

Case brief

AI extract

What is this about?

Three writ petitions by prospective bidders challenged Clause 5(5)(i) of a warehousing tender notice requiring average storage experience of 4 LMT of MSP-procured food grain. The court held no appeal lay because Section 40(b) excludes conditions limiting bidder participation, but on merits found the condition justified, non-arbitrary and not restrictive, and dismissed the petitions.

What the court decided

AI extract

Ltc Commercial Company Private Limited Vs… — Public Procurement and Tenders | Rajasthan HC (2020)

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

¶2

(1) S.B. Civil Writ Petition No. 5529/2020

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Star Agriwarehousing And Collateral Management Limited, A Company Incorporated And Registered In India, Having Their Registered Office At 601-604, A Wing, 6Th Floor, Bonanza Building, Sahar Plaza Complex, Near Chakala Metro Station, J.b. Nagar, Andheri (E), Mumbai 4000059, Mahrashtra Through Its Authorized Signatory Rakesh Chajjar.

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----Petitioner

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Versus

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State Of Rajasthan, Through Its Principal Secretary, Department Of Agriculture And Marketing, Government Of Rajasthan, Government Secretariat, Bhagwan Das Road, Jaipur.

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Rajasthan State Warehousing Corporation (A Government Undertaking), Through Its Managing Director, Having Its Head Office At Bhawani Singh Road, Jaipur, 302015, Rajasthan.

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Managing Director, Rajasthan State Warehousing Corporation (A Government Undertaking) Tender/bid Inviting Authority, Having Its Head Office At Bhawani Singh Road, Jaipur, 302015, Rajasthan.

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----Respondents

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Connected with

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(2) S.B. Civil Writ Petition No.5534/2020

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M/s National Collateral Management Service Limited, (A Company Incorporated Under The Indian Companies Act), Having Its Registered Office At Unit No. 502 To 509, Vth Floor, Lodha Supremus, Off Jvlr, Kanjurmarg (East), Mumbai (Maharashtra) Through Its Authorized Signatory Mr. Abhishek Singh Son Of Late Shri Ram Gopal Singh, Aged 33 Years, State Head, Ncml, Rajasthan.

¶13

----Petitioner

¶14

Versus

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State Of Rajasthan, Through Secretary To The Government, Food And Civil Supplies Department, Government Of Rajasthan, Secretariat, Jaipur.

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(2 of 20)

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[CW-5529/2020]

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Rajasthan State Warehousing Corporation Limited, (A Government Of Rajasthan Undertaking), Bhawani Singh Road, Jaipur Through Its Managing Director.

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Managing Director, Rajasthan State Warehousing Corporation Limited, (A Government Of Rajasthan Undertaking), Bhawani Singh Road, Jaipur.

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----Respondents

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(3) S.B. Civil Writ Petition No. 5543/2020

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Ltc Commercial Company Private Limited, Having Its Corporate Office At 156, Navalgarh House, Sansar Chand Road, Jaipur302001, Through Authorised Representative Shri Prashant Kumar Ojha S/o Sh. Shyam Sunder Ojha

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----Petitioner

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Versus

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Rajasthan State Warehousing Corporation (A Government Undertaking), Through Its Managing Director, Having Its Head Office At Bhawani Singh Road, Jaipur - 302015, Rajasthan.

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Managing Director, Rajasthan State Warehousing Corporation (A Government Undertaking), Tender/bid Inviting Authority, Having Its Head Office At Bhawani Singh Road, Jaipur - 302015, Rajasthan.

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----Respondents

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For Petitioner(s)	: Mr. RK Mathur, Sr. Adv. assisted by Mr. Pankaj Gupta, Adv Mr. Ajay Kumar Bajpai, Adv Mr. Prakhar Gupta, Adv.
For Respondent(s)	: Mr. Rajendra Prasad, Sr. Adv. assisted by Mr. Harsh Sahu, Addl. G.C.

¶29

HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA

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Judgment / Order

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Reserved on 13/05/2020

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Pronounced on 19/05/2020

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Since all these three writ petitions raise common question, the same have been heard jointly. The respective counsel for the

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(3 of 20)

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parties argued and made their submissions through Video Conferencing.

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While Mr. RK Mathur, learned Senior Counsel submitted that he has filed rejoinder today, during the course of Video Conferencing he requested that the case may be heard as there is urgency and he does not press his rejoinder.

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The petitioners in the present writ petitions are prospective bidders who are engaged in warehousing services and are aggrieved of the conditions laid down in the Notice Inviting Bid (hereinafter referred to as 'NIB') by the Rajasthan State Warehousing Corporation (hereinafter referred to as 'RSWC') dated 12/03/2020.

¶39

In all these three writ petitions, the condition laid down in the Eligibility Criteria of NIB in Para 5(5)(1) is under challenge which reads as under:-

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"The bidder (either directly or through its 100% owned subsidiary) should have experience in preservation, maintenance and storage of not less than 4.00 Lac MT on an average basis for last 3 Financial Years (i.e. 2016-17 to 2018-19) of MSP procured food grain, pulses, oil seeds etc of Central/State Government agencies at part with CWC/SWC/FCI/NAFED etc. in any State/Union Territory across India. i. Experience: Certificate of related work from central/state government agencies at per with CWC/SWC/FCI/NAFED etc."

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Learned counsel for the petitioners have also challenged the

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order dated 23/04/2020 whereby, after the pre-bid conferencing, clarifications/amendments were issued but no amendment/clarification was issued in relation to the aforesaid

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Condition No.5(5)(i) and therefore it has been prayed as under:- "(A) Issue a writ of certiorari or any other appropriate writ, order or direction to quash/set aside Clauses 5(5)(i) of Notice Inviting Bid

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(4 of 20)

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No.RSWC/HO/BP/12(53)PPP-II/2019/3039 12.03.2020.

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dated

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(B) By way of appropriate writ direction the Respondents to relax the terms induced under Notice Inviting Bid No.RSWC/HO/BP/12(53)PPPII/2019/3039 dated 12.03.2020.

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(C) Issue a writ of certiorari or any other appropriate writ, order or direction to quash/set aside Pre-Bid Modification/Clarification dated 23.04.2020 (Annexure.7).

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(D) During the pendency of this writ petition petitioner may kindly be allow to participate in a bidding process.

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(E) Pass any other order which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case may be granted in favour of the petitioner."

¶52

A reply was filed by the State Government and a preliminary objection was raised and that there was an alternate remedy available under 'The Rajasthan Transparency In Public Procurement Act, 2012 (hereinafter referred to as RTPP Act, 2012) and with regard to alternate remedy of appeal not availed within prescribed period

¶53

Mr. RK Mathur, learned Senior Counsel appearing for the petitioner in SB Civil Writ Petition No.5529/2020 submitted that the alternate remedy is not available in terms of Section 40 of the RTPP Act, 2012 which bars appeal in certain cases. He submitted that the present writ petitions challenge the Condition No.5(5)(i) of the NIB on the ground that it provides for limiting participation of bidders in the bid process in terms of provisions of Section 6 of the RTPP Act, 2012 and therefore, as per Section 40(b) of the RTPP Act, 2012, appeal would not lie. Learned Senior Counsel has taken this Court to Section 6 of the RTPP Act, 2012 which provides that the procuring entity shall not establish any requirement aimed at limiting participation of bidders in the procurement

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process that discriminates against or among bidders or against any category thereof and therefore, the Condition No.5(5)(i) of the NIB which provides eligibility criteria for only those bidders who have experience of not less than 4 LMT on an average basis for preservation, maintenance and storage and who have procured food grain, pulses, oil seeds etc. at MSP alone with the Central/State Government's agencies and ousts those prospective bidders, who have experience of less than 4 LMT and who have procured from other private agencies, is a limitation clause within meaning of Section 6 of the RTPP Act ,2012 and therefore, appeal would not lie.

¶57

7.1. On merits, learned Senior Counsel for petitioners submitted that the present NIB is with regard to the same work as per NIB floated earlier in 2018 for similar services. The present condition as incorporated in Para 5(5)(i) of NIB herein was not a part of the previous tender. The present NIB provides that the most advantageous bidder will be allowed to choose maximum of two clusters of warehouse out of three clusters and the left over cluster/clusters, after selection of cluster/clusters by L-1 bidder, will be given to L-2 bidder for offer to match the rate of L-1. Thus, the condition of 4 LMT does not have any nexus and it should be maximum equal to the cluster-wise capacity which varies from 2.58 LMT to 3.51 LMT and the bidders having less experience should also have been allowed to bid for smaller clusters and such a condition of experience for last three years is an stringent condition and only a limited number of players would qualify due to this condition.

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(6 of 20)

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7.2 Learned Senior Counsel for the petitioners further submitted that the condition ought to have been relaxed as cumulative for last three years linked to the capacity of cluster as it would enable wider participation. He further submitted that as per Section 22 of the RTPP Act, 2012, the pre-bid qualification conference was conducted by giving opportunity to all bidders in respect of particular procurement and the petitioner had submitted its objections and also prayed for the relevant relaxations. However, their objection and relaxation part was not considered at all and was not incorporated in the order and thus, there is violation of Rule 46 of the RTPP Rules, 2013 which provides that pre-bid qualifications conference minutes shall be prepared which shall contain the request submitted at the meeting and will also contain its responses to those request. It is submitted that such minutes were required to be provided probably to all bidders to which the procuring entity provided the bid documents to enable those bidders to take minutes into account for preparing their bids and such minutes shall also be published on the State Public Procurement Portal but the respondents issued the order on 23/04/2020 which does not even refer to Clause 5(5)(i) and there is no discussion or decision in this respect. It is further submitted that on account of the stringent condition, the petitioner and several other bidders have been ousted and there are only two bidders who have been declared qualified.

¶61

Mr. AK Bajpai, learned counsel, appearing on behalf of petitioner in SB Civil Writ Petition No.5534/2020, while adopting the arguments of learned Senior Counsel Mr. RK Mathur, submitted that the Minimum Support Price (MSP) could not be a condition as

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the same was not part of the earlier tender. He further submitted that the conditions, which were earlier mentioned in the NIB issued in 2018, came to be challenged before this Court in SB Civil Writ Petition No.17412/2018 (Shree Shubham Logistics Limited Vs. State of Raj. & Ors.) alongwith SB Civil Writ Petition No.17725/2018 and the conditions were held to be in violation of Section 6 of the RTPP Act, 2012. However, the said judgment was set aside by the Division Bench in DB Special Appeal (Writ) No.1153/2018 and connected appeals, decided on 29/11/2018. Thus, such conditions have already been approved by this Court. Once they were approved, there was no occasion to change the conditions by issuing a fresh NIB.

¶65

Mr. Prakhar Gupta, learned counsel appearing for the petitioner in SB Civil Writ Petition No.5543/2010, has adopted the arguments as noted above and has further submitted that the condition is wholly arbitrary and curbing of competition. He further submitted that no reason has come forward for change of condition and laying down a precondition for only allowing those who have experience of goods purchased under MSP. He further submitted that the NIB issued was only for the purpose of managing and operating of RSWC Warehouses under Public Private Participation Model and there was no occasion for laying down condition of MSP procurance and that too from Central/State Government agencies alone. If a Company has experience with other private firms and agencies of preservation and maintenance and storage of food grain, pulses, oil seeds etc., the same was sufficient for the purpose of eligibility and the condition is tailormade with the purpose to only qualify two bidders. It is submitted

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that although as far as the condition No.5(5)(i) was fulfilled by four other bidders, the two other bidders, who had disqualified, were known to be disqualified already to everyone as they did not fulfill the other conditions as they were not registered with the commodity exchange warehouses. Thus, the condition was wholly tailor-made and could not have been accepted. He relied on the judgment of Apex Court in Shimnit Utsch India Private Limited & Anr. Vs. West Bengal Transport Infrastructure Development Corporation Limited & Ors.: (2010)6 SCC 303 to submit that the conditions which had already been approved by this Court in a litigation which ensued upto the Division Bench, could not have been altered at the whims and fancies of the State Government or its officers and there was no cogent reason to have amended the eligibility criteria.

¶69

Per-contra, Mr. Rajendra Prasad, learned Senior Counsel assisted with Mr. Harsh Sahu, Addl. Govt. Counsel, appearing on behalf of the respondents submitted that the writ petitioners are devoid of merit and deserve to be dismissed at the threshold. He further submitted that the issue is no more res-integra and has taken this Court to the judgment passed earlier by the Division Bench in appeal whereby the judgment passed by the Single Bench (authored by me) was set aside and it was held that:

¶70

"This Court, therefore, in exercise of its power of judicial review cannot insist on the procuring entity not to have a requirement like this when its purpose is to ensure availability of sufficient warehousing capacity with the proposed service provider throughout the State. It is clear from comparative chart of the prosepctive bidders given in the writ petition of Origo Commodities that there are many players in the field, who possess warehousing capacity of 1 lac MT and three out of six prospective

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(9 of 20)

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bidders named therein qualify this condition. Such condition in the NIB can neither be said to be unreasonable, unconstitutional, illegal, arbitrary or in any manner restricting scope of competition. The principles of judicial review would apply to the exercise of contractual powers by the Government bodies in order to prevent arbitrariness or favoutism, but there are inherent limitations in exercise of that power of judicial review, as held by the Supreme Court in Tata Cellular (supra)."

¶74

10.1.Learned Senior Counsel for the respondents further submitted that earlier the RSWC had issued an NIB for only 31 warehouses and 38 warehouses were already with the RSWC management and certain conditions were laid down in Clause 5 for eligibility which came to be challenged before this Court in writ petitions (supra). The learned Senior Counsel has taken this Court to those eligibility criteria and submitted that the present eligibility criteria is different from the eligibility criteria laid down earlier. It is submitted that the present NIB is for 71 warehouses and an attempt has been made to broaden the competition by lowering down the criteria in all respects. However, so far as the condition No.5(5)(i) is concerned, the criteria which was laid down of minimum 4 LMT storage experience is in consonance with the requirement of the contract and during the bid clarification conference when the petitioners raised this issue, the same was considered and reasons were incorporated in the minutes of the Committee and in this regard, he has taken this Court to the minutes of the Committee dated 22/04/2020 namely; Item No.347 & 348 and submitted that the Committee is the expert in deciding and it has given its reasons for providing 4 LMT as the minimum criteria. It has been further submitted that earlier the criteria laid down was 5 LMT which was reduced to 4 LMT.

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10.2 In view of condition that L-1 bidder can have two clusters together, it was noticed that the capacity of warehouses shall be, at a given time, more than 4 LMT if two clusters are accepted by the bidder and therefore, the criteria of 4 LMT was justified and proper. He further submitted that in light of the judgment as noticed above and the law laid down by the Supreme Court in Tata Cellular Vs. Union of India: (1994) 6 SCC 651, this Court will not change the criteria of eligibility and substitute its own opinion to that of the procuring entity.

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10.3 Learned Senior Counsel for the respondents has also submitted that the experience for MSP is also a necessary criteria taking into consideration that in Rajasthan, the average purchases and storage of material is at the MSP and 90% storage is of the material which is purchased at MSP rates and as the purchase at MSP is a cumbersome and complex process, the experience in this regard is necessary. Such an aspect has been discussed at length by the Committee while hearing objections of the petitioners and it decided to continue with the such condition in the NIB and in view thereof, no interference is warranted. Learned Senior Counsel has further submitted that the judgment passed by the Supreme Court as cited (supra) has been wrongly interpreted by the learned counsel for the petitioners.

¶79

Heard learned counsel for the parties at length and considered the submissions made by them.

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The first aspect which relates to the present case is in relation to availability of alternative remedy.

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Learned counsel appearing for the respondents relied on the judgment passed in DB Special Appeal (Writ) No.1153/2018 and

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(11 of 20)

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the connected appeals, decided on 29/11/2018 to submit that the qualification laid down are under Section 7 of the RTPP Act, 2012 and, therefore, Section 6 of the RTPP Act, 2012 would have no application with regard to laying down the qualification and hence the appeal would lie. However, it has been informed by the office that the SLP No.6589-90/2019 (Shree Shubham Logistics Limited) is pending before the Supreme Court against the said decision. 14. However, this Court finds that the Division Bench, while deciding the aforesaid DB Special Appeal (Writ) No.1153/2018 has not examined the issue with regard to the alternative remedy nor the same was taken up for consideration. Thus, the said judgment will have no application on the issue relating to existing of alternative remedy

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Section 38 of the RTPP Act, 2012 provides as under:-

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"38.Appeals.- (1) Subject to section 40, if any bidder or prospective bidder is aggrieved that any decision, action or omission of the procuring entity is in contravention to the provisions of this Act or the rules or guidelines issued thereunder, he may file an appeal to such officer officer of the procuring entity, as may be designated by it for the purpose, within a period of ten days or such other period as may be specified in the pre-qualification documents, bidder registration documents or bidding documents, as the case may be, from the date of such decision or action, omission, as the case may be, clearly giving the specific ground or grounds on which he feels aggrieved:

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Provided that after the declaration of a bidder as successful in terms of section 27, the appeal may be filed only by a bidder who has participated in procurement proceedings:

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Provided further that in case a procuring entity evaluates the technical bid before the opening of the financial bid, an appeal related to the matter of financial bid may be filed only by a bidder whose technical bid is found to be acceptable.

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(2) On receipt of an appeal under sub-section (1), the officer designated under that sub-section shall, after affording a reasonable opportunity of being heard to the parties, determine as to whether or not the procuring entity has complied with the provisions of this Act, the rules and guidelines made thereunder and the terms of the pre-qualification documents, bidder registration documents or bidding documents, as the case may be, and pass an order accordingly which shall, subject to the order passed under sub-section (5), be final and binding on the parties to the appeal.

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(3) The officer to whom an appeal is filed under sub-section (1) shall deal with the appeal as expeditiously as possible and shall endeavour to dispose it of within thirty days from the date of filing of the appeal.

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(4) If the officer designated under sub-section (1) fails to dispose of the appeal filed under that subsection within the period specified in sub-section (3), or if the bidder or prospective bidder or the procuring entity is aggrieved by the order passed under subsection (2), the bidder or prospective bidder or the procuring entity, as the case may be, may file a second appeal to an officer or authority designated by the State Government in this behalf within fifteen days from the expiry of the period specified in subsection (3) or of the date of receipt of the order passed under sub-section(2), as the case may be.

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(5) On receipt of an appeal under sub-section (4), the officer or authority designated under that sub-section shall, after affording a reasonable opportunity of being heard to the parties, determine as to whether or not the procuring entity has complied with the provisions of this Act, the rules and guidelines made thereunder and the terms of the perqualification documents, bidder registration documents or bidding documents, as the case may be, and pass an order accordingly which shall be final and binding on the parties to the appeal.

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(6) The officer or authority to which an appeal is filed under sub-section (4) shall deal with the appeal as expeditiously as possible and shall endeavour to dispose it of within thirty days from the date of filing of the appeal:

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Provided that if the officer or authority to which an appeal is filed under sub-section (4) is unable to dispose of the appeal within the aforesaid period, he shall record reason for the same.

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(7) The officer or authority to which an appeal may be filed under sub-section (1) or (4) shall be indicated in the pre-qualification documents, bidder registration documents or bidding documents, as the case may be.

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(8) Every appeal under sub-sections (1) and (4) shall be filed in such form and manner and shall be accompanied by such fee as may be prescribed.

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(9) While hearing an appeal under this section, the officer or authority concerned shall follow such rules of procedure as may be prescribed.

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(10) No information which would impair the protection of essential security interests of India, or impede the enforcement of law or fair competition, or prejudice the legitimate commercial interests of the bidder or the procuring entity, shall be disclosed in a proceeding under this section."

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Section 40 of the RTPP Act, 2012 lays down the exceptions where the appeal would not lie which provides as under:-

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" 40. Appeal not to lie in certain cases.- No appeal under section 38 shall lie against any decision of the procuring entity relating to the following maters, namely:-

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(a) determination of need of procurement in terms of section 5;

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(b) provisions limiting participation of bidders in the bid process in terms of the provisions of section 6;

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(c) the decision of whether or not to enter into negotiations in terms of section 15;

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(d) cancellation of a procurement process in terms of section 26;

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(e) applicability of the provisions of confidentiality under section 49."

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A perusal of the aforementioned provisions show that appeal

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can be filed by any bidder or prospective bidder with regard to the decision, action or omission of the procuring entity u/S 38. However, if a condition has been laid down in the NIB itself, which

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provides the eligibility criteria for participation of bidders in the bid process and if a person is aggrieved that it limits participation to the bidders or prohibits him from participation, then in the opinion of this Court, in terms of Section 40 (b) of the RTPP Act, 2012, the appeal would not lie.

¶115

Examining facts of the present case, it is noticed that the petitioners seek to challenge the provisions of Clause 5(5)(i) of the NIB on the ground that it limits participation of bidders which results in ousting the petitioners from consideration as they do not possess the requisite eligibility criteria as a bidder. Thus, appeal would not lie and the preliminary objection raised by the respondents is unsustainable and the writ petitioners cannot be ousted on the said ground alone.

¶116

On merits, this Court notices that the scope of judicial review in award of contracts has been a subject matter of various decisions by the Supreme Court. However, generally the Courts have been following consistently the principles laid down in the case of Tata Cellular Vs. Union of India (supra) wherein the Supreme Court in Para 94 of its judgment has observed as under:-

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" 94. The principles deducible from the above are:

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(1) The modern trend points to judicial restraint in administrative action.

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(2) The Court does no sit as a court of appeal but merely reviews the manner in which the decision was made.

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(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.

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(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.

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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

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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) hut must be free arbitrariness not affected by bias or actuated by malafides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."

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In AIR India Ltd. Vs. Cochin International Airport Ltd. & others: (2000) 2 SCC 617, the Supreme Court observed in Para 7

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of its judgment as under:-

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"7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in R.D. Shetty v. International Airport Authority, 1979 (3) SCC 488; Fertilizer Corporation Kamgar Union v. Union of India, : (1981)ILLJ193SC ; Asstt. Collector, Central Excise v. Dunlop India Ltd,:1985ECR4(SC), Tata Cellular v. Union of India,: AIR1996SC11 ; Ramniklal N. Bhutta v. State of Maharashtra,: AIR1997SC1236 and Raunaq International Ltd. v. I.V.R. Construction Ltd.,: AIR1999SC393 . The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even

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though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene."

¶132

The submission of learned counsel for the petitioners is that since the tender conditions were challenged earlier when the NIB was issued in 2018 and the said conditions were upheld by this Court, the State Government was bound to proceed accordingly and they could not have departed from the earlier conditions. In support thereof, they have relied on the judgment of Apex Court in Shimnit Utsch India Private Limited and others Vs. West Bengal Transport Infrastructure Development Corporation Limited and others: (2010) 6 SCC 303 wherein the Apex Court has, however, held as under:-

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"51.In the backdrop of these reasons, the State Government seemed to have formed an opinion that by increasing competition, greater public interest could be achieved and, accordingly, decided to cancel first NIT and issued second NIT doing away with conditions like experience in foreign countries and prescribed minimum turnover from that business. Whether State Government could have changed terms of NIT despite the judgment of this Court in

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Association of Registration Plates (2005) 1 SCC 379? Once a particular matter relating to conditions in NIT has been finally decided by the highest Court, the State Government, which was party to the litigation, ought to have proceeded accordingly but, in a case such as the present one, where the circumstances changed in some material respects as aforenoticed, departure from the earlier policy cannot be held to be legally flawed, particularly when there is no challenge to the changed policy reflected in second NIT on the ground of Wednesbury reasonableness or principle of legitimate expectation or arbitrariness or irrationality. In considering whether there has been a change of circumstances sufficient to justify departure from the previous stance, the Division Bench of the Calcutta High Court recorded a finding that reasons stated by the State Government for departure from the conditions in the first NIT did exist and accepted the contention of the State Government that by increasing the area of competition, greater public interest would be sub-served because of financial implications.

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52.We have no justifiable reason to take a view different from the High Court insofar as correctness of these reasons is concerned. The courts have repeatedly held that government policy can be changed with changing circumstances and only on the ground of change, such policy will not be vitiated. The government has a discretion to adopt a different policy or alter or change its policy calculated to serve public interest and make it more effective. Choice in the balancing of the pros and cons relevant to the change in policy lies with the authority. But like any discretion exercisable by the government or public authority, change in policy must be in conformity with Wednesbury reasonableness and free from arbitrariness, irrationality, bias and malice.

¶138

The judgment of this Court in Assn. of Registration Plates v. Union of India, (2005) 1 SCC 679 cannot be read as prescribing the conditions in NIT for manufacture and supply of HSRP. Rather this Court examined the legality and justification of the impugned conditions within the permissible parameters of judicial review and recongnised the right of the States in formulating tender conditions.In

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our opinion, there is no justification in denying the State authorities latitude for departure from the conditions of NIT that cmae up for consideration before this Court in larger public interest to broaden the base of competitive bidding due to lapse of time and substantial increase in the number fo persons having TAC from the approved institutes without compromising on the quality and specifications of HSRP as set out in Rule 50 (sic) of the 2001 Order and the Amendment Order, 2001.

¶142

It is true that the State or its tendering authority is bound to give effect to essential conditions of eligibility stated in a tender document and is not entitled to waive such conditions but that does not take away its administrative discretion to cancel the entire tender process in public interest provided such action is not actuated with ulterior motive or is otherwise not vitiated by any vice of arbitrariness or irrationality or in violation of some statutory provisions. It is always open to the State to give effect to new policy which it wished to pursue keeping in view `overriding public interest' and subject to principles of Wednesbury reasonableness."

¶143

From perusal of above, it is apparent that the argument raised by respective counsel is without basis. The Supreme Court has held otherwise.

¶144

In the present case, this Court notices that the respondentRSWC has withdrawn its earlier NIB and has issued a fresh NIB for more than the number of warehouses for which earlier the NIB was issued. Now, the NIB has been issued for 71 warehouses. The conditions of eligibility have been also accordingly changed.

¶145

Noticing the contentions as advanced, as noted herein above and without bothering to repeat the same again, this Court is satisfied that the NIB issued by the respondent-RSWC is based on cogent principles. The objections raised at the clarification stage by the prospective bidders have been duly examined and have been placed on record alongwith reply as noticed herein above.

¶146

(19 of 20)

¶147

[CW-5529/2020]

¶148

The condition of having minimum experience of managing warehouse of 4 LMT or above is found to be just and proper in view of the provisions of allowing L-1 bidder to opt for 2 clusters at a time as a cumulative amount or 2 clusters would be more than 4 LMT, the L-1 must essentially be a bidder which has experience of managing warehouses of 4 LMT or above.

¶149

The contention of Mr. RK Mathur, learned Senior Counsel for the petitioner that there has been a violation of Rule 46 of the RTPP Act, 2013 is found to be without basis. The minutes and responses under sub-section (3) of Section 22 of the RTPP Act, 2012 are two different parts. While the petitioners have placed on record the response i.e. Annexure-7 dated 23/04/2020, the minutes, which were available with the respondents and could not have been obtained by the petitioner were not placed. The respondents have placed the minutes on record and it is not the case of the petitioners that they had applied but were not given copy of the minutes. This Court is of the further view that the provisions of Rule 46 of the RTPP Rules, 2013 are not such that the violation whereof would vitiate the proceedings. The provisions are essentially directory and a transgression from Rule 46 of the RTPP Rules, 2013 to certain extent would not vitiate the proceedings undertaken.

¶150

This Court is also satisfied that the conditions laid down under Clause 5(5)(i) of the NIB cannot be said to be of limiting nature. From the perusal of the document Annexure-7 dated 23/04/2020, this Court finds that out of the total number of participating bidders, which were 8 in number, 4 bidders possessed the said eligibility criteria. Thus, it cannot be said to be

¶151

(20 of 20)

¶152

[CW-5529/2020]

¶153

hit by Section 6 of the RTPP Act, 2012. The other conditions of the terms of contract are not under challenge before this Court. 27. This Court also notices that the conditions laid down under Clause 5(5)(i) of the NIB are having relevance to the purpose sought to be achieved. Although this Court is of the firm view that it need not interfere in the contractual conditions which are laid down unless it smacks of arbitrariness or are of such nature that it is prima-facie discriminatory or suffer from malice on facts or law. 28. In view of the discussion made herein above, all the three writ petitions are found to be devoid of merit and without substance in law and the same are accordingly dismissed. All pending applications also stand dismissed. No costs.

¶154

(SANJEEV PRAKASH SHARMA),J

¶155

Raghu/

Ltc Commercial Company Private Limited v. Rajasthan State Warehousing Corporation (a Government Undertaking)

Case brief

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Ltc Commercial Company Private Limited v. Rajasthan State Warehousing Corporation (a Government Undertaking)

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