High Court rejected a writ petition challenging a tender condition excluding flour mill owners from foodgrain transportation tenders, ruling the ban was reasonable to curb corruption and not arbitrary.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
S.B. Civil Writ Petition No. 18689/2023
Laxmi Industries, Through Its Proprietor Hari Shanker Paliwal S/o Roopa Ram Paliwal Aged 44 Years, Resident Of 107, RIICO Industrial Area, Pokaran, District Jaisalmer, Rajasthan.
----Petitioner
Versus
----Respondents
| For Petitioner(s) | : Dr. Pratishtha Dave |
|---|---|
| For Respondent(s) | : Mr. Navneet Singh Birkh, Assistant to |
| Mr. Sudhir Tak,AAG |
HON'BLE MS. JUSTICE REKHA BORANA
Order
02/12/2023
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Foodgrains Under PDS from FCI Depots and sugar from Godowns To FPS in Dungerpur Districts for the period 12 Months” .
“ foHkkxh; fn”kk funsZ”k tfj;s i=kad ,Q40¼7½ [kk-ys@ifjogu@2016&17 fnukad 23-10-2017 ds rgr tkjh funsZ”kkuqlkj vkVk fey ekfyd fcM esa Hkkx ysus gsrq ;ksX; ugh gksaxsA vr% fey ekfyd fcM gsrq vik= gksaxsA fcM izfØ;k ds fdlh Hkh Lrj ij ;g rF; mtkxj gksus dh n”kk esa izLrqr izLrko ;k tkjh dk;kZns”k rRdky izHkko ls fujLr dj fn;k tkosxkA lkFk dh QeZ dks CySd fyLV@fMckj djrs gq, tek dk;Z lEiknu izfrHkwfr jkf”k@vfrfjDr dk;Z laiknu izfrHkwfr jkf”k ¼vlarqfyr fcM dh n”kk esa½ iw.kZr;k tCr dj yh tkosxhA bl ckcr fcMnkrk }kjk ;g “kiFk i= izLrqr djuk gksxk fd og@QeZ fdlh Hkh vkVk fey dk LokfeRo ugh j[krs gS vFkok vkVk foØ; lEcfU/kr O;kikj ugh djrs gSA ”
Learned counsel further submits that even otherwise the petitioner firm is situated/operational at Pokran in District Jaisalmer whereas the work in question is for District Dungarpur
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and therefore, it cannot be concluded that the petitioner can in any manner, enter into any corrupt activity.
Circular dated 23.10.2017 provided as under :
“fo’k;% ifjogu fufonk esa “krksZa esa la”kks/ku ds Øe esaA
mijksDr fo’k;kUrxZr ys[k gS fd jk’Vªh; [kk| lqj{kk ;kstukUrxZr [kk|kUu ifjogu gsrq lEcaf/kr gkWylsyj (RSFCSC/ KVSS vkfn½ }kjk fufonk;sa vkeaf=r dh tkdj njsa vuqeksfnr dh tkrh gSA dfri; ftyksa esa vkVk fey ekfydksa }kjk Hkh ifjogu fufonk esa Hkkx fy;k tk jgk gS] ftuds fo:) [kk| lqj{kk dh xsgwa ds nq:i;ksx dh xEHkhj f”kdk;rsa izkIr gq;h gS ,oa gky gh esa Hkz’Vkpkj fujks/kd C;wjks us Hkh buds fo:) dk;Zokgh dh gSA
vr% vkVk fey ekfydksa }kjk [kk| lqj{kk dh xsgwa ds nq:i;ksx dks jksdus gsrq mudks fufonk esa Hkx ysus gsrq iw.kZr% vik= eku tk;sA fufonk izi= esa mDr “krZ dk Li’V vadu gks dh vkVk fey ekfyd ifjogu fufonk gsrq ik= ugha gksxsA
mijksDr funsZ”kksa dh dMkbZ ls ikyuk dh tkosaA
(i) Admittedly, the circular in question was issued way back in the year 2017 and the impugned condition No.59 has been
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incorporated in NIB in pursuance of the said circular. The petitioner, being well aware of the said condition and the circular of the year 2017, did not choose to assail the same earlier but, after having participated in the tender process, has opted to challenge the same only after apprehending that his technical bid would be rejected because of the said condition.
It cannot be assumed that the petitioner was not aware of the above circular or impugned condition before entering his bid as the NIB specifically provides for an affidavit to be furnished by the bidder along with the bid to the effect that the bidder neither owns any flour mill nor is it involved in any business relating to foodgrain flour. The said requirement of filing of affidavit has been specified in the special condition No.59 itself. Even the check-list qua the documents to be uploaded along with technical bid also specifies for uploading of the said affidavit. Meaning thereby, the petitioner Firm was well aware of the fact that it is not eligible to participate in the tender process but then too, it did file its bid.
Therefore, it is clear that the petitioner, with open eyes, participated in the tender process and now, after technical bid having been opened, has opted to challenge the circular as well as special condition No.59 which cannot be held to be tenable. (ii) A bare perusal of circular dated 23.10.2017 makes it clear that the decision that the flour mill owners or the persons/firms involved in foodgrain flour business should not be allowed to participate in the tender process for transportation of the foodgrain has been taken with the purpose to curtail the corrupt activities being undertaken by such owners/persons. The circular specifies that various complaints regarding such corrupt activities
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had been received in the past and cognizance of such complaints had even been taken by the Anti Corruption Department. Therefore, to curtail such corrupt activities in future, the said decision was taken.
In the specific opinion of this Court, the decision as taken, being totally logical and reasoned, cannot be said to be arbitrary or irrational. It is the settled position of law that the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, malafide or actuated by bias, the Courts would interfere. (iii) Further, the scope of judicial review by the Courts in the matters wherein the conditions of tender/bid are under challenge is well defined, narrow and very limited. The Hon’ble Apex Court in
Michigan Rubber (India)Limited Vs. State of Karnataka and Others, (2012) 8 SCC 216, laid down the following principles governing such issues.
“ 23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down
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such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government. ”
(iv) The Hon’ble Apex Court further, while laying down criteria for interfering in such matters framed two questions to be considered and to decide the issue on basis of the reply to the said two questions. The Court observed as under :
“Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions: (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
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decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and
(ii) Whether the public interest is affected ?
If the answers to the above questions are in negative, then there should be no interference under Article 226.”
(REKHA BORANA),J
213-KashishS/-
3 issues framed by the court
Whether the exclusion of flour mill owners from a tender for foodgrain transportation is arbitrary or irrational.
Whether the condition restricting participation violates Article 14 of the Constitution.
Whether the court should interfere with the tender conditions under Article 226.
Colour shows how this judgement treated each authority
Michigan Rubber (India)Limited Vs. State of Karnataka and OthersFollowed¶48
Michigan Rubber (India)Limited Vs. State of Karnataka and Others, (2012) 8 SCC 216 · Who else cites this
Rajasthan State Food and Civil Supplies Corporation Ltd.Referred¶9
5 provisions across 5 enactments
Laxmi Industries
State Of Rajasthan
Registrar, Cooperative Societies
Rajasthan State Food and Civil Supplies Corporation Ltd.
Rekha Borana
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
