C/SCA/7493/2020                                     ORDER




       IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

         R/SPECIAL CIVIL APPLICATION NO. 7493 of 2020

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1 Whether Reporters of Local Papers may be allowed to
  see the judgment ?

2 To be referred to the Reporter or not ?

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                PMP INFRATECH PVT. LIMITED
                           Versus
          OIL AND NATURAL GAS CORPORATION LTD
======================================================
Appearance:
MR.CHIRAG K SUKHWANI(6603) for the Petitioner(s) No. 1
MR KUNAN B NAIK WITH MR VIVAN SHAH AND MR. UTSAV
PARIKH, ADVOCATES for the Respondent(s) No. 1
NOTICE NOT RECD BACK(3) for the Respondent(s) No. 2,3,4
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CORAM: HONOURABLE MR. JUSTICE R.M.CHHAYA
        and
        HONOURABLE MR. JUSTICE ILESH J. VORA

                           Date : 20/08/2020

                            ORAL ORDER

(PER : HONOURABLE MR. JUSTICE ILESH J. VORA)

1. The petitioner is a company incorporated under the Companies Act, 1956, having designated as "AA" class Civil Contractor, claiming the experience in the field of disposal of hazardous waste - sludge. The respondent Corporation (ONGC) published Notice Inviting Tender (NIT for short) being No. E16XC20006 dated 4.2.2020 for hiring of services of Treatment, Storage and Disposal Facility (for short 'TSDF'), for disposal and incineration of sludge which is hazardous waste generated in various effluent treatment plants of Mehsana Asset of respondents for a period of Page 1 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER 3 years with certain eligibility criteria. The petitioner Company has challenged in the present petition the Bid Evaluation Criteria (Clause B.1.2.0) and prays to amend the said criteria as suggested by then during pre-bid meeting.

2. This writ petition has been filed under Article 226 of the Constitution of India, claiming the following main reliefs:

"14-B Your Lordships may be pleased to issue a writ of mandamus, or any other appropriate order or direction by directing the respondents to issue the corrigendum for the hiring of services of TSDF facility of disposal of sludge generated in various ETPS of Mehsana Asset for a period of 3 years (Tender No. : E16XC20006) and amend the bid evaluation criteria as suggested during the pre-bid meeting held on 17.02.2020 as reproduced in para-5 of the petition."

3. The brief facts leading to file the present petition is as under:

3.1 The petitioner PMP Infratech Pvt. Ltd is a company incorporated under the Companies Act, 1956 and is a AA class Government registered contractor, having team of qualified engineer and necessary infrastructure, with vast experience to execute the work of disposal of hazardous and other waste.

3.2 The respondent ONGC produces and supply crude oil and natural gas and other products, having Assets whole over the India.

3.3 The respondent No. 1 Oil and Natural Gas Corporation Limited (for short 'ONGC') published Notice Inviting Tender dated 04.02.2020 for hiring of services of Treatment, Storage and Disposal Facility (for short 'TSDF') for disposal of sludge, which is hazardous waste under the Hazardous and other Wastes (Management and Tranboundary movement) Rules, Page 2 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER 2016 (the 'Rules' for short) generated in various Effluent Treatment Plant (for short "ETP") of Mehsana Asset of respondent ONGC for a period of 3 years, specifying eligibility and experience criteria.

3.4 The eligibility and experience of the bidder of the "Bid Evaluation Criteria" (for short "BEC) clause B.1.2.0(2.1(a), which reads as under:

Clause B.1.2.0(2.1(a) :

(i) The bidder should be a TSDF (Treatment, Storage, Disposal Facility) which is approved by Gujarat Pollution Control Board on date of opening of technical bid;

(ii) The bidder should have either (a) or (b) or both from the following; (a) facility for Direct Land filling / Direct Sludge Disposal for participating in Group A, (b) Facility for incinerable Sludge Disposal for participating in Group B.

(iii) The bidder should have sludge handling capacity of 150 MT/ month.

To this effect, bidder, should submit copy of Gujarat Pollution Control Board approval along with documents in support of the above BEC Clause."

3.5 The petitioner company has participated in the aforesaid tender bid and at pre-bid meeting held on 17.02.2020, the petitioner has raised the objection with regard to eligibility criteria (clause B.2.1.0) incorporated in the NIC and further requested to amend, modify or adopt the following bid evolution criteria for better competition. The written objection submitted before the respondent Corporation reads as under:

"To, The GGM,I/c. MM, MM Department, ONGC Ltd., Mehsana Asset, Central Store Complex, Palavasana, Mehsana - 384 003, Gujarat, India Name of work : HIRING OF SERVICES OF TSDF Page 3 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER FACILITY DISPOSAL OF SLUDGE GENERATED IN VARIOUS ETPS OF MEHSANA ASSET FOR A PERIOD OF THREE YEARS.

Tender No. : E16XC20006.

Pre-bid Meeting : 17.02.2020 at 11:00 Hrs.

Respected Sir, With reference to above, our firm, which is engaged in this types of jobs in last 10 years and our firm is registered as 'AA' Class category in R&B department government of Gujarat We have a team of qualified engineers & we have over a decade of experience in this field. We have experience for similar type of work in E&P industry. We have successfully Executed work of waste management for several E&P companies including GAIL India) Ltd., IOCL, NTPC BPRL, GSPC etc. We have knowledge of all rules and regulation related to Hazardous and Other Wastes (Management and Trans boundary Movement) Rules! 2016 and we have successfully executed work as per GPCB/CPCB norms. It is our kind request that the BEC should be as below for better competition in global E- tender as per ONGC/CVC Guideline.

Technical Criteria should be:

Bidder should be a TSDF or TSDF membership Or Bidder should have necessary Agreement/MoU/Tie-up with TSDF Or any other designated disposal facilities approved by GPCB on the date of opening of technical bid.

and Bidder must have successfully completed at least

a) One Work Order of collection, transportation and disposal of sludge waste of E&P Industry/drilling waste of value of at least Rs 80% of estimated value in previous seven years.

OR

b) Two Work Orders of collection transportation and disposal of sludge waste of E&P industry/drilling waste of value of at least Rs 50% of estimated value in previous seven years.

OR

c) Three Work Order of collection, transportation and disposal of sludge waste of E&P industry/drilling waste of value of at least Rs 40% of estimated value in previous seven years.

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C/SCA/7493/2020 ORDER Similar work means: Bidder should have successfully executed collection. Transportation and disposal of waste of GPCB authorized TSDF/CETP site of E&P industry/drilling waste in last seven years.

Financial Criteria:

(i) Turnover : Bidder should 'have achieved minimum annual turnover of 50% of the annualized estimated value in any of the last two financial results

(ii) Net worth: Net Worth should be positive as per last audited financial results

(iii) Working Capital: The working capital should not be less than 10% of the annualized estimated value as per the last audited financial results.

The tendered services include collection, transportation and disposal of sludge waste to TSDF facility. TSDFs have only disposal facility and they are not experienced in collection and transportation of the waste. We have successfully executed works which included safe collection, transportation and disposal of the sludge waste to TSDF sites. Also, many TSDFs do not operate in monsoon seasons. In such cases, we can arrange to dispose the waste to other TSDFs who are functioning in monsoon seasons. The above proposed BEC will invite better competition and at the same time will be as per PSU/CVC guidelines. This BEC will give opportunity to not only TSDFs but service providers like us who in the past have successfully executed several similar works.

Some Other criteria may also be added in this tender.

* The scope of work should also include provision for hiring of services of GPCB approved Common Effluent Treatment Plant (CETP) in case there is any requirement for disposal of liquid waste.

 MSME bidder should get benefit of EMD exemption and Price preference.

 GST should be extra on our quoted rate.

We had been some drought that, this tender BEC was Page 5 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER made only for DETOX/ SEPPL group. Therefore, this type of BEC sited in this tender. In this BEC no any contractors will be qualified.

We here by giving our opinion as per our knowledge and industry practice for this tender. For your reference please. Kindly consider our above mentioned requests please."

3.6 It is the case of the petitioner that the BEC inclusion of clause B.1.2.0 in the NIC having been drafted with a view to favour DETOX / SEPPL group.

3.7 It is further case of the petitioner that, the company has experience for similar type of work in E&P Industry and has successfully executed the work of waste management for several E&P companies including IOCL, NTPC, GAIL, GSPC, and also having knowledge of all rules and regulations related to Rule, 2016 and have successfully executed the work as per Central Pollution Control Board and Gujarat Pollution Control Board.

3.8 It is case of the petitioner that respondents were called upon to amend the BEC as suggested during the pre-bid meeting by serving several notices, stating inter-alia that the BEC drafted in the NIC is nothing but to favour the DETOX / SEPPT company and the Corporation did not have follow the CVC guidelines.

4. Being aggrieved by the aforesaid BEC of the NIC, the petitioner company has preferred the present writ petition to direct the respondent Corporation to amend the BEC as proposed by the petitioner Company and issue corrigendum in this regard.

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C/SCA/7493/2020 ORDER

5. The respondent - Corporation has filed detailed affidavit denying the contentions raised by the petitioner in the petition, stating as follows:

5.1 The petition does not require to be entertained for the reason that BEC is required to be determined by party inviting tender on the basis of requirement and purpose of the work for which NIC has been issued.

5.2 The terms and conditions having incorporated on the basis of statutory requirement, which is privilege of the corporation looking to scope of work, which does not require any interference.

5.3 The petitioner does not have any justification or locus to file the present petition as they have not submitted the tender bid and consequently, petition deserves to be dismissed. 5.4 At the time of pre-bid meeting, the petitioner was informed and explained about the statutory requirement under which, the condition under challenge, is necessary condition of tender. 5.5 Petitioner has not obtained requisite expertise / qualification to deal with hazardous waste and at the time of pre-bid meeting, they were aware of the conditions and by that time, they could have obtained the necessary approvals from the Gujarat Pollution Control Board, but the petitioner have not obtained the same. Therefore, petitioner is not eligible for the work and they cannot challenge the terms and conditions of the NIC, which has been drafted in compliance with statutory requirement.

6. The petitioner Company has also filed rejoinder to affidavit filed by respondent Corporation and denied the contentions raised by respondent Corporation.

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C/SCA/7493/2020 ORDER

7. Heard Mr. Chirag K. Sukhwani, learned advocate for the petitioner company and Mr. Kunan Naik, learned advocate for respondents ONGC. The respective advocates were permitted to file their written submissions, which are taken on record.

8. Mr. C.K. Sukhwani, learned advocate for the petitioner has mainly contended as under :

8.1 It was contended that the terms and conditions of the eligibility criteria of the work are unreasonable, arbitrary, actuated by malice and tailor-made to suit the DETOX/ SEPPL Company Limited and exclude the petitioner from participating in the bid. In support of this contention, the reliance is placed on the decision in case of United India Periodicals Pvt. Ltd Vs. M/s. M&N Publication Ltd and others, reported in (1993) 1 SCC p.446, wherein, it was observed that if the decision influenced by extraneous, irrelevant consideration, would vitiate the decision and the discretion of authorities is not absolute and must be governed by some norms and procedure in public interest and for public good.

8.2 It is further contended that the petitioner company having all necessary eligibility and has experience in the field of hazardous waste management having team of experience engineers with all necessary infrastructure and have executed lot of similar work with PSUs company like GAIL, IOCL. The other PSU companies had followed the technical eligibility bid criteria suggested at the pre-bidding meeting. 8.3 It was further contended that the petitioner company having fundamental right to carry the business guaranteed by the Constitution of India and by alleged BEC of the NIC, the right of the petitioner has been infringed on account of impugned Page 8 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER eligibility criteria, which required modification to the extent making others eligible so that there will be fair competition and in larger public interest the tender process becomes more competitive.

8.4 It was further contended that the eligibility criteria are not in compliance with relevant guideliens issued by the Central Vigilance Commission (for short 'CVC') in relation to the tender process.

8.5 Mr. Sukhwani, learned advocate for the petitioner has invited our attention to the bid documents filed by the petitioner Company with other PSUs like GAIL, IPCL, IOCL, GSPC, NTPC, BERL and emphasis that all the PSUs have been following the CVC guidelines and having similar conditions for eligibility criteria which have been suggested at the time of pre-bidding meeting. Thus, the action of the respondent Corporation while fixing the terms and conditions of eligibility criteria for the work is seems to be arbitrary, discriminatory, illegal and not adhering to the CVC guidelines and against the public interest, required to be amend suitably in larger public interest.

9. Mr. Chirag Sukhwani, learned advocate appearing for the petitioner placed reliance on the following judgments :

(i) BSN Joshi & Sons Ltd Vs. Niar Coal Services Ltd, reported in 2006 (11) SCC 548, paras 61 & 69

(ii) Sterling Computers Ltd Vs. M&N Publication Ltd and another, reported in 1993 (1) SCC 445

(iii) New Horizons Ltd and another Vs. Union of India and others, reported in (1995) 1 SCC 478

(iv) 2016(3) SCC 569 Page 9 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER

(v) Rakesh Construction Co. Vs. Ahmedabad Urban Development Authority, Decision rendered in SCA No. 19313 of 2017 dtd 16.01.2018.

10. On the above premise, learned advocate for the petitioner prays that the petition be allowed.

11. On the other hand, Shri Kunan Naik, learned advocate appearing for the respondent Corporation ONGC raised the following contentions:

11.1 It was contended that the Court may not interfere with the Bid Evolution Criteria unless and until it is arbitrary, unreasonable and discriminatory and scope of judicial review would be limited to examine the decision making process on the ground of malafide or an act of nepotism to favour particular bid. It was further contended that the terms of invitation to tender are not open to judicial scrutiny, the same being in the realm of contract and the respondent Corporation have a free hand in setting the terms of the tender and court cannot strike down the terms of tender prescribed by the Government because it feels that some other terms of the tender would have been framed wiser or logical. On the factual aspect, contention was raised that the work in question involves highly technical and methodological work such as lifting of sludge from sludge beds of effluent treatment plants, packing and loading of sludge as per Gujarat Pollution Control Board prescribed procedure, transportation of sludge and disposal thereof by the approved TSDF operator. After came into force Rules 2016, framed under the Environment Protection Act and the guidelines issued by the Pollution Control Board, it is mandatory for the Page 10 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER respondent Corporation to obtain membership of common TSDF site for the disposal of waste and the occupier of the unit shall have to obtain membership of active TSDF site. Thus, the impugned eligibility criteria having been incorporated on account of statutory provision. Therefore, in absence of any proof of malafide, arbitrariness, or unreasonableness, the eligibility criteria cannot be examined or amend under the power of judicial review. In support of this submission, learned counsel for the respondent heavily relied on the decisions rendered by this Court and Supreme Court in case of (i) Gold Stone Infratech Limited Vs. State of Gujarat, reported in (2018) SCC On-line 262. (ii) Director of Education and others Vs. Educom Datamatics Ltd, reported in (2004) 4 SCC 19, (iii) Central Coal Fields Ltd Vs. SLL - SMN (Joint Venture Consortium), reported in (2016) 8 SCC 622, (iv) Municipal Corporation, Ujjain and others Vs. BVG India Limited and others, reported in (2018) 5 SCC 462.

11.2 It was further contended by learned advocate Mr. Kunan Naik that the notice inviting tender being a highly technical matter, may not offer large participation considering requirement high priority qualification and high level expertise. Therefore, the petitioner company without acquiring such eligibility, challenge for removal of eligibility criteria, which is statutory in nature, is not permissible in eye of law.

11.3 It was further contended that the allegation of favouritism being made by the petitioner against the respondent Corporation, alleging that the eligibility criteria having been drafted to favour the certain entities like DETOX/ SEPPL group. On this issue it was submitted that the petition is liable Page 11 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER to be dismissed for non-joinder of necessary parties like DETOX/SEPPL group. There is no material to substantiate the eligibility criteria contained in the NIC are tailor made suit to the said group.

11.4 It was further submitted by the learned advocate Mr. Kunan Naik that the petitioner has no locus to file present petition as the company has no even submitted the tender bid.

11.5 It was further submitted by the learned advocate for respondent Corporation that at the time of pre-bidding conference, the petitioner company was informed and explained that the eligibility and experience criteria have been framed to cater the ONGC requirement rather than any particular capability or lack of any bidder and detailed reply to the query raised during pre-bid conference of the subject tender has been uploaded in the ONGC tender site. In view of this, rather taking remedial recourses, the petitioner company did not take prompt action and on this ground of inordinate delay, the petition require to be dismissed.

11.6 It was further submitted by learned advocate Mr. Kunan Naik, for the respondent that the subject NIT for treatment and disposal of hazardous and other waste is a highly complex contract which demands specialized skill as provided under the Rules 2016. Therefore, the CVC guidelines, as contended by the petitioner having not applicable to the present case.

12. Making the above submissions, Shri Kunan Naik, learned advocate appearing on behalf of the respondent has tried to justify the eligibility criteria of the NIC of which the petitioner is aggrieved and seeks to modify and/or amend.

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C/SCA/7493/2020 ORDER

13. No further and other submissions / contentions / grounds have been raised by the learned advocates for the respective parties.

14. We have considered oral as well as written submissions advanced by learned advocates for respective parties and have perused the records carefully.

15. The scope of judicial review in award of contract has been defined by the Supreme Court in various decisions on which the reliance has been placed by the petitioner as well as respondents. The ultimate conclusion culled out from the decisions of the Supreme Court is that the High Court can interfere in the contractual matter when the action of the tendering authority is found to be malicious, discriminatory for the process adopted or decision made is so arbitrary and irrational that the court can say the decision is such that no responsible authority reasonably and in accordance with relevant law could have reached. It has also been held that when the public interest is affected, the Court can also interfere with the contractual matter.

16. In the present case, the challenge is the terms and conditions of the NIC , more particularly, called as Bid Eligibility Criteria B.1.2.0. The petitioner company had suggested what should be the technical eligibility criteria and requested to rewrite or amend or modification of the same by issuing corrigendum. It is also the grievance of the petitioner that the said conditions were drafted to exclude the petitioner company and to favour the other group, consequently the eligibility criteria being arbitrary, unreasonable, actuated by malice and discriminatory.

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C/SCA/7493/2020 ORDER

17. Considering the facts of the present case, the identical issue raised before the Supreme Court in case of Michigan Rubber(India) Limited Vs. State of Karnataka, reported in (2012) 8 SCC 216., It is apt to refer paras 11 to 24, of the judgment for deciding the present controversy, which are reproduce hereunder for ready reference:

11) In Tata Cellular vs. Union of India, (1994) 6 SCC 651, this Court emphasised the need to find a right balance between administrative discretion to decide the matters on the one hand, and the need to remedy any unfairness on the other, and observed:

"94. (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. ... (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."

(emphasis in original) Page 14 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER

12) In Raunaq International Ltd. vs. I.V.R. Construction Ltd. & Ors. (1999) 1 SCC 492, this Court reiterated the principle governing the process of judicial review and held that the writ court would not be justified in interfering with commercial transactions in which the State is one of the parties except where there is substantial public interest involved and in cases where the transaction is mala fide.

13) In Union of India & Anr. vs. International Trading Co. & Anr., (2003) 5 SCC 437, this Court, in similar circumstances, held as under:

"15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. 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. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.

16. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in a different manner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary.

22. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted Page 15 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed.

23. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country.

(See Parbhani Transport Coop. Society Ltd. v. Regional Transport Authority, Shree Meenakshi Mills Ltd. v. Union of India, Hari Chand Sarda v. Mizo District Council and Krishnan Kakkanth v. Govt. of Kerala.)"

14) In Jespar I. Slong vs. State of Meghalaya & Ors., (2004) 11 SCC 485, this Court, in paragraph 17, held as under:

"17......fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable......"

15) In Association of Registration Plates vs Union of India & Ors., (2005) 1 SCC 679, similar issue was considered by a bench of three Judges. In that case, the dispute was about the terms and conditions of notices inviting tenders (NITs) for supply of high security registration plates for motor vehicles. The tenders have been issued by various State Governments on the guidelines circulated by the Central Government for implementing the provisions of the Motor Vehicles Act, 1988 and the newly amended Central Motor Vehicles Rules, 1989. The Page 16 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER main grievance of the appellant therein was that all notices inviting tenders (NITs) which were issued by various State Governments, contained conditions which were tailored to favour companies having foreign collaboration. Their further grievance was that the tender conditions were discriminatory as per Article 14 of the Constitution and were being aimed at excluding indigenous manufacturers from the tender process. It was also contended that in all the cases, the work of supply of high security registration plates for all existing vehicles and new vehicles was being entrusted to a single licence plates manufacturer in a State or a region and for a long period of 15 years thus creating monopoly in favour of selected bidders to the complete exclusion of all others in the field.

16) The further contention advanced therein was that creation of monopoly in favour of a few parties having connection with foreign concerns is violative of the fundamental right of trade under Article 19(1)(g) and discriminatory under Article 14 of the Constitution. It was also pointed out that in the name of implementing the amended Rule 50 of the Motor Vehicles Rules, 1989, the States are imposing conditions in the tender that would take away the existing rights of the manufacturers of plates in India.

17) On the condition laid down for prescribed minimum turnover of business, the challenge made on behalf of the petitioners therein was that fixing such high turnover for such a new business is only for the purpose of advancing the business interests of a group of companies having foreign links and support. It is impossible for any indigenous manufacturer of security plates to have a turnover of approximately 12.5 crores from the high security registration plates which were sought to be introduced in India for the first time and the implementation of the project has not yet started in any of the States.

18) On behalf of the Union of India, the State authorities and counsel appearing for the contesting manufacturers, in their replies, have tried to justify the manner and implementation of the policy contained in Rule 50 of the Motor Vehicles Rules. On behalf of the Union of India, learned ASG submitted that Rule 50 read with Statutory Order of 2001 issued under Section 109(3) of the Motor Vehicles Act, the State Governments are legally competent to formulate an appropriate policy for choosing a sole or more manufacturers in order to fulfil the object of affixation of security plates. The Scheme contained in Rule 50 Page 17 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER read with the Statutory Order of 2001 leaves it to the discretion of the State concerned to even choose a single manufacturer for the entire State or more than one manufacturer regionwise. It was pointed out that such a selection cannot be said to confer any monopoly right by the State on any private individual or concern. He further pointed out that the tender conditions were formulated taking into account the public interest consideration and aspects of high security.

19) While considering the above submissions, the three- Judge Bench held as under:

"38. In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, 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, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or encroach on fundamental rights of the class of intending tenderers under Article 19 of the Constitution. On the basis of the submissions made on behalf of the Union and State authorities and the justification shown for the terms of the impugned tender conditions, we do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover are intended only to keep indigenous manufacturers out of the field. It is explained that on the date of formulation of scheme in Rule 50 and issuance of guidelines thereunder by the Central Government, there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimension, on a long-term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates.

39. The notice inviting tender is open to response by all and even if one single manufacturer is ultimately selected for a region or State, it cannot be said that the State has created a monopoly of business in favour of a private party. Rule 50 permits the RTOs concerned themselves to implement the policy or to get it implemented through a Page 18 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER selected approved manufacturer.

40. Selecting one manufacturer through a process of open competition is not creation of any monopoly, as contended, in violation of Article 19(1)(g) of the Constitution read with clause (6) of the said article. As is sought to be pointed out, the implementation involves large network of operations of highly sophisticated materials. The manufacturer has to have embossing stations within the premises of the RTO. He has to maintain the data of each plate which he would be getting from his main unit. It has to be cross-checked by the RTO data. There has to be a server in the RTO's office which is linked with all RTOs in each State and thereon linked to the whole nation. Maintenance of the record by one and supervision over its activity would be simpler for the State if there is one manufacturer instead of multi- manufacturers as suppliers. The actual operation of the scheme through the RTOs in their premises would get complicated and confused if multi-manufacturers are involved. That would also seriously impair the high security concept in affixation of new plates on the vehicles. If there is a single manufacturer he can be forced to go and serve rural areas with thin vehicular population and less volume of business. Multi- manufacturers might concentrate only on urban areas with higher vehicular population.

43. 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. Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the Government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest. Undisputedly, the legal position which has been firmly established from various decisions of this Court, cited at the Bar (supra) is that government contracts are highly valuable assets and the court should be prepared to enforce standards of fairness on the Government in its dealings with tenderers and contractors.

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44. The grievance that the terms of notice inviting tenders in the present case virtually create a monopoly in favour of parties having foreign collaborations, is without substance. Selection of a competent contractor for assigning job of supply of a sophisticated article through an open-tender procedure, is not an act of creating monopoly, as is sought to be suggested on behalf of the petitioners. What has been argued is that the terms of the notices inviting tenders deliberately exclude domestic manufacturers and new entrepreneurs in the field. In the absence of any indication from the record that the terms and conditions were tailor-made to promote parties with foreign collaborations and to exclude indigenous manufacturers, judicial interference is uncalled for." After observing so, this Court dismissed all the writ petitions directly filed in this Court and transferred to this Court from the High Courts.

20) In Reliance Airport Developers (P) Ltd. vs. Airports Authority of India & Ors., (2006) 10 SCC 1, this Court held that while judicial review cannot be denied in contractual matters or matters in which the Government exercises its contractual powers, such review is intended to prevent arbitrariness and must be exercised in larger public interest.

21) In Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517, the following conclusion is relevant:

"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court.

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C/SCA/7493/2020 ORDER Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. 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 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."

22) The same principles have been reiterated in a recent decision of this Court in Tejas Constructions & Infrastructure Pvt. Ltd. vs. Municipal Council, Sendhwa & Anr., (2012) 6 SCC 464.

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 Page 21 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER purview of the executive and courts hardly have any role to play in this process except for striking down 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 fundamental right to carry on business with the Government.

24) 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 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.

18. After considering the law laid down by the Apex Court in the above case and examined the facts as well as documentary evidence produced by both the parties, now let us examine the contention raised by the petitioner.

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19. The first contention raised by the petitioner is that the eligibility criteria having been drafted with a view to favour the DETOX/ SEPPL group and considering the clause B.1.2.0, no party would eligible for the NIC and the said clauses are arbitrary, unreasonable and discriminatory, which required modification as proposed by them at the time of pre-bid meeting. Looking to the contention raised by the petitioner, we are of the considered opinion that there is no any evidence to show that the clauses having been incorporated arbitrarily or discriminatorily and to favour the certain entity as alleged in the petition. Merely making allegation without substantiate it, the allegation of favouritism cannot be inferred, unless and until it has been proved by producing cogent and convincing evidence. No material to infer any malafide design on the part of the authority. Merely because petitioner unable to compete with the bid on account of non- qualification of criteria, the terms and conditions formulated by the authority cannot be held to be discriminatory.

20. It was brought to our notice by the respondent Corporation by filing affidavit in reply that M/s. DETOX India Pvt. Ltd and M./s Saurashtra Enviro Project Ltd possesses the approval from the State Pollution Control Board and both entities possess technical and eligibility criteria. In addition to that, as pointed out by the respondent Corporation, there were around 10 qualified agencies, who possessed requisite qualifications and experience to execute the work as per the State Pollution Control Board guidelines. Record further indicates that both the entities are completely different and have submitted their bid for group A and group B as mentioned in the technical requirement of the bid. Therefore, we are not convinced with the contentions raised by the petitioner that the terms and conditions being drafted with malafide intention Page 23 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER to favour the two companies who are successful bidders. It is pertinent to note that names of qualified bidders and other explanation and/or clarification with respect to technical criteria having uploaded on the web-site of respondent Corporation as well as the same facts are available to the petitioner company, but somehow for the reasons best known to them, the same having not been produced by the petitioner Company. Thus, the allegation of favouritism made by the petitioner having no substance.

21. From the record, it transpired that the scope of work and eligibility criteria mentioned in the NIT, specifically mentioned that transport and disposal of sludge waste shall be in accordance with the provisions of Hazardous and other waste (Management of Trans Boundary Movement) Rules, 2016, framed under the Environment Protection Act, 1986 and the guidelines issued by the Central Pollution Control Board and Gujarat Pollution Control Board from time to time. The condition for eligibility criteria as prescribed under Rule 6 is mandatorily requirement to be followed by all the Companies after Rules came into force in the year 2016. The provision of Rules 6 is reproduced herewith :

Rule : 6. Grant of authorisation for managing hazardous and other wastes.- (1) Every occupier of the facility who is engaged in handling, generation, collection, storage, packaging, transportation, use, treatment, processing, recycling, recovery, pre-processing, co- processing, utilisation, offering for sale, transfer or disposal of the hazardous and other wastes shall be required to make an application in Form 1 to the State Pollution Control Board and obtain an authorisation from the State Pollution Control Board within a period of sixty days from the date of publication of these rules. Such application for authorisation shall be accompanied with a copy each of the following documents, namely:-

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(a) consent to establish granted by the State Pollution Control Board under the Water (Prevention and Control of Pollution) Act, 1974 (25 of 1974) and the Air (Prevention and Control of Pollution) Act, 1981 (21 of 1981);

(b) Consent to operate granted by the State Pollution Control Board under the Water (Prevention and Control of Pollution) Act, 1974 (25 of 1974) and/or Air (Prevention and Control of Pollution) Act, 1981, (21 of 1981);

(c) in case of renewal of authorisation, a self-certified compliance report in respect of effluent, emission standards and the conditions specified in the authorisation for hazardous and other wastes:

xxxxxx (2) On receipt of an application complete in all respects for the authorisation, the State Pollution Control Board may, after such inquiry as it considers necessary, and on being satisfied that the applicant possesses appropriate facilities for collection, storage, packaging, transportation, treatment, processing, use, destruction, recycling, recovery, pre-processing, co-processing, utilisation, offering for sale, transfer or disposal of the hazardous and other waste, as the case may be, and after ensuring technical capabilities and equipment complying with the standard operating procedure or other guidelines specified by the Central Pollution Control Board from time to time and through site inspection, grant within a period of one hundred and twenty days, an authorisation in Form 2 to the applicant, which shall be valid for a period of five years subject to such conditions as may be laid down therein. For commonly recyclable hazardous waste as given in Schedule IV, the guidelines already prepared by the Central Pollution Control Board shall be followed ........ xxxxxx"

22. In view of the aforesaid rule and considering the bid eligibility criteria, it is mandatorily for the respondent Corporation to obtain "consent to establish" under the Rules 2016. The record indicates that on 14.11.2017, the Gujarat Pollution Control Board has Page 25 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER issued the "consent to establish" to the respondent Corporation which mandates to obtain membership of TSDF site for disposal of hazardous waste as per the Rules 2016. The authorization issued by the authority has been produced by the respondent Corporation (Annexure-R1, R2 at page156 to 162) . It is also mandatory for the unit like successful bidder to obtain membership of active TSDF site for disposal of ETP sludge. The successful bidder in the present case has obtained the same, which is produced at Annexure - R3 page-163 to 176. Therefore, necessary permission for disposal of ETP sludge is granted only to certain qualified agencies who meet with the requirements and qualifications as prescribed by the authority under the statutory provisions.

23. In view of the above, we are of the considered opinion that the bidder should have Gujarat Pollution Control Board authorized site. It is statutory requirement for corporation respondent as well as all the occupiers who are in possession or generate hazardous or other waste. Therefore the criteria as prescribed for the work shows that bidder should be a TSDF which is approved by the competent authority on the date of opening technical bid and further the bidder should have facility for direct land feeling / direct sludge disposal for participating in group A or facility for incinerable sludge disposal for participating in Group B and should submit a copy of GPCB approval along with the documents to comply the eligibility criteria clause B.1.2.0

24. It is admitted facts that the petitioner was aware of the condition of the NIT and had an opportunity to obtain the necessary approvals as required by the authority. However, the petitioner did not obtain the same, meaning thereby, the petitioner company Page 26 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER do not possess the requisite expertise / qualification to execute the work mentioned in the NIT. The statutory requirement required to be followed by the respondent corporation for inclusion of the impugned clauses having not been denied by the petitioner in the rejoinder affidavit. Even the petitioner company failed to produce the necessary authorization of the GPCB to show their eligibility to execute the work.

25. In view of the above, we are unable to accept the contention that the inclusion of the impugned clauses in the bid document is malafide, arbitrary, unreasonable and is motivated to ensure that the DETOX / SEPPL group is qualified to submit bids pursuant to the NIC floated by the respondent Corporation.

26. The other contention raised by the petitioner Company is that other PSUs such as NTPC, GAIL, IOCL, BPRL and GSPC are not following such eligibility criteria. On this issue, the respondent ONGC Corporation has clarified in the affidavit in reply and draw the attention of this Court towards the bid documents of other PSUs produced by the petitioner Company, wherein, it appears that the GAIL, IOCL, BPRL floated the tender in the year 2019, 2015 and 2018 respectively, wherein, the same eligibility criteria having been prescribed. Thus, after Rules 2016 came into force, it is mandatory to obtain consent authorisation as provided under Rule 6(1) and 6(2). Therefore, the other PSU company have the Bid Evaluation Criteria, as suggested by the petitioner Company, is misconceived. Even otherwise, the bid eligibility criteria as prescribed in the NIT (Clause B.1.2.0, 2.1(a)), which is statutory requirement and accordingly, by inclusion of the same clause in the NIT, the action of the respondent Corporation cannot be termed as discriminatory and arbitrary.

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27. The third contention raised by the petitioner Company that the respondent Corporation has not followed the Central Vigilance Guidelines, while formulating the technical criteria, as a result, the scope of healthy competition having been minimized. We have carefully examined the copy of the Office Memorandum dated 17.12.2002 (Annexure - F, page-126). The Office Memorandum relates to procurement of computer hardware, DG sets, Civil and Electrical works. It is specifically mentioned therein that while framing the pre-qualification criteria the end purpose should be kept in mind. We have noticed the scope of the NIT in the present case, which is related to disposal of hazardous waste generated in various effluent plants of respondent Corporation, regulated and managed under the Hazardous and Other Waste (Management and Transboudary Movement ) Rules 2016, notified under the Environment Protection Act. The respondent Corporation as rightly stated in the affidavit in reply that the CVC guidelines are not applicable to the subject NIT which involved highly technical and specialized skill job of treatment and disposal of hazardous waste. Therefore, considering the statutory provisions as discussed above as well as the scope of the work, the respondent Corporation has formulated the impugned bid, so as to avoid environmental pollution, huge adverse impact on the public at large. Thus, the bid clause under challenge has been rightly included in the bid documents by the respondent Corporation and CVC guidelines are not applicable to the subject NIT. Even otherwise, it appears from the record that except the petitioner Company the other 10 companies were technically qualified for the execution of work of the subject NIT, which fortifies the contention of the petitioner Company that the impugned bid clause having been incorporated with an intention to exclude the petitioner Company from the bid and no other Page 28 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER company would become eligible and/or to fulfil the technical specifications. Thus, we are convinced that the impugned bid criteria so far eligibility clause incorporated as per the statutory requirement and for proper disposal of hazardous waste.

28. It is required to be noted that the petitioner company has not submitted its bid and the company is alien to the contract and there is no any privity of contract. The challenge is to bid clause of the NIT. Considering the dispute raised by the petitioner Company, it is purely a private dispute and no any public interest affected on account of inclusion of impugned bid clause. Therefore, the petitioner Company failed to make out the case that the action of the respondent Corporation for inclusion of impugned bid is contrary to public interest.

It is also required to be noted that the condition in question provided by the authority justifies the rational of such a condition, as the work involved requires strict compliance of disposal of hazardous waste as provided by the guidelines and therefore, the provision of such condition on the contrary enhances the element of public utility and ensures disposal of hazardous waste in a proper organized manner.

29. In view of the aforesaid discussion and reasons thereof, we are of the view that action of respondent Corporation for the inclusion of bid clause B.1.2.0, 2.1(a) in the NIT is neither malafide, arbitrary nor intended to favour anybody and the same does not adversely affect the public interest, consequently, the petitioner has miserably failed to make out the case for interference in exercise of extra ordinary jurisdiction under Article 226 of Constitution of India and we accordingly, hold that there is no reason to exercise the power of judicial review in the present matter, as the petitioner Page 29 of 30 Downloaded on : Fri Aug 21 01:01:40 IST 2020 C/SCA/7493/2020 ORDER has not been able to demonstrate arbitrariness, malafide, discriminatory treatment and unfairness while formulation of impugned bid B.1.2.0, 2.1(a) of the subject NIT.

30. As a result, the writ petition devoid of merit and is hereby dismissed. Notice discharged.

***** (R.M.CHHAYA, J) (ILESH J. VORA,J) NAIR SMITA V.

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