Gujarat High Court Imposes 1 Lakh Costs On 7 Event Management Firms For "Unholy Alliance" Against Gujarat University

WWW.LIVELAW.
IN
C/SCA/10009/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10009 of 2017

With
CIVIL APPLICATION NO. 1 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 10055 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
===============================================
1 Whether Reporters of Local Papers may be allowed

to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of

the judgment ?
4 Whether this case involves a substantial question of

law as to the interpretation of the Constitution of
India or any order made thereunder ?
===============================================
LABH DECOR
Versus
GUJARAT UNIVERSITY
===============================================
Appearance:
MR.ASIM PANDYA for MR JAY S SHAH(7244) for the PETITIONER(s) No.
1,2,3,4,5,6
MR MIHIR THAKORE SR. ADV. with MR JP SHAH & MR DHAVAL D
VYAS(3225) for the RESPONDENT(s) No. 2
MR SN SHELAT SR. ADV. with MRS VD NANAVATI(1206) for the
RESPONDENT(s) No. 1 & MR PRAKASH JANI, SR. ADV. with MRS VD
NANAVATI in SCA No.10055 of 2017
===========================================
CORAM: HONOURABLE MR.JUSTICE ANANT S. DAVE

and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
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Date : 17/10/2018
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE ANANT S. DAVE)
1. Both these writ petitions filed under Article 226 of the

Constitution of India challenge initiation of the tender inquiry No.
GU/ESTATE/CONV/2017-18/01 dated 2/3.5.2017 by respondent No.1
namely the Gujarat University and tender document is for leasing of
the ‘Convention Facility of Infrastructure of Gujarat University’. All
writ petitioners have common grievances since they are carrying on
the business of decoration and providing temporary infrastructure
and materials for organizing events and functions, basically the
procedure followed by respondent NO.1 in inviting bids for tender
documents, for which, tender notice was published in the newspaper
which reveal reputed agencies with capabilities with managing State-
of-Art Convention Centre facility and allied infrastructure with open
land area at Gujarat University in the centre of Ahmedabad City and
interested agencies were requested to visit the web-site of the
university so as to get terms and conditions for participating in the
tendering process. That challenge to the above, is manifolds to which
we may advert later on but before that for the sake of convenience we
may refer to a prayer clause 10 (A), (B), (C) , (D), (E) including
alternatively and amended clause (EE). The prayers of Special Civil
Application No.10055 of 2017 is substantially same as under:
“(A) This Hon’ble Court may be pleased to quash and set

aside the tender inquiry no:GU/ESTATE/CONV/2017-
18/01 (Annexure P1) and the corrigendum dated
12/5/2017 being arbitrary, malafide, contrary to law and
violative of articles 14, 19 and 21 of the Constitution of
India.
(B) This Hon’ble Court may be pleased to quash and set
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aside the basic eligibility criterion clause 4 fixing the

cutoff dated 1/04/2008 being malafide, arbitrary,
irrational and hence violative of Article 14 of the
Constitution of India.
(C) This Hon’ble Court may be pleased to quash and set

aside clause 19 providing the system of marking on the
basis of certain pre-decided objective criteria by the
respondents being mala-fide and suffering from the vice
of favoritism.
(D) The Hon’ble Court may be pleased to quash and set

aside clause 14 which gives a distinct advantage to the
Q1 bidder to have the final say in the matter of the price
bid being arbitrary and vi8lative of Article 14 of the
Constitution of India.
(E) Pending admission and final disposal of the present

petition this Hon’ble Court may be pleased to stay the
further proceedings of the tender inquiry no:
GU/ESTATE/CONV/2017-18/01.
(EE) Pending admission and final disposal of the present

petition this Hon’ble Court may be pleased to stay the
further implementation and operation of the lease deed
executed by respondent NO.1 in the favour of respondent
NO.2 and the respondent NO.2 be directed not to create
any third party rights and the respondents be directed to
maintain the status quo with regard to the lease deed.”
2. On 16.4.2018, this Court issued rule making it returnable on

22.6.2018 and refused to grant interim relief against which the
petitioners preferred SLP being Special Leave to Appeal (C) Nos. 10515
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of 2018 wherein following order was passed on 23.4.2018:
“We see no ground to entertain these petitions.

Accordingly, the special leave petitions are dismissed.
However, we request the High Court to disposed of
the matter(s) as early as possible.
Pending applications stand disposed of.”
2.1. In view of the above request and order passed in SLP, we have
taken up these matters for final hearing with consent of the parties.
3. It is the case of the petitioners that respondent No.1 University

being the owner of the land admeasuring 3,19,675 sq.mts bearing
Final Plot No.22 of Town Planning Scheme No.31 situated near Helmet
Circle, Memnagar, Ahmedabad, established Exhibition Hall and
Convention Centre since the University desired to lease the aforesaid
land.
4. As per subject NIT pre-bid meeting was to be held on 8.5.2017.

According to the petitioners many issues were raised in the above
meeting but were not paid any heed. A corrigendum was issued by
respondent NO.1 on 12.5.2017, whereby eligibility and financial
criteria of the tender document were modified. As per the
corrigendum, date of submission Technical Bid Part-I in physical form
was extended upto 19.5.2017 upto 2.00 p.m. Lease deed draft was
modified and changes were effected in “Evaluation of criteria of
qualification” about basic eligibility criteria whereby Point No.3 is
revised as “Average annual financial turnover of the bidding firm
should not be less than Rs.20 crores of last three years (2016-2017,
2015-2017 and 2014-2015)”. Point NO.4 was revised as “The year of
establishment of the bidder shall be not after 1st April, 2008”. So far
as financial criteria at Point NO.1 is concerned it was revised as
“Average annual financial turnover of the bidding firm should not be
less than Rs.20 crores of last three years”. Even objective criteria
pertaining to turnover vis-a-vis marks to be awarded for such
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turnover was revised and replaced as under:
25 crores to 50 crores 10 marks

About operation and management/leasing of similar property in

Public Private Partnership firm or operation mode with any
government undertaking for the turn over of
Rs. 20 crores to 25 crores 10 marks

more than 26 crores 15 marks.
Point No.5 with regard to net worth vis-a-vis turn over and
marks to be awarded was also revised for
25 crores 10 marks
50 crores 20 marks
Point No.6 with regard to profit before Tax was revised and
replaced in the contention of turnover and marks to be awarded
more than 21 crores 20 marks
Point NO.7 pertaining to Bank Solvency Certificate was revised

for the turn over
5. After corrigendum was issued by modifying the conditions as

above, Special Civil Application NO. 9923 of 2017 was preferred on
12.5.2017 and two other writ petitions being Special Civil Applications
No. 10009 of 2017 and 10055 of 2017 by other writ petitioners.
Initially as per oral order dated 19.6.2017 while issuing notice making
it returnable on 8.6.2017 and it was made clear that any further action
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taken pursuant to impugned notice inviting tenders shall be subject to

further orders passed by the Court. On the very same day, the tenders
were submitted and the technical bids were opened. On 26.5.2017
intimation to the qualified bidders for ‘power point presentation’ on
the subjective criteria was sent and upon power point presentation
held on 29.5.2017 to qualified bidders marks were awarded. On the
very same day later on financial bids were opened, in which,
respondent No.2 was declared as technically qualified as Q1 and
highest financial bid as H1 was proposed to be awarded the tender
and pursuant to which the bank security was also furnished by
respondent No.2.
6. So far as Special Civil Application No. 9923 of 2017 is

concerned, earlier Gandhi Corporation preferred writ petition being
Special Civil Application No.13390 of 2017 which came to be
dismissed by judgement and order dated 19.7.2017 passed by this
Court against which Special Leave to Appeal (C) No. 18597 of 2017 was
preferred before the Apex Court and as per order dated 21.7.2017
Special Leave Petition came to be disposed of. When the above order
was passed, the Apex Court has taken note of successful bidder
offering Rs. 1,10,00,000/- per month towards rent of the property and
Gandhi Corporation was allowed to continue for a period commencing
from 1.6.2017 till 30.4.2018 on the condition to pay Rs.1,10,00,000/-
per month.
7. In the backdrop of above fatual scenario Mr. Asim Pandya,

learned advocate appearing for the writ petitioners of Special Civil
Application No. 10009 of 2017 would contend that notice inviting
tenders was for leasing the property and therefore, challenge to
subject NIT is to be considered keeping in mind above aspect. By
carrying out amendment so granted by this Court as per order dated
10.4.2018 and it was averred on oath in the affidavit-in-reply filed by
respondent No.1 on 5.2.2018 that the University had executed the
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registered lease deed in favour of the highest bidder M/s. Lallooji &
Sons and since respondent NO.2 herein and initial order was passed
while issuing the notice on 19.5.2017 by this Court whereby notice
inviting tender was made subject to further orders passed by the
Court, the execution of lease deed dated 16.10.2017 by respondent No.
1 in favour of respondent NO.2 is also illegal.
8. At the outset, it is submitted that non-participation of the

petitioners in the tender process as such is no ground for not
considering the challenge to notice inviting tenders inasmuch as
participation by the petitioners in the tender process would have been
an exercise in futility and also an empty formality for the petitioners.
The conditions and clauses of subject NIT including those conditions
which were revised, replaced and modified/amended of fixing basic
eligibility and technical bid evaluation criteria wherein turnover of the
bidder was to be considered for awarding marks for bid evaluation.
Introduction of such criteria had no rational or any nexus with notice
inviting tenders for leasing out the property in question. Further, no
material exist of whatsoever in nature with respondent No.1-
University to depart or deviation from settled practice or any
experience with regard to tender procedure followed for the preceding
years commencing from 2012 onwards and subjective criteria so
revised amended, replaced and modified including that of eligibility
criteria is with sole purpose to favour respondent No.2 and such
criterias incorporated by way of corrigendum issued on 12.5.2017 are
designed and tailor made to suit respondent NO.2 only and to oust
other bidders from the bidding process.
9. Ordinarily, according to learned counsel for the petitioners rule

for notice inviting tenders may be commercial or otherwise is that of
1% or 2% EMD/bid security amount of total contract value and in the
facts of this case the above ordinary rule is not adhered to and the
amount of EMD is exorbitant and bids security of Rs. 2 crores for the
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tender cost of Rs.11,50,00,000/- for which no explanation is provided

and, therefore, 20% of EMD of the tender value is not only dis-
proportionate but it is onerous condition and not capable of
complying and, therefore, such harsh condition deprives and
discourage other interested persons though having experience and
capability in the field of subject tender.
10. Next, it is contended that fixing of cut off date namely 1.4.2007
is arbitrary and has no nexus with the objects sought to be achieved
namely, to fetch highest price for the property in question. That the
basic eligibility criteria so provided in the tender document require
that the establishment of a bidder proposing to participate in the
tender process should be prior to 1.4.2007 and such bidder should
have turn over of more than Rs. 25 crores for last three financial years
and that such cut off date prescribed initially solely with a view to
oust the existing contractor M/s. Gandhi Corporation and such other
establishments who might have started their business after 1.4.2007.
No doubt as per corrigendum dated 12.5.2017, the cut off date is
changed from 1.4.2007 to 1.4.2008 again in arbitrary manner and
devoid of any logic or rational behind it, realizing gross blunder that it
would result into discrimination and may oust other bidders and
therefore, such a change apparently would reveal that M/s. Gandhi
Corporation may also qualify who was holding the contract for earlier
period just to make a show. That change of criteria with regard to
experience of 5 years to 9 years is again revealed mala fide intention
on the part of respondent No.1 since for the earlier period namely
2012 to 2017 the experience so required was only of 5 years.
11. Likewise, the criteria about turn over of Rs. 25 crore or more for
tender contract value of Rs.11,50,00,000/- was also highly irrelevant
and not germane to the purpose for which, the property in question
was to be leased out. That fixation of criteria of turn over was also
with a view to help respondent No.2 who alone was satisfying such
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criteria. Again in the corrigendum dated 12.5.2017 the criteria for

turn over was reduced from Rs.25 crores to 20 crores.
12. In the tender process, it is submitted no subjective criteria could

be incorporated and what is to be considered is qualification of a
bidder qua technically and of fetching higher price of the subject
property, such provisions of subjective criteria in tender document is
vulnerable to manipulation and irregularities for selecting the bidder.
It lacks bonafide much less any rational or even logic behind it. As
submitted earlier, it was about leasing of the property of Respondent
NO.1-University what is expected of lessee is to see that the property
should be used for lawful purpose and usage thereof and do not result
into any damage or value of the property. Ordinarily, only in a Joint
Venture/Private Partnership Enterprise such subjective criterias are
incorporated. Our attention is also invited to the lease agreement
dated 16.10.2017 attached to the tender and Section 108 of the
Transfer of Property Act which would reveal irrelevance and futility of
introducing subjective criteria.
13. By taking us to the procedure if any followed by respondent

NO.1-University for incorporating such onerous terms and conditions
whether preceded by any minutes of the meeting or deliberations or
any resolution passed by respondent NO.1-University insisting
incorporation of such conditions based on any experience in the past
which require any improvement. However, no such material is placed
on record and based on the principle of doctrine of proportionality the
burden of proof is upon respondent No.1 to justify the reasonableness
and rationale behind the terms and conditions of the subject tender.
By taking us to corrigendum dated 12.5.2017 it is submitted that by
way of such corrigendum terms and conditions of NIT were
substantially revised, replaced or modified. It was incumbent upon
respondent NO.1-University to issue fresh public notice and by not
doing so respondent NO.1-University has not acted in fair and
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transparent manner. Even clause-12 of notice inviting tenders allows

respondent NO.1-University to issue clarifications and not for
changing, amending, regularizing or revising basic eligibility criteria or
other such terms and conditions. At the most, respondent NO.1 was
entitled to correct manner, mistakes or seek clarifications about
inadequacy or any discrepancies in the offer submitted by bidders qua
minor lacunas.
14. Even changing the cut off line from 1.4.2007 to 1.4.2008
whereby M/s. Gandhi Corporation became eligible to bid was also a
sham and amounts formation of a cartel by a qualified bidders, since
M/s. Gandhi Corporation had offered only Rs. 2 lakhs above the upset
price fixed in the tender and third bidder M/s. Deepali Designs and
Exhibits was a person of respondent NO.2 and all three acted in
collusion to see that respondent NO.2 fulfills all terms and conditions
of NIT and become successful bidder. An open offer is made by the
petitioner No.1 that he is ready and willing to offer Rs.13.51 crores
and commensurate with that also ready and willing to furnish solvent
security or any other conditions suitable so that bonafide of the
petitioner can be considered in case if this Court is not inclined to
order invitation of fresh tender.
15. Thus, collectively based on submissions as above, in the

backdrop of factual aspects emerging on record of the case the whole
exercise of floating notice inviting tenders by respondent NO.1 is
nothing but unjust, unreasonable, discriminatory and colourable
exercise consisting of legal malice and by all means against public
interest which is not expected of respondent NO.1-University a ‘State’
withing meaning of Article 12 of the Constitution of India, and
expected to act in a fair and transparent manner so as to rule out an
iota of irregularities and illegality both when such an exercise is in
public domain and, therefore, it was a bounden duty of respondent
NO.1 to have followed the basic norms of transparency and fairness
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and by not doing so, respondent No.1 has exercised its power in
violation of Article 14 and 19 of the Constitution of India and
therefore requires to be quashed and set aside.
16. Learned advocate for the petitioners relied on following

decisions in support of his various contentions namely Reliance
Energy Limited and Ors. vs. Maharashtra State Road Development
Corporation Ltd. and Ors. reported in (2007) 8 SCC 1 and
particularly paragraphs 22 to 25 in support of the contentions there
cannot be subjectivity in tender inquiry.
“22. We find merit in this civil appeal. Standards applied

by courts in judicial review must be justified by
constitutional principles which govern the proper exercise
of public power in a democracy. Article 14 of the
Constitution embodies the principle of "non-
discrimination". However, it is not a free- standing
provision. It has to be read in conjunction with rights
conferred by other articles like Article 21 of the
Constitution. The said Article 21 refers to "right to life". In
includes "opportunity". In our view, as held in the latest
judgment of the Constitution Bench of nine-Judges in the
case of I.R. Coelho vs. State of Tamil Nadu (2007) 2 SCC 1,
Article 21/14 is the heart of the chapter on fundamental
rights. It covers various aspects of life. "Level playing
field" is an important concept while construing Article
19(1)(g) of the Constitution. It is this doctrine which is
invoked by REL/HDEC in the present case. When Article
19(1)(g) confers fundamental right to carry on business to
a company, it is entitled to invoke the said doctrine of
"level playing field". We may clarify that this doctrine is,
however, subject to public interest. In the world of
globalization, competition is an important factor to be
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kept in mind. The doctrine of "level playing field" is an

important doctrine which is embodied in Article 19(1)(g) of
the Constitution. This is because the said doctrine provides
space within which equally-placed competitors are
allowed to bid so as to subserve the larger public interest.
"Globalization", in essence, is liberalization of trade.
Today India has dismantled licence-raj. The economic
reforms introduced after 1992 have brought in the
concept of "globalization". Decisions or acts which results
in unequal and discriminatory treatment, would violate
the doctrine of "level playing field" embodied in Article
19(1)(g). Time has come, therefore, to say that Article 14
which refers to the principle of "equality" should not be
read as a stand alone item but it should be read in
conjunction with Article 21 which embodies several
aspects of life. There is one more aspect which needs to be
mentioned in the matter of implementation of the afore-
stated doctrine of "level playing field". According to Lord
Goldsmith - commitment to "rule of law" is the heart of
parliamentary democracy. One of the important elements
of the "rule of law" is legal certainty. Article 14 applies to
government policies and if the policy or act of the
government, even in contractual matters, fails to satisfy
the test of "reasonableness", then such an act or decision
would be unconstitutional.
23. In the case of Union of India and another vs.

International Trading Co. and another - (2003) 5 SCC
437, the Division Bench of this Court speaking through
Pasayat, J. had held :
"14. It is trite law that Article 14 of the Constitution

applies also to matters of governmental policy and if the
policy or any action of the Government, even in
contractual matters, fails to satisfy the test of
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reasonableness, it would be unconstitutional.
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 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 heart beat 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 reasons, 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."
24. When tenders are invited, the terms and conditions

must indicate with legal certainty, norms and
benchmarks. This "legal certainty" is an important aspect
of the rule of law. If there is vagueness or subjectivity in
the said norms it may result in unequal and
discriminatory treatment. It may violate doctrine of "level
playing field".
25. In the case of Reliance Airport Developers (P) Ltd. v.
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Airports Authority of India and others -(2006) 10 SCC 1,

the Division Bench of this Court has held that in matters
of judicial review the basic test is to see whether there is
any infirmity in the decision-making process and not in
the decision itself. This means that the decision-maker
must understand correctly the law that regulates his
decision- making power and he must give effect to it
otherwise it may result in illegality. The principle of
"judicial review" cannot be denied even in contractual
matters or matters in which the Government exercises its
contractual powers, but judicial review is intended to
prevent arbitrariness and it must be exercised in larger
public interest. Expression of different views and opinions
in exercise of contractual powers may be there, however,
such difference of opinion must be based on specified
norms. Those norms may be legal norms or accounting
norms. As long as the norms are clear and properly
understood by the decision-maker and the bidders and
other stakeholders, uncertainty and thereby breach of
rule of law will not arise. The grounds upon which
administrative action is subjected to control by judicial
review are classifiable broadly under three heads, namely,
illegality, irrationality and procedural impropriety. In the
said judgment it has been held that all errors of law are
jurisdictional errors. One of the important principles laid
down in the aforesaid judgment is that whenever a
norm/benchmark is prescribed in the tender process in
order to provide certainty that norm/standard should be
clear. As stated above "certainty" is an important aspect of
rule of law. In the case of Reliance Airport Developers
(supra), the scoring system formed part of the evaluation
process. The object of that system was to provide
identification of factors, allocation of marks of each of the
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said factors and giving of marks had different stages.

Objectivity was thus provided.”
I. Global Energy Ltd and Ors. vs. Adani Exports Ltd. and Ors.
reported in AIR 2005 (SC) 2653 (paragraph 9 to 10)
“9. In Tata Cellular v. Union of India AIR 1996 SC 11, a

Three Judge Bench has explained what is a tender and
what are the requisites of a valid tender. It has been held
that the tender must be unconditional and must conform
to the terms of the obligation and further the person by
whom the tender is made must be able and willing to
perform his obligations. It has been further held that the
terms of the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of
contract. In Air India Ltd. v. Cochin International Airport
Ltd. 2000 (2) SCC 617 the same view was reiterated that
the State can fix its own terms of invitation of tender and
that it is not open to judicial scrutiny. Whether and in
what conditions the terms of a notice inviting tenders can
be a subject matter of judicial scrutiny, has been
examined in considerable detail in Directorate of
Education v. Educomp Datamatics Ltd. 2004(4) SCC 19.
The Directorate of Education, Government of National
Capital Territory of Delhi had taken a decision to establish
computer laboratories in all Government schools in NCT
area and tenders were invited to provide hardware for
this purpose. For the final phase of 2002-03, tenders were
called for 748 schools and the cost of project was approx.
Rs.100 crores. In view of the difficulty faced in the earlier
years where the lowest tenderers were not able to
implement the entire project, a decision was taken to
invite tenders from firms having a turnover of Rs.20
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crores or more for the last three financial years ending

with 31.3.2002, as it was felt that it would be easier for
the department to deal with one company which is well
managed and not with several companies. Some of the
firms filed writ petitions in Delhi High Court challenging
the clause of the NIT whereby a condition was put that
only such firms which had a turnover of Rs.20 crores or
more for the last three financial years would be eligible. It
was contended before the High Court that the aforesaid
condition had been incorporated solely with an intent to
deprive a large number of companies imparting computer
education from bidding and monopolize the same for big
companies. The writ petition was allowed and the clause
was struck down as being arbitrary and irrational. In
appeal, this Court reversed the judgment of the High
Court basically on the ground that the terms of the
invitation to tender are not open to judicial scrutiny, the
same being in the realm of contract and the Government
must have a free hand in settling the terms of the tender.
The courts would not interfere with the terms of the
tender notice unless it was shown to be either arbitrary or
discriminatory or actuated by malice. It was further held
that while exercising the power of judicial review of the
terms of the tender notice, the Court cannot order change
in them.
10. The principle is, therefore, well settled that the terms
of the invitation to tender are not open to judicial scrutiny
and the Courts cannot whittle down the terms of the
tender as they are in the realm of contract unless they are
wholly arbitrary, discriminatory or actuated by malice.
This being the position of law, settled by a catena of
decisions of this Court, it is rather surprising that the
learned Single Judge passed an interim direction on the
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very first day of admission hearing of the writ petition

and allowed the appellants to deposit the earnest money
by furnishing a bank guarantee or a bankers' cheque till
three days after the actual date of opening of the tender.
The order of the learned Single Judge being wholly illegal,
was, therefore, rightly set aside by the Division Bench.
II. Directorate of Education and Ors. vs. Educomp Datamatics

Ltd. and Ors. reported in AIR 2004 SC 1962 (Paragraph 9 to 12)
9. It is well settled now that the courts can scrutinize

the award of the contracts by the government or its
agencies in exercise of its powers of judicial review to
prevent arbitrariness or favoritism. However, there are
inherent limitations in the exercise of the power of judicial
review in such matters. The point as to the extent of
judicial review permissible in contractual matters while
inviting bids by issuing tenders has been examined in
depth by this Court in Tata Cellular vs. Union of India
[1994 (6) SCC 651]. After examining the entire case law
the following principles have been deduced.
"94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in

administrative action.
(2) The court does not sit as a court of appeal but merely
reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the
administrative decision. If a review of the administrative
decision is permitted it will be substituting its own decision,
without the necessary expertise which itself may be
fallible.
(4) The terms of the invitation to tender cannot be open to
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judicial scrutiny because the invitation to tender is in the

realm of contract. Normally speaking, the decision to
accept the tender or award the contract is reached by
process of negotiations through several tiers. More often
than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In

other words, a fair play in the joints is a necessary
concomitant for an administrative body functioning in an
administrative sphere or quasi-
administrative sphere. However, the decision must not

only be tested by the application of Wednesbury principle
of reasonableness (including its other facts pointed out
above) but must be free from arbitrariness not affected by
bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative

burden on the administration and lead to increased and
unbudgeted expenditure.
[Emphasis supplied]
10. In Air India Limited vs. Cochin International Airport

Limited [2000 (2) SCC 617], this Court observed:
"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 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
Page 18 of 78
accept the offer even 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."
[Emphasis supplied]
11. This principle was again re-stated by this Court in

Monarch Infrastructure (P) Ltd. vs. Commissioner,
Ulhasnagar Municipal Corporation and Others [2000 (5)
SCC 287]. It was held that the terms and conditions in the
tender are prescribed by the government bearing in mind
the nature of contract and in such matters the authority
calling for the tender is the best judge to prescribe the
terms and conditions of the tender. It is not for the courts
to say whether the conditions prescribed in the tender
under consideration were better than the one prescribed in
the earlier tender invitations.
12. It has clearly been held in these decisions that the

terms of the invitation to tender are not open to judicial
scrutiny the same being in the realm of contract. That the
government must have a free hand in setting the terms of
the tender. It must have reasonable play in its joints as a
necessary concomitant for an administrative body in an
administrative sphere. The courts would interfere with the
administrative policy decision only if it is arbitrary,
discriminatory, mala fide or actuated by bias. It is entitled
to pragmatic adjustments which may be called for by the
particular circumstances. The courts cannot strike down
Page 19 of 78
the terms of the tender prescribed by the government

because it feels that some other terms in the tender would
have been fair, wiser or logical. The courts can interfere
only if the policy decision is arbitrary, discriminatory or
mala fide.
(emphasis supplied)
That terms of tender are subject to judicial review if they are

found to be arbitrary, mala fide and irrational.
17. In case of Global Energy Ltd and Ors. (supra) wherein

contention was raised that exemption of EMD granted to
Government/Semi Government/Public Sector unit was discriminatory
and highest offer of the petitioner-Global Energy was not considered
since it lacked requisite license. Though in the above case, contract
valuing more than Rs.100 crores for which only Rs. 30 lakhs EMD was
insisted and it was held that such condition was not arbitrary. Of
course there was o contention raised about extensive EMD. In the
Directorate of Education and Ors (surpa) based on past experience of
the contractor eligibility criteria was fixed to Rs.2O crores in a contract
value and put forward was more than Rs.100 crores and in the facts of
this case, no such bad past experience is brought on record. In the
case of Michigan Rubber (India) Ltd. vs. The State of Karnataka and
Ors. reported in (2012) 8 SCC 216 wherein certain terms and
conditions were incorporated in the tender document but the same
was after detail deliberation and upon advise of the expert committee
and, therefore, the court did not find such conditions to be arbitrary
or irrational. No such material exist on record of the case. By relying
on two other decisions namely Kalabharati Advertising vs. Hemant
Vimalnath Narichania and Ors. reported in AIR 2010 SC 3745. In
the context of submissions on legal malice particularly when in the
above case order passed by the Corporation was vitiated in not
recording reasons and violative of principle of nature justice and in
Page 20 of 78
the facts of this case there is conscious violation of the law to the
prejudice of another, a depraved inclination on the part of the
authority to disregard the rights of others and apparently lease deed is
executed for an unauthorised purpose, since it is a deliberate act in
discretionary to the rights of others. The decision in the case of
Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar
Municipal Corporation and Ors. reported in AIR 2000 SC 2272 it
was held by the Apex Court that tender process should be fair and not
arbitrary and when it is borne out from the record that such process
was tainted with malafide, discrimination and having no nexus with
policy or object the award of contract quash and set aside by the High
Court and calling for fresh tender was justified by the Apex Court
lastly about arbitrariness in fixing of cut off line and burden of proof
cast upon an authority to rule out irrationality reliance was placed in
the case of D.S.Nakara and Ors. vs. Union of India (UOI) reported in
AIR 1983 SC 130 and it was emphasized that authority within
meaning of Article 12 of the Constitution of India is to strictly adhere
to twin tests of reasonable classification and the rational principle
correlated to the object sought to be achieved. In the facts of these
case the respondent NO.1 is given complete go by to fundamental
principles so elucidated by the Apex Court in various such other
decisions to which reference is made in D.S.Nakara and Ors. (supra)
and even burden is also not discharged by respondent No.1 to justify
such cut off line.
18. By relying on decision in the case of K. Beeran Kutty vs. Prl.

Secretary (Medical and Health) and Ors. reported in 2017 (5) ALT
261, the decision of learned Judge of the High Court for the State of
Telangana in the State of Andhra Pradesh particularly para 9 that it is
not open for a person, who is participated in a bidding process to
challenge the tender condition and to challenge the bidding process
and, therefore, not joining the queue of bidders by the petitioners
especially when onus conditions were imposed the stand of the
Page 21 of 78
petitioners were justified.
19. Therefore, the prayer contained in para 10 of the writ petition

be granted by quashing and setting aside subject NIT dated 2/3 rd May
2017 and also the corrigendum dated 12.5.2017 and as per amended
prayer clause (EE) of para 10 also to quash and set aside the lease deed
dated 16.10.2017 executed by respondent NO.1 in favour of
respondent NO.2 and alternatively accept the offer of the petitioners
of Rs.13.51 crores for the contract value along with suitable security to
be furnished by him for the rest of the contract period.
19.1. Learned advocate appearing for the petitioners in Special Civil

Application No. 10055 of 2017 relied on submissions made by learned
counsel for the petitioners of Special Civil Application No.10009 of
2017 and contended that conditions of NIT were tailor made so as to
suit respondent No.2 and decision making process by respondent No.1
was arbitrary and discriminatory and grounds raised in the petition
are almost identical to that of Special Civil Application No.10009 of
2017 and, therefore, detail reference is avoided at this stage.
20. Per contra, Mr. S.N.Shelat, learned senior counsel for respondent
NO.1-University would contend that no averments are made with
regard to expertise and turn over by the petitioners and the petitions
deserve to be rejected at the threshold since notice inviting tender is
not purchased by the petitioners. On the above ground the petitioners
are not entitled to invoke extraordinary jurisdiction of this Court
under Article 226 of the Constitution of India and further the
petitioners have no locus to challenge the subject NIT. The petitioners
are onlookers and sitting on the fence and lack bonafide. It is
submitted that respondent NO.1 has already executed lease deed on
16.10.2017 in favour of respondent NO.2 during pendency of the writ
petition and, therefore, any grievance in this regard by the petitioners
though amendment is granted and permitted to be carried out the
Page 22 of 78
remedy lies elsewhere and not before the writ Court.
21. Along with the above submissions our attention was drawn to
further affidavit filed on behalf of respondent No.1-University in
which, reference is made to previous litigation instituted on behalf of
M/s.Gandhi Corporation by filing Special Civil Application No. 13390
of 2017 wherein order of eviction was passed by respondent NO.1
under the provisions of the Gujarat Public Premises (Eviction of
Unauthorised Occupants) Act, 1972 and the erstwhile occupier
challenged the order of eviction which was partly modified and
confirmed by the appellate court. By the judgement and order dated
19.7.2017 of this Court the above writ petition came to be rejected and
upon a challenge by way of SLP No.1851 of 2017 the Apex Court
passed an order on 21.7.2017 dismissed the same. A reference is
already made to above order in earlier part of this judgement. So far
as Special Civil Application No.9923 of 2007 filed by M/s. Gandhi
Corporation along with present group of writ petitions liberty was
sought for to withdraw the writ petition and an order was passed
accordingly on 13.10.2017. It is not in dispute that the petitioner
attended pre-bid meeting held on 8.5.2017 in which they had raised
grievances with regard to terms and conditions of the tender
document which were taken note of. In addition to above, on 9.5.2017
representatives of the Association were invited by the Vice Chancellor
and on behalf of the Association namely, ‘Ahmedabad Decorators
Merchant Association’, it’s President expressed satisfaction over the
meeting and also tendered an apology for the conduct of unruly
members in the meeting so held earlier on 8.5.2017. No suggestion
was made thereafter. According to learned senior counsel, petitioners
are close associates of M/s. Gandhi Corporation and one of the
petitioners is brother of Mr. Hasmukh Gandhi, a close relative of
Gandhi family. At the cost of repetition, it is submitted that none of
the petitioners averred as regards to eligibility or financial strength
and experience and failed to purchase the tender document or any
Page 23 of 78
further request to participate in the bid processing, the belated offer

of Rs.13.51 crores by one of the petitioners towards contract value is a
hoax and not genuine and at the stage when lease deed is already
executed by respondent No.1 in favour of respondent NO.2 as early as
on 16.10.2017, no relief as prayed for can be granted.
22. That only consideration weighed with respondent NO.1-

University is to see that property in question forming part of subject
NIT to fetch maximum revenue/rent and, therefore, corrigendum was
issued on 12.5.2017 and out of three qualified bidders respondent
NO.2 ranked H1 and Q1 both having made offer of Rs.12.51 crores and
being a successful bidder the lease deed is executed in his favour. At
this stage, when entire tender process is completed upon handing over
the possession of the property in question by M/s. Gandhi Corporation
to respondent No.1 University and M/s. Lallooji and Sons, respondent
No.2 now granted lease hold rights and in possession exercising extra
ordinary jurisdiction under Article 226 of the Constitution of India is
not warranted.
22.1. By taking us to the various particulars i.e. of publication of

tender notice on 2.5.2017 and tender process was declared open on-
line on 3.5.2017, it is submitted that evaluation of objective criteria
has been done as per the strict compliance of the tender conditions
and particularly clause 19 of the tender evaluation criteria and as per
the instructions of the bidders including 12 and 16. It is
empathetically submitted that even introduction of subjective criteria
is based on norms prevailing to value of tender bid as a whole so as to
rule out arbitrariness or any kind of favoritism, since, it introduces
transparency and fairness in assessing criteria namely eligibility vis-a-
vis required turn over, experience in the field so as to ascertain
financial credibility and infrastructural viability of the bidder and to
have comparative assessment with and amongst bidders. By referring
to details about criterias qua eligible bidders under various heads
Page 24 of 78
namely, average turn over, similar work, single order, net worth, profit
before tax and solvency value out of total marks respondent No.2 was
awarded 70 out of 100 and the evaluation of subjective criteria was
done by the committee constituted by various persons including Vice
Chancellor of respondent No.1-University, other five members of
Executive Chancellor of University, Registered Valuer (Special Invitee),
a representative on behalf of Executive Engineer, R&B Department,
State of Gujarat and Registrar In-charge of the University and lastly
Tender Consultant. It is submitted that an explanation is given that
various subjective criterias were taken into consideration for the
evaluation which consisted of 30% weightage for determination of Q1
bidder and such eleven criterias based on scientific management of
the property and on power point presentation with other documents
the assessment was made accordingly in which respondent No.2
secured 22% out of total marks. The final outcome of the tender
qualifying evaluation, in which total evaluation namely objective as
well as subjective criteria wherein total marks secured by respondent
NO.2 was 92 out of 100. Even the financial bids were opened in the
presence of authorised representative of the University on 29.5.2017
whereby respondent No.2 was ranked H1 having highest offer of
Rs.12.51 crores which was more than the upset price of contract value
and price quoted by other bidders.
23. By emphasizing on a technical bid, it was divided into two parts

objective and subjective criteria and weight-age given to each of 70%
i.e. for objective criteria and 30% for subjective criteria. Average turn
over was of three years to ascertain financial history and strength and
experience of similar work of similar order so as to ascertain ability to
take up the management and as per the formula of determining net
worth so that successful bidder can pay the lease amount so offered.
For the subjective evaluation various heads were taken into
consideration including overall methodology/operations and
maintenance plan of the venue, existing skill-set and abilities, detail
Page 25 of 78
vision for the upliftment of the venue along with sales and marketing
plan, improvement and up-gradation of existing infrastructure.
24. Justification was also canvassed since objective of bid was to

identify qualitatively best agency and award the tender at the best
lease price, the method of Q1-H1 was followed. Q1 being the
qualitatively best bidder while H1 being highest lease officer. The
above methodology ensures respondent No.1 to rely the best value of
the property to be managed and maintained by the best agency in the
field.
25. While denying the tender conditions were tailor made and so
designed in favour of respondent No.2, it is submitted that the criteria
set forth were far lower than the actual numbers of respondent NO.2
in the field on the aspect of turn over policy and maintenance
experience, single work order, net worth and profit before tax so fixed
Rs.50 crores, 26 crores, 40 crores, 50 crores, 30 crores as against
respondent NO.2 having turn over of 168 crores O&M single work
order for more than 73 crores, net worth of 90 crores and profit
before tax 37 crores. That potential bidders like Wizcraft International
Entertainment Private Ltd. had turnover of Rs. 239 crores.
26. Even for determination of net worth of the partnership firm

formula adopted was of fix assets + trade receivable + current assets
together and offer was considered accordingly. That introducing
various criteria’s after publication of tender and issuance of
corrigendum heavy reliance was placed on an additional affidavit
dated 15.6.2017 whereby the entire tender process was explained
including that of grievance redressed by the petitioners. That various
stages from publication of tender, pre-bid meeting, issues of
corrigendum, submissions of technical bid (on-line as well as off line
both), qualification assessment, objective assessment, calling for
presentation, objective as well as subjective assessment, calculation of
Page 26 of 78
marks, opening of financial bid, financial assessment, declaration of

Q1 and H1 and requirement of interconnection for matching the price
and relevance of Q1 and H1 was only for the purpose of fetching
highest revenue.
27. It is submitted that no comparison is required of terms and

conditions incorporated in the earlier contract for a period of 5 years
commencing for the year 2012 onwards and it is clear from the
conduct of the petitioners that they had participated in the tender
procedure and realized chances of their success would be nil and they
have lost the opportunity to compete with successful bidder and filing
of these petitions is nothing but an abuse of process of the Court.
28. Our attention is also invited so far Special Civil Application No.
9923 of 2017 is concerned about pending arbitration proceedings.
That on each count or ground of challenge for fixing the aspect of
minimum turn over, it is submitted that it is a sole discretion of the
respondent NO.1-University and upon grievances raised during pre-
bid meeting which was also attended by the petitioners on the aspect
of minimum turn over the eligibility criteria was reduced to Rs.20
crores. Even details about credibility of respondent No.2 for the
criteria of financial and technical bid are examined in detail and a
separate affidavit is filed by respondent No.2 which may reveal that
decision taken by the respondent No.1-University for a long term of
contract is justified.
29. Likewise, it is submitted that change in cut off line,

determination of EMD, publication required in newspaper for
corrigendum and undefined criteria in subjective marking so marked
and under challenge, tenders were well published in the newspaper
having nation vide circulation and that interested participants were
informed to keep visiting the website for any further change,
modification etc. or any other information with regard to tender
Page 27 of 78
document. Such corrigendum was also published on the website open

for the visit by the petitioners for which, no grievance can be made.
Therefore, the property in question having worth more than 1000
crores in real estate is to be managed and operated by a bidder having
adequate financial credibility and infrastructural stability for the
reasons as above, the petitions are devoid of merit and deserve to be
dismissed.
30. Mr.Shelat Learned Senior Counsel for the Respondent No.1

University, relied on the following decisions in support of his
submissions:
(1).Raunaq International Limited Vs.I.V.R.Construction Ltd.& Ors.AIR

1999 SC 393. Reliance was made on Paras 22 and Para 27 of the
judgement to contend that it is a settled position of law since the
judgement in the case of Tata Cellular v Union Of India reported in
AIR 1996 SC 11 that, the modern trend is to exercise judicial restraint
in administrative action. The terms of the tender cannot be open to
judicial review as they are on the realm of contract. For the sake of
convenience the six parameters laid down therein to which reference is
made in later part of this judgment.
Para 27 of the judgement in the case of Raunaq International

was pressed in to service to support his submission that judicial relief
ought not to be granted at the instance of a party that does not fulfill
the requisite criteria to participate in the Tender.
(2). Jagdish Mandal Vs. State Of Orissa and Ors.(2007) 14 SCC 517.
Para 19 of the judgement was relied upon. It was submitted that if the
decision relating to the award of the contract was bonafide and in
public interest, courts will not, in exercise of power of judicial review,
interfere even if there is a procedural aberration or error in
assessment or prejudice to or prejudice to a tenderer. Attempts by
Page 28 of 78
unsuccessful bidders with wounded pride or imaginary grievances and

having business rivalry should be resisted.
(3). Meerut Development Authority v.Association of Management

Studies and Anr Pawan Kumar Agarwal vs Meerut Development
Authority. AIR 2009 SC 2894. Paras 15 to 17 of his judgement were
read before us to submit that invitation to tender was in the realm of
contract and not open to judicial review.
(4).Municipal Corporation,Ujjain And Another Versus BVG Limited

And Others. (2018) 5 SCC 462. This judgement, in Mr Shelat’s
submissions reiterates that entire trend on the subject of judicial
review of the past cases including Tata Cellular(supra): Raunaq
International(supra).Our Attention was drawn to Paras 15 to 17. of the
judgement.
30.1. Mr.Shelat, learned senior counsel also distinguished the

judgements referred to and relied upon Mr.Asim Pandya and
submitted that the common thread in all these judgements is that he
Court cannot interfere with the terms of the tender because it feels
that some other terms in the tender could have been fair,wiser or
logical.
31. Mr.J.P.Shah, Learned Senior Counsel assisted by Mr

Dhaval.D.Vyas appeared for the Respondent No.2, the successful
bidder. In addition to reiterating and adopting the submissions made
on behalf of the University, Mr Shah submitted as under:
(a) He invited our attention to the Affidavit-In Reply filed by the

Respondent No.2 and submitted that the petition was filed in
collusion with the partner of M/s Gandhi Corporation, the Petitioner
of SCA 9923/2017 which came to be withdrawn. He submitted that
the Petitioner No.5 Deepak Navinchandra Gandhi, is the real brother of
Page 29 of 78
Mr.Hemendra Navinchandra Gandhi-the partner of Gandhi

Corporation. Which is an unsuccessful bidder. The partner of the
Petitioner No:1 Mr Manoj Gandhi is the first cousin of Hemendra
Gandhi, partner of Gandhi Corporation and the Petitioner No.4 is the
brother-in-law of the Petitioner No.4.Petitioners Nos 2,3 and 6 are
closely associated with Petitioner Nos 1,4 and 5 and Mr Hemendra
Gandhi partner of Gandhi Corporation. The above fact is also referred
in the affidavit-in-reply filed by respondent No.1.
(b) Mr Shah submitted that the Petitioners did not meet the
basic(revised) eligibility criteria of having average annual turnover of
Rs.20 Crores for the last three years. The annual turnover of the
Petitioner No.1 for the last three years for the year 2015-2016 was
Rs.689 Lakhs. For the year 2014-15 it was Rs.1246 Lakhs and for the
year 2013-14 it was Rs.889 Lakhs. For the Petitioner no.3 for the last
three years was: for the year 2015-14 Rs.321 Lakhs: for the year
2013-14 Rs.377 lakhs and for the year 2012-13 was Rs.542 lakhs. For
the Petitioner No.4 the turnover was Rs.244 lakhs for the year 2015-
16;Rs.247 lakhs for year 2014-2015 and Rs.232 lakhs for the year
2013-2014.
31.1. In support of his submissions Mr. Shah relied upon the

following decisions of the Supreme Court:
(1). AIR India Ltd. vs Cochin International Airport Ltd and Others.
(2000) 2 SC 617 (Para 7)
(2).B.S.N.Joshi & Sons Ltd versus Nair Coal Services Ltd and Others.
(2016) 11 SCC 548 (Para 61)
(3). S.S.& Company Versus Orissa Mining Corporation Limited.

(2008)5SCC 772. (Paras 47 and 51)
This was cited in support of his submission that even the
Page 30 of 78
amended criteria did not make the petitioner eligible.
32. In a rejoinder Mr. Asim Pandya, learned counsel appearing for

the petitioners once again highlighted substantial challenge about
revising, replacing, amending and modifying basic conditions about
eligibility criteria for evaluation of technical and financial bids and
valuation on the part of respondent No.1-University to justify such
changes by way of corrigendum inspite of inviting tenders afresh of
scrapping subject tender and distinguishing the judgments on which
reliance is placed by Mr. S.N.Shelat, learned senior counsel.
33. Having regard to facts and circumstances of the case,

submissions made by learned counsels appearing for the parties and a
careful perusal of the record of writ petitions in the context of prayer,
we would like to first address the issue about Corrigendum dated
12.5.2017.
33.1. Initially eligibility and financial criteria along with method of

evaluation on criteria for clarification along with Clauses 9, 12 and 16
are reproduced herein below vis-a-vis corrigendum dated 12.5.2017.
Tender Notice
PROJECT: Leasing of the convention facility

infrastructure
The Registrar: Gujarat University invites bids with two

bid system for leasing of the convention facility
infrastructure-detailed in the table below from the
bidders having experience for similar type of works and
meeting the qualifying criteria specified.
Page 31 of 78
Sr. Name of Work Minimum Bid Security Tender Fee Period of

No. expected lease (RS.) lease
amount
1 2 3 4 5 6
1 Leasing of the 11,50,00,000/- 2,00,00,000/- 1,00,000/- 60 months
convention facility (Non-
infrastructure refundable)
Milestone Dates for Tendering

1 Tender Downloading Date From 3rd May 2017 to 15th May
2017
2 Tender Online submission On or before 06:00 PM, 16th
May, 2017
3 Submission of tender On or Before 2:00 PM, 16th May
(Technical bid part-1 2017
including pre-qualification
form and its documents) in
physical form at room no.38,
Gujarat University,
Ahmedabad
4 Last day of submitting On or Before 4:00 PM, 5th May
bidder’s query 2017
5 Pre-Bid Meeting On 12:00 PM, 8th May 2017
6 Opening of Technical Bid On 3:00 PM, 16th May 2017
7 Opening of Financial Bid Will be intimated to the bidders
online
8 Bid Validity 180 Days from last date of
submission of the bid.
Nature of scope of corrigendum and

changes/additions/alterations made in the tender document, to which,
bidders were requested to take note.
Corrigendum -12.5.2017
Bidders are requested to note the following
changes/additions/alterations in the tender document:
Date of submission of Technical Bid Part 1, in physical
Page 32 of 78
form is extended up to 19th May 2017 up to 2.00 p.m.
1. Lease deed draft has been modified.

CHANGES IN “EVALUATION OF CRITERIA OF
QUALIFICATION” are as under:
Basic Eligibility Criteria:

Point 3 to be revised as:
“Average annual financial turnover of the bidding firm
should not be less than Rs.20 crores of last three years (i.e.
2017-17, 2015-16 and 2014-15)”.
Point 4 to be revised as
“The year of establishment of the bidder shall be not after
1st April, 2008”.
FINANCIAL CRITERIA Point 1 to be revised as:
“Average annual financial turnover of the bidding firm

should not be less than Rs.20 crores of last three years (.i.e.
2016-17, 2015-16 and 2014-15)”.
Objective Criteria:
Point 1 Turn Over to be revised and replaced as:
Point 3 to be revised and replaced as:

O&M/Leasing of similar property in PPP or Operation
mode with any government undertaking.
20 crores to 25 crores 10 Marks
More than 26 crores 15 Marks
Page 33 of 78
Net worth
25 crores 10 Marks
50 crores 20 Marks

Profit before Tax

More than 21 crores 20 marks

Bank Solvency Certificate
Additional Condition to be added in “Instructions to the

bidder”.
34. So far as scrutiny of NIT and procedure adopted by respondent

No.1 explaining the entire tender process including grievances raised
by the petitioners and redressal thereto by respondent No.1 from the
beginning namely, publication of tender, pre-bid meeting, issuance of
corrigendum, then technical bid submissions (on-line and off-line),
qualification assessment was done on the basis of document
submitted by three qualified bidders for the technical bid and the date
of registration of their firms prior to the date namely 1 st June, 2008
and, therefore, declared technically qualified. Thereafter objective
assessment was done and by qualified bidders were called for power
point presentation. Having completed all the above stages, subjective
assessment was carried out on the basis of presentations and pre-
Page 34 of 78
defined criterias and application of mind by the committee comprising

of the members of Finance and Building Committee of Gujarat
University and specially invited members to which reference is made
in earlier paragraphs recorded their marks and based on calculation of
marks complete assessment was carried out having regard to tender
condition of proportionate marking and the list was prepared for Q1,
Q2 and Q3 and pursuant to that financial bid was opened in presence
of designated officers on 29.5.2017 and even in final assessment also
respondent No.2 was ranked H1 and since on both counts namely, Q1
and H1, respondent No.2 was ranking 1st, no other exercise was to be
carried out and declared as successful bidder and thereafter on
issuance of letter of indent deposit of Rs.2 crores was submitted by
respondent No.2 and finally executing lease deed on 16.10.2017.
35. Respondent NO.1 has provided sufficient justification for

awarding property on lease basis of executed lease deed preceded by
invitation of offers in view of the fact that the property in question
was constructed using University funds and it is to be released to the
agency with best credentials in terms of financial abilities and
management capabilities and therefore terms and conditions of the
tender document must be such that the convention centre is managed
by highly professional agency with sufficient experience and financial
capabilities. The tender in process was divided in two parts namely, (i)
technical evaluation to find qualitatively best agency through technical
bid and (ii) use market forces to get the best lease price through a
financial bid. Further even the technical bid was also divided into two
parts namely, objective criteria and subjective criteria.
“Objective criteria being more dependable, they are

assigned 70% weight-age while subjective criteria are
assigned 30% weight-age.
A. The heads used for objective (Through financial
Page 35 of 78
documents) evaluation are:
1. Average turn-over of three years: To ascertain

financial history and strength.
2. Experience of similar work in terms of single
order size and similar work: To ascertain ability to take
up the management.
3. Net-worth, profit before tax and solvency:
Considering the high value asset being leased, it is
critical to ascertain financial soundness of the agency
to pay the lease amount.
B. The heads used for subjective evaluation are:
1. Overall methodology/operations and

maintenance plan of the venue.
2. Existing skill-set and abilities.
3. Presentation of necessary and proposed technical
team/manpower details.
4. Detail vision for the upliftment of the venue.
5. Sales and marketing plan, improvement and up-
gradation of existing infrastructure.
The Q1-H1 concept:
As the objective of bid is to identify qualitatively best

agency and award him the tender at the best lease
price, the method of Q1-H1 is derived, where Q1 being
the qualitatively best bidder while H1 being highest
lease offer.
The tender objective of bid is to identify qualitatively

best agency and award him the tender at the best lease
Page 36 of 78
price, the method of Q1-H1 is derived, where Q1 being

the qualitatively best bidder while H1 being highest
lease offer.
The tender proposed to identify Q1 using technical bid

evaluation and H1 through financial bid of qualified
parties.
Based on the objective of best man with best price, H1

value ascertained by competitive financial bid, same is
offered to the Q1 bidder.
This methodology ensured that Gujarat University is
able to realize the best value and yet appoint the best
agency to operate the prestigious and price property.”
36. Following events have taken place in the tender process which
are as under:
19.05.2017 Technical Bid 4 Bidders submitted

Submission tender on-line but
only 3 bidders
submitted the hard
copy
19.05.2017 Technical Bid Opened Documents from only
at 03:00 PM 3 bidders
19.05.2017 For determination of
the pre-qualification
criteria, the tenders
came to be forwarded
to the Consultant-
Auctors
26.05.2017 Communication from All the 3 bidders
the Tender Consultant stood qualified and
Page 37 of 78
regarding pre- further action for

qualification of the inviting the committee
bidders members for
assessment of
subjective criteria
initiated
26.05.2017 Intimation to the A panel of 9 members
members of the was constituted for
Building Committee the subjective
and Finance Committee assessment based on
for a joint meeting on different criteria
29.05.2017 at 11:00PM
26.05.2017 Hand Delivered
communication and
Emails were sent to all
the three bidders for
the presentation for
subjective criteria
assessment to be held
on 29.05.2017 at 11:00
AM onwards
29.05.2017 All the three bidders All the committee
from 11:15 remained present on members assessed the
onwards the allotted time slot presentation as per
and presented before their satisfaction in
the constituted the respective topics
committee. Out of the as prescribed by the
invited members one score-sheet
Shri Dhrumilbhai Patel
could not remain
present and hence the
Incharge Registrar and
Tender Consultant Shri
Page 38 of 78
Samir Shukla were

asked to be a part of
the assessment
committee
29.05.2017 The entire assessment
report and the
documents were
forwarded to the
Tender Consultant-
Auctors
29.05.2017 Evaluation report was
obtained from the
Consultant
29.05.2017 The objective criteria
evaluation obtained
and proportion
calculation was done
on 70% basis
29.05.2017 The subjective criteria

calculation was done as
per the score-sheets
and proportion
calculation was done
on 30% basis
The total of the Lallooji declared Q1
objective and Gandhi declared Q2
subjective criteria was Deepali declared Q3
done
29.05.2017 Financial bids which Lallooji offered a price
at 19:05 hours were submitted on-line of Rs.12.51 crores per
on www.nprocure.com year and was declared
were opened in the H1 Deepali Designs
Page 39 of 78
presence of University offered a price of

Engineer, Chief Rs.11.75 crores per
Accounts Officer, year and was declared
Librarian, Programmer H2 Gandhi
Corporation offered a
price of Rs.11.52
crores per year and
was declared H3
The financial bids were
forwarded to the
Consultant for further
process
30.05.2017 Declaration of The firm Lallooji and
successful bidder and sons being the Q1 and
so proposal for also offering the
recommending the highest bid and
successful bidder declared as H1 is
declared as the
successful bidder
31.05.2017 Communication to
Lallooji and Sons with
letter of intent and
furnishing bank
guarantee
05/06/17 The bank guarantee as
mandated under the
tender conditions came
to be submitted by
Lallooji and Sons
37. Evaluation of objective criteria was done by the University as

per the compliance of the tender condition particularly Clause 19 of
the Tender Evaluation Criteria in the instructions to the bidders and
assessment made reads as under:
Page 40 of 78
Criteria Gandhi Lallooji and Sons Deepali

Corporation Respondent No.2 Corporation
Rs.in Cr Marks Rs. in Cr Marks Rs. in Cr Marks
Average 31.5 10 168 20 44 10
Turnover
Similar Work 53 15 73 15 1.46 0
Single Order 42 20 73 20 12 5
Net-worth 10.33 0 90.92 20 13.75 0
Profit Before 1.26 0 37.97 20 3.12 0
Tax
Solvency 11 5 50 5 13.5 5
Value
Total Marks 50 100 20

(Out of 100)
Proportionat 35 70 14
e (Out of 70)
38. The Evaluation Committee for consideration of subjective

criteria consisting of following persons were as under:
a. Shri Himanshu Pandya-The Vice Chancellor

b. Shri Maheshbhai Kaswala-Executive Council Member
c. Shri Digvijaysinh Gohil-Executive Council Member
d. Shri Pankajbhai Shukla-EExecutive Council Member
e. Shri Vanrajsinh Chavda-Executive Council Member
f. Dr.Dhavalbhai Patel-Executive Council Member
g. Shri Bakul Desai-Registered Valuer (Special Invitee)
h. Shri Maheshbhai Gor-On behalf of Executive Engineer, Road and
Building Department, State of Gujarat
i. Dr. P.M.Patel-Registrar Incharge (Gujarat University)
j. Shri Samir Shukla-Tender Consultant.
Page 41 of 78
39. Criteria given for consideration for the evaluation of subjective

criteria giving 30% weight-age for determination of Q1 tender are as
under:
a. Overall Methodology
b. Operation and Management Strategy
c. Existing Skill-Set
d. Man-power (proposed)
e. Manpower (existing)
f. Vision
g. Sale and Marketing Plan
h. Improvement of Venue Proposed
i. Up-gradation of Venue Proposed
j. New Ideas
k. Special Offers
40. Thus, Tender Evaluation Criteria in the instructions to the

bidders as per clause 19 and marks awarded are as under:
Total Marks Gandhi Lallooji and Deepali

Corporation Sons Corporation
Out of 1100 687 813 469
% Marks 62.45 73.91 42.64
Rounded off as 19 22 13
per 30% Criteria
and Final tender qualifying evaluation was as under:

Firm Technical Technical Total Rank
Objective Subjective
M/s. Gandhi 35 19 54 Q2
Corporation
M/s Deepali 14 13 27 Q3
M/s Lallooji and 70 22 92 Q1
Sons
Page 42 of 78
As per above marks M/s. Lallooji and Sons, respondent No.2 rank Q1.
41. In the final bid which was opened on 29.5.2017on 19:05 hours
reads as under:
Firm Offer Rank

M/s. Gandhi Corporation Rs.11,52,00,000/- H3
M/s. Deepali Rs.11,75,00,000/- H2
M/s. Lallooji and Sons Rs.12,51,00,000/- H1
This reveals M/s. Lallooji and Sons, respondent No.2 herein has
offered Rs. 12.51 crores and was ranked as H1.
42. With regard to grievances about modification in cut off date by

issuance of corrigendum, qualification of minimum turn over,
evaluation on the basis of bank solvency, profit before tax and
operation and management of similar property it was done after due
deliberation and even sole discretion so as to determine the actual
conditions for awarding of tender. That the object which was kept in
mind by respondent NO.1 University was quality cum cost principle
and to ascertain financial credibility, stability with experience
incorporation of such conditions do not appear to be arbitrary or
unreasonable. Considering entire value of work to the tune of
minimum Rs. Of 57.5 crores for the period of 5 years EMD of Rs. 2
crores is reasonable and there is no such normal rule or a precedent
were EMD can be fixed only at the rate of !5 or 2% of total value of the
contract.
43. That submissions made by learned counsel for the petitioners

falls apart when important criteria set forth for bidders across India
and that of tailor made conditions since such criteria were set far
lower than the actual price of M/s. Lallooji and Sons.
Page 43 of 78
1. The tender was open to bidders across India where

there are many players capable of qualifying and bidding.
2. The important criteria were set far lower than the
actual numbers of M/s. Lallooji & Sons
a. Turn over worth with than 50 crores were assigned

highest marks, while M/s. Lallooji & Son’s Turn over is
more than 168 crore, i.e. more than three times the
required.
b. O&M experience of more than 26 crores are assigned

full marks, while M/s. Lallooji & son’s O&M experience is
more than 73 crore, i.e. more than double the required.
c. Single work order of more than 40 crores is assigned

full marks, while M/s. Lallooji & Son’s Single work is more
than 73 crore, i.e. far more than the required.
d. Net worth of more than 50 crores were assigned

highest marks, while M/s. Lallooji & Son’s net worth 90
crore, i.e. far more than the required.
e. Profit-before-tax of more than 30 crores is assigned

highest marks, while M/s. Lallooji & Son’s Profit before tax
is more than 37 crores, i.e. far more than the required.”
44. What emerges on record which almost remained undisputed

that none of the petitioners was a bidder and made any attempt to
purchase tender document. That erstwhile occupier who was
successful when the tender was floated for the very property in the
year 2012 for a period of 5 years when asked to vacate premise as per
provisions of Gujarat Pubic Premises (Eviction of Unauthorised
Occupants) Act, 1972 and order passed by competent authority and
Page 44 of 78
with partial modification confirmed by the appellate forum in Appeal

No.1 of 2017 Order Below Exh.5 by learned Judge City Civil Court
No.10, Ahmedabad on 7.7.2017, the petitioners the erstwhile occupier
M/s. Gandhi Corporation somehow wanted to remain in possession of
the subject property and the above order was challenged by filing
Special Civil Application No. 13390 of 2017 which came to be rejected
by oral judgement dated 19.7.2017 and Leave to Appeal No.18597 of
2017 preferred before the Supreme Court of India also came to be
disposed of but it is worth while to refer to the above order and we
may reproduce the same as under:
“Heard Mr. Mukul Rohatgi and Mr. Harin P. Raval,

learned senior counsel along with Mr.Shiv Mangal
Sharma, learned counsel appearing for the petitioner
and Mr.C.A. Sundaram and Mr. K.V.Vishwanathan,
learned senior counsel along with Mr. Nikhil Goel, for
the respondents.
Having heard learned counsel for the parties, it is

directed that the petitioner shall hand over the vacant
possession to the respondent-university by the end of
April, 2018 failing which the partners or any person
connected with the petitioner-firm shall be liable for
contempt of this Court and sent to jail. We have been
apprised that the property was put to auction and the
successful bidder has offered Rs.1,10,00,000/- (Rupees
one crore ten lac only) per month, towards rent.
Regard being had to the same, we direct the petitioner-
firm to pay Rs1,10,00,000/- (Rupees one crore ten lac
only) per month commencing 1.6.2017 (till 30.4.2018).”
45. Therefore, thus, it appears that only when erstwhile occupier

M/s. Gandhi Corporation was threatened with dire consequences
Page 45 of 78
including to face contempt proceedings of the Supreme Court and to

send him in jail vacated the premise but considering facts and
circumstances M/s. Gandhi Corporation was allowed to continue to
occupy the property in question till 30.4.2018 on the condition to pay
monthly rent so offered by the successful bidder namely Rs.1.10
crores p.m. As per counter affidavits filed by respondent No.1
-University and respondent No.2 successful bidder and lessee now in
whose favour lease deed is executed on 16.1.2007 on oath averred
about close blood relationship of the petitioners and/or partnership
with M/s. Gandhi Corporation the petitioners together formed un-
wholly alliance to see that under one or other pretext possession of
the disputed property remained with erstwhile occupier. In the
affidavit-in-reply filed by respondent NO.2 it is clearly averred that
petitioner NO.5 is the real brother of Mr.Hemendra Navinchandra
Gandhi, the partner of the Gandhi Corporation who was unsuccessful
bidder. Partner of the petitioner NO.1 Mr. Manoj J.Gandhi is the first
cousin of Mr. Hemendra Navinchandra Gandhi of M/s. Gandhi
Corporation and petitioner No.1 is the brother-in-law of petitioner
No.4, Petitioner Nos. 2, 3 and 6 are closely associated with the
petitioner Nos. 1, 4 and 5 and also with Mr. Mr. Hemendra
Navinchandra Gandhi, partner of the M/s. Gandhi Corporation. The
above fact remained un-controverted and even supported by
respondent No.1-University. None of the petitioners satisfied basic
revised eligibility criteria having average annual turn over of Rs.20
crorers for the last three years and a categorically statement about
their turn over made in affidavit-in-reply that turn over of all the
petitioners was fair below Rs.20 crores for the last three years again
remained un-controverted.
46. Therefore, the petitioners though not bidders were permitted to

attend pre-bid meeting on 8.5.2017 and later on President of the
Association of the Decorators expressed satisfaction over procedure
adopted for processing the tender document and even tendering the
Page 46 of 78
an apology for their rude behaviour in the meeting, the grounds of

challenge to tender document are not germane to rely intentions of
the petitioners. Further, facts about display of corrigendum with all
details on the website of respondent No.1 and on-line information to
be obtained by all bidders as per ITB instruction 12 and 16 and
respondent No.1 was entitled to issue corrigendum and hence
contention about fresh advertisement in newspaper etc. is hereby
rejected.
46.1. It was not even the conscious decision to remain out of tender
process solely with a view to challenge conditions of the tender but
only because the petitioners lacked even pre-qualification criteria and
subsequently also participated in pre-bid meetings and thereafter it
was decided to challenge subject NIT by forming unholy license to
cartel the whole process and the above arguments namely that, had
the petitioners participated in tender process would have made them
ineligible to challenge such conditions subsequently his argument in
desperation and is hereby rejected.
47. That next contention about provisions of Section 108 of

Transfer of Property Act and conditions in lease deed would govern
relationship between the parties and that requirement of separate
conditions in tender document including corrigendum were irrelevant
is again based on mis-concealed notion and it is trite that while
executing the lease deed lessor and lessee would get distinguished
rights qua the lease property under the Transfer of Property Act and
will be governed by such conditions but for the lease property an
amount of rent to be derived for which, serious efforts to be made by
University can be done only by inviting tenders and offers of floating
the tenders from bidders so that maximum rent is fixed and the
bidder should be able to pay fix and determined rent regularly without
any default and simultaneously maintenance and operation of the
property without any damage or deterioration in its value can be done.
Page 47 of 78
Therefore, the above contention of the learned counsel for the

petitioners has no substance. That willingness shown by petitioner
No.1 to offer Rs.13.51 crores and deposit of reasonable amount with
security belatedly and by a person who found EMD of Rs. 2 crores as
incapable of complying with harsh and onerous without participating
in the tender procedure do not deserve any consideration and such
offer is not only an after thought to derail whole procedure
undertaken by respondent No.1 and finality is reached in favour of
successful bidder upon executing a lease deed on 16.10.2017 but to
take the advantage without fulfilling terms and conditions of NIT.
48. We fail to understand contention raised on comparative analysis

of EMD tender from 2012 to 2017 and the subject NIT and absence of
any material to issue corrigendum for determining contract value and
eligibility criteria of turn over of Rs. 20 crores in last three years and
necessity to fix EMD at exorbitant rate to the extend of 20% of the
amount of value of contract. In the facts of this case, Rs. 2 crores vis-
a-vis total value of contract for more than Rs.57 crores, the authority
by no stretch of imagination is prevented from assigning value of the
property and rented charges to be levied in case of lease deed to be
executed on the basis of market forces and current trend in real
estate. The contention about normal rule of 1% EMD of the total
tender cost is again an argument without any basis. The above
contention is devoid of merit and is hereby rejected. That basic
eligibility criteria so provided originally in the tender document about
establishment of a person proposing to participate in the tender
process should be prior to 1st April, 2007 and that such person should
have turn over of more than Rs.25 crores for last three financial year
which was reduced later on and cut off date was changed from
1.4.2007 to 1.4.2008. As per corrigendum of 12th May, 2017 on the
contrary reveal that such relaxation was beneficial to all those persons
who wanted to make their offer. Under no circumstances, it can be
said that by issuance of corrigendum substantially change basic
Page 48 of 78
condition like eligibility criteria but to make the procedure more

transparent and fair and remained opened for scrutiny even upon a
challenge on judicial side.
48.1. Introduction of objective and subjective criteria, for which,

different heads were prescribed and marks were fixed and to be
awarded based on various sub categories/criteria and norms on the
contrary rule out any arbitrariness, favoritism or colourable exercise in
contract awarding procedure. It is always open for the institution,
organization or an authority within the meaning of Article 12 of the
Constitution of India to seek clarifications from bidders qua
submissions of their documents and even change or revising,
modifying the conditions to the extent keeping in mind public interest
and fetching highest value of the property so as to justify commercial
wisdom and in such kind of dealing in a given case scope of judicial
review is limited though the Court may notice arbitrariness or even to
some extent breach of principles of natural justice. We are fortified on
the submissions based on the decision of the Apex Court in the case of
Jagdish Mandal vs. State of Orissa reported in 2007 (14) SCC 517.
49. In Jagdish Mandal (supra), the Apex Court defined scope of

judicial review of award of contracts by referring to some of the
decisions of the Apex Court in paragraphs 21 and 22 which reads as
under:
“21. We may refer to some of the decisions of this Court,

which have dealt with the scope of judicial review of
award of contracts.
21.1) In Sterling Computers Ltd vs. M & N Publications Ltd

[1993 (1) SCC 445], this Court observed :
"While exercising the power of judicial review, in respect
Page 49 of 78
of contracts entered into on behalf of the State, the court

is concerned primarily as to whether there has been any
infirmity in the decision making process the courts can
certainly examine whether 'decision making process' was
reasonable, rational, not arbitrary and violative of Article
14 of the Constitution."
21.2) In Tata Cellular v. Union of India [AIR 1996 SC 11],

this Court referred to the limitations relating to the scope
of judicial review of administrative decisions and exercise
of powers in awarding contracts, thus :
(1) The modern trend points to judicial restraint in

(2) The Court does not sit as a court of appeal but merely
(3) The Court does not have the expertise to correct the
administrative action. 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.

realm of contract. More often than not, such decisions are
made qualitatively by experts.

other words, a fairplay in the joints is a necessary
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 facets pointed out above) but must be
Page 50 of 78
free from arbitrariness not affected by bias or actuated by

mala fides.

unbudgeted expenditure.
This Court also noted that there are inherent limitations

in the exercise of power of judicial review of contractual
powers. This Court also observed that the duty to act
fairly will vary in extent, depending upon the nature of
cases, to which the said principle is sought to be applied.
This Court held that the State has the right to refuse the
lowest or any other tender, provided it tries to get the best
person or the best quotation, and the power to choose is
not exercised for any collateral purpose or in infringement
of Article 14.
21.3) In Raunaq International Ltd., vs. I.V.R. Construction

Ltd. [1999 (1) SCC 492], this Court dealt with the matter in
some detail. This Court held : "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 importance are commercial considerations.
These would be : (1) The price at which the other side is
willing to do the work; (2) Whether the goods or services
offered are of the requisite specifications; (3) Whether the
person tendering has the ability to deliver the goods or
services as per specifications. When large works contracts
involving engagement of substantial manpower or
requiring specific skills are to be offered, the financial
ability of the tenderer to fulfill the requirements of the job
is also important; (4) the ability of the tenderer to deliver
Page 51 of 78
goods or services or to do the work of the requisite

standard and quality; (5) past experience of the tenderer,
and whether he has successfully completed similar work
earlier; (6) time which will be taken to deliver the goods or
services; and often (7) the ability of the tenderer to take
follow up action, rectify defects or to give post contract
services. Even when the State or a public body enters into
a commercial transaction, considerations which would
prevail in its decision to award the contract to a given
party would be the same. However, because the State or a
public body or an agency of the State enters into such a
contract, there could be, in a given case, an element of
public law or public interest involved even in such a
commercial transaction.
What are these elements of public interest? (1) Public

money would be expended for the purposes of the
contract; (2) The goods or services which are being
commissioned could be for a public purpose, such as,
construction of roads, public buildings, power plants or
other public utilities. (3) The public would be directly
interested in the timely fulfillment of the contract so that
the services become available to the public expeditiously.
(4) The public would also be interested in the quality of
the work undertaken or goods supplied by the tenderer.
Poor quality of work or goods can lead to tremendous
public hardship and substantial financial outlay either in
correcting mistakes or in rectifying defects or even at
times in re-doing the entire work - thus involving larger
outlays or public money and delaying the availability of
services, facilities or goods, e.g. A delay in commissioning
a power project, as in the present case, could lead to
power shortages, retardation of industrial development,
hardship to the general public and substantial cost
Page 52 of 78
escalation. When a writ petition is filed in the High court

challenging the award of a contract by a public authority
or the State, the court must be satisfied that there is some
element of public interest involved in entertaining such a
petition. If, for example, the dispute is purely between two
tenderers, the court must be very careful to see if there is
any element of public interest involved in the litigation. A
mere difference in the prices offered by the two tenderers
may or may not be decisive in deciding whether any
public interest is involved in intervening in such a
commercial transaction. It is important to bear in mind
that by court intervention, the proposed project may be
considerably delayed thus escalating the cost far more
than any saving which the court would ultimately effect in
public money by deciding the dispute in favour of one
tenderer or the other tenderer. Therefore, unless the court
is satisfied that there is a substantial amount of public
interest, or the transaction is entered into mala fide, the
court should not intervene under Article 226 in disputes
between two rival tenderers."
21.4) In Air India Ltd. vs. Cochin International Airport Ltd

[2000 (2) SCC 617], this Court summarized the scope of
interference as enunciated in several earlier decisions thus
:
"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 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
Page 53 of 78
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, for bona
fide reasons, if the tender conditions permit such a
relaxation. It may not accept the offer even 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."
[Emphasis supplied]
21.5) In Association of Registration Plates vs. Union of

India [2005 (1) SCC 679], this Court held:
"..Article 14 of the Constitution prohibits government from

arbitrarily choosing a contractor at its will and pleasure.
Page 54 of 78
It has to act reasonably, fairly and in public interest in

awarding contracts. At the same time, no person can
claim a fundamental right to carry in 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. ..."
21.6) In B.S.N. Joshi v. Nair Coal Services Ltd. [2006 (11)

SCALE 526], this Court observed :
"It may be true that a contract need not be given to the

lowest tenderer but it is equally true that the employer is
the best judge therefor; the same ordinarily being within
its domain, court's interference in such matter should be
minimal. The High Court's jurisdiction in such matters
being limited in a case of this nature, the Court should
normally exercise judicial restraint unless illegality or
arbitrariness on the part of the employer is apparent on
the face of the record."
22. Judicial review of administrative action is intended to

prevent arbitrariness, irrationality, unreasonableness,
bias and malafides. 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
Page 55 of 78
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.
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 black-
listing 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.”
Page 56 of 78
(emphasis supplied)
50. The decision of the Apex Court in the case of Municipal
Corporation, Ujjain and Anr. vs. BVG India Limited and Ors.
reported in (2018) 5 SCC 462 wherein the Apex Court revisited law on
government contracts and tenders and scope and nature of judicial
review particularly in commercial transactions vis-a-vis
considerations thereof and that involvement of element of public law
or public interest of such commercial transaction duty is cast upon the
authority to be fair to all concerned and a procedural lacking should
not matter if it is bonafide public interest and the Court should always
make largest public interest in mind. We may safely refer to
paragraph 10 of the above decision which reveal modern trend which
point out to judicial restraint in administration action and such
decision must not only be tested by the application of the
Wednesbury principle of reasonableness but also be free from
arbitrariness and not affected by bias or actuated by mala fides. The
Court has placed reliance on judgement in Master Marine Services (P)
Ltd. v. Metcalfe & Hodgkinson (P) Ltd., reported in (2005) 6 SCC 138
again reference was made in Sterling Computers Ltd. v. M & N
Publications Ltd., Raunaq International Ltd. v. I.V.R. Construction Ltd.,
U.P.Financial Corporation v. Naini Oxygen & Acetylene Gas Ltd., ,
Karnataka SIIDC Ltd. V. Cavalet India Ltd. wherein the Apex Court
delineated 11 illustrative criteria and even considered B.S.N.Joshi and
Sons Ltd. v. Nair Coal Services Ltd., and paragraph 65 and 66 whereby
role of the superior courts/writ courts in judicial review is elaborated
and reverting to Tata Cellular v. Union of India (1994) 6 SCC 651,
para 94 and other such decision including Afcons Infrastructure Ltd.
vs. Nagpur Metro Rail Corporation Ltd. reported in (2016) 16 SCC
818, Jagdish Mandal (supra) the above paragraphs are reproduced
herein below:
“11. In Sterling Computers Ltd. v. M & N Publications Ltd.

(1993) 1 SCC 445, this Court held as under:
Page 57 of 78
“18. While exercising the power of judicial review, in

respect of contracts entered into on behalf of the State, the
Court is concerned primarily as to whether there has been
any infirmity in the “decision making process”. In this
connection reference may be made to the case of Chief
Constable of the North Wales Police v. Evans [(1982) 3 All
ER 141] where it was said that: (p. 144a) “The purpose of
judicial review is to ensure that the individual receives fair
treatment, and not to ensure that the authority, after
according fair treatment, reaches on a matter which it is
authorised or enjoined by law to decide for itself a
conclusion which is correct in the eyes of the court.” By
way of judicial review the court cannot examine the
details of the terms of the contract which have been
entered into by the public bodies or the State. Courts have
inherent limitations on the scope of any such enquiry. But
at the same time as was said by the House of Lords in the
aforesaid case, Chief Constable of the North Wales Police
v. Evans [(1982) 3 All ER 141] the courts can certainly
examine whether “decision-making process” was
reasonable, rational, not arbitrary and violative of Article
14 of the Constitution”.
19. If the contract has been entered into without ignoring

the procedure which can be said to be basic in nature and
after an objective consideration of different options
available taking into account the interest of the State and
the public, then Court cannot act as an appellate authority
by substituting its opinion in respect of selection made for
entering into such contract. But, once the procedure
adopted by an authority for purpose of entering into a
contract is held to be against the mandate of Article 14 of
the Constitution, the courts cannot ignore such action
saying that the authorities concerned must have some
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latitude or liberty in contractual matters and any

interference by court amounts to encroachment on the
exclusive right of the executive to take such decision.”
12. In Raunaq International Limited v. I.V.R.

Construction Limited, (1999) 1 SCC 492, this Court dealt
with the matter in some detail and held in (para 9) as
under:
“9…..In arriving at a commercial decision considerations
which are of paramount importance are commercial
considerations. These would be :
(1) the price at which the other side is willing to do the

work;
(2) whether the goods or services offered are of the

requisite specifications;
(3) whether the person tendering has the ability to deliver

the goods or services as per specifications. When large
works contracts involving engagement of substantial
manpower or requiring specific skills are to be offered, the
financial ability of the tenderer to fulfill the requirements
of the job is also important; (4) the ability of the tenderer
to deliver goods or services or to do the work of the
requisite standard and quality;
(5) past experience of the tenderer and whether he has

successfully completed similar work earlier;
(6) time which will be taken to deliver the goods or

services; and often (7) the ability of the tenderer to take
follow up action, rectify defects or to give post contract
services.”
13. Whenever the State or public body or the Agency of
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the State enters into such contract, an element of public

law or public interest may be involved even in such a
commercial transaction. In that very judgment, i.e.,
Raunaq International Limited (supra), the elements of
public interest are also noted. It is held thus:
“10. What are these elements of public interest? (1) Public
money would be expended for the purposes of the
contract; (2) The goods or services which are being
commissioned could be for a public purpose, such as,
construction of roads, public buildings, power plants or
other public utilities. (3) The public would be directly
interested in the timely fulfillment of the contract so that
the services become available to the public expeditiously.
(4) The public would also be interested in the quality of the
work undertaken or goods supplied by the tenderer. Poor
quality of work or goods can lead to tremendous public
hardship and substantial financial outlay either in
correcting mistakes or in rectifying defects or even at
times in redoing the entire work - thus involving larger
outlays or public money and delaying the availability of
services, facilities or goods, e.g. a delay in commissioning a
power project, as in the present case, could lead to power
shortages, retardation of industrial development, hardship
to the general public and substantial cost escalation.
11. When a writ petition is filed in the High court

challenging the award of a contract by a public authority
or the State, the court must be satisfied that there is some
element of public interest involved in entertaining such a
petition. If, for example, the dispute is purely between two
tenderers, the court must be very careful to see if there is
any element of public interest involved in the litigation. A
mere difference in the prices offered by the two tenderers
may or may not be decisive in deciding whether any
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public interest is involved in intervening in such a

commercial transaction. It is important to bear in mind
that by court intervention, the proposed project may be
considerably delayed thus escalating the cost far more
than any saving which the court would ultimately effect in
public money by deciding the dispute in favour of one
tenderer or the other tenderer. Therefore, unless the court
is satisfied that there is a substantial amount of public
interest, or the transaction is entered into mala fide, the
court should not intervene under Article 226 in disputes
between two rival tenderers.”
14. The judicial review of administrative action is

intended to prevent arbitrariness. The purpose of judicial
review of administrative action is to check whether the
choice or decision is made lawfully and not to check
whether the choice or decision is sound. If the process
adopted or decision made by the authority is not mala fide
and not intended to favour someone; if the process
adopted or decision made is neither so arbitrary nor
irrational that under the facts of the case it can be
concluded that no responsible authority acting reasonably
and in accordance with relevant law could have reached
such a decision; and if the public interest is not affected,
there should be no interference under Article 226.
15. It is well settled that the award of contract, whether

it is by a private party or by a public body or by the State,
is essentially a commercial transaction. In arriving at a
commercial decision, the considerations which are of
paramount importance are commercial considerations.
These would include, inter alia, the price at which the
party is willing to work; whether the goods or services
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offered are of the requisite specifications; and whether the

person tendering the bid has the ability to deliver the
goods or services as per the specifications. It is also by now
well settled that the authorities/State can choose its own
method to arrive at a decision and it is free to grant any
relaxation for bona fide reasons, if the tender conditions
permit such a relaxation.
16. The State, its corporations, instrumentalities and

agencies have a 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
them 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 interfere.
(See the judgment in the case of Air India Limited v.
Cochin International Airport Limited (2000) 2 SCC 617).
17. In U.P. Financial Corporation. v. Naini Oxygen &

Acetylene Gas Ltd. (1995) 2 SCC 754, this Court held that
it was not a matter for the courts to decide as to whether
the Financial Corporation should invest in the defaulting
unit, to revive or to rehabilitate it and whether even after
such investment the unit would be viable or whether the
Financial Corporation should realise its loan from the sale
of the assets of the Company. The Court observed that a
Corporation being an independent autonomous statutory
body having its own constitution and rules to abide by,
and functions and obligations to discharge, it is free to act
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according to its own right in the discharge of its functions.

The views it forms and the decisions it takes would be on
the basis of the information in its possession and the
advice it receives and according to its own perspective and
calculations. In such a situation, more so in commercial
matters, the Courts should not risk their judgment for the
judgments of the bodies to which that task is assigned. The
Court further held that:
“21......Unless its action is mala fide, even a wrong decision
taken by it is not open to challenge. It is not for the courts
or a third party to substitute its decision, however more
prudent, commercial or businesslike it may be, for the
decision of the Corporation. Hence, whatever the wisdom
(or the lack of it) of the conduct of the Corporation, the
same cannot be assailed for making the Corporation
liable.”
18. In U.P. Financial Corporation v. Gem Cap (India) Pvt.

Ltd. & Ors. (1993) 2 SCC 299, it was observed that the High
Court while exercising its jurisdiction under Article 226 of
the Constitution cannot sit as an appellate authority over
the acts and deeds of the corporation and seek to correct
them, and that the doctrine of fairness, evolved in
administrative law, was not supposed to convert the writ
Courts into appellate authorities over administrative
authorities. It is further observed by this Court that
fairness is not a one way street, and fairness required of
the corporation cannot be carried to the extent of
disabling it from recovering what is due to it.
19. In Karnataka State Financial Corporation v. Micro

Cast Rubber & Allied Products (P) Ltd. & Ors. (1996) 5 SCC
Page 63 of 78
65 the issue was whether the financial corporation was

wrong in rejecting the offer given by the borrower which,
after proper evaluation, was considered lower than the
offer made by the purchasers. This Court, while upholding
the action of the financial corporation, held that the action
of the said financial corporation should not be interfered
with if it has acted broadly in consonance with the
guidelines.
20. In Karnataka State Industrial Investment &

Development Corporation Limited v. Cavalet India Ltd. &
Ors. (2005) 4 SCC 456, this court after taking into
consideration various questions on various subjects laid
down the following legal principles, viz.-
“(i) The High Court while exercising its jurisdiction
under Article 226 of the Constitution does not sit as an
appellate authority over the acts and deeds of the
Financial Corporation and seek to correct them. The
doctrine of fairness does not convert the writ courts into
appellate authorities over administrative authorities.
(ii) In a matter between the Corporation and its debtor, a

writ court has no say except in two situations:
a There is a statutory violation on the part of the

Corporation, or b Where the Corporation acts unfairly i.e.
unreasonably.
(iii) In commercial matters, the courts should not risk their

judgments for the judgments of the bodies to which that
task is assigned.
(iv) Unless the action of the Financial Corporation is mala

fide, even a wrong decision taken by it is not open to
challenge. It is not for the courts or a third party to
substitute its decision, however, more prudent, commercial
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or businesslike it may be, for the decision of the Financial

Corporation. Hence, whatever the wisdom (or the lack of
it) of the conduct of the Corporation, the same cannot be
assailed for making the Corporation liable.
(v) In the matter of sale of public property, the dominant

consideration is to secure the best price for the property to
be sold and this could be achieved only when there is
maximum public participation in the process of sale and
everybody has an opportunity of making an offer.
(vi) Public auction is not the only mode to secure the best
price by inviting maximum public participation, tender
and negotiation could also be adopted.
(vii) The Financial Corporation is always expected to try

and realise the maximum sale price by selling the assets
by following a procedure which is transparent and
acceptable, after due publicity, wherever possible and if
any reason is indicated or cause shown for the default, the
same has to be considered in its proper perspective and a
conscious decision has to be taken as to whether action
under Section 29 of the Act is called for. Thereafter, the
modalities for disposal of the seized unit have to be
worked out.
(viii) Fairness cannot be a one-way street.
The fairness required of the Financial Corporations cannot

be carried to the extent of disabling them from recovering
what is due to them. While not insisting upon the borrower
to honour the commitments undertaken by him, the
Financial Corporation alone cannot be shackled hand and
foot in the name of fairness.
(ix) Reasonableness is to be tested against the dominant

consideration to secure the best price.
Page 65 of 78
21. Likewise, in B.S.N. Joshi and Sons Ltd. v. Nair Coal

Services Ltd. (2006) 11 SCC 548, this Court while
summarising the scope of judicial review and the
interference of superior courts in the matter of award of
contracts, observed thus:
“65. We are not oblivious of the expansive role of the
superior courts in judicial review.
66. We are also not shutting our eyes towards the new
principles of judicial review which are being developed;
but the law as it stands now having regard to the
principles laid down in the aforementioned decisions may
be summarised as under:
(i) if there are essential conditions, the same must be

adhered to;
(ii) if there is no power of general relaxation, ordinarily

the same shall not be exercised and the principle of strict
compliance would be applied where it is possible for all the
parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the

parties in regard to any of such conditions, ordinarily
again a power of relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such

relaxation should not ordinarily be allowed to take a
different stand in relation to compliance with another part
of tender contract, particularly when he was also not in a
position to comply with all the conditions of tender fully,
unless the court otherwise finds relaxation of a condition
which being essential in nature could not be relaxed and
thus the same was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate authority

upon due consideration of the tender document submitted
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by all the tenderers on their own merits and if it is

ultimately found that successful bidders had in fact
substantially complied with the purport and object for
which essential conditions were laid down, the same may
not ordinarily be interfered with;
(vi) the contractors cannot form a cartel. If despite the

same, their bids are considered and they are given an
offer to match with the rates quoted by the lowest
tenderer, public interest would be given priority;
(vii) where a decision has been taken purely on public

interest, the court ordinarily should exercise judicial
restraint.”
22. In Tata Cellular (supra), this Court referred to the

limitations relating to the scope of judicial review of
administrative decisions and exercise of powers in
awarding contracts, by observing in para 94 thus:
“(1) The modern trend points to judicial restraint in

(2) The Court does not sit as a court of appeal but merely
(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.

realm of contract. Normally speaking, the decision to
accept the tender or award the contract is reached by
process of negotiation through several tiers. More often
Page 67 of 78
than not, such decisions are made qualitatively by experts.

other words, a fair play in the joints is a necessary
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.

unbudgeted expenditure.”
23. In that very judgment, this Court proceeded to

observe that there are inherent limitations in the exercise
of the power of judicial review of contractual powers. This
Court observed that the duty to act fairly will vary in
extent, depending upon the nature of the cases to which
the said principle is sought to be applied. The State has the
right to refuse the lowest or any other tender, provided
that it tries to get the best person or the best quotation.
24. This Court in Delhi Science Forum v. Union of

India (1996) 2 SCC 405 observed in para 13 as follows:
“13…..While exercising the power of judicial review even
in respect of contracts entered on behalf of the
Government or authority, which can be held to be State
within meaning of Article 12 of the Constitution courts,
have to address while examining the grievance of any
petitioner as to whether the decision has been vitiated on
one ground or the other. It is well-settled that the onus to
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demonstrate that such decision has been vitiated because

of adopting a procedure not sanctioned by law, or because
of bad faith or taking into consideration factors which are
irrelevant, is on the person who questions the validity
thereof. This onus is not discharged only by raising a
doubt in the mind of the court, but by satisfying the court
that the authority or the body which had been vested with
the power to take decision has adopted a procedure which
does not satisfy the test of Article 14 of the Constitution or
which is against the provisions of the statute in question or
has acted with oblique motive or has failed in its function
to examine each claim on its own merit on relevant
considerations. Under the changed scenarios and
circumstances prevailing in the society, courts are not
following the rule of judicial self-restraint. But at the same
time all decisions which are to be taken by an authority
vested with such power cannot be tested and examined by
the court. The situation is all the more difficult so far as
the commercial contracts are concerned. Parliament has
adopted and resolved a national policy towards
liberalisation and opening of the national gates for foreign
investors…….” (emphasis supplied)
25. In Central Coalfields Ltd. v. SLL-SML (Joint Venture

Consortium) (2016) 8 SCC 622, it was observed as follows:
“38. In G.J. Fernandez v. State of Karnataka [(1990) 2 SCC
488] both the principles laid down in Ramana Dayaram
Shetty (1979) 3 SCC 489 were reaffirmed. It was
reaffirmed that the party issuing the tender (the employer)
“has the right to punctiliously and rigidly” enforce the
terms of the tender. If a party approaches a court for
an order restraining the employer from strict enforcement
of the terms of the tender, the court would decline to do so.
Page 69 of 78
It was also reaffirmed that the employer could deviate

from the terms and conditions of the tender if the
“changes affected all intending applicants alike and were
not objectionable". Therefore, deviation from the terms
and conditions is permissible so long as the level playing
field is maintained and it does not result in any
arbitrariness or discrimination in Ramana Dayaram
Shetty sense.
47. The result of this discussion is that the issue of the

acceptance or rejection of a bid or a bidder should be
looked at not only from the point of view of the
unsuccessful party but also from the point of view of the
employer. As held in Ramana Dayaram Shetty the terms
of NIT cannot be ignored as being redundant or
superfluous. They must be given a meaning and the
necessary significance. As pointed out in Tata Cellular
there must be judicial restraint in interfering with
administrative action. Ordinarily, the soundness of the
decision taken by the employer ought not to be questioned
but the decision-making process can certainly be subject
to judicial review. The soundness of the decision may be
questioned if it is irrational or mala fide or intended to
favour someone or a decision “that no responsible
authority acting reasonably and in accordance with
relevant law could have reached” as held in Jagdish
Mandal followed in Michigan Rubber.” (emphasis supplied)
26. This Court also made an observation on judicial

interference in Afcons Infrastructure Ltd. v. Nagpur Metro
Rail Corporation Ltd. and Ors. (2016) 16 SCC 818, as
hereunder:
“15. We may add that the owner or the employer of a
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project, having authored the tender documents, is the best

person to understand and appreciate its requirements and
interpret its documents. The constitutional courts must
defer to this understanding and appreciation of the tender
documents, unless there is mala fide or perversity in the
understanding or appreciation or in the application of the
terms of the tender conditions. It is possible that the owner
or employer of a project may give an interpretation to the
tender documents that is not acceptable to the
constitutional courts but that by itself is not a reason for
interfering with the interpretation given.” Similar
observations were made in the cases of Jagdish Mandal v.
State of Orissa and Ors. (2007) 14 SCC 517, and Meerut
Development Authority v. Assn. of Management Studies (2009)
6 SCC 171.
27. Thus, only when a decision making process is so

arbitrary or irrational that no responsible authority
proceeding reasonably or lawfully could have arrived at
such decisions, power of judicial review can be exercised.
However, if it is bona fide and in public interest, the Court
will not interfere in the exercise of power of judicial review
even if there is a procedural lacuna. The principles of
equity and natural justice do not operate in the field of
commercial transactions. Wherever a decision has been
taken appropriately in public interest, the Court ordinarily
should exercise judicial restraint. When a decision is taken
by the concerned authority upon due consideration of the
tender document submitted by all tenderers on their own
merits and it is ultimately found that the successful bidder
had in fact substantially complied with the purpose and
object for which the essential conditions were laid down,
the same may not ordinarily be interfered with.”
(emphasis supplied)
Page 71 of 78
51. That based on the law as laid down the submissions made by
learned advocate for the petitioners and the ground of challenge it
cannot be said that respondent No.1 as acted contrary to above law
laid down by the Apex Court. Further in the very judgement, the Apex
Court also referred to decisions of the Apex Court in the case of
Montecarlo Ltd. v. NTPC Ltd reported in (2016) 15 SCC 272, Central
Coalfields Ltd. vs. SLL-SML (Joint Venture Consortium) reported in
(2016) 8 SCC 622, Sterling Computers Ltd., v. M & N Publications
Ltd., (1993) 1 SCC 445 and also Afcons Infrastructure Ltd. v.
Nagpur Metro Rail Corpn. Ltd. (2016) 16 SCC 818 and we may
squarely refer to paragraphs 39, 40, 41, 42, 43, 44, 45 and 46 as under:
“39. In Montecarlo Ltd. v. NTPC Ltd. (2016) 15 SCC 272,

this Court highlighted the freedom of the owner to decide
in matters of tenders as follows:
“26. We respectfully concur with the aforesaid statement
of law. We have reasons to do so. In the present scenario,
tenders are floated and offers are invited for highly
complex technical subjects. It requires understanding and
appreciation of the nature of work and the purpose it is
going to serve. It is common knowledge in the competitive
commercial field that technical bids pursuant to the notice
inviting tenders are scrutinised by the technical experts
and sometimes third-party assistance from those
unconnected with the owner's organisation is taken. This
ensures objectivity. Bidder's expertise and technical
capability and capacity must be assessed by the experts.
In the matters of financial assessment, consultants are
appointed. It is because to check and ascertain that
technical ability and the financial feasibility have
sanguinity and are workable and realistic. There is a
multi-prong complex approach; highly technical in
nature. The tenders where public largesse is put to
Page 72 of 78
auction stand on a different compartment. Tender with

which we are concerned, is not comparable to any scheme
for allotment. This arena which we have referred requires
technical expertise. Parameters applied are different. Its
aim is to achieve high degree of perfection in execution
and adherence to the time schedule. But, that does not
mean, these tenders will escape scrutiny of judicial
review. Exercise of power of judicial review would be
called for if the approach is arbitrary or mala fide or
procedure adopted is meant to favour one. The decision-
-making process should clearly show that the said

maladies are kept at bay. But where a decision is taken
that is manifestly, in consonance with the language of the
tender document or sub serves the purpose for which the
tender is floated, the court should follow the principle of
restraint Technical evaluation or comparison by the court
would be impermissible. The principle that is applied to
scan and understand an ordinary instrument relatable to
contract in other spheres has to be treated differently
than interpreting and appreciating tender documents
relating to technical works and projects requiring special
skills. The owner should be allowed to carry out the
purpose and there has to be allowance of free play in the
joints.” (emphasis supplied)
40. In Central Coalfields (supra), the Court held that the

employer can decide to even deviate from the NIT:
“48. Therefore, whether a term of NIT is essential or not is
a decision taken by the employer which should be
respected. Even if the term is essential, the employer has
the inherent authority to deviate from it provided the
deviation is made applicable to all bidders and potential
Page 73 of 78
bidders as held in Ramana Dayaram Shetty. However, if

the term is held by the employer to be ancillary or
subsidiary, even that decision should be respected. The
lawfulness of that decision can be questioned on very
limited grounds, as mentioned in the various decisions
discussed above, but the soundness of the decision cannot
be questioned, otherwise this Court would be taking over
the function of the tender issuing authority, which it
cannot.” (emphasis supplied)
41. The reason for allowing public authorities such wide

leeway in matters of contracts and tenders was elucidated
in Sterling Computers (supra). Therein, the Court
observed as follows:
“12. At times it is said that public authorities must have
the same liberty as they have in framing the policies, even
while entering into contracts because many contracts
amount to implementation or projection of policies of the
Government. But it cannot be overlooked that unlike
policies, contracts are legally binding commitments and
they commit the authority which may be held to be a
State within the meaning of Article 12 of the Constitution
in many cases for years. That is why the courts have
impressed that even in contractual matters the public
authority should not have unfettered discretion. In
contracts having commercial element, some more
discretion has to be conceded to the authorities so that
they may enter into contracts with persons, keeping an
eye on the augmentation of the revenue. But even in such
matters they have to follow the norms recognised by
courts while dealing with public property. It is not possible
for courts to question and adjudicate every decision taken
by an authority, because many of the Government
Page 74 of 78
Undertakings which in due course have acquired the

monopolist position in matters of sale and purchase of
products and with so many ventures in hand, they can
come out with a plea that it is not always possible to act
like a quasi-judicial authority while awarding contracts.
Under some special circumstances a discretion has to be
conceded to the authorities who have to enter into
contract giving them liberty to assess the overall situation
for purpose of taking a decision as to whom the contract
be awarded and at what terms. If the decisions have been
taken in bona fide manner although not strictly following
the norms laid down by the courts, such decisions are
upheld on the principle laid down by Justice Holmes, that
courts while judging the constitutional validity of
executive decisions must grant certain measure of
freedom of "play in the joints" to the executive.”
42. That the authorities should be given latitude in

making a decision on the offers was also observed in
Sterling Computers (supra). Therein, the Court observed
that any judicial interference amounts to encroachment
on the exclusive right of the executive to take a decision.
43. In the matter on hand, admittedly, the successful

bidder was more technically qualified and it got more
marks. Normally, the contract could be awarded to the
lowest bidder if it is in the public interest. Merely because
the financial bid of BVG India Ltd. is the lowest, the
requirement of compliance with the Rules and conditions
cannot be ignored.
44. As rightly contended by respondent no. 3, a statutory
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authority granting licences should have the latitude to

select the best offer on the terms and conditions
prescribed. The technical expert in his report categorically
stated that, “All the above aspects demand high level of
Technicalities and Expertise rather than just depending on
lowest financial price quote for a material transport.” As
clarified earlier, the power of judicial review can be
exercised only if there is unreasonableness, irrationality or
arbitrariness and in order to avoid bias and mala fides.
This Court in Afcons Infrastructure (supra) held the same
in the following manner:
“13. In other words, a mere disagreement with the
decision making process or the decision of the
administrative authority is no reason for a constitutional
Court to interfere. The threshold of mala fides, intention
to favour someone or arbitrariness, irrationality or
perversity must be met before the constitutional Court
interferes with the decision making process or the
decision.”
45. Evaluating tenders and awarding contracts are

essentially commercial transactions/contracts. If the
decision relating to award of contract is in public interest,
the Courts will not, in exercise of the power of judicial
review, interfere even if a procedural aberration or error
in awarding the contract is made out. The power of
judicial review will not be permitted to be invoked to
protect private interest by ignoring public interest.
Attempts by unsuccessful bidders with an artificial
grievance and to get the purpose defeated by
approaching the Court on some technical and procedural
lapses, should be handled by Courts with firmness. The
exercise of the power of judicial review should be avoided
Page 76 of 78
if there is no irrationality or arbitrariness. In the matter

on hand, we do not find any illegality, arbitrariness,
irrationality or unreasonableness on the part of the expert
body while in action. So also, we do not find any bias or
mala fides either on the part of the corporation or on the
part of the technical expert while taking the decision.
Moreover, the decision is taken keeping in mind the public
interest and the work experience of the successful bidder.”
(emphasis supplied)
52. As the above judgements covers and refers to law laid down by
the Apex Court on various facets of contracts especially commercial in
nature to be given by Government or any authority within meaning of
Article 12 of the Constitution of India as a ‘State’ and the petitioners
were not purchasers of the tender, we avoid detail discussion of the
authorities otherwise relied on by learned counsel by the respondent
No.1 University and respondent No.2 as we are satisfied with the facts
and circumstances of the case. Even decisions making process so
elaborately referred to by us reveal that the respondent No.1 has acted
within four corners of law leaving no room of doubt of any
arbitrariness or the decision can be said to be contrary to public
interest and, therefore, we find no merit in the submissions made by
learned advocate for the petitioners.
53. Considering the above celebrated principles laid down by the

Apex Court in the case of Municipal Corporation, Ujjain v. BVG India
Ltd. wherein earlier decisions on the subject were considered,
confirmed, referred and tested on such principles action of
respondent No.1 under challenge by the petitioners do not suffer
from any vice of irrationality or decision making process is vitiated by
arbitrariness or a case of colorable exercise of power or from vice of
irrationality in decision making process nor it was based on any
irrelevant consideration viz. conditions were tailor made to suit
Page 77 of 78
requirement of respondent No.2 only and under no circumstances we

find any public interest was jeopardied by issuing corrigendum dated
12.5.2017 for which on-line information was given, we find that lease
deed is already executed by respondent No.1 in favour of respondent
No.2 on 16.10.2017 and though initially while issuing notice by this
Court process of NIT was kept subject to further order that may be
passed by this Court in absence of any irregularity violation of either
any terms/conditions of contract or the legal malice as per law laid
down by the Apex Court in the judgement relied on earlier and
refereed to in earlier paragraph, we find the petition being Special Civil
Application No. 10009 of 2017 is merit less and is hereby rejected.
54. Accordingly, Civil Application also stands disposed of.
55. Based on the above reasonings i.e. Special Civil Application NO.
10055 of 2017 is also rejected.
56. Rule discharged in each of the writ petitions.
57. Before parting, we may note that efforts made by unholy alliance
of the petitioners in filing the petitions arguing the case by taking
substantial time of the Court for no justifiable reason amounts abuse
of process of law, we are of the considered opinion that if we do not
award cost we will be failing in our duty as other deserving cases were
to be adjourned and petitioners of both these writ petitions are
directed to pay Rs.1 lakh cost for each petition and to be deposited in
the registry within 10 days from the date of the copy of the judgement
received.
(ANANT S. DAVE, J)
(BIREN VAISHNAV, J)
NAIR SMITA V.
Page 78 of 78

Gujarat High Court Imposes 1 Lakh Costs On 7 Event Management Firms For "Unholy Alliance" Against Gujarat University

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Gujarat High Court Imposes 1 Lakh Costs On 7 Event Management Firms For "Unholy Alliance" Against Gujarat University

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 10009 of 2017

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE ANANT S. DAVE

HONOURABLE MR.JUSTICE BIREN VAISHNAV

1 Whether Reporters of Local Papers may be allowed

2 To be referred to the Reporter or not ?

3 Whether their Lordships wish to see the fair copy of

4 Whether this case involves a substantial question of

CORAM: HONOURABLE MR.JUSTICE ANANT S. DAVE

(PER : HONOURABLE MR.JUSTICE ANANT S. DAVE)

1. Both these writ petitions filed under Article 226 of the

“(A) This Hon’ble Court may be pleased to quash and set

(B) This Hon’ble Court may be pleased to quash and set

aside the basic eligibility criterion clause 4 fixing the

(C) This Hon’ble Court may be pleased to quash and set

(D) The Hon’ble Court may be pleased to quash and set

(E) Pending admission and final disposal of the present

(EE) Pending admission and final disposal of the present

2. On 16.4.2018, this Court issued rule making it returnable on

of 2018 wherein following order was passed on 23.4.2018:

“We see no ground to entertain these petitions.

3. It is the case of the petitioners that respondent No.1 University

4. As per subject NIT pre-bid meeting was to be held on 8.5.2017.

turnover was revised and replaced as under:

25 crores to 50 crores 10 marks

About operation and management/leasing of similar property in

Rs. 20 crores to 25 crores 10 marks

Point NO.7 pertaining to Bank Solvency Certificate was revised

5. After corrigendum was issued by modifying the conditions as

taken pursuant to impugned notice inviting tenders shall be subject to

6. So far as Special Civil Application No. 9923 of 2017 is

7. In the backdrop of above fatual scenario Mr. Asim Pandya,

8. At the outset, it is submitted that non-participation of the

9. Ordinarily, according to learned counsel for the petitioners rule

tender cost of Rs.11,50,00,000/- for which no explanation is provided

criteria. Again in the corrigendum dated 12.5.2017 the criteria for

12. In the tender process, it is submitted no subjective criteria could

13. By taking us to the procedure if any followed by respondent

transparent manner. Even clause-12 of notice inviting tenders allows

15. Thus, collectively based on submissions as above, in the

16. Learned advocate for the petitioners relied on following

“22. We find merit in this civil appeal. Standards applied

kept in mind. The doctrine of "level playing field" is an

23. In the case of Union of India and another vs.

"14. It is trite law that Article 14 of the Constitution

reasonableness, it would be unconstitutional.

15. While the discretion to change the policy in exercise of

24. When tenders are invited, the terms and conditions

25. In the case of Reliance Airport Developers (P) Ltd. v.

Airports Authority of India and others -(2006) 10 SCC 1,

said factors and giving of marks had different stages.

“9. In Tata Cellular v. Union of India AIR 1996 SC 11, a

crores or more for the last three financial years ending

very first day of admission hearing of the writ petition

II. Directorate of Education and Ors. vs. Educomp Datamatics

9. It is well settled now that the courts can scrutinize

"94. The principles deducible from the above are:

(1) The modern trend points to judicial restraint in

(4) The terms of the invitation to tender cannot be open to

judicial scrutiny because the invitation to tender is in the

(5) The Government must have freedom of contract. In