G.S. Singhvi, J. - (1.) THE petitioner has invoked jurisdiction of this Court under Article 226 of the Constitution of India for quashing of the decision taken by the Haryana State Industrial Development Corporation Ltd. (for short, the Corporation) rejecting its application for prequalification for award of contract for infrastructural development works including roads, sewerage, drainage, water supply, electrical and telecommunication works for IMT. Manesar and Investate Bawal.
(2.) A perusal of the record shows that in pursuance of the notice issued by the Corporation in January, 1998, the petitioner and others submitted pre -qualification tenders. After considering the offers of the various applicants, the Screening Committee constituted by the Corporation rejected the application of the petitioner. The representation dated 14.4.1998 submitted by the petitioner was considered by the Board of Directors of the Corporation in its meeting held on 20.5.1998 and after hearing its representative -Shri Sushil Sethi, the Board of Directors reiterated the earlier decision. The petitioner has challenged the rejection of its application at the stage of pre -qualification mainly on the grounds of arbitrariness, mala fides, non -application of mind and the consequential violation of its fundamental right to equality guaranteed under Article 14 of the Constitution of India. To substantiate this assertion, the petitioner has made the following averments in paragraphs 7,8,11, and (25 -B) of the petition: - "7. That the dispute in the present writ petition is three fold. The pre -qualification tender for contractors for a project under various packages have been rejected without assigning any reason. Whereas, there was a clear condition in the initial application form and the pre -qualification norms based upon objective valuation, but no reason whatsoever has been given in rejection. The second dispute in the present writ petition is that there is deviation/reduction of the package value under option No. 1, 2, 5 and 6. After the pre -qualification no notice whatsoever has been given to the petitioner or the similarly situated persons because the reduction of value will also affect the minimum eligibility criteria. The right of the petitioner is seriously prejudiced particularly, under option No. 6 because he was having additional experience in regard to that value after reduction of value. The respondent cannot deviate later on without giving any notice to the petitioner or similarly situated persons. The act is also mala fide, because to give benefit to certain companies and to out certain companies. The third grievance of the petitioner is that there is clear mala fide on the part of the respondents for not qualifying the petitioner. That certain contractors who have been qualified are not only having less experience but has no experience and their tender were liable to be rejected in the initial screening itself. The records of those are with the respondents and at the face of it, the act is mala fide and discriminatory. 8. That pre -qualification applications were opened to all eligible firms and voluntary joint Venture, from all countries/areas in the world and accordingly the petitioner -company not only entered into Joint Venture by entering into a Memorandum of Undertaking on 18th Feb. 1998 with four other leading Companies of the country but also one independent body of State of U.P. known as "Construction & Designs Services. Uttar Pradesh Jal Nigam" who has done one single similar Public Health Works above Rs. 64 crores. Apart from the petitioner the other four leading companies who form the joint venture with the petitioner which are as under: (1) Construction and Design Services, Uttar Pradesh Jal Nigam having its registered office at A -4/18 Vishal Khand, Gomati Nagar, Lucknow 226010 (hereinafter referred to as C & DS. UPJN). (2) Valecha Engineering Limited in Joint Venture with MTD Construction Sdn and Bhd having its registered office Keshava 8th floor. Bandra Kurla Complex Bandra (East). Mumbai 400 051 (hereinafter referred to as VALECHA MTD). (3) Himachal Futuristic Communication Limited, having its registered office at 8, Commercial Complex, Masjid Moth, Greater Kailash -II New Delhi 110 048 (hereinafter referred to as HFCL). (4) EMCO Transformers Limited, having its registered office at F -5, Road No. 28 Wagle Industrial Estate, Thane 400 604 (hereinafter referred to as EMCO). xx xx xx 11. That the petitioner firm itself on behalf of the other joint venture companies -submitted the pre -qualification to respondent No. 2 on the following date regarding the various options. i) 19.2.1998 Option No. 5 & 6. ii) 19. 2.1998 Option No. 7 & 8. iii) 19.2.1998 Option No. 1 & 2. These were given vide separate application forms along with the documents in detail containing the details of experience etc. xx xx xx (25 -B) That the respondents have handed over the report of the committee which the petitioner company is now annexing as Annexure P. 10. In fact, the perusal of the same clearly shows that the case of the petitioner has been rejected in the pre -qualification tender illegally and with mala fide intentions. That in Annexure P. 10. the initial screening results, have also been shown along with final results. The committee was basically to calculate various values on the basis of the certificate produced and on that evaluation various marks were to be given to various applicants. It was an objective evaluation and not the subjective evaluation and was based upon the relevant information of an applicant annexed with the application form. A set criteria was formed for the purpose of scoring which is evident from the tender document and so also from the report of the committee. After going through the report of the committee. It is not only full of mistakes, contradiction but the evaluation clearly is an act of favoritism, mala fide and illegal. The petitioner company is pointing out the certain facts, which are not only glaring to show that there is no evaluation at all by the alleged committee. The petitioner is citing certain examples as under: (A) FINANCIAL SCORING: It contains three heads: i) Latest turn over ii) Net Worth iii) Working Capital. These factors were to be considered in relation to the value of the work and then the turn over etc. was to be evaluated from the balance sheet and the certificates of bankers etc. Now the deponent is reproducing the relevant information under various options to show the illegalities of the respondents i.e. HSIDE which is as follows: Position of Petitioner Company Option 1. 2. 5. 6. 7. 8. Nos. VALUE OF 180/140 Cr. 65 Cr. 72/56 Cr. 29 Cr 32 Cr. 13 Cr. CONTRACT LATEST TURN 4.5 4.5 4 4 4.5 4.5 OVER 121 Crores NET WORKED 8 8 5 5 8 8 60 Crores WORKING 7.5 7.5 3 3 7.5 7.5 CAPITAL 64 crore This shows the same marks have been given for different types of jobs, which cannot be done as the value of the work as shown above, will be different in each case. Secondly, where the financial valuation is more than of value of the work, there are no reasons for giving ess marks out of the total marks i.e. 10., The petitioner company should have got full marks or one or two less marks as given to other companies keeping in view the financial status of it. (B) EXPERIENCE/MAX. RELEVANT WORK DONE. That" most glaring mistake is in their own records is in respect to the factor of the experience/max, relevant work done. At the time of initial screening as stated above, the respondents have assessed the max. work done by the particular company in particular option of work and have then failed the company or have passed the particular company. The petitioner company is trying to show as values in respect of option Nos. 5 and 6 by giving the details, which are as under, which have been taken from Annexure P. 10 only. Sr. Name of the Option Nos. Max. work Marks given for No. firm applied done. options 5 6 1. Hind, Steels Works 5&6 110 21 21 2. Jay Hind Projects 5&6 32 21 23 3. Hindustan Const. 5&6 28.29 21.5 21.5 4. Unitek Ltd. 5&6 130 14 14 5. Dodsal 5&6 210 27.5 27.5 6. Engg. Projects 5&6 83.05 21 22 7. Ansal Properties 5&6 77.76 14 16 8. Punj Lloyd 5&6 47.38 23 23 9. M/s Subhash Pro.Ltd. 5&6 166 15 15 10. Shapoorji 5&6 134.2 25.5 27.5 11. Gannon 5&6 39.35 21 23 12. L&T 5&6 120 27 27 13. HOHYP 5&6 95.32 25.5 25.5 (C) SUB CONTRACTING (a) That third glaring mistake is with regard to sub -contracting. There was a schedule with the application form i.e. Schedule G in which specifically it was denied that the petitioner is a sub -contracting agency of any kind. There was no such document or even now to show that the petitioner is sub -contracting, therefore, the marks should have been 5 out of 5. However, in the present case the marks have been given as under various option for which the petitioner has applied are as under: Option Nos 1 2 5 6 7 8 Total Marks (5) 2 2 3 3 2 2 (b) That not only this one of the company M/s Jay Hind Projects was itself a sub -contractor of another Company EPIL and they have been given 5 out of 5 and 5 out of 5 respectively under Option No. 5 & 6. It is further pertinent to mention that the certificate, which has been produced by M/s Jay Hind Projects with regard to experience under Option No. 5 and 6 was of Rs. 32 crores. This job was allotted to another Company EPIL, who had also applied for the various options, but M/s Jay Hind projects have been given 23 Nos. under the evaluation of experience and EPIL has been given 22 marks for experience evaluation, which clearly shows that there in fact, no assessment of evaluation by the committee has been done, (c) That there is total non -application of mind not only in the case of petitioner company but also in the case of some other companies, which shows that there is no proper evaluation or screening for example under option No. 5 and 6 in the case of initial screening certain companies having more experience than one of the company like M/s Jay Hind projects and they have been failed for the reasons best known to the respondents. The three companies are as under: 1. M/w Bhandari Builders 180 Crores Fail 2. UEM India Ltd. 38.8 Crores Fail 3. M/s Gyatari 57 Crores Fail Projects 4. M/s Jay Hind 32 Crores Passed Projects. 4. The official respondents have controverted these, averments. They have made the following averments in the corresponding paragraphs of the written statement: "7. That the contents of para 7 of the writ petition are wrong and denied. Regarding reasons for rejection of petitioner, it will be pertinent to mention that besides the instructions for submission of application for pre -qualification, provided in per -qualification document, the application for pre -qualification submitted by the petitioner also specifically provided that the respondent -Corporation was under no obligation to inform the petitioner the grounds for rejection. The relevant clauses i.e. B -14 and B -15 of the INSTRUCTIONS FOR APPLICATION SUBMISSION and clause 3 (C) of LETTER OF APPLICATION FOR PRE -QUALIFICATION, of pre -qualification document are reproduced herein under : B -14. The decision of HSIDC to accept or reject any application shall be final. The employer reserves the right to reject any or all pre -qualification applications without assigning any reason. B -15. HSIDC will inform all applicants of the result of their applications. HSIDC reserves the right to reject any application and reject all applications, without thereby incurring any, liability towards the applicant nor any obligation to inform the applicants of the grounds of rejection. 3(C) Your agency shall not be liable for any such action and shall be under no obligation to inform the applicants of grounds of rejection. However, as mentioned in the preliminary objections, the petitioner on its representation against the rejection for pre -qualification was given an opportunity to explain his case to the Board of Directors of respondent -Corporation by way of presentation in the meeting held on 20.5.1998, as a special case. Having considered the presentation made before the Board by Mr. Sushil Sethi, the representative of the petitioner, the Board vide resolution dated 20.5.1998 (Annexure R.2) decided that notwithstanding the clarifications given by Mr. Sushil Sethi, no case was made out for pre -consideration of pre -qualification already decided upon. The second allegation by the petitioner that there is deviation/reduction of the package value under option No. 1, 2, 5, and 6 after the pre -qualification, which prejudiced the right of petitioner, has no force and is not legally tenable. It is clarified that in view of the clear condition of the completion of at least one project of similar nature of minimum contract value equal to 80% of the value of the package for which application was to be submitted, the petitioner, who was eliminated in pre -qualification not on account of non -fulfilment of said condition but on the basis of detailed evaluation viz -a -viz. the other contenders, has no right to challenge the reduction of package value by Corporation while determining the actual estimates for the purpose of detailed Notice Inviting Tenders (DNIT) after the process of pre -qualification. The issue of package value for pre -qualification and estimated cost for the purpose of DNIT are also two separate issues. The petitioner, who failed to qualify for short -listing, has no right to challenge the reduction in estimated cost at a later stage particularly in view of the fact that the criteria for pre -qualification was applied to all the applicants uniformly and no body either out of the applicants rejected at the stage of pre -qualification on any outsider was given the benefit of reduction in the actual estimates for the purpose of DNIT. The third grievance of the petitioner that certain contractors with no experience have been qualified by the respondents, is factually incorrect and merely a figment of imagination of the petitioner. The contractors short -listed by the respondents have experience in the relevant field. Experience is one of the criteria laid down in the pre -qualification document. 8. That the contents of para 8 of the writ petition are admitted to the extent that the applications for pre -qualification invited through International Competitive Bidding route, were open to all eligible firms and voluntary joint Ventures and the petitioner had made an application as a Joint Venture by entering into a Memorandum of Understanding with four other Companies. It is, however, relevant to point out that despite a number of irregularities/omissions in submission of application by the petitioner, as Joint Venture, the petitioner on the basis of data submitted along with the application, was invited for presentation before the Committee constituted for short -listing. However, in the process of detailed evaluation, it was noticed that: (i) the cost of project which, in fact, have been designed for execution purposes by Construction and Design Services (C&DS) of U.P. Jai Nigam, a joint venture partner of the petitioner, had been mentioned by the petitioner to its account, whereas the design part of the project cannot be considered relevant for actual execution of the work at site i.e. works falling under option Nos. 5 and 6. It needs to be explained here that the designing work is, in fact, to be done by the Consultants of respondent -Corporation and, therefore, what was needed was a prospective contractor to execute the work at site; (ii) EMCO, a joint venture partner of the petitioner in respect of the Options Nos. 7 & 8 is known to be the manufacture and supplier of transformers and have not executed any work of the Sub Station and Distribution & Transmission Systems similar to specific requirements of respondent -Corporation. Thus, the experience of EMCD ltd. was not relevant for the purpose of electrification and telecommunication system at site i.e. works under Options 7 & 8. xx xx xx 9, 10, & 11. The contents of paras 9, 10 and 11 are not disputed being the matter of record. xx xx xx 25 -B. That the contents of para 25 -B of the writ petition are devoid of merit and hence denied. In reply to sub paras, the position is explained as under. A. Financial Scoring It is submitted that the petitioner had claimed the strength with regard to value of the contract, latest turn over, net worth and working capital by incorporating the cost of project which have been only designed and the execution thereof had not been carried out by the petitioner. Regarding the works against option Nos. 5 and 6 i.e. Public Health Works at IMT Manesar and Bawal, the design strength of Construction and Design Services (C & DS) of U.P. Jal Nigam, a joint venture partner of petitioner was claimed, which cannot be considered to be relevant for actual execution of work at site against option Nos. 5 and 6. Similarly against option Nos. 7 & 8 i.e. works pertaining to Electrification and Telecommunication system at IMT Manesar and Bawal, the petitioner had claimed the strength of EMCO, a joint venture of petitioner, whereas EMCO is known to be the manufacturer and suppliers of the Transformer and have not executed any similar works, which HSIDC wants to get executed at site and, therefore, the cost of the project executed by M/s EMCO Ltd. was not found to be relevant for the purpose of execution of said works. The Committee had taken into consideration the above Position while allotting marks to the petitioner. (B) Experience/Max. Relevant Works Done: At the time of initial screening, the maximum value of the cost of the projects was assessed and recorded by the committee but during detailed examination, it was observed that though some of the agency have executed large' magnitude of works but their work experience in the relevant filed as required by HSIDC was very limited and accordingly keeping this very factor in view, the marks of option 5 & 6 were given. (C). Sub Contracting (a). As stated in the above para, the Committee during detailed evaluation observed that the petitioner Company did not have the requisite experience, financial/technical capability to execute the development works for different options 1, 2, 5, 6, 7 and 8 as such they have rightly assessed the capabilities of the firm to do the job on their own and awarded the marks according to merits only. (b). M/s Jai Hind Projects Ltd. might have been sub contractor of M/s EPIL is one of the case/project, but after detailed evaluation, the Committee satisfied themselves with reference to the sub contracting system of both these agencies and awarded the marks accordingly. As regards the allotment of marks to EPIL M/s Jai Hind Projects under the evaluation of work experience, it is again clarified that the marks were allotted against the similar relevant work experience only in particular field/option. 5. In their separate written statements, respondents No. 4, 6 and 7 have justified the decision of the Corporation to entertain their applications at the stage of pre -qualification. They have also averred that the Corporation has issued work order. 6. We have, heard learned counsel for the parties at considerable length and have carefully examined the entire record. In our opinion, the writ petition deserves to be dismissed because: - (a). the issues raised by the petitioner fall primarily in the realm of contract and for adjudication of the claim made by it, an effective alternative remedy is available by way of civil suit; (b) the contentious issues of fact raised by the petitioner cannot be decided by this Court under Article 226 of the Constitution of India; (c) as per the statement of the counsel for the respondents, which has been controverted by the counsel for the petitioner, the projects have been substantially completed by investment of crores of rupees. Therefore, at this stage, it would not be in public interest to stultify further execution of the projects. In Air India Ltd. v. Cochin International Airport Ltd., 2000(1) SC 481, their Lordships of the Supreme Court have laid down the following guiding principles for Courts interference in such matters: "The law relating to award of a contract by the state, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in R.D. Shetty v. International Airport Authority, (1979) 3 S.C.C. 488, Fertilizer Corporation Kamgar Union v. Union of India : (1981) 1 S.C.C. 568, Astt. Collector, Central Excise v. Dunlop India Ltd. : (1985) 1 S.C.C. 260, Tata Cellular v. Union of India , 1994(4) SC 532 : : (1994) 6 S.C.C. 651, Ramniklal N. Bhutta v. State of' Maharashtra : 1996 (10) SC 452 : (1997) 1 SCC 134 and Raunaq International Ltd. v. I.V.R. Construction Ltd. . The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract, it is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even 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 amendable 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." By applying the ratio of the above noted decision to the facts of this case, we hold that the present one is not a fit case for exercise of jurisdiction by the High Court under Article 226 of the Constitution of India. Hence the writ petition is dismissed.;