R.K.MERATHIA, J. - (1.) THE petitioner has prayed for quashing the order dated 14.8.2003 whereby and whereunder, pursuant to the notice inviting tender (NIT) issued by respondent No. 3 for supply of cloth material, supply order has been is -sued in favour of respondent No. 4; and for . a declaration that the specification of the cloth materials in the NIT is bad and not in accordance with the Government Circular; and for a direction for issuance of a fresh NIT after following the guidelines issued by the Government from time to time, and for restraining the respondents from executing the work order during the pendency of this case.
(2.) THE petitioner has placed the following facts. The petitioner is a Government of India undertaking. A notice inviting tender (NIT) was published on 21.7.2003 for supply of dress materials for school girl students as per the specifications given therein. The petitioner took part in the tender. When it learnt that as per the NIT it could not quote two rates, the petitioner explained that as per the Government Rules, the dress materials should compose Polyester and Cotton (Tericot) and there is no scope of supplying any dress materials with composition of Viscose in place of Cotton and therefore two rates of Polyester + Viscose and Polyster + Cotton were given; for the dress material of students the composition of Viscose is not suitable and should be avoided; the dress materials composing of Polyster + Cotton is recommended by the Government. Ignoring the clarification of the petitioner, the tender committee recommended for issuing work/ supply order in favour of respondent No. 4 on 14.8.2003 (Annexure 6). As per the policy of the Government, if the petitioner is not in a position to supply the required cloth materials, then only it has to be purchased from a well -known Textile Mill. Petitioners further case is that as per the NIT, the successful tenderer was to supply the materials at the places as may be directed by the District Welfare Office and for which no separate transportation cost will be paid to the supplier, but in violation of the said term, the Department has accepted the subsequent offer of the respondent No. 4 (Annexure D) for payment of 3% extra towards delivery/packing/forwarding/freight etc. and 1.5% extra (Total 4.5% extra) towards insurance/handling charges etc. against the terms of NIT. Thus in the present work order amounting to about Rs. 2.19 crores, the Government is made to suffer a loss of about Rs. 9 to 10 lacs. This also shows that respondent No. 4 has been favoured by the Department. The case of the respondent Nos. 1 to 3 is as follows. As per the NIT, the supplier Mill should be a registered Mill having an ISO Certificate. The petitioner did not produce ISO Certificate. According to the test report submitted by the petitioner itself (Annexure A), the ratio of Polyester and Viscose was not as per the specifications mentioned In the NIT. Therefore, it was clear that the petitioner was disqualified and it was not in a position to supply the dress materials, as specified in the NIT. Being an unsuccessful tenderer it could not challenge the decision of the Department to take supply from respondent No. 4. The Department has decided to purchase the cloth material composing Polyester and Viscose as per the specifications given in the NIT, and that decision cannot be challenged by the petitioner. The Government Circulars relied on by the petitioner are not relevant in the present case inasmuch as those Circulars related to the dress materials of class IV employees of the Government. There is no Government Circular by which the purchase of school dress composing of Polyster + Viscose is banned. The Home Department of the State Government has recently invited tender for .cloth materials of similar specifications for providing liveries to the Home Department. The respondent No. 4 by letter dated 30.7.2003 (Annexure D), before opening of the bid, had asked for the aforesaid 3% + 1.5% (total 4.5%) extra which was accepted by the Tender Committee. Only by this circumstance, it cannot be said that respondent No. 4 has been favoured. Learned Advocate General submitted that, however, if this Court finds that the said extra amount is against the terms of NIT and should not have been allowed, this Court can direct that the same should not be paid to the respondent No. 4, and the amount already paid, be recovered/adjusted from respondent No. 4. He further submitted that the Tender Committee found that the cloths of S. Kumar was of better quality and the rates were lowest. Moreover the supply of cloth material by S. Kumars has been done to different Central Government and Sate Government Departments and Companies and therefore the order was given to respondent No. 4 on satisfaction that it was the authorized agent of S. Kumars. Learned Advocate General pointed out with a reference to the decision reported in AIR 1986 SC 75 (H. Anraj v. Government of Tamil Nadu) that a winding up proceeding was pending against the petitioner and in fact the petitioner is presently under BIFR. He relied on AIR 1986 SC 1527 (Shri Har -minder Singh Arora v. Union of India and others) and submitted that the NIT did not indicate any preference to the Government undertaking and the tender is to be on the bid by the tenderers and in the matter of tender, the Government Company and the Private Company are at par. He further relied on 1999 SC 393 (Raunaq International Ltd. v. I.V.R. Construction Ltd. and others) and submitted that unless there is substantial amount of public interest is involved or the transaction entered into is mala fide, the Court should not intervene under Article 226 of constitution in disputes between two rival tenderers. He also relied on (1994) 6 SCC 651 (Tata Cellular v. Union of India) to show the scope of judicial review in such matters. He then relied on (2000) 2 SCC 617 (Cochin International Airport Ltd. and Ors. v. Cambatta Aviation Ltd. and others) and submitted that the award of a contract whether it Is by a private party of by a public body or the State is essentially a commercial transaction involving commercial considerations. The State can choose its own methods to arrive at decision. It can fix its own terms in NIT and that is not open to judicial scrutiny. It can enter into negotiation before finally deciding to accept one of the offers made to it. Even when some defect is found in the decision making process, the Court should not interfere under Article 226 keeping in view the larger public interest. Only if the Court comes to a conclusion that public interest requires interference, the Court should intervene.
(3.) RESPONDENT No. 4 has adopted the arguments of learned Advocate General and submitted that the work/supply order has been rightly given in its favour and that it has already delivered more than 50% of the cloths and the rest has already been purchased from S. Kumar which is in the ransit and the same would be delivered within few days. Regarding the extra payment of the aforesaid 4.5%, it Is stated that the same was accepted by the Tender Committee.;