TaxTMI 
TaxTMI 
2005 (4) TMI 579
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.... constitution of the firm/company, turn over for past three years, a copy of the license to act as surveyor/loss assessor under the Insurance Act, 1938, besides other matters and earnest money in the form of bank draft/pay order. The second part was to consist of the "Financial Bid". The technical bid was to be opened on 15.12.2003 and the financial bid was to be opened on 28.2.2004. After opening the technical bid, the CONCOR pre-qualified two bidders, viz., the appellant and the first respondent. Thereafter, the financial bid was opened. The bid of the appellant was Rs. 3.00 per container while that of the first respondent it was Rs. 3.75 per container and as the appellant's bid was 25 per cent lower than that submitted by the first respondent, its bid was accepted and the work was awarded to it. The fist respondent initially filed Writ Petition (C) No.3687 of 2004 before the Delhi High Court challenging the eligibility of the appellant to participate in the tender process, mainly on the ground that the appellant did not have a license to act as a surveyor/loss assessor under the Insurance Act, 1938, and in support of this submission it was urged that on an earlier occasion, the....
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....ender committee took a decision that the financial bids of both the bidders be opened. The first respondent had enclosed two IICL certificates, but the same were not in conformity with the tender conditions. It was further pleaded that the major work (98%) under the contract is of data entry i.e. recording of container number, seal number, condition of seal and external condition of container on arrival and dispatch of containers from the ICD for which the appellant had quoted Rs. 3.00 per container against Rs. 3.75 of the first respondent and for such kind of work no license under IRDA is required. Having regard to the fact that the bid offered by the first respondent for external survey of a container, which is the main work, was 25 per cent higher than that of the appellant, the work was awarded to the appellant. 4. The appellant also filed a counter affidavit stating that Capt. Percy Meher Master started a sole proprietorship business of marine and cargo surveyors by the name of Master Marine Services in February, 1983. He had in his name a license to act as a surveyor/loss assessor under the Insurance Act, 1938. As over the years the business had considerably increased, a pri....
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....g which fresh tenders may be invited. 6. Learned counsel for the appellant has submitted that the only ground on which the High Court has set aside the award of contract to the appellant is that it does not possess a license to act as surveyor/loss assessor under the Insurance Act, 1938. Initially in the year 1983, Capt. Percy Meher Master, who had a license to act as surveyor/loss assessor under the Insurance Act, had started a sole proprietorship business in the name of Master Marine Services. Subsequently, on account of increase in business, he formed a private limited company in 1997 by the name of Master Marine Services Pvt. Ltd. (appellant herein), which took over the entire business of Master Marine Services (the sole proprietorship concern). Capt. Percy Meher Master holds 40.02 per cent share holding in the said company and the remaining is held by his wife, son and daughter who are all directors of the company. The company had also entered into an agreement whereunder Capt. Percy Meher Master, who is also the Chairman and Managing Director of the company, will be employed as consultant. Having regard to these facts, it could not be said that the appellant did not hold a l....
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....n bid. The relevant parts of para 1, para 2, para 3 and para 11 of the instructions are being reproduced below : 1. The tendering will be through a two bid process. Document duly completed should be submitted in two parts. 2. First part will consist of "Pre-Qualification Bid" for tender for professional services for survey of cargo/containers for CONCOR at ICD/TKD and should be superscribed as such. It should be sealed in a separate envelope, to be called envelope "A". The envelope must contain the following documents : (a) ............................................................................................................... (g) Copy of license to act as surveyor/loss assessor under Insurance Act, 1938. ......................................................................... 3. The second part will consist of the "Financial Bid" for tender for professional services for survey of containers and cargo for CONCOR at ICD/TKD and should be superscribed similarly on the second envelope as such. Only the Schedule of Rates as given in Annexure III should be completely filled up, signed and placed in this envelope which should be sealed. This envelope will be called Envelope....
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....nical bids of the appellant and the second respondent were considered and recorded as under in the notings : "The documents given by M/s Metcalfe are perfectly in order. There is slight ambiguity about one of the documents given by M/s Master Marine Services. This concerns the surveyor license. The license is issued in the name of Mr. Percy Meher Master who is the sole proprietor of M/s Master Marine Services. The license issued by the IRDA mentions Mr. Percy as being the sole proprietor of M/s Master Marine Services. As per our tender criteria, clause 1(d), Chapter 2 (pg.6) mentions that the tenderer must have license to act as surveyor/loss assessor under Insurance Act, 1938. The TEC feels that there are only two bidders in this tender. It would be desirable to prevent this tender from lapsing into a single bidder tender. Therefore, the TEC feels that, subject to the approval of Accepting Authority, Master Marine Services can be asked to provide proof of the company, i.e. Master Marine Services, having a survey license in the name of the company. This might require the company to get an endorsement on the license issued to Sh. Percy as per clause-3 of the license issued by IRDA....
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....ork was awarded to the appellant. 9. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three Judge Bench in Tata Cellular v. Union of India AIR 1996 SC 11. It was observed that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose ....
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....ion Ltd. 1999 (1) SCC 492 it was observed that 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, which would include, inter alia, the price at which the party is willing to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of ability to deliver the goods or services as per specifications. 12. The law relating to award of contract by State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd. 2000 (2) SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It 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. It was further held that 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 decisio....