Supreme Court of India
G.J FERNANDEZversusSTATE OF KARNATAKA & ORS.
- Citation
- 1990 INSC 25
- Decided
- 1 February 1990
- Disposal
- Dismissed
- Bench
- S RANGANATHAN
Holding
Paragraph V must be read with Paragraph I; essential documents under Paragraph V are required to assess pre‑qualification, but non‑compliance with every detail does not automatically disqualify a bidder, and the court will not interfere with KPC’s assessment of comparative merits.
Summary
The petitioner challenged the award of a contract by Karnataka Power Corporation (KPC) to Mysore Construction Co. (MCC), alleging that MCC had not satisfied the pre‑qualifying requirements in Paragraphs I and V of the Notice Inviting Tender (NIT) and therefore should not have been issued tender documents. The Supreme Court examined whether Paragraph V must be read together with Paragraph I to constitute a condition precedent for receiving tender forms, and whether the failure to furnish certain documents under Paragraph V disqualified MCC. It held that Paragraph V is to be read with Paragraph I and that some documents in Paragraph V are essential to assess pre‑qualification, but the omission of every detail does not automatically render a bidder ineligible. The Court further ruled that the assessment of the comparative merits of the bids is within KPC’s discretion and not for judicial interference, and that the slight procedural deviations did not prejudice the petitioner. Consequently, the appeal was dismissed.
Issues considered
- Whether Paragraphs I and V of the NIT must be read together as pre‑qualifying conditions for eligibility to receive tender documents.
- Whether the failure to supply documents required under Paragraph V disqualifies a bidder from eligibility.
- Whether KPC’s acceptance of MCC’s tender was arbitrary or violative of Article 14 of the Constitution.
- Whether the court can intervene in the assessment of the comparative merits of the bids.
- Whether the delay in furnishing certain documents by MCC warrants denial of its right to tender.
Subjects
tender eligibilitypre‑qualificationadministrative lawArticle 14Article 226contract awardKarnataka Power Corporationprocedural fairnesscomparative merit
Judgment
G.J. FERNANDEZ A
v.
I
STATE OF KARNATAKA & ORS.
FEBRUARY 1, 1990
B
[S. RANGANATHAN AND K.N. SAIKIA, JJ.)
Constitution of India 1950: Articles 226 and 136--Award of con-
tract by Karnataka Power Corporation to Mysore Construction Co.-
Validity of-Eligibility of party to apply for State contracts-Supply of
tender documents-Essentiality of-Comparative merits of parties- c
Not for Court to decide.
The petitioner aggrieved by the award of a contract by the respon-
dent in favour of Mysore Construction Company (M.C.C.) filed a Writ
Petition and a further Writ Appeal in the Karnataka High Court. Being
unsuccessful there he came up in appeal before this Court by way. of D
special leave.
The single judge of the High Court had taken the view that pre-
requisites for the supply of tender forms were contained in Para I of the
Notification Inviting Tender (NIT) and the details called for in Para V
could be supplied any time. The Division Bench on appeal did not E
express any opinion regarding the requirements set out in para V but
was of the view that there was nothing unfair or arbitrary about the
award of the contract to the MCC. In appeal before this Court the plea
of the petitioner is that the Karnataka Power Corporation should not
have accepted the tender of MCC, as the MCC did not fulfil certain
preliminary requirements contained in Para I and V of tbe NIT which F
~
according to him have to be fulfilled before the forms of tender could be
supplied to any intending contractor.
Dismissing the appeal of the petitioner, the Court,
HELD: Para V cannot but be read with para I. The supply of G
some of the documents referred to in para V is indispensable to assess
whether the applicant fulfills the prequalifying requirements set out in
'(" para I. It will be too extreme to hold that the omission to supply every
small detail referred to in para V would affect the eligibility under para
I and disqualify the tenderer. [240E-FJ
H
~
229
230 SUPREME COURT REPORTS [1990] 1 S.C.R.
If a party has been consistently and bona fide interpreting the
A
standards prescribed by it in a particular manner, this Court should
not interfere thoueh it may he inclined to read or construe the condi- \
tions differently. [241E]
Assuming for purposes of argument that there has been a slight
B deviation from the terms of the NIT, it has not deprived the appellant of
its right to be considered for the contract. On the other hand its tender
has received due and full consideration. If, save for the delay in filing
one of the relevant documents, MCC is also found to he qualified
to tender for the contract, no injustice can be said to have been
done to the appellant by the consideration of its tender side by side
with that of the MCC and in the KPC going in for a choice of the
c better on the merits. [242E-G l
The comparatil'e merits of the appellant vis-a-vis MCC are, how-
ever, a matter for the KPC to decide and not for the Courts.[243C-DI
D Ram Gajadher Nishad v. State of U.P., (C.A. 1819/89); Ramana
Dayaram Shetty v. The International Airport Authority of India &
Ors., [ 1979] (3) SCR 1014, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1027
of 1990.
E
From the Judgment and Order dated 27.10.1989 of the Karna-
taka High Court in Writ Appeal No. 2017 of 1989.
K. Parasaran, C.S. Vaidyanatha, S.R. Bhat, S.R. Setia, K.V.
Mohan and Mrs. 'Sunitba B. Singh for the Petitioner. -
F
K.N. Bhatt, Rajinder Sachhar, Vineet Kumar, B . Mohan and
K.G. Raghvan for the Respondents.
The Judgment of the Court was delivered by
G RANGANATHAN, J. The petitioner is aggrieved by the award
of a contract by the Karnataka Power Corporation Ltd. (K.P.C.), an
instrumentality of the State u~· Karnataka, in favour of the Mysore
Construction Co. (M.C.C. ). His writ petition and a further writ appeal ·,
in the Karnataka High Court having been unsuccessful, he has prefer-
red this Special Leave Petition from the judgment of the High Court in
H the writ appeal. We have heard counsel for both sides at length. We
232 SUPREME COURT REPORTS [1990] 1 S.C.R.
block, precast concrete block, ..... etc., and period of comple-
A
tion scheduled/envisaged, equipments and their deployment i.e.,
man months etc.
The N .I. T. specified January 17, 1989, as the last date for receipt
of application forms for issue of blank tender books. The issue of
B blank tender books was to be between 23rd January to 27th January,
1989 and the completed tender books had to be submitted by 3.00 p.m.
on 6.2.89. It is common ground, however, that subsequently this time
frame was altered. The last date for receipt of application form for
issue of blank tender books remained as 17th January, 1989 but the
other items were altered to read a:; follows:
c "I. Last date for receipt of 10.2.89
clarification:
2. Period to issue blank tender 10-2-89 to
books: 16.2.89
D
3. Last date and time for receipt of 27-2-89
completed tender books: upto 3 P .M.
It appears that six parties applied for tender books. These were
scrutinised with reference to the pre-qualifying requirements and data
E on experience, work done etc. as furnished by each of the applicants.
Four of the firms were found to be pre-qualified by the Chief Engineer
and tender books were issued to them. Only three of them, however,
submitted completed tender books by February 27, 1989. These
tenders were examined by the Chief Engineer as well as an indepen-
dent firm of Engineering Consultants, namely, Tata Consulting
F Engineers (T.C.E.). Both the Chief Engineer as well as T.C.E. recom- ~
mended acceptance of the tender of M.C.C. (which was the lowest
tender) in view of the fact that M.C.C. had adequate experience in the
construction of R.C.C. works and they were capable of mobilising the
work-force required for the work. It may be mentioned that after
making necessary adjustments it was found that the tender of M.C.C.
G was Rs.15 lakhs less than the tender of the petitioner.
The principal argument advanced on behalf of the petitioner is
that paragraphs I and V of the N.l.T. specified certain pre-qualifying
requirements. Unless these requirements were fulfilled, the contractor
was not even entitled to be supplied with a set of tender documents. It
H is submitted that M.C.C. did not comply with these requirements and
G.J. FERNANDEZ v. STATE OF KARNATAKA [RANGANATHAN, J.] 233
hence its application for tender forms should have been rejected at the
A
outset.
~
The learned single Judge in the High Court went into the matter
in great detail and came to the conclusion that the petitioner's conten-
tions were not well founded. He took the view that the pre-requisi1es
for supply of tender forms were only the three conditions set out in B
para I of the N.I.T. and that the details called for in para V could be
supplied at any time. He, therefore, rejected the petitioner's conten-
r tion that the extensions of time given to M.C.C. to submit the tender
with requisite clarifications were not warranted. The Division Bench,
on appeal, did not express any clear opinion as to the nature of the
requirements set out in Para V but was satisfied, on an overall view,
that there was nothing unfair or arbitrary about the award of the c
contract t'o the M.C.C. It observed:
"We have carefully considered these contentions. We
are of the view that while exercising jurisdiction under Arti-
cle 226 of the Constitution, it is not for us to reappraise the D
facts on merits and come to one conclusion or other with
regard to these aspects of the matter. Why we are obliged
l to say this is if the Court is satisfied there is nothing
arbitrary or unfair in the award of the contract, it cannot
convert itself into a super technical Committee and find out
whether the requirements have been fulfilled or not. While E
saying so, we are conscious of the fact that what is argued
before the learned single Judge is with reference to pre-
qualifications or in other words the eligibility. Nevertheless
where the person who is incharge of award of contract was
/
satisfied about the eligibility and that too after consultancy
~
through an independent agency like Tata's, we cannot F
come to a contrary conclusion and then say a particular
certificate does not in terms meet the requirement laid
down under clause V(d). That we consider is no function of
the Court. After all the object of tender in most matters
like this is to satisfy the authority that the person who
undertakes to execute the work or the person who offers G
the tender would be really worth and then he would
perform to the best of his ability and to the requirement of
y' the person who wants to have the contract. If these basic
principles are kept in mind, we do not think we can intro-
duce nuances of law to enter into the realm of contract
which we consider should be kept out of the purview of writ H
234 SUPREME COURT REPORTS [1990] 1 S.C.R.
jurisdiction. From this point of view, we are unable to find
A out any justification to interfere with the order of the
learned single Judge."
The first question that falls to be considered is as to whether
there is any difference between the requirements in paras I and V and
whether only para I and not para V-sets out the pre-conditions of
B eligibility to submit a tender for the contract. In our opinion, it is
difficult to accept the view of the learned single Judge of the High
Court that it is only para I that stipulates the pre-conditions and that
all the documents referred to in the other paras can be supplied at any
time before the final award of the. contract. It is .seen that paras I to
XIII set out various terms and conditions some of which relate to the
pre-tender stage and some to later stage. For instance, paras X and XI
c come into operation only after the tenders are received and para XII
makes it clear that the K.P.C.'s decision regarding the fulfilment of
para IV may remain open right till the actual award of the contract.
However, on the contrary, the condition set out in para VI has clearly
to be fulfilled even before asking for tender forms. Para V seems to
D stand somewhere in between. If one reads paras I and V together, it
will be seen that a common thread runs through them and that they are
really meant to supplement each other. It is in order to satisfy itself
that the requirements of para I(l) and (2) are fulfilled that the K.P.C.
calls for the certificates mentioned in para V and the fulfilment of the
requirement in para I(3) has obviously to be verified by reference to
E the audited balance sheets callecHor under clause (a) of para V. The
reference in clause (d) of para V to the "annual output of the works of
the above nature" is also obviously a reference to the works of the
nature described in para I. It is clear that at least some, if not all, of the
documents referred to in para V, are intended to verify the fulfilment
of the three prequalifying requirements of para I. The stipulation of
F the time element within which the information asked for in para V
should be supplied is also of some significance; it specifically requires
the information to be supplied aiong with the application for tender
forms. As pointed out by this Court in its judgment dated 3.3.1989 in
Ram Gajadher Nishad v. State of U.P., C.A. 1819/89, an intending
tenderer can be perhaps letigimately excluded from consideration for a
G contract, if the certificates such as the ones under clauses (b) and (c) of
para V are not furnished. It may not, therefore, be correct to read para
I in isolation and treat it as the only condition precedent for the supply
of forms of tender. The more harmonious and practical way of constru- y
ing the N.I.T. is by saying that, before the tender books can be sup-
plied, an intending tenderer should satisfy the K.P.C, by supplying
H such of the documents called for in para Vas are material in assessing
\he fulfilment of the condition in para I, that he fulfills the three
G.J. FERNANDEZv. STATEOFKARNATAKA [RANGANATHAN,J.l 235
conditions set out in para I. lt seems clear to us that, apart from para I,
there are some other requirements in the N.I.T. which have to be A
/ complied with before the applicant can be eligible for supply of tender
forms. These include, if not all, at least such of those documents
referred to in para V(d) as have a direct bearing on the three condi-
tions outlined in para I.
Bearing this approach in mind, let us examine to what extent, B
according to the appellants, the M.C.C. failed to fulfil the N.I.T.
requirements:
So far as para I is concerned, two defects were pointed out. The
first was that, as against the requirement that the applicant "should
have executed ..... works including insulation", the certificate of
25.1.1989 produced by the M.C.C. was only to the effect that it "is c
conscructing" a building in Hyderabad for the National Geophysical
Research Institute "in which they have done wall insulation and roof
insulation for airconditioning work". The seCOJld was that, as against
the second requirement of para I that the applicant should have
executed "at least 300 cubic metres per month of brick work at one D
site, the certificate from Vasavadatta Cements produced by the
M.C.C. on 1.2.89 only stated that it had "constructed over 300 cubic
meter of brick masonry for the packing plant and D.G. building total-
ling to 327 .29 cubic metre during the month of June 1985". These
certificates, it is submitted, do not come up to the requirements of
Para I. We think that this criticism, based on the differences in word-
ing as between the language of para I and the certificates produced by E
the M.C.C., is too weak to be accepted. It was for the K.P.C. to
consider the sufficiency of these certificates. The conditions only
required that the apylicant should supp_ly information to show that he
had experienced in insulation work and that he could carry out brick
work in a month to the extent indicated. It was for the K.P.C. to assess
the value of the certificates furnished in this regard and if the K.P.C. F
considered them sufficient to warrant the issue of a tender form to the
applicant, we do not think we should interfere with their decision.
So far as para V is concerned, the criticism is that two items of
information concerning the requirements of clause (d) of Para V were
not supplied along with the request for application of ten<l5r forms· but G
were supplied much later. it was only on 21.6.89 that M.C.C. fur-
nished a certificate that they had executed "hollow cement blocks
work" for the Indian Telephone Industries Ltd. but even that certifi-
cate gave no details. It vaguely stated that "the item had been
executed as per our bill of quantities". Again, it was only on 18.8.89
that M.C.C. produced a certificate from Va_svadatta Cements regard- Ji
ing the work of concreting done by it. It is pointed out incidentally that
236 SUPREME COURT REPORTS [1990] 1 S.C.R.
this is also a part of the specific requirements in para I and, as such, the
A M.C.C. cannot be said to have satisfied the preliminary conditions
rendering it eligible to tender for the contract. The second of these
does not really cause much difficulty. For, even as early as 11.1.89
(aiong with its application for tender dated 3.1.89) M.C.C. had pro-
duced a certificate from the K.P.C. itself that it had done 35,000 cubic
metres of concreting during 7 months and this was apparently con-
B
sidered sufficient for the K.P.C. subsequently called for a certificate
only regarding brick work. This leaves only the first of the criticisms
that the details regarding hollow cement block works done by the
M.C.C. was furnished only on 21.5.89.
Should the M.C.C. have been denied altogether the right to
C tender for the contract consequent on the delay in submitting this
document is the second question that arises for consideration. Sri
Parasaran, for the appellant would have us answer this question in the ~
affirmative on the principle enunciated by Frankfurter, J. and ,
approved by this Court in Raman Dayaram Shetty v. The International
Airport Authority of India & Ors., [1979] 3 S.C.R. 1014. Bhagwati, J.
D (as his Lordship then was) formulated in the following words a princi-
ple which has since been applied by this Court in a number of cases:
"It is a well settled rule of administrative law that an execu-
tive authority must be rigorously held to the standards by
which it professes its actions to be judged and it must
scrupulously observ~ those standards on pain of invalida-
E tion of an act in violation of them. This rule was enunciated
by Mr. Justice Frankfurter in Viteralli v. Seton, 359 U.S.
535: 3 Law. Ed. (Second series) 1012, where the learned
Judge said:
An executive agency must be regorously held to the
F standards by which it professes its action to be judged.
Accordingly, if dismissal from employment is based on a
defined procedure, even though generous beyond the
requirements that bind such agency, that procedure must
be scrupulously observed. This judicially evolved rule of
administrative law is now add, rightly so. He that takes the
G procedural sword shall perish with the sword."
"This Court accepted the rule as valid and applicable in
India in A.S. Ahluwalia v. Punjab, [1975] 3 SCR 82 and in
subsequent decision given in Sukhdev v. Bhagatram, [1975]
3 SCR 619. Mathew, J., quoted the above-referred obser-
vations of Mr. Justice Frankfurter with approval. It may be
H
noted that this rule, though supportable also as emanation
G.J,FERNANDEZv. STATEOFKARNATAKA [RANGANATHAN,J.I 237
from Article 14, does not rest merely on tnat article. It has
an independent existence apart from Article 14. It is a rule A
of.administrative law which has been judicially evolved as a
check against exercise of arbitrary power by the executive
authority. If we turn to the judgment of Mr. Justice Frank-
furter and examine it, we find that he has not sought to
draw support for the rule from the equality clause of the
B
United States Constitution, but evolved it purely as a rule
of administrative law. Even in England, the recent trend in
administrative law is in that direction as is evident from
~ what is stated at pages 540-41 in Prof. Wade's Administra- _
tive Law 4th edition. There is no reason why we should
hesitate to adopt this rule as a part of our continuallv
expanding administrative law. c
xxx xxx xxx
1t is, therefore, obvious that both havin_g regard to the con-
stitut10nal mandate of Article 14 as also the judicially
evolved rule of administrative law, the Ist respondent was
not entitled to act arbitrarily in accepting the tender of the D
4th respondents, but was bound to conform to the standard
or norm laid down in paragraph 1 of the notice inviting
l
tenders which required that only a person running a re-
gistered Ilnd Class hotel or restaurant and having at least 5
years' experience as such should be eligible to tender. It
was not the contention of the appellant that this standard E
or norm prescribed by the Ist respondent was discrimina-
tory having no just or reasonable relation to the object of
inviting tenders namely, to award the contract to a suffi-
ciently experienced person who would be able to run effi-
ciently a Hnd class ·restaurant at the airport. Admittedly
~
the standard or norm was reasor.able and non-discrimina- F
tory and once such a standard or norm for running a Ilnd
Class restaurant should be awarded was laid down, the Ist
responde.nt was not entitled to depart from it and to award
-the contract to the 4th respondents who did not satisfy the
condition of eligibility prescribed by the standard or norm.
If there was no acceptable tender from a person who G
satisfied the condition of eligibility, the Ist respondent
could have rejected the tenders and invited fresh tenders
y on the basis of a less stringent standard or norm, but it
could not depart from the standard or norm pre·scribed by it
and arbitrarily accept the tender of the 4th respond¢nts.
When the Ist respondent entertained the tender of the 4th H
respondents even though they did not _have s·years' expe-
238 SUPREME COURT REPORTS [1990] 1 S.C.R.
rience of running a IInd Class restaurant or hotel, denied
A equality of opportunity to others similarly situate in the
matter of tendering for the contract. There might have
been many other persons, in fact the appellant himself
claimed to be one such person, who did not have 5 years'
experience of running a llnd Class restaurant, but who
were otherwise competent to run such a restaurant and
B they might also have competed with the 4th respondents for
obtaining the contract, but they were precluded from doing
so by the condition of eligibility requiring five years' ex-
perience. The action of the Ist respondent in accepting the
tender of the 4th respondents, even though they did not
satisfy the prescribed condition of eligibility, was clearly
discriminatory, since it excluded other person similarly
c situate from tendering for the contract and it was plainly
arbitrary and without reason. The acceptance of the tender
of the 4th respondents was, in the circumstances invalid as
being violative of the equality clause of the Constitution as
also of the rule of administrative law inhibiting arbitrary
D action." ,
Shri Vaidyanathan, who supplemented the arguments for the
petitioner, contended that this rule has been demonstrably infringed in
the present case, even on the K.P.C.'s own showing. He cited two
documents filed by the K.P .C. to substantiate this contention. The
first is "A note on the tendering system in K.P.C." which, inter alia,
J
reads:
"2.00 Brief tender notification containing description of
the work, estimated cost of the work, period of completion
and the minimum prequalifying/eligibility conditions
required and other general requirements such as the value/
fashion of C.M.D. to be furnished, latest certificates
works, and furnishing of audited balance sheet etc., duly
indicating the dates for issuing and receipt of tenders is
widely circulated and also advertised in leading newspapers
for the information of the intending tenderers. Where pre-
qualifying conditions are notified in the notification, the
G applications for the issue of tenders is carefully scrutinised
with reference to these requirements and the tenders will
be issued to those who comply with all the prequalifying/
eligibility requirements. Apart from the prequalifying con- r
ditions contained in the brief tender notification, certain
general requirements as described above will also be
looked into. any deficiency in the general requirements
G.J. FERNANDEZv. STA1EOFKARNATAKA [RANGANATIJAN,J.J 239
will, however, not disqualify the tenderers from receiving
the tender books as these conditions could be satisfied A
prior to acceptance of the successful tender. Any clarifica-
tions required on the prequalifying requirements/general
requirements will also be obtained before issue of tender
documents from the intending tenderers. The tenders will
be issued to those tenderers who comply with the pre- B
qualifying conditions.
The second is the record of minutes showing what they actually did:
"57.01 There was extended discussion on the issue.
C.M.D. also informed that one of the tenderers had sent a
representation objecting to the consideration of the tender
of M/s M.C.C. on the ground that they had not fulfilled the C
prequalifying requirements. There was a discussion as to
whether the stipulations mentioned in the N.I.""f. other
than those stipulated under prequalifying conditions have
to be mandatorily fulfilled before the tenders were filed. It
was clarified that only three preq ualifying conditions were
0
prescribed in the N.I.T. and other details called for vide
para 5( c) of N .I. T., were only for information and are such
they could be met before consideration of the tenders. It
was clarified that while tenders which did not meet
minimum prequalifying conditions were not eligible to be
considered at all, any shortcoming in furnishing the details E
at the time of tendering would not disqualify the tenderer
from bidding for the work, so long as the conditions could
be met before finalisation of the award. It was further
clarified that the word 'shall' used in the N.I.T. has been
the· normal practice in all tenders and agreement clauses
anct the decision of the K.P.C. and the application other F
than the minimum qualifying requirement should be pre-
rogative of K.P.C. only. It was informed that the practice
in K.P.C. so far has been to go by the minimum qualifying
requirements as stated in the N.I.T. and the rest of the
information were only for assessing the capabilities of the
tenderers as well as their eligibility and simply because G
Mr. G .J. Fernandez has made a complaint it would not be
proper to deviate from this established procedure. As per
( clause-11,. the Corporation reserves the right to reject or
accept the tender without assigning any reasons. In this
particular case, the lacuna in furnishing the information
has been set right subsequently by the tenderer before H
opening of the price documents, the Chief Engineer had
240 SUPREME COURT REPORTS [1990] 1 S.C.R.
come to the conclusion that the firm had fulfilled all the
A prequalifying requirements and as such the tender of M/s
M.C.C. had been found to be in order. It was also clarified
by GM(T) that the use of cement hollow block masonry
may not be required at all and instead the brick masonry
may be used as this item of work was essentially for a filler
wall and the walls would be non-load bearing. It was
B clarified that those who were prequalified had satisfied the
condition with regard to quantity of brick masonry work.
57.02 Under the circumstances, the Committee
recommended entrustment of work to Mis M.C.C. at their
quoted rates amounting to Rs.209.39 lakhs together with
their stipulation regarding release of security deposit
c against furnishing bank guarantee.
57 .03 However, it was decided that in future it should be
made clear that only prequalifying conditions would be
mandatory."
D These two documents, particularly the last sentence of the second one,
clearly show, Shri Vaidyanathan urged, that the K.P.C. had relaxed its
N.l.T. standards in favour of the M.C.C.
Interesting as this argument is, we do not see much force in it. In
the first place, although, as we have explained above, para V cannot
but be read with para I and that the supply of some of the documents
E referred to in para V is indispensable .to assess whether the applicant
fulfills the prequalifying requirements set out in para I, it will be too
extreme to hold that the omission to supply every small detail referred
to in para V would affect the eligibility under para I and disqualify the
tenderer. The question how far the delayed supply, or omission to
s11pply, any one -OT more of the details referred to therein will affect
F any of the prequalifying conditions is a matter which it is for the
K.P.C. to assess. We have seen that the documents having a direct
bearing on para I viz. regarding output of concrete and brick'work had
been supplied in time. The delay was only in supplying the details
regarding "hollow cement blocks" and to what extent this lacuna
affected the conditions in para I was for the K.P:c. to assess. The
G minutes relied upon show that, after getting a clarification from the
General Manager (Technical), the conclusion was reached that. "the
use of cement hollow block masonry may not be required at all and
instead the brick masonry may be used". In other words, the contract
was unlikely to need any work in hollow cement blocks and so the
documents in question was considered to be of no importance in judg-
H
ing the pre-qualifying requirements. There is nothing "'.rong with this,
G.J. FERNANDEZ v. STATE OFKARNATAKA IRANGANATHAN,J.] 241
particularly as this· document was eventually supplied.
A
Secondly, whatever may be the interpretation that a court may
place on the N.l.T, the way in which the tender documents issued by it
has been understood and implemented by the K.P.C. is explained in its
"'note", which sets out the general procedure which the K.P.C. was
following in regard to N.I.T.s issued by it from time to time. Para 2.00
of the "note" makes it clear that the K.P.C. took the view that para I B
alone incorporated the "minimum prequalifying/eligibility conditions"
and the data called for under para V was in the nature "general
requirements". It further clarifies that while tenders will be issued
> only to those who comply with the prequalifying conditions, any defi-
ciency in the general requirements will not disqualify the applicant
from receiving tender documents and that data regarding these
requirements could be supplied later. Right or wrong, this was the way
c
they had understood the standard stipulations and on the basis of
which it had processed the applications fOr contracts all along. The
minutes show that they did not deviate or want to deviate from this
established procedure in regard to this contract, but, on the contrary,
decided to adhere to it even in regard to this contract. They only D
decided, in view of the contentions raised by the appellant that para V
should also be treated as part of the prequalifying conditions, that they
would make it specific and clear in their future N.I.T.s that only the
fulfilment of prequalifying conditions would be mandatory. If a party
has been consistently and bona fide interpreting the standards pre-
scribed by it in a particular manner, we do not think this Court should E
interfere though it may be inclined to read or construe the conditions
differently. We are, therefore, of opinion that the High Court was
right in declining to interfere.
Thirdly, the conditions and stipulations in a tender notice like
this have two types of consequences. The first is that the party issuing F
the tender has ihe right to punctiliously and rigidly enforce them.
Thus, if a party does not strictly comply with the requirements of paras
III, V or VI of the N.l.T., it is open to the K.P.C. to decline to
consider the party for the contract and if a party comes to Court saying
that the K.P.C. should be stopped from doing so, the Court will
decline relief. The second consequence, indicated .by this Court in G
earlier decisions, is not that the K.P.C. cannot deviate from these
guidelines at all in any situation but that any deviation, if made, should
not result in arbitrariness or discrimination. It comes in for application
where the non-conformity with, or relaxation from, the prescribed
standards results in some substantial prejudice or injustice to any of
the parties involved or to public interest in general. For example, in
this very case, the K.P.C. made some changes in the time frame origi- 1:1
242 SUPREME COURT REPORTS [1990] 1 S.C.R.
A nally prescribed. These changes affected all intending applicants alike
and were not objectionable. In the same way, changes or relaxations in
other directions would be unobjectionable unless the benefit of those
changes or relaxations were extended to some but denied to others.
The fact. that a document was belatedly entertained from one of the
applicants will cause substantial prejudice to another party who
B wanted, likewise, an extension of time for filing a similar certificate or
document but was declined the benefit. It may perhaps be said to cause
prejudice also to a party which can show that it had refrained from
applying for the tender documents only because it thought it would not
be able to produce the document by the time stipulated but would have
applied had it known that the rule was likely to be relaxed. But neither
of these situations is present here. Sri Vaidhyanathan says that in this
c case one of the applicants was excluded at the preliminary stage. But it
is not known on what grounds that application was rejected nor has
that party come to Court with any such grievance. The question, then,
is whether the course adopted by the K.P.C. has caused any real
prejudice to the appellant and other parties who had already supplied
D all the documents in time and sought no extension at all? It is true that
the relaxations of the time schedule in the case of one party does affect
even such a person in the sense that he would otherwise have had
one competitor less. But, we are inclined to agree with the respon-
dent's contention that while the rule in Ramana's case (supra) will be
readily applied by Courts to a case where a person complains that a
E departure from the qualifications has kept him out of the race,
in justice is less apparent where the attempt of the applicant before
Court is only to gain immunity from competition. Assuming for
purposes of argument that there has been a slight deviation from the
terms of the NIT, it has not deprived the appellant of its right to be
considered for the contract; on the other hand, its tender has received
F due and full consideration. If, save for the delay in filing one of the
relevant documents, M.C.C. is also found to be qualified to tenderfor
the contract, no injustice can be said to have been done to the appel-
lant by the consideration of its tender side by side with that of the
M.C.C. and in the K.P.C. going in for a choice of the better on .the
merits. The appellant had no doubt also urged that the M.C.C. had no
G experience in this· line of work and that the appellant was much better
qualified for the contract. The comparative merits of the appellant vis-
a-vis M.C.C. are, however, a matter for the K.P.C. (counselled by che
T.C.E.) to decide and not for the Courts. We were, therefore, rightly
not called upon to go into this question.
For the reasons discussed above, this appeal fails and is dismis-
H sed. But we make no order as to costs.
R.N.J. Appeal dismissed.
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