Celex Technologies Pvt. ... vs State Of U.P., Thru. Secretary, ...

Hon'ble S.C. Chaurasia, J (Delivered by Hon'ble Devi Prasad Singh, J)

1. Instant writ petition under Art. 226 of the Constitution of India has been preferred for quashing of tender document dated 20.5.2011 and the Addenda dated 21.6.2011, followed by technical and financial bid and consequential decision taken in granting contract, vide agreement dated 14.2.2012 for sale of High Security Registration Plates(In short, HSRP) in the State of U.P.

2. The petitioners 1 and 2 are incorporated under Companies Act, 1956 whereas the petitioner No.3 is the Director as well as shareholder of the petitioner No.2.

The petitioner No.1 is a Type Approved company possessing certificate from Automotive Research Association of India (In short, ARAI). The Central Motor Vehicles Rules, 1989 (In short, 1989 Rules) were amended by the Central Motor Vehicles (First Amendment) Rules, 2001 ( in short, 2001 Rules). By amending the Rules, the Government of India provided that the registration mark referred in Sub Section (6) of Section 41 of Motor Vehicle Act (in short Act), shall be displayed both at the front as well as the rear side of all motor vehicles clearly and legibly in the form of security licence plates. 2001 Rules provide specifications with regard to security licence plates, which are required to be complied with by the licence plate manufacturers or their dealers and must be approved by the Central Road Research Institute, New Delhi or any of the agencies authorised by the Central Government.

3 Section 41 of the Motor Vehicles Act, 1988 contains detailed procedure with regard to registration. Rule 50 of 1989 Rules as amended upto date, contains the form and manner of display of registration marks on the motor vehicles on or after commencement of the Rules. The plates provided under the Rules should be protected against counterfeiting by applying chromium-based hologram by hot stamping. The stickers and adhesive labels are not permitted. The plate should bear a permanent consecutive identification number of minimum seven digits, to be laser branded into the reflective sheeting and hot stamping film bearing a verification inscription. The Rule further provides a third registration in the form of self-destructive type, chromium based hologram sticker to be affixed on the left hand top side of the windshield of the vehicle. The registration details including registration number, registering authority should be painted on the sticker. The third registration mark is to be issued by the registering authorities/approved dealers of the licence plates manufacturer along with the regular registration marks. The plate shall be fastened with non-removable/non-reusable snap lock fitting ystem on rear of the vehicle at the premises of the registering authority.

4. Rule 126 of the 1989 Rules further provides that the prototype of every Motor vehicle shall be subject to test on or from the date of commencement of Central Motor Vehicles (Amendment) Rules, 1993.

5. According to Society of Indian Automobiles Manufacturers (SIAM), by 31st March, 2007, there were 10.5 crores estimated registered motor vehicle owners. Because of amendment in the Rules, a new industry came to light for the manufacture of HSRP. According to the petitioners' counsel, in the State of U.P., approximate number of registered vehicles is around 1.2 crores and according to tender document published by the State of Uttar Pradesh, in the year 2009-10, 14,42,000 vehicles were registered in the State of U.P. The Government invited tender from qualified persons. According to the tender document dated 20.5.2011, followed by Addenda dated 21.6.2011, issued by the opposite parties 1 and 2 for supply of HSRP, the number of vehicles expected for registration every year is 15 lacs and tenders were invited to award contract for the period of ten years. Expected number of vehicles shall be more than 1.5 crores in the span of ten years.

6. While assailing the tender document datd 20.5.2011 and Addenda dated 21.6.2011, it has been pleaded and stated by the learned counsel for the petitioners that it is a 'tailor made' procedure adopted to give undue favour to the companies, i.e. respondents 3 and 4. During pendency of the writ petition, an interim order dated 23.11.2011 was passed by this Court permitting the respondents to proceed with the technical bid and the proceedings initiated shall be subject to further orders passed by this Court. During pendency of the writ petition, the tender of the respondent No.3 was accepted and the contract was signed. According to the original tender floated on 5.5.2011, the last date for submission of tender was 20.6.2011 which required bank guarantee of Rs.5 crores. The respondents 3 and 4 could not apply since they could not furnish bank guarantee of Rs.5 crores on or before 20.6.2011.

7. A writ petition (C) No.4175 of 2011 was filed by the respondent No.4 in Delhi High Court but the Delhi High Court declined to stay the tender notified on 5.5.2011. Hence, the respondent No.4 approached the Hon'ble Supreme Court by filing SLP (Civil) No.16291 of 2011 and their Lordships of Hon'ble Supreme Court by order dated 23.6.2011 permitted the State to process the tender but ruled that the decision shall be taken only after final outcome of pending writ petition in Delhi High Court. The order dated 23.6.2011 of Hon'ble Supreme Court and the Delhi High Court dated 10.6.2011 have been filed as Annexure No.10 to the writ petition.

8. It appears that later on, by issuing Addenda dated 21.6.2011, the original tender document dated 20.5.2011 was amended and the last date for submitting duly filled signed tender was fixed as 5.7.2011. The Association of Registration Plates Manufacturers of India objected by its representations dated 13th and 26th June, 2011 raising serious objections with regard to certain conditions and the amendment done in the tender document. The petitioners 1 and 2 submitted their bid as joint venture to the respondents 1 and 2 on 5.7.2011.

9. While advertising the bid, under tender document dated 20.5.2011 under para 2.18.1.1, it was provided that the technical bid will be opened on 20.6.2011 at 5.30p.m. and under para 2.18.1.5, the date for financial bids of the tenderer qualified in technical evaluation was to be opened on 27.6.2011 at 12.30p.m. but later on 21.6.2011, the addenda was published substantially changing the terms and conditions of the tender document and the date for technical bid was deferred to 5.7.2011 and the financial bid was to be notified later on.

10. Mr. R.N. Trivedi, learned senior counsel appearing for the petitioners assailed the entire procedure adopted by the respondents inviting tender for supply of HSRP with the submission that the impugned tender document is violative of the statutory provisions, false affidavit has been filed with concealment of facts, material documents not filed calling for rejection of tender, bid forms were changed in violation of tender condition, repeated negotiations were done, that too without any provision in the tender document, addenda was issued after last date fixed for application and opening of technical bid, the documents not given, rate is excessive for extraneous reasons and consideration, entire process adopted by the respondents is tailor made. Office of the Legal Remembrancer of the State of U.P. had deliberately given incorrect advice which suites the government and the respondent No.3, fraud and corrupt practices have been adopted to award the tender. Report of High Power Committee dated 16.8.2011 has been given go-by under the garb of opinion expressed by the office of Legal Remembrancer. Circuitous procedure has been adopted to accept the tender of the respondent No.3.

11. On the other hand, while defending the State action, Mr. J.N. Mathur, learned Addl. Advocate General later on, engaged as Special Counsel, and Shri Shanti Bhushan and Shri Raghvendra Kumar Singh, learned Senior counsels submits that the State has adopted just and fair procedure to award the contract. It is not a case of commission of fraud or adoption of corrupt practices. Everything was done keeping in view the report of Legal Remembrancer of the State of U.P.

12. Keeping in view the length of argument advanced by the parties' counsel, controversy under the present writ petition is adjudicated under following Heads :

(I) Maintainability of the writ petition (II) Judicial review of the tender (III) Whether the tender document/advertisement is violative of the statutory provisions ?

13. Learned Addl. Advocate General emphasized that now it is not open for this Court to adjudicate the controversy on merit keeping in view the judgment in Maninderjit Singh Bitta versus Union of India (Writ Petition (Civil) No.510 of 2005. He submits that under Art. 144 of the Constitution of India, it is mandatory for all civil and judicial authorities to aid and assist their Lordships of Hon'ble Supreme Court in a matter decided by Hon'ble Supreme Court. Attention has been invited to orders dated 7.4.2011, 30.8.2011, 30.10.2011 and 8.12.2011, passed by Hon'ble Supreme Court.

14. Before considering preliminary objection of the learned Additional Advocate General, it shall be appropriate to reproduce relevant portion of the order dated 23.11.2011 passed by this Court. :

"As an interim measure, the respondents are permitted to proceed with the technical bid, however, they shall notify the date for financial bid after 15th December, 2011.

List on 12th December, 2011 for peremptorily hearing.

State Government shall also produce the entire record including the outcome of the technical bid and the related records on the next date of listing.

Proceedings initiated by the respondents shall be subject to further orders passed by the court."

15. Thereafter, on 12.12.2011, attention of this Court was invited to order dated 8.12.2011, passed by Hon'ble Supreme Court in Maninderjit Singh Bitta(supra). We have considered the interim order produced by the learned Addl. Advocate General and passed an order on 12.12.2011 holding that the hearing may go on but the parties may approach for clarification of the order dated 8.12.2011 to remove the doubt, if any. Relevant portion from the order dated 12.12.2011 passed by this Court is reproduced as under :

"8. The argument advanced by Sri J.N. Mathur, learned Additional Advocate General, seems to be not correct for the reasons that order dated 23.11.2011 was passed in the presence of learned counsel for both sides in the open court. In case, correct facts would have been brought in the knowledge of the Hon'ble Supreme Court, then, there would have been no observation by their Lordships that "there is no stay granted by High Court". The order dated 08th December, 2011 passed by Hon'ble Supreme Court in Writ Petition (Civil) No. 510 of 2005 is reproduced as under:-

"Uttar Pradesh

31.As per the affidavit filed on behalf of the State of Uttar Pradesh, the notice for inviting tenders had been published. Last date for submission of tenders was 5th July, 2011. Seven bids were received, though no contract has so far been awarded and no agreement has been signed as yet. Request had been made on behalf of the State for extension of time. We may also notice that according to the State, a writ petition had been filed in the High Court of Allahabad to quash the tender for manufacture of these registration plates. There is no interim stay granted by the High Court. We make it clear that the State of Uttar Pradesh should ensure manufacture and affixation of HSRP through a single process and person in terms of the judgment of this Court. The Evaluation Committee should meet and take a final decision. The contract should be awarded and the implementation of the scheme should commence within three months from the date of passing of this order as prayed for. By way of last opportunity, the period is extended upto 29th February, 2012."

9. Thereafter, with regard to interim order, Hon'ble Supreme Court has observed as under:-

"6. In the interest of justice and to ensure proper implementation of the judgments and directions of this Court, as contained in its various orders, in regard to manufacturing and affixation of the HSRP, it is imperative for this Court to direct that it will be in the fitness of things and even the judicial proprietary would demand that no High Court should pass any interim orders cancelling or staying the tender process in relation to implementation of the scheme. While so directing, we grant liberty to the parties to make a mention before this Court after they have instituted their petitions, if any, before the High Court and interim orders have been declined in furtherance to the observations aforemade."

10. From the aforesaid direction issued by the Hon'ble Supreme Court, at the face of record, it appears that their Lordships have restrained the High Court not to pass any interim order with regard to cancellation or stay of the tender process with regard to implementation of the scheme. At the face of record, Hon'ble Supreme Court has restrained the High Courts of the country from passing any order interfering with the tender process. The order passed by Hon'ble Supreme Court is binding on all the courts and authorities and calls for no discussion. No Interim order can be passed by this Court or any other High Court of the country in view of the order passed by Hon'ble Supreme Court. However, we should pronounce our judgment or not after hearing the learned counsel for the parties, is the question which cropped up during the course of hearing of learned counsel for the parties.

11.Sri R.N. Trivedi, learned Senior Counsel assisted by Sri Gaurav Bhatia, learned counsel for petitioners submits that Hon'ble Supreme Court has not debarred this Court to adjudicate the dispute on merits. On the other hand, Sri J.N. Mathur, learned Additional Advocate General submits that no hearing could take place in view of the order passed by the Hon'ble Supreme Court. Prima facie, We are of the view that their Lordships of Hon'ble Supreme Court have restrained the High Courts of the country to interfere with the tender process and have not restrained the High Courts to entertain the writ petitions and adjudicate the dispute on merits. However, we are of the view that hearing may go on and in the meantime, parties may approach the Hon'ble Supreme Court for clarification of order dated 08-12-2011 to remove doubt, if any.

12. Since, this case may take some more time to conclude the hearing of both the sides, petitioners may file rejoinder affidavit by the next date of listing.

13. List/Put up on 15.12.2011 at 2.00 P.M."

16. In spite of the fact that after 12.12.2011, the case of Maninderjit Singh Bitta(supra) was listed before Hon'ble Supreme Court but the parties have not moved any application for clarification of the order. It has been stated by the learned counsel for the petitioners that they are not party in the pending case before the Supreme Court. Hence, it was incumbent on the State or its authorities to apprise their Lordships of Hon'ble Supreme Court with regard to the interim order passed by this Court. However, it appears that during subsequent hearing, the State of U.P and its counsel have not apprised the Hon'ble Supreme Court with regard to interim order passed by this Court. On 15.12.2011, Hon'ble Supreme Court had taken note of the fact that in the State of U.P, no action has been taken by the State Government to flow tender for High Security Registration Plates. Hence, their Lordships have warned the State Government and directed to proceed in terms of Rule 50. On 30.8.2011, in the case of Maninderjit Singh Bitta (supra), Hon'ble Supreme Court granted eight weeks' time to complete entire process for implementation of the Scheme. On 30.8.2011 also, the State Government has not apprised the Hon'ble Supreme Court with regard to pendency of the present writ petition. Again on 13.10.2011, the case of Maninderjit Singh Bitta(supra) was listed before Hon'ble Supreme Court whereby the State of Haryana was punished on account of non-compliance of its order. Thereafter the Hon'ble Supreme Court has granted eight weeks' time to finalise the process with regard to implement its order.

Again, the case of Maninderjit Singh Bitta (supra) came up before Hon'ble Supreme Court on 8.12.2011 whereby with regard to State of U.P, their Lordships have made observation discussed in preceding para.

A plain reading of the said order passed by Hon'ble Supreme Court reveals that though the State of U.P informed the Supreme Court with regard to pendency of the present writ petition but the State Government has not invited attention of the Supreme Court with regard to interim order passed (supra) whereby outcome of the tender was subjected to further orders passed by this Court.

17. The case of Maninderjit Singh Bitta(supra) was finally decided by Hon'ble Supreme Court by judgment and order dated 7.2.2012. Their Lordships of Hon'ble Supreme Court had issued certain directions under Para 11 of the judgment directing various States to complete the process positively by 30.4.2012. For convenience, para 11 is reproduced as under :

"11. In furtherance to our order dated 8th December, 2011, learned Registrar, Judicial-II, has submitted his Report pointing out that some of the states have not filed affidavits/undertakings. They have not taken effective steps for implementation of the scheme, in discharge of their statutory obligation and in compliance with the orders of the Court as well. Having perused the Report of the Registrar and the affidavits filed on behalf of different states, we issue the following directions:-

(a) All States which have invited tenders, have completed the process of finalizing the successful bidder and issued the Letter of Intent, but have not yet signed agreements with -

(b) the successful bidder, shall sign such agreements within four weeks from today. These States are Assam, Bihar, Gujarat, Haryana, Jammu and Kashmir, Jharkhand, Punjab, Tripura and Uttar Pradesh.

(c) The States which have so far not even finalized the tender process, they should do so, again, within four weeks from today. Amongst others these States and Union Territories are Chhattisgarh, Madhya Pradesh, Chandigarh, Delhi (NCT) and Puducherry.

(d) Installation of HSRP is a statutory command which is not only in the interest of the security of State, but also serves a much larger public interest. Therefore, it is not only desirable, but mandatory, for every State to comply with the statutory provisions/orders of this Court in terms of Article 129 of the Constitution of India, 1950. All states, therefore, are mandated to fully implement the scheme of fixation of HSRP in their entire state, positively by 30th April, 2012, in relation to new vehicles and 15th June, 2012 for old vehicles. We make it clear that they shall not be allowed -

(e) any further extension of time for implementation of this direction.

(f) The directions contained in the earlier judgments of this Court and more particularly, the orders dated 30th August, 2011, 13th October, 2011, 8th December, 2011 and this order, should be implemented within the extended period without default.

(g) In the event of default, concerned Secretary (Transport) /Commissioner, State Transport Authority and/or any other person or authority responsible for such default shall be liable to be proceeded against under the provisions of the Contempt of Courts Act, 1971."

18. While finally deciding the writ petition, their Lordships of Hon'ble Supreme Court directed all the High Courts to deal with pending writ petitions, keeping in view the aforesaid directions and orders. To quote operative portion of the judgment from Maninderjit Singh Bitta(supra) :

"21. All the files that had been summoned by this Court for ensuring the complete implementation of the scheme shall now revert back to the respective courts for their disposal in accordance -with law. Some of the learned counsel appearing for the parties before us had argued that because of certain directions passed by the Courts concerned in these ongoing cases, the concerned States may not be able to finally implement the scheme within the time bound schedule. We request the concerned High Courts to deal with such matters on priority keeping in view the afore-stated directions and orders. We further give liberty to the parties whose petitions are pending before this Court to make a mention before the concerned Bench for expeditious disposal. We have no doubt in our mind that such request of the petitioners would be examined on its own merits by the Hon'ble Judges in the larger interest of national security.

22. Since all aspects of this matter stand finally concluded vide our orders dated 30th August, 2011, 13th October, 2011 and 8th December, 2011 and ultimately by this Order, we see no reason to keep this petition pending on the Board of this Court.

23. Consequently, all I.As., contempt petitions in Writ Petition No. 510 of 2005 and Writ Petition (Civil) No. 510 of 2005 stand finally disposed of with no order as to costs."

19. Learned Addl. Advocate General gave much emphasis to the fact that the records of certain writ petitions were summoned by Hon'ble Supreme Court and reverted back to the respective High Courts for disposal in accordance with law and accordingly, the submission is that the period fixed by Hon'ble Supreme Court in terms of the judgment and order dated 7.2.2012 is confined only to those cases of whose records were summoned by the Supreme Curt and not to the pending writ petitions of which records were not summoned by their Lordships of Hon'ble Supreme Court. Accordingly, the submission is that it is not open for this Court to adjudicate the controversy.

20. Argument advanced by the learned Addl. Advocate General seems to be mis-conceived. The direction issued by the Supreme Court seems to be not only to the pending cases of which records were reverted back to High Courts for disposal in accordance with law but also to all the pending cases on priority basis keeping in view the directions issued in the case of Maninderjit Singh Bitta(supra). That is why, their Lordships have given liberty to the High Courts to consider the case on their own merit in larger interest of national security. Their Lordships noted that because of certain direction, passed by the High Courts in ongoing cases, the State may not be able to finally implement the Scheme within time bound schedule.

21. In case the State of U.P or its authorities were having any doubt, it was open to them to apprise Hon'ble Supreme Court with regard to the interim order passed by this Court. Neither in para 11 nor in para 21 of the judgment and order dated 7.2.2012 nor from the overall reading of any of the orders passed by Hon'ble Supreme Court passed from time to time in the case of Maninderjit Singh Bitta (supra), it is borne out that the High Courts are prevented to exercise their power of judicial review conferred by Art. 226 of the Constitution of India. The only embargo put forth by the Supreme Court is that the cases be decided expeditiously so that the judgment of Hon'ble Supreme Court be complied with on or before 30.4.2012. Accordingly, the contention of learned Addl. Advocate General does not seem to be sustainable.

22. One of the arguments advanced by the learned Addl. Advocate General is that the petitioners have been awarded contract of HSRP in West Bengal as member of the consortium but in the State of U.P, they have applied through joint venture agreement instead of joint venture company and even otherwise they lack experience of one year. Hence, it is not open for this Court to proceed ahead with the case.

23. It is not disputed that the petitioners' tender has been cancelled because of lack of experience of the period of one year. When the writ petition was filed, the tender conditions were challenged. Later on, the subsequent action including awarding of contract to the opposite party No.3 has been challenged by way of amendment. Application for amendment was neither opposed nor the order of amendment has been impugned in Supreme Court. Accordingly, the argument advanced by the learned Addl. Advocate General seems to be mis-conceived. Of course, while proceeding with judicial review of the impugned action, this Court has to exercise its jurisdiction strictly in accordance with the settled proposition of law and not otherwise but so far as the argument advanced with regard to the petitioners' right to challenge the impugned action does not seem to be sustainable.

II-JUDICIAL REVIEW OF TENDER

24. Mr. R.N. Trivedi, learned Senior Advocate appearing for the petitioners has invited attention to the grounds on which the power of judicial review of the tender process may be exercised in the matter of tender process. In the case reported in (2007)14 SCC 517 Jagdish Mandal versus State of Orissa and others, while considering the judicial review of the administrative action of contractual or commercial transaction, Hon'ble Supreme Court held as under :

"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 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 tendered/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.

Re : Contract for First Stretch"

While assailing the impugned contract in favour of the respondent No.3, it has been submitted by the learned Senior Counsel for the petitioner that all the three conditions required for interference through the process of judicial review propounded by Hon'ble Supreme Court in the case of Jagdish Mandal (supra) have been fulfilled. It is submitted that the Addenda dated 21.6.2011 has been issued to facilitate the selection of the opposite party No.3 for extraneous reasons which suffers from malice in fact and law both.

25. In (1975)1 SCC 70 M/s Erusian Equipment & Chemicals Limited versus State of West Bengal and another which is a case of blacklisting of contractors, Hon'ble Supreme Court while holding that for blacklisting compliance of natural justice is necessary, ruled that the equality of opportunity varians to importance of public contract. The government cannot choose to exclude by discrimination. The government is a government of laws and not of men.

26. In 1980 Vol. 4 SCC 1 M/s Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal and others versus State of Jammu and Kashmir and another, while emphasising for reasonableness in the State action, their Lordships of Hon'ble Supreme Court held that an action which is inconsistent with or runs counter to a Directive Principle would prima facie incur the reproach of being unreasonable. Their Lordships ruled that it is imperative that if the government awards a contract or lease, it would liable to be tested for its validity at the touch stone of reasonableness and public interest.

27. Their Lordships of Hon'ble Supreme Court relying upon Ramana Dayaram Sheetty versus International Airport Authority of India (1979)3 SCC 489 held as under :

"It was pointed out by this Court in ''Ramana Dayaram Shetty v. The International Airport Authority of India and others : (1979)IILLJ217SC that with the growth of the welfare state, new forms of property in the shape of Government largess are developing, since the Government is increasingly assuming the role of regulator and dispenser of social services and provider of a large number of benefits including jobs, contracts, licences, quotas, mineral rights etc. There is increasing expansion of the magnitude and range of governmental functions, as we move closer to the welfare state, and the result is that more and more of our wealth consists of these new forms of property. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. The law has however not been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognised as rights, while others have been given legal protection not only by forging procedural safeguards but also by confining, structuring and checking Government discretion in the matter of grant of such largess. The discretion of the Government has been held to be not unlimited in that the Government cannot give largess in its arbitrary discretion or as its sweet will or on such terms as it chooses in its absolute discretion. There are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess."

28. Hon'ble supreme Court further held that like private individual, State cannot act as it pleases in the matter of giving largess. While reiterating the earlier principles flowing from State of Madras versus B.G. Row 1952 SCR 597 followed by Maneka Gandhi versus Union of India (1978) 2 SCR 62 and E.P. Royappa versus State of Tamilnadu (1974)4 SCC 3, their Lordships held that the action of the government shall be subject to constitutional or legal inhibitions or other overriding considerations, qualify for being regarded as reasonable and where the government failed to satisfy the test of reasonableness and public interest and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would liable to be struck down as invalid. It shall be appropriate to quote relevant portion from the judgment of Kasturi Lal (supra), to quote :

"Where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost, of the State; such an action would be both unreasonable and contrary to public interest. The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so."

29. In (2005)1 SCC 679 Association of Registration Plates versus Union of India and others, relied upon by counsels for both side, their Lordships held that certain pre-condition or qualification for tender has to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Art. 14 prohibits the government for arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding the contract and the courts should be prepared to enforce the standard of fairness on the government in its dealings with tenderer or contractors. (para 43). However, keeping in view the huge investment required subject to fairness in action, the Government should be given leverage to play in joint.

30. Mr. R.K. Singh, learned Senior Counsel, appearing for the opposite party No.3 while relying upon the case of Association of Registration Plates (supra) vehemently argued that now it is not open for this Court to interfere under the process of judicial review once the petitioner's association approached the Supreme Court and guideline with regard to auction and sale has been settled by their Lordships. Argument advanced by learned Senior Counsel seems to be mis-conceived. The order impugned and the relief claimed before Hon'ble Supreme Court was with regard to validity of 2001 Order and condition imposed by the State Government providing experience etc. Their Lordships have upheld 2001 Order as well as the right of the State Government to provide certain safeguard as well as to provide experience. Their Lordships have observed as under :

"35................Its concern to get the right and most competent person cannot be questioned. It has to eliminate manufacturers who have developed recently just to enter into the new field. The insistence of the State to search for an experienced manufacturer with sound financial and technical capacity cannot be misunderstood. The relevant terms and conditions quoted above are so formulated to enable the State to adjudge the capability of a particular tenderer who can provide a fail-safe and sustainable delivery capacity. Only such tenderer has to be selected who can take responsibility for marketing, servicing and providing continuously the specified plates for vehicles in large number firstly in initial two years and annually in the next 13 years......................."

Hon'ble Supreme Court further held that greater latitude is required to be conceded to the State authorities. Unless direction of tendering authority is found to be malicious and a misuse of its statutory powers, tender conditions are unassailable. To quote relevant portion from the aforesaid judgment (supra) :

"38. In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. Unless the action of tendering Authority is found to be malicious and misuse of its statutory powers, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or encroach on fundamental rights of a class of intending tenderer under Article 19 of the Constitution................

Subject to the aforesaid observation, Hon'ble Supreme Court further held as under :

"43. Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Article 14 of the Constitution prohibits the government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim fundamental right to carry on 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. Undisputedly, the legal position which has been firmly established from various decisions of this Court, cited at the Bar (supra) is that government contracts are highly valuable assets and the court should be prepared to enforce standards of fairness on government in its dealings with tenderers and contractors."

31. The case of Association of Registration Plates (supra) has been relied upon in subsequent judgment of Hon'ble Supreme Court reported in (2010)6 SCC 303 Shimnit Utsch India Private Limited versus West Bengal Transport Infrastructure Development Corporation and others, that too filed by the respondent No.3. While reiterating the Association of Registration Plates (supra), Hon'ble Supreme Court held as under :

"53. In Association of Registration Plates (2005) 1 SCC 679, this Court while dealing with the challenge to the conditions with regard to experience in foreign countries and prescribed minimum turnover from that business observed that these conditions have been framed in the NIT to ensure that the manufacturer selected would be technically and financially competent to fulfill the contractual obligations and to eliminate fly-by-night operators and that the insistence of the State to search for an experienced manufacturer with sound financial and technical capacity cannot be misunderstood. While maintaining the State Government's right to get the right and most competent person, it was held that in the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of HSRP, greater latitude is required to be conceded to the State authorities and unless the action of tendering authority is found to be malicious and a misuse of statutory powers, tender conditions are unassailable."

32. Thus, even relying upon the case cited by the respondent No.3 though ordinarily the terms of tender are not opened to judicial scrutiny and the court must whittle down the terms of tenders unless they are held to be arbitrary, discriminatory or actuated by malice.

33. The State action should not be actuated by vice of arbitrariness, irrationality or violation of some statutory provisions. The power of judicial review at the touch stone of reasonableness to secure public interest has been reiterated and affirmed by Hon'ble Supreme Court in (1994)6 SCC 651 Tata Cellular versus Union of India, (2007)8 SCC 1 Reliance Energy Limited and another versus Maharashtra State Road Development Corporation Limited and others, (2011)1 SCC 394 Bharat Sanchar Nigam Limited versus Reliance Communication Limited, (1991)3 SCC 273 M/s. Poddar Steel Corporation versus M/s Ganesh Engineering Works and others, (2006)11 SCC 548 B.S.N. Joshi & Sons Limited versus Nair Coal Services Limited, followed by recent judgment in commonly known as 2-G case decided by Hon'ble Supreme Court by the judgment and order dated 2.2.2012 Central for Public Interest Litigation and another versus Union of India and others.

34. Sri Raghwendra Kumar Singh, learned Senior Counsel, appeared and argued the case on behalf of O.P. No.3 on 20.3.2012. Relying upon a judgment and order dated 31.3.2010 passed by a Division Bench of this Court at Allahabad, in Writ-C No.31622 of 2009: M/s. Chandra Construction Company Vs. State of U.P. and others, he submits that the tender of the petitioner was cancelled and now, it is not open for judicial review of the matter. In case of Chandra Construction Company (supra), the Division Bench has dealt with a situation where the writ petition was filed at later stage challenging the work contract without any allegation of commission of fraud or mala fide and the bidders' tenders were found to be perfectly in order. There was no allegation that the contractor does not fulfil the terms and condition of tender document. The case does not seem to be applicable to the facts and circumstances of the present case.

35. The other case relied upon by the learned Senior Counsel is reported in (2004) 4 SCC 19: Directorate of Education and others. Vs. Educomp Datamatics Ltd. and others. In the case of Educomp Datamatics Ltd. (supra), Hon'ble Suprem eCourt held that it is not for the Court to say whether condition prescribed under the tender consideration were better than the others prescribed in the earlier tender invitations. it is for the State to determine the term and conditions of the tender document. However, their lordship further ruled that in case the decision taken suffers from arbitrariness, discriminatory, mala fide or actuated by bias, Court may interfere under the process of judicial review. The relevant portion of para 11 and 12 of the aforesaid judgment are reproduced as under:-

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 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."

36. In the present case, serious allegations have been raised not only against the conditions provided under the tender document but against the State Government to be pre-determined while proceeding with the tender. It is also pleaded that respondent No.3 does not fulfil the essential condition of tender document and State has acted maliciously while framing tender conditions and granted the same in favour of the O.P. No.3. In view of the material on record even if there exists certain allegation against the petitioner or his tender has been cancelled, it is a fit case where extraordinary remedy of Art. 226 be exercised.

37. Keeping in view the aforesaid broader principle laid down by Hon'ble Supreme Court, in case the allegations contained in the writ petition and the affidavits are true, then there appears to be no room of doubt that it is a fit case where jurisdiction conferred by Art. 226 of the Constitution of India may be exercised.

III-WHETHER THE TENDER DOCUMENT/ADVERTISEMENT IS VIOLATIVE OF THE STATUTORY PROVISIONS ?

38 Rule 126 of the Central Motor Vehicles Rules, 1989 as amended by the Parliament provides that it shall be obligatory on the manufacturer of the motor vehicle to obtain certificate by certain agencies. For convenience, Rule 126 is reproduced as under :

"[126. Prototype of every motor vehicle to be subject to test.-- On and from the date of commencement of Central Motor Vehicles (Amendment) Rules, 1993, every [manufacturer or importer] of motor vehicles other than trailers and semi-trailers shall submit the prototype of the vehicle [to be manufactured or imported by him] for test by the Vehicle Research and Development Establishment of the Ministry of Defence of the Government of India or Automotive Research Association of India, Pune, [or the Central Farm Machinery Testing and Training Institute, Budni (MP)], or the Indian Institute of Petroleum, Dehradun, [or the Central Institute of Road Transport", Pune, or the International Centre for Automotive Technology, Manesar,] and such other agencies as may be specified by the Central Government for granting a certificate by that agency as to the compliance of provisions of the Act and these rules:] [Provided that the procedure for type approval and certification of motor vehicles for compliance to these rules shall be in accordance with the AIS:017-2000, as amended from time to time:] [Provided further that in respect to the vehicles imported into India as completely built units (CBU), the importer shall submit a vehicle of that particular model and type to the testing agencies for granting a certificate by that agency as to the compliance to the provision of the Act and these rules.] [126A. The testing agencies referred to in rule 126 shall in accordance with the procedures laid down by the Central Government also conduct tests on vehicles drawn from the production line of the manufacturer to verify whether these vehicles conform to the provisions of [rules made under section 110 of the Act]:] [Provided that in case the number of vehicles sold in India for a given base model and its variants (manufactured in India or imported to India) are less than 250 in any consecutive period of six months in a year, then such base model and its variants need not be subjected to the above test, if at least one model or its variants manufactured or imported by that manufacturer or importer, as the case may be, is subjected to such tests at least once in a year:

Provided further that, in case the number of base models and its variants manufactured/imported is more than one and if the individual base model and its variants are less than 250 in any consecutive period of six months in a year, then the testing agencies can pick up one of the vehicle out of such models and their variants once in a year for carrying out such test.] [126B. Prototype of every construction equipment vehicle to be subject to test.--

(1) On and from the date of commencement of the Central Motor Vehicles (Sixth Amendment) Rules, 2000, every manufacturer of construction equipment vehicle shall submit the prototype of the construction equipment vehicle to be manufactured by him for test by any of the agencies referred to in rule 126 for granting a certificate by that agency as to the compliance of provisions of the Act and these rules.

(2) The testing agencies referred to in rule 126 shall in accordance with the procedure laid down by the Central Government conduct tests on vehicles drawn from the production line of the manufacturer to verify whether the vehicles conform to the provisions of the Act, or rules or orders issued thereunder shall be re-numbered as sub-rule (1) thereof and after sub-rule (1) as so, renumbered:] [Provided that the provisions of this sub-rule shall not be applicable in respect of any construction equipment upto and including [26th August, 2002].

39. Apart from the aforesaid provisions, the Government of India issued Motor Vehicles (New High Security Registration Plates) Order, 2001 (In short, 2001 Order). Clause 4 of the 2001 Order provides that a manufacturer or supplier of new high security registration plates shall comply with the specification provided therein. It provides that the manufacturer or supplier shall have a certificate from Central Road Research Institute (New Delhi) or any other testing agencies authorised by the Central Government under Rule 126 of 1989 Rules. Clause (xa) further provides certain conditions which have to be complied with by the State Government and Union Territory administration while inviting any person for supply of high security number plates. Clause (xa) (f) provides that the persons found to be connected with activities prejudicial to national security, shall not be considered for selection as manufacturer or vendor for supply of High Security Number Plates. For convenience, relevant portion of Clause 4 of 2001 Order is reproduced as under:

"4. A manufacturer or supplier of new high security registration plates shall comply with the following specifications, namely.--

(i)The manufacturer or supplier shall have a certificate from the Central Road Research Institute, New Delhi or any one of the testing agencies authorised by the Central Government under Rule 126 of the Central Motor Vehicles Rules, 1989.

(xa) The State Government or Union Territory Administration shall ensure that any person who has been,---

(a) convicted of a cognizable offence by any court of law with imprisonment for a term exceeding one year, or

(b) imposed a penalty of rupees one crore or more for violation of the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) (since repealed) or the Foreign Exchange Management Act, 1999 (42 of 1999); or

(c) detained under the National Security Act, 1980 (65 of 1980) or the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

(d) adjudged guilty by the Stock Exchange Board of India or any other such Financial Regulatory Boards or tribunals or Agencies; or

(e) found to be associated in any manner with an organized crime syndicate or its associate or with any Association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 (37 of 1967) or any other law for the time being in force; or (xa)(f) found to be connected with activities prejudicial to the National Security, is not considered for selection as manufacturer or vendor for supply of High Security Registration Plates.

(xb) The person or firm selected for any State or any region of the State shall not change the ownership of the firm without prior permission of the State Government or Union Territory Administration.

(xc) The State Government or Union Territory Administration shall take necessary action to ensure compliance with the provisions of clause (xa), as so inserted, and complete the implementation of rule 50 of the Central Motor Vehicles Rules, 1989 on or before the 31st day of October, 2006 for the newly registered vehicles and within a period of two years thereafter for already registered vehicles:

Provided that before cancelling the selection of or disqualifying a manufacturer or vendor, the State Government or Union Territory Administration shall give such manufacturer or vendor, as the case may be, a reasonable opportunity to represent against such action and communicate in writing the reasons for such cancellation or disqualification.]

40. Tender document originally notified on 20.5.2011 under Para 1.5.1 provides that the bidder should have possessed a "valid type approval certificate" in its own name from testing agencies authorised under Rule 126 of 1989 Rules. However, condition was later on changed, that too after a date fixed for opening of technical bid, i.e. 20.6.2011 by publishing an addenda on 21.6.2011 providing therein that the bidder require experience or expertise of working in India whereas in the original document, requirement was experience expertise and exposure in India and abroad both. Para 1.1.9 was added by the addenda, defining experience means experience of minimum one year before the last date for submission of bid. Though, it provides that the experience should in conformity with the provision of 1989 Act keeping in view Rule 50 but the rules or Act does not provide as eligibility criteria for having experience of one year. Only condition provided under Rule 126 is that the bidder must have approval certificate from agencies authorised under Art. 126. It shall be appropriate to reproduce the conditions provided with regard to eligible bidder under para 1.5 which is as under :

"1.5. ELIGIBLE BIDDERS This invitation for Bid is open to all the Bidders who fulfill all the following criteria on cumulative basis :

1.5.1The Bidder must be in possession of a valid "Type Approval Certificate" in its own name, from the testing agencies as authorized under Rule 126 of Central Motor Vehicle Rules, 1989.

1.5.2 The Bidder shall submit an affidavit as per Annexure IX A (which relates to the requirements laid down by GoI). The bidder or any of the Directors of Bidder or its constituent entities or their Directors must not have been-

(a) convicted of a cognizable offence by any Court of law with imprisonment for a term exceeding one year; or imposed a penalty of rupees one crore or more for violation of the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973)(since repealed) or the Foreign Exchange Management Act, 1999 (42 of 1999); or

(c) detained under the National Security Act, 1980 (65 of 1980) or the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

(d) adjudged guilty by the Stock Exchange Board of India or any other such Financial Regulatory Boards or Tribunals or Agencies; or

(e) found to be associated in any manner with an organized crime syndicate or its associate or with any Association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 (37 of 1967) or any other law for the time being in force; or

(f) found to be connected with activities prejudicial to the National Security. (omission)

41. In case the aforesaid conditions are compared with 2001 Order (supra), particularly sub clauses (xa), (xb), (xc) of Clause 4, there appears to be apparent omission in the tender document. From Sub-Clause (f) of Clause (xa), one important portion containing the words, "is not considered for selection as manufacturer or vendor for supply of high security registration plates" is omitted.

A plain reading of Sub Clause (xa) of Clause (4) of Order, 2001 provides that the State government and Union Territory administration were directed to ensure, not to award contract to such persons who are suffering from the infirmities mentioned therein.

42. The provisions contained in Para 1.5 under the head, "eligible bidder" is pari-materia to para 4 (clause1) read with Clause (xa) of 2001 Order. In the present case, it is not disputed that the contract granted to the opposite party No.3 was cancelled by the State of Karnataka and Goa on account of some serious illegalities or mis-conduct committed by them.

43. It has been categorically pleaded by the petitioners that the collaboration partner of opposite party No.3 is M/s. Shimnit Utsch India Pvt. Ltd., whose Chief Executive was convicted by Egyptian Court and sentenced to one year imprisonment with respect to a contract in Egypt. According to the petitioners, it also faced similar allegation in Guatemala and contract granted to it in Germany is under review.

44. While filing counter affidavit, in para 16, the State Government invited attention to guidelines dated 16.3.2002, issued by the Union of India regulating the auction of HSRP. It has also been filed by the respondent No.3 in its affidavit under title "guidelines for NIT document". The guideline provides that the bidder shall furnish bank guarantee and other tender document with regard to manufacturing facility, experience and expertise.

45. In Para 64 of the writ petition, it is categorically pleaded that one Nitin Shah was initially the Managing Director of the opposite party No.3 awarded tender for Meghalaya. Mr. Nitin Shah was arrested on charge of murder and convicted by the trial court but later on acquitted by the High Court. The State has filed a SLP(Criminal) No.3697 of 2007 and the leave has been granted. Appeal is pending with the Supreme Court.

46. Hon'ble Supreme Court in a case reported in (2005)1 SCC 679 Association of Registration Plates versus Union of India and others had dealt with various conditions including experience of the bidders, after taking into account Rule 50 of the amended Rules, 2001. The relevant portion is reproduced as under :

12. After Rule 50 was amended and New High Registration Plates (amendment) Order, 2001 was issued in purported exercise of power under Section 109(3) of the Act. The Ministry of Road Transport and Highways vide its letter dated 6.3.2002 circulated the minutes of meeting of 4.3.2001 held between the representatives of all States and Union Territories on introduction of the new system of the registration plates. A series of meetings were held by the Union with the States. Eventually, on 6.3.2002 the Union laid down guidelines for incorporating necessary conditions in the Notices Inviting Tenders to be issued by the various States. In substance, the guidelines suggest as follows: -

1. The tender document would specify whether the appointment of vendor was for the whole State or for certain parts.

2. The tender document would specify the terms of the bank guarantee .

3. The tender document would require report back on certain aspects on "a periodic and regular basis".

4. The bidder must furnish proof of past experience/expertise in this area or proof of the same with a collaborator.

13. NIT guidelines were later modified by letter dated 14.6.2002 sent by the Ministry. It was suggested that the bidders may be asked to provide details about the experience/capability of its collaborator to the satisfaction of the State Authorities."

Keeping in view the aforesaid allegations on record, there appears to be no doubt that the conditions in Clause 4 (xa) are material and important and it was not open for the respondents 1 and 2 to omit the words, "is not considered for selection of manufacturer or vendor for supply of High Security Registration Plates. Admittedly, issue relates to national security and the candidature of the respondent No.3 should have been considered in the light of Sub Clause (f) of Clause (4) (xa) of 2001 Order, more so when the contract of the opposite party No.3 was rejected by the Karnataka and Goa government. It may not be ruled out that the aforesaid passage from the condition provided under the head, "eligible bidder" may have been omitted deliberately from clause (f) of tender document. In view of above, addition of one year's experience in contravention of Rule 126 read with Para 4 of 2001 Order and the omission of the aforesaid portion from clause (f) of the tender document creates a reasonable doubt over the fairness of the respondents 1 and 2. The tender document has not been published containing all the conditions strictly in accordance with Rule 126 read with 2001 Order.

Omitted portion has significance in case it is considered keeping in view letter of Home Ministry, a copy of which has been filed as Annexure No.8 to the writ petition. Reliance placed by Shri R.K. Singh, learned Senior Counsel for the opposite party No.3 to the opening words of clause 1.5.2 of tender document sustainable when question relates to compliance of statutory provisions.

47. It is trite in law that by executive instructions, the statutory provisions cannot be overridden or modified. It is further settled proposition of law that in case the authorities want to do certain thing, then it should be done in the manner provided by the Act or statute and not otherwise vide Nazir Ahmed Vs. King Emperor, AIR 1936 PC 253; Deep Chand Versus State of Rajasthan, AIR 1961 SC 1527, Patna Improvement Trust Vs. Smt. Lakshmi Devi and others, AIR 1963 SC 1077; State of U.P. Vs. Singhara Singh and other, AIR 1964 SC 358; Barium Chemicals Ltd. Vs. Company Law Board AIR 1967 SC 295, (Para 34) Chandra Kishore Jha Vs. Mahavir Prasad and others, 1999 (8) SCC 266; Delhi Administration Vs. Gurdip Singh Uban and others, 2000 (7) SCC 296; Dhanajay Reddy Vs. State of Karnataka, AIR 2001 SC 1512, Commissioner Of Income Tax, Mumbai Vs. Anjum M.H. Ghaswala and others, 2002 (1) SCC 633; Prabha Shankar Dubey Vs. State of M.P., AIR 2004 SC 486 and Ramphal Kundu Vs. Kamal Sharma, AIR 2004 SC 1657, Taylor Vs. Taylor, (1876) 1 Ch.D. 426; Nika Ram Vs. State of Himachal Pradesh, AIR 1972 SC 2077; Ramchandra Keshav Adke Vs. Govind Joti Chavare and others, AIR 1975 SC 915; Chettiam Veettil Ammad and another Vs. Taluk Land Board and others, AIR 1979 SC 1573; State of Bihar and others Vs. J.A.C. Saldanna and others, AIR 1980 SC 326, A.K.Roy and another Vs. State of Punjab and others; AIR 1986 SC 2160; State of Mizoram VS. Biakchhawna, 1995 (1) SCC 156.

IV- ISSUANCE OF ADDENDA DATED 21.6.2011

48. While publishing the schedule of tender, it is provided that the tender document may be purchased from the office of the Transport Commissioner, U.P. from 24.5.2011 to 19.6.2011 (both days inclusive) between 10.30 a.m. to 4.00 p.m. on payment of non-refundable fee of Rs.25,000/- or may be downloaded subject to payment of demand draft of Rs.25,000/- duly filled and signed tender is to be submitted by 20th June, 2011 from 9.30 a.m. to 4.00 p.m. The schedule in pursuance to original advertisement while inviting tender along with important notes is as under :

SCHEDULE FOR INVITATION TO TENDER A Name of the Client Government of U.P. Through Transport Commissioner, U.P., Lucknow.

B Address from where the Tender Documents can be obtained

(a) Office of the Transport Commissioner, U.P., Tehri Kothi, MG Marg Lucknow-226001

(b) Website : www.uptransport.org www.upgov.nic.in C Addressee and Address where Tender Documents have to be submitted.

Room No.22, Ist Floor, Office of the Transport Commissioner, U.P. Tehri Kothi, M.G. Marg, Lucknow-226001 D Pre-bid Conference On May 30, 2011 in Room no.111, Yojana Bhawan, Lucknow at 12.30 PM E Time and date for submission of tender Bids.

On June 20, 2011 between 9.30AM to 4.00PM.

F Time and place and date for opening of the Technical Bids.

a. Time : 5.30 PM b. Date : June 20, 2011 c. Place : Committee Room of office of Transport Commissioner, U.P., Tehri Kothi, M.G. Marg, Lucknow-226001 G Time and place and date for opening of the Financial Bids.

a. Time : 12.30 PM b. Date : June 27, 2011 c. Place : Room no 111, Yojana Bhawan, Lucknow.

Important Notes :-

1.The Bids are to be delivered within the stipulated time on the date specified above.

2.Conditional Bids shall be summarily rejected.

3.Bids must be delivered at Room no : 22, 1st floor, in the office of the Transport Commissioner, Tehri Kothi, MG Marg, Lucknow - 226001, on June 20, 2011 between 9.30 A.M. To 4 PM and will be opened as per schedule indicated in the instructions to the Bidders in the Tender Documents.

4.The offers will be based on the requirement of the provisions of Central Motor Vehicle Rules, 1989 with special emphasis on Rule 50 thereof and MOTOR VEHICLES (NEW HIGH SECURITY REGISTRATION PLATES) ORDER, 2001 as amended from time to time and the requirements of the Office, which are laid down in this Tender Document.

5.Name with locations of RTO/ARTO offices in the State of Uttar Pradesh with statistical data of vehicles registered, are available in the Tender Document and on the website of the Transport Department (www.uptransport.org) which can be downloaded.

TRANSPORT COMMISSIONER Uttar Pradesh"

49. In terms of tender document, pre-bid meeting of the prospective bidders was not held on 30.5.2011. It was alleged to have been held on 13.6.2011. Opinion of Transport Department was obtained on 15.6.2011 and decision keeping in view the opinion expressed by bidders was converted into writing in a meeting held on 17.6.2011, copy of which has been attached as Annexure No.CA-8 to the counter affidavit.

50. Thus, in terms of original schedule, the technical bid should have been opened on 20.6.2011 by 5.30p.m. and financial bid of successful bidder in terms of technical bid was to be opened on 27.6.2011. The State Government instead of opening technical bid on 20.6.2011 published the addenda on 21.6.2011 changing the date with regard to technical bid as on 5.7.2011 and with regard to financial bid, no date was notified. It shall be appropriate to reproduce fresh schedule in terms of addenda, to quote :

SCHEDULE FOR INVITATION TO TENDER A Name of the Client Government of U.P. Through Transport Commissioner, U.P., Lucknow.

B Address from where the Tender Documents can be obtained

(a) Office of the Transport Commissioner, U.P., Tehri Kothi, MG Marg Lucknow-226001

(b) Website : www.transport.org www.upgov.nic.in C Addressee and Address where Tender Documents have to be submitted.

Room No.22, Ist Floor, Office of the Transport Commissioner, U.P. Tehri Kothi, M.G. Marg, Lucknow-226001 D Pre-bid Conference On May 30, 2011 in Room no.111, Yojana Bhawan, Lucknow at 12.30 PM (which was held on 13.6.2011 at 12 noon) E Time and date for submission of tender Bids.

On July 5, 2011 between 9.30AM to 4.00PM.

F Time and place and date for opening of the Technical Bids.

a. Time : 5.30 PM b. Date : July 5, 2011 c. Place : Committee Room of office of Transport Commissioner, U.P., Tehri Kothi, M.G. Marg, Lucknow-226001 G Time and place and date for opening of the Financial Bids.

To be notified later.

51. The date for opening of technical bid was 20.6.2012. On 13.6.2011 at about 5.00 p.m., the prebid meeting was convened chaired by the Commissioner, Awasthapana & Audyogik Vikas Ayukt for pre-bid conference. It shall be relevant to take note of the fact that after pre-bid meeting, one Sudhir Kumar Srivastava, who was the Transport Commissioner, joined the meeting, scheduled on 17.6.2011. A perusal of the proceeding held on 17.6.2011, a copy of which has been filed as Annexure No.CA-8 to the counter affidavit filed by the State reveals that on 17.6.2011, the draft of amended tender document in terms of decision taken in pre-bid meeting was circulated. It was a meeting presided by the Chief Secretary of the State on 1.4.2009, in which it was resolved to prohibit the 'consortium' to participate in tender proceeding. In pursuance to the decision taken in the meeting presided by the Chief Secretary on 1.4.2009, the tender document was finalised and circulated on 8.5.2009 deleting the consortium from the eligibility list of candidates.

52. The proceeding dated 17.6.2011 further reveals that most of the conditions were added through published Addenda on 21.6.2011 on the advice of the opposite party No.3 and 4. In a pre-bid meeting, held on 13.6.2011 the opposite party No.3 has floated the following suggestions which were accepted by the State Government :

1.The joint venture duly incorporated under the Companies Act, 1956 should be minimum of two and maximum of three, out of which one entity should be Indian and of which one is lead member duly nominated by all other members of that joint venture. The lead member should hold an equity of stock of 50% in the joint venture.

2.The rates should be quoted by the bidder as actual price uniformly, charged from a vehicle owner in the entire State of Uttar Pradesh for each category of vehicle and shall be exclusive of all duties, taxes and charges. The annual turn over should be equivalent to 50 crores immediately preceding last three years.

3.Net worth should be reduced to 40 crores from 50 crores proved from the certificate issued by the Chartered Accountant attached to bid.

4.Solvency certificate should be reduced from 50 to 40 crores issued by its banker to prove financial soundness. The provision in the original bid with regard to solvency certificate, net worth certificate of the period of three months preceding to date of article in the newspaper deleted.

5.The bidder or any member of the joint venture should have experience in the field of registration plates.

6.Minimum four Credentials from User Agency of the country towards experience in the field of Registration Plate should be added by the Addenda.

7.Three years experience were added with minimum one year experience necessary to obtain quality point mark.

8.The opposite party No.4 suggested that the consortium should not be allowed in the bid document which was accepted by the government in pursuance to decision taken in a meeting presided by the Chief Secretary of the State (supra) for the reason that in tender document of 2003, consortium was allowed, LOI issued but the consortium has not implemented the project in spite of many reminders. Hence, the government rejected the petitioners' claim to allow consortium.

9.The original certificate from a Chartered Accountant giving proof of the bidder should be minimum net worth of Rs.40 crores.

53. Thus, at the face of record, though the date and time with regard to technical bid was published but while amending the tender document no date and time was published with regard to opening of financial bid, that too without assigned any reason. Prebid meeting was also held on 13.6.2011 instead of 30.5.2011 in terms of tender document. It shall be appropriate to reproduce certain amendments (relevant) done in the tender document while publishing the addenda on 21.6.2011 in the form of comparative chart, that too substantially on the request of the opposite party No.3 and 4 (Anexure 7 to writ petition) :

ADDENDA TO THE HSRP TENDER NOTICE/DOCUMENT ISSUED ON 20.5.2011, PUBLISHED ON 21.6.2011 (ONLY RELEVANT PORTION) S.

No.

Provisions of the Original Tender Document released on 20.5.2011 Amended provisions 1 Page 2 Para 1 Tender Notice It is, therefore, intended to select an eligible Bidder having type approval certificate from agencies authorized in this behalf by the Government of India and who has required experience, expertise and exposure for such complex work in India and/ or abroad.

It is, therefore, intended to select an eligible Bidder having type approval certificate from agencies authorized in this behalf by the Government of India and who has required experience, expertise and exposure for such complex work in India.

2. Page 3 Tender Notice Bid must be accompanied with the EMD of Rs 50,00,000/- (Rupees Fifty lakhs only) in form of Bank Draft drawn in favour of Transport Commissioner, Uttar Pradesh payable at Lucknow. No Exemption Certificate will be accepted. Tender duly filled and signed shall be submitted on June 20, 2011 between 9.30 AM to 4.00 PM. For detailed information aforesaid websites may be accessed.

Bid must be accompanied with the EMD of Rs 50,00,000/- (Rupees Fifty lakhs only) in form of Bank Draft drawn in favour of Transport Commissioner, Uttar Pradesh payable at Lucknow, or in the form of Bank Guarantee of the same amount issued by a Nationalized Bank. Bank Guarantee should be in favour of Transport Commissioner, Uttar Pradesh valid for the period of 6 (six) months.

3. 1.1.9B New Definition inserted "Experience" means experience of minimum one year before last date for submission of Bid, in the field of manufacturing and affixing of High Security Registration Plates in any State/Union Territory of India, in conformity with provisions of Central Motor Vehicle Rules, 1989 as amended from time to time, with special emphasis on Rule 50.

4. Definition 1.1.19 "Period" shall mean entire period of 10 years of the contract with effect from the date of signing of the Agreement.

"Period" shall mean entire period of 10 years and 3 months of the contract with effect from the date of signing of the Agreement.

5. Definition 1.1.26 "Security Deposit" means the Performance Bond or unconditional Bank Guarantee that provides protection to the Government of Uttar Pradesh for the completion of the contract.

""Security Deposit" means the unconditional Bank Guarantee that provides protection to the Government of Uttar Pradesh for the completion of the contract.

1.5.1 The Bidder must be in possession of a valid " Type Approval Certificate" in its own name, from the testing agencies as authorized under Rule 126 of Central Motor Vehicle Rules, 1989.

The Bidder must be in possession of a valid " Type Approval Certificate" in its own name, from the testing agencies as authorized under Rule 126 of Central Motor Vehicle Rules, 1989 as amended. In addition, the Bidder must also have experience of minimum one year before last date for submission of Bid, in the field of manufacturing and affixing of High Security Registration Plates in any State / Union Territory of India, in conformity with provisions of Central Motor Vehicle Rules, 1989 as amended from time to time, with special emphasis on Rule 50.

1.5.3(i) The Bidder must have a minimum net worth, equivalent to Rs 50 crores (Certificate from the Chartered Accountant to be attached with the Bid).

The Bidder must have a minimum net worth, equivalent to Rs 40 crores (Certificate from the Chartered Accountant to be attached with the Bid).

10. 1.5.3(iii) The Bidder must attach a solvency certificate of minimum Rs 50 crores from its banker, to prove his financial soundness to execute and invest in this project.

The Bidder must attach a solvency certificate of minimum Rs 40 crores from its banker, to prove his financial soundness to execute and invest in this project.

13. 2.3.4(F) Experience record in the field of High Security Registration Plates. Original certificates issued by respective User Agencies shall also be submitted.

Experience record in the field of High Security Registration Plates in India. Attested copies of the certificates issued by respective User Agencies shall also be submitted.

2.3.5 Bank Solvency Certificate equivalent to Rs.50 crores of the Bidder Bank Solvency Certificate equivalent to Rs.40 crores of the Bidder 15 2.3.6 The Successful Bidder shall, before signing the Agreement, submit a certificate from Chartered Accountant certifying net worth of Rs 50 crores, and a Bank Solvency Certificate of Rs 50 crores, both such documents certifying status at not earlier than 03 (three) months from the last date of Bid submission.

Deleted 15 2.3.11 Bidder shall have to submit copy of Income Tax Return bearing Permanent Account Number (PAN) submitted to the Income Tax Officer of the concerned circle, for the previous two financial years i.e. 2009-10 and 2010-11 and TIN number issued by concerned Sales Tax / Trade Tax Office, along with the Bid.

Bidder shall have to submit copy of Income Tax Return bearing Permanent Account Number (PAN) submitted to the Income Tax Officer of the concerned circle, for the previous two financial years i.e. 2008-09 and 2009-10 and TIN number issued by concerned Sales Tax / Trade Tax Office, along with the Bid.

2.3.18 Any Bid not accompanied by any of the documents mentioned in Clauses 2.3.1, 2.3.2, 2.3.3, 2.3.4, 2.3.5, 2.3.6, 2.3.7, 2.3.8, 2.3.9, 2.3.11, 2.3.15, 2.3.16 and documents required as per Annexure III, Annexure V, Annexure VI, Annexure VII, Annexure VIII and Annexure IX A, and a net worth certificate as per sub-clause (e) under Clause 2.3.4 hereinabove, and in the manner specified, shall be rejected by the Authority without entertaining any correspondence whatsoever. However, in place of Balance Sheet as required in Clause 2.3.4 (d), the attested copy of Chartered Accountant' s Certificate may be attached at the time of Bid submission, but in such cases, originally required balance sheets shall be submitted before signing of the Agreement. The remaining documents mentioned under this Clause 2.3 may be submitted after Bid submission but shall mandatorily be submitted by the Successful Bidder before signing of the Agreement.

Deleted 18 2.3A New Clause inserted All the documents mentioned in Clause 2.3 shall be submitted at the time of submission of Bid document, and any Bid not accompanied by any of the said documents, and in the manner specified, shall be rejected by the Authority, without entertaining any correspondence whatsoever.

2.18 OPENING OF BIDS AND EVALUATION On the date specified in the Notice following procedure shall be adopted for the opening of the Bids.

OPENING OF BIDS AND EVALUATION On the date specified in the Schedule for invitation to tender following procedure shall be adopted for the opening of the Bids.

2.18.1.1.

The Technical Bid will be opened on June 20, 2011 at 5.30PM in the presence of the Bidders or their authorized representatives who wish to be present at the time of opening, to verify its contents as per the requirement.

The Technical Bid will be opened on July 5, 2011 at 5.30 PM in the presence of the Bidders or their authorized representatives who wish to be present at the time of opening, to verify its contents as per the requirement.

2.18.1.4A New Clause inserted For the purpose of Technical evaluation of the Bidders, the qualification parameters given hereunder, and the marks scored by the Bidder against each parameter, will be computed to arrive at the total marks scored by the Bidder from out of a maximum of 100 marks. Only those Bidders who score 60 marks or more in this evaluation shall be considered as technically qualified.

(A) Financial Parameters: (Total 50 Maximum Marks) (1): Turnover (Maximum Marks 25) Turnover Amount Marks allotted Rs.50 crores 15 Over Rs.50 crores and upto Rs.80 crores 17.5 Over Rs.80crores and upto Rs.100 crores 20 Over Rs.100 crores 25 (2) Networth (Maximum Marks 25) Networth Amount Marks allotted Rs.40 crores 15 Over Rs.40 crores and upto Rs.75 crores 17.5 Over Rs.75 crores and upto Rs 100 crores 20 Over Rs.100 crores 25 (B) : Technical Parameters :(Total 50 maximum Marks) Parameter Marks allotted One year experience of HSRP in India 30 More than one year, and upto two years experience of HSRP in India 35 More than two years, and upto three years experience of HSRP in India 40 Over three years experience of HSRP in India 50

24. 2.18.1.5 Envelope No. 2 - Financial Bids of the Bidders who qualify in Technical Evaluation shall be opened on June 27, 2011 at 12.30 PM, in the presence of only those Bidders or their authorized representatives whose Envelope No.2 is to be opened.

Envelope No. 2 - Financial Bids of the Bidders who qualify in Technical Evaluation shall only be opened on the date, time and place notified later for this purpose, in the presence of only those Bidders or their authorized representatives whose Envelope No.2 is to be opened.

27. 2.27.3 Will reject a proposal for award if it determines that the Bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question.

Will reject a proposal for award if it determines that the Bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question.

29. 2.29 New Clause Inserted Non Collusion of Bidders / Members of Joint Venture No bidder applying individually, or as a member of a Joint Venture, can be member of another Joint Venture.

No Bidder shall submit more than one Bid.

Any Bidder or constituent of Joint Venture, which submits or participates in more than one Bid, will be disqualified and will also cause the disqualification of the Joint Venture of which it is a member.

Each Bidder, and each member of the Joint Venture shall submit a certificate / affidavit confirming that in the preparation and submission of the Proposal, no Bidder or any member of the Joint Venture has acted in concert or in collusion with another Bidder/s and also done any act, deed or thing which is, or could be, regarded as anti-competitive.

4.23.1 Unless terminated earlier, pursuant to Clauses 4.13, 4.15, and 4.16, the contract shall terminate on the completion of 10 Years.

Unless terminated earlier, pursuant to Clauses 4.13, 4.15, and 4.16, the contract shall terminate on the completion of 10 Years and 3 months.

Financial Bid Form 1 (Note 2) The rate is inclusive of all taxes, levies and all other charges.

The rate is inclusive of all taxes, levies and all other charges imposed by Central Government and/or State Government.

Financial Bid Form 2(Note 3) The rate is inclusive of all taxes, levies and all other charges.

The rate is inclusive of all taxes, levies and all other charges imposed by Central Government/or State Government

54. A comparative scrutiny of the impugned amendment done through addenda, it appears that the State government has changed the criteria with regard to experience that too without taking note of 2001 Order read with Rule 126. Experience of one year was made mandatory. It is submitted by the petitioners' counsel that only three companies in the country have got one year's experience in manufacturing of High Security Registration Plates. Being a new concept in the country, there appears to be no justification to put such condition through the addenda published on 21.6.2011, that too after last date of opening of tender and the date schedule for opening of technical bid in terms of original publication dated 20.5.2011. Though addition of experience may not be unlawful, but the manner in which it was done raise eyebrow.

55. Originally, only condition with regard to bidder was type approval certificate in terms of Rule 126 along with experience but later on, one year's experience was added in the manufacturing of High Security Registration Plates which, according to the petitioners' counsel, was done to extend favour to the respondents 3 and 4.

56. On the other hand, the minimum net worth of Rs.50crores was reduced to Rs.40 crores along with certificate of Chartered Accountant. It is stated that on 20.6.2011 when it was found that the respondents 3 and 4 could not furnish the certificate of Rs.50 crores, certified by Chartered Accountant, the addenda was issued on 21.6.2011 reducing the amount to Rs.40 crores. Originally, it was provided that the document certifying the solvency should not be earlier than three months but the same was deleted while publishing the addenda. It is also stated that since the opposite party No.3 could not file relevant document required under original bid, the addenda was issued changing the original conditions.

57. From the aforesaid facts and circumstances and the material on record, it may not be ruled out that the pre-bid meeting was delayed for extraneous reasons and the government took a decision to publish the addenda on 21.6.2011, on the basis of pre-bid meeting dated 13.6.2011. The issuance of addenda on 21.6.2011 contains the smack of foul play. For justness and fairness in action, if the pre-bid meeting was necessary, then it should have been held earlier on specified date (i.e., 30.5.2011) and addenda should have been published prior to 20.6.2011. The Government took a decision to issue an addenda with substantial change in the terms and conditions of the tender document, that too broadly on the request of the opposite parties 3 and 4. Some of the conditions were made more stringent that too not based on 2011 Order, read with Rule 126 (supra) and some of the conditions were relaxed or deleted giving a way to expected bidder to succeed in the process.

V-AFFIDAVIT AND EXPERIENCE

58. Clause 2.3.4. of the tender document provides the document which shall be required by the bidders to furnish at the time of submission of tender documents. For convenience, clauses 2.3.4 and 2.3.5 are reproduced as under :

"2.3.4 The envelope shall also contain application on the letter head of the Bidder as per Annexure No. III, which shall be signed in ink by the Authorized Signatory, and shall be accompanied with:

a General Information As per Annexure-IV b List of Directors certified by As per Annexure-V Registrar of Companies having jurisdiction, for each of its constituent entities, at a date not earlier than 03 (three) months from the last date of Bid submission.

C Certificate of Incorporation As per Annexure-VI d Details of Turnover as As per Annexure VI required under Clause 1.5.3.

(ii) and accompanied with documents in support of Balance sheet and Turnover as mentioned therein.

e Original Certificate from a Chartered Accountant giving proof of the Bidder having minimum Net worth of Rs.50 crores.

F Experience record in the field As per Annexure - VIII of High Security Registration Plates. Original certificates issued by respective User Agencies shall also be submitted.

G Affidavits (2) As per Annexure-IX and IX A h Undertaking As per Annexure-X 2.3.5 Bank Solvency Certificate equivalent to Rs 50 crores of the Bidder."

59. Apart from the aforesaid documents, the tender document further provides for supply of some other documents under Clause 2.3.6, 2.3.7, 2.3.8, 2.3.9, 2.3.10, 2.3.10a, 2.3.11, 2.3.12, 2.3.13, 2.3.14, 2.3.15, 2.3.16, 2.3.17.

60. Clause 2.3.18 further provides that any bid not accompanied by any of the documents aforesaid shall be rejected by the authority without any correspondence or notice. Clause 2.3.18 has been deleted by addenda dated 21.6.2008 inserting clause 2.3a wherein it has been provided that any bid not accompanied by any of the said document and in the manner specified may be submitted at the time of submission of bid documents and in case it is not done shall be rejected by the authority without entertaining any correspondence whatsoever (supra).

The format of affidavit has been provided under Annexure-IX to the bid document is as under :

"AFFIDAVIT (In case of Joint Venture, to be given separately by each partner) Before the Authority, I....................aged about........, son of.........., resident of............., do hereby solemnly affirm and state on oath as under :

1.I have been duly authorised to swear this affidavit on behalf of M/s..........

2.2. I also hereby certify that neither M/s.........nor any of its Directors/constituent partners have abandoned any work on High Security Registration Plates in India or abroad, nor any contract awarded to us for such works have been rescinded, during last five years prior to the date of submission of the Bid. (If yes, specify reasons for the same)

3.I hereby authorize and request any authority, bank, person, firm or corporation to furnish pertinent information deemed necessary and requested by GOVERNMENT OF UTTAR PRADESH to verify this statement or any or all information submitted by me/us in this Bid, or regarding my competence and general reputation.

4.I understand and agree that further qualifying information may be requested, and agree to furnish any such information at the request of the GOVERNMENT OF UTTAR PRADESH.

5.All the statements made or information supplied in the Bid document are true and correct.

________________________ Deponent Verification I, the above named______________do hereby verify on oath that the contents of paras - 1 to 5 of my above affidavit are true and correct to my personal knowledge. Nothing has been concealed there from and no part of it is false.

So help me god.

_________________________ Deponent Date......................

61. Admittedly, the opposite party No.3 to whom the contract has been awarded had not disclosed while filing the affidavit with regard to cancellation of contract by Goa and Karnataka Government as well as Rajasthan Government in compliance of Para 2 of the affidavit. In consequence thereof, the provisions under amendment tender document vide addenda dated 21.6.2011 under clause 2.3a read with clause 2.24.3 the bid should have been outrightly rejected. Under clause 2.24, the government has been conferred power to accept or reject any bid or all bids in the event of commission of fraud or concealment of facts. For convenience, clause 2.24 is reproduced as under :

"2.24 GOVERNMENT'S RIGHT TO ACCEPT ANY BID AND TO REJECT ANY OR ALL BIDS 2.24.1 The decision of the Authority regarding the evaluation, qualification, opening and award of the Bid shall be final and binding on all the Bidders.

2.24.2 The Authority on behalf of Government of Uttar Pradesh reserves the right to reject any or all offers received from the Bidders without assigning any reasons.

2.24.3Evaluation of the Bid and signing of the Agreement in pursuance thereof shall be subject to verification of the documents, references and certificates submitted with the Bid. In case of detection of any fraud or misrepresentation prior to finalization of Tender, the Bid shall be rejected after due opportunity of hearing and the EMD shall be forfeited. If the same is detected before signing of the Agreement, the security deposit and / or the ED whichever is available with the Department, shall be forfeited and the Bid / LoI shall be cancelled after due opportunity of hearing, in addition to any other legal recourse that may be taken by the Government of Uttar Pradesh. In case it is detected after signing of the Agreement, in addition to any other legal recourse that may be taken by the Government of Uttar Pradesh, the Agreement shall be cancelled after due opportunity of hearing, and security deposit shall be forfeited."

62. Disclosure of material fact becomes more necessary and the concealment seems to be intentional in case the controversy in question is looked into on the grounds, on which the contract/tender of the respondent No.3 was rejected by the State of Karnataka, Goa and Rajasthan. The State Government has not taken into account the representation dated 13.6.2011, submitted by the petitioner association annexing the copy of the order of the State of Karnataka giving reason with regard to rejection of tender of the opposite party No.3. Copy of the representation dated 13.6.2011 has been filed as Annexure No.12 to the affidavit filed by the petitioner. It shall be appropriate to reproduce relevant portion from the order passed by the Government of Karnataka while rejecting the claim of the respondent No.3 :

"At this juncture it is learnt that Executive members of M/s Shimnit Usch Pvt. Ltd are participating in many suspicious and anti social activities, and the rates quoted by this company is 3 times higher than the rates prevailing in West Bengal and other states, the exorbitant rates quoted by company will be a financial burden on the vehicle owners. And the tenders proceedings are not at par with transparency rules. As per the discussions held in both the houses of Karnataka State assembly on 28.7.2009. The Govt by taking into consideration of the opinions expressed by the peoples representatives has agreed to reconsider the H.S.R.P implementation by keeping in view the security and safety in affixing the number plates, since the rates of HSRP in many states is lower then rates quoted in Karnataka , to prevent the financial burden on the public. The Govt has keenly observed as to the acceptance of tenders by Transport Commissioner in conformity with the rules and regulations of K.T.P.P. Act and rules. "

Similar pleading is contained in the aforesaid affidavit indicating therein that the respondent No.3 applied as Joint Venture Company, having agreement, with Nitin Shah as Indian partner but later on, the Joint Venture Company was dissolved on account of suppression of facts and misrepresentation with regard to fact that Nitin Shah ceased to be Director of Joint Venture Company. Hence, the State of Goa cancelled the tender.

63. With regard to cancellation of tender by Rajasthan Government, similar reason has been assigned by the petitioner while submitting a representation (supra).

64. There appears to be no reason for the government not to invoke power conferred by para 24.3 since the affidavit filed by the opposite party No.3 admittedly does not disclose the fact with regard to cancellation of contract by Goa and Karnataka Government. There is another aspect of the matter. Annexure IX-A contains another affidavit which is pari-materia of clause (xa) of para 4 of 2001 Order, but para 3 (6) is not in conformity with the provisions contained in Clause (xa) of para 4 of 2001 Order and there is omission of the words, "is not considered for selection of manufacturer or vendor for supply of High Security Registration Plates". Affidavit under annexure IX-A is not in conformity with sub clause xa of Para 4 of 2001 Order. Hence, it suffers from substantial illegality. Because of omission of important condition (supra), the bidder had not disclosed as to whether their contract was cancelled, rescinded or refused on account of involvement or connected with activities prejudicial to national security. Compliance was necessary keeping in view the letter of Ministry of Home Affairs, filed as Annexure No.8 to the writ petition.

65. By Addenda dated 21.6.2011, Clause 1.1.9 B was added providing therein the definition of "Experience" which means experience of minimum one year before the last date of submission of bid in the field of manufacturing and affixing of High Security Registration Plates. However, while inserting another new Clause, i.e. 2.18.1.4A, marks with regard to experience for one year has been provided as 30, upto two years, 35 and upto three years, 40 marks and over three years experience, it is 50 marks. Thus, virtually, the candidates having less than one year experience shall be disqualified to participate in the tender proceeding.

66. Learned Senior Counsel Shri R.N. Trivedi submits that Sikkim and Meghalaya whereby the respondent No.3 has contract with regard to HSRP, the total number of plates will come to one lac and odd on the other hand within six months while holding the same job in West Bengal, the petitioner has delivered about 20 lacs of number plates and almost 45 lacs in a year. The addition of experience on the basis of suggestion made by the opposite party No.3 in the pre-bid meeting dated 17.6.2011 seems to be pre-decided action of the State Government to award contract in favour of the opposite party No.3.

67. The form required to be furnished by the bidder has been provided in Annexure No.VIII which contains column for experience in the State/Union Territory and other territories. The format under Annexrue-VIII was not amended by the State while publishing the Addenda on 21.6.2011. Submission of learned Senior Counsel Shri R.K. Singh that disclosure was not necessary keeping in view the pendency of cases in different High Courts and Supreme Court seems to be not sustainable.

68. Mr. R.K. Singh, learned Senior Counsel while advancing his argument that non-disclosure of material with regard to cancellation of contract by Goa, Karnataka and Rajasthan Government is not an essential condition and does not affect the right of the respondent No.3 to continue with the contract has relied upon the cases reported in (2010)13 SCC 364 Indian Rly. Catering and Tourism Corporation Limited and another versus Doshion Veolia Water Solutions Pvt. Limited and others, (2002)6 SCC 315 Kanhaiya Lal Agarwal versus Union of India and others, (2002)2 SCC 507 State of Haryana versus State of Punjab and another, (2011)5 SCC 103 Glodyne Technoserve Limited versus State of M.P. and others, (2008)5 SCC 772 S.S. & Company versus Orissa Mining Corporation Limited, B.S.N. Joshi(supra), Educomp Datamatics Limited (supra).

69. The case of Indian Railway Catering and Tourism Corporation (supra) deals with a situation where the bidder inserted a condition in the tender document offering a discount of 1% on the quoted price. Hon'ble Supreme Court has relied upon the judgment of Kanhaiya Lal Agarwal (supra) and held that it does not violate the tender condition being not essential in nature in absence of express stipulation. To quote relevant portion :

"In the absence of any express stipulation in the Instructions to Bidders or the Special Terms and Conditions or in the Prescribed Price Schedule prohibiting the tenderer from quoting a discount on the price offered by him, the High Court could not have come to the conclusion that by offering a discount of 1% on the quoted price Ion Exchange has committed a breach of the essential terms of the tender notification or the tender format. For this conclusion, we are supported by a direct authority of this Court in Kanhaiya Lal Agrawal v. Union of India and Ors. (supra) cited by Mr. Vahanvati."

In the case of Kanhaiya Lal Agrawal followed in the subsequent judgment reported in (1990)2 SCC 488 G.I. Fernandez versus State of Karnataka and observed as under :

"It is settled law that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to the consequence of non-compliance thereto. If non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only a collateral term. This legal position has been well explained in G.J. Fernandez v. State of Karnataka."

70. In the case of State of Haryana versus State of Punjab (supra),Hon'ble Supreme Court ruled that the decision of one government relating to governance of a State of its executive would be binding on the successor government.

71. The case of Glodyne Technoserve Limited (supra) relates to a situation where the appellant tenderer was having ISO 9001:2000 certificate of the highest quality standards and a high annual turn over applied for appointment of vendor for district mechanism for public distribution system failed to submit ISO 9001:2000 certificate as certification at the time of submission of bid but it could not be submitted. In consequence thereof, tender condition bid was rejected. Explanation given by the contractor was not accepted by the government treating the filing of the ISO condition as essential condition. Hon'ble Supreme Court upheld the decision of the government and held that in spite of having an active ISO 9001:2000 certificate since the same was not submitted, the government had a right to reject the bid. The case of Glodyne Technoserve Limited virtually makes out a case for cancellation of bid of the opposite party No.3 in terms of condition contained in the tender document and does not support the respondent No.3.

72. The case relied upon by the learned Counsel for the opposite party No.3 reported in (2005)4 SCC 435 Global Energy Limited and another versus Adani Exports Limited and others relates to a situation where the controversy relates to deposit of earnest money in a tender notice and the Supreme Court ruled that the government was having right to grant exemption.

73. In the case reported in (2011)4 SCC 756 THDC India Limited versus Voith Hydro GMBH Company and others relied upon by the learned counsel for the opposite party No.3, Hon'ble Supreme Court repelled the mala fide of bias on the ground that in absence of person against whom mala fide is alleged without naming the individual, that too in absence of any supporting material, the allegation of fraud, forgery or mala fide shall not be sustainable. However, in the present case, things are different where the concealment of fact relates to cancellation of contract by three States and its non-disclosure in the affidavit filed by the respondent No.3 itself. Filing of a false affidavit is not only an offence under Indian Penal Code and the disclosure was necessary for appreciation of material in terms of Order, 2001.

74. The cases relied upon by the learned counsel for the respondent No.3 seems to deal with different situation and is not applicable under the facts and circumstances of the present case. Otherwise also, consequences of non-disclosure may be serious, hence even in view of Kanhailal's case (supra), the condition is essential one.

75. It is trite in law that a judgment should be looked into in reference to the context and must be fitten into the controversy involved and raised before the Court while dealing with the subject matter of dispute vide AIR 2002 SC 1187 Jawahar Lal Sazawal and others versus State of Jammu & Kashmir and others, AIR 2003 SC 2339 Union of India versus Chajju Ram, AIR 2003 SC 2661 Ashwani Kumar Singh versus U.P. Public Service Commission and others, AIR 1990 SC 85 India Cement Limited versus State of Tamil Nadu.

76. It is not a disputed fact on record that the contract with regard to HSRP awarded to the opposite party No.3 was cancelled by the State of Goa and Karnataka. The 2001 Order specifically debars a bidder or contractor who is connected with activities prejudicial to national security and because of such activities, he or she is not considered for selection as a manufacturer or vendor for supply of High Security Registration Plates. By not disclosing the material fact with regard to cancellation of the contract by the Government of Goa and Karnataka, the opposite party No.3 has prevented the State Government to find out the reason with regard to cancellation of the assignment by the State of Goa and Karnataka. Whether the contract of the opposite party No.3 was cancelled because of its conduct which may be prejudicial to the national security is the question which has to be investigated by the State Government in terms of Clause (xa) (f) of Order 2001. The concealment is material and violative of statutory provisions contained in 2001 Order as well as the terms and conditions of tender document and consequence may be serious. Prima facie, by deleting the statutory requirement under 2001 Order (supra) from the tender document that a bidder who has not been considered or selected as manufacturer or vendor for supply of High Security Registration Plates because of his or her prejudicial activities does not rule out involvement of officers of State in publishing the document in such a manner which may suit to the private respondents.

VI- JOINT VENTURE, LEAD MEMBER, TURN OVER, NETWORTH AND SOLVENCY

77. The financial capabilities of the bidder had been set forth under Clause 1.5.3. of the tender document and the requirement of bid proposal and signing of bid has been provided under Clause 1.5.4 and 1.6 of the tender document which are reproduced as under :

"1.5.3 Financial Capabilities :

I)The Bidder must have a minimum net worth, equivalent to Rs 50 crores (Certificate from the Chartered Accountant to be attached with the Bid).

II)The Bidder must have a minimum annual turnover of Rs.50 crores in any two of the immediately preceding three years. Certificate along with the balance sheets for any two of the three preceding financial years, 2008-09, 2009-10 and 2010-11, confirming the above will have to be provided, duly attested by a Chartered Accountant in support of fulfillment of this condition.

III)The Bidder must attach a solvency certificate of minimum Rs 50 crores from its banker, to prove his financial soundness to execute and invest in this project.

1.5.3.1 For the purpose of above evaluation, if the Bidder is a Joint Venture, the financial capabilities of its constituent entities shall be considered in the ratio of their share holding in the JV.

1.5.4 Requirement of Bid proposal :

1.5.5 The Bidder must provide complete set of Samples of each size of High Security Registration Plate, including third registration plate and snap lock, for all types of vehicles, strictly as per specifications, conforming to provisions of Central Motor Vehicles Rules, 1989 as amended from time to time, with special emphasis on Rule 50, and shall be duly marked and sealed along with the Bid document in a separate envelope.

1.5.6..............................

1.6 Signing of the Bid 1.6.1 If a limited company or a corporation submits the Bid, a duly authorized person holding power of attorney for signing the Bid document, in which case a certified copy of the power of attorney shall accompany the Bid, shall sign it.

1.6.2 If the Bid is submitted by a Joint Venture, the authorized representatives shall sign it. A certified copy of Power of Attorney in favour of the authorized representative, signed by legally authorized signatories of all the partners of a Joint Venture, shall accompany Bid document. All partners of a Joint Venture shall be jointly and severally liable for execution of the contract in accordance with the terms and conditions laid down in the Bid. The ownership or the composition or the constitution of the Company, Corporation/Joint Venture shall not be altered without the prior consent of the Government of Uttar Pradesh.

1.6.3 The original Bid shall be printed, typed or ink written, and shall be signed by a person or persons duly authorized to sign on behalf of the Bidder. All pages of the Bid, and where corrections or amendments have been made, shall be initialed by the person or persons signing the Bid.

1.6.4 The Bid shall ordinarily contain no alterations or additions. In case there is any alteration or addition, the same should be initialed by the person authorized to sign the Bid before submission of the Bid.

1.6.5 All witnesses and sureties shall be persons of status and probity. Their full names, occupations and addresses shall be provided below their signatures. All signatures shall be dated.

1.6.6 The Bidder should submit memorandum of association and articles of association of the company / corporation / Joint Venture along with the latest details of Board of Directors of the company / corporation/ Joint Venture In case of signing of Bid by person other than Managing Director (MD) or Company Secretary of the company /corporation /Joint Venture, a copy of resolution duly authenticated resolved by the Board of Directors or proper legal authority issued by the MD/Chief Executive Officer authorizing the signatory in the matter should be submitted."

The aforesaid provision has been reproduced from the original tender document dated 20.5.2011 which was later on amended on 21.6.2011 by revising the tender document. The amount of networth and solvency has been reduced to Rs.40 crores (supra).

78. (I) Joint Venture

(a) Under Clause 1.6.6. of the tender document, it has been provided that the bidder shall furnish Memorandum of Association along with latest details of Board of Directors of the company and in case of signing of Bid by person other than Managing Director or Company Secretary, a copy of the resolution duly authenticated, resolved by the Board of Directors. While submitting tender bid under Clause 2.3, an envelope shall be submitted containing various documents. It shall be appropriate to reproduce relevant portion from Clause 2.3 which is as under :

"2.3 Envelope No. 1-Technical Bid:

The first envelope clearly marked as: Envelope No. 1 (Technical Bid) must contain the following:

2.3.1 Original cash receipt in respect of purchase of Tender document.

OR In case the Tender document has been downloaded from the website, a cross Bank Draft issued by Nationalized Bank for Rs. 25,000 shall be encosed towards the cost of the Tender Document, drawn in the name of the Transport Commissioner, Uttar Pradesh, payable at Lucknow.

2.3.2 The Earnest Money Deposit (EMD) of Rs. 50,00,000 Rupees fifty lakhs) only shall be in the form of crossed Bank Draft issued by Nationalized Bank, drain in the name of the Transport Commissioner, Uttar Pradesh, payable at Lucknow, or in the form of Bank Guarantee of the same amount issued by a Nationalized Bank and valid for a period of 6 months. The Bank Guarantee shall be as per Annexure No. II-A. LoI to the successful Bidder will be issued only after verification of the Bank Guarantee from the issuing bank.

2.3.3 Attested "Type Approval Certificate" for each size and type of High Security Registration Plates issued by Testing Agencies authorized by the Government of India to supply the High Security Registration Plate (original shall be produced at the time of opening of Bid).

2.3.4 The envelope shall also contain application on the letter head of the Bidder as per Annexure No. III, which shall be signed in ink by the Authorised Signatory, and shall be accompanied with:

a General Information As per Annexure IV b List of Directors certified by As per Annexure V Registrar of Companies having jurisdiction, for each of its constituent entities, at a date not earlier than 03 (three) months from the last date of Bid submission. c Certificate of Incorporation As per Annexure VI d Details of Turnover as As per Ann.VII under Clause 1.5.3 (ii) and accompanied in support of Balance sheet and Turnover as mentioned therein. e Original Certificate from a Chartered Accountant giving proof of the Bidder having minimum Net worth of Rs. 50 crores f Experience record in the field As per Ann.VIII of High Security Registration Plates. Original certificates issued by respective User Agencies shall also be submitted. g Affidavits (2) As per Annexure IX and IX A h Undertaking As per Annexure X 2.3.5 Bank Solvency Certificate equivalent to Rs. 50 crores of the Bidder." 79. Under Section-I para 15, Joint Venture has been defined which is as under :

"15. "Joint Venture", duly incorporated under provisions of the Companies Act, 1956, and possessing Type Approval Certificate in its own name shall mean the combination of a minimum of two and a maximum of five entities, of which at least one of the entities is an Indian entity and of which one entity is the Lead Member, duly nominated by all other members of that Joint Venture. The Lead Member shall commit to hold an equity stake of at least 50% in the Joint Venture. Rest of the members may possess remaining equity share."

A plain reading of the aforesaid provisions reveals that a joint venture applying as bidder shall have two and a maximum of five entities which was later on reduced to maximum of three by amendment (supra) but the condition remains that out of three or two, one entity shall be lead member duly nominated by all other members of the joint venture. Lead Member shall commit to hold an equity stake of at least 50% in the Joint Venture. Rest member, if any, may possess remaining equity share.

80. During perusal of the record on 27.2.2012, as is evident from the order sheet dated 27.2.2012, the respondent No.3 had not submitted any document by which UTSCH AG has been nominated as lead member. Order sheet dated 27.2.2012 is reproduced as under:

Case :- MISC. BENCH No. - 7447 of 2011 Petitioner :- Celex Technologies Pvt. Ltd.,Calcutta & Others Respondent :- State Of U.P., Thru. Secretary, Transport Deptt. & Others Petitioner Counsel :- Gaurav Bhatia Respondent Counsel :- C.S.C.,A.S.G.,Neerav Chitravnashi Hon'ble Devi Prasad Singh,J.

Hon'ble S.C. Chaurasia,J.

We have perused the original record/tender document of the respondent no. 3, which reveals a declaration whereby UTSCH AG has been declared as Lead Member. While filing the turn-over as detailed in the format contained as Annexure No. VII in pursuance of Clause 2.3.4, UTSCH AG has been shown as Lead Member having 50% share holding in bidder entity and another member/Partner, Mr. Rushang Nitin Shah, has been shown to hold the remaining 50% share in Joint Venture as "INDIAN PARTNER". In the format, the annual turn over of UTSCH AG Joint venture partner, has been mentioned for the year 2008-2009 to Rs. 4,970,806,638.61, for the year 2009-2010 to Rs. 5,881,505,856.76 and for the year 2010-2011, the turn over has been mentioned to Rs. 3,670,026,194.00. With regard to Mr. Rushang Nitin Shah, the Joint Indian Partner, the turn over has not been indicated 'as not applicable' in the format of Annexure No. VII under Clause 2.3.4. With regard to networth of UTSCH AG, the certificate filed by German Public Auditor, is as under:-

"To Whomsoever It May Concern 20th June 2011 Dear Sirs, Our valued client Messrs. Erich Utsch AG has requested us to give a bank reference on themselves.

We take pleasure in complying with such request informing you that we know this company to be a renowned and absolutely reliable company with world wide activity.

The group networth exceeds EUR 50.000.000,00 with adequate earnings.

No irregularities of their general delivery and payment transactions are known to us.

As usual please make use of this report only strictly confidentially and without any liability on our part.

Yours faithfully Sd/ German Public Auditor"

The solvency certificate issued by Deutsche Bank AG German, has been relied upon and filed in compliance of Clause 1.5.3. of the Tender Document of minimum Rs. 40 Crore. The said certificate is reproduced as under:

"Deutsche Bank Deutsche Bank AG German Corporates Siegen Branch To Whom it may concern D-57069 Siegen Michael Bohi Telefon+49-271-597-363 Telefax+49-271-597-407 Email: [email protected] June 28th, 2011 Re: Erich Utsch AG, D-57080 Siegen Dear Sirs, Our valued clients Messrs. Erich Utsch AG have requested us to give a bank reference on themselves.

We take pleasure in complying with such request informing you that we know this company to be a renowned and absolutely reliable company with wordwide activity.

The group turnover exceeds EUR 75.000.000,00 (EUR seventy-five million) with adequate earnings.

The ordinary capital of the company amounting to EUR 3.000.000,-- (EUR three million) is mainly in family possession. Moreover the company disposes of further noticeable own funds. We estimate the net worth of the company well over EUR 25.000.000,00 (EUR twenty-five million).

No irregularities of their general delivery and payment transactions are known to us.

As usual please make use of this report only strictly confidentially and without any liability on our part.

Yours faithfully, Deutsche Bank AG German Corporates Siegen Branch Sd/ Sd/ (Gartz) (Bohl)"

We have already observed in our earlier order with regard to Joint Venture agreement which is of 7th day of April 2011 between UTSCH AG and Mr. Nitin Ji Shah, son of G.J. Shah, as Indian Partner, organized under the German Law. According to Joint Venture Agreement, the Indian partner is the sole shareholder of 50% in Joint Venture Company.

Sri J.N. Mathur, learned Additional Advocate General, representing the State, is proceeding with his arguments, but, his arguments could not be concluded.

Put up tomorrow i.e. 28.02.2012 at 2.00 P.M. for further hearing.

Order Date :- 27.2.2012"

There appears to be violation of condition No.15 under Section-I of the tender document.

81. (II) Turn Over : Under clause 2.3.4 (supra), all bidders are required to submit turn over certificate in Annexure No.VII. For convenience, Annexure-VII is reproduced as under :

"ANNEXURE VII (Clause 2.3.4) TURN OVER DETAILS A. Annual Turnover of Bidder (From all sources if Bidder is Company or Corporation) Financial Year Turnover

1. 2008-2009

2. 2009-2010

3. 2010-2011 B. i) Joint Venture/Partnership from Summary Name of all partners of the Joint Venture/Partnership firm % share holding in "Bidder entity"

1. Member/Partner (A)

2. Member/Partner (B)

3. Member/Partner (C)

4. Member/Partner (D)

5. Member/Partner (E)

ii) Annual Turnover Partner Year 1 (2008-09) Year 2 (2009-10) Year 3 (2010-11)

1. Member/Partner (A)

2. Member/Partner (B)

3. Member/Partner (C)

4. Member/Partner (D)

5. Member/Partner (E) TOTAL C. Name, address and Contact Number (Telephone and Fax) of Bankers to the Bidder:

D. Details regarding financial responsibility and participation (percentage share in the total) of each Company in the Joint Venture. Attach a Memorandum of Understanding for the proposed agreement of Joint Venture, which should lay down responsibility regarding work and financial arrangements in respect of each of the Company in the Joint Venture.

E. Documents as required in the clause 1.5.3 are being attached.

SIGNATURE & STAMP OF BIDDER"

82. The format with regard to turn over provides to disclose the detail regarding financial responsibility and participation of each company of the joint venture (both partners of Joint Venture) along with documents required under para 1.5.3.. In compliance of the aforesaid conditions, the opposite party No.3 has submitted turn over certificate dated 28.6.2011. From the perusal of the record in the order sheet dated 27.2.2012, the factual position has been noted.

The turn over certificate reveals that it exceeds 75 million with adequate earning but it also reveals that ordinarily, capital of the company amounting to 3 million is in family possession and the company has disposed of further noticeable own fund.

At the face of record, the turn over certificate does not contain details in terms of Annexure No.VII which seems to essential condition for the grant of contract. Moreover, the certificate issued by Deutsche Bank is in favour of Erich Utsch AG and not in the name of bidder, i.e. the Joint Venture Company.

83. According to Oxford Business English Dictionary, the turn over has been defined as under :

Page 580 blue book small The Competition Act, 2002 defines "turn over" as under :

"2(y) "turnover" includes value of sale of goods or services"

In the Central Sales Tax Act, 1956, the words, "turnover" have been defined in Section 2(j) as under :

"turnover" used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period [and determined in accordance with the provisions of this Act and the rules made thereunder]"

The U.P. Value Added Tax Act, 2008 defines "turnover of purchase" and "turnover of sale" as under :

2(ap) "turnover of purchase" with its cognate expressions means the aggregate of the amounts of purchase prices paid or payable in respect of purchase of goods made by a dealer either directly or through another dealer, whether on his own account or on account of others, after deducting the amount, if any, refunded by the seller in respect of any goods returned to such seller within such period as may be prescribed;

(aq) "turnover of sale" means the aggregate of amount of sale prices of goods, sold or supplied or distributed by way of sale by a dealer, either directly or through another, whether on his own account or on account of others;"

84. Hon'ble Supreme Court while dealing with the words, "turnover" had defined it as under :

(1) (2005)1 SCC 719 State of A.P. versus A.P. Paper Mills Limited as ''TURNOVER' means the total amount set out in the bill of sale excluding the amount collected towards the tax or the tax due under the Act whoever is less.

(2) (1975)2 SCC 358 Joint Commrl. Tax Officer versus Spencer and Co.

"TURNOVER" means the aggregaste amount for which goods are bought or sold, or supplied or distributed, by a dealer, either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration.

(3) AIR 1962 SC 1352 George Oakes (P) Limited versus State of Madras "turnover" means the amount of money which is turned over in the business.

(4) (2007)7 SCC 320 State of U.P. versus P.N.C. Construction Co. Limited The ''turnover' as defined under Section 2(i) of the Act means the total amount for which goods are supplkied or distributed by any of sale by a dealer on his own account or on account of others for cash or deferred payment or for any other valuable consideration.

(5) (2008)4 SCC 548 Mariroku Ut Injdia (P) Limited versus State of U.P.

The aggregate amount for which the goods are sold constitutes the ''turnover' relating to such sales within meaning of Section 2(h) of the Act.

(6) AIR 1999 all 333 Dheeraj Coal Traders versus Commr. Of Trade Tax, Lucknow ''Turnover' under section 2(i) means the aggregate amount for which the goods are supplied to the buyers and it includes freight payable by the buyers.

(7) (1997)5 SCC 93 State of W.B. versus O.P. Lodha The expression ''turnover' under Section 2(i) of the Act includes sales made by a dealer whether on his own account or on account of somebody else as an agent.

85. Though the respondent No.3 while filing Annexure No.VII indicated the turnover for the years 2008-09, 2009-10 and 2010-11 between 2 to 3 billion but the certificate dated 28.62011 does not contain a declaration or verification of annual turnover of financial years 2008-09, 2009-10 and 2010-11 in terms of Clause 1.5.3 of the tender document of the bidder or the Joint Venture Company but it is for Erich Utsch AG only. The Chartered Accountant had also given turnover certificate of 2007, 2008, 2009 and 2010 of German Company and not of the Joint Venture Company shown 57% earning in 2010 only from sale of HSRP plates.

86. (III) NETWORTH A Net worth certificate dated 20.6.2011 issued by Deutch Bank AG has been filed by the opposite party No.3 which has been taken into account and reproduced in the order sheet dated 27.2.2012. But it does not relate to Joint Venture Company i.e. the bidder.

According to the aforesaid certificate, the net worth exceeds 5,00,00,000 EURO.

Different statutes define the networth as under :

"Section 2(29A) of Companies Act : "NET WORTH" means the sum total of the paid-up capital and free reserves after deducting the provisions or expenses as may be prescribed.

"Section 3(1)(ga) Sick Industrial Companies (Special Provisions) : "NET WORTH" means the sum total of the paid-up capital and free reserves."

Section 49 Income Tax Act : ''NET WORTH' means the aggregate of the paid up share capital and general reassures as appearing in the books of account of the demerged company immediately before the demerger."

87. Hon'ble Supreme Court in a case reported in AIR 1984 SC 1182 Commissioner of Income Tax, Bombay versus Mahindra and Mahindra Limited has defined the Net Worth as under :

"The concept of 'Net Worth' always denotes the excess of the book value of all assets over liabilities and market value of the assets is never taken into consideration; in fact the market value of assets which gives the ''current worth' becomes a relevant factor when in liquidation the question has to be considered whether the company possesses assets which would be sufficient to meet all its creditors or not."

Keeping in view the aforesaid definition of Net Worth and conditions provided under tender document, though the certificate disclose the Net Worth of M/s. Erich Utsch AG but it does not disclose the financial year for which it has been issued, that too is not of the Joint Venture Company.

88. (IV) SOLVENCY Under Clause 1.5.3 (iii), it has been provided that the banker shall provide a financial solvency certificate of minimum of 40 crore to prove the financial soundness of bidder to execute and invest in a project. Clause 1.5.3.1 further provides that if the bidder is joint venture the financial capabilities of its construing entities shall be considered in ratio of their share holding any joint venture.

89. It has been vehemently argued by the petitioners' counsel Shri R.N. Thrived that the respondents had not filed the solvency certificate of the Joint Venture Company.

The Major Law Lexicon 4th Edition 2010 defines the solvency and solvent as under :

"Solvency. Ability to discharge debts and obligations in full; as also such state of his property as that it may be reached and subjected by process of law, amount his consent, to the payment of such debts.

The availability of cash over the longer term to meet financial commitments as they fall due.

The state of a person or company that is cash positive and able to pay all bills as they fall dues; i.e. its assets are more than its liabilities. The converse is insolvency.

Solvent. One who has sufficient means to pay is debts and all obligations.

Able to discharge one's debts and o'oligations in full [S.14, ill.(f), Indian Evidence Act (1 of 1872)]; anything that dissolves another [5th. Sch. Item 31, Income-tax Act (43 of 1961)].

Describing a person or company in a state of solvency. (Business Term)."

90. With regard to solvency certificate, it has been vehemently argued by the petitioners' counsel that no solvency certificate has been furnished in terms of tender document. The opposite party No.3 had not submitted any solvency certificate of joint venture company.

With regard to solvency net worth certificate, the petitioner has pleaded in paras 48 and 49 of the writ petition a under :

"48. That the petitioners state that in the original tender dated 20.5.2011 clause 2.3.6 required the successful bidder to submit a certificate from Chartered Accountant certifying networth of Rs.50 crores and a bank solvency certificate of Rs.50 crores and both these documents were to certify status not earlier than 3 months from the last date of bid submission. However, to benefit the above mentioned two companies who are cartel members, the above clause was deleted.

"Clause 2.3.6: The Successful Bidder shall, before signing the agreement, submit a certificate from a chartered accountant clarifying net wroth of Rupees Fifty crore and a bank solvency of Rs.50 crores, both such documents certifying statues at not earlier than 03 (three) months from the last date of bid submission."

49. That the Petitioners state that this was only done because the two cartel members did not have a solvency certificate as required by the deleted clause 2.3.6 and the two above named companies would have failed to qualify in the technical bid if the clause would have not been deleted. The Petitioners have reliably learnt that the solvency certificate submitted by M/s Shimnit Utsch India Ptv. Ltd; and M/s. Tonnjes Eastern Security Technologies Pvt. Ltc. were more than 10 months old and therefore new certificates are being arranged now by both companies."

91. In response to the aforesaid pleading in the counter affidavit dated 15.12.2011, the opposite party No.3 has made a statement as under :

"66. That the contents of para 48 and 49 of the writ petition are denied in the manner stated as false, baseless and incorrect. It may be pertinent to state that the petitioner has both net worth and bank solvency of Rs.50 Crores each and is ready to produce the same before this Hon'ble Court if so direct. It is categorically submitted that the answering respondent neither sought the deletion of clause 2.3.6 nor asked for any changes in the said clause the clarification/deletion of the said clause seems to have been brought about on the clarification sought by two of the bidders namely M/s. Agros Impex and IL & FS which is clear from the bear perusal at serial no.33 and 43 of the minutes of the meeting of the Pre-Bid conference dated 17.0-6.2011 under the chairmanship of Industrial Development Commissioner, State of Uttar Pradesh with respect to HSRP. Petitioner is deliberately attributing any change having been made in the original tender document to the answering respondent merely to prejudice the mind of this Hon'ble Court."

92. While filing counter affidavit, the opposite party No.3 has not categorically denied the averments contained in para 48 of the writ petition; rather an evasive reply has been given stating that the manner in which the petitioners stated is false, baseless and incorrect.

93. It has been vehemently argued by the learned Senior Counsel for the petitioner that no solvency certificate of joint venture has been filed by the opposite party No.3 in terms of tender document. Keeping in view the pleading on record, the argument advanced by the petitioners' counsel seems to be correct. The original document filed with supplementary affidavit reveals that an endorsement was made to obtain information from the financial controller but the same does not seem to have been done.

94. Clause 2.3.6 contained in the tender document dated 20.5.2011 was deleted by Addenda dated 21.6.2011. Clause 2.3.6 provides that the solvency certificate should be not earlier than three months. According to the petitioners' counsel, the solvency certificate of the opposite party No.3 is more than 10 months that too is not in conformity with the tender document, that too of the Joint Venture Company. However, the certificate of the bank does not indicate their period during which the opposite party No.3 is solvent in terms of Clause 2.3.5.

There appears to be room of doubt that the solvency certificate is essential condition. Unless a Company/person is solvent in the eyes of bank and authorities, it shall not be entitled for contractual assignment.

95. Question with regard to solvency certificate was considered by the bid committee which took a decision to seek expert opinion. By letter dated 8.7.2011, an advice was sought from M/s. J.P. Gupta & Company Chartered Accountant, Sapru Marg, Lucknow ehich, in turn, gave its opinion dated 90.7.2011 filed along with the application dated 21.2.2012. The report of the Chartered Accountant dated 9.7.2011 reveals that along with the tender document, no formal joint venture agreement along with solvency certificate has been filed. Thereafter, the office took note of the fact that in the certificate issued by Deutsch Bank, Germany dated 1.6.2010, the word, ''solvency' has not been used and in terms of Clause 1.5.3.(iii), bank's solvency certificate is must. The opinion of the Chartered Accountant is as under :

''निविदा अभिलेखों में इस प्रकार का कोई भी औपचारिक ज्वाइन्ट वेन्चर एग्रीमेन्ट होने का साक्ष्य नहीं लगाया गया है। हालांकि एक टेक्निकल लाइसेंस एग्रीमेन्ट दि० 31-01-2007 को साइन किया गया है जो केवल टान्जेस शब्द को इस्तेमाल करने के लिए तथा know-how technology support के लिए है। उसमें ज्वाइन्ट वेन्चर से संबंधित कोई बात नहीं लिखी है। हालांकि एम०ओ०यू० द्वारा ज्वाइन्ट वेन्चर का होना आभासित होता है परन्तु एम० ओ० यू० में दी गई शर्तों और बातों का ही पूरा अनुपालन नहीं हुआ है और एम० ओ० यू० के अनुसार कोई औपचारिक ज्वाइन्ट वेन्चर एग्रीमेन्ट भी नहीं हुआ है। ऎसे में निविदा प्रस्तुतकर्ता को ज्वाइन्ट वेन्चर नहीं माना जा सकता।'' Subject to the aforesaid observation with regard to solvency, office further proceeded to make an endorsement as under :

''अवगत कराना है कि निविदादाता ने डायश बैंक (Deutsche Bank) प्राप्त "Solvency certificate" के रूप में एक प्रमाण-पत्र, जो दिनांक 28.06.2011 को जारी नहीं हुआ है। यद्यपि कि कम्पनी के टर्नओवर, नेटवर्थ एवं अच्छी ख्याति की चर्चा उक्त प्रमाण-पत्र में की गयी है, जबकि इस योजना को कार्यान्वित करने एवं निवेश करने की दृष्टि से सुदृढ़ वित्तीय सामर्थ्य को प्रमाणित करने हेतु निविदा अभिलेख के पेज-13 पर अनुच्छेद 1.5.3 (iii) पर न्यूनतम रु०40 करोड़ की "Bank solvency certificate" प्रस्तुत करने की अपेक्षा की गयी है।''

96. Thereafter, a meeting was convened on 27.7.2011, presided by the Commissioner, Industrial Development. Again the question with regard to solvency was considered and following observation was made :

''2. निविदा अभिलेखों के तकनीकी बिड्स के परीक्षण के आधार पर उप समिति द्वारा प्रस्तुत तथ्यात्मक आख्या के अनुसार कुल सात निविदादाताओं में से 05 निविदादाताओं--(1) जे. के. एस. डी. डी. हाई सिक्योरिटी नम्बर प्लेट जे. वी., (2) आकृति सेफ गार्ड सिस्टम प्रा० लि० (3) एग्रोज इम्पेक्स (आई) प्रा० लि० (4) ग्रेट सैटर्न एम. ई. पी. जे. वी. एवं (5) रोड स्केच प्रा० लि० के पास भारत के किसी राज्य/केन्द्र शासित राज्य में हाई सिक्योरिटी रजिस्ट्रेशन प्लेट के निर्माण एवं उसके लगाने के क्षेत्र में, निविदा प्रस्तुत करने की अन्तिम तिथि से पूर्व कम से कम एक वर्ष का अनुभव प्रमाण-पत्र नहीं है, जबकि यह निविदा अभिलेख की अनिवार्य शर्त है। इसलिये निविदा समिति द्वारा उक्त निविदादाताओं की निविदाओं को अर्ह नहीं पाया गया, अतः प्रस्तुत की गयी तकनीकी निविदाओं को अस्वीकृत किया गया।

3. उप समिति द्वारा टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० के ज्वाइन्ट वेनचर होने के सम्बन्ध में प्रस्तुत तथ्यात्मक आख्या का अवलोकन किया गया तथा अवलोकनोपरान्त निविदा समिति द्वारा इस आश्य का निर्णय लिया गया कि उच्च सुरक्षायुक्त निबन्धन प्लेट (HSRP) की योजना को लागू करने के लिये विभाग द्वारा जारी किये गये निविदा अभिलेखों के क्रम में टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० द्वारा प्रस्तुत अभिलेख के आधार पर न्याय विभाग से यह परामर्श प्राप्त कर लिया जाय कि निविदा अभिलेख मे वर्णित शर्तों के अनुसार टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० ज्वाइन्ट वेन्चर के श्रेणी में आता है अथवा नहीं।

4.प्रस्तुत की गयी तथ्यात्मक आख्या में टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० तथा शिमनित उच इण्डिया प्रा० लि० द्वारा प्रस्तुत किये गये सालवेन्सी सर्टीफिकेट में निविदा समिति के निर्णय की अपेक्षा की गयी है। निविदा समिति द्वारा टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० तथा शिमनित उच इण्डिया प्रा० लि० द्वारा प्रस्तुत सालवेन्सी सर्टीफिकेट का अवलोकन किया गया तथा निविदा अभिलेखों में उक्त अपेक्षा का परिशीलन किया गया और यह पाया गया कि निविदा अभिलेख में सालवेन्सी सर्टीफिकेट का कोई प्रारूप निर्धारित नहीं है। इस दृष्टि से टान्जेज ईस्टर्न सिक्योरिटी प्रा०लि०तथा शिमनित उच इण्डिया प्रा० लि० द्वारा प्रस्तुत सालवेन्सी सर्टीफिकेट को इस प्रतिबन्ध के साथ स्वीकार किया गया कि परिवहन आयुक्त संगठन में कार्यरत वित्त नियंत्रक, टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० तथा शिमनित उच इण्डिया प्रा० लि० द्वारा दिये गये निविदा अभिलेखों को देखकर यह आश्वस्त हो लें कि उक्त निविदादाताओं का नेटवर्थ रुपये 40 करोड़ या उससे अधिक है।''

97. Learned Senior Counsel while defending the solvency certificate relied upon the case reported in (1995)1 SCC 478 New Horizons Limited and another versus Union of India and others vehemently argued that in a Joint Venture Company, experience of its various constituents had to be taken into consideration. Submission of the petitioners' counsel may be looked into only within the four corners of the tender conditions in the light of the judgment relied upon. Clause 1.5.3.1 deals with evaluation and provides that for the purpose of evaluation, if the Bidder is a Joint Venture, the financial capabilities of its constituent entities shall be considered in the ratio of their share holding in the Joint Venture. It does not absolve the Bidder from filing of certificate of Joint Venture. In view of the definition given in the tender condition and requirement under Clause 1.6.6, it shall be necessary to file the solvency certificate of the bidder itself as envisaged by tender document including requirement under Clause 2.3.4 read with Clause 2.3.5 which does not permit to file the certificate of one of constituent of Joint Venture. Of course, while evaluating the overall financial capabilities individual capability may be looked into by the tender committee keeping in view the disclosure in Annexure VII. In case, the word, "bidder" used at different places in the tender document given a meaning confining it to constituent of Joint Venture, then whole of the Scheme under the tender document including the security attached to HSRPs may be frustrated.

This inference is fortified from Annexures-IX and IX-A which provides that in the event of Joint Venture, each of the partners shall file separate affidavit in pursuance to the provisions contained in Clauses 2.3.4, read with Clause 1.5.2 and 2.3.4 (g). The language used in Annexure-X (undertaking) also requires undertaking by Joint Venture Company (bidder). In the absence of solvency certificate of the bidder, i.e. the Joint Venture Company, the bid should have been summarily rejected under clause 2.18.1.3.

98. However, during the course of argument, attention of the court has not been invited to any material on record which may reveal that with regard to solvency, the Finance Controller of the office of the Transport Commissioner has submitted any report. Thus, it appears that for the reason best known to the government, the contract has been awarded to the respondent No.3 ignoring the terms and conditions of the tender document with regard to solvency certificate of Joint Venture Company.

VII- ARBITRARINESS IN AWARDING THE CONTRACT

99. Along with the supplementary affidavit, photostat copy of some original document has been filed by the State of U.P. which reveals that the tenders were invited by 5.7.2011 upto 4.00p.m. in pursuance to Addenda issued on 21.6.2011 (supra). The office note dated 4.7.2011 reveals that the tender shall be opened before the Transport Commissioner on 5.7.2011 at 5.30 p.m. and the entire proceeding shall be vidiographed. A meeting of the tender committee was also convened on 4.7.2011 and the proceedings were recorded. The note dated 6.7.2011 further reveals that in pursuance to the bid opened on 5.7.2011 for further action, a meeting was convened on 7.7.2011 at 5.00 p.m. in the office of the Establishment and Industrial commissioner, U.P. the office note shows that the meeting of 7th July, 2011 was suspended. The office note dated 8.7.2011 reveals that the opinion of the Chartered Accountant be obtained with regard to bids opened on 5.7.2011. According to the office note dated 18.7.2011, the bid of M/s Road Sketch Private Limited (petitioner No.2) was cancelled for the reason that the bid was filed as a member of joint venture but it is not registered as company under the Companies Act and in West Bengal, the contract has been awarded since 17.1.2011 resulting in less than one year experience, hence it is not qualified under Clause 1.5.1. The opinion of M/s J.P. Gupta & company, Chartered Accountant was invited (supra) and the Chartered Accountant opined that a joint venture agreement has not been filed by the petitioners (supra). The committee further noted that the contractor M/s. Shimnit Utsch India Private Limited filed affidavit that in the last five years with regard to construction of HSRP under joint venture obligation its contract never cancelled. The observation made by the committee on 18.7.2011 is reproduced as under :

''उक्त के क्रम में यह भी उल्लेख करना है कि निविदा अभिलेख के पृष्ठ--73 पर दिये गये अनुलग्नक--IX के प्रारूप में शपथ-पत्र में शिमनित उच इण्डिया प्रा० लि० के अधिकृत हस्ताक्षरी द्वारा शपथ पूर्वक प्रमाणित किया गया है कि निविदा प्रस्तुत करने की तिथि से विगत पाँच वर्षों के अन्दर ज्वाइन्ट वेन्चर को उच्च सुरक्षायुक्त निबन्धन प्लेट (HSRP) लगाने सम्बन्धी किया गया करार न तो ज्वाइन्ट वेन्चर द्वारा और न नही इसके किसी निदेशक/पार्टनर द्वारा परित्यक्त किया गया है और न ही सक्षम प्राधिकारी द्वारा करार को विखण्डित किया गया है। इस सम्बन्ध में निविदा समिति को अवगत कराना है कि औपचारिक रूप से प्राप्त की गयी सूचना के अनुसार शिमनित उच इण्डिया प्रा० लि० को कर्नाटक सरकार व गोवा सरकार द्वारा उच्च सुरक्षायुक्त निबन्धन प्लेट (HSRP) लगाने एवं विनिर्माण इकाई स्थापित करने सम्बन्धी किये करार विखण्डित किये गये हैं। अतः ज्वाइन्ट वेन्चर के इस कृत्य पर निविदा अभिलेख के अनुच्छेद 2.24 एवं अनुच्छेद 2.27 के आलोक में मत स्थिर किया जाना अपेक्षित है।''

100. After 18.7.2011, the record reveals that under the Commissioner, Establishment and Industrial Development, a meeting was convened on 27.7.2011 which opined to seek advice with regard to solvency from the Finance Controller of the transport department and also to ensure with regard to net worth of 50 crore or above. The committee took note of the fact that the opposite party No.3 has not filed affidavit in terms of Annexure No.IX and concealed the fact that the contract granted by the Karnataka and Goa government with regard to HSRP was cancelled. The observation made by the committee in its meeting dated 27.7.2011 is reproduced as under :

''5. उप समिति द्वारा प्रस्तुत तथ्यात्मक आख्या के पृष्ठ--6 के अन्तिम प्रस्तर मे उल्लिखित बिन्दु यह है कि शिमनित उच इण्डिया प्रा० लि० द्वारा अनुलग्नक--IX के प्रारूप में प्रस्तुत किये गये शपथ-पत्र के अनुसार कम्पनी/ज्वान्ट वेन्चर द्वारा अथवा इसके किसी निदेशक/पार्टनर द्वारा विगत पाँच वर्षों के अन्दर उच्च सुरक्षा युक्त निबन्धन प्लेट (HSRP) लगाने के सम्बन्ध में किया गया करार न तो परित्यक्त किया गया है और न ही सक्षम प्राधिकारी द्वारा करार को विखण्डित किया गया है। टेण्डर उप समिति द्वारा प्रस्तुत तथ्यात्मक आख्या में वर्णित है कि उक्त कम्पनी/ज्वाइन्ट वेचन्चर को कर्नाटक सरकार एवं गोवा सरकार द्वारा उच्च सुरक्षा युक्त निबन्धन प्लेट (HSRP) लगाने एवं विनिर्माण इकाई स्थापित करने सम्बन्धी करार विखण्डित किये गये हैं। इससे यह स्पष्ट हो रहा है कि निविदादाता द्वारा श्पथ-पत्र में सही तथ्य नहीं दर्शाया गया है किन्तु यह विचारणीय बिन्दु है कि निविदादाता का यह कृत्य निविदा अभलेख के अनुच्छेद 2.24 एवं 2.27 में वर्णित Misrepresentation की श्रेणी मे आता है या नहीं; तथा Misrepresentation की श्रेणी में आने पर निविदादाता पर निविदा अभिलेख का अनुच्छेद 2.27 आकृष्ट होगा या अनुच्छेद 2.24 आकृष्ट होगा जिसमें यह अभिलिखित है कि Misrepresentation detect होने पर निविदा अस्वीकृत करने से पहले निविदादाता को सुनवाई का अवसर उपलब्ध कराया जायेगा। इस बिनदु पर निविदा समिति द्वारा सम्यक रूप से विचार किया गया और निणर्य लिया गया कि इन बिन्दुओं पर न्याय विभाग से विधिक परामर्श प्राप्त कर लिया जाय। तदोपरान्त उक्त बिन्दुओं पर आख्या/ परामर्श प्राप्त होने के उपरान्त निविदा समिति द्वारा अन्तिम निर्णय लिया जायेगा।''

101. Thereafter, meetings were convened from time to time under the Commissioner, Establishment & Industrial Development to take further action but could not be materialised and ultimately the meeting of the tender committee was held on 16.8.2011. The tender committee observed with regard to solvency of the opposite party No.3 that the opinion may be obtained from the Finance Controller working in the office of the Transport Commissioner in terms of earlier recommendation.

102. The committee in its meeting dated 16.8.2011 took note of the fact that while filing affidavit in terms of Annexure No.IX of the tender document, it has been specifically mentioned that M/s Shimnit Utsch India Private Limited or any of its Director construed partners has neither abandoned any work on HSRP in India nor any contract awarded to them has been rescinded during last five years. Its affidavit was at the face of record false and punishable under Section 193 of the Indian Penal Code. The committee further proceeded to observe as under :

''शिमनित उच इण्डिया प्रा० लि० द्वारा अपनी निविदा प्रपत्र के पृष्ठ 198 से 201 पर प्रस्तुत किये गये शपथ-पत्र एवं प्र० वि० का यह कथन कि कर्नाटक सरकार एवं गोवा सरकार द्वारा उच्च सुरक्षायुक्त निबन्धन प्लेट (HSRP) लगाने एवं विनिर्माण इकाई स्थापित करने सम्बन्धी करार को विखण्डत किये गये हैं, से यह सुस्पष्ट है कि निविदादाता द्वारा प्रस्तुत किये गये शपथ्-पत्र में सही तथ्य नहीं दर्शित किये गये हैं। निविदादाता का उक्त कृत्य निविदा प्रपत्र के प्र्स्तर-2.27.2 (ii) में परिभाषित Fraudulent Practice की परिधि में आता है। चूंकि विचाराधीन Fraud/ misrepresentation विचाराधीन निविदा के अन्तिमीकरण के पूर्व प्रकाश में आ गया है, अतः प्र० वि० शिमनित उच इण्डिया प्रा० लि० को सुनवाई का अवसर देकर के प्रस्तर 2.24.3 के अनुसार विचाराधीन निविदा को निरस्त करने एवं EMD को जब्त करने पर विचार कर सकते हैं। इसके अतिरिक्त प्र० वि० प्रस्तर- 2.27.4 की कार्यवाही पर भी विचार कर सकते हैं।''

103. It appears that instead of taking action on account of filing of false affidavit under Clause 2.24.3, a show cause notice was issued to the respondent No.3 and 4 and reply was sent to the office of Legal Remembrancer for opinion. According to the record, the question posed to the respondents 3 and the reply given by it along with the office comment has been summarised as under :

"2. कारण बताओ नोटिस सन्दर्भ-- मे० शिमनित उच इण्डया प्रा० लि० नोटः- बिडकर्ता मे० शिमनित उच इण्डिया प्रा० लि० को दिया गया कारण बताओ नोटिस पत्रावली में पताका--ग पर तथा उसके द्वारा दिया गया उत्तर पत्रावली मे पताका--घ पर दृष्टव्य है जिसका सारांश स्तम्भ--2 पर तथा स्थिर किया गया वभभागीय अभिमत स्तम्भ--3 पर अंकित है।

पृच्छा उत्तर टिप्पणी 1 2 3

1. कर्नाटक सरकार एवं गोवा सरकार द्वारा एच एस आर पी लगाने एवं विनिर्माण इकाई स्थापित करने सम्बअन्धी शिमनित उच इण्डिया प्रा० लि० के करार विखण्डित किये गये हैं लेकिन शिमनित उच इण्डिया प्रा० लि० द्वारा प्रस्तुत की गयी तकनीकी निविदा में एनेक्जर--IX पर अपेक्षित प्रारूप के शपथ-पत्र पर उक्त तथ्य नहीं दर्शाये गये हैं। बिडकर्ता का यह कृत्य न्याय विभाग के अनुसार Fraudulent Practice की परिधि में आता है। अतः शिमनित उच इण्डया प्रा० लि० को कारण बताओ नोटिस जारी की गयी कि उनके विरुद्घ निविदा प्रपत्र के प्रस्तर-- 2.24.3 एवं प्रस्तर--2.27.4 के प्राविधानों के अन्तर्गत क्यों न कार्यवाही की जाय?

मे० शिमनित उच इण्डिया प्रा० लि० द्वारा अपने उत्तर के प्रस्तर--6 से 8 तक के अंशो में इस तथ्य को स्वीकार किया गया है कि कर्नाटक सरकार एवं गोवा सरकार द्वारा एचएसआरपी लगाने एवं विनिर्माण इकाई स्थापित करने सम्बन्धी उनके करार विखण्डत किये गये हैं लेकिन उनका यह भी कहना है कि कर्नाटक सरकार के विखण्डन सम्बन्धी आदेश दिनांक 22.1.2010 को अपील संख्या--4066/2011 में माननीय कर्नाटक उच्च न्यायालय के आदेश दिनांक 17.6.2011 द्वारा स्थगित किया गया है तथा गोवा सरकार के आदेश के विरुद्घ माननीय उच्चतम न्यायालय में एसएलपी (सी) संख्या-13485/2011 लम्बित है, अतः उक्त दोनों प्रकरण पर निरस्तीकरण विधिक रूप से विवादग्रस्त होने के कारण अन्तिम रूप नहीं ले पाया।

बिडकर्ता द्वारा उक्त कृत्य को fraudulent या practice' "misrepresentationन मानने के सन्दर्भ में निम्न उत्तर प्रस्तूत किया गया--

9. We reiterate that we have not indulged in 'fraudulent practice' nor have we made any "misrepresentation of facts" in order to influence the evaluation process or execution to the detriment of the Government of Uttar Pradesh.

10. We also reiterate that Annexure-IX of the Tender document is not in any even part of the eligibility requirement of the bidder as mentioned in clause 1.5 of the Tender document and therefore, any inconsistency in the said Annexure-IX can not be a ground for rejecting the bid and/or initiation of any action under Clause 2.27.2 or Clause 2.27.3. Assuming (whilst not admitting) that there is any inconsistency in the information furnished in Annexure-IX, we state that even then the Government of Uttar Pradesh is not entitled to initiate action against the bidder nor would the same for within the preview of the word 'fraudulent practice'. We categorically deny that we have indulged in any fraud/ misrepresentation as alleged by you in the Show Cause notice.

11- Even otherwise we have been advised to state that requirements of the condition of a tender notice can be classified in two categories-- those which lay down the essential conditions of the eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. It is trite that while essential condition in the tender may be enforced rigidly, qua non-essential conditions, rigid compliance is not required and deviation is permissible (COPY ENCLOSED AS ENCLOSURE D COLLY). Therefore, as already stated hereinabove Annexure-IX does not form part of the eligibility conditions of the bidder nor is non compliance to Annexure-IX a ground for disqualification of the bidder. Even if there is a slight deviation in the information furnished by a bidder under Annexure-IX, the same being a non essential condition can not be construed to initiate stringent action of disqualifying the bidder.

निविदा अभिलेख के पृष्ठ-73 पर एनेक्जर-IX के बिन्दु-2 मे मे० शिमनित उच इण्डिया प्रा० लि० को स्पष्ट से इसका उल्लेख किया जाना चाहिये था कि उनके करार निम्न कारणों से विखण्डत किये गये हैं और वर्तमान में उनकी यह विधिक स्थिति है। लेकिन मे० शिमनित उच इण्डिया प्रा० लि० द्वारा एनेक्जर--IX के बिन्दु-2 में असत्य कथन किया गया है कि उनके करार कभी विखण्डित ही नहीं किये गये हैं। अतः शिमनित उच इण्डिया प्रा० लि० का उक्त असत्य कथन Fraudulent Practice/Misrepresentation की परिधि में आने के बिन्दु पर न्याय विभाग का सुविचारित परामर्श अवलोकनीय है।''

104. The aforesaid reply of the respondents 3. is evasiv and does not fulfil required condition. The comments were sent to the government and in turn, it was referred to the office of the Legal Remembrancer and in turn the office of the Legal Remembrancer, Government of U.P. has submitted its report. The office of the Legal Remembrancer has opined that the non-disclosure of cancellation of contract by the Karnataka and Goa government in the affidavit is not vital or essential and it is not one of the essential conditions of the tender document. The Legal Remembrancer further opined that the Tonjies having 95% share shall be lead member. This information was given in spite of the fact that under tender document, it was necessary conditions that one of the joint venture companies shall nominate the other who may be termed as lead member. In spite of absence of nomination by Indian partner of the joint venture, the Law Department submitted its opinion ignoring the mandatory requirement of tender document.

However, there appears to be no opinion on record with regard to the respondent No.3. The action of the State Government in granting the contract in favour of the respondent No.3 seems to suffer from vice of arbitrariness for the reason that the State government proceeded to negotiate the matter with the respondent No.3 from time to time not only given opportunity to explain their conduct in not fulfilling the required condition under tender document but also with regard to lowering down of the rate of HSRP. Negotiation took place in violation of tender condition as well as circular of Chief Vigilance Commissioner of India as discussed hereinafter.

The defence of the respondent that because of paucity of time and compulsion of order of Hon'ble Supreme Court they travelled beyond the terms and conditions of tender document is neither justifiable nor lawful; more so when delay seems to be intentional and deliberate.

VIII- NEGOTIATION AND RATE OF HSRP

105. It appears that after opening of the tender, a comparative chart was prepared whereby it was found that the rate of the respondent No.3 is lowest one but simultaneously, it was also found that no reservation price was fixed by the Government of U.P. in pursuance to which a valuation may be done with regard to tender rate and alleged effort was made to obtain the rate of HSRP in different States of the country but the same could not be obtained by the Transport Commissioner. Hence, the matter was referred for Cabinet decision after opening of financial bid on 31.12.2011. The office note with regard to placement before the Cabinet is as under :

'' दरों के निर्धारण के बिन्दु पर यह विचार-विमर्श् हुआ कि निविदा प्रकाशित किये जाते समय इस कार्य के लिए परिवहन विभाग द्वारा कोई रिजर्व प्राइस नहीं रखी गई थी जिसके मानक के आधार पर प्राप्त दर का मूल्यांकन किया जा सके। परिवहन आयुक्त द्वारा अन्य राज्यों से उनके यहां लागू दर प्राप्त किये जाने हेतु प्रयास किया गया है परन्तु अधिकृत रूप से अन्य राज्यों में लागू दरों की सूचना प्राप्त नहीं हुई है। दूरभाष पर प्राप्त की गई सूचना को अधिकृत न मानते हुए समिति द्वारा इसे संज्ञान में नहीं लिया गया। समिति द्वारा निर्णय लिया गया कि उक्त तथ्यों को परिवहन विभाग द्वारा माननीय मंत्रिपरिषद के समक्ष लाते हुए मा० मंत्रिपरिषद से आवश्यक दिशा निर्देश प्राप्त किया जाय।

यह भी अवगत कराया गया कि मा० मंत्रिपरिषद के विचारार्थ एजेण्डा में विषय को शामिल कर लिया गया है एवं ''बाई सर्कुलेशन'' यह बैठक आज दिनांक 21-12-2011 को ही की जानी है। मा० मंत्रिपरिषद के विचारार्थ टिप्पणी शासन की ओर से आज ही प्रस्तुत की जायेगी। तद्नुसार शासन से आवश्यक निर्देश प्राप्त होने के बाद पत्रावली प्रस्तुत की जाय।''

106. According to the office note, the government took a decision that the information may be collected from different States and accordingly rates may be finalised with the respondent No.3. Relevant portion from the office note is reproduced as under :

''कृपया शासन के पत्र संख्या--3003/तीस--3--11--20एम/08टी.सी.--11, दिनांक 21.12.2011 का अवलोकन करने का कष्ट करें जिसके द्वारा अवगत कराया गया है निविदा समिति द्वारा दिनांक 21.12.2011 को तकनीकी रूप से अर्ह आवेदकों से प्राप्त निविदाओं को खोला गया और न्यूनतम निविदा मे० शिमनित उच इण्डिया प्रा० लि० की निविदा न्यूनतम निविदा समिति द्वारा पायी गयी, पत्र के साथ निविदा समिति की संस्तुतियां (मय संलग्नक) प्रेषित करते हुये अवगत कराया गया है कि शासन द्वारा सम्यक विचारोपरान्त निर्णय लिया गया है कि अन्य राज्यों द्वारा दरों की सूचना एकत्रित कर न्यूनतम निविदादाता से निगोशियेट कर दरें अंतिम की जायें। यह भी आदेशित किया गया है कि न्यूनतम् निविदाकर्ता से निगोशिएट कर दरें अंतिम करते हुए प्रदेश में हाई सिक्योरिटी नम्बर प्लेट योजना के कार्यान्वयन के संबंध में अग्रेतर कार्यवाही सुनिश्चित की जाय। उक्त शासनादेश द्वारा यह भी अवगत कराया गया है कि प्रश्नगत योजना के कार्यान्वयन हेतु दि० 21-06-2011 को जारी निविदा अभिलेख के समस्त प्राविधानों पर अनुमोदन प्रदान किया जाता है। उक्त के अतिरिक्त इस तथ्य का भी उल्लेख है कि यह प्रकरण मा० न्यायालय के आदेश से आच्छादित एवं सर्वोच्च प्राथमिकता का है, अतः इसे प्राथमिकता प्रदान किया जाए।''

107. Subject to the aforesaid backdrop, the State Government entered into negotiation with the respondent No.3. the record also reveals that the circular of the Chief Vigilance Commissioner dated 3.3.2007 was well in the knowledge of the State Government which provides that the negotiation could often be a source of corruption and no post tender negotiation except in certain exceptional situation be held. The exceptional circumstance has also been dealt with in the letter of the Chief Vigilance Commissioner which does not seem to exist in the present case. The letter dated 3.3.2007 is on record of the State government. For convenience, it is reproduced as under :

"Dated the 3rd March, 2007 Circular No.4/3/07 Sub:- Tendering process - negotiations with L-1.

Reference is invited to the Commission's circulars of even number, dated 25.10.2005 and 3.10.2006, on the above cited subject. In supersession of the instructions contained therein, the following consolidated instructions are issued with immediate effect:-

(i)As post tender negotiations could often be a source of corruption, it is directed that there should be no post-tender negotiations with L-1, except i n certain exceptional situations. Such exceptional situations would include, procurement of proprietary items, items with limited sources of supply and items where there is suspicion of a cartel formation. The justification and details of such negotiations should be duly recorded and documented without any loss of time.

(ii)..........

(iii)Negotiations should not be allowed to be misused as a tool for bargaining with L-1 with dubious intentions or lead to delays in decision-making. Convincing reasons must be recorded by the authority recommending negotiations. Competent authority should exercise due diligence while accepting a tender or ordering negotiations or calling for a re-tender and a definite timeframe should be indicated so that the time taken for according requisite approvals for the entire process of award of tenders does not exceed one month from the date of submission of recommendations. In cases where the proposal is to be approved at higher levels, a maximum of 15 days should be assigned for clearance at each level. In no case should the overall timeframe exceed the validity period of the tender and it should be ensured that tenders are invariably finalised within their validity period."

108. With regard to reasonableness of price, the opinion of the Chief Vigilance Commissioner of India is also on record and is reproduced as under :

4.12 REASONABLENESS OF PRICE Before placing the contact on the lowest evaluated responsive tender (L 1), the purchase organization is to ensure that the price to be paid is reasonable. Reasonableness of the price shall be assessed in a realistic and objective manner. The broad guidelines for judging the reasonableness of price are as under:

a. Last purchase price of same (or, in its absence, similar) goods.

b. Current market price of same (or, in its absence, similar) goods.

c. Current market price of major raw materials, which go into the production of the goods.

d. Prices at which similar contracts are being operated in similar organizations i.e. CWC, State agencies etc. e. Quantity involved.

f. Terms of delivery.

g. Period of delivery.

h. Cost analysis and changes in price index.

Price paid in an emergency purchase or purchase price of goods offered by a firm through 'distress sale' (i.e. when the firm clears its excess stock at throw away prices to avoid further inventory carrying cost etc) and purchases made at high rates under emergency situations to meet immediate requirement are not accurate guidelines for future use."

The aforesaid letters of the Chief Vigilance Commissioner of the country was taken into account but it is unfortunate that the same was not followed by the respondents while finalising the contract. The reason for giving a go-bye of the opinion of the Chief Vigilance Commissioner is that in case it is complied with, the tender could not have been granted. Accordingly, a decision was taken on 22.12.2011 to proceed with the tender process with due negotiation and award the same to the respondent No.3. To quote relevant portion from the office note dated 22.11.2011.

"उपरोक्त समस्त परिस्थितियों के दृष्टगत निगोशिएशन की प्रक्रिया को पूर्ण किये जाने के सम्बन्ध में तीन विकल्प विचारणीय हैं--

विकल्प-1:- एल-1 द्वारा निगोशिएशन के पश्चात् अंतिम रूप से दी गई दरों को स्वीकार नहीं करते हुए शासन को यह सूचित कर दिया जाय कि टेण्डर प्रक्रिया को निरस्त करते हुए दुबारा टेण्डर किया जाय।

विकल्प-2:- अन्य राज्यों में प्रभावी ऎसी दरों की जानकारी के लिये विभिन्न राज्यों के परिवहन आयुक्त एवं प्रमुख सचिव, परिवहन को प्रेषित पत्र दिनांक 17.12.2011 एवं 21.12.2011 के प्रत्युत्तर की दो-तीन दिन और प्रतीक्षा कर ली जाय, तदोपरान्त निगोशियेटेड रेट अन्तिम किये जायं।

विकल्प-3:- एल-1 द्वारा निगोशिएशन के पश्चात् दी गई दरें, जो मेघालय एवं नागालैण्ड से कम है परन्तु बिहार राज्य से अधिक है, उन पर निगोशिएशन समाप्त करते हुए योजना के समग्र कार्यान्वयन की कार्यवाही की जाय।

उपरोक्त समस्त विकल्पों पर विस्तार से विचार किया गया। यदि विकल्प-1 के अनुरूप कार्यवाही की जाती है तो ऎसी स्थिति में मात्र रेट निगोशिएशन के आधार पर पूरी प्रक्रिया हेतु पुनः निविदा आमंत्रित करना होगा परन्तु यदि पुनः निविदा आमंत्रित किये जाने की संस्तुति की जाती है तो ऎसी स्थिति में मा० सर्वोच्च न्यायालय द्वारा निर्धारित समय-सीमा के अंदर इस योजना का क्रियान्वयन कराया जा सकना सम्भव नहीं हो पायेगा। ऎसा न हो पाने की स्थिति में मा० सर्वोच्च न्यायालय द्वारा पारित आदेश दिनांक 08.12.2011 के प्रस्तर-36 (2) के अनुरूप मा० सर्वोच्च न्यायालय द्वारा स्वतः अवमानना की कार्यवाही आरम्भ कर दी जायेगी जिसके कारण राज्य सरकार को अत्यन्त विषम परिस्थिति का सामना करना पड़ेगा। यदि विकल्प दो के अनुरूप कार्यवाही की जाती है तो ऎसी स्थिति में मा० मंत्रिमण्डलीय सचिव के कक्ष मे दिनांक 22.12.2011 को आहूत उच्च स्तरीय बैठक में दिये गये निर्देशों का अनुपालन सम्भव नहीं हो सकेगा।

उपरोक्त वर्णित समस्त तथ्यों एवं परिस्थितियों को ध्यान में रखते हुए यह उचित प्रतीत होता है कि चूंकि एल-1 मे० शिमनित उच इण्डिया प्रा० लि० के द्वारा निगोशिएशन के पश्चात् की गई दरें, मेघालय, नागालैण्ड एवं उत्तर प्रदेश में वित्तीय निविदा डाले जाते समय दी गयी दरों से कम है, इस लिये निगोशिएशन समाप्त करते हुए निगोशियेशन के पश्चात् दी गयी दरों को शासन को सूचित करते हुए अनुमोदन प्राप्त किया जाय।''

109. Subject to the aforesaid backdrop, it appears that the things were negotiated on 21.12.2011 with regard to reasonableness of price and other factors and the rates of Meghalaya, Nagaland and Bihar were taken into account which is as under :

क्रमांक राज्य का नाम (दरें रुपये में) दोपहिया यान तिपहिया यान हल्के मोटरयान ट्रैक्टर मध्यम/भारी यान वेटेड एवरेज़ 1 2 3 4 5 6 7 8 1 उ० प्र० में वित्तीय निविदा में एल--1 की दर 470.63 595.90 887.08 573.33 909.65 530.17 2 मेघालय राज्य में क्रियान्वयन की दर 692.32 959.35 1681.29 n.a.

1681.29 n.a.

नागालैण्ड राज्य में क्रियान्वयन की दर 558.00 744.00 1208.00 n.a.

1208.00 n.a.

बिहार राज्य द्वारा सूचित दर 131.00 162.00 335.00 140.00 310.00 n.a.

110. In spite of exorbitant price quoted by the O.P. No.3, from the material on record it appears that a decision was taken to award contract to O.P. No.3 in compliance of the Order of the State Government, as is evident from another office note dated 22.12.2011, filed by State with supplementary affidavit, to reproduce the office note:-

वित्त नियंत्रक /अ०प०आ०(प्रशा०) कृपया हाई सिक्योरिटी नम्बर प्लेट योजना लागू किये जाने के सम्बन्ध में इस कार्यालय द्वारा शासन को प्रेषित पत्र संख्या 3932ए/2011, दिनांक 22.12.2011 के सन्दर्भ में शासन से प्राप्त वि० प० पत्र संख्या-3024-ए/तीस-3-11-20एम/08टी.सी.-11, दिनांक 22.12.2011 का अवलोकन करने का कष्ट करें जिसके द्वारा अवगत कराया गया है कि शासनादेश संख्या-3003/ तीस-3-11-20एम/ 08टी.सी.-11. दिनांक 21.12.2011 द्वारा उक्त योजना के सम्बन्ध में कार्यवाही हेतु परिवहन आयुक्त को अधिकृत किया गया है, पत्र में उक्त पत्र का प्रस्तर-1 का कुछ अंश उल्लिखित करते हुये निर्देशित किया गया है कि परिवहन आयुक्त द्वारा अपने स्तर से अविलम्ब कार्यवाही की जाये।

शासन से प्राप्त उक्त पत्र में दिये गये निर्देश के अनुसार हाई सिक्योरिटी नम्बर प्लेट योजना लागू किये जाने न्यूनतम निविदादाता मे० शिमनित उच इण्डिया प्रा० लि० को टेण्डर डाकुमेन्ट के प्राविधानों के क्रम में लेटर आफ इन्टेन्ट जारी करने की आवश्यकता होगी और यह भी आवश्यक होगा कि इस पत्र में निविदा अभिलेख के क्लाज 2.25.1 के क्रम में परफार्मेंन्स सिक्योरिटी जमा कहने का भी उल्लेख किया जाये। अतः तद्नुसार उक्त फर्म को टेण्डर डाकूमेन्ट के क्लाज के क्रम में लेटर आफ इन्टेन्ट जारी करने हेतु परिवहन आयुक्त महोदय से अनुरोध करना चाहें। तैयार कराये गये लेटर आफ इन्टेन्ट का आलेख प्रस्तुत है। कृपया सहमति की दशा में अनुरोध करना चाहें।'' Thus, it appears that during negotiation, it is noted that Bihar was having lowest rate as number of vehicles was much higher than Nagaland and Meghalaya where the respondents 3 and 4 have been awarded contract.

111. It appears that from time to time, the government and the respondent No.3 has entered into negotiation and ultimately, the contract was signed under the title , "draft agreement" on 21.1.2012 on the following agreed rate with regard to supply of HSRP to quote:-

"ANNEXURE-III (Equivalent to Form I of Financial Bid)

1. Sale Price to be charged for High Security Registration plates for Newly Registered and Already Registered Vehicles.

Sl.

No.

Item Weight attached Unit Rate Break Up Amount Rate in Rs Total (3x5) Figures Words 1 2 3 4 5 6

1. Complete set of Registration Plates inclusive of Snap Lock and fixing for two-wheelers-scooters, Motor Cycles and moped.

0.7833 Set Rate any where i n Uttar Pradesh 213.00 Two hundred and thirteen only 166.84 VAT 23.00 Twenty three only 18.02 Service Tax 4.39 Four and paise thirty nine only 3.44 Others (Pl Specify) TOTAL-A 240.39 Two hundred fourty and paise thirty nine only 188.30

2. Complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plat and fixing for three-wheelers (Passenger and goods) and invalid carriages.

0.0128 Set Rate any where in Uttar Pradesh 253.00 Two hundred and fifty three only 3.24 VAT 27.32 Twenty seven and paise thirty two only 0.35 Service Tax 5.22 Five and paise twenty two only 0.06 Others (Pl Specify) TOTAL-B 285.54 Two hundred eighty five and paise fifty four only 3.65 3 Complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plat and fixing for Light Motor Vehicles/Passenger Cars, (excluding tractors) 0.0997 Set Rate any where in Uttar Pradesh 415.00 Four hundred fifteen only 41.38 VAT 44.82 Forty four and paise eighty two only 4.47 Service Tax 8.55 Eight and paise fifty five only 0.85 Others (Pl Specify) TOTAL-C 468.37 Four hundred sixty eight and paise thirty seven only 46.70

4. Complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plate and fixing for tractors 0.0872 Set Rate any where in Uttar Pradesh 109.00 one hundred nine only 9.50 VAT 11.77 Eleven and paise seventy seven only 1.02 Service Tax 2.25 Two and paise twenty five 0.20 Others (Pl Specify) TOTAL-D 123.02 One hundred twenty three and paise two only 10.72

5. Complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plate and fixing for Medium Commercial Vehicles/Heavy Commercial Vehicles/Trailer combination.

0.0170 Set Rate any where in Uttar Pradesh 425.00 Four hundred twenty five only 723 VAT 45.90 Forty five and paise six ninety only 0.77 Service Tax 8.76 Eight and paise seventy six only 0.15 Others (Pl Specify) TOTAL-E 479.66 Four hundred seventy nine and paise sixty six only 8.15

6. Total No. of vehicles in ratios.

1.0000

7. Sum Total Weighted Average (A+B+C+D+E) In Figures: Rs 257.52 In Words: Rs Two hundred fifty seven and paise fifty two only NOTE:

1.The above Sale Price are chargeable from vehicle owners and are for providing and fixing High Security Plate on the vehicles.

2.The rate is inclusive of all taxes, levies and all, other charges.

3.Weights attached have been arrived at by the department o n the basis of % of types of vehicles registered in the State as on 31.3.2008."

112. Attention of this Court has been invited by Mr. R.N. Thrivedi, learned Senior Counsel appearing for the petitioners with regard to rate quoted by the opposite party No.3 in the State of Tamilnadu which is much lower than the rate quoted by it in the State of U.P. This fact has been not disputed by the opposite party No.3 while filing affidavit dated 14.2.2012 filed with the application dated 15.2.2012. It is also stated that the petitioner himself has quoted lower rate than West Bengal. For convenience, para 6 of the affidavit of the opposite party No.3 is reproduced as under :

"6. That here it may be pertinent to mention that the petitioner no.1 had also participated in the bidding process for HSRP in the State of Tamil Nadu and the price quoted by the petitioner in the State of Tamil Nadu is comparatively very low to the price being charged by petitioner in the State of West Bengal. The following chart would show the comparatives difference of price quoted by the petitioner in the State of Tamil Nadu and being charged in State of West Bengal:

Sr. No. Type of Vehicle Prices Difference State West Bengal Tamil Nadu 1 Two Wheelers 320 110 210 2 Three Wheelers 338 125 213 3 Light Motor Vehicles 500 279 221 4 Heavy Motor Vehicles 532 279 253 5 Average Price 396 135.8 260.2 The petitioner while filing affidavit dated 16.1.2012 stated that the total turnover of new vehicles in 10 years at the current rate would be around of Rs.620 crores and the total HSRP project in State of U.P. will be of 1050 crore in next 10 years.

113. During the course of negotiation, the Transport Commissioner sent a letter dated 22.12.2011 to the opposite party No.3 (Annexure SA-2 to the affidavit of the petitioner dated 16.1.2012) informing that its has been accepted by the government and accordingly directed to submit amended financial bid in form 2. The letter dated 22.12.2011 filed with the affidavit dated 16.1.2012 of the petitioner in its totality is reproduced as under :

GOVERNMENT OF UTTAR PRADESH TRANSPORT DEPARTMENT OFFICE OF THE TRANSPORT COMMISSIONER LUCKNOW.

Letter No:3933A/2011 Dated: 22 Dec, 2011 From: Transport Commissioner, TRANSPORT DEPARTMENT OFFICER OF THE TRANSPORT COMMISSIONER LUCKNOW. To: M/S Shimnit Utsch India Pvt. Ltd. 8th Floor, Regent Chambers Nariman Point MUMBAI-400021 Sub: Letter of Intent (or Acceptance) for manufacture and supply of High Security Registration Plates in the State of UTTAR PRADESH Dear Sir,

I am directed to refer to your offer vide Bid document dated 5th July, 2011, and your Financial Bid opened on 21st December, 2011, wherein your rates were found to be lowest Subsequent to negotiations held in this regard, and your subsequent letter dated 22nd December, 2011 vide which you have submitted the negotiated rates on above subject; I am to inform you that the negotiated rates quoted as mentioned below, by you have been accepted by the State Government.

The price for the different sizes of HSRP sets, payable to the concessionaire will be as follows:

Schedule of Rates of HSRP Sr. No. (1) Item (2) Unit (3) Amount Rate in Figures/Rate in Words (4)

1. Providing and Fixing complete set of Registration Plates inclusive of Snap Lock for all 2 wheelers - scooters, Motor Cycles and mopes Set Rs.361.15 only Rs. three hundred sixty one and paise fifteen only

2. Providing and Fixing complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plate and fixing for 3 wheelers (passenger & goods) and invalid carriages Set Rs.468.37 only Rs Four hundred sixty eight and paise thirty seven only.

3. Providing and Fixing complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plate and fixing for light Motor Vehicles/Passenger Cars Set Rs.750.52 only Rs Seven hundred fifty and paise fifty two only.

Providing and Fixing complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plate and fixing for Tractors Set Rs.553.01 only Rs Seven hundred eighty four and paise thirty eight only.

Providing and Fixing complete set of Registration Plates inclusive of Snap Lock, 3rd Registration Plate and fixing for Medium Transport/Commercial Vehicles/Heavy Transport/Commercial Vehicles/Trailer- Combination Set Rs.784.38 only Rs. Seven hundred eighty four and paise thirty eight only.

NOTE:

1.The above rates are inclusive of all taxes.

2.The amount to be levied and collected from the vehicle owners shall be as per above schedule as may be issued by Government of UTTAR PRADESH from time to time.

It may further be noted that you are required to submit the amended Financial Bid Form I as per the above negotiated rates, as well as the Financial Bid Form II according to the terms and conditions laid down in the Tender Document.

You are now requested to arrange to deposit a sum of Rs.8.51 crores Performance Security in terms of clause no 2.25.1 of Tender Document, within from the date of issue of this letter.

You are also requested to depute your representative to the office of under to sign the Contract Agreement by both the parties.

Yours faithfully, sd/- illegible Transport Commissioner GOVERNMENT OF UTTAR PRADESH, TRANSPORT DEPARTMENT, OFFICE OF THE TRANSPORT COMMISSIONER, LUCKNOW. "

Letter of Intent seems to be based on decision taken in a meeting held in the office of Cabinet Secretary (supra).

114. The petitioner has filed another letter dated 22.12.2011 by which the State government directed the Transport Commissioner to negotiate for reduction of rate of HSRP keeping in view its rate in neighbouring states. For convenience, the letter dated 22.12.2011 (Annexure SA-1 to the supplementary affidavit dated 16.1.2012 of the petitioner is reproduced as under :

"संख्या --3024--ए/तीस-3-11--20एम/08टी. सी.--11 प्रेषक, श्याम सुन्दर शर्मा संयुक्त सचिव उत्तर प्रदेश शासन।

सेवा में परिवहन आयुक्त उत्तर प्रदेश लखनऊ ।

परिवहन अनुभाग--3 विषयः-- उत्तर प्रदेश में मोटरयानों हेतु हाई सिक्योरिटी नम्बर प्ले ट योजना लागू किए जाने के संबंध में।

महोदय, उपरोक्त विषयक आपके पत्र संख्या 3954 ए/2011 दिनांक 12.12.2011 के संदर्भ में मुझे यह कहने का निर्देश हुआ है कि शासनादेश संख्या 3003/तीस-3-11-08 एम/टी. सी.--11 दिनांक 21.12.2011 द्वारा आपको इस संबंध में कार्यवाही हेतु अधिकृत किया गया है, जैसा कि उक्त पत्र के प्रस्तर.... उल्लिखित निन्म अंश से स्पष्ट है--

''अन्य राज्यों द्वारा स्वीकृत दरों की सूचना एकत्रित कर न्यूनतम निविदाकर्ता से निगोशिएट कर दरे अन्तिम की जाय। कृपया तद्नुसार निविदाकर्ता से निगोशिएट करते हुए दरें अन्तिम करते हुए प्रदेश में हाई सिक्योरिटी नम्बर प्लेट योजना के कार्यान्वयन के ...... में अग्रेतर कार्यवाही सुनिश्चित करने का कष्ट करें।'' अतः कृपया अपने स्तर से अविलम्ब कार्यवाही करने का कष्ट करें।

भवदीय अपठनीय (शयाम सुन्दर शर्मा) संयुक्त सचिव। '' It appears that the aforesaid letter was only formal one and a decision was taken to award contract to the opposite party No.3 by the Transport Commissioner by letter of the same date, i.e. 22.12.2011 (supra) may be an oral instruction of some officers of the State Government or in terms of decision taken in the meeting held in the office of Cabinet Secretary, requires probe.

115. Along with the same affidavit, the petitioners have filed a comparative chart on HSRP rate in different States of the country as Annexure No.SA-3 which is reproduced as under :

PRICES OF HIGH SECURITY REGISTRATION PLATES DECLARED IN VARIOUS CATEGORY OF VEHICLES WITH VEHICLE POPULATION OF THE STATE 1 2 3 4 5 6 7 8 9 10 11 12 Vehicle Type TamilNadu Gujrat Haryana Punjab Himanchal Pradesh Assam Jharkhand Bihar Jammu & Kasshmir Uttrakhand Chattisgarh Uttar Pradesh 2 Wheeler 79.56 95.00 100.00 100.00 105.00 105.00 106.88 131.00 169.36 215.78 220.00 361.15 3 Wheeler 119.34 120.00 133.00 135.00 125.00 105.00 135.00 162.00 197.36 234.96 244.00 468.37 4 Wheeler 221.65 280.00 318.00 295.00 304.00 280.00 326.25 335.00 401.00 373.25 366.00 750.52 Tractor 100.00 100.00 106.88 140.00 215.78 553.01 Commercial 244.38 290.00 220.00 315.00 315.00 295.00 337.03 310.00 401.00 393.87 385.00 784.38 Weighted Average 102.74 143.00 223.13 128.52 190.36 150.60 133.03 172.08 238.04 234.00 249.35 425.27 No. of Vehicles 1.40 Crore 1.30 Crore 0.56 Crore 0.62 Crore 0.07 Crore 0.12 Crore 0.27 Crore 0.26 Crore 0.08 Crore 0.14 Crore 0.26 Crore 1.34 Crore L-1 Shimni Utsch Agros Impex D.D. Industries Agros Impex Uttsav Safety Agors Impex Agros Impex D.D. Industries Promuk Hoffmann Utsav Safety Promuk Hoffmann Shimnit Utsch

116. Thus, at the face of record, in spite of earlier letter issued to reduce the rate at par with Tamilnadu, the tender of the opposite party No.3 was accepted on the rate much higher than the rate quoted by the opposite party No.3 in the State of Tamilnadu. On the same date, the State government directed the Transport Commissioner to award contract as is evident from the letter of Transport Commissioner (supra).

117. It has been vehemently argued by the petitioners' counsel that even at current reduced rate from the actual price declared by the opposite party No.3, the rate in the State of U.P. is higher than Tamilnadu to the extent of 302% for two wheeler, 239% for 3-Wheeler, 211% for LMV, 155% for tractor and 196% for commercial vehicles.

118. The facts and circumstances and the material on record reveals beyond doubt that the contract has been awarded to the opposite party No.3 on exorbitant rate by negotiation with the change of financial bid which was not permissible under the tender document as well as circular of the Chief Vigilance Commissioner, New Delhi (supra). There appears to be foul play and collusive act in the process adopted by the State of U.P. while awarding the contract.

IX- OFFICE OF LEGAL REMEMBRANCER, STATE OF U.P.

119. It is vehemently argued by the learned counsel representing the respondent State of U.P. that the contract was awarded to the opposite party No.3 strictly in accordance with rules that too after seeking opinion from the Legal Remembrancer of the State of U.P. It appears that for the purpose of awarding the contract, the government took shelter of the opinion of the Legal Remembrancer. No opinion was obtained from the Advocate General, Additional Advocate General or the State counsel or special counsels of the State of U.P.

120. The record reveals that the Legal Remembrancer office has changed its views to clear the contract of the opposite party No.3. On 4.8.2011, the Addl. Legal Remembrancer has expressed his opinion that by not disclosing the cancellation of the contract by the Karnataka and Goa government, the opposite party No.3 has acted fraudulently and it amounts to misrepresentation. Hence, action may be taken under Clause 2.24.3 of the tender document for cancellation of bid. Shri K.K. Sharma, Legal Remembrancer while agreeing with the opinion of the Addl. Legal Remembrancer made an endorsement that the administrative department should look into the matter after providing opportunity of hearing to the opposite party No.3 with regard to cancellation of contract. The remark of office of Legal Remembrancer dated 4.8.2011 is reproduced as under :

''शिमनित उच इण्डया प्रा० लि० द्वारा अपनी निविदा प्रपत्र के पृष्ठ--198 से 201 पर प्रस्तुत किए गये शपथ पत्र एवं प्रा० लि० का यह कथन कि कर्नाटक सरकार एवं गोवा सरकार द्वारा उच्च सुरक्षा युक्त निबन्धन प्लेट (HSRP) लगाने एवं विनर्माण इकाई स्थापित करने सम्बन्धी करार को विखण्डित किये गये हैं, से यह सुस्पष्ट है कि निविदादाता द्वारा प्रस्तुत किए गये शपथ पत्र में सही तथ्य नहीं दर्शित किये गये हैं। निविदादाता का उक्त कृत्य निविदा प्रपत्र के प्रस्तर--2.27.2 (ii) में पारिभाषित Fraudulent Practice की परिधि में आता है। चूंकि विचाराधीन fraud/misrepresentation विचाराधीन निविदा के अंतिमीकरण के पूर्व प्रकाश में आ गया है, अतः प्र० वि० शिमनित उच इण्डया प्रा० लि० को सुनवायी का अवसर देकर के प्रस्तर 2.24.3 के अनुसार विचाराधीन निविदा को निरस्त करने एवं EMD को जब्त करने पर विचार कर सकते हैं। इसके अतिरिक्त प्र० वि० प्रस्तर 2.27.4 की कार्यवाही पर भी विचार कर सकते हैं।

उपरोक्त परामर्श दोनों निविदा में उपलब्ध कराये गये तथ्यों पर आधारित है। तथ्यों के बारे में प्र० वि० अपना समाधान स्व-स्तर से कर लेंगे।

टान्जेज ईस्टर्न सिक्योरिटी प्रा० लि० एवं शिमनित उच इण्डया प्रा० लि० द्वारा प्रस्तुत दोनों निविदा प्रपत्रों को पत्रावली पर यथावत रख दिया गया है। प्र० वि० उक्त पर अपने समाधानकर लेंगे।

सहमत हों तो उपरोक्त परामर्श प्र० वि० को देना चाहें।

अपठनीय मुहर अपर शासकीय हस्तांतरिक/ प्रमुख सचिव न्याय पृष्ठ 120 का अंश 'क' से सहमत होते हुए---x---x---x---

प्रशासकीय विभाग को शिमनित उच इण्डिया प्रा० लि० को सुनवाई का अवसर देकर निविदा को निरस्त करने एवं EMD को जब्त कहने के उपरान्त सुसंगत निर्णय लेना होगा।

प्रमुख सचिव विशेष सचिव 4.8.2011 4.8.2011 ह० अपठनीय ह० अपठनीय मुहर मुहर ''

121. When the aforesaid opinion was brought to the notice of the Joint Secretary, Transport, Shri Shivananad Ojha, he made an endorsement dated 26.9.2011 pointing out that the office has received the explanation submitted by the respondents 3 and 4 which may be sent to the judicial department for its another opinion. By endorsement dated 30.9.2011, the Joint Secretary of judicial department Shri Surendra Nath Srivastava noted that in the State of Rajasthan, the contract was given to the opposite party No.3 in the year 2006 but it did not take steps to implement the contract and the government terminated the contract by order dated 9.5.2011 which was impugned before the Rajasthan High Court and the matter is pending. The contract of the opposite party No.3 was cancelled by the Karnataka government in pursuance to Cabinet decision dated 22.1.2010 which was stayed by a Division Bench of Karnataka High Court. Later on, the writ petition was dismissed to resolve the dispute in pursuance to Art. 10 of the contract document by way of alternative dispute resolution.

122. The Government of Goa has cancelled the agreement of O.P. No.3 by order dated 25.1.2011 with regard to HSRP. Against the order passed by the Government of Goa, the opposite party No.3 approached the Bombay High Court and the High Court dismissed the writ petition without expressing any opinion on merit. The Special Leave Pettion was filed in the Hon'ble Supreme Court and the Supreme Court permitted the opposite party No.3 to approach the High Court again. After making note of these facts, again, opinion was sought from the judicial department.

123. Subject to aforesaid backdrop, the Legal Remembrancer, government of U.P. gave its opinion on 19.10.2011 and opined that equity share capital may be coupled with voting right and since J.H. Thonges East Co. Possess 95% share and the Sachin Arora possess 5% share, by implication, the company possessing 95% share shall be lead member. To quote relevant portion from the opinion of Principal Secretary, Law :

''उक्त से स्पष्ट है कि कम्पनियों की बीच शेयर की धारिता वोटिंग शेयर की है, जो पत्रावली पर उपलब्ध अभिलेखों से भी प्रमाणित है। ऎसी स्थिति में जबकि Joint Venture की एक कम्पनी के पास 5 प्रतिशत शेयर तथा दूसरे के पास 95 प्रतिशत शेयर हैं तो ऎसी स्थिति में by implication 95 प्रतिशत वाली कम्पनी को लीड मेम्बर माने जाने का निष्कर्ष निकाला जा सकता है। इस प्रकार इस कम्पनी को Joint Venture की श्रेणी में माने जाने में कोई विधिक बाधा नहीं है। मे० शिमनित उच प्रा० लि० ने अपने स्पष्टीकरण में कहा है कि उन्होंने को ई भी fraudulent practice का कार्य नहीं किया है और न ही उन्होंने टेण्डर की मूल्यांकन प्रक्रिया को प्रभावित करने के लिये किसी तथ्य को छिपाया है।

टेण्डर डाक्यूमेंट का प्रदर्श 9 किसी भी प्रकार से पात्रता मापदण्उ (eligibility criteria) का हिस्सा नहीं था। '' For the aforesaid conclusion, the law department has relied upon the case reported in (1991)2 SCC 273 Poddar Engineering versus Ganesh Engineering and others.

124. With regard to affidavit, the opinion expressed by the Principal Secretary, Law, is as under :

''अतः टेण्डर डाक्यूमेंट के प्रस्तर 1.5 (पृष्ठ 12) जिसमें निविदा दाताओं के लिये पात्रता की शर्तें दी गयी हैं, के अवलोकन से स्पष्ट है कि संलग्नक 19 में दिये गये प्रारूप में शपथ पत्र न देने अथवा शपथ पत्र में सही तथ्य प्रस्तुत न करना पात्रता की आवश्यक शर्तें में नहीं था। ऎसी स्थिति में निविदाकर्ता का यह कृत्य अधिक से अधिक सद्भावी त्रुटि माना जायेगा न कि चालाक पूर्ण कृत्य (fraudulent practice)। इस आधार पर निविदाकर्ता को अपात्र घोषित नहीं किया जा सकता है।

अतः मे० शिमनित उच प्रा० लि० को पात्रता की श्रेणी में माने जाने में कोई विधिक अड़चन नहीं है।

अपठनीय 19.10.2011 ''

125. So far as lead member is concerned, the Principal Secretary, Law failed to take notice of the condition of the tender document which requires nomination of one Joint Venture Company in favour of others to be lead member and secondly, according to document on record, the Joint Venture Company possess 50% share each, i.e. Shimnit India Limited and Rohtang P Shah and solvency certificate was filed of the Joint Venture Company by the opposite party No.3.

126. Further, the office of the Legal Remembrancer through the Principal Secretary, Law while changing its opinion (supra) with regard to filing of false affidavit failed to appreciate the statutory provisions contained in Clause 4(xa) (f) of the Motor Vehicle New High Secretary Registration Plates (Order), 2001 which has got statutory force and makes it mandatory to disclose that the agency is not considered as a manufacturer or vendor for supply of High Security Registration Plates found to be connected with attitude prejudicial to national security and the later part of Clause 4(xa)(f) containing the words, "is not considered for selection as manufacturer or vendor for supply of High Security Registration Plates" has been omitted from the affidavit under Annexure IX. Further, para 2 of Annexure IX of the tender document has been provided in pursuance to Clause 2.3.4 read with U.P. Motor Vehicles (New High Security Registration Plates) Order, 2001 and is mandatory as well as essential for the agreement of contract. Concealment or filing of false affidavit is an offence punishable under Chapter X of the Indian Penal Code, particularly Sections 175, 176 and 177 read with Sections 195 and 196 CrPC and there was no reason on the part of Principal Secretary, Law to change the opinion (supra) that too when Ministry of Home Affairs, Government of India, vide its letter dated 18.5.2005, filed as Annexure No.8 to the writ petition levelled serious allegations against O.P. No.3.

127. In Poddar Steel Works versus M/s Ganesh Engineering (1991)3 SCC 273, Hon'ble Supreme Court opined that the tender notice may be classified into two categories - those lay down essential condition for eligibility and then which are merely ancillary or subsidiary. In the event of latter authorities may deviate and may not necessitate for strict literal compliance. In Poddar Steels Corporation, (supra) tenders were rejected because of the fact that instead of bank draft, the banker's cheque marked and certified by the Union Bank of India was deposited. Deposition of earnest money through banker's cheque does not make any difference so far as compliance of tender condition is concerned. Hence, it may not be essential condition but in the present case, the requirement under Clause 2.3.4 for filing of affidavit in the formate provided under Annexure No.IX and IX-A is mandatory and essential condition keeping in view the 2001 Order (supra) and national security involved.

128. In a case reported in B.S.N. Joshi & Sons versus Nair Coal Services Limited and others, reported in (2006) 11 SCC 548, Hon'ble Supreme Court ruled that variation may be permissible only in public interest and not otherwise. Permissible variation shall be subject to substantial compliance of tender document. The controversy in B.S.N. Joshi case relates to employment of workmen and number of provident fund contribution. Even in B.S.N. Joshi case (supra), their Lordships of Hon'ble Supreme Court held that where huge public money is involved as the principle of good corporate governance, such tenders may be accepted which are economically beneficial and serve the public interest subject to substantial compliance and requirement of tender conditions. The test shall be whether the exercise of power is fair, reasonable, bona fide and serve the public purpose. To quote relevant portion from the judgment in the case of B.S.N. Joshi case:-

69. While saying so, however, we would like to observe that having regard to the fact that a huge public money is involved, a public sector undertaking in view of the principles of good corporate governance may accept such tenders which is economically beneficial to it. It may be true that essential terms of the contract were required to be fulfilled. If a party failed and/or neglected to comply with the requisite conditions which were essential for consideration of its case by the employer, it cannot supply the details at a latter stage or quote a lower rate upon ascertaining the rate quoted by others. Whether an employer has power of relaxation must be found out not only from the terms of the notice inviting tender but also the general practice prevailing in India. For the said purpose, the court may consider the practice prevailing in the past. Keeping in view a particular object, if in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Once such a power is exercised, one of the questions which would arise for consideration by the superior courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain themselves in exercise of their discretionary jurisdiction."

In the present case, the office of the Legal Remembrancer does not seem to have tried to read the judgment of Hon'ble Supreme Court in the case of B,.S.N. Joshi in light of the fact that the rate quoted by the respondent No.3 is higher than Tamil Nadu where it has quoted lower rate than U.P. In Bihar, the rate of HSRP is much lower than the rate quoted by the opposite party No.3, in U.P. and Tamil Nadu then how and in what manner, the deviation from tender condition shall serve the public purpose is beyond imagination and reflect smack of foul place on the part of the respondents. It is unfortunate that the office of the Legal Remembrancer has failed to discharge its obligation and the contract has been awarded to the opposite party No.3 under the shield of report submitted by Legal Remembrancer of the State of U.P., that too after changing earlier opinion.

129. Apart from affidavit Annexure No.IX and IX-A of the tender document, Legal Remembrancer as well as State Government have not taken note of undertaking required under para 9 & 10 of Annexure No.X of the tender document and omission of para 4 (xa) (f) of the 'Order, 2001' (supra), Circular of Chief Vigilance Commission, New Delhi, (supra) and the letter dated 8.5.2011 sent by Ministry of Home Affairs, Government of India a copy of which has been filed as Annexure No.8 to the writ petition. Such material omission and non-application of mind does not seem to be bona fide but is the blatant abuse of power.

130. While deciding a writ petition No. 7851(M/B) of 2008 U.P. Shaskiya Adhivakta Kalyan Samiti versus State of U.P. by judgment and order dated 6.1.2012, a Division Bench of this Court has shown deep concern of the mal-functioning of the office of the Legal Remembrancer with remark that the Legal Remembrancer in the State of U.P. is working as an employee of the State Government by circumventing the law and tendering advice which suits to bureaucracy or political masters. Immediate attention requires to streamline the functioning of the office of the Office of Legal Remembrancer of the State of U.P.

X- CORRUPTION OR FRAUDULENT PRACTICE

131. Condition No.2.27 of the tender document deals with corruption and fraudulent practice. The bidders have been expected to disclose the entire information in terms of tender document. Clause 2.27 of the tender document defines fraudulent practice where a misrepresentation of facts are made to influence evaluation process. It shall be appropriate to quote clause 2.27 of the tender document which is as under :

2.27 CORRUPT OR FRAUDULENT PRACTICES 2.27.1 The Government of Uttar Pradesh requires that all the Bidders should observe the highest standard of ethics, and Each Bidder or each of its constituent entities (in case of IV) shall be required to give an undertaking with respect to the below as in Annexure X.

2.27.2 For the purpose of this Tender Document:

i)"Corrupt Practice" means behaviors on the part of Bidder or his representative by which they improperly and unlawfully enrich themselves and/or those close to them, or induce others to do so, by misusing the position in which they are placed, and it includes the offering, giving, receiving, or soliciting of anything of value.

ii)"Fraudulent Practice" means a misrepresentation of facts, in order to influence evaluation process or execution to the detriment of the Government of Uttar Pradesh,and includes, collusive practice among Bidders (prior to or after Bid submission) designed to establish Bid price at artificial non-competitive level and to deprive the Government of Uttar Pradesh of the benefits of free and open competition.

2.27.3 GOUP will reject a proposal for award if it determines that the Bidder recommended for award has engaged i n corrupt or fraudulent practices in competing for the contract in question.

2.27.4 GOUP will declare a Bidder ineligible, either indefinitely or for a stated period of time, if it at any time determines that the Bidder has engaged i n corrupt or fraudulent practice in competing for, or in executing, this project."

132. The affidavit contained in Annexure No.IX provides that the bidder shall disclose different factual position with regard to involvement in criminal cases. Clause 6 of the affidavit under Annexure IX-A provides for declaration that the bidder is not connected with activities prejudicial to national security. Annexure X is an undertaking whereby various conditions have been imposed in the form of declaration which includes that the bidder has not indulged in any corrupt, fraudulent or collusive practice and in case it is found, the government shall be free to invoke power conferred by Clause 2.27.3 and 2.27.4. It shall be appropriate to reproduce Annexure No.X of the tender document which is as under :

SIGNATURE & STAMP OF BIDDER ANNEXURE X (Clause 2.3.4) I................, aged about..........., son of............., resident of............., do hereby solemnly affirm and undertake as under:

1.that the infrastructure required and necessary for carrying out the work as prescribed under the scope of the Bid document shall be made operational within the period stipulated under the clause 4.1 of the Bid document.

2.that the Bidder shall implement the project themselves and shall not franchise/sublet/subcontract it, if awarded to them.

3.that the Bidder shall ensure the fixation of High Security Registration Plate within 4 working days of authorization/order being placed to the Bidder by the Registering Authority as per clause 3.3.

4.that the Bidder shall provide the service within 15 days of notice by the Transport Commissioner for the new offices as per clause 3.1.2.

5.that the Bidder shall provide the services within 7 days of notice i n case the Registering Authority declares any new place as place for registration.

6.that the Bidder shall pay as user charges a sum equivalent to 5% of the amount collected on the sale of HSRP from vehicle owners, within 30 (thirty) days of close of preceding month.

7.that the Bidder shall comply with, and observe at all times, the direction and orders issued by the Government time to time.

8.that i n the preparation and submission of this Tender, we have not acted in correct or in collusion with any other Bidder or other person(s) and also not done any act, deed or thing which is or could be regarded as anti-competitive.

9.We further confirm that we have not offered nor will offer any illegal gratification in cash or kind to any person or agency in connection with the instant Proposal.

10.We further undertake that we, or any of our Directors have not indulged in any corrupt, fraudulent or collusive practice, as per Clause 2.27.2. We further confirm that in case GoUP determines otherwise, the Government of Uttar Pradesh shall be free to act as per provisions of Clause 2.27.3 and 2.27.4 __________________ Signed by Bidder __________________ Name of Bidder __________________ Date:____________ SIGNATURE & STAMP OF BIDDER _______________________________________________________ * To be given on Non-judicial stamp paper of Rs.10.00 duly attested by public notary."

133. In the present case, the opposite party No.3 has not only filed false affidavit provided by Annexure IX punishable under Indian Penal Code but also gave a false and incorrect undertaking necessary under Annexure X. The affidavit under Annexure IX, IX-A, and Annexure X are essential conditions to make a person eligible for contractual assignment, otherwise the government has option to cancel in terms of clause 2.27.3 and 2.27.4. We have already observed how the office of Legal Remembrancer of U.P. had submitted its opinion which is not expected even from a man of common prudence.

134. Apart from the definition given in the tender document (supra), 'fraud' may be defined as under :

FRAUD. "Action or matter in which fraud is alleged" as regards Administration of Justice Act 1920 (c.8), ss.2, 3--but see now Administration of Justice (Miscellaneous Provisions) Act 1933 (c.36), s.6--see Everett v Islington Gunardians, 92 L.J.K.B.250, in which it was held that the action must be onein which a relevant issue of fraud is raised which must be decided in order to determine the rights of the parties to the action.

"Fraud on a power". "A bargain is not essential. it is enough that the appointor's purpose and intention is to secure a benefit for himself or some other person". It is not necessary to establish that the object of the power in whose favour it was exercised is "subject to strong moral suasion to benefit a non-object, which suasion the object would, in the appointor's opinion, be unable to resist", (per Lord Parker of Waddington in Vatcher v Paull [1915] A.C. 372 and see also Re Crawshay, Hore-Ruthven v Public Trustee [1948] Ch. 123). This does not necessarily mean that whenever there is any intention to benefit some non-object in some measure the exercise if the power is bad (Re Dick, Knight v Dick [1953] Ch.343; Re Merton, Public Trustee v Wilson [1953] 1 W.L.R. 1096). An appointment under a power to appoint to a single person possession a specified qualification, e.g., to appoint a life interest go a spouse, cannot be fraudulent in the absence of an actual arrangement with the appointee. Where there is a power of selection between several persons, an appointment with an ulterior motive is fraudulent even if the appointee is ignorant of such motive (Re Nicholson's Settlement [1939] Ch. 11). It was held that there could not be a "fraud on the power" of revocation since a power of revocation is free from obligation (Re Greaves, Public Trustee v Ash [1954] Ch.434).

(Limitation Act 1939 (c.21), s.26 (b)), Fraudulent concealment within the meaning of the subsection is not confined to fraud which in its nature is sufficient to give rise to an independent cause of action. It includes the wide range of conduct which before the Limitation Act, 1939 was regarded in equity as so dishonest as to prevent the Statute of Limitations (or its analogous application in equity) from coming into operation (Beaman v A.R.T.S. [1949] 1 K.B. 550). It also includes conduct which, having regard to the relationship between the parties, was unconscionable by the defendant (Clark v Woor [1965] 1 W.L.R., 650). "Fruad" in this section is a wider term than fraud which would itself be actionable, and included any unconscionable conduct making it inequitable for a defendant to rely on the limitation period (Applegate v Moss [1971] 1 Q.B. 406). A builder who in breach of contract, or with knowledge of its inadequacy for a particular site, builds a house with unsafe foundations conceals the owner's right of action by "fraud" within the meaning of this section (Applegate v Moss; Archer v Moss [1971] 1 Q.B. 406; King v Victor Pursons & Co [1973] 1 W.L.R. 29).

135. In AIR 2007 SC 2798: Himadri Chemicals Industries Ltc. v Coal Tar Refining Company,Hon'ble Supreme Court held that fraud must be egregious nature such as to vitiate the entire underlying transaction.

136. In Encyclopaedic Law Lexicon Vol.2, 2008 Edn., the word, 'fraud', has been drawn from foreign judgments, which is reproduced as under:[page 1939]

(i) "A term used in a variety of meanings. At Common Law, fraud is actionable under the heading of deceit (q.v.) In equity and upon the equitable principles which are now applicable in any Court of law, fraud may be described as an infraction of the rules of fair dealing. For the action at law intention and representation (q.v.) are material. In equity an act or its consequences to the person aggrieved may be of greater importance than the intention of the defendant or any representation made to the plaintiff, and the same may be said of acts which have been stigmatized as fraudulent by statute. In Patrick v. Lyon, 1933 Ch.786, it has held that an offence under Section 275 of the Companies Act, 1929, required a proof of fraud which a contravention of the law under Section 265 did not necessarily imply moral blame.

(ii) In Kerr of Fraud and Mistake, at page 23, it is stated, "The true and only sound principle to be derived from the cases represented by Slim v. Croucher is this, that a representation is fraudulent not only when the person making it known it to be false, but also when, as Jessel, M.R. pointed out, he ought to have known, or must be taken to have known, that it was false. This is sound and intelligible principle, and is, moreover, not inconsistent with Derry v Peek. A false statement which a person ought to have known was false and which he must therefore be taken to have known was false, cannot be said to be honestly believed in, "A consideration of the grounds of belied", said Lord Herschell, "is no doubt an important aid in ascertaining whether the belief was really entertained. A man's mere assertion that he believed the statement he made to be true is not accepted as conclusive proof that he did so."

(iii) In Bigelow on Fraudulent Conveyance at page 1, it is stated.

"If on the facts the average man would have intended wrong, that is enough."

It was further opined, "This conception of fraud (and since it is not the writer's, he may speak of it without diffidence), steadily kept in view, will render the administration of the law less difficult, or rather will make its administration more effective. Further, not to enlarge upon the last matter, it will do away with much of the prevalent confusion which, in addition to other things, often causes lawyers to take refuge behind such convenient and indeed useful but often obscure language as 'fraud upon the law'. What is fraud upon the law? Fraud can be committed only against a being capable of rights, and 'fraud upon the law' darkens Counsel. What is really aimed at in most cases by this obscure contrast between moral fraud and fraud upon the law, is a contrast between fraud in the individual's intention to commit the wrong and fraud as seen in the obvious tendency of the act in question."

(iv) In Lazarus Estate v. Berly, (1996) 1 All ER 341, the Court of Appeal stated the law thus, "I cannot accede to this argument for a moment "no Count i n this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a Court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything." The Court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever."

(v) In Arlidge and Parry on Fraud, it is stated at page 21.

"Indeed, the word sometimes appears to be virtually synonymous with "deception", as in the offence (now repealed) of obtaining credit by fraud. It is true that i n this context "fraud" included certain kinds of conduct which did not amount to false pretenses, since the definition referred to an obtaining of credit "under false pretences, or by means of any other fraud". In Jones, for example, a man who ordered a meal without pointing out that he had no money was held to be guilty of obtaining credit by fraud but not of obtaining the meal by false pretences, his conduct, though fraudulent; did not amount to a false pretence. Similarly it has been suggested that a charge of conspiracy to defraud may be used where a "false front" has been presented to the public (e.g. a business appears to be reputable and creditworthy when in fact it is neither) but thee has been nothing so concrete as a false pretence. However, the concept of deception (as defined in the Theft Act, 1968) is broader than that of a false pretence in that inter alia it includes a misrepresentation as to the defendant is intentions; both Jones and the "false front" could not be treated as cases of obtaining property by deception."

Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata.

In Smt. Shrisht Dhawan v. M/s. Shaw Brothers, AIR 1992 SC 1555, it has been held that, "Fraud and collusion vitiate even the most solemn proceedings in any vitalized system of jurisprudence. It is concept descriptive of human conduct."

137 In 2004 (1) Civil LJ 1 (SC), Ramchandra Singh v. Savitri Devi, Hon'ble Supreme Court reiterated the principle that fraud vitiates solemn acts. In AIR 1963 SC 1572, Dr. Vimla v. Delhi Administration, Hon'ble Supreme Court defined the fraud as under:

"Fraud means and includes any of the following acts committed by a party to a contract or with his connivance, or by his agent (see Section 238, infra) with intent to deceive another party thereto or his agent, or to induce him to enter into the contract.

(1) the suggestion as a fact, of that which is not true, by one who does not believe it to be true;

(2) the active concealment of a fact by one having knowledge or belief of the fact.

(3) a promise made without any intention of performing it;

(4) any other act fitted to deceive;

(5) any such act or omission as the law specially declares to be fraudulent. [Section 17, The Indian Contract Act, 1872] By "Fraud" is meant an intention to deceive; whether it be from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the person deceived. Injury is something other than economic loss, that is, deprivation of property, whether movable or immovable or of money and it will include and any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non-economic or non-pecuniary loss. A benefit or advantage to the deceiver, will almost always call loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied."

"Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by word or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensures therefrom although the motive from which the representation proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application or any equitable doctrine including res judicata."

138. While defining the word fraud, Hon'ble Supreme court in a case reported in 1994 (1) SCC 1, S.P. Chengalvarsaya Naidu v. Jagannath; held that "a fraud is an act of deliberate deception with the decision of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage".

139. In a judgment reported in 2005 (6) SCC 149, State of A.P. and another. v. T. Suryachandra Rao, Apex Court held that fraud as is well known vitiates every solemn act. The fraud and justice never dwell together. Fraud is a conduct either by letter or words, which includes other persons or authority to take a definite determination stand as a response to the conduct of the former either by words or letter. A fraudulent mis-representation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if parties make representation which he knows to be false, and injury ensures there-from although the motive from which the representation proceeded may not have been bad.

140. In Concise Oxford Dictionary it has been defined as criminal deception, use of false representation to gain unjust advantage, die-honest artifice or trick in the cases reported in Roshan Deen v. Preeti Lal, (2002) 1 SCC 100: 2002 SCC (L&S) 97, Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education, (2003) 8 SCC 311, Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319, Ashok Leyland Ltd. v. State of T.N. (2004) 3 SCC 1).

141. On 22.12.2012, on the one hand, the Government wrote to the Transport Commissioner to talk for reduction of rate but on the same day, the Transport Commissioner issued order accepting bid of the opposite party No.3, in pursuance to the Government's instruction (supra).

142. No solvency certificate of the Joint Venture Company has been filed by the opposite party No.3. No opinion was obtained from the Finance Controller of the office of Transport Commissioner, U.P. in terms of office note. 'Net worth' and 'Turnover' certificate issued by Deutsche Bank AG is for Erich Utsch AG, and not in the name of the opposite party No.3, as Joint Venture (supra). Affidavit suffers from concealment of material fact. Law Department initially opined with regard to commission of fraud, later on changed its opinion. Substantial change in the tender document by Addenda dated 21.6.2011 has been done on the request of the opposite parties 3 and 4. Office note (supra) reveals that the decision was taken to award contract in the meeting convened in the office of Cabinet Secretary (supra), that is why on 22.12.2011, on one hand, one letter by Government, directs to negotiate for reduction of rate of HSRP, and on other, Letter of Intent was issued by Transport Commissioner (supra). All these material on record makes out a case of collusive, planned and deliberate act of the State Government to finalise contract in favour of the opposite party No.3, with pre-determined mind.

143. Fraud and collusion vitiates even most solemn proceeding in any system of governance. Suppression of material document which vitiates the condition of tender document amounts to fraud and even principle of natural justice shall not require to be complied with in such a situation. Fraud vitiates every solemn acts vide AIR 1992 SC 155 Smt. Dhaon versus , 2004 Vol. 1 Civil Law Journal 1 Ram Chandra Singh versus Savitri Devi.

In view of above, merely on the ground of commission of fraud, the entire action with regard to sanction of contract in favour of the opposite party No.3 vitiates.

144. According to Legal maxims "Act a Exteriora indicant interiora secreta" i.e. act indicate the intention, applicable in the present case with full vigour. In Broom's Legal Maxims (Tenth Edition: Page 200) it has been discussed as under:

"The law, in some cases, judges of a man's previous intentions by the subsequent acts; and, on this principle, it was resolved in a well-known case, that if a man abuse an authority given him by the law, he comes a trespasser ab initio."

Under the facts and circumstances of the case discussed hereinabove, the irresistible conclusion is 'fraud has reached its crescendo'. The deeds as rather inconceivable much less could be perpetrated. In the words of Shakespare:

"Thus much of this, will make Black, white; foul fair;

Wrong, right; Base, noble;

Ha, you gods! Why this?

(Timon of Athens, Act IV. Sc.3) XI- CRIMINAL ANTECEDENTS

145. It is admitted fact on record that contract with regard to HSRP of the respondent No.3 was cancelled by the respective Government of Karnataka and Goa. Government of Rajasthan also cancelled the contract. In the affidavit required to be filed (Annexure No.IX), the petitioner has not disclosed this fact. The Law Department of the State of U.P. has changed its opinion for the reasons best known to it and treated it as non-essential condition. The petitioner pleaded with regard to criminal antecedents of respondent No.3 and involvement in unfair practice, which prima facie requires probe in view of letter of Ministry of Home Affairs, Government of India (Annexure No.8).

146. Along with the writ petition, the petitioner has filed a Circular of Ministry of Home, Government of India as Annexure No.8 which reveals that one Nitin Shah was owner of Shimnit Machine Tools and Equipment Ltd., and being disqualified and convicted, he floated Shimnit Utsch India (Pvt.) Limited (opposite party No.3). He has also been instrumental in floating two front companies. Thus, Circular of Ministry of Home Affairs, Internal Security Division, Government of India reveals that the respondent No.3 has been floated by Nitin Shah now managed by his own son (supra). It shall be appropriate to reproduce the confidential Circular of Government of India dated 18.5.2005 (Annexure No.8 to the writ petition):-

"SECRET MOST IMMEDIATE Ministry of Home Affairs Internal Security Division/IS-IV Desk **** Reference is invited to PMO's U.O. No.430/31/c/6/2005 ES.1 dated 19.3.2005 forwarding therewith copy of letter from Shri Abani Roy, regarding efforts being made by businessmen linked with the underworld to bag contracts for the new scheme of High Security Registration Vehicle Number Plates and subsequent reminders including the one dated 16.5.2005.

2. The matter was taken up with the intelligence Bureau. Inputs provided by IB are summarized below:-

2.1 Nitin Shah is the owner of Shimnit Machine Tools and Equipment Ltd., and floated another company, Shimnit Utsch India (Pvt.) Ltd.. He has also been instrumental in floating two front companies viz. M/s. Real Industries Ltd. Promoted by one Ravi Hassija, located at 34, Ram Road, New Delhi and M/s. Tojies Eastern Security Technologies Pvt. Ltd. Rune by one A.V. Karmik.

2.2 As regards the allegation against Nitin Shah, a case pertaining to murder of one Lalit Suneja, s/o chander Bhan, r/p Kothi No.228, Bank Enclave, Laxmi Nagar, Delhi, who was working as an Accountant in Nitin Shah's firm, is pending in the Court of Additional Sessions Judge, Karkardooma, Delhi. The case was registered on August 2, 1992 vide FIR No.258/92 in PS Shakarpur, Delhi and was challaned on May 24, 1993. It is now at the stage of recording of evidence. The five accused in the case include Nitin Shah and Om Prakash Srivastava @ Babloo Srivastava. Nitin Shah is currently on bail in this case. Babloo Srivastava is reportedly detained at Bareilly Jail in some other case.

2.3 As regards reports of alleged links of Babloo Srivastava with Nitin Shah which appeared in the media in connection with the Lalit Suneja murder case, Nitin Shah had complained to the Press Council of India against the write-ups and the latter has reportedly ruled in favour of Nitin Shah, as the murder case is subjudice.

2.4 The allegations of penalties imposed under the Customs Act against Nitin Shah could not be confirmed during enquiries. Regarding allegations that Nitin Shah had been a COFEPOSA detainee it is a fact that the Enforcement Directorate (ED) had arrested one Nitin Shah in a hawala case in 1989. The ED had also issued detention order against this Nitin Shah in 1990. According to the ED authorities, the accused Nitin Shah had given his address as Flat No.12, 6/8 Anandwadi, Nagar Niwas, 1st Floor, Mumbai-400002. However, it could not be established from the enquiries as to whether the COFEPOSA warrantee, Nitin Shah, is same as the subject of this enquiry.

3. This Ministry is accordingly taking up the matter with Dte. of Enforcement to confirm whether Nitin Shah, MD, Shimnit Utsch was arrested in a hawala case in 1989. This Ministry has also consulted CBI in the matter and their comments would be communicated as and when they are received from the CBI.

4. A copy of this ID note is being endorsed to the Deptt. of Road Transport and Highways.

Illegible (L. C. Goyal) Joint Secretary (IS) PMO (Shri Jawed Usmani, Jt. Secretary)

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MHA's ID Note No.1-11034/17/2005-IS.IV dated 18th May, 2005 COPY to: Deptt. of Road Transport & Highways (Shri Alok Rawat, Joint Secretary-RT), Parivahan Bhawan, New Delhi for information and further action at their end."

147. From the perusal of the aforementioned Circular of the Ministry of Home Affairs, Government of India, there appears to be no reason not to draw inference that Shimnit Utsch India (Pvt.) Ltd. (O.P. No.3) to whom the contract has been awarded, was floated by Nitin Shah to continue with his business and avail contract for HSRP. The allegations contained in the Circular of Ministry of Home Affairs, (supra), are serious and contract could not have been awarded to the respondent No.3 in case, necessary material would have been disclosed required by the affidavit under Annexure No.IX of tender document and the undertaking as per Annexure X. Under Order 2001, (Clause XA) (sv) (supra), no contract could have been awarded in case a person has been not considered for selection as manufacturer or vendor for supply of HSRP in case found to be connected with activities prejudicial to national security. The material portion of para 4 of Clause XA (f) has been omitted from the affidavit Annexure-IXA of Tender document (supra).

148. Apart from the above, the respondent No.3 has not supplied correct material in the form of undertaking provided by para 9 and 10 of Annexure-X of tender document.

149. Keeping in view the statutory requirement under the Motor Vehicles (New High Security Registration Plates) Order, 2001, coupled with Circular of Ministry of Home Affairs (supra), the contract could not have been granted to the opposite party No.3 for manufacture and supply of HSRP. There appears to be violation of statutory mandate. Respondent No.3 is guilty not only of concealment of material fact but possesses such antecedents which may hamper the national security and safety in due course of time. At no stage, of the proceedings, the State Government or the Legal Remembrancer has taken note of statutory mandate as well as the Circular dated 18.5.2005, of the Ministry of Home Affairs, Government of India (supra) which seems to be intentional to give undue favour to opposite party No.3.

XII- MISFEASANCE IN PUBLIC OFFICE AND MALICE IN LAW

150. Keeping in view the omissions of material conditions required under the Order 2001(supra) on the tender document, ignoring and not taking note of serious charges against the respondent No.3 in terms of the Circular of Ministry of Home Affairs, contained in Annexure No.8 (supra), the changing of terms and conditions being influenced by suggestion given by the opposite party No.3 and 4, amending the conditions that too, which suits to them and disqualify others, the patently absurd and incorrect opinion given by the Principal Secretary (Law), makes the entire action of the State in awarding contract in favour of the opposite party No.3, a misfeasance in public office.

151. In Administrative Law by Sir William Wade, 7th Edn., "misfeasasnce in public office" has been defined as malicious abuse of power, deliberate mal-administration and unlawful acts causing injury. It is further provided in the same book that "misfeasance in public office" is the name now given to the tort of deliberate abuse of power. After considering various decided cases, Prof. Wade proceeds to say :

"This and other authorities, including the last-mentioned decision of the House of Lords, were held to establish that the tort of misfeasance in public office goes at least to the length of imposing liability on a public officer who does an act which to his knowledge amounts to an abuse of his office and which causes damage."

(Emphasis supplied) Prof. Wade further proceeds to say as under:

"There are now clear indications that the courts will not award damages against public authorities merely because they have made some order which turns out to be ultra vires, unless there is malice or conscious abuse. Where an Australian local authority had passed resolutions restricting building on a particular site without giving notice and fair hearing to the landowner and also in conflict with the planning ordinance, the Privy Council rejected the owner's claim for damages for depreciation of his land in the interval before the resolutions were held to be invalid. The well-established tort of misfeasance by a public officer, it was held, required as a necessary element either malice or knowledge by the council of the invalidity of its resolutions. In New Zealand, also a company failed in a claim for damages resulting from a minister's refusal of permission for it to obtain finance from a Japanese concern. The minister's refusal was quashed as ultra vires, but it was held that this alone was not a cause of action. Nor does it appear that claims of this kind can be strengthened by pleading breach of statutory duty.

The Court of Appeal reinforced these decisions in a case of importance, but since shown to be of doubtful authority, under European Community law. A ministerial revocation order had prohibited the import of turkey meat from France and was held unlawful by the European Court as being in breach of Article 30 of the Treaty of Rome, which is binding in British law under the European Communities Act 1972. French traders who had suffered losses under the ban then sued the ministry for damages. On preliminary issues it was held that they had no cause of action merely for breach of statutory duty, as already related. Likewise there was no cause of action merely because the minister's order was unlawful: it could be quashed or declared unlawful on judicial review, but there was no remedy in damages. There would be such a remedy, however, if it could be shown that the minister had abused his power, well knowing that his order was a breach of Article 30 and would injure the plaintiffs' business. It was alleged that his conscious purpose was to protect English turkey producers rather than to prevent the spread of disease, and that he knew that this made his order unlawful. The element of bad faith, or malice as judges have often called it, seems now to be established as the decisive factor."

(Emphasis supplied)

152. Thereafter, after discussing a number of authorities, Prof. Wade further says as under :

"But the main principles of liability seem now to be emerging clearly. It can be said that administrative action which is ultra vires but not actionable merely as a breach of duty will found an action for damages in any of the following situations:

1.if it involves the commission of a recognised tort such as trespass, false imprisonment or negligence;

2.if it is actuated by malice, e.g. personal spite or a desire to injure for improper reasons;

3.if the authority knows that it does not possess the power to take the action in question.

The decisions suggest that there is unlikely to be liability in the absence of all these elements, for example where a licensing authority cancels a licence in good faith but invalidly, perhaps in breach of natural justice or for irrelevant reasons. Since loss of livelihood by cancellation of a licence is just as serious an injury as many forms of trespass or other torts, it may seem illogical and unjust that it should not be equally actionable; and in obiter dicta in a dissenting judgment Denning LJ once suggested that it was. Some cases of this kind may involve breach of statutory duty, where there is the broad principle of liability discussed above. But where there is no such breach it seems probable that public authorities and their officers will be held to be free from liability so long as they exercise their discretionary powers in good faith and with reasonable care. Losses caused by bona fide but mistaken acts of government may have to be suffered just as much when they are invalid as when they are valid."

153. Halsbury's Laws of England, Vol I(I) 4th Edn. (Reissue), (para 203) provides as under :

"Deliberate abuse of public office or authority. Bad faith on the part of a public officer or authority will result in civil liability where the act would constitute a tort but for the presence of statutory authorisation, as Parliament intends statutory powers to be exercised in good faith and for the purpose for which they were conferred. Proof of improper motive is necessary in respect of certain torts and may negative a defence of qualified privilege in respect of defamation, but this is not peculiar to public authorities. There exists an independent tort of misfeasance by a public officer or authority which consists in the infliction of loss by the deliberate abuse of a statutory power, or by the usurpation of a power which the officer or authority knows he does not possess, for example by procuring the making of a compulsory purchase order, or by refusing, or cancelling or procuring the cancellation of a licence, from improper motives. However, where there has been no misfeasance, the fact that a public officer or authority makes an ultra vires order or invalidly exercises statutory powers will not of itself found an action for damages."

154. De Smith in Judicial Review of Administrative Action, while speaking of tort of misfeasance in public office, says as under :

"A public authority or person holding a public office may be liable for the tort of misfeasance in public office where :

(1)there is an exercise or non-exercise of public power, whether common law, statutory or from some other source;

(2)which is either (a) affected by malice towards the plaintiff or (b) the decision maker knows is unlawful; and (3)the plaintiff is in consequence deprived of a benefit or suffers other loss."

De Smith further says as under :

"A power is exercised maliciously if its repository is motivated by personal animosity towards those who are directly affected by its exercise. Where misfeasance is alleged against a decision-making body, it is sufficient to show that a majority of its members present had made the decision with the object of damaging the plaintiff. Often there may be no direct evidence of the existence of malice, and in these circumstances the court may make adverse inferences, e.g. from the fact that a decision was unreasonable that it could only be explained by the presence of such a motive. A court will not entertain allegation of bad faith or malice made against the repository of a power unless it has been expressly pleaded and properly particularised."

155. At every stage of the proceeding coupled with Cabinet decision and meeting held in office of Cabinet Secretary (supra), there has been deliberate, dishonest and malicious action to award contract in favour of the opposite party No.3. Since the petitioner has not impleaded the authorities who acted in such unlawful manner, there appears to be no reason to record finding with regard to fixing individual liability but in the manner, the contract has been awarded to the opposite party No.3, that too on the direction of State Government as apparent from the letter dated 22.12.2011 (supra) makes it a case of misfeasance in public office and malice in law.

156. There is one other disturbing feature borne out from the record. After issuance of the letter of intent on 22.12.2011 (supra) by the Transport Commissioner in pursuance to the direction issued by the State Government, another letter dated 14.1.2012 was sent by the then Transport Commissioner Shri Jitendra Kumar directing the opposite party No.3 to reduce the rate of HSRP at par with Tamilnadu to which the respondent No.3 declined to do so but even then the letter of intent dated 22.12.2012 (supra) was implemented and the agreement was signed. Relevant portion from the letter dated 14.1.2012 written by the Transport Commissioner is reproduced as under :

"From the above rate charts, it is evident that there is a sharp difference in the rates quoted by you for both states, and even your negotiated rates in Uttar Pradesh are very high as compared to the ones quoted by you in Tamil Nadu. This sharp difference in rates for similar type of work can not be justified in any way, and if it is hence not judicious or acceptable that a similar tyype of work which can be done at lower rates in one state should be allowed to be undertaken at much higher rates in another, by the same bidder. Therefore, it would not be in the interest of the public of Uttar Pradesh to burden them with such a high rate of HSRP, as compared to other States.

You are therefore directed to reduce the rates of HSRP in Uttar Pradesh in the public interest and bring them down to the level of above rates offered by you in Tamil Nadu, failing which we would be forced to cancel the Lot issued to you. Please respond to this notice January 19, 2012 so that further necessary action may be taken in this regard.

Sd/ (Jitendra Kumar) Transport Commission,UP Thus, under these facts either the Government should have cancelled the bid of the opposite party No.3 and invited fresh tender or the respondent No.3 would have been compelled to supply HSRP on the rate at par to Tamilnadu but it does not seem to have been done for some unforeseen reasons. It is stated by the petitioners' counsel that the Transport Commissioners were transferred and changed swiftly during the relevant period.

157. The State is under obligation to act fairly without ill-will or malice in law. Legal malice or malice in law means something done without lawful excuse. It is an act done wrongfully and wilfully without reasonable or probable cause. It is a deliberate act in disregard to the rights of others. When it can never be a case of personal ill-will or spite on the part of the State but when State acted upon with an oblique or indirect object, then it may be held to be malice in law. Thus, the malice in law means exercise of statutory power for the purpose foreign to those for which it is in law intended. it means 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, which intent is manifested by its injurious acts. (Vide Jaichand Lal Sethia. Vs. The State of West Bengal & Ors., AIR 1967 SC 483 A.D.M. Jabalpur. Vs. Shiv Kant Shukla, AIR 1976 SC 1207; State of A.P. Vs. Goverdhanlal Pitti, AIR 2003 SC 1941).

158. Hon'ble Supreme court reiterated the aforesaid proposition and held that passing of an order for unauthorised purpose, constitutes malice in Law, vide, (2005) 6 SCC 776: Punjab State Electricity Ltd. Vs. Zora Singh and (2005) 8 SCC 394: Union of India Vs. V. Ramakrishnan.

159. The facts and circumstances and material on record, makes out a case of misfeasance in Office as well as malice in law where the contract has been awarded to opposite party No.3 with blatant abuse of power ignoring the mandatory requirements and the Circular dated 18.5.2005 of the Ministry of Home Affairs, Government of India (supra) as well as the circular of Chief Vigilance Commissioner on the direction of the State Government.

XIII- FINDING/TAILOR MADE

160. Great reliance has been placed by the learned counsel for the respondents to different judgments of Hon'ble Supreme Court where their Lordships ruled that experience with regard to contractual matters as well as terms and conditions of tender document falls within the domain of the State and the Court should loath to interfere. There appears to be no dispute over this proposition of law but when a case is set up by an aggrieved party with the ground that the State action suffers from malice and pre determination to give undue favour to a bidder and substantial change is made in the tender condition on the advice of successful bidder while publishing Addenda (in the present case, the Addenda is dated 21.6.2011), then in such a situation, the courts should not hesitate to interfere to maintain the purity in the system of governance. The action of the State should not only be just and fair but seem to be fair.

161. In the present case, material change was made by publishing the addenda dated 26.6.2011 broadly on the advice of the opposite parties 3 and 4. In consequence thereof, not only the petitioner but the respondent No.4 was ousted from the fray resulting in the grant of tender to the opposite party No.3 who remains solitary successful bidder among the persons who submitted their tender.

162. Under 2001 Order , it was necessary for the State Government to obtain an affidavit which may reveal that the bidder has not been involved in an act detrimental to the national security and bidder's contract for supply of HSRP are never cancelled or rescinded. Being a matter relating to national security, it was incumbent on the respondent No.3 to disclose all the material facts and circumstances under which its contract was cancelled by Karnataka, Goa and Rajasthan government. Because of non-disclosure of this fact, the State was not in a position to find out the reason for cancellation of the contract by respective governments.

163. Letter sent by the Ministry of Home, Government of India (Annexure-8) subject to investigation by the government does not rule out involvement of opposite party No.3 in serious mis-conduct which may be detrimental to safety and security of the State as well as law and order. No one has taken note of the circular of the Government of India, Ministry of Home Affairs (Annexure No.8).

164. Two circulars of Chief Vigilance Commissioner (supra) were overlooked in spite of the fact that the same are on record and part of official note.

165. The Legal Remembrancer of the State of U.P has changed the opinion that by concealment a fraud is committed but later on treated it as a 'non essential condition' though disclosure is an essential condition keeping in view 2001 Order which has got mandatory force.

166. On 22.12.2012, the government directed to negotiate for lowering down of HSRP rates keeping in view the bid of the respondent No.3 itself in Tamilnadu and other States and made it at par with them. On the other hand on the same day, the Transport Commissioner, issued the Letter of Intent with the observation that the government has accepted the bid of the opposite party No.3 and directed to complete the formality. Obviously, it was done without any negotiation to reduce the rate of HSRP at par with Tamilnadu by the respondent No.3 on the direction of Government. Decision is not by tender committee but by the government with regard to rate of HSRP.

167. Solvency certificate of Joint Venture Company has not been filed by the opposite party No.3. In spite of specific order, opinion was not obtained from the Finance Controller working in the office of the Transport Commissioner.

168. Required documents with regard to turn over and net worth in terms of the tender condition have not been filed.

The aforesaid facts and circumstances and the material discussed in the body of judgment make out a case of blatant abuse of power and entire proceeding seems to be a tailor made.

169. In the case reported in (1986)2 SCC 594 Chaitanya Kumar and others versus State of Karnataka and others, Hon'ble Supreme Court held that the government may enter into contract with any person but while doing so, the State or its instrumentality cannot act arbitrarily. In case the authority of the State chooses to invite tenders then it must abide by the conditions laid down in the tender notices. In case tender form submitted by any party is not in conformity with the conditions of tender notice, the same should not have been accepted.

170. Controversy before Hon'ble Supreme Court was for supply of pasteurized milk instead of fresh buffalo or cow milk as specified in the tender notice. Hon'ble Supreme Court held that in such situation, the opportunity should have been given to change the tender. Hon'ble Supreme court further held that since the tender submitted was not in conformity with the tender notice, hence, it should not have been accepted by the authorities.

171. In (1986)3 SCC 247 Harminder Singh Arora versus Union of India and others, Hon'ble Supreme court held that once the government decided to award contract on the basis of bid by tender, it must abide by terms of tender.

172. In (1995(1) SCC 478 New Horizons Limited and another versus Union of India and others, Hon'ble Supreme Court ruled that in the matter of entering into a contract, State does not stand on the same footing as private person who is free to enter into a contract to any person he likes. The State in exercise of its various powers is governed by the mandate of Art. 14 of the Constitution of India which excludes arbitrariness in State action and requires the State to act fairly and reasonably. The government cannot act arbitrarily at its sweet will like a private individual and deal with any person it pleases but its action must be in conformity with the standard or norms which are not arbitrary, irrational and irrelevant. Of course, certain measures of "free play in the joints" is necessary for an administrative body functioning but that too without violating the fundamental right guaranteed under Article 14 of the Constitution of India.

173. In 1993 Vol1 SCC 492 Raunak International Limited versus IVR Construction Limited, Hon'ble Supreme Court observed that a criteria can be relaxed only in case relaxation is permissible under the terms of tender.

However, in the present case, neither in the advertisement nor the tender condition provides that instead of fully automatic imaging system, a partial automatic imaging system (supra) may be purchased by relaxing the published conditions.

174. In (2001)2 SCC 451 West Bengal State Electricity Board versus Patel Engg. Company Limited and others, Hon'ble Supreme Court declined to permit to correct the negligent mistake in bid document on the basis of equity. Hon'ble Supreme Court further held that rules and conditions have to be complied with even in respect of lowest bid. The principle of awarding contract to lowest tenderer is applied when all the things are equal. In case the conditions are not satisfied, then there is no obligation to award contract to lowest bidder. Hon'ble Supreme Court held that even bit being lowest one shall not create a ground to award contract in case other material conditions are not satisfied. It is essential to maintain the sanctity and process of the tender of the bid and also award a contract. It shall be appropriate to reproduce relevant portion from the judgment of West Bengal Electricity Board(supra) ; to quote :

"The submission that remains to be considered is that as the price bid of Respondents 1 to 4 is lesser by 40 crores and 80 crores than that of Respondents 11 to 10 respectively, public interest demands that the bid of Respondents 1 to 4 should be considered. The Project undertaken by the appellant is undoubtedly for the benefit of the public. The mode of execution of the work of the Project should also ensure that the public interest is best served. Tenders are invited on the basis of competitive bidding for execution of the work of the Project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in competing for the contract relating to execution of the work and, on the other hand, it affords the appellant a choice to select the best of the competitors on a competitive price without prejudice to the quality of the work. Above all, it eliminates favouritism and discrimination in awarding public works to contractors. The contract is, therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. It is obvious that the bid of Respondents 1 to 4 is the lowest of bids offered. As the bid documents of Respondents 1 to 4 stand without correction there will be inherent inconsistency between the particulars given in the annexure and the total bid amount, it (sic they) cannot be directed to be considered along with the other bids on the sole ground of being the lowest."

175. In 2007 Vol. 10 SCC 333 Puravankara Projects Limited versus Hotel Venus International and others, Hon'ble Supreme Court held that duty to act fairly which is sought to be imported into a contract to modify and/ or alter its terms and/or to create an obligation upon the State government which is not there in the contract is not covered by any doctrine of fairness or reasonableness. Duty to act fairly and reasonably is a doctrine developed in Administrative Law field to ensure rule of law and to prevent failure of justice when the action is administrative in nature. Just as the principle of natural justice ensure fair decision where function is quasi judicial, the doctrine of fairness is evolved to ensure fair action when the function is administrative. But the said principle cannot be invoked to amend, alter or vary the expressed terms of the contract between the parties.

176. In 2009 Vol. 11 SCC 9 Sorath Builders versus Shreejikrupa Buildcon Limited and another, Hon'ble Supreme Court reiterated the age old settled law that the terms and conditions of the tender are required to be adhered to strictly.

177. Hon'ble Supreme Court in the case reported in (2009) 6 SCC 171: Meetur Development Authority. Vs. Association of Management Studies and another, held that bidders participating in tender process, have no right except the right to equality and fair treatment and the Government has got power to reject the highest or lowest bid. Their lordships held that in any case, the authorities action must be free from arbitrariness or favouritism. It is further held by Hon'ble Supreme Court that in case it is established that the terms of inviting to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate others from participating in the bidding process or suffers from mala fide, court may review the decision of the State Government, to quote relevant para-26 of the said judgment as under:-

" 17. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor made to suit the convenience of any particular person with a view to eliminate all others from participating in the biding process. "

178. In a case reported in (2011) 3 Supreme Court Cases 436 State of Orissa and another vs. Mamata Mohanty, their Lordships held that every action of the State or its instrumentality should not only be fair, legitimate and above-board but should be without any affection or aversion. It should neither be suggestive of discrimination nor even give an impression of bias, favouritism and nepotism.

179. In a case reported in (2011)6 Supreme Court Cases 125 Humanity and another vs. State of West Bengal and others, where the allotment was made on the request of allottee, Hon'ble Supreme Court held it to be bad in law. Their Lordships held that it is axiomatic that in order to achieve a bona fide end, the means must also justify the end, to quote relevant portion:-

"This Court is unable to accept the aforesaid contentions. It is axiomatic that in order to achieve a bona fide end, the means must also justify the end. This Court is of the opinion that bona fide ends cannot be achieved by questionable means, specially when the State is involved. This Court has not been able to get any answer from the State why on a request by the allottee to the Hon'ble Minister for Urban Development, the Government granted the allotment with remarkable speed and without considering all aspects of the matter. This Court does not find any legitimacy in the auction of the Government, which has to act within the discipline of the constitutional law, explained by this Court in a catena of cases. We are sorry to hold that in making the impugned allotment in favour of the allottee, in the facts and circumstances of the case, the State has failed to discharge its constitutional role."

180. In the present case, subject to finding recorded (supra), and keeping in view the law settled by Hon'ble Supreme Court with regard to contractual obligation of the Government and interfering in such matters under process of judicial review, there appears to be no reason to disbelieve that the State Government deliberately extended undue favour to respondent No.3 by entering into the negotiation in utter disregard to the terms and conditions of tender document and circular of Chief Vigilance Commissioner, New Delhi. THE FINDINGS ARE SUMMARIZED AS UNDER :

(i) The Government has obfuscated the procedure and the terms and conditions of tender document by negotiation with the opinion of Office of Legal Remembrancer, while finalizing the bid in favour of the respondent No.3.

(ii) No insolvency certificate of the Joint Venture Company was filed and no opinion was obtained in spite of repeated office notes from the Finance Controller working in the Office of Transport Commissioner.

(iii). Affidavits provided by tender document as Annexure No.IX and IX-A, require correct disclosure of material facts. The opposite party No.3 has not disclosed the cancellation of contract by Karnataka, Goa and Rajasthan Government. The disclosure was necessary to appreciate the conduct of opposite party No.3 in terms of Order, 2001 (supra). Filing of false affidavit is punishable making out criminal offence and also it is essential condition of tender documents. Office of Legal Remembrancer initially opined the concealment of fact as essential condition and commission of fraud but later on, changed its opinion, which seems to be for extraneous reasons or considerations, requires probe.

(iv). Tender document has not been published containing para-4 Clause xa (f) of Order, 2001, omitting the word, "is not considered for selection as manufacturer or vendor for supply of High Security Registration Plates (supra), giving a way out to the respondent No.3 not to disclose the cancellation of contract by Karnataka, Goa and Rajasthan Government and an opportunity to Government to investigate its conduct with regard to activities which may be prejudicial to national security. By not publishing tender document strictly in accordance with Order, 2001, (supra), which has got statutory force, the Government violated the statutory provisions.

(v). The contents of Annexure No.8 to the writ petition, the Circular dated 18.5.2005 sent by the Ministry of Home Affairs, Government of India (Internal Security) prima facie reveals that the opposite party No.3 was established by one Nitin Shah, who has been convicted in a criminal case hence, floated another Company, i.e., the respondent No.3 Shimnit Utsch India Pvt. Ltd., managed by Rushang P. Shah, but neither State Government nor the Office of Legal Remembrancer took note of contents of Circular dated 18.5.2005 of Ministry of Home Affairs, Government of India, New Delhi, while awarding contract to the respondent No.3. It seems to be violative of Order, 2001 (supra) and the Circular dated 18.5.2005 of Ministry of Home Affairs, Government of India, New Delhi।।

(vi). Nitin Shah was arrested under COFEPOSA. Appropriate inquiry should have been held by the State Government before awarding and finalizing the contract to the opposite party No.3 in view of the confidential Circular dated 18.5.2005 of Ministry of Home Affairs, Government of India, New Delhi, but there appears to be no discussion o n the issue from the record produced before this Court. In case the allegations in the Circular (supra), are correct, the contract should not have been awarded to opposite party No.3.

(vii). Negotiation has been done with opposite party No.3 in contravention of provisions contained in tender document as well as the Circular of Chief Vigilance Commissioner, New Delhi and awarding of contract suffers from vice of arbitrariness. Decision has been taken with pre-determined mind based on instructions, issued in a meeting held in the office of Cabinet Secretary (supra).

(viii). Concealment and non-disclosure of material facts with regard to cancellation of contract, amounts to corrupt or fraudulent practice in terms of tender document, hence bid should have been rejected out rightly in terms of Clause 2.27.3 and 2.27.4 of tender document without further negotiation and security should have been forfeited. Under Clause 2.27.4, the Government possesses right to reject bid even after grant of contract and signing of the agreement. Incorrect undertaking has been given while filing affidavit as per Annexure No.X with regard to terms and condition of tender document.

(ix). Substantial change has been done in the original tender document dated 20.5.2011 in pursuance of suggestion given by the opposite parties No.3 and 4 in pre-bid meeting. Pre-bid meeting was scheduled for 30.5.2011 but it was held on 13.6.2011. The decision taken in pre-bid meeting was converted into writing on 17.6.2011 and Addenda was published on 21.6.2011 i.e., after the last date (20.6.2011) scheduled for filing of bid in terms of original advertisement.

(x). Substantial change on the suggestion of the opposite parties No.3 and 4 in the bid document creates reasonable doubt over the bona fide of the State Government. Though the Government has taken note of the Circular of the Chief Vigilance Commissioner of India, dated 18.5.2005 (supra), and referred the same in the Office note but has not followed the same (supra). The opposite party No.3 has given higher rate in the State of U.P., than what it has given in the State of Tamil Nadu. The rate in the State of U.P. is higher than Tamilnadu to the extent of 302% for two wheeler, 239% for 3-Wheeler, 211% for LMV, 155% for tractor and 196% for commercial vehicles. In case the rate of HSRP is tested in comparison of rate of State of Bihar, it shall be 3 or 4 times higher than it. Bihar seems to possess lowest rate in the country (supra). There appears to be no justification to award contract on such exorbitant rate in a State where 35% of population is below poverty line.

(xi). The tailor-made arrangement seems to be evident from the fact that on 22.12.2011, the State Government through its Joint Secretary Shyam Sunder Sharma, has written letter to the Transport Commissioner, directing him to collect the rate of HSRP from neighbouring States and thereafter finalized the contract. Strange enough, the contract awarded by the Transport Commissioner is by the Letter of Intent of the same date i.e., 22.12.2011 indicating therein that the negotiable rate of HSRP of opposite party No.3, has been accepted by the State Government. Hence directed to complete necessary formalities and sign the contract subject to deposit of 08.51 crores as performance security. At the face of record, rate of the opposite party No.3 was not accepted by the Tender Committee of the Government but by the Government itself and in consequence thereof, the Transport Commissioner awarded contract (supra). The rate of HSRP in the State of U.P. quoted by the opposite party No.3 and accepted by the State Government is exorbitantly higher than the State of Bihar and Tamil Nadu. In spite of the fact that number of vehicles in the State of U.P. is not less than those States.

(xii). No man of ordinary prudence shall believe that the rates quoted by the opposite party No.3 and accepted by the State Government, are reasonable and is an instance of bona fide deal/transaction.

(xiii). The evidence and material on record prima facie make out a case of misfeasance in public office and collusive act involving the constitutional functionaries, bureaucrats and persons working in the office of Legal Remembrancer.

181. Father of Nation, Mahatma Gandhi in an article, published in 1921 in Young India, said to quote:-

"The devil succeeds only by receiving help from his fellows. He always takes advantage of the weaker spots in order to natures in order to gain mastery over us. Even so does the Government retain control over us through our weaknesses or vices. And if we could render ourselves proof against its machinations, we must remove our weaknesses."

182. Unfortunately, since last two decades, no much remarkable development in law has been done by the higher judiciary to check the weakness in the system of governance, in spite of the fact that constitution is an organic body and must be interpreted in such a manner to cope with situation. Now, further development takes place where statutory provision has also been held to be organic body. (Benion's Statutory Interpretation).

183. Things become worst, when members of judiciary working in the Government on deputation or otherwise, as Advisor or Legal Remembrancer, come in toe with bureaucrats and politicians and refrain themselves to give firm and correct advice for extraneous reasons. Time has come when members of subordinate judiciary working in the Office of Legal Remembrancer as Advisor or other places, must be imparted training to be firm while tendering advice to the Government. Otherwise, message will go to the people that all are 'hands in gloves' while perpetuating the corruption in the system of governance. It will be appropriate that High Court/Hon'ble Chief Justice find out some ways and means to regulate the conduct of its Officers working in Government as advisor.

184. Edmund Clerihew Bentley said, to quote:-

When their lordships asked Becon How many bribes he had taken He had at least the grace To get very red in the face."

Now, we feel their skin is so thick that even their face become not red, while involving in corrupt practice or violating constitutional mandate..

185. Alexander Solzhenitsyn , the great noble laureate of erstwhile USSR in "The First Circle" observed :

"You only have power over people as long as you don't take everything away from them. But when you've robbed a man of everything he's no longer in your power- he's free again."

The noble laureate was known for his visionary thoughts which is reflected from his literary and historical books. However, he was compelled to live in exile in 1974 and again his prestige was restored in 1994 but it was too late. Being not accepting his advice through his literary writings, USSR dissolved on 25.12.1991 leaving 15 Republics and Soviet Union as independent sovereign States.

186. There is Laxman Rekha or limit to every wrong actions. Abrasion may not affect a country but when wrong doers cross the Laxman Rekha of "law and constitutional mandate", it may damage a country with irreparable loss and consequences.

There appears to be institutional break down of bureaucracy in the State of U.P because of political alienation of a section of its member. Immediate attention requires not only to uplift the morale of the bureaucracy but also make it as an integral but independent part of the government for socio-economic development of the country in national interest.

187. Long back Swyambhu Manu a great ancient Indian scholar said, "peoples obey law because of fear of punishment". There appears to be no fear of punishment. Hence, India has become a country of scandals and heaven for corrupt people, requires immediate remedial measures by the government.

188. In any case, even if the terms and conditions with regard to experience or turnover, and net worth is kept aside, the substantial material on record relating to non-publication of tender document containing the conditions provided under 2001 Order, non-compliance of circular of Chief Vigilance Commissioner (supra), not furnishing the solvency certificate of the Joint Venture in terms of tender document, the Tender Committee being dead to the wide, the decision taken by the Government finalising the rate of HSRP instead of 'tender committee' keeping in view the two letters of 22.12.2011(supra) giving no heed to letter of Ministry of Home Affairs dated 18.5.2005( Annexure-8) and the repeated negotiation that too in violation of tender condition, filing of affidavit concealing material facts in violation of tender condition (supra), change of opinion by office of Legal Remembrancer, State of U.P with regard to commission of fraud and other related facts discussed in the body of present judgment makes out a case of 'misfeasance in public office'/malice in law and makes a ground to allow the writ petition and quash the advertisement as well as agreement granting tender in favour of the opposite party No.3 with exemplary cost. In view of the judgment of Hon'ble Supreme Court in (2005) 6 Supreme Court Cases 344, Salem Advocate Bar Association (II), Vs. Union of India and 2011(8) SCC 249 Rameshwari Devi and others versus Nirmala Devi and others, exemplary cost may be imposed.

189. It is also a fit case to refer the matter for investigation/enquiry through independent agency like C.B.I. keeping in view the law settled by Hon'ble Supreme Court in the case reported in (2010)2 SCC 200 Rubabbuddin Sheikh versus State of Gujrat and others and AIR 2010 SC 1476 State of West Bengal and others versus Committee for protection of Democratic Rights, West Bengal and others.

190. The people of the State seems to have overburdened more than by 800 (eight hundred) crores and odd because of exorbitant rate of HSRP plates, that too by arbitrary exercise of power by the Government.

ORDER

191. The writ petition is allowed with cost as follows :

(i) A writ in the nature of certiorari is issued quashing the impugned agreement dated 14.2.2012 with consequential benefits and with cost quantified to Rs.50 lacs (fifty lacs) which shall be deposited in this Court within two months. Out of the cost of Rs.50 lacs, Rs.25 lacs shall be deposited by the State Government recoverable from the officers actively participated in finalising the contract in favour of the opposite party No.3 after holding an enquiry and the remaining Rs.25 lacs of cost shall be deposited by the respondent No.3. Cost shall be remitted to the Mediation Centre, Lucknow. In case, within the stipulated period, the cost is not deposited, it shall be recovered as arrears of land revenue.

Registry to take follow-up action.

The State Government may forfeit the security deposit of the opposite party No.3 in terms of the provisions contained in Clause 2.24.3 of the tender document.

(ii) A writ in the nature of mandamus is issued directing the State Government to re-advertise the bid with due modification of the tender document strictly in accordance with rules, the Order, 2001 and the guidelines dated 16.3.2002, issued by the Government of India (supra) and keeping in view the observation made in the body of judgment within one week from today, scheduling the date in such a manner so that the entire process be completed by 30.4.2012 in compliance of the judgment of Hon'ble Supreme Court.

(iii) The Central Bureau of Investigation is directed to investigate the entire process with regard to grant of contract including the criminal antecedents and link of the opposite party No.3 for supply of HSRP in the State of U.P. in accordance with law, expeditiously say, within six months and submit a status report to this Court at the interval of every two months till the investigation reach to its logical end.

(iv) Registry shall send a copy of the present judgment to the Director, C.B.I., New Delhi as well as provide a copy to the learned counsel for the CBI of this Court and the Chief Secretary of the State for compliance. A copy shall also be sent to Hon'ble Chief Justice of Allahabad High Court for information and appropriate action to provide due training or take steps so that judicial officers working in the government discharge their obligation without fear or favour and in accordance with law.

The writ petition is allowed accordingly. Costs as above.

(Justice S.C. Chaurasia) (Justice Devi Prasad Singh) April 3, 2012 Rajneesh Kumar AR/PS 03-04-2012