Full Judgment Text
$~2 & 3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
st
% Reserved on 21 May, 2021
th
Pronounced on 04 June, 2021
+ W.P.(C) 2060/2021
M/S OMEGA ELEVATORS ..... Petitioner
Through: Mr. Bhargav Hasurkar, Mr. Anshul
Narayan, Advs.
versus
UNION OF INDIA & ANR. ..... Respondents
Through: Mr. Satya Ranjan Swain, Sr. Panel
Counsel with Mr. Kautilya Birat, Mr. Vedansh
Anand, Advs. for R-2/ AIIMS
3
+ W.P.(C) 4043/2021
M/S OMEGA ELEVATORS ..... Petitioner
Through: Mr. Bhargav Hasurkar, Mr. Anshul
Narayan, Advs.
versus
UNION OF INDIA & ANR. ..... Respondents
Through: Mr. Ruchir Mishra, Mr. Sanjiv Kr.
Saxena, Mr. Mukesh Kumar Tiwari, Mr. Ramneek
Mishra, Advs. for Resp./ UOI
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
HON'BLE MR. JUSTICE JASMEET SINGH
J U D G M E N T
: JASMEET SINGH, J
CM APPL.16898/2021- (EXEMPTION) in W.P.(C) 4043/2021
Allowed, subject to all just exceptions.
The application is disposed of.
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 1 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 (COMMON GROUNDS)
1. The above two writ petitions raise similar issues and hence are being
decided by this common order.
2. The petitioner in both the cases is M/s Omega Elevators, sole
proprietorship concern of Mr. Kumarbhai Manharlal Desai having its
registered office at 11, Sanjeev Baug Society, New Sharda Mandir
Road, Paldi, Ahmedabad, Gujarat – 380007.
3. The petitioner is an original manufacturer of lifts and does not operate
through any other agency for the purpose of sale, marketing or after-
sale maintenance and service of the lifts.
4. It is further stated that petitioner has been successfully executing
several contracts/ work orders for various State bodies and is also
effectively maintaining all lifts/ escalators commissioned by it as on
today. The credentials of the petitioner are brilliant and impeccable and
it is a 100% Indian company.
5. The petitioner is a “A-Class” Certified/ Enlisted electrical Contractor
with various State PWD Departments.
6. The petitioner in both cases is aggrieved by the tender issued by the
respective respondents alleging violations of Article 14 of the
Constitution of India as well as the notifications and guidelines issued
by the Union of India (UOI). Briefly, stating the facts are as under:
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 2 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
W.P.(C) 2060/2021 & CM APPL. 6040/2021- (INTERIM
ORDER)
1) The present writ petition is directed against E-Tender Notice/
Detailed Notice Inviting Tender (hereinafter referred to as
DNIT) dated 08.02.2021 issued by respondent No.2 i.e. The
Executive Engineer (Elect) -1 All India Institute of Medical
Sciences (AIIMS). The substantive prayers are:-
PRAYER
It is therefore, most respectfully prayed that the Hon‟ble
Court be pleased to:
i. Issue Writ in the nature of certiorari quashing the E-
Tender Notice/ Detailed Notice Inviting Tender
(Annexure P-1) issued by Respondent No.2 – i.e.
Respondent No.2.The Executive Engineer (Elect)-1 All
India Institute of Medical Sciences (AIIMS) having
Tender reference no: nit66/eee-i/aiims/2020-21 for
UPGRADATION OF LIFT NO.11,15,16 & 17 in MAIN
HOSPITAL AT AIIMS, as the same is arbitrary, illegal
and not maintainable in the eyes of law, and
ii. Be pleased to hold and declare that such insertion of list
of makes is arbitrary as well as illegal as it seeks to
make the tender manufacture specific and is per se
illegal and without any application of mind.
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
iii. Issue Writ in the nature of mandamus directing and/ or
commanding the Respondent, the Respondent No.2- i.e.
The Executive Engineer (Elect)-1 All India Institute of
Medical Sciences (AIIMS), to withdraw the list of makes
from the tender document or alternatively direct the
respondent no.2 to incorporate name of the petitioner
i.e. OMEGA Elevators as an eligible bidder to offer its
bid for Tender Notice (NIT) for UPGRADATION OF
LIFT NO. 11, 15, 16 & 17 IN MAIN HOSPITAL AT
AIIMS; and
iv. Issue Writ in the nature of mandamus quashing and
setting aside condition in for Tender Notice for
UPGRADATION OF LIFT NO. 11, 15, 16 & 17 IN
MAIN HOSPITAL AT AIIMS, which entitles
“Manufacturer‟s of only certain brands from
participating in the tender process;
2) It is alleged by the petitioner that by way of the tender in
question, the respondents have purposefully and intentionally
omitted the name of the petitioner‟s brand from the list of
permitted brands in respect whereof of the bidders are allowed
to bid for the tender.
3) It is further stated that the DNIT clearly states that the bids are
invited only from selected brands that are OTIS/ Johnson/
Mitsubishi/Schindler/FUJIHD.
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
4) The petitioner further alleged that the petitioner made a detailed
representation dated 12.02.2021 with the respondent but the
petitioner was told that the tender will remain limited to the
brands mentioned in the tender document.
5) A bare perusal of the DNIT states that “The Executive Engineer
Electrical, AIIMS, New Delhi on behalf of the Director, AIIMS
invites online item rate tender from the manufacturer/
authorised dealers of OTIS/ Johnson/ Mitsubishi/ Schindler/
FUJIHD make lifts for the following work.”
6) The petitioner further alleged that the respondents are insisting
on conducting the tender only amongst the chosen few
manufacturers. Such insistence on part of the respondents
makes the tender brand-specific, which is arbitrary and amounts
to creation of a syndicate. The above actions of the respondents
are not only violative of Article 14 and 19 of the Constitution
of India, but also violative of CPWD‟s office memorandum
dated 10.01.2019 as well as the office order issued by the
Ministry of Commerce and Industry, Government of India
dated 29.05.2019.
7) The petitioner also relies on communication/ directive dated
03.01.2019 issued by the Prime Minister‟s Office (PMO).
8) The specifications have also been stated as in the DNIT which
the petitioner meets.
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
9) Lastly, the petitioner has submitted that he has undertaken
project with various hospitals in the country which is more than
500 in number.
10) In view of this matter, the present petition has been filed.
11) The Respondent No. 2 i.e. AIIMS has filed its Counter
Affidavit, wherein it has stated and argued that:
a) That the petitioner‟s elevators were found to be not satisfactory
for one of the lifts installed at the hospital, NDDTC Ghaziabad
Premises which is part of respondent No.2.
b) The respondent has further stated that the petitioner was unable
to maintain the said lift due to which annual maintenance order
was not renewed by the Department.
c) On merit, the respondent has stated that respondent No.2 is not
bound to follow CPWD manual and the DNIT has been invited
in accordance with CVC guidelines requiring three or more
bidders.
d) The respondent has further stated and argued that the Notice
Inviting e-Tenders (NIT) has been invited on the basis of
specialised nature of work involved. The five approved makes
are considered on the basis of specialised nature of the work.
e) The respondents also stated and argued that the lifts of “OTIS/
Johnson /Mitsubishi /Schindler /FUJIHD are “make in India”
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
compliant.
12) The petitioner has filed a rejoinder. The lift eligibility criteria
published by CPWD dated 25.10.2019 has been relied upon and
it has been stated that the petitioner meets each and every
eligibility criteria published by CPWD.
13) In regards to the lift in Ghaziabad, it has been stated that the
project was awarded to the petitioner on 13.03.2004. The
petitioner has been maintaining the lift until 2019.The
petitioner stated and argued that it is petitioner who has been
chasing the concerned authority for payments of its dues
pertaining to the lift in question. Due to the non-payment and
refusal on the part of the concerned authority to make payment
of the maintenance amount, the petitioner has not renewed the
contract. The petitioner has further stated and argued that the
lift was installed in the Drug De-addiction centre at AIIMS,
Ghaziabad, UP and the lift was abused by the patients. As a
result of such abuse, even the doors of the lift had to be re-
installed as they were damaged.
W.P.(C) 4043/2021 & CM APPL. 12209/2021-( INTERIM
ORDER ), CM APPL.16897/2021-( DELAY IN FILING C/A )
1) That the present writ petition has been filed seeking the
following substantive reliefs:
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
PRAYER
It is therefore, most respectfully prayed that the Hon‟ble Court
be pleased to:
i. Issued Writ in the nature of certiorari quashing the E-
Tender Notice/ Detailed Notice Inviting Tender (Annexure
P -1) issued by Respondent No.2 – i.e. The Executive
Engineer, (E), DED-102, CPWD having Tender reference
no: 67/ 2020-21/DED-102/DELHI/3 pertaining to supply,
installation, testing and commissioning of 10 passenger
Lift at Nehru Museum, Teen Murti House, New Delhi as
the same is arbitrary, illegal and not maintainable in the
eyes of law and further be pleased to hold and declare that
inserting brand names and restricting participation of the
tender only to such brands/ manufacturers is illegal and
against the spirit of Article 16 of the Constitution of India;
and
ii. Be pleased to hold and declare that such insertion of list of
makes is arbitrary as well as illegal as it seeks to make the
tender manufacture specific and is per se illegal and
without any application of mind.
iii. Issue Writ in the nature of mandamus directing and/ or
commanding the Respondent, the Respondent No.2- i.e.
The Executive Engineer, (E), DED-102, CPWD, to
withdraw the list of makes from the tender document or
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 8 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
alternatively direct the respondent no.2 to consider the bid
of the petitioner i.e. OMEGA Elevators at par with other
bidders to offer its bid for Tender Notice (NIT) having
Tender reference no. 67/2020-21/DED-102/DELHI/3
pertaining to supply, installation, testing and
commissioning of 10 Passenger Lift at Nehru Museum,
Teen Murti House, New Delhi; and
iv. Issue Writ in the nature of mandamus quashing and setting
aside email communication dated 19.03.2021 which
illegally disqualifies the petition from the tender process
(Annexure-11);
2) In this writ petition, the petitioner has challenged the E-Tender
Notice/ Detailed Notice Inviting Tender (DNIT) issued by
respondent No.2 (The Executive Engineer, (E), DED-102, CPWD)
pertaining to supply, installation, testing and commissioning of 10
Passenger Lift at Nehru Museum, Teen Murti House, New Delhi.
3) The petitioner has stated that the DNIT clearly states that the bids
are invited only from the selected brands that are KONE/
THYSSENKRUPP/ JOHNSON/ SCHINDLER/ OTIS.
4) The said condition has been imposed despite the fact that the
tender is an open tender.
5) The petitioner has further stated that they have made a detailed
representation dated 18.12.2020 to the respondents, bringing it to
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 9 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
the notice of respondent No.2 that insertion of specific brands in
the tender document is illegal and the petitioner was assured by
the respondents that they would not be disqualified on the ground
of brand condition. Consequently, the petitioner participated in the
tendering process to offer its own branded product.
6) The petitioner has stated and argued that the insistence of the
respondent on conducting the tender only amongst chosen few
manufacturers, makes the tender brand specific which is arbitrary,
violative of Article 14, and amounts to creation of a syndicate.
7) The petitioner has stated and argued that the petitioner is
competent like all other brands that the respondents are insisting
upon. The petitioner has challenged the disqualification of the
petitioner by the respondent vide email dated 19.03.2021 which
states that the “Reason for Disqualification: Undertaking
regarding providing of Lift from one of the five approved makes
has not been given.”
8) Hence the Petition.
9) We have also heard the learned counsel for the respondent who
submits that the instruction 1(g) of the „Information and
Instructions for Contractors for e-Tendering Forming Part of Bid
Document‟ reads as under:
g) The bidder shall submit, along with the performance
guarantee after the acceptance of tender, an undertaking from
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
the authorised signatory of OEM regarding:
(i) Authorization Certificate from OEM of Lift, namely,
Kone/Thyssenkrupp/Johnson/Schindler/Otis.
(ii) The OEM shall unconditionally support technically
throughout the execution of contract and during defect liability
period of 1 (one) year, for the useful life of the system, and
(iii) The manufacturer shall furnish an undertaking regarding
availability of spares for the entire expected life of the lift i.e.
15 to 20 years.
10) The respondent argued that the petitioner, knowing fully well of
the said instruction, participated in the DNIT but when it was
disqualified by the communication dated 19.03.2021 for not
submitting the desired undertaking, the petitioner has chosen to
file this Petition. The petitioner having participated in the DNIT
and having not been declared as a successful bidder, cannot be
permitted to maintain the writ petition to assail the conditions of
the DNIT.
11) The respondents have further stated and argued that the five
brands/ makes mentioned in the DNIT are reputed brands of
unquestionable quality and performance, and hence no fault can
be found with the actions of the respondents.
12) The respondent has further submitted that the order issued by
CPWD dated 10.01.2019 permits the requirements of a client to be
Signature Not Verified
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
taken into account, and these five makes were the requirements of
the client.
13) Lastly, the respondents have relied on judgment of this Court
being Delite Kom Limited v. Government of NCT of Delhi, W.P.
(Civil) No. 5350 of 2007 which, according to the respondents,
permits specification of brands in a tender.
DISCUSSION
1) Since the legal issues raised arise in the same factual background, vis,
that the Respondents in both the petitions have invited tenders for
supply and installation of lifts of specified brands, which does not
include the brand of the petitioner‟s lifts, we have heard the
submission in both the petitions at the same time and proceed to
decide them by this common judgment.
2) We have heard the arguments of Mr. Bhargav Hasurkar, learned
counsel for petitioner and Mr. Satya Ranjan Swain, Sr. Panel
Counsel for Respondent No. 2 in W.P.(C) 2060/2021, and Mr.
Ruchir Mishra, learned counsel for Respondent No.1 in W.P.(C)
4043/2021 and considered the judgments cited.
3) The mandate of Article 14 of the Constitution of India is most
relevant and mandates that there should be no arbitrariness in state
action. It has been held in Ramana Dayaram Shetty v. International
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W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 12 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
1
Airport Authority of India :
“21. This rule also flows directly from the doctrine of equality
embodied in Article 14. It is now well-settled as a result of the
decisions of this Court in E.P. Royappa v. State of Tamil
Nadu [(1974) 4 SCC 3 : (1974) 2 SCR 348] and Maneka
Gandhi v. Union of India [(1978) 1 SCC 248] that Article 14
strikes at arbitrariness in State action and ensures fairness and
equality of treatment. It requires that State action must not be
arbitrary but must be based on some rational and relevant
principle which is non-discriminatory: it must not be guided by
any extraneous or irrelevant considerations, because that
would be denial of equality. The principle of reasonableness
and rationality which is legally as well as philosophically an
essential element of equality or non-arbitrariness is projected
by Article 14 and it must characterise every State action,
whether it be under authority of law or in exercise of executive
power without making of law. The State cannot, therefore, act
arbitrarily in entering into relationship, contractual or
otherwise with a third party, but its action must conform to
some standard or norm which is rational and non-
discriminatory . This principle was recognised and applied by a
Bench of this Court presided over by Ray, C.J., in Erusian
Equipment and Chemicals Ltd. v. State of West Bengal where
the learned Chief Justice pointed out that
“the State can carry on executive function by making a
law or without making a law. The exercise of such powers
and functions in trade by the State is subject to Part III of
the Constitution. Article 14 speaks of equality before the
law and equal protection of the laws. Equality of
opportunity should apply to matters of public contracts.
The State has the right to trade. The State has there the
duty to observe equality. An ordinary individual can
choose not to deal with any person. The Government
cannot choose to exclude persons by discrimination. The
order of blacklisting has the effect of depriving a person of
1
(1979) 3 SCC 489
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W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 13 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
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equality of opportunity in the matter of public contract. A
person who is on the approved list is unable to enter into
advantageous relations with the Government because of
the order of blacklisting .... A citizen has a right to claim
equal treatment to enter into a contract which may be
proper, necessary and essential to his lawful calling .... It
is true that neither the petitioner nor the respondent has
any right to enter into a contract but they are entitled to
equal treatment with others who offer tender or quotations
for the purchase of the goods”.
It must, therefore follow as a necessary corollary from the
principle of equality enshrined in Article 14 that though the
State is entitled to refuse to enter into relationship with any
one, yet if it does so, it cannot arbitrarily choose any person it
likes for entering into such relationship and discriminate
between persons similarly circumstanced, but it must act in
conformity with some standard or principle which meets the
test of reasonableness and non-discrimination and any
departure from such standard or principle would be invalid
unless it can be supported or justified on some rational and
non-discriminatory ground.” (emphasis supplied)
2
And also in New Horizons Ltd. v. Union of India , where the court observed
the following,
“ 17. At the outset, we may indicate that in the matter of entering
into a contract, the State does not stand on the same footing
as a private person who is free to enter into a contract with
any person he likes. The State, in exercise of its various
functions, is governed by the mandate of Article 14 of the
Constitution which excludes arbitrariness in State action and
requires the State to act fairly and reasonably. The action of
the State in the matter of award of a contract has to satisfy
this criterion. Moreover a contract would either involve
expenditure from the State exchequer or augmentation of public
revenue and consequently the discretion in the matter of
2
(1995) 1 SCC 478
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
selection of the person for award of the contract has to be
exercised keeping in view the public interest involved in such
selection. The decisions of this Court, therefore, insist that
while dealing with the public, whether by way of giving jobs or
entering into contracts or issuing quotas or licences or
granting other forms of largesse, the Government cannot act
arbitrarily at its sweet will and like a private individual, deal
with any person it pleases, but its action must be in conformity
with the standards or norms which are not arbitrary,
irrational or irrelevant. It is, however, recognised that certain
measure of “free play in the joints” is necessary for an
administrative body functioning in an administrative sphere
[See : Ramana Dayaram Shetty v. International Airport
Authority of India [(1979) 3 SCC 489 : (1979) 3 SCR 1014]
(SCR p. 1034 : SCC pp. 505-06, para 12); Kasturi Lal Lakshmi
Reddy v. State of J & K [(1980) 4 SCC 1 : (1980) 3 SCR 1338]
(SCR p. 1355 : SCC pp. 11-12, para 11); Fasih
Chaudhary v. Director General, Doordarshan [(1989) 1 SCC
89 : 1988 Supp (3) SCR 282] (SCR p. 286 : SCC p.
92,); Sterling Computers Ltd. v. M & N Publications
Ltd. [(1993) 1 SCC 445] ; Union of India v. Hindustan
Development Corpn. [(1993) 3 SCC 499] (at p. 513)].”
(emphasis supplied).
4) Article 14 speaks of equality before law and equal protection of
the laws. Equality of opportunity applies to matters of public
contracts. Unlike an individual, the State cannot choose to exclude
persons by discrimination. In matters of floating a tender,
awarding a contract, the State has to satisfy the criterion of
fairness and reasonableness.
5) In order to pass the test of permissible classification, two
conditions must be fulfilled, namely,
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
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a) The classification must be founded on an intelligible
differentia which distinguishes persons or things that
are grouped together from others left out of the
groups; and
b) That the differentia must have rational nexus to the
objects sought to be achieved.
6) In fact, earlier judgments of High Courts of different states in the
case of the petitioner itself have found such a
categorization/condition unsustainable in law. In M/s. Omega
Elevators v. Union of India, WP Nos. 11478 & 11481 of 2019
which was a similar matter to the one before us, currently, the
Telangana High Court held that „ there should be some rational
nexus between the basis of classification and the object intended to
be achieved by the respondents. When there is no such glaring
difference between the lift manufacturers mentioned in Group-I
with that of the petitioner, the said categorization is unsustainable
in law .‟ The court further stated that it was within its ambit to
review the conditions posed by the respondents when it includes
brand specifications by relying on the judgment as held by the
3
Hon‟ble Supreme Court in Union of India v. N.S. Rathnam ,
wherein the court held as follows:
“13. It is, thus, beyond any pale of doubt that the justiciability of
particular notification can be tested on the touchstone of Article
14 of the Constitution. Article 14, which is treated as basic
feature of the Constitution, ensures equality before the law or
equal protection of laws. Equal protection means the right to
equal treatment in similar circumstances, both in the privileges
conferred and in the liabilities imposed. Therefore, if the two
persons or two sets of persons are similarly situated/placed,
they have to be treated equally. At the same time, the principle
3
(2015) 10 SCC 681.
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
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of equality does not mean that every law must have universal
application for all persons who are not by nature, attainment or
circumstances in the same position. It would mean that the
State has the power to classify persons for legitimate purposes.
The legislature is competent to exercise its discretion and make
classification. Thus, every classification is in some degree likely
to produce some inequality but mere production of inequality is
not enough. Article 14 would be treated as violated only when
equal protection is denied even when the two persons belong to
same class/category. Therefore, the person challenging the act
of the State as violative of Article 14 has to show that there is
no reasonable basis for the differentiation between the two
classes created by the State. Article 14 prohibits class
legislation and not reasonable classification.
14. What follows from the above is that in order to pass the test of
permissible classification two conditions must be fulfilled,
namely, (i) that the classification must be founded on an
intelligible differential which distinguishes persons or things
that are grouped together from others left out of the group; and
(ii) that, that differential must have a rational relation to the
object sought to be achieved by the statute in question. If the
Government fails to support its action of classification on the
touchstone of the principle whether the classification is
reasonable having an intelligible differentia and a rational
basis germane to the purpose, the classification has to be held
as arbitrary and discriminatory. In Sube Singh v. State of
Haryana [(2001) 7 SCC 545] , this aspect is highlighted by the
Court in the following manner: (SCC p. 548, para 10)
“10. In the counter and the note of submission filed on behalf of
the appellants it is averred, inter alia, that the Land
Acquisition Collector on considering the objections filed
by the appellants had recommended to the State
Government for exclusion of the properties of Appellants 1
and 3 to 6 and the State Government had not accepted
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ARORA
Signing Date:05.06.2021
16:36:35
such recommendations only on the ground that the
constructions made by the appellants were of „B‟ or „C‟
class and could not be easily amalgamated into the
developed colony which was proposed to be built. There is
no averment in the pleadings of the respondents stating the
basis of classification of structures as „A‟, „B‟ and „C‟
class, nor is it stated how the amalgamation of all „A‟
class structures was feasible and possible while those of
„B‟ and „C‟ class structures was not possible. It is not the
case of the State Government and also not argued before
us that there is no policy decision of the Government for
excluding the lands having structures thereon from
acquisition under the Act. Indeed, as noted earlier, in
these cases the State Government has accepted the request
of some landowners for exclusion of their properties on
this very ground. It remains to be seen whether the
purported classification of existing structures into „A‟, „B‟
and „C‟ class is a reasonable classification having an
intelligible differentia and a rational basis germane to the
purpose. If the State Government fails to support its action
on the touchstone of the above principle, then this decision
has to be held as arbitrary and discriminatory. It is
relevant to note here that the acquisition of the lands is for
the purpose of planned development of the area which
includes both residential and commercial purposes. That
being the purpose of acquisition, it is difficult to accept the
case of the State Government that certain types of
structures which according to its own classification are of
„A‟ class can be allowed to remain while other structures
situated in close vicinity and being used for same purposes
(residential or commercial) should be demolished. At the
cost of repetition, it may be stated here that no material
was placed before us to show the basis of classification of
the existing structures on the lands proposed to be
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 18 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
acquired. This assumes importance in view of the specific
contention raised on behalf of the appellants that they
have pucca structures with RC roofing, mosaic flooring,
etc. No attempt was also made from the side of the State
Government to place any architectural plan of different
types of structures proposed to be constructed on the land
notified for acquisition in support of its contention that the
structures which exist on the lands of the appellants could
not be amalgamated into the plan.”
18. We are conscious of the principle that the difference which will
warrant a reasonable classification need not be great.
However, it has to be shown that the difference is real and
substantial and there must be some just and reasonable relation
to the object of legislation or notification. Classification having
regard to microscopic differences is not good. To borrow the
phrase from the judgment in Roop Chand
Adlakha v. DDA [1989 Supp (1) SCC 116 : 1989 SCC (L&S)
235 : (1989) 9 ATC 639] : “To overdo classification is to undo
equality.”
7) Then again in Omega Elevators v. National Health Mission, WP-
12880-2018, the Madhya Pradesh High Court held that „ the
condition that certain specific manufactures or the distributors of
such manufacture alone would participate in the tender process is
arbitrary and does not provide a level playing field to all the
manufactures. Consequently such condition is set aside .‟ Learned
counsels for the Respondents have not been able to distinguish
these decisions on the relevant and germane facts. In our view,
they are squarely attracted to the facts of the two cases being dealt
with by us, and we find ourselves in respectful agreement with the
principles on which they are founded.
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W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 19 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
8) The judgment relied by the learned counsel for the respondents of
this Court in Delite Kom Limited vs. Govt. of NCT of Delhi also
does not aid the respondents, but rather the petitioner.
9) This was a case where the tender was invited by a specific brand
of compactor. The Court found that the contract had not only been
performed, but the payment had also been partially released to the
vender by the time the petitioner was heard. Thus, the Petitioner
did not seek the substantive relief in the Petition. The Court,
however, decided to examine the procedure adopted by the High
Court to award the contract, and whether the same was correct.
10) To justify its action of limiting the tender to only one brand of
compactors, the respondents relied upon the CPWD circular dated
03.03.2006 bearing No.17, which reads as follows:
“GOVERNMENT OF INDIA
QUALITY ASSURANCE CORE WING
CPWD, NIRMAN BHAWAN, NEW DELHI.
No: CSQ/QACW/G-2/83 Dt: 03.03.2006
Circular No. 17
Sub: Use of approved/branded materials in the works.
Instructions have been issued vide Directorate’s OM No.
DGW/CON/184 dt: 28.8.03 to indicate makes/brands of the items
to be used on work, in the agreement of the work. While preparing
such a list, following guidelines may be followed:
(i) For some of the items there is a large variation in the market rates
of various brands and there is a tendency to use the cheapest
brand. While incorporating such a list in the NIT, Technical
Sanctioning Authority must ensure that the market rate variation
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between various brands of a particular item (when product of
various brands are functionally equivalent) should be minimum and
not more than ±10%.
If client demands a particular brand of an item to be provided in a
work due to some special reason, it should be obtained in writing
from them with reasons for going for a particular brand and that
brand may be specified before hand in the NIT by the Technical
Sanctioning Authority after obtaining proprietary certificate from
competent authority.
(ii) The final approval of the brand to be used shall be the discretion of
Engineer-in-Charge. The brand used shall be one of the brands
specified in the list of approved materials attached in the
agreement.
(iii) In case of non availability of material of the brands specified in the
list of approved materials, an equivalent brand may be used after
getting written approval of T/S authority giving details to indicate
that the brand proposed to be used is equivalent to the brands
mentioned in the agreement.
(iv) Inspite of directions issued vide SE/SS/EE(S&S)I/880 dt:
11/15.1.1996 and No. CSQ/SE/S&S/EEI/04-61 dt: 7.1.98 and
further vide No. SE(S&S)/EE/ISI product/90 dt: 16.7.03, the use of
BIS marked products is not being stressed upon by the field staff.
It must be ensured that all materials to be used in CPWD works
bear BIS certification mark. In cases where BIS certification system
is available for a particular material/product but not even a single
producer has so far approached BIS for certification, the material
can be used subject to the condition that it should confirm to CPWD
specifications and relevant BIS codes. In such case written approval
of the Technical Sanctioning Authority may be obtained before use
of such material in the work.
This issues with the approval of DG(W).
Sd/-
SUPERINTENDING ENGINEER (QA)”
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
11) The circular was partially modified vide circular dated
15.05.2007, which reads as follows:
“GOVERNMENT OF INDIA
TECHNO LEGAL & QUALITY ASSURANCE CORE WING
CPWD, NIRMAN BHAWAN, NEW DELHI.
No: CSQ/QACW/G-2/581-E Dt: 15/05/2007
Sub: Use of approved/branded materials in the works-
Modification to circular No. 17 dt: 3.3.06.
In partial modification to Circular No. 17 issued vide No.
CSQ/QACW/G-2/83 dt: 3.3.2006, the para (i) of the circular is
being elaborated further as under –
(i) For some of the items there is a large variation in the market rates
of various brands and there is a tendency to use the cheapest
brand. While incorporating such a list in the NIT, Technical
Sanctioning Authority must ensure that the market rate variation
between various brands of a particular item (when product of
various brands are functionally equivalent) should be minimum and
not more than ±10%.
If client demands a particular brand of an item to be provided in a
work due to some special reason, it should be obtained in writing
from them with reasons for going for a particular brand and that
brand may be specified before hand in the NIT by the Technical
Sanctioning Authority. However if during execution the client want
any item of a particular brand, he can be asked to choose from any
of the brands equivalent to the brands specified in the agreement
and if the client wants to go for any other item which is not
equivalent to the specified brands he will make a request for that in
writing specifying reasons.
If client insists for an item which is being produced by a sole
manufacturer, the technical sanctioning authority shall specify the
same in NIT after obtaining proprietary certificate from competent
authority (i.e. CE; the Head of Deptt.).
This issues with the approval of DG(W).
Sd/-
SUPERINTENDING ENGINEER (TLQA)”
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
12) Reliance placed by the respondents on these circulars was,
however, negated in the facts of that case, by observing “ In so far
as the High Court itself is concerned, the matter of supply of
furniture was taken up by a Committee of Judges of the Court
from time to time but there is nothing to suggest what was the
special reason that weighed with the High Court in choosing
furniture manufactured only by Godrej & Boyce, other than the
advice given by the PWD. ”
13) We may quote para 12 to 14 of the judgment, which reads as
under:
“12. In so far as the present case is concerned, it does appear
that the High Court decided to opt for good quality but in
doing so it ought to have been advised that there are other
equally good manufacturers of furniture including modular
furniture and compactors and they should also be considered.
It would then be left to the wisdom of the High Court to decide
which brand to accept. We are of the view that in its failure to
correctly advise the High Court, Respondents No.1 to 3
committed a lapse to the detriment of the Petitioner.
13. However, since the Petitioner has given up its grievance
with regard to the supplies already made, we are not disturbing
the tender process that was initiated but would direct
Respondents No. 1 to 3 to be far more careful in future in
advising not only the Delhi High Court but other departments
of the Government as well.
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
14. In Nagar Nigam, Meerut v. Al Faheem Meat Exports Pvt.
Ltd. & Ors., JT 2007 (1) SC 484 the Supreme Court has
summarized the law in the following words: -
“The law is, thus, clear that ordinarily all contracts by
the Government or by an instrumentality of the State
should be granted only by public auction or by inviting
tenders, after advertising the same in well known
newspapers having wide circulation, so that all eligible
persons will have opportunity to bid in the bid, and there
is total transparency. In our opinion this is an essential
requirement in a democracy, where the people are
supreme, and all official acts must be actuated by the
public interest, and should inspire public confidence.””
14) The reliance placed by the respondent on the judgment in Delite
Kom Limited (Supra) is misconceived. The High Court in para 15
of the judgment had held that „ there must be a special reason, as
mentioned in the Circulars, for selecting a particular brand and
once that pre-condition is fulfilled, Respondents No.1 to 3 can fix
the terms and conditions of the contract .‟ The Court further
observed that while it recognized that Godrej & Boyce is a reputed
brand, however, it does not mean that other companies, which
may be equally good should be excluded from consideration. This
would stifle private enterprise and competition which would be to
no one‟s advantage. It was found that the Consumer i.e. the Delhi
High Court had not chosen the specific brand for any special
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Digitally Signed By:AMIT
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Signing Date:05.06.2021
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reasons or features after being made aware of the availability of
other similar brands, and after evaluation of the features of all the
brands available.
15) In the facts of the present cases as well, the respondents have not
given any special/specific reasons for limiting the tender to five
manufacturers of lifts. There is nothing in the counter affidavits,
tender conditions or anything urged before us, to show any
particular specifications/ features which the five manufacturers
named in the tender could only comply with. The respondents
have failed to show as to why the petitioner was not equally good
to participate in the tender, or as to why it should be excluded
from consideration. Pertinently, the respondents have laid down
the technical specifications in the tenders in question, and any
prospective bidder, who satisfies those specifications should be
able to participate in the tendering process. The acts of the
respondent in limiting the tender to five named manufacturers is
clearly indicative of creating a syndicate and excluding the
petitioner in the matter of public procurement without any reason
or justification. The same cannot be permitted. It is clearly
arbitrary and discriminatory without any disclosed rationale.
16) In the present cases, the acts of the respondents smacks of
arbitrariness and unreasonableness. The factum of floating the
tender and restricting it to four / five manufacturers does not meet
the twin test of permissible classification as enunciated by the
Supreme Court in NS Rathnam Case (Supra).
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
17) The factum of the lift installed by the petitioner in Ghaziabad
being a reason for its exclusion also does not meet the test of
Article 14 of the Constitution of India. The respondents have
neither given a Show Cause Notice to the Petitioner, nor passed
any order blacklisting the Petitioner. In effect, without taking steps
to blacklist the Petitioner – which action, if taken, would have
been opened to judicial scrutiny, the Respondents have sought to
treat the petitioner as blacklisted. This is not permissible.
18) The argument in W.P.(C) 4043/2021 that the petitioner having
participated in the tender, now cannot be permitted to challenge
the same, is also misconceived. The petitioner did not accept the
condition 1(g)(i) and has averred that it participated on the
assurance that its bid would be entertained despite it offering a
brand different from one of the specified brands. Immediately on
receiving the communication dated 19.03.2021, the Petitioner has
filed the writ petition.
19) In this view of the matter, the action of the respondent in floating
the tenders, limited to their particular brands, and ousting the
petitioner is hit by Article 14 of the Constitution of India.
20) It will also be necessary to refer and rely on the directions/
communications issued by the Government of India from time to
time.
21) The Ministry of Commerce and Industry, Govt. of India on
29.05.2019 came up with an order regarding Public Procurement
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Signing Date:05.06.2021
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(Preference to Make in India), Order 2017 bearing No. P-
45021/2/2017-PP (BE-II).
22) Clause 10 of the order reads as under:
Specifications in Tenders and other procurement solicitations:
a. Every procuring entity shall ensure that the eligibility
conditions in respect of previous experience fixed in any
tender or solicitation do not require proof of supply in
other countries or proof of exports.
b. Procuring entities shall endeavour to see that eligibility
conditions, including on matters like turnover,
production capability and financial strength do not result
in unreasonable exclusion of local suppliers who would
otherwise be eligible, beyond what is essential for
ensuring quality or creditworthiness of the supplier.
c. ….
d. ….
23) The CPWD on 10.01.2019 modified its earlier Office
Memorandum dated 09.11.2018 wherein five lift manufacturers
namely, OTIS, Kone, Mitsubishi, Schindler and Johnson were
discontinued in the enlistment of lift manufacturers. The OM
order No. DG/SE TAS(E)/Enlist. Rules-Lifts-A/03 reads as under:
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 27 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
CENTRAL PUBLIC WORKS DEPARTMENT
ISSUED BY THE AUTHORITY OF DIRECTOR GENERAL, CPWD,
DG/SE TAS(E)/Enlist Rules-Lifts-A/ 03
NIRMAN BHAWAN, NEW DELHI DATED: 10/01/2019
OFFICE MEMORANDUM
SUB: Discontinuation of the enlistment of contractors in Category-Lifts, Class-A
In continuation of OM No. DG/Misc.(E&M)/09 dated 09-11-2018, vide which
list of 5 nos. Lift Manufacturers i.e. M/s OTIS, M/s Kone, M/s Mitsubishi, M/s
Schindler and M/s Johnson Lifts Pvt. Ltd. Chennai was kept on hold, it has
now been decided to discontinue the enlistment of lift manufacturers.
Accordingly, Enlistment Rules-2018 for Category-Lifts, Class-A issued vide OM
no. DG/SE TAS (E)/ Enlist Rules-Lifts-A/01 dated 10-04-2018 stands modified
with immediate effect. This also applies to the effect of removal of names of
M/s OTIS, M/s Kone, M/s Mitsubishi, M/s Schindler and M/s Johnson Lifts Pvt.
Ltd. Chennai from the Works Manual as laid down in Section 16.7(i) of CPWD
Works Manual 2014.
NIT approving authorities may therefore take decision to invite tenders of
SITC of Lifts as per prevailing Rules, Orders and Guidelines of the
Government issued by the Government from time to time and as per the
requirements of the client.
This issues with the approval of DG, CPWD.
(D. K. Tulani)
Superintending Engineer (E) TAS
Issued from file No. E-314102/30(1)/Lifts/CE(E)/CSQ/2018
Copy to : (Through website only)
1. All Spl. DGs, ADGs CPWD, E-in-C PWD, Delhi Govt.
2. All CEs, CPWD, PWD Delhi Govt. – They are requested to endorse a copy of this to all
SEs & EEs concerned.
Superintending Engineer (E) TAS
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 28 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
24) The office of the Prime Minister of India also issued a letter on
03.01.2019 stating as under:
Nripendra Misra
Principal Secretary to Prime Minister
D.O. No.330/31/C/64//2018-ES-1
rd
3 January, 2019
Dear Secretary,
Complaints are being received, alleging that Government entities
are indicating foreign make/brands and/or restrictive conditions in
their tenders, thereby excluding local manufacturers from bidding
process.
2. It may be noted that such stipulation of foreign make/brands
and/or restrictive conditions (line mandatory requirement of
certification by foreign bodies) in the tenders is not only violative of
Public Procurement (Preference to Make in India) Order, 2017 (PPP-
MII Order 2017) issued by DIPP, but also in violation of the General
Financial Rules. In this regard, it is necessary to follow the following
general guidelines:
a. Indicating foreign make/brands in the tender, and thereby
excluding local manufacturers and service providers from
participation, is in violation Public Procurement (Preference to
Make in India) Order 2017. Also, as per Rule 144(i)(b) of GFR
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Digitally Signed By:AMIT
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Signing Date:05.06.2021
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2017, procuring agency shall not indicate a requirement for a
particular trade mark, trade name or a brand.
b. As per Rule 144(iii) of the GFR 2017, the technical specifications
shall, to the extent practicable, be based on the national
technical regulations or recognized national standards.
c. Ministries/Departments should also ensure that their
procurement entities do not incorporate any such restrictive and
discriminatory eligibility criteria regarding turnover,
specifications/testing/other standards in tender documents that
exclude local manufacturers/service providers.
3. Please ensure compliance of the above guidelines strictly at the
level of Ministry/Department as also by all attached/subordinate
officers and PSUs/Autonomous bodies under the administrative control
of your Ministry/Department. Any violation in regard shall be viewed
seriously.
With regards,
Yours sincerely
Sd/-
(Nripendra Misra)
Shri Arun K Panda,
Secretary,
M/o Micro, Small & Medium Enterprise,
New Delhi
May also be circulated to all the division…illegible
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35
25) A bare perusal of the entire set of office orders/ letters, clearly
demonstrate the shift and the intent of the Govt. of India to:
a. Desist from specifying manufacturers in matters of public
procurement through tender.
b. To ensure that there is no unreasonable exclusion of local
suppliers who would otherwise be eligible, beyond what is
essential for ensuring quality or credit worthiness of the
suppliers.
26) The actions of the respondents in specifying five manufacturers to
participate in the tender and excluding the other suppliers/
prospective bidders, such as the petitioner are clearly violative of
the order dated 29.05.2019 of the Ministry of Commerce and
Industry, Govt. of India. In none of the counter affidavits, it has
either been alleged or shown to us that no other supplier/
prospective bidder, such as the petitioner, meets the eligibility
criteria on matters of turnover; production capability; financial
strength, or; technical specification and capability.
27) In this view of the matter, the action of the respondent in limiting
the tender to five manufacturers and excluding the petitioner cries
foul of the order dated 29.05.2019 passed by M/o Commerce and
Industry, Govt. of India and order No. DG/SE TAS(E)/Enlist.
Rules-Lifts-A/03 dated 10.01.2019 passed by CPWD.
28) The letter of the Principal Secretary to the Prime Minister dated
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Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
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03.01.2019, further clears the misconceptions, if any, when it
clarifies that indicating foreign make/ brands in the tender, and
thereby excluding local manufactures and service providers, is in
violation of Public Procurement (Preference to Make in India),
Order 2017 and Rule 144(i)(b) of General Financial Rules 2017.
In fact, said letter states that indicating foreign makes or brands in
a tender is a restrictive and discriminatory eligibility criteria aimed
at excluding local manufacturers/ service providers which should
be avoided.
29) For the reasons as stated above, we allow these two writ petitions
and quash Tender reference no:
i. nit66/eee-i/aiims/2020-21 for UPGRADATION OF LIFT NO.
11, 15, 16 & 17 IN MAIN HOSPITAL AT AIIMS dated
08.02.2021.
-AND-
ii. 67/2020-21/DED-102/DELHI/3 pertaining to supply,
installation, testing and commissioning of 10 Passenger Lift at
Nehru Museum, Teen Murti House, New Delhi.
The parties are left to bear their respective costs.
JASMEET SINGH, J
VIPIN SANGHI, J
JUNE 04, 2021 / „ms‟
Signature Not Verified
W.P.(C) 2060/2021 & W.P.(C) 4043/2021 Page 32 of 32
Digitally Signed By:AMIT
ARORA
Signing Date:05.06.2021
16:36:35