Shagun Mahila Udyogik Sahakari Sanstha Maryadit vs State of Maharashtra & Ors

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7104 OF 2011

[Arising out of SLP (Civil) No. 29363 of 2010]

Shagun Mahila Udyogik

Sahakari Sanstha Maryadit .. Appellant

VERSUS

State of Maharashtra & Ors. ..Respondents

J U D G M E N T

SURINDER SINGH NIJJAR, J.

1. Leave granted.

2. The instant appeal is directed against the final

judgment and order of the High Court of judicature

at Bombay, Nagpur Bench at Nagpur

dated 9th September, 2010, in Writ Petition No. 4210

of 2010 vide which the Division Bench of the High

Court dismissed the petition of the appellant

thereby affirming the decision of awarding the

contract to the respondent Nos. 4 to 6.

2 3. We may notice here the essential facts, which would

have a bearing on the determination of the issues

raised in this appeal.

4. The appellant is a society registered under the

Maharashtra Co-operative Societies Act, 1960. The

appellant has several years of experience in

supplying hot cooked meal (ready to eat food) for

children and other beneficiaries of Anganwadi

Centres (in short `AWCS') in the State of

Maharashtra.

5. In the year 1975, the Central Government floated a

scheme termed as "Integrated Child Development

Scheme" (in short `ICDS') in order to improve the

health and nutrition status of the children (between

the age group of 0-6 years); pregnant and lactating

women, by providing them with supplementary

food. Under the said Scheme, certain kind of

3

specified food was proposed to be supplied through

AWCS. Accordingly, around fourteen lakhs

Anganwadi Centres were proposed to be set up.

6. It appears that the lack of progress made in the

implementation of the aforesaid Scheme prompted

the Peoples Union for Civil Liberties (in short `PUCL)

to move this Court by way of a Writ Petition (Civil)

No. 196 of 2001 under Article 32 of the Constitution

of India, seeking necessary directions for

implementation of the Scheme. By a series of orders

passed in the aforesaid writ proceedings, this Court

issued the necessary directions. On 8th May, 2002,

this Court gave detailed directions with regard to

implementation of various Schemes, which have

been floated for giving relief to the poor,

impoverished and the hungry. At the same time,

this Court appointed Dr. N.C. Saxena and Shri S.R.

Sankaran as Commissioners of the Court, inter-alia,

for the purpose of looking into the grievances that

4

may persist after the grievance resolution

procedure, laid down in the said order was

exhausted. Scope of the work of the Commissioners

also included monitoring of the implementation of

the Court's orders as well as monitoring and

reporting to this Court of the implementation by the

respondents of various welfare measures and

schemes.

7. Again on 29th October, 2002, this Court directed the

respective State Governments to appoint

Government Officials as Assistants to the

Commissioners. The Commissioners submitted a

very detailed report to this Court, salient features of

which have been noticed by the order dated 7th

April, 2004. This Court appreciated the work done

by the Commissioners. It was also noticed that

although fourteen lakhs AWCS were directed to be

established, only six lakhs centres had been

sanctioned. It was also noticed that many of the

5

sanctioned centres were not operational. In some

States, the problem seemed to be more acute than

the others. Upon consideration of the entire matter,

directions were issued for the sanction of remaining

AWCS and for increase of norm for the food value to

be supplied to these beneficiaries from rupee one to

rupee two per day. This Court also noticed that on

an average, forty two paisa as against the norm of

rupee one was being allocated per beneficiary per

day by the State of Jharkhand. The position in

Bihar and Uttar Pradesh was also no better.

Therefore, necessary directions were issued to the

State Governments to make operational all

sanctioned AWCS by 30th November, 2004.

8. Taking into consideration all the facts and

circumstances placed on record by the two Court

Commissioners and through various affidavits filed

by the respondents, this Court issued the following

twelve directions:-

6 (i) The aspect of sanctioning 14 lakhs AWCS and

increase of norm of rupee one to rupees two

per child per day would be considered by this

Court after two weeks.

(ii) The efforts shall be made that all SC/ST

hamlets/habitations in the country have

AWCS as early as possible.

(iii) The contractors shall not be used for supply of

nutrition in Anganwadis and preferably ICDS

funds shall be spent by making use of village

communities, self-help groups and Mahila

Mandals for buying of grains and preparation

of meals.

(iv) All State Governments/Union Territories shall

put on their website full data for the ICDS

schemes including where AWCS are

operational, the number of beneficiaries

category-wise, the funds allocated and used

and other related matters.

7 (v) All State Governments/Union Territories shall

use the Pradhanmantri Gramodaya Yojna fund

(PMGY) in addition to the state allocation and

not as a substitute for State funding.

(vi) As far as possible, the children under PMGY

shall be provided with good food at the Centre

itself.

(vii) All the State Governments/Union Territories

shall allocate funds for ICDS on the basis of

norms of one rupee per child per day,

100 beneficiaries per AWC and 300 days

feeding in a year, i.e., on the same basis on

which the Centre make the allocation.

(viii) BPL shall not be used as an eligibility criteria

for ICDS.

(ix) All sanctioned projects shall be operationalised

and provided food as per these norms and

wherever utensils have not been provided, the

same shall be provided (Instance of Jharkhand

State has been noticed in the Report where

8

utensils have not been provided). The

vacancies for the operational ICDS shall be

filled forthwith. (Instance of Uttar Pradesh

where vacancies have not been filled up is

quite alarming though in the affidavit it has

been stated that a drive has been initiated to

fill up the vacancies).

(x) All the State Governments/Union Territories

shall utilize the entire State and Central

allocation under ICDS/PMGY and under no

circumstances, the same shall be diverted and

preferably also not returned to the Centre and,

if returned, a detailed explanation for

non-utilisation shall be filed in this Court.

(xi) All State/Union Territories shall make earnest

effort to cover the slums under ICDS.

(xii) The Central Government and the States/Union

Territories shall ensure that all amounts

allocated are sanctioned in time so that there

9

is no disruption whatsoever in the feeding of

children.

9. Pursuant to the aforesaid directions, respondent

Nos. 1 and 2 passed a resolution on 28th October,

2005. The resolution provided for a detailed

procedure of making available "Ready to Eat" (`RTE')

food targeted to beneficiaries through Anganwadis.

The food was to be supplied by Mahila Mandal,

Mahila Sanstha, Women Self Helping Saving

Groups, Sale Assistant Saving Group for

Anganwadis, registered under the provisions of

either (i) Public Trust Act, 1950, (ii) Societies

Registration Act, 1860, (iii) Maharashtra

Cooperative Societies Act, and (iv) Company

registered under the Companies Act, 1956. The

resolution further required that every member of the

Group should be a woman.

10 10. In the meantime, this Court had passed a number

of other orders providing for Supplementary

Nutrition to the beneficiaries, particular attention

was directed to be paid to the following:-

(i) Children falling within the age group

of 6 months to 3 years,

(ii) Pregnant and lactating women and

(iii) Severely underweight children within the

age group of 6 months to 3 years.

11. The Central Government found that the original

ICDS scheme was insufficient to cater to the

nutritional demands of the categories of children

and women noticed above. The Central

Government, therefore, conducted further surveys

through experts which recommended that the gap

in the calories norms between the Recommended

Dietary Allowance (in short `RDA') and the Actual

Dietary Intake (in short `ADI') be filled. Therefore,

the Central Government, in consultation with its

11

experts, published a revised nutritional and feeding

norm for supplementary nutrition in ICDS Scheme

on 24th February, 2009. The revised norms required

that the supplementary food may be fortified with

essential micro nutrients with 50% of RDA level per

beneficiary per day.

12. These revised norms were filed before this Court

alongwith an affidavit dated 2nd March, 2009 by the

Central Government highlighting the various factors

including the recommendations received from the

Task Force constituted by the Central Government.

Upon consideration of the affidavit of the Central

Government, this Court passed a further order on

22nd April, 2009. In Paragraph 5 and 6, it was

observed as follows:-

"5. The Revised Nutritional and Feeding

Norms for SNP in ICDS Scheme circulated

vide letter no.5-9/2005/ND/Tech.(Vol. I)

dated 24.02.2009 states that children in the

age group of 6 months to 3 years must be

entitled to food supplement of 500 calorie of

energy and 12-15 gm. of protein per child

per day in the form of take home ration

12

(THR). For the age group of 3-6 years, food

supplement of 500 calories of energy and

12-15 gm of protein per child must be made

available at the Anganwadi Centers in the

form of a hot cooked meal and a morning

snack for severely underweight children in

the age group of 6 months to 6 years, an

additional 300 calories of energy and 8-10

gm of protein would be given as THR. For

pregnant and lactating mothers, a food

supplement of 600 calories of energy and

18-20 gm of protein per beneficiary per day

would be provided as THR.

6. The letter dated 24.02.2009 No.5-

9/2005/NO/Tech (Vol. II) has been annexed

to the affidavit dated 2nd March, 2009 filed

by the Union of India. It is directed that

norms indicated in the said letter addressed

to all the State Government sand Union

Territories have to be implemented forthwith

and the respective States/UTS would make

requisite financial allocation and undertake

necessary arrangements to comply with the

stipulation contained in the said letter."

13. This Court noticed the statement made by the

learned Additional Solicitor General that

Supplementary Nutrition Food (in short `SNF') in the

form of Take Home Ration (in short `THR') shall be

provided to all children in the age group of 6

months to 3 years and additional 300 calories to

severely underweight children in the age group of 3

13

to 6 years, pregnant women and lactating mothers

as per norms laid down in the letter dated 24th

February, 2009. Accordingly, all Union Territories

and State Governments were directed to ensure

compliance with the aforementioned stipulations

without fail. A further direction was issued to all

the States and Union Territories to provide

supplementary nutrition in the form of a morning

snack and a hot cooked meal to the children in the

age group of 3 to 6 years, in accordance with the

guidelines contained in the letter dated 24th

February, 2009 preferably by 31st December, 2009.

Provision was also made for continuance of the

Nutritional Programme for Adolescent Girls and

Kishori Shakti Yojana till such time as a

comprehensive universal scheme for the

empowerment of adolescent girls called the Rajiv

Gandhi Scheme for the Empowerment of Adolescent

Girls is implemented.

14 14. The Central Government, through the Ministry of

Women and Child Development and Food and

Nutrition Board Office vide its letter dated 28th July,

2009, circulated the Recipe to the State Government

(respondent No. 1) as per new norms of ICDS for

preparation of the food. It was provided that the

feeding norms ought to have two components in it,

to be provided as supplementary nutrition to the

beneficiaries at Anganwadis namely:- Hot Cooked

Meal (HCM) and Take Home Ration (THR).

Directions were issued that HCM and THR should

be given in the form of "energy dense food / micro

nutrient fortified food" and should conform to the

standards laid by the Prevention of Food

Adulteration Act, Integrated Food Law, Infant and

Young Child Practices. The micro nutrient fortified

food was defined to be the food in which essential

mineral and vitamins are added separately to

ensure that minimum dietary requirements are met.

It was emphasised that to attain the required

15

protein content in the food proposed to be supplied,

the only source was Soyabean. The food was to be

processed by using Extrusion Technology to draw

maximum results by use of Soyabean. The

guidelines in the aforesaid letter further emphasised

that since the revised guidelines laid major stress

on micro nutrient fortification of the THR, it

required "expert technical supervision" and that it

can be achieved by using accurate machines with

precision in measuring the quantity in milligrams.

15. It was in response to the directions issued by this

Court from time to time and to implement the

revised norms set by the Central Government that

respondent No. 1, Maharashtra Government passed

a resolution on 24th August, 2009. Under this

resolution, the Government not only prescribed the

procedure for implementing the revised norms but

also revised the rates in all the categories of

beneficiaries.

16 16. Based on the above, an Expression of Interest

(in short `EOI') was taken out by respondent No. 2,

the Commissioner, i.e., Integrated Child

Development Services Scheme, Maharashtra, on 7th

December, 2009 for supply of fortified blended food

manufactured through process of extrusion. In

response to the aforesaid EOI, the State

Government received 351 applications for 34

districts across the State of Maharashtra.

17. The aforesaid EOI was challenged by one Smt.

Nanda Chandrabhan Thakur in Writ Petition No.

2588 of 2009 before a Division Bench of the

Bombay High Court. Primary challenge of that

petitioner was to condition No.6 which required the

applicant to possess a turn over of Rs. 1 crore for

the last three consecutive financial years.

Condition No. 6 of the EOI provided as under:-

"6. The eligible Mahila Mandal, Mahila

Sanstha, self helping saving group, should

17

attach a certificate about producing of the Food

or equivalent like Fortified Blended Premix and

supplying the same upto the Anganwadi in

ICDS for the last 3 consecutive financial years

having a turn over of Rs. 1.00 crores. The said

certificate should be certified by the Chartered

Accountant. (Year 2006-2007, 2007-2008,

2008-2009)."

18. Upon consideration of the matter, the Division

Bench observed that plain language of the condition

indicates that only Mahila Mandal, Mahila Sanstha

and Self helping Saving Group can participate in the

tender process, provided they qualify other

requirements in Clause 6. It was further observed

that one of the requirements of this clause was that

the tenderer should attach a certificate about

producing the specified food for three consecutive

financial years (2006-2007, 2007-2008 and 2008-

2009) having a turnover of atleast one crore. The

said certificate should be certified by a Chartered

Accountant.

18 19. The writ petition was dismissed with the

observations that since the petitioners were not

espousing the case of Mahila Mandal or Mahila

Sanstha or Self helping Saving Group, they were not

eligible as per the tender document at all. Secondly,

even if the petitioners were held to be eligible, they

did not have a turn over of Rs. 1 crore as required

under Clause 6. The petitioners had also sought to

argue that the condition of Rs. 1 crore would

deprive small time traders and business persons

from participating in the tender process. This

submission was also negated by the Division Bench

with the observation that the criteria fixed by the

respondent is a policy matter and is keeping in

mind all other factors to further the implementation

of child development service scheme. The clause

was found to be not arbitrary in any manner.

20. It appears that the EOI had also given rise to certain

agitations by some of the Mahila Bachat Gats.

19 During the pendency of these complaints, the

Government decided not to proceed further and

stayed the process under the EOI on 16th January,

2010. A Committee was constituted on 19th

January, 2010 to go into the complaints. Upon

examination of the entire material, the Committee

concluded that the Extrusion Technology was

necessary to produce the food as required under the

directions of the Central Government. On 5th

February, 2010, the Committee, therefore,

recommended that the stay granted by the State

Government may be vacated. The decision was

communicated by respondent No. 1 to respondent

No. 2 through letter dated 22nd February, 2010. The

tender submitted by the petitioner was rejected.

21. This led to the appellant herein filing a Writ Petition

No. 1311 of 2010, seeking a direction that the

appellant be also considered in respect of supply of

extruded fortified blended food / energy food under

20

ICDS Scheme. However, the aforesaid writ petition

was withdrawn on 17th February, 2010 with

liberty to approach the Government.

22. It is the claim of the appellant that the writ petition

was withdrawn as respondent No. 1 had itself

stayed the decision of respondent No. 2 to award

the contract and was reviewing the condition Nos. 6,

7 and 8. Not knowing that the stay order dated 16th

July, 2010 had been recommended to be vacated on

5th February, 2010, the appellant made a

representation to respondent Nos. 1 and 2 for

consideration to supply the food under the ICDS

Scheme. As noticed earlier, in view of the vacation

of the stay on 22nd February, 2010, condition Nos.

6, 7 and 8 remained intact. We may further notice

here that in the order dated 22nd February, 2010,

respondent No. 1 had decided as under:-

21 (i) That 5% of the tender work be reserved for

Mahila Mandal / Mahila Bachat Gat etc., who

do not have the Extrusion Technology.

(ii) For this 5% work so reserved, the Extrusion

Technology is not required.

23. However, on 23rd February, 2010, the decision taken

in the letter dated 22nd February, 2010, was

withdrawn. It was, however, further provided that

"in future, if some Mahila Bachat Gat / Mahila

Sanstha / Mahila Mandal made production

machinery, set up unit and shown their ability of

making products, then the Commissioner, Ekatmik

Bal Vikas Seva Yojana, Navi Mumbai will give them

an opportunity and will purchase THR production

made by them."

24. Thereafter, the appellant submitted three

representations on 26th February, 2010, 2nd March,

2010 and 4th March, 2010 requesting respondent

22

Nos. 1 and 2 to consider them for supply of the food

under ICDS Scheme. It is the case of the appellant

that without considering these representations, the

respondent Nos. 1 and 2 signed an agreement,

awarding the contract to respondent Nos. 4 to 6 for

a period of one year, with a clause for extension of

two years. Ultimately, in spite of further

representations of the appellant, the work order was

awarded to respondent Nos. 4 to 6 to support the

supply of food material forthwith in accordance with

the agreement signed on 28th April, 2010.

25. Aggrieved by the action of respondent Nos. 1 and 2

in awarding the contract to respondent Nos. 4 to 6,

the appellant filed a writ Petition No. 4210 of 2010

on 25th August, 2010. The High Court initially

passed an order on 30th August, 2010 granting

interim relief. Respondent Nos. 1 and 2 filed an

application for vacation of stay, the appellant in the

reply to the aforesaid application stated that the

23

respondent Nos. 4 to 6 have not fulfilled one of the

conditions in the original application form namely

that of applicants should submit the copies of the

documents signed by the notary, which included

VAT Clearance Certificate as on 31st March, 2009.

It was also stated that the respondent Nos. 4 to 6

had wrongly stated that no tax was due and

payable. Upon consideration of the entire matter,

the High Court dismissed the writ petition filed by

the appellant. Hence the present Special Leave

Petition.

26. We have heard the learned counsel for the parties at

length. Although, very elaborate submissions have

been made by the learned counsel for the parties, it

would be appropriate to summarize the

submissions.

27. Mr. Mukul Rohtagi, learned senior counsel,

appearing for the appellant, submitted that the

24

condition Nos. 6, 7, 8 and 9 in the EOI are

arbitrary. He further submits that the Government

order permitted the grant of contract for a period of

one year. However, the agreement entered into with

respondent Nos. 4 to 6 provides that the agreement

will remain valid for one year and extendable for

next 24 months from the date of allotment of the

first dispatch advice by the Commissioner with the

same terms and conditions. Learned counsel

submitted that since the period of one year has

expired, it would be appropriate to invite fresh

tenders. Learned counsel invited our attention to

the Government Resolution dated 24th August,

2009, which clearly provided that as per existing

practice, the period of supplying supplementary

nutrition food, Mahila Mandal, Women

Institutions, Self Assistance Saving Group will be

for the period of one year only. Mr. Rohtagi

further invited our attention to the Minutes of the

meeting held on 5th February, 2010, in view of the

25

Government Circular dated 19th January, 2010

regarding selection of tenders. In Paragraph 7 of

the Minutes, it is mentioned that "the agreement for

the supply of THR will be for one year and the

orders for supply will be given for one year only."

On the basis of the above, it is submitted that

permitting the extension of the contract for three

years is contrary to the decisions taken by the

Competent Authority. Hence, the contract is liable

to be declared illegal. Learned senior counsel,

thereafter, submitted that the entire selection

process was suspect. Having stayed the selection

process, it was vacated only to show undue favour

to respondent Nos. 4 to 6. According to the learned

senior counsel, it would have been much more

transparent if the tender process was conducted

afresh. Mr. Rohtagi then submitted that even if the

appellant is not successful on the one year issue,

respondent Nos. 4 to 6 still could not be

selected as they are not qualified. Learned senior

26

counsel made a reference to Clause 17 of the EOI,

which reads as under:-

"All applicants should submit the copies of the

following documents signed by the Notary.

Certificate of District Industry Centre, VAT

Registration/CST Registration certificate.

Validity Certificate as per Food Adulteration

Prohibition Act, 1954.

PAN Card.

ISO 9001 : 2000 Certificate, H.A.C.C.P.

Certificate for preparing extruded fortified

blended/energy food.

Income tax returns

VAT clearance certificate (as on 31.3.2009)

Evidence/proof to the effect that production

centre having permanent structure which is

owned public acquired on agreement is in the

possession of the Institution."

27 28. Mr. Rohtagi submits that the VAT Clearance

Certificate given by respondent Nos. 4, 5 and 6

depict the details of tax dues from 1st April, 2006 to

31st March, 2009 as "Nil". The statement made is

that amount of tax dues is given as per return. The

aforesaid declaration, according to the learned

senior counsel is not correct. It is submitted that

the information given by the Tax Department in

response to an enquiry made by the appellant under

the Right to Information shows that respondent

Nos. 4, 5 and 6 owe lakhs of rupees. It is further

submitted by Mr. Rohtagi that not only the

statements made by respondent No. 4 are incorrect

but there is concealment of the fact that the

aforesaid respondents were black listed by the Tax

Department. Mr. Rohtagi submits that cumulative

effect of all the aforesaid facts would clearly show

that the respondent Nos. 4 to 6 have been shown

undue favour by respondent Nos. 1 and 2. Learned

senior counsel buttressed this submission on the

28

ground that conditions are clearly tailor-made for

respondent Nos. 4 to 6, to the exclusion of

everybody else.

29. In response to these submissions, Mr. C.U. Singh,

learned senior counsel, appearing for respondent

Nos. 1 and 2 submitted that there is no condition

limiting the contract to one year. In fact, it has

always been one year extendable by two years.

Learned senior counsel drew our attention to the

events leading to the passing of the order by this

Court on 22nd April, 2009. Mr. Singh has pointed

out that the appellant admittedly does not fulfill any

of the conditions, i.e., 6, 7, 8 and 9. The appellant

does not have the turn over of over Rs. 1 crore each

year for the last continuous three financial years.

This condition has already been upheld by the

Bombay High Court in Writ Petition No. 2588 of

2009. The appellant also does not fulfill condition

No. 9 as admittedly, it does not have a functioning

29

unit for preparation of fortified blended nourishing

food (premix) prepared by extruded system.

Learned senior counsel pointed out that initially in

Writ Petition No. 1311 of 2010, the appellant had

challenged condition Nos. 6, 8, 13 and 14 of the

EOI. This writ petition was withdrawn on 17th

February, 2010 with liberty to represent to the

Government. The present writ petition was filed

on 24th August, 2010 before the Nagpur bench. In

this writ petition, none of the tender conditions were

challenged. The appellant merely prayed for a

declaration that condition No. 6 be deemed to be

waived. Learned senior counsel submits that the

points urged by Mr. Rohtagi in this Court were

never argued before the High Court. Therefore,

according to the learned senior counsel, the

submissions of the appellant need to be shut out at

the threshold. It is further submitted that the

representations submitted by the appellant and

others were duly considered. The appellant was

30

duly heard. The contract was given initially for one

year, which was extendable for three years, on

satisfactory performance in the twelve months.

Therefore, the agreement clearly stipulated that the

work order shall be for one year, extendable by 24

months. According to the learned senior counsel,

there is no justification for saying that the contract

was to be limited only to one year. Learned senior

counsel further submitted that under any

circumstances, appellant by its own showing has no

locus standi to challenge the grant of contract to

respondent Nos. 4 to 6. Mr. Singh points out to the

submission made by the appellant in I.A. No. 1 of

2010 seeking permission for filing additional

documents. In Paragraph 1, the appellant submits

that it had submitted the application for supply of

ICDS food for all 34 districts of Maharashtra. It is

further submitted that all documents as required by

the Notice dated 7th December, 2010 were also

submitted. The appellant further states that it had

31

complied with all conditions mentioned in the

application, excepting conditions 6, 7 and 8 of the

application form. Mr. Singh submits that in the face

of this admission, the appellant does not deserve to

be heard at all. He has relied on two judgments of

this Court in the case of Glodyne Technoserve

Limited Vs. State of Madhya Pradesh & Ors.1

and Larsen and Toubro Limited & Anr. Vs. Union

of India & Ors.2 , in support of the submissions that

the tender conditions have to be strictly complied

with by all the candidates.

30. Mr. P.S. Patwalia, learned senior counsel, appearing

for respondent Nos. 4 to 6, submitted that it was on

the representations made by various associations

and the appellant that the tender process was

stayed. Upon consideration of the entire material,

the two letters dated 22nd February, 2010 and 23rd

February, 2010 were issued. Learned senior

1 (2011) 5 SCC 103

2 (2011) 5 SCC 430

32

counsel further submitted that although in the

letter dated 22nd February, 2010, it was stated that

the period of the tender would be one year, the

same was withdrawn the next date. Thereafter, the

respondent Government reverted back to the EOI.

It is further submitted that respondent Nos. 4 to 6

had already been supplying hot meals for a number

of years. The condition with regard to supply of

THR was added pursuant to the orders passed by

this Court, as noticed earlier. In any event, it is

submitted by the learned senior counsel that the

condition of one year relates only to hot food, it has

no connection to the supply of THR. The respondent

Nos. 4 to 6 are supplying only THR. It is further

submitted that the Sales Tax objection raised by the

appellant is wholly without any basis.

On 31st March, 2009, there was no Sales Tax dues.

This is evident from the assessment made in favour

of the respondents, which was much later in point

of time. As on 31st March, 2009, the statement

33

made by the respondents was in accordance with

the return filed. Learned senior counsel also

submitted that these arguments were not raised

before the High Court. On the question of black

listing, it is submitted that the recommendation for

black listing was based on an incident in the year

2004. This was subsequently explained and there

was no black listing. Mr. Patwalia also emphasised

that the appellant is even otherwise ineligible. It is

not in possession of a unit. A reference is made in

this connection to the Lease Agreement executed by

the appellant on 24th December, 2009. In this

agreement, the appellant would be permitted to

lease out an existing manufacturing facility.

Therefore, on 7th December, 2009, relevant

for the purpose of EOI, the appellant did not have a

manufacturing unit. Again referring to the Joint

Venture Agreement, entered into by the appellant

with a third party, it is pointed out that it is without

any definite terms and conditions, no consideration

34

was so ever provided for the Joint Venture

Agreement. Mr. Patwalia further submits that the

appellant is trying to mislead the Court by relying

on an Analysis Certificate dated 25th December,

2009, which shows that the appellant had

manufactured fortified blended sukhadi premix on

12th December, 2009. Since the appellant did not

have a manufacturing unit, the certificate is clearly

procured for the purposes of this case. Learned

senior counsel, therefore, submits that the High

Court rightly dismissed the writ petition filed by the

appellant herein. In reply to the submissions,

Mr. Rohtagi submitted that the appellant is

concerned only with transparency which must be

observed in any tender process. The appellant is

only desirous of getting an opportunity to

participate in the tender process.

31. We have considered the submissions made by the

learned counsel for the parties. We are of the

35

considered opinion that the writ petition has been

rightly dismissed by the High Court after

examination of the entire issue. The High Court

concluded that the appellant failed to satisfy the

eligibility criteria as contained in Clause 6, as

noticed earlier. The aforesaid clause requires that

the tenderer should have produced the specified

food for the last three consecutive years and

supplied the same to Anganwadi's in ICDS. Since

the appellant did not possess a suitable

manufacturing unit, the appellant would be

rendered ineligible on this score alone. As pointed

out by Mr. C.U. Singh, the appellant admitted in

terms in its pleadings in I.A. No. 1 of 2010 that it

does not satisfy conditions 6, 7 and 8. We could

have, therefore, dismissed the appeal solely on the

ground that the appellant had made a voluntary

admission by which it was bound. However,

keeping in view the importance of the issues

involved, i.e., the provision of supplementary diet to

36

a segment of the Indian population, which is either

severely undernourished or in need of extra calories,

we have chosen to examine the entire matter to

ensure that the Scheme is being implemented in its

letter and spirit by all the participating agencies.

32. In our view, the High Court also correctly observed

that the validity of the eligibility criteria contained

in Clause 6 of the tender dated 7th December, 2009

has already been upheld by the Division Bench

whilst dismissing the Writ Petition No. 2588 of

2009. The High Court also correctly negated the

submissions of the appellant that in spite of not

having a unit of its own, the appellant ought to be

declared eligible. The High Court also found that in

the facts and circumstances of the case, it was only

respondent Nos. 4 to 6, who were suitable for grant

of contract.

37 33. We are also unable to accept the submission of

Mr. Rohtagi that the original Government decision

had limited the period of contract to one year. In

fact, as demonstrated by the learned senior counsel

for the respondents, the Government decision as

well as tender condition clearly stipulated that the

contract would be initially for one year. Upon

completion of one year, the work of the successful

candidate would be reassessed. In case, it is found

that the performance has been satisfactory, the

tender shall be extended for a period of two more

years.

34. We are also of the considered opinion that the food,

which is to be supplied to the recipients as a part of

the supplementary nutrition programme has to be

prepared in the manner prescribed by the

Government for safety and nutrient composition of

the food. It can not be left to uncertainties of the

machinery available with individual manufacturers.

38 The successful supplier is duty bound to necessarily

comply with all the specifications laid down by the

Government in its norms. Mr. C.U. Singh and Mr.

Patwalia, in our opinion, by referring to the various

documents, have clearly demonstrated that the

appellant is not eligible at all to be even considered

in the tender process. It has also been pointed out

that all the objections raised by the appellant and

other Mahila Mandal / Mahila Sanstha / Mahila

Bachat Gat etc. etc. were duly considered by the

Government. This is evident from the letters dated

22nd February, 2010 and 23rd February, 2010.

35. We are also not impressed by the submission of

Mr. Rohtagi that the condition of having Rs. 1 crore

over the three previous consecutive years, is either

arbitrary or whimsical. Mr. C.U. Singh by making

detailed reference to the counter affidavit has shown

that in the State of Maharashtra, there are 34

districts having an annual value in terms of at-least

39

Rs. 1.7 crores per district. Therefore, the condition

of asking for minimum Rs. 1 crore turn over for the

last three years can not be said to be arbitrary. In

fact, the condition would be of utmost importance.

36. We also find substance in the submission of

Mr. C.U. Singh and Mr. Patwalia that EOI had

deliberately stressed on the need of precise

measurements for the preparation of the food. The

supplier is required to provide a fine mix of all kinds

of ingredients including the revised intake of

proteins and calories to the precise level. In fact,

the level of precision is earmarked for each kind of

food. The concept behind the same can not be

permitted to be demonized by referring to it as food

prepared by "automated machines". The procedure

adopted is necessary to ensure that there is "zero

infection" in the food which is going to be consumed

by infants and the children who are already under

nourished. It cannot be over emphasised that,

40

since the beneficiaries of the Dense Energy Food

and Fortified Blended Mixture are infants from the

age group of 6 months to 3 years and pregnant and

lactating mothers, it was all the more desirable to

have fully automated plants. Such procedure avoids

the use of human hands in processes like -

handling, cleaning, grinding, extrusion, mixing etc.,

all of which are done automatically.

37. We are of the considered opinion that the aforesaid

considerations can not be said to be extraneous to

the purpose for which EOI was floated.

38. Taking into consideration, all the facts and

circumstances of the case, we find the appeal to be

wholly devoid of any merit and is, therefore,

dismissed.

41 ...................................J.

[Altamas Kabir]

...................................J.

[Surinder Singh Nijjar]

New Delhi;

August 19, 2011.