Holding

The bid was non‑responsive because the essential condition of submitting a CIB registration certificate was not satisfied; a provisional registration decision does not amount to a certificate.

Summary

The appellants, Mis Shobikaa Impex Pvt. Ltd. and a related entity, submitted a bid for a government tender to supply long‑lasting insecticide nets but failed to produce a Central Insecticide Board (CIB) registration certificate at the time of bid opening. The tender documents, as amended, required the registration certificate to be submitted with the bid or at the latest at the opening, making it an essential condition. The appellants argued that a provisional registration decision dated 31‑03‑2015, later reflected on the CIB website, should satisfy the requirement and that the amendment was arbitrary. The Supreme Court held that the provisional decision did not constitute an actual registration certificate and that the non‑submission of the certificate rendered the bid non‑responsive, with the amendment being a valid clarificatory measure, not violative of Article 14. Consequently, the appeal was dismissed, upholding the High Court's decision to reject the bid.

Issues considered

Whether the failure to produce a CIB registration certificate at the bid opening renders the bid non‑responsive under the amended Instructions to Bidders.
Whether a provisional registration decision by the CIB, without an actual certificate, satisfies the tender's registration requirement.
Whether the amendment to the tender conditions is arbitrary or violative of Article 14 of the Constitution.
Whether the High Court erred in refusing to grant relief to the appellants.

Legislation cited

Insecticides Act, 1968s. 10, s. 11, s. 3(e), s. 9(3), s. 9(3B)
Insecticides Rules, 1971s. Rule 9

Subjects

tenderbid non‑responsiveregistration certificateInsecticides Actpublic interestessential conditionarbitrarinessArticle 14

Judgment

[2016] 5 S.C.R. 319

MIS SHOBIKAA IMPEX PVT. LTD. AND ANR. A
v.
CENTRAL MEDICAL SERVICES SOCIETY AND ORS.
(Civil Appeal No.8461 of2016)
SEPTEMBER 20, 2016 8

(DIPAK MISRA AND C. NAGAPPAN, JJ.)
Tender - Instructions to Bidders - Compliance of - On facts,
appellant no. 2 applied for provisional registration for insecticides
product - Decision taken but registration certificate not made c
available - Thereafter, tender floated by respondent - Submission
of bid by appellant, however, on the bid opening date certificate of
registration not available with the appellant - Decision by
respondents to treat the bid submitted by the tenderer as non-
compliant with the conditions of invitation of bids - Said decision
upheld by the Division Bench of the High Court - On appeal, held: D
Appellant cannot claim benefit of the decision to grant registration
certificate and of treating itself as a responsive bidder - It is an
essential condition incorporated in the Instructions to Bidders - As
per the Instructions to Bidders, the initial clause was that the bidder
must be registered under Central Insecticide Board and the. E
documentary evidence should be submitted along with the bid -
Amendment postulated that the registration certificate shall be
submitted along with the bid at the time of opening of the tender
and if not, the bid shall be held as non-responsive - Decision by
the Registration Committee to provisionally approve registration does
not amount to registration by itself with the CIB, thus, the condition F
was not satisfied under the unamended stipulation -Amended clause
only provided about the consequence thereof - Even if clause 6
would not have been amended, the first respondent, on the ground
of non-production of the registration certificate, would have been
legally justified to rejec(1Jie bid as non-responsive and non-
G
compliant - Thus, the ~ssential conditwn· of tender being not met
with, the tenderer-appellants were ineligible and the tender was
non-responsive - Insecticides Act, I968 - s. 9(3B).
Dismissing the appeal, the Court
HELD: 1.1 On reading clauses 5.4 and 5.4.1 of Instructions H
319
320 SUPREME COURT REPORTS [2016] 5 S.C.R.

A to Bidders, it becomes clear that the goods to be supplied under
the contract has to be registered with the authority for the supplier
and purchasers' benefit. It is luminescent that the decision of the
Registration Committee to grant registration certificate is subject
to conditions. Apart from that, it had not granted any certificate
but only a decision was taken. There is a clear distinction between
B
a decision taken and the decision acted upon or given effect to.
Therefore, the appellant cannot claim benefit of the said decision.
The appellants cannot lay stress on clause 5.4.1 to avail the benefit
of treating itself as a responsive bidder. As far as Instructions to
Bidders is concerned, the initial clause was that the bidder must
c be registered under CIB. under the Act and the documentary
evidence in this regard shall be submitted along with the bid.
Amendment elaborating the same postulates that the registration
certificate shall be submitted along with the bid at the time of
opening of the tender and if it is not done, the bid shall be held as
non-responsive. A submission is advanced by the first respondent
D
that it is a clarificatory condition. It is opined that decision by the
Registration Committee of CIB to provisionally approve
registration does not amount to registration by itself with the
CIB. So the condition, as such, was not satisfied under the
unamended stipulation. The amended clause only provides about
E the consequence thereof. It can be stated without any shadow of
doubt that even if clause 6 would not have been amended, the
first respondent, on the ground of non-production of the
registration certificate, would have been legally justified to reject
the bid. It is an essential condition incorporated in the Instructions
to Bidders. (Paras 20, 211 [331-B, D-H; 332-A)
F
1.2 The appellant No.l had not filed an application for grant
of registration. It was appellant No.2 who had filed it. Be that as
it may, the decision dated 31.03.2015 was taken by the
Registration Committee of CIB to approv_e the registration
subject to the condition DAC granting permission for
G commercialization. That apart, the decision taken by the
concerned authority, even if it is put on the website, despite the
astute submission of the appellant, would not tantamount to grant
of registration certificate. The amendment was made, to clarify
the position. Even if the amendment was not brought in, the first
H respondent would have been in a position, by applying objective
MIS SHOBIKAA IMPEX PVT. LTD. v. CENTRAL MEDICAL 321
SERVICES SOCIETY AND ORS.

standards, to treat the appellants' bid as non-responsive and non- A
compliant. The use of the word "must" adds a great degree of
certainty to the same; it is a requisite parameter as thought of by
the respondent No.1. The tender was floated for purchase which
is needed for the nation. The first respondent along with
respondent Nos.2 and 3 were taking immense precaution. In such
B
a circumstance, needless to emphasize, public interest is
involved. It cannot succumb to private interest. The action on
the part of the respondent Nos.I to 3 cannot be regarded as
arbitrary or unreasonable. By no stretch of imagination it can be
construed to be an act which is not bonafide or to have been
done to favour the fourth respondent. Nothing has been pleaded c
that the fourth respondent is not eligible or qualified. The essential
condition of tender being not met with, the tenderer, the
appellants, were ineligible and the tender was non-responsive.
That apart, the amendment was applicable to all. Additionally,
the High· Court in the first round of litigation had not held that
the registration certificate granted on 31.03.2015 would enure
D
to the benefit of the writ petitioners from the date of the decision
of the registration authority, and it had rightly not said so. Judged
from any angle, there is no substance in the grounds raised in
this appeal. [Para 26) [334-B-F]
B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. and E
others 2006 (8) Suppl. SCR 11:(2006) 11 SCC 548;
Master Marine Services (P) Ltd. v. Metcalfe &
Hodgkinson (P) Ltd and another 2005 (3) SCR
666:(2005) 6 SCC 138; Jagdish Manda! v. State of Orissa
and others 2006 (10) Suppl. SCR 606:(2007) 14 SCC F
517; Union of India and another v. lnternationaj Trading
Co. and another 2003 (1) Suppl. SCR 55:(2003) 5 SCC
437; Jespar I. Slang v. State of Megha/aya and others
(2004) 11 sec 485 - referred to.
Case Law Reference
2006 (8) Suppl. SCR 11 G
referred to Para 21
2005 (3) SCR 666 referred to Para22
2006 (10) Suppl. SCR 606 referred to Para23
2003 (1) Suppl. SCR 55 referred to Para·24
(2004) 11 sec 485 referred to Para25 H
322 SUPREME COURT REPORTS (2016] 5 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8461
of2016.
From the Judgment and Order dated 10.05.2016 of the High Court
of Delhi at New Delhi in WPC No. 1994 of2016.
Vikas Singh, Sr. Adv., Sriram Krishna, Ms.Udita Singh, Advs. for
B the Appellants.
Ms. Pinky Anancj., ASG., Atulesh Kumar, S. Wasim A. Qadri, D.
S. Mahra, Rishikant Singh, Ms. Kritika Sachdeva, Shadman Ali,
Dharmendra Kumar Sinha, Advs. for the Respondents.

c The Judgment of the Court was delivered by
DIPAK MISRA, J. I. The instant appeal, by special leave, has
been filed questioning the justifiability of the judgment and order dated
I 0.05.2016 passed by the High Court of Delhi at New Delhi in W.P.(C)
No.1994 of2016 whereby the Division Bench has declined to interfere
with the decision taken by the respondents to treat the bid submitted by
D
the appellants as non-compliant with the conditions oflnvitation for Bids
(IFB) which resulted in dismissal of the writ petition and the application
for clarification.
2. The appellant No. I is a company incorporated under the
Companies Act, 1956 and the appellant No.2 is a proprietorship concern
E
and its authorized agent is a director of the said company. The appellant-
company commenced manufacture of its insecticide product, Long
Lasting Insecticide Net ("LLIN"). The World Health Organization
Pesticides Evaluation Scheme (WHOPES) is the global body for
monitoring, evaluating and approving LLIN brands, for without the said
F recommendation LLIN cannot be sold in the market. It is averred that
WHOP ES conducts very stringent tests at three levels before it gives
recommendation to a product, which includes laboratory test, wash
effective test and bio-efficacy field trial test, and due to rigorousness of
the test, only handful of LLINs have been recommended by WHOPES
and the appellants' product that is DURANET® is one of them. The
G·
appellant No. I was issued a license to manufacture insecticide on
08.01.2014 under the Insecticides Rules, 1971 (for short, "the Rules")
and also allowed for carrying on wholesale dealing and storage for sale.
The license granted in favourofthe appellant was renewed from time to
time and it was valid till 31.12.2015.
H
MIS SHOBIKAA IMPEX PVT. LTD. v. CENTRAL MEDICAL 323
SERVICES SOCIETY AND ORS. [DIPAK MISRA, J.]

3. As the facts as have been unrolled, the appellant No.2 vide A
application No. 45295 applied for provisional registration for the
insecticides product, i.e., Alphacyphermethrin Incorporated Long Lasting
Mosquito Bed Net (commercial name being DURAN ET®) to the Central
Insecticide Board (CIB) as per Section 9(3B) of the Insecticide Act,
1968 (for short, "the Act"). The Registration Committee of (CIB) in its
B
354rn meeting dated 31.03.2015 approved LLIN, that is, DURANET®
for provisional registration under Section 9(3B) of the Act for Public
Health Programmes. We shall refer to the said decision of the CIBRC
at the relevant stage.
4. The first respondent floated a tender, i.e., CMSS/PROC/
NVBDCP/2015-16/006 for procurement of 1 crore LLIN under National
c
Vector Borne Disease Control Project. Section 1 of CIB pertained to
Instructions to Bidders. Para 4 dealt with eligibility. Paragraph 5 provided
for listing of the documents establishing confonnity of goods and services
to bidding documents. Paragraph 6 specified qualifications of the bidder.
Paragraph 6( A) dealt with manufacturer bidders. After the lnstru~tions D
to Bidders were issued incorporating various clauses including ones
which have been referred to hereinabove, Amendment No. 3 to the bid
document was made on 28.09.2015. The clause contained in 6.1 (AXd)6
in Section I of the Instructions to Bidders was amended. The initial
. paragraph 6.1 (A)( d)6 read as follows:- "
E
"6. The LLINs offered by the Bidders must be registered with
Central Insecticide Board (CIB) of India under Insecticide Act
1968. The documentary evidence to establish these shall be
submitted along with the bid."
5. The amended clause stipulated as under:- F
"The LLINs offered by the Bidders must be registered with
Central Insecticide Board (CIB) of India under Insecticide Act
1968. The certificate of registration issued by the CIB shall be
submitted along with the bid or should be at the latest provided at
the time of tender opening. The bids not accompanied with the G
CIB registration certificate on the date and time of opening of
tender (technical bid) shall be held as non-responsive."
6. At this junction, the narrative requires to travel to the past. The
application for grant of provisional registration that was submitted by the
appellant No.2, a decision was taken by CIBRC on 31.03.2015. The
H
324 SUPREME COURT REPORTS [2016] 5 S.C.R. •'

A relevant part of the said decision which has been emphatically pressed
into se..Vice by the appellants, reads as follows:-
"Consideration of an application ofM/s Shobikaa Impex, Karur,
T.N. for grant of registration for indigenous manufacture of
Alphacypermethrin Incorporated Long Lasting Mosquito Bed Net
B (LLIN) 0.55% w/w under section 9(38) of the Insecticides Act
1968.
The agenda was deliberated in detail and Committee approved
provisional registratio'n u/s 9(38) for public health programmes,
subject to the outcome of the court case having W.P. No. 8408/
c 2015 & W.P. No. 8409/2015 before the Hon'ble High Court of
Judicature at Madras. The Committee further decided that the
case be sent to DAC for according permission for
commercialization during provisional registration."
[Emphasis Supplied]
D 7. The appellant No.I felt grieved, for in spite of the fact a decision
was taken, the registration certificate was not made available and further
the amendment in Instructions to Bidders had come which was
unacceptable in law. Therefore, it invoked the jurisdiction of the High
Court in WP(C) No. 9694 of2015, which vide order dated 14.10.2015,
E while issuing notice, directed that the bid of the writ petitioners shall not.
be rejected merely on the ground that it had not been able to produce the
registration certificate. On 19.10.2015, the first respondent communicated
to the appellants that the direction of the High Court shall be complied
with and the bid shall be processed in a transparent and fair manner. It
was also communicated that a letter had been written to the Director,
F CIB regarding the latest status of registration and the CIB had also been
informed in the same communication regarding the case being renotified
on 30.10.2015.
8. As the factual narration would reveal, on 27. I 0.2015 the
appellants had applied for renewal of license for manufacturing
G insecticides for product DURANET® under Rule 9 of the Rules framed
under the Act. Certain communications took place between the appellants
and the respondent No. I with regard to clarification of the bid conditions.
The High Court directed the appellant to imp lead CIBRC as a party and
it also directed the said authority to file an affidavit. During the pendency
of writ petition, CIBRC issued the registration certificate on 21.12.2015.
H

'
M/S SHOBIKAA IMPEX PVT. LTD. v. CENTRAL MEDICAL 325
SERVICES SOCIETY AND ORS. [DIPAK MISRA, J.]

The certificate was issued in favour of Shobikaa Impex, the appellant A
No.2 herein. The High Court vide order dated 20.01.2016 disposed of
the Writ Petition (C) 9694/2015 recording as follows:-
"An affidavit has been filed on behalf of respondent No.4 dated
23.12.2015 wherein it is categorically stated that as per the decision
of the Registration Committee taken in its 354'h meeting held on B
31.03.2015, M/s Shobikaa Impex, Karur is registered under Section
9(3B) of the Insecticide Act, 1968 with the Central Insecticides
Board and Registration Committee vide Registration No. CIR-
1802/2015(354 )-Alphacypermthrin Incorporated Long Lasting
Mosquito Bed Net 0.55% w/w-04, dated 21.12.2015 which is valid
for two years i.e. upto 20.12.2017, for indigenous manufacture.
c
A certificate has also been issued by the said Board in respect of
the said insecticides in favour ofM/s Shobikaa lmpex. A copy of
the same has been placed on record as Annexure A- I to CM
No.1402/2016.
In view of these clarifications, the respondent No. I can go ahead D
with the subject tender.
The writ petition stands disposed of in the above terms"
9. After the Writ Petition (C) 9694/2015 was disposed of,
respondent No.I constituted a sub-Committee for evaluation of the E
technical bid and the said sub-Committee found that the appellant No. I
was not having CIB registration certificate in its name as categorically
required in Amendment No.3 dated 28.09.2015, and further the certificate
was not produced at the time of submission of the bid, and accordingly
treated the bid as not acceptable being non-compliant. At th is juncture,
the appellant No. I moved a clarification application of the order dated F
20.01.2016 passed in Writ Petition (C) 9694/2015 before the High Court.
In the meantime, the licensing authority renewed the license for
manufacturing of the insecticide of the appellant No. I pursuant to
application for renewal dated 27.10.2015 and, on 17.02.2016, the sub-
committee recommended to place the order for the insecticide product G
with M/s Vestergaard Group SA at the total value of US$30,407,886.
The appellant No. I entered into correspondence with the respondent
No. I but as nothing fruitful ensued, it approached the High Court in Writ
Petition (C) No. 1994of2016.
JO. On aperusal of the order of the High Court, it is noticeable
H
326 SUPREME COURT REPORTS [2016] 5 S.C.R.

A that it has referred to the unamended clause 6. l(A)(d)6 of the Instructions
to Bidders. The stand of the appellants before the High Court was that
its product was duly registered with CIB as per meeting dated 31.03.2015
and, therefore, the decision of respondents was totally unsustainable.
The High Court took note of the amendment brought into the clause
which we have reproduced hereinbefore. It referred to its earlier order
B
passed in Writ Petition (C) 9694/2015 and took note of the fact that
prayer was made for issue of a writ of mandamus to the respondents to
consider its bid without insistence on production of registration certificate
and also quashing of the Amendment No.3, but no such relief was granted.
It further referred to the stand with regard to grant of certificate in
c favour of appellant No.2 therein but observed that it had no relevance.
The Division Bench of the High Court, as we find, has been persuaded
by the non-compliance of the condition as incorporated by amendment
to FIB. The observations of the High Court read as follows:-
" 13. The contention of the respondent is that the bid of the
D petitioners is non-responsive in view of the mandatory clause
6. l(A)(d) 6 (as amended by Amendment no.3) which stipulates
that the certificate of registration issued by CIB is to be submitted
along with the bid or latest be provided at the time of tender
opening. The bids not accompanied with the CIB certificate at
the time of tender opening are to be held as non-responsive."
E
Andagain:-
"15. In the present case, the bid submission and opening date
admittedly was 14.10.2015. Though the contention of the petitioner
is that as on the date they were registered, the certificate of
F registration was not available with them. Admittedly, the certificate
of registration has been issued only on 21.12.2015. On the bid
opening date i.e., 14.10.2015, the petitioners did not possess the
registration certificate. They clearly do not satisfy the qualifying
condition. Even if it were be assumed that the product of the
petitioner was registered as on the said date, as the meeting of
G the CIB had already been held, still it does not help the case of the
petitioners as, the petitioners clearly do not conform to Clause
6.1 (A) ( d) 6 i.e. submission of the certificate of registration along
with bid or latest by the bid opening date. Clearly, the bid of the
petitioners is non-compliant and is to be held as non-responsive."
H
MIS SHOBIKAA IMPEX PVT. LTD. v. CENTRAL MEDICAL 327
SERVICES SOCIETY AND ORS. [DIPAK MISRA, J.]

11. Being of this view, the High Court dismissed the Writ Petition. A
12. We have heard Mr. Vikas Singh, learned senior counsel
appearing for the appellants and Ms. Pinky Anand, learned Additional
Solicitor General for respondent Nos. I to 3. None has entered appearance
on behalf of the respondent No.4.
13. It is submitted by Mr. Singh, learned senior counsel that when B
CIBRC had decided to grant the registration certificate and it has put it
on the website, it is to be deemed that the certificate had been granted
on that date and, therefore, the High Court has erred in treating the bid
as non-compliant or non-responsive. It is his further submission that the
respondent No. I has amended the Instructions to Bidders with the sole c
intention to favour the respondent No.4 as it was the singular bidder and
hence, the entire action of the respondents suffers from gross
arbitrariness that violates Article 14 of the Constitution.
14. Ms. Pinky Anand, learned Additional Solicitor General, per
contra, contends that the amendment was brought into existence to D
clarify the position as it was a tender of a different nature. She would
contend that the registration certificate did not belong to the appellant
No. I but to the appellant No.2 and appellant No.2 had given authoriz.ation
to appellant No. I to use the domestic registration of the insecticide
product DURANET® and that did not satisfy the requirement as
stipulated in the instructions to bidders. Learned counsel submits that E
the provisions of the Act do not contain any provision for authorization
by one person to another to use its registration. In any way, submits Ms.
Pinky Anand, the appellant No. I had not submitted the requisite
registration certificate at the time of submission of the bid and, in that
backdrop, the opinion expressed of the High Court cannot be regarded F
as fallacious. It is also her submission that even the appellant No. I
could not have been a bidder as per clause 5.4 of the tender conditions.
That-apart, it is urged that the 4'h respondent was not the only bidder but
there were six bidders and the amendment was thought of to have clarity
which was in public interest.
G
15. It is noteworthy that the Act has been brought into force to
regulate the import, manufacture, sale, transport, distribution and use of
insecticides with a view to prevent risk to human beings or animals, and
for matters connected therewith. Section 3(e) defines "insecticide"
which is as follows"-
H
328 SUPREME COURT REPORTS [2016] 5 S.C.R.

A "Insecticides" means-
(i) Any substance specified in the Schedule; or
(ii) Such other substances (including fungicides and weedicides)
as the Central Government may, after consultation with the Board,
by notification in the Official Gazette, include in the Schedule from
B time to time; or
(iii)Any preparation containing any one or more of such
substances;"
16. The competent authority has issued the Schedule which relates
c to lists of insecticides. Section 4 deals with constitution of the Central
Insecticides Board and role of the Board. Section 9 deals with
registration of insecticides. Sub-section (3) and Section (3B) of Section
9 being relevant are reproduced below:-
"(3) On receipt of any such application for the registration of an
insecticide, the Committee may, after such enquiry as it deems fit
D
and after satisfying itself that the insecticide to which the
application relates conforms to the claims made by the importer
or by the manufacturer, as the case may be, as regards the efficacy
of the insecticide and its safety to human beings and animals,
register[ on such conditions as may be specified by it] and on
E payment of such fee as may be prescribed, the insecticide, allot a
registration number thereto and issue a certificate of registration
in token thereof within a period of twelve months from the date of
receipt of the application:
Provided that the Committee may, if it is unable within the said
F period to arrive at a decision on the basis of the materials placed
before it, extend the period by a further period not exceeding six
months:
Provided further that if the Committee is of opinion that the
precautions claimed by the applicant as being sufficient to ensure
G safety to human beings or animals are not such as can be easily
observed or that notwithstanding the observance of such
precautions the use of the insecticide involves serious risk to human
beings or animals, it may refuse to register the insecticide.
xxxx.xxxxxx
H (3B) Where the Registration Committee is of opinion that the
MIS SHOBIKAA IMPEX PVT. LTD. v. CENTRAL MEDICAL 329
SERVICES SOCIETY AND ORS. [DIPAK MISRA, J.]

insecticide is being introduced for the first time in India, it may, A
pending nay enquiry, register it provisionally for a period oftwo
years on such conditions as may be specified by it."
17. Section I 0 provides for appeal against non-registration or
cancellation. Section 11 confers power of revision of Central Government.
The scheme of the Act, as we find, deals with the procedure in detail. B
18. Rule 9 of the Rules deals with licenses to manufacture
insecticides. The said Rule is extracted below:-
"9. Licenses to manufacture insecticides:
I. Application forthe grant ofrenewal ofa license to manufacture c
any insecticide shall be made in Form III or Form IV, as the case
may be to the licensing officer and shall be accompanied by a fee
of rupees fifty for every insecticide for which the license is applied,
subject to a maximum of rupees five hundred.
2. If an insecticide is proposed to be manufactured at more than
D
one place, separate applications shall be made and separate licenses
shall be issued in respect of every such place.
3. A license to manufacture insecticides shall be issued in Form
V and shall be subject to the following conditions namely;
i. The license and any certificate ofrenewal shall be kept on the E
approved premises and shall be produced for inspection at the
request of an Insecticide Inspector appointed under the Act or
any other officer br authority authorized by the licensing officer.
ii. Any change in the expert staff named in the license shall
forthwith be reported to the licensing officer. F
iii. If the licensee wants to undertake during the currency of the
license to manufacture for sale of additional insecticides, he,shall
apply to the licensing officer for the necessary endorsement in
the license on payment of the prescribed fee for every category
of insecticides. G
iv. An application for the renewal of a license shall be made as
laid down in Rule 11.
v. The licensee shall comply with the provisions of the Act and
the rules made there under for the time being in force.
H
330 SUPREME COURT REPORTS [2016] 5 S.C.R.

A vi. The Licensee shall obtain ISi Mark Certificate from Bureau
oflndian Standard within three months of the commence of the
manufacture.
vii. No Insecticides shall be sold or distributed without ISI Mark
Certification.
B 4. (A) Licensing officer may after giving reasonable opportunity
of being heard, to the applicant, refuse to grant any license.
(4-A) No license to manufacture an insecticide shall be granted
unless the licensing officer is satisfied that necessary plant and
machinery, safety devices and first-aid facilities etc., exist in the
c premises where the insecticide is proposed to be manufactured.
5. A fee of rupees five shall be paid for a duplicate copy of a
license issued under this rule, ifthe original is defaced, damaged
or lost."

D 19. The provisions of the Act and the Rules, as it seems to us,
constitute a complete code in itself. In this context, we have to see the
nature of the decision taken by the Registration Committee ofCIB which
dealt with the application of appellant No.2 under Section 9(38) of the
Act and approved for provisional registration. We have already
reproduced the said decision. The decision stated that it was to be sent
E to DAC (Department of Agriculture & Co-operation) for according
permission for commercialization during provisional registration. In this
context, clauses 5.4 and 5.4.1 of Instructions to Bidders become
significant. They read as follows:-
"5.4 The Goods to be supplied under the Contract shall be
F registered with the relevant authority in the supplier's and
Purchaser's country. The bidder should submit a copy of the
Registration Certificate with its bid as indicated below:
(I) a copy of the Registration Certificate of the Goods for use in
the Purchaser's country issued by Central Insecticides Board
G
(CIB).
Note: Bidders are requested to inquire in advance about the
registration requirements and procedures in order to avoid any
delays due to involvement of various government agencies.
Purchaser shall not be responsible for any delay on this account.
5.4.1 The purchaser shall at times cooperate with the successful
H
M/S SHOBIKAA lMPEX PVT. LTD. v. CENTRAL MEDICAL 331
SERVICES SOCIETY AND ORS. [DIPAK MISRA, J.]

Bidder to facilitate the registration process within the Purchaser's A
country to the extent possible. The agency and contact person
able to provide additional information about the requirements for
registration can be obtained from the website: www.cibrc.nic.in."
20. On a reading of the said clauses, it is graphically clear that the
goods to be supplied under the contract has to be registered with the B
authority for the supplier and purchasers' benefit. Mr. Singh has
emphasized on clause 5.4.1 to highlight that the purchaser is under
obligation to co-operate with the successful bidder to facilitate the
registration process within the purchaser's country to the extent possible.
Ms. Pinky Anand would submit that the said clause is meant for generally
helping the potential bidders by providing them with pame, address and c
contact persons of various agencies involved in the registration process
but it not meant to create an impediment for the owner to put a definite
date by which time the registration has to be submitted at the time of
submission of the tender.
21. The thrust of the matter is whether the decision by the D
Registration Committee by itself can be regarded as grant of registration
certificate. It is luminescent that its decision to grant registration
certificate is subject to conditions. Apart from that, it had not granted
any certificate but only a decision was taken. There is a clear distinction
between a decision taken and the decision acted upon or given effect to. E
Therefore, the appellant cannot claim benefit of the said decision. The
appellants cannot lay stress on clause 5.4.1 to avail the benefit of treating
itself as a responsive bidder. As far as Instructions to Bidders is
concerned, the initial clause was that the bidder must be registered under
CIB under the Act and the documentary evidence in this regard shall be
submitted along with the bid. Amendment elaborating the same postulates F
that the registration certificate shall be submitted along with the bid at
the time ofopening ofthe_tender and ifit is not done, the bid shall be held
as non-responsive. A submission is advanced by the first respondent
that it is a clarificatory condition. As we have already opined, decision
by.the Registration Committee ofCIB to provisionally approve registration G
- does not amount to registration by itself with the CIB. So the condition,
as such, was not satisfied under the unamended stipulation. The amended
clause only provides about the consequence thereof. It can be stated
without any shadow of doubt that even if clause 6 would not have been
amended, the first respondent, on the ground of non-production of the
H
332 SUPREME COURT REPORTS [2016] 5 S.C.R.

A registration certificate, would have been legally justified to reject the
bid. It is an essential condition incorporated in the Instructions to Bidders.
In this context, we may profitably refer to the authority in B.S.N. Joslti
& Sons Ltd. v. Nair Coal Services Ltd. and ot/1ers 1 where a two-
Judge Bench, after referring to series of jµdgments has culled out the
following principles:-
B
"(i) ifthere are essential conditions, the same must be adhered to;
(ii) ifthere is no power of general relaxation, ordinarily the same
shall not be exercised and the principle of strict compliance would
be applied where it is possible for all the parties to comply with all
.. c such conditions fully;
(iii) if, however, a deviation is made in relation to all the parties in
regard to any of such conditions, ordinarily again a power of
relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation
should not ordinarily be allowed to take a different stand in relation
D to compliance with another part of tender contract, particularly
when he was also not in a position to comply with all the conditions
of tender fully, unless the court otherwise finds relaxation of a
condition which being essential in nature could not be relaxed and
thus the same was wholly illegal and without jurisdiction;
E (v) when a decision is taken by the appropriate authority upon
due consideration of the tender document submitted by all the
tenderers on their own merits and if it is ultimately found that
successful bidders had in fact substantially complied with the
purport and object for which essential conditions were laid down,
the same may not ordinarily be interfered with;
F
(vi) the contractors cannot form a cartel. If despite the same,
their bids are considered and they are given an offer fo match
with the rates quoted by the lowest tenderer, public interest would
be given priority;
(vii) where a decision has been taken purely on public interest,
G the court ordinarily should exercise judicial restraint."
22.In Master Marine Services (P) Ltd. v. Metcalfe &
Hodf?kinson (P) Ltd a11d anotltei2, it has been held that the State can
1 (2006) 11 sec 548
H '(2005) 6 sec 138
MIS SHOBIKAA IMPEX PVT. LTD. v. CENTRAL MEDICAL 333
SERVICES SOCIETY AND ORS. [DIPAK MISRA, J.]

choose its own method to arrive at a decision and it is free to grant any A
relaxation for bona fide reasons, ifthe tender conditions permit such a
relaxation. It has been further heJd that the State, its corporations,
instrumentalities and agencies have the public duty to be fair to all
concerned. Even when some defect is found in the decision-making
process, the court must exercise its discretionary powers under Article
226 with great caution and should exercise it only in furtherance of public
interest and not merely on the making out of a legal point.
B
•
23. In Jagdish Manda/ v. State of Orissa and ot/~ers3, it has
been ruled that when the power ofjudicial 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
c
tenders and awarding contracts are essentially commercial functions.
Principles of equity and natural justice stay at a distance. lfthe 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, D
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.
24. In Union of India <md <motlzer v. International Trading
Co. and another, it has been held that the basic requirement of Article E
14 is fairness in action by the State, and non-arbitrariness in essence and
substance is the heartbeat of fair play. Actions are amenable, in the
panorama of judicial review only to the extent that the State must act
validly for a discernible reason, not whimsically for any ulterior purpose.
It has been further opined that the meaning and true import and concept
ofarbitrariness is more easily visualized than precisely defined. A question F
whether the impugned action is arbitrary or not is to be ultimately
answered on the facts and circumstances of a given case.
25. In Jespar L Stong v. State of Meglwlaya and others-', this
Court stated that fixation of a value of the tender is entirely within the
purview of the executive and courts hardly have any role to play in this G
process except for striking down such action of the executive as is proved
to be arbitrary or unreasonable.
sec s11
' (2007) t 4
• (2003) s sec 437
sec 485
' (2004) 1 1 H
334 SUPREME COURT REPORTS [2016] 5 S.C.R.

A 26. Keeping in view the aforesaid authorities, we have to consider
whether the High Court has fallen into error by not interfering with the
grant of contract in favour of the fourth respondent. As the factual analysis
would reveal, the appellant No. I had not filed an application for grant of
registration. It was appellant No.2 who had filed it. Be that as it may, the
decision dated 31.03.2015 was taken by the Registration Committee of
B
CIB to approve the registration subject to the condition DAC granting
permission for commercialization. That apart, the decision taken by the
concerned authority, even if it is put on the website, despite the astute
submission of Mr. Singh, would not tantamount to grant ofregistration
certificate. The amendment was made, as we perceive, to clarify the
c position. We have already stated, even ifthe amendment was not brought
in, the first respondent would have been in a position, by applying objective
standards, to treat the appellants' bid as non-responsive and non-
compliant. The use of the word "must" adds a great degree of certainty
to the same; it is a requisite parameter as thought of by the respondent
No. I. The tender was floated for purchase which is needed for the'
D
nation. The first respondent along with respondent Nos.2 and 3 were
taking immense precaution. In such a circumstance, needless to
emphasize, public interest is involved. It cannot succumb to private
interest. The action on the part of the respondent Nos. I to 3 cannot be
regarded as arbitrary or unreasonable. By no stretch of imagination it
E can be construed to be an act which is not bonafide or to have been
done to favour the fourth respondent. Nothing has been pleaded that
the fourth respondent is not eligible or qualified. In our considered
opinion, the essential condition of tender being not met with, the tenderer,
the appellants herein, were ineligible and the tender was non-responsive.
That apart, the amendment was applicable to all. Additionally, the High
F
Court in the first round of litigation had not held that the registration
certificate granted on 31.03.2015 would enure to the benefit of the writ
petitioners from the date of the decision of the registration authority, and
it had rightly not said so. Judged from any angle, we do not perceive any
substance in the grounds raised in this appeal.
G 2?. Consequently, the appeal, being devoid of merit, stands
dismissed. There shall be no order as to costs.
Nidhi Jain Appeal dismissed.