SANJAY KUMAR SHUKLAversusM/S BHARAT PETROLEUM CORPORATION LTD. & ORS.

                      [2014] 1 S.C.R. 959


               SANJAY KUMAR SHUKLA                                   A
                           v.
M/S BHARAT PETROLEUM CORPORATION LTD. & ORS.
        (Civil Appeal Nos. 1871-1872 of 2014)

                     FEBRUARY 07, 2014                                B
     [P. SATHASIVAM, CJI. AND RANJAN GOGOi, J.]

       Constitution of India, 1950: Article 226 - Writ jurisdiction
 in contractual matter - Advertisement for award of dealership
 of retail outlets - Selection held and appellant placed at C
 SI.No. 1 and respondent No. 7 at Sl.No.2 - No Letter of Intent
·granted at that stage - Aggrieved by selection, respondent
 No. 7 filed writ petition alleging that land offered by appellant
 was under litigation and was not immediately available for use
 of the retail outlet - A Single Judge of High Court directed that D
 selection process be redone as respondent No. 7 did not
 produce any document of title in respect of assets mentioned
 by him and appellant was not granted requisite NOC from
 District Magistrate in respect of land offered by him - On
 appeal, Division Bench of High Court took the view that once E
 appellant was found to be disentitled, the dealership should
 have been awarded to respondent No. 7, he being, at serial
 No.2 of merit list - On appeal, held: Initially, District Authority
 had taken stand that NOC in respect of land offered by
 appellant cannot be issued as the same was found to be F
 involved in a litigation i.e. Partition Suit - While writ petition
 was pending, Partition suit was withdrawn and so there was a
 change in stand of District Authority regarding grant of NOC
 - Yet, same was not brought to the notice of Single Judge -
  That apart, relevant facts were ignored at different stages by G
 High Court and in light of totality of facts there was a deliberate
 and not bona fide attempt on part of respondent No. 7 to deny
 fruit of selection made in favour of appellant - Corporation is
 directed, if it is of view that operation of the retail outlet is still
                                959                                   H
   960      SUPREME COURT REPORTS              (2014] 1 S.C.R.


A justified by the exigencies, to award the same to appellant by
   completing the requisite formalities in accordance with the
   procedure laid down by the Corporation itself

       The first respondent-Corporation issued an
  advertisement calling applications for award of dealership
8
  of retail outlets. On receipt of applications, selection was
  held and the appellant was placed at Sl.No.1 with 78.04
  marks and respondent No.7 who had secured 77.75
  marks was placed at Sl.No.2. Aggrieved by the selection,
  respondent No.7 filed a complaint before the Corporation
C challenging the award of 'zero' marks to respondent no.7,
  against a maximum of 'four' awardable under the head
  "Fixed and Moveable Assets" and alleging that the land
  offered by the appellant was under litigation and was not
  immediately available for use of the retail outlet. The said
D complaint was rejected on the ground that the Technical
  Evaluation Committee in its report had found the land
  offered by the appellant suitable for development of the
  retail outlet and that the issue raised by the respondent
  in the complaint would be dealt with in the process of
E grant of No Objection Certificate (NOC) by the District
  Magistrate to whom a reference of the matter would be
  made. As regards the claim of respondent No.7 with
  respect to award of marks was concerned, the same was
  rejected on the ground that he had not furnished any
F document in support of his title to the assets mentioned
  by him in his application. Aggrieved, respondent No.7
  filed a writ petition before the High Court. No Letter of
  Intent was granted to the appellant at that stage. A Single
  Judge of the High Court took the view that there was no
G fault in the decision of the Corporation in so far as award
  of marks to respondent No.7 was concerned inasmuch
  as the respondent No.7 did not produce any document
  of title in respect of assets mentioned by him and such
  failure on the part of respondent No.7 amounted to
H suppression/concealment of relevant facts. In so far as
.SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 961
'
            CORPORATION LTD.

the appellant was concerned, the Single Judge held that           A
the requisite NOC from the District Magistrate in respect
of the land offered by the appellant not having been
granted, the Corporation cannot be expected to wait
indefinitely and directed that the selection process be
redone. Aggrieved by the order passed by the Single               B
Judge both the appellant and respondent No.7 filed LPAs.
The Division Bench of the High Court took the view that
once the appellant was found to be disentitled, the
dealership should have been awarded to respondent
No.7, he being, at serial No.2 of the merit list.                 c
    Aggrieved, the appellant filed instant appeals.
Respondent no.7 also filed SLPs challenging the findings
of the Single Judge with regard to suppression/
concealment which was not set aside by the Division
Bench of the High Court. The said SLP was dismissed.              D

    Allowing the appeals, the Court

    HELD~ 1. After the selection for the dealership was
finalized by the Corporation, a reference was made to the         E
District Authority on 24.01.2011 for grant of NOC. The
District Authority informed the Corporation that NOC
would not be granted on account of the fact that the land,
on which outlet was proposed, was involved in Partition
Suit. The appellant was impleaded as defendant in the
                                                                  F
said suit on 04.02.2011 i.e. after 5 years of its institution
and that too after the finalization of the select list/merit
panel by the Corporation. An order of injunction to
restrain the District Authority from issuing NOC was
sought by the plaintiff in Partition Suit which was refused
by the trial court on 19.07.2011. Taking note of this fact        G
i.e. refusal of injunction, the District Authority, once again,
sought for a report from the Sub-Divisional Officer
whether NOC can be granted. This was on 04.08.2011.
The Sub-Divisional Officer sought the opinion of the
Government Advocate and submitted a report                        H
   962     SUPREME COURT REPORTS               (2014) 1 S.C.R.


A recommending grant of NOC. These documents, though
  vital, were not before the High Court. After the Single
  Judge had decided the writ petition by ordering a fresh
  selection, an amendment application was filed in the said
  Partition Suit for deletion of the land offered for the
B dealership from the purview of the suit. The said
  amendment was allowed by the trial court. In the LP.A.
  filed by the appellant, the amendment application for
  deletion of the land in question as well as the order of the
  trial court allowing the said amendment application were
c enclosed. The High Court overlooked the same and did
  not consider the effect thereof on the rights and
  entitlements of the respective parties. A reminder was
  issued to the District Authority for grant of the NOC
  applied for by the Corporation. The Partition Suit was
  dismissed as withdrawn on 7.1.2014 on an application
0
  filed by the plaintiff. No other pending litigation involving
  the land was brought to the notice of the Court. [Para 9]
  [968-F-H; 969-A-G; 970-C]

       2. In the instant case, even before the Letter of Intent
E in respect of the dealership could be issued to the
  appellant the proposed grant came to be challenged
  before the High Court by respondent No.7 who had
  impugned the decision of the Corporation rejecting the
  complaint filed by him against the selection made. Initially,
F the District Authority had taken the stand that the NOC
  in respect of the land offered by the appellant cannot be
  issued as the same was found to be involved in a litigation
  i.e. Partition Suit. While the writ petition was pending there
  was a change in the stand of the District Authority in the
G matter of grant of NOC. Yet, the same was not brought
  to the notice of the Single Judge. A vital fact, therefore,
  escaped notice. The fact that the appellant was
  impleaded in the suit nearly 5 years after the institution
  thereof and after the selection was finalized by the
H Corporation on 30.12.2010 was before the High Court; yet
SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 963
           CORPORATION LTD.

the same was overlooked by the Single Judge. The A
Division Bench hearing the L.P.A.s also overlooked the
fact that the trial court by order dated 19.10.2011 had
allowed the deletion of the land in question from the
purview of the said partition suit on an application filed
by the plaintiff. This was, notwithstanding, the fact that B
the amendment application as well as the order thereon
was brought on the record of the LP.A. by the appellant.
That apart, the facts brought on record of the instant
appeal by the parties were of considerable significance.
The subsequent report of the Sub-Divisional Officer C
recommending grant of NOC; the reminder of the
Corporation to the District Authority for grant of NOC; the
institution of title suit in respect of the land in question
and the dismissal thereof on the ground of maintainability
as well as the dismissal of Partition Suit (on withdrawal) D
were too significant to be ignored, as already held.
Relevant facts were ignored at different stages of
consideration of the matter by the High Court and in the
 light of the totality of the facts there was a deliberate and
 not very bona fide attempt on the part of respondent No.7 E
to deny the fruit of the selection made in favour of the
appellant by the Corporation as far back as on 30.12.2010.
The situation, therefore, has to be remedied and it is the
 precise manner thereof which must now engage the
attention of the Court. [para 10] [970-D-H; 971-A-E]           F

     3. In the instant case, exercise of the extraordinary
jurisdiction vested in the High Court by Article 226 of the
Constitution has been with a somewhat free hand
oblivious of the note of caution struck by this Court with
regard to such exercise, particularly, in contractual          G
matters. The entertainment of a writ petition in contractual
matters, unless justified by public interest, can entail.
Delay in the judicial process that seems to have become
inevitable could work in different ways. Deprivation of the
benefit of a service or facility to the public; escalating     H   1
    9&4     SUPREME COURT REPORTS                [2014] 1 S.C.R.


A costs burdening the public exchequer and abandonment
  of half completed works and projects due to the ground
  realities in a fast changing economic/market scenario are
  some of the pitfalls that may occur. In the instant case,
  fortunately, the litigation has not been very time
s consuming. Nothing has been suggested on behalf of
  the Corporation that the establishment of a retail outlet
  at site in question was not required as on date. It can,
  therefore, be safely understood that in the instant case
  the public of the locality have been deprived of the benefit
c of the service that the outlet could have generated. The
  present litigation initiated by respondent No. 7 does not
  constitute a very bonafide exercise on the part of the said
  Respondent and the entire litigation appears to have
  been driven by desire to deny the fruits of the selection
  in which the appellant was found to be the most eligible
0
  candidate. Whether the outlet is operated by the appellant
  or Respondent No. 7 is of no consequence to the ultimate
  beneficiaries of the service to be offered by the said
  outlet. This highlights the need of caution that was
  imperative on the part of the High Court while
E entertaining the writ petition and in passing orders
  therein. Be that as it may, in the totality of the facts of the
  present case, it would be just and proper to direct the
  Corporation, if it is of the view that the operation of the
  retail outlet is still justified by the exigencies, to award the
F same to the appellant by completing the requisite
  formalities in accordance with the procedure laid down
  by the Corporation itself. (paras 11, 14, 15] (971-E-F; 975-
  G-H; 976-A-F]

G      Raunaq International Ltd. vs. I. V.R. Construction Ltd. &
  Ors. (1999) 1 SCC 492: 1998 (3) Suppl. SCR 421; Air India
  Ltd. Vs. Cochin International Airport Ltd. & Ors. (2000) 2 SCC
  617: 2000 (1) SCR 505~ Master Marine Services (P) Ltd. vs.
  Metcalfe & Hodgkinson (P) Ltd. & Anr. (2005) 6 SCC 138:
H 2005 (3) SCR 666; Tejas Constructions and Infrastructure
 SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 965
            CORPORATION LTD.
 Private Limited vs. Municipal Council, Sendhwa and Anr.          A
 (2012) 6 SCC 464: 2012 (4) SCR 190 - relied on.
                      Case Law Reference:
     1998 (3) Suppl. SCR 421        relied on        Para 11
                                                                  B
     2000 (1) SCR 505               relied on        para 12
     2005 (3) SCR 666               relied on        para 13
     2012 (4) SCR 190               relied on        para 13

     CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.             C ,
 1871-1872 of 2014.

     From the Judgment and order dated 16.05.2012 of the
 High Court of Patna in LPA No. 1845, 1916 of 2011 and CWJC
 No. 6125 of 2011.                                                o·
     P.S. Patwalia, U.U. Lalit, S.B. Sanyal, Amit Pawan, Subhro
 Sanyal, Bhavna Arora, Sunil Murarka, Parijat Sinha, Reshmi
 Rea Sinha, S.C. Ghosh, Abhinav Mukerji, Binu Sharma,
 Pumima Krishna for the appearing parties.
                                                                  E
     The Judgment of the Court was delivered by

     RANJAN GOGOi, J. 1. Leave granted.

       2. These appeals are directed against the common
  judgment and order dated 16.05.2012 passed by th,e High F
  Court of Judicature at Patna in Letters Patent Appeal Nos.1845
  and 1916 of 2011. By the aforesaid impugned order, the High
  Court has directed that the respondent No. 7 herein who was
  placed at serial No.2 of the select list/merit panel for award of
  dealership of retail outlet under the respondent No.1, i.e. M/s. G
  Bharat Petroleum Corporation Ltd., be offered the said
  dealership after completing the process contemplated under
. the selection procedure in force in the Corporation.

                                                                  H
    966       SUPREME COURT REPORTS                  [2014] 1 S.C.R.


A        3. A summary of the essential facts is delineated
    herein below:-

        The first respondent Corporation issued an advertisement
  dated 30.05.2010 for award of dealership of retail outlets in
  different locations including Areraj, East Champaran District in
8
  the State of Bihar. The selection was to be made in accordance
  with the norms laid down by the Corporation and available in a
  booklet published on 15.09.2008 under the caption "procedure
  for selection of petrol/diesel retail outlet dealers" (hereinafter
  referred to as the "Norms"). On the basis of the applications
C received for grant of the dealership in question, a selection was
  held wherein the appellant was placed at Sl.No.1 with 78.04
  marks whereas the respondent No.7 who had secured 77.75
  marks was placed at Sl.No.2. The dealership was to be offered
  to the most meritorious candidate after necessary field
D verification. The norms contemplated issuance of a Letter of
  Intent (Loi) on the expiry of 30 days from the date of publication
  of the select list/merit panel or till disposal of complaints, if any,
  with regard to the selection made by the Corporation. A
  grievance redressal mechanism is expressly laid down in the
E 'Norms'.

       4. Aggrieved by the selection, the respondent No.7 filed a
  complaint dated 25.01.2011 before the Corporation raising a
  two-fold grievance. The first was with regard to award of 'zero'
F marks to the Respondent, against a maximum of 'four'
  awardable under the head "Fixed and Moveable Assets". The
  second grievance raised was that the land offered by the
  appellant was under litigation and was not immediately
  available for use of the retail outlet. The complaint filed by the
  respondent No. 7 was promptly answered by an order of
G rejection dated 28.01.2011 on the ground that the Technical
  Evaluation Committee in its report had found the land offered
  by the appellant suitable for development of the retail outlet and
  that the issue raised by the respondent in the objection/
  complaint would be dealt with in the process of grant of No
H
  SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 967
      CORPORATION LTD. [RANJAN GOGOi, J.]
 Objection Certificate (NOC) by the District Magistrate to whom      A
 a reference of the matter is required to be made. In so far as
 the claim of the respondent No.7 with regard to award of marks
 is concerned, the same was rejected on the ground that the
 respondent had not furnished any document in support of his
 title to the assets mentioned by him in his application.            B

        5. Aggrieved by the rejection of his complaint, the
. respondent No.7 moved the High Court by means of a writ
  petition registered and numbered as C.W.J.C. No.6125 of
  2011. No Letter of Intent had been granted to the appellant at     C
  that stage. A learned Single Judge of the High Court by order
  dated 29.09.2011 took the view that in so far as award of marks
  to _the respondent No.7 is concerned no fault can be found in
  the decision of the Corporation inasmuch as the respondent
  No. 7 did not produce any document of title in respect of assets
  mentioned by him in his application for the dealership. In fact,   D
  the learned Single Judge came to the further conclusion that
  such failure on the part of the respondent No. 7 amounted to
  suppression/concealment of relevant facts. In so far as the
  present appellant is concerned, the learned Single Judge came
  to the conclusion that the requisite NOC from the District         E
  Magistrate in respect of the land offered by the appellant not
  having been granted, the Corporation cannot be expected to
  wait indefinitely. Consequently, the learned Single Judge
  directed that the selection process be redone.
                                                                     F
       6. Aggrieved by the order dated 29.09.2011 passed by
 the learned Single Judge both the appellant and the respondent
 No.7 filed their respective Letters Patent Appeals. The Division
 Bench of the High Court by the impugned order dated
 16.05.2012 substantially agreed with the findings recorded by       G
 the learned Single Judge in so far as both the parties are
 concerned. However, taking note of Clause 16 of the Norms
 i.e. "Procedure For Selection Of Petrol/Diesel Retail Outlet
 Dealers", the Bench took the view that once the appellant was
 found to be disentitled, the dealership should have been
                                                                     H
    968      SUPREME COURT REPORTS                 [2014] 1 S.C.R.


A   awarded to respondent No.7, he being, at serial No.2 of the
    merit list. Consequential directions were issued by the Division
    Bench of the High Court. Aggrieved, the present appeals have
    been filed.

B      7. Contending that the findings of the learned Single Judge
  with regard to suppression/concealment had not been set aside
  by the Division Bench of the High Court in its order dated
  16.05.2012, the respondent No.7 had moved SLP (C)
  No.28324 of 2012 against the aforesaid part of the order dated
  16.05.2012. The SLP filed by the respondent No. 7 was
C dismissed by this Court by order dated 05.10.2012.

       8. An effective resolution of the contentious issues that
  have emerged from the arguments made on behalf of the rival
  parties would require specific notice of the relevant documents
D brought on record by the parties at different stages of the
  proceedings before the High Court as well as this Court. As
  none of the said documents are disputed and the authenticity/
  genuineness thereof is not questioned, considering the
  relevance of the same to the subject matter, we are of the view
E that the facts unfolded by the said documents can be ignored
  only at the cost of a fair adjudication of the lis between the
  parties. We, therefore, proceed to take note of the said facts
  in proper sequential order.

       9. After the selection for the dealership was finalized by
F the Corporation on 30.12.2010, a reference was made to the
  District Authority on 24.01.2011 for grant of NOC to enable the
  Corporation to apply for the necessary licence under the
  Petroleum Rules, 2002. By communications dated 11.07.2011
  and 16.07.2011 the District Authority informed the Corporation
G that NOC cannot be granted on account of the fact that the land,
  on which outlet was proposed, was involved in Partition Suit
  No.7 of 2006. It would be of some significance that the appellant
  was impleaded as defendant in the said suit on 04.02.2011 i.e.
  after 5 years of its institution and that too after the finalization
H of the select list/merit panel by the Corporation. An order of
 SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 969
     CORPORATION LTD. [RANJAN GOGOi, J.]
injunction to restrain the District Authority from issuing NOC was   A
sought by the plaintiff in Partition Suit No.7 of 2006 which was
refused by the learned Trial Court on 19.07.2011. Taking note
of the aforesaid fact i.e. refusal of injunction, the District
Authority, once again, sought for a report from the Sub-
Divisional Officer whether NOC can be granted. This was on           B
04.08.2011. The Sub-Divisional Officer sought the opinion of
the Government Advocate and submitted a report dated
18.08.2011 recommending grant of NOC. These documents,
though vital, were not before the High Court but have been
placed before us. After the learned Single Judge had decided         c
the writ petition by ordering a fresh selection, an amendment
application dated 17.10.2011 was filed in Partition Suit No.7
of 2006 for deletion of the land offered for the dealership from
the purview of the suit. The said amendment was allowed by
the learned Trial Court on 19.10.2011. In the LP.A. filed by the
                                                                     0
appellant, i.e. L.P.A. No.1845 of 2011 the amendment
application for deletion of the land in question as well as the
order dated 19.10.2011 of the learned Trial Court allowing the
said amendment application were enclosed. The High Court
overlooked the same and did not consider the effect thereof
on the rights and entitlements of the respective parties. It also    E
appears that on 26.12.2011, on behalf of the Corporation, a
reminder was issued to the District Authority for grant of tbe
NOC applied for by the Corporation on 24.01.2011. There is
another letter on record dated 30.12.2011 from the District
Magistrate to the Territory Manager (Retail) Bharat Petroleum        F
Corporation Limited in the matter of grant of NOC. In the said
letter reference has been made to the order of the learned
Single Judge in the C.W.J.C. No.6125 of 2011 dated
29.09.2011. In the ultimate paragraph of the said letter it is
stated that:-                ·                                       G

    "Thus, in view of the present context, kindly inform about
    your final decision regarding issuance of NOC whether
    issuance of NOC can be considered or not."
                                                                     H
    970      SUPREME COURT REPORTS                    (2014] 1 S.C.R.


A The aforesaid letter dated 30.12.2011 is an English translation
  of the original. The contents of the last paragraph quoted
  hereinabove has left the true meaning thereof clouded though
  the appellant contends that the said paragraph should be read
  as containing a query from the Corporation as to whether in
B view of the learned Single Judge's order passed in the writ
  petition, NOC can be issued or not. Be that as it may, another
  su!t i.e. T.S.No.638 of 2011 involving land in question had been
  instituted though the same has been dismissed on 6.1.2014
  as not maintainable. Above all, Partition Suit No. 7 of 2006 has
c been dismissed as withdrawn on 7 .1.2014 on an application
  filed by the plaintiff. No other pending litigation involving the land
  has been brought to the notice of the Court.

         10. In the present case even before the Letter of Intent in
    respect of the dealership could be issued to the appellant the
D   proposed grant came to be challenged before the High Court
    by the respondent No.7 who had impugned the decision of the
    Corporation dated 28,01.2011 rejecting the complaint filed by
    him against the selection made. Initially, the District Authority
    had taken the stand that the NOC in respect of the land offered
E   by the appellant cannot be issued as the same was found to
    be involved in a litigation i.e. Partition Suit No.7 of 2006. While
    the writ petition was pending there was a change in the stand
    of the District Authority in the matter of grant of NOC. Yet, the
    same was not brought to the notice of the learned Single Judge.
F   A vital fact, therefore, escaped notice. The fact that the appellant
    was impleaded in the suit on 04.02.2011, i.e. nearly 5 years
    after the institution thereof and after the selection was finalized
    by the Corporation on 30.12.2010 was before the High Court;
    yet the same had been overlooked by the learned Single
G   Judge. The Division Bench hearing the Letters Patent Appeals
    also overlooked the fact that the learned Trial Court by order
    dated 19.10.2011 had allowed the deletion of the land in
    question from the purview of the said partition suit on an
    application filed by the plaintiff. This is, notwithstanding, the fact
H   that the amendment application dated 17 .10.2011 as well as
      SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 971
          CORPORATION LTD. [RANJAN GOGOi, J.]
  the order thereon dated 19.10.2011 was brought on the record          A
  of the LP.A. by the appellant. That apart, the facts brought on
  record of the present appeal by the parties is of considerable
  signifi~nce. The subsequent report of the Sub-Divisional
  Officer dated 18.8.2011 recommending grant of NOC; the
  reminder of the Corporation dated 26.12.2011 to the District          8
  Authority for grant of NOC; the institution of Title Suit No.638
  of 2011 in respect of the land in question and the dismissal
  thereof by order dated 06.01.2014 on the ground of
  maintainability as well as the dismissal of Partition Suit No. 7
  of 2006 on 07.01.2014 (on withdrawal) are too significant to          C
  be ignored, as already held. Relevant facts have been ignored
  at different stages of consideration of the matter by the High
  Court and in the light of the totality of the facts now placed
 ·before us, we unhesitatingly come to the conclusion that in the
  present case there was a deliberate and not very bona fide
  attempt on the part of the respondent No.7 to deny the fruit of       D
  th~selection made in favour of the appellant by the Corporation
  as far back as on 30.12.201 o. The situation, therefore, has to
  be remedied and it is the precise manner thereof which must
  now engage the attention of the Court.
                                                                        E
        11. We cannot help observing that in the present case
  exercise of the extraordinary jurisdiction vested in the High
  Court by Article 226 of the Constitution has been with a
  somewhat free hand oblivious of the note of caution struck by
  this Court with regard to such exercise, particularly, in             F
  contractual matters. The present, therefore, may be an
  appropriate occasion to recall some of the observations of this
  Court in the above context. In Raunaq International Ltd. Vs.
· I. V.R. Construction Ltd. & Ors. 1, (paragraphs 9, 10 and 11) this
  Court had held as follows:-                                           G

        "9. The award of a contract, whether it is by a private party
        or by a public body or the State, is essentially a
        commercial transaction. In arriving at a commercial
 1.    (1999) 1 sec 492.                                                H
    972       SUPREME COURT REPORTS                   [2014] 1 S.C.R.


A         decision, considerations which are of paramount
          importance are commercial considerations. These would
          be:

                 (1) the price at which the other side is willing to do
                 the work;
B
                 (2) whether the goods or services offered are of the
                 requisite specifications;

                 (3) whether the person tendering has the ability to
c                deliver the goods or services as per specifications.
                 When large works contracts involving engagement
                 of substantial manpower or requiring specific skills
                 are to be offered, the financial ability of the tenderer
                 to fulfil the requirements of the job is also important;
D                (4) the ability of the tenderer to deliver goods or
                 services or to do the work of the requisite standard
                 and quality;

                 (5) past experience of the tenderer and whether he
E                has successfully completed similar work earlier;

                 (6) time which will be taken to deliver the goods or
                 services; and often

                 (7) the ability of the tenderer to take follow-up
F                action, rectify defects or to give post-contract
                 services.
          Even when the State or a public body enters into a
          commercial transaction, considerations which would
          prevail in its decision to award the contract to a given party
G
          would be the same. However, because the State or a
          public body or an agency of the State enters into such a
          contract, there could be, in a given case, an element of
          public law or public interest involved even in such a
          commercial transaction.
H
-r
SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 973
    CORPORATION LTD. [RANJAN GOGOi, J.]
       10. What are these elements of public interest? (1) Public          A
     . money would be expended for the purposes of the contract.
     · (2) The goods or services which are being commissioned
       could be for a public purpose, such as, construction of
       roads, public buildings, power plants or other public
       utilities. (3) The public would be directly interested ~n the       B
       timely fulfilment of the contract so that the services become
       available to the public expeditiously. (4) The public would
       also be interested in the quality of the work undertaken or
       goods supplied by the tenderer. Poor quality of work or
       goods can lead to tremendous public hardship and                    c
       substantial financial outlay either in correcting mistakes or
       in rectifying defects or even at times in redoing the entire
       work - thus involving larger outlays of public money and
       delaying the availability of services, facilities or goods, e.g.,
       a delay in commissioning a power project, as in the                 D
       present case, could lead to power shortages, retardation
       of industrial development, hardship to the general public
       and substantial cost escalation.

      t 1. When a writ petition is filed in the High Court
      challenging the award of a contract by a public authority E
      or the State, the court must be satisfied that there is some
      element of public interest involved in entertaining such a
      petition. If, for example, the dispute is purely between two
      tenderers, the court must be very careful to see if there is
      any element of public interest involved in the litigation. A . F
      mere difference in the prices offered by the two tenderers
      may or may not be decisive in deciding whether any public
      interest is involved in intervening in such a commercial
      transaction. It is important to bear in mind that by court
      intervention, the proposed project may be considerably G
      delayed thus escalating the cost far more than any saving
      which the court would ultimately effect in public money by
      deciding the dispute in favour of one tenderer or the other
      tenderer. Therefore, unless the court is satisfied that.there
      is a substantial amount of public interest, or the transaction H
    974        SUPREME COURT REPORTS                  [2014] 1 S.C.R.


A         is entered into mala fide, the court should not intervene
          under Article 226 in disputes between two rival tenderers."

         12. In Air India Ltd. Vs. Cochin International Airport Ltd.
    & Ors. 2, there was a further reiteration of the said principle in
    the following terms:-
8
          "7. The law relating to award of a contract by the State, its
          corporations and bodies acting as instrumentalities and
          agencies of the Government has been settled by the
          decision of this Court in Ramana Dayaram Sheffy v.
C         International Airport Authority of lndia 3, Fertilizer Corpn.
          Kamgar Union (Regd.) v. Union of lndia 4, CCE v. Dunlop
          India Ltd. 5, Tata Cellular v. Union of lndia 6, Ramniklal N.
          Bhutta v. State of Maharashtra 7 and Raunaq International
          Ltd. v. I. V.R. Construction Ltd. 8 The award of a contract,
D         whether it is by a private party or by a public body or the
          State, is essentially a commercial transaction. In arriving
          at a commercial decision considerations which are
          paramount are commercial considerations. The State can
          choose its own method to arrive at a decision. It can fix
E         its own terms of invitation to tender and that is not open to
          judicial scrutiny. It can enter into negotiations before finally
          deciding to accept one of the offers made to it. Price need
          not always be the sole criterion for awarding a contract. It
          is free to grant any relaxation, for bona fide reasons, if the
F         tender conditions permit such a relaxation. It may not
          accept the offer even though it happens to be the highest
          or the lowest. But the State, its corporations,

    2.    c2000) 2 sec 617.
G   3.    (1979) 3 sec 489.
    4.    (1981) 1 sec 568.
    5.    (1985) 1 sec 260.
    6.    (1994) 6 sec 651.
    7.    (1997) 1 sec 134.

H   8.    (1999) 1 sec 492.
 SANJAY KUMAR SHUKLA v. BHARAT PETROLEUM 975
     CORPORATION LTD. [RANJAN GOGOi, J.]
     instrumentalities and agencies are bound to adhere to the A
     norms, standards and procedures laid down by them and
     cannot depart from them arbitrarily. Though that decision
     is not amenable to judicial review, the coLTrt can examine
     the decision-making process and interfere if it is found
     vitiated by mala tides, unreasonableness and arbitrariness. B
     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 power under Article
     226 with great caution and should exercise it only in c
     furtherance of public interest and not merely on the making
     out of a legal point. The court should always keep the larger
     public interest in mind in order to decide whether its
     intervention is called for or not. Only when it comes to a
     conclusion that overwhelming public interest requires D
     interference. the court should intervene."

                                            (Emphasis is ours)

     13. Similar reiteration is to be found in Master Marine
Services (P) Ltd. Vs. Metcalfe & Hodgkinson (P) Ltd. & Anr. 9;    E
Tejas Constructions and Infrastructure Private Limited Vs.
Municipal Council, Sendhwa and Another10 and several other
pronouncements reference to which would only be repetitive
and, therefore, is best avoided.

       14. We have felt it necessary to reiterate the need of F
 caution sounded by this Court in the decisions referred to
 hereinabove in view of the serious consequences that the
 entertainment of a writ petition in contractual matters, unless
 justified by public interest, can entail. Delay in the judicial
 process that seems to have become inevitable could work in G
 different ways. Deprivation of the benefit of a service or facility
·to the public; escalating costs burdening the public exchequer

s.   (2005) 6 sec 138.
10. (2012> 6 sec 464.                                             H
    976      SUPREME COURT REPORTS                    [2014] 1 S.C.R.


A   and abandonment of half completed works and projects due
    to the ground realities in a fast changing economic/market
    scenario are some of the pitfalls that may occur.

          15. In the present case, fortunately, the litigation has not
B   been very time consuming. Nothing has been suggested on
    behalf of the Corporation that the establishment of a retail outlet
    at Areraj, East Champaran District in the State of Bihar is not
    required as on date. It can, therefore, be safely understood that
    in the instant case the public of the locality have been deprived
    of the benefit of the service that the outlet could have generated.
C   We have already indicated that the present litigation initiated
    by Respondent No. 7 does not constitute a very bonafide
    exercise on the part of the said Respondent and the entire
    litigation appears to have been driven by desire to deny the
    fruits of the selection in which the appellant was found to be
D   the most eligible candidate. Whether the outlet is operated by
    the appellant or the Respondent No. 7 is of no consequence
    to the ultimate beneficiaries of the service to be offered by the
    said outlet. The above highlights the need of caution that was
    imperative on the part of the High Court while entertaining the
E   writ petition and in passing orders therein. Be that as it may,
    in the totality of the facts of the present case, we are of the view
    that it would be just and proper to direct the Corporation, if it is
    of the view that the operation of the retail outlet is still justified
    by the exigencies, to award the same to the appellant by
F   completing the requisite formalities in accordance with the
    procedure laid down by the Corporation itself.

       16. Consequently, these appeals are allowed and the
  impugned order dated 16.05.2012 passed by the Division
G Bench of the High Court in LP .A. Nos.1845 and 1916 of 2011
  as well as the order dated 29.09.2011 passed by learned
  Single Judge in C.W.J.C. No.6125 of 2011 are set aside.

    D.G.                                             Appeals allowed.