Supreme Court of India
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA MARYADITversusSTATE OF MAHARASHTRA & ORS.
- Citation
- 2011 INSC 598
- Decided
- 19 August 2011
- Disposal
- Dismissed
- Bench
- ALTAMAS KABIR
Holding
The EOI’s eligibility criteria, including the Rs 1 crore turnover and three‑year production requirement, were valid and the appellant was ineligible, so the contract award to respondents 4‑6 was lawful.
Summary
The appellant, a Mahila cooperative society, challenged the award of a contract for supplying fortified blended food under the Integrated Child Development Scheme, arguing that the eligibility criteria in the Expression of Interest (EOI) were arbitrary and that the contract period should be limited to one year. The High Court dismissed the writ petition, holding that the appellant failed to meet Clause 6 of the EOI, which required a three‑year turnover of at least Rs 1 crore and prior production of the specified food, and that the contract could be extended for two years after satisfactory performance. The Supreme Court affirmed the High Court’s decision, finding that the turnover and production requirements were reasonable, the contract period of one year with a possible two‑year extension was proper, and the technical specifications (extrusion technology, precise measurements) were essential for safety and nutrient composition. Consequently, the appellant was ineligible to participate and the award to respondents 4‑6 stood. The appeal was dismissed.
Issues considered
- The validity and reasonableness of the eligibility criteria (turnover and three‑year production) in the EOI.
- Whether the contract could be extended beyond one year.
- Whether the technical specifications (extrusion technology, automated processes) were extraneous to the purpose of the EOI.
- Whether the appellant had locus standi to challenge the award.
Legislation cited
Subjects
government contractstender eligibilitysupplementary nutritionIntegrated Child Development Schemeextrusion technologypublic procurementfood fortificationeligibility criteria
Judgment
[2011] 13 (ADDL.) S.C.R. 789
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA A
MARYADIT
v.
STATE OF MAHARASHTRA & ORS.
(Civil Appeal No.7104 of 2011)
B
AUGUST 19, 2011
[ALTAMAS KABIR AND SURINDER SINGH NIJJAR, JJ.]
Government Contracts - Tender - Eligibility criteria -
Supply of food under Supplementary Nutrition Programme of C
Integrated Child Development Scheme (!CDS) - Central
Government revised nutritional and feeding norms which
required the food to be fortified with essential micro nutrients
- Extrusion technology was required to produce such food -
In response, respondent-State took out Expression of Interest D
(EOI) for supply of fortified blended food manufactured
through process of extrusion - Contract granted to respondent
Nos.4 to 6 - Challenge to - Writ petition filed by appellant
dismissed by the High Court - On appeal, held. The writ
petition was rightly dismissed by the High Court - The EOI E
had deliberately stressed on the need of precise
measurements for preparation of the food - The food was to
be prepared in the manner prescribed by the Government for
safety and nutrient composition of the food - It could not be
left to uncertainties of the machinery available with individual F
manufacturers - The procedure adopted was necessary to
ensure that there was "zero infection" in the food - Since the
beneficiaries were 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 and thus avoid G
the use of human hands in processes like- handling,
cleaning, grinding, extrusion and mixing - Such
considerations were not extraneous to the purpose for which
the EOI was floated - The condition in EOI of asking for
789 H
790 SUPREME COURT REPORTS [2011] 13 (ADDL) S.C R
A minimum Rs. 1 crore turnover for the last three years was also
not arbitrary - The appellant failed to satisfy the eligibility
criteria as contained in Clause 6 of the EOI which required
that the tenderer should have produced the specified food for
the last three consecutive years and supplied the same to
B Anganwadi's in /CDS - Since the appellant did not possess
a suitable manufacturing unit, it was ineligible on this score
alone - The appellant was not eligible at all to be even
considered in the tender process.
C In the year 1975, the Central Government floated a
scheme termed as "Integrated Child Development
Scheme" (ICDS) in order to improve the health and
nutrition status of the children (between the age group
of 0-6 years) and pregnant and lactating women, by
providing them with supplementary food. Under the
D Scheme, c.ertain kind of specified food was proposed to
be supplied through Anganwadi Centres (AWCS).
Apparent lack of progress in implementation of the
aforesaid Scheme prompted the Peoples Union for Civil
Liberties (PUCL) to move this Court by way of a Writ
E Petition under Article 32 of the Constitution, whereafter
by a series of orders passed in the aforesaid writ
proceedings, this Court issued necessary directions.
Pursuant to the directions, respondent Nos.1 and 2
F passed a resolution which 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
G Assistant Saving Group for Anganwadis.
Subsequently, in 2009, the Central Government
revised the nutritional and feeding norms for
supplementary nutrition in ICDS Scheme. The revised
H,
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA MARYADIT 791
v. STATE OF MAHARASHTRA
norms required that the supplementary food be fortified A
with essential micro nutrients with 50% of RDA level per
beneficiary per day. The Central Government thereafter
circulated the Recipe to the Maharashtra State
Government (respondent No.1) as per new norms of ICDS
for preparation of the food. It was provided that the B
feeding ncrms ought to have two components in it, to be
provided as supplementary nutrition to the beneficiaries
at Anganwadi Centres (AWCS) namely:- Hot Cooked
Meal (HCM) and Take Home Ration (THR). Directions were
issued that HCM and THR should be given in the form of c
"energy dense food I micro nutrient fortified food" and
the food be processed by using Extrusion Technology.
It was further emphasised that since the revised
guidelines laid major stress on micro nutrient fortification
of the THR, there was requirement of "expert technical
0
supervision" and that it can be achieved by using
accurate machines with precision in measurement.
In response, respondent No.1, Maharashtra
Government passed a resolution whereunder, the
Government prescribed the procedure for implementing E
the revised norms. Based on the above, an Expression
of Interest ('EOI') was taken out by respondent No. 2, the
Commissioner, i.e., Integrated Child Development
Services Scheme, Maharashtra, for supply of fortified
blended food manufactured through process of F
extrusion.
Appellant, a society having several years of
experience in supplying hot cooked meal (ready to eat
food) for children and other beneficiaries of AWCS in the G
State of Maharashtra, submitted representations
requesting respondent Nos.1 and 2 to consider it for
supply of food under the ICDS Scheme. It is the case of
the appellant that without considering these
representations, respondent nos. 1 and 2 signed an
H
792 SUPREME COURT REPORTS [2011] 13 (ADDL.) $.C.R.
A agreement, awarding the contract to respondent Nos. 4
to 6 for a period of one year, with a clause for extension
of two years. 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. The writ petition was
8 dismissed by the High Court.
In the instant appeal, the appellant contended that
condition Nos. 6, 7, 8 and 9 in the EOI were arbitrary; that
the Government order permitted the grant of contract for
a period of one year, however, the agreement entered into
C with respondent Nos. 4 to 6 provided that the agreement
will remain valid for one year and extendable for next 24
months; that permitting extension of the contract for three
years was contrary to the decision taken by the
Competent Authority and hence, the contract was liable
D to be declared illegal; that the entire selection process
was suspect and respondent Nos. 4 to 6 were shown
undue favour by respondent Nos.1 and 2 and that the
conditions were clearly tailor-made for respondent Nos.
4 to 6, to the exclusion of everybody else.
E
Dismissing the appeal, the Court
HELD: 1.1. The writ petition was rightly dismissed by
the High Court after examination of the entire issue. The
High Court concluded that the _appellant failed to satisfy
F the eligibility criteria as contained in Clause 6 of the EOI
which required 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,
G the appellant would b"e rendered ineligible on this score
alone. 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. [Paras 31,
32] [811 ·D-E; 812·A·B]
H
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA MARYADIT 793
v. STATE OF MAHARASHTRA
1.2. It cannot be said that the original Government A
decision had limited the period of contract to one year.
In fact, as demonstrated by the respondents, the
Government decision as well as tender condition clearly
stipulated that the contract would be initially for one year;
that upon completion of one year, the work of the B
successful candidate would be re-assessed and in case,
it was found that the performance was satisfactory, the
tender shall be extended for a period of two more years.
[Para 33] [812-C-D]
1.3. The food, which was to be supplied to the C
recipients as a part of the supplementary nutrition
programme was to be prepared in the manner prescribed
by the Government for safety and nutrient composition
of the food. It could not be left to uncertainties of the
machinery available with individual manufacturers. The D
successful supplier was duty bound to necessarily
comply with all the specifications laid down by the
Government in its norms. The various documents clearly
demonstrate that the appellant was not eligible at all to
be even considered in the tender process. All the E
objections raised by the appellant and other Mahila
Manda! I Mahila Sanstha /Mahila Bachat Gat etc. etc. were
duly considered by the Government. [Para 34] [812-E-G]
1.4. The condition of asking for minimum Rs. 1 crore F
turnover for the last three years could not be said to be
arbitrary. In fact, the· condition would be of utmost
importance. [Para 35] [813·8]
1.5. The EOI had deliberately stressed on the need
of precise measurements for the preparation· of the food. G
The supplier was 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 was earmarked for each kind of food. The
H
794 SUPREME COURT REPORTS [2011) 13 (ADDL) S C.R
A concept behind the same cannot be permitted to be
demonized by referring to it as food prepared by
"automated machines". The procedure adopted was
necessary to ensure that there was "zero infection" in the
food which was going to be consumed by infants and the
B children who were already under-nourished. Since the
beneficiaries of the Dense Energy Food and Fortified
Blended Mixture were 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
c plants. Such procedure avoids the use of human hands
in processes like- handling, cleaning, grinding, extrusion,
mixing etc., all of which are done automatically. The
aforesaid considerations could not be said to be
extraneous to the purpose for which the EOI was floated.
D [Paras 36, 37] [813-C-G]
G/odyne Technoserve Limited v. State of Madhya
Pradesh and Ors. (2011) 5 SCC 103 and Larsen and Toubro
Limited & Anr. vs. Union of India & Ors. (2011) 5 SCC 430 -
cited.
E
Case Law Reference:
(2011) s sec 103 cited Para 29
(2011) s sec 430 cited Para 29
F CIVIL APPELLATE J\JRISDICTION : Civil Appeal No.
7104 of 2011.
From the Judgment & Order dated 09.09.2010 of the High
Court of Judicature at Bombay, Nagpur Bench at Nagpur in Writ
G Petition No. 4210 of 2010.
Mukul Rohatgi, Dhruv V. Mehta, P.M. Shah, C.U. Singh,
P.S. Patwalia, P.N. Shah, Jayashree Wad, Dipti, Tamali Wad,
Ashish Wad, Shikhar Srivastava, Kanika Bhutani,
H Shriramkrishna, Ninad Laud (for J.S. Wad & Co.) Uday B.
SHAGUN MAHllJ\ UDYOGIK SAHAKARI SANSTHA MARYADIT 795
v. STATE OF MAHARASHTRA
Dube, Sanjay Kharde, Asha Gopalan Nair, Ravi Prakash A
Mehrotra. Vibhu Tiwari, Roh it Shetty, Viraj Ka dam, D. M.
Nargolkar for the appearing parties.
The Judgment of the Court was delivered by
SURINDER SINGH NIJJAR, J. 1. Leave granted. B
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 c
Court dismissed the petition of the appellant thereby affirming
the decision of awarding the contract to the respondent Nos. 4
to 6.
3. We may notice here the essential facts, which would
have a bearing on the determination of the issues raised in this D
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 E
(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 F
short '!CDS') 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 specified food
was proposed to be supplied through AWCS. Accordingly, G
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 H
796 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R
A 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
8 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
C Commissioners of the Court, inter-alia, for the purpose of
looking into the grievances that 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
D 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
E 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
F directed to be established, only six lakhs centres had been
sanctioned. It was also noticed that many of the 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
G 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.
H The position in Bihar and Uttar Pradesh was also no better.
SHAGUN MAHI LA UDYOGIK SAHAKARI SANSTHA MARYADIT 797
v. STATE OF MAHARASHTRA [SURINDER SINGH NIJJAR, J.]
Therefore, necessary directions were issued to the State A
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 B
various affidavits filed by the respondents, this Court issued the
following twelve directions:-
(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 c
after two weeks.
(ii) The efforts shall be made that all SC/ST hamlets/
habitations in the country have AWCS as early as
possible. D
(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. E
(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 F
and used and other related matters.
(v) All State Governments/Union Territories shall use
the Pradhanmantri Gramodaya Yojna fund (PMGY)
in addition to the state allocation and not as a
G
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 H
798 SUPREME COURT REPORTS [2011] 13 (ADDL) S.C.R.
A 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.
B
(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
c utensils have not been provided, the same shall be
provided (Instance of Jharkhand State has been
noticed in the Report where utensils have not been
provided). The vacancies for the operational ICDS
shall be filled forthwith. (Instance of Uttar Pradesh
D 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
E
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
F Court.
(xi) All State/Union Territories shall make earnest effort
to cover the slums under ICDS.
G (xii) The Central Government and the States/Union
Territories shall ensure that all amounts allocated
are sanctioned in time so that there is no disruption
whatsoever in the feeding of children.
9. Pursuant to the aforesaid directions, respondent Nos.
H
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA MARYADIT 799
v. STATE OF MAHARASHTRA [SURINDER SINGH NIJJAR, J.)
1 and 2 passed a resolution on 28th October, 2005. The A
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 s
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. c
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:-
D
(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 E
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 F
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 G
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.
H
800 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
B 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/NO/
c 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
(THR). For the age group of 3-6 years, food supplement
D 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
E 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.
F
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
G
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
H Additional Solicitor General that Supplementary Nutrition Food
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHAMARYADIT 801
v. STATE OF MAHARASHTRA [SURINDER SINGH NIJJAR, J]
(in short 'SNF') in the form of Take Home Ration (in short 'THR') A
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 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 B
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, c
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 D
empowerment of adolescent girls called the Rajiv Gandhi
Scheme for the Empowerment of Adolescent Girls is
implemented.
14. The Central Government, through the Ministry of
Women and Child Development and Food and Nutrition Board E
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 F
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 "e.nergy dense food I micro nutrient
fortified food" and should conform to the standards laid by the
Prevention of Food Adulteration Act, Integrated Food Law, G
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 protein content in the food proposed to be supplied, H
802 SUPREME COURT REPORTS [2011) 13 (ADDL) S.C.R.
A 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
B 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
C 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.
D
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, 200~ for supply of fortified
E 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
F 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
G as under:-
"6. The eligible Mahila Manda!, Mahila Sanstha, self
helping saving group, should attach a certificate about
producing of the Food or equivalent like Fortified Blended
Premix and supplying the same upto the Anganwadi in
H
SHAGUN rw\HllA UDYOGIK SAHAKARI SANSTHA rw\RYADIT 803
v. STATE OF rw\HARASHTRA[SURINDER SINGH NIJJAR, J.]
ICDS for the last 3 consecutive financial years having a 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 B
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 C
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.
19. The writ petition was dismissed with the observations 0
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 E
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 F
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. During the G
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,
201 Oto go into the complaints. Upon examination of the entire
material, the Committee concluded that the Extrusion H
804 SUPREME COURT REPORTS [2011) 13 (ADDL.) S.C.R.
A 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
B 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
C food I energy food under 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
0 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 maat:: a representation to
E 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:-
F
(i) That 5% of the tender work be reserved for Mahila
Manda! I Mahila Bacha! Gat etc., who do not have
the Extrusion Technology.
(ii) For this 5% work so reserved, the Extrusion
G 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 Bacha!
H Gat I Mahila Sanstha I Mahila Manda! made production
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHAMARYADIT 805
v. STATE OF MAHARASHTRA[SURINDER SINGH NIJJAR, J.)
machinery, set up unit and shown their ability of making A
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
B
representations on 26th February, 2010, 2nd March, 2010 and
4th March, 2010 requesting respondent 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 C
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 . D
•
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 201 O on 25th August, 2010.
The High Court initially passed an order on 30th August, 2010 E
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 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
F
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. G
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
H
,..
806 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R .
.
A to summarize the submissions.
27. Mr. Mukul Rohtagi, learned senior counsel, appearing
for the appellant, submitted that the 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
8 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
C 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
D nutrition food, Mahila Manda!, Women Institutions, Self
Assistance Saving Group will be for the periodof one year only.
Mr. Rohtagi further invited our attention to the Minutes of the
meeting held on 5th February, 2010, in view of the Government
Circular dated 19th January, 2010 regarding selection of
E 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
F 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
G 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 counsel made a
H
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA MARYADIT 807
v. STATE OF MAHARASHTRA [SURINDER SINGH NIJJAR, J.)
reference to Clause 17 of the EOI, which reads as under:- A
1
"All applicants should submit the copies of the
following documents signed by the Notary.
B
Certificate of District Industry Centre, VAT
Registration/CST Registration certificate .
•
Validity Certificate as per Food Adulteration C
Prohibition Act, 1954.
PAN Card.
D
ISO 9001 : 2000 Certificate, H.A.C.C.P. Certificate
for preparing extruded fortified blended/energy
food.
Income tax returns E
•
VAT clearance certificate (as on 31.3.2009)
F
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.·
28. Mr. Rohtagi submits that the VAT Clearance Certificate G
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
H
808 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R.
A seni0r 1qpunsel is not correct. It is submitted that the information
given bY.~he Tax Department in response to an enquiry made
by the· appellant under the Right to Information shows that
resporident Nos. 4, 5 and 6 owe lakhs of rupees. It is further
submitted by Mr. Rohtagi that not only the statements made by
B 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
c and 2. Learned senior counsel buttressed this submission on
the 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
D 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
E 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
F fulfill condition No. 9 as admittedly, it does not have a
functioning 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
G 14 of the EOL 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
H
SHAGUN MAHI LA UDYOGIK SAHAKARI SANSTHA MARYADIT 809
v. STATE OF MAHARASHTRA [SURINDER SINGH NIJJAR, J]
counsel submits that the points urged by Mr. Rohtagi in this A
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 duly heard. B
The contract was given initially for one year, which was .
extendable for three years, on satisfactory performance in tl]e
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 c
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
0
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, E
2010 were also submitted. The appellant further states that it
had 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 F
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.
G
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
1. (2011) s sec 103.
2. (2011) s sec 430. H
810 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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 counsel
further submitted that although in the letter dated 22nd
February, 2010. it was stated that the period of the tender would
B 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
c 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
D 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 ~he respondents, which was
much later in point of time. As on 31st March, 2009, the
statement made by the respondents was in accordance with
the return filed. Learned senior counsel also submitted that
E 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
F 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
G 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 was so ever provided for the Joint
H Venture Agreement. Mr. Patwalia further submits that the
SHAGUN MAHI LA UDY()(31t< SAHAKARI SANSTHA MARYADIT 811
v. STATE-OF-MAHARASHTRA [SURINDER SINGH NIJJAR, J.]
appellant is trying to mislead the Court by relying on an Analysis A
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, B
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 c
participate in the tender process.
31. We have considered the submissions made by the
learned counsel for the parties. We are of the considered
opinion that the writ petition has been rightly dismissed by the
High Court after examination of the entire issue. The High Court D
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 E
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 F
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 a segment of the Indian population, which is either severely
undernourished or in need of extra calories, we have chosen G
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 H
812 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
B 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.
33. We are. also unable to accept the submission of Mr.
Rohtagi that the original Government decision had limited the
C 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
ye_ar, the work of the successful candidate would be
D reassessed. In case, ii is found that the performance has been
satisfactory, the tender shall bP extended for a period of two
more years.
34. We are also of the considered opinion that the food,
E 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. The
successful supplier is duty bound to necessarily comply with all
F 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
G objections raised by the appellant and other Mahila Manda! I
Mahila Sanstha I Mahila Bacha! Gal etc. etc. were duly
considered by the Government. This is evident from the letters
dated 22nd Februarf, 2010 and 23rd February, 2010.
35. We are also not impressed by the submission of Mr.
H
SHAGUN MAHILA UDYOGIK SAHAKARI SANSTHA MARYADIT 813
v. STATE OF MAHARASHTRA [SURINDER SINGH NIJJAR, J.] ·•
Rohtagi that the condition of having Rs. 1 crore over the three A
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 Rs. 1. 7
crores per district. Therefore, the condition of asking for B
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 C
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 D
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, E
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, F
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. G
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.
H
B.B.B. Appeal dismissed.
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