S.R. Alam, C. J.

1. The Order of the Court was delivered by:-In the instant writ petition the petitioner has questioned the validity of Clause 3(B)(i) of the Tender Notice dated 12.5.2008 whereby the Northern Coalfields Limited has invited tenders for supply of Rotary Blast Hole Drill machines. In order to appreciate the controversy involved in the case it would be apt to refer few relevant facts which are as under.

2. The petitioner is a company registered under the Companies Act, 1956 and is engaged in the business of manufacture of waterwell drilling rigs, blast hole drills, vertical turbine pumps,, etc. The respondent No.2 is a government company having eight subsidiaries. The respondent No.3, namely, Northern Coalfields Limited is one of the subsidiary of respondent No.2-company and is registered under the Companies Act. The respondent No.3 for excavation of coal requires various mechanical equipments, one of which is Rotary Blast Hole Drill machine. In order to meet the aforesaid requiredment a Notice Inviting Tender ('NIT') dated 05.4.2005 was issued for procurement of one 160 MM Rotary Blast Hole Drill machine. The petitioner in pursuance to the aforesaid NIT submitted its offer dated 11.4.2005. On a request being made by the respondent No. 3, the petitioner-company extended the validity of its offer upto 15.11.2005. Thereafter, by communication dated 20.10.2005 the petitioner was informed that price bid shall be opened on 24.10.2005. However, on 24.10.2005 vide a Fax Message, the petitioner was informed that opening of price bid has been deferred. Thereafter, by communication dated 11.11.2005 the petitioner was asked to extend the validity of its offer upto 31.12.2005. The petitioner accordingly extended the validity of its offer upto 31.12.2005.

3. However, without finalizing the Tender Notice dated 05.4.2005, again another NIT (Annexure-P-13) was issued for procurement of two 160 MM Rotary Blast Hole Drill machines. The petitioner once again submitted its bid. The petitioner was asked to extend the validity of its offer upto 30.3.2007. Thereupon by communication dated 16.2.2007 the petitioner extended the validity of its offer upto 31.3.2007. Thereafter, again on a request being made by respondent No.3 the petitioner extended the validity of its offer upto 30.4.2007 and subsequently upto 30.6.2007. The petitioner thereafter was informed that price bid shall be opened on 02.6.2007. However, vide letter dated 01.6.2007 the petitioner was apprised that opening of the price bid has been kept in abeyance until further communication. Once again, on a request being made by respondent No.3-company, the petitioner extended the validity of its offer upto 29.2.2008. However, the aforesaid NIT was not finalized.

4. However, without finalizing the second Tender Notice (Annexure-P-28) was issued. The petitioner once again submitted the bid in response to the aforesaid notice. Once again on a request being made by respondent No.3 the petitioner extended the validity of its bid upto 31.8.2007. However, even the aforesaid NIT was not finalized.

5. Thereafter, a fresh Notice Inviting Tender dated 12.5.2008 was issued for procurement of thirteen 160 MM Rotary Blast Hole Drill machines. The tender contains Clause 3(B)(i), which reads as under:

Clause S (B)(i) - Procurement against this tender shall be done only for proven equipment. Equipment offered by a bidder shall be considered proven provided:

The bidder must have supplied atleast 03 (three) nos. of the type and the model of equipment offered, to mining industry and/or all other industries (Private or Government/ Public Sector Undertaking Indigenous or Global) during the last 5 years (as on the date of opening of the tender) and atleast three equipments should have been performed satisfactorily for a minimum period of one year from the date of commissioning, at 03 (three) different locations.

It is the aforesaid clause by which the petitioner is aggrieved and therefore has challenged its validity.

6. Shri Anil Khare, learned counsel for the petitioner submitted that three previous Notice Inviting Tenders were cancelled by respondent no.3 without any justification with a malafide intention to oust the petitioner. It is urged that Clause 3 (B)(i) of the NIT is contrary to the principle of 'level playing field'. It is argued that impugned condition is violative of Articles 14 and 19(1)(g) of the Constitution of India. He further sought to argue that inclusion of Clause 3(B)(i) in NIT dated 12.5.2008 is malafide and is arbitrary. In support of his submissions reliance has been placed on the decisions of Supreme Court in Reliance Energy Ltd. and Another vs. Maharashtra State Road Development Corporation Ltd. and Others, (2007) 8 SCC 1, United India Insurance Co. Ltd. vs. Manubhai Dharam singh bhai Gajera, (2008) 10 SCC 404, S.S. & Company vs. Orissa Mining Corporation, (2008) 5 SCC 772 and in the case of Tata Cellular vs. Union of India, AIR 1996 SC 11.

7. On the other hand, Shri Greeshm Jain, learned counsel appearing for respondent nos. 1 and 2 has submitted that respondent no.3 is an independent company registered under the provisions of Companies Act, 1956 and is empowered to issue NIT setting forth the terms and conditions as per its requirements. The previous three NITs were cancelled without evaluating the offer made by any of the bidder. Clause 3(B)(i) has been inserted in the NIT to procure better quality machines which have proven performance so that work of production of coal is not adversely affected. It has further been submitted that NIT in question is a global tender and in response to the aforesaid NIT, five tenderers have submitted their bids. It is contended that in past the petitioner had supplied six machines to different subsidiaries of Coal India Limited, out of which five machines failed to achieve even the target of 83% within a period of 12 months from the date of their commission and, therefore, subsidiaries of Coal India Limited were constrained to invoke the performance guarantees furnished by the petitioner. It has further been submitted that terms and conditions of invitation to tender are beyond judicial review. In support of his submissions learned counsel has placed reliance on the decisions of Supreme Court in Tata Cellular vs. Union of India, AIR 1996 SC 11, Association of Registration Plates vs. Union of India and others, AIR 2005 SC 469 and Siemons Public Communication Pvt. Ltd. and another Vs. Union of India, AIR 2009 SC 1204.

8. We have considered the submissions made on both sides. The scope of judicial review in the matters relating to tender or award of contract is no longer res integra and stands concluded by catena of decisions of Supreme Court. In Tata Cellular vs. Union of India, (1994) 6 SCC 651, it has been held that terms of invitation to tender are not open to judicial scrutiny because invitation to tender is in the realm of contract. In Air India Limited vs. Coachin International Airport Limited, (2000) 2 SCC 617 it has held that authority inviting tender can fix its own terms of invitation to tender. The Court can examine the decision making process and interfere with the same only if it is found to have vitiated by malafide and arbitrariness. In Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Others, (2000) 5 SCC 287, it has been held that authority calling for the tender is the best judge to prescribe the terms and conditions of the tender and even it is not open to courts to say whether the conditions prescribed in the tender under consideration were better than one prescribed in earlier tender invitations. It has further been held that the courts cannot strike down the terms of the tenders prescribed by the authorities merely because it feels that some other terms in the tender would have been fair, wiser or logical. The court can interfere when the terms of tender are shown to be arbitrary, discriminatory or malafide. Similar view has been taken by the Supreme Court in Director of Education and Others vs. Educomp Datamatics Ltd. And Others, (2004) 4 SCC 19. In Siemons Public Communication Pvt. Ltd. and Another vs. Union of India, AIR 2009 SC 1204, the Supreme Court has held that when the power of judicial review is invoked in the matters relating to tenders or award of contract the court must bear in mind that the contract is a commercial transaction and evaluation of tenders in awarding of contracts is essentially the commercial function.

9. In the backdrop of aforesaid well settled legal position and also in the facts of the case we now proceed to deal with the challenge to the impugned condition of N.I.T. The respondent No.3 undoubtedly has the authority to lay down the pre-conditions of qualifications of tenderers to ensure that they have the capacity and resources to successfully execute the contract awarded to them. One cannot lose site of the fact that the petitioner in the past had supplied six machines to subsidiaries of Coal India Limited, out of which five machines have failed in achieving its target of 83% within a period of 12 months from the date of commission which compelled the subsidiary of respondent No.2 to invoke the performance guarantee clause for encashment of Bank guarantee. The object of incorporating clause 3(B)(i) is to achieve the best quality machines which are having proven performance so that the production of the coal does not suffer. Looking to the object and purpose of incorporation of the aforesaid condition, in our view, the same by no stretch of imagination can either be said to be arbitrary or unreasonable.

10. The contention advanced on behalf of petitioner that three previous Notice Inviting Tenders were cancelled with malafide intention and without any justification has no force and cannot be accepted for the simple reason that the petitioner did not lodge any protest when successive Notice Inviting Tenders were issued. On the contrary, it participated in the same by submitting tenders. Besides, the respondent No.3, namely, Norther Coalfields Limited, has given the reasons and circumstances under which previous three NITs were cancelled. In paragraph 3 of reply to rejoinder of respondent No.3 it has been averred that one M/s. Revathi Equipment Limited, one of the tenderer who had submitted its bid pursuant to first Notice Inviting Tender dated 05.4.2005 made a representation dated 22.10.2005 whereunder it questioned the provenness of offered equipment by the petitioner on the ground that the Bank guarantee furnished by the petitioner in respect of five out of six machines which were supplied by the petitioner were encashed, on account of non-achieving of guaranteed availability as per terms of the respective orders by the Coal India hence the petitioner does not fulfill the eligibility criteria laid down in N.I.T.

11. In view of aforesaid representation the opening of price bid was postponed with a view to ascertain factual position on account of passage of time and withdrawal/unwillingness of one of the participating tenderer to continue with the tender, the tender for supply of one Drill was closed and the requirement of one Rotary Blast Hole Drill machine was clubbed with the second NIT. It has further been averred that prior to cancellation of subsequent tenders i.e. second and third NITs the matter was taken up with Coal India Limited and the opinion of Additional Solicitor General was sought. A copy of the opinion has been annexed as Annexure-R-3. In the opinion it was stated that petitioner does not qualify the test of provenness and one machine supplied by him earlier cannot be given the certificate of provenness. No decision to finalize the second and third NITs could be taken as there were numerous complaints regarding quality of machines supplied by the petitioner. On account of passage of time, second and third NITs were also cancelled.

12. Thus from the aforesaid facts it is evident that in the first N.I.T. The tenders were invited only for one Rotary Blast Hole Drill machine, however, looking to the need of one more Rotary Blast Hole Drill machine the second N.I.T. Was floated for supply of two Rotary Blast Hole Drill machines, which included the Rotary Blast Hole Drill machine of first N.I.T. and thus the first N.I.T. not being concluded and having been merged with second N.I.T. automatically stood cancelled. Besides that, the same having not been concluded, no right accrued to any one including the petitioner. The authority inviting offer can withdraw the invitation, even after receipt of offer, so long as it is not accepted, hence there can be no exception to the order cancelling the N.I.T. before taking steps to finalize the same. The respondent No.3 even before cancellation of second and third N.I.T. by way of abundant cuation and in all fairness, obtained, opinion of Additional Solicitor General and only after receipt of the opinion, the respondent No. 3 decided to cancel second and third N.I.T.

13. Thus, we find that explanation given for cancellation of previous Notice Inviting Tenders on behalf of the respondents is plausible, convincing and as such the action of cancellation of NITs cannot be held to have been taken only to oust the petitioner from submitting the bid. Mere participation in the tender does not create any indefeasible or legally enforceable right on the petitioner and respondent No.3 is well within its right to cancel the NIT for cogent reasons, which have been referred to supra. No fault can be found with the action of respondent No.3 in cancelling the NIT in previous three NITS. Thus, the challenge to validity of clause 3(B)(i) of N.I.T. Dated 12.5.2008 cannot be sustained.

14. In the result, the writ petition fails and is hereby dismissed.