M/S UTKAL SUPPLIERS versus M/S MAA KANAK DURGA ENTERPRISES & ORS.

Citation: [2021] 3 S.C.R. 391 · Decided: 09-04-2021 · Supreme Court of India · Bench: R.F. NARIMAN, BHUSHAN RAMKRISHNA GAVAI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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M/S UTKAL SUPPLIERS
v.
M/S MAA KANAK DURGA ENTERPRISES & ORS.
(Civil Appeal Nos. 1517-1518 of 2021)
APRIL 09, 2021
[ROHINTON FALI NARIMAN AND B. R. GAVAI, JJ.]
Tender: Invitation of tender – The Tender call notice stipulated
that the bidder should have valid Labour Licence of Labour
Department – Respondent no. 1 was disqualified  for want of valid
Labour Licence i.e. a contract labour licence from competent
authority – Writ petition by respondent no.1 was allowed holding
that the stipulation in the tender never mandated the licence to be
issued under the Contract Labour (Regulation and Arbitration) Act,
1970 and rather same is required under Odisha Shops and
Commercial Establishments Act – Appeal by successful bidder –
Held: The writ court does not have the expertise to correct decision
by substituting its own decision for the decision of the authority –
High Court  clearly overstepped the bounds of judicial review in
such matters – In any case, a registration certificate under s.4 of
the Orissa Act cannot possibly be the equivalent of a valid labour
licence issued by the labour department – A reading of s.4 of the
Orissa Act would show that the registration of an establishment
under the Orissa Act is to categorise the establishment as a shop,
commercial establishment, hotel, etc. and not for the purpose of
issuing a labour licence which, in the context of the present TCN,
can only be a labour licence under the Contract Labour Act – High
Court’s order set aside – Judicial review – Writ jurisdiction.
Allowing the appeals, the Court
HELD: 1. The authority concerned read its own TCN to
refer to the licence to be submitted by bidders as the labour
licence under the Contract Labour Act. This is also clear from a
reading of the tender document as a whole, and in particular,
clauses VI.20.6, VI.20.20 and VI.20.21. Sub-clauses (20) and (21),
in particular, make it clear that the staff employed would be
employed by the agency as contract labour, the agency being
[2021] 3 S.C.R. 391
391
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SUPREME COURT REPORTS
[2021] 3 S.C.R.
responsible to make alternative arrangements in cases where
their staff goes on strike. [Para 10][398-C-D; 398-G-H]
2. Judicial review in these matters is equivalent to judicial
restraint in these matters. What is reviewed is not the decision
itself but the manner in which it was made. The writ court does
not have the expertise to correct such decisions by substituting
its own decision for the decision of the authority. The High Court
has clearly overstepped the bounds of judicial review in such
matters. In any case, a registration certificate under Section 4 of
the Orissa Act cannot possibly be the equivalent of a valid labour
licence issued by the labour department. [Paras 11, 14][399-A-
B; 402-D]
Tata Cellular v. Union of India (1994) 6 SCC 651 :
[1994] 2 Suppl. SCR 122; Afcons Infrastructure Ltd. v.
Nagpur Metro Rail Corpn. Ltd. (2016) 16 SCC 818 :
[2016] 3 SCR 551; Montecarlo Ltd. v. NTPC Ltd., (2016)
15 SCC 272 : [2016] 8 SCR 224; Caretel Infotech Ltd.
v. Hindustan Petroleum Corpn. Ltd., (2019) 14 SCC 81
: [2019] 6 SCR 950; State of Madhya Pradesh v. U.P.
State Bridge Corporation Ltd., (2020) SCC OnLine SC
1001; Galaxy Transport Agencies v. New J.K.
Roadways, (2020) SCC OnLine SC 1035 – relied on.
3. A reading of Section 4 of the Orissa Act would show that
the registration of an establishment under the Orissa Act is to
categorise the establishment as a shop, commercial establishment,
hotel, etc. and not for the purpose of issuing a labour licence
which, in the context of the present TCN, can only be a labour
licence under the Contract Labour Act. [Para 14][403-D-E]
4. The argument of Respondent no.1 with reference to
Section 1(4) of Contract Labour Act is wholly misplaced. The
requirement of this Act that its applicability be extended only to
establishments in which there are 20 or more workmen can be
done away with by the appropriate government under the proviso,
making it clear that this is not an inflexible requirement. In any
case, the acceptance of such argument would amount to second-
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guessing the authority’s interpretation of its own TCN which, as
has been stated hereinabove, cannot be so second-guessed unless
it is arbitrary, perverse or mala fide. Except  for an incantation of
the expression malafide, no mala fide has in fact been made out
on the facts of this case. [Paras 15, 16][403-E-F; 404-B-C; 405-
C]
Case Law Reference
[1994] 2
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