[Cites 13, Cited by 0]
Chattisgarh High Court
M/S. Prem Chand And Company vs State Urban Development Agency (Suda) on 1 April, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
Digitally signed
2026:CGHC:14959-DB
by SAGRIKA
SAGRIKA AGRAWAL
AGRAWAL Date:
2026.04.04
13:18:54 +0530
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 1437 of 2026
M/s. Prem Chand And Company A Partnership Firm Having Office At-
309, 2nd Floor, Eskey Plaza, Near Anand Talkies, Raipur, 492001
Through Its Managing Partner- Sajay Kumar Agrawal S/o Late Motilal
Agrawal, Aged About 55 Years, R/o Plot No. 35, Phase 2, Labhandi,
Magneto Signature Homes, Raipur, Distt. Raipur (C.G.)
... Petitioner(s)
versus
1 - State Urban Development Agency (Suda), Through Its Chief
Executive Officer, Having Office At- Indrawati Bhawan, Block- D, 4th
Floor, Atal Nagar, Nava Raipur, Distt. Raipur, Chhattisgarh
2 - Chief Executive Officer State Urban Development Agency (Suda),
Having Office At- Indrawati Bhawan, Block- D, 4th Floor, Atal Nagar,
Nava Raipur, Distt. Raipur Chhattisgarh
3 - State Of Chhattisgarh Through Secretary, Department Of Urban
Administration And Development (Uad), Having Office At- Indrawati
Bhawan, Block- D, 4th Floor, Atal Nagar, Nava Raipur, Distt. Raipur,
Chhattisgarh
... Respondent(s)
For Petitioner(s) : Mr. Shivam Agrawal, Advocate along with
Mr. Hemant Kumar Agrawal, Advocate
For Res. No. 1 and 2 : Mr. Rishabh Garg, Advocate
For State : Mr. Prasoon Bhaduri, Dy. A.G.
Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri Ravindra Kumar Agrawal, Judge
Order on Board
Per Ramesh Sinha, Chief Justice
01/04/2026
1. Heard Mr. Shivam Agrawal, along with Mr. Hemant Kumar
Agrawal, learned counsel for the petitioner. Also heard Mr. Prasoon
Bhaduri, Dy. Advocate General, appearing for the Respondent/State
and Mr. Rishabh Garg, learned counsel for the Respondent No. 1 and 2.
2. By this petition under Article 226 of the Constitution of India, the
petitioners seek for the following relief(s):
"1. That, this Hon'ble Court may kindly be pleased
to call for the entire records pertaining to the Tender
(Request for Proposal) "RFP for Engagement of
Consultant for conducting Post Audit, Pre/Internal
Audit & Statutory Compliance in Durg Cluster-48
ULBs of Chhattisgarh State." (2nd Call) bearing
RFP No. 8183/STN-186680/SUDA/IA/2026 DATED
02/03/2026 (System Tender No. 186680) floated by
Respondent Nos. 01 & 02 in the Chhattisgarh
Government Integrated e-Procurement Portal [ULB
Urban Local Body).
2. That, this Hon'ble Court may kindly be pleased to
issue appropriate Writ(s), Order(s), Direction(s) to
quash the arbitrary & illegally 2nd Call for tender
(Request for Proposal) bearing RFP No. 8183/STN-
186680/SUDA/IA/2026 DATED 02/03/2026 (System
Tender No. 186680) [Dated 03/03/2026 as per the
Corrigendum Notice floated by Respondent Nos. 01
& 02 in the Chhattisgarh Government Integrated e-
Procurement Portal for "RFP for Engagement of
Consultant for conducting Post Audit, Pre/Internal
Audit & Statutory Compliance in Durg Cluster-48
ULBs of Chhattisgarh State." (2nd Call).
3. That, in the alternate, this Hon'ble Court may
kindly be pleased to issue appropriate Writ(s),
Order(s), Direction(s) to respondent authorities to
offer the opportunity of participation in the tender
process to the Petitioner Partnership Firm and to
give sufficient-time to it to apply/bid with respect to
the 2nd Call for tender.
4. That, this Hon'ble Court may kindly be pleased to
set-aside/quash the "restrictive minimum eligibility
criteria exclusive to ULB [Urban Local Body]
experience" which suffers from the vices of illegality
& arbitrariness.5. That, this Hon'ble Court may
kindly be pleased to issue appropriate
orders/directions to the subject authorities to
correct/relax the illegal & arbitrary restriction
imposed by the respondent SUDA authorities with
respect to the minimum eligibility criteria to
participate in the 2nd Call for tender (System
Tender No. 186680) & to instead allow the
participation of firms having experience in State/
Central Government or PSUs. Departments,
organizations, inter alia. Semi-Government
6. That, this Hon'ble Court may kindly be pleased to
issue appropriate orders/directions to the subject
authorities to have the 2nd Call for tender (System
Tender No. 186680) floated in the Government e
Marketplace (GeM) Portal, as per the letter dated
01.09.2025 written by the Secretary to the
Department of Commerce & Industry, Government
of Chhattisgarh.
7. Cost of the petition & compensation for the
mental agony, harassment & the hardships accrued
to the petitioner because of the arbitrary & illegal
act of the respondent authorities.
8. That, this Hon'ble Court may grant any other
relief in favour of the Petitioner, which it deems fit in
the facts and circumstances of the case, in the
interest of justice."
3. The brief facts of the case are that, the Petitioner is a well-
established partnership firm of Chartered Accountants, registered under
the Chartered Accountants Act, 1949, having extensive experience in
conducting internal audit, pre/post audit, and statutory compliance
assignments. The Petitioner is desirous of participating in the tender
process initiated by Respondent No. 1 - State Urban Development
Agency (SUDA), through Respondent No. 2, for engagement of a
consultant for conducting Post Audit, Pre/Internal Audit and Statutory
Compliance in Durg Cluster (48 ULBs) of the State of Chhattisgarh,
pursuant to RFP dated 02.03.2026 (2nd Call). However, the Petitioner is
aggrieved by the arbitrary and restrictive eligibility condition contained in
Clause 3.12.3, which mandates prior experience in at least 10 Urban
Local Bodies, thereby unreasonably excluding otherwise competent
firms despite the evaluation criteria recognizing broader experience in
Government, PSU and semi-government organizations.
4. That, the Petitioner raised its concerns regarding such restrictive
and inconsistent eligibility criteria through a representation dated
10.03.2026 and also during the pre-bid conference held on 11.03.2026;
however, the Respondents, without considering the objections or
passing any speaking order, issued a corrigendum dated 16.03.2026
maintaining the impugned condition. The tender process is further
vitiated by arbitrary QCBS weightage of 80:20, lack of transparency,
and non-publication on the GeM portal, which collectively restrict fair
competition and indicate mala fide intent. Left with no efficacious
alternative remedy, the Petitioner has approached this Court
challenging the impugned tender conditions and the arbitrary conduct of
the Respondents.
5. Learned counsel appearing on behalf of the petitioner, submits
that, the impugned tender process initiated by the Respondent
authorities is vitiated by arbitrariness, illegality and lack of transparency,
thereby offending Articles 14, 19(1)(g) and 21 of the Constitution of
India. The restrictive eligibility condition under Clause 3.12.3, mandating
prior experience exclusively in a minimum of 10 ULBs, is wholly
irrational and inconsistent with Clause 4.5 of the RFP, which recognizes
experience in State/Central Government Departments, PSUs and Semi-
Government organizations for the purpose of technical evaluation. Such
internal inconsistency creates an artificial barrier, unjustifiably excluding
otherwise competent and experienced firms like the Petitioner, thereby
violating the doctrine of level playing field and defeating the very
objective of fair competition in public procurement.
6. It is further submitted that the Respondents have acted in a non-
transparent and unreasonable manner by ignoring the Petitioner's
representation and issuing a corrigendum without any speaking order.
The adoption of an 80:20 QCBS ratio for a routine audit assignment is
contrary to established procurement guidelines and disproportionately
diminishes financial competitiveness. Additionally, the failure to publish
the tender on the GeM portal and the cumulative effect of restrictive
conditions indicate a mala fide intention to limit participation and favour
select entities. In light of settled law laid down by the Hon'ble Supreme
Court in Tata Cellular Vs. Union of India (1994) 6 SCC 651, Reliance
Energy Ltd. vs. Maharashtra State Road Development Corpn. Ltd
(2007) 8 SCC 1 and other judgments, the impugned action is liable to
be set aside as it suffers from illegality, irrationality and procedural
impropriety, warranting interference by this Hon'ble Court in exercise of
its power of judicial review.
7. On the other hand, learned counsel for the respective respondents
would submit that that the present petition is devoid of merit and liable
to be dismissed, as the tender conditions impugned by the Petitioner fall
squarely within the domain of policy decision and administrative
discretion of the tender inviting authority. The eligibility criteria
prescribed under Clause 3.12.3, requiring experience in a minimum
number of Urban Local Bodies (ULBs), has been consciously designed
keeping in view the nature, scale, and specific requirements of the
assignment pertaining to urban governance and municipal audit
systems, and thus bears a rational nexus with the object sought to be
achieved. Merely because the technical evaluation criteria under Clause
4.5 recognizes broader experience does not render the eligibility
condition arbitrary, as pre-qualification and evaluation operate in distinct
fields. It is further submitted that the QCBS ratio of 80:20 is justified to
ensure quality-based selection for a sensitive and large-scale
assignment involving multiple ULBs, and no statutory provision
mandates a fixed ratio. The allegations regarding mala fide intent, lack
of transparency, or non-publication on the GeM portal are wholly
baseless and unsupported by evidence. It is settled law that courts do
not interfere in tender matters unless the decision-making process is
shown to be patently arbitrary, discriminatory, or actuated by mala fides,
which is not the case herein. Hence, the present petition deserves to be
dismissed.
8. We have learned counsel for the parties, perused the material
annexed with the petition.
9. The Hon'ble Supreme Court in the case of Tata Motors Limited v
The Brihan Mumbai Electric Supply & Transport Undertaking
(Best) and Others passed in Civil Appeal No. 3897 of 2023 vide
judgment dated 19.05.2023 held as follows :
"48. This Court being the guardian of fundamental rights is
duty-bound to interfere when there is arbitrariness,
irrationality, mala fides and bias. However, this Court has
cautioned time and again that courts should exercise a lot
of restraint while exercising their powers of judicial review
in contractual or commercial matters. This Court is
normally loathe to interfere in contractual matters unless a
clear-cut case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that today
many public sector undertakings compete with the private
industry. The contracts entered into between private
parties are not subject to scrutiny under writ jurisdiction.
No doubt, the bodies which are State within the meaning
of Article 12 of the Constitution are bound to act fairly and
are amenable to the writ jurisdiction of superior courThe
Hon'ble Supreme Court in the case of Tata Motors
Limited v The Brihan Mumbai Electric Supply &
Transport Undertaking (Best) and Others passed in Civil
Appeal No. 3897 of 2023 vide judgment dated 19.05.2023
held as follows :
"48. This Court being the guardian of fundamental rights is
duty-bound to interfere when there is arbitrariness,
irrationality, mala fides and bias. However, this Court has
cautioned time and again that courts should exercise a lot
of restraint while exercising their powers of judicial review
in contractual or commercial matters. This Court is
normally loathe to interfere in contractual matters unless a
clear-cut case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that today
many public sector undertakings compete with the private
industry. The contracts entered into between private
parties are not subject to scrutiny under writ jurisdiction.
No doubt, the bodies which are State within the meaning
of Article 12 of the Constitution are bound to act fairly and
are amenable to the writ jurisdiction of superior courts but
this discretionary power must be exercised with a great
deal of restraint and caution. The courts must realise their
limitations and the havoc which needless interference in
commercial matters can cause. In contracts involving
technical issues the courts should be even more reluctant
because most of us in Judges' robes do not have the
necessary expertise to adjudicate upon technical issues
beyond our domain. The courts should not use a
magnifying glass while scanning the tenders and make
every small mistake appear like a big blunder. In fact, the
courts must give "fair play in the joints" to the government
and public sector undertakings in matters of contract.
Courts must also not interfere where such interference will
cause unnecessary loss to the public exchequer. (See:
Silppi Constructions Contractors v. Union of India,
(2020) 16 SCC 489)
52. Ordinarily, a writ court should refrain itself from
imposing its decision over the decision of the employer as
to whether or not to accept the bid of a tenderer unless
something very gross or palpable is pointed out. The court
ordinarily should not interfere in matters relating to tender
or contract. To set at naught the entire tender process at
the stage when the contract is well underway, would not be
in public interest. Initiating a fresh tender process at this
stage may consume lot of time and also loss to the public
exchequer to the tune of crores of rupees. The financial
burden/implications on the public exchequer that the State
may have to meet with if the Court directs issue of a fresh
tender notice, should be one of the guiding factors that the
Court should keep in mind. This is evident from a three-
Judge Bench decision of this Court in Association of
Registration Plates v. Union of India and Others,
reported in (2005) 1 SCC 679.
53. The law relating to award of contract by the State and
public sector corporations was reviewed in Air India Ltd.
v. Cochin International Airport Ltd., reported in (2000) 2
SCC 617 and it was held that the award of a contract,
whether by a private party or by a State, is essentially a
commercial transaction. It can choose its own method to
arrive at a decision and it is free to grant any relaxation for
bona fide reasons, if the tender conditions permit such a
relaxation. It was further held that the State, its
corporations, instrumentalities and agencies have the
public duty to be fair to all concerned. Even when some
defect is found in the decision-making process, the court
must exercise its discretionary powers under Article 226
with great caution and should exercise it only in
furtherance of public interest and not merely on the making
out of a legal point. 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
interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v. State
of Orissa and Others, reported in (2007) 14 SCC 517,
that while invoking power of judicial review in matters as to
tenders or award of contracts, certain special features
should be borne in mind that evaluations of tenders and
awarding of contracts are essentially commercial functions
and principles of equity and natural justice stay at a
distance in such matters. If the decision relating to award
of contract is bona fide and is in public interest, courts will
not interfere by exercising powers of judicial review even if
a procedural aberration or error in assessment or prejudice
to a tenderer, is made out. Power of judicial review will not
be invoked to protect private interest at the cost of public
interest, or to decide contractual disputes."
10. Upon perusal of the judgment passed by the Hon'ble Supreme
Court in Tata Motors Limited (Supra), as the Apex Court has
categorically held that judicial review in contractual and tender matters
must be exercised with great restraint and only in cases where clear
arbitrariness, mala fides, bias or irrationality is demonstrated, in the
present case, no such exceptional circumstance is made out. The
impugned eligibility conditions requirig prior experience in ULBs has a
reasonable nexus with the nature of the work and can not be termed as
arbitrary or discreminatory merely because it excludes the petitioner.
The scope of judicial review in contractual and tender matters is limited
and the Court ordinarily does not interfere unless the decision-making
process is found to be arbitrary, irrational or contrary to law, which is not
established in the present case.
11. It is also considered that the conditions stipulated in the impugned
tender, including the eligibility criteria and evaluation methodology, fall
within the exclusive domain of the tender inviting authority and are
matters of policy, formulated in view of the specific requirements of the
project. The Petitioner has failed to demonstrate that the said conditions
are manifestly arbitrary, discriminatory, or actuated by mala fide intent.
Mere dissatisfaction with the eligibility criteria or an attempt to seek
relaxation thereof cannot be a ground for judicial review. It is well settled
that this Court does not sit as an appellate authority over administrative
decisions in contractual matters and will interfere only when the
decision-making process is vitiated by illegality, irrationality, or
procedural impropriety, which is not established in the present case.
The impugned tender conditions are uniformly applicable to all bidders
and are neither tailor-made nor exclusionary in nature.
12. Hence, in light of the settled legal position, the present petition
being devoid of merit, and liable to be and hereby dismissed, leaving
the petitioner to avail appropriate alternative remedies available under
law.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
sagrika
