Gauhati High Court
Page No.# 1/22 vs The State Of Assam And 6 Ors on 15 July, 2025
Author: Devashis Baruah
Bench: Devashis Baruah
Page No.# 1/22
GAHC010058112025
2025:GAU-AS:9149
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/1572/2025
TAPASH LODH ROY
S/O- LATE SUBODH LODH ROY,
R/O- VILL. THANAPARA,
P.O.- KOKRAJHAR,
P.S.- KOKRAJHAR,
DIST.- KOKRAJHAR, ASSAM,
PIN- 783370.
VERSUS
THE STATE OF ASSAM AND 6 ORS.
REPRESENTED BY THE SECRETARY, GOVERNMENT OF ASSAM,
DEPARTMENT OF HOUSING AND URBAN AFFAIRS, DISPUR, GUWAHATI- 6.
2:THE DIRECTOR
MUNICIPAL ADMINISTRATION ASSAM
DISPUR
GUWAHATI-6.
3:THE DISTRICT COMMISSIONER
DHUBRI
ASSAM
PIN- 783301.
4:THE ADDITIONAL DISTRICT COMMISSIONER (URBAN)
DHUBRI
ASSAM
PIN- 783301.
5:THE CO-DISTRICT COMMISSIONER
BILASIPARA
DIST.- DHUBRI
Page No.# 2/22
ASSAM
PIN- 783348.
6:SAPATGRAM MUNICIPAL BOARD
REPRESENTED BY THE EXECUTIVE OFFICER
SAPATGRAM MUNICIPAL BOARD
P.O.- SAPATGRAM
DIST.- DHUBRI
ASSAM
PIN- 783337.
7:THE EXECUTIVE OFFICER
SAPATGRAM MUNICIPAL BOARD
P.O.- SAPATGRAM
DIST.- DHUBRI
ASSAM
PIN- 783337
BEFORE
HON'BLE MR. JUSTICE DEVASHIS BARUAH
Advocates for the petitioner(s) :Mr. MU Mahmud
Ms. D Bora
Advocates for the respondent(s) :Mr. D Nath
Sr. Govt. Advocate, Assam
Mr. M Chetia
For respondent Nos.6 and 7
Date of hearing & judgment :15.07.2025
JUDGMENT & ORDER(ORAL)
Heard Mr. MU Mahmud, the learned counsel appearing on behalf
of the petitioner. Mr. D Nath, the learned Senior Government Advocate
Assam, who appears on behalf of the respondent Nos.1 to 5 and Mr.
M Chetia, the learned counsel, who appears on behalf of the
Page No.# 3/22
respondent No.6 and 7.
2. The petitioner herein has assailed the cancellation of the offline
and online tenders invited under the 15th Finance Commission vide
SMB. 15th FC/2024-25/460 dated 14.11.2024 and No. SMB. 15 th
FC/2024-25/461 dated 14.11.2024 on the ground that the same was
unreasonable and unfair and arbitrary and is in violation to Article 14
of the Constitution. The consequential Re-Tender dated 06.03.2025
issued by the respondent Nos.6 and 7 has also been assailed in the
present proceedings.
3. In the backdrop of the above, the question, therefore, arises as
to whether this Court is required to exercise its powers of judicial
review insofar as the decision of the respondent authorities, more
particularly, the respondent Nos.6 and 7 to cancel the tender and
going for fresh re-tender.
4. To appreciate the same, this Court finds it relevant to take note
of the brief facts which led to the filing of the present proceedings.
5. The respondent No.6 through its Executive Officer i.e. the
respondent No. 7 had issued a Notice Inviting Tender (for short, the
NIT) SMB. 15th FC/2024-25/460 dated 14.11.2024 inviting sealed
tenders from eligible bidders in respect to four works, as has been
Page No.# 4/22
detailed out in the said NIT. The petitioner herein, who was,
otherwise, eligible participated in the said tender process in respect to
the work, namely, Construction of boundary wall on the northern and
southern side of Sapatgram Municipal Office premises under Untied
Grant of 15th Finance Commission. Taking into account the relevance
in respect to the present dispute, this Court finds it pertinent to
reproduce the details in respect to the work, for which, the petitioner
participated pertaining to the tender, in question.
Sl.No. Name of Approximate Eligible Class Amount of Time of
Work(s) Value of the of Earnest Completion
work(s) in (₹) Contractors Money in
(₹)
2. Construction of 12,70,788.00 Class-C 26,000.00 30 Days
boundary wall on
the northern and
southern side of
the Sapatgram
Municipal Office
premises under
Untied Grant of
15th Finance
Commission
6. On the said date, the respondent No. 6 through the respondent No.
7 issued an Invitation of Bids in the online mode inviting bids from
reputed Class-C and above contractors, firms, etc. in respect to five
works as detailed out in the said Invitation of Bids. The petitioner, out
of the five works, as mentioned in the said Invitation of Bids,
Page No.# 5/22
submitted his tender in respect to three works. Taking its relevance,
for the purpose of the present dispute, the works, in which, the
petitioner participated as detailed out in the Invitation of Bids are
reproduced hereinunder:
Sl.No. Name of Estimated Value Cost of RFP EMD/BID Period of
Work of Work (in Rs.) and Bid Security Completion
Document approx.
3. Construction Rs.19,82,658.0 Rs.2000.00 Rs.40,000.0 60 days
of general 0 0
public at
Sapatgram
in the
premises of
Sapatgram
Bengali
Higher
Secondary
School, Ward
No.2,
Sapatgram
under the
Tied Grant of
15th Finance
Commission
4. Construction Rs.28,38,486.0 Rs.2000.00 Rs.57,000.0 60 days
of Boundary 0 0
wall
including site
development
of the
proposed
land allotted
for STP of
Sapatgram
Municipal
Board in
Ward No.8,
Sapatgram
under Tied
Page No.# 6/22
Grant of 15th
Finance
Commission
5. Improvemen Rs.35,71,731.0 Rs.2000.00 Rs.72,000.0 75 days
t of 0 0
Sapatgram
Municipal
Cremation
Ground
(Shamshan
Ghat) in
Ward No.8,
Sapatgram
under Untied
Fund of 15th
FC Grant
7. This Court has duly perused both the NIT dated 14.11.2024 as
well as the Invitation of Bids dated 14.11.2024 and it is pertinent to
mention that there is nothing mentioned in the said two documents,
enclosed as Annexures-3 and 4 to the present writ petition in respect
of any viability range pertaining to the work, in question. It is further
relevant to mention that along with the Invitation of Bids, a notice
inviting e-tender dated 14.11.2024 was also issued, wherein the time
schedule was duly mentioned. The record reveals from a perusal of
Annexures-6, 7, 8 and 9 that the petitioner was the lowest bidder in
respect to the four works, for which the petitioner submitted his bid.
It is pertinent to mention that in respect to the Construction of
boundary wall on the northern and southern side of Sapatgram
Municipal Office premises under Untied Grant of 15 th Finance
Commission, though the estimated value of the work was
Page No.# 7/22
Rs.12,70,788/-, the petitioner quoted Rs.10,69,904.50/-. In respect to
the Construction of general public at Sapatgram in the premises of
Sapatgram Bengali Higher Secondary School, Ward No.2, Sapatgram
under the Tied Grant of 15th Finance Commission, though the
estimated value of the work was Rs.19,82,658/-, the petitioner quoted
Rs.16,85,049.91/-. In respect to the Construction of Boundary wall
including site development of the proposed land allotted for STP of
Sapatgram Municipal Board in Ward No.8, Sapatgram under Tied
Grant of 15th Finance Commission, though the estimated value of the
work was Rs.28,38,486/-, the petitioner was the lowest bidder
quoting for Rs.24,12,532.61/-. In respect to the Improvement of
Sapatgram Municipal Cremation Ground (Shamshan Ghat) in Ward
No.8, Sapatgram under Untied Fund of 15 th FC Grant though the
estimated value of the work was Rs.35,71,731/-, the petitioner was
the lowest bidder quoting Rs.30,35,046.44/-.
8. Subsequent thereto, the respondent No. 7 had issued a notice on
17.02.2025, whereby it was informed to all concerned that the offline
and online tender invited under the 15th Finance Commission vide
SMB. 15th FC/2024-25/460 dated 14.11.2024 and No. SMB. 15 th
FC/2024-25/461 dated 14.11.2024 were cancelled by the Technical
Evaluation Committee of the 15th Finance Commission of Sapatgram
Page No.# 8/22
Municipal Board. In pursuance thereto, a re-tender was issued in
respect to five works on 06.03.2025, which included two works in
respect to which, the petitioner had submitted his tender earlier.
9. The petitioner being aggrieved has approached this Court by
filing the present writ petition. This Court, vide an order dated
19.03.2025, issued notice and further directed the respondents not to
finalize the re-tender notice dated 06.03.2025. The petitioner was also
permitted to participate in the re-tender dated 06.03.2025, if so
advised.
10. On behalf of the respondents, only the respondent Nos. 6 and 7
have filed a joint affidavit-in-opposition. The stand so taken in the
affidavit-in-opposition filed on 20.05.2025 is that a discussion was
held amongst the members of the Technical Evaluation Committee of
Sapatgram Municipal Board on 16.01.2025 and a resolution was
adopted that as the lowest offered rate, i.e. L1, against each work in
the online and the offline mode was very low, it was decided
unanimously not to accept the lowest rate to maintain the quality of
work in public interest and directed the Executive Officer, Sapatgram
Municipal Board to re-invite the tender. The minutes of the meeting of
16.01.2025 has been enclosed as Annexure -III to the affidavit-in-
opposition filed by the respondent Nos. 6 and 7. The contents of the
said minutes being relevant is reproduced hereinunder:
Page No.# 9/22
"Minutes of the meeting of the technical evaluation committee of
Sapatgram Municipal Board held on 16.01.2026 at 4.30 P.M. in the office
chamber of the Co-District Commissioner, Bilasipara for finalization of rates
and selection of eligible tenderer of the work under TIED and UNTIED
grant of 15th FC.
The meeting was presided over by the Chairman, Sapatgram Municipal
Board cum Chairman of the Technical Evaluation Committee of 15 th FC of
the Sapatgram Municipal Board. At the very outset the President welcomed
all the members present in the meeting and explained the purpose of the
meeting i.e. selection of eligible tenderer for the works tender of which
invited through Online and Offline.
The Assistant Engineer, Sapatgram Municipal Board submitted the
comparative statements of the tenders received on 04.12.2024.
After threadbare discussion the Committee took the following
resolutions:-
1. As the Lowest Offered rate (L1) against each work of Online Tender
and Offline Tender is very much low, all Members of the Technical
Evaluation Committee anonymously decided not to accept the lowest rates
to maintain the quality of the works in public interest and directed the
Executive Officer, Sapatgram Municipal Board to invite re-tender of the
same works.
The meeting ended with vote of thanks from the Chair.
Chairman
Sapatgram Municipal Board
&
Chairman
Technical Evaluation Committee
Page No.# 10/22
Sapatgram Municipal Board"
11. It was further mentioned that the petitioner though sought for
submitting his tender in respect to the re-tender proceedings, but the
same was rejected as the tender period was over.
12. In the backdrop of the above, this Court had duly heard the
learned counsels appearing on behalf of the parties.
13. Mr. MU Mahmud, the learned counsel appearing on behalf of the
petitioner submitted that the perusal of both the offline and online
tenders, both dated 14.11.2024 would show that there is no mention
about any viability range. He, therefore, submitted that what action
has been sought to be taken by the respondent authorities now is to
exclude the petitioner who was the lowest bidder and that too
arbitrarily, unreasonably and unfairly and in order to allot the said
work to some blue-eyed person. In that regard, Mr. Mahmud has
referred to the judgment of the Supreme Court in the case of Dutta
Associates Private Limited Vs. Indo Merchantiles Private
Limited and Others, reported in (1997) 1 SCC 53 as well as the
judgment of the Supreme Court in the case of Jespar I. Slong Vs.
State of Meghalaya and others, reported in (2004) 11 SCC 485.
14. Mr. D Nath, the learned counsel appearing on behalf of the
respondent Nos.1 to 5 submitted that as the tender had been issued
Page No.# 11/22
already by the respondent Nos. 6 and 7, the respondent Nos.1 to 5
otherwise have no role to play, for which, no affidavit-in-opposition
has been filed. He, however, submitted that in respect to certain
departments, there are certain circulars/ instructions which imposes a
viability range of 10% or 15% as the case may be. However, he is not
aware as to whether the respondent Nos. 6 and 7 had taken any
decision prior to initiation of the NIT as well as the Invitation of Bids,
about any viability range or the respondent Nos.6 and 7 have any
standing order in that regard.
15. Mr. M Chetia, the learned counsel appearing on behalf of the
respondent Nos. 6 and 7 had reiterated the stand so taken in the
affidavit-in-opposition and submitted that the decision was taken by
taking into account the quality of the work, in question, inasmuch as,
by quoting a very low rate, it would impact on the quality of the work
and, as such, in the public interest, such a decision was taken. In that
regard, he has placed the judgment of the Supreme Court in the case
of JSW Infrastructure Limited and Another Vs. Kakinada
Seaports Limited, reported in (2017) 4 SCC 170.
Court Query:
16. During the course of the hearing, this Court, enquired with Mr.
MU Mahmud, the learned counsel appearing on behalf of the
Page No.# 12/22
petitioner as to whether the petitioner is still willing to perform the
contractual work at the rate so quoted in his tender document. Mr.
Mahmud, the learned counsel upon instruction submits that the
petitioner is willing to extend the validity of his bid so submitted in
respect to the four contractual works, for which, he submitted his bid
for a period of 6(six) months from today and in that regard also
willing to submit an affidavit before the respondent No.6.
17. This Court has heard the learned counsels appearing on behalf
of the parties and had given its anxious consideration to the
submissions made.
Analysis and Determination:
18. From the materials on record, more particularly, the NIT dated
14.11.2024 as well as the Invitation of Bids dated 14.11.2024, there is
no mention whatsoever about any viability range. It only stipulates
the approximate value of the work/estimated value of the work. There
is no denial to the fact that in respect to the four contractual works to
which the petitioners submitted his tender, the petitioner was the
lowest bidder. It is also an admitted fact that the petitioner's bids
were less than the approximate value/estimated value. In fact, it is
pertinent to mention that in respect to the construction work
pertaining to the NIT dated 14.11.2024, all the tenderers quoted
below the approximate value.
Page No.# 13/22
19. In this regard, this Court now finds it relevant to take note of the
reasons so assigned by the respondent Nos. 6 and 7 in the affidavit,
insofar as cancellation of both the offline and online bid process
initiated on 14.11.2024.
20. The affidavit-in-opposition only mentions that the amount
quoted by the lowest bidder was very much low and it was, therefore,
decided not to accept the lowest rate to maintain the quality of the
work in public interest. In the foregoing segments of the present
judgment, this Court has also quoted the resolutions so adopted in
the minutes of the meeting dated 16.01.2025, wherein there is only a
mention that the Technical Evaluation Committee has decided not to
accept the lowest rate in order to maintain the quality of the work in
public interest. However, there is nothing on record to show that there
is any further discussion or analysis as to why the work in question
cannot be carried out at the lowest rate.
21. This Court now finds it very pertinent to take note of the
judgment of the Supreme Court in the case of Dutta Associates
(supra) which dealt with the aspect of viability range. Paragraph 4 of
the said judgment being relevant is reproduced hereinunder:
"4. After hearing the parties, we are of the opinion that the entire process leading to
the acceptance of the appellant's tender is vitiated by more than one illegality. Firstly,
Page No.# 14/22
the tender notice did not specify the "viability range" nor did it say that only the tenders
coming within the viability range will be considered. More significantly, the tender notice
did not even say that after receiving the tenders, the Commissioner/Government would
first determine the "viability range" and would then call upon the lowest eligible
tenderer to make a counter-offer. The exercise of determining the viability range and
calling upon Dutta Associates to make a counter-offer on the alleged ground that he
was the lowest tenderer among the eligible tenderers is outside the tender notice.
Fairness demanded that the authority should have notified in the tender notice itself the
procedure which they proposed to adopt while accepting the tender. They did nothing of
that sort. Secondly, we have not been able to understand the very concept of "viability
range" though Shri Kapil Sibal, learned counsel for the appellant, and the learned
counsel for the State of Assam tried to explain it to us. The learned counsel stated that
because of the de-control of molasses, the price of rectified spirit fluctuates from time
to time in the market and that, therefore, the viability range was determined keeping in
view (1) distillery cost price; (2) export pass fees; (3) Central sales tax; (4)
transportation charges; (5) transit wastage @ 1%; and (6) warehouse operational
wastage @ 1 1/2% -- vide the counter-affidavit filed by the Secretary to Excise
Department, Government of Assam pursuant to this Court's orders. Shri Sibal further
explained that because of the possibility of the fluctuation, the tender notice contains
clause (16) which reserves to the Government the power to reduce or increase the
contract rate depending upon the escalation or deceleration of the market price in the
exporting States. We are still not able to understand. Clause (16) deals with post-
contract situation, i.e., the situation during the currency of the contract and not with a
situation at the inception of the contract. The tenderers are all hard-headed
businessmen. They know their interest better. If they are prepared to supply rectified
spirit at Rs 11.14 per LPL or so, it is inexplicable why should the Government think that
they would not be able to do so and still prescribe a far higher viability range. Not only
the rate obtaining during the period when the tenders were called was Rs 11.05 per
LPL, the more significant feature is that during the period of about more than two years
pending the writ petition and writ appeal, the appellant has been supplying rectified
spirit @ Rs 9.20 per LPL. If it was not possible for anyone to supply rectified spirit at a
Page No.# 15/22
rate lower than Rs 14.72 (the lower figure of the viability range), how could the
appellant have been supplying the same at such a low rate as Rs 9.20 for such a long
period. It may be relevant to note at this stage the circumstances in which the appellant
volunteered to supply at the said rate. Indo Mercantiles, the respondent herein, filed the
writ petition and asked for an interim order. The learned Single Judge directed (vide
Order dated 2-6-1994) that while Dutta Associates (appellant herein) shall not be given
the contract, he "shall be allowed to execute the contract at the lowest quoted rate
which is stated to be Rs 9.20 by the writ petitioner. Respondent 3 (Dutta Associates)
states that the lowest quoted rate is Rs 11.14. If the lowest quoted rate is Rs 9.20, it is
that rate at which the contract shall be given to Respondent 3". It is pursuant to the
said order that the appellant-Dutta Associates has been supplying rectified spirit @ Rs
9.20 per LPL since June 1994 till October 1996. The said order did not compel the
appellant (Respondent 3 in the writ petition) to supply at the rate of Rs 9.20p. If that
rate was not feasible or economic, he could well have said, 'sorry'. He did not say so but
agreed to and has been supplying at that rate, till October 1996. It is equally significant
to note that pursuant to the interim orders of this Court (which directed the
Government to implement the orders of the Guwahati High Court with respect to interim
arrangement) negotiations were held with both the appellant and the first respondent
herein; both offered to supply at Rs 9.20p. The Commissioner, of course, chose the first
respondent, Indo Merchantiles, over the appellant, for reason given by him in his order
dated 14-10-1996. The rate, however, remains Rs 9.20p and the appellant's counsel has
been making a grievance of the Commissioner not accepting the appellant's offer. All
these facts make the so-called "viability range" and the very concept of "viability range"
looks rather ridiculous -- and we are not very far from the end of the three-year period
for which the tenders were called for. Neither the interlocutory order of the learned
Single Judge dated 2-6-1994 aforesaid nor does the order of the Commissioner dated
14-10-1996 passed pursuant to the interim orders of this Court provide for any
fluctuation in the rate of supply depending upon the fluctuation in the market rate in the
exporting States, as provided by clause (16) of the Tender Conditions, which too
appears rather unusual. The order of the learned Single Judge aforesaid does not also
say that the rate specified therein is tentative and that it shall be subject to revision at
Page No.# 16/22
the final hearing of the writ petition. As a matter of fact, no such revision was made
either by the learned Single Judge or by the Division Bench. It is in these circumstances
that, we said, we have not been able to understand or appreciate the concept of
"viability range", its necessity and/or its real purpose. Thirdly, the Division Bench states
repeatedly in its judgment that having determined the "viability range", the Government
called upon only the appellant-Dutta Associates (third respondent in the writ
petition/writ appeal) to make a counter-offer to come within the "viability range" and
that his revised offer at the higher limit of the "viability range" (Rs 15.71) was accepted.
The Division Bench has stressed that no such opportunity to make a counter-offer was
given to any other tenderer including the first respondent. As the Division Bench has
rightly pointed out, this is equally a vitiating factor."
(emphasis supplied on the underlined portion)
22. From a perusal of the above-quoted judgment, it would appear
that if the respondent authorities were to consider that there is a
viability range in respect to the work in question, the tender notice is
required to include such terms in the NIT or invitation of the bids
which is not there in the tenders in question. Nothing has also been
placed by the respondent Nos. 6 and 7 before this Court that there
was any discussion, which is based on records, that prior to the
issuance of the NIT/ Invitation of Bids, any viability range was fixed
by the respondent No.6.
23. This Court further finds it relevant to take note of the judgment
of the Supreme Court in the case of Jespar I. Slong (supra) and,
more particularly, paragraph 21 which is reproduced hereinunder:
"21. The respondent State owns a weighbridge at Morkjniange. The income from this
Page No.# 17/22
weighbridge is received from the fees charged for weighment of trucks which pass
through the route on which this weighbridge is situated. We are told that these trucks
mostly carry coal from Jaintia Hills to Guwahati. As per the notification, the person
operating the weighbridge can only charge a sum of Rs 30 for a loaded truck and Rs 10
for an unloaded truck. Therefore, the fee to be collected from the transporters for
weighment of their vehicles is fixed and it does not vary with the amount of bid offered
by the contractor. This is not a contract of supply where a contractor by manipulating
the price may cause loss to the public at large. This is not a contract which would have
any effect on the price of coal, since weighment charges are fixed by the Government
and the contractor has no right to increase the same. Payment of the bid amount is
purely a matter between the contractor and the State. As a matter of fact, obtaining
higher revenue by accepting the eligible highest bid would only be in public interest
because the State stands to gain more revenue. The offering of the bid after knowing
the commercial value of the contract is a matter left to the business acumen or
prudence of the tenderer. No third party's interest is involved in such contract.
Therefore, in our opinion, application of the principle of predatory pricing is wholly alien
to this type of contract. Mere offer of a fancy or high bid by itself does not make the bid
a predatory bid in this type of contract. If the State decides to give its largesse to the
public it has an obligation to see that it fetches the best possible value for the same,
provided otherwise it does not in any manner affect the rights of other citizens. No
bidder has any right in law to demand the State to give away its largesse for an amount
which he considers to be reasonable even when there are bidders willing to pay more
for it. The principle of monopoly also does not come into play in these types of
contracts."
(emphasis supplied on the underlined portion)
24. The observations made by the Supreme Court in the above-
quoted paragraph has relevance for the purpose of the present
dispute, inasmuch as, the works which the petitioner is required to
perform requires the petitioner to carry out the quality construction
Page No.# 18/22
works. The Tendering Authority in the opinion of this Court would
have free play to arrive at such a conclusion on the basis of materials
available as to whether it is feasible on the part of the contractor to
carry out the quality construction work with the amount so quoted.
However, neither in the minutes of the meeting held on 16.01.2025
nor in the decision so made on 17.01.2025, there is anything
mentioned in that regard. Even in the affidavit so filed, there is no
mention as to why the respondent Nos. 6 and 7 considered that the
petitioner would not be in a position to provide quality construction
work with the price so quoted.
25. This Court now finds it relevant to take note of the judgment so
referred to by Mr. M Chetia, the learned counsel appearing on behalf
of the respondent Nos. 6 and 7 i.e. JSW Infrastructure Limited
(supra) and with specific relevance at paragraph Nos. 8, 9 and 10.
The said paragraphs being relevant are reproduced hereinunder:
"8. We may also add that the law is well settled that superior courts while exercising
their power of judicial review must act with restraint while dealing with contractual
matters. A three-Judge Bench of this Court in Tata Cellular v. Union of India held that:
(i) there should be judicial restraint in review of administrative action;
(ii) the court should not act like court of appeal; it cannot review the decision but can
only review the decision-making process;
(iii) the court does not usually have the necessary expertise to correct such technical
decisions;
(iv) the employer must have play in the joints i.e. necessary freedom to take
administrative decisions within certain boundaries.
Page No.# 19/22
9. In Jagdish Mandal v. State of Orissa this Court held that evaluation of tenders and
awarding contracts are essentially commercial functions and if the decision is bona fide
and taken in the public interest the superior courts should refrain from exercising their
power of judicial review. In the present case there are no allegations of mala fides and
the appellant consortium has offered better revenue sharing to the employer.
10. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., this Court held as
follows : (SCC pp. 825-26, paras 13 & 15-16)
"13. ... a mere disagreement with the decision-making process or the decision of
the administrative authority is no reason for a constitutional court to interfere. The
threshold of mala fides, intention to favour someone or arbitrariness, irrationality
or perversity must be met before the constitutional court interferes with the
decision-making process or the decision.
***
15. We may add that the owner or the employer of a project, having authored
the tender documents, is the best person to understand and appreciate its
requirements and interpret its documents. The constitutional courts must defer to
this understanding and appreciation of the tender documents, unless there is mala
fide or perversity in the understanding or appreciation or in the application of the
terms of the tender conditions. It is possible that the owner or employer of a
project may give an interpretation to the tender documents that is not acceptable
to the constitutional courts but that by itself is not a reason for interfering with the
interpretation given.
16. In the present appeals, although there does not appear to be any ambiguity
or doubt about the interpretation given by NMRCL to the tender conditions, we are
of the view that even if there was such an ambiguity or doubt, the High Court
ought to have refrained from giving its own interpretation unless it had come to a
clear conclusion that the interpretation given by NMRCL was perverse or mala fide
or intended to favour one of the bidders. This was certainly not the case either
before the High Court or before this Court."
The view taken in Afcons was followed in Montecarlo Ltd. v. NTPC Ltd. Thus it is
apparent that in contractual matters, the writ courts should not interfere unless the
Page No.# 20/22
decision taken is totally arbitrary, perverse or mala fide."
26. The law laid down by the Supreme Court are well-settled
principles of judicial restraint in review of administrative actions. The
said principles do not, however, denude the power of this Court under
Article 226 of the Constitution to interfere with the decision-making
process, if such a decision is arbitrary, irrational, or perverse on the
face of the records.
27. In the backdrop of the above discussions, it would be seen that
the respondent authorities have decided to cancel the said online and
offline process initiated on 14.11.2024 merely on the ground that the
lowest bidder had quoted a very low rate without taking into
consideration as to whether with the said rate(s) so quoted, the
petitioner herein would be able to perform quality contractual work.
The terms of the Notice Inviting Tender as well as the Invitation of
Bids do not in any manner refer to any viability range. No records
have also been produced that the respondent Nos.6 and 7 have taken
any decision prior to the tender proceedings thereby fixing any
viability range. This Court further observes that the respondent Nos.6
and 7 being the Tendering Authority have the power to have
discussions with the lowest bidder, if they have doubts as regards
feasibility of providing quality construction works with the rates
quoted by the lowest bidder. However, nothing was done. Instead of
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adopting such an approach, the respondent Tendering Authority have
cancelled the tender and gone for a fresh tender.
28. This in the opinion of this Court is unfair, unreasonable,
irrational, as well as suffers from perversity. Additionally the right of
legitimate expectations of the Petitioner being the lowest bidder is
taken away without any justifiable reasons.
29. Considering the above, the instant writ petition stands disposed
of with the following observations and directions:
(i). The notice bearing No.SMB/15th FC/2024-25/669 dated
17.02.2025 issued by the respondent No.7 on behalf of the
respondent No.6 is set aside and quashed.
(ii). The re-tender bid bearing No. SMB.15th FC/2024-25/721
dated 06.03.2025 is set aside and quashed.
(iii). The respondent Nos.6 and 7 and more particularly, the
Technical Evaluation Committee of the respondent No.6 is directed to
again review the financial bids and to come to a conclusion as to
whether the petitioner who is the lowest bidder in respect to the four
works would be in a position to perform quality construction work on
the rates so quoted and in that regard, the Technical Evaluation
Committee of the Respondent No.6 shall have discussions with the
petitioner who is the lowest bidder.
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(iv). Basing upon such evaluation, the Respondent Nos.6 and 7
shall proceed in accordance with law.
(v). The said exercise be completed within a period of 15 (fifteen)
days from the date a certified copy of the instant judgment is
submitted to the respondent No. 7.
30. With the above, the instant writ petition stands disposed of.
JUDGE
Comparing Assistant
