Madhya Pradesh High Court
Lokesh vs Indore Development Authority on 3 May, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 3 rd OF MAY, 2024
WRIT PETITION No. 9052 of 2024
BETWEEN:-
1. LOKESH S/O LT. SHRI GOPALDAS BIDAL, AGED
ABOUT 38 YEARS, OCCUPATION: BUSINESS 337,
K.A. SCHEME NO. 71, INDORE (MADHYA
PRADESH)
2. SMT. NEELAM W/O SHRI ANISH JAIN, AGED
ABOUT 44 YEARS, OCCUPATION: BUSINESS 62,
PADMALAY COLONY, INDORE (MADHYA
PRADESH)
.....PETITIONER
(BY SHRI CHETAN JAIN, ADVOCATE)
AND
1. INDORE DEVELOPMENT AUTHORITY THROUGH
CHIEF EXECUTIVE OFFICER 7 RACE COURSE
ROAD, INDORE (MADHYA PRADESH)
2. ESTATE OFFICER INDORE DEVELOPMENT
AUTHORITY 7 RACE COURSE ROAD, INDORE
(MADHYA PRADESH)
3. SHRI GAJENDRA SINGH TOMAR S/O SHRI
SURENDRA SINGH TOMAR OCCUPATION:
BUSINESS 68, GREATER TIRUPATI COLONY,
INDORE (MADHYA PRADESH)
4. SHRI AMIT PATNI S/O SHRI ASHOK PATNI
OCCUPATION: BUSINESS 68, GREATER TIRUPATI
COLONY, INDORE (MADHYA PRADESH)
.....RESPONDENTS
(NONE FOR THE RESPONDENTS)
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 11-05-2024
12:16:21
2
This petition coming on for admission this day, Justice Sushrut Arvind
Dharmadhikari passed the following:
ORDER
Heard on the question of admission.
02. In this writ petition under Article 226 of the Constitution of India, the
petitioners are aggrieved by the allotment of tender in favour of respondents
No.3 & 4 in respect of plot situated at Scheme No.134 of respondent No.1 /
Indore Development Authority which was reserved for education purpose.
03. Brief facts of the case are that respondent No.1 had floated a Notice
Inviting Tender (for short 'NIT') bearing No.217 dated 26.09.2023 inviting bids
for the plots situated at Scheme No.134 for education purpose at Indore. The
plot was reserved for general category admeasuring 759.91 sq.mt. The base
price was fixed @ Rs.25,070/- per sq.mt. The petitioners were one of the
bidders and submitted a bid on 25.10.2023. The bid was opened on
11.12.2023.
04. The grievance of the petitioners is that after receiving the information
under the Right to Information Act, 2005 to the effect that the bid which has
been allotted to respondents No.3 & 4 in that tender document part - 2, an
affidavit was required to be sworn by the bidder on the non-judicial stamp of
Rs.100/- and further to be notarized as per the prevailing rules.
05. Learned counsel for the petitioners contended that strict terms and
conditions of the tender are required to be followed before the allotment. The
respondents No.1 & 2 have not taken pains to the notice sent by the petitioners
and in spite of that declared respondents No.3 & 4 to be a successful bidder,
even though the documents submitted were not in order. Hence, the order
allotting the tender in favour of respondents No.3 & 4 is arbitrary, perverse,
illegal and unfair. Learned counsel further submits that due to non-compliance
of mandatory conditions, the petitioners' chance for allotment of bid is highly
affected.
06. Heard learned counsel for the petitioners.
07. The Apex Court in the case of Silppi Constructions Contractors v/s
Union of India & Another reported in (2020) 16 SCC 489 in paragraphs - 7
to 18 has held as under:-
"7 . I n Tata Cellular v. Union of India 3 it was held that judicial review of
government contracts was permissible in order to prevent arbitrariness or
favouritism. The principles enunciated in this case are (SCC pp.687 - 88 para 94):
"94. ......
(1) The modern trend points to judicial restraint in administrative
action.
(2) The Court does not sit as a court of appeal but merely reviews
the manner in which the decision was made.
(3) The Court does not have the expertise to correct the
administrative decision. If a review of the administrative decision is
permitted it will be substituting its own decision, without the
necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the
contract is reached by process of negotiations through several tiers.
More often than not, such decisions are made qualitatively by
experts.
(5) The Government must have freedom of contract. In other words,
a fair play in the joints is a necessary concomitant for an
administrative body functioning in an administrative sphere or
quasiadministrative sphere. However, the decision must not only be
tested by the application of Wednesbury principle of reasonableness
(including its other facts pointed out above) but 1 must be free from
arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on
the administration and lead to increased and unbudgeted
expenditure."
8. In Raunaq International Ltd. vs. I.V.R. Construction Ltd.2, this Court held that
superior courts should not interfere in matters of tenders unless substantial public
interest was involved or the transaction was mala fide.
9. In Air India Limited vs. Cochin International Airport Ltd.3, this Court once again
stressed the need for overwhelming public interest to justify judicial intervention in
contracts involving the State and its instrumentalities. It was held that Courts must
proceed with great caution while exercising their discretionary powers and should
exercise these powers only in furtherance of public interest and not merely on
making out a legal point.
1 0 . I n Karnataka SIIDC Ltd. vs. Cavalet India Ltd.4 it was held that while
effective steps must be taken to realise the maximum amount, the High Court
exercising its power under Article 226 of the Constitution is not competent to
decide the correctness of the sale affected by the Corporation.
11. In Master Marine Services (P) Ltd. vs. Metcalfe & Hodgkinson (P) Ltd.5 it
was held that while exercising power of judicial review in respect of contracts, the
Court should concern itself primarily with the question, whether there has been any
infirmity in the decision making process. By way of judicial review, Court cannot
examine details of terms of contract which have been entered into by public bodies
or State.
12. In B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd.6 it was held that it is
not always necessary that a contract be awarded to the lowest tenderer and it must
be kept in mind that the employer is the best judge therefor; the same ordinarily
being within its domain. Therefore, the court's interference in such matters should
be minimal. The High Court's jurisdiction in such matters being limited, the Court
should normally exercise judicial restraint unless illegality or arbitrariness on the part
of the employer is apparent on the face of the record.
13. In Jagdish Mandal vs. State of Orissa7 it was held:
"2 2 . Judicial review of administrative action is intended to prevent
arbitrariness, irrationality, unreasonableness, bias and mala fides. Its
purpose is to check whether choice or decision is made "lawfully" and not
to check whether choice or decision is "sound". When the power of
judicial review is invoked in matters relating to tenders or award of
contracts, certain special features should be borne in mind. A contract is a
commercial transaction. Evaluating tenders and awarding contracts are
essentially commercial functions. Principles of equity and natural justice
stay at a distance. If the decision relating to award of contract is bona fide
and is in public interest, courts will not, in exercise of power of judicial
review, interfere even if a procedural aberration or error in assessment or
prejudice to a tenderer, is made out. The power of judicial review will not
be permitted to be invoked to protect private interest at the cost of public
interest, or to decide contractual disputes. The tenderer or contractor
with a grievance can always seek damages in a civil court. Attempts by
unsuccessful tenderers with imaginary grievances, wounded pride and
business rivalry, to make mountains out of molehills of some
technical/procedural violation or some prejudice to self, and persuade
courts to interfere by exercising power of judicial review, should be
resisted. Such interferences, either interim or final, may hold up public
works for years, or delay relief and succour to thousands and millions and
may increase the project cost manifold........"
14. In Michigan Rubber (India) Ltd. vs. State of Karnataka & Ors.8 it was held
that if State or its instrumentalities acted reasonably, fairly and in public interest in
awarding contract, interference by Court would be very restrictive since no person
could claim fundamental right to carry on business with the Government. Therefore,
the Courts would not normally interfere in policy decisions and in matters
challenging award of contract by State or public authorities.
15. In Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd.9 it was
held that a mere disagreement with the decisionmaking 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. 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. 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 Montecarlo vs. NTPC Ltd.10 it was held that where a decision is taken that
is manifestly in consonance with the language of the tender document or subserves
the purpose for which the tender is floated, the court should follow the principle of
restraint. Technical evaluation or comparison by the court would be impermissible.
The principle that is applied to scan and understand an ordinary instrument
relatable to contract in other spheres has to be treated differently than interpreting
a nd appreciating tender documents relating to technical works and projects
requiring special skills. The owner should be allowed to carry out the purpose and
there has to be allowance of free play in the joints.
1 7 . I n Municipal Corporation, Ujjain and Another vs. BVG India Ltd. and
Others11 it was held that the authority concerned is in the best position to find out
the best person or the best quotation depending on the work to be entrusted under
the contract. The Court cannot compel the authority to choose such undeserving
person/company to carry out the work. Poor quality of work or goods can lead to
tremendous public hardship and substantial financial outlay either in correcting
mistakes or in rectifying defects or even at times in redoing the entire work.
18. Most recently this Court in Caretel Infotech Limited vs. Hindustan Petroleum
Corporation Limited and Others12 observed that a writ petition under Article 226
of the Constitution of India was maintainable only in view of government and public
sector enterprises venturing into economic activities. This Court observed that there
are various checks and balances to ensure fairness in procedure. It was observed
that the window has been opened too wide as every small or big tender is
challenged as a matter of routine which results in government and public sectors
suffering when unnecessary, close scrutiny of minute details is done."
08. Normally, the duty of the Court is to confine itself to the question of
legality such as: (i) whether the decision making authority exceeded its power
? (ii) committed any error of law; (iii) committed a breach of rules of natural
justice; (iv) reached a decision which no reasonable tribunal would have
reached or (v) abused its power.
09. This Court being a guardian of fundamental rights is duty bound to
interfere when there is arbitrariness, irrationality, malafides and bias. However,
the Apex Court in the aforesaid cases has cautioned time and again that the
courts should exercise a lot of restraint while exercising their powers of
judicial review in contractual or commercial matters. The Court can only
interfere in contractual matters where clear-cut case of arbitrariness or
malafides or bias or irrationality is made out. As laid down in the aforesaid
judgments stated above, the Courts should not use a magnifying glass while
scanning the tenders and make every small mistake appear like a big
blunder.
10. Even otherwise, the reliefs claimed by the petitioners cannot be
granted, since the allotment of bid in favour of respondents No.3 & 4 is not
under challenge in the present writ petition. In the present petition, the
petitioners have not even alleged any malafides, arbitrariness or biasness while
allotting the bid to respondents No.3 & 4.
11. In view of the aforesaid, this Court does not find any merit to
entertain the present writ petition. Accordingly, the same is hereby dismissed at
admission stage itself.
(S. A. DHARMADHIKARI) (GAJENDRA SINGH)
JUDGE JUDGE
Ravi
