Case Note & Summary
The dispute arose from a tender process initiated by the Road Construction Department of Jharkhand for the reconstruction of Nagaruntari–Dhurki–Ambakhoriya Road. Respondent No. 1 participated in the tender but its bid was declared non-responsive by the Tender Evaluation Committee due to deviations in the bank guarantee format, validity issues, and inadequate bid capacity. The appellant's bid was accepted, and work commenced. Respondent No. 1 filed a writ petition challenging the rejection, which was allowed by the Single Bench of the High Court, quashing the award to the appellant and directing fresh tenders. The Division Bench dismissed the State's appeal, finding no valid distinction from other similar cases. The core legal issues involved the scope of judicial review in tender matters and whether the High Court's interference was justified. The appellant argued that the High Court acted as an appellate authority, exceeding the limited role of judicial review, while the State supported the appellant's position. The Supreme Court analyzed the principles from Tata Cellular v. Union of India, emphasizing that judicial review is confined to examining legality, not correctness, and that courts must not substitute their opinion for administrative decisions. The Court found that the State's decision was not manifestly arbitrary or unjust, and the High Court's interference was unwarranted, causing public interest harm by disrupting infrastructure development. The appeal was allowed, permitting the appellant to complete the project without escalation claims for the pending period, and the writ petition was dismissed.
Headnote
A) Administrative Law - Judicial Review - Tender Matters - Scope of Judicial Review - Constitution of India, 1950, Article 14 - The Supreme Court examined the scope of judicial review in tender disputes, emphasizing that courts must confine themselves to legality and not act as appellate authorities. Held that the High Court exceeded its power by substituting its opinion for the State's decision, as the State's decision was not manifestly arbitrary or unjust, and interference was unwarranted, causing loss to public interest (Paras 10-11). B) Contract Law - Tender Evaluation - Bank Guarantee Compliance - Standard Bidding Document - Not mentioned - The Court considered whether deviations in bank guarantee format justified rejection of a bid. It referenced Central Coalfields Limited & Anr. v. SLL-SML (Joint Venture Consortium) & Ors., holding that when a format is prescribed, bidders must adhere to it, and the State has discretion to accept or reject deviations within acceptable parameters. The High Court's finding of non-uniform standards was overruled as the State's evaluation was within its authority (Paras 4, 9, 11). C) Public Interest - Infrastructure Development - Road Construction - Judicial Interference - Not mentioned - The Court highlighted that construction of roads is essential for infrastructure development and that judicial interference in awarded contracts can harm public interest. Held that quashing the tender award to the appellant was unwarranted as it disrupted ongoing work and caused financial loss, emphasizing the need for judicial restraint in such matters (Paras 5, 10).
Issue of Consideration
Whether the High Court exceeded its power of judicial review by interfering with the State's decision to award a tender contract, and whether the interference was justified under the principles laid down in Tata Cellular v. Union of India
Final Decision
The Supreme Court allowed the appeal, quashed the High Court's order, permitted the appellant to complete the project without escalation claims for the pending period, and dismissed the writ petition.
Law Points
- Judicial review in tender matters is limited to examining legality
- not correctness
- courts must not act as appellate authorities over administrative decisions
- principles of fairness and non-arbitrariness under Article 14 of the Constitution apply
- government has freedom of contract and discretion in tender evaluation
- interference is warranted only if decision is manifestly arbitrary
- unjust
- or mala fide
- courts should exercise restraint and avoid substituting their opinion for that of experts
- quashing decisions may impose heavy administrative burden and un-budgeted expenditure
