Case Note & Summary
The petitioners, who are contractors engaged in drilling borewells, challenged a communication dated 02-11-2023 from the Department of Backward Classes Welfare and a tender notification dated 05-12-2023 issued by the second respondent, the Managing Director and EOI Accepting Authority of D. Devaraj Urs Backward Class Development Corporation. The tender notification invited Expression of Interest for empanelment of drilling agencies for borewell drilling in Chitradurga district. The impugned condition restricted participation to contractors who were residents of Chitradurga district only. The petitioners, who were from other districts, were thus excluded. They contended that this condition was arbitrary, discriminatory, and violative of Article 14 of the Constitution. The respondents argued that the condition was to ensure local employment and better supervision. The court analyzed the tender conditions and found that the restriction had no nexus with the object of the tender, which was to get the work done efficiently. The court held that the condition was unreasonable and arbitrary, as it excluded equally qualified contractors from other districts without any valid justification. The court also noted that the right to participate in a tender is a constitutional right under Article 19(1)(g), and such a condition was not a reasonable restriction. Consequently, the court quashed the communication and the tender notification to the extent of the impugned condition, directing the respondents to re-issue the tender without such restriction.
Headnote
A) Constitutional Law - Article 14 - Arbitrariness in Tender Conditions - Tender condition restricting participation to contractors of a particular district is arbitrary and violative of Article 14 - The court held that such a condition has no nexus with the object of the tender and is discriminatory, as it excludes equally qualified contractors from other districts. (Paras 10-15) B) Contract Law - Tender - Reasonableness of Conditions - Tender inviting authority cannot impose conditions that are not germane to the purpose of the tender - The court held that the condition requiring contractors to be from the same district as the work is unreasonable and stifles competition, and thus liable to be quashed. (Paras 12-16) C) Constitutional Law - Article 19(1)(g) - Right to Practice Profession - Right to participate in tender is a constitutional right under Article 19(1)(g) subject to reasonable restrictions - The court held that the impugned condition is not a reasonable restriction and infringes the petitioners' right to carry on their business. (Paras 17-18)
Issue of Consideration
Whether the condition in the tender notification restricting participation to contractors of a particular district is arbitrary and violative of Article 14 of the Constitution of India?
Final Decision
The writ petition is allowed. The communication dated 02-11-2023 and the tender notification dated 05-12-2023 are quashed to the extent of the condition restricting participation to contractors of Chitradurga district. The respondents are directed to re-issue the tender notification without such condition.
Law Points
- Tender condition restricting participation to contractors of a particular district is arbitrary and violative of Article 14
- Tender inviting authority cannot impose conditions that are not germane to the purpose of the tender
- Right to participate in tender is a constitutional right under Article 19(1)(g) subject to reasonable restrictions
- Judicial review of tender conditions is permissible if they are arbitrary or discriminatory.
