IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

APPELLATE SIDE

BEFORE :-

THE HON’BLE JUSTICE SHAMPA SARKAR

THE HON’BLE JUSTICE AJAY KUMAR GUPTA

CAN 1 of 2026

and

CAN 2 of 2026

in

MAT 690 of 2026

Ainul Haque

vs.

The State of West Bengal & Ors.

For the Appellant : Mr. Saptansu Basu, Sr. Adv.

Mr. Mirza Firoj Ahmed Begg, Adv.

Ms. Rita Patra, Adv.

Ms. Pusmita Das, Adv.

Mr. Suman Biswas. Adv.

For the State : Mr. D.N. Ray, Ld. G.P.

Ms. Susmita Saha Dutta, Ld. A.G.P.

Mr. Madhu Jana, Ld. Jr. Govt. Adv.

Ms. Tanusree Ghosh, Adv.

For the Respondent Nos. 3 – 6. : Mr. Soumya Majumder, Sr. Adv.

Mr. Pritam Roy, Adv.

For the Writ Petitioner/Respondent : Mr. Abhratosh Majumdar, Sr. Adv.

Md. T.M. Siddiqui, Sr. Adv.

Mr. Suman Banerjee, Adv.

Mr. Somnath Ganguly, Adv.

For the Applicant/Intervenor

In CAN 2 of 2026 : Mr. Jaydip Kar, Sr. Adv.

Md. T.M. Siddiqui, Sr. Adv.

Mr. Suman Banerjee, Adv.

Mr. Somnath Ganguly, Adv.

Judgment reserved on : 09.06.2026

Judgment pronounced on : 14.07.2026

Judgment uploaded on : 14.07.2026.

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Shampa Sarkar, J.

1. The appeal is directed against an order dated April 7, 2026, passed in

WPA 3311 of 2026.

2. By the order impugned, the learned Single Judge held that clause D of

the terms and conditions of the e-Auction notice dated December 31, 2025

had been incorporated by the tender ing authority arbitrarily and with

malafide intention, only to debar the writ petitioner from participating in the

said tender process. Accordingly, the writ petition was allowed and the e-

Auction process initiated by the Birbhum Zilla Parishad by the notice dated

December 31, 2025, bearing No. WBZP-BHM-A-06-2025-26, was set aside

and quashed.

3. The work order issued to the appellant, as also the order of rejection

of the bid of the respondent No. 7/writ petitioner, were set aside. The

tendering authorities were directed to initiate a fresh e-Auction process, by

giving an opportunity to all the eligible bidders to participate and to

complete the process within a period of eight weeks from the date of receipt

of the order of His Lordship.

4. The writ petition was preferred by the respondent No.7, seeking

cancellation and/or withdrawal and/or rescission and/or stay of clause D of

the terms and conditions of the notice of e-Auction No. WBZP-BHM-A-06-

2025-26 dated December 31, 2025 and also for cancellation and/or

withdrawal of the decision of the tendering authority which was uploaded in

the technical evaluation summary dated January 30, 2026. The writ

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petitioner/respondent No. 7 was disqualified by the tendering authority,

from participating in the later part of the e-Auction process for collection of

toll tax from vehicular traffics plying through Sagarbandhi Dholkata and

Raipur Habrafari Road, in the district of Birbhum.

5. According to the writ petitioner/respondent No.7, all the required

documents and the earnest money, as contemplated under the said e-

Auction notice, had been duly submitted. The schedule had been extended

from time to time by issuing corrigendum. On January 30, 2026, the

technical evaluation was scheduled. The technical evaluation summary was

uploaded in the website on January 30, 2026, wherefrom, the respondent

No. 7 came to know that he had not qualified in the technical round. On the

basis of the communication dated January 28, 2026, of Executive Engineer

Burdwan, North Highway Division, PWD Road Directorate , the respondent

No. 7 was considered to be a defaulter. The tendering authority was

informed that, in respect of similar work orders, there were outstanding

dues against the respondent No.7. The respondent No.7, being aggrieved by

the decision and alleged illegality in the method of evaluation of the

technical bid, approached the writ court. Allegation of violation of the

principles of natural justice was also made. It was contended before the

learned Single Judge that, the disqualification of the respondent No. 7 in the

technical evaluation round, entailed civil consequences. Therefore, the

Birbhum Zilla Parishad was bound to give a hearing to the writ petitioner

before cancelling his bid. It was further contended that the decision was

violative of the principles enshrined under Article 14 of the Constitution of

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India, inasmuch as, clause D of the e-Auction notice was arbitrary,

discriminatory, irrational and tailor-made.

6. According to the writ petitioner, the said clause was intended to

exclude competent, experienced and financially sound bidders from

participating in the e-Auction process. The bidders were required to file their

solvency certificates. The financial capacity of the bidders could be judged

from such certificate. Outstanding dues in respect of other work orders

given by other departments, was an irrelevant consideration. The said

condition did not have any nexus with the object sought to be achieved .

According to the writ petitioners, the validity of the dues of the PWD was the

subject matter of WPA 12861 of 2023, which was pending adjudication.

Until and unless the claim of PWD was decided by the competent court to be

payable, the writ petitioner/respondent No. 7 could not be termed, as a

defaulter. The alleged default had not been established.

7. It was also contended by the respondent No. 7 that, clause D in the e-

Auction notice, penalized a bidder who had approached a court of law, by

challenging the unjustified claim of the PWD. The respondent authorities

had followed a pick and choose policy, in order to intentionally oust the writ

petitioner from the competition. The clause was incorporated with an

ulterior motive and for extraneous reasons. The Zilla Parishad had a vested

interest and thus, had favoured the appellant. The dues did not remain

unpaid on account of insolvency or financial incapacity. The dues were

disputed. Thus, under such circumstances, clause D could not be applied in

case of the writ petitioner. It was also urged that, although a query had been

5

made with regard to the outstanding dues of the writ petitioner, no such

query had been made from the other authorities, to find out whether the

appellant also had outstanding dues, in respect of prior contracts of similar

nature.

8. The Zilla Parishad contested the said writ petition, inter alia, stating

that, clause D was known to the writ petitioner and the respondent No. 7

had participated in the said e-Auction process without any objection to such

clause. The respondent No. 7 affirmed an affidavit as per the format

prescribed in the e-Auction notice, and categorically stated that there were

no outstanding dues towards either the State Government or the Central

government or in respect of any undertaking or autonomous or statutory

body under any Ministry. He had also stated on oath that, no legal disputes,

arbitrations or court cases were pending between him and such entities.

9. According to the Zilla Parishad, incorrect and false statements were

made in the affidavit. The PWD Roads had forwarded a report to the Zilla

Parishad, inter alia, informing that claims were pending against the

respondent No. 7 in respect of two similar contracts, i.e., collection of toll tax

from vehicular traffics plying through Lochan Das Setu over river Ajay at

Natun Haat, in the district of Purba Burdwan. It was also urged that, as the

respondent No. 7 participated in the process upon having accepted the said

clause, he was estopped from challenging the validity of the said clause after

being disqualified. In justification of the rationale behind the incorporation

of clause D of the terms and conditions, it was submitted that the said

clause was incorporated to avoid potential future disputes, recovery

6

complications and administrative inconvenience. It was considered prudent,

to expressly incorporate the said condition, instead of confining such criteria

to a formatted affidavit. The incorporation of clause D was a precautionary

and a regulatory condition, which was imposed in order to ensure that

honest, diligent and financially sound agencies participated in the process.

Only those who were prompt in paying the annual lease value at the

appropriate time, without any delay and/or without committing any breach

of such contractual obligation, were eligible to participate.

10. The learned Judge did not accept the contentions of the Zilla Parishad

and was of the view that as, every agency had to deposit the performance

guarantee, adequate pecuniary measure had been employed by the

authority in order to ensure that, in the event a successful bidder failed to

comply with the terms and conditions, the performance guarantee could be

invoked as a mode of recovery of the dues . Although, the respondent

authority obtained a report from the Executive Engineer, Burdwan, North

Highway Division, PWD Roads, which, inter alia, stated that there were

some dues in respect of contracts awarded by them to the respondent No. 7,

the quantum of the claim was the subject matter of a litigation before the

High Court. Until and unless the issue was decided, the question of holding

the respondent No. 7 to be a defaulter, did not arise. The writ petitioner

rightly did not consider himself to be a defaulter and did not provide the

necessary information in the affidavit. When the issue was pending before a

court of law, the Zilla Parishad could not have prejudged the issue and held

that the appellant was not technically qualified, on account of unpaid dues

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of PWD Roads. His Lordship held that, as the dues of the PWD had not

crystalized, the eligibility of the writ petitioner to participate in the said e-

Auction and carry out the work successfully could not be adjudged on the

basis of the said claim. According to His Lordship, the respondent

authorities acted in a discriminatory manner. The authorities relied on

clause D of the e-Auction notice and imposed the said condition on the writ

petitioner, but failed to treat the appellant at par with the writ petitioner.

The clause should have been equally applied to all, and consequently,

information with regard to the appellant ought to have been sought for from

the authorities under which the appellant had executed similar works.

11. Thus, His Lordship concluded that, clause D was arbitrary, irrational

and had been incorporated with a malafide intention to oust eligible bidders.

The work order issued in favour of the appellant was also set aside. The

authorities were directed to initiate a fresh e-Auction process, upon giving

opportunity to all eligible bidders to participate in the same.

12. Mr. Saptansu Basu, learned Senior Advocate appeared for the

appellant and submitted that clause D was incorporated to ensure that the

agency would deposit the annual lease rent as per the time schedule

mentioned in the said e-Auction notice. This was done to avoid delay and

disputes arising from non-payment of money, to a public authority. The

money collected from the annual lease rent was used by the Zilla Parishad

to serve the public. A person who had defaulted in making payment of

money to public authorities could not be trusted. It was further submitted

that defaulters were not allowed to participate in such e-Auctions held by

8

the Zilla Parishad even on earlier occasions. In the subject tender, a more

stringent clause was incorporated to the effect that, an agency which was a

defaulter in respect of similar contracts with the central, or state

government, or undertakings, statutory bodies, local bodies etc., would also

be debarred from participating. The clause was neither arbitrary, nor

irrational. The Zilla Parishad had the jurisdiction to impose such clause, in

order to ensure that financially sound, honest and experienced bidders,

having good reputation with other authorities, would participate in the e-

Auction. According to Mr. Basu, the pendency of a dispute with regard to

the outstanding dues of PWD Roads, was a reasonable basis to assess and

or evaluate the competence or eligibility of an agency. It was submitted that

the clause has a reasonable nexus with the object sought to be achieved.

Agencies who were not diligent, prompt and vigilant in paying up the dues,

were sought to be excluded and the authority always had the right to do so.

13. According to Mr. Basu, the said condition was not tailor-made. It

applied to all bidders. As many as seven persons had participated in the

process. The author of the document was the best judge to decide what kind

of precautionary and regulatory conditions would serve the best interest of

the Zilla Parishad and ensure that future complications with regard to

recovery of money, performance of work as per the terms and conditions,

proper execution of the work etc, could be avoided. The intention was to

protect public money.

14. Mr. Soumya Majumder, learned Senior Advocate for the Birbhum Zilla

Parishad supported the submissions of Mr. Basu. The Zilla Parishad further

9

contended that the learned Judge erred in holding that the Zilla Parishad

had acted in a discriminatory manner, by calling for a report with regard to

the alleged outstanding dues of the writ petitioner, but did not call for any

report with regard to the past dues of the appellant. It was contended that,

as there was a complaint with regard to the eligibility of writ petitioner/

respondent No. 7, at the instance of the appellant, the report was called for.

Had there been any such complaint against the appellant as well, a similar

step would have been taken . In the absence of any complaint against

participants, the statements made by the participants in their respective

affidavits were accepted to be true and correct. The ap pellant and the

respondent No. 7 filed such affidavits in the prescribed format. Both stated

that there were no outstanding dues. Only after the complaint was received

in respect of the respondent No. 7 the query was made.

15. According to Mr. Majumder, a writ court was not empowered to set

aside a tender condition, inter alia, holding that the same was incorporated

with mala fide intention. Public authorities also have the freedom to enter

into business transactions in the same manner as private entities. Some fair

play in the joints must be allowed to the public authorities to frame their

own conditions. Even if a condition was harsh or unfair, a writ court could

not substitute such condition with its own opinion. Judges were not experts.

Such matters fell within the domain of contractual obligations in commercial

matters and should be left to the authority inviting such tender/e-Auction.

16. Rebutting the submissions of the appellant, Mr. Abhratosh Majumdar,

learned senior Advocate for the writ petitioner/respondent No. 7 submitted

10

that the reasons afforded by the Zilla Parishad in disqualifying the writ

petitioner at the technical evaluation stage, were not tenable in law. The writ

petitioner could not be treated as a defaulter, inasmuch as, the claim of the

PWD was disputed. A writ petition challenging such claim was pending.

Until and unless the writ petition was dismissed, upon the court holding

that the claim was correct and legitimate, the respondent No. 7 could not be

termed as a defaulter.

17. It was next submitted that, clause D was unconstitutional and

violative of Article 14 of the Constitution of India. In the field of contractual

obligations, disputes with regard to the claim and counter-claim of the

contractor and the employer were common. If a contractor or a bidder was

engaged by the government or an authority , disputes with regard to

payment often arose. Such disputes were often legitimate. Thus, the

condition was not only stringent, but also irrational and unreasonable.

Contractors/bidders could not be prohibited from raising any dispute with

regard to the claims arising out of contractual obligations. If such stringent

conditions were imposed, the right of a party to raise disputes and/or

challenge the claims or actions of public authorities would be denied. This

was antithetic to the very concept of dispensation of justice.

18. Relying on the decision of AKA Logistic Pvt. Ltd. Vs. Durgapur

Projects Ltd. reported in 2012 SCC Online Cal 8568, it was submitted

that, the restrictive condition which operated at the threshold and

disentitled participants who had any dispute with other state authorities or

undertakings of public bodies, from participating in the subject tender, was

11

unconstitutional. The said condition debarred many deserving, experienced

and financially strong candidates from participating in the process. Reliance

was also placed on the decision of Adani Exports Ltd., Mumbai & Anr. Vs.

Maharashtra State Electricity Board & Ors 2003(4) Mh.L.J. 391 , in

support of the contention that, the statements in the affidavit could not be

taken as false declaration. The claim of unpaid dues of PWD Roads, had not

reached a finality. Moreover, Annexure 2 to the terms and conditions was a

prescribed format. There was no scope to mention the exact nature of the

litigation that was pending, and that the claim of PWD was unacceptable.

The eligibility condition under clause D was illegal, arbitrary,

unconstitutional and mala fide. Right to approach the court was an inherent

right conferred by the constitution. Every person had the right to go to court

for vindication of his grievance, and as such, in terms of the ratio laid down

in AKA Logistics (supra), clause D was rightly struck down by the learned

trial Judge.

19. A tender condition, which prevented a person from raising a dispute

with an authority, on issues which emanated from breach of terms and

conditions of another contract, should be struck down and His Lordship had

rightly done so.

20. Mr. Jaydip Kar, learned Senior Advocate appeared for Sk. Nasir,

another participant whose bid was also cancelled for the same reasons. An

application for intervention was filed. Mr. Kar submitted that, the decision

to place a bidder in the category of a defaulter, must be preceded by a

declaration. At best, the writ petitioner and Sk. Nasir were alleged defaulters

12

and not declared defaulters. Whether the outstanding dues, as reported by

PWD Roads, were actually payable under those contracts, was yet to be

decided by a competent court of law, and as such, the Zilla Parishad ought

to have taken note of such factor and allowed both Sk. Nasir and the

respondent No. 7 to participate in the financial bidding. Reliance was placed

on the decision of BN Joshi & Sons Limited vs. Nair Coal Services

Limited & Others in this regard.

21. Having discussed the submissions of the parties in details, we

proceed to deal with the issue involved. The Birbhum Zilla Parishad invited

offers from eligible and resourceful agencies, for collection of fees for the

works listed in the notice for e-Auction dated December 31, 2025. The name

of the work and mode and manner in which the fees were to be collected and

the rates, are quoted below:-

Name of Work

SL

No.

Name of the

work

Period

of

Lease

Base Value

per Year

Bid

Security/

EMD

Rate of

increme

nt

Amount

Auction

processi

ng fees

1.

Collection of

Toll Tax from

the vehicular

traffic plying

through

Sagarbandhi-

03

(Three)

years

from

the

date of

Rs.

2,40,03,37

5.00

Rs.

24,00,400

.00

Rs.

5,00,000

.00

Rs.

20,000.

00

13

Dholkata &

Raipur-

Habraphari

Road in the

district of

Birbhum.

issue of

work

order.

Fees will be collected as per rate mentioned below

SL.

No.

Type of Vehicle Description of Vehicle Rate per Trip

1.

Light Vehicles Matador Tempo (Empty) Rs. 15.00

2.

Light Vehicles Light Vehicle Matador Tempo

(Loaded)

Rs. 30.00

3.

Medium Vehicles Bus, Truck, Lorry and Minibus

(Empty)

Rs.45.00

4.

Medium Vehicles Bus, Truck, Lorry and Minibus

(Loaded/with Passenger)

Rs. 75.00

5.

Heavy Vehicles JCB Six and above wheelers

vehicles (empty)

Rs.90.00

6.

Heavy Vehicles JCB Six and above wheelers

vehicles (loaded)

Rs. 165.00

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22. The successful bidder was required to abide by such terms and

conditions which are quoted below:-

“A. Engagement of Sub-Contractor or Subletting the assignment is

not permitted.

B. GST, Royalty, and all other statutory levies, cess, taxes, and

charges (as applicable under prevailing rules and Government

Orders) shall be borne by the bidder. The bidders shall quote their

bid rate after considering all such financial implications. Under no

circumstances shall the quoted rate be reduced at a later stage.

C. The selected bidder shall be required to execute an Agreement, in

the prescribed format enclosed, on Non-Judicial Stamp Paper prior

to commencement of the assignment.

D. If any bidder is found to be a defaulter against any outstanding

dues with any Authority who previously issued a work order for a

similar nature of assignment, at any stage of the auction process

(including after the issuance of the Work Order), the bidder shall be

disqualified from further participation, and the Earnest Money

Deposit (EMD) submitted by the bidder shall be forfeited.

E. Birbhum Zilla Parishad may at any time, require the intending

bidder to produce the original copies of the documents uploaded

online for verification. For this purpose, a notice shall be issued to

the intending bidder through the registered e-mail ID, requiring

submission of the original documents within a specified period to

the specific authority mentioned in the notice and before completion

of technical evaluation. Failure to produce the required documents

within the stipulated time and place shall result in cancellation of

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the eligibility of the intending bidder, without any further

communication.

F. No fees shall be collected from Government vehicles provided

valid official authorization/identification is produced at the time of

entry.

G. Any deviation from the approved rate chart during fee collection

shall be treated as a serious breach and the lease will be cancelled

forthwith.

H. The selected bidder shall deposit the annual lease value as has

been accepted along with applicable Income Tax within fourteen

(14) days from the date of issuance of the Letter of Acceptance,

failing which the contract shall be treated as cancelled and the

Earnest Money Deposit (EMD) shall be forfeited. Annual lease value

for the subsequent year shall have to be deposited before expiry of

the preceding year. No extension in this regard will be allowed.

Failure to comply will result in termination of the lease without

further notice.

I. No expenditure shall be borne by the Authority of Birbhum Zilla

Parishad for establishing the fee collection centre or constructing

any structure of any kind.”

23. The imposition of clause D, was the subject matter of challenge in the

writ petition. The clause provides that, if a bidder was found to be a

defaulter and had unpaid dues in relation to a contract/work order, for a

similar nature of work with any public authority of the state or the central

government, the bidder shall be disqualified from participation and the

earnest money deposit submitted by the bidder shall be fo rfeited. Such

16

disqualification could also be made during the pendency of the work and

after issuance of the work order. Under the special terms and conditions, it

was stated that, an affidavit must be sworn by the prospective bidder as per

the enclosed format, before a notary public/executive magistrate/judicial

magistrate. Annexure 2 is the prescribed format for such affidavit, and the

same is quoted below:-

“I, the undersigned, do hereby certify that all the statements made in

the attached documents are true and correct. In the event that any

information submitted is found to be false, incorrect, or concealed, the

application shall be liable for rejection and I shall raise no objection or

claim in this regard.

The undersigned understands that further qualifying information may

be requested and agrees to furnish any such information as and when

required by the Department or the Notice Inviting Authority.

As a participating bidder, I hereby declare and affirm that there is no

outstanding amount payable by me/us to the State Government or

Central Government, their undertakings, or any

statutory/autonomous bodies under any ministry. I/we also confirm

that there are no legal disputes, arbitrations or court cases pending

against me/us with any such entities. In the event of any false

declaration or suppression of facts in this regard, my/our bid shall be

rejected outright and the Earnest Money Deposit (EMD) shall be

forfeited.”

24. Clause H of the terms and conditions stipulates that, the bidder was

required to deposit the annual lease value as had been accepted along with

the applicable income tax, within 14 days from the date of issuance of the

letter of acceptance, failing which the contract would be treated as cancelled

and the earnest money deposit would be forfeited. Annual lease value for the

17

subsequent year should be deposited before the expiry of the preceding year.

No extension in such regard would be allowed. Failure to comply would

result in termination of the lease, without further notice. Thus, the

respondent No. 7 participated in the e-Auction, without challenging the

clauses and by accepting the same. A bidder, who was a defaulter and had

outstanding dues in respect of a public authority which had previously

issued work orders for a similar assignment, was ineligible to participate. In

the event such fact came to light after issuance of the work order, the

contract was liable to be terminated and the earnest money deposit

submitted by the bidder was liable be forfeited. The successful bidder was

required to deposit the annual lease value as had been accepted along with

the applicable income tax within 14 days from the date of issuance of the

letter of acceptance, failing which the contract would be treated as cancelled

and the earnest money deposit would be treated to be forfeited. The contract

was for three years. The annual lease value for the subsequent years were to

be deposited before the expiry of the preceding year and no extension in this

regard would be allowed. Failure to comply would result in termination.

These conditions were not challenged when th e e-Auction notice was

published. The writ petitioner/respondent No. 7 submitted his bid

document upon accepting such conditions and also submitted an affidavit

indicating that there were no outstanding dues. When the respondent No. 7

was disqualified upon being treated as a defaulter in respect of similar

nature of contracts awarded by the PWD Roads, the writ petition was filed

by challenging not only the disqualification, but also the basis for

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disqualification, that is, clause D. Upon a harmonious reading of the clauses

and the affidavit, we hold that clause D was a precursor to clause H and

was imported to ensure fulfilment of the contractual obligation to make

timely payment. We do not accept the contention of Mr. Abhratosh

Majumder that, the respondent No. 7 did not have any option to disclose

either the pending litigation with the PWD or the dispute with regard to the

alleged outstanding dues of PWD, as Annexure 2 was a set format and there

was no scope to provide any further information. As per the clause, any

person who had outstanding dues with a public authority could not

participate. In our view, clause D could not be read in the same manner as

the clause in AKA Logistic Pvt. Ltd. (supra). In that case, the issue was

whether requiring an undertaking from a prospective bidder to the effect

that, they had not initiated any litigation against any employer in respect of

a contract, could be a valid condition.

25. It was held that bidders who had approached the court for

preservation, protection and enforcement of their rights, could not be

prevented from participating in any tender process, and such a clause was

not only unconstitutional, but an affront to the judicial process by which

courts aimed to secure justice to the wronged. A bidder who approached the

court, could not be treated to be less competent than one who did not

approach the court for preservation of his right. Every man who suffered a

legal wrong could approach the appropriate forum in order to seek justice. It

was the duty of the constitutional court to preserve and protect the rights of

the wronged. Access to justice was a right guaranteed by the Constitution

19

and under such circumstances, the decision was rendered in AKA Logistic

Pvt. Ltd. (supra).

26. However, in the subject e-Auction notice, the authorities wanted to

ensure that honest bidders, who were prompt in making payments, either of

the annual lease rents, or the toll taxes collected in respect of similar

contracts, would be eligible to participate. Bidders with outstanding dues

towards the public authorities, should not be allowed to participate. This

was done to avoid future disputes with regard to recovery of the annual

lease rent, and also to avoid litigations. The clause was precautionary and

regulatory in nature. Delayed deposit of lease rent or failure to deposit lease

rent for the subsequent years, would result in loss of revenue and public

interest would suffer. A clause which ensured financial discipline and

accountability amongst bidders, is reasonable and rational. Public money

was sought to be protected. This is not a case in which a clause had been

incorporated to exclude all bidders having any kind of dispute in respect of

earlier contracts. This clause clearly states that, if there were outstanding

dues in respect of similar leases/assignments, in such event, bidders who

had such dues would not be allowed to participate. The contract was for

collection of toll tax, which required the successful bidder to deposit the

annual lease rent for the first year along with the income tax payable within

14 days from the issuance of the letter of acceptance and thereafter, each

year’s annual lease was to be paid before expiry of the previous year. The

annual lease rent to be paid for each year was a fixed amount. Similarly, toll

tax to be collected, were also fixed as per the rates.

20

27. Hence, the ratio of AKA Logistic Pvt. Ltd. (supra) is not applicable in

this case. This is not a case in which, if the clause is interpreted in its

proper perspective, a person who had taken recourse to any legal proceeding

would automatically be disqualified for having approached a court of law.

The clause merely prescribed that, bidders who failed to pay the dues in

respect of similar contracts awarded by the state government or the central

government or any statutory authority, or any public authority, for similar

works, could not participate. The reason/rationale underlying incorporation

of such clause was that, a bidder who had failed to comply with the

contractual obligation of payment of the lease rents or deposit of the toll tax

which were collected under those contracts (as the case may be), could not

be depended upon and trusted. P roper execution of the subject contract

could not be guaranteed. The clause was inserted in public interest and to

ensure timely payment of the money due to a public authority . The Zilla

Parishad wanted to avoid protracted and expensive litigation, and also

protect its exchequer.

28. Thus, the contentions of Mr. Abhratosh Mazumdar and Mr. Kar that

the clause did not have any rationale with the object sought to be achieved,

are not accepted. Secondly, it appears from the demand of justice of the writ

petitioner that, the Executive Engineer, Burdwan, North Highway Division

had instituted a criminal proceeding against the writ petitioner for

wrongfully withholding government money. He was also suspended for not

depositing the toll tax. Moreover, the Zilla Parishad cannot be prevented

from expanding the scope of clause D, from what it stood earlier, by

21

prescribing that defaulters of similar contracts, in respect of work awarded

by the state government/central government/public authority/statutory

body etc., should not be allowed to participate in the proceeding. The

authority has a right to incorporate any conditions it deems fit and proper,

for effective execution of the work. Even, harsh and stringent conditions can

be incorporated, so that reputed bidders participate, and the best amongst

those, is ultimately awarded the work order. The said clause has a direct

nexus with the reputation, bonafide and integrity of a bidder.

29. Thus, it cannot be said that the clause was incorporated with mala

fide intention, in order to oust the writ petitioner/respondent No. 7.

Moreover, the writ petitioner suppressed the factum of the pending

litigation, including the pending criminal case. The complaint of Ainul

Haque against the respondent No. 7 was considered. There was no such

complaint against the appellant. As no right had been created in favour of

the respondent No. 7 when such report in respect of the complaint had been

sought for, granting a hearing to the writ petitioner would not change the

situation. The respondent No. 7 would be disqualified in any case. It was a

foregone conclusion.

30. The writ petitioner has not alleged that the information given by the

PWD, was false. Even if a hearing was given to the writ petitioner, he could

not have proved otherwise. The writ petitioner stood automatically

disqualified, the moment it was found that there were outstanding dues with

regard to a similar nature of work. Under such circumstances, the order

impugned is set aside. Moreover, His Lordship proceeded on an incorrect

22

presumption that performance guarantee had been obtained from the

bidders. The terms do not require furnishing of performance guarantee.

31. Clause D is neither tailor-made nor discriminatory. It has not been

incorporated with any mala fide intention to oust the writ petitioner from the

zone of competition. It applied equally to all participants. With regard to the

decision cited by Jaydip Kar, we are of the view that the same does not

apply in case of the writ petitioner. The decision was rendered in a situation

in which, the clause provided that the bidder could not be allowed to

participate if he was a declared defaulter. The Hon’ble Apex Court held that

such declaration had a definite connotation. It was a statement of existence

of material facts. It was a formal announcement or a deliberate statement.

Such declaration must be announced and made known. When a person was

declared to be a defaulter, such declaration must be preceded by a decision.

The expression ‘declared’ was wider than the expression ‘found’ or ‘made’. In

clause D, the expression used is ‘found to be a defaulter’.

32. The scope of judicial review in matters relating to award of tenders, is

limited. In the matter of Maa Binda Express Carrier and Anr. vs

Northeast Frontier railway and Ors. reported in AIR 2014 SC 390, the

Hon’ble Apex Court held as follows:-

“8. The scope of judicial review in matters relating to award of

contracts by the State and its instrumentalities is settled by a long

line of decisions of this Court. While these decisions clearly recognise

that power exercised by the Government and its instrumentalities in

regard to allotment of contract is subject to judicial review at the

instance of an aggrieved party, submission of a tender in response to

a notice inviting such tenders is no more than making an offer which

the State or its agencies are under no obligation to accept. The bidders

participating in the tender process cannot, therefore, insist that their

tenders should be accepted simply because a given tender is the

23

highest or lowest depending upon whether the contract is for sale of

public property or for execution of works on behalf of the Government.

All that participating bidders are entitled to is a fair, equal and non-

discriminatory treatment in the matter of evaluation of their tenders.

It is also fairly well settled that award of a contract is essentially a

commercial transaction which must be determined on the basis of

consideration that are relevant to such commercial decision. This

implies that terms subject to which tenders are invited are not open to

the judicial scrutiny unless it is found that the same have been tailor-

made to benefit any particular tenderer or class of tenderers. So also,

the authority inviting tenders can enter into negotiations or grant

relaxation for bona fide and cogent reasons provided such relaxation

is permissible under the terms governing the tender process.

9. Suffice it to say that in the matter of award of contracts the

Government and its agencies have to act reasonably and fairly at all

points of time. To that extent the tenderer has an enforceable right in

the court which is competent to examine whether the aggrieved party

has been treated unfairly or discriminated against to the detriment of

public interest. (See Meerut Development Authority v. Assn. of

Management Studies [(2009) 6 SCC 171 : (2009) 2 SCC (Civ) 803]

and Air India Ltd. v. Cochin International Airport Ltd. [(2000) 2 SCC

617 : (2000) 1 SCR 505] )

10. The scope of judicial review in contractual matters was further

examined by this Court in Tata Cellular v. Union of India [(1994) 6

SCC 651] , Raunaq International Ltd. case [Raunaq International

Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492] and in Jagdish

Mandal v. State of Orissa [(2007) 14 SCC 517] besides several other

decisions to which we need not refer.

11. In Michigan Rubber (India) Ltd. v. State of Karnataka [(2012) 8 SCC

216] the legal position on the subject was summed up after a

comprehensive review and principles of law applicable to the process

for judicial review identified in the following words: (SCC p. 229, paras

23-24)

“23. From the above decisions, the following principles emerge:

(a) the basic requirement of Article 14 is fairness in action by the

State, and non-arbitrariness in essence and substance is the

heartbeat of fair play. These actions are amenable to the judicial

review only to the extent that the State must act validly for a

discernible reason and not whimsically for any ulterior purpose. If the

State acts within the bounds of reasonableness, it would be legitimate

to take into consideration the national priorities;

(b) fixation of a value of the tender is entirely within the purview of the

executive and courts hardly have any role to play in this process except

for striking down such action of the executive as is proved to be

arbitrary or unreasonable. If the Government acts in conformity with

certain healthy standards and norms such as awarding of contracts

by inviting tenders, in those circumstances, the interference by courts

is very limited;

24

(c) in the matter of formulating conditions of a tender document and

awarding a contract, greater latitude is required to be conceded to the

State authorities unless the action of the tendering authority is found

to be malicious and a misuse of its statutory powers, interference by

courts is not warranted;

(d) certain preconditions or qualifications for tenders have to be laid

down to ensure that the contractor has the capacity and the resources

to successfully execute the work; and

(e) if the State or its instrumentalities act reasonably, fairly and in

public interest in awarding contract, here again, interference by court is

very restrictive since no person can claim a fundamental right to carry

on business with the Government.

20. Therefore, a court before interfering in tender or contractual

matters, in exercise of power of judicial review, should pose to itself

the following questions:

(i) Whether the process adopted or decision made by the authority is

mala fide or intended to favour someone; or whether the process

adopted or decision made is so arbitrary and irrational that the court

can say: ‘the decision is such that no responsible authority acting

reasonably and in accordance with relevant law could have reached’?

and

(ii) Whether the public interest is affected?

If the answers to the above questions are in the negative, then there

should be no interference under Article 226.”

(emphasis supplied)

33. In Tata Cellular v. Union of India reported in (1994) 6 SCC 651,

the Hon’ble Apex Court held as follows:-

“70. It cannot be denied that the principles of judicial review would

apply to the exercise of contractual powers by Government bodies in

order to prevent arbitrariness or favouritism. However, it must be

clearly stated that there are inherent limitations in exercise of that

power of judicial review. Government is the guardian of the finances of

the State. It is expected to protect the financial interest of the State.

The right to refuse the lowest or any other tender is always available

to the Government. But, the principles laid down in Article 14 of the

Constitution have to be kept in view while accepting or refusing a

tender. There can be no question of infringement of Article 14 if the

Government tries to get the best person or the best quotation. The

right to choose cannot be considered to be an arbitrary power. Of

course, if the said power is exercised for any collateral purpose the

exercise of that power will be struck down.”

34. In the matter of Balaji Ventures Pvt. Ltd. vs Maharashtra State

Power Generation Company Ltd. & Anr. decided in Special Leave to

25

Appeal (C) No(s). 1616 & 1673 /2022 , the Hon’ble Apex Court held as

follows:-

“5.1 Now so far as the impugned Judgment and order passed by the

High Court dismissing the writ petitions is concerned, what was

challenged before the High Court was one of the tender

conditions/clauses. The High Court has specifically observed and

noted the justification for providing clause 1.12(V). The said clause

was to be applied to all the tenderers/bidders. It cannot be said that

such clause was a tailor made to suit a particular bidder. It was

applicable to all. Owner should always have the freedom to provide the

eligibility criteria and/or the terms and conditions of the bid unless it

is found to be arbitrary, mala fide and/or tailor made. The

bidder/tenderer cannot be permitted to challenge the bid

condition/clause which might not suit him and/or convenient to him.

As per the settled proposition of law as such it is an offer to the

prospective bidder/tenderer to compete and submit the tender

considering the terms and conditions mentioned in the tender

document.

5.2 In the case of Silppi Constructions Contractors vs. Union of

India, (2020) 16 SCC 489, it is observed in para 20 as under:

“20. The essence of the law laid down in the judgments referred

to above is the exercise of restraint and caution; the need for

overwhelming public interest to justify judicial intervention in

matters of contract involving the State instrumentalities; the

courts should give way to the opinion of the experts unless the

decision is totally arbitrary or unreasonable; the court does not

sit like a court of appeal over the appropriate authority; the

court must realise that the authority floating the tender is the

best judge of its requirements and, therefore, the court's

interference should be minimal. The authority which floats the

contract or tender, and has authored the tender documents is

the best judge as to how the documents have to be interpreted.

If two interpretations are possible then the interpretation of the

author must be accepted. The courts will only interfere to

prevent arbitrariness, irrationality, bias, mala fi des or

perversity. With this approach in mind we shall deal with the

present case.”

5.3 In the case of Montecarlo Limited vs. National Thermal Power

Corporation Limited, (2016) 15 SCC 272 , it is observed and held

that the tender inviting authority is the best person to understand

and appreciate its requirement and tender documents, so long as

there are no mala fides/arbitrariness etc. It is further observed and

held that the Government must have freedom of contract and such

action can be tested by applying Wednesbury principle and also

examining whether it suffers from arbitrariness or bias or mala fides.

26

6. Applying the law laid down by this Court in the aforesaid decisions

to the facts of the case on hand and when it is found that clause

1.12(V) cannot be said to be arbitrary, mala fide and/or tailor made

and the same shall be applicable to all the bidders/tenderers and

there is justification also shown providing such a clause and even

subsequently a corrigendum has been issued and even the

Respondent No.2 private siders also made it clear that uniform charge

shall be quoted for each bidder and even clause 1.12(V) was modified

to the extent the necessary permission/consent/no objection

certificate that was required at the time of submission of the bid was

now required to be submitted before the opening of the price bid and

the date for submission of the bid was extended, the High Court has

rightly dismissed the writ petition and has rightly refused to interfere

with the decisions of the respondents providing clause 1.12(V) of the

tender document.”

35. In the matter of Airport Authority of India vs Centre for Aviation

Policy, Safety and Research (CAPSR) & Ors. decided in CIVIL APPEAL

Nos. 6615-6616 of 2022, the Hon’ble Apex Court held as follows:-

27. Even otherwise, even on merits also, the High Court has erred in

quashing and setting aside the eligibility criteria/tender conditions

mentioned in the respective RFPs, while exercising the powers under

Article 226 of the Constitution of India. As per the settled position of

law, the terms and conditions of the Invitation to Tender are within

the domain of the tenderer/tender making authority and are not open

to judicial scrutiny, unless they are arbitrary, discriminatory or mala

fide. As per the settled position of law, the terms of the Invitation to

Tender are not open to judicial scrutiny, the same being in the realm

of contract. The Government/tenderer/tender making authority must

have a free hand in setting the terms of the tender.”

36. In Jagdish Mandal v. State of Orissa and Ors. WITH Laxman

Sharma Vs. State of Orissa and Ors. reported in (2007) 14 SCC 517 it

was held as hereunder: -

“22. 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.

27

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.

Therefore, a court before interfering in tender or contractual matters

in exercise of power of judicial review, should pose to itself the

following questions:

(i) Whether the process adopted or decision made by the authority is

mala fide or intended to favour someone;

OR

Whether the process adopted or decision made is so arbitrary and

irrational that the court can say: “the decision is such that no

responsible authority acting reasonably and in accordance with

relevant law could have reached”;

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interference

under Article 226. Cases involving blacklisting or imposition of penal

consequences on a tenderer/contractor or distribution of State

largesse (allotment of sites/shops, grant of licences, dealerships and

franchises) stand on a different footing as they may require a higher

degree of fairness in action.”

37. In Michigan Rubber (India) Limited vs. State of Karnataka and

Ors. reported in (2012) 8 SCC 216 it was held as hereunder:-

24. Therefore, a court before interfering in tender or contractual

matters, in exercise of power of judicial review, should pose to itself

the following questions:

28

(i) Whether the process adopted or decision made by the authority is

mala fide or intended to favour someone; or whether the process

adopted or decision made is so arbitrary and irrational that the court

can say: “the decision is such that no responsible authority acting

reasonably and in accordance with relevant law could have reached”?

and

(ii) Whether the public interest is affected?

If the answers to the above questions are in the negative, then there

should be no interference under Article 226.

* * *

* * *

35. As observed earlier, the Court would not normally interfere with

the policy decision and in matters challenging the award of contract

by the State or public authorities. In view of the above, the appellant

has failed to establish that the same was contrary to public interest

and beyond the pale of discrimination or unreasonable. We are

satisfied that to have the best of the equipment for the vehicles,

which ply on road carrying passengers, the 2nd respondent thought

it fit that the criteria for applying for tender for procuring tyres

should be at a high standard and thought it fit that only those

manufacturers who satisfy the eligibility criteria should be permitted

to participate in the tender. As noted in various decisions, the

Government and their undertakings must have a free hand in setting

terms of the tender and only if it is arbitrary, discriminatory, mala

fide or actuated by bias, the courts would interfere. The courts

cannot interfere with the terms of the tender prescribed by the

Government because it feels that some other terms in the te nder

would have been fair, wiser or logical. In the case on hand, we have

already noted that taking into account various aspects including the

safety of the passengers and public interest, CMG consisting of

experienced persons, revised the tender conditions. We are satisfied

that the said Committee had discussed the subject in detail and for

specifying these two conditions regarding pre-qualification criteria

and the evaluation criteria. On perusal of all the materials, we are

satisfied that the impugned conditions do not, in any way, could be

classified as arbitrary, discriminatory or mala fide.”

38. With regard to the case of Sk. Nasir, as the writ petition is pending, we

are not inclined to consider his specific averments in the connected

application. We keep it open for the learned Single Judge to decide the

29

matter in the facts and circumstance of that case. This order will also not

prejudice the proceeding which is pending before the writ court with regard

to the demand of the PWD, against the respondent No. 7.

39. The order impugned is set aside. The decision of the Zilla Parishad is

upheld. The appellant was already continuing with the work provisionally,

on the basis of an interim direction passed by us. With the appeal being

allowed and the order of the learned Single Judge being set aside, the work

order issued to the appellant by the Zilla Parishad shall be finalized/treated

as final. The condition imposed by us upon the appellant to maintain

separate accounts of the toll tax collected by the appellant, is lifted. Further

direction to furnish accounts before this court, is also lifted. If it is found in

future that the appellants had outstanding dues as envisaged under clause

D, the same clause shall be imposed upon the appellant.

40. The appeal is allowed. The applications are disposed of.

41. Urgent Photostat certified copies of this judgment, if applied for, be

supplied to the relevant parties upon fulfilment of requisite formalities.

(Shampa Sarkar, J.)

I agree.

(Ajay Kumar Gupta, J.)