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IN THE HIGH COURT OF JHARKHAND AT RANCHI

L.P.A. No. 46 of 2022

With

I.A.No.1070 of 2022

With

I.A.No.1076 of 2022

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Gujarat Life Sciences (P) Ltd., Vadodara, being represented through

its authorized representative Sri Ashutosh Ranjan, Supervisor, (Bihar

and Jharkhand), Aged about 33 years, Gender-Male, S/o Sri

Amardeo Singh, Resident of Village-Savera, Post Office-Diha, Police

Station-Guraru, District-Gaya, Bihar .... …. Petitioner/Appellant

Versus

1. The State of Jharkhand, through the Chief Secretary, Government of

Jharkhand, having office at MDI Building, Dhurwa, P.O. & P.S. Dhurwa,

District Ranchi (Jharkhand)

2. The Secretary, Department of Agriculture, Animal Husbandry & Co-

operative, Government of Jharkhand, having its office at Nepal House,

P.O. & P.S. Doranda, District-Ranchi (Jharkhand).

3. The Under Secretary, Department of Agriculture, Animal Husbandry

& Co-operative, Government of Jharkhand, having its office at Nepal

House, P.O. & P.S. Doranda, District-Ranchi (Jharkhand).

4. The Secretary, Department of Finance, Government of Jharkhand,

MDI Building, Dhurwa, P.O. & P.S. Dhurwa, District Ranchi (Jharkhand).

5. The Chief Executing Officer, Organic Farming Authority of

Jharkhand, Krishi Bhawan Campus, Kanke Road, P.O. & P.S.-Kanke,

District-Ranchi (Jharkhand).

6. The Tender Committee, represented through its Chairman cum

Chief Executive Officer, Organic Farming Authority of Jharkhand, Krishi

Bhawan Campus, Kanke Road, P.O. & P.S.-Kanke, District-Ranchi

(Jharkhand). .... .... Respondents/Respondents

CORAM : HON’BLE THE CHIEF JUSTICE

HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD

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For the Appellant : Mr. Ajit Kumar, Advocate

For the State : Mr. Piyush Chitresh, A.C. to A.G.

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ORAL JUDGMENT

04/Dated: 22.03.2022

The instant intra-court appeal preferred under Clause-10 of Letters

Patent is directed against the order/judgment dated 28.01.2022 passed by

the learned Single Judge of this Court in W.P.(C) No.1173 of 2021,

whereby and whereunder, the writ petition has been dismissed by refusing

to interfere with the order as contained in letter no.308 dated 17.02.2020,

by which, the contract awarded to it was stayed, as also, the learned

Single Judge has refused to interfere with the order as contained in letter

no.479 dated 10.03.2021 issued by the Director, Horticulture, Jharkhand,

Ranchi, by which, the contract awarded and concluded in favour of the

writ petitioner-company, in pursuant to inviting applications through

‘Expression of Interest’ (in short ‘EoI’) dated 12.10.2019 published in

newspaper on 16.10.2019 for supply of Organic Farm Inputs was

rescinded.

2. The brief facts of the case, as per the pleading made in the writ

petition, required to be enumerated, are as hereunder:-

The writ petitioner, in pursuant to the ‘EoI’ published by the Organic

Farming Authority of Jharkhand (in short ‘OFAJ’) on 16.10.2019 in a daily

newspaper "Prabhat Khabar" with reference to the government’s sanction

letter no.106 dated 23.09.2019, inviting applications for empanelment of

manufacturers for supply of Organic Farm Inputs (Bio-Fertilizers/Bio-

Pesticides/Soil Conditioner/Plant Growth Enhancers/Other approved Bio-

Products (if any). The writ petitioner-company participated and submitted

the required technical and financial documents along with requisite fee as

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well as earnest money of Rs.5,00,000/- within the stipulated time before

the concerned authority as per the terms and conditions of the EoI. The

Chief Executive Officer, OFAJ- respondent no.5 held a pre-bid meeting on

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th

October, 2019, in which, all the bidders who had submitted their bids

were called for discussion, wherein, the prospects of said scheme and the

procedures for finalization of tender process were discussed apprising

them the manner in which the tender proposals were to be submitted,

moreover, the procedures of evaluation of technical bid proposal were

also made known to them. It was also clarified that the technical bid would

be scrutinized by an evaluation committee and those firms/agencies, who

fulfilled the minimum eligibility conditions, would be evaluated on the basis

of scoring criteria. In terms with the EoI, a meeting of the tender

committee under the Chairmanship of the respondent no.5 was convened

on 24.10.2019 for technical evaluation of the proposals received and

thereafter, the tender committee notified the number of tender proposals

(in total 08) received with the authority within the stipulated time and

further, the reasons for rejection of proposal of one of the bidders, namely,

Indore Biotech Input & Research Pvt. Ltd., Indore, due to non-submission

of E.M.D. and tender fee at the threshold, was also assigned.

So far as the remaining seven tender proposals are concerned, the

tender committee decided to evaluate and scrutinize the technical

documents submitted by the concerned agencies. The tender committee,

after scrutiny had rejected the proposals of four agencies for non-

conformity with the terms as stipulated in the tender document.

Accordingly, tentative/provisional list of agencies likely to be empanelled

was uploaded on the website of OFAJ on 03.01.2020 inviting objections

from the concerned agencies within seven days from the date of such

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uploading. One of the agencies, namely, International Panacea Ltd. (I.P.L.)

submitted its grievance/objection. The tender committee upon submission

of said objection held a meeting on 17.01.2020 and took decision over the

grievance of the aforesaid agency, discussing all the points so mentioned

in the said objection and justified their decision attributable to non-

conformity of clauses/terms by the said agency. The tender committee

after deciding the objections so received by the aggrieved agency, finally

drew proceedings for empanelment of three agencies including the

petitioner-company and awarded contract to them for supply of organic

farm inputs in Jharkhand vide memo no.53 dated 17.01.2020. The tender

and purchase committee, while approving the financial proposals of these

three agencies empanelled for supply of Bio-farm Inputs, notified the bio-

products which the empanelled agencies were able to satisfy by meeting

the guidelines and standards fixed by the Government and, accordingly,

the list of products with their rate was also notified enabling the service

providers to place their respective indents.

The writ petitioner-company has received a communication as

contained in letter no.60 dated 18.01.2020 from the office of the OFAJ

under the signature of the Chief Executive Officer, requiring it to appear

physically with the requisite documents as stipulated in the aforesaid letter

for signing the MoU in pursuance of earlier information given by the OFAJ

vide memo no.53 dated 17.01.2020. The petitioner through one of its

board member appeared before the authority for signing the MoU in the

light of the letter no.60 dated 18.01.2020 and, accordingly, the MoU came

to be signed between the authorities of OFAJ and the writ petitioner on

24.01.2020. The authority, while undertaking the process for empanelment

of manufacturers for the supply of organic farm inputs, initiated the

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process of empanelling the service providers/ agencies of repute for

certification of Horticulture/ agricultural crops as per technical guidelines of

National Standards for Organic Production (NSOP) and accredited by

Agricultural and Processed Food Products Export Development Authority

(APEDA) through the same process by publishing ‘EoI’ within same

timeline in the daily newspaper “Prabhat Khabar" on 16.10.2019 itself.

After having completed the process of selection of service

providers, the list of service providers was intimated by the respondent

no.5 to the writ petitioner and other two agencies vide letter No.154 dated

29/01/2020 for coordinating and ensuring supply of the Bio-farm input to

the service providers responsible for implementation of the Organic

farming Project in the state of Jharkhand under NPOP/PGS certification

Programme. The writ petitioner-company by coordinating with the service-

providers, as mentioned/detailed in the said letter, initiated the process of

supply by accepting the indent of organic farm inputs. The writ petitioner-

company upon accepting the indent of said inputs placed by the service

provider of Hazaribagh, namely, “Vedic Organic Certification Agency",

initiated the process for supply of products as referred in the demand

letter dated 07.02.2020, however, the Additional Secretary, Department of

Agriculture, Animal Husbandry & Co-operative, Government of Jharkhand

vide order as contained in memo no.308 dated 17.02.2020 stayed the

operation of proceeding of empanelment, which was done by the

respondent no.6 vide memo no.53 dated 17.01.2020 and in consequence

thereof, the writ petitioner-company could not supply the organic farm

inputs mentioned in the indent placed by the said service provider to the

concerned farmers at their destination. Moreover, with passage of one

year, the said products also lost efficacy and got destroyed putting loss to

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the writ petitioner-company besides affecting the project and purpose of

the scheme. The writ petitioner represented the respondent no.5 against

the suspension/ stay, as directed by the respondent no.3 putting the

proceedings of empanelment done for supply of Bio-Farm inputs by the

empanelled agencies on hold without assigning any reason, whereas

other agencies empanelled for providing services for certification of

Agriculture/ Horticulture Crops, as per technical guidelines of National

Standards for Organic production (N.S.O.P) and accredited by A.P.E.D.A.

were allowed to discharge their duties without organic farm inputs

necessary for organic farming. Consequence thereof, the actual work of

farming is impeded or put on hold for want of supply of Bio-farm

inputs. The respondent no.5 replied the said representation of the

petitioner vide letter No.513, dated 18.05.2020, wherein, it was informed

that the proceeding of empanelment earlier made vide memo no.53, dated

17.01.2020 was stayed and effected in terms with letter no.308 dated

17.02.2020 issued by the respondent no.3 and as soon as the information

with respect to vacation of the said stay was received from the

Department of Agriculture, Animal Husbandry and Co-operative,

Government of Jharkhand (Agriculture Wing), the same would be

informed to the writ petitioner-company for further action. However, no

action was taken by the respondents which resulted in filing the present

writ petition. However, during pendency of the writ petition, the writ

petitioner-company received an e-mail with respect to the order as

contained in letter no.479 dated 10.03.2021 issued under the signature of

the Secretary, Department of Agriculture, Animal Husbandry &

Cooperative, Government of Jharkhand, Ranchi- respondent no.2,

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whereby, the contract awarded through ‘EoI’ published in the newspaper

dated 16.10.2019, was rescinded/cancelled.

3. In the aforesaid backdrop, the writ petitioner-company has

approached to this Court by invoking the jurisdiction conferred under

Article 226 of the Constitution of India assailing the order of stay dated

17.02.2020 as contained in letter no.308 and the order of cancellation of

contract dated 16.10.2019 by filing the writ petition being W.P.(C) No.1173

of 2021 taking the ground of commission of arbitrariness on the part of the

respondent authorities in arriving at such conclusion of cancelling the

‘EoI’.

Further, ground has been taken that OFAJ had floated

three different tenders/EoI on 12.10.2019 for selection of three different

stakeholders (service providers/ organic certification agencies/bio-input

manufacturers) for implementation of ICS Projects, but stay was only

imposed on Bio-inputs supply tender which was cancelled after more than

one year. So far other two categories of stake-holders i.e., service

providers for implementation of ICS projects & organic certification

agencies, who are also empanelled through ‘EoI’ published in newspaper

with reference to government sanction order vide letter no.106 dated

23.09.2019 are concerned, they are still working in Jharkhand since

January, 2020 and are also getting payment by OFAJ at regular intervals

after completion of their respective work under National Programme for

Organic Production (NPOP).

Further, ground has been taken, so far as it pertains to Clause-9 of

the sanction letter no.106 dated 23.09.2019 is concerned, the same could

have been done immediately after the award of contract without keeping

the matter pending and stalling the National Programme for Organic

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Production (NPOP) for more than a year without Bio-farm inputs affecting

the public interest.

4. While on the other hand, the State respondent has took the plea

that since the entire tender has been floated in terms of the direction

issued by the Government of Jharkhand, as contained in letter no.106

dated 23.09.2019, wherein, as per Clause-9 thereof, the selection of the

executing agency/certification agency/organic farm inputs supplier were to

be made through open tender, however, the OFAJ issued ‘EoI’ dated

12.10.2019 which was contrary to the specific direction issued by

the Department of Agriculture, Animal Husbandry & Co-operative

(Agriculture wing) Government of Jharkhand.

5. The learned Single Judge, after considering the rival submissions

advanced on behalf of the parties, has dismissed the writ petition by

refusing to interfere with the impugned order, which is the subject matter

of the present intra-court appeal.

6. Mr. Ajit Kumar, learned counsel appearing for the appellant-writ

petitioner has submitted that the learned Single Judge has not considered

the thing in right perspective and merely gone into the condition stipulated

under Clause-9 of the letter of the State Government dated 23.09.2019,

whereby and whereunder, the direction to allot the work is on the basis of

the open tender but even accepting that there is no open tender but the

process which was to be followed in a case of open tender, has already

been followed even when the applications have been invited through ‘EoI’.

According to the learned counsel, the learned Single Judge has

failed to appreciate this aspect of the matter and therefore, the order

impugned is not sustainable in the eye of law.

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Further, submission has been made on behalf of the learned

counsel for the appellant writ petitioner that the process of opening of

financial bid has also been followed and therefore, it is incorrect on the

part of the State authority to say that the final allotment of the work was

based upon the technical evaluation of one or the other applicants.

7. While on the other hand, Mr. Piyush Chitresh, learned A.C. to A.G.

appearing for the State of Jharkhand has submitted by defending the

impugned order by taking the plea that when the State Government has

come out with the decision to allot the work on the basis of the open

tender, it was not proper on the part of the authority to allot the work on

the basis of publication of ‘Expression of Interest’ and after taking into

consideration this aspect of the matter, initially, the competent authority

has stayed the entire process and subsequently, the contract awarded in

favour of the appellant writ petitioner has been rescinded and therefore,

the action of the State Government cannot be said to suffer from illegality.

The learned Single Judge after taking into consideration this aspect

of the matter, since has refused to interfere with the impugned order, as

such, the same cannot be said to suffer from infirmity and therefore, the

instant appeal lacks merit and the same is fit to be dismissed.

8. We have heard the learned counsel for the parties, perused the

documents available on record as also considered the finding recorded by

the learned Single Judge in the impugned order.

9. This Court before scrutinizing the legality and propriety of the

impugned order, deems it fit and proper to refer certain undisputed facts

as per the material available on record.

10. The ‘Expression of Interest’ was published on 16.10.2019 inviting

applications from one or the other applicants for allotment of work

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pertaining to EoI/proposals from the interested service providers/agencies

of repute for empanelment for certification of horticulture/agriculture crops

as per technical guidelines of National Standards for Organic Production

(NSOP) and accredited by APEDA.

11. The sole question which requires to be answered in this case as to

whether the action of the State authority in inviting application through

‘Expression of Interest’ can be considered to be right approach taking into

consideration the condition stipulated under Clause-9 of the Government

order dated 23.09.2019 as contained in letter no.106, wherein, the

decision has been taken to allot the work only through open tender.

12. It is not in dispute, as has been gathered from the material available

on record more particularly the notice of ‘Expression of Interest’ as

contained under Annexure-11 to the writ petition, wherein, the Organic

Farming Authority of Jharkhand has come out with ‘Expression of Interest’

with reference to Government sanction order through letter no.106 dated

23.09.2019 inviting application from the interested service

providers/agencies of repute for empanelment for certification of

horticulture/agriculture crops as per technical guidelines of National

Standards for Organic Production (NSOP) and accredited by APEDA.

Further, as per Annexure-19, one another ‘Expression of Interest’

was published on the same day i.e., on 16.10.2019 with reference to

Government sanction letter no.106 dated 23.09.2019, by which,

applications have been invited for empanelment of manufacturers for

supply of organic farm inputs (Bio-fertilizers/Bio-pesticides/Soil

conditioner/Plant growth enhancers/Other approved Bio-products (if any)

in Jharkhand.

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It is evident from both the notice inviting tender applications by way

of ‘Expression of Interest’ which have been issued with reference to the

Government sanction letter no.106 dated 23.09.2019, therefore, it requires

to consider the decision of the State Government as has been taken and

contained in letter no.106 dated 23.09.2019, in order to answer the issue,

as to whether in the facts of the given case the ‘Expression of Interest’ will

be said to be sufficient compliance of the aforesaid Government order or

not?

The letter no.106 dated 23.09.2019 appended as Annexure-1 to the

writ petition which has been issued under the seal and signature of the

Secretary, Department of Agriculture, Animal Husbandry & Cooperative,

Government of Jharkhand, Ranchi addressed to the Accountant General,

Jharkhand, Ranchi for sanctioning the amount to be spent in three years

biological farming for the financial year 2019-20, 2020-21 or 2021-22,

wherein, specific decision has been communicated about sanction of the

amount in the aforesaid scheme for execution of the work only on the

basis of the open tender, for ready reference, Clause-9 of the aforesaid

Government order as contained in letter no.106 dated 23.09.2019 is being

reproduced hereinbelow:-

“9. bl ;kstuk gsrq dk;Zdkjh laLFkk@izek.khdj.k

laLFkk@miknku vkiwfÙkZdÙkkZ dk p;u [kqyh fufonk ds ek/;e

ls fd;k tk;sxkA”

It is evident that under the sanction letter dated 23.09.2019 issued

by the order of the State Government, the work order was issued only on

the basis of the open tender.

13. The admitted fact herein is that applications have been invited by

way of ‘Expression of Interest’, wherein, the condition has been stipulated

that the bidders will be selected only on the basis of the technical bid.

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14. Therefore, according to the considered view of this Court, the

expression of notice having the condition of allotment of work only on the

basis of scrutinization of the technical bid is quite different to that of the

process which is to be followed in the allotment of work under the open

tender process. Since, under the open tender process, the settled

procedure for allotment of work is on the basis of the opening of the

technical bid and the bidders who have found to be eligible in the technical

bid, their price bids will be opened and after making comparative

assessment of rate quoted by one or the other technically qualified

bidders, the decision is supposed to be taken by the Tender/Purchase

Committee on the basis of the comparative assessment of the rate by

consideration of rate of one or the other bidders.

But so far as the ‘Expression of Interest’ is concerned as would be

evident from the expression of notice annexed as Annexure-11 and 19 to

the amended writ petition, wherein, the process of tender is to be finalized

only on the basis of opening of technical bid of one or the other bidders.

15. It is the admitted position herein that the writ petitioner has been

found to be successful on the basis of the opening of technical bid,

however, the appellant writ petitioner claims that he has also quoted the

price bid and subsequent to its success in the technical bid, the financial

bid was also opened, therefore, the condition which is required to be

followed in the process of allotment of work under the open tender

process, has also followed in the process where the applications have

been invited on the basis of ‘Expression of Interest’.

16. But, we are not impressed with such argument, reason being that

the purpose of allotment of work through open tender is to make it known

to all the eligible bidders to participate by quoting the price as also in order

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to make the process more competitive and further, if the process has been

decided to be followed on the basis of open tender process, being the

decision of the State Government, it cannot be expected from the

department concerned or the functionaries of the department concerned

to flout the government order and ignoring the decision of the State

Government to go for the open tender and replacing it to the ‘Expression

of Interest’ for finalization of work to be allotted in favour of one or the

other successful bidders.

17. There is no dispute about the position of law that once the

government takes decision, meaning thereby, the same has got its

approval from the Cabinet and therefore, there is binding upon the

functionaries of the concerned department.

But, it appears from the material available on record that instead of

allotting the work on the basis of the open tender, the concerned

department has gone into the process of inviting application of ‘Expression

of Interest’ and therefore, has allotted the work in favour of the appellant

writ petitioner.

The concerned department, subsequent to the allotment of work in

favour of the appellant writ petitioner has found the infirmity in the process

of allocation of work being contrary to the order of the State Government

as contained in letter no.106 dated 23.09.2019 and therefore, initially

passed the order of ad-interim stay of restrainment in executing the work

further.

18. This Court, therefore, is of the view that when the State Government

takes a decision to settle the work/allot the work through open tender as

would appear from letter no.106 dated 23.09.2019, if any contrary

decision has been taken by the concerned department by inviting

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application through ‘Expression of Interest’, the same according to the

considered view, cannot be said to be proper.

19. The learned Single Judge after taking into consideration the

stipulation made under Clause-9 of letter no.106 dated 23.09.2019, since

has refused to interfere with the same, which according to the considered

view of this Court, cannot be said to suffer from infirmity, reason being that

the decision taken by the State Government as under letter no.106 dated

23.09.2019 will prevail upon the department and if any decision contrary

to the decision of the State Government has been taken by the concerned

department, the same will be said to be improper.

20. The contention has been raised by the learned counsel for the

appellant writ petitioner that once the contract has been executed, the

decision of the State authority by rescinding the contract cannot be said to

be proper, but, we are not impressed with such argument, reason being

that if any illegality has been committed in its inception, the same cannot

be allowed to be rectified due to subsequent development, reference in

this regard may be made to the judgment rendered by the Hon’ble Apex

Court in Ritesh Tewari and Another v. State of Uttar Pradesh and

Others [(2010) 10 SCC 677], wherein, at paragraph-32, the Hon'ble Apex

Court has held as under :-

“32. It is settled legal proposition that if an order is bad

in its inception, it does not get sanctified at a later

stage. A subsequent action/development cannot

validate an action which was not lawful at its inception,

for the reason that the illegality strikes at the root of the

order. It would be beyond the competence of any

authority to validate such an order. It would be ironical

to permit a person to rely upon a law, in violation of

which he has obtained the benefits.”

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In another judgment rendered in State of Orissa and Another v.

Mamata Mohanty [(2011) 3 SCC 436], similar view has been taken by the

Hon'ble Apex Court at paragraph 37 which is being quoted hereunder :-

“37. It is a settled legal proposition that if an order is

bad in its inception, it does not get sanctified at a later

stage. A subsequent action/development cannot

validate an action which was not lawful at its

inception, for the reason that the illegality strikes at

the root of the order. It would be beyond the

competence of any authority to validate such an

order. It would be ironic to permit a person to rely

upon a law, in violation of which he has obtained the

benefits. If an order at the initial stage is bad in law,

then all further proceedings consequent thereto will

be non est and have to be necessarily set aside. A

right in law exists only and only when it has a lawful

origin.”

21. This Court, therefore, is of the view that merely because the

contract has been executed, the illegality committed in its inception cannot

be allowed to be rectified.

22. Further, this Court is well aware about the settled position of law

that the High Court should be loath in interfering in the contract matter but

certainly, the High Court, sitting under Article 226 of the Constitution of

India can well interfere in the contract matter if there is error in the

decision making process and not in the decision, otherwise, the High

Court will deem to have acted as an appellate authority over the decision

of the State, as has been settled by the Hon’ble Apex Court in the case of

Tata Cellular Vrs. Union of India, (1994) 6 SCC 651, wherein at

paragraph-70, it has been held that the principle of judicial review would

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apply to the exercise of contractual powers by Government bodies in

order to prevent arbitrariness or favoritism, the relevant passage as

contained under paragraph-70, 77 and 94 reads as under:-

“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.

77. The duty of the court is to confine itself to the

question of legality. Its concern should be:

1. Whether a decision-making authority exceeded its

powers?

2. Committed an error of law,

3. committed a breach of the rules of natural justice,

4. reached a decision which no reasonable tribunal

would have reached or,

5. abused its powers.

Therefore, it is not for the court to determine whether a

particular policy or particular decision taken in the

fulfilment of that policy is fair. It is only concerned with

the manner in which those decisions have been taken.

The extent of the duty to act fairly will vary from case to

case. Shortly put, the grounds upon which an

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administrative action is subject to control by judicial

review can be classified as under:

(i) Illegality : This means the decision-maker must

understand correctly the law that regulates his decision-

making power and must give effect to it.

(ii) Irrationality, namely, Wednesbury

unreasonableness.

(iii) Procedural impropriety.

The above are only the broad grounds but it does not

rule out addition of further grounds in course of time. As

a matter of fact, in R. v. Secretary of State for the Home

Department, ex Brind [(1991) 1 AC 696] , Lord Diplock

refers specifically to one development, namely, the

possible recognition of the principle of proportionality. In

all these cases the test to be adopted is that the court

should, “consider whether something has gone wrong

of a nature and degree which requires its intervention”.

94. The principles deducible from the above are:

(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

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administrative sphere or quasi-administrative 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 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.

Further, in the case of Central Coalfields Limited and Anr. Vrs.

SLL-SML (Joint Venture Consortium) & Ors., (2016) 8 SCC 622,

wherein, it was held that it was now for the Court to substitute its opinion

in respect of acceptance of bank guarantee, relevant passage as

contained under paragraph-32, 37, 47 and 49 reads as under:-

“32. The core issue in these appeals is not of judicial

review of the administrative action of CCL in adhering to

the terms of NIT and the GTC prescribed by it while

dealing with bids furnished by participants in the bidding

process. The core issue is whether CCL acted perversely

enough in rejecting the bank guarantee of JVC on the

ground that it was not in the prescribed format, thereby

calling for judicial review by a constitutional court and

interfering with CCL's decision.

37. For JVC to say that its bank guarantee was in terms

stricter than the prescribed format is neither here nor

there. It is not for the employer or this Court to scrutinise

every bank guarantee to determine whether it is stricter

than the prescribed format or less rigorous. The fact is that

a format was prescribed and there was no reason not to

adhere to it. The goalposts cannot be rearranged or asked

to be rearranged during the bidding process to affect the

right of some or deny a privilege to some.

47. The result of this discussion is that the issue of the

acceptance or rejection of a bid or a bidder should be

looked at not only from the point of view of the

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unsuccessful party but also from the point of view of the

employer. As held in Ramana Dayaram Shetty [Ramana

Dayaram Shetty v. International Airport Authority of India,

(1979) 3 SCC 489] the terms of NIT cannot be ignored as

being redundant or superfluous. They must be given a

meaning and the necessary significance. As pointed out

in Tata Cellular [Tata Cellular v. Union of India, (1994) 6

SCC 651] there must be judicial restraint in interfering with

administrative action. Ordinarily, the soundness of the

decision taken by the employer ought not to be questioned

but the decision-making process can certainly be subject

to judicial review. The soundness of the decision may be

questioned if it is irrational or mala fide or intended to

favour someone or a decision “that no responsible

authority acting reasonably and in accordance with

relevant law could have reached” as held in Jagdish

Mandal [Jagdish Mandal v. State of Orissa, (2007) 14

SCC 517] followed in Michigan Rubber [Michigan Rubber

(India) Ltd. v. State of Karnataka, (2012) 8 SCC 216] .

49. Again, looked at from the point of view of the employer

if the courts take over the decision-making function of the

employer and make a distinction between essential and

non-essential terms contrary to the intention of the

employer and thereby rewrite the arrangement, it could

lead to all sorts of problems including the one that we are

grappling with. For example, the GTC that we are

concerned with specifically states in Clause 15.2 that “Any

bid not accompanied by an acceptable Bid Security/EMD

shall be rejected by the employer as non-responsive”.

Surely, CCL ex facie intended this term to be mandatory,

yet the High Court held that the bank guarantee in a

format not prescribed by it ought to be accepted since that

requirement was a non-essential term of the GTC. From

the point of view of CCL, the GTC has been impermissibly

rewritten by the High Court.”

In Afcons Infrastructure Ltd. Vrs. Nagpur Metro Rail

Corporation Ltd. & Anr., (2016) 16 SCC 818, the Hon’ble Apex Court

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has held that the owner of the employer of a project, having authored the

tender documents, is the best person to understand and appreciate its

requirements and interpret its documents, wherein, at paragraph-13 and

15, it has been held as under:-

“13. In other words, 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.”

So far as the power of judicial review in the decision making

process is concerned, the judgment rendered by the Hon’ble Apex Court

in Syed TA Naqshbandi and Ors. vs. State of J&K and Ors., [(2003)

9SCC 592], wherein, the Hon‘ble Supreme Court has observed as under:-

“Judicial review is permissible only to the extent of

finding whether the process in reaching the decision

has been observed correctly and not the decision

itself, as such. Critical or independent analysis or

appraisal of the materials by the Courts exercising

powers of judicial review unlike the case of an

appellate court, would neither be permissible nor

21

conducive to the interests of either the officers

concerned or the system and institutions……”

Likewise, in Raunaq International Ltd. Vrs. I.V.R. Construction

Ltd. & Ors. (1999)1 SCC 492 the scope of judicial review has been laid

down by holding therein that the decision making process suffers from

bias of arbitrariness, the same will be scrutinized under the power of

judicial review.

In the case of Jagdish Mandal Vrs. State of Orissa &Ors.

reported in (2007) 14 SCC 517, it has been laid down that the power of

judicial review in the contractual matters is permissible only if (i) Whether

the process adopted or decision made is mala fide or intended to favour

someone or the same is so arbitrary and irrational that the court can say:

the decision is such that no responsible authority acting reasonably and in

accordance with law could have reached. (ii) Whether public interest is

affected.

23. This Court on the basis of the aforesaid position of Law to the effect

that if there is error in the decision making process can well exercise the

power of judicial review sitting under Article 226 of the Constitution of

India.

24. This Court, on the basis of the facts of the given case is of the

considered view that when the State Government has come out with an

order for allotment of work on the basis of open tender, it is none of the

business of the concerned department to sit over upon the decision of the

State Government for allotment of work by deviating from the order of the

State Government and without going for open tender has allotted the work

by way of ‘Expression of Interest’.

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25. This Court has considered, on the basis of the judgments, as

referred hereinabove that there is patent illegality in the decision making

process since the decision for allotment of work which ought to have been

taken on the basis of open tender in pursuant to Clause-9 of the

Government order dated 23.09.2019 as contained in letter no.106 but the

State authority has allotted the work on the basis of ‘Expression of

Interest’, as such, the same is nothing but patent illegality has been

committed in allotment of work by taking wrong decision.

26. This Court, therefore, after going into the finding recorded by the

learned Single Judge is of the considered view that if the learned Single

Judge has come to the conclusive finding by holding about deviation from

the State Government decision as contained under Clause-9 of the

Government order dated 23.09.2019, which according to our considered

view, cannot be said to suffer from an error.

27. In view of the discussions made hereinabove as also the ratio laid

by the Hon’ble Apex Court in the judgments as referred above, we are of

the considered view that the order passed by the learned Single Judge

suffers from no infirmity.

28. In the result, the instant appeal fails and is dismissed.

29. In consequent to dismissal of this appeal, Interlocutory Applications

being I.A. Nos.1070 of 2022 and 1076 of 2022 stand disposed of.

(Dr. Ravi Ranjan, C.J .)

(Sujit Narayan Prasad, J.)

Rohit/-

A.F.R.