IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

****

WRIT PETITION NO: 8990 of 2025

M/s. RKEC Projects Limited – YFC Projections pvt. Ltd., Rep.

by its General Manager, Somanadh Namburu, Door No.10-12-

1, 3

rd

Floor, Rednam Alcazar, Rednam Gardens, Opp. SBI

Main branch, Visakhapatnam – 530 002.

… PETITIONER

Versus

The Union of India, Rep. by its Chairman and CEO Railway

Board, Room No.256A, Rail Bhavan, Raisina Road, New

Delhi, India and others.

… RESPONDENTS

DATE OF ORDER PRONOUNCED : 30.04.2025

SUBMITTED FOR APPROVAL :

HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

1. Whether Reporters of Local Newspapers

may be allowed to see the order? : Yes/No

2. Whether the copy of order may be

marked to Law Reporters/Journals? : Yes/No

3. Whether His Lordship wish to

see the fair copy of the order? : Yes/No

_____________________

SUBBA REDDY SATTI, J

Page 2 of 24 SRS,J

W.P.No.8990 of 2025

* HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

WRIT PETITION NO: 8990 of 2025

% 30.04.2025

WRIT PETITION NO: 8990 of 2025

M/s. RKEC Projects Limited – YFC Projections pvt. Ltd., Rep.

by its General Manager, Somanadh Namburu, Door No.10-12-

1, 3

rd

Floor, Rednam Alcazar, Rednam Gardens, Opp. SBI

Main branch, Visakhapatnam – 530 002.

… PETITIONER

Versus

The Union of India, Rep. by its Chairman and CEO Railway

Board, Room No.256A, Rail Bhavan, Raisina Road, New

Delhi, India and others.

… RESPONDENTS

! Counsel for Petitioner s : Sri Venkat Sailendra G

^ Counsel for Respondents : Sri Challa Dhananjai,

Assistant Solicitor General

< Gist:

> Head Note:

? Cases referred:

1) (1994) 6 SCC 651

2) (2016) 16 SCC 818

3) (2021) 16 SCC 808

4) (2007) 14 SCC 517

5) (2016) 8 SCC 622

6) (2020) 16 SCC 489

7) (2022) 6 SCC127

8) 2023 (4) Supreme 87

9) (2005) 1 SCC 679

10) (2000) 2 SCC 617

This Court made the following:

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W.P.No.8990 of 2025

APHC010167642025

IN THE HIGH COURT OF ANDHRA PRADESH

AT AMARAVATI

(Special Original Jurisdiction)

[3331]

WEDNESDAY, THE THIRTIETH DAY OF APRIL

TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

WRIT PETITION NO: 8990/2025

Between:

M/s. Rkec Projects Limited - Yfc Projects Pvt. Ltd ...PETITIONER

AND

The Union Of India and Others ...RESPONDENT(S)

Counsel for the Petitioner:

1. VENKAT SAILENDRA G

Counsel for the Respondent(S):

1. JUPUDI V K YAGNADUTT(CENTRAL GOVERNMENT COUNSEL)

The Court made the following:

::ORDER::

The above writ petition is filed to declare the action of respondent No.2

in disqualifying the technical bid of the petitioner vide online rejection dated

31.07.2024 in relation to the tender issued vide RFP No.CPMGSUWATEN

GG20203012 dated 29.12.2023 as illegal and arbitrary.

2. The averments in the affidavit, in brief, are that RKEC Projects Limited –

YFC Projects Pvt. Ltd., entered a joint venture to take part in a tender floated

by respondent No.2 vide RPF No.CPMSUWATENGG2023012 , dated

30.12.2023, inviting bids for the major upgradation of Visakhapatnam Railway

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W.P.No.8990 of 2025

Station, Visakhapatnam, Andhra Pradesh, on EPC Mode. Both companies

were incorporated under the Companies Act. The petitioner is a construction

company with vast experience in executing marine structures, bridges,

buildings, and electrical and firefighting projects. YFC Projects Private Limited

is a private limited company that is a turnkey EPC Contractor, executing

projects all over India in the line of Highway, Metro Rail, Indian Rail, buildings,

etc. Eight bidders participated in the tender process. Respondent No.2

adopted a single two-packet system for the selection of a bidder for the

awarding of the project. The first part is the technical bid, and the second part

is the financial bid.

b) The petitioners submitted the bid vide I.D.No.16315770 dated

12.02.2024 and also executed the bank guarantee. The petitioner satisfied the

eligibility criteria as per the tender notification issued by respondent No.2. On

29.07.2024, respondent No.2 notified through IREPS portal that the technical

bid of the petitioner stands disqualified. In remarks column, it was mentioned

that “data does not meet the test of responsiveness in terms of mandatory

documents, hence rejected”.

c) Thereafter, the petitioner addressed two letters, dated 31.07.2024

and 21.08.2024, seeking detailed reasons for rejection of the bid. Since no

reply was received, the petitioner filed W.P.No.20105 of 2024 and later

withdrew the same, on 01.04.2025. Respondent No.2 opened the financial

bids on 31.07.2024. The petitioner came to know that respondent No.3 is L1

among the qualified bidders. Respondent No.2, to issue the tender in favour of

respondent No.3, rejected the technical bid of the petitioner without any valid

reason. The petitioner quoted the financial bid for Rs.453,07,22,889.55 paise

wherein respondent No.3 quoted for an amount of Rs.484,50,55,338.82 paise.

Respondent No.2 acted hand in glove with respondent No.3 and rejected the

technical bid of the petitioner. With these averments, the above writ petition is

filed.

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W.P.No.8990 of 2025

3. Respondent No.2 filed a counter-affidavit. It was contended, inter alia,

that the tender was floated for the work of major upgradation of

Visakhapatnam Railway Station, which is a national infrastructure project. The

proposed work, to be undertaken under the subject tender, is :

a. Construction of new Departure Air Concourse (142M X 108M)

b. Construction of new station buildings

c. Provision of 12m wide FOBs

d. Passenger handling capacity of station 81,000 will increase to

1,50,000

e. Improved Traffic and Parking Planning in and around the Station

4. The respondents followed the due procedure and rejected the

petitioner’s bid. The following are the reasons for rejecting five technical bids,

including the petitioner’s bid:

Name of the Bidder Remarks

M/s. RKEC-YFC (JV)/Writ Petitioner (1) Mandatory document at Sl.No.6 of

Appendix-IA has been altered as 02

years in place of 03 years,

(2) The petitioner has not fulfilled

criteria for eligibility projects as per

clause 2.2.2.1 of RFP,

(3) JV member (M/s YFC Projects

Ltd.) has not submitted the format,

(4) The petitioner furnished two

Power of Attorneys for signing of Bid,

(5) The annual statements are not

tallying with net accruals.

M/s. Sannverse-ALTIS (JV) The firm M/s. ALIS Holding

Corporation has failed to submit that

Page 6 of 24 SRS,J

W.P.No.8990 of 2025

Articles of Association which is

required vide clause of 2.11.1 (h) of C

of Section-2 as part of technical bid

as prescribed. Therefore, the

technical bid is considered incomplete

and fails to meet the Test of

responsiveness in terms of clause

No.3.1.6.1 (h), section – 3. Hence the

bid is rejected for being non -

responsive in terms of clause 3.1.6.2,

section-3.

M/s. H.G. Infra Engineering Limited The bidder does not meet the

qualification requirement with regard

to technical capacity

M/s. KPC Projects Limited The bidder does not meet commercial

compliance criteria as they have not

submitted mandatory documents at

Sl.No.7 of Commercial compliance of

NIT. As they have submitted

incomplete documents in regard to

Annexure-VII of Appendix-IA which is

a mandatory document of

Commercial compliance, this is

contrary to the affidavit submitted with

respect to point No.2 and 3 of

Appendix-VI

M/s. Varindera Constructions Ltd. The bidder has not submitted bid

Security as per the format prescribed

Appendix-V. Since Bid Security is

improper, the bid is considered as the

bid not accompanied by the Bid

Security as per the clause No.2.20.2

and therefore fails to meet to the Test

of responsiveness in terms of Clause

3.1.6.1 (C), Section -3 of Page 30 of

RFP documents and rejected in terms

of Clause 3.1.6.2, Section -3.

b) A three-member tender evaluation committee, consisting of

Senior Administrative Grade Officers, was formed to scrutinise the bids, and

the Divisional Railway Manager /WAT was the accepting authority. The

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W.P.No.8990 of 2025

committee rejected the petitioner’s bid after due deliberation and on cogent

reasons. The respondents acted as per the terms of the tender document

while rejecting the petitioner’s bid, and no fundamental or constitutional or

legal right of the petitioner has been infringed. Since the petitioner failed to

submit the mandatory documents as required under the RFP/NIT, the tender

authority rightly rejected the petitioner’s technical bid vide order dated

29.07.2024.

5. In so far as the rejection of the technical bid of the petitioner the

following discrepancies were pointed out in the counter at para 17.

i) That the document in Appendix-1A that the petitioner has altered

the certificate to two years instead of three years at paragraph 6

in Appendix-1A.

ii) That the petitioner has not fulfilled the criteria of eligibility projects

and further stated that all three works done by the petitioner JV

do not come under the eligibility projects, the document related to

Annexure-IV of Appendix – 1A.

iii) The other member of the petitioner JV has not submitted

documents related to Annexure-VII of Appendix-1A.

iv) The petitioner has not properly submitted the power of attorney

documents as per Appendix-2 of the tender document.

v) The annual statements are not tallying with the net accruals.

6. A reply affidavit was filed by the petitioner, and it was contended that

the above-mentioned reasons were not mentioned in the disqualification order

dated 31.07.2024, except stating that the bidder does not meet the test of

responsiveness in terms of mandatory documents. The petitioner submitted all

the documents, and the same are filed along with the writ petition. Insofar as

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W.P.No.8990 of 2025

the alteration about two years instead of three years is concerned, it is a

clerical error. However, in Annexure-I, it was specified that for the last three

years, the petitioner was neither expelled nor terminated, or court cases

pending.

c) Insofar as the second reason is concerned, the lead member of

JV has executed contracts for Jawaharlal Nehru Port Authority, Navy Mumbai,

and Delhi Metro Rail Corporation Ltd. (DMRCL) and experience/completion

certificates are submitted to that effect. DMRCL has given a certificate of

financial progress for completing 98%. The petitioner JV specifically

mentioned that their share was 74%. Therefore, the reason that the bidder

received less than 75% of the financial progress is unsustainable.

d) The other member of the petitioner JV executed a work for

National Building Corporation (NBCL), a government entity, whereby he

received an amount of Rs.223.04 crores from the government entity.

e) The petitioner has satisfied the condition under clause 2.2.2.1,

which speaks about the submission of two eligible projects. The petitioner has

satisfied the technical capacity, and hence, the rejection of the technical bid of

the petitioner JV without verifying the same is only to favour others. The third

reason for rejection is that the other member has not submitted Annexure-VII

of Appendix-1A, is not a valid ground for the reason that the lead member of

the petitioner JV has taken power of attorney to submit any documents

regarding the said project and signature of the lead member and submission

of Annexure-VII of Appendix-1A suffices. Nowhere in the tender document

was it mentioned that both the members of JV shall sign Annexure VII of

Appendix -1A.

f) The petitioner JV submitted Appendix-II as per the proforma in

the tender document, and the question of non-compliance of the requirement

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W.P.No.8990 of 2025

under said appendix does not arise, and rejection of the technical bid for the

fourth ground is unreasonable.

g) The fifth reason of rejection relating to Annexure-III of Appendix-

1A that the annual statements are not tallying with the net accruals is false as

a detailed statement of the lead member of the petitioner JV as per Annexure

III, which is certified by the Chartered Accountant, is filed The petitioner JV

was disqualified only for the reason that he is the lowest bidder (L1) of the

project whereby the petitioner quoted for Rs.453.07 crores whereas

respondent No.3 quoted for an amount of Rs.484.50 crores.

The petitioner, JV, satisfied all the requirements regarding technical and

financial capacity, and rejection of the petitioner’s bid is illegal.

7. Heard Sri Gudapati Venkateswar Rao, learned counsel assisted by Sri

Venkat Sailendra G, learned counsel for the petitioner and Sri Challa

Dhananjai, learned Assistant Solicitor General, for the official respondents.

8. Learned Senior Counsel for the petitioner would contend that the

rejection of the technical bid of the petitioner is arbitrary and irrational. The

rejection was made to confer benefit on respondent No.3 and the authority

acted with malice. Learned Senior Counsel would further contend that two

years mentioned at para 6 of the format of Appendix-1A, is clerical. Insofar as

the non-tallying of Annexure III of Appendix-1A, the annual statements, with

the net accruals, he would contend that the lead member adopted the Indian

Accounting Standards (IND AS) in the year, 2020-21 as it is mandatory

requirement for the shares to be listed on Stock Exchange Main board and

thus, there was change in the net accruals. However, the same was certified

by Chartered Accountant. Learned Senior Counsel would further submit that

despite the petitioner complied with all the requirements, the technical bid of

the petitioner was rejected.

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W.P.No.8990 of 2025

9. Learned Assistant Solicitor General, would contend that due to non-

compliance of certain requirements, as pointed out at para 17 of the counter

affidavit, the petitioner’s technical bid was rejected. He would also contend

that the portal, concerning the reasons, does not exceed 190 characters and

hence, the rejection order was briefly mentioned. He would further submit that

the official respondents acted neither arbitrarily nor hand in glove with

respondent No.3.

10. Both the counsels argued the matter elaborately and cited a number of

judgments regarding the scope of judicial review vis-à-vis the tender.

11. The points for consideration are:

1. Whether respondent No.2 exceeded its power and committed

any error?

2. Whether respondent No.2 acted hand in glove with respondent

No.3?

CONSIDERATION

12. Before proceeding further, let this Court examine the scope of judicial

review vis-à-vis, the tenders. The scope of judicial review of administrative

action has been well crystallized by a Three-Bench Judge of the Hon’ble Apex

Court in Tata Cellular v. Union of India

1

. Subsequently, the said decision has

been followed in several judgments. The Hon’ble Apex Court at paras 70,77

and 94 observed 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

1

(1994) 6 SCC 651

Page 11 of 24 SRS,J

W.P.No.8990 of 2025

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 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.

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W.P.No.8990 of 2025

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 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.

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W.P.No.8990 of 2025

Based on these principles we will examine the facts of this case

since they commend to us as the correct principles.”

13. It is a settled principle that the owner or employer of the Project, having

authored the tender document, is the best person to understand and

appreciate its requirements and interpret its documents. The Hon’ble Apex

Court in Afcons Insfrastrucutre Limited v. Nagpur Metro Rail Corporation

Limited & Anr.

2

, at paras 13 and 15 observed thus:

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.

14. In Galaxy Transport Agencies v. New J.K. Roadways

3

. The Hon’ble

Apex Court reiterated the above principle and further considered the aspect of

equity and natural justice vis-à-vis tenders.

2

(2016) 16 SCC 818

3

(2021) 16 SCC 808

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W.P.No.8990 of 2025

15. In Jagdish Mandal v. State of Orissa

4

, the Hon’ble Apex Court again

considered the judicial review vis-à-vis administrative action and interference

in matter relating to tenders observes at para No.22 as follows:

“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. 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. …”

16. The Hon’ble Apex Court in Central Coalfields Limited & Anr. V. SLL-

SML (Joint Venture Consortium) & Ors

5

, observed that it is not for the Court

to substitute its opinion in respect of acceptance of a bank guarantee, when a

particular format of bank guarantee is prescribed. The bidder is required to

4

(2007) 14 SCC 517

5

(2016) 8 SCC 622

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W.P.No.8990 of 2025

stick to that particular format alone with the caveat that the State reserves the

right to deviate from the terms of the bid document within the acceptable

parameters. The Hon’ble Apex Court, at paras 32, 37, 47 and 49, observed as

follows:

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

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

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W.P.No.8990 of 2025

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.”

17. The Hon’ble Apex Court in Silppi Constructions Contractors v.

Union of India and Ors

6

, considered the interference of the courts by

exercising judicial review in commercial matters and contracts involving

technical issues and held that the Courts should be more reluctant because

most of the Judges’ robes do not have the necessary expertise to adjudicate

upon the technical issues. The courts should not use a magnifying glass while

scanning the tender and make every small mistake appear like a big blunder.

The Court must give “fair play in the joints” to the government and public

sector undertakings in matters of contract. The Hon’ble Apex Court cautioned

6

(2020) 16 SCC 489

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W.P.No.8990 of 2025

that the interference would cause unnecessary loss to the public etc. At paras

19 and 20, it was observed as under :

19. This Court being the guardian of fundamental rights is duty-bound to

interfere when there is arbitrariness, irrationality, mala fides and bias.

However, this Court in all the aforesaid decisions has cautioned time and

again that courts should exercise a lot of restraint while exercising their powers

of judicial review in contractual or commercial matters. This Court is normally

loathe to interfere in contractual matters unless a clear-cut case of

arbitrariness or mala fides or bias or irrationality is made out. One must

remember that today many public sector undertakings compete with the

private industry. The contracts entered into between private parties are not

subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State

within the meaning of Article 12 of the Constitution are bound to act fairly and

are amenable to the writ jurisdiction of superior courts but this discretionary

power must be exercised with a great deal of restraint and caution. The courts

must realise their limitations and the havoc which needless interference in

commercial matters can cause. In contracts involving technical issues the

courts should be even more reluctant because most of us in Judges' robes do

not have the necessary expertise to adjudicate upon technical issues beyond

our domain. As laid down in the judgments cited above the courts should not

use a magnifying glass while scanning the tenders and make every small

mistake appear like a big blunder. In fact, the courts must give “fair play in the

joints” to the government and public sector undertakings in matters of contract.

Courts must also not interfere where such interference will cause unnecessary

loss to the public exchequer.

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

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W.P.No.8990 of 2025

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

present case.

18. In M/s. N.G. Projects Limited versus M/s. Vinod Kumar Jain & Ors

7

the Hon’ble Apex Court while considering scope of judicial review in tender

matters at para No.27 observed that the multiple layers of exercise of

jurisdiction delay the final adjudication, challenging the grant of tender and

therefore, it would be open to the High Courts or the Hon’ble the Chief Justice

to entrust these petitions to a Division Bench of the High Court, which would

avoid at least hearing by one of the forums.

19. In Tata Motors Limited v. The Brihan Mumbai Electric Supply &

Transport Undertaking (Best) and Others

8

, the Hon’ble Apex Court

observed at para No.52:

52. Ordinarily, a writ court should refrain itself from imposing its

decision over the decision of the employer as to whether or not to

accept the bid of a tenderer unless something very gross or palpable is

pointed out. The court ordinarily should not interfere in matters relating

to tender or contract. To set at naught the entire tender process at the

stage when the contract is well underway, would not be in public

interest. Initiating a fresh tender process at this stage may consume lot

of time and also loss to the public exchequer to the tune of crores of

rupees. The financial burden/implications on the public exchequer that

7

(2022) 6 SCC 127

8

2023 (4) Supreme 87

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W.P.No.8990 of 2025

the State may have to meet with if theCourt directs issue of a fresh

tender notice, should be one of the guiding factors that the Court

should keep in mind. This is evidence from a three-Judge Bench

decision of this court in Association of Registration Plates v. Union of

India and others

9

20. In Air India Ltd. V. Cochin International Airport Ltd.

10

, the Hon’ble

Apex Court held as under:

7. The law relating to award of a contract by the State, its corporations

and bodies acting as instrumentalities and agencies of the Government

has been settled by the decision of this Court in Ramana Dayaram

Shetty v. International Airport Authority of India [(1979) 3 SCC 489] ,

Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India [(1981) 1

SCC 568] , CCE v. Dunlop India Ltd. [(1985) 1 SCC 260 : 1985 SCC

(Tax) 75] , Tata Cellular v. Union of India [(1994) 6 SCC 651] ,

Ramniklal N. Bhutta v. State of Maharashtra [(1997) 1 SCC 134] and

Raunaq International Ltd. v. I.V.R. Construction Ltd. [(1999) 1 SCC

492] The award of a contract, whether it is by a private party or by a

public body or the State, is essentially a commercial transaction. In

arriving at a commercial decision considerations which are paramount

are commercial considerations. The State can choose its own method

to arrive at a decision. It can fix its own terms of invitation to tender and

that is not open to judicial scrutiny. It can enter into negotiations before

finally deciding to accept one of the offers made to it. Price need not

always be the sole criterion for awarding a contract. It is free to grant

any relaxation, for bona fide reasons, if the tender conditions permit

such a relaxation. It may not accept the offer even though it happens to

be the highest or the lowest. But the State, its corporations,

instrumentalities and agencies are bound to adhere to the norms,

9

(2005) 1 SCC 679.

10

(2000) 2 SCC 617

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W.P.No.8990 of 2025

standards and procedures laid down by them and cannot depart from

them arbitrarily. Though that decision is not amenable to judicial

review, the court can examine the decision-making process and

interfere if it is found vitiated by mala fides, unreasonableness and

arbitrariness. The State, its corporations, instrumentalities and

agencies have the public duty to be fair to all concerned. Even when

some defect is found in the decision-making process the court must

exercise its discretionary power under Article 226 with great caution

and should exercise it only in furtherance of public interest and not

merely on the making out of a legal point. The court should always

keep the larger public interest in mind in order to decide whether its

intervention is called for or not. Only when it comes to a conclusion

that overwhelming public interest requires interference, the court

should intervene.

21. Thus, a conspectus of the above expressions of the Hon’ble Apex court,

while exercising judicial review under Article 226 of the Constitution of India,

the Court normally will not sit as an appellate authority. It will only review the

decision-making process. The interference of the Court is limited to arbitrary

actions or in cases of malice. The courts should not use a magnifying glass

while scanning the tender and make every small mistake appear like a big

blunder. The authority that floated the contract or tender and authored the

tender documents is the best judge as to how the documents have to be

interpreted.

22. Testing the facts of the case at hand on the touchstone of the law

declared by the Apex Court above, one of the reasons for rejection is that in

Sl.No.6 of Appendix-IA, the petitioner has altered two years in the place of

three years. As per the contention of learned counsel for the petitioner, it is a

clerical error. A perusal of para 6 in Ex.P7, Appendix -1A - it indicates that the

petitioner must mention that for the last three years, the petitioner neither

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W.P.No.8990 of 2025

failed to perform for the works of railways, as evidence by imposition of a

penalty by any authority nor expelled or terminated by the Ministry of Railway,

etc. However, in the document filed by the petitioner at page No.107 (Ex.P5),

it was mentioned as two years. Of course, in Appendix 1A on page 115, it

was mentioned as three years. According to the tender er/evaluation

committee, the petitioner altered the certificate to two years instead of three

years as stipulated, and hence, it is disqualification.

23. As noted supra, the tenderer is the best person to understand and

appreciate the requirements. This Court cannot act as an appellate authority

and substitute its decision. Whether the mistake is clerical or intentional,

according to the tenderer, the petitioner was disqualified, and the petitioner’s

bid was rejected on that ground, among other grounds.

24. As many as five grounds were mentioned in the counter affidavit

regarding petitioner’s disqualification in technical bid. According to the

tenderer, the petitioner’s annual statements do not tally with the net accruals.

In the information furnished in the format under Annexure-III, the net accrual

for the financial year 2019-20 is shown as 32.07 crores, whereas the

statement of actual gross for the financial years 2019-2020 depicts that the

net accrual is 34 crores.

25. In reply, the petitioner explained that the lead member of the petitioner

JV is a public limited company, and it adopted Indian Accounting Standards, a

mandatory requirement for the shares to be listed on the Stock Exchange

Main Board and hence, a change in net accrual was occurred and in fact, the

Chartered Accountant certified the same.

26. Thus, even as per the petitioner’s explanation, in para 10 of the reply

affidavit, the net annual statement was not tallied with the net accrual. The

tenderer/evaluation committee found that the petitioner is not qualified on that

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W.P.No.8990 of 2025

count also. As discussed supra, this Court will not act as an appellate

authority.

27. The statement of principles of equity and natural justice, while

evaluating the tender, stays at a distance. In the case at hand, the tender was

called for major upgradation of Visakhapatnam Railway Station ,

Visakhapatnam, Andhra Pradesh, on EPC Mode, which is a public utility

contract. The interference of this Court, while exercising judicial review, given

the pronouncements of the Hon’ble Apex Court, coupled with the reasons

assigned, is unwarranted.

28. The petitioner attributed malafides in awarding the tender in favour of

respondent No.3. However, except for making a self-serving statement,

nothing is placed before this Court. No authority was impleaded as ‘eonomine’

respondent, to refute the malice, if any. Unless the petitioner arrays the

authority in individual capacity, the contention in that regard is no merit

consideration.

29. This Court is not going into the other reasons assigned by the authority

for the petitioner’s disqualification i.e. regarding the petitioner’s failure to fulfil

eligibility criteria as per clause 2.2.2.1; non-submission of formats as

prescribed under Annexure VII of Appendix -1A and Appendix-V, given the

reasons mentioned supra.

30. Finally, this court is reminded of the words of the Hon’ble Apex Court in

Jagdish Mandal’s case, that the judicial review on administrative action is to

check whether a chance or decision is made lawfully and not to check whether

the chance or the decision is sound.

31. Given the facts and circumstances of the case and the scope of judicial

review vis-à-vis tender, this Court does not find any arbitrary or irrational

action on the part of the official respondents, as also any malafides while

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rejecting the technical bid of the petitioner and awarding the contract to

respondent No.3. There are no merits in the writ petition and the writ petition

is liable to be dismissed.

32. In the result, this writ petition is dismissed. No costs.

Miscellaneous petitions pending, if any, shall stand closed.

_____________________

SUBBA REDDY SATTI, J

Note: LR Copy to be marked

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W.P.No.8990 of 2025

THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

WRIT PETITION NO: 8990 of 2025

Note: LR Copy to be marked

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