High Court · 2012

ect, the defects may be removed, instead of resorting to re-tendering. In above circumstances, as suggested by learned counsel for the petitioner, with out prejudice to its rights and contentions, the petitioner may give its bid in the fresh process and after due evaluation the State may indicate its stand to t he Court. Learned counsel for the parties jointly suggest that the matter may be listed ag ain on August 14, 2012 for further consideration. In view of the above, we defer the hearing, as proposed. (cid:29)

5. Learned counsel for the State has submitted that in the fresh tender pro cess except the petitioner no other person has participated and the State propos es to again invite a fresh process in the matter.

6. We have heard learned counsel for the parties.

7. Learned counsel for the petitioner submits that the petitioner being the lowest bidder in the earlier tender process and being the only bidder in the pr esent process, could not be denied consideration on non-existent grounds and suc h a course will not only be against interest of the petitioner but also against public interest. Even, according to the stand of the State, the project was of u rgent nature requiring installation of high tension transmission lines. Reliance has been placed on judgment of the Hon’ble Supreme Court in HARMINDER SINGH ARO RA VS. UNION OF INDIA AND OTHERS, (1986) 3 SC 247, laying down that once the Gov ernment decides to award contract on the basis of bids by tender, it must abide by the terms of the tender and cannot reject the most suitable offer of a contra ctor in contravention of terms of the tender.

8. ible and the State was entitled to take its decision in the matter. Learned counsel for the State submitted that the petitioner was not elig

9. Question for consideration is whether in the facts and circumstances any interference is called for.

10. TOC) dated 25.10.2011 are as follows : The minutes of the meeting of the Divisional Tender Opening Committee (D (cid:28)3. Documentation in fulfilment of qualifying requirements placed by the bidder also M/S UTKAL GALVANIZERS LTD, BHUBANESWAR has two shortcomings. (a) As per Clause No.1.1(ii) of the qualifying requirements, the bidder if n ot a manufacturer, requires to submit legally enforceable undertaking from the m anufacturers. The bidder did not furnish such a undertaking. (b) In fulfilment of Clause No.1.4 of qualifying requirements a bank certifi cate stating the availability of liquid asset on availability of credit facility submitted by the bidder is not in order as the certificate does not speak of th e unit of the currency whether the amount so indicate is in thousands/lakhs/cror es. Clarification from the bank is being sought. Apart from the above shortcomings all the documents submitted are found to be in order. In the meanwhile this office had confirmed from the banks who had issued bank gu arantee as a part of bid guarantee on behalf of all the above three bidders were confirmed on telephone and some of them by FAX. Telephonical confirmations have been obtained from the banks of the three bidders. Further written confirmation has also been sought from the banks of which SBI Commercial Branch, Bhubaneswar , Orissa had been confirmed by FAX of issuing bank guarantee on behalf of M/s Ut kal Galvanizers Ltd, Bhubaneswar. Coming back to the technical bids of the above bidders the committee unanimously opted to recommend to qualify all the three bidders as rejection and disqualifi cation would lead to either re-tendering or make it less competitive. In both th e cases it shall be detrimental to the successful implementation of the project and timely completion as re-tendering will take so much of time and by the time when the tender is again submitted the cost of the material in the market would have escalated to a high level. This unanimous opinion of the committee has rout ed from the reasons that so many valuable time have already passed on account of cancellation of earlier tender for the same work. Further, even though in some point the bidders do not expressively match the qualifying requirements in ditto , it can be felt and understood that all the three bidders are qualified enough to execute the work. If more bidders are allowed to participate in the commercia l bid it is expected to bring better competition in the tender. This opinion of the committee is however without undermining the authority and without any preju dice to the prerogative of the SE(E) to take decision on the issue. This submiss ion is only in good gesture and faith so that the tender gets through and the wo rk implemented in time in most competitively and competently. (cid:29)

11. The above proceedings show that the shortcomings pointed out in the tend er of the petitioner were only of technical nature and not of any substance. On confirmation from the Bank giving of bank guarantee was duly confirmed. The comm ittee found that the rejection of the bid was detrimental to public interest hav ing regard to the delay and the escalation of the cost. Moreover, in additional affidavit filed on 31.7.2012, in para 4 it has been stated that it was wrongly a ssumed that the petitioner had not furnished undertaking from the manufacturers. Copies of the undertaking given has been annexed as Annexure-A series to the af fidavit dated 31.07.2012. The State has not rebutted this aspect. A copy of tend er documents has also been shown containing documents of experience of the petit ioner in executing such projects.

12. In view of this material on record, stand of the State that the petition er was not technically qualified does not appear to be based on application of m ind, particularly in view of recommendation of the evaluation committee. In thes e circumstances, the matter may require fresh consideration at an appropriately higher level and decision may need to be taken having regard to following or any other relevant factors : (i) (ii) (iii) Need for getting the work executed expeditiously in public interest; Escalation in cost on account of delay; Available options for execution of the work; (iv) fered. Capacity of the petitioner to execute the work and viability of terms of

13. We may now deal with legal position in the matter. While it is true that in judgment of the Hon’ble Supreme Court in Harminder Singh Arora relied upon o n behalf of the petitioner it has been observed that if tenders are invited, the State must go by the result of the tenders and give contract to the person offe ring lowest cost or highest price. However, the observations are in the context of checking arbitrariness. It cannot be understood to have been laid down that a writ of mandamus will mechanically issue to accept the highest bid. The State, unlike a private person, may not be free to act whimsically a 14. s it is bound by principles of fairness as well as protecting interest of public revenue. While it must have free play in joints in exercise of discretion for u pholding larger public interest over any private interest, it cannot act arbitra rily to promote any individual interest or otherwise prejudicing public interest by ignoring relevant considerations. The Court, though observes restraint in ab sence of its expertise in dealing with the issue and also to avoid interference with the administrative functioning, has to step in to uphold public interest an d constitutional norms when decision making process is vitiated by arbitrariness . Law on the point has been clearly laid down in several decisions. Reference to few will suffice: In Tata Cellular vs. Union of India (1994) 6 SCC 651, it was observed: It cannot be denied that the principles of judicial review would apply t

15. (cid:29)70. o the exercise of contractual powers by Government bodies in order to prevent ar bitrariness or favouritism. However, it must be clearly stated that there are in herent limitations in exercise of that power of judicial review. Government is t he guardian of the finances of the State. It is expected to protect the financia l interest of the State. The right to refuse the lowest or any other tender is a lways available to the Government. But, the principles laid down in Article 14 o f 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 cons idered to be an arbitrary power. Of course, if the said power is exercised for a ny 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, 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 p articular decision taken in the fulfilment of that policy is fair. It is only co ncerned 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 upo n 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 furthe r grounds in course of time. As a matter of fact, in R. v. Secretary of State fo r the Home Department, ex Brind (1991)1 AC 696, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of propor tionality. In all these cases the test to be adopted is that the court should, (cid:28) consider whether something has gone wrong of a nature and degree which requires its intervention (cid:29).

92. In Sterling Computers Limited v. M&N Publications Ltd. (1993) 1 SCC 445, this Court observed thus : (SCC p. 455, para 12) (cid:28)In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognised by courts while dealing with public property. It is not possible for courts to question and adjudicate every decision taken by an a uthority, because many of the Government Undertakings which in due course have a cquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not alwa ys possible to act like a quasi-judicial authority while awarding contracts. Und er some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situa tion for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not st rictly following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice Holmes, that courts while judging the consti tutional validity of executive decisions must grant certain measure of freedom o f ’play in the joints’ to the executive. (cid:29) The principles deducible from the above are :

94. (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 bec ause the invitation to tender is in the realm of contract. Normally speaking, th e decision to accept the tender or award the contract is reached by process of n egotiations 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 m ust not only be tested by the application of Wednesbury principle of reasonablen ess (including its other facts pointed out above) but must be free from arbitrar iness not affected by bias or actuated by mala fides. (6)Quashing decisions may impose heavy administrative burden on the administrati on and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they comm end to us as the correct principles. (cid:29)

16. Same view has been reiterated in subsequent decisions. In New Horizons Ltd. v. Union of India, (1995) 1 SCC 478, it was observe d: (cid:28)17. At the outset, we may indicate that in the matter of entering into a contra ct, the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State, in exercise of it s various functions, is governed by the mandate of Article 14 of the Constitutio n which excludes arbitrariness in State action and requires the State to act fai rly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion. Moreover a contract would either involve expendi ture from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contra ct has to be exercised keeping in view the public interest involved in such sele ction. The decisions of this Court, therefore, insist that while dealing with th e public, whether by way of giving jobs or entering into contracts or issuing qu otas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any perso n it pleases, but its action must be in conformity with the standards or norms w hich are not arbitrary, irrational or irrelevant. It is, however, recognised tha t certain measure of (cid:28)free play in the joints (cid:29) is necessary for an administrativ e body functioning in an administrative sphere [See : Ramana Dayaram Shetty v. I nternational Airport Authority of India (1979) 3 SCC 489: (1979) 3 SCR 1014 (SCR p. 1034 : SCC pp. 505-06, para 12); Kasturi Lal Lakshmi Reddy v. State of J & K (1980) 4 SCC 1: (1980) 3 SCR 1338 (SCR p. 1355 : SCC pp. 11-12, para 11); Fasih Chaudhary v. Director General, Doordarshan (1989) 1 SCC 89: 1988 Supp (3) SCR 2 82 (SCR p. 286 : SCC p. 92,); Sterling Computers Ltd. v. M & N Publications Ltd (1993) 1 SCC 445; Union of India v. Hindustan Development Corpn. (1993) 3 SCC 49 9 (at p. 513)]. In Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, it was observed: (cid:28)21.4. In Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617 this Court summarised the scope of interference as enunciated in several earlier decisions thus: (SCC pp. 623-24, para 7) (cid:28)7. & The award of a contract, whether it is by a private party or by a public b ody or the State, is essentially a commercial transaction. In arriving at a comm ercial decision considerations which are paramount are commercial considerations . The State can choose its own method to arrive at a decision. It can fix its ow n terms of invitation to tender and that is not open to judicial scrutiny. It ca n enter into negotiations before finally deciding to accept one of the offers ma de to it. Price need not always be the sole criterion for awarding a contract. I t is free to grant any relaxation, for bona fide reasons, if the tender conditio ns 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, instrumentalit ies and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is n ot amenable to judicial review, the court can examine the decision-making proces s and interfere if it is found vitiated by mala fides, unreasonableness and arbi trariness. 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 d ecision-making process the court must exercise its discretionary power under Art icle 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 al ways keep the larger public interest in mind in order to decide whether its inte rvention is called for or not. Only when it comes to a conclusion that overwhelm ing public interest requires interference, the court should intervene. (cid:29) (emphasis supplied)

21.5. In Assn. of Registration Plates v. Union of India (2005) 1 SCC 679 this C ourt held: (SCC p. 700, para 43) (cid:28)43. & Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can cl aim a fundamental right to carry on business with the Government. All that he ca n claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest. (cid:29)

21.6. In B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. (2006) 11 SCC 548 ( 2006) 11 Scale 526 this Court observed: (SCC p. 568, para 56) (cid:28)56. It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefor; the same ordin arily being within its domain, court’s interference in such matter should be min imal. The High Court’s jurisdiction in such matters being limited in a case of t his nature, the Court should normally exercise judicial restraint unless illegal ity or arbitrariness on the part of the employer is apparent on the face of the record. (cid:29)

22. Judicial review of administrative action is intended to prevent arbitrarines s, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made (cid:28)lawfully (cid:29) and not to check whether choice o r decision is (cid:28)sound (cid:29). When the power of judicial review is invoked in matters r elating to tenders or award of contracts, certain special features should be bor ne in mind. A contract is a commercial transaction. Evaluating tenders and award ing contracts are essentially commercial functions. Principles of equity and nat ural justice stay at a distance. If the decision relating to award of contract i s 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 assessmen t 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 in terest, or to decide contractual disputes. The tenderer or contractor with a gri evance can always seek damages in a civil court. Attempts by unsuccessful tender ers with imaginary grievances, wounded pride and business rivalry, to make mount ains out of molehills of some technical/procedural violation or some prejudice t o self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up pu blic 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 p ose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide o r intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: (cid:28)the decision is such that no responsible authority acting r easonably and in accordance with relevant law could have reached (cid:29); (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Articl e 226. Cases involving blacklisting or imposition of penal consequences on a ten derer/contractor or distribution of State largesse (allotment of sites/shops, gr ant of licences, dealerships and franchises) stand on a different footing as the y may require a higher degree of fairness in action. (cid:29) In Meerut Development Authority v. Association of Management Studies, (2009) 6 S CC 171, it was observed: (cid:28)37. A large number of authorities have been cited before us in support of the s ubmission that even in contractual matters the State or (cid:28)other authorities (cid:29) are bound to act within the legal limits and their actions are required to be free f rom arbitrariness and favouritism. The proposition that a decision even in the m atter of awarding or refusing a contract must be arrived at after taking into ac count all relevant considerations, eschewing all irrelevant considerations canno t for a moment be doubted. The powers of the State and other authorities are ess entially different from those of private persons. The action or the procedure ad opted by the authorities which can be held to be (cid:28)State (cid:29) within the meaning of A rticle 12, while awarding contracts in respect of properties belonging to the St ate, can be judged and tested in the light of Article 14. Once the State decides to grant any right or privilege to others, then there is no escape from the rig our of Article 14. These principles are settled by the judgments of this Court i n Ramana Dayaram Shetty v. International Airport Authority of India (1979) 3 SCC 489, Kasturi Lal Lakshmi Reddy v. State of J&K (1980) 4 SCC 1, Ram and Shyam Co . v. State of Haryana (1985) 3 SCC 267, Mahabir Auto Stores v. Indian Oil Corpn. (1990) 3 SCC 752, Sterling Computers Ltd. v. M&N Publications Ltd. (1993) 1 SCC 445 and ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd. (2004) 3 SCC 553.

38. The executive does not have an absolute discretion, certain principles have to be followed, the public interest being the paramount consideration. It has be en stated by this Court in Kasturi Lal case (1980) 4 SCC 1: (SCC p. 13, para 14) (cid:28)14. & It must follow as a necessary corollary from this proposition that the Go vernment cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public i nterest. The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render i t reasonable and in public interest to do so. (cid:29) (emphasis supplied)

39. The law has been succinctly stated by Wade in his treatise, Administrative L aw: (cid:28)The powers of public authorities are therefore essentially different from those of private persons. A man making his will may, subject to any rights of his dep endants, dispose of his property just as he may wish. He may act out of malice o r a spirit of revenge, but in law this does not affect his exercise of his power . In the same way a private person has an absolute power to allow whom he likes to use his land, to release a debtor, or, where the law permits, to evict a tena nt, regardless of his motives. This is unfettered discretion. But a public autho rity may do none of these things unless it acts reasonably and in good faith and upon lawful and relevant grounds of public interest. So a city council acted un lawfully when it refused unreasonably to let a local rugby football club use the city’s sports ground, though a private owner could of course have refused with impunity. Nor may a local authority arbitrarily release debtors, and if it evict s tenants, even though in accordance with a contract, it must act reasonably and ’within the limits of fair dealing’. The whole conception of unfettered discret ion is inappropriate to a public authority, which possesses powers solely in ord er that it may use them for the public good. (cid:29)

40. There is no difficulty to hold that the authorities owe a duty to act fairly but it is equally well settled in judicial review, the court is not concerned w ith the merits or correctness of the decision, but with the manner in which the decision is taken or the order is made. The court cannot substitute its own opin ion for the opinion of the authority deciding the matter.

41. The distinction between appellate power and a judicial review is well known but needs reiteration. By way of judicial review, the court cannot examine the d etails of the terms of the contract which have been entered into by the public b odies or the State. The courts have inherent limitations on the scope of any suc h enquiry. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and th e public, then the court cannot act as an appellate court by substituting its op inion in respect of selection made for entering into such contract. But at the s ame time the courts can certainly examine whether the (cid:28)decision-making process (cid:29) was reasonable, rational, not arbitrary and violative of Article 14. (See Sterli ng Computers Ltd. (1993) 1 SCC 445) In Tejas Constructions & Infrastructure (P) Ltd. v. Municipal Council, Sendhwa,( 2012) 6 SCC 464, it was observed: (cid:28)17. In Raunaq International Ltd. v. I.V.R. Construction Ltd. (1999) 1 SCC 492 t his Court reiterated the principle governing the process of judicial review and held that the writ court would not be justified in interfering with commercial t ransactions in which the State is one of the parties to the same except where th ere is substantial public interest involved and in cases where the transaction i s mala fide. The Court observed: (SCC pp. 500-01, paras 10-11) (cid:28)10. What are these elements of public interest? (1) Public money would be expen ded for the purposes of the contract. (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, publ ic buildings, power plants or other public utilities. (3) The public would be di rectly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be inter ested in the quality of the work undertaken or goods supplied by the tenderer. P oor quality of work or goods can lead to tremendous public hardship and substant ial financial outlay either in correcting mistakes or in rectifying defects or e ven at times in redoing the entire work-thus involving larger outlays of public money and delaying the availability of services, facilities or goods, e.g., a de lay in commissioning a power project, as in the present case, could lead to powe r shortages, retardation of industrial development, hardship to the general publ ic and substantial cost escalation.

11. When a writ petition is filed in the High Court challenging the award of a c ontract by a public authority or the State, the court must be satisfied that the re is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the l itigation. A mere difference in the prices offered by the two tenderers may or m ay not be decisive in deciding whether any public interest is involved in interv ening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escal ating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other t enderer. Therefore, unless the court is satisfied that there is a substantial am ount of public interest involved, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival t enderers. (cid:29)

18. In Reliance Airport Developers (P) Ltd. v. Airports Authority of India (2006 ) 10 SCC 1, this Court held that while judicial review cannot be denied in contr actual matters or matters in which the Government exercises its contractual powe rs, such review is intended to prevent arbitrariness and must be exercised in la rger public interest.

19. Reference may also be made to Sterling Computers Ltd. v. M & N Publications Ltd. (1993)1 SCC 445 where this Court held that the power of judicial review in respect of contracts entered into on behalf of the State primarily involves exam ination of the question whether there was any infirmity in the decision-making p rocess, and if such process was reasonable, rational and non-arbitrary, the Cour t would not interfere with the decision.

20. In Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617 thi s Court held that the award of contract was essential in commercial transactions which involves commercial consideration and results in commercial decision. Whi le taking such decision the State can choose its own method on terms of invitati on to tender and enter into negotiations. The following passage from the decisio 623-24, para 7) n is apposite: (SCC pp. (cid:28)7. & The award of contract, whether it is by a private party or by a public bod y or the State, is essentially a commercial transaction. In arriving at a commer cial 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, instrumentalitie s and agencies are bound to adhere to the norms, standards and procedures laid d own 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 arbitr ariness. & Even when some defect is found in the decision-making process the co urt must exercise its discretionary power under Article 226 with great caution a nd should exercise it only in furtherance of public interest and not merely on t he making out of a legal point. The court should always keep the larger public i nterest 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. (cid:29)

21. To the same effect is the decision of this Court in Master Marine Services ( and Jagdish Mand P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. (2005) 6 SCC 138 al v. State of Orissa (2007) 14 SCC 517 where this Court laid down the f ollowing tests for judicial interference in exercise of power of judicial review of administrative action: (Jagdish Mandal case (2007) 14 SCC 517 , SCC p. 531, para 22) (cid:28)22. & Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following quest ions: (i) Whether the process adopted or decision made by the authority is mala fide o r 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 r easonably 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 Articl e 226. (cid:29) In view of above legal position, while we are not inclined to direct acc 17. eptance of bid of the petitioner, we cannot ignore the fact that even according to the State the work is urgent nature, price is escalating and there is no infi rmity in the tender documents. These aspects show that outright rejection of bid of the petitioner which was lowest in earlier process and is the only bid in th e fresh process is vitiated by non application of mind. In these circumstances, the Court directs that the State must reconsider the matter at an appropriate hi gher level preferably at the level of the Chief Secretary and take decision as f ar as possible within one month from the date of receipt of a copy of this order . The petition is disposed of accordingly.