The High Court
Case Details
IN THE HIGH COURT OF ORISSA, CUTTACK W.P.(C) No. 1110 of 2025 An application under Article 226 of the Constitution of India. ----------------------------- M/s. Winners Pharma, Cuttack ……… Petitioner -Versus- State of Odisha and Another ……… Opp. Parties For Petitioner - Mr. P.P. Mohanty, Advocate For Opp. Parties - Mr. Aurobinda Mohanty, Addl. Standing Counsel ----------------------------- P R E S E N T:- THE HON’BLE MR. JUSTICE S.K. SAHOO AND THE HON’BLE MR. JUSTICE CHITTARANJAN DASH --------------------------------------------------------------------------------------------------- Date of Hearing & Judgment : 16.01.2025 --------------------------------------------------------------------------------------------------- S.K. SAHOO, J. The petitioner, claiming to be a wholesale drugs distributor, has filed this writ petition seeking following relief:- “In these circumstances it is therefore prayed that your Lordship’s would graciously be pleased to issue a ’Rule Nisi" calling upon the Opposite Parties to show cause as to why Page 1 of 11 Clause 3.1 and 5.2.8 of the impugned tender notice dated 09.12.2014 issued by the Director, Animal Husbandry and Veterinary Services, Odisha, Mangalabag, Cuttack, Odisha-753001), Opposite Party No.2 under Annexure-6 shall not be quashed and if the Opposite Parties fail to show cause or show insufficient cause make the said Rule absolute. AND Issue a writ in the nature of mandamus directing the Opposite Parties to allow the Petitioner to participate in the impugned tender issued by the Director, Animal Husbandry and Veterinary Services, Odisha, Opposite Party No.2 under Annexure-6. AND Pass any other Order/Orders, Writ/Writs, direction/ directions as deem fit and proper. And for which act of kindness the Petitioners shall as in duty bound ever pray.” 2. The facts leading to filing of this writ petition, succinctly put, as follows:- 2.1. The Director of Animal Husbandry and Veterinary Services, Odisha-opposite party no.2 issued tender notice dated 19.12.2024 vide Annexure-6 inviting applications from the Page 2 of 11 interested bidders to supply veterinary medicines and vaccines
Legal Reasoning
containing 147 items. The last date of submission of bid was fixed to 10.01.2025 on the online basis. The date for submission of queries by the bidders was fixed to 16.12.2024 and the pre- bid meeting was posted to 18.12.2024 at 2.00 PM. Pursuant to the terms and conditions of the tender notice, the petitioner deposited a sum of Rs.11,800/- as the tender fees before the Director, Animal Husbandry and Veterinary Services, Odisha- opposite party no.2 and duly obtained the tender paper. 2.2. On 16.12.2024, the petitioner submitted its grievance through mail vide Annexure-7 inter alia challenging Clause 3.1 and 5.2.8 of the tender call notice. Further, on 18.12.2024, the petitioner appeared in pre-bid meeting through online and submitted its grievance in details with regard to Clause 3.1 and 5.2.8 of the impugned tender notice. 2.3. After the pre-bid meeting held on 18.12.2024, the Director, Animal Husbandry and Veterinary Services, Odisha- opposite party no.2 issued a pre-bid corrigendum on 26.12.2024 vide Annexure-8. On 26.12.2024, the Director, Animal Husbandry and Veterinary Services, Odisha-opposite party no.2, vide Annexure-9, also issued another corrigendum for extension of the date and time, wherein the submission of online bid is Page 3 of 11 extended to 5.00 PM of 16.01.2025 and the date of opening of online tender is extended to 11.30 AM of 18.01.2025. 2.4. The specific case of the petitioner is that Clause 3.1 of Section 111 and Clause 5.2.8 of the impugned tender call notice, being contrary to Rule 212(i) of OGFR, 2023, are arbitrary, irrational, unreasonable, discriminatory, mala fide, bias and violative of Articles 14, 19(1)(g), 21 and 300-A of the Constitution of India, for which interference of this Court is warranted. 3. As is evident from the factual matrix delineated above, the date of opening of online tender is fixed to 11.30 AM of 18.01.2025. It is at this stage, instead of participating in the tender process, the petitioner has approached this Court questioning the tender conditions. But fact remains, whether in the facts and circumstances of the case, this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, can interfere with the tender conditions imposed by the authority concerned. 4. In Tata Cellular -Vrs.- Union of India reported in 1994 6 Supreme Court Cases 651, wherein the apex Court, referring to the limitations relating to the scope of judicial review Page 4 of 11 of administrative decisions and exercise of powers in awarding contracts, held to the following effect:- “(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 action. 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. … 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. Page 5 of 11 (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” The apex Court also noted that there are inherent limitations in the exercise of power of judicial review in contractual matters. As such, it was observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. It was further held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14. 5. In Air India Ltd. -Vrs.- Cochin International Airport Ltd. reported in (2000) 2 Supreme Court Cases 617, the apex Court, while summarizing the scope of interference as enunciated in several earlier decisions, held as follows:- “7. … 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 Page 6 of 11 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, 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 Page 7 of 11 comes to a conclusion that overwhelming public interest requires interference, the court should intervene.” 6. In Master Marine Service (P) Ltd. -Vrs.- Metcafe & Hodgkinson (P) Ltd. reported in (2005) 6 Supreme Court Cases 138, the apex Court held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favourtism. However, there are inherent limitations in exercise of that power of judicial review. 7. The scope of judicial review has also been taken into consideration elaborately in Jagdish Mandal -Vrs.- State of Odisha reported in (2007) 14 Supreme Court Cases 517. In paragraph-22 of the said judgment, the apex Court held as follows:- “…………..Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Page 8 of 11 Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” 8. In the case of Michigan Rubber (India) Ltd. -Vrs.- State of Karnataka reported in (2012) 8 Supreme Court Cases 216, held as follow:- “23. From the above decisions, the following principles emerge: (a) The basic requirement of Article 14 is fairness in action by the State, and non- arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the Page 9 of 11 extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; xx xx xx” Similar view has also been reiterated in Maa Binda Express Carrier -Vrs.- North East Frontier Railway reported in (2014) 3 Supreme Court Cases 760. Page 10 of 11 9. In view of the above judicial pronouncements, this Court is of the considered view that in the matter of formulating conditions of a tender document and awarding a contract, unless the actions of the tendering authority is found to be malicious, arbitrary and a misuse of its statutory powers, interference by courts is not warranted. 10. For the foregoing discussions, we are not inclined to accede to the prayer made in this writ petition, which is accordingly dismissed. …………………………… S.K. Sahoo, J. ……………………………… Chittaranjan Dash, J. Orissa High Court, Cuttack The 16th January, 2025/GDS Page 11 of 11