The judgment highlights the deference to the executive authority's decision-making and the limited scope of judicial review under Article 226 of the Constitution.

S. RAVINDRA BHAT, J.

1. The petitioner is aggrieved by the cancellation of the tender issued by the Indian Oil Corporation Ltd. (IOCL) for which the second respondent – Engineers India Limited (EIL) was the PMC.

2. The facts are that the Global Competitive Bidding was invited for BS-VI Project for IOCL and the invitation was published on 25.10.2016. The petitioner contends that it was one of the bidders which had applied for the tender. It is further stated that after completion of the prequalification round, technical evaluation of the bids and price bid opening, the respondents apparently resorted to retendering on 15.07.2017. This was later followed swiftly by its letter of intimation that the entire tender process earlier notified (i.e. on 25.10.2016) was cancelled.

3. The petitioner contends that the rationale for cancellation given by the respondents, i.e. that this was pursuant to the Govt. of India’s policy to permit indigenous manufacturers within a price range, is arbitrary. It is contended further that the effort on the part of the respondents to remove four items from the original bid so as to give the fresh tender a new shape altogether is mala fide and motivated. According to the petitioner, the price revision and the manner of cancellation is contrary to directives and rules formulated by the Central Vigilance Commission (CVC).

4. The petitioner relies upon the order of the Central Government dated 15.07.2017 and submits that the ostensible reasons given for cancellation of the Make in India policy embodied in that order clearly envision that the subject tender could not have been cancelled. Reliance is placed particularly upon the following condition with respect to tender for goods and services:

“3. Requirement of Purchase Preference: Subject to the provisions of this Order and to any specific instructions issued by the Nodal Ministry or in pursuance of this Order, purchase preference shall be given to local suppliers in all procurements undertaken by procuring entities in the manner specified hereunder:

(a) In procurement of goods in respect of which the Nodal Ministry has communicated that there is sufficient local capacity and local competition, and where the estimated value of procurement is Rs. 50 lakhs or less, only local suppliers shall be eligible. If the estimated value of procurement of such goods is more than Rs.50 lakhs, the provisions of sub-paragraph b or c as the case may be shall apply.

(b) In the procurements of goods which are not covered by paragraph 3a and which are divisible in nature the following procedure shall be followed:

i. Among all qualified bids, the lowest bid will be termed as L1. If L1 is from a local supplier, the contract for full quantity will be awarded to L1.

ii. If L1 bid is not from a local supplier, 50% of the order quantity shall be awarded to L1. Thereafter, the lowest bidder among the local suppliers will be invited to match the L1 price for the remaining 50% quantity subject to the local supplier’s quota price falling within the margin of purchase preference and contract for that quantity shall be awarded to such local supplier subject to matching the L1 price. In case such lowest eligible local supplier fails to match the L1 price or accepts less than the offered quantity, the next higher local supplier within the margin of purchase preference shall be invited to match the L1 price for remaining quantity and so on, and contract shall be awarded accordingly. In case some quantity is still left uncovered on local suppliers, then such balance quantity may also be ordered on the L1 bidder.

c. In procurements of goods not covered by sub-paragraph 3a and which are not divisible and in procurement of services where the bid is evaluated on price alone, the following procedure shall be followed.

i. Among all qualified bids, the lowest bid will be termed as L1. If L1 is f