The central legal point established in the judgment is the importance of the decision-making process in awarding contracts, the parameters of judicial review, and the concept of malice in law.

B.S. Reddy, C.J.

Background Facts:

1. The Chief Engineer, PWD (Roads), Assam, on behalf of the Government of Assam, invited bids for the standard bidding documents for 'construction of Flyover at Six Miles at the junction of G.S. Road and Rupkonwar Jyotiprasad Agarwalla Road under City Roads Division No. II' at the estimated cost of Rs. 39,14,43,000/- (Rupees thirty nine crore fourteen lakhs and forty three thousand).

2. The writ Appellant company and as well as the 4th Respondent, a construction company, submitted their bids in response to the said tender notice dated 30.5.2005. That in terms of the instructions to bidders, bids were to be submitted in two envelopes containing technical bid and price bid.

3. On 18.6.2005, envelopes containing the technical bids were open in the presence of the parties and upon evaluation of the technical bids, both the parties were required to attend the office of the Chief Engineer, PWD (Roads) on 26.7.2005 in connection with opening of envelopes containing the price bids. It was found that between the two parties, the Appellant's bid was the lowest (L1) with the price bid of Rs. 39,14,43,000/- (Rupees thirty nine crore fourteen lakhs and forty three thousand). The price bid offered by the 4th Respondent company was Rs. 50,00,00,000/- (Rupees fifty crore) and thus was the second lowest (L2).

4. The Appellant asserts that the Bid Evaluation Committee made its recommendations for awarding the contract in favour of the Appellant being the lowest responsive evaluated bidder. The Tender Committee on 5.7.2005 rejected the bid of the Appellant on the ground that the Appellant does not satisfy the eligibility criteria as laid down in Clause 4.5(A)(b) of the Instructions to Bidders (for short "ITB"). On 14.9.2005, the Tender Committee decided to offer the contract to the 4th Respondent at a value of 3.98% above the estimated costs, which works out to Rs. 40,70,22,431.00 (Rupees forty crore seventy lakhs twenty two thousand four hundred thirty one). The Government of Assam, PWD vide its letter dated 14.9.2005 conveyed the recommendations of the Tender Committee to the 3rd Respondent who, in turn, vide letter dated 15.9.2005 issued Letter of Intent to the 4th Respondent. Thereafter on 3.10.2005 a contract agreement was executed and the final work order was accordingly issued.

5. The case set up by the Appellant is that after opening of the technical and price bid, there was no option for the employer but to accept its bid being the lowest evaluated responsive bid, which is lower by over 10 crore (Rupees ten crore) than the bid of Rs. 50 crore (Rupees fifty crore) offered by 4th Respondent. It is contended that the employer instead of awarding the contract to the Appellant had chosen to award the work to the 4th Respondent in secretive manner after unilaterally entering into the negotiation with the 4th Respondent. The decision, according to the Appellant, is not only arbitrary but also actuated by malice in law.

6. The simple case set up by the Respondents is that against the qualifying conditions as laid down in Clause 4.5(A)(b) the Appellant on its own accord disclosed in its bid that it had satisfactorily completed the work of similar nature to the tune of Rs. 2200.50 lakhs only as against the required amount of Rs. 2622.6681 lakhs. Such being the position the Appellant does not meet the eligibility criteria as laid down in Clause 4.5(A)(b) of the ITB. That the technical bid of the Appellant itself ought to have been rejected but inadvertently the office of the Chief Engineer misconstrued the eligibility conditions and accordingly opened the financial bid of the Appellant That after preparing the comparative statement the employer forwarded the same along with all the papers in original to the Tender Committee. It is at that stage the Scrutiny Committee detected the mistake committed by the office of the Chief Engineer in concluding as if the Appellant was technically qualified. The Scrutiny Commit