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2025 Supreme(Gau) 947

IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH 
SANJAY KUMAR MEDHI, J.
M/s NT Agency - Appellant 
Versus
The State of A.P. and Others - Respondents 
W.P. (C) No. 619 of 2024
Decided On : 23-05-2025


Advocates:
Advocate Appeared:
For the Appellants : P. Taffo, Tana Rini, Eho Menjo, Minter Karbak
For the Respondents: Gimi Tarak, Tsering Nyima, Takar Bagang, Bedanta Kaushik, Nabam Kakum, Pankaj Borah

Judicial review of tender rejection mandates clarity and consistency in administrative decisions, with intervention permitted only in cases of gross arbitrariness.

Headnote:(A) Constitution of India - Article 226 - Judicial review of administrative action - Bid rejection - A writ petition was filed challenging the rejection of the technical bid due to alleged non-compliance with three tender clauses, deemed mechanical without adequate reasoning - Court found the decision inconsistent with a subsequent NIT where similar documents were accepted, rendering the rejection arbitrary - The requirement for disclosure of pending litigations was uniformly applicable to all parties involved. (Paras 20, 23, 26, 28)

(B) Judicial review - Application principles - The principles governing judicial review in contractual matters were reiterated, emphasizing non-interference unless gross arbitrariness or mala fide is evident. (Paras 12, 26)

Facts of the case:
The petitioner participated in a tender process for road construction and was rejected based on non-compliance with certain clauses, although similar documents were accepted in a subsequent bid.

Findings of Court:
The impugned rejection was found to be arbitrary and lacked consistency, leading to the conclusion that the petitioner should have been considered eligible.

Issues: The main issues centered on the applicability of tender clauses and the rationale behind rejection.

Ratio Decidendi: The court upheld that decision-making must be based on clear reasoning and consistency, rejecting the notion that administrative action is immune to judicial scrutiny.

Result: Writ petition allowed, with directives for reconsideration of the bid.

Table of Content
1. challenge to bid rejection under article 226 (Para 1 , 2 , 3)
2. arguments presented by petitioner against bid rejection (Para 4 , 5 , 6 , 7)
3. department's defense and references to judicial precedents (Para 8 , 9 , 10)
4. judicial review under contract law standards (Para 11 , 12)
5. issues related to fairness and public interest in tender evaluation (Para 15 , 18)
6. court's observation on technical evaluation inconsistency (Para 19)
7. court's findings on the rejection order's validity (Para 20 , 21 , 23)
8. discretionary power and reasons for decision consistency (Para 24 , 26)
9. final order and consequences of the court's decision (Para 28 , 29 , 30)

JUDGMENT :

SANJAY KUMAR MEDHI, J.

1. The instant petition has been filed under Article 226 of the Constitution of India, inter alia, challenging the action of the respondent authorities in rejecting the bid of the petitioner in the technical evaluation which was submitted pursuant to an NIT No. RWD/C/ TAJO/VVP/GE-PRO- 01/2024 dated 05.07.2024 for construction of L027-Road from Kremapao Road to Raro vide package No. AR-03-03268. Amongst others, the petitioner has taken the grounds that such rejection has been done in a most mechanical manner without assigning any discernible reasons and by the said impugned action, the aspect of competitiveness in the financial evaluation has been reduced.

2. As per the facts projected in the petition, an NIT was floated by the Rural Works Department, Arunachal Pradesh on 05.07.2024 pertaining to the construction of L027-Road from Kremapao Road to Raro vide package No. AR-03-03268 in which the petitioner had participated. It is the case of the petitioner that such participation was duly done by submitting all the necessary documents and fulfilling all the necessary conditions. On 02.08.2024, the technical evaluation was done of the bids in which the bid of the petitioner was rejected. In the rejection memo, the grounds have been stated to be violation of the following clauses of the tender:

(i) 4.4B(b)(i);

(ii) 4.4B(b)(ii);

(iii) 4.7 (i).

3. It is the aforesaid action which is the subject matter of challenge in this writ petition.

4. I have heard Sri P. Taffo, learned counsel for the petitioner. I have also heard Sri G.Tarak, the learned Standing counsel of the Department. Sri D. Mazumdar, learned Senior Counsel has appeared online for the Respondent No.5 who is assisted by Shri T. Bagang, learned counsel whereas Sri P. Bora, learned counsel is present for the Respondent No. 6.

5. Sri Taffo, the learned counsel for the petitioner has submitted that from the communication dated 02.08.2024, three clauses have been cited for rejecting the technical bid of the petitioner. He has submitted that neither of the three clauses are applicable in the case of the petitioner and therefore could not have been taken into consideration for rejecting the bid. He has submitted that the first clause being 4.4B(b)(i) relates to the list of equipments and machineries which the petitioner had given as required under the NIT. Similarly, clause 4.4B(b)(ii) is on the requirement of list of technical personnel which was also submitted in accordance with law. He submits that the last clause namely 4.7(i) is on the aspect of giving misleading statement or misrepresentation or of having a record of poor performance. He submits that the said clause will not have any application at all as there was no instance of giving any misleading statement or misrepresenting any facts.

6. The learned counsel has drawn the attention of this Court to the list of equipments and list of technical personnel submitted along with the bid which have also been annexed to the writ petition. He has submitted that the illegality of the impugned action becomes apparent inasmuch as in another contract which was initiated vide an NIT dated 28.10.2024. The petitioner was declared qualified and in the said NIT the same documents were given in the tender process. He has submitted that the said aspect

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