Judicial review in contractual matters requires courts to exercise restraint and intervene only in cases of clear arbitrariness or bias, respecting the expertise of public sector undertakings.

JUDGMENT :

S.M. SUBRAMANIAM, J.

1. Under assail is the writ order dated 18.03.2025 passed in W.P. No. 8141 of 2025.

2. The writ petitioner is the appellant before this Court.

3. The writ petition was instituted challenging the tender notification and consequential direction to issue fresh tender for hiring of the water tanker lorries of 18,000, 12,000, 9,000 and 6,000 litres capacity on contract basis for the period of three years (2024-2027).

4. The issue relating to the subject tender notification is no more res integra, as this Court has already adjudicated the issues and passed orders on 18.02.2025 in W.A. No. 3300 of 2024 filed by Metro Water Tanker Lorry Contractors Association represented by its President. This Court passed the following orders:

"9. The Court not being an expert body cannot place its opinion in the matter of prescription of eligibility criteria, unless such eligibility criteria is fixed in violation of the Act or Rules or being arbitrary.

10. The Hon'ble Supreme Court of India in the case of Tata Motors Limited Vs. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Others, 2023 SCC Online SC 671 ruled as follows:

"48. This Court being the guardian of fundamental rights is duty-bound to interfere, when there is arbitrariness, irrationality, malafides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass which scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the Government and public sector undertakings in matter of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See : Silppi Constructions Contractors v. Union of India , (2020) 16 SCC 489 )

49. to 53..............................

54. As observed by this Court in Jagdish Mandal v. State of Orissa , (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cos