The decision-making process in tender rejections must adhere to tender conditions and requirements, and the scope of judicial review in contractual powers is limited to prevent arbitrariness and favoritism.

JUDGMENT :

Vineet Saran, J.

The opposite party Bharat Petroleum Corporation Ltd. (BPCL) floated a tender on 25.02.2016 for “Road Transportation of Bulk Pol Products (MS/HSD/SKO/ BRANDED FUELS) EX BPCL location at Paradeep in the State of Odisha”. In response to the same, petitioner no.1 M/s. Jadumani Transport submitted the bid application along with the necessary documents of tank-lorries, etc. Upon having received its bid evaluation status through internet, petitioner no.1 came to know that on 23.05.2016 its technical bid had been rejected. There were five reasons given for rejection of the technical bid of petitioner no.1-M/s. Jadumani Transport, which shall be dealt with later on. Challenging the said order dated 23.05.2016 this writ petition has been filed.

2. We have heard learned Senior Advocate Mr. J. Patnaik along with advocate-on-record Mr. B.M. Sarangi appearing for the petitioners as well as learned Senior Advocate Dr. A.K. Mohapatra along with advocate-on-record Mr. Srinivas Patnaik appearing for the opposite party and perused the records. Since pleadings have been exchanged between the parties, with their consent this writ petition is disposed of at this stage.

3. Before delving into the merits of the case, the basic principles of law laid down by the apex Court are to be taken into consideration for just decision in the case at hand.

In Raunaq International Ltd. V. IVR Construction Ltd., AIR 1999 SC 393, the Supreme Court at page 398 held as follows:

“Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene.”

The above decision clearly shows that the State or its instrumentalities have to deal with its power with regard to the award of contract in accordance with the principle enshrined in Article 14 of the Constitution of India.

It is well settled principle of law laid down by the apex Court time and again that the power of judicial review can be exercised in the matter of decision making process and not in the decision itself. If the decision is taken without there being any material on record or on the basis of irrelevant or extraneous consideration, it attracts the wrath of Article 14 of the Constitution of India and this Court is empowered to nullify such a decision.

Therefore, the principle of judicial review would apply to the exercise of contractual powers in order to prevent arbitrariness and favoritism. The scope of the judicial review is limited to see whether the selection of a particular tenderer is arbitrary or whether the selection has been made with mala fide intention. The Court is also entitled to dissect the process of decision making to satisfy itself whether any arbitrariness or discrimination has crept in the above process.

4. Petitioner no.1 M/s. Jadumani Transport is a partnership firm with petitioner no.2 Archana Muduli and petitioner no.3 Bishnupriya Behura as its partners. On perusal of the impugned order (Annexure-1), it is clear that the technical bid of petitioner no.1 was rejected for the following reasons:

“(1) As per rejection criteria K.h of NIT.

(2) As per Attachment (1) of clause 14.

(3) As per Attachment (2).

(4) As per Attachment (5) of clause 15(c).

(5) As per Attachment (8) of Clause-3 & 5.”

The details of the above mentioned reasons, for which the tender of petitioner no.1 has been rejected, are delineated herein below:

(1) K. h of NIT

K. REJECTION CRITERIA:

Tenders will be rejected in the event of the bidders not complying with any of the following tender guidelines.

a. to g. xx xx xx

h. Tenders not meeting any of the Tender Terms and conditions or incomplete in any respect or with any additions, deletions or modifications are