2000 Supreme(MP) 783

2001 (2) JLJ 81
Bhawani Singh, C.J. and A.K. Mishra, J.
Optel Telecommunications Ltd. v. Union of India and others
L.P.A. No. 209 of 2000; against the order of Single Bench, passed in Writ
Petition No. 3406 of 2000; Decided on. 25.8.2000.

Headnote:(1) Constitution of India -- Art. 226 -- contractual powers of Government principles of judicial review would apply to prevent arbitrariness or favouritism. (1994) 6 SCC 651 followed. [Para 10

        (2) Constitution of India -- Art. 226 -- award of contract -- is essentially a commercial transaction -- Court may see public interest and malafide of the transaction. (1999) 1 SCC 492 followed. [Para 10

        (3) Constitution of India -- Art. 226 -- tender by State -- it can fix its own terms of invitation -- Court can examine decision making process.

        In arriving at a commercial decision, considerations which are paramount are commercial considerations. The state can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and the is not open to judicial scrutiny. It can enter into negotiations, before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation.

        But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though said decision is not amenable to judicial review, the court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. (2000) 2 SCC 617 followed. [Para 11

        (4) Constitution of India -- Art. 226 -- amendment made in tender before submissions of bids -- scope of participation enlarged -- uniformly applicable to all bidders -- rightly not interfered with being not arbitrary, etc.

        The respondents considered representations by interested parties and took decision at the highest level before making the amendments to the bid document. These were intimated to prospective bidders. To facilitate them in preparing their bids after taking into consideration the amendments, time was extended. Power to make amendment is there in the bid documents. It has been exercised on representations by parties. Result of amendment is that it has enlarged the scope for participation by more bidders. Amendment has taken place before any of the bidders had submitted the bid documents. It was uniformly applicable to all bidders. With this background, it is difficult to hold that amendment was carried out with a view to eliminate the petitioner and benefit the new bidders. [Para 12

       Unless the decision is arbitrary, malafide and against public interest, judicial scrutiny is not possible. Court cannot examine the merits of the decision. [Para 13

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