The judgment emphasizes the parameters for judicial review in contractual matters and the factors that make an impugned order subject to interference.

ORDER :

Sujoy Paul, J.

1. This petition filed under Article 226 of the Constitution of India assails the order dated 22.09.2020, whereby the petitioner's bid was rejected.

2. The admitted facts between the parties are that petitioner along with other bidders submitted their bid pursuant to NIT No. 25/2020-21 dated 04.09.2020. The petitioner's bid was lowest. Being L-1 petitioner expected the contract but same was rejected by stating twin reasons namely-(i) the rates quoted by the petitioner were comparatively higher and (ii) the tender was issued for the first time.

3. Criticizing the said order, learned counsel for the petitioner submits that the impugned order is arbitrary and unreasonable in nature. As per Clause-14 of Appendix-2.10 (conditions of contract), the only parameter is that rate quoted by L-1 should not be below 15% otherwise it shall be treated as unworkable rate. The rate quoted by the petitioner was admittedly above the said percent. The respondents have allotted similar contract to certain contractors who have quoted rates more than the petitioner. Hence, the petitioner was subjected to discrimination. Reliance is placed on (2014) 3 SCC 760, (Maa Binda Express Carrier & Another v/s. North East Frontier Railway & Others).

4. Per contra, learned Additional Advocate General supported the impugned order. The respondents placed reliance on Clause-2 of the aforesaid Appendix which enables the authorities to accept or reject the tender without assigning any reason.

It is further argued that the reasons for cancellation are in fact mentioned in the relevant decision of a four member Committee (Annexure-R/1). Since petitioner's rate was compared with previous year's rate and it was found that it is first tender and if it is repeated, the Department may get a better comparable rate, impugned order was passed.

5. So far question of discrimination is concerned, learned Additional Advocate General submits that every tender of every area were different based on their fact situation, rates quoted with the rates to be compared with that of previous years. Thus those examples are of no relevance.

6. No other point is pressed by the learned counsel for the parties.

7. So far Clause-2, which enables the respondents to accept or reject the tender is concerned, we are inclined to observe that similar question cropped up and decided by this Court in W.P. No. 16878/2020 (Krsnaa Diagnostics Private Limited v/s. The State of Madhya Pradesh & Others) on 22.02.2021. A similar Clause No. 17 of the contract was relied upon by the Department. This Court considered the same and opined as under:-

"[18.] We deem it proper to first deal with the argument of learned AAG and Counsel for the respondent No. 2 based on Clause-17 of the NIT. It was argued that the order of scrapping NIT is founded upon Clause-17 aforesaid which gives power to the Competent Authority to accept, reject or annul any selection process/NIT. In our view, existence of power and exercise of power are two different things. Mere existence of power does not insulate the ultimate order which is passed in exercise of such power. Whether power is exercised in a justifiable manner is always subject to judicial review. Despite existence of power like one which is mentioned in Clause-17, it is duty of the Court to examine following factors:-

(i) Whether the decision making authority exceeded its power?

(ii) Committed an error of law.

(iii) Breached the rules of natural justice.

(iv) Arrived to a decision which no reasonable authority would have reached (Wednesbury principle of reasonableness).

(v) Abused its power.

[19.] Thus any enabling provision does not make the ultimate order passed in exercise of such power as sacred or sacrosanct.

[20.] The Apex Court in catena of judgments held that the judicial review of a contractual matter is permissible on certain parameters spelled out by us in the previous paragraph. In Tata Cellular vs. Union of India, (1994) 6 SCC 651 and Elektron Lighting Systems (