Judicial review in government contracts allows for negotiation with all tenderers, not just the lowest bidder, as established by procedural guidelines.

1. The main grievance of the petitioner / Company in this petition under Art.226 of the Constitution of India is against the decision of the Respondents Nos. 2 and 3 to enter into the negotiations with all the tenderers asking them to send their negotiated rates in a sealed envelope and not to accept the petitioner's tender even though the rates quoted by him were lowest. The petitioner Company has filed this petition with the averments that the Chief Engineer, Pradhan Mantri Gram Sadak Yojna had floated the tender for road and cross drainage works for various areas under Pradhan Mantri Gram Sadak Yojna including the maintenance of the same for five years after the construction. The tender notice was published on 16th April 2003. In response to the said tender notice the petitioner had applied for group No. 18 i.e. Raigarh CG - 13-7. The estimated cost Rs.513.18 lacs was fixed by the respondent No. 2. The petitioner quoted the rate 4.8% below the estimated value whereas the rate quoted by the Respondent No. 5 was 5% above the estimated cost value. After opening the tender it was found that the rates quoted by the petitioner was lowest therefore in all fairness the tender of the petitioner should have been accepted by the Respondents Nos. 1 to 3 but to the utter surprise of the petitioner the Respondent No. 2 had decided to negotiate with the petitioner and also with the Respondent No. 5, both were called by the Respondent No. 2 and they were asked to give their rates in sealed envelope under the negotiation. After receiving the negotiation offer the petitioner had submitted his rates under negotiated offer as 11.7% below the estimated cost therefore the Respondents No. 1 to 3 should have awarded the tender to the petitioner but to the utter surprise they have also asked the Respondent No. 5 to submit negotiated offer and according to the confirmed information of the petitioner the rates quoted by the petitioner in the negotiated tender were disclosed to the Respondent No. 5 by the Respondent No. 2 and therefore the Respondent No. 5 had quoted his rates as 14.7% below the estimated cost. Since the negotiated revised rates of the respondent No. 5 are lower than the rates quoted by the petitioner therefore the Respondents Nos. 1 to 3 have decided to award the work to the Respondent No. 5.

2. The petitioner has further submitted in his petition that the Respondents Nos. 1 to 3 were not within their right to award the work to the Respondent No. 5 on the revised rates given by the Respondent No. 5 because the petitioner was the lowest bidder therefore the same should have been accepted as it was. Moreover, if the negotiation has to be done this can only be done with the L - 1 (Lowest Tenderer) and not with the Respondent No. 5. Now it is settled law that how the tender is to be finalized and the manner in which the negotiations are to be concluded. Even the Respondent No. 4 (Central Vigilance Commission) has issued very categorical directions to all the departments of the country saying that "It is only L - 1, who can be called for negotiations to avoid corruption and to have more transparent and effective system. These directions were issued on 18-11-1998, copy of which is enclosed as Annexure P / 7 with the petition. The action of the respondents Nos. 1 and 2 is prima facie illegal, arbitrary and against the law. It is expected from the State Government to act fairly and honestly while awarding the tender to anyone. They cannot do any favour to any particular group or person for the best reasons known to them only. It is submitted that there is no rule, which authorizes the Respondents Nos. 1 and 2 to call other tenderers for negotiation whose rates have not been found lowest. Ultimately prayed that the Res