Tendering Authority is Best Judge of Its Requirements; Court's Interference Minimal Unless Decision is Mala Fide or Perverse: Gauhati High Court - 2025-06-19

Gauhati HC Upholds Tender Award to Highest Bidder, Rules 'Neighbourhood' Concept Cannot be Measured in 'Inches and Feet'

Guwahati , Assam – The Gauhati High Court, in a significant ruling on tender law and judicial review, has dismissed a challenge to the settlement of a fishery, reinforcing the principle that the tendering authority is the "best judge" of its own requirements. Justice N. Unni KrishnanNair held that courts should exercise restraint and not interfere with the authority's decision unless it is proven to be mala fide, arbitrary, or perverse.

The judgment settles a dispute over the 'No. 11, Part 5, Kolong Nadi Fishery' in Morigaon District, which had seen its settlement order awarded, cancelled, and re-awarded in quick succession.

A Tale of Two Bidders and Three Orders

The case originated from a Notice Inviting Tender (NIT) issued in September 2021 for the seven-year settlement of the Kolong Nadi Fishery.

M/s Matshya Gandha Matshya Bebasai Samabai Samity Ltd (Respondent No. 7) emerged as the highest bidder (H1) with an offer of ₹65.17 lakh.

M/S Dhipujijan Garanga Garchak Malia Meen Palon CSS Ltd. (the Petitioner) was the second-highest bidder (H2) at ₹63.77 lakh.

Initially, on May 25, 2022, the government awarded the tender to the H2 bidder, reasoning that its members resided closer to the fishery's "Zero Point," thereby better satisfying the "neighbourhood" criterion under the Assam Fishery Rules.

However, following a representation from the H1 bidder, the government swiftly cancelled this order on May 31, 2022. Subsequently, on June 17, 2022, the fishery was settled in favour of the H1 bidder, M/s Matshya Gandha, prompting the petitioner to approach the High Court with multiple writ petitions.

Arguments Before the Court

The Petitioner (H2 Bidder) argued: - The cancellation of their settlement was illegal as it was done without affording them an opportunity of hearing, violating the principles of natural justice. - The members of the H1 society were scattered across Morigaon and Kamrup (Metro) districts, and their eligibility as "actual fishermen" was questionable, especially for those residing outside Morigaon. - The re-award to the H1 bidder was a result of ministerial interference and not a fair evaluation.

The Respondent (H1 Bidder) contended: - The initial settlement in favour of the H2 bidder was illegal as it was based on an erroneous and narrow interpretation of "neighbourhood." - Citing the Division Bench judgment in Pub Goalpara Fishery Cooperative Society , they argued that neighbourhood should be interpreted pragmatically and not be measured in "inches, feet, and yards." - As the highest valid bidder, they were the most deserving candidate, and the subsequent settlement order corrected the initial error. - Quashing the cancellation order would revive an illegal order, which is impermissible in law.

Court's Analysis: Deference to Authority's Interpretation

Justice N. Unni KrishnanNair undertook a thorough review of the administrative actions and the governing legal principles. The Court found the government's initial reasoning for awarding the tender to the H2 bidder to be flawed.

On the 'Neighbourhood' Concept: The Court heavily relied on the Division Bench's precedent in Pub Goalpara Fishery Cooperative Society , which clarified the interpretation of "neighbourhood" under the fishery rules. Justice Nair noted:

> "It is a settled position of law that the term ‘neighbourhood’ cannot be permitted to be interpreted in terms of inches, feet and yards and a pragmatic and purposive interpretation to the same, has to be given... The respondent authorities could not have further sub-categorised the issue of neighbourhood by measuring the distance of the residence of the members."

The court concluded that the initial settlement with the petitioner on this ground was based on an "erroneous parameter" and its subsequent cancellation was justified.

On Principles of Natural Justice: Addressing the petitioner's grievance of not being heard before the cancellation, the Court held the contention was liable to be rejected. It reasoned that interfering with the cancellation would "have the effect of reviving an illegal order," which is legally untenable.

On Judicial Review in Tender Matters: The judgment extensively quoted Supreme Court precedents, including Agmatel India Pvt. Ltd. and Silppi Constructions Contractors , to underscore the limited scope of judicial review in contract and tender awards. The key takeaway was:

> "The author of the tender document is taken to be the best person to understand and appreciate its requirements... The constitutional courts must defer to this understanding and appreciation... unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions."

The Court found that the government had performed its due diligence before awarding the contract to the H1 bidder, including verifying that all its members were genuine fishermen. No mala fide was established by the petitioner.

Final Decision

The High Court dismissed the writ petitions filed by M/S Dhipujijan Garanga Garchak Malia Meen Palon CSS Ltd., thereby upholding the government's order dated June 17, 2022, which settled the fishery with the highest bidder, M/s Matshya Gandha Matshya Bebasai Samabai Samity Ltd. The authorities were directed to proceed with the settlement as per the final order.