Power Of Judicial Review Not To Be Invoked To Decide Contractual Disputes; Tenderer Can Seek Damages In Civil Court: Allahabad High Court

The Petition before the High Court was filed at the instance of a construction company whose bid was not selected in the tender invited by the Public Works Department.

The Division Bench of Justice Prashant Kumar and Justice Shekhar B. Saraf affirmed, “ The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. In this case, bid of the petitioner was rejected on the ground of concealment of relevant facts. No benefit can be awarded to the bidder, who has not filed the bid with clean hands.”

Advocate Manish Kumar Rai represented the Petitioner, while Central Standing Counsel represented the Respondent.

Factual Background

The petitioner engaged in the business of constructing roads, participated in an E-Tender invited by the Superintending Engineer, Public Works Department, District - Pratapgarh. The petitioner submitted his bid on the Prahari portal after logging in through the ‘Chankya Software’. The Petitioner submitted a written complaint against the respondent company, M/s Arunima Constructions, stating that the bid of the respondent was ‘non-responsive’. After completion of the technical evaluation of the tender, the bid of the petitioner and four other bidders were rejected by the respondent authorities. The tender was awarded to the Respondent Company. Against the rejection of the bid of the petitioner as well as the grant of Letter of Acceptance (LOA) in favour of the respondent Company, the petitioner filed the writ petition before the High Court.

Reasoning

Referring to the judgments of the Apex Court, the Bench affirmed that judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether the decision is made 'lawfully' and not to check whether the decision is 'sound'.

“When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere in exercise of power of judicial review, even if a procedural aberration or error in assessment or prejudice to a tenderer is made out”, it held.

The Bench noted that the 72-hour period for filing objections is a critical timeline. If no time limit is prescribed, bidders could continue filing objections indefinitely, which would hinder the tender process and prevent finalisation of the contract. “Once the stipulated time has lapsed, it is not open to the petitioner to raise any fresh objection against the competing bidders. No reason for the delay, or for not availing the three-day period provided under the Government Order dated August 25, 2020, has been stated in the writ petition. Moreover, the allegations of mala fides raised in this writ petition are vague and ambiguous in nature”, the Bench noticed.

As per the Bench, the petitioner, by means of the instant writ petition, was trying to make a mountain out of a molehill by pointing out some technical/procedural violation, and persuade the court to interfere by exercising power of judicial review. “Any interference by this Court would amount to holding up public works and would cause huge loss to the State Exchequer. The Hon’ble Supreme Court in a catena of judgements has held that infrastructure projects should not be halted for mere technicalities. The Supreme Court has categorically deprecates the practice of interference by the High Court simpliciter as a matter of course. Unless specific and cogent grounds are made out that indicate arbitrariness and/or mala fide, no interference is warranted”, it added.

Considering that the bid of the petitioner was rejected on the ground of concealment, and no objection to the bid of the respondent was raised as per the time period provided, the Bench found no ground for intervention. In light of such facts and circumstances, the Bench dismissed the Petition.

Cause Title: M/S A.S. Traders v. State of U.P. ( Neutral Citation: 2025:AHC-LKO:68984-DB)

Appearance

Appellant: Manish Kumar Rai

Respondent: Central Standing Counsel, Dr. Pooja Singh

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