Petrioners challenged exclusion of BSIV trucks in food transport tenders and sought work order extension. Court held exclusion was non-arbitrary for pollution control and rejected extension claim as mutual consent remained required under the 2022 contract terms.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
SHRI RUCHIT BANSAL & ANR. .....Petitioners
Through: Mr. Somnath Bharti and Mr. Anand Prakash Gautam, Advs. with the petitioners in person.
Versus
GOVT OF NCT OF DELHI & ANR. .....Respondents Through: Mr. Sameer Vashisht, SC, GNCTD with Ms. Harshita Nathrani, Adv. for R-1.
Mr. Gurpreet Singh, Adv. for R-2.
CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE TUSHAR RAO GEDELA J U D G M E N T
DEVENDRA KUMAR UPADHYAYA, C.J.
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Hon’ble Supreme Court but also contravenes the judgment dated 03.03.2023, passed by this Court in the aforesaid batch of writ petitions.
“3. The tenderer shall use Delhi state registered BSVI/CNG GPS enabled trucks in PDS supplies allowed by concerned Government Authorities/National Green Tribunal, Courts & any other government
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establishment and further amendments / guidelines issued by the any authority time to time. The tenderer shall arrange required number of trucks per day for each godown as per Annexure A . The tenderer should have the owning capacity of vehicles/trucks of 60 MT for each godown with less than 5000 MT per allocation, 120 MT with less than 10000 MT per allocation, 180 MT with less than 15000 MT per allocation, 240 MT with less than 20000 MT per allocation and more than 20000 MT per allocation shall be 260 MT. The tenderers can apply in all godowns and their owing capacity of vehicle/truck should be separate for each godown. The transporter will attach copies of RC certified by Notary or Gazetted officer as a proof of ownership of trucks. All the transporters shall have necessary permission /license /permit for carrying transportation of food items in NCT of Delhi from Food, Safety & Standard Deptt. to ply within NCT of Delhi, if applicable. In support of transporter mustering remaining transport fleet from other sources, he shall be required to furnish written consent with proof of ownership from owners of such trucks/vehicles at the time of executing the contract. Further, the trucks engaged in PDS supply should not be used in any other Government activities.”
“4. The contract shall remain in force initially for a period of two years from the date when the transporter is called upon to perform the services and the said period may be extended for a period of three months on same terms & conditions at the sole discretion of the Corporation and subsequently further one year with mutual consent of the parties in writing.”
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extension for a further period of one year of the work order, issued in their favour on the basis of the earlier tender, namely, the tender floated in the year 2022.
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transporting the specified food articles was taken considering the requirement of large number of vehicles, but now, since the PMGKAY has been withdrawn, less number of vehicles will be required and therefore, use of BSIV vehicles has been excluded as a measure to check the air pollution and therefore, the decision is in public interest.
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NGT again passed an order dated 27.07.2018, permitting use of BSIV compliant vehicles in supply of essential services.
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permitted the operation of BSIV compliant vehicles. In view of these developments, W.P.(C) 201/2020 and W.P.(C) 1552/2020 were permitted to be withdrawn by this Court.
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extension granted to them for a period of three months, pursuant to the earlier tender issued in the year 2022.
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has already been extracted above. A bare perusal of Clause 4 of the terms and conditions of the earlier tender reveals that on successful participation the tenderer was to be awarded a contract which was to remain in force initially for a period of two years from the date the tenderer was called upon to perform the services. Clause 4 further provides that this period of two years ‘may be’ extended for a period of three months on the same terms and condition ‘at the sole discretion of respondent no.2/Corporation’. Further provision as embodied in Clause 4 of the tender condition of the earlier tender is that subsequent to the first extension for a period of three months on the same terms and conditions, the term of contract may further be extended for a period of one more year ‘with mutual consent of the parties’ in writing. Thus, Clause 4 of the terms and conditions of the earlier tender provides for possible three terms of the contract. The first term of the contract was to remain in force for a period of two years, whereas, the second term of the contract was permissible to be extended for a period of three months, however, such extension was permissible on the same terms and conditions, that too, at the sole discretion of respondent no.2/Corporation. The third term permitting extension for a period of one year is permissible only ‘with mutual consent of the parties’ in writing. In the instant case the petitioners’ contract was in force for a period of two years initially and, thereafter, they have been granted extension for a period of three months on the same terms and conditions. The question which now falls for our consideration is as to whether Clause 4 of the terms and conditions vests any right in the petitioners to seek extension for a period of one more year.
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Coordinate Bench of this Court in W.P.(C.) No. 11749/ 2022 and other connected matters.
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“14. The judicial review of administrative action is intended to prevent arbitrariness. The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; if the process adopted or decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference under Article 226.
15. It is well settled that the award of contract, whether it is by a private party or by a public body or by the State, is essentially a commercial transaction. In arriving at a commercial decision, the considerations which are of paramount importance are commercial considerations. These would include, inter alia, the price at which the party is willing to work; whether the goods or services offered are of the requisite specifications; and whether the person tendering the bid has the ability to deliver the goods or services as per the specifications. It is also by now well settled that the authorities/State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation.
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16. The State, its corporations, instrumentalities and agencies have a public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary power under Article 226 with great caution and should exercise them only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere. (See the judgment in Air India Ltd. v. Cochin International Airport Ltd. [Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617])”
“19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
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20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case.”
Paragraph 23 in NG Projects Limited (supra) reads as under:-
“23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead
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relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.”
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larger public interest of mitigating ever-deteriorating air quality in NCT of Delhi.
“27. Even otherwise, even on merits also, the High Court has erred in quashing and setting aside the eligibility criteria/tender conditions mentioned in the respective RFPs, while exercising the powers under Article 226 of the Constitution of India. As per the settled position of law, the terms and conditions of the Invitation to Tender are within the domain of the tenderer/tender making authority and are not open to judicial scrutiny, unless they are arbitrary, discriminatory or mala fide. As per the settled position of law, the terms of the Invitation to Tender are not open to judicial scrutiny, the same being in the realm of
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contract. The Government/tenderer/tender making authority must have a free hand in setting the terms of the tender.
28. While considering the scope and ambit of the High Court under Article 226 of the Constitution of India with respect to judicial scrutiny of the eligibility criteria/tender conditions, few decisions of this Court are required to be referred to, which are as under:
29. In the case of Maa Binda Express Carrier (supra), in paragraph 8, this Court observed and held as under:
“8. The scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognise that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. So also, the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process.
31. In the aforesaid decision, it is further observed that the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. It is further observed that the courts cannot interfere with the terms of the tender prescribed by the
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Government because it feels that some other terms in the tender would have been fair, wiser or logical.”
(DEVENDRA KUMAR UPADHYAYA) CHIEF JUSTICE
(TUSHAR RAO GEDELA) JUDGE
MARCH 05, 2025/MJ
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3 issues framed by the court
Whether petitioners have an indefeasible right to seek a one-year extension of the work order under Clause 4 of the 2022 tender terms.
Whether the exclusion of BSIV compliant vehicles from the new tender condition is arbitrary, mala fide, or in violation of NGT/Supreme Court orders.
Whether the tendering authority's discretion to set vehicle specifications supersedes the petitioner's reliance on prior tender conditions.
Colour shows how this judgement treated each authority
OA No.21/2014Referred¶15
W.P.(C) 13029/1985Referred¶16
W.P.(C) 11749/2022Distinguished¶19
Municipal Corpn., Ujjain v. BVG India Ltd.Followed¶30
Municipal Corpn., Ujjain v. BVG India Ltd., (2018) 5 SCC 462 · Who else cites this
Silppi Constructions Contractors v. Union of IndiaApplied¶31
Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489 · Who else cites this
N.G. Projects Ltd. v. Vinod Kumar JainRelied on¶32
N.G. Projects Ltd. v. Vinod Kumar Jain, (2022) 6 SCC 127 · Who else cites this
Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.Relied on¶33
Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818 · Who else cites this
Subodh Kumar Singh Rathour v. Chief Executive Officer and OthersDistinguished¶37
Subodh Kumar Singh Rathour v. Chief Executive Officer and Others, 2024 SCC OnLine SC 1682 · Who else cites this
Madras City Wine Merchants' Assn. v. State of T.N.Distinguished¶39
Madras City Wine Merchants' Assn. v. State of T.N., (1994) 5 SCC 509 · Who else cites this
Airport Authority of India v. Centre for Aviation Policy, Safety & ResearchApplied¶40
Airport Authority of India v. Centre for Aviation Policy, Safety & Research (CAPSR), 2022 SCC OnLine SC 1334 · Who else cites this
SHRI RUCHIT BANSAL & ANR.
GOVT OF NCT OF DELHI
DEVENDRA KUMAR UPADHYAYA
TUSHAR RAO GEDELA
As recorded by the court registry
A petition under Article 226 of the Constitution asking a High Court to issue a writ against the State or a public authority in a civil matter.
Judgements on the same questions, provisions and authorities, from every court
