The High Court quashed the Sub-Judge's order extending time for fulfilling tender conditions. Holding that courts cannot interfere in bona fide tender processes, the Court ruled the extension was without jurisdiction under Article 227.
The impugned order dated 04.07.2020 extending time for fulfiling EOI conditions is quashed.
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.
HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
(Through virtual mode)
CM(M) No. 49/2020 CM Nos. 2535/2020, 2516/2020 & 2517/2020
Pronounced on: 03.09.2020
Indian Oil Corporation Limited & ors.
…. Petitioner(s)
Through:Mr. D. C. Raina, Sr. Advocate with Mr. Hakim Aman Ali, Advocate
V/s
South Kashmir Petroleum …..Respondent(s) Dealers Association & ors. Through:Mr. Malik Mushtaq and Mr. G. M. Dar, Advocates
Coram : HON’BLE MRS. JUSTICE SINDHU SHARMA, JUDGE
JUDGMENT
“a)…That a decree for declaration declaring the tender notice bearing EOI No. PSO/OPS/EO1/(MS-HSD)/Jammu Kashmir and Ladakh locations bearing tender ID no. 2020PSO113260, ineffective, inoperative, illegal, unfair and detrimental to the interest of the plaintiffs and other RO dealers operating in South Kashmir;
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defendants to continue with the arrangements for transporting of petroleum products as per the allotment of 2014 which is in vogue till date, be passed in favour of the plaintiffs and against the defendants.”
“therefore, arguments advanced by ld counsel for the applicants seems to be just, proper and appealing to the extent of extension of time, hence application to that extent is allowed hence interim order dated 20.05.2020 is modified to the extent that non-applicants are directed to extend three months more time to the applicants for fulfilling the condition of EOI in question from the date of this order keeping into account peculiar and unhealthy circumstances of the South Kashmir.”
grounds:-
“Before interfering in tender or contractual matter, the Court in exercise of its powers of judicial review should pose to itself the following questions:
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(a) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone
or whether the process adopted or decision made is so arbitrary or irrational that the Court can say that the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached;
(b) Whether the public interest affects, if the answer is in the negative, there should be no interference under Article-226 of the Constitution and judicial review it appears is always to test the grievance under Article 14 of the constitution.”
“94. The principles deducible from the above are :
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”
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“23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
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(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.”
“……..After all said and done above it seems that applicants have two grievance one harsh conditions of EOI in question and paucity of time in fulfilling conditions of EOI preparing documents/undertakings. As far as former question is concerned the Hon’ble Superior Courts have once for all settled the issue hence need not to be addressed, but so far as later question with regard to paucity of time is concerned, in my opinion certain issues emerge out pleading which need trail and can be decided during the course of trial after the evidence is lead, hence to that extent applicants have a prima face case in their favour, because in case sufficient time is not granted to the applicants for fulfilling the conditions of EOI and in preparing document keeping into account peculiar and unhealthy circumstances in the South Kashmir the applicants shall definitely suffer an irreparable loss.
Therefore, arguments advanced by 1d counsel for the applicants seems to be, just, proper and appealing to the extent of extension of time, hence application to that extent is allowed hence interim order dated 20-05-2020 is modified to the extent that non applicants are directed to extend three months more time to the applicants for fulfilling the condition of E01 in question from the date of this order keeping into account peculiar and unhealthy circumstances of the South Kashmir.
This is order shall dispose of application for interim relief and also application for vacation of order dated 20-052020 moved by Ld counsel for the non applicants.
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Application is accordingly disposed of be consigned to records after due compilation.
“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or 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. Principles of
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equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. 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. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold”.
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SRINAGAR 03.09.2020
Ram Murti
(Sindhu Sharma)
Judge
Whether the order is speaking : Yes
Whether the order is reportable : Yes
RAM MURTI 2020.09.04 15:26 I attest to the accuracy and integrity of this document
3 issues framed by the court
Whether a Civil Court can extend time for fulfilling Expression of Interest conditions in a government tender.
Whether Article 227 writ petition is maintainable against an order that is appealable but without jurisdiction.
Whether the Trial Court had jurisdiction to interfere in the terms of the tender invitation.
Colour shows how this judgement treated each authority
Tata Cellular Vs. Union of IndiaApplied¶22
Tata Cellular Vs. Union of India, 1994 (6) SCC 651 · Who else cites this
M/s Michigan Rubber (India) Ltd. V. State of KarnatakaApplied¶32
M/s Michigan Rubber (India) Ltd. V. State of Karnataka & ors., (2012) 8 SCC 216 · Who else cites this
Jagdish Mandal vs. State of OrissaApplied¶49
Jagdish Mandal vs. State of Orissa and others, (2007) 14 SCC 517 · Who else cites this
Koyilerian Janki & ors. vs. Rent ControllerExplained¶53
Koyilerian Janki & ors. vs. Rent Controller, 2000 (9) SCC 406 · Who else cites this
Waryam Singh and another V. Amarnath and anotherRelied on¶54
Waryam Singh and another V. Amarnath and another AIR 1954 SC 215 · Who else cites this
1 provisions across 1 enactments
Indian Oil Corporation Limited & ors.
South Kashmir Petroleum Dealers Association & ors.
Sindhu Sharma
As recorded by the court registry
A petition under Article 227 of the Constitution invoking the High Court's supervisory jurisdiction over subordinate civil courts.
Judgements on the same questions, provisions and authorities, from every court
