M/S. Attal Plastics, Hyderabad Vs State of Odisha

Digitally Signed Signed by: SIPUN BEHERA Designation: Senior Stenographer Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 17-Jul-2025 13:45:46

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On the last date i.e. 14.07.2025, Mr. B. P. Tripathy, learned Senior Advocate appearing for opp. party nos.2 & 3 produced the copies of the relevant contracts executed

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by the petitioner for the financial years 2021-22 and

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2022-23 along with the bid documents, which was filed by the petitioner along with the bid and further stated he has received written instruction that the petitioner, the bidder has failed to supply the relevant contract document in support of the supply contract for the financial year 2023-24 and the petitioner has only furnished the copies of invoices against supply of nonwoven bags to private limited and public unlisted companies, which does not meet the requirements of Clause-18.8 of the tender document and therefore, the tender committee after careful evaluation of the bid documents of the petitioner, rejected the bid as per Clause-18.8 of the bid documents vide Ext.5 and those documents were handed over to Mr. B. Baivab, learned counsel for the petitioner and he sought time to obtain instruction on those documents.

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Today, Mr. B. Baivab, learned counsel for the petitioner has failed to produce the contract documents for the financial year 2023-24 and he fairly submits that the documents, which were handed over to him by Mr. B. P. Tripathy, learned Senior Advocate appearing for opp. party nos.2 & 3 are the documents of the petitioner and he has not filed any additional document.

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Mr. B. Baivab, learned counsel for the petitioner submits that a representation is pending before the opp. party nos.2 & 3, which was filed by the petitioner for consideration, but Mr. Tripathy, learned counsel

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appearing for opp. party nos.2 & 3 has disputed the same.

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It is the apprehension of the learned counsel for the petitioner that the petitioner may not be qualified to participate in the next year bid since the technical bid has been rejected this year because of the nonavailability of the contract documents for the financial year 2023-24.

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Mr. B. P. Tripathy, learned Senior Advocate appearing for opp. party nos.2 & 3 submits that if the petitioner files the required documents in the future year, there is no question of the opp. party nos.2 & 3 in not considering the same in accordance with law.

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The Hon’ble Supreme Court in the case of Tata Cellular -Vrs.- Union of India reported in (1994) 6 Supreme Court Cases 651 while dealing with the tender matters has laid down the following principles in para 94, which reads as follows:-

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“94. The principles deducible from the above are:

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(1) The modern trend points to judicial restraint in administrative action.

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(2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.

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(3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without

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the necessary expertise which itself may be fallible.

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(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.

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(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.

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(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”

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In case of Michigan Rubber (India) Limited -Vrs.- State of Karnataka and Others reported in (2012) 8 Supreme Court Cases 216 wherein at para 23, the Hon’ble Apex Court has observed as under:-

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“23. From the above decisions, the following principles emerge:

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( a ) The basic requirement of Article 14 is fairness in action by the State, and nonarbitrariness 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;

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( b ) Fixation of a value of the tender is entirely within the purview of the executive and the 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;

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( 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 the tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;

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( 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;

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( e ) If the State or its instrumentalities act reasonably, fairly and in public interest in

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awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.”

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In the case of Uflex Limited -Vrs.- Government of Tamil Nadu and others reported in (2022) 1 Supreme Court Cases 165 wherein at para 42 following has been laid by the Hon’ble Apex Court:-

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“42. ………... In commercial tender matters there is obviously an aspect of commercial competitiveness. For every succeeding party who gets a tender there may be a couple or more parties who are not awarded the tender as there can be only one L-1. The question is should the judicial process be resorted to for downplaying the freedom which a tendering party has, merely because it is a State or a public authority, making the said process even more cumbersome. We have already noted that element of transparency is always required in such tenders because of the nature of economic activity carried on by the State, but the contours under which they are to be examined are restricted as set out in Tata Cellular [ Tata Cellular v. Union of India , (1994) 6 SCC 651] and other cases. The objective is not to make the Court an appellate authority for scrutinising as to whom the tender should be awarded. Economics must be permitted to play its role for which the tendering authority knows best as to what is suited in terms of technology and price for them.”

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Further in the case of Tata Motors Limited -Vrs.Brihan Mumbai Electric Supply and Transport Undertaking (Best) and others reported in (2023) 19 Supreme Court Cases 1 wherein at para 50 following has been held by the Hon’ble Apex Court:-

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“50. 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 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. The

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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. (See Silppi Constructions Contractors v. Union of India [ Silppi Constructions Contractors v. Union of India , (2020) 16 SCC 489].”

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Admittedly, the petitioner has failed to produce the relevant contract documents as per the bid in question and in that view of the matter, the opp. parties are quite justified in rejecting the bid of the petitioner in view of Clause-18.8 of the bid documents vide Ext.5.

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In the light of aforesaid factual position and principles of law as discussed above and the limited nature of scope available with this Court to interfere in the tender matter, we are not inclined to accept the prayer made in this writ petition and accordingly, the writ petition is found to be devoid of any merits and resultantly fails.

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Accordingly, the writ petition stands dismissed.

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Pending application (s), if any, shall stand disposed of.

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Interim order dated 28.01.2025 stands vacated.

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Sipun

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Issue urgent certified copy as per Rules.