Dismissed¶75

M/S. Meher Agencies, Cuttack v. State of Odisha

Orissa HC18 Feb 2025WP(C)/4546/2025

Case brief

AI extract

What is this about?

Orissa High Court, Cuttack; W.P.(C) No. 4546 of 2025 (decided 18.02.2025, K.R. Mohapatra & S.K. Mishra, JJ.); judicial review of tender conditions; challenge to EMD of Rs.85,00,000/-, turnover criterion Rs.4.50 Cr and experience criterion Rs.4.00 Cr in DTCN bid ref. No.02/2024-25 of DAHVS (veterinary care equipment/consumables/ancillaries); Rule 212(1) OGFR 2023; Articles 226 & 227; mala fide; arbitrariness; level playing field/fair competition; MSE/OSME and Start-Up exemption (MSME Notification No.566 dt.24.01.2024); Jagdish Mandal v. State of Odisha (2007) 14 SCC 517 applied; M/s. Winners Pharma, W.P.(C) No.1110 of 2025 relied on; Tata Cellular (1994) 6 SCC 651 referred; writ petition dismissed, no costs.

What did the court decide?

None; writ petition dismissed, with no order as to costs. ¶75

M/S. Meher Agencies, Cuttack Vs State of Odisha — Writ and Judicial Review | Orissa HC (2025)

What the court decided

AI extract

Outcome

None; writ petition dismissed, with no order as to costs.

¶75

Issue for consideration

Whether Clauses 3.1, 5.2.5.1 and 5.2.5.2 of the Detailed Tender Call Notice dated 01.02.2025 are arbitrary and unreasonable and liable to be struck down. +2 more

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Court's answer

Judicial review in tender and contractual matters is of a very limited scope: interference is warranted only if the process or decision is mala fide or intended to favour someone, or is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with relevant law could have reached it, or if public interest is affected.

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Ratio / Principle

It is not always possible to state the estimated value of the goods in a particular tender call notice; fixation of EMD at Rs.85,00,000/- keeping in mind the requirement of the goods is not per se arbitrary or mala fide absent a specific allegation, and on a conspectus of the tender conditions the EMD condition does not appear unreasonable.

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Key takeaways

The plea of denial of fair competition and level playing field was rejected at that stage because the bids of intending bidders had not yet been opened and no material supported the contention.ratio¶69
Certain conditions fixed by the Tender Inviting Authority on applying its mind and taking into consideration the requirements cannot be said to be illegal, arbitrary or mala fide in absence of any material.ratio¶73
Merely being a registered dealer, distributor, wholeseller and supplier of veterinary medicines, equipments and instruments does not make a person entitled or eligible to participate in a tender if it does not satisfy the tender conditions in the DTCN.

Detailed headnote1 paragraphs

Writ petition under Articles 226/227 of the Constitution challenging Clauses 3.1, 5.2.5.1 and 5.2.5.2 of the Detailed Tender Call Notice (bid reference No.02/2024-25) dated 01.02.2025 issued by the Director, Directorate of Animal Husbandry and Veterinary Services for procurement of veterinary care equipment/consumables/ancillaries - EMD of Rs.85,00,000/- purportedly under Rule 212(1) of the OGFR 2023, minimum average turnover of Rs.4.50 Cr and past-supply experience worth Rs.4.00 Cr, with exemption/relaxation for Odisha MSE/OSME and Start-Ups - assailed as arbitrary, unreasonable and destructive of a level playing field. HELD: (i) judicial review in tender and contractual matters is of very limited scope (test in Jagdish Mandal, (2007) 14 SCC 517, as adopted in M/s. Winners Pharma, W.P.(C) No.1110 of 2025); (ii) no mala fide was alleged and no public-interest averment was made; (iii) it is not always possible to state the estimated value of goods in a tender call notice, and fixation of EMD at Rs.85,00,000/- keeping in mind the requirements is not per se arbitrary; (iv) bids had not been opened and no material showed denial of fair competition; (v) mere registration as a dealer/distributor/wholeseller/supplier confers no eligibility to participate without satisfying tender conditions. Writ petition dismissed; no order as to costs. Tata Cellular, (1994) 6 SCC 651, referred.

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 4546 OF 2025

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(An application under Articles 226 and 227 of the Constitution of India)

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M/s. Meher Agencies, Cuttack …… Petitioner -Versus-

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1. State of Odisha, represented through its Commissioner-Cum-Secretary, Fisheries and Animal Resources Development Department, Odisha, Bhubaneswar.

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2. Directorate of Animal Husbandry and Veterinary Services through its Director, Mangalabag, Dist- Cuttack

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.…… Opp. Parties

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Advocates appeared:

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For Petitioner : Mr. Adwitiya Satpathy, Advocate

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For Opp. Parties : Mr. Swayambhu Mishra ,

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Additional Standing Counsel

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CORAM :

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MR. JUSTICE K.R. MOHAPATRA & MR. JUSTICE SANJAY KUMAR MISHRA

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-----------------------------------------------Heard and disposed of on 18.02.2025

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----------------------------------------------

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JUDGMENT

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By the Bench;

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1. This matter is taken up through hybrid mode.

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2. Petitioner in this writ petition prays for a direction to

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strike down Clauses 3.1, 5.2.5.1 and 5.2.5.2 of Detailed Tender

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W.P.(C) No. 4546 OF 2025

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Page 1 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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Call Notice (DTCN) vide bid reference No.02/2024-25, DAHVS Veterinary Care Equipment/Consumables/Ancillaries dated 1^st February, 2025 (Annexure-2).

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3. Mr. Satpathy, learned counsel for the Petitioner submits that Petitioner is a registered dealer, distributor, whole-seller and supplier of Veterinary medicines, drugs, chemicals, veterinary equipments and instruments. The Director, Directorate of Animal Husbandry and Veterinary Services, Government of Odisha- Opposite Party No. 2 came up with aforesaid DTCN under Annexure-2. But the impugned Clauses of the DTCN prevent the Petitioner to participate in the tender process. He drew attention to Clause 3.1 of the Tender Schedule. Clause 3 thereof deals with Earnest Money Deposit (EMD), which reads as under.

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“3.1.(3) BID Details

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3. Earnest	Bidders except MSE/OSME & START-	Ups
Money	are required to deposit EMD	of
Deposit	Rs.85,00,000/-(Rupees Eighty-Five Lakh)	as
	per Rule 212(1) of OGFR 2023 and v	ide
	MSME Department Notificat	ion
	No.566/MSME dt.24.01.2024 as bid secur	ity.
	The OSME/Local MSE & Start-Ups	of
	Odisha are exempted to furnish the EMD.	To
	claim exemption the bidders must have	to
	submit the supporting documents.”

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4. It is his submission that the bidders except MSE/OSME and START-Ups are required to deposit EMD of Rs.85,00,000/(Rupees eighty-five lakh) as per Rule 212(1) of the Odisha General Financial Rules, 2023 (for brevity, ‘OGFR’) and vide

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W.P.(C) No. 4546 OF 2025

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Page 2 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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MSME Department Notification No.566/MSME dated 24^th January, 2024, the Petitioner is not a MSE/OSME and STARTUp unit. Thus, it is not exempted from depositing the EMD and is required to make a deposit of Rs.85,00,000/- as EMD along with the tender document.

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5. He further submits that Clause 5.2 of DTCN deals with Pre-Qualification of Bidders. Clauses 5.2.5.1 and 5.2.5.2 thereof are relevant for consideration, which read as under.

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“5.2.5.1 Proof of annual average turnover (Manufacturers/Importer) of Rs.4.50 Cr (Four Crore Fifty Lakh) or more in any three (3) consecutive financial years during 2018-19, 2019-20, 2020-21, 202122 & 2022-23 certified by the Chartered Accountant mentioning the UDIN as per the format at Format T8. The turnover for Odisha SME will be relaxed by 90% that applicable to normal bidder as per MSME Deptt. Notification No 566 dt 24.01.2024.

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5.2.5.2 The Bidder (manufacturer, supplier, distributor, importer) must have 3 (three) years' experience in supplying Veterinary equipment and instruments of its own manufacturing or reputed manufacturers of National level to Central & State Government / semi Govt. organizations, PSUs with annual average worth of Rs.4.00 Cr. or more in any three (3) financial years during 2018-19, 2019-20, 2020-21, 2021-22 & 2022-23. The Bidders are required to submit the proof of supply i.e. purchase order and the copy of invoice. The Odisha SME are fully exempted from past experience criteria as per MSME Deptt. Notification No.566 dt 24.01.2024.”

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6. It is his submission that the Clause 5.2.5.1 makes it clear that bidders like Petitioner should have annual average turnover of Rs.4,50,00,000/- (Rupees Four Crore Fifty Lakh) or more in any three consecutive financial years during 2018-19, 2019-20, 202021, 2021-22 and 2022-23. Likewise, as per requirement of Clause

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W.P.(C) No. 4546 OF 2025

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Page 3 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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No.5.2.5.2 of DTCN, the bidder must have three years’ experience in supplying veterinary equipments and instruments of its own manufacturing or reputed manufacturers of National Level to Central and State Government/Semi Government Organizations, PSUs with annual average worth of Rs.4.00 crore or more in any three financial years, as above. Thus, by introducing these Clauses in DTCN, the Tender Inviting Authority did not leave level playing field for the bidders like the Petitioner. Lot of intended bidders like the Petitioner will be deprived of submitting their bids complying with the aforesaid bid conditions. He, therefore, submits that the aforesaid clauses are arbitrary and unreasonable and need to be struck down. He further submits that as per Rule 212 (1) of OGFR, the EMD should be within 2% to 5% of the estimated value of the goods to be procured. In the DTCN, no such amount has been stated. Thus, the authorities arbitrarily fixed an EMD at Rs.85,00,000/- and introduced unreasonable conditions as per Clause 5.2.5.1 and 5.2.5.2, which are liable to be struck down.

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7. Mr. Mishra, learned Additional Standing Counsel submits that in W.P.(C) No.1110 of 2025 (M/s. Winners Pharma, Cuttack Vs. State of Odisha and another), similar question came up for consideration. In the said writ petition, this Court vide judgment dated 16^th January, 2025 taking into consideration the ratio decided in the case of Tata Cellular Vs. Union of India ; (1994) 6 SCC 651 and Jagdish Mandal Vs. State of Odisha ; (2007) 14 SCC 517 along with other case laws, held that judicial

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W.P.(C) No. 4546 OF 2025

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Page 4 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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review of a tender condition can be made, if the Petitioner satisfies the following pre-conditions, i.e.,

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“(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

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(ii) Whether the process adopted or decision taken is so arbitrary and irrational that the Court can say: ‘ the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached’ , or

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(iii) Whether public interest is affected.”

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None of the aforesaid conditions is satisfied in the instant case. No mala fide against the Tender Inviting Authority is alleged by the Petitioner in the instant case and it is not stated as to how the impugned conditions are affecting public interest. Hence, the writ petition merits no consideration and is liable to be dismissed.

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8. Heard learned counsel for the parties and perused the materials on record, more particularly, the case of Jagdish Mandal (supra), wherein the Hon’ble Supreme Court, while dealing with the scope of interference in a tender, tender conditions or contractual matters in exercise of power of judicial review, held as under.

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“…… Therefore, a court before interfering in tender or contractual matters in exercise of

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W.P.(C) No. 4546 OF 2025

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Page 5 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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power of judicial review, should pose to itself the following questions:

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(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

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Whether the process adopted or decision made is so arbitrary and irrational that the court can say: ‘the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”;

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(ii) Whether public interest is affected.

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If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licenses, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.”

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9. Thus, as per the settled position of law, this Court has a very limited scope of judicial review in tender and contractual matters. The case of the Petitioner has to be considered keeping in mind the ratio decided, as stated above.

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10. Mr. Satpathy, learned counsel for the Petitioner submits that Rule 212(1) of OGFR clearly stipulates that EMD should be 2% to 5% of the estimated value of the goods to be procured. In the instant case, no estimated value of the goods to be procured has been stated in the DTCN. He, therefore, submits that the tender condition requiring a bidder to deposit EMD of Rs.85,00,000/- is illegal and arbitrary. No specific allegation is made in the writ petition stating as to how such tender condition

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W.P.(C) No. 4546 OF 2025

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Page 6 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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is so arbitrary or irrational that a responsible tender authority like the Opposite Party No.2 in the instant case could have reasonably and in accordance with law introduced it as an essential condition. It is only stated that EMD is not in consonance with Rule 212 (1) of the OGFR, 2023.

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11. In a particular tender call notice, it is not always possible to state the estimated value of the goods to be procured, as in the instant case. However, keeping in mind the requirement of the goods to be procured, EMD of Rs.85,00,000/- has been fixed by the Tender Inviting Authority. That itself cannot be said to be arbitrary or mala fide unless a specific allegation is attributed. In the instant case, no such allegation has been made or material produced to appreciate the allegation. On a conspectus of the relevant tender conditions vis-à-vis the condition regarding deposit of EMD, it does not appear to be unreasonable.

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12. A feeble argument is made that bidders like the Petitioner will be deprived of participating in the tender process and there will be no fair competition or level playing field for the bidders like the Petitioner. As yet, the bids submitted by the intending bidders have not been opened. Thus, it is very difficult at this stage to accept the submission of Mr. Satpathy, learned counsel for the Petitioner, more particularly, in absence of any material in support of the same. There is also no material on record to come to a conclusion that imposition of condition is mala fide and unreasonable. The Tender Inviting Authority, applying its mind and taking into consideration the requirements, fixed

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W.P.(C) No. 4546 OF 2025

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Page 7 of 8

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Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Reason: Authentication Location: HIGH COURT OF ORISSA CU TTACK Date: 21-Feb-2025 16:27:31

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certain conditions in the tender, which cannot be said to be illegal, arbitrary or mala fide in absence of any material. Only because the Petitioner is a registered dealer, distributor, wholeseller and supplier of Veterinary medicines, drugs, chemicals, veterinary equipments and instruments, that itself would not make the Petitioner entitled or eligible to participate in the tender process for procurement of materials it is dealing with, like the instant one, if it does not satisfy the tender conditions in the DTCN.

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12.1 Further, the conditions so imposed cannot be said to be against the public interest. No such allegation or averment is also made in the writ petition.

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13. In that view of the matter, the writ petition merits no consideration and is accordingly dismissed. In the circumstances, there shall be no order as to costs.

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Urgent certified copy of the order shall be supplied as per rules, if applied for.

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(K.R. Mohapatra) Judge

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(S.K. Mishra) Judge

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Orissa High Court, Cuttack, Dated 18^th February, 2025/Kanhu

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W.P.(C) No. 4546 OF 2025

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Page 8 of 8

M/S. Meher Agencies, Cuttack v. State of Odisha

Case brief

What is this about?

What did the court decide?

M/S. Meher Agencies, Cuttack v. State of Odisha

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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