Facts of the case: BVG (The petitioner) was awarded acontract by the respondent-Navi Mumbai Municipal Corporation (for short ‘the Corporation’) inJanuary 2016, fora period offive years forthe work of mechanisedhousekeeping and multi-purpose(patient care) servicesin its health centres(three general hospitalsand three maternityand child health centres),and which cameto be terminatedby the Corporation on 15March 2017. BVG, however, challenged the pre-qualification criteria/eligibility condition in the fresh tender issued for the same work, in two petitions. The issuein these writpetitions revolves around afresh tender issuedby the Corporationfor the samework, interalia prescribing a pre-qualification criteriabeing an eligibilitycondition providing that “the contractorswhose work contractis terminated due tounsatisfactory services or are black listedwould not beeligible to participate inthe tender". The causeof action inboth these petitionsis identical namely thenew tender forthe abovesaid work,albeit the tender noticesissued by theCorporation are ofdifferent dates. Contention of petitioner:
BVG, represented by Senior Advocate VA Thorat, argued that the qualification criterion must be declared illegal, as, by virtue of such a condition, the petitioner stood prohibited from participating in the tender in question issued by the Corporation. He argued that the "real effect" of the condition is that the petitioner stands blacklisted, without being heard.Contention of respondent: Advocate Sandeep Marne, on behalf of the Corporation, submitted that the Corporation being the tendering authority, had the freedom to insert a tender condition which is in the best interest of the Corporation, hence there is nothing arbitrary and/or illegal to impose such a condition.
Observation of the court: The bench held that the power of judicial review in contractual matters concerning the State, is limited. The concern of the Court in exercising such powers would be to prevent any arbitrariness, discrimination, malafides in the tender process, so as to ensure adherence of fairness in the State action.
“It is not the function of the Court to act as a super board, or with the zeal of a pedantic school master substituting its judgment for that of the administration. The duty of the court is to confine itself to the question of legality of the tender process on the touchstone of Article 14 of the Constitution,” court held.The bench said that:
“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 but must be free from arbitrariness not affected by bias or actuated by mala fides. Quashing decisions may impose heavy administrative burden on the administration and would lead to increased and unbudgeted expenditure.”The bench held that the Court does not sit as an appellate authority over the tendering authority, but merely reviews the manner in which the decision was made. It is to be noted that the grounds uponwhich an administrative actionis subject to controlby judicial reviewis classified onthree counts firstly,Illegality, secondly, Irrationality and thirdly Proceduralimpropriety. The court further held that It is also settled that the "terms of the invitation to tender" cannot be open to judicial scrutiny as an invitation to tender is in the realm of contract. The bench therefore dismissed both of BVG's contentions; first challenging such a condition, second that it resulted in implied blacklisting.
we reject thecontention as urged onbehalf of thepetitioner of anyblacklisting of thepetitioner by the Corporationby providing theimpugned pre-qualification criteria.[READ JUDGMENT]