LexDELHI DEVELOPMENT AUTHORITY AND ANR. versus M/S. UEE ELECTRICAL ENGG. (P) LTD. AND ANR.
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A DELHI DEVELOPMENT AUTHORITY AND ANR. v. MIS. UEE ELECTRICAL ENGG. (P) LTD. AND ANR. MARCH 19, 2004 B (S. RAJENDRA BABU, ARIJlT PASA YAT AND G.P. MATHUR, JJ.] Administrative Law: Administrative action-Judicial review-Grounds for-Development C Authority invited tenders for certain work-A company also submitted a tender-Subsequently, the Director of the said company went to the office of the Authority and assaulted one of its employees for not handing over certain Jiles-The Authority, therefore, blacklisted the company and awarded the contract to another company-High Court held that the Director and the D company were two separate legal entities and the Director's unbecoming act should not stand in the way of awarding the contract to the compa1'.v- Correctness of-Held: Administrative action is subject to control by judicial review on the grounds of "illegality", "irrationality" and "procedural impropriety"-The test is to see whether there is any infirmity in the decision- making process and not the decision itself-Jn the instant case the Authority liad not acted in a mala fide manner or with oblique motives-Hence, the action of the Authority not open to judicial review-High Court judgment set aside. The appellant-authority invited tenders for the supply and installation of Clear Water Boosting Pumping Station. The respondent No. 1- company also submitted a tender. Subsequently, the Director of respondent No. I - company went to the appellant's office and assaulted one of its employees for not handing over certain files. The price bid was opened and the respondent No. I - company was declared a successful bidder. However, the Works Advisory Board of the appellant - Authority, on the recommendation of the Contractor Registration Board, decided not to consider the tender of respondent No. I - company and awarded the contract to respondent No. 2. The appellant !" - authority, after issuing a show cause notice to the respondent No. I - :ii. 286 i ·l D.D.A. v. UEE ELECTRICAL ENGG. (P) LTD. 287 company, blacklisted it for 5 years due to the unbecoming conduct of its A Director. Being aggrieved respondent No. I - company filed 'a writ petition before the High Court challenging the award of the contract to respondent No. 2. The High Court held that the Director of the respondent No. I - company and the company itself were two separate legal entities and even B if any unbecoming act was done by the Director, that should not stand in the way of the contract being awarded to the respondent No. I - company. 1 .} Hence the appeal. . )~ On behalf of the appellant, it was contended that the scope of judicial C review of administrative action was very limited; and that unless there was a flaw in the decision-making process, there was no scope for any interference. Allowing the appeal, the Court HELD: I. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is "illegality", the second "irrationality" and the third "procedural impropriety". [292-BJ D Council of Civil Unions v. Minis fer for the Civil Service, (1984) 3 All. E ER. 935, referred to. 2.1. Courts are slow to interfere in mattc1·s relating to administrative functions unless the decision is tainted by any vulnerability such as, lack of fairness in procedure, illegality and irrationality. Whether the action falls within any of the categories has to be established. Mere assertion in F that regard would not be sufficient. [292-C-DJ "'• 2.2. The law is settled that in considering a challenge to administrative decisions courts will not interfere as if they are sitting in appeal over the decision. In essence, the test is to see whether there is any infirmity in the decision-making process and not in the decision itself. G Union of India v. G. Ganayutham, [1977) 7 SCC 463 and Indian Railway Construction Co. ltd. v .. Ajay Kumar, [2003) 4 SCC 579, relied on. ~ (292-E-FJ Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., All E.R. 682 (KB), referred to. H 288 SUPREME COURT REPORTS [2004) 3 S.C.R. A 3.1. Doubtless, he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by the authority of its powers. While the indirect motive or purpose, or bad faith or personal ill-will is not to be held established except on clear proof thereof, it is
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