LexM/S. MONARCH INFRASTRUCTURE (P) LTD. versus COMMISSIONER, ULHASNAGAR MUNICIPAL CORPORATION AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
l .,
.... ..,.
-.... ,.
.;
MIS. MONARCH INFRASTRUCTURE (P) LTD.
A
v.
COMMISSIONER, ULHASNAGAR MUNICIPAL
CORPORATION AND ORS.
MAYS, 2000
B
[S. RAJENDRA BABU AND S.N. PHUKAN, JJ.]
Contract-Award of-Tender process-Eligibility conditions pre-
scribed-Prescribed conditions altered after last date for submission of
tenders but before their opening-Tenderer not satisfying said conditions c
awarded contract-Challenged-Held, Tenderer not fulfilling prescribed
conditions on last date for submission of tenders-If tender terms/conditions
altered after last date for submission of tenders, fresh tender process was only
alternative permissible-Modified tender conditions cannot be restricted to
existing bidders only-Award quashed-Arbitrariness-Constitution of India,
D
Article 14.
Judicial review-Scope of-Tender process-Award of contract-Ad-
ministrative action-Intervention by court-When-Held, when Government
""" . ...
action is arbitrary, discriminatory, contrary to public interest or malafide-
Constitution of India, Article 14.
E
Respondent - Municipal Corporation issued notice inviting tenders
for appointing agents for collection of Octroi. Clauses 6(a) and 6(b) were
qualifying conditions for tenderers. Tender of M was opened despite the
1
fact that it did not qualify said condition clauses on the ground that Clause
6(a) had been waived and upon finalisation of tenders, contract was awarded
F
in favour of M. Appellant-K filed writ petition challenging award of
contract to M which was allowed by High Court on the ground that
-
Municipal Corporation bad acted arbitrarily in considering bid of
M which did not fulfil the prescribed eligibility conditions for submission
of tenders as Clause 6(a) was deleted after last date for submission for
G
.,._
tenders. High Court did not accept next highest bid of K by restricting
application of modified tender conditions to only existing bidders but gave
liberty to Municipal Corporation to invite tenders afresh to enable every-
one to participate under modified tender conditions. Aggrieved by the
order of High Court, K & M have filed the present appeals.
H
1159
1160
SUPREME COURT REPORTS
[2000] 3 S.C.R.
A
Appellant-K contended the sequence of events indicated malafide on
B
the part of Commissioner of Municipal Corporation which affected sanc-
. tity of tender process; and that clauses 6(a) and 6(b) had been deleted in
new tender process to favour M.
This Court by an order allowed steps for calling tenders as directed
by High Court but directed not to finalise them 1 until further orders. M
made the highest offer in this tender process.
Disposing the appeals, the Court
C
HELD : 1. While public interest is paramount there should be no
D
arbitrariness in the matter of award of contract and all participants in the
tender process should be treated alike. The-legal position is thus - (i) The
Government is free to enter into any contract with citizens but the court
may interfere where it ~cts arbitrarily or contrary to public interest; (ii)
The Government cannot arbitrarily choose any persons it likes for enter-
ing into such a relationship or to discriminate between persons similarly
situated; (iii) ltis open to the Government to reject even the highest bid at
a tender where such rejection is not arbitrary or unreasonable or such
rejection is in public interest for valid and good reasons. Broadly stated,
the courts would not interfere with the matter of administrative action or
E
changes made therein -unless the Government's action is arbitrary or
discriminatory or the policy adopted has no nexus with the object it seeks
to achieve or is malafide. [1165-A-E]
F
G
H
2.1. The High Court was justified in setting aside the award of
contract in favour of M because it had not fulfilled the conditions relating
to Clause 6{a) of the Tender Notice but the same was deleted subsequent to
the last date of acceptance of the tenders. [1165-E-HJ
2.2. H a term of the tender having been deleted after the players
entered into the arena it is like changing the rules of the game after it had
began and, therefore, if the Government or the Municipal Corporation
was free to alter the conditions fresh process of tender was the only
alternative permissible. The course adopted by the High Court in the
circumstances is justified because by reason of deletion of a particular
condition the wider net will be permissible and a larger participation oExcerpt shown. Read the full judgment & AI analysis in Lexace.