SUBODH KUMAR SINGH RATHOUR versus THE CHIEF EXECUTIVE OFFICER & ORS.

Citation: [2024] 7 S.C.R. 532 · Decided: 09-07-2024 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Case Allowed

Cited by 5 judgment(s) · cites 23 · see the full citation network in Lexace

Judgment (excerpt)

[2024] 7 S.C.R. 532 : 2024 INSC 486
Subodh Kumar Singh Rathour  
v. 
The Chief Executive Officer & Ors.
(Civil Appeal No. 6741 of 2024)
09 July 2024
[Dr. Dhananjaya Y. Chandrachud, CJI,  
J.B. Pardiwala* and Manoj Misra, JJ.]
Issue for Consideration
Scope of judicial review of the actions of the State in the matters 
relating to contract/tender disputes under writ jurisdiction; whether 
the action on the part of the respondent in cancelling the tender 
was amenable to the writ jurisdiction of the High Court; if so, 
whether the said action could be termed as arbitrary or unfair 
and in consequence of violation of Article 14 of the Constitution 
of India.
Headnotes†
Contract/tender disputes – Judicial review – Scope – Tender 
awarded to the appellant on Public-Private Partnership basis 
for maintenance of two underpasses was cancelled by the 
respondent-Kolkata Metropolitan Development Authority 
stating that there was a technical fault therein and also on 
account of a change in policy whereby, the operation & 
maintenance of the concerned underpasses was handed over 
to another authority – Action to cancel the tender, if amenable 
to writ jurisdiction and whether was arbitrary and influenced 
by extraneous considerations:
Held: The tender was not terminated pursuant to any terms of the 
contract subsisting between the parties – Respondent cancelled 
the tender saying that there was technical fault in the tender 
that was floated – Thus, the respondent exercised powers in its 
executive capacity as the action to cancel the tender fell outside 
the purview of the terms of the contract – Hence, the present 
matter is not purely a contractual dispute even if related to a 
tender, as the dispute involves a public law element – Although 
there is no discharge of a public function by the respondent 
* Author
[2024] 7 S.C.R. 
533
Subodh Kumar Singh Rathour v. The Chief Executive Officer & Ors.
towards the appellant yet there is a right to public law action 
vested in him against the respondent in terms of Article 14 – Thus, 
writ petition filed by the respondent was maintainable and the 
relief prayed for could have been considered by the High Court 
in exercise of its writ jurisdiction – On facts, just a month prior to 
cancelling the tender, the respondent issued work stop notice to 
the appellant, asking to stop all work in respect of the tender in 
view of the handing over of the operation & maintenance of the 
concerned underpasses by the respondent to another authority, 
Kolkata Municipal Corporation – Appellant pointed out that the 
work stop orders were misconceived as the respondent continued 
to retain the custody as well as the advertisement rights of the 
concerned underpasses – As such the respondent even after 
the change in policy, remained well within its rights to continue 
charging license fee in lieu of the advertisement rights by way 
of the tender issued to the appellant – Change in policy had no 
bearing on the cancellation of the tender – It was only after the 
appellant highlighted why the work stop orders were misconceived 
and uncalled for, that the respondent immediately flipped its stance 
and in its notice of cancellation that was issued just 1-month 
later, it attributed ‘technical faults’ in the tender – Furthermore, 
although the internal-file notings mention about the policy change 
in the operation and maintenance of the concerned underpasses, 
however, the cancellation of the tender for work was neither due 
to any technical fault nor due to the policy change but it was at 
the behest of the concerned minister who suggested to cancel the 
tender – The concerned minister’s decision to cancel the tender on 
account of purported ‘change in policy’ was without any application 
of mind, capricious and influenced by malice – Cancellation of the 
tender was not in public interest – Present lis is a classic case of 
an arbitrary and capricious exercise of powers by the respondent 
to cancel the tender on the basis of extraneous considerations 
and at the behest of the concerned Minister-In-Charge – Notice 
of cancellation was non-est, quashed – Impugned judgment of 
the High Court upholding the decision of the respondent to cancel 
the tender, set aside. [Paras 60-62, 103-105, 107, 122]
Contract/tender disputes – Involving State or its 
instrumentalities  – Administrative actions of the State – 
Judicial Review – Shift in the scope of – Earlier position of 
law; misconception of the State as a La

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