Judicial Review Of Tender Conditions Is Limited: Andhra Pradesh High Court

The bench of Justice Ravi Nath Tilhari observed, “formulation of tender invitation conditions i.e as to what conditions are to be incorporated falls within the administrative domain of the authority. The scope of judicial review of such conditions is limited.”

The petitioner filed a writ petition to declare two conditions - namely, condition no. 2 and condition no. 19 - in the tender invitation notice for scanning, printing, and serving spot bills in consumer premises, etc issued by Superintendent Engineer, Andhra Pradesh State Power Distribution Corporation Limited (APSPDCL) as illegal and arbitrary, and requested their quashing.

The petitioner's counsel argued that the condition no. 2 of the tender, which requires participants to quote supervision charges at 0% minimum and 6.5% maximum, is not in the interest of the public at large and violates the principle of equal treatment.

The counsel for the petitioner submitted that tender Condition No. 19 stipulates that each Electricity Revenue Office (ERO) be considered as a separate unit, which means bidders cannot be awarded a spot work of more than one ERO anywhere in the APEPDCL area. Furthermore, the same person or agency cannot be awarded work in multiple EROs. The counsel argued that this condition violates the right to practice any profession, or to carry on any occupation, trade or business, guaranteed by Article 19(1)(g) of the Constitution of India.

Furthermore, the counsel for the petitioner submitted that in previous tender invitations, no such conditions were imposed, but in the current tender, these conditions have been included.

The counsel for the respondent, APSPDCL, submitted that the tender conditions are not arbitrary and do not violate the principles of equality. It was argued that any person who meets the eligibility criteria can participate and must comply with the conditions, which apply equally to all bidders.

After hearing both parties, the court opined that the submission by the petitioner's counsel that the impugned conditions violate the fundamental right under Article 19(1)(g) of the Constitution,  is unsustainable. It referred to Erusian Equipment and Chemicals v. State of West Bengal wherein the Apex Court held that no person has a fundamental right to insist that the Government must enter into a contract with him.

The Court further explained that it is well settled that no person can claim a fundamental right to carry on business or trade with the Government.

The Court referred to the Supreme Court judgment in Directorate of Education and others vs. Educomp Datamatics Ltd and others wherein it was held that the terms and conditions of the tender are prescribed by the Government bearing in mind the nature of contract and in such matters, the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the Court to say as to whether the conditions prescribed in the tender under consideration were better than the one’s prescribed in the earlier tender invitations, the Court added.

The Court also referred the case Michigan Rubber (India) Limited vs. State of Karnataka and others, wherein Apex Court held that in the matter of formulating ,conditions of a tender document and awarding a contract greater latitude is required to be conceded to the State authorities and unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted.

The High Court concluded that the fact that previous tender invitations did not contain conditions 2 and 19 does not prevent the authority from imposing different conditions in the present invitation.

Consequently, the writ petition was dismissed.

Case Title- Nallacheruvu Obulesu v.State of Andhra Pradesh & ors.

Citation: 2023 LiveLaw (AP) 16

Counsel for the Petitioner: Mr P. Sai Surya Teja

Counsel for the respondents: Government Pleader for Energy for the 1st respondent, Mr V. R. Reddy Kovvuri, learned standing counsel for the respondents 2 and 3.

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