05 Jan 2121

While judicial review of contractual concerns may be exercised, such review must be limited to the decision-making process - Gauhati High Court

Case : M/S Tata Motors Ltd. v. The State of Assam and Ors. WP(C)/4621/2020

Court : Gauhati High Court

Bench : Justice Sanjay Kumar Medhi

Decided on : 05 Jan 2121

The Relevant Statutes

Article 226, 12 of the Constitution of India

Brief Facts & Procedural History

1. The Mission Director of the National Health Mission of Assam (NHM) has issued a tender notice for the purchase of 100 Type C Ambulances-R. The aforementioned notice was posted on the GeM portal (Government e-Marketplace). The petitioner and respondent no. 5 had each submitted their bids in response to the same. The bid of respondent no. 5 was deemed to be the lowest after evaluation (L1). However, the petitioner claims that upon careful examination of respondent no. 5's credentials and testimonials, it was discovered that respondent no. 5 had shared credentials with M/S Force Motors Ltd., including a certificate issued by the Automotive Research Association of India (ARAI) for Type C ambulances.

2. The petitioner claims that because respondent no. 5 claimed to be an Original Equipment Manufacturer (OEM), it could not have shared OEM papers from another company with the GeM during the current contract process. It is also the petitioner's position that the main discrepancy was notified to the GeM, which in its reply via email was prima facie satisfied regarding the said mismatch, stating that the ARAI certificate number belonged to another organisation. As a result, it was requested that the problem be reported to the GeM as an incident so that appropriate action might be done. Nonetheless, the petitioner learned that, despite conceding the discrepancy, the contested purchase order was issued in favour of respondent no. 5. As a result, a writ petition was issued.

3. High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh had ordered that the case be listed for the motion for the Department to place directions and that the status quo be maintained until the next date set. High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh upheld the temporary order, which remains in effect to this day.

The Issue(s) of the Case

Whether the extra-ordinary jurisdiction of High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh conferred by Article 226 of the Constitution of India has been sought to be invoked by filing the present writ petition?

The Observations of the Court

1. The Honourable High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh observes that in the case of the availability of Service Centres, it is stipulated that either the Bidder or the OEM must have a functional Service Centre in the State of Assam, and while M/S Force Motors Ltd. admittedly has Service Centres in the State, the aforementioned ground is also unavailable to the petitioner.

2. The Honourable High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh also observes that it should also be noted that the current challenge is brought by an unsuccessful Bidder, whose prices are admittedly greater than those of respondent no. 5. Though the abovementioned stance may not be an absolute bar to presenting a challenge, it does necessitate an examination of the grounds of the challenge as well as the petitioner's actions. The petitioner had admittedly used the dispute resolution procedure by bringing an occurrence to the attention of the proper authorities, which was ostensibly noted. However, the incident was closed by the GeM itself dismissing the claim, and the petitioner has not disputed this closure. High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh, which has jurisdiction under Article 226 of the Indian Constitution, is a Court of Equity in which the conduct of the parties in front of the Court is taken into account.

3. Referring to the case of Tata Cellular Vs. Union of India (1994) 6 SCC 651, It has been clarified that, while judicial review of contractual concerns may be exercised, such review must be limited to the decision-making process and the Courts should refrain from interfering unless the decision-making process is grossly illegal or seems to be unreasonable and arbitrary. The Hon'ble Supreme Court has also emphasised the need for authorities to have "free play in the joints" while yet adhering to the public interest.

4. Referring to the cases Central Coal Fields Ltd. Vs. SLL-SML (2016) 8 SCC 622; Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. and Anr. (2016) 16 SCC 818; Municipal Corporation, Ujjain and Arn. Vs. BVG India Ltd. and Ors. (2018) 5 SCC 462; The Bharat Coking Coal Ltd. Vs. AMR Dev Prabha MANU/SC/0317/2020, decided on 18.03.2020, The Supreme Court has ruled that the owner/authority should be given considerable leeway to make judgments that are in the public interest. What's important to remember is that the tender is for the procurement of specialist ambulances in light of the current COVID 19 outbreak, and any delay would be entirely against the public interest.

The Decision Held by the Court

The Honourable High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh held that the petitioner has failed to establish a case for High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh to intervene in the exercise of its powers under Article 226 of the Indian Constitution. As a result, the writ petition is dismissed, and the temporary injunction is lifted. Given that the writ petition was filed on November 2, 2020, before the petitioner's incident was rejected, the High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh does not believe it is appropriate to impose any costs on the parties.

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