M/S Sumeet Security Service, Nayagarh vs. State Of Orissa

Held

The Court held that the decision-making process in awarding contracts is subject to judicial review to check for mala fides, unreasonableness, or arbitrariness. However, constitutional courts are expected to exercise restraint and not substitute their views for administrative authorities unless the decision is perverse. Citing precedents like Jagdish Mandal and Michigan Rubber (India) Limited, the Court noted that interference under Article 226 is warranted only if the process adopted or decision made is mala fide, intended to favour someone, or so arbitrary and irrational that no responsible authority could have reached it, or if public interest is affected. In the present case, the Court found no infirmity in the decision-making process of the tendering authority in rejecting the petitioner's bid based on the submitted financial bid format (F2). The Court concluded that the petitioner's bid was rejected due to the submission of an incomplete financial bid format, and no illegality or irregularity was found in the authority's decision. Therefore, the writ petition was dismissed.

Facts

M/s Sumeet Security Service, Nayagarh (the petitioner) filed a writ petition challenging an order dated 01.11.2022 by the tender committee, which rejected its entire financial bid format (F2) for outsourcing manpower services at Government Health Institutions in Nayagarh. The rejection was based on the submission of an incomplete financial bid format. The petitioner had qualified in the technical bid and was provisionally selected. The tender was issued by opposite party no.2 on 30.06.2022. The petitioner submitted its bid, attended the financial bid meeting, and subsequently submitted a representation and legal notice. The impugned order was passed in response to these actions.

Key Issues

1. Whether the order dated 01.11.2022 (Annexure-6), rejecting the petitioner's financial bid format (F2), is sustainable in law, given that it was passed without assigning specific reasons for the alleged incompleteness? (Question of law) Petitioner's contention: The order is unsustainable as it lacks specific reasons for the alleged incompleteness of the financial bid format (F2), violating principles of natural justice. Revenue's contention: The petitioner's bid was rejected because Form-F2 was submitted incomplete, specifically at Column-f (total per personnel per month) where annual service charges were excluded, and the quoted service charge of Re.1 per bill resulted in a fraction when applied to 154 workmen, which is not permissible. Therefore, no illegality or irregularity was committed by the authority.