M/S Prateek Contractor Through Its Proprietor Prateek Chawla vs. Mp State Agriculture Marketing Board

Held

The Court held that the conditions imposed in the circular dated July 25, 2023, and the NIT dated February 7, 2025, requiring three years of experience in a Government Department or Undertaking or a Scheduled Bank, appear to be without any rational basis and are arbitrary. The Court found these conditions to be unsustainable in the eyes of law. The Court distinguished the present case from the cited case of Indermani Mineral, noting that the nature of the work in that case justified specific experience requirements, unlike the housekeeping work in question. The Court also referenced principles from Michigan Rubber (India) Limited, emphasizing that while tender conditions are generally within the executive's domain, they are subject to judicial review if found to be arbitrary or unreasonable. Consequently, the NIT dated February 7, 2025, was quashed, and the conditions appended in Schedule II of the circular dated July 25, 2023, were also quashed. The Court directed Respondent No. 3 to issue a fresh NIT.

Facts

The petitioner, M/s Prateek Contractor, has filed a writ petition challenging a circular dated July 25, 2023, issued by the MP State Agriculture Marketing Board, and an advertisement dated October 7, 2024, issued by Respondent No. 3. The circular and advertisement mandated three years of experience in a Government Department/Undertaking/Nationalized Scheduled Bank for selection as a contractor for housekeeping work in Krishi Upaj Mandi Samitis. The petitioner, who had been satisfactorily performing housekeeping work for Respondent No. 3 since November 30, 2022, and whose contract had been extended twice, argued that these new conditions were arbitrary and discriminatory, preventing him from participating in the subsequent tender process initiated by an advertisement dated February 7, 2025. The respondent argued that the petitioner's contract had expired and the new conditions were based on a government memorandum and were commercially sound.

Key Issues

1. Whether the condition mandating three years of experience in a Government Department/Undertaking/Nationalized Scheduled Bank for housekeeping work is arbitrary, illegal, and unconstitutional, violating Article 14 of the Constitution of India? (Petitioner's contention: Yes, it debars new entrants and is unreasonable for housekeeping work. Respondent's contention: No, it is based on a government memorandum and is a commercial decision within the executive's purview, citing precedents on commercial transactions and tender conditions.) 2. Whether the conditions requiring audited accounts for the last three years and a minimum annual turnover of ₹20 Lakhs, duly certified by a Chartered Accountant, are discriminatory and violative of Article 14 of the Constitution of India? (Petitioner's contention: Yes, these conditions are discriminatory and prejudice participation. Respondent's contention: Not explicitly addressed, but impliedly part of the commercial decision-making process.) 3. Whether the impugned tender conditions are sustainable in law, considering the petitioner's satisfactory performance and the nature of the work? (Petitioner's contention: No, they are unjust, unreasonable, and arbitrary. Respondent's contention: The contract expired, and the new tender conditions are validly imposed.)