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2018 (5) TMI 2128 - HC - Indian LawsScope of Judicial Review - Withdrawal of a Request of Proposal issued by the Union Ministry of Defence (MoD), for procurement of forty-five (45) Bird Detection and Monitoring Radar Systems - Accrual of enforceable rights - HELD THAT:- A long line of decisions of this Court settles the scope of judicial review in matters relating to award of contracts by the State and its instrumentalities. The Supreme Court, in TATA CELLULAR VERSUS UNION OF INDIA [1994 (7) TMI 307 - SUPREME COURT] reviewed the law on award of public contracts and held that The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free arbitrariness not affected by bias or actuated by mala fides. Again, in Master Marine Services Pvt. Ltd. v. Metcalfe and Hodgkinson Pvt. Ltd., [2005 (4) TMI 579 - SUPREME COURT], it was stated that the role of the Court is not to review or oversee the award of contract, on the merits of the decision, but rather consider whether the decision making was regular, legal, procedurally fair and untainted by mala fides. On reading of the above judgments, it is clear that the courts can review a tender process or tender stipulation, on grounds of proven procedural irregularity. In judicial review, a court under Article 226 of the Constitution reviews the decision-making process, its legality and procedural regularity and not the merits of the decision of the executive agency. The principal decision maker is the administrative or public agency - the uniform judicial view has been that public law review of tender matters ought to be exercised, judiciously. Such judicial review must be restrained to ensure that the choice or decision is made "lawfully" and not to exercise oversight over whether choice or decision is "sound". The state cannot be compelled to enter into a contract with any entity and ultimately even in tender related cases, commercial considerations ought to be paramount. In the present case, the Petitioner’ petition premised on its contention that it is the lowest bidder and therefore the Union MoD, should be directed to enter into a contract with it. This court is of the view however, that it is a settled principle of law that no vested right accrues on the lowest bidder and the government has the right to withdraw the bid with valid reasons - the MoD’ contentions that the Petitioner’ bid, if allowed to stand would have resulted in unfairness to other Indian bidders, because all of them tendered in Indian currency, whereas the Petitioner tendered in a manner that allowed it to hedge in foreign currency. This, according to MoD resulted in an unequal playing field, which compelled it to cancel and withdraw the bid. The decision to award a public contract is not based merely on factors such asfulfilment of technical qualifications and financial viability of the offer of a given bidder but much more. The vital public interest is a necessary condition, which invariably informs every decision of the executive authority or agency that is to award the contract - this Court is satisfied that the withdrawal of the RFP dated 30.04.2012 is not arbitrary and fresh RFP issued dated 31.08.2016 does not call for any interference - petition dismissed.
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