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Judgment
HARISH TANDON, CJ.
The tender was floated by the Director, Textbook Production and Marketing for supply of 70 GSM Maplitho reel paper (with Water Mark) (84 CM size) of 26450 MT on 11th September, 2026 with the condition that the paper sample shall also be included along with the bid document and the opening date of technical bid was fixed to 8th October, 2026.
The said tender notice contains several clauses including an eligibility criteria that the bidder must have past experience in supply of the maplitho virgin paper with water mark, at least 60% of the tender offered quantity or minimum supply of 11000 MTs of paper in each year in last three consecutive years to any Govt. Department /Govt. Organization/ Semi Govt. /Semi Govt. Organization. The said conditions incorporated in the tender document is the center to the dispute raised in the instant writ petition on the ground of being excessive, arbitrary and tailored to favour a person augmenting nepotism and favoritism and not have any relation to the object sought to be achieved.
It is not in dispute that a pre-bid meeting was held as objections and suggestions came to be filed by many intending bidders where the major issue was flagged over the said clause on two counts. Firstly, restricting the maplitho virgin paper with water mark shall eliminate the intending bidders as the water mark does not have any nexus with the printing of the textbook and, therefore, should be removed therefrom. Secondly, fixing supply of 60% of the tender offered quantity or minimum supply of 11000 MTs of paper in each year during the last three consecutive years to any Govt. Department /Govt. Organization/ Semi Govt. /Semi Govt. Organization is tainted with mala fide as many intending bidders may not have supplied in last three consecutive years and, therefore, the said tender is restricted to a few players in the said field which is opposed to the level playing field concept. Ultimately, a meeting was held and a corrigendum was issued on 30th September, 2026 reducing 11000 MTs to 10000 MTs.
The challenge is basically founded both on the incorporation of such clause in the tender document as well as the corrigendum being excessive and restricting the participation in the tender process by eliminating many intending bidders who have otherwise capacity to supply such papers.
Reliance is placed upon the tender floated by the state of West Bengal and State of Tamil Nadu which does not contain any such stipulation mainly, the supply of a specified quantity of the said paper during the last three consecutive years, in support of the contention that the said clause is not only offends Article 14, but also Article 19 (1) (g) of the Constitution of India.
Mr. Manoj Kumar Mishra, learned Senior Advocate vehemently submits that the authorities while floating the tender cannot incorporate any stringent condition which has no nexus to the object sought to achieve. He further submits that the said clause is not only arbitrary, but disturbs the core fabric of the level playing field concept, thereby denying the equal opportunity to the intending participants and restricting to some favoured person. In support of the same, he relies upon the judgment of the apex Court rendered in the case of Vinishma Technologies Pvt. Ltd v. State of Chhattisgarh and another [SLP (C) No. 24075 of 2025 decided on 6th October, 2026]. He thus submits that the said clause warrants interference by this Court under Article 226 of the Constitution of India.
Per contra, Mr. Saswat Dash, learned Additional Government Advocate refuted the contention of the learned Senior Advocate by contending that fixation of eligibility parameters by the tender inviting authorities should not be interfered with unless it fails to meet the test of reasonability. He further submits that it is within the domain of tender inviting authority to incorporate any condition in the tender notice and, therefore, the Court should be slow in interfering with the same except on well recognized parameters of law. He thus submits that the terms and conditions incorporated in the tender document has a nexus to achieve on a subjective satisfaction in order to ensure the seamless supply of the materials from capable participants and if the Court does not find any arbitrariness or capricious exercise of power, it does not erode the concept of level playing field and placed reliance upon division bench judgments of this Court in the case of M/s Utkal Suppliers, Berhampur, Ganjam v. Veer Surendra Sai Institute of Medical Science and Research, Burla, Sambalpur and another (W.P.(C) No. 19004 of 2025 decided on 18th December, 2025) and in the case of Biswajit Rath v. State of Odisha and another (W.P.(C) No. 1413 of 2025 decided on 9th January, 2026). He therefore submits that there is no unreasonableness or capricious exercise of powers in putting such condition into the tender notice and, therefore, the writ petition should be dismissed.
On the backdrop of the aforesaid facts and the submissions advanced by the rival parties through their respective counsel, the seminal point involved in the instant writ petition is whether the said Clause 4 (x), by which the condition with regard to at least 60% of the tender offered quantity or minimum supply of 11000 MTs of paper in each year in last three consecutive years to any Govt. Department /Govt. Organization/ Semi Govt. /Semi Govt. Organization, is an outcome of mala fide, arbitrariness, capricious exercise of power or does not meet the test of reasonability.
The facts succinctly narrated hereinabove are more or less undisputed in the sense that the instant writ petition is filed challenging the said Clause 4 (x) incorporated in the tender notice, which runs thus:
“4 (x) The manufactures must have past experience in supply of Maplitho Virgin Paper with water mark, at least 60% of the tender offered quantity or minimum supply of 11000 MTs of paper in each year during last three consecutive years to any Govt. Department/ Govt. Organizations/ Semi Govt./Semi Govt. Organizations (As per Annexure-D). Any deviation, the Director will have right to reject the tender.”
Though the time for opening of the technical bid was mentioned in the tender notice, yet the pre-bid meeting was held by the tender inviting authority on the basis of the objection and/or suggestion came from the petitioner. After the deliberation on such objection and/or suggestion made, the corrigendum was issued by reducing the quantity from 11000 MTs to 10000 MTs, obviously upon subjective satisfaction of the said tender inviting authority. The incorporation of a condition pertaining to supply of different quantity of materials in the preceding three years is to ensure the capability of a person for seamless supply of the said paper which are primarily used for printing of the textbooks, which is one of the integral part of the educational system. Any disruption in the midst of the printing of the textbook will hamper the continuous supply to meet the requirement and will ultimately impact the education system and the beneficiaries thereunder.
The aforesaid object can also be corroborated by the format used for technical tender where the Bidder must have a production capacity of 200 MT per day so as to ensure the continuous supply of the paper in the time bound manner.
The question often arises on the exercise of extra ordinary powers conferred under Article 226 of the Constitution of India when a challenge is made to any of the terms and conditions incorporated in the tender document and the apex Court in plethora of judgments have put a caution in interfering therewith. It has been highlighted in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., reported in (2005) 6 SCC 138 that the Writ Court should not act as an appellate Court to go deep into every bit of the administrative decision, but exercises such jurisdiction by merely reviewing the manner in which such administrative decision has been arrived. It has emphasized that in the event every administrative decision is interfered with by substituting its own decision without having any necessary expertise in the specific field, such decision would itself be fallible. The court must restrict the interference only in the event the manner in which the administrative decision is arrived percolate a sense of arbitrariness, unreasonableness and offending the constitutional ethos in the following:-
“12.After an exhaustive consideration of a large number of decisions and standard books on Administrative Law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, a fairplay 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 principles of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (See para 113 of the report SCC para 94.)”
In Michigan Rubber (India) Limited v. State of Karnataka, reported in (2012) 8 SCC 216, the Apex Court laid down the broad principles warranting the interference under Article 226 and has been succinctly elaborated and elucidated in the following:
23.From the above decisions, the following principles emerge:
(a)The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b)Fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
(c)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 unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
(d)Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e)If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.”
However in Subodh Kumar Singh Rathour v. Chief Executive Officer, reported in AIR 2024 SC 3784, the apex Court explained and expanded the concept of arbitrariness in the contractual field in the sense that if the Court finds a discernible principle emerging from the impugned act and arrived at the conclusion that it satisfies the test of reasonability, freedom to incorporate a condition in the context should not be readily upset in the following:-
“65.The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned action is arbitrary or not, is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, the performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that be you ever so high, the laws are above you.”
Both the coordinate bench decisions relied upon by Mr. Dash, learned Additional Government Advocate have reaffirmed the proposition of law laid down by the apex Court in the above noted decisions and unequivocally held that though the administrative action of the authorities in a contractual field is amenable to judicial review, but within the restricted parameters of arbitrariness, unfair treatment, unreasonableness, irrational and above all violative of Article 14 and 19 (1)(g) of the Constitution of India. Any discriminatory action manifest from the administrative action if opposed to level playing field doctrine, it restricts the participation amongst the particular class of persons without any discernible rationality in it.
In a recent decision rendered in Vinishma Technologies Pvt. Ltd. (supra), the apex Court was considering a case where the participation in the open tender was restricted amongst the intending bidders, who had an experience of supply of sports goods worth at least Rs.6.00 crores to the State Government agencies of Chhattisgarh in the last three financial years. The challenge was made that once an open invitation is ensued by the tender inviting authority in granting its largesse it cannot restrict the participation amongst the bidders who had the previous experience of supplying the said goods within the state of Chhattisgarh. It is held that such restriction closes the market to the outsiders in offering the competing price without any just cause and will disturb the equality principle. It also has an impact on the doctrine of the level playing field as it forecloses the doors for the others and intended to embrace the persons of a particular State. It is ultimately held that such restrictive clause is violative of Articles 14 and 19 (1)(g) of the Constitution of India in the following:
“20.Such a restriction, therefore, cannot be justified as reasonable within the meaning of 19(6) of the Constitution of India. The State while it enjoys the freedom to prescribe the conditions in the tender, cannot exercise that power in a manner that infringes upon constitutional guarantees, by closing the market to outsiders without just cause. The doctrine of level playing field requires that gates of competition be opened to all who are equally placed. The impugned tender condition excludes the competent and experienced suppliers, who may have executed contracts of far greater magnitude in other States or for the Central Government departments, from participating in the tender and has the impact of promoting cartelisation. The impugned condition operates as a closed door to outsiders and restricts the wider participation of bidders and restricts competition. The impugned tender condition, therefore, is violative of Article 14 and also offends Article 19(1)(g) of the Constitution of India.”
We do not have any scintilla of doubt in our mind on the proposition of law laid down in Vinishma Technologies Pvt. Ltd. (supra) as the participation cannot be restricted amongst the suppliers who have previously supplied the goods in any Government organization within the state of Chhattisgarh. Article 14 of the Constitution of India propagates the equality principle amongst the equals and any discriminatory act which creates a classification without any intelligible differentia is opposed to the said provision. The apex Court did not find any subjective satisfaction behind the incorporation of such restrictive clause nor did find any object which was sought to be achieved therefrom. It is no gain saying that the core object of inviting the open bid is to secure the large participation of eligible participants to have the competitive price while granting the largesse. It further aimed the equal participation embracing the competition amongst them in order to uphold the doctrine of level playing field. The Court having no expertise should not substitute its decision over the decision of the administrative authorities, as such decision may at times be fallible. The Court should not readily interfere with such administrative decision unless it is found to be arbitrary, capricious, whimsical and disturbs the constitutional mandate. Every administrative action does not call for interference and, therefore, the Court must put a great caution in interfering therewith. The Court must respect the freedom into the tender inviting authorities for incorporating any terms and conditions which is reasonable, rational and does not inculcate any sense of arbitrariness or mala fide. All tender inviting authorities are free to tailor the terms and conditions on a need basis and even if some of the State has not incorporated a particular condition, does not render such condition liable to be interfered with.
We thus do not find any arbitrariness in the said clause whereby the intending participants must have supplied such papers in the last preceding years. Apart from the same, the tender inviting authority held the pre-bid meeting and reduced the quantity upon a deliberation, which does not warrant any interference in the instant writ petition.
The writ petition is thus dismissed.