Andhra Pradesh High Court – Amravati
M/S Shri Shivashakthi Construction vs The Andhra Pradesh Power Development … on 10 April, 2025
APHC010134882025
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3331]
(Special Original Jurisdiction)
THURSDAY, THE TENTH DAY OF APRIL
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
WRIT PETITION NOs: 6866 and 7553 of 2025
WRIT PETITION NO: 6866/2025
Between:
M/s Devaraj Infratech Pvt Ltd. ...PETITIONER
AND
The Andhra Pradesh Power Development Company ...RESPONDENT(S)
Limited and Others
Counsel for the Petitioner:
1. J UGRANARASIMHA
Counsel for the Respondent(S):
1. THENEPALLI NIRANJAN SC FOR CENTRAL. GOVT
2. Nagaraju Naguru,Standing Counsel For APGENCO
WRIT PETITION NO: 7553/2025
Between:
M/s Shri Shivashakthi Construction ...PETITIONER
AND
The Andhra Pradesh Power Development Company ...RESPONDENT(S)
Limited and Others
Page 2 of 22
Counsel for the Petitioner:
1. KASA JAGANMOHAN REDDY
Counsel for the Respondent(S):
1.
The Court made the following:
:: COMMON ORDER :
:
Since the subject matter in the above writ petitions is the same, they are
disposed of by this common order.
2. The above writ petitions are filed to declare the alleged tailor-made
tender conditions prescribed in the impugned tender Notice No.RFx
No.610001880 dated 17.02.2025 issued by respondent No.1, as illegal,
arbitrary and a violation of Articles 14 and 19(1) (g) of the Constitution of India.
3. The averments, in the affidavits, in brief:
The petitioners are reputed engineering companies with good
experience in civil contracts, ash and coal transport. The petitioners undertook
various works under the Government Organization / PSUs. In pursuance of
using the fly ash produced by the thermal power stations, established either
by the Government of India or the State GENCO, for laying the roads and
manufacture of bricks, respondent No.1 issued, impugned tender, for
transportation of the fly ash produced by SDSTPS Ash Dyke at Nelatur (v),
Muthukur (M), SPSR Nellore District to the NHAI road projects around 300 Km
radius of SDSTPS. The estimated contract value was Rs.270 crores, and the
maximum awardable contract is fixed at Rs.90 crores for three agencies
selected as L1 to L3.
b) The petitioners meet the criteria to compete in bidding for the
allocable estimated value of Rs.90 crores worth of contract, as per the criteria
prescribed, in the previous tender notices, issued for similar work, estimated
Page 3 of 22at Rs.32 crores (Ex.P2). In the previous tender, the eligibility criteria was to
possess experience of ‘minimum executed value’ of Rs.8 crores within the
preceding five years i.e. 1/4th of ECV through any of the three routes, viz.,
Route (1): Construction of ash dyke / embankment / earthen dam/road; or
Route (2): The work of Transportation through road (including
loading/unloading of ash / any earthen material / any mineral/coal; or Route
(3) The work of ‘earth work including loading/unloading and transportation by
raod’ in any civil works (other than those listed above in Route – 1). II) The
Average Annual Turn Over (AATO) during the preceding 3 consecutive
financial years should not be less than 1/4th of the ECV. III) No solvency
Certificate was insisted, except for the Net worth Certificate.
c) The petitioners are also eligible under the general criteria
prescribed by the Central Vigilance Commission guidelines (for short ‘CVC
Guidelines’), Ex.P4. As per CVC, during the preceding years, the executed
value of the work of similar nature has been truncated from a 5 to 10-year
block period.
d) Whereas, in the tender notice dated 17.02.2025, impugned in the writ
petition, respondent No.2 has altered the technical eligibility criteria of the
tender (1) a prime contractor, (2) should have executed the similar nature of
works (transportation of Ash to thermal power plants) of a value of not less
than 45 crores in any one year, (3) within the preceding three years reckoned
from the date of bid opening.
e) The estimated value of Rs.270 crores is allocable to L1 to L3 with a
ceiling of Rs.90 crores, as per the scope of the work. As per the CVC
guidelines, the minimum executed value of the work of similar nature during
the preceding years has been shortened from 5 to 10 year block period and
mentioning of a three year block period with 50% of the contract value, in the
present tender notification, would eliminate many of the eligible contractors
like the petitioners.
Page 4 of 22
f) Limiting the block period for the minimum contract value and
recognizing only one route for assessment and prescription of prime
contractor in the qualifications has no nexus for the purpose. The new
conditions create an artificial class and disqualify many agencies, including
the petitioner, from the bidding. The eligibility criteria in the impugned
tendering process disable the deserving agencies from competing in bidding,
without any nexus to the purpose. Hence, it suffers from the vice of invidious
discrimination, attracting Article 14 of the Constitution of India.
4. A counter affidavit is filed in W.P.No.6866 of 2025, on behalf of
respondents 1 and 2. It is contended, inter alia, that the National Highways
Authority of India (NHAI) has requested for transportation of pond ash for
NHAI project of “Six laning of dedicated port road to Krishnapatnam Port from
Km. 0+000 Km to Km 18+0000 under Bharatmala Pariyojana Phase-1.”
Because of the said requirement, a tender notice No.510000214 dated
15.03.2024 was floated in consonance with G.O.Ms.No.94 dated 01.07.2003
and G.O.Ms.No.73 dated 27.06.2009, for transportation of pond ash for the
said project at an estimated contract value of Rs.32 crores. Thereafter, on the
further request of NHAI for transportation of pond ash for two road projects, at
a maximum distance of 75 and 175 Kms, the subject tender notification was
issued. The value is much higher when compared to the previous contract,
and can be executed without being bootstrapped, only if the prospective
bidders are experienced and have the wherewithal to execute the contract.
The criteria were changed to suit the nature of the requirement. The estimated
contract value is Rs.270 crores, which will be split among three successful
bidders.
b) The CVC guidelines are only a directory and recommendatory. The
compliance thereof cannot be enforced through the Court of Law. Guidelines
are different from statutory Rules. Cricular No.13/6/09 dated 11.08.2009
elaborates the jurisdiction of the Commission and demarcates the ambit of
Page 5 of 22
CVC. Respondents 1 and 2 are not Central Government Public Sector
Undertakings and do not feature in the list provided in said circular.
c) The office memorandum dated 17.12.2022 deals with Civil / Electrical
Works and sub-clause (i) postulates that the average annual financial turnover
during the last three years should be at least 30% of the estimated cost. There
is no upper limit prescribed in the said circular. In fact, the respondents have
prescribed 50% of the total contract value in one of the three preceding years
and not on average.
d) As on 31.01.2025, the unutilized ash available in the ash pond is
39.78 lakh mt, and the balance capacity of the ash pond is 7.56 lakh mt. The
rate of accumulation of ash in the ash pond is 2680 mt per day; as such, the
excavation of the ash pond is very much essential. Therefore, the tenders are
invited from the contractors, who are financially sound and technically well
equipped to transport such huge amounts of ash within the time frame.
e) In the case of the earlier tender notification dated 15.03.2024, the
maximum lead transportation is only 42 Kms from SDSTPS, whereas in the
present notification, the transportation involved is 75 and 175 Kms from
SDSTPS ash pond. The subject tender is valued at Rs.270 crores (given to
three different entities by splitting the contract amount equally), and the
performance of the tender requires expert assistance with sound experience
in the industry. Eventually, prayed to dismiss the writ petition. Learned
Advocate General would contend to treat the counter as the same in both the
writ petitions.
5. Heard Sri J. Ugranarasimha and Sri Kasa Jaganmohan Reddy, learned
counsel for the petitioners; learned Advocate General for respondents 1 and 2
and Sri Niranjan, learned standing counsel for respondent No.3.
6. Learned counsels for the petitioners, while reiterating the averments in
the affidavits, would further contend that specific eligibility, followed earlier,
was dispensed with, resulting in restricting small tenderers from participating
Page 6 of 22
in the bid. Learned counsels would further contend that the conditions
introduced in the tender notification, impugned in this writ petition, are tailor-
made and to benefit a particular class of tenderers and hence, the same is
violative of Article 14 of the Constitution of India. The petitioners are not fence-
sitters and, in fact, they are eligible to participate in the tender. A few entities
raised concerns regarding the eligibility criteria, and hence, an amendment
No.1 dated 28.02.2025 was issued while extending the bid submission date.
However, there is no redressal regarding the grievance raised by the entities.
7. Learned counsels would further submit that another amendment dated
17.03.2025 was issued extending the bid submission date to 25.03.2025.
However, the concern regarding the criteria was not attended to. The routes 1
to 3 mentioned in the earlier tender notification were dispensed with, and the
experience was restricted to three years from five years. The financial criteria
were also changed from the earlier notification to the present notification.
8. Learned Advocate General, on the other hand, would contend that there
is no pleading in the affidavits that, because of the alleged restrictions, the
petitioners are barred from participating in the tender process. There is no
challenge in the affidavit that a particular condition in the tender is violative of
Article 14 of the Constitution of India. He would also contend that the lead in
this tender is more, and hence, the necessary qualifications were prescribed.
The exigency of the work is also one of the criteria. Five bids were received.
9. The points for consideration are:
1. Whether E-Tender Specification No:RFx No:610001880 issued by
respondent No.1 for transportation of pond ash, suffers from
arbitrariness and is violative of Article 14 of the Constitution of India?
2. Whether the terms of the tender notice are tailor-made to benefit a
particular class of tenderers?
Page 7 of 22
10. Before proceeding further, it is appropriate to note down the nature of
the work in Ex.P2, the earlier tender and the nature of work in Ex.P1, the
present tender.
S.No. Ex.P1 (impugned tender) Ex.P2 (earlier tender)
1. The estimated value and period of The estimated value and
the contract are Rs.270 crores and period of the contract are
24 months Rs.32 crores and 12 months.
2. Technical criteria
The bidder, as a prime contractor, The bidders should have
should have executed a similar executed works with a
nature of works of a value not less minimum executed value of of
than Rs.45 crores in any one year Rs.8 crores, in any State or
within the preceding three years Central Government and PSUs
reckoned from the Techno or any Government
commercial bid opening. undertakings or APGENCO/
APPDCL approved contractors
The experience of the contractor
under EPC contract within the
who has executed the similar nature
preceding five years reckoned
of works, i.e., the work of
from the date of Techno-
transportation through road
commercial bid opening
(including loading and unloading of
through certain routes, which
ash) in any Thermal Power Plants
are as under:
or state/central Govt. & PSUs or
IPPs will be considered. Route-1 : Construction of 'Ash
Dyke'/ 'Embankment'/ 'Earthen
In case of contract(s) under
Dam' 'Road' / 'Site Levelling'
execution as on date of Techno-
commercial bid opening, the value OR
of work executed till such date will
Page 8 of 22
be considered. Route-2
For the PO/WO which were The Work of Transportation
awarded prior to preceding 3 years through Road (including
from the date of Techno-commercial loading/unloading) of ‘Ash’ /
bid opening, the value of work ‘Any Earthen Material’/’Any
executed in the preceding 3 years Mineral’/ Coal’
from the date of Techno-commercial
OR
bid opening will be considered.
Route-3
The executed value shall mean the
total value of work executed under a The work of ‘Earthwork
single Purchase Order/Work Order/ including loading / unloading
Agreement. and transportation by road” in
any Civil Works (other than
However, if the work of
those listed above in Route-1).
"Transportation through Road
(including loading/unloading) of
Ash" is part of some different nature
of Work/Purchase Order/Work
Order/Agreement, then the total
value of work executed in respect of
similar items will only be
considered.
3. Financial Criteria
The Bidder shall submit audited The Average Annual Financial
financial statements / turnover Turnover (AATO) of the bidder
certificate for the last 3 financial during preceding three
years and the turnover should be consecutive financial years as
more than Rs.50 crores in any one on the date of techno-
year within the preceding three commercial bid opening should
Page 9 of 22
years reckoned from the date of not be less than Rs.8 crores.
techno-commercial bid opening.
11. Before proceeding further, let this Court examine the judicial review and
interference by the Court under Article 226 of the Constitution of India
concerning tenders.
12. In Tata Cellular v. Union of India1, the Hon’ble Apex Court, while
considering the scope of judicial review concerning tenders, observed as
follows:
“69. A tender is an offer. It is something which invites and is
communicated to notify acceptance. Broadly stated, the following are the
requisites of a valid tender:
1. It must be unconditional.
2. Must be made at the proper place.
3. Must conform to the terms of obligation.
4. Must be made at the proper time.
5. Must be made in the proper form.
6. The person by whom the tender is made must be able and willing to
perform his obligations.
7. There must be reasonable opportunity for inspection.
8. Tender must be made to the proper person.
9. It must be of full amount.
70. It cannot be denied that the principles of judicial review would apply to
the exercise of contractual powers by Government bodies in order to
prevent arbitrariness or favouritism. However, it must be clearly stated
that there are inherent limitations in exercise of that power of judicial
review. Government is the guardian of the finances of the State. It is
expected to protect the financial interest of the State. The right to
refuse the lowest or any other tender is always available to the1
(1994) 6 SCC 651
Page 10 of 22Government. But, the principles laid down in Article 14 of the
Constitution have to kept in view while accepting or refusing a tender.
There can be no question of infringement of Article 14 if the
Government tries to get the best person or the best quotation. The
right to choose cannot be considered to be an arbitrary power. Of
course, if the said power is exercised for any collateral purpose the
exercise of that power will be struck down.
71. Judicial quest in administrative matters has been to find the right
balance between the administrative discretion to decide matters
whether contractual or political in nature or issues of social policy;
thus they are not essentially justiciable and the need to remedy any
unfairness. Such an unfairness is set right by judicial review.”
13. In R.v. Panel on Take-overs and Mergers, ex p in Guinness Plc2,
Lord Donaldson, M.R. referred to the judicial review jurisdiction as being
supervisory or ‘longstop’ jurisdiction. Unless that restriction on the power of
the court is observed, the court will, under the guise of preventing the abuse of
power, be itself guilty of usurping power.
14. In Tata Cellular‘s case, it was further observed that the court must
confine itself to the question of legality. Its concern should be (1) whether a
decision-making authority exceeded its powers; Committed an error of law;
Committed a breach of the rules of natural justice; Reached a decision which
no reasonable tribunal would have reached, or abused its powers. Therefore,
it is not for the court to determine whether a particular policy or particular
decision taken in the fulfillment of that policy is fair or not. It is only concerned
with how those decisions have been taken. The extent of the duty to act fairly
will vary from case to case. Shortly put, the grounds upon which an
administrative action is subject to control by judicial review can be classified
as Illegality, Irrationality (Wednesbury unreasonableness) and procedural
impropriety.
2
(1990) 1 QB 146
Page 11 of 22
15. The court does not sit as a court of appeal, but merely reviews how 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
and the Court substitutes its decision, without the necessary expertise, that
itself may be fallible. The terms of the invitation to tender cannot be open to
judicial scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the contract is
reached by a process of negotiations through several tiers. More often than
not, such decisions are made qualitatively by experts. The Government must
have freedom of contract. In other words, 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 the Wednesbury principle of reasonableness, but it also
must be free from arbitrariness, not affected by bias or actuated by mala fides.
Quashing decisions may impose a heavy administrative burden on the
administration and lead to increased and unbudgeted expenditure.
16. In Municipal Corpn., Ujjain v. BVG (India) Ltd. [Municipal Corpn.,
Ujjain v. BVG (India) Ltd.,3 it was held that the authority concerned is in the
best position to find out the best person or the best quotation depending on
the work to be entrusted under the contract. The court cannot compel the
authority to choose such an undeserving person/company to carry out the
work. Poor quality of work or goods can lead to tremendous public hardship
and substantial financial outlay either in correcting mistakes or in rectifying
defects or even at times in redoing the entire work.
17. In Caretel Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd. [Caretel
Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd.,4 it was observed that a
writ petition under Article 226 of the Constitution was maintainable only in view
of government and public sector enterprises venturing into economic activities.
3
(2018) 5 SCC 462
4
(2019) 14 SCC 81
Page 12 of 22
This Court observed that there are various checks and balances to ensure
fairness in procedure. It was observed that the window has been opened too
wide as every small or big tender is challenged as a matter of routine which
results in government and public sectors suffering when unnecessary, close
scrutiny of minute details is done.
18. In Silppi Constructions Contractors v. Union of India5, The Apex
Court observed as follows:
19. This Court being the guardian of fundamental rights is duty-bound to
interfere when there is arbitrariness, irrationality, mala fides and bias.
However, this Court in all the aforesaid decisions has cautioned time
and again that courts should exercise a lot of restraint while exercising
their powers of judicial review in contractual or commercial matters.
This Court is normally loathe to interfere in contractual matters unless a
clear-cut case of arbitrariness or mala fides or bias or irrationality is
made out. One must remember that today many public sector
undertakings compete with the private industry. The contracts entered
into between private parties are not subject to scrutiny under writ
jurisdiction. No doubt, the bodies which are State within the meaning of
Article 12 of the Constitution are bound to act fairly and are amenable to
the writ jurisdiction of superior courts but this discretionary power must
be exercised with a great deal of restraint and caution. The courts must
realise their limitations and the havoc which needless interference in
commercial matters can cause. In contracts involving technical issues
the courts should be even more reluctant because most of us in Judges’
robes do not have the necessary expertise to adjudicate upon technical
issues beyond our domain. As laid down in the judgments cited above
the courts should not use a magnifying glass while scanning the tenders
and make every small mistake appear like a big blunder. In fact, the
courts must give “fair play in the joints” to the government and public
sector undertakings in matters of contract. Courts must also not
5
(2020) 16 SCC 489
Page 13 of 22
interfere where such interference will cause unnecessary loss to the
public exchequer.
20. The essence of the law laid down in the judgments referred to
above is the exercise of restraint and caution; the need for
overwhelming public interest to justify judicial intervention in matters of
contract involving the State instrumentalities; the courts should give way
to the opinion of the experts unless the decision is totally arbitrary or
unreasonable; the court does not sit like a court of appeal over the
appropriate authority; the court must realise that the authority floating
the tender is the best judge of its requirements and, therefore, the
court’s interference should be minimal. The authority which floats the
contract or tender, and has authored the tender documents is the
best judge as to how the documents have to be interpreted. If two
interpretations are possible then the interpretation of the author
must be accepted. The courts will only interfere to prevent
arbitrariness, irrationality, bias, mala fides or perversity. With this
approach in mind we shall deal with the present case. (emphasis
added)
19. In Galaxy Transport Agencies v. New J.K. Roadways, Fleet Owners
and Transport Contractors6 three-Bench of the Hon’ble Apex Court
reiterated that the authority that authors the tender document is the best
person to understand and appreciate its requirements, and thus, its
interpretation should not be second-guessed by a court in judicial review
proceedings.
20. In Jagadish Mandal v. State of Orissa7, the Hon’ble Apex Court
observed as under:
“22. Judicial review of administrative action is intended to prevent
arbitrariness, irrationality, unreasonableness, bias and mala fides. Its6
(2021) 16 SCC 808
7
(2007) 14 SCC 517
Page 14 of 22purpose is to check whether choice or decision is made “lawfully” and
not to check whether choice or decision is “sound”. When the power of
judicial review is invoked in matters relating to tenders or award of
contracts, certain special features should be borne in mind. A contract
is a commercial transaction. Evaluating tenders and awarding contracts
are essentially commercial functions. Principles of equity and natural
justice stay at a distance. If the decision relating to award of contract is
bona fide and is in public interest, courts will not, in exercise of power of
judicial review, interfere even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out. The power of
judicial review will not be permitted to be invoked to protect private
interest at the cost of public interest, or to decide contractual disputes.
The tenderer or contractor with a grievance can always seek damages
in a civil court. Attempts by unsuccessful tenderers with imaginary
grievances, wounded pride and business rivalry, to make mountains out
of molehills of some technical/procedural violation or some prejudice to
self, and persuade courts to interfere by exercising power of judicial
review, should be resisted. Such interferences, either interim or final,
may hold up public works for years, or delay relief and succour to
thousands and millions and may increase the project cost manifold.
Therefore, a court before interfering in tender or contractual matters in
exercise of power of judicial review, should pose to itself the following
questions:
(i) Whether the process adopted or decision made by the
authority is mala fide or intended to favour someone; or Whether the
process adopted or decision made is so arbitrary and irrational that the
court can say: “the decision is such that no responsible authority acting
reasonably and in accordance with relevant law could have reached”;
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no
interference under Article 226. Cases involving blacklisting or imposition
Page 15 of 22
of penal consequences on a tenderer/contractor or distribution of State
largesse (allotment of sites/shops, grant of licences, dealerships and
franchises) stand on a different footing as they may require a higher
degree of fairness in action.”
21. In Montecarlo Ltd. v. NTPC Ltd.,8 the Hon’ble Apex Court observed as
under:
“”26. We respectfully concur with the aforesaid statement of law.
We have reasons to do so. In the present scenario, tenders are floated
and offers are invited for highly complex technical subjects. It requires
understanding and appreciation of the nature of work and the purpose it
is going to serve. It is common knowledge in the competitive
commercial field that technical bids pursuant to the notice inviting
tenders are scrutinised by the technical experts and sometimes third-
party assistance from those unconnected with the owner’s organisation
is taken. This ensures objectivity. Bidder’s expertise and technical
capability and capacity must be assessed by the experts. In the matters
of financial assessment, consultants are appointed. It is because to
check and ascertain that technical ability and the financial feasibility
have sanguinity and are workable and realistic. There is a multi-prong
complex approach; highly technical in nature. The tenders where public
largesse is put to auction stand on a different compartment. Tender with
which we are concerned, is not comparable to any scheme for
allotment. This arena which we have referred requires technical
expertise. Parameters applied are different. Its aim is to achieve high
degree of perfection in execution and adherence to the time schedule.
But, that does not mean, these tenders will escape scrutiny of judicial
review. Exercise of power of judicial review would be called for if the
approach is arbitrary or mala fide or procedure adopted is meant to
favour one. The decision-making process should clearly show that the
said maladies are kept at bay. But where a decision is taken that is
manifestly in consonance with the language of the tender document or8
2016 (15) SCC 272
Page 16 of 22subserves the purpose for which the tender is floated, the court should
follow the principle of restraint. Technical evaluation or comparison by
the court would be impermissible. The principle that is applied to scan
and understand an ordinary instrument relatable to contract in other
spheres has to be treated differently than interpreting and appreciating
tender documents relating to technical works and projects requiring
special skills. The owner should be allowed to carry out the purpose
and there has to be allowance of free play in the joints.”
22. In Uflex Ltd. vs. The Government of Tamil Nadu 9, the Hon’ble Apex
Court held as under :
2. The judicial review of such contractual matters has its own
limitations. It is in this context of judicial review of administrative actions
that this Court has opined that it is intended to prevent arbitrariness,
irrationality, unreasonableness, bias and mala fides. The purpose is to
check whether the choice of decision is made lawfully and not to check
whether the choice of decision is sound. In evaluating tenders and
awarding contracts, the parties are to be governed by principles of
commercial prudence. To that extent, principles of equity and natural
justice have to stay at a distance. [Jagdish Mandal v. State of Orissa,
(2007) 14 SCC 517]
3. We cannot lose sight of the fact that a tenderer or contractor
with a grievance can always seek damages in a civil court and thus,
“attempts by unsuccessful tenderers with imaginary grievances,
wounded pride and business rivalry, to make mountains out of molehills
of some technical/procedural violation or some prejudice to self, and
persuade courts to interfere by exercising power of judicial review,
should be resisted”. [Jagdish Mandal v. State of Orissa, (2007) 14 SCC
517]…
9
(2022) 1 SCC 165
Page 17 of 22
47. Insofar as the participating entities are concerned, it cannot
be contended that all and sundry should be permitted to participate in
matters of this nature. In fact, in every tender there are certain
qualifying parameters whether it be technology or turnover. The
Court cannot sit over in judgment on what should be the turnover
required for an entity to participate.” (emphasis added)
23. Thus, a conspectus of the above expressions of the Hon’ble Apex
court, while exercising judicial review under Article 226 of the Constitution of
India, this Court normally will not sit as an appellate authority and it will only
review the decision-making process. The authority that floated the contract or
tender, and authored the tender documents, is the best judge as to how the
documents have to be interpreted. The interference of the Court is limited to
arbitrary actions or in case of malice. In the cases of tenders, the tenderer is
the best person to frame the conditions of the tender, and it is not within the
domain of the Court to change or fix the tender conditions unless the
conditions are unreasonable. The Government and its undertaking must have
a free hand in setting the terms of the tender. The Courts normally cannot
interfere with the terms of the tender prescribed by the Government, because
they feel that some other terms in the tender would be fairer or logical. In
contracts having a commercial element, some more discretion has to be
conceded to the authorities so that they may enter into the contracts, keeping
an eye on the augmentation of the revenue.
24. Now turning to the contention of the learned counsels for the
petitioners, their main contention, as noted supra, is that the technical and
financial criteria were changed from the earlier tender and the same is
arbitrary and to favour a particular class of contractors.
25. The table supra, would demonstrate that the estimated value of the
subject tender is Rs.270 crores, which will be provided to three individuals at
Rs.90 crores, each, and the contract is for 24 months. The area of supply of
pond ash in the present tender is at a distance of 75 to 175 km. Whereas in
Page 18 of 22
the earlier tender notification (Ex.P2), the estimated value is Rs.32 crores,
and the maximum lead transportation of pond ash for construction of projects
by NHAI, is at a distance of 45 Kms.
26. Keeping in view the value of the tender, quantity and the lead, the
tendering authority slightly changed the conditions in the present tender,
which cannot be termed as tailor-made. As the Hon’ble Apex Court observed,
the tenderer is the best person to author the document. When the tenderer
authored the conditions, given the value of the contract and distance, this
court, with no expertise, would conclude that the terms are arbitrary. One
should not be oblivious concerning value, distance etc.
27. Regarding the experience, in both the tender notifications, it was
mentioned that one should execute a similar nature of work. Non-mention of
the routes, per se, in the considered opinion of this Court does not attract the
vice of arbitrariness. It is not the case of the petitioners that, but for the
conditions in the subject tender i.e. technical and financial criteria, they are
eligible to participate in the bid. The affidavit does not contain information
regarding their eligibility and the condition that restricts their participation.
28. When it comes to financial criteria, the condition imposed in the subject
tender is, ‘audited financial statements for the last three financial years
and the turnover should be more than 50 crores in one year, within the
preceding three years’ and whereas in Ex.P2, the condition was ‘the
Average Annual Financial Turnover of the bidder during preceding three
consecutive financial years as on the date of techno-commercial bid
opening should not be less that Rs.8 crores’.
29. Thus, in the present tender, it was restricted to 50 crores in one year
and in the earlier tender, the bidder’s turnover average was taken for three
consecutive financial years, which should not be less than 8 crores. The value
of the work plays a vital role. Therefore, this Court is not persuaded by the
contention of learned counsel for the petitioners in this regard.
Page 19 of 22
30. The other contention of the learned counsel for the petitioners is that
the conditions of the said tender violate CVC guidelines. The guidelines of
CVC are directory but not mandatory, as rightly pointed out by the learned
Advocate General. The office memorandum issued by the Chief Technical
Examiner, Central Vigilance Commission, dated 07.05.2004 would clarify
doubts, if any, in this regard. It was mentioned in the memorandum that the
guidelines issued are illustrative and the organizations may suitably modify
the guidelines for specialized works, if considered necessary. Thus, this Court
is not persuaded by the said contention.
31. The tender was floated on 17.02.2025. Petitioners filed writ petitions on
17.03.2025 and 18.03.2025. According to the original schedule, the last date
for submission is 04.03.2025. In the affidavit, it was pleaded that another writ
petition was filed, and the learned Government Pleader submitted that the
time was extended till 18.03.2025, and the representation of local MLA is
under consideration, however, no revised criteria were issued, and hence the
petitioners approached the Court. This statement makes it more than
discernible that the petitioners are watching the proceedings without
approaching the Court at the earliest, and thus, they can be termed as fence
sitters. If the petitioners are competitors, and are otherwise eligible to
participate in the tender, and the clauses in the tender are coming in their
way, they could have approached the Court at the earliest point in time. The
writ petition, referred to in the affidavit, was withdrawn by the petitioner
therein. Had the authority not extended the time and proceeded with as per
schedule, the opening of the tenders itself would have been completed by
04.03.2025. Thus, the petitioners, in the considered opinion of this Court,
being the fence sitters, cannot allege arbitrariness qua the alleged tailor-made
tender conditions impugned in the writ petition.
32. Given the discussion supra, the tenderer is the best person to frame the
conditions and the conditions in the subject tender were framed keeping in
view the value and importance of the project and the distance of
Page 20 of 22
transportation; this Court does not find any arbitrariness in the decision-
making process. In the absence of arbitrariness, interference by this Court is
unwarranted.
There are no merits in the writ petitions and thus the writ petitions are
liable to be dismissed and accordingly dismissed. No costs.
Miscellaneous petitions pending, if any, shall stand closed.
_____________________
SUBBA REDDY SATTI, J
Date: 10.03.2025
ikn
Page 21 of 22
HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
WRIT PETITION Nos.6866 and 7553 of 2025
Dated: 10.03.2025
IKN
Page 22 of 22