In M.P. Power Management Co. Ltd., Jabalpur vs. Sky Power Southeast Solar India Pvt. Ltd. reported in (2023) 2 SCC 703, Supreme Court has held that the courts may entertain a contractual dispute under its writ jurisdiction where (I) there is any violation of natural justice or (II) where doing so would serve the public interest or (III) where though the facts are convoluted or disputed, but the courts have already undertaken an in-depth scrutiny of the same provided that the it was pursuant to a sound exercise of its writ jurisdiction. It exhaustively delineated the scope of judicial review of the courts in contractual disputes concerning public authorities. This decision has been cited with approval in para Nos. 55, 56, 60, 62, 115, 127 and 128 in Subodh Kumar Singh Rathour Vs. Chief Executive Officer & Ors., reported in 2024 SCC OnLine SC 1682.
In M/S R. K. Tech vs. The State of Bihar through the Principal Secretary, Election Department, Government of Bihar & Ors. (2025), Patna High Court's Division Bench of Chief Justice Vipul M. Pancholi and Justice Partha Sarthy passed a 26-page long judgment dated August 4, 2025 dismissed the petition. This is the 12th judgement by Justice Pancholi as chief justice. He concluded:"we are of the view that the decision taken by the respondent authority of issuing a fresh very short term tender notice cannot be termed as ‘arbitrary’ and thereby violative of Article-14 of the Constitution of India, as contended by learned senior counsel for the petitioner. We are of the view that scope of judicial review is very limited and we see no reason to entertain the present petition on the grounds urged by the petitioner. 23. Accordingly, the petition is dismissed." The other seven respondents were: Principal Secretary, Election Department, Government of Bihar, Chief Electoral Officer, Election Department, Government of Bihar, Joint Chief Electoral Officer, Bihar, District Election Officer-cum-District Magistrate, Sitamarhi, District Deputy Election Officer, Sitamarhi, District Purchase Committee of NIT dated August 23, 2023 bearing PR No.007685 (Election) 2023-2024 through its Chairman-Deputy Development Commissioner, Sitamarhi and Deputy Development Commissioner, Sitamarhi respectively.
The petitioner had prayed for setting aside the short term tender notice dated July 2, 2025, bearing PR No. 007741 (Election) 2025-26, issued under the signature of District Election Officer-cum-District Magistrate, Sitamarhi by which, without issuing any notice to the petitioner, the work under agreement dated December 20, 2023 has been advertised. The petitioner had also prayed that the respondent authorities be directed to continue the agreement dated December 20, 2023 till its validity, i.e. December 19, 2026. The petitioner had prayed that the respondent be directed to produce the signed copy of agreement dated October 20, 2023, executed between the petitioner and the respondent authorities, including Principal Secretary, Election Department, Government of Bihar, Chief Electoral Officer, Election Department, Government of Bihar, Joint Chief Electoral Officer, Bihar, District Election Officer-cum-District Magistrate, Sitamarhi, District Deputy Election Officer, Sitamarhi, District Purchase Committee of NIT dated August 23, 2023 bearing PR No.007685 (Election) 2023-2024 through its Chairman-Deputy Development Commissioner, Sitamarhi, and Deputy Development Commissioner, Sitamarhi. After the petition was filed by petitioner, the concerned respondent issued another short term tender notice dated July 18, 2025 and thereafter very short term tender notice dated July 19, 2025 and, therefore, the petitioner filed I.A. No. 1/2025 as well as I.A. No. 2/2025 respectively for setting aside the tender notices.
It was the case of the petitioner that notice inviting tender (NIT) dated August 23, 2023 bearing PR No.007685 (Election) 2023-24 was issued by District Election Officer-cum-District Magistrate, Sitamarh, the respondent No. 5 for execution of data entry, scanning, uploading, checklist printing, printing of electoral lists and all other types of work related to electoral list under preparation of photo voter list through ERO-NET, revision/brief revision of electoral list and continuous updating for all eight Vidhan Sabhas of the district of Sitamarhi. The petitioner had submitted its bid in the NIT. Thereafter, petitioner was declared L-1 in the financial bid by the District Purchase Committee. Therefore, on September 18, 2023, direction was given to Deputy Election Officer, Sitamarhi to enter into an agreement with the petitioner in accordance with the terms and conditions of the tender. Before the petitioner entered into an agreement, work order dated October 25, 2023 came to be issued by Deputy Election Officer, Sitamarhi in favour of the petitioner. It was the case of the petitioner that the petitioner was thereafter called in the office of Deputy Election Officer, Sitamarhi for entering into an agreement. The agreement dated December 20, 2023 was given to the petitioner which the petitioner signed and thereafter gave it to the Deputy Election Officer, Sitamarhi, however, Deputy Election Officer, Sitamarhi did not sign the agreement and, in fact, an assurance was given that the agreement will be signed and delivered to the petitioner. The petitioner stated that, as per Clause-17 of the agreement dated December 20, 2023, the agreement is valid for a period of three years, i.e. upto December 19, 2026 and could be extended, if required, on finding the work satisfactory, for a year. It was also stated that performance bank guarantee of Rs. 2,00,000/- was also provided on March 15, 2024 which is valid up to March 17, 2027. It was further stated that the respondent authority issued work orders in favour of the petitioner from time to time and petitioner also executed the entire work as per the work orders and completion certificates were also issued by the respondent authority. It was the grievance of the petitioner that on July 2, 2025, a very short term tender notice came to be issued by the respondent authority for the same work which the petitioner had been executing in terms of the agreement dated December 20, 2023. Therefore, the petitioner approached the High Court. It preferred the petition. After the filing of the petition, the said tender notice dated July 2, 2025 was cancelled. The respondent issued another very short term tender notice dated July 19, 2025 and, therefore, the petitioner had filed two separate interlocutory applications challenging the subsequent action of the respondent authority.
The advocate for the petitioner
contended that, as per the NIT, the agreement was executed by the
petitioner and the agreement was valid for a period of three years from
the date of finalizing the tender by
the District Purchase Committee,
i.e. upto 19.12.2026. He submitted that performance bank guarantee for a
period of three years was also accepted. As per the communication dated
12.07.2024, copy of which is produced, the petitioner requested the
concerned respondent authority to sign the document and original copy of
the same be given to him, however, the respondent authority did not
sign the agreement nor the agreement signed by the respondent was
supplied to the petitioner. He referred the certificate issued by the
respondent authority wherein it has been mentioned that the satisfactory
work was performed by the petitioner. He also referred the work order
issued by the respondent authority during the period 2024. The work
order issued on 01.01.2025. After referring to these documents, it was
contended that as the work order was issued to the petitioner on
01.01.2025, it can be said that the respondents, by their conduct,
accepted that the agreement is continued at least upto December, 2025.
Thus, as on date, the agreement is still subsisting and, therefore, it
is not open for the respondent authority to cancel the said agreement
unilaterally, without assigning any reason and without giving any notice
to the petitioner. He contended that, looking to the facts and
circumstances of the present case, doctrine of estoppel as well as waiver
would be applicable and, therefore, the respondents be restrained from
proceeding further with the impugned tender notice. He placed reliance
upon the following decisions rendered by Supreme Court:-
1. Provash Chandra Dalui & Anr. vs. Biswanath Banerjee & Anr., reported in 1989 Supp (1) SCC 487;
2. Bharat Sanchar Nigam Limited & Anr. Vs. BPL Mobile Cellular Limited & Ors., reported in (2008) 13
SCC 597;
3. Subodh Kumar Singh Rathour Vs. Chief Executive Officer & Ors., reported in 2024 SCC OnLine SC
1682.
He
contended that the respondent authority unilaterally terminated the
contract, without assigning any reason and thereafter, without any
justification, now fresh tender was issued by the respondent authority.
Thus, the action of the respondent authority is arbitrary and,
therefore, is violative of Article-14 of the Constitution of India.
Therefore, he urged that this Court can interfere with the action of the
respondent authority by which now very short term tender notice has
been issued for carrying out the work which the
petitioner is performing. But the bench was not persuaded by his argument.
Opposing the petition, Advocate General submitted that the draft agreement was never signed by the competent authority. Therefore, there is no concluded contract between the parties that the work in question is to be allotted to the petitioner for a period of three years. The petitioner failed to produce any document from which it can be said that the agreement was executed for a period of three years. Though the petitioner was allowed to work during the year 2024 and thereafter work order was issued on January 1, 2025, but that does not mean that the agreement was executed for a period of three years. In fact, term of contract was not extended in terms of NIT. The bank guarantee having validity of three years was deposited by the petitioner as performance security in view of Clause-7 of NIT as the maximum period for which work was to be allotted was of three years, extendable every year having found the satisfactory performance. Thus, it does not give any leeway to the petitioner to argue that work was allotted to him for three years. The very short term tender notice dated July 2, 2025 was issued by the concerned respondent authority for carrying out the work mentioned in the said notice in all the eight Bihar Legislative Assembly Constituencies of Sitamarhi District. However, thereafter it was cancelled and lastly on July 19, 2025 once again such type of notice has been issued. Last date for submitting the tender was mentioned as July 28, 2025. Advocate General also submitted that in contract/tender matters, the scope of interference while exercising powers under Article-226 of the Constitution of India is very limited. He relied upon the recent decision rendered by Supreme Court in the case of The Principal Chief Conservator of Forest & Ors. Vs. Suresh Mathew & Ors., passed in SLP(C) No(s). 12353-12355 of 2021. Therefore, he urged that the petition should be dismissed.
Justice Pancholi recorded that the senior counsel for the petitioner "informed to this Court that he is not interested in filing reply to the counter affidavit" filed by the respondents. Therefore, it proceeded with the
matter. He observed: "In fact, even it is the case of the petitioner that the respondent authority did not sign the agreement and, therefore, signed copy of agreement was demanded by the petitioner."He also noted that the petitioner's senior counsel submitted that because of the conduct of the respondent, it can be said that the respondent accepted the terms of the agreement and, therefore, the work order was given in the year 2025 and, therefore, now the respondent be restrained from issuing fresh tender notice. Justice Pancholi observed: "We are of the view that the aforesaid contention is misconceived. As observed hereinabove, the petitioner has failed to produce any document from which it can be said that the agreement was executed by both the parties for a period of three years." He referred to the decisions in the cases of Provash Chandra Dalui and Subodh Kumar Singh Rathour relied upon by the senior counsel appearing for the petitioner. He observed:"we are of the view that the aforesaid decisions would not be applicable to the facts of the present case."
Justice Pancholi referred to the Supreme Court's observation in para-50 of of its decision in Tata Motors Limited vs. Brihan Mumbai Electric Supply and Transport Undertaking (BEST) & Ors., reported in (2023) 19 SCC-1 with approval. It reads: “50. 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 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. 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 interfere where such interference will cause unnecessary loss to the public exchequer.”
Drawing on this decision, Justice Pancholi observed:" 21. Keeping in view the aforesaid decisions rendered by Hon’ble Supreme Court, it can be said that the court should exercise a lot of restraint while exercising powers of judicial review in contractual or commercial matters. The 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. While reviewing the decision making process, the Court should not act as a court of appeal."
Prior to this Justice Pancholi referred to the para Nos. 19 and 20 of the Supreme Court's decision in Bharat Coking Coal Limited & Ors. vs. AMR Dev Prabha & Ors., reported in (2020) 16 SCC 759, in which the Court had recorded the argument of the appellant. Notably, the paragraphs cited by him do not refer to Court;s observation.
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