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True it is that the legal position governing the matters of Government contracts envisages that, ordinarily, the soundness of the taken by the tender issuing authority ought not to be questioned, but the decision-making process can certainly be subject to judicial review as held by the Hon’ble High Court of J&K through a learned bench of Justice Ali Mohammad Magrey and Justice Sanjay Dhar in the case of Mohammad Shafi Lone Vs Union Territory of JK & Ors. [LPA No. 148/2021; CM No. 7352/2021; & Caveat No. 1714/2021] and M/S A. Khan Trading Company Vs Union Territory of JK & Ors [LPA No. 147/2021; CM No. 7323/2021; & Caveat No. 1724/2021].

Brief facts of the case are that the official Respondents invited e-bids for appointment of Government Auctioneer in relation to conducting of auction of Government properties for the year 2020-21 for Jammu as well as Kashmir Division on the terms and conditions prescribed in the tender notice. After culmination of the aforesaid tendering process, it appears that the official Respondents appointed M/S F. S. Enterprises (L1) as Government Auctioneer for Kashmir Division. Thereafter, a Writ Petition, being WP(C) No. 1421/2021, was filed by a firm, namely, M/S A. Khan Trading Company/ Writ Petitioner/ Appellant in LPA No.147/2021, who had also participated in the aforesaid tendering process; thereby assailing the appointment of said M/S F. S. Enterprises as a Government Auctioneer made in terms Order dated 5th of July, 2021 on the ground that the said firm did not meet the eligibility criteria prescribed in the tender notice qua having experience certificate of at least two years in the business of auctioning. The learned Single Judge, vide Judgment dated 28th of October, 2021, disposed of the Writ Petition.

After a perusal of the record, the Hon’ble High Court observed that the learned Single Judge has, on the basis of the pleadings on record and upon hearing the parties, decided the Writ Petition after framing the question ‘as to whether the certificate of experience of at least two years in the business of auctioning submitted by the private Respondent meets the eligibility requirements of e-tender notice issued by the official Respondents’. While answering the aforesaid question in the negative, the Writ Court was of the view that the decision of the official Respondents to award contract to the private Respondent-F. S. Enterprises is arbitrary, irrational and smacks of bias/ mala fide and, therefore, cannot sustain in the eyes of law.

In conclusion, while dismissing the appeals, the Hon;ble Court stated that “The soundness of the decision can be questioned, firstly, if the decision made is so arbitrary and irrational that the Court can say that the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached or; second, if the process adopted or decision made by the authority is malafide or intended to favour someone or; third, if the public interest is affected. In the instant case, when the said firm F.S. Enterprises did not meet all the terms and conditions prescribed in the tender notice inasmuch as it did not furnish the requisite experience certificate in the business of conducting auction of any Government Office/ Semi-Government organization/ Military establishment/ Public enterprise, in such eventuality, the decision of the official Respondents to appoint the said firm as Government Auctioneer clearly falls within the scope of such action where they have acted in a manner in which no responsible authority acting reasonably and in accordance with the relevant law would have acted.”

Click here to read the Judgment

Judgment reviewed by – Aryan Bajaj