Judicial review of tender conditions is restricted to instances of manifest arbitrariness, irrationality, or mala fides.

The Petitioner, a partnership firm of Chartered Accountants, challenged a tender (Request for Proposal) issued by the State Urban Development Agency (SUDA) for conducting audits and statutory compliance in the Durg Cluster, comprising 48 Urban Local Bodies (ULBs).

The Petitioner specifically challenged Clause 3.12.3 of the RFP, which mandated prior experience in at least 10 ULBs, arguing it was restrictive and inconsistent with Clause 4.5, which recognized broader experience in Government/PSU sectors for technical evaluation.

Despite the Petitioner’s representations and objections raised during a pre-bid conference, the Respondents issued a corrigendum maintaining the impugned condition.

The Petitioner sought to quash the tender conditions, alleging arbitrariness, lack of transparency (non-publication on GeM portal), and an unfair Quality and Cost Based Selection (QCBS) weightage of 80:20.

1. Whether the eligibility criterion requiring experience in a minimum of 10 Urban Local Bodies (ULBs) is arbitrary, discriminatory, or violates the doctrine of a level playing field.

2. Whether the Court can interfere with the technical and commercial conditions of a tender process under Article 226 of the Constitution in the absence of patent illegality or mala fides.

The Court primarily applied the principles of judicial restraint in contractual matters as established in Tata Motors Limited v. The Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Others (2023), which holds that courts should not interfere in commercial transactions unless a clear case of arbitrariness, mala fides, or irrationality is made out.

It further relied on Jagdish Mandal v. State of Orissa (2007), establishing that tender evaluations are commercial functions where principles of equity stay at a distance.

Air India Ltd. v. Cochin International Airport Ltd. (2000), which affirms the State's right to choose its own method for arriving at a commercial decision provided it acts fairly.

The Court observed that the eligibility criteria, specifically the requirement for prior experience in ULBs, bears a rational nexus to the nature and scale of the assignment involving municipal audit systems.

It rejected the Petitioner's argument regarding internal inconsistency, noting that pre-qualification (eligibility) and technical evaluation operate in distinct fields.

The Court emphasized that the 80:20 QCBS ratio and the specific eligibility conditions fall within the exclusive domain of the tender-inviting authority’s administrative discretion and policy formulation.

Citing Tata Motors, the Court held that it cannot act as an appellate authority over administrative decisions or use a "magnifying glass" to scan tenders for minor errors.

Since the conditions were uniformly applicable to all bidders and not "tailor-made" to favor any specific entity, no procedural impropriety or mala fides were established.

It reaffirmed that judicial review in contractual matters must be exercised with great restraint and is only warranted if the decision-making process is patently irrational or contrary to law, which was not the case here.

Consequently, the High Court dismissed the writ petition, stating it was devoid of merit, while leaving the Petitioner at liberty to avail other alternative legal remedies.