### Rejection of L1 bidder by misrepresenting urgency and contractor qualifications to favor L2 bidder is arbitrary and mala fide.

The Petitioner, a Class-1(A) contractor registered in Assam, participated in an E-Tender issued by the Water Resource Division-VI, Tripura, for embankment works.

The Petitioner was the lowest bidder (L1) at 52.89% below the estimated cost.

Despite the Petitioner providing a valid registration certificate from the Assam PWD—which was verified as genuine by the authorities—the Respondents awarded the contract to Respondent No. 6 (L2), whose bid was ₹83,50,207 higher than the Petitioner’s.

The official Respondents justified the rejection on grounds that the Petitioner’s "meteoric jump" in registration classes was suspicious, the rate was "abnormally low," and the work was of "national importance" requiring immediate execution due to an alleged emergency at the Bangladesh border.

During proceedings, it was revealed that Respondent No. 6 failed to complete the work within the 90-day stipulated period, achieving only 36.36% progress by the deadline, yet received multiple extensions.

Whether the process adopted by the State for awarding the work to the L2 bidder (Respondent No. 6) instead of the L1 bidder (Petitioner) was proper, justified, and in the public interest.

Whether the reasons assigned for the rejection of the Petitioner’s bid were arbitrary, mala fide, or based on irrelevant considerations.

The Court applied the principles of judicial review in contractual matters established in *Tata Cellular v. Union of India*, which limits intervention to cases of illegality, irrationality (Wednesbury unreasonableness), and procedural impropriety.

It relied on *Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd.* regarding the prevention of favoritism and protection of public interest.

It further cited *Michigan Rubber (India) Ltd. v. State of Karnataka*, emphasizing that while the State has latitude in tender conditions, actions found to be malicious or a misuse of statutory power warrant interference.

Finally, it noted *Municipal Corpn., Ujjain v. BVG India Ltd.*, holding that while the State can refuse the lowest tender, it must demonstrate an attempt to obtain the best quotation through a non-arbitrary process.

The Court found the Respondents’ actions to be a "clear afterthought" to justify favoritism toward Respondent No. 6.

Firstly, the Petitioner met the tender requirement of being a Class-1(A) contractor; the fact that the registration was from Assam was not a disqualification under the tender terms.

Secondly, the "national emergency" plea was deemed a "mirage" used to "draw wool over the eyes of the Court," as the alleged situation in Bangladesh existed five months prior to the tender and no actual danger materialized despite the project’s delay.

The Court highlighted that the Respondents misled the Court by filing conflicting affidavits regarding the progress of work.

By awarding the contract to an "incompetent and inefficient entity" at a higher cost and granting repeated extensions instead of terminating the contract, the Respondents jeopardized public interest and caused a loss to the exchequer.

The Court declared the award of work to Respondent No. 6 as tainted by bias and favoritism.

Consequently, the Court ordered: (i) the immediate cancellation of the work order dated 13.03.2025; (ii) the blacklisting of Respondent No. 6 for future contracts for a period of one year; and (iii) a direction to Respondents 1 to 5 to pay costs of ₹50,000 to the Petitioner.