Court Highlights Procedural Fairness and Mandates Communication of Reasons in Tender Decisions
In a significant ruling, the Allahabad High Court's Lucknow Bench delivered a judgment on August 21, 2026, in the case of Ranjana Pandey v. State of U.P., concerning the judicial review of tender processes. The petitioner, Ranjana Pandey, challenged the awarding of a contract to M/s Jai Prakash Verma (Respondent No. 6) for the "Renovation and Expansion Work of Press Club" in Ambedkar Nagar, alleging procedural improprieties and discriminatory practices in the tender process.
The Division Bench, comprising Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary, adjudicated on the writ petition filed under Article 226 of the Indian Constitution. The petitioner sought the quashing of the Headquarters Tender Disposal Committee's report and subsequent actions, arguing that Respondent No. 6 had concealed material information to misrepresent its bid capacity.
The court reiterated the established legal principle that judicial review in tender matters is confined to examining the legality of the decision-making process rather than the merits of the decision itself. It emphasized that courts typically refrain from interfering unless there is manifest arbitrariness, mala fides, or irrationality.
The judgment highlighted the importance of procedural fairness, noting that the failure to communicate reasons for the reversal of a decision by administrative committees constitutes a procedural infirmity. The court underscored the principle of audi alteram partem, stating that the complainant is entitled to know the basis for undoing a favorable finding.
Addressing the petitioner's claims, the court found that the application of a Standard Operating Procedure (SOP) issued by the state was rational and consistent with public interest. The SOP, which introduced a 10% concealed work limit criterion, did not create new substantive disqualifications but structured pre-existing norms. The court upheld its application during the pending proceedings.
The court also dismissed allegations of discrimination, noting that Article 14 of the Constitution forbids equal treatment of unequals. It justified the differential treatment based on the quantum of concealed work, as the concealment by Respondent No. 6 was significantly less than that by the petitioner in a separate tender.
While acknowledging a procedural irregularity in the non-communication of reasons to the petitioner, the court declined to quash the contract awarded to Respondent No. 6, given the substantial progress in the project. Instead, it directed the respondent-state to communicate a reasoned order to the petitioner and allowed the petitioner to pursue alternative remedies, including civil damages.
The judgment serves as a reminder of the courts' restrained role in tender disputes, balancing the need for procedural fairness with the practical considerations of public cost and project disruption.
Bottom Line :
Judicial review in tender matters is confined to examining the decision-making process and not the decision itself unless arbitrariness, mala fides, or unreasonableness is evident. Procedural infirmities, such as failure to communicate decisions, can affect fairness but may not necessarily warrant quashing a substantially performed public contract.
Statutory provision(s):
Article 226 of the Constitution of India, Article 14 of the Constitution of India, Article 19(1)(g) of the Constitution of India
Ranjana Pandey v. State of U.P., (Allahabad)(DB)(Lucknow) : Law Finder Doc id # 2964772
