Court can interfere in State’s commercial decisions, if vitiated by malafides, unreasonableness and arbitrariness

High Court of Kerala: In a batch of writ petitions filed by transporting contractors challenging the notice of Kerala State Civil Supplies Corporation Ltd. (Supplyco.) which invited tenders for transportation of food grains to the fair price shops in some of the taluks in the State, a Single Judge Bench comprising P.B. Suresh Kumar, J. held that though the petitioners were all lowest bidders in a previous process and should have been awarded the tender, but since the contracts were not concluded, the respondent was free to come up with a fresh tender notice.

The petitioners argued that a fresh tender notice issued by Supplyco. after the petitioners had emerged lowest bidders at a previous process for the same works was not justified. The respondent contended that the fresh notice was issued on account of confusion as regards the invitations submitted by the previous contractors since some quotations included handling charges while others did not. Therefore, the notice cannot be declared illegal since “the fresh invitation has been made to select contractors after following a fair procedure not only to enable the Supplyco. to get competitive rates for the transportation and handling works but also to provide the bidders an opportunity to submit their bids in identical manner.”

The Court also observed that the decisions of the State and its instrumentalities with respect to commercial transactions and contracts are not amenable to judicial review but the Court can interfere “if it is found that the same is vitiated by malafides, unreasonableness or arbitrariness.” [Muhammed Abdul Hakkim v. Kerala State Civil Supplies Corporation Ltd., 2017 SCC OnLine Ker 7648, decided on 04.07.2017]

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