Ori HC | Judicial review of administrative actions to be done only if it suffers from vice of illegality, Irrationality or Procedural Impropriety

Orissa High Court: A Division Bench of Mohammad Rafiq and Debabrata Dash JJ. disposed off the petition on merits.

The factual matrix of the case is that the petitioner is a registered cooperative society, involved in supply/sale of different products including fertilizers, who participated in the e-auction made by the Steel Authority of India Limited, Rourkela Steel Plant for the purpose of sale of Ammonium Sulphate by depositing the required EMD. The auction was conducted and the petitioner’s name appeared in the bid sheet under rank-1 being the sole bidder. Despite the petitioner being the successful bidder no supply of the stock was made instead another open sale dated 19-12-2019 was published by the opposite parties. Being apprehensive that in the subsequent open sale, the entire stock would be sold wholly to the detriment of the petitioner; bid was given by the petitioner for purchase of small quantity of Ammonium Sulphate.  Hence the instant writ of mandamus has been filed to command the opposite parties to deliver the stock and direct the opposite party to consider and dispose of the petitioner’s representation dated 21-12-2019 as the action of the opposite party in holding the second auction is arbitrary and illegal.

B. K. Mohanty and S S Rao, Counsel for the petitioner submitted that as there was no response towards representation dated 19.12.2019 given by the petitioner, it is clear that there was no prior intimation regarding cancellation of the first auction process been given and it is a fit case for judicial review in annulling the second auction and for restoration of the result of the first auction.

B. Dasmohapatra and B.N Bhol, Counsel for the opposite parties highlighted the scope of writ jurisdiction in contractual dealings of the State. He further highlighted that in the first auction; the petitioner was the only participant and had applied for the quantity quoting the fixed bid price making the first auction not competitive at all. Hence the present case is not fir for judicial review.

The Court after hearing both sides relied on the judgment titled Maa Binda Express Carrier v. North-East Frontier Railway (2014) 3 SCC 760 and observed that there is a certain public interest at stake in the decision of cancellation of the first auction as petitioner being the sole participant in an auction reduces competition and hinders public interest. It also stated that judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made ‘lawfully’ and not to check whether choice or decision is ‘sound’.

In view of the above, petitioner is estopped from questioning the validity/legality of the cancellation of the first auction and the petition is disposed off. [Maa Sarala Multipurpose Co-operative Ltd. v. Steel Authority of India, 2020 SCC OnLine Ori 536, decided on 20-07-2020]

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