Court’s Decision:
The Meghalaya High Court dismissed the writ petition, rejecting the petitioner’s challenge to the tender conditions for aluminum roofing sheets. The court ruled that the tender conditions, despite some restrictions, were not arbitrary or discriminatory and were in line with the state’s policy to promote local economic development.
Facts:
The petitioner, a company based outside Meghalaya, filed a writ petition challenging the terms of a Notice Inviting Quotation (NIQ) dated September 10, 2024. The NIQ called for bids for the supply of aluminum roofing sheets, with specific conditions favoring local manufacturers. The petitioner argued that these conditions, particularly those related to local registration and trading licenses, were discriminatory and violated Articles 14 and 16 of the Indian Constitution. A corrigendum dated September 30, 2024, was issued, amending some of the conditions, but the petitioner remained dissatisfied.
Issues:
- Whether the tender conditions restricted the bidding process in a discriminatory manner, violating Articles 14 and 16 of the Constitution.
- Whether the tender conditions were justified under the Meghalaya Industrial and Investment Promotion Policy (MIIPP), 2024.
Petitioner’s Arguments:
The petitioner argued that the tender conditions, particularly clauses 1, 3, 6, and 13, were discriminatory. The requirements for bidders to be local entrepreneurs, registered under the MIIPP, and possessing a trading license were seen as limiting competition. The petitioner contended that these restrictions prevented them from participating in the tender process, violating their right to equal opportunity under Articles 14 and 16. They also argued that the conditions were arbitrary and not in line with previous tender processes for the same product.
Respondent’s Arguments:
The state, represented by its counsel, argued that the tender conditions were in line with the MIIPP, 2024, a policy designed to encourage local investment and create employment in Meghalaya. The state maintained that the policy’s objective was to foster economic growth within the state, and the conditions were a part of that larger framework. The respondents also highlighted that the tender process had been amended to include all Indian citizens, not just local residents, thus removing the alleged discriminatory elements.
Analysis of the Law:
The court examined whether the impugned conditions violated the principles of fairness and non-arbitrariness as outlined under Article 14 of the Constitution. It referred to the established legal principle that the scope of judicial review in matters of tenders and commercial contracts is limited, particularly when the tender process is based on government policies designed to promote specific economic goals.
Precedent Analysis:
The court cited several Supreme Court judgments, including Directorate of Education vs. Educomp Datamatics Ltd., and Airport Authority of India vs. Centre for Aviation Policy, which emphasized that the authority floating the tender is best placed to determine its requirements. Judicial interference in such matters is warranted only when the tender process is shown to be arbitrary or malicious.
Court’s Reasoning:
The court reasoned that the tender conditions, even with some restrictions, were rooted in the state’s policy to promote local industrial growth. The MIIPP, 2024, was designed to attract investment and create employment opportunities in Meghalaya, and the tender process was aligned with these objectives. The court found that the restrictions imposed on non-local bidders were not arbitrary but were justifiable within the framework of the state’s economic development policies.
Conclusion:
The court dismissed the petition, holding that the tender conditions were reasonable and in furtherance of a legitimate government policy. It ruled that no interference was warranted in the tender process, as the restrictions were justified and did not violate the petitioner’s constitutional rights.
Implications:
The ruling reinforces the principle that states can adopt policies that favor local enterprises and promote regional economic development, provided they do not violate constitutional rights. It also affirms the limited scope of judicial review in matters of tender processes, especially when they are linked to government policies aimed at specific economic outcomes.
