Telangana High Court
M/S. Loesche Energy Systems India … vs Ntpc Limited on 22 April, 2026
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
IN THE HIGH COURT OF JUDICATURE FOR THE STATE OF
TELANGANA
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 13166 OF 2024
22.04.2026
Between:
M/s Loesche Energy Systems India Private Limited
..... Petitioner
And
NTPC Limited & another
..... Respondents
O R D E R:
Respondent – NTPC rejected Petitioner’s bid by way
of e-mail dated 02.05.2024 which was questioned in this Writ
Petition filed seeking Certiorari on the ground that the same is
illegal, arbitrary, untenable, violative of principles of natural
justice and fundamental rights of Petitioner.
2. The facts of the case are: Respondent – NTPC
invited bids from eligible bidders for the ‘Contract for Design,
Engg, Manufacturing. Supply of New better/efficient Coal Pulv
by replacement of existing 8.5E10 Coal Pulverizers at st-1 boiler
of NRPC RDM’ vide its Invitation of Bids bearing NIT No.
9900258610 (“IFB”) with respect to the Tender bearing no.
NTPC/USSC-CPG1/9900258610 dated 21.11.2023. In terms of
2
the IFB, the scope of work shall include but not be limited to the
supply, erection, testing and inspection of equipment and
materials manufacturer’s works, packing, supply,
transportation, transit insurance, delivery to site, unloading,
storage and equipment erection including associated civil and
structural works if any. Pertinently, the site of works is situated
in Ramagundam, Telangana. The IFB mentions the term ‘NRPC
RDM in which NRPC is inadvertently misspelt instead of ‘NTPC’
and ‘RDM’ is short for ‘Ramagundam’.
2.1. As per the IFB, to be eligible for participation in the
bidding process, bidders had to meet certain Qualification
Requirements (QR) which include both Technical and Financial
Criteria which were made a mention in the writ affidavit, in
detail. Hence, the same are not reiterated.
2.2. Pursuant to the Tender, Petitioner submitted bid on
27.02.2024, enclosing all the documents, as per the IFB.
Thereafter, Respondent addressed e mail dated 03.04.2024 and
sought various documents in furtherance of Petitioner’s
technical bid. Petitioner responded vide its e mail dated
06.04.2024 and provided all necessary documents including but
not limited to the audited balance sheet of Loesche UK.,
proposed coal mill GA drawing, proof that the QCMM had
erected/supervised the erection and commissioned/supervised
3
the commissioning against the contract of M/s. Doosan Heavy
Industries & Construction Co. Ltd.
2.3. In response thereto, vide e mail dated 10.04.2024,
Respondent inter alia sought further clarifications from
Petitioner more particularly, as to how the Petitioner fulfilled the
Additional Financial Criteria under Clause 6.2.2 of the IFB and
also sought documents in support thereof. Vide its e mail dated
13.04.2024, Petitioner issued a detailed response to
Respondent, clarifying the queries apprising that it qualifies
under Clause 6.3.1 as a “licensor” of QCMM and accordingly
licensing agreement dated 31.03.2015 was submitted. Since
Clause 6.2.2.1 only refers to “collaborator” or “associate” and
does not prescribe any additional financial criteria for a
“licensor”, the additional financial criteria are not required to be
fulfilled by Petitioner. It was also informed that Petitioner by
itself qualifies the financial criteria under the tender with an
average annual turnover of INR 74.51 crores and a net worth of
452.19% in the preceding financial year.
2.4. Despite these clarifications, Respondent issued
another e mail dated 16.04.2024 on similar lines and once
again sought supporting documents from Petitioner regarding
the fulfilment of additional financial criteria by the OCMM of the
Petitioner. It is pertinent to mention here that whenever
4
Petitioner asked for clarifications from Respondent, its response
was also mechanical thereby not providing necessary inputs
regarding the bid. Petitioner immediately responded to the
Respondent’s e mail dated 16.04.2024 vide its e mail dated
19.04.2024 and once again, clarified the position that Clause
6.2.2 specifies the additional qualifications only for a
collaborator and associate and not for a licensor. In any case,
any associate or collaborator is actively involved in the project
bid whereas a licensor under a licensing agreement merely
provides a license to the licensee for consideration and is not
involved in the project actively when compared to an associate
or collaborator. Thus, vide the said e mail, this was also brought
to the attention of the Respondent.
2.5. However, without even considering the same, vide
e mail dated 02.05.2024, impugned in the Writ Petition,
Respondent has arbitrarily and unreasonably rejected the
Petitioner’s bid by merely stating the reason of “Not meeting
QR”. Due to paucity of time, considering the financial bids were
due to be opened on 03.05.2024, the Petitioner attempted to
reach out to the Respondent but there was no response. Hence,
the Writ Petition.
2.6. It is finally, stated that this Court has jurisdiction
to entertain the present Writ Petition as the cause of action in
5
respect of the IFB (Invitation for Bids) arises within the
territorial jurisdiction of this Court more so, in view of the fact
that the site of works in terms of the IFB is Ramagundam,
Telangana as indicated in the IFB as ‘NPPC RDM’ wherein RDM
stands for Ramagundam and therefore the part cause of action
is arising with in territorial jurisdiction of this Hon’ble Court.
3. In the counter filed on behalf of NTPC, it is stated,
NTPC Limited being the Central Public Sector Undertaking, the
entire bid processing is being made through the transparent
“Government e Procurement System managed by National
Informatics Centre” (hereinafter referred as “GePNIC” portal-
online system of Government E-tendering website). The tender
has been processed strictly as per the “Procurement and Work
Policy of NTPC Ltd.”. The various allegations raised by the
Petitioner is therefore, misconceived and are an afterthought
and therefore denied.
3.1. It is stated further, NTPC had floated the subject
tender and the same was called on “OPEN TENDER” by the
Central Procurement Group (CPG) of the answering Respondent
Corporation and the bidding was done “ONLINE”, at GePNIC
portal through the well detailed and established procedures
which the petitioner is well aware of it. It is submitted that since
it was an Open Tender, any agency who possess /meets
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required Qualifying Requirements (QR) was eligible to
participate in the Bidding Process.
3.2. It is stated, petitioner’s collaborator M/s Loesche
Energy Systems Limited, United Kingdom having Negative
financial Networth, does not fulfil the individual tender financial
Networth criteria. Accordingly, Petitioner Bidder was declared to
be not meeting the Financial Qualifying requirements. During
clarification stage before tender opening, bidder’s queries with
respect to the tender requirements were replied. Accordingly,
bidder had submitted the bid. Hence it is evident that full
opportunity was afforded to the Petitioner to represent his Case.
As per Clause 4.2 of the Invitation to Bid (ITB), submission of a
bid not substantially responsive to the bidding documents in
every respect will be at the Bidder’s risk and may result in
rejection of its bid. Further as per Clause 22.3 of ITB, “An
affirmative determination of meeting the qualifying requirements
will be a prerequisite for further evaluation of Techno-
Commercial bid and holding clarification meeting, if any, with
the Bidder. A negative determination will result in rejection of
the Bidder’s Techno-Commercial Bid in which event EMPLOYER
will not open the Price Bid of the concerned bidder and his bid
security shall be returned.” Further as per clause 28.0 of ITB,
specifies the “Employer’s Right to Accept Any Bid and to Reject
7
Any or All Bids”, as Employer reserves the right to accept or
reject any bid, and to annul the bidding process and reject all
bids at any time prior to award of contract, without thereby
incurring any liability to the affected Bidder or bidders or any
obligation to inform the affected Bidder or bidders of the
grounds for Employer’s action. There is no gainsaying that
Petitioner has unequivocally accepted the terms and condition
of ITB. From the above clauses of ITB, it is clear that, it is not
obligatory on the part of the Answering Respondent to provide
any ground of rejection of the Bid. However, as petitioner failed
to meet the QR an auto-generated communication regarding his
non-qualifying for Tender was received by the petitioner.
However, the petitioner, who (also by virtue of his Deed of Joint
Undertaking), is fully aware that his Collaborator fails to meet
Financial Capability related Qualifying Criteria cannot take a
different stand in the matter.
3.3. It is stated, petitioner has not approached this
Court with clean hands. In similar circumstances, when Writ
Petition No. 16442 of 2023 was filed against the NTPC, this
Court dismissed the same vide order dated 03.10.2023 and the
said order applies to this case. At para 18 and 19, it has been
observed thus:
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” The Apex Court in Jagdish Mandal v State of Orissa and
others reported in 2007 (14) SCC page 517 at para 22 observed as
under:
” 22…. Attempts by unsuccessful tenderers with imaginary
grievances, wounded pride and business rivalry, to make mountains out
of molehills of some technical/procedural violation or some prejudice to
self, and persuade courts to interfere by exercising power of judicial
review, should be resisted. Such interferences, either interim or final,
may hold up public works for years, or delay relief and succour to
thousands and millions and may increase the project cost manifold.
Therefore, a court before interfering in tender or contractual matters in
exercise of power of judicial review, should pose to itself the following
questions:
i) Whether the process adopted or decision made by the authority is
mala fide or intended to favour someone.
OR
Whether the process adopted or decision made is so arbitrary and
irrational that the court can say: ‘the decision is such that no
responsible authority acting reasonably and in accordance with relevant
law could have reached.;
ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under
Article 226″.
19. Taking into consideration, the aforesaid facts and
circumstances and duly considering the averments made by the
respondent Nos. 1 to 3 in their counter affidavit in particular, paras 13,
14 15 and 16 and taking into consideration the law laid down by the
Apex Court in the judgments relied upon by the learned counsel for the
respondents (referred to above) and duly taking into consideration, the
law laid down by the Apex Court reported in 2020 (10) SCC page 766 in
Shanthi Devi alias Shanthi Mishra v Union of India and others (referred
to above) and the view taken by the Apex Court in the judgment dated
12.04.1996 in State of U.P. and others v Harish Chandra and others
reported in 1996(9) SCC 309 (referred to and extracted above) and
applying the view taken by the Apex Court in Jagdish Mandal v State of
Orissa and others reported in 2007 (14) SCC page 517 (referred to and
extracted above) and posing the said questions, as indicated in the said
judgment to this Court itself, this Court opines that the answers are in
9
the negative, therefore, the present writ petition is dismissed since the
same is devoid of merits”.
The Hon’ble Apex Court in number of cases upheld
the said legal proposition and it has now become a well-
established law governing Judicial interference in Tendering
process that the Court should not ordinarily interfere in matters
relating to tender or contract. Hence, the Writ Petition be
dismissed on the basis of the above.
3.4. It is also stated, since the entire tendering process
is being done at Raipur, Chhattisgarh, on line mode, no cause of
action has arisen within the territorial Jurisdiction of this
Court. Further as per Deed of Joint Undertaking executed by
Petitioner, the Courts of Raipur shall have exclusive
jurisdiction. As per Clause 2.2 of the Special Condition of
Contract also Court of Competent Jurisdiction at Raipur is
having exclusive jurisdiction.
3.5. This Court vide order dated 03.05.2024 issued
directions as extracted under:
“The issue, whether the petitioner has fulfilled all the
conditions of the tender notification dated 21.11.2023 issued by the
respondent and is eligible for financial bid, is required to be adjudicated
after filing of the counter affidavit by the respondent. In the meanwhile,
any further action taken by the respondent in pursuance of the tender
notification dated 21.11.2023 shall be subject to further orders of this
Court.”
10
It is stated, in compliance with the said order, PO
No. 5500044674 dated 29.05.2024 was placed upon L1 Bidder
M/s. Schenck Process Solutions India Pvt Ltd, Bangalore, with
the stipulation that the Award of PO shall be subjected to the
further/final Order (s) of this Court. Accordingly, no claim on
account of any reason / ground whatsoever shall be admissible
against NTPC for any rescinding/modification of the Contract
/PO, made in compliance to the Final Judgment in this regard
and any decision of EIC in this regard shall be final and binding
on the parties. It is also stated, bidding conditions has the pre-
requisite of entering DJU with the Collaborator. Further,
Collaborator should invariably be a Holding Company of the
bidder as well as should simultaneously comply with the
requirement of being a ‘Qualified Coal Mill Manufacturer’ which
has been specified under tender technical Qualifying
Requirement at Clause 6.1.1. Thus, the bidder’s contention to
set aside the applicability of additional financial Qualification
Requirements for licensor, in spite of submitting the DJU on
non-judicial stamp paper so as to fulfill the Technical
Qualification Requirements is devoid of merit.
3.6. It is stated, bid of Petitioner was not rejected
unreasonably. Rather the compliance of tender technical
Qualifying Requirements, submission of DJU to fulfil technical
11
Qualification Requirements based on the Collaborator,
compliance of financial requirements for bidder and the
compliance of additional financial Requirements for Collaborator
with whom bidder/petitioner has executed the DJU as the
Executant Partner was evaluated in the tender. Accordingly, bid
of petitioner was rejected and a system generated e mail dated
02.05.2024 was sent to petitioner for rejection of bid.
4. In the counter filed on behalf of Respondent No.2, it
is stated, on 03.06.2024, they received information from the
on line portal of Respondent No. 1 that it was the L1 bidder for
the subject Tender and it was awarded the Tender vide
Purchase Order dated 29.05.2024, after having met all the
specifications under the QR as per the instructions under the
Tender. They met the QR under Invitation for Bid (“IFB”), also
qualified the financial criteria under Clause 6.2, furnished
performance securities for ten per cent (10%) of the total
contract price in compliance with Clause 31 of the Instructions
to Bidders (“ITB”).
4.1. It is also stated that the present matter pertains to
the award of tender by a Public Sector Undertaking. It is a
settled position of law upheld by the Hon’ble Apex Court in a
catena of judgments that there are inherent limitations in
exercise of the power of judicial review in matters pertaining to
12
tenders and contractual powers of Government bodies. It is
stated, the right to choose cannot be considered to be an
arbitrary power. In the present case, Petitioner did not meet the
qualification requirements under the IFB, as such, Respondent
No. 1 rightly rejected the bid of Petitioner. This respondent
draws attention to Clause 28 of the ITB stipulates as follows:
” Employer’s Right to Accept Any Bid and to Reject Any
or All Bids:
Employer reserves the right to accept or reject any bid, and to and
the bidding process and reject all bids at any time prior to award of
contract, without thereby incurring any liability to the affected Bidder or
bidders or any obligation to inform the affected Bidder or bidders of the
grounds for Employer’s action”.
Clause 28 clearly states that Respondent No. 1
reserves the right to accept or reject any bid, and to annul the
bidding process and reject all bids at any time prior to the
award of the contract, without incurring any liability to the
affected bidder or bidders or any obligation to inform the
affected bidder or bidders of the grounds for employer’s action.
4.2. It is stated, petitioner alleges to have qualified
under the technical criteria via Route 3 under Clause 6.1.3 of
the IFB viz. Subsidiary of a Qualified Coal Mill Manufacturer.
Petitioner also alleges to have filed a Deed of Joint Undertaking
with the Qualified Coal Mill Manufacturer. Here, it is to be seen,
13
as per Clause 6.2 of the IFB, there were Additional Financial
Requirements to be met by the Collaborator of Petitioner. As is
clear from the counter filed by Respondent No.1, Petitioner did
not meet the Additional Financial Requirements stipulated
under Clause 6.2 of the IFB. In fact, as per the counter of
Respondent No. 1, the net worth of the Collaborator of Petitioner
is on the negative side. Since Petitioner did not meet the QR laid
down under the IFB, Respondent No.1 rightly rejected the bid of
Petitioner. Petitioner cannot, at this point of time, take a stand
that it could change its Collaborator and enter into a fresh Deed
of Joint Undertaking to meet the aforementioned financial
requirements.
4.3. It is stated, the Hon’ble Supreme Court had
unequivocally held in a catena of decisions that it is not for the
Court to determine whether a particular policy or particular
decision taken in the fulfilment of that policy is fair. The Court
is only concerned with the manner in which those decisions
have been taken. The Court does not sit as a court of Appeal but
merely reviews the manner in which the decision was made. The
action of Respondent No.1 cannot be regarded as arbitrary
action as there was proper reasonable criteria by which
petitioner’s qualification was rejected. The terms of the
14
invitation to tender cannot be open to judicial scrutiny because
the invitation to tender is in the realm of contract.
4.4. It is further stated, this Court under Article 226 of
the Constitution would not be justified in interfering with
commercial transactions in which the State is one of the parties
except where there is substantial public interest involved and in
cases where the transaction is mala fide. The scope of judicial
review in matters pertaining to tenders and contracts by Public
Sector Undertakings is limited to cases where it is clearly
established that there was a mala fide action on the part of the
Respondent or there is substantial public interest involved. It is
respectfully submitted by the Answering Respondent that the
present case does not qualify both the parameters and s such,
the present Petition is liable to be dismissed.
5. Petitioner filed rejoinder denying the averments of
the counter and reiterating the averments of the writ petition. It
is well-settled that constitutional courts can interfere in the
decision making process of the tender authority when the
decision is arbitrary and irrational. Reliance is placed on the
judgments in Jagdish Mandal v. State of Orissa 1, Monarch
Infrastructure (P) Ltd. v. Ulhasnagar Municipal Corpn. 2. It is
1
(2007) 14 SCC 517
2
(2000) 5 SCC 287
15
also stated, the order dated 03.10.2023 in Writ Petition No.
16442 of 2023 relied on by Respondent No.1 is in fact, in favour
of Petitioner. Although the facts in the said case are different to
the facts in the present case, the Court in the said case did
interpret the bid conditions and came to the conclusion that
petitioner therein did not fulfil the qualification requirements.
However, in the present case, Petitioner fulfilled all the
Qualifying Requirements stipulated in the IFB.
6. Sri P. Venugopal, learned Senior Counsel assisted
by Sri M. Abhinay Reddy, learned counsel for petitioner
contends that the action of Respondent No.1 in rejecting
petitioner’ bid for non-compliance with clause 6.2.2. is
arbitrary, irrational and contrary to the tender conditions. He
further argues that the entire tendering process is being done at
Raipur, Chattisgarh, on line mode, however, relying on the
judgment in Shanti Devi v. UOI 3, contends that irrespective of
the fact that seat of the authority concerned is outside the
territorial jurisdiction of the High Court, even if a small fraction
of cause of action arises within its jurisdiction, it has
jurisdiction. In that regard, reliance is also placed on the
3
(2020) 10 SCC 766
16
judgment in Gupta Freight Carrier v. Executive Director 4
and MRT Signals Ltd. V. UOI 5.
6.1. Another argument put forward by learned counsel
is that reserving rights clause in tender does not absolve the
authority from furnishing valid reasons. Based on the judgment
of the Hon’ble Delhi High Court in PKF Sridhar and
Santhanam v. Airports Economic Regulatory Authority of
India 6, learned counsel submits that such clauses do not mean
that the authority should not have valid reasons to justify its
conduct.
7. On the other hand, learned counsel for Respondent
No.1 Sri Ch. Sidharth Sharma primarily takes objection on the
maintainability of the Writ Petition as the writ of certiorari is not
maintainable against the NTPC order. He places reliance on the
judgment of the Hon’ble Apex Court in Central Council for
Research in Ayurvedic Studies v. Bikartan Das 7, Radhey
Shyam v. Chhabi Nath 8. Secondly, it is argued, this Court
does not possess the territorial jurisdiction to adjudicate the
present dispute. Reliance is placed on the judgment of the
Hon’ble Supreme Court in State of Rajasthan v. M/s Swaika
4
2022 SCC On line Bom 706
5
2024 SCC On line Cal 5593
6
2022 SC On line Del 122
7
2023 SCC On line SC 996
8
(2015) 5 SCC 423
17
Properties 9. Thirdly, learned counsel, on the scope of judicial
review in matters pertaining to tender, argued that the scope is
limited and the terms of the invitation for bids cannot be open
to judicial scrutiny and interpretation and understanding of the
tender conditions given by the Employer should be second-
guessed by courts under judicial review. Learned counsel tries
to take cue from the judgments of the Hon’ble Apex Court in
Silppi Constructions Contractors v. Union of India10,
Jagdish Mandal’s case (supra), JSW Infrastructure Ltd. v.
Kakinada Sea Port 11, and Galaxy Transport Agency v. New
J.K. Roadways 12.
8. Heard M/s King Stubb & Kasiva, learned counsel for
Respondent No.2.
9. Upon consideration of the pleadings, material on
record and the submissions, this Court finds that the primary
relief sought is issuance of a Writ of Certiorari to quash the
rejection email dated 02.05.2024 issued by Respondent No.1 in
the course of a tender process. Whereas the contention of
respondent No.1 is writ of certiorari is not maintainable.
9
(1985) 3 SCC 217
10
(2020) 16 SCC 489
11
(2017) 4 SCC 170
12
(2021) 16 SCC 808
18
10. It is settled position of law that a writ of certiorari is
issued to quash decisions of judicial or quasi-judicial authorities
where such authorities act without jurisdiction, exceed
jurisdiction, commit an error apparent on the face of the record,
or violate principles of natural justice. The scope of certiorari
does not ordinarily extend to purely administrative or
contractual decisions unless such decisions are shown to be
vitiated by arbitrariness, mala fides, or violation of statutory
provisions.
11. In Central Council for Research in Ayurvedic
Studies v. Bikartan Das (supra), the Hon’ble Supreme Court
held as under:
” 53. This Court explained that a court which has jurisdiction
over a subject-matter has jurisdiction to decide wrong as well as right,
and when the legislature does not choose to confer a right of appeal
against that decision, it would be defeating its purpose and policy if a
superior court were to rehear the case on the evidence and substitute its
own finding in certiorari.
54. In Yakoob v. K.S. Radhakrishnan [Yakoob v. K.S.
Radhakrishnan, 1963 SCC OnLine SC 24 : AIR 1964 SC 477] , P.B.
Gajendragadkar, C.J., speaking for the Constitution Bench, placed the
matter beyond any position of doubt by holding that a writ of certiorari
can be issued for correcting errors of jurisdiction committed by inferior
courts or tribunals. The observations of this Court in para 7 are worth
taking note of : (SCC OnLine SC para 7)
“7. The question about the limits of the
jurisdiction of High Courts in issuing a writ of certiorari
under Article 226 has been frequently considered by this
Court and the true legal position in that behalf is no longer in
doubt. A writ of certiorari can be issued for correcting errors
19of jurisdiction committed by inferior courts or tribunals :
these are cases where orders are passed by inferior courts or
tribunals without jurisdiction, or is in excess of it, or as a
result of failure to exercise jurisdiction. A writ can similarly
be issued where in exercise of jurisdiction conferred on it, the
Court or Tribunal acts illegally or improperly, as for instance,
it decides a question without giving an opportunity to be
heard to the party affected by the order, or where the
procedure adopted in dealing with the dispute is opposed to
principles of natural justice. There is, however, no doubt that
the jurisdiction to issue a writ of certiorari is a supervisory
jurisdiction and the Court exercising it is not entitled to act
as an appellate court. This limitation necessarily means that
findings of fact reached by the inferior court or Tribunal as a
result of the appreciation of evidence cannot be reopened or
questioned in writ proceedings. An error of law which is
apparent on the face of the record can be corrected by a writ,
but not an error of fact, however grave it may appear to be. In
regard to a finding of fact recorded by the Tribunal, a writ of
certiorari can be issued if it is shown that in recording the
said finding, the Tribunal had erroneously refused to admit
admissible and material evidence, or had erroneously
admitted inadmissible evidence which has influenced the
impugned finding. Similarly, if a finding of fact is based on no
evidence, that would be regarded as an error of law which can
be corrected by a writ of certiorari. In dealing with this
category of cases, however, we must always bear in mind that
a finding of fact recorded by the Tribunal cannot be
challenged in proceedings for a writ of certiorari on the
ground that the relevant and material evidence adduced
before the Tribunal was insufficient or inadequate to sustain
the impugned finding. The adequacy or sufficiency of evidence
led on a point and the inference of fact to be drawn from the
said finding are within the exclusive jurisdiction of the
Tribunal, and the said points cannot be agitated before a writ
court. It is within these limits that the jurisdiction conferred
on the High Courts under Article 226 to issue a writ of
certiorari can be legitimately exercised….”
12. From the above, it is to be understood, while
exercising extraordinary jurisdiction under Article 226 of the
Constitution, more particularly when it comes to the issue of a
writ of certiorari, the High Court does not exercise the powers of
Appellate Tribunal and it does not review or reweigh the
evidence upon which the determination of the inferior tribunal
20
purports to be based and the writ of Certiorari can be issued if
an error of law is apparent on the face of the record and it being
a high prerogative writ, should not be issued on mere asking.
Further, the Writ of Certiorari is issued for correcting errors of
jurisdiction, as and when an inferior court or tribunal acts
without jurisdiction or in excess of it, or fails to exercise it.
13. Further, the Hon’ble Supreme Court in Silppi
Constructions Contractors v. Union of India laid down the
law that calling for a tender is purely an administrative decision
and it need not contain any reasons and that it is neither a
judicial nor a quasi-judicial order. Learned counsel for
petitioner in his Note, relied on the aforementioned judgment in
Silppi Constructions Contractors’ case (supra) wherein the
Hon’ble Supreme Court held at Para 19 that the Court being the
guardian of fundamental rights is duty bound to interfere when
there is arbitrariness, irrationality, mala fides and bias.
However, the Counsel for the Petitioner is only relying on the
judgment in part and the entire para 19 wherein the Hon’ble
Apex Court clearly held that Government Contracts must not be
easily interfered with is extracted herein below:
“This Court being the guardian of fundamental rights is
duty bound to interfere when there is arbitrariness, irrationality, mala
fides and bias. However, this Court in all the aforesaid decisions has
cautioned time and again that courts should exercise a lot of restraint
21while exercising their powers of judicial review in contractual or
commercial matters. This Court is normally loathe to interfere in
contractual matters unless a clearcut case of arbitrariness or mala fides
or bias or irrationality is made out. One must remember that today
many public sector undertakings compete with the private industry. The
contracts entered into between private parties are not subject to
scrutiny under writ jurisdiction. No doubt, the bodies which are State
within the meaning of Article 12 of the Constitution are bound to act
fairly and are amenable to the writ jurisdiction of superior courts but
this discretionary power must be exercised with a great deal of restraint
and caution. The Courts must realise their limitations and the havoc
which needless interference in commercial matters can cause. In
contracts involving technical issues the courts should be even more
reluctant because most of us in judges’ robes do not have the necessary
expertise to adjudicate upon technical issues beyond our domain. As
laid down in the judgments cited above the courts should not use a
magnifying glass while scanning the tenders and make every small
mistake appear like a big blunder. In fact, the courts must give “fair play
in the joints” to the government and public sector undertakings.”
14. In the present case, the impugned action arises out
of a tender process initiated by Respondent No.1 – NTPC Limited,
a Public Sector Undertaking, under NIT No. NTPC/USSC-
CGP1/9900258610 dated 21.11.2023. The process of evaluation
of bids, determination of technical and financial eligibility, and
rejection of non-responsive bids is essentially a contractual and
administrative function carried out in terms of the Invitation for
Bids and Instructions to Bidders. The rejection e mail dated
02.05.2024, which is sought to be quashed, is not an
adjudicatory order passed by a judicial or quasi-judicial
22
authority after hearing parties, but is an outcome of evaluation
of bids in a commercial tender process governed by contractual
terms such as Clause 6.1, Clause 6.2.2, Clause 28 of the ITB
and other provisions of the bidding documents. The said action
does not involve determination of rights in a lis between parties
in a judicial manner, but is a decision taken by the tendering
authority in exercise of its contractual discretion. In the light of
the same, as rightly contended by learned Counsel for
Respondent No.1, writ of certiorari cannot be entertained against
the impugned order.
15. Secondly, the question is whether the High Court
possesses territorial jurisdiction to adjudicate the present
dispute. Admittedly, The Tender was floated at Raipur in the
State of Chattisgarh; petitioner is a resident of Chennai, Tamil
Nadu; they submitted Tender, in respect of a work at
Ramagundam in the State of Telangana, hence, they cannot file
this Writ before Telangana High Court in as much as, no “fact”
has yet arisen in Telangana to give rise to cause of action in
Telangana. The Hon’ble Supreme Court in M/s Swaika
Properties (supra) has categorically held that once the Hon’ble
High Court lacks territorial jurisdiction, the High Court cannot
entertain the Writ Petition. In the said Judgment, the property
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which was the subject matter of litigation was situated in
Rajasthan. Merely because a Notice of acquisition of the said
property was served at Kolkata, it was held, that per se does not
enable the Kolkata High Court to assume jurisdiction and
entertain the Writ Petition. In this case also, no fact per-se has
arisen in the State of Telangana so that Petitioner can seek the
indulgence of this Court to entertain the Writ Petition.
16. Though learned counsel for petitioner sought to
place reliance on the judgment of this Court in Writ Petition No.
16442 of 2023, the ratio laid down therein is inapplicable
inasmuch as petitioner therein who participated in the tender
floated by NTPC is an entity based in State of Telangana itself,
whereas petitioner herein is a Chennai-based entity. Further,
learned counsel for Respondent No.1 filed a memo enclosing
thereto the Special Conditions of the Contract, Condition No.
2.2 of which stipulates that ‘the contract shall be governed by
and interpreted in accordance with the Laws in force in India.
The Courts at Raipur shall have exclusive jurisdiction in all
matters arising under the contract. Also, Clause 9 in Deed of
Joint Undertaking says that any dispute that may arise in
connection with the Deed of Joint Undertaking shall be settled
as per arbitration procedure / rules mentioned in the contract
documents. This Deed shall be construed and interpreted in
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accordance with the Laws of India and the Courts of Raipur
shall have exclusive jurisdiction. This clause again reiterates
that the Courts at Raipur shall have exclusive jurisdiction in the
mater. In that view of the matter, it is to be concluded that this
Court lacks territorial jurisdiction to entertain the Writ Petition.
17. Thirdly, it is to be seen, the scope of judicial review
in matters pertaining to tender is limited and the terms of the
invitation for bids cannot be open to judicial scrutiny and
interpretation and understanding of the tender documents given
by the employer should be second-guessed by courts under
judicial review. In Jagdish Mandal‘s case, the Hon’ble Apex
Court held that a Court before interfering in tender or
contractual maters in exercise of power of judicial review,
should pose to itself the following questions:
(i) Whether the process adopted or the decision taken by the authority is
mala fide or intended to favour some one;
Or
Whether the process adopted or decision made is so arbitrary and irrational
that the Court can say: “the decision is such that no responsible authority
acting reasonably and in accordance with relevant law could have reached”.
(ii) Whether public interest is affected?
18. It has been held by the Hon’ble Supreme Court in
JSW Infrastructure Ltd. and New J.K. Roadways (supra) that
interest of the person who issued the tender has to be protected
and nothing beyond. In matters of contract, the Courts must
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also not interfere where such interference will cause
unnecessary loss to the public exchequer. No doubt, the tender
in question arises out of contractual domain involving
commercial decision of a Public Sector Undertaking. The scope
of judicial review in such matters is limited to examining the
decision-making process and not the merits of the decision. The
law laid down in Jagdish Mandal‘s case clearly holds that
interference is warranted only when the decision is mala fide,
arbitrary to the extent that no reasonable authority
would have taken such decision, or where public interest is
affected. Even in TATA Cellular v. Union of India 13, the
Hon’ble Supreme Court have laid down the parameters of
interpretation and the one stated by petitioner does not fit in
those parameters.
19. In the present case, petitioner, admittedly,
participated under Route-3 under Clause 6.1.3 and submitted
Deed of Joint Undertaking dated 24.11.2023. The DJU, which
forms part of the tender documents, specifically treats the
associated entity as Collaborator and binds both the parties
jointly and severally. Respondent No. 1 has evaluated the bid on
the basis of the DJU submitted by petitioner. The contention of
Petitioner that its QCMM is a ‘licensor’ and not a ‘collaborator’
13
(1994) 6 SCC 651
26
cannot be accepted in view of the fact that Petitioner has itself
executed DJU in prescribed format and relied upon such
document for qualification. The attempt to re-characterize the
relationship after submission of bid is clearly untenable and
amounts to altering the basis of qualification after participation.
20. Further, Clauses 6.2.2.1 and 6.2.2.2 clearly
stipulate Additional Financial Criteria for Collaborator/Associate
for bidders under Clause 6.1.3. Once Petitioner has submitted
DJU and projected its QCMM as Collaborator for the purpose of
qualification, compliance with Clause 6.2.2 becomes mandatory.
The material on record establishes that Collaborator’s net worth
is negative and does not meet the requirement of not less than
100% or even 75% of paid-up share capital. The plea of
Petitioner that it independently satisfies financial criteria is also
of no assistance, as the tender conditions specifically require
compliance with criteria applicable to Route-3 including
collaborator requirements. The terms of the tender cannot be
rewritten by the Court.
21. It is also relevant to note that contract has already
been awarded to Respondent No.2 vide Purchase Order dated
29.05.2024 and Contract Agreement dated 11.07.2024, and
substantial steps have been taken including furnishing of bank
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guarantees. Interference, at this stage, would cause prejudice,
delay in execution of a project of national importance and
adversely affect public interest. In view of the above, this Court
is of the considered opinion that petitioner failed to establish any
arbitrariness, mala fide or illegality in the decision-making
process of Respondent No.1.
22. Accordingly, the Writ Petition is dismissed. No costs.
23. Consequently, the miscellaneous Applications, if
any shall stand closed.
——– —————————–
NAGESH BHEEMAPAKA, J
22nd April 2026
ksld
