HC dismisses petition challenging award of school shoes supply contract

GANGTOK, 21 March: The High Court of Sikkim has dismissed a petition challenging the award of contract for supply of school shoes to BATA by the State government through the HRD Department. The petition was filed by Sital Enterprises of Jorethang, one of the bidders for the supply order in response to a notice inviting tenders issued by the HRD Department for supply of readymade school uniforms, shoes and socks for the academic session 2011. The petition was limited to the award of the contract for supply of school shoes only. While admitting the petition last year, the Court had directed that any further action on the tender process would be subject to the outcome of the petition.
The petition was dismissed on 15 March, 2012 by Chief Justice Permod Kohli, noting that High Courts do not sit as a court of appeal over the administrative decision of the public authorities.
The Court noted that even if there was an irregularity in the award of the contract to BATA, it did not call for any interference in exercise of the power of judicial review. The Chief Justice observed, “Power of judicial review in commercial field is to be exercised to examine the validity of decision making process of public authorities and not the decision itself”.
The tender process had resulted in 3 firms being shortlisted by the committee set up by the HRD Department. On the basis of the lowest bids the three selected firms shortlisted were Sital Enterprises which quoted Rs. 357 per pair of shoe; Zambala Enterprises, Gangtok which quoted Rs. 398 per pair and BATA Ltd, Kolkata which quoted Rs.397.
While the committee recommended the name of Basun Bisnu Enterprises, Namchi, which had quoted Rs. 461 per pair, the government rejected the recommendation of the committee and chose BATA as it was noted that Basun Bisnu Enterprises was a dealer of BATA shoes which was also the brand of shoes which were to be supplied to the department.
The government then placed the supply order dated 31 March, 2011 with BATA for supply of notified quantity of shoes at it quoted rate of Rs. 397 per pair plus 1% cess and inclusive of transportation and delivery to the respective stores in all the four districts.
Sital Enterprises, which had submitted tender for supply of Action and BATA shoes, then challenged the award of the contract in the court. The court noted that while the NIT invited tenders from reputed dealers, manufacturers and distributors the petitioner had not indicated that it was a dealer, distributor or manufacturer of either Action or BATA shoes; thus the petitioner did not fulfill an essential qualification.
The High Court noted that the petitioner’s tender was rightly rejected and thus also loses locus to challenge the award of the contract to BATA.
However, the Court went on to observe that the award of contract to BATA dos not suffer from any arbitrary, malafide or unfair action on the part of the department and being the manufacturer, was rightly preferred by the government over its dealer, Basun Bisnu Enterprises, the firm which was the recommendation of the selection committee.
The Chief Justice has also highlighted in the order the various observations and notes of caution of the Supreme Court about the interference in the administrative action of the public authorities in the matter of award of contracts. The CJ observed that while exercising the power of judicial review, the Court has to examine whether the decision making process has been fair, transparent, non arbitrary and not influenced by extraneous or irrelevant considerations.
“In absence of any such infirmity on examination even if it is found that decision, per se, may not be sound, no interference is warranted provided the decision is in public interest”.