Transparent government procurement under the Swiss Challenge Method was upheld; no arbitrariness, favouritism, or Article 14 breach was shown.

Government procurement under the Swiss Challenge Method was upheld where the procedure was expressly disclosed in the public notice and bid documents, applied on a pilot basis, and adopted after consideration by the competent authorities for public-private development of undeveloped land. The court found no arbitrariness, unreasonableness, or violation of Article 14 because all participants knew the first right of refusal and the process aimed at securing value and better housing development. Allegations of favouritism or improper executive influence also failed because the proposal was examined through the departmental process, there was application of mind, and no binding direction to confer an undue benefit was shown. Judicial interference in such policy-based contractual matters was therefore unwarranted.

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Issues: (i) Whether the Swiss Challenge Method adopted for development of MHADA land was arbitrary, unreasonable or violative of Article 14 of the Constitution of India; (ii) Whether the award of the contract to the original proposer was vitiated by alleged favouritism or improper executive influence.

Issue (i): Whether the Swiss Challenge Method adopted for development of MHADA land was arbitrary, unreasonable or violative of Article 14 of the Constitution of India.

Analysis: The method was expressly disclosed in the public notice and bid documents, including the first right of refusal in favour of the original proposer. All participants entered the process with knowledge of the procedure and undertakings reflecting that understanding. The record showed that the method was adopted on a pilot basis after consideration by the competent authorities, in the context of public-private participation for optimal use of undeveloped public land. The material also showed that the method was intended to secure the highest value while enabling better housing development, and that the originator's proposal did not have to be innovative merely because it was processed under the Swiss Challenge procedure.

Conclusion: The Swiss Challenge Method was not arbitrary or unreasonable and did not offend Article 14.

Issue (ii): Whether the award of the contract to the original proposer was vitiated by alleged favouritism or improper executive influence.

Analysis: The proposal was first placed before MHADA, then routed through the Housing Department, and subsequently examined and recommended by the competent authorities. The Chief Minister's role, in the context of the housing portfolio and the internal governmental process, did not establish any unlawful favouritism. The documents showed application of mind by the authority, absence of any binding direction to confer benefit on the original proposer, and a decision taken after the tender process in accordance with the disclosed method. Judicial interference in such contractual and policy matters is limited where the decision is neither arbitrary nor contrary to public interest.

Conclusion: The allegation of favouritism or improper influence was not made out and the award of contract could not be faulted on that ground.

Final Conclusion: The High Court's interference with the pilot project and the tender process was unsustainable, and the challenge to the adoption and implementation of the Swiss Challenge Method failed.

Ratio Decidendi: In matters of government contracts and policy-based procurement, the court will not interfere where the procedure is transparently disclosed, applied uniformly, and adopted with due application of mind in public interest, unless arbitrariness, discrimination, or mala fide is established.

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