Tender judicial review is limited, but legality of proposed premises must be reconsidered before liquor licence action
Judicial review in tender matters under Article 226 is limited to checking whether the authority acted fairly, non-arbitrarily, and in line with the standards it fixed; the court will not substitute its own assessment of the bid decision. The bidder's challenge on alleged non-compliance with financial and documentary tender conditions failed because the required documents had been uploaded and minor objections did not invalidate acceptance of the technical bid. However, the field verification report raised a material issue about the legality of the proposed premises and the absence of sanctioned construction, requiring fresh consideration before a licence could be acted upon, with the existing licencee permitted to continue meanwhile.
Issues: (i) whether the court could interfere with the tender evaluation under Article 226 of the Constitution of India when the challenge was directed to the acceptance of the technical bid; (ii) whether the bidder's compliance with the tender conditions relating to financial ability and supporting documents could be negatived on the grounds urged; and (iii) whether the field verification material concerning the proposed premises and the absence of sanctioned construction required fresh consideration before grant of licence.
Issue (i): whether the court could interfere with the tender evaluation under Article 226 of the Constitution of India when the challenge was directed to the acceptance of the technical bid.
Analysis: The scope of judicial review in tender matters is confined to examining the decision-making process and whether the authority acted fairly, non-arbitrarily, and in conformity with the standards it prescribed. The court cannot substitute its own view on the merits of the tender decision, but it can interfere where the authority departs from its declared norms or ignores a relevant consideration.
Conclusion: Interference in tender matters was permissible only to the limited extent of reviewing the process and the observance of the prescribed standards.
Issue (ii): whether the bidder's compliance with the tender conditions relating to financial ability and supporting documents could be negatived on the grounds urged.
Analysis: The tender conditions required a statement of immovable property, supporting documents, current bank balance, and for hired premises a no-objection certificate from the owner with supporting documents duly attested by a Notary Public. The court held that these conditions were to be treated as mandatory, but found that the bidder had uploaded the necessary documents and the objection based on the absence of immovable property, rent agreement, or minor discrepancies in the touji particulars did not by itself invalidate the acceptance of the technical bid. The challenge on these grounds therefore could not succeed.
Conclusion: The challenge based on alleged non-compliance with the financial and documentary tender conditions failed.
Issue (iii): whether the field verification material concerning the proposed premises and the absence of sanctioned construction required fresh consideration before grant of licence.
Analysis: The field verification report recorded that the proposed premises was part of a two-storeyed RCC building and noted the absence of any permission order for construction. The court held that this aspect was a serious relevant consideration and that the authority had not shown how it was dealt with before proceeding further. Since the grant of a foreign liquor licence should not rest on an unauthorized construction, the authority was required to take a fresh decision on that aspect before the licence could be acted upon.
Conclusion: Fresh consideration of the field verification report and the legality of the construction was required before grant of licence.
Final Conclusion: The technical-bid challenge did not succeed, but the authority was directed to reconsider the legality of the proposed premises and to keep the licence decision in abeyance until that exercise was completed, with the existing licencee allowed to continue in the meantime.
Ratio Decidendi: In tender-related judicial review, the authority must adhere to its own prescribed standards and cannot ignore a material factor, such as the legality of the proposed premises, where that factor bears directly on the grant of licence.
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