# M/S Rajan Construction Comp v. State of U.P. & Anr

- **Citation:** (2025) 4 ILRA 693
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-04-18
- **Case number:** Writ C No. 34248 of 2024
- **Bench:** Shekhar B. Saraf, Vipin Chandra Dixit
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-rajan-construction-comp-v-state-of-u-p-anr-53197
- **Pages:** 15

## Headnote

Civil Law - Constitution of India,1950 -
Article 14, 19, 19(1)(g), 19(6), 21, 226 &
301-
Writ
Petition
-
challenging
the
restricting clause of the impugned E-tender -
Petitioner, a biomass pellet supplier, was
restricted from participating in an E-Tender
issued by Uttar Pradesh Rajya Vidyut Utpadan
Nigam Ltd. - tender was for the supply of
Agro-based non-torrefied biomass pellets - -
Judicial Review - court finds that, tender
documents contained a restrictive clause 3(i)
as a pre-qualifying condition, which mandated
that only existing manufacturers in the NCR
region or those are located within 100 km of
HTP Station, Aligarh - Plea taken that, Clause
3(i) is arbitrary, unconstitutional, and violates
Articles 14, 19(1)(g), 21, and 301 of the
Constitution of India - court observed that,
the restriction was aimed at reducing NCR air
pollution caused by stubble burning - and it is
aligns with government policies, including the
Environment Rules, 2023, and advisories from
the Ministry of Power - court held that, - (i)
Judicial review will not be permitted to be
invoked to protect private interest at the cost
of public interest - (ii) courts being the
guardian of fundamental rights is duty-bound
to interfere only in cases when there is
arbitrariness,
irrationality,
mala-fide
and
biasness and not otherwise, - (iii) Restrictive
condition in the tender cannot be considered
to be arbitrary and discriminatory because, it
is the wisdom of the employer to determine
conditions/clauses which are suited for the
work to be performed in the public interest -
(iv) no evidence of mala fide intent or
targeted exclusion was found - accordingly,
writ petition is dismissed.
(Para no. 16, 22, 23, 24, 26, 27, 28, 29, 31,
32)

Writ Petition Dismissed. (E-11)

List of referred Cases: -

## Text

_Characters 0–39,937 of 48,622. This is a partial read: ask again with offset=39937 for what follows._

4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
693
consequential
steps
for
entering
of
respondent no. 4 as Gram Pradhan of
village in question within one month from
the date of production of certified copy of
this order.

52. The writ petition is disposed of
with the aforesaid observations/directions.
----------
(2025) 4 ILRA 693
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.04.2025

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.
THE HON'BLE VIPIN CHANDRA DIXIT, J.

Writ C No. 34248 of 2024

M/S Rajan Construction Comp....Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Sri Satyendra Chandra Tripathi, Sri Shiv
Poojan Yadav

Counsel for the Respondents:
Sri Mukul Tripathi, S.C., Sri Shad Khan,
Sri Shishir Prakash
Civil Law - Constitution of India,1950 -
Article 14, 19, 19(1)(g), 19(6), 21, 226 &
301-
Writ
Petition
-
challenging
the
restricting clause of the impugned E-tender -
Petitioner, a biomass pellet supplier, was
restricted from participating in an E-Tender
issued by Uttar Pradesh Rajya Vidyut Utpadan
Nigam Ltd. - tender was for the supply of
Agro-based non-torrefied biomass pellets - -
Judicial Review - court finds that, tender
documents contained a restrictive clause 3(i)
as a pre-qualifying condition, which mandated
that only existing manufacturers in the NCR
region or those are located within 100 km of
HTP Station, Aligarh - Plea taken that, Clause
3(i) is arbitrary, unconstitutional, and violates
Articles 14, 19(1)(g), 21, and 301 of the
Constitution of India - court observed that,
the restriction was aimed at reducing NCR air
pollution caused by stubble burning - and it is
aligns with government policies, including the
Environment Rules, 2023, and advisories from
the Ministry of Power - court held that, - (i)
Judicial review will not be permitted to be
invoked to protect private interest at the cost
of public interest - (ii) courts being the
guardian of fundamental rights is duty-bound
to interfere only in cases when there is
arbitrariness,
irrationality,
mala-fide
and
biasness and not otherwise, - (iii) Restrictive
condition in the tender cannot be considered
to be arbitrary and discriminatory because, it
is the wisdom of the employer to determine
conditions/clauses which are suited for the
work to be performed in the public interest -
(iv) no evidence of mala fide intent or
targeted exclusion was found - accordingly,
writ petition is dismissed.
(Para no. 16, 22, 23, 24, 26, 27, 28, 29, 31,
32)

Writ Petition Dismissed. (E-11)

List of referred Cases: -

1. Maa Binda Express Carrier Vs North-East
Frontier Railway - (2014) 3 SCC 760,

2. Reliance Energy Ltd. Vs Maharashtra St.
Road Development Corpn. Ltd. - (2007) 8 SCC
1,

3. Tata Cellular Vs U.O.I.- (1994) 6 SCC 651,

4.
Caretel
Infotech
Ltd.
Vs
Hindustan
Petroleum Corpn. Ltd. - (2019) 14 SCC 81,

5. Silppi Constructions Contractors Vs U.O.I.-
(2020) 16 SCC 489,

6. Montecarlo Ltd. Vs NTPC Ltd. - (2016) 15
SCC 272,

7. Agmatel India (P) Ltd. Vs Resoursys Telecom
- (2022) 5 SCC 362,

8. Balaji Ventures (P) Ltd. Vs Maharashtra St.
Power Generation Co. Ltd. - 2022 SCC OnLine
SC 1967,

9. N.G. Projects Ltd. Vs Vinod Kumar Jain -
(2022) 6 SCC 127,
694 INDIAN LAW REPORTS ALLAHABAD SERIES
10. Airport Authority of India Vs Centre for
Aviation Policy, Safety & Research (CAPSR) -
2022 SCC OnLine SC 1334,

11. Engineering Kamgar Union Vs Electro Steels
Castings Ltd. and another - (2004) 6 SCC 36,

12. Association of UPS and Power Conditioning
Systems Manufacturer Vs Society of Applied
Microwave Electronics Engineering and Research
(Sameer) & Ors. - 2002 (65) DRJ 678,

13. Ramana Dayaram Shetty Vs International
Airport Authority of India & ors.- (1979) 3 SCC
489,

14. Rash Bihari Panda Vs St. of Orissa - (1969)
1 SCC 414

(Delivered by Hon'ble Shekhar B. Saraf,
J.)

1. The present writ petition has
been filed under Article 226 of the
Constitution
of
India,
wherein
the
petitioner prays for the issuance of a writ
of certiorari quashing the impugned ETender
No.
ET-60/
MMC/PD/ETPS/HTPS/2024 dated July
10, 2024 as amended on August 13, 2024
issued
by
Superintending
Engineer,
Material Management Circle (MMC),
Harduaganj
Thermal
Power
Station
(HTPS), Uttar Pradesh Rajya Vidyut
Utpadan
Nigam
Limited,
Kasimpur,
Aligarh
(hereinafter
referred
to
as
'respondent no.3') whereby the petitioner
was restricted from participating in ETender. The petitioner further prays for a
direction to respondent no.3 to invite a
fresh tender for the supply of agro-based
non-torrefied biomass pellets for coal
handling plant at the aforementioned
location and to permit the petitioner to
participate in the tender process without
imposing any pre-qualifying condition as
mentioned in Clause 3(i) of the impugned
E-Tender.
FACTS
2. The factual matrix of the
present writ petition is delineated below:

 a. The petitioner is a firm
registered at District Ambedkar Nagar,
Uttar Pradesh, engaged in small-scale
business
of
supplying
non-torrefied
biomass pellets for coal handling plants.

 b. On November 17, 2017 the
Ministry of Power published a Standard
Operating Procedure (SOP) regarding
biomass utilization for power generation
through co-firing in coal-based power
plants. This was followed by an advisory
dated November 24, 2017 wherein all
State Power Secretaries, Thermal Power
Generating Plants/ Utilities (Public or
Private)
along
with
the
Managing
Director of Uttar Pradesh Rajya Vidyut
Utpadan
Nigam
Limited,
Lucknow
(hereinafter referred to as 'respondent
no.2') were directed to utilize biomass
pellets to the extent of 5-10%.

 c. Subsequently, the said advisory
was revised on October 8, 2021 further
emphasizing biomass utilization for power
generation through co-firing in coal based
power plants.

 d. On March 2, 2022 the Ministry
of Power issued a Model Contract for the
use of biomass in Thermal Power Plants
(TPPs) which was later revised on January
6, 2023.

 e.
Clause
2(b)
of
the
aforementioned Model Contract provides
that the power stations situated within 300
km of National Capital Region (NCR) must
use a minimum 50% raw materials
consisting of stubble/straw/crop residue
4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
695
from rice paddy sourced exclusively from
Punjab, Haryana or NCR region.

 f. On July 11, 2023, Ministry of
Environment, Forest and Climate Change
notified the Environment (Utilisation of
Crop residue by Thermal Power Plants)
Rules, 2023 which are applicable to the
NCR region. These rules mandate that all
coal-based thermal power plants must
utilize a minimum five percent blend of
pellets or briquettes made from crop
residue along with coal.

 g. On July 10, 2024, respondent
no.3 under the control of the Uttar Pradesh
Rajya Vidyut Utpadan Nigam Ltd. floated
an
E-Tender
(No.
ET60/MMC/PD/ETPS/HTPS/2024), inviting
bids for the supply of non-torrefied
biomass pellets, a renewable fuel source
promoted by the Central Government to
reduce pollution and encourage cleaner
energy in thermal power plants and the said
E-Tender was amended on August 13,
2024.

 h.
However,
the
tender
documents contained a restrictive Clause
3(i) as a pre-qualifying condition, which
mandated that only existing manufacturers
in the NCR region or those whose
manufacturing plants are located within
100 km from the Truck Gate (Material
Entry Gate), Harduaganj Thermal Power
Station, Kasimpur, Aligarh are eligible to
participate in the tender. Bidders were
required to confirm compliance with this
condition in Part-I, that is, technical bid of
the tender.

 i. The technical bids wherein the
confirmation of the impugned restrictive
clause was mandatory were opened on
September 12, 2024.
 j. Subsequently, on October 8,
2024, Ministry of Power, Government of
India, has issued a notification concerning
significant shortfall in biomass co-firing
monthly targets, wherein immediate action
was required from the Head of all the
thermal power plants to mitigate air
pollution caused due to stubble burning in
the NCR region by achieving the stipulated
mandate for co-firing of biomass pellets in
each thermal power plants.

 k. Thereafter, the financial bids
were opened on November 13, 2024 and
twelve firms were selected for the supply of
agro-based non-torrefied biomass pellets.

 l. The petitioner's firm situated at
District Ambedkar Nagar in Uttar Pradesh
was excluded from participating due to the
restrictive clause mentioned in the tender
documents.

 m. Aggrieved by the exclusionary
condition under Clause 3(i) of the tender,
the petitioner has approached this Court by
means of the present writ petition.

 CONTENTIONS
OF
PETITIONER

3. Learned counsel appearing on
behalf of the petitioner has made the
following submissions:

 a. There exists no nexus between
the objective of procuring raw materials
from specific regions and location of
manufacturing unit as required within a
particular geographical area. The petitioner
further emphasized that the restriction lacks
any
reasonable
connection
with
the
objective of the tender and merely serves to
unfairly limit the competition.
696 INDIAN LAW REPORTS ALLAHABAD SERIES
 b. The tender condition is in
violation of Article 19 and Article 21 of the
Constitution of India, as they restrict
applicants
to
a
specific
location,
particularly within the NCR region and are
therefore, discriminatory, arbitrary and
contrary to the principles of natural justice.

 c. Clause 3(i) as a pre-qualifying
condition in the tender document is wholly
illegal, arbitrary and in gross violation
of the right to equality under Article 14,
the right to practice any profession or
trade under Article 19(1)(g), and the
freedom of trade and commerce across
India
under
Article
301
of
the
Constitution of India.

 d.
Article
14
of
the
Constitution of India mandates that the
State shall not deny equality before law
or
equal
protection
of
laws.
By
imposing such a restrictive condition, the
respondent
authority
being
an
instrumentality
of
the
State
has
discriminated against the petitioner in the
E-Tendering process.

 e.
Article
19(1)(g)
of
the
Constitution of India guarantees all its
citizens
the
right
to
practice
any
profession or to carry on any occupation,
trade or business. However, this right is
subject to reasonable restrictions under
Article 19(6) of the Constitution of India
and must be justified in the interest of the
general public.

 f. Clause 3(i) as a pre-qualifying
condition is not based on any intelligible
differentia. It lacks substantial reasoning
or justification as to how it serves public
interest and effectively excludes many
capable suppliers from other parts of the
State from participating in the tender
process.

 g.
Despite
possessing
all
necessary
registrations,
technical
capabilities, and willingness to comply
with Government guidelines including
the requirement of sourcing 50% raw
materials as stubble, straw or crop residue
of rice paddy from Punjab, Haryana, or
NCR
region,
the
petitioner
was
disqualified solely due to their location
falling outside the arbitrary 100 km
radius.

 h. The Central Government
through a circular dated January 6, 2023,
issued a revised Model Contract which
does not impose such a restriction.
Therefore, the restriction under Clause
3(i) of the impugned E-Tender is in gross
violation
of
the
said
circular
and
contradicts the spirit and intent of various
Central Government policies.

 i. The Ministry of Power,
through its Model Contract and other
advisories, has consistently emphasized
promoting the use of biomass to combat
air pollution, particularly that is caused by
stubble burning in the northern states.
However,
none
of
these
guidelines
prescribe a territorial restriction on who
may supply the biomass fuel. In case of any
repugnancy between Central and State
guidelines, the Central guidelines must
prevail. Consequently, the tender floated by
the State Government must conform to the
Central policies.

 j. The petitioner is left with no
alternative remedy except to approach this
Court against the arbitrary actions of the
respondent authorities.
4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
697
 k. To buttress his arguments,
counsel has placed reliance upon the
judgments in Engineering Kamgar Union
v. Electro Steels Castings Ltd. and
another reported in (2004) 6 SCC 36;
Association
of
UPS
and
Power
Conditioning Systems Manufacturer v.
Society
of
Applied
Microwave
Electronics Engineering and Research
(Sameer) & Ors. reported in 2002 (65)
DRJ 678 ; Ramana Dayaram Shetty v.
International Airport Authority of India
and Others reported in (1979) 3 SCC 489
and Rashbihari Panda v. State of Orissa
reported in (1969) 1 SCC 414.

CONTENTIONS
OF
THE
RESPONDENT

4. Learned counsel appearing on
behalf of the respondents has made the
following submissions:

 a. The clause in question imposes
certain restrictions aimed at addressing the
significant issue of air pollution in the NCR
region which is primarily caused by the
widespread
practice
of
farm
stubble
burning. This environmental regulation has
been introduced with the objective of
reducing the carbon footprints associated
with thermal power generation, particularly
in the NCR region, where air quality has
been a persistent concern.

 b. In this context, the impugned
E-Tender was issued with the specific
purpose
of
mitigating
environmental
pollution in the NCR region by promoting
the use of biomass pellets, thereby offering
a sustainable alternative to the conventional
disposal of agricultural residue through
burning. The ultimate aim of the tender is
to support eco-friendly initiatives that
contribute to cleaner air and align with the
broader goals of environmental protection
and climate change mitigation.

 c. The clause in question is in
consonance with the draft notification dated
July 11, 2023, issued by Ministry of
Environment, Forest and Climate Change
whereby the Environment (Utilisation of
Crop residue by Thermal Power Plants)
Rules, 2023 directed the thermal power
plants to use crop residue in NCR region to
reduce air pollution caused by stubble
burning.

 d. The tender condition is also in
consonance and purposely made to mitigate
air pollution caused due to stubble burning
in the NCR region as directed vide
notification dated October 8, 2024, issued
by the Ministry of Power, Government of
India concerning significant shortfall in
biomass co-firing monthly targets.

 e. It is pertinent to note that the
petitioner was not found to be technically
qualified during the bid evaluation process.
Following this, the contract was awarded
and executed between Uttar Pradesh Rajya
Vidyut Utpadan Nigam Limited and twelve
successful
manufacturers.
These
manufacturers have already commenced
the supply of biomass pellets to the
designated thermal power plant, and such
supply has been ongoing for over a month.

 f. To buttress his arguments,
counsel has placed reliance upon judgments
in Tata Cellular v. Union of India
reported in (1994) 6 SCC 651 ; Caretel
Infotech Ltd. v. Hindustan Petroleum
Corpn. Ltd. reported in (2019) 14 SCC 81
; Silppi Constructions Contractors v.
Union of India reported in (2020) 16 SCC
489 ; Montecarlo Ltd. v. NTPC Ltd.
reported in (2016) 15 SCC 272 ; Agmatel
698 INDIAN LAW REPORTS ALLAHABAD SERIES
India (P) Ltd. v. Resoursys Telecom
reported in (2022) 5 SCC 362; Balaji
Ventures (P) Ltd. v. Maharashtra State
Power Generation Co. Ltd. reported in
2022 SCC OnLine SC 1967; N.G. Projects
Ltd. v. Vinod Kumar Jain reported in
(2022) 6 SCC 127 ; Airport Authority of
India v. Centre for Aviation Policy, Safety
& Research (CAPSR) reported in 2022 SCC
OnLine SC 1334.

ANALYSIS

5. We have considered the rival
submissions and have perused the materials
placed on record.

6. Before delving into the rival
contentions canvassed by both the sides, it is
necessary to examine Clause 3(i) as a prequalifying condition of the E-Tender dated July
10, 2024. The said clause in verbatim is as
follows:

 "(1)
Only
Existing
Pellets
manufacturers having their Manufacturing
Plant location in NCR region only shall be
allowed to participate in the tender. Every
bidder shall confirm the same in Part-1 of the
Tender Only".

7. Subsequently, the said tender was
amended on August 13, 2024. The amended
clause in verbatim is as follows:

 "1.
Only
Existing
Pellets
manufacturers having their Manufacturing
Plant location in NCR region shall be allowed
to participate in the tender. Every bidder shall
confirm the same in Part-I of the Tender Only.

OR

 2. Only those manufacturers whose
manufacturing plant location is within the
radius of 100 Km from Truck Gate (Material
Entry Gate), Harduaganj Thermal Power
station, Kasimpur Aligarh shall also be allowed
to participate in the tender. Every bidder shall
confirm the same in Part-l of the Tender
Only

 Note: For measurement of Km
(Kilometer) from Truck Gate (Material
Entry Gate), Harduaganj Thermal Power
station,
Kasimpur
Aligarh
to
the
manufacturing plant location, Google
Map shall be applicable only."

8. Clause 2(b) of the Technical
Specification in the tender documents
mandates the manufacturers to purchase
raw materials for manufacturing pellets
only from Punjab, Haryana or National
Capital Region (NCR). The said clause in
verbatim is as follows:

 "Since
Harduaganj
Thermal
Power Station is within 300 km of NCR,
use of minimum 50% raw material as
stubble/straw/crop residue of rice paddy
sourced
from
Punjab,
Haryana
or
National
Capital
Region
only
is
mandatory. Successful Bidder has to
submit documentary evidence in the form
of Certificate from State Authority from
where the paddy straw has been sourced/
any
amendment
regarding
this
by
SAMARTH (if any) may be incorporated
from time to time."

9.
The
Standard
Operating
Procedure (SOP) for biomass pellets cofiring published by the Ministry of
Power,
Government
of
India
on
November 17, 2017, highlights the need,
advantages and impact of utilization of
biomass in coal-based power plants. It
also directs the development of sitespecific SOPs based on the Model SOP.
4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
699
10.
The
Ministry
of
Power
subsequently issued an advisory dated
November 24, 2017, to all State Power
Secretaries, addressing smog in North-West
India caused by stubble burning. The
relevant paragraphs of the advisory in
verbatim are as follows:

 "As you may be aware that
stubble burning has been cited as a major
cause of recent smog in North-West India.
Stubble burning is been cited as a major
the straw stubble that remains after
harvesting of paddy and other crops.
Instead of burning in open fields, these can
be collected, processed and can be used as
Biomass fuel to generate power.

 Biomass Co-firing is a well
proven
technology.
With
increasing
environmental awareness, power plants all
over the world have adopted Biomass Cofiring as a strategy to combat pollution.
UNFCCC recognizes Biomass Co-firing as
a carbon neutral technology for mitigation
of carbon emission from coal based power
plants.

 NTPC
have
successfully
demonstrated the Co-firing of 7% blend of
Biomass pellets with coal in its Dadri
Power Plant. This can be replicated in
other coal fired power plants having bowl
mills/vertical roller mills/ beater mills."

11. The aforementioned advisory
was later revised on October 8, 2021,
specifically for coal-based power plants.
The relevant paragraph of the advisory in
verbatim is as follows:

 "(1). All coal based thermal
power plants of power generation utilities
with bowl mill, shall on annual basis
mandatorily use 5 percent blend of biomass
pellets made, primarily, of agro residue
along with coal with effect from one year of
the date of issue of this guideline. The
obligation shall increase to 7 percent with
effect from two years after the date of issue
of this order and thereafter."

12. The Revised Model Contract
dated January 6, 2023, for the use of
biomass in thermal power plants mandated
the purchase of stubble from specific
regions. The relevant paragraph from the
aforesaid Model Contract in verbatim is as
follows:

 " For power stations within 300
km of NCR use of minimum 50% raw
material as stubble/straw/crop residue of
rice paddy sourced from Punjab, Haryana
or NCR Region only is mandatory.
Successful
Bidder
has
to
submit
documentary evidence in the form of
Certificate from State Authority from
where the paddy straw has been sourced."

13. The submissions canvassed by
the learned counsel for the petitioner is
mainly two-fold. Firstly, there is allegedly
no nexus between the requirement to
procure biomass from specific regions and
the location of manufacturing units within a
defined geographical area. Secondly, the
guidelines
issued
by
the
Central
Government regarding biomass utilization
do not impose such stringent territorial
restrictions. Thus, in the event of any
inconsistency, the Central Government's
guidelines should prevail over the State's
tender conditions.

14. Per contra, the learned counsel
appearing for respondents submitted that
although Article 19(1)(g) and Article 301
of the Constitution of India, guarantees the
right to carry profession, trade, occupation
700 INDIAN LAW REPORTS ALLAHABAD SERIES
or business to all its citizens throughout the
country but this right is subject to
reasonable
restrictions
in
the
public
interest. The primary objective behind the
restrictive clause is mainly to reduce air
pollution, a concern repeatedly addressed
by the Hon'ble Supreme Court and the
Central Government through its various
guidelines in view of the persistent
obnoxious environmental condition of
NCR region. The clause limits participation
to local manufacturers, ensuring they
source biomass from Punjab, Haryana or
NCR region. This directly reduces the
availability of stubble for open burning by
farmers
in
these
regions,
thereby
addressing the root cause of the pollution.
Thus, there exists a rational nexus between
sourcing biomass from specified regions
and locating manufacturing units nearby.
The pre-qualification condition imposed by
the State in the tender is accordingly,
reasonable and serves a legitimate purpose.

15. The tender in question was
floated for the supply of agro-based non-
torrefied biomass pellets to Harduaganj
Thermal Power Station in Aligarh. Nontorrefied biomass pellets are made from
agro-based residue without undergoing
torrefaction
(a
process
to
transform
biomass into coal-like material). Biomass
including wood, crops, seaweed, stubble,
and animal waste, is an organic matter
which contains stored energy from the Sun.
Historically used for heating and cooking,
biomass is now being traversed by largescale energy production. Stubble, a residual
product after harvesting of crops, is often
burnt by farmers to quickly clear fields and
make it ready for the next sowing. This
practice results in severe air pollution
releasing large amounts of unburnt carbon
along with ashes which reduces soil
fertility.
Through
torrefaction
and
densification (pelletisation or briquetting),
biomass
becomes
more
suitable
for
transport and storage. When used as fuel in
coal-based power plants, biomass pellets
combust more efficiently, and their ashes is
captured by electrostatic precipitators,
thereby reducing the pollution. Co-firing
biomass with coal significantly reduces
greenhouse gas emissions. Recognized by
the United Nations Framework Convention
on Climate Change (UNFCCC) as a
carbon-neutral practice, this method allows
carbon released during biomass combustion
to be absorbed in the next crop cycle via
photosynthesis. Moreover, emissions from
processing and transporting biomass are
negligible as compared to the resulting
carbon emissions from its utilization in
large coal-based power plants. Biomass cofiring thus presents a viable path towards a
cleaner environment.

16. Additionally, utilization of
agro-based residue pellets in thermal power
plants
lowers
carbon
emissions
and
mitigates air pollution caused by manual
stubble burning, which emits huge amounts
of unburnt carbon, ashes, Sulphur and
Mercury. Biomass also has a higher oxygen
content compared to coal.

17. In a celebrated case of Tata
Cellular v. Union of India (Supra), the
Supreme Court had laid down significant
principles regarding judicial review of
administrative
decisions,
particularly
emphasizing
the
concept
of
judicial
restraint. The Court emphasized that
judicial review is concerned with the
decision-making process, not the decision
itself. It emphasized that Courts should not
act
as
appellate
authorities
over
administrative decisions and must not
substitute their own judgment for that of
4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
701
the authority. The relevant paragraphs of
the judgment are quoted hereinbelow:

 "70. It cannot be denied that the
principles of judicial review would apply to
the exercise of contractual powers by
Government bodies in order to prevent
arbitrariness or favouritism. However, it
must be clearly stated that there are
inherent limitations in exercise of that
power of judicial review. Government is the
guardian of the finances of the State. It is
expected to protect the financial interest of
the State. The right to refuse the lowest or
any other tender is always available to the
Government. But, the principles laid down
in Article 14 of the Constitution have to be
kept in view while accepting or refusing a
tender. There can be no question of
infringement
of
Article
14
if
the
Government tries to get the best person or
the best quotation. The right to choose
cannot be considered to be an arbitrary
power. Of course, if the said power is
exercised for any collateral purpose the
exercise of that power will be struck down.

 ***

 94. The principles deducible from
the above are:

 (1) The modern trend points to
judicial restraint in administrative action.

 (2) The court does not sit as a
court of appeal but merely reviews the
manner in which the decision was made.

 (3) The court does not have the
expertise to correct the administrative
decision. If a review of the administrative
decision is permitted it will be substituting
its own decision, without the necessary
expertise which itself may be fallible.
 (4) The terms of the invitation to
tender cannot be open to judicial scrutiny
because the invitation to tender is in the
realm of contract. Normally speaking, the
decision to accept the tender or award the
contract
is
reached
by
process
of
negotiations through several tiers. More
often than not, such decisions are made
qualitatively by experts.

 (5) The Government must have
freedom of contract. In other words, a fair
play
in
the
joints
is
a
necessary
concomitant for an administrative body
functioning in an administrative sphere or
quasi-administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facts
pointed out above) but must be free from
arbitrariness not affected by bias or
actuated by mala fides.

 (6)
Quashing
decisions
may
impose heavy administrative burden on the
administration and lead to increased and
unbudgeted expenditure

 Based on these principles we will
examine the facts of this case since they
commend to us as the correct principles."

18. In Reliance Energy Ltd. v.
Maharashtra State Road Development
Corpn. Ltd. reported in (2007) 8 SCC 1,
the Supreme Court held that necessary
conditions in the contract have to satisfy
the test of 'reasonableness'. The relevant
paragraph of the judgment is quoted
hereinbelow:

 "36. We find merit in this civil
appeal. Standards applied by courts in
judicial review must be justified by
constitutional principles which govern the
702 INDIAN LAW REPORTS ALLAHABAD SERIES
proper exercise of public power in a
democracy. Article 14 of the Constitution
embodies
the
principle
of
"nondiscrimination". However, it is not a freestanding provision. It has to be read in
conjunction with rights conferred by other
articles like Article 21 of the Constitution.
The said Article 21 refers to "right to life".
It includes "opportunity". In our view, as
held in the latest judgment of the
Constitution Bench of nine Judges in I.R.
Coelho v. State of T.N. [(2007) 2 SCC 1] ,
Articles 21/14 are the heart of the chapter
on fundamental rights. They cover various
aspects of life. "Level playing field" is an
important concept while construing Article
19(1)(g) of the Constitution. It is this
doctrine which is invoked by rel/hdec in the
present case. When Article 19(1)(g) confers
fundamental right to carry on business to a
company, it is entitled to invoke the said
doctrine of "level playing field". We may
clarify that this doctrine is, however,
subject to public interest. In the world of
globalisation, competition is an important
factor to be kept in mind. The doctrine of
"level playing field" is an important
doctrine which is embodied in Article
19(1)(g) of the Constitution. This is
because the said doctrine provides space
within which equally placed competitors
are allowed to bid so as to subserve the
larger public interest. "Globalisation", in
essence, is liberalisation of trade. Today
India has dismantled licence raj. The
economic reforms introduced after 1992
have
brought
in
the
concept
of
"globalisation". Decisions or acts which
result in unequal and discriminatory
treatment, would violate the doctrine of
"level playing field" embodied in Article
19(1)(g). Time has come, therefore, to say
that Article 14 which refers to the principle
of "equality" should not be read as a stand
alone item but it should be read in
conjunction with Article 21 which embodies
several aspects of life. There is one more
aspect which needs to be mentioned in the
matter of implementation of the aforestated
doctrine of "level playing field". According
to Lord Goldsmith, commitment to the
"rule of law" is the heart of parliamentary
democracy. One of the important elements
of the "rule of law" is legal certainty.
Article 14 applies to government policies
and if the policy or act of the Government,
even in contractual matters, fails to satisfy
the test of "reasonableness", then such an
act or decision would be unconstitutional."

19. In the case of Maa Binda
Express Carrier v. North-East Frontier
Railway reported in (2014) 3 SCC 760, the
Apex Court held that although fairness and
transparency
are
essential
in
public
procurement,
administrative
authorities
must be granted the necessary autonomy to
make decisions that best serves the public
interest. The relevant paragraphs of the
judgment are quoted hereinbelow:

 "8. The scope of judicial review
in matters relating to award of contracts by
the State and its instrumentalities is settled
by a long line of decisions of this Court.
While these decisions clearly recognise that
power exercised by the Government and its
instrumentalities in regard to allotment of
contract is subject to judicial review at the
instance of an aggrieved party, submission
of a tender in response to a notice inviting
such tenders is no more than making an
offer which the State or its agencies are
under no obligation to accept. The bidders
participating in the tender process cannot,
therefore, insist that their tenders should be
accepted simply because a given tender is
the highest or lowest depending upon
whether the contract is for sale of public
property or for execution of works on
4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
703
behalf of the Government. All that
participating bidders are entitled to is a
fair,
equal
and
non-discriminatory
treatment in the matter of evaluation of
their tenders. It is also fairly well settled
that award of a contract is essentially a
commercial transaction which must be
determined on the basis of consideration
that are relevant to such commercial
decision. This implies that terms subject to
which tenders are invited are not open to
the judicial scrutiny unless it is found that
the same have been tailor-made to benefit
any particular tenderer or class of
tenderers. So also, the authority inviting
tenders can enter into negotiations or grant
relaxation for bona fide and cogent reasons
provided such relaxation is permissible
under the terms governing the tender
process.

 9. Suffice it to say that in the
matter
of
award
of
contracts
the
Government and its agencies have to act
reasonably and fairly at all points of time.
To that extent the tenderer has an
enforceable right in the court which is
competent
to
examine
whether
the
aggrieved party has been treated unfairly
or discriminated against to the detriment of
public interest. (See Meerut Development
Authority v. Assn. of Management Studies
[(2009) 6 SCC 171 : (2009) 2 SCC (Civ)
803] and Air India Ltd. v. Cochin
International Airport Ltd. [(2000) 2 SCC
617 : (2000) 1 SCR 505] )"

(Emphasis Supplied)

20. The Supreme Court in Afcons
Infrastructure Ltd. v. Nagpur Metro
Rail Corpn. Ltd. (Supra), has held that the
interpretation of terms and conditions of
tender by the project owner or the employer
should be respected, unless it is arbitrary or
mala fide. The owner is best positioned to
understand its requirements, and thus, its
interpretation should not be second-guessed
by a court in judicial review proceedings.
This case reinforces the limited scope of
judicial
intervention
in
administrative
decisions, highlighting the discretion of the
tendering authority and its expertise in
relation to formulate the terms and
conditions of the tender. The relevant
paragraph of the judgment is quoted
hereinbelow:

 "15.We may add that the owner
or the employer of a project, having
authored the tender documents, is the best
person to understand and appreciate its
requirements and interpret its documents.
The constitutional courts must defer to this
understanding and appreciation of the
tender documents, unless there is mala fide
or perversity in the understanding or
appreciation or in the application of the
terms of the tender conditions. It is possible
that the owner or employer of a project
may give an interpretation to the tender
documents that is not acceptable to the
constitutional courts but that by itself is not
a
reason
for
interfering
with
the
interpretation given."

21.
In
Silppi
Constructions
Contractors v. Union of India (Supra),
the Supreme Court citing precedents like
Tata Cellular (Supra), Afcons Infrastructure
Ltd. (Supra), Air India Ltd. (Supra),
Raunaq International Ltd. (Supra) amongst
others, reiterated that the evaluation of
tenders falls within the exclusive domain of
the tendering authority, and the Courts
should refrain from substituting their
judgment with that of authority unless there
is a clear violation of constitutional or legal
provisions. The decision reinforces the
principle that administrative authorities
704 INDIAN LAW REPORTS ALLAHABAD SERIES
have the discretion to assess and decide on
tender matters, and judicial interference is
warranted
only
in
exceptional
circumstances where the decision-making
process is flawed. The relevant paragraphs
of the judgment are quoted hereinbelow:

 "8. In Raunaq International Ltd.
v.
I.V.R.
Construction
Ltd.
[Raunaq
International Ltd. v. I.V.R. Construction
Ltd., (1999) 1 SCC 492] , this Court held
that the superior courts should not interfere
in matters of tenders unless substantial
public interest was involved or the
transaction was mala fide.

 9. In Air India Ltd. v. Cochin
International Airport Ltd. [Air India Ltd. v.
Cochin International Airport Ltd., (2000) 2
SCC 617] , this Court once again stressed
the need for overwhelming public interest
to justify judicial intervention in contracts
involving
the
State
and
its
instrumentalities. It was held that the
courts must proceed with great caution
while exercising their discretionary powers
and should exercise these powers only in
furtherance of public interest and not
merely on making out a legal point.

 ***

 11. In Master Marine Services
(P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd.
[Master Marine Services (P) Ltd. v.
Metcalfe & Hodgkinson (P) Ltd., (2005) 6
SCC 138] it was held that while exercising
power of judicial review in respect of
contracts, the court should concern itself
primarily with the question, whether there
has been any infirmity in the decisionmaking process. By way of judicial review,
the court cannot examine details of terms of
contract which have been entered into by
public bodies or the State.
***

 14. In Michigan Rubber (India)
Ltd. v. State of Karnataka [Michigan
Rubber (India) Ltd. v. State of Karnataka,
(2012) 8 SCC 216] it was held that if the
State
or
its
instrumentalities
acted
reasonably, fairly and in public interest in
awarding contract, interference by court
would be very restrictive since no person
could claim fundamental right to carry on
business with the Government. Therefore,
the courts would not normally interfere in
policy decisions and in matters challenging
award of contract by the State or public
authorities.

 15. In Afcons Infrastructure Ltd.
v. Nagpur Metro Rail Corpn. Ltd. [Afcons
Infrastructure Ltd. v. Nagpur Metro Rail
Corpn. Ltd., (2016) 16 SCC 818] it was
held that a mere disagreement with the
decision-making process or the decision of
the administrative authority is no reason
for a constitutional court to interfere. The
threshold of mala fides, intention to favour
someone or arbitrariness, irrationality or
perversity
must
be
met
before
the
constitutional court interferes with the
decision-making process or the decision.
The owner or the employer of a project,
having authored the tender documents, is
the best
person to
understand
and
appreciate its requirements and interpret
its documents. It is possible that the owner
or employer of a project may give an
interpretation to the tender documents that
is not acceptable to the constitutional
courts but that by itself is not a reason for
interfering with the interpretation given.

***

 17. In Municipal Corpn., Ujjain
v. BVG (India) Ltd. [Municipal Corpn.,
4 All. M/S Rajan Construction Comp. Vs. State of U.P. & Anr.
705
Ujjain v. BVG (India) Ltd., (2018) 5 SCC
462 : (2018) 3 SCC (Civ) 291] it was held
that the authority concerned is in the best
position to find out the best person or the
best quotation depending on the work to be
entrusted under the contract. The court
cannot compel the authority to choose such
undeserving person/company to carry out
the work. Poor quality of work or goods
can lead to tremendous public hardship
and substantial financial outlay either in
correcting mistakes or in rectifying defects
or even at times in redoing the entire work.

 (Emphasis Supplied)

22. Upon a perusal of the umpteen
judgments cited by both the parties and
sifting through the ratios laid down by the
Apex Court in the various judgments, it
emerges that Courts can scrutinize the award
of contracts by Government or its agencies in
exercise of its power of judicial review to
prevent arbitrariness or favouritism, but there
are inherent limitations in the exercise of such
power. It becomes crystal clear that
conventionally the Writ Court does not
intermeddle with the terms and conditions
mentioned in the tender documents, unless,
there
is
a
prima
facie
arbitrariness,
favouritism, irrationalism or perversity. After
examining a catena of judgments cited before
this Court, one may carve out the principles
for judicial intervention in tender cases as
follows:-

 A. Emerging trend of globalisation
and competition equates judicial review with
judicial restraint in tender matters.