High Court of Kerala

Reliance General Insurance Company Ltd. Vs. State of Kerala

MANU/KE/0842/2021

29.03.2021

Contract

Scope of judicial review in contractual matters is very limited and except in cases of arbitrariness, mala fides, etc., interference is uncalled for

The order of Government revoking the award of contract to the Petitioner is under challenge in present Writ Petition. The Petitioner has sought for a declaration also to the effect that, the conditions stipulated by the Government in Exhibit P27 invitation for request for proposal (RFP) for implementing Medical Insurance Scheme for State Employees and Pensioners (MEDISEP) would not apply to it.

The issue to be considered is whether Exhibit P23 order requires interference by this Court. Based on Exhibit P1 RFP, the bid submitted by the Petitioner was accepted and contract was awarded to the Petitioner. That contract is revoked as per Exhibit P23 order stating that, the Petitioner did not comply with the conditions in Exhibit P1 RFP. The Petitioner has approached this Court, because of the conditions fixed in Exhibit P27 RFP, based on which it is unable to participate in the tender/RFP because of Exhibit P23.

In the present case, Exhibit P23 order itself does not refer to any black listing. There is no order as such against the Petitioner incurring any disqualification on it for participating in future tenders. Disqualification arises only in Exhibit P27 RFP, which does not refer to the petitioner particularly. A plain reading of Exhibit P23 would only show that the award of contract is revoked for failure to comply with its conditions. Independent of Exhibit P27 RFP, there is no disability. The petitioner did not have any complaint over it when it sent Exhibit P24 letter, apparently in the absence of any indication as to the consequences.

It is well settled that, scope of judicial review in contractual matters is very limited and that except in cases of arbitrariness, mala fides, etc., interference is totally uncalled for. In the present case, the reason stated by the respondents for cancellation of contract is stated to be the failure on the part of the Petitioner to comply with the terms of Exhibit P1 read with the corrigendum. This Court is not expected to delve into and evaluate those reasons or into the correctness of the reason and into the sufficiency or otherwise of the same and find out whether the failure if any could have resulted in cancellation.

The grievance of the Petitioner is in effect on the conditions imposed in Exhibit P27, though the Petitioner does not challenge the same. In fact, the Petitioner has readily accepted the cancellation. The contention relating to arbitrariness is raised only on account of the conditions fixed in Exhibit P27. Exhibit P23 order only revokes the award of contract, on failure to comply with the conditions in Exhibit P1 RFP and its corrigendum. Exhibit P23 order does not warrant any interference by this Court under Article 226 of the Constitution of India, 1950. Petition dismissed.

Tags : Tender Conditions Legality

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