A Division Bench of the High Court of Meghalaya clarified that while judicial review in tender matters is circumscribed, limited procedural shortcomings alone do not vitiate contract awards absent clear illegality or mala fides. Upholding the award in favour of one bidder, the Court awarded compensation to a rival for deprivation of legitimate expectation. This judgment affirms Supreme Court precedents and is binding authority within Meghalaya.
Summary
| Category | Data |
|---|---|
| Case Name | MC(WA)/20/2024 of TAIBIN WARJRI Vs ODIMAR SYIEMSAD AND 10 OTHERS |
| CNR | MLHC010007192024 |
| Date of Registration | 08-07-2024 |
| Decision Date | 01-09-2025 |
| Disposal Nature | Disposed Off |
| Judgment Author | HON’BLE MR JUSTICE I. P. MUKERJI, CHIEF JUSTICE |
| Concurring or Dissenting Judges | HON’BLE MR. JUSTICE W. DIENGDOH (concurring) |
| Court | High Court of Meghalaya |
| Bench | Division Bench (Chief Justice I.P. Mukerji and Justice W. Diengdoh) |
| Precedent Value | Binding authority within Meghalaya; persuasive elsewhere |
| Overrules / Affirms | Affirms Supreme Court precedents; sets aside single judge’s order |
| Type of Law | Administrative Law / Public Procurement / Government Contracts |
| Questions of Law |
|
| Ratio Decidendi | The power of judicial review in tender and contract matters is limited; the Court will only interfere where there is illegality, arbitrariness, mala fide, or overwhelming public interest. Minor procedural errors or issues of technical evaluation do not, by themselves, justify setting aside an award—especially where work has already commenced and public interest is at stake. However, if an eligible and rightful bidder’s legitimate expectation is frustrated due to lack of fair opportunity, compensation may be granted even if the contract is upheld. The doctrine is rooted both in equity and in precedent (A.T. Brij Paul Singh & Bros v. State of Gujarat) for estimating compensation. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Principles of judicial restraint in contract/tender matters, the difference between full appellate scrutiny and intra-court appeal, legitimate expectation, and quantification of compensation in works contracts |
| Facts as Summarised by the Court | State PSU invited tenders for an indoor stadium; four of five bidders bid the same minimum price, a fifth added one rupee. Three of the four matching bidders withdrew after being called by the Committee, leaving one, Taibin Warjri, to whom the contract was awarded. The solitary higher bidder, Odimar Syiemsad, challenged the process, and a single judge set the whole process aside. Construction started but was halted. Upon appeal, the Division Bench partly reversed the single judge, upholding the contract, but awarded compensation to Odimar for deprivation of his legitimate expectation. |
| Citations | 2025:MLHC:785-DB; 2023 SCC Online SC 671; (2005) 1 SCC 679; (2000) 2 SCC 617; (2005) 12 SCC 303; (2022) 3 SCC 90; 2023 SCC Online SC 1223; AIR 1984 SC 1703 |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and authorities in Meghalaya |
| Persuasive For | Other High Courts, administrative tribunals; persuasive in all Indian jurisdictions on similar contract/tender disputes |
| Overrules | Sets aside the judgment of the single judge in WP(C) No.34 of 2024 (Meghalaya HC, 2024) |
| Distinguishes | Distinguishes approach in intra-court appeals as not being a mere review, but akin to full appellate scrutiny |
| Follows |
|
What’s New / What Lawyers Should Note
- Clarifies that minor lapses in process or technical evaluation do not by themselves vitiate a government contract award—especially where public interest and partial work execution are established.
- Judicial interference in tender matters requires a finding of illegality, mala fides, arbitrariness, or overwhelming public interest — mere differences in technical approach or procedural departures are not sufficient.
- Compensation can be awarded for “legitimate expectation” lost due to denial of fair consideration, despite the absence of a concluded contract.
- The ratio on legitimate expectation is explicitly quantified (7.5% of contract value), citing Supreme Court guidance on works contract profits.
- Law clarified on difference between writ appellate (full appellate) power and mere intra-court scrutiny.
Summary of Legal Reasoning
- Scope of Judicial Review: The Court, drawing from Supreme Court jurisprudence (Tata Motors Ltd.; Association of Registration Plates; Air India Ltd.), reaffirmed that interference in government tenders/contracts is limited to cases of illegality, procedural impropriety, mala fides, or where overwhelming public interest outweighs contractual finality.
- Nature of Appellate Review: The High Court clarified that, unlike some High Courts where intra-court appeals are narrow, Meghalaya follows a model under which writ appeals are akin to first appeals under CPC, allowing full factual and legal scrutiny.
- Allegations of Cartelisation and Process Flaws: The evidence did not amount to proof of a cartel or serious illegality — all bids were at the minimum, no undue benefit shown, and the process (excluding the single Re1 variance) was substantially fair.
- Denial of Legitimate Expectation: The Court recognized that Odimar Syiemsad was unfairly deprived of a fair chance to compete, amounting to a loss of legitimate expectation, and thus warranted compensation though not setting aside the contract.
- Relief Moulded by Equity: In light of the work already done and the absence of clear illegality, the contract award was upheld. Compensation for legitimate expectation was set at 7.5% of the contract value (referencing A.T. Brij Paul Singh).
Arguments by the Parties
Petitioner (Odimar Syiemsad):
- Award to rival was invalid as the process was still at the negotiation stage (no formal agreement).
- Tender Committee failed to undertake proper technical evaluation.
- Exclusion from the post-bid negotiation meeting amounted to unfairness.
- Sought either the contract or compensation.
Respondent (Meghalaya Power Generation Corp. Ltd. & Taibin Warjri):
- All prescribed procedures were followed; technical evaluation conducted.
- No injunction was issued; work had substantially progressed by date of challenge.
- Depriving the successful contractor of the contract after commencement would be harsh and contrary to public interest.
- Cited Supreme Court authority on minimal judicial interference in contractual matters.
Factual Background
The Meghalaya Power Generation Corporation invited public tenders for construction of an indoor stadium, setting a minimum bid price. Out of five bidders, four quoted the minimum, one bidder (Syiemsad) bid just one rupee more. After a meeting, three of the matching bidders withdrew, and the contract was given to Taibin Warjri. Syiemsad, who was not called to the meeting, challenged the award. Construction work began but was halted after a single judge invalidated the tender. Upon appeal, the Division Bench partly reversed, upholding the contract but awarding compensation to Syiemsad.
Statutory Analysis
- Articles 14, 19, and 21 of the Constitution of India concerning principles of equality, protection of business rights, and fair procedure in public contracts.
- Section 23 of the Indian Contract Act, 1872 cited in the context of contracts tainted with illegality.
- Provisions under Chapter V of the Meghalaya High Court Rules concerning the nature of writ appellate jurisdiction.
Dissenting / Concurring Opinion Summary
Both judges concurred in the result; no substantive dissent or distinct additional reasoning was recorded.
Procedural Innovations
The Court clarified, for the first time in Meghalaya, that writ appeals under Chapter V are akin to first appeals, not mere intra-court reviews, broadening scope for factual and legal reassessment of single judge rulings.
Alert Indicators
- ✔ Precedent Followed (Bindingly affirms Supreme Court doctrine on judicial review of tenders; sets aside single judge’s broader interference.)
Citations
- 2025:MLHC:785-DB (Reportable – High Court of Meghalaya, Division Bench)
- Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking (2023 SCC Online SC 671), Paras 52–54
- Association of Registration Plates v. Union of India, (2005) 1 SCC 679
- Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617
- Jagannath v. Arulappa, (2005) 12 SCC 303
- Manjula & ors v. Shyamsundar, (2022) 3 SCC 90
- BTL EPC Ltd. v. Macawber Beekay Pvt Ltd., 2023 SCC Online SC 1223
- A.T. Brij Paul Singh & Bros v. State of Gujarat, AIR 1984 SC 1703