The Orissa High Court clarified that in the absence of statutory provisions, duly issued non-statutory administrative guidelines—such as the 2018 SNP/THR Guidelines—have binding force, and authorities may not ignore or act contrary to such guidelines in the name of transparency or level playing field. The judgment reaffirms the binding nature of procedural guidelines in government contract renewals, upholding existing precedent, and will serve as binding authority within the State and persuasive authority elsewhere, especially in public welfare contexts.
Summary
| Category | Data |
|---|---|
| Case Name | WP(C)/18135/2025 of BINAPANI WOMENS S.H.G., BHADRAK Vs STATE OF ODISHA |
| CNR | ODHC010459112025 |
| Date of Registration | 02-07-2025 |
| Decision Date | 24-10-2025 |
| Disposal Nature | Disposed Off |
| Judgment Author | MR. JUSTICE SASHIKANTA MISHRA |
| Court | Orissa High Court |
| Bench | Single—Justice Sashikanta Mishra |
| Precedent Value | Binding within jurisdiction of Orissa High Court; persuasive elsewhere |
| Overrules / Affirms | Affirms and applies Supreme Court precedents; does not overrule prior SC precedent |
| Type of Law | Administrative Law, Constitutional Law—Articles 14, 226 & 227; Contract Law as applied to public welfare schemes |
| Questions of Law |
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| Ratio Decidendi |
The Court held that where non-statutory guidelines such as the 2018 SNP/THR Guidelines comprehensively provide the procedure for renewal and rescission of contracts, authorities cannot depart from them by issuing advertisements for open competition in their discretion. The exercise of executive discretion is circumscribed by the binding force of such guidelines, and failure to follow them, especially without any performance review or adverse findings, constitutes arbitrariness violative of Article 14. The Court reaffirmed that administrative instructions/guidelines, when creating rights and regulating contractual relationships in public welfare matters, are enforceable in writ jurisdiction if deviation undermines fairness or damages substantive rights. The “level playing field” principle does not override explicit procedures set in guidelines. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
The petitioner SHGs had contracts for supplying Take Home Ration (THR/Chhatua) to ICDS beneficiaries, renewed annually based on performance in accordance with 2018 Guidelines. Despite satisfactory performance reports, the Collector issued an open advertisement for new suppliers without conducting the prescribed performance review or finding any adverse material. Petitioners sought quashing of the advertisement and renewal of their contracts, while competing SHGs sought finalization of the new selection process. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and authorities within Orissa |
| Persuasive For | Other High Courts, especially in public welfare contract renewal disputes; potentially Supreme Court |
| Follows |
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What’s New / What Lawyers Should Note
- The Orissa High Court explicitly held that authorities cannot deviate from duly issued non-statutory guidelines (such as the 2018 THR Guidelines) on grounds of discretionary fairness or “level playing field” unless the guidelines themselves permit such deviation.
- Non-statutory administrative guidelines acquire binding enforceability when they confer rights or regulate procedures in public welfare contexts.
- Any renewal or rescission of contract must follow the review procedure stated in the guidelines; authorities cannot bypass this by issuing open advertisements without review or adverse material.
- The judgment clarifies maintainability of writ petitions even in contract renewal disputes where violation of guidelines and not merely contractual terms is alleged.
- The Court reaffirmed the Nazir Ahmad principle: when a rule prescribes the manner, it must be strictly followed.
- Lawyers representing SHGs or equivalent entities in public welfare supply contracts can cite this as binding or persuasive authority to challenge arbitrary non-renewals or deviations from prescribed procedures.
Summary of Legal Reasoning
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Maintainability of Writ Petition:
- The Court relied on Joshi Technologies, Radha Krishan Industries, and Tata Motors Ltd. to hold that while writs do not lie in purely contractual disputes, exceptions exist where guidelines are violated, causing arbitrariness or breach of public law obligations.
- The dispute here was about violation of binding guidelines, not mere contractual breach, permitting writ jurisdiction.
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Nature and Binding Force of Guidelines:
- The 2018 Guidelines comprehensively govern selection, renewal, and rescission of THR supply contracts.
- As per Supreme Court authorities (Narendra Kumar Maheshwari, E.S. Patangwala, Nagpur Improvement Trust, D.P. Singh), administrative guidelines are enforceable in courts if deviation causes arbitrariness or substantive harm.
- Nazir Ahmad’s principle applies: procedures prescribed in guidelines must be followed strictly.
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Assessment of Collector’s Actions:
- The Collector issued an open advertisement (20.3.2025) to select new SHGs without reviewing performance of existing SHGs as mandated by Clause-12(ii) or finding adverse reports.
- The guidelines did not contemplate open advertisements; selection was to be premised on performance reviews.
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Level Playing Field/Article 14 Arguments:
- The State’s invocation of level playing field and transparency principles (Reliance Energy) does not override mandatory, binding procedures unless the guidelines themselves permit such departure.
- No authority exists to unilaterally change the selection process.
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Conclusion and Relief:
- The advertisement was quashed as being contrary to the 2018 Guidelines.
- The Collector was directed to strictly follow the guideline-mandated procedure for contract renewal or rescission.
Arguments by the Parties
Petitioners (First Batch – Existing SHGs):
- No provision in the 2018 Guidelines for open advertisements; only performance review–based renewal or rescission is allowed.
- Performance of SHGs was positively certified; State Testing Laboratory and field reports were satisfactory.
- Arbitrary deviation from guidelines harmed vested rights under public law.
- Renewal not to be denied unless negative findings are recorded after a review.
Petitioners (Second Batch – Competing/New SHGs):
- Collector’s decision ensured transparency and a level playing field for all SHGs.
- Non-renewal and open advertisement after 15 years of engagement was a fair policy direction.
- Petitioner had invested in infrastructure and met eligibility but was being unfairly denied selection due to an interim order.
Respondent State:
- No SHG has a right to automatic renewal; renewals must follow performance review.
- Complaints and adverse reports justified consideration of new suppliers.
- Open advertisement ensured fairness, opportunity, and transparency; did not bar existing SHGs from participation.
- No malafides; process attempted to benefit the scheme’s public objectives.
Factual Background
In Bhadrak district, SHGs that had been preparing and distributing Take Home Ration (THR/Chhatua) to ICDS beneficiaries, with annually renewable contracts as per 2018 Guidelines, were aggrieved by the Collector’s March 2025 decision to issue an open advertisement for new SHG selection, bypassing the guideline-mandated performance review of existing contractors. Petitioners produced positive performance reports and absence of adverse findings, challenging the new selection as arbitrary. Competing SHGs that applied under the new advertisement sought finalization of the selection process, but their claims depended on the validity of the impugned advertisement.
Statutory Analysis
- Constitution of India:
- Article 226: High Court’s writ jurisdiction invoked to address alleged arbitrariness and violation of administrative guidelines.
- Article 14: Equality before the law cited by both sides—petitioners (existing SHGs) used it to challenge arbitrariness; respondents (State, new SHGs) invoked transparency and non-arbitrariness.
- Guidelines (Non-Statutory):
- “Revised Guidelines for Implementation of Take Home Ration, 2018” (SNP/ICDS/THR): Clause-7 (Selection of SHG), Clause-12 (Contract renewal/rescission procedures).
- The Court interpreted the guidelines as binding, not merely directory, stressing that deviation strikes at the public interest purpose of the scheme.
- Applied Nazir Ahmad v. King-Emperor principle: prescribed procedure must be strictly followed.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions are recorded in the judgment as it is a single-judge decision.
Procedural Innovations
Clarified that writ jurisdiction is maintainable when administrative guidelines are violated and such violation leads to arbitrariness, even if the dispute arises in a contract renewal context.
Alert Indicators
- ✔ Precedent Followed – The Court reaffirmed established principles regarding enforceability of non-statutory administrative guidelines and the need to follow prescribed procedures.