Introduction

The case of Md. Salam Khan & Brothers Through Its Managing Partner Md. Salam Khan v. State Of Manipur represents a pivotal moment in the jurisprudence surrounding public tenders and the principles of fairness and transparency in contract awards. Filed before the Manipur High Court on January 27, 2021, the petitioners, Md. Salam Khan & Brothers, challenged the State of Manipur's decision to award a construction contract despite being the lowest bidder. The respondents, including the Principal Secretary Commissioner/Secretary (Rd & Pr), Government of Manipur, defended the state’s actions, asserting that due process was duly followed.

Summary of the Judgment

The High Court scrutinized the tender process under the Pradhan Mantri Gram Sadak Yojana (PMGSY), where the petitioner emerged as the lowest bidder for the construction of a bridge over the Imphal River. Despite this, the contract was awarded to respondent No. 3 without transparent criteria, leading to allegations of bias and favoritism. The Court found that the Tender Evaluation Committee had altered the evaluation norms post-tender initiation, thereby violating the principles of natural justice and the constitutional mandate of equality under Article 14. Consequently, the Court quashed the existing work order and directed a re-evaluation of the bids in accordance with the established legal standards.

Analysis

Precedents Cited

The judgment extensively referenced several landmark Supreme Court decisions to reinforce its stance on procedural fairness in tender evaluations:

• Ram Ganesh Tripathy vs. State of UP (1997): Emphasized that altering selection criteria mid-process is unlawful.
• Hemani Malhotra vs. High Court Of Delhi (2008): Highlighted the illegality of introducing new evaluation norms after the selection process has commenced.
• Kartick Chandra Mondal vs. Union of India (2010): Asserted that administrative actions must not be arbitrary or irrational.
• BVG India Ltd. vs. Ujjain Municipal Corporation (2018): Clarified the limited scope of judicial review in contract awards, stressing that commercial considerations must be paramount but not at the expense of fairness.

These precedents collectively underscored the necessity for consistency, transparency, and adherence to predefined criteria in public procurement processes.

Legal Reasoning

The High Court's legal reasoning focused on several key principles:

• Article 14 of the Constitution of India: Guarantees equality before the law and the right to equal protection. The Court found that altering the evaluation criteria after bids were submitted breached this fundamental right.
• Principle of Natural Justice: Ensures fairness in legal proceedings. By changing the workable percentage norms during the tender process, the Respondents violated this principle.
• Judicial Restraint in Commercial Transactions: Referencing BVG India Ltd., the Court acknowledged that while judicial review is limited in commercial matters, it becomes essential when decisions are arbitrary or irrational.
• Public Interest: The Court emphasized that decisions should serve the public good without prejudice or favoritism towards any bidder.

The Court concluded that the Tender Evaluation Committee's unilateral modification of evaluation norms constituted arbitrariness and a violation of Article 14, thereby necessitating the quashing of the work order and a fresh evaluation.

Impact

This judgment has profound implications for future public tenders and contract awards:

• Strengthened Compliance: Public authorities must strictly adhere to the predefined tender criteria without making arbitrary changes post-bid submission.
• Enhanced Transparency: The decision promotes transparency in the tender evaluation process, ensuring that all bidders are treated equitably.
• Judicial Oversight: Reinforces the role of judiciary in safeguarding fundamental rights against administrative overreach in procurement processes.
• Policy Formulation: Encourages the formulation of comprehensive and immutable tender guidelines to prevent future disputes.

Overall, the judgment serves as a cautionary tale for public bodies to maintain integrity and fairness in their contractual engagements, aligning their practices with constitutional mandates.

Complex Concepts Simplified

Article 14 of the Constitution of India

Article 14 ensures that everyone is treated equally by the law. It prohibits discrimination and mandates that laws and administrative actions must be fair and reasonable.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

PMGSY is an Indian government initiative aimed at providing all-weather road connectivity to unconnected rural areas, enhancing socioeconomic development.

Tender Evaluation Committee

A body constituted by the government to assess and evaluate bids submitted by contractors for public projects based on predefined criteria.

Natural Justice

A legal philosophy used in some jurisdictions to ensure fairness in decision-making processes, including the right to a fair hearing and the absence of bias.

Judicial Review

The process by which courts examine the actions of the executive and legislative branches of government to ensure they comply with the constitution and laws.

Conclusion

The Manipur High Court's judgment in the Md. Salam Khan & Brothers vs State Of Manipur case underscores the paramount importance of fairness, transparency, and adherence to established procedures in public tender processes. By quashing the arbitrary alteration of evaluation criteria, the Court reinforced foundational legal principles enshrined in the Constitution, particularly Article 14. This decision not only serves as a deterrent against malpractices in public procurement but also fortifies the judiciary's role in upholding citizens' rights against administrative overreach. Moving forward, public authorities must ensure meticulous compliance with tender norms, fostering an environment of trust and equity in governmental contracts and fostering overall public welfare.