The Delhi High Court in Accurate Auctioneers V. Union Of India & Anr held that neither Article 19 nor any other provision of the Constitution of India recognizes a right inhering in an individual to compel the Government to enter into a contract.
The Court referred to a catena of judgments in which the Government’s Right to choose to contract has been extensively explained. In M/s. Erusian Equipment & Chemicals Ltd. v. State of West Bengal and Another it was observed that
“14. The State can enter into contract with any person it chooses. No person has a fundamental right to insist that the Government must enter into a contract with him. A citizen has a right to earn livelihood and to pursue any trade. A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling.”
It also referred to Association of Registration Plates v. Union of India and Others wherein it was held that “Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the Government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest….”
It has been explicitly held in Jindal Steel v. Rail Vikas Nidam Ltd that “Indisputably, the respondent has the freedom to decide, as with whom and on what terms it should enter into a contract. No citizen has a fundamental right to enter into a contract with the state.”
Therefore, in light of the aforesaid legal position, the Court observed that the petitioner can claim no fundamental right which may compel the respondents to necessarily enlist the petitioner for the purposes of auctioning uncleared or unclaimed goods. All that Articles 14 and 19 of the Constitution mandate is to place the respondents under an obligation to ensure that as and when they do decide to invite tenders or bids or invite persons to enter into a contract with an organ of the State, it adopts a fair and non-arbitrary criterion for the award of contract. The Court thus finds that the challenge as raised in the instant writ petition is misconceived and consequently must fail.