Introduction:

In the matter of G Venkata Ramana v. The State of AP and Others (W.P. No. 331 of 2025), decided on April 22, 2025, by the Andhra Pradesh High Court, Justice Subba Reddy Satti dismissed a writ petition that challenged the validity of a lottery clause embedded within a government tender document. The petitioner sought to strike down Clause 5(iii) of the tender floated by Andhra Pradesh Transmission Corporation Limited (APTRANSCO), which prescribed that in the event of two or more bidders quoting the same lowest commission, the tie would be resolved through a lottery draw. The petitioner, claiming to hold an A Grade license and authorization to carry out electrical installations, contended that such a method was arbitrary, discriminatory, and violative of the principles of natural justice. The Court, however, rejected this claim, affirming the validity of the clause and holding that it was framed to ensure fairness and transparency in the tendering process.

Arguments of Both Sides:

The petitioner, G Venkata Ramana, submitted that Clause 5(iii) lacked rational basis and was contrary to constitutional principles such as equality, fairness, and reasonableness. He argued that deciding the award of public contracts by the drawing of lots is akin to gambling and fails to take into account critical factors such as the financial viability, turnover, and capability of the competing bidders. He stated that this approach eroded the very essence of competitive tendering, which ought to be based on merit and not chance. Moreover, he questioned the wisdom of having such a clause when contractors invest significant time and resources in preparing and submitting bids. He contended that the impugned clause ignored key qualitative assessments and imposed an arbitrary system that could lead to incompetent or less qualified bidders securing government contracts merely due to a lottery win.

The respondents, including the State of Andhra Pradesh and APTRANSCO, defended the clause as a practical and transparent measure aimed at avoiding disputes and ensuring neutrality in the case of tied bids. They clarified that the tender was floated for operation and maintenance work, including watch and ward, house-keeping, gardening, MRT Assistance, and Telecom assistance related to E.H.T substations and lines. The evaluation parameter was limited to a percentage of commission quoted over a fixed Estimated Contract Value (ECV), and there was little room for qualitative variance among bids. The nature of the work did not require complex technical qualifications, and the estimated value already factored in salaries and necessary inputs. Hence, the only differentiating factor was the commission percentage. They argued that if two or more bidders quote the same lowest commission, determining a winner through lottery was a fair and objective mechanism to prevent favoritism or prolonged litigation. Importantly, they contended that the petitioner never participated in the tender process and had no locus standi to challenge the process from the outside.

Court’s Judgment:

The Court examined the scope of its judicial review in contractual matters and held that interference with tender conditions must be sparing and restricted to cases of manifest arbitrariness or illegality. The judge stressed that the principle of party autonomy in framing tender conditions must be respected, especially when the clause in question does not infringe any statutory or constitutional provision. Justice Satti emphasized that to declare a rule or clause as ultra vires or violative of natural justice, specific pleadings must be presented by the petitioner. However, in the present case, the petition lacked any concrete pleadings outlining how the lottery clause violated the principles of natural justice. Merely asserting that a clause is arbitrary without substantiating the claim with reasoning or evidence is insufficient.

Citing precedent, the Court observed that no party should be permitted to travel beyond the scope of their pleadings, and courts should refrain from granting relief not prayed for. In this instance, the petitioner failed to articulate or establish a coherent case of arbitrariness. The judge noted that the clause in question was designed not to introduce chance arbitrarily but to bring uniformity and transparency in the rare event of a tie. The Court reiterated that even in cases where contracts involve the public exchequer, minor elements such as a lottery in case of tie bids may be necessary tools to expedite administrative decision-making and eliminate allegations of bias.

Furthermore, the Court was critical of the petitioner’s approach, highlighting that he had not participated in the tender process and yet had chosen to invoke the extraordinary writ jurisdiction under Article 226 of the Constitution. This behavior, according to the Court, undermined the bona fides of the challenge, as the petitioner did not suffer any direct legal injury from the clause’s implementation. The Court emphasized that public interest litigation in the guise of individual grievances must be viewed with circumspection, especially when the challenge is against administrative discretion exercised within permissible boundaries.

In summation, the Andhra Pradesh High Court found the petitioner’s arguments legally untenable and the challenge procedurally flawed. It held that the lottery clause was neither arbitrary nor violative of natural justice and that it was implemented to enhance the fairness and neutrality of the selection process. Accordingly, the writ petition was dismissed.