Introduction:

In a judgment reinforcing the principles governing judicial review in contractual and tender matters, the Bombay High Court held that a mere familial relationship between bidders cannot, by itself, establish cartelisation or collusion in a public tender process. The decision came in M/s G.H. Khandelwal v. Amravati Municipal Corporation & Others (Writ Petition No. 293 of 2026; 2026 LiveLaw (Bom) 218), where the petitioner challenged the rejection of its technical bid in an e-tender issued by the Amravati Municipal Corporation for road maintenance works.

The case arose from a dispute concerning the evaluation of bids submitted in response to a public tender. The petitioner, a registered contractor, contended that it had fulfilled all eligibility criteria prescribed under the tender conditions and that its bid was wrongly rejected by the authorities. Additionally, it alleged that the successful bidders—respondent Nos. 4 and 5—were closely related (father and son) and had participated in the tender using common resources, thereby engaging in cartelisation and undermining the fairness of the process.

The tendering authority, however, rejected the petitioner’s bid on the ground that it did not meet certain eligibility requirements as interpreted by the evaluation committee. The contract was subsequently awarded to one of the respondents. Aggrieved by this decision, the petitioner invoked the writ jurisdiction of the High Court under Article 226 of the Constitution, seeking quashing of the tender process and reconsideration of its bid.

The matter was heard by a division bench comprising Justice Urmila Joshi-Phalke and Justice Nivedita P Mehta, who were called upon to examine not only the validity of the petitioner’s rejection but also the broader question of how allegations of cartelisation should be assessed in tender proceedings.

Arguments of the Parties:

The petitioner advanced a two-pronged challenge to the tender process. First, it argued that the rejection of its technical bid was arbitrary and contrary to the terms of the tender. According to the petitioner, it had complied with all eligibility conditions and had submitted the requisite documents within the stipulated time. It was contended that the interpretation adopted by the tendering authority was overly restrictive and resulted in an unjustified exclusion of a qualified bidder.

The petitioner further submitted that it had been willing to cure any deficiencies in its documentation and had responded to communications from the authority in this regard. However, despite this opportunity, the authority proceeded to reject its bid without adequately considering the material placed on record. This, it was argued, amounted to a violation of principles of natural justice and fair play.

The second and more serious allegation raised by the petitioner pertained to cartelisation. It was contended that respondent Nos. 4 and 5, being father and son, had submitted separate bids using common resources, thereby creating an artificial semblance of competition. According to the petitioner, such conduct was indicative of collusion and was aimed at manipulating the tender process to their advantage.

The petitioner argued that allowing related parties to participate as independent bidders without adequate safeguards could undermine the integrity of public procurement processes. It was submitted that the tendering authority ought to have scrutinized the relationship between the bidders more closely and disqualified them on the ground of conflict of interest or anti-competitive practices.

On the other hand, the respondents, including the Amravati Municipal Corporation, defended the tender process and the decision to reject the petitioner’s bid. It was argued that the evaluation of bids is a technical exercise entrusted to an expert committee, which is best equipped to interpret the tender conditions and assess compliance. The respondents contended that the petitioner had failed to meet the eligibility criteria as interpreted by the authority and that this assessment was based on objective evaluation of the documents submitted.

The respondents further submitted that the petitioner had been given an opportunity to rectify deficiencies in its bid, thereby satisfying the requirements of natural justice. However, the material subsequently furnished by the petitioner did not establish compliance with the relevant conditions, justifying the rejection of its bid.

With respect to the allegation of cartelisation, the respondents argued that mere familial relationship between bidders does not automatically imply collusion or anti-competitive conduct. It was emphasized that both respondent Nos. 4 and 5 were independent registered contractors, each entitled to participate in the tender process in their own capacity. The respondents maintained that there was no evidence of bid-rigging, price manipulation, or lack of independent decision-making.

The respondents also highlighted the limited scope of judicial review in tender matters, arguing that courts should not interfere with administrative decisions unless they are shown to be arbitrary, mala fide, or in violation of statutory or contractual provisions. In the absence of such factors, it was contended, the Court should defer to the expertise of the tendering authority.

Court’s Judgment:

The Bombay High Court, after a detailed consideration of the facts and legal principles, dismissed the writ petition and upheld the decision of the tendering authority. In doing so, the Court reaffirmed the well-established principles governing judicial review in matters of public contracts and tenders.

At the outset, the Court emphasized that the scope of judicial interference in tender matters is limited to examining the decision-making process and not the merits of the decision itself. The Court reiterated that the authority issuing the tender is the best judge of its requirements and is entitled to interpret its conditions in a manner it deems appropriate. Even if multiple interpretations are possible, the Court observed, the interpretation adopted by the authority should not be interfered with unless it is shown to be arbitrary, irrational, or mala fide.

Applying this principle to the present case, the Court found that the petitioner had indeed been given an opportunity to cure deficiencies in its bid. However, the material placed on record did not demonstrate compliance with the eligibility conditions as interpreted by the authority. The Court held that the evaluation of such documents falls within the domain of the expert committee, and in the absence of any perversity or arbitrariness, there was no justification for judicial interference.

The Court also addressed the petitioner’s contention regarding violation of natural justice. It held that since the petitioner had been afforded an opportunity to rectify deficiencies and present its case, the requirements of fairness had been satisfied. The mere fact that the outcome was adverse to the petitioner did not, in itself, establish a breach of natural justice.

Turning to the allegation of cartelisation, the Court made an important observation that mere familial relationship between bidders cannot be the sole basis for inferring collusion. The Court emphasized that allegations of cartelisation must be supported by cogent evidence demonstrating anti-competitive conduct, such as bid-rigging, price manipulation, or absence of independent decision-making.

In the present case, the Court found no material to suggest that respondent Nos. 4 and 5 had engaged in any such conduct. Both were independent registered contractors, and there was no evidence to show that their bids were coordinated or that they had acted in concert to manipulate the tender process. The Court cautioned against drawing adverse inferences based solely on personal relationships, noting that such an approach could unfairly restrict participation in public tenders.

The Court further observed that to establish cartelisation, it must be shown that the tendering authority has been misled or that a competent bidder has been ousted due to anti-competitive practices. In the absence of such evidence, the allegation of collusion cannot be sustained.

In conclusion, the Court held that the petitioner had failed to demonstrate any arbitrariness, mala fides, or illegality in the decision-making process of the tendering authority. The rejection of the petitioner’s bid was found to be in accordance with the terms of the tender, and the allegation of cartelisation was unsupported by evidence. Accordingly, the writ petition was dismissed, and the tender process was upheld.

The judgment thus serves as a reaffirmation of judicial restraint in contractual matters and provides clarity on the evidentiary threshold required to establish cartelisation in public procurement processes.