Supreme Court on Judicial Review of Administrative Actions

 

INTRODUCTION

Today we will discuss the case of Utkal Suppliers v. Maa Kanak Durga Enterprises & Others, 2021 SCC SC OnLine SC 301, wherein the Supreme Court discussed about the judicial review of administrative actions, specifically in the context of Governmental Tenders.

 

The facts of the case are not relevant for our purposes. Therefore, let us discuss the important observations of the Court.

 

OBSERVATIONS OF THE COURT

 

Firstly, it was observed that “what is reviewed is not the decision itself but the manner in which it was made. The writ court does not have the expertise to correct such decisions by substituting its own decision for the decision of the authority.” Here the Supreme Court is talking about when an administrative decision could be interfered with.

 

Secondly, the Supreme Court discussed the case of Tata Cellular v. Union of India, (1994) 6 SCC 651, wherein it was held that “the terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.” It was further observed that the decision of the administrative authorities must be tested on the anvil of Wednesbury Principle of Reasonableness, and it must be kept into mind that “quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”

 

Thirdly, the Court discussed earlier landmark case-laws such as RD Shetty v. International Airport Authority of India, (1979) 3 SCC 489 and Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, wherein it was held that “the words used in the tender documents cannot be ignored or treated as redundant or superfluous — they must be given meaning and their necessary significance.” It was further observed that the makers of the tender documents are the best persons to understand the requirements in a contract and even if an interpretation that may not be found to be acceptable to the Courts is given by the makers, but that by itself would not be a reason for interfering with such an interpretation.

 

Fourthly, the Court perused the case of Galaxy Transport Agencies v. New J.K. Roadways, 2020 SCC OnLine SC 1035, wherein it was observed that “judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes” and the author of a document is generally in a better position to appreciate and interpret such document.

 

And lastly, the Supreme Court held that second guessing an administrative authority’s decision is impermissible unless it is arbitrary, perverse or mala fide. Such case of arbitrariness or mala fide would have to be made out and mere allegations would not be enough.

 

Those were the observations of the Court. So, what are my concluding remarks?

 

CONCLUSION

 

Judicial Review of Administrative Decision is a tight rope on which our Courts have to walk. Though the rule to be followed is that only the manner in which a decision has been taken is susceptible to judicial and not the decision itself, yet it is easier said than done. The Courts have to look at the totality of circumstances and evidence brought before it, to ascertain if there is a case of arbitrariness, unreasonableness or mala fide. It is often difficult to make out such cases and as has been seen in this case as well, the Courts tend to give the benefit of doubt to the makers of the contractual document or the tender document. The Courts are wary of the administrative burden that might accumulate if overturn an administrative decision. I find it be a meaningful approach. If the Courts start to second guess every administrative decision, then it would become next to impossible to carry on any administrative work as every administrative decision would be challenged by the opposing parties before the Courts. Thus, to close the flood gates of undesirable litigation, the Courts have adopted such an approach.