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Supreme Court Sets Aside High Court’s Judgement for Overstepping Bounds of Judicial Review Amounting to Judicial Restraint

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Excerpt

On 09.04.2021, the Supreme Court set aside the order of the High Court in the case M/S Utkal Suppliers V. M/S Maa Kanak Durga Enterprises and Ors. The Supreme court pointed out that in these matters judicial review amounts to judicial restraint. Further, the Supreme Court stated that High Court has overstepped the bounds of judicial review in second-guessing the authority’s requirement of a license under the Contract Labour Act.

Facts of the Case

In this case, the appeals arise out of a Tender Call Notice (TCN) dated 30.12.2019 issued by Respondent no.4, SCB Medical College and Hospital, Cuttack. By this TCN, sealed tenders are invited to have a valid labour and food license with a minimum of 3 years of relevant experience in the field of preparation and distribution of therapeutic and non-therapeutic diet to the government or private institutions having a minimum of 200 beds for the year 2019-2020. Under the aforesaid, four bids were received from the Appellant, Respondent no.1, Respondent no.5, and Respondent no.6. 

Respondent no.1 and 6 failed to provide a valid labour license and were disqualified. Thus, Appellant and Respondent no.5 were shortlisted for the opening of financial bids. At this point, a writ petition was filed by Respondent no.1 but was dismissed on the ground of being premature. On 24.02.2020, the financial bids took place and Appellant was found to be the lowest bidder, quoting an average cost of Rs.82/- per patient per day. Meanwhile, Respondent no.1 filed a writ petition dated 13.03.2020, praying that the Tender Committee proceedings be set aside and that he be awarded that tender. On 27.11.2020, the Appellant was awarded the tender at the approved rate and an agreement was made between the Appellant and Respondent no.4 for one year. 

Being aggrieved by the decision, the matter was taken into High Court. The High Court gave an order in the favour of Respondent stating that the requirement of labour license under the Contract Labour (Regulation and Abolition) Act,1970 does not seem justified.  

Petitioner’s Arguments

Shri Siddhartha Dave, appearing on behalf of the Appellant argued that the High Court could not have second-guessed the authority’s regarding its tender and held that a registration certificate granted under the Orissa Shops and Commercial Establishments Act, 1956 could replace a labour license under the Contract Labour ( Regulation and Abolition) Act,1970. He also argued that granting the contract in favour of the Appellant was mala fide. Further, the High Court exceeded its jurisdiction in directing the authority to grant the work order to Respondent.1.

Respondent’s Arguments

Shri Aditya Kumar Chaudhary, learned counsel appearing on the behalf of Respondent.1 countered the aforesaid submissions. He stated that the High Court had not exceeded its authority and the contract was to be awarded to Respondent no.1 only if its financial bid was lower than that of Appellant. 

Court’s Decision

The court stated that it is clear that the authority concerned read its own TCN to refer to the license to be submitted by bidders as the labour license under the Contract Labour Act. The court also pointed out that the judicial review in these matters amounts to judicial restraint. Further, the court said that High Court has overstepped the bounds of judicial review in second-guessing the authority’s requirement of a license under the Contract Labour Act. Thus, on 09.04.2021 the Supreme Court set aside the order of the High Court.

CLICK HERE TO VIEW THE JUDGEMENT.


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