Public Interest Also Shall Be Demonstrated Before Writ Remedy Is Sought In Tender Matters: SC [Read Judgment]

The Supreme Court has observed that the public interest should also be demonstrated before a writ remedy is sought in tender matters.

The bench of CJI SA Bobde, Justices BR Gavai and Surya Kant was considering an appeal against the High Court judgment in a writ petition relating to tender matters in which one of the issue pertained to the maintainability of the writ considering the nature of tender processes. BCCL, a subsidiary of Coal India Ltd, had approached the Apex Court challenging the High Court order which quashed the  award of tender by BCCL to M/s RK Transport Co by allowing the writ petition filed by filed by AMR­Dev Prabha. 

The bench observed that writs are impermissible when the allegation is solely with regard to violation of a contractual right or duty and therefore the persons seeking writ relief must also actively satisfy the Court that the right it is seeking is one in public law, and not merely contractual. It observed thus:

"Such conscious restraint is also necessary because judicial intervention by itself has effects of time and money, which if unchecked would have problematic ramifications on the State's ability to enter into contracts and trade with private entities. Further, it is not desirable or practicable for courts to review the thousands of contracts entered into by executive authorities every day. Courts also must be cognizant that often ­a ­times the private interest of a few can clash with public interest of the masses, and hence a requirement to demonstrate effect on 'public interest' has been evolved by this Court.

"It is thus imperative that in addition to arbitrariness, illegality or discrimination under Article 14 or encroachment of freedom under Article 19(1)(g), public interest too is demonstrated before remedy is sought. Although the threshold for the latter need not be high, but it is nevertheless essential to prevent bypassing of civil courts and use of constitutional avenues for enforcement of contractual obligations."

Taking note of the facts in the instant case, the bench observed that there was neither any public law right which was affected, nor was there any public interest sought to be furthered. The Court also said that merely because the accusations made are against the State or its instrumentalities doesn't mean that an aggrieved person can bypass established civil adjudicatory processes and directly seek writ relief. In determining whether to exercise their discretion, writ courts ought not only confine themselves to the identity of the opposite party but also to the nature of the dispute and of the relief prayed for.

Thus, although every wrong has a remedy, depending upon the nature of the wrong there would be different forums for redress.In cases where a constitutional right is infringed, writs would ordinarily be the appropriate remedy. In tender matters, such can be either when a party seeks to hold the State to its duty of treating all persons equally or prohibit it from acting arbitrarily; or when executive actions or legislative instruments are challenged for being in contravention to the freedom of carrying on trade and commerce. However, writs are impermissible when the allegation is solely with regard to violation of a contractual right or duty. Hence, the persons seeking writ relief must also actively satisfy the Court that the right it is seeking is one in public law, and not merely contractual. In doing so, a balance is maintained between the need for commercial freedom and the very real possibility of collusion, illegality and squandering of public resources.

Case name: Bharat Coking Coal Ltd. vs. AMR Dev Prabha 
Case no.: CIVIL APPEAL NO. 2197 OF 2020
Coram: CJI SA Bobde, Justices BR Gavai and Surya Kant

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