Jagdish Mandal vs State Of Orissa & Ors on 11 December, 2006
6. The Supreme Court in Jagdish Mandal v. State of Orissa and
Others, (2007) 14 SCC 517, had held that the contract is a commercial
transaction. Evaluating tenders and awarding contracts are essentially
commercial functions. Principles of equity and natural justice stay at a
distance. If the decision in such matters is bona fide and is in public interest,
courts will not in exercise of power of judicial review, interfere even if a
procedural aberration or error in assessment or prejudice to a tenderer is
made out. The power of judicial review will not be permitted to be invoked
to protect private interest at the cost of public interest, or to decide
contractual disputes. The Court should exercise judicial restraint unless
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illegality or arbitrariness on the part of the Government in these matters is
apparent. In other words, interference is permissible if the process adopted
or decision made is malafide or intended to favour someone or the same is
so arbitrary and irrational that no responsible authority acting under the law
could have arrived at it or it affected the public interest.