In late 1959, the late professor Stanley de smith, in the first edition of his locus classicus, judicial review of administrative action stated that:-

“In the broad context of the administrative process, the role of judicial institutions is inevitably sporadic and peripheral”

In 1995, the editors of the Vth edition of the work claimed that:

“…. the effect of judicial review on the practical exercise of power has now become constant and central”

For quite some time now the Courts have dramatically extended the principles of Judicial Review, and have applied those principles over a wide area of public Administration, but the laws dominion does appear to have diminished substantially due to developments like privatization, contracting out, ombudsman, the citizen’s charter & various other aspects of new public management.

In the famous case of Council of Civil Service Unions & Ors. Vs. Minister for the Civil Service1, or commonly known as the CCSUK case, Lord Diplock Summarized the concept of Judicial Review as follows and I quote:-

“…. My lords, I see no reason why simply because a decision making power is derived from a common law and not a statutory source, it should for that reason only, be immune from Judicial Review. Judicial Review has I think developed to a stage today when without reiterating any analysis of the steps by which the development has come about, one can Conveniently classify under three heads, the grounds on which administrative action is subject to control by Judicial Review.

The first ground I would call “Illegality”, the second “Irrationality” and the third “Procedural Impropriety”.

This is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adaptation in the future of the principle of “Proportionality” which is recognized in the Administrative Law of several of our fellow members of the European Economic Community.” Unquote.

The aforementioned words of Lord Diplock resonate in judicial forums in all the common law abiding countries. Now we all know that the power of Judicial Review of any decision is an extra ordinary power vested in a superior court to keep under check the exercise of power of the public authorities, whether they are statutory, quasi- Judicial or administrative.

Such a power is exercised only when a person who is aggrieved of such a decision, challenges the same before a Judicial Authority. It is common knowledge that while discharging administrative functions, public authorities take various decisions for which they allow sufficient elbow space for proper exercise of discretion. In India, by reasons of Article 32 and 136 of the Constitution of India, the Supreme Court can exercise the power of Judicial Review. Similarly, under Article 226 and 227 of the Constitution of India, High Courts have a power of Judicial Review. No other courts in India have been conferred with such a power.

Modern trend points to judicial restraint in administrative action. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the Legislature and the Executive. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and the executive is subject to judicial restraint, the only check on our own exercise of power in the self imposed discipline of judicial restraint.

In the case of Tata Cellular Vs. Union of India2, is now regarded as the starting point for the modern statement of law as regards Judicial Review of administrative action. Particularly of action in relation to tenders. The Supreme Court held, that although it cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism, However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power, of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.

Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters.

Shortly put, the grounds upon which an administrative action in relation to tenders is subject to control by judicial review has been classified as under by the Supreme Court:

(i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.

(ii) Irrationality, namely, Wednesbury unreasonableness.

(iii) Procedural impropriety.

The above are only the broad grounds but it does not rule out addition of further grounds in course of time.

After referring to several decisions, the Supreme Court finally has observed as under:-

1. The modern trend points to judicial restraint in administrative action.
2. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
3. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
4. 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.
5. The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
6. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.

Later on With regard to Judicial Review, in tender matters, the Supreme Court once again summarized the principles in the case of BSN Joshi & Sons Vs. Nair Coal Services Ltd. & Ors.3, as under and I quote:-

“We are not oblivious of the expansive role of the superior courts in judicial review.

We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarised as under:-

(i) if there are essential conditions, the same must be adhered to;

(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;

(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;

(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;

(v) when a decision is taken by the appropriate authority

upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;

(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;

(vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint.

Law operating in the field is no longer res integra. The application of law, however, would depend upon the facts and circumstances of each case….

The employer concededly is not bound to accept a bid only because it is the lowest….”

The principles laid down by the Supreme Court in the cases that are cited above clearly establish that the law laid down now is clearly indicative of the fact that principles of Judicial Review would apply to exercise of contractual powers by the government bodies in order to prevent arbitrariness or favoritism.

However, it is very important that the Courts must not embarrass the administrative authorities and must realize that administrative authorities have expertise in the field of administration while the courts do not have the same expertise. For example a judge cannot be an accountant, electrical engineer, financier, banker, stock broker, or a system management analyst.

There is yet another very important aspect which has to be kept in mind and that now relates to growth of judicial review in the era of outsourcing by the government. Gone is the time when government considered it essential that it should itself perform its functions like industrial activities etc. to fulfill its constitutional goals. What was broadly known as the era of socialism. But things have drastically changed now with the advent of era of privatization. The role of state and its intervention is reduced, even in areas which the state had taken over earlier from private bodies. Like Education, Telecommunications, Municipal services etc. also in Administration of Justice (ADR) defence, prisons. In the Era of Globalization international regulatory regimes such as WTO and GATT are working parallel to domestic regimes. Thus it has become necessary to develop constitutional interpretation that can make the private entities that are performing public functions without popular mandate liable under the domestic laws of the Nation.

Thus the number of functionaries against whom judicial review is available is expanding, and is most likely to have a great and significant impact on the national development as a whole. Although Economic policies of the state can normally not be interfered with, in keeping with the ethos and spirit of constitutional governance however they are also not altogether beyond the pace of Judicial Review.

Courts are not experts in policy and public administration, therefore they should not step beyond their constitutional capacity. This is the call of the day.

In Lochner Vs. New York6, Mr. Justice Holmes of the U.S. Supreme Court in his dissenting judgment criticized the majority of the court for becoming a super legislature by inventing a liberty of contract theory, thereby enforcing its particular laissez faire economic philosophy.

Similarly, in his dissenting judgment in Griswold Vs. Cannecticut7, Mr. Justice Hugo Black warned that unbounded judicial creativity would make this Court a day-to-day Constitutional Convention. In the ‘Nature of Judicial Process’ Justice Cardozo remarked: The Judge is not a Knight errant, roaming at will in pursuit of his own ideal of beauty and goodness. Justice Frankfurter has pointed out that great judges have constantly admonished their brethren of the need for discipline in observing their limitations (see Frankfurters ‘some reflections on the reading of statutes)

Therefore if the Courts start to exercise their power of judicial review outside their arena of expertise, it will result in causing a great impact on the development of the nation. It is a matter of common knowledge that time which is taken to settle a matter in courts is very long and that can itself lead to blockage of a particular project which may be otherwise very

important for the public at large. There have been instances in our country where foreign investments in the form of donations have been withdrawn by a foreign country when it discovered that its funds were lying idle and not being used due to a court battle which had erupted due to the challenge of a tender, in the courts. There appears to be some hope today for quick decisions by Courts as the government is introducing the Commercial Division of High Courts Bill, 2009 in the Parliament.

Although it is necessary that for positive development of the nation, their should be a fast track towards implementation of all types of projects, which are in public interest like Railways, metro rails, telecom, mobile etc. at the same time it is also necessary that there should be proper checks and balances and Judicial Review of administrative action by courts if we have to develop a nation guided by the rule of law.

Projects where tender process have not been followed are rocking the nation today, a clear example is corruption in almost all projects of the Commonwealth games.

It would be therefore, prudent to remember the following observations of Lord Justice Lawton in Laker Airway8.

“In the United Kingdom aviation policy is determined by ministers within the legal framework set out by Parliament. Judges have nothing to do with either policy making or the carrying out of policy. Their function is to decide whether a minister has acted within the powers given (sic.) him by statute or the common law. If he is declared by a court, after due process of law, to have acted outside his powers, he must stop doing what he has done until such time as parliament gives him the powers he wants. In a case such as this I regard myself as a referee. I can blow my judicial whistle when the ball goes out of play; but when the game restarts I must neither take part in it nor tell the players how to play.”

1. (1984) 3 ALL E.R. 935

2. (1994) 6 SCC 651

3. (2006) 11 SCC 548

4. (2002) 3 WLR 344

5. (country of sessions, Times 8-8-2002)

6. 198 US 45 (1905)

7. 381 U.S. 479

8. 1977 (2) WLR 234 AT 267