In the matter of entering into contract the state does not stand on the same footing as a private person who is free to enter into contract with any person he likes. The state in exercising its various functions, is governed by the mandate of Article 14 of the Constitution which excludes arbitrariness in state action and requires it to act fairly and reasonably. Moreover, in selecting the person for award of contract the state has to exercise discretion keeping in view the public interestinvolved. Thus the government cannot act arbitrarily at will. Its action must be in conformity with the standards or norms and not arbitrary, irrational or irrelevant. It is however recognised that a certain measure of "free play in the joints" is necessary for an administrative body functioning in its administrative sphere.

The scope of judicial review in the field of exercise of contractual powers of government and public bodies and after noticing the current mood of judicial restraint in England, the Supreme Court has laid down the following principles:

1 The modern trends 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 administrative decision. If review of 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 totender 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 quantitatively by experts.

5 The government must have freedom of contract. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness including its other facets pointed out above, but must be free from arbitrariness, not affected by bias or actuated by malafides.

6 Quashing decisions may impose heavy administrative burden on the administration and lead to increased unbudgeted expenditure.

It is open to court to review the decision-maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker or if the weight of facts pointing to one course of action is overwhelming, then a decisionin other ways cannot be upheld. A decision would be regarded as unreasonable if it is partial, and unequal in the operation as between different classes.

It must be clearly understood that there are inherent limitations in exercise of the power of judicial review. The right to refuse the lowest or any tender is always available to the government. But the principle laid down in Article 14 of the Constitution has to be kept in view while accepting or refusing 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 so long as it is not exercised for collateral purposes.

Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in the nature of social policy issues. Thus they are not essentially justifiable and the need to remedy any unfairness which is set rightby judicial review.

The judicial power of review is exercised to rein in an any unbridled executive functioning. The restraint has two contemporary manifestations, one is the ambit of judicial intervention; the other covers the scope of the court's ability to quash an administrative decision on merit. These restraints bear the hallmarks of judicial control over administrative action. Judicial review is concerned with reviewing not the merits of decision in support of which the application for judicial review is made but the decision-making process itself. Judicial review is protection and not a weapon. An application for judicial review is not an appeal. The duty of the court is to confine itself to the question of legality. Its concerns should be whether decision-making authority exceeded its powers, committed an error of law, or committed a breach of rule of natural justice, reached a decision which no reasonable tribunal would have reached; or abused its power. Therefore it is not for the court todetermine whether a particular policy or decision taken in the fulfillment of its policy is fair. It is only concerned with the manner in which the decision has been taken.

The grounds upon which an administrative action is subject to control by judicial review can be classified as under:

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

2 Irrationality or unreasonableness;

3) Procedural impropriety.

The court's power to interfere in each case is not as an appellate authority to override a decision of the local authority but as a judicial authority which is concerned and concerned only to whether the local authority has contravened the law by acting in excess of the power which parliament has confided in them.

The author is a Mumbai-based chartered accountant