Facts of the Case

The petitioner, Kiran Kumari, had leased her building to the Central Goods and Services Tax (CGST) Department under a lease agreement dated 16.11.2018 for operating its office at Begusarai. Subsequently, the CGST Department issued a notice informing the petitioner that the premises would be vacated upon expiry of the lease.

Thereafter, the Department floated a fresh tender inviting offers from various landlords for hiring office premises. The petitioner participated in the tender process and claimed to have quoted the minimum rental rate while fulfilling all eligibility conditions. She alleged that despite offering a competitive bid and successfully accommodating the department for several years without any dispute, the authorities selected another premises at a higher rent.

Aggrieved by the decision, the petitioner approached the Patna High Court seeking a writ directing the authorities not to misuse public funds and to continue the office in her premises by accepting her bid.

Issues Involved

  1. Whether the High Court can issue a writ directing a Government department to continue occupying a particular landlord's premises.
  2. Whether rejection of the petitioner's tender despite quoting a lower rent amounted to arbitrary or discriminatory action.
  3. Whether the selection of another premises by the Government was liable to judicial interference under Article 226 of the Constitution of India.

Petitioner’s Arguments

  • The petitioner contended that the CGST office had been functioning in her building for more than three years without any complaint.
  • She argued that she had quoted the minimum rental amount and fulfilled all conditions prescribed in the tender.
  • According to her, the successful bidder's building was incomplete, under construction and unsuitable for housing a Government office.
  • It was further argued that shifting the office to a higher-rent premises amounted to misuse of Government funds.
  • The petitioner sought issuance of a writ of mandamus directing the respondents to consider her premises and prevent shifting of the office.

Respondent’s Arguments

  • The respondents submitted that the petitioner's bid had indeed been considered during the tender process.
  • However, after evaluating the available options, the authorities selected another premises which they considered to be a better location for establishing the office.
  • It was argued that the decision was taken in accordance with commercial considerations and administrative discretion.
  • The respondents maintained that no arbitrariness, discrimination or illegality was involved in the tender evaluation process.

Court Order / Findings

The Patna High Court dismissed the writ petition and held that:

  • The petitioner's offer had been duly considered by the authorities.
  • Merely because another premises was selected, even at a comparatively higher rent, it could not be inferred that the decision was arbitrary or discriminatory.
  • There was no evidence showing that the rent accepted by the successful bidder was excessively higher than the prevailing market rate.
  • Selection of office accommodation is a commercial and administrative decision falling within the discretion of the Government department as tenant.
  • A landlord has no legal right to compel a Government department to continue tenancy in a particular building.
  • The High Court cannot issue a writ of mandamus directing the Government to rent or continue occupying any specific premises.

Finding no illegality or arbitrariness in the decision-making process, the Court dismissed the writ petition along with the interlocutory application.

Important Clarification

This judgment reiterates that:

  • Participation in a Government tender does not create any enforceable right to secure the contract merely because the bidder offers the lowest price.
  • Government departments retain the discretion to select premises based on overall suitability, commercial considerations and administrative requirements.
  • Courts exercising jurisdiction under Article 226 ordinarily do not interfere with such administrative decisions unless arbitrariness, mala fides or violation of law is clearly established.
  • A landlord cannot seek a writ compelling a tenant, including a Government department, to continue occupying or rent a particular property.

Section / Constitutional Provision Involved

  • Article 226 of the Constitution of India – Writ Jurisdiction of High Courts.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785325534_2253compressed.pdf

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