By Yash Gupta
Citation - JT 2020 (6) SC 463
Article 136 of Constitution of India
Interim Stay was granted in contractual matters.
Issue: Whether Supreme Court can interfere in the contractual matters?
The Rajasthan State Warehousing Corporation Ltd. is in appeal aggrieved against the said
interim order. It is argued by the learned counsel for the appellant that the tender was given
for warehouses at 71 locations on 12th March, 2020 for operation and management of the
warehouses under Public Private Participation (PPP) Model. Certain queries were raised by
the writ petitioners before the High Court (respondents herein) in respect of clause 5(5)(i) of
the notice inviting bid. There was pre-bid conference and thereafter certain clarifications/amendments
were issued. Tender floated by Rajasthan State Warehousing Corporation Ltd. Writ petitions
were put challenging tender conditions which was subsequently dismissed by Single Judge,
High Court Technical bids was opened to all and thereafter letter of intent was issued to
successful bidders. However, on 29.5.2020, in an intra-court appeal, Division Bench, High
Court directed status quo and it was held that no contract shall be signed without its leave.
This order was maintained on the next date i.e. 10.6.2020 in Supreme Court and the issue was
whether Supreme Court could interfere with these interim orders, when High Court had
granted liberty to appellant to seek its leave for execution of contract. The Supreme Court in
its opinion held, yes. Though, in an appeal under Article 136, Supreme Court does not
ordinarily interfere with an interim order but in this case, order of stay passed by the Division
Bench, High Court restraining successful bidders from executing contract was not in public
interest, specially when tender was for storage of food articles in the warehouses of the State
Government undertaking. These orders affecting revenue of the State, were passed without
recording any reason and after dismissal of writ petitions. Hence, both interim orders granting
status quo are set aside. However, grant of contract shall be subject to orders which may be
passed in the intra-court appeals pending before High Court.