Judgement of the Day - Rajasthan State Warehousing Corporationv.Star Agriwarehousing And Collate

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.

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