Tata Cellular v. Union of India

Facts

• Government invited bids for cellular telephone licenses
• Multiple companies competed; Tata Cellular was unsuccessful bidder
• Tata Cellular challenged award to rival bidder alleging arbitrariness in evaluation criteria
• Government argued: commercial decisions are policy matters beyond judicial review

Issue

1. What is the scope of judicial review of government decisions in awarding commercial contracts/licenses?

Held

• Judicial review of administrative action is available even in contractual/commercial matters
• But scope is limited to three grounds (adopting GCHQ): illegality, irrationality (Wednesbury), procedural impropriety
• Court will NOT examine: whether government's commercial judgment was correct; whether evaluation weights were optimal; whether different criteria would produce better result
• Court WILL examine: whether process was fair, whether irrelevant considerations influenced, whether decision was arbitrary or mala fide
• On facts: government's decision was within permissible range, not Wednesbury unreasonable

Ratio Decidendi

Government possesses domain expertise in commercial matters that courts lack. Judicial review in contractual decisions is narrow: courts ensure fairness and legality of process without substituting their commercial judgment. A decision to award a contract to Bidder A over Bidder B is not reviewable merely because the court might have preferred B, only if the choice is tainted by illegality, irrationality, or procedural unfairness.