TaxTMI 
TaxTMI 
2022 (1) TMI 1512
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....een rejected on the ground that the same is non-responsive and consequently has directed the appellant herein to proceed in accordance with law qua the tender process by further examining the Bid of the original writ petitioner, the original respondent - National High Speed Rail Corporation Limited (hereinafter referred to as "NHSRCL") has preferred the present appeal. 2. That the appellant herein - NHSRCL is a Government Company incorporated under the Companies Act, 2013 with equity participation of the Government of India, Government of Gujarat and Government of Maharashtra, incorporated with the object to finance, construct, maintain and manage the upcoming High Speed Rail Corridor in India. 2.1 That the NHSRCL issued a tender notice on 22.10.2020 calling for bids in relation "to the Bid Package No. MAHSR-8 for the -- Design and Construction of Civil and Building Works for the Depot on Design Build Lump Sum Price Basis for Double Line High Speed Railway involving works for Site Formation, Abutment, Retaining Walls, Roadbed for track, Box Culvert, Roads, Cable Duct, Foundations of OHE Masts, Piping, Drainage, Water Supply, Water Harvesting, Fire Fighting, Land-scraping, Bou....
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....ented upon Clauses 28.1 and 42.5 of ITB and has observed that not to give reasons at that stage would tantamount to depriving the bidders to approach the Court and know the reasons for rejection of their Bid. That thereafter the High Court has considered the reasons for which the Bid submitted by the original writ petitioner was found to be technically non- responsive and has overruled the objections while treating the Bid as technically non-responsive and has observed and held that the Bid submitted by the original writ petitioner was substantially responsive and that there was a substantial compliance of the terms and conditions of the Bid document. Consequently, the High Court has quashed and set aside the aforesaid communications rejecting the original writ petitioner's Bid at Technical Stage as a technically non-responsive and has directed the NHSRCL to consider and evaluate the Bid submitted by the original writ petitioner alongwith the Bids submitted by four other bidders. 2.5 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the NHSRCL has preferred the present appeal. 3. Shri Tushar Mehta, learned Solicitor General ....
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....nd approved by JICA. It is submitted that the decision to hold that the Bid was non-responsive was of JICC, which has been approved by the JICA. It is submitted that appellant under the contractual mechanism cannot in its discretion deviate from the evaluation done by JICC and any deviation unilaterally made by the Appellant/Government of India may not be acceptable/concurred by JICA. It is submitted that the same shall also be violative of "privilege participation principle" as implementing the High Court's order will enable the other bidders whose Bids have been rejected by the appellant on the same ground to participate in the tender. It is submitted that the High Court's evaluation of the other bidders will also render their bids responsive and therefore any such action will render the entire bidding un-competitive and shall have cascading effect on the other Packages. 3.2 Shri Mehta, learned Solicitor General has taken us to the relevant clauses of the Memorandum of Corporation or Understanding as entered between JICA and the President of India; JICA's Standard Bidding Guidelines and the Guidelines for procurement under Japanese ODA Loans. He has also taken us t....
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....nct from Government Contracts/ Public Works Department Contracts / Public Private Partnership Contracts, which are either wholly or partially funded from public money, i.e., Consolidated Fund of India or of the State and implemented by a statutory/local authority of the State. It is submitted that in such foreign funded contracts, it is the investor, which normally is the friendly sovereign country (a developed nation, like in the present case Japan) which takes a decision to invest in a friendly State (a developing nation, like in the present case India) and finances and implements projects meant for development of the recipient developing nation. 3.7 It is submitted that these investments from developed nations are made on the basis of non-negotiated terms and conditions, where the sole discretion as to what would be the conditions of the investments and on what terms the contractors would be chosen to implement the project, vests with the investor foreign developed nation. Thus, all crucial aspects of decision making and the terms and conditions on which such investment has to be made and how the contractors have to be chosen to implement the said project remains with the ins....
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....der Article 226 of the Constitution of India. It is submitted that in the present case the High Court has exceeded in its jurisdiction in exercise of powers under Article 226 of the Constitution of India and has deviated the scope of judicial review in contractual matters. It is submitted that the High Court while exercising the powers under Article 226 of the Constitution of India and interfering with the administrative process with respect to the Foreign Sovereign Funded Contract/Project has not at all appreciated and/or considered the difference between the foreign funded contracts and the ordinary Public Works contracts funded from Public Exchequer. 3.10 It is submitted that considering the special peculiarity of such Foreign Sovereign Funded Development Contracts, which can be envisaged and exist only due to the availability of the investment and willingness of the foreign sovereign country to finance such infrastructural project, the said contract assumes the characteristics, which are more of private in nature rather than being a full-fledged Public Works Contracts/Government Contracts where the Government of India is the sole authority of funding and implementing the pro....
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....hat when the final decision-making authority is under the jurisdictional control of a governmental body in India, the State may adopt a position wherein it allows tender participant to participate in case there is substantial compliance. However, the same may not be a position with contracts issued for implementing foreign funded infrastructural projects as the same would amount to changing the terms on which the investment is agreed to be made. It is submitted that in the present case as such, the appellant has complied with and/or followed the conditions as envisaged by the foreign funding party and there cannot be any deviation from the terms and conditions of the NIT by the appellant; as such which can be said to be a facilitating party and/or implementing agency only. It is submitted that in the present case, as one of the essential conditions of signing the forms in indelible ink has not been complied with, therefore, a conscious decision was taken by the investor - JICA and the consultant - JICC, which has been applied by the appellant. 3.13 It is submitted that in the impugned judgment and order the High Court has applied the doctrine of substantial compliance, equity an....
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....one; or where the process adopted or decision made is arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law would have reached"; and in cases where the public interest is affected, the Courts will be justified in interfering such decision in exercise of powers under Article 226 of the Constitution of India. Reliance is placed upon the following decisions :- Afcons Infrastructure Limited Vs. Nagpur Metro Rail Corporation Limited, AIR 2016 SC 4305; B.S.N. Joshi and Sons Ltd. Vs. Nair Coal Services Ltd. and Ors., (2006) 11 SCC 548; Michigan Rubber (India) Limited Vs. State of Karnataka, (2012) 8 SCC 216; Jagdish Mandal Vs. State of Orissa, (2007) 14 SCC 517; Tejas Constructions and Infrastructure (P) Ltd. Vs. Municipal Council, Sendhwa, (2012) 6 SCC 464; Central Coalfields Limited & Anr. Vs. SLL-SML [A Joint Venture Consortium], (2016) 8 SCC 622; and Maa Binda Express Carrier & Anr. Vs. North Eastern Frontier Railway & Ors., (2014) 3 SCC 760. 3.15 It is further submitted that with the aforesaid limited scope of judicial interference/intervention in exercise of the powers un....
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....take recourse to law at that stage and even after the contract is awarded; the bidder is not rendered remediless. It is, therefore, submitted that the observations made by the High Court with respect to the aforesaid two clauses are absolutely unwarranted and beyond the scope of judicial review in exercise of powers under Article 226 of the Constitution of India. 3.17 It is submitted that the findings recorded by the High Court in the impugned judgment and order that ITB Clauses 28.1 and 42.5 are patently illegal may lead to altering the tender conditions as these are as per JICA SBD and can be altered only with JICA's concurrence. It is submitted that seeking alterations in JICA ITB will tantamount to re- negotiations between the tendering authorities and JICA. This will not only delay the BID-Package No.C8 but also the other 17 Bid Packages which are yet to be awarded for this project, valued at approximately Rs.50,000 crores. 3.18 It is submitted that the confidentiality clauses are a part of JICA guidelines and the appellant as well as the participating bidders are bound by the same. It is submitted that as a consequence of the findings of the High Court, the confiden....
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....ellant has treated all the Bidders at equal footing. It is submitted that the High Court has wrongly observed and held that the clarification sought by the appellant only from other bidders is discriminatory. It is submitted that procedure followed by the appellant in disqualifying the bidder and nature of clarifications sought from other bidders were strictly as per the protocols laid down by JICA. It is submitted that evaluation of the bids is done in various stages. In the present case, the original writ petitioner was disqualified at stage 1 and only the bidders who pass Stage 1 were to proceed to next stage and given their disqualification at Stage 1, no clarifications were sought from original writ petitioner. 3.22 It is submitted that on the issue of clarifications, the High Court has wrongly concluded that seeking clarifications from other bidders was discriminatory. It is submitted that other bidders from whom clarifications were sought had cleared stage 1 and pursuant to that the clarifications were sought from them. It is submitted that the submission on behalf of the respondent - original writ petitioner that the appellant would have granted the liberty to cure the d....
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....associated works. It is submitted that the Bullet Train Project is of national importance and the appellant/Government /Union Government's ultimate object is catering to aspirations of the people of India. It is submitted that the total cost of the Bullet Train Project is Rs.1,08,000 crores and the substantial amount with the concessional rate of interest is to be funded by JICA and, therefore, the project is a foreign funded project due to the relations between the developed country and developing country. It is submitted that therefore any delay in such a project due to frivolous litigation and baseless challenges to the tendering clauses may render the project commercially and transactionally unviable as it may affect the willingness of the investor/financing State to go ahead with the project. 3.25 Making above submissions and relying upon above decisions, it is prayed to allow the present appeal and quash and set aside the impugned judgment and order passed by the High Court. 4. Present appeal is vehemently opposed by Shri Anshin H. Desai, learned Senior Advocate appearing on behalf of the respondent. It is vehemently submitted by Shri Desai, learned Senior Advocate ....
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....by Shri Desai, learned Senior Advocate appearing on behalf of the respondent that in the present case the respondent is not asking for the tender to be awarded to it, the only prayer is that its Bid, which is wrongly rejected at Stage I (Evaluation of Administrative Requirements) by adopting a discriminatory approach must be evaluated further. It is submitted that as such the respondent's Bid is almost Rs.32 crores lesser than that of L1. It is further submitted on behalf of the respondent that the terms of the tender must be applied uniformly to all Bidders and there can be no discrimination even in a JICA funded/loaned project. Shri Desai, learned Senior Advocate appearing on behalf of the respondent has taken us to the ITB Clauses 1.1, 22.1, 22.2, 29.1, 33.2, 34 and 1.3, the relevant clauses of the tender. It is submitted that the evaluation sequence comprises of five stages of evaluation as under :- i. Stage 1 - Evaluation of Administrative Requirements ii. Stage 2 - Evaluation of Compliance and Responsiveness iii. Stage 3 - Evaluation of Compliance with Qualification Requirements iv. Stage 4 - Technical Evaluation v. Stage 5 - E....
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....t is submitted that even the said reasoning is provided to the respondent after the respondent approached the Hon'ble High Court. It is submitted that all the appellant had to do was to call upon the respondent to provide a signed copy, or to seek a clarification that the respondent confirms the Form CON 2.0 and CON 3.0. It is submitted that the respondent is not resiling from the declaration made in the said Forms and stands by it even today and the stage to evaluate whether the declaration made by the respondent is correct or not has not come and still the Bid is rejected on the sole ground that it is not signed. It is further submitted that surprisingly, in relation to 'Material Deviations' and non-conformities of far more serious nature, the appellant has permitted select Bidders to rectify and/or clarify. 4.9 It is submitted that so far as the Bidder No.9/9 (L2) is concerned, he had made an identical error whereby the said Bidder failed to put its signature and stamp on the Site Organization Chart in accordance with ITB 22.2. In the case of the said Bidder, the appellant exercised discretion and called upon the said Bidder to rectify the same. 4.10 It is subm....
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....the appellant. 4.14 Now, so far as the submission on behalf of the appellant that there would be a cascading effect of the impugned order is concerned, it is submitted that the aforesaid is not sustainable, in view of the fact that after the impugned order, till date the appellant has awarded or is in the process of awarding contracts for other Packages cumulating to about Rs. 5,000 crores already. 4.15 Now so far as the documents produced by the appellant before this Court by way of I.A. No.128406 of 2021 and I.A. No.132078 of 2021 are concerned, it is submitted that as they do not form part of the record before the High Court and therefore, the same may not be considered by this Hon'ble Court. It is submitted that nothing has been stated why the same could not be placed before the Hon'ble High Court. 4.16 Making above submissions, it is prayed to dismiss the present appeal and direct the appellant to proceed and further evaluate the Bid submitted by the respondent in accordance with the terms of the Bid Document. 5. Heard learned counsel for the respective parties at length. 6. By the impugned judgment and order, the High Court has allowed the writ petition....
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....on to 'Make in India' the bullet train which would be operating under the said project. That thereafter a discussion was held between the JICA and the Ministry of Railways, Government of India on 26.09.2016 and the discussion was recorded on various aspects including the project objectives, selection of the consultant(s), implementation schedule, Products (Draft and final documents for adoption by the Ministry of Railways), which included :- (1) Technical specifications and standards, as required for the project (excluding those prepared under the Follow-up Study); (2) Basic Design Documents including drawings and Design Basis Reports necessary for bidding or implementation of the Project; (3) Standard Design Documents including drawings and Design Basis Reports necessary for bidding or implementation of the Project; (4) Detailed Design Documents including drawings and Design Basis Reports necessary for bidding or implementation of the Project; (5) Bidding Documents, including Prequalification Documents (hereinafter referred to as "Bidding Documents"); (6) General Arrangements Drawings (hereinafter referred to as "GAD"); (7) Cost Estimate of the Project; (8) Construction St....
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....dding Documents, including Prequalification Documents (hereinafter referred to as "Bidding Documents"); (6) General Arrangements Drawings (hereinafter referred to as "GAD"); (7) Cost Estimate of the Project; (8) Construction Standards; and (9) Updated Resettlement Action Pion, Environment Impact Assessment and Environmental Management Plan which were prepared under the Joint F/S. 7. Implementing Arrangements 7.1 Precondition for the Commencement of the Study The MOR will complete the items described in Annex 2 at its own cost and expense, and submit them to JICA, in a satisfactory manner, prior to the commencement of the Study, Neither JICA nor JICA Consultant(s) will have any obligation to commence the Study unless such preconditions are satisfied. 7.3 Implementation Arrangement The MOR and the JICA Consultant(s) will be responsible in the following manner for completing the Study in order to ensure a smooth procurement procedure of the Protect. (1) The JICA Consultant(s) will prepare the Draft Design Documents and technical specification and standards as required under this study and submit ....
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....rts necessary for bidding or implementation of the Project; (4) Preparation of Detailed Design Documents including drawings and Design Basis Reports necessary for bidding or implementation of the Project; (5) Preparation of Bidding Documents; (6) Preparation of Engineering Cost Estimation; (7) Preparation of Construction Standard; (8) Support to the MOR for procurement of contractors; (9) preparation of GAD; and (10) Review and update of the Resettlement Action Plan, Environment Impact Assessment and Environmental management Plan, which were prepared under the Joint F/S. It is the MOR's responsibility to provide necessary, accurate and appropriate data/information to JICA and the JICA Consultant(s), so as to finalize the documents listed at (2) to (4), (hereinafter collectively referred to as "the Draft Design Documents") and (1), (5) to (7) and (9) to (10) so that they can be utilized only for the procurement (bidding) process and construction work of the Project. 8.2 Adoption by the MOR Upon request from the relevant government authorities of Japan, JICA will set up a committee composed ....
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....rice schedule for design and built packages; h. Design Drawing; i. Contract Form; j. Bid Security Form; k. Performance Security Form: and I. Employer's Requirement. 3) Tender Assistance 3)-1 Assistance in Pre-Qualification (P/Q) The JICA Consultant(s) will: a. define technical and financial requirements, capacity and/or experience for P/Q criteria taking into consideration technical features of the Project and the capabilities of industry in both countries; b. prepare draft P/Q documents in accordance with the latest version of Standard Prequalification Documents under Japanese ODA Loans, C. assist the MOR in P/Q announcement, addendum/corrigendum, and clarifications to the applicants' queries, d. assist the MOR in evaluating P/Q applicants in accordance with the criteria set forth in PQ documents; and e. prepare a draft P/Q evaluation report for approval by the P/Q evaluation committee of the MOR. 3)-2 Assistance in the Bidding Procedure The JICA Consultant(s) will :- a. assist the MOR in issuing bid invitation, conducting pre- bid....
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....ocurement of contractors for the construction of the Project. It is required to be noted that the Bidding Documents were prepared as per JICA's International Guidelines and as per the terms and conditions of the Loan Agreement as observed hereinabove. 6.8 That Nine Bidders including the respondent herein - original writ petitioner submitted their Bids. That Technical Bid of Nine Bidders was evaluated by JICC as per JICA's International Guidelines. The evaluation of the Technical Bids was carried out as per Evaluation and Qualification Criteria in four stages namely, (i) - Stage 1 - Evaluation of Administrative Requirements; (ii) Stage 2 - Evaluation of Compliance and Responsiveness; (iii) Stage 3 - Evaluation of Compliance with Qualification Requirements; and (iv) Stage 4 - Technical Evaluation. 6.9 It appears that during the course of technical evaluation, clarification was sought from four Bidders (other than the respondent herein - original writ petitioner, who was Bidder No.5/9). It was found that respondent herein - original writ petitioner had material deviation in its Bid and therefore it was disqualified at Stage 1. The Bid submitted by other Bidders, i.e., 2/....
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....ticular Bidder is responsive or not and/or compliant or not to the technical requirements of the Bidding Documents. From the impugned judgment and order passed by the High Court, it appears that what is weighed by the High Court is that some of the Bidders were called for negotiation and the original writ petitioner was not called for the negotiation and therefore the High Court has held that the action of the appellant is discriminatory and violative of Article 14 of the Constitution of India. However, the High Court has not appreciated that it was the decision of the JICC concurred by the JICA that the Bid submitted by the original writ petitioner was non-responsive and non-compliant to the technical requirements of the Bidding Documents. It appears that the JICC thought it fit to call clarification from some of the Bidders at the initial stage, however, it was found that the Bid submitted by the respondent - original writ petitioner was suffering from material deviation, the JICC thought it fit not to call for any explanation and/or clarification from the original writ petitioner and the Bid submitted by the respondent - original writ petitioner was rejected at the first stage i....
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....n has agreed to fund a huge amount for a National Project in favour of another friendly State - developing nation - in the present case, the Republic of India. Such a huge sum/amount is funded by the developed nation to implement the Project meant for development of the developing nation - the Republic of India. The contracts are entered into and the huge sum is funded on the basis of non-negotiated terms and conditions and therefore, the foreign developed nation, who has agreed to invest/fund such a huge amount is always justified in insisting for their own terms and conditions on which such a huge amount is funded. 7.2 At this stage, a decision of the Gujarat High Court, which has been confirmed by this Court in the case of CRRC Corporation Ltd. Vs. Metro-Link Express for Gandhinagar and Ahmedabad (MEGA) Company Ltd. in Special Civil Application No.12833 of 2017 is required to be referred to. In that case the Metro Rail Project was financed by the JICA. One GEC was appointed as consultant. Bid submitted by one of the Bidders was rejected on the ground that the same was non-responsive. The decision was taken by the Metro Rail Corporation after consulting JICA. Rejection of the ....
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....Construction (I) Ltd. and Ors., (1997) 1 SCC 738 is required to be referred to. In that case, before this Court, the offer made by the Bidder, who was found to be L1 was not accepted after consulting the international financial institutions such as Asian Development Bank/World Bank, approving the same, this Court observed that it is difficult for a country to go ahead with such a high-cost projects unless the financial institutions the Asian Development Bank and/or the World Bank grant loan/subsidy. It is further observed that when such financial institutions grant such huge loan, they always insist that for any project for which loan has been sanctioned must be carried out in accordance with the specifications and within the scheduled time and the procedure for granting the award must be duly adhered to. In the case before this Court, there was some dispute between the Bank on the one hand and the consultant, who was called upon to evaluate bids on the question whether there is any power of making any correction to the bid documents after a specified period. The High Court after construing certain clauses of the bid documents came to the conclusion that such a correction was permi....
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....ring with a conscious decision taken by the JICC/JICA, which has been followed by the appellant. 7.8 At this stage, few decisions of this Court on the interference by the Courts in the tender matters are required to be referred to :- 7.8.1 In the case of Afcons Infrastructure Limited Vs. Nagpur Metro Rail Corporation Limited, AIR 2016 SC 4305, this Court in paras 11 to 13 and 15 has observed and held as under :- "11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622, it was held by this Court, relying on a host of decisions that the decision- making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision-making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision- making process or the decision should be perverse and not merely fau....
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.... the aforementioned decisions may be summarised as under: (i) if there are essential conditions, the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it....
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....successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government. 24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and (ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226." 7.8.4 In the case of the Central Coalfields Limited & Anr. Vs. SLL- SML [A Joint Venture Consortium] and Ors., (2016) 8 SCC 622, it is specifically observed and held by this Court that the Court ....
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....ara 7) "7. ... It is a well-settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the Court should not be prompt to ascribe superfluity to the language of a document "and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use". To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. The court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable." 34. In Ramana Dayaram Shetty case, the expression "registered IInd Class hotelier" was recognised as being inapt and perhaps ungrammatical; nevertheless common sense was not offended in describing a person running a registered IInd grade hotel as a registered IInd class hotelier. Despite this construction in its favour, Respondent 4 in that case wer....
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....er) "has the right to punctiliously and rigidly" enforce the terms of the tender. If a party approaches a court for an order restraining the employer from strict enforcement of the terms of the tender, the court would decline to do so. It was also reaffirmed that the employer could deviate from the terms and conditions of the tender if the "changes affected all intending applicants alike and were not objectionable". Therefore, deviation from the terms and conditions is permissible so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination in Ramana Dayaram Shetty sense. 42. Unfortunately, this Court in Poddar Steel Corpn. v. Ganesh Engg. Works, (1991) 3 SCC 273 did not at all advert to the privilege-of-participation principle laid down in Ramana Dayaram Shetty and accepted in G.J. Fernandez. In other words, this Court did not consider whether, as a result of the deviation, others could also have become eligible to participate in the bidding process. This principle was ignored in Poddar Steel. 43. Continuing in the vein of accepting the inherent authority of an employer to deviate from the terms and conditions of ....
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....ublic works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold." This Court then laid down the questions that ought to be asked in such a situation. It was said: (Jagdish Mandal case, SCC p. 531, para 22) "22. ... Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226." 44. On asking these questions in the present appeals, it is more than apparent that the decision taken by CCL to adhere to the terms and conditions of NIT and the GTC was certainly not irrational in any manner whatsoever or intended to f....
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....rt held that the bank guarantee in a format not prescribed by it ought to be accepted since that requirement was a non- essential term of the GTC. From the point of view of CCL, the GTC has been impermissibly rewritten by the High Court. 52. There is a wholesome principle that the courts have been following for a very long time and which was articulated in Nazir Ahmad v. King Emperor, AIR 1936 PC 253 (2), namely: " ... where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden." There is no valid reason to give up this salutary principle or not to apply it mutatis mutandis to bid documents. This principle deserves to be applied in contractual disputes, particularly in commercial contracts or bids leading up to commercial contracts, where there is stiff competition. It must follow from the application of the principle laid down in Nazir Ahmad that if the employer prescribes a particular format of the bank guarantee to be furnished, then a bidder ought to submit the bank guarantee in that particular format only and not in any other format. However, as....
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....y well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. So also, the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process. 9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the court which is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest. (See Meerut Development Authority v. Assn. of Management Studies [(2009) 6 SCC 171] and Air India Ltd. v. Cochin International Airport Ltd. [(2000) 2 SCC 617]. 10. The scope of judicial review in contractual matters wa....
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..../errors can be said to be discriminatory and violative of Article 14 of the Constitution of India. However, it is required to be noted that a conscious decision was taken by JICC/JICA holding that the Bid submitted by the original writ petitioner suffers from material deviation and the same cannot be said to be a substantially responsive Technical Bid. The decision was taken by the employer - JICC/JICA and followed by the appellant considering the relevant clauses of the ITB, more particularly, ITB Clause 33.2, which defines a substantially responsive Technical Bid. The High Court ought to have appreciated that other Bidders, who were granted opportunity to cure the defects had cleared the first stage and they were granted opportunity to cure the defects as per ITB Clause 34. As per the JICC and JICA, with respect to those Bidders, who were given an opportunity to cure the defects after they cleared Stage I, their defects were found to be substantially responsive and, therefore, in exercise of the powers under Clause 34, the opportunity was given to them to cure the defects, which as such was found to be substantially responsive and non- material compliance. The High Court ought....
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....onditions of the tender document are finalized by the JICC/JICA, and, therefore, when conscious decision has been taken by the JICC/JICA, the same was not required to be interfered with by the High Court lightly and when such a decision of the High Court would have a cascading effect on such a foreign funded Mega project. The scope of judicial review in such foreign funded contract should be far much less than the ordinary Government funded contracts funded from Consolidated Fund of India. The scope of judicial review in such foreign funded contracts/projects would be restricted and minimal. In such foreign funded contracts, the only ground for judicial review ought to be on a limited aspect, i.e., the action of the executing authority does not suffer from favouritism or nepotism and based on the grounds which have been concealed from the foreign financing authority, if disclosed, would have persuaded the financing authority to cancel the contract. 12. The High Court ought to have appreciated that the Bullet Train Project is a result of long-drawn deliberations between the Government of India on the one hand and the Government of Japan on the other. That thereafter a loan agreem....
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.... Clauses 28.1 and 42.5 of ITB were well within the knowledge of the original writ petitioner at the time of participating in the tender process. The aforesaid clauses of the ITB were put to the knowledge of all the participants/bidders and the same applied to all. Despite the above clauses in the ITB, original writ petitioner participated in the tender process. Therefore, once having accepted the terms and conditions of the tender process with the full knowledge of Clauses 28.1 and 42.5, and participated with full knowledge, thereafter, it was not open for the original writ petitioner to make a grievance with respect to such clauses. 14.1 Even otherwise, it is required to be noted that Clauses 28.1 and 42.5 are part of the instructions to the Bidders (ITB) and, therefore, part of the Bidding Document. At this stage, it is required to be noted that loan agreement was materialized after a detailed Memorandum of Understanding and the loan agreement between the two Prime Ministers and how the project would be financed and operated. That thereafter followed by general consultancy of the project discussion, it was culminated into a loan agreement with the specific condition that the t....
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.... 42.5 After notification of award, unsuccessful Bidders may request, in writing, to the Employer a debriefing seeking explanations on the grounds on which their Bids were not selected. The Employer shall promptly respond, in writing, to any unsuccessful Bidders who, after the notification of award in accordance with ITB 42.1, request a debriefing." (emphasis supplied) 14.3 The purpose of the aforesaid clauses appears to be to prevent a possible challenge to the multiple stage tender process midway. The High Court has construed that the said clauses would restrict the right of the bidders to seek judicial scrutiny of the tender process. However, the High Court does not seem to be wholly true. The High Court ought to have appreciated that first of all Clause 28 is a confidentiality clause. On general reading of the aforesaid two clauses, it can be said that it does not take away the right of the Bidders to seek judicial scrutiny at all. Only the stage and time to know the reasons and thereafter if the unsuccessful Bidder is aggrieved can seek the remedy, which is deferred till the final decision on award of contract is taken and communicated. As observed hereinabove, the obje....
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....illegal, more particularly, in absence of any challenge to the same and also on the ground that once the original writ petitioner participated having knowledge of the aforesaid clauses in the ITB, thereafter it was not open for the original writ petitioner to challenge the same. The original writ petitioner was knowing right from the very beginning with respect to the confidentiality clause contained in Clause 28 and that grounds on which the Bids of unsuccessful Bidders are not selected shall be communicated only after a final decision to award the contract is communicated under Clause 42. If the original writ petitioner was aggrieved either it would not have participated and/or ought to have challenged such clauses before participating in the tender process Under the circumstances, the impugned judgment and order passed by the High Court holding Clauses 28.1 and 42.5 as patently illegal cannot sustain and the same also deserves to be quashed and set aside. 15. Before we part, we deem it proper to express few words of caution to the High Courts while entertaining the writ petitions challenging the tender process midway and/or while interfering with the tender process in the con....
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....unded by the foreign countries on bilateral mutual understanding/agreement by the developed country to a developing country may affect the future investments/funding. Many a times, such a delay in the execution of the project due to the intervention by the Courts may have cascading effect on the project cost and ultimately may increase the project cost and may impose heavy financial burden and lead to increased and unbudgeted expenditure. Therefore, while exercising the writ jurisdiction challenging the tender process midway and/or while entertaining the writ petition challenging the award of contract with respect to such Mega projects, more particularly, when such Mega projects are funded by the foreign countries, the Courts have to bear in mind the following principles laid down by this Court in the case of Tata Cellular Vs. Union of India, 1994 6 SCC 651 in paragraph 94 as under: "94. The principles deducible from the above are: (1) The modern trend 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 ....