Karnataka High Court
Megha Engineering And Infrastructures ... vs State Of Karnataka on 2 March, 2023
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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WP No. 3608 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF MARCH, 2023
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 3608 OF 2023 (GM-TEN)
BETWEEN:
MEGHA ENGINEERING AND
INFRASTRUCTURES LIMITED,
A COMPANY REGISTERED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 2013,
HAVING ITS OFFICE AT NO.10,
3RD MAIN, 16TH CROSS,
MALLESHWARAM,
BANGALORE - 560 003.
REPRESENTED BY ITS AUTHORISED
REPRESENTATIVE AND VICE PRESIDENT
MR. SUDHEER MOHAN T.V.
...PETITIONER
(BY SRI. JAYAKUMAR S. PATIL, SR. ADVOCATE A/W
SRI. MOHAMMED AKHIL, ADVOCATE)
Digitally signed
by PADMAVATHI
BK AND:
Location: HIGH
COURT OF
KARNATAKA 1. STATE OF KARNATAKA,
REPRESENTED BY ITS SECRETARY,
DEPARTMENT OF MINOR IRRIGATION
AND GROUNDWATER DEVELOPMENT,
VIKAS SOUDHA,
BANGALORE - 560 001.
2. STATE OF KARNATAKA,
REPRESENTED BY ITS
EXECUTIVE ENGINEER,
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WP No. 3608 of 2023
DEPARTMENT OF MINOR IRRIGATION
AND GROUNDWATER DEVELOPMENT,
CHIKKABALLAPURA - 562 101.
...RESPONDENTS
(BY SRI. DHYAN CHINNAPPA, AAG A/W
SRI. M. VINOD KUMAR, AGA)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE
ENDORSEMENT/ORDER PASSED BY THE R-2 ORDER DATED
07/02/2023 AND IT WAS UPLOAED ON 10.02.2023 HEREWITH
PRODUCED AS ANNEXURE - A AND ETC.,
THIS PETITION COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus to permit the petitioner to participate in the tender process pursuant to a notice inviting tender dated 12.12.2022.
2. Heard Sri. Jayakumar S. Patil, learned Senior counsel along with Sri. Mohammaed Akhil, learned counsel appearing for the petitioner and Sri. Dhyan Chinnappa, learned AAG along with Sri. M. Vinod Kumar, learned AGA appearing for the respondents.
-3- WP No. 3608 of 20233. Shorn of unnecessary details, facts in brief, germane are as follows:
The respondent - State issued a notice inviting tender on 12.12.2022 for the purpose of lifting of 243 MLD of Secondary Treated Water from Vrishabhavathi Valley STP to feed 82 tanks in Bengaluru urban, Bengaluru rural and Tumakuru District in phase - I. The petitioner submitted his tender pursuant to the aforesaid notice inviting tender by submitting all the necessary documents claiming himself to be eligible in terms of aforesaid notice. The Tender Scrutiny Committee, scrutinizes the documents submitted by the petitioner and opines to reject the tender of the petitioner, holding the petitioner to be technically disqualified. It is this disqualification that drives the petitioner to this Court, in the subject petition.
4. This Court in terms of its order dated 15.02.2023, permitted the petitioner to participate in the tender, which would be subject to result of the subject petition. The petitioner was not permitted to participate on the ground that it was not permissible to permit him to participate, the State has moved for vacation of the interim order, as it would not be -4- WP No. 3608 of 2023 open for a tenderer to be permitted to be participated, who has been technically disqualified and the State comes before the Court by filing an application seeking vacation of the interim order. The matter was heard with the consent of the parties, as there was impending urgency in the light of the nature of the work involved in the tender.
5. Sri. Jayakumar S. Patil, learned Senior counsel appearing for the petitioner would contend that there are no reasons recorded, while rejecting the technical qualification of the petitioner and therefore, they had to knock at the doors of this Court. During the pendency of this petition, by way of statement of objections, plethora of reasons are rendered by the respondents by placing the records appending them to the statement of objections, indicating the reason for disqualifying the petitioner in the technical bid.
5.1 The learned Senior counsel would also submit that the disqualification of the petitioner is in terms of clause 4.8, clause 4.14 and clause 4.19 of the tender notification, so issued on 12.12.2022. He would further contend that these clauses -5- WP No. 3608 of 2023 being invoked for rejection of the tender is completely contrary to the facts, as the assessment made by the Tender Scrutiny Committee qua the technical qualification and they run contrary to the records as well.
6. The learned Additional Advocate General on the other hand would seek to refute the submissions of the learned Senior counsel taking this Court through the documents appended to the petition contending that the Technical Scrutiny Committee of the Tender Scrutiny Committee having gone into the documents submitted by the petitioner and assessed them technically have rejected the bid of the petitioner. This being purely in the realm of technical experts, this Court would not interfere at this stage of the tender and the petitioner has a remedy of filing an appeal once the contract is awarded in favour of any tenderer, which stage has not yet come about.
He would submit that the Court should not entertain petitions at every stage of the tender, which would stall the progress in the tender and cause harm to the public interest.
7. The learned Senior counsel for the petitioner would contend that the writ petition, even at this stage would be -6- WP No. 3608 of 2023 maintainable, if arbitrariness in the action is demonstrable and he would submit, it is demonstrable.
8. The afore-narrated facts, link in the chain of events and its dates are not in dispute. The rejection of the technical bid of the petitioner is what drives the petitioner to this Court.
The rejection is ostensibly on the score that the petitioner would be disqualified in terms of clause 4.8, 4. 14 and 4.19 of the tender document. In the light of rejection being on the aforesaid clauses, it is germane to consider those clauses. The clause 4.8, clause 4.14 and clause 4.19 which are relied on by the learned Senior counsel, reads as follows:
"Particular 4.8 (a) The Applicant shall provide evidence that construction it has successfully completed or Experience substantially completed at least the number of contracts stated in the PITA, of a nature, complexity, and requiring construction technology similar to the proposed contract, within the period stated in the PITA. The works may have been executed by the Applicant as a prime contractor, management contractor, or proportionately as member of a joint venture, or subcontractor, with references being submitted to confirm satisfactory performance.
(b) The Applicant shall also provide evidence that it has achieved the minimum Monthly and/or annual production rates of -7- WP No. 3608 of 2023 the key construction activities described in the PITA under similar contract conditions.
.... .... ....
Litigation History 4.14 The Applicant shall provide accurate
information on the related
Application Form about any litigation or arbitration resulting from contracts completed or ongoing under its execution over the last five years. A consistent history of awards against the Applicant or any partner of a joint venture may result in failure of the application.
.... .... ....
Tender Capacity 4.19 Applicants meeting the above criteria,
are nevertheless subject to be
disqualified if they have:
- made misleading or false representation
in the form, statements and
attachments submitted; and / or
- record of poor performance such as
abandoning the work, not properly
completing the contract, inordinate delays in completion, litigation history, or financial failures, etc."
i. Clause 4.0 deals with qualification criteria. ii. Clause 4.8 deals with particular construction experience.
iii. Clause 4.14 deals with litigation history. iv. Clause 4.19 deals with certain criteria with regard to the misrepresentation of the misleading of the tenderers.
-8- WP No. 3608 of 20239. The entire fulcrum of the issue in the lis lies in the aforesaid clauses. A perusal at the statement of objections would indicate that the Tender Scrutiny Committee has invoked these clauses to disqualify the petitioner technically owing to the rigour of the aforesaid clauses.
10. Clause 4.8(a) deals with the production of evidence by any tenderer, who has successfully completed or substantially completed certain number of contracts stated in the past. The objections filed by the State would indicate that the Tender Scrutiny Committee has assessed the number of works undertaken by the petitioner in the past and found them to be not satisfactory. This is disputed by the learned Senior counsel appearing for the petitioner contending that what was necessary for awarding the contract was the earlier contract being executed for a minimum distance of 19kms, it is the contention that he has achieved more than what is required and therefore, the rejection of tender on the said clause is illegal.
11. The other contention is with regard to clause 4.14.
Clause 4.14 deals with litigation history. The indication in the -9- WP No. 3608 of 2023 statement of objections is that the petitioner is disqualified even on this score. This becomes erroneous on a perusal of the documents appended to the petition, as the petitioner has not suffered any award in the last 5 years. Therefore, any indication of invocation of clause 4.14 is illegal and unsustainable.
12. The third contention is with regard to clause 4.19 which deals misrepresentation or misleading by the tenderers which also encompasses within itself poor performance in the past. To substantiate this allegation, the State has placed on record plethora of communications made by the Assistant Executive Engineer or the Assistant Engineer, as the case would be of the particular area, time and again indicating that the work of the petitioner is incomplete and far from being satisfactory, in fact the communications indicate that the petitioner has short performed the contract. The earlier tender was for operation and maintenance of canals in Chitradurga District. The allegation is, those canals are neither properly operated or maintained and complaints from every quarter with regard to the work galore. Therefore, it becomes germane to
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WP No. 3608 of 2023notice a reply submitted by the petitioner to one such communication of the aforesaid allegations. The reply submitted on 15.09.2022 reads as follows:
"To The Assistant Executive Engineer, Minor Irrigation Special Sub Division, Govt. of Karnataka, Bangalore, Dear Sir, Sub: Tender for the work of "Lifting / pumping 210 MLD secondary treated water from Nagavara, Hennr and Horamavu STP to Amani Gopal Krishna kere and onwards to fill 65 tanks in Bengaluru Rural, Bengaluru Urban and Chikkaballapura Districts, including operation and maintenance for a period of 5 years after successful commissioning of the scheme on Lumpsum and turnkey basis." - Giving details of the works yet to be completed with respect to HN Valley Lift irrigation project - Reg.
Ref: 1.Our agreement No.47/2016-17; Dt: 31.03.2017.
2.AEESSB/FS/C-1/243/2022; Dt:05.09.2022.
******* Adverting to the reference subject, this is to bring to your kind notice that all the 5 Pump Houses are successfully commissioned and running successfully till date.
We would like to inform you that the work is completed. For any further information, it is to inform that all the data is available in your office only.
Thanking you and assuring our best services at all time."
After the said reply, there has been continuous communication to the petitioner appending photographs with regard to the
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WP No. 3608 of 2023work performed and its shortcomings. The communications have been made up to 25.11.2022.
13. The petitioner has admittedly not replied to any one of those communications refuting the allegations. The solitary reply submitted by him is what is quoted hereinabove. The reply also is in no way countering the allegations. What is replied to is that all the records are available at the office of the Minor Irrigiation Department and the Department itself has to look into it. It is the discretion of the tender inviting authority to look into all these materials and arrive at a conclusion. This Court again would not sit in the arm chair of experts to asses whether the petitioner has completed the work to the satisfaction of the department of otherwise. These are again in the realm of the expert's assessing the situation; and the fact that the Court not being an expert to assess the situation.
Reference being made to the judgments of the Apex Court in plethora of the cases on the issue become apposite. The Apex Court in the case of GALAXY TRANSPORT AGENCIES, CONTRACTORS, TRADERS, TRANSPORTS AND SUPPLIERS Vs.
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WP No. 3608 of 2023NEW J.K. ROADWAYS, FLEET OWNERS AND TRANSPORT CONTRACTORS AND OTHERS1 has held as follows:
"12. Having heard the learned counsel for the parties, it is first necessary to set out the N.I.T.'s "Terms and Conditions/Qualifying Criteria". Condition Nos. 27 and 31 of the N.I.T., which are material to this case, state as follows:
"Terms and Conditions/Qualifying Criteria xxxxxxxxx
27. The firm/association shall have working experience of at least Five years with documentary proof and work should not [be] less [than] 2 Crores.
xxxxxxxxx
31. The firm/tenderer should have owned at least 30 nos. of vehicles both HMV/LMV and attached 200 vehicles with the firm alongwith documentary proof." 13. Even a cursory glance at Condition No. 31
of the N.I.T. would show that the 30 vehicles referred to, are "both HMV/LMV". The tendering authority has construed this condition to mean that both types of vehicles, i.e., HMV and LMV, need to be included in the list of the 30 vehicles submitted by each bidder.
14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818, this Court held:
12020 SCC Online SC 1035
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"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."
(page 825) (emphasis supplied)
15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha 2020 SCC OnLine SC 335, under the heading "Deference to authority's interpretation", this Court stated:
"51. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes.
52. In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818)
53. The High Court ought to have deferred to this understanding, unless it was patently
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perverse or mala fide. Given how BCCL's interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a finding that the appellant committed illegality."
(emphasis supplied)
16. Further, in the recent judgment in Silppi Constructions Contractors v. Union of India, 2019 SCC OnLine SC 1133, this Court held as follows:
"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
(emphasis supplied)
17. In accordance with these judgments and noting that the interpretation of the tendering authority in this case cannot be said to be a perverse one, the Division Bench ought not to have interfered with it by giving its own interpretation and not giving proper credence to the word "both" appearing in Condition No. 31 of the N.I.T. For this
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WP No. 3608 of 2023reason, the Division Bench's conclusion that JK Roadways was wrongly declared to be ineligible, is set aside.
18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, this Court noted:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some
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technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. 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. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
(emphasis supplied)
19. Similarly, in Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272, this Court stated as follows:
"26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical
- 17 -WP No. 3608 of 2023
subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third-party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner
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should be allowed to carry out the purpose and there has to be allowance of free play in the joints."
20. This being the case, we are unable to fathom how the Division Bench, on its own appraisal, arrived at the conclusion that the Appellant held work experience of only 1 year, substituting the appraisal of the expert four- member Tender Opening Committee with its own."
(Emphasis supplied)
14. The Apex Court in the afore-quoted judgment was considering disqualification of a tenderer at the technical stage.
The judgment in the case of GALAXY TRANSPORT AGENCIES, CONTRACTORS, TRADERS, TRANSPORTS AND SUPPLIERS (supra) is again followed by the Apex Court in the case of N.G. PROJECTS, both of which bear consideration in the case of AGMATEL INDIA (P) LTD. Vs. RESOURSYS TELECOM2. The Apex Court in the case of AGMATEL INDIA (P) LTD. (supra), was again considering the interference by the High Court, at the stage of technical evaluation. The Apex Court has held as follows:
" 25. This Court referred to various decisions on the subject and stated the legal principles as follows : (Galaxy Transport Agencies case [Galaxy Transport Agencies v. New J.K. Roadways, Fleet Owners & Transport Contractors, 2 (2022) 5 SCC 362
- 19 -WP No. 3608 of 2023
(2021) 16 SCC 808 : 2020 SCC OnLine SC 1035] , SCC paras 14-20) "14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn.
Ltd. [Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818] , this Court held : (SCC p. 825, para 15) '15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.'
15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha [Bharat Coking Coal Ltd. v. AMR Dev Prabha, (2020) 16 SCC 759] , under the heading "Deference to authority's interpretation", this Court stated : (SCC p. 776, paras 50-52) '50. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent 1 seeks to only enforce terms of NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes.
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WP No. 3608 of 202351. In the present facts, it is clear that BCCL and C1-India have laid recourse to clauses of NIT, whether it be to justify condonation of delay of Respondent 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. [Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818]
52. The High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL's interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a finding that the appellant committed illegality.'
16. Further, in the recent judgment in Silppi Constructions Contractors v. Union of India [Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489] , this Court held as follows : (SCC pp. 501-02, para 20) '20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this
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WP No. 3608 of 2023approach in mind we shall deal with the present case.'
17. In accordance with these judgments and noting that the interpretation of the tendering authority in this case cannot be said to be a perverse one, the Division Bench ought not to have interfered with it by giving its own interpretation and not giving proper credence to the word "both" appearing in Condition No. 31 of the NIT For this reason, the Division Bench's conclusion [New JK Roadways v. State (UT of J&K), 2020 SCC OnLine J&K 733] that JK Roadways was wrongly declared to be ineligible, is set aside.
18. Insofar as Condition No. 27 of the NIT prescribing work experience of at least 5 years of not less than the value of Rs 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State of Orissa [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] , this Court noted : (SCC pp. 531-32, para 22) '22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public
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WP No. 3608 of 2023interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. 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. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.'
19. Similarly, in Montecarlo Ltd. v. NTPC Ltd. [Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272] , this Court stated as follows : (SCC p. 288, para 26)
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WP No. 3608 of 2023'26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third-party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the Court should follow the principle of restraint. Technical evaluation or comparison by the Court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.'
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WP No. 3608 of 202320. This being the case, we are unable to fathom how the Division Bench, on its own appraisal, arrived at the conclusion that the appellant held work experience of only 1 year, substituting the appraisal of the expert four- member Tender Opening Committee with its own."
15. All the afore-quoted judgments of the Apex Court were considering the interference of the High Court at the stage of technical evaluation and has held that the evaluation, particularly the technical, should be left to the experts. The High Court should not interfere in orders rejecting the technical evaluation, save otherwise, in cases where the rejection is arbitrary not arbitrariness pleaded in thin air, but arbitrariness palpable and demonstrable, which would entail interference.
16. This again is followed by a subsequent judgment of the Apex Court in the case of NATIONAL HIGH SPEED RAIL CORPN. LTD. Vs. MONTECARLO LTD.3 has held as follows:
"22. It is required to be noted that as per the tender documents, all the bidders were required to adhere to the requirements as per the terms and conditions mentioned in the tender document. There cannot be any deviation by any bidder. The terms and conditions of the tender documents were settled by JICA as per JICA's International Guidelines, which are required to be followed by all bidders including the original writ 3 (2022) 6 SCC 401
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petitioner. Therefore, when the terms and conditions of the tender document were settled by JICA, it is ultimately for JICC/JICA to take a decision whether a bid submitted by a particular bidder is non-responsive and/or non-compliant to the technical requirements of the bidding documents. Therefore, when a conscious decision has been taken by JICC/JICA on the bid submitted by the original writ petitioner being non- responsive/non-compliant to the technical requirements of the bidding documents, unless there are specific allegations of mala fides and/or favouritism, the same could not have been the subject-matter of scrutiny by the High Court in exercise of the powers under Article 226 of the Constitution of India.
23. At this stage, the decision of this Court in Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd. [Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd., (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 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.
24. 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 permissible, and therefore, the Bank could not have insisted upon granting the contract in favour of the appellant therein. This Court did not accept the view
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WP No. 3608 of 2023taken by the High Court by observing that it was not within the permissible limits of interference for a court of law, particularly when the Court has not found any mala fides/favouritism in the grant of contract.
25. From the impugned judgment and order passed by the High Court and as observed hereinabove, the High Court has set aside the decision of the appellant to reject the bid submitted by the original writ petitioner as non- responsive and suffering from material deviation on the ground of violation of Article 14 of the Constitution of India by observing that other bidders were called for clarification but the original writ petitioner was not called. However, as observed hereinabove, the appellant had taken a decision as per the decision taken by JICC/JICA. JICC/JICA took a conscious decision to reject the bid of the original writ petitioner as non- responsive/non-compliant and the same was found to be material deviation.
26. At this stage, it is to be noted that what can be said to be substantially responsive technical bid has been defined under Article 33.2. The High Court in the impugned order has observed and held that the bid submitted by the original writ petitioner can be said to be substantially responsive technical bid. However, it is required to be noted that when the author of the tender document, in the present case, JICC/JICA, had taken a conscious decision that the bid submitted by the respondent-original writ petitioner can be said to be non-responsive and suffering from material deviation, it was not for the High Court to consider/opine whether the bid submitted by the original writ petitioner is substantially responsive technical bid or not unless the decision is found to be perverse and/or suffered from mala fides and/or favouritism.
27. At the cost of repetition, it is to be noted that under the contractual obligation, it was not open for the appellant Corporation and/or even the Republic of India to deviate from any of the terms and conditions of the loan agreement and/or the decision of JICC/JICA. Therefore, in the absence of
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WP No. 3608 of 2023any allegation of mala fides/arbitrariness and/or favouritism, we are of the opinion that the High Court has committed a grave error in interfering with a conscious decision taken by JICC/JICA, which has been followed by the appellant."
(Emphasis supplied)
17. Therefore, in the light of the aforesaid judgments of the Apex Court, all of which consider the cases of interference by the High Court accepting the challenge to rejection of the technical qualification of the tenderes. The case at hand becomes one where this Court would hold its hands in any interference as it finds prima facie there are cogent reasons for rejection of the technical bid.
18. The submission of the learned Senior counsel is that the N.G. PROJECTS has been distinguished in a subsequent judgment in the case of JAI BHOLENATH CONSTRUCTION VS. THE CHIEF EXECUTIVE OFFICER, ZILLA PARISHAD rendered in Civil Appeal No.4140 of 2022 is a submission does not merit acceptance, as nowhere in the judgment, the judgment in the case of N.G.PROJECTS is distinguished, it is only noted. Therefore, reserving liberty to the petitioner to knock at the doors of the appropriate forum in appropriate proceedings, I deem it appropriate to dispose the petition with
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WP No. 3608 of 2023the aforesaid observations without interfering with the order of rejection of the petitioner qua technical evaluation.
The Writ Petition stands disposed on the aforesaid terms.
Sd/-
JUDGE JY