2022 Supreme(SC) 246

SUPREME COURT OF INDIA
(From the High Court of Jharkhand at Ranchi)
HEMANT GUPTA, V. RAMASUBRAMANIAN, JJ.
M/s. N.G. Projects Limited – Appellant
Versus
M/s. Vinod Kumar Jain and Others – Respondents
Civil Appeal No. 1846 of 2022, SLP (Civil) No. 2103 of 2022
Decided On : 21-03-2022

IMPORTANT POINTS
(1) Tender – Courts must give fair play in joints to Government and public sector undertakings in matters of contract – Courts must also not interfere where such interference would cause unnecessary loss to public exchequer.
(2) Tender – If Court finds that there is total arbitrariness or that tender has been granted in a malafide manner, still Court should refrain from interfering in grant of tender but instead relegate parties to seek damages for wrongful exclusion rather than to injunct execution of contract.

Headnote:

(A) Government Contract – Tender – Cancellation of tender and fresh NIT issued – Interference in contract awarded to appellant is wholly unwarranted and has caused loss to public interest – Construction of roads is an essential part of development of infrastructure in any State – Single Bench and Division Bench of High Court were exercising power of judicial review to find out whether decision of State was manifestly arbitrary or unjust – Courts should not use a magnifying glass while scanning tenders and make every small mistake appear like a big blunder – Courts must give fair play in joints to Government and public sector undertakings in matters of contract – Courts must also not interfere where such interference would cause unnecessary loss to public exchequer – Ground reality today is that almost no tender remains unchallenged – Unsuccessful parties or parties not even participating in tender seek to invoke jurisdiction of High Court under Article 226 of Constitution – Authority that authors tender document is the best person to understand and appreciate its requirements and its interpretation should not be second-guessed by a court in judicial review proceedings – Question as to whether a term of contract is essential or not is to be viewed from perspective of employer and by employer. (Paras 10, 13, 16 and 17)

(B) Constitution of India – Article 226 – Specific Relief Act, 1963 – Section 41 – Cancellation of tender and fresh NIT issued – Satisfaction whether a bidder satisfies tender condition is primarily upon authority inviting bids – Such authority is aware of expectations from tenderers while evaluating consequences of non-performance – Since construction of road is an infrastructure project and keeping in view intent of legislature that infrastructure projects should not be stayed, High Court would have been well advised to hold its hand to stay construction of infrastructure project – Such provision should be kept in view even by Writ Court while exercising its jurisdiction under Article 226 of Constitution of India – It is not the case of writ petitioner that action of Technical Evaluation Committee was actuated by extraneous considerations or was malafide – On same set of facts, different conclusions can be arrived at in a bona-fide manner by Technical Evaluation Committee – Since view of Technical Evaluation Committee was not to liking of writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder – Writ Court should refrain itself from imposing its decision over decision of employer as to whether or not to accept bid of a tenderer – Court does not have expertise to examine terms and conditions of present day economic activities of State and this limitation should be kept in view – Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of necessary expertise to adjudicate upon such issues – If Court finds that there is total arbitrariness or that tender has been granted in a malafide manner, still Court should refrain from interfering in grant of tender but instead relegate parties to seek damages for wrongful exclusion rather than to injunct execution of contract – Injunction or interference in tender leads to additional costs on State and is also against public interest – Action of respondent in setting aside letter of acceptance granted to appellant suffers from manifest illegality and cannot be sustained – Appeal disposed of with a direction to respondent State to allow appellant to resume and complete work by excluding period spent in stay of execution of contract – Any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing entire process of services meant for larger public good. (Paras 21, 22, 23, 25 and 26)

Facts of the case:

Challenge in the present appeal is to an order dated 6.1.2022 passed by Division Bench of the High Court of Jharkhand at Ranchi whereby appeal filed by the State against the order of Single Bench allowing the Writ Petition No. 5416 of 2019 was dismissed.

Findings of Court:

Multiple layers of exercise of jurisdiction also delay final adjudication challenging the grant of tender. Therefore, it would be open to the High Courts or Hon’ble Chief Justice to entrust these petitions to a Division Bench of the High Court, which would avoid at least hearing by one of the forums.

Result : Appeal disposed of with directions.