2023 Supreme(SC) 547

SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, CJI., PAMIDIGHANTAM SRI NARASIMHA, J. B. PARDIWALA, JJ.
Tata Motors Limited – Appellant
Versus
The Brihan Mumbai Electric Supply & Transport Undertaking (Best) and Others – Respondents
Civil Appeal No.3897 of 2023 (Arising Out of SLP(C) No. 15708 of 2022) With Civil Appeal No. 3899 of 2023 (Arising Out of SLP(C) No. 11871 of 2022), Civil Appeal No.3898 of 2023 (Arising Out of SLP(C) No. 11933 of 2022)
Decided On : 19-05-2023

IMPORTANT POINTS
(1) Evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters.
(2) Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.

Headnote:

(A) Constitution of India – Article 226 – Government Contract – Scope of judicial review – Courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters – Supreme Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out – Ordinarily, writ court should refrain itself from imposing its decision over decision of employer as to whether or not to accept bid of a tenderer unless something very gross or palpable is pointed out – Even when some defect is found in decision-making process, court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point – Court should always keep larger public interest in mind in order to decide whether its intervention is called for or not – Only when it comes to a conclusion that overwhelming public interest requires interference, court should interfere. (Paras 48, 52 and 53)

(B) Government Contract – Scope of Judicial Review – Evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters – If decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out – Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes – Part of judgment and order passed by High Court set aside. (Paras 54, 55 and 56)

Facts of the case:

Only question that falls for our consideration is: Whether High Court after upholding the disqualification of TATA Motors from the Tender was justified in undertaking further exercise to ascertain whether EVEY also stood disqualified and that BEST in its discretion may undertake a fresh tender process?

Findings of Court:

High Court should have been a bit slow and circumspect in reversing action of BEST permitting EVEY to submit a revised Annexure Y. BEST committed no error or cannot be held guilty of favoritism, etc. in allowing EVEY to submit a revised Annexure Y as the earlier one was incorrect on account of a clerical error. This exercise itself was not sufficient to declare the entire bid offered by EVEY as unlawful or illegal.

Result : Appeal dismissed.