1. Unsuccessful bidder challenged an evaluation process for a power plant maintenance contract involving technical and financial scoring weightage under a tender mechanism. (Para 3 , 4 , 7 , 12 )
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2026 Supreme(SC) 321
SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA, ALOK ARADHE, JJ.
M/s. Steag Energy Services (India) Pvt. Ltd. – Appellants
Versus
GSPC Pipavav Power Company Ltd. (GPPC) & Ors. – Respondents
Civil Appeal No(s). 3895-3896 of 2026 Arising out of SLP (C) No(s). 30209-30210 of 2025
Decided On : 25-03-2026
Important Points
Tender evaluation processes must be respected and not interfered with unless there is clear evidence of arbitrary or irrational decision-making by the contracting authority.
Subject
Contract Law - Tender Evaluation and Judicial Review
Act Referred
Headnote
(A) Tender Evaluation Process - Clause 20 of Tender Document - Contract awarded on Quality and Cost Based System (QCBS) with weightage of 70% to technical evaluation and 30% to cost evaluation - Appellant initially scored higher technical evaluation points than petitioner - High Court quashed LOA based on marginal price difference - Tendering decisions are discretionary and should not be overturned unless arbitrary or irrational. (Paras 5, 17, 27)
(B) Judicial Review - Courts should exercise restraint in reviewing tender evaluation unless evidence of mala fides, arbitrariness, or irrationality is presented - The final decision in tender evaluations lies with the owner, and the courts should not pre-empt executive actions. (Paras 19, 24, 29)
Facts of the case:
The appellant successfully bid for a power plant operation contract following a tender process in which it outscored the respondent in technical evaluation. The High Court, however, quashed the contract based on a minor price difference.
Findings of Court:
The Supreme Court upheld the appellant's bid and reinstated the LOA, emphasizing the owner's discretion in decisions.
Issues: Whether the High Court erred in interfering with the tender evaluation process solely based on price difference.
Ratio Decidendi: The court held that decisions regarding bid evaluations, especially involving technical criteria, are best left to the discretion of the owners unless extreme circumstances necessitate judicial intervention.
Result: Civil Appeal allowed; High Court's judgment set aside.
(B) Judicial Review - Courts should exercise restraint in reviewing tender evaluation unless evidence of mala fides, arbitrariness, or irrationality is presented - The final decision in tender evaluations lies with the owner, and the courts should not pre-empt executive actions. (Paras 19, 24, 29)
Facts of the case:
The appellant successfully bid for a power plant operation contract following a tender process in which it outscored the respondent in technical evaluation. The High Court, however, quashed the contract based on a minor price difference.
Findings of Court:
The Supreme Court upheld the appellant's bid and reinstated the LOA, emphasizing the owner's discretion in decisions.
Issues: Whether the High Court erred in interfering with the tender evaluation process solely based on price difference.
Ratio Decidendi: The court held that decisions regarding bid evaluations, especially involving technical criteria, are best left to the discretion of the owners unless extreme circumstances necessitate judicial intervention.
Result: Civil Appeal allowed; High Court's judgment set aside.
Judgement Key Points
Key Points: - Tender evaluation processes must be respected and not interfered with unless there is clear evidence of arbitrary or irrational decision-making by the contracting authority [judgement_subject]. - Courts should exercise restraint in reviewing tender evaluations unless evidence of mala fides, arbitrariness, or irrationality is presented [judgement_subject]. - The final decision in tender evaluations lies with the owner, and courts should not pre-empt executive actions [judgement_subject]. - The Supreme Court upheld the appellant's bid and reinstated the Letter of Award (LOA), emphasizing the owner's discretion in decisions [Facts of the case]. - The court held that decisions regarding bid evaluations, especially involving technical criteria, are best left to the discretion of the owners unless extreme circumstances necessitate judicial intervention [Ratio Decidendi]. - The tender was based on a Quality and Cost Building System (QCBS) with a 70% weightage to technical evaluation and 30% to cost evaluation (!) . - The appellant initially scored higher in technical evaluation, and after a re-evaluation, a tie in technical scores occurred, but the appellant had a marginally higher financial score (!) (!) (!) . - The High Court quashed the LOA based solely on a marginal price difference, which the Supreme Court found to be an unjustified interference [Issues] (!) . - The Supreme Court emphasized that technical evaluation or comparison by the court is impermissible and that courts should allow "free play in the joints" for the owner (!) . - The Supreme Court noted that the owner (GPPC) has the right to accept any bid and reject any or all bids (!) . - The Civil Appeal was allowed, and the High Court's judgment was set aside [Result] (!) .
What is the scope of judicial review in tender evaluation processes?
What are the principles governing judicial restraint in tender disputes?
How should courts balance the needs of the owner with the rights of bidders in tender processes?
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. DVS Somayajulu, Sr. Adv. Mr. AVS Subramanyam, Adv. Mr. Niraj Kumar, Adv. Mr. P. Srinivasan, AOR
For the Respondent(s): Mr. Priyabrat Tripathy, Adv. Mrs. Prabhleen Apoorv Shukla, AOR Mr. Ayush Acharjee, Adv. Mr. Nahush Khera, Adv. Mr. Aspi Kapadia, Adv. Ms. Anushree Prashit Kapadia, AOR Mr. Pranay Bhardwaj, Adv. Ms. Pragya Jaishwal, Adv.
For the Appellant(s) : Mr. DVS Somayajulu, Sr. Adv. Mr. AVS Subramanyam, Adv. Mr. Niraj Kumar, Adv. Mr. P. Srinivasan, AOR
For the Respondent(s): Mr. Priyabrat Tripathy, Adv. Mrs. Prabhleen Apoorv Shukla, AOR Mr. Ayush Acharjee, Adv. Mr. Nahush Khera, Adv. Mr. Aspi Kapadia, Adv. Ms. Anushree Prashit Kapadia, AOR Mr. Pranay Bhardwaj, Adv. Ms. Pragya Jaishwal, Adv.
Table of Contents
2. Petitioner alleged arbitrariness in the tender evaluation and sought re-evaluation, while the successful bidder argued against judicial interference based on the principle of self-restraint. (Para 12 , 19 , 22 , 23 )
3. Courts must exercise restraint in judicial review of technical tender evaluations unless the process is arbitrary, mala fide, or irrational, avoiding interference regarding marginal scoring differences. (Para 18 , 19 , 20 , 21 , 24 , 26 , 27 )
4. Judicial review of tender processes is confined to ensuring the absence of arbitrariness, mala fides, or perversity; courts shall not substitute their own decision for the owner's expertise. (Para 19 , 20 , 23 )
5. The High Court judgment is set aside and the Letter of Award in favour of the successful bidder is upheld. (Para 29 , 30 )
6. What is the scope of judicial review in matters of awarding government or public sector tender contracts?
Judicial review is limited to checking for arbitrariness, mala fides, or perversity in the decision-making process. Courts should not interfere with technical evaluations or exercise wide jurisdiction to pre-empt executive decisions, as owners must have freedom to act based on technical expertise. (Para 19 , 20 , 21 , 26 )
7. Should courts interfere when the competitive tender process shows only a marginal or miniscule difference in final scores?
No, courts must not use a magnifying glass to scan technical tenders for minor errors. When the difference in scores is marginal or minuscule, the court should exercise restraint rather than substitute its own evaluation for that of the project owner. (Para 18 , 22 , 23 , 27 )
8. Is a court permitted to order a fresh tender process simply because it disagrees with the administrative authority's evaluation outcome?
No, a mere disagreement with the reasoning or the final outcome of an administrative tender process is insufficient ground for a constitutional court to interfere. Interference is only warranted if the process is found to be grossly arbitrary or illegal. (Para 19 , 20 , 23 )
JUDGMENT :
1. Leave granted.
2. These appeals arise out of the judgment and order passed by the High Court of Gujarat at Ahmedabad in Special Civil Application No. 7289 of 2025 and Special Civil Application No. 12328 of 2025.
3. Facts leading to filing of these appeals lie in a narrow compass. The first respondent GSPC PIPVAV Power Company Limited, (hereinafter referred to as GPPC) commissioned in the year 2013-2014 a gas based combined cycle power plant of 702.86 MW. In January 2025, GPPC floated a public tender inviting bids for operation and maintenance of the combined cycle power plants for an initial period of 5 years.
4. The tender was based on Quality and Cost Building System (QCBS) in which weightage is given to quality as well as cost for the purpose of evaluation and grant of tender. Quality quotient would consider the technical strength/evaluation of the bidders wherein the financial capability of the bidder is taken into account as per the tender terms. The cost quotient considers the cost of the owner for hiring i.e. the financial bid submitted by the bidder. The weightage is 70% to the technical evaluation and 30% to the cost evaluation. The terms of the tender relating to evaluation of bids and award of contract is contained in clause 20.2 of the tender document.
5. It is necessary to reproduce clause 20 to the extent that it is relevant for our consideration:
“20.0 EVALUATION OF BIDS AND AWARD OF CONTRACT
20.1 The Contract will be awarded to the competitive responsive Bidder, with most optimized evaluated price, for five years, offering the technically acceptable Bid in conformity with the requirements of this enquiry specification. A responsive Bid is one which accepts all terms and conditions of these specifications and documents without any modifications. A modification is one which affects in any way the prices, quality, quantity of the Works or which limits in any way the responsibilities or liabilities of the Bidder or any rights of the Owner as required in these specifications. The decision of Owner is final in this regard.
20.2. i) Evaluation of offer/ proposal shall be done on Quality and Cost Based System (QCBS) wherein the Technical Score i.e. Marks Given During Unpriced Technical Bid Evaluation will be allotted weightage of 70 % and the price proposal will be allotted weightage of 30% as Mentioned below:
A combined "Score (S)" will be arrived at after considering weightages 30% for price bid and 70% for technical scores, according to the following methodology.
S= (St X Tw) + (Sf X Fw)
Where S = Total Score
St = combined technical score (Total marks scored as per evaluation methodology)
Sf = Combined financial score = 100 x Fm/F
Fm = Lowest Cost
F = Price Bid of the bidder of whom Sf is to be calculated
Tw = Weight assigned to technical score i.e. 70% or 0.70
Fw = Weight assigned to financial score i.e. 30% or 0.30
The successful bidder will be the one who has highest score (S).
ii) Evaluation Technical scores (St): (Allocation of marks against each parameter shall be as per the marks defined for each parameter and Pro-Rata calculation wherever mentioned in the table given below.
| S.No. | Parameter | Maximum Marks allotted | Documents to be attached as an evidence to substantiate the claim |
| B | Technical Experience of the bidder | ||
| 3 | Experience of planning and supervising of Major Overhaul, HGPI and CI of 1 (one) GT (GAS Turbine of ISO rating more than 100 MW. Major Overhaul = maximum 5 marks individual HGPI = maximum 3 marks individual CI = maximum 2 marks individua | 10 | Bidder shall submit copy of work orders/execution orders and relevant completion/execution certificate and complete details of work issued by the client duly certified by notary public. Bidder has to submit the details of orders executed in last seven years duly certified by notary public. |
| 4 | Operation and Maintenance of Sea w |
