Back
2017 Supreme(Online)(SC) 1559
SUPREME COURT
, J
Consortium of Titagarh Firema Adler S. P. A. - Titagarh Wagons Ltd. Through Authorized Signatory v. Nagpur Metro Rail Corporation Ltd. (Nmrcl) and Another
Writ Petition No. 5818 of 2016 | M.C.A. [Review] No. 1087 of 2016 | Civil Appeal Nos. 1353-1354 of 2017 | Civil Appeal No. 1355 of 2017
Dr. Abhishek Manu Singhvi, Ms. Anannya Ghosh
Mr. Raju Ramachandran, Mr. Ramendra Mohan Patnaik
Mr. Mukul Rohatgi, Mr. Gopal Subramaniam, Mr. R.P. Gupta
Mr. Shyam Divan, Mr. S.S. Jauhar
Government-owned entities may utilize subsidiary experience in bidding, provided eligibility criteria are satisfied; judicial review is limited to legality, not technical merit of bids.
Headnote:(A) Notice Inviting Tender (NIT) - Clause 26 - Eligibility criteria - Bidding process - Bid of respondent No. 2 accepted as lowest despite appellant's claims it relied on subsidiary experience - High Court dismissed writ petition challenging technical qualifications stating it was not open post-bid opening - Validity of evaluation process upheld, deemed rational and compliant with criteria. (Paras 2, 5, 15-35)
(B) Judicial review - Restraint on administrative action - Court reviews legality, not merits of technical bid evaluations - Interference only if decisions are arbitrary, irrational, or mala fide. (Paras 27-30)
Facts of the case:
The appellant challenged the award of a contract in favor of respondent No. 2, arguing it did not independently meet experience criteria, while respondent No. 2 contends it combined experience from its wholly owned subsidiaries under a claimed single entity status.
Findings of Court:
The evaluation process by the Technical Committee found respondent No. 2 eligible based on substantial prior experience, which met requirements of the tender.
Issues: Key issues include the technical qualifications of respondent No. 2, adherence to stipulated qualifications, and the scope of judicial review concerning tender evaluations.
Ratio Decidendi: The court held that the mere reliance on subsidiary experience could be acceptable for government-owned entities and affirmed the decision as legally sound.
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. nit issued for nagpur metro project. (Para 1 , 2) |
| 2. appellant's contention on clause 26. (Para 3 , 4) |
| 3. court validated evaluation process of respondent no. 2. (Para 8 , 10 , 11) |
| 4. respondent no. 2's eligibility and experience assessed. (Para 12 , 14 , 15) |
| 5. corporate entity's eligibility criteria acknowledged. (Para 21 , 29 , 32) |
| 6. appeal dismissed with no order as to costs. (Para 35) |
1. Nagpur Metro Rail Corporation Ltd., the 1st respondent herein, issued a Notice Inviting Tender (NIT) on 25.01.2016 for the work of design, manufacture, supply, testing, commissioning of 69 passenger rolling stock (Electrical Multiple Units) and training of personnel at Nagpur Metro Rail Project. The said project is being funded by KfW Development Bank, Germany. As per the clause ITS 35.8 at all stages of bid evaluation and contract, award would have to be subject to no - objection from KfW Development Bank.
2. In response to the said NIT, three bidders submitted their bids. One was found technically disqualified and thus, only the appellant and the respondent No. 2 remained in contest. Upon opening of financial bid on 29.09.2016, it was found that the appellant had given a bid of Rs. 852 crores whereas the bid of the respondent No. 2 was Rs. 851 crores. The Director Level Tender Committee of the 1st respondent agreed with the report of the tender evaluation committee and recommended to accept the lowest offer of respondent No. 2 and the work order was to be issued after compliance of certain technical requirements. Before issue of work order, the appellant filed Writ Petition No. 5818 of 2016 before the High Court contending that respondent No. 2 was not technically qualified and, therefore, its financial bid could not have been opened.
3. It was contended by the appellant herein before the High Court that Clause 26 of the tender document prevented a person from getting any information about the technical qualification of the competitor, till the contract is awarded, which is arbitrary, unreasonable and violative of Art.14 of the Constitution; that the respondent No. 2 is not having the requisite experience as required under the NIT, for it does not meet the eligibility criteria on its own, but was relying on the experience of its subsidiary.
4. The Division Bench rejected the contention to go into the legality or otherwise of clause 26 observing that the appellant had participated in the tender bid knowing very well that such a clause existed and it was not open to it to contend that the said clause is onerous and lacks transparency and, therefore, violative of Art.14 of the Constitution; and it had challenged the same only after it is found that its financial bid was higher than that of respondent No. 2. It further observed that the matter would have been different had the appellant, immediately after the tender notice was published, challenged the said condition after NIT was issued. The High Court placing reliance upon the decisions in New Horizons Ltd. v. Union of India , 1995 (1) SCC 478 , Tata Cellular v. Union of India , 1994 (6) SCC 651 , Central Coalfields Ltd. v. SLL - SML (Joint Venture Consortium), 2016 (8) SCALE 99 : 2016 (8) SCC 622 and Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. , 2016 (8) SCALE 765 dismissed the writ petition. Be it noted, though the High Court felt that it could have non - suited the writ petitioner only on the ground that it had participated in the tender process knowing fully well that stipulation in nature of the clause 26.1 existed, yet proceeded to address the controversy and directed the owner to produce the record solely for the further purpose of being satisfied as to whether the decision making process by the employer / owner is legally valid or not and further to examine as to whether the decision arrived at by the owner that the respondent No. 2, the lowest bidder, possessed requisite experience. After perusing the entire documents on record, the High Court ca
