2016 Supreme(SC) 538

SUPREME COURT OF INDIA
T.S. THAKUR, CJI., R. BANUMATHI, J.
STATE OF JHARKHAND & ORS. – Appellants
Versus
M/S CWE-SOMA CONSORTIUM – Respondent
CIVIL APPEAL NO. 6125 OF 2016 (Arising out of SLP (C) No.19285 of 2015)
Decided On : 12-07-2016

IMPORTANT POINTS
In high value tender any variation from SBD needs prior approval from the department.
Authority issuing tender not obliged to accept any tender, even the lowest one.
Court’s primary concern is to see whether there is any infirmity in the decision-making process or whether it is vitiated by mala fide, unreasonableness or arbitrariness.
Government must have freedom of contract.

Headnote:(a) Government Contract – Tender – Award of – Tender of estimated value more than Rs.250/-lakhs – Has to be in consonance with Standard Bidding Documents (SBD) – Any variation from SBD needs prior approval from the department. (Para 8)

       (b) Government contract – Tender – Instant tender containing unapproved departures in clauses 4.5 (A) (b) and 4.5 (A) (c) from the clauses of the SBD – Resultantly only three bidders out of ten submitting bids – Even out of the three only respondent’s bid found responsive – Even then Tender Committee deciding to cancel the tender and go for fresh tender – Authority issuing tender not obliged to accept any tender, even the lowest one – Tendering authority will be within its rights to reject the tender without assigning any reason – Instantly Government assigning reasons for cancelling the tender – Point missed by High Court. (Para 9, 10, 12, 13)

       (2007) 1 SCC 477; (2013) 5 SCC 182; (1996) 4 SCC 208 – Relied upon

       (c) Government contract – Article 298, Constitution of India – Decision to enter into a contract or not – Subject only to the requirement of reasonableness under Article 14 – Instantly tender cancelled due to lack of real competition – There being only one responsive bid decision to cancel the tender and issue fresh tender not arbitrary or unreasonable. (Para 14)

       (d) Government contract – High value Tender – CVC guidelines – Clause 4.17 and 4.18 r/w clause 4.5(A) (a) and clause 4.5 (A)(c) of NIT – NIT clauses found stringent – Bidding lacked competition – No error in decision of tender committee to cancel and re-invite tenders in the light of SBD norms. (Para 17, 18)

       (e) Administration of justice – Judicial review – Court’s primary concern is to see whether there is any infirmity in the decision-making process or whether it is vitiated by mala fide, unreasonableness or arbitrariness – It is not appellate jurisdiction. (Para 18, 19)

       (1994) 6 SCC 651 – Relied upon

       (f) Government contract – Government must have freedom of contract – In absence of ant pleading of mala fide High Court could not sit in appeal over decision of the Tender Committee – Also, High Court ought not have deliberated on financial implications of fresh tender. (Para 20, 21)

       (2005) 6 SCC 138; (1996) 4 SCC 208 – Relied upon

       (g) Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 – Section 41 – Acquisition of land in scheduled areas to be made only as last resort – Proposed Icha-Kharkai Dam requiring acquisition of 20,421.43 acre of land in scheduled area – Tribal Advisory Council opining against such acquisition – Judgment of High Court directing (Para 22)

       Facts of the case:

       The proposed project, Kharkai Dam at Icha is a part of Subernarekha Multipurpose Project.

       Government of Jharkhand, issued a Notice Inviting Tender (NIT) for the construction of the Dam as per the Standard Bidding Documents (SBD) dated 28.02.2014.

       In the pre-bidding meeting ten tenderers participated wherein it was observed that in the clauses of the NIT, there were certain departures from the SBD.

       After the pre-bid meeting only three bidders namely, M/s CWE-SOMA Consortium, Hyderabad (respondent herein), M/s. IL & FS Engineering and Construction Co. Ltd., Hyderabad and M/s. Navyuga Engineering Co. Ltd., Hyderabad submitted their bids.

       Out of the three bidders, only the respondent was found responsive and other two bidders were found unresponsive. Therefore the tender committee took a decision under clause 4.18(d) of the Central Vigilance Commission Guidelines (‘CVC Guidelines’) to cancel the tender and go for retender to make the tender process more competitive.

       The respondent made a representation against this decision which was forwarded by the Chief Minister to the Tender Committee. Aggrieved thereof, respondent filed a writ petition before the High Court.

       The Single Judge allowed the writ petition, holding the action of the appellants as arbitrary and against public interest.

       The Division Bench concurred with the conclusion of the Single Judge.

       Finding of the Court:

       Impugned judgment is liable to be set aside.

       Result: Appeal allowed.