National High Speed Rail Corporation Limited vs Montecarlo Limited

National High Speed Rail Corporation Limited vs Montecarlo Limited - Supreme Court Case 2022

 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6466 OF 2021
National High Speed Rail Corporation Limited …Appellant(s)
Versus
Montecarlo Limited & Anr. …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 23.08.2021 passed by the High Court of Delhi in Writ
Petition (C) No. 5127 of 2021 by which the High Court has allowed the
said writ petition preferred by the respondent herein – original writ
petitioner (hereinafter referred to as the “original writ petitioner”) and has
quashed the communications dated 27.04.2021 and 28.04.2021 and the
notification dated 28.04.2021 by which the original writ petitioner was
informed that its technical Bid has been rejected on the ground that the
same is non-responsive and consequently has directed the appellant
herein to proceed in accordance with law qua the tender process by
further examining the Bid of the original writ petitioner, the original
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respondent – National High Speed Rail Corporation Limited (hereinafter
referred to as “NHSRCL”) has preferred the present appeal.

2. That the appellant herein – NHSRCL is a Government Company
incorporated under the Companies Act, 2013 with equity participation of
the Government of India, Government of Gujarat and Government of
Maharashtra, incorporated with the object to finance, construct, maintain
and manage the upcoming High Speed Rail Corridor in India.
2.1 That the NHSRCL issued a tender notice on 22.10.2020 calling for
bids in relation “to the Bid Package No. MAHSR-8 for the -- Design and
Construction of Civil and Building Works for the Depot on Design Build
Lump Sum Price Basis for Double Line High Speed Railway involving
works for Site Formation, Abutment, Retaining Walls, Roadbed for track,
Box Culvert, Roads, Cable Duct, Foundations of OHE Masts, Piping,
Drainage, Water Supply, Water Harvesting, Fire Fighting, Land-scraping,
Boundary Wall, General Inspection Train Shed, Maintenance Depot and
other Associated Works at Sabarmati between MAHSR Km. 507.599
and MAHSR Km. 509.726 in the State of Gujarat for the Project of
Construction of Mumbai-Ahmedabad High Speed Rail, (hereinafter
referred to as “the Project”).
2.2 That the Technical Bids submitted by various bidders including the
original writ petitioner, were opened by the NHSRCL on 19.02.2021.
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The original writ petitioner alongwith four other bidders were declared
unsuccessful. The NHSRCL informed the original writ petitioner through
uploading of Technical Proposal Evaluation Summary on 27.04.2021 on
CPPP that the Bid of the original writ petitioner alongwith four other
bidders have been rejected at Technical Stage. The original writ
petitioner sought the reasons for rejection of its Bid. In response,
NHSRCL vide its communication dated 28.04.2021 addressed to original
writ petitioner informed that its Bid was not substantially responsive. A
reference was made to Clauses ITB 28.1 and 42.5. Under clause 28.1
“information relating to the evaluation of the Bids and recommendation of
the Contract award shall not be disclosed to bidders or any other
persons, not officially concerned, with such process until information on
Contract award is communicated to all bidders in accordance with ITB
42.” As per clause 42.5, “only after notification of award, unsuccessful
Bidders may request, in writing, to the Employer a debriefing seeking
explanations on the grounds on which their Bids were not selected and
the Employer shall promptly respond, in writing, to any unsuccessful
Bidders who, after the notification of the award in accordance with ITB
42.1, request a debriefing.” It appears that NHSRCL acted as per the
aforesaid two clauses.
2.3 Aggrieved by the aforesaid communication/notification dated
27.04.2021 and 28.04.2021 respectively and aggrieved by the
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disqualification of its Bid, the original writ petitioner approached the High
Court by way of writ petition being Writ Petition (C) No. 5127 of 2021 and
by the impugned judgment and order, the High Court has allowed the
said writ petition and has quashed and set aside the communications
dated 27.04.2021 and 28.04.2021 and the notification dated 28.04.2021
rejecting the Bid of original writ petitioner at Technical Stage.
2.4 While allowing the writ petition, the High Court has commented
upon Clauses 28.1 and 42.5 of ITB and has observed that not to give
reasons at that stage would tantamount to depriving the bidders to
approach the Court and know the reasons for rejection of their Bid. That
thereafter the High Court has considered the reasons for which the Bid
submitted by the original writ petitioner was found to be technically nonresponsive and has overruled the objections while treating the Bid as
technically non-responsive and has observed and held that the Bid
submitted by the original writ petitioner was substantially responsive and
that there was a substantial compliance of the terms and conditions of
the Bid document. Consequently, the High Court has quashed and set
aside the aforesaid communications rejecting the original writ petitioner’s
Bid at Technical Stage as a technically non-responsive and has directed
the NHSRCL to consider and evaluate the Bid submitted by the original
writ petitioner alongwith the Bids submitted by four other bidders.
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2.5 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the NHSRCL has preferred the
present appeal.
3. Shri Tushar Mehta, learned Solicitor General appearing on behalf
of the appellant – NHSRCL has submitted that the present matter
pertains to the tender floated for works in Package C8, which is a part of
various other packages being finalized for the implementation of
Mumbai-Ahmedabad High Speed Rail popularly known as Bullet Train
Project. It is submitted that the Mumbai-Ahmedabad Project is a fully
foreign funded project, which was envisaged when the Japanese and
the Indian Governments entered into a Memorandum of Understanding,
pursuant to which it was agreed that the said project would be fully
funded by the Concessional Official Development Assistance Loan of
over Rs.80,000/- crores by the Japan International Cooperation Agency
(JICA). It is submitted that thus, the Bullet Train Project is a Foreign
Sovereign Funded Contract distinct from Contracts Funded from
Consolidated Fund of India. It is submitted that as per the Memorandum
of Corporation, and when the said project is fully funded by JICA for an
amount of Rs.1 lakh crore with a very negligible rate of interest and by
providing repayment in installments of 27 years and above, as per the
Memorandum of Corporation, the process of bidding and the subsequent
decisions are to be vetted by JICA. It is submitted that the content of the
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bidding documents was based on JICA’s Standard Bidding Documents
(SBD) as well as JICA’s procurement guidelines and the same form an
integral part of the loan agreement. It is submitted that in the present
case, JICA appointed JICC as consultant.
3.1 It is further submitted by Shri Mehta, learned Solicitor General that
in the present case when the original writ petitioner submitted its Bid /
Technical Bid and when the same was evaluated at the Technical
Evaluation Stage, the Technical Bid submitted by the original writ
petitioner was found to be non-responsive on the ground of (i) NonSigning of Form CON: 2.0 Pending Litigation and (ii) Non-Signing of 3.0
Litigation History in the physically submitted Bid by the authorised
representative of the original writ petitioner. It is submitted that as such
the Bid document was prepared by JICC and approved by JICA. It is
submitted that in the present case when the Bids submitted by the
respective bidder was evaluated by JICC as per the JICA’S International
Guidelines, the same was approved by the Tender Committee of the
appellant, which was finally concurred and approved by JICA. It is
submitted that the decision to hold that the Bid was non-responsive was
of JICC, which has been approved by the JICA. It is submitted that
appellant under the contractual mechanism cannot in its discretion
deviate from the evaluation done by JICC and any deviation unilaterally
made by the Appellant/Government of India may not be
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acceptable/concurred by JICA. It is submitted that the same shall also be
violative of “privilege participation principle” as implementing the High
Court’s order will enable the other bidders whose Bids have been
rejected by the appellant on the same ground to participate in the tender.
It is submitted that the High Court’s evaluation of the other bidders will
also render their bids responsive and therefore any such action will
render the entire bidding un-competitive and shall have cascading effect
on the other Packages.
3.2 Shri Mehta, learned Solicitor General has taken us to the relevant
clauses of the Memorandum of Corporation or Understanding as entered
between JICA and the President of India; JICA’s Standard Bidding
Guidelines and the Guidelines for procurement under Japanese ODA
Loans. He has also taken us to the various clauses of the Bid
documents and to satisfy the Court’s conscience that the appellant acted
just in accordance with the Memorandum of Understanding, Loan
Agreement entered between JICA and Government of India and as per
the relevant terms and conditions of the Bid document.
3.3 It is submitted that in the present case, Technical Bid Evaluation
was done by JICC (consultant appointed by JICA). It is submitted that
there was a detailed deliberation / discussion by the Technical
Consultant (TC) on Technical Bid evaluation. It is submitted that Stage 1
was Evaluation of Administrative Requirements and Stage 3 was
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Evaluation of Compliance with Technical Requirements. It is submitted
that the JICC recommended that the Bids of the five bidders had
material non-conformities and were not in compliance with the technical
requirements of the Bidding Documents and so they were disqualified. It
is submitted that the Bid submitted by the original writ petitioner was also
found to be non-responsive/found to be had material non-conformities. It
is submitted that by letter dated 10.04.2021, the appellant – NHSRCL
sought the concurrence of JICA to Technical Bid Evaluation Report. It is
submitted that vide communication dated 23.04.2021, JICA confirmed
the Technical Bid Evaluation Report.
3.4 It is submitted that when JICA, JICC and the Technical Evaluation
Committee took a conscious decision that the Bid submitted by the
original writ petitioner was non-responsive and was not in conformity
with the relevant clauses of the Bidding Document, and therefore, when
the appellant acted upon the said recommendation/Technical Bid
Evaluation Report and rejected the Bid submitted by original writ
petitioner at Technical Stage, the High Court has materially erred in
interfering with such a fair and conscious decision in exercise of powers
under Article 226 of the Constitution of India.
3.5 Shri Tushar Mehta, learned Solicitor General appearing on behalf
of the appellant has vehemently submitted that in the present case and
with greatest respect, the High Court has not at all considered the
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distinction between Foreign Sovereign Funded Contracts and the
contracts funded from the Consolidated Fund of India.
3.6 It is submitted that Foreign Sovereign Funded Contracts, like the
present one, are sui generis specie of contracts and are completely
different and distinct from Government Contracts/ Public Works
Department Contracts / Public Private Partnership Contracts, which are
either wholly or partially funded from public money, i.e., Consolidated
Fund of India or of the State and implemented by a statutory/local
authority of the State. It is submitted that in such foreign funded
contracts, it is the investor, which normally is the friendly sovereign
country (a developed nation, like in the present case Japan) which takes
a decision to invest in a friendly State (a developing nation, like in the
present case India) and finances and implements projects meant for
development of the recipient developing nation.
3.7 It is submitted that these investments from developed nations are
made on the basis of non-negotiated terms and conditions, where the
sole discretion as to what would be the conditions of the investments
and on what terms the contractors would be chosen to implement the
project, vests with the investor foreign developed nation. Thus, all
crucial aspects of decision making and the terms and conditions on
which such investment has to be made and how the contractors have to
be chosen to implement the said project remains with the
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instrumentality/agency of the sovereign which has proposed to make
investments in developing nation. It is submitted that so far as role of
Indian authorities / local authorities is concerned, they theoretically act
as an intermediary and are technically only given the role of performing
‘first level scrutiny’ that the investment made would be
expended/contractors would be chosen as per the terms and conditions
proposed by the investor State. It is submitted that in such a case, the
local authority/instrumentality of the State acts as a facilitator and for all
purposes the final decision-making authority regarding selection of the
contractors etc. remains with the entity of the foreign State through
whom the investments are made. It is submitted that in the present
case, the scrutiny of the Bids was not done by the NHSRCL. It was
done by JICC which is an independent body authorised by JICA to
evaluate the bids as per its terms and conditions and thereafter on the
basis of recommendations given by JICC, the final decision to select a
contractor is of JICA. It is, therefore, submitted that the discretion with
the Indian authority - appellant - NHSRCL to vary any term is not at all
permissible and even advisable.
3.8 It is submitted that the Hon’ble Gujarat High Court in its judgment
and order in the case of CRRC Corporation Ltd. Vs. Metro-Link
Express for Gandhinagar and Ahmedabad (MEGA) Company Ltd. in
Special Civil Application No.12833 of 2017 has dealt with and
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considered in detail role of JICA and role of the implementing agency of
the project in India and the scope of the judicial review of the Indian
Courts while exercising the power under Article 226 of the Constitution of
India. It is submitted that the decision of the Gujarat High Court in the
case of CRRC Corporation Ltd. Vs. Metro-Link Express for
Gandhinagar and Ahmedabad (MEGA) Company Ltd. (supra) has
been confirmed by this Court. Heavy reliance is placed upon the
decision of this Court in the case of M/s CRRC Corporation Ltd. Vs.
Metro Link Express for Gandhinagar and Ahmedabad (MEGA)
Company Ltd. passed in Special Leave Petition (Civil) Diary No.35385
of 2017.
3.9 Shri Mehta, learned Solicitor General has further vehemently
submitted that in the facts and circumstances of the case, the High Court
has materially erred in interfering with the tender process in exercise of
powers under Article 226 of the Constitution of India. It is submitted that
in the present case the High Court has exceeded in its jurisdiction in
exercise of powers under Article 226 of the Constitution of India and has
deviated the scope of judicial review in contractual matters. It is
submitted that the High Court while exercising the powers under Article
226 of the Constitution of India and interfering with the administrative
process with respect to the Foreign Sovereign Funded Contract/Project
has not at all appreciated and/or considered the difference between the
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foreign funded contracts and the ordinary Public Works contracts funded
from Public Exchequer.
3.10 It is submitted that considering the special peculiarity of such
Foreign Sovereign Funded Development Contracts, which can be
envisaged and exist only due to the availability of the investment and
willingness of the foreign sovereign country to finance such
infrastructural project, the said contract assumes the characteristics,
which are more of private in nature rather than being a full-fledged Public
Works Contracts/Government Contracts where the Government of India
is the sole authority of funding and implementing the project and in which
the element of public law and judicial review parameters are applicable
in its full vigour. It is submitted that being in the nature of an investment
by a friendly sovereign country on concession, the decision remains with
the investor as to through whom the said investments are transformed
into public infrastructural projects and as to on what terms and
conditions the contractors are to be chosen who would transform their
project into public infrastructural projects.
3.11 It is submitted that the terms of NIT proposed by the investor
assumes a sacrosanct effect as any deviation from the same can
perpetrate a detrimental effect on the funding of the infrastructural
project. Such Contracts have ramification which are international in
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nature, far beyond the decision-making power of the local Government
situated in India and therefore, the decision making with regard to such
contract is dependent upon larger consideration of international fiscal
policy where a developed country decides to finance an infrastructural
project for a developing country. It is submitted that considering the
aforesaid factors, the scope of judicial review in these foreign funded
contracts is far much less than the ordinary Government Funded
Contracts, i.e., funded from the Consolidated Fund of India, whose
scope of judicial review is otherwise held to be restricted and limited by
this Court. Reliance is placed upon the decision of this Court in the case
of Siemens Public Communication Networks Private Limited and
Anr. Vs. Union of India and Ors., (2008) 16 SCC 215 @ paras 20-24.
3.12 It is further submitted that in such foreign funded contracts, there is
no room of any deviation from essential conditions of tender proposed by
the investor. Signing of the forms to the Bid in indelible ink, thus, formed
an essential condition of the NIT. It is submitted that deviation from the
essential conditions of NIT is not at all permissible in the contract of
present nature and the doctrine of substantial compliance, which may be
applicable in the case of domestic tender matters shall not be applicable
at all with respect to the contract of present nature having international
ramification and foreign funding. Reliance is placed upon the decision of
this Court in the case of Poddar Steel Corporation Vs. Ganesh
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Engineering Works and Others, (1991) 3 SCC 273. It is submitted that
when the final decision-making authority is under the jurisdictional
control of a governmental body in India, the State may adopt a position
wherein it allows tender participant to participate in case there is
substantial compliance. However, the same may not be a position with
contracts issued for implementing foreign funded infrastructural projects
as the same would amount to changing the terms on which the
investment is agreed to be made. It is submitted that in the present case
as such, the appellant has complied with and/or followed the conditions
as envisaged by the foreign funding party and there cannot be any
deviation from the terms and conditions of the NIT by the appellant; as
such which can be said to be a facilitating party and/or implementing
agency only. It is submitted that in the present case, as one of the
essential conditions of signing the forms in indelible ink has not been
complied with, therefore, a conscious decision was taken by the investor
– JICA and the consultant – JICC, which has been applied by the
appellant.
3.13 It is submitted that in the impugned judgment and order the High
Court has applied the doctrine of substantial compliance, equity and fair
play. It is submitted that however the doctrine of substantial compliance
shall not be applicable in commercial contracts. It is submitted that it
would tantamount to violation of the essential conditions of the contract.
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It is submitted that when a condition which is specifically imposed by a
foreign funding party for an infrastructural project, such condition being
non-negotiable in nature and forms an integral part to the contract, the
adherence of such condition has to be in totality as it is not permissible
either for the executing authority in India to approve a Bid document
despite there being a clear breach of a condition imposed by the foreign
funding party. It is submitted that doctrine of substantial compliance,
thus, cannot be negotiated with the foreign funding party; though in
public works which are funded from Consolidated Fund of India/public
money the same may be possible and/or may be permissible. It is
submitted that the High Court has not properly appreciated the facts
while allowing the doctrine of substantial compliance to creep in such
foreign funded international projects which would result in seriously
jeopardizing the willingness of the foreign State to finance an
infrastructure project of this magnitude. It is submitted that as such the
scope of judicial review on the parameters laid down for judicial review of
contractual matters and projects funded solely from the Consolidated
Fund of India where the decision-making authority is solely an Indian
Governmental authority will not be applicable in such cases. It is
submitted that in cases like the present one, the terms offered by the
foreign sovereign, on the basis of which it proceeds to finance an
infrastructural project, becomes sacrosanct and cannot be deviated from
and in such cases, the compliance has to be strict and not substantial. It
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is submitted that any insistence on substantial compliance may affect the
willingness of the foreign sovereign to finance such a project and to
share technical know-how regarding the same.
3.14 It is further submitted by Shri Mehta, learned Solicitor General that
as per the settled preposition of law laid down by this Court, the scope of
judicial review in contractual matters is extremely limited. It is submitted
that only in a case where the process adopted or decision made by the
authority is mala fide or intended to favour someone; or where the
process adopted or decision made is arbitrary and irrational that the
court can say: "the decision is such that no responsible authority acting
reasonably and in accordance with relevant law would have reached";
and in cases where the public interest is affected, the Courts will be
justified in interfering such decision in exercise of powers under Article
226 of the Constitution of India. Reliance is placed upon the following
decisions:-
Afcons Infrastructure Limited Vs. Nagpur Metro Rail
Corporation Limited, AIR 2016 SC 4305; B.S.N. Joshi and
Sons Ltd. Vs. Nair Coal Services Ltd. and Ors., (2006) 11 SCC
548; Michigan Rubber (India) Limited Vs. State of Karnataka,
(2012) 8 SCC 216; Jagdish Mandal Vs. State of Orissa, (2007)
14 SCC 517; Tejas Constructions and Infrastructure (P) Ltd.
Vs. Municipal Council, Sendhwa, (2012) 6 SCC 464; Central
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Coalfields Limited & Anr. Vs. SLL-SML [A Joint Venture
Consortium], (2016) 8 SCC 622; and Maa Binda Express
Carrier & Anr. Vs. North Eastern Frontier Railway & Ors.,
(2014) 3 SCC 760.
3.15 It is further submitted that with the aforesaid limited scope of
judicial interference/intervention in exercise of the powers under Article
226 of the Constitution of India, the decision taken in the present case to
reject the Bid of original writ petitioner at Technical Stage on the ground
that the same is non-responsive is to be considered. It is submitted that
considering the relevant clauses of the ITB/Bid document, it is ultimately
for the investor and/or the appropriate authority to consider whether the
Bid complies with the terms and conditions of the Bid document and/or
whether there is a substantial compliance and/or whether there is any
material deviation or not. Once there is an application of mind on the
aforesaid aspects and the appropriate authority/investor comes to the
conclusion that there is a material deviation in the Bid submitted by the
bidder, unless there are allegations of mala fide and the same are
established and proved, the interference of the Court in exercise of
powers under Article 226 of the Constitution of India with respect to such
a conscious decision is not warranted. It is submitted that it is ultimately
for the Employer to have a conscious call or decision whether the Bid is
technically responsive or there is a material deviation or not.
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3.16 It is further submitted by Shri Mehta, learned Solicitor General that
observations made by the High Court that applying Clauses ITB 28.1
and 42.5 it affects the fairness in the tender process and it affects the
rights of the bidders to challenge the decision rejecting their bids, the
High Court has not at all appreciated and/or considered the object and
purpose of the said clauses. It is submitted that the object and purpose
of the said clauses cannot be said to be taking away the rights of the
bidders to challenge the decision rejecting its bids. It is submitted that it
only differs the challenge. It is submitted that the main object and
purpose of the aforesaid clauses is that there is no interference at the
stage where the tender process is going on. It is submitted that if at
every stage the bidder approaches the Court and/or makes grievance, it
may further delay the completion of the tender process and which may
ultimately result in delay in execution of the Mega project / public project.
It is submitted that after the entire tender process is completed and the
work order is issued, on the request made, the reasons for rejecting the
Bid can be supplied and thereafter it will be open for the bidder to take
recourse to law at that stage and even after the contract is awarded; the
bidder is not rendered remediless. It is, therefore, submitted that the
observations made by the High Court with respect to the aforesaid two
clauses are absolutely unwarranted and beyond the scope of judicial
review in exercise of powers under Article 226 of the Constitution of
India.
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3.17 It is submitted that the findings recorded by the High Court in the
impugned judgment and order that ITB Clauses 28.1 and 42.5 are
patently illegal may lead to altering the tender conditions as these are as
per JICA SBD and can be altered only with JICA’s concurrence. It is
submitted that seeking alterations in JICA ITB will tantamount to renegotiations between the tendering authorities and JICA. This will not
only delay the BID-Package No.C8 but also the other 17 Bid Packages
which are yet to be awarded for this project, valued at approximately
Rs.50,000 crores.
3.18 It is submitted that the confidentiality clauses are a part of JICA
guidelines and the appellant as well as the participating bidders are
bound by the same. It is submitted that as a consequence of the
findings of the High Court, the confidentiality clauses will have to be
removed from all the on-going and future tenders. JICA being an
international funding agency may or may not agree to altering of the
tendering rules and this may take substantial period of time for
negotiations, which eventually may lead to a deadlock in all the JICA
funded projects. It is submitted that JICA SBD shall apply to all JICA
funded projects in India and, therefore, this change will have to be
implemented across all the projects including but not limited to the Bullet
Train Project. It is submitted that between 2016-2021, JICA has
approved 49 loan agreements amounting to JPY 1975 Billion (INR
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132,300 crores) for different projects in India. It is submitted that
therefore the impugned judgment and order passed by the High Court
would have a far-reaching cascading effect, which has not been
considered by the High Court at all.
3.19 It is submitted that the Bullet Train Project is a highly prestigious
project and it is imperative and in the interest of public welfare that the
contract ought to be concluded at the earliest. It is, therefore, submitted
that if every unsuccessful bidder is granted liberty to approach a court of
law as per their whims and fancies seeking remedy against its individual
grievances, the whole intent and approach behind the project will get
throttled. It is submitted that bearing in mind that, clause Nos.28.1 and
42.5 are enacted which are as per JICA ITB.
3.20 It is further submitted that in the present case as such the terms of
the tender has been applied uniformly to all the bidders and there is no
discrimination at all. It is submitted that the entire tender process has
been conducted absolutely in fair and transparent manner. It is
submitted that as such there are no specific allegations of either mala
fides or favouritism and, therefore, the tender process is not vitiated.
3.21 It is submitted that ITB 29.1 in order to enable examination,
evaluation and comparison of the Bids, permits the Appellant to ask any
Bidder for a clarification of its Bid, provided the same does not result in a
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change in the substance of the Bid. It is submitted that the submission
on behalf of the original writ petitioner that the discretion of seeking
clarifications from other Bidders except the original writ petitioner is
discriminatory and arbitrary is wrong and misplaced. It is submitted that
the appellant has treated all the Bidders at equal footing. It is submitted
that the High Court has wrongly observed and held that the clarification
sought by the appellant only from other bidders is discriminatory. It is
submitted that procedure followed by the appellant in disqualifying the
bidder and nature of clarifications sought from other bidders were strictly
as per the protocols laid down by JICA. It is submitted that evaluation of
the bids is done in various stages. In the present case, the original writ
petitioner was disqualified at stage 1 and only the bidders who pass
Stage 1 were to proceed to next stage and given their disqualification at
Stage 1, no clarifications were sought from original writ petitioner.
3.22 It is submitted that on the issue of clarifications, the High Court has
wrongly concluded that seeking clarifications from other bidders was
discriminatory. It is submitted that other bidders from whom clarifications
were sought had cleared stage 1 and pursuant to that the clarifications
were sought from them. It is submitted that the submission on behalf of
the respondent - original writ petitioner that the appellant would have
granted the liberty to cure the defect cannot be sustained. It is
submitted that at Stage 1.1 (b) (iii) read with Clause A.4 (b), the
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appellant was not obliged to provide opportunity to Montecarlo- original
writ petitioner for curing the defects of non-signing of the forms and JICA
was justified in holding the said omission as material and holding the Bid
as non-compliant/non-responsive. It is submitted that as per clause A.4
(b), all the forms must be reviewed exactly as submitted and errors or
omissions may count against the bidder.
3.23 It is submitted that the High Court has failed to appreciate that the
Technical Bids of four bidders – Bidder Nos. 1, 3, 7 and 9 were
“Substantially Responsive” as they adhered to the requirements laid
down in Stage 1 evaluation. It is submitted that therefore an opportunity
was accorded to them for clarification. It is submitted that clarifications
to re-confirm compliance to the Bidding Documents were sought by the
appellant on the recommendations of JICC in terms of ITB clause 29.1
for rectification of the non-conformities. The said decision was affirmed
by the Tender Committee of the appellant in its meeting dated
09.04.2021. Therefore, clarifications were sought only from those
bidders whose bids were found to be ‘Substantially Responsive’ and
were in conformity with the evaluation process laid down in Stages 1 &
2. It is submitted that the High Court has erred in concluding that such
opportunity was discriminatory.
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3.24 It is further submitted by learned Solicitor General that if the
impugned judgment and order passed by the High Court in these
circumstances is interfered by this Court, the same would have a
cascading effect. It will not only affect the fundings to the National
projects by the foreign country/foreign agency, it would further delay the
MEGA project like Bullet Train Project. It is submitted that pursuant to
the impugned judgment and order, the Package C8 has been delayed
which has a cascading effect on implementation of other packages and
thus eventually delaying the entire project. It is submitted that halting of
work of C8 Package which concerns the construction of depot at
Sabarmati will have a cascading effect on another linked package,
package D2 which pertains to the design, construction, installation,
testing and commissioning of Sabarmati Depot consisting of workshop,
inspection shed, maintenance facilities and associated works. It is
submitted that the Bullet Train Project is of national importance and the
appellant/Government /Union Government’s ultimate object is catering to
aspirations of the people of India. It is submitted that the total cost of the
Bullet Train Project is Rs.1,08,000 crores and the substantial amount
with the concessional rate of interest is to be funded by JICA and,
therefore, the project is a foreign funded project due to the relations
between the developed country and developing country. It is submitted
that therefore any delay in such a project due to frivolous litigation and
baseless challenges to the tendering clauses may render the project
23
commercially and transactionally unviable as it may affect the willingness
of the investor/financing State to go ahead with the project.
3.25 Making above submissions and relying upon above decisions, it
is prayed to allow the present appeal and quash and set aside the
impugned judgment and order passed by the High Court.

4. Present appeal is vehemently opposed by Shri Anshin H. Desai,
learned Senior Advocate appearing on behalf of the respondent. It is
vehemently submitted by Shri Desai, learned Senior Advocate appearing
on behalf of the respondent/original writ petitioner that in the facts and
circumstances of the case, the High Court has not committed any error
in allowing the writ petition directing the appellant herein to proceed in
accordance with law qua the tender process examining the Bid of the
original writ petitioner.
4.1 It is submitted by Shri Desai, learned Senior Advocate appearing
on behalf of the respondent that the main contention on behalf of the
appellant is that the project being funded by JICA and the same being a
foreign funded project, the decisions taken in this regard must not be a
subject matter of judicial review. So far as the said submission is
concerned, it is submitted that though the project is funded by JICA and
the evaluation assistance is rendered by JICC, which upon being
approved by Ministry of Railways is subject to review of JICA, still the
24
project involves outlay of a substantial amount of the public exchequer of
this country. It is submitted that 81% of the total project cost is funded
by JICA loan, which needs to be repaid from the public exchequer –
capital along with interest. It is submitted that the amount paid by JICA
for the project in question is not an aid but it is a loan. It is submitted
that even the balance 19% of the total project cost needs to be arranged
for by the Ministry of Railways upfront from the public exchequer. It is
submitted that therefore the decision with respect to the tender process
is always a subject matter of judicial review.
4.2 It is further submitted on behalf of the respondent that in the case
of CRRC Corporation Limited Vs. Metro Link Express for
Gandhinagar and Ahmedabad (MEGA) Company Limited, (2017) 8
SCC 282, in relation to a JICA funded project, while reversing the
decision of the Hon’ble Gujarat High Court, which rejected the petition,
has held the evaluation done therein as erroneous and has directed the
concerned authority to proceed with the further evaluation of the Bid,
despite existence of Clause 42.5. It is submitted that in the aforesaid
case, the facts and circumstances were similar to that in the present
case.
4.3 It is further submitted that even if the sole contention of the
appellant is accepted the same cannot in any manner be deemed to be
providing the appellant with a free hand to act in an arbitrary and
25
discriminatory manner. It is further submitted by Shri Desai, learned
Senior Advocate appearing on behalf of the respondent that in the
present case the respondent is not asking for the tender to be awarded
to it, the only prayer is that its Bid, which is wrongly rejected at Stage I
(Evaluation of Administrative Requirements) by adopting a discriminatory
approach must be evaluated further. It is submitted that as such the
respondent’s Bid is almost Rs.32 crores lesser than that of L1. It is
further submitted on behalf of the respondent that the terms of the
tender must be applied uniformly to all Bidders and there can be no
discrimination even in a JICA funded/loaned project. Shri Desai, learned
Senior Advocate appearing on behalf of the respondent has taken us to
the ITB Clauses 1.1, 22.1, 22.2, 29.1, 33.2, 34 and 1.3, the relevant
clauses of the tender. It is submitted that the evaluation sequence
comprises of five stages of evaluation as under:-
i. Stage 1 – Evaluation of Administrative Requirements
ii. Stage 2 – Evaluation of Compliance and Responsiveness
iii. Stage 3 – Evaluation of Compliance with Qualification
Requirements
iv. Stage 4 – Technical Evaluation
v. Stage 5 – Evaluation of Price Bid
4.4 It is submitted that in the present case, the respondent submitted
Form CON 2.0 with the requisite details filled in. It is submitted that the
26
Form was duly stamped, however, inadvertently, the same was not
signed. It is submitted that the respondent also submitted Form CON
3.0 with the requisite details filled in. The said form was also duly
stamped, however, inadvertently, the same was also not signed.
4.5 It is submitted that the respondent Bidder had also filed Form ACK
with specific declaration that all information provided in the Bid by the
respondent is true, correct and accurate as per Para A(i). It is submitted
that the said Form is also duly signed and stamped. It is submitted that
as rightly observed by the High Court, the evaluation process and
holding the respondent non-compliance at Stage 1 is discriminatory.
4.6 It is submitted that JICC Evaluation Report, which was confirmed
by the Ministry of Railways and acted upon, in Para 2.1.1, there is a
specific observation pursuant to a Preliminary Examination that there are
no material non-conformities as regards the respondent (5/9) and others,
except 2 Bidders. It is submitted that in Para 2.1.3, it is specifically
observed that there were a number of non-conformities in the Bids
submitted by Bidders 1/9, 3/9, 7/9 and 9/9 creating inconsistencies with
the stated position in their Letter of Technical Bid which is an essential
document as per ITB 31.2(a).
4.7 It is submitted that clarifications were sought from the above
Bidders and they were given opportunity to rectify the non-conformities
27
in accordance with ITB 29.1 so as to re-confirm compliance to the
Bidding Document. However, so far as the respondent is concerned, no
such opportunity and/or clarification has been sought for contrary to ITB
33.2 which defines Material Deviation and arbitrarily, the respondent’s
non-conformity has been held to be as material non-conformities. It is
submitted therefore that the action of the appellant is rightly held to be
discriminatory.
4.8 It is submitted by Shri Desai, learned Senior Advocate appearing
on behalf of the respondent that in the present case, the sole reason
provided for rejection is that “without signature, it is unknown whether it
has been submitted with the Bidder’s knowledge and approval”. No
other reason has been ascribed for the rejection. It is submitted that
even the said reasoning is provided to the respondent after the
respondent approached the Hon’ble High Court. It is submitted that all
the appellant had to do was to call upon the respondent to provide a
signed copy, or to seek a clarification that the respondent confirms the
Form CON 2.0 and CON 3.0. It is submitted that the respondent is not
resiling from the declaration made in the said Forms and stands by it
even today and the stage to evaluate whether the declaration made by
the respondent is correct or not has not come and still the Bid is rejected
on the sole ground that it is not signed. It is further submitted that
surprisingly, in relation to ‘Material Deviations’ and non-conformities of
28
far more serious nature, the appellant has permitted select Bidders to
rectify and/or clarify.
4.9 It is submitted that so far as the Bidder No.9/9 (L2) is concerned,
he had made an identical error whereby the said Bidder failed to put its
signature and stamp on the Site Organization Chart in accordance with
ITB 22.2. In the case of the said Bidder, the appellant exercised
discretion and called upon the said Bidder to rectify the same.
4.10 It is submitted that even with respect to Bidder No.7/9 (L1), though
it failed to provide details qua the Site Organization Chart, Method
Statement qua Earthwork and other details, the appellant exercised
discretion in terms of ITB 29.1 and permitted the Bidder to rectify all
defects. It is submitted that the said Bidder also did not submit Bid
Security Form in accordance with ITB 12.1. It is submitted that despite
noting that the submission was in contravention of ITB 12.1, which does
not permit alteration to the Bidding Form, the defect was waived as
being non-material.
4.11 It is submitted that so far as Bidder 3/9 is concerned, though it
failed to submit details of Key Personnel and also failed to give an
undertaking as required in Form ACK, the appellant has given the
opportunity to rectify the defects. It is submitted that the aforesaid
errors/non-conformities are far more serious than the inadvertent error of
29
the respondent. It is submitted that though the aforesaid Bidders were
given the opportunity to rectify the defects, no such opportunity was
given to the respondent.
4.12 It is submitted that so far as the respondent is concerned, not
signing of Forms CON 2.0 and Con 3.0 is an inadvertent error, which can
be said to be a non-material, non-conform in terms of ITB 33.2 read with
ITB 34, which ought to have been waived as has been done in the case
of other Bidders with more serious non-conformities.
4.13 It is further submitted that even otherwise as held by this Court in
the case of Poddar Steel Corporation Vs. Ganesh Engineering
Works and Others (supra) and B.S.N. Joshi and Sons Ltd. Vs. Nair
Coal Services Ltd. and Ors., (2006) 11 SCC 548, non-material nonconformity can be waived even if there is no clause permitting such
waiver. It is submitted that even if ITB 28.1 and ITB 42.5 provide for no
reasons to be given, the respondent where it perceives foul play in the
tendering process, can always approach the Court. It is submitted that
in the present case, the High Court having examined the facts and the
record, has categorically observed that the appellant has indulged in
‘changing the goal posts’ and ‘giving a long rope to the other Bidders’,
while adopting ‘an allergic attitude towards the respondent’. It is
submitted that before the High Court, the respondent also specifically
alleged ‘mala fide’ on the part of the appellant.
30
4.14 Now, so far as the submission on behalf of the appellant that there
would be a cascading effect of the impugned order is concerned, it is
submitted that the aforesaid is not sustainable, in view of the fact that
after the impugned order, till date the appellant has awarded or is in the
process of awarding contracts for other Packages cumulating to about
Rs. 5,000 crores already.
4.15 Now so far as the documents produced by the appellant before
this Court by way of I.A. No.128406 of 2021 and I.A. No.132078 of 2021
are concerned, it is submitted that as they do not form part of the record
before the High Court and therefore, the same may not be considered by
this Hon’ble Court. It is submitted that nothing has been stated why the
same could not be placed before the Hon’ble High Court.
4.16 Making above submissions, it is prayed to dismiss the present
appeal and direct the appellant to proceed and further evaluate the Bid
submitted by the respondent in accordance with the terms of the Bid
Document.

5. Heard learned counsel for the respective parties at length.
6. By the impugned judgment and order, the High Court has allowed
the writ petition preferred by the respondent herein – original writ
petitioner and has quashed the communications dated 27.04.2021 and
31
28.04.2021 and the notification dated 28.04.2021 by which the technical
Bid submitted by the respondents – original writ petitioners was rejected
on the ground that the same is non-responsive and consequently the
High Court has directed to proceed in accordance with law qua the
tender process by further examining the Bid of the respondent herein –
original writ petitioner.
6.1 Therefore, the short question which is posed for the consideration
of this Court is whether in the facts and circumstances of the case and
with respect to such a foreign funded project, the High Court is justified
in interfering with the tender process in absence of any specific
allegations of mala fides and/or favouritism?
6.2 While considering the aforesaid issue, the nature of the project and
few relevant chronological dates and events are required to be noted,
referred to and considered.
6.3 The present matter pertains to the tender floated for works in
Package C8, which is a part of various other Packages being finalized
for the implementation of the Mumbai-Ahmedabad High Speed Rail
popularly known as Bullet Train Project. It cannot be disputed that the
Bullet Train Project is very important and National project. The Bullet
Train Project is a fully foreign funded project, which was envisaged when
the Japanese and Indian Governments entered into a Memorandum of
32
Understanding, pursuant to which it was agreed that the said project
would be fully funded by a Concessional Official Development
Assistance (ODA) loan of Rs.1 lakh crores by the Japan International
Cooperation Agency. It appears that before the loan agreement was
entered into, a Memorandum of Understanding / Agreement was entered
into between the two Prime Ministers - Japan and the India, which
provided how the project would be financed and operated. From the
Memorandum of Understanding, it appears that the loan was on
diplomatic consideration and was based on Republic of India’s position
in commodity of nations due to which a huge loan was granted to India
with provisions of:- (i) technology transfer (which is unavailable in India);
(ii) Indian Human resource training/development by Japan International
Cooperation Agency and its consultant for operation of the said projects;
and (iii) provision to ‘Make in India’ the bullet train which would be
operating under the said project. That thereafter a discussion was held
between the JICA and the Ministry of Railways, Government of India on
26.09.2016 and the discussion was recorded on various aspects
including the project objectives, selection of the consultant(s),
implementation schedule, Products (Draft and final documents for
adoption by the Ministry of Railways), which included:- (1) Technical
specifications and standards, as required for the project (excluding those
prepared under the Follow-up Study); (2) Basic Design Documents
including drawings and Design Basis Reports necessary for bidding or
33
implementation of the Project; (3) Standard Design Documents
including drawings and Design Basis Reports necessary for bidding or
implementation of the Project; (4) Detailed Design Documents including
drawings and Design Basis Reports necessary for bidding or
implementation of the Project; (5) Bidding Documents, including
Prequalification Documents (hereinafter referred to as “Bidding
Documents”); (6) General Arrangements Drawings (hereinafter referred
to as “GAD"); (7) Cost Estimate of the Project; (8) Construction
Standards; and (9) Updated Resettlement Action Pion, Environment
Impact Assessment and Environmental Management Plan which were
prepared under the Joint F/S.
6.4 A detailed discussion took place with respect to the role of JICA,
Consultant (JICC) and the Ministry of Railways. The relevant clauses of
the record of discussion for General Consultancy (excluding supervision)
of the Bullet Train Project between JICA and Ministry of Railways are as
under:-
“1. Project Objectives
With the Final Alignment Design (FAD) being prepared
as part of the Follow-up Study, the objectives of the General
Consultancy (hereinafter referred to as “the Study”) are to
prepare technical specification and standards (excluding
those prepared under the Follow-up study), Basic Design
Documents, Standard Design Documents, Detailed Design
Documents (along with Design Basis Reports (set of
conditions and requirements taken into account in designing)
necessary for bidding or implementation of the Project,
Bidding Documents, Engineering Cost Estimation and
34
Construction Standard for the Project which are to be
adopted by the Ministry of Railways (hereinafter referred to
as “the MOR”), to prepare General Arrangement Drawings
(hereinafter referred to as “GAD”), Environment and Social
Impact Assessment and to support the MOR for procurement
of contractors. It is confirmed by the MOR that the drawings
and documents to be formulated by the Study will be utilized
for procurement of the Project, only after they are adopted
and endorsed by the MOR.
3. Selection of the Consultant(s)
A Japanese consultant firm(s) will be selected and
engaged by JICA for the implementation of the Study
(hereinafter referred to as “the JICA Consultant (s)”)
6.2 Products (Draft and final documents for adoption
by the MoR)
(1) Technical specifications and standards, as required for
the project (excluding those prepared under the
Follow-up Study);
(2) Basic Design Documents including drawings and
Design Basis Reports necessary for bidding or
implementation of the Project;
(3) Standard Design Documents including drawings and
Design Basis Reports necessary for bidding or
implementation of the Project;
(4) Detailed Design Documents including drawings and
Design Basis Reports necessary for bidding or
implementation of the Project;
(5) Bidding Documents, including Prequalification
Documents (hereinafter referred to as “Bidding
Documents”);
(6) General Arrangements Drawings (hereinafter referred
to as “GAD");
(7) Cost Estimate of the Project;
(8) Construction Standards; and
35
(9) Updated Resettlement Action Pion, Environment
Impact Assessment and Environmental Management
Plan which were prepared under the Joint F/S.
7. Implementing Arrangements
7.1 Precondition for the Commencement of the Study
The MOR will complete the items described in Annex 2
at its own cost and expense, and submit them to JICA,
in a satisfactory manner, prior to the commencement of
the Study, Neither JICA nor JICA Consultant(s) will
have any obligation to commence the Study unless
such preconditions are satisfied.
7.3 Implementation Arrangement
The MOR and the JICA Consultant(s) will be
responsible in the following manner for completing the
Study in order to ensure a smooth procurement
procedure of the Protect.
(1) The JICA Consultant(s) will prepare the Draft
Design Documents and technical specification and
standards as required under this study and submit
them to the MOR.
(2) The MOR will review the Draft Design Documents
as well as technical specification and standards. It
will give comments, if any, within 15 days of
submission of the Draft Design Documents by the
JICA Consultant(s). The JICA Consultant(s) will
consider these comments and incorporate them
appropriately, wherever the JICA Consultant(s)
consider it necessary. If no comments are
submitted by the MOR by the said deadline, it will
be deemed that the MOR has no comments to
offer.
(3) The JICA Consultant(s) will then forward these
documents and technical specification and
standards along with the comments from the MOR
to the committee for their review, as mentioned in
paragraph 8.2.
36
(4) The MOR will adopt the outcomes of the study
based on the recommendations of the committee
within 15 days of receiving the final documents
duly recommended. If the intimation for adoption
by the MOR is not issued by the said deadline, the
documents/outcomes will be deemed to be
adopted by the MOR. JICA will notify the MOR in a
written form after such deemed adoption.
7.4 The JICA Consultant(s)
The JICA Consultant(s) will work on the comments and
requests of the MOR with all due technical diligence to
the extent of the TOR stipulated in this Record of
Discussion between the MOR and JICA.
7.5 Consultation
JICA, the JICA Consultant(s) and the MOR will consult
each other in good faith in respect of any matter that
may arise from or in connection with the Study,
including any disputes among from this document.
When a dispute that cannot be solved through an
amicable consultation among the three parties arises,
both sides will consult their relevant government
authorities to solve such dispute.
8. Products of the Study
8.1 Services of the JICA Consultant(s)
The JICA Consultant(s) will provide the following
services:-
(1) Customize and provide all technical
specifications and standards required for design
and operation of High Speed Rail systems, along
with their technical commentary (excluding those
prepared under Follow- up study)
(2) Preparation of Basic Design Documents
including drawings and Design Basis Reports
necessary for bidding or implementation of the
Project;
(3) Preparation of Standard Design Documents
including drawings and Design Basis Reports
37
necessary for bidding or implementation of the
Project;
(4) Preparation of Detailed Design Documents
including drawings and Design Basis Reports
necessary for bidding or implementation of the
Project;
(5) Preparation of Bidding Documents;
(6) Preparation of Engineering Cost Estimation;
(7) Preparation of Construction Standard;
(8) Support to the MOR for procurement of
contractors;
(9) preparation of GAD; and
(10) Review and update of the Resettlement Action
Plan, Environment Impact Assessment and
Environmental management Plan, which were
prepared under the Joint F/S.
It is the MOR’s responsibility to provide
necessary, accurate and appropriate
data/information to JICA and the JICA
Consultant(s), so as to finalize the documents
listed at (2) to (4), (hereinafter collectively
referred to as ''the Draft Design Documents”) and
(1), (5) to (7) and (9) to (10) so that they can be
utilized only for the procurement (bidding)
process and construction work of the Project.
8.2 Adoption by the MOR
Upon request from the relevant government
authorities of Japan, JICA will set up a committee
composed of experts of Japanese high speed
railway (hereinafter referred to as "the
Committee") to review the organization structure,
the process and the GC's work for the Draft
Design Documents, technical specification and
standards which are developed through the
Fellow-up Study and the Study. The Committee
offer its review may require the JICA
Consultant(s) to revise the documents. The JICA
Consultant(s) will revise the documents as
38
advised by the committee and resubmit them for
the Committee's review. The Committee, when
satisfied, will issue a letter to the MOR
recommending the Draft Design Documents for
adoption by the MOR.
The MOR will conduct technical inspection to
review the technical aspects of the Final Design
Documents and Construction Standard and
adopt the Final Design Documents. the Bidding
Documents, the Engineering Cost Estimation,
and the Construction Standard in a written form,
as the executing agency of the Project, for use of
these documents on the Project, at its own
expense.
The MOR acknowledges and confirms that the
JICA and the Committee, or the Committee
members will not bear any liability and
responsibility in connection with their review of
the Draft Design Documents and technical
specification and standards. The MOR will
indemnify and hold harmless JICA, the
Committee and the Committee members against
any claim from any third parties that may arise
from or in connection with such review.”
6.5 As per Annexure I to the said Record of Discussion, the JICA
consultant was to prepare GAD on all aspects mentioned in Clause 2,
which included preparation of Bidding Documents. Clause 2.8 and
Clause 3, which are relevant for our purpose are as under:-
“2.8 Preparation of Bidding Documents
The JICA Consultant(s) will prepare the Draft Bidding
Documents for each contract package in accordance with
the latest version of Standard Bidding Documents under
Japanese ODA Loans together with all relevant
specifications, drawings and other documents, which are
consisting of the following documents:-
a. Instruction to Bidders;
39
b. Bid Form;
c. General Conditions of Contract;
d. Particular Conditions of Contract;
e. General Specifications;
f. Technical Specifications;
g. Bill of Quantities based on the design drawings for
detailed design packages and price schedule for
design and built packages;
h. Design Drawing;
i. Contract Form;
j. Bid Security Form;
k. Performance Security Form: and
I. Employer's Requirement.
3) Tender Assistance
3)-1 Assistance in Pre-Qualification (P/Q)
The JICA Consultant(s) will:
a. define technical and financial requirements, capacity
and/or experience for P/Q criteria taking into
consideration technical features of the Project and the
capabilities of industry in both countries;
b. prepare draft P/Q documents in accordance with the
latest version of Standard Prequalification Documents
under Japanese ODA Loans,
c. assist the MOR in P/Q announcement,
addendum/corrigendum, and clarifications to the
applicants' queries,
d. assist the MOR in evaluating P/Q applicants in
accordance with the criteria set forth in PQ documents;
and
e. prepare a draft P/Q evaluation report for approval by
the P/Q evaluation committee of the MOR.
3)-2 Assistance in the Bidding Procedure
The JICA Consultant(s) will:-
40
a. assist the MOR in issuing bid invitation, conducting prebid meetings, issuing addendum/corrigendum, and
clarifications to bidders' queries;
b. assist the MOR in evaluating bids in accordance with the
criteria set forth in the bidding documents;
c. prepare a draft bid evaluation report for approval by the
bid evaluation committee of the MOR;
d. assist the MOR in contract negotiation by preparing
agenda and facilitating negotiations. including preparation
of minutes of negotiation meetings; and
e. prepare a draft contract agreement.”
6.6 That the Japan International Consultants Consortium (JICC) was
appointed by JICA. That thereafter a loan agreement No.ID-P277 came
to be entered into between JICA and the President of India dated
28.09.2018 under which the JICA agreed to lend the Republic of India
approximately Rs.1 Lakh Crores on the terms and conditions mentioned
in the loan agreement. Article 1 provided for loan amount; Article II
provided for repayment, interest and Front-End Fee; Article III provided
for Particular Covenants, which included, Section 1 – General Terms and
Conditions, Section 2 – Procurement Procedure and Section 3 –
Disbursement Procedure. Thereafter the Bidding Documents were
prepared based on JICA’s Standard Bidding Documents as well as
JICA’s procurement guidelines, which was an integral part of the loan
agreement. The Bidding Documents were prepared by the JICC –
41
consultant approved/weighed by the JICA. From the aforesaid, it
appears that the entire tender process was to be carried out by the
Consultant – JICC, approved by JICA and the Ministry of Railways can
be said to be only an implementing agency.
6.7 That thereafter the tenders came to be invited taking into
consideration the Record of Discussion for General Consultancy of the
Project and Loan Agreement and JICA’s Standard Bidding Guidelines
and Guidelines for procurement under the Japanese ODA Loans. The
Bidding Documents were prepared by the JICC (consultant) and
approved by JICA. That evaluation of the Technical Bids was carried
out by JICC (consultant), which was appointed by JICA. At this stage, it
is required to be noted that the JICC was appointed in terms of the
specific understanding between the Borrower (Republic of India) and
JICA with the specific mandate to support the Ministry of Railways for
preparation of Bidding Documents including Prequalification Documents
and procurement of contractors for the construction of the Project. It is
required to be noted that the Bidding Documents were prepared as per
JICA’s International Guidelines and as per the terms and conditions of
the Loan Agreement as observed hereinabove.
6.8 That Nine Bidders including the respondent herein – original writ
petitioner submitted their Bids. That Technical Bid of Nine Bidders was
42
evaluated by JICC as per JICA’s International Guidelines. The
evaluation of the Technical Bids was carried out as per Evaluation and
Qualification Criteria in four stages namely, (i) - Stage 1 – Evaluation of
Administrative Requirements; (ii) Stage 2 – Evaluation of Compliance
and Responsiveness; (iii) Stage 3 – Evaluation of Compliance with
Qualification Requirements; and (iv) Stage 4 – Technical Evaluation.
6.9 It appears that during the course of technical evaluation,
clarification was sought from four Bidders (other than the respondent
herein - original writ petitioner, who was Bidder No.5/9). It was found
that respondent herein – original writ petitioner had material deviation in
its Bid and therefore it was disqualified at Stage 1. The Bid submitted by
other Bidders, i.e., 2/9, 4/9, 6/9 and 8/9, which also had material
deviation, their respective Bids were not further evaluated. A conscious
decision was taken by the consultant – JICC holding that the Bid
submitted by the original writ petitioner was non-responsive and was
suffering from material deviation. By communication dated 23.03.2021,
accepting the report, which was prepared as per the Evaluation and
Qualification Criteria, a conscious decision was taken by the JICC
(Consultant) that five Bidders namely Bidder Nos. 2/9, 4/9, 5/9, 6/9 and
8/9 be disqualified. Thereafter, the JICC took a conscious decision
accepting the Draft Final Technical Bid Evaluation Report and it was
observed that JICC has determined that the Technical Bids of Bidder
43
Nos. 1/9, 3/9, 7/9 and 9/9 are substantially responsive. That thereafter
JICA concurred with the decision of the JICC holding that the Technical
Bids of the above four Bidders are substantially responsive and
compliant to the Technical Requirements of the Bidding Documents.
That thereafter the JICC recommended the NHSRCL, the opening of the
Price Bid of the aforesaid four Bidders after JICA’s concurrence of the
Final Technical Bid Evaluation Report, which as observed hereinabove,
the JICA concurred.
6.10 From the aforesaid, it appears that a conscious decision has been
taken by the JICC (consultant) approved/concurred by the JICA on the
Bid submitted by the original writ petitioner as non-responsive and noncompliant to the technical requirements of the Bidding Documents. The
decision of the JICC and JICA has been followed by the appellant herein
– Corporation, which otherwise, they were bound to as per the terms and
conditions of the loan agreement as well as the general terms and
conditions referred to hereinabove.
6.11 From the aforesaid, it can be seen that the decision to hold that the
Bid was not responsive was of JICC. Under the contractual mechanism,
the appellant had no authority to deviate from the evaluation done by
JICC. Any deviation by the appellant or Government of India may not be
acceptable by JICA, who has agreed to fund a huge sum of
approximately Rs. 1 lakh crores for the Bullet Train Project, which was
44
funded on the terms and conditions agreed between the JICA and the
Republic of India / Hon’ble the President of India. It is ultimately for the
JICC/JICA to take a decision whether the Bid submitted by a particular
Bidder is responsive or not and/or compliant or not to the technical
requirements of the Bidding Documents. From the impugned judgment
and order passed by the High Court, it appears that what is weighed by
the High Court is that some of the Bidders were called for negotiation
and the original writ petitioner was not called for the negotiation and
therefore the High Court has held that the action of the appellant is
discriminatory and violative of Article 14 of the Constitution of India.
However, the High Court has not appreciated that it was the decision of
the JICC concurred by the JICA that the Bid submitted by the original
writ petitioner was non-responsive and non-compliant to the technical
requirements of the Bidding Documents. It appears that the JICC
thought it fit to call clarification from some of the Bidders at the initial
stage, however, it was found that the Bid submitted by the respondent –
original writ petitioner was suffering from material deviation, the JICC
thought it fit not to call for any explanation and/or clarification from the
original writ petitioner and the Bid submitted by the respondent – original
writ petitioner was rejected at the first stage itself, i.e., at the stage of
Technical Evaluation.
45
6.12 At the cost of repetition, it is observed that the appellant herein
acted as per the decision of the JICC concurred by JICA. As per the
contractual obligation and the terms and conditions of the loan
agreement as well as the Guidelines for procurement under the
Japanese ODA loans and the Memorandum of Understanding and the
terms and conditions on which the JICA agreed to fund a huge sum of
approximately Rs.1 lakh crores, the JICC and JICA can be said to be the
final authority and no contrary decision to the decision of the JICC/JICA
could have been taken by the appellant, more particularly, with respect
to the Bidding Process etc. It cannot be disputed that being the funding
agency, who has agreed to fund such a huge amount, role of the JICA is
very important and the JICA would always have an upper hand and the
say in the entire Project. From the material on record, we are satisfied
that the Bidding Procedure adopted is transparent, fair and does not
suffer from any arbitrariness. It is required to be noted that as such
there are no allegations of mala fides and/or favouritism either against
the appellant or against JICC and/or JICA.
7. In light of the above, it is required to be considered whether in the
facts and circumstances of the case, the High Court is justified in setting
aside the decision of the appellant / JICC / JICA in rejecting the Bid
submitted by the respondent – original writ petitioner on the ground that
it is non-responsive / non-compliant to the technical requirements of the
Bidding Documents.
46
7.1 While considering the aforesaid issue, few decisions of this Court
are required to be referred to and considered coupled with the fact that
Bullet Train Project is a high cost and MEGA Government Project and is
funded by a foreign country and which is one of the biggest National
Project. It is to be noted that foreign sovereign funded contracts, like the
present one, are completely different and distinct from the Government
Contracts/ Public Works Department Contracts / Public Private
Partnership Contracts, which are either wholly or partially funded from
public money, i.e., Consolidated Fund of India or of the State and
implemented by a statutory/local authority of the State. It cannot be
disputed that in the present case, Japan being friendly sovereign country
– a developed nation has agreed to fund a huge amount for a National
Project in favour of another friendly State – developing nation – in the
present case, the Republic of India. Such a huge sum/amount is funded
by the developed nation to implement the Project meant for development
of the developing nation – the Republic of India. The contracts are
entered into and the huge sum is funded on the basis of non-negotiated
terms and conditions and therefore, the foreign developed nation, who
has agreed to invest/fund such a huge amount is always justified in
insisting for their own terms and conditions on which such a huge
amount is funded.
47
7.2 At this stage, a decision of the Gujarat High Court, which has been
confirmed by this Court in the case of CRRC Corporation Ltd. Vs.
Metro-Link Express for Gandhinagar and Ahmedabad (MEGA)
Company Ltd. in Special Civil Application No.12833 of 2017 is
required to be referred to. In that case the Metro Rail Project was
financed by the JICA. One GEC was appointed as consultant. Bid
submitted by one of the Bidders was rejected on the ground that the
same was non-responsive. The decision was taken by the Metro Rail
Corporation after consulting JICA. Rejection of the Bid at Technical
Stage was the subject matter of writ petition before the High Court. One
of the submissions made on behalf of the Bidder was that the JICA
ought not to have been consulted and that decision could not have been
taken on the basis of the opinion of the JICA. While rejecting the
submission on behalf of the original writ petitioner that JICA ought not to
have been consulted, it was observed that when the entire project is
being financed by the JICA, and when JICA is going to fund the entire
project, the cost of which is Rs. 10,773 Crores, it is expected of the JICA
that the whole process of awarding tender has to be done and is being
done, after obtaining JICA's concurrence at all stages. It was held that
there is nothing wrong in involving JICA at every stage of tender process
and in obtaining JICA's concurrence on it. In the present case also, no
wrong has been committed by the appellant corporation in accepting
and/or taking decision to reject the original writ petitioner’s Bid at
48
Technical Stage on the basis of the decision of the JICC
approved/concurred by JICA.
7.3 It is required to be noted that as per the tender documents, all the
Bidders were required to adhere to the requirements as per the terms
and conditions mentioned in the tender document. There cannot be any
deviation by any Bidder. The terms and conditions of the tender
documents were settled by the JICA as per JICA’s International
Guidelines, which are required to be followed by all Bidders including the
original writ petitioner. Therefore, when the terms and conditions of the
tender document were settled by the JICA, it is ultimately for the
JICC/JICA to take a decision whether a Bid submitted by a particular
Bidder is non-responsive and/or non-compliant to the technical
requirements of the Bidding Documents. Therefore, when a conscious
decision has been taken by the JICC/JICA on the Bid submitted by the
original writ petitioner being non-responsive/non-compliant to the
technical requirements of the Bidding Documents, unless there are
specific allegations of mala fides and/or favouritism, the same could not
have been the subject matter of scrutiny by the High Court in exercise of
the powers under Article 226 of the Constitution of India.
7.4 At this stage, the decision of this Court in the case of Asia
Foundation and Construction Ltd. Vs. Trafalgar House Construction
(I) Ltd. and Ors., (1997) 1 SCC 738 is required to be referred to. In that
49
case, before this Court, the offer made by the Bidder, who was found to
be L1 was not accepted after consulting the international financial
institutions such as Asian Development Bank/World Bank, approving the
same, this Court observed that it is difficult for a country to go ahead with
such a high-cost projects unless the financial institutions the Asian
Development Bank and/or the World Bank grant loan/subsidy. It is
further observed that when such financial institutions grant such huge
loan, they always insist that for any project for which loan has been
sanctioned must be carried out in accordance with the specifications and
within the scheduled time and the procedure for granting the award must
be duly adhered to. In the case before this Court, there was some
dispute between the Bank on the one hand and the consultant, who was
called upon to evaluate bids on the question whether there is any power
of making any correction to the bid documents after a specified period.
The High Court after construing certain clauses of the bid documents
came to the conclusion that such a correction was permissible, and
therefore, the Bank could not have insisted upon granting the contract in
favour of the appellant therein. This Court did not accept the view taken
by the High Court by observing that it was not within the permissible
limits of interference for a court of law, particularly when the Court has
not found any mala fides / favouritism in the grant of contract.
50
7.5 From the impugned judgment and order passed by the High Court
and as observed hereinabove, the High Court has set aside the decision
of the appellant to reject the Bid submitted by the original writ petitioner
as non-responsive and suffering from material deviation on the ground of
violation of Article 14 of the Constitution of India by observing that other
Bidders were called for clarification but the original writ petitioner was not
called. However, as observed hereinabove, the appellant had taken a
decision as per the decision taken by the JICC/JICA. JICC/JICA took a
conscious decision to reject the Bid of the original writ petitioner as nonresponsive/non-complaint and the same was found to be material
deviation.
7.6 At this stage, it is to be noted that what can be said to be
substantially responsive Technical Bid has been defined under Article
33.2. The High Court in the impugned order has observed and held that
the Bid submitted by the original writ petitioner can be said to be
substantially responsive Technical Bid. However, it is required to be
noted that when the author of the tender document, in the present case,
JICC/JICA, had taken a conscious decision that the Bid submitted by the
respondent – original writ petitioner can be said to be non-responsive
and suffering from material deviation, it was not for the High Court to
consider/opine whether the Bid submitted by the original writ petitioner is
51
substantially responsive Technical Bid or not unless the decision is found
to be perverse and/or suffered from mala fides and/or favoritism.
7.7 At the cost of repetition, it is to be noted that under the contractual
obligation, it was not open for the appellant – corporation and/or even
the Republic of India to deviate from any of the terms and conditions of
the loan agreement and/or the decision of JICC/JICA. Therefore, in
absence of any allegation of mala fides/arbitrariness and/or favouritism,
we are of the opinion that the High Court has committed a grave error in
interfering with a conscious decision taken by the JICC/JICA, which has
been followed by the appellant.
7.8 At this stage, few decisions of this Court on the interference by the
Courts in the tender matters are required to be referred to:-
7.8.1 In the case of Afcons Infrastructure Limited Vs. Nagpur Metro
Rail Corporation Limited, AIR 2016 SC 4305, this Court in paras 11 to
13 and 15 has observed and held as under :-
“11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint
Venture Consortium), (2016) 8 SCC 622, it was held by this
Court, relying on a host of decisions that the decisionmaking process of the employer or owner of the project in
accepting or rejecting the bid of a tenderer should not be
interfered with. Interference is permissible only if the
decision-making process is mala fide or is intended to favour
someone. Similarly, the decision should not be interfered
52
with unless the decision is so arbitrary or irrational that the
Court could say that the decision is one which no
responsible authority acting reasonably and in accordance
with law could have reached. In other words, the decisionmaking process or the decision should be perverse and not
merely faulty or incorrect or erroneous. No such extreme
case was made out by GYT-TPL JV in the High Court or
before us.
12. In Dwarkadas Marfatia and Sons v. Port of Bombay,
(1989) 3 SCC 293, it was held that the constitutional courts
are concerned with the decision-making process. Tata
Cellular v. Union of India, (1994) 6 SCC 651 went a step
further and held that a decision if challenged (the decision
having been arrived at through a valid process), the
constitutional courts can interfere if the decision is perverse.
However, the constitutional courts are expected to exercise
restraint in interfering with the administrative decision and
ought not to substitute its view for that of the administrative
authority. This was confirmed in Jagdish Mandal v. State of
Orissa, (2007) 14 SCC 517, as mentioned in Central
Coalfields Ltd. v. SLL-SML (Joint Venture Consortium),
(2016) 8 SCC 622.
13. In other words, a mere disagreement with the
decision-making process or the decision of the
administrative authority is no reason for a constitutional court
to interfere. The threshold of mala fides, intention to favour
someone or arbitrariness, irrationality or perversity must be
met before the constitutional court interferes with the
decision-making process or the decision.
15. We may add that the owner or the employer of a
project, having authored the tender documents, is the best
person to understand and appreciate its requirements and
interpret its documents. The constitutional courts must defer
to this understanding and appreciation of the tender
documents, unless there is mala fide or perversity in the
understanding or appreciation or in the application of the
terms of the tender conditions. It is possible that the owner
or employer of a project may give an interpretation to the
53
tender documents that is not acceptable to the constitutional
courts but that by itself is not a reason for interfering with the
interpretation given.”
7.8.2 In the case of B.S.N. Joshi & Sons Ltd. Vs. Nair Coal Services
Ltd. and Ors., (2006) 11 SCC 548, after considering the various
decisions of this Court on the point enumerated in para 66, this Court
has observed and held as under:
“66. We are also not shutting our eyes towards the
new principles of judicial review which are being developed;
but the law as it stands now having regard to the principles
laid down in the aforementioned decisions may be
summarised as under:
(i) if there are essential conditions, the same must be
adhered to;
(ii) if there is no power of general relaxation, ordinarily
the same shall not be exercised and the principle of strict
compliance would be applied where it is possible for all the
parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the
parties in regard to any of such conditions, ordinarily again a
power of relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such
relaxation should not ordinarily be allowed to take a different
stand in relation to compliance with another part of tender
contract, particularly when he was also not in a position to
comply with all the conditions of tender fully, unless the court
otherwise finds relaxation of a condition which being
essential in nature could not be relaxed and thus the same
was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate
authority upon due consideration of the tender document
submitted by all the tenderers on their own merits and if it is
ultimately found that successful bidders had in fact
substantially complied with the purport and object for which
54
essential conditions were laid down, the same may not
ordinarily be interfered with;
(vi) the contractors cannot form a cartel. If despite the
same, their bids are considered and they are given an offer
to match with the rates quoted by the lowest tenderer, public
interest would be given priority;
(vii) where a decision has been taken purely on public
interest, the court ordinarily should exercise judicial
restraint.”
7.8.3 In the case of Michigan Rubber (India) Limited Vs. State of
Karnataka, (2012) 8 SCC 216, after considering various other decisions
of this Court on the point, more particularly, after considering the
decisions in the case of Jagdish Mandal (supra) and Tejas
Constructions and Infrastructure (P) Ltd. (supra), in paras 23 and 24,
this Court has observed and held as under:
“23. From the above decisions, the following principles
emerge:
(a) The basic requirement of Article 14 is fairness
in action by the State, and non-arbitrariness in
essence and substance is the heartbeat of fair
play. These actions are amenable to the judicial
review only to the extent that the State must act
validly for a discernible reason and not
whimsically for any ulterior purpose. If the State
acts within the bounds of reasonableness, it
would be legitimate to take into consideration the
national priorities;
(b) Fixation of a value of the tender is entirely
within the purview of the executive and the courts
hardly have any role to play in this process
except for striking down such action of the
55
executive as is proved to be arbitrary or
unreasonable. If the Government acts in
conformity with certain healthy standards and
norms such as awarding of contracts by inviting
tenders, in those circumstances, the interference
by courts is very limited;
(c) In the matter of formulating conditions of a
tender document and awarding a contract,
greater latitude is required to be conceded to the
State authorities unless the action of the
tendering authority is found to be malicious and a
misuse of its statutory powers, interference by
courts is not warranted;
(d) Certain preconditions or qualifications for
tenders have to be laid down to ensure that the
contractor has the capacity and the resources to
successfully execute the work; and
(e) If the State or its instrumentalities act
reasonably, fairly and in public interest in
awarding contract, here again, interference by
court is very restrictive since no person can claim
a fundamental right to carry on business with the
Government.
24. Therefore, a court before interfering in tender or
contractual matters, in exercise of power of judicial review,
should pose to itself the following questions:
(i) Whether the process adopted or decision made by the
authority is mala fide or intended to favour someone; or
whether the process adopted or decision made is so
arbitrary and irrational that the court can say: “the decision is
such that no responsible authority acting reasonably and in
accordance with relevant law could have reached”? and
(ii) Whether the public interest is affected?
56
If the answers to the above questions are in the
negative, then there should be no interference under Article
226.”
7.8.4 In the case of the Central Coalfields Limited & Anr. Vs. SLLSML [A Joint Venture Consortium] and Ors., (2016) 8 SCC 622, it is
specifically observed and held by this Court that the Court must, as far
as possible, avoid a construction which would render the words used by
the author of the document meaningless and futile or reduce to silence
any part of the document and make it altogether inapplicable. It is further
observed that whether a term of NIT is essential or not is a decision
taken by the employer, which should be respected and soundness of
that decision cannot be questioned by Court. In the case before this
Court, the bid was rejected for non furnishing of bank guarantee in
prescribed format. While submitting EMD by furnishing bank guarantee
in format prescribed by GTC of another tender and the bidder took the
plea that bank guarantee format of present tender was ambiguous.
Rejecting the claim of the bidder and upholding the decision of the
employer of rejection of bid for non-compliance of submitting the bank
guarantee in prescribed format, this Court in paras 31 to 38, 42 to 44, 47
to 49, 52, 55 and 56 has observed and held as under:
“31. We were informed by the learned Attorney
General that 9 of the 11 bidders furnished a bank guarantee
in the prescribed and correct format. Under these
circumstances, even after stretching our credulity, it is
extremely difficult to understand why JVC was unable to
57
access the prescribed format for the bank guarantee or
furnish a bank guarantee in the prescribed format when
every other bidder could do so or why it could not seek a
clarification or why it could not represent against any
perceived ambiguity. The objection and the conduct of JVC
regarding the prescribed format of the bank guarantee or a
supposed ambiguity in NIT does not appear to be fully above
board.
32. The core issue in these appeals is not of judicial
review of the administrative action of CCL in adhering to the
terms of NIT and the GTC prescribed by it while dealing with
bids furnished by participants in the bidding process. The
core issue is whether CCL acted perversely enough in
rejecting the bank guarantee of JVC on the ground that it
was not in the prescribed format, thereby calling for judicial
review by a constitutional court and interfering with CCL's
decision.
33. In Ramana Dayaram Shetty v. International Airport
Authority of India, (1979) 3 SCC 489, this Court held that the
words used in a document are not superfluous or redundant
but must be given some meaning and weightage: (SCC p.
500, para 7)
“7. … It is a well-settled rule of interpretation
applicable alike to documents as to statutes that,
save for compelling necessity, the Court should
not be prompt to ascribe superfluity to the
language of a document “and should be rather at
the outset inclined to suppose every word
intended to have some effect or be of some use”.
To reject words as insensible should be the last
resort of judicial interpretation, for it is an
elementary rule based on common sense that no
author of a formal document intended to be acted
upon by the others should be presumed to use
words without a meaning. The court must, as far
as possible, avoid a construction which would
render the words used by the author of the
document meaningless and futile or reduce to
58
silence any part of the document and make it
altogether inapplicable.”
34. In Ramana Dayaram Shetty case, the expression
“registered IInd Class hotelier” was recognised as being
inapt and perhaps ungrammatical; nevertheless common
sense was not offended in describing a person running a
registered IInd grade hotel as a registered IInd class hotelier.
Despite this construction in its favour, Respondent 4 in that
case were held to be factually ineligible to participate in the
bidding process.
35. It was further held that if others (such as the
appellant in Ramana Dayaram Shetty case) were aware that
non-fulfilment of the eligibility condition of being a registered
IInd class hotelier would not be a bar for consideration, they
too would have submitted a tender, but were prevented from
doing so due to the eligibility condition, which was relaxed in
the case of Respondent 4. This resulted in unequal
treatment in favour of Respondent 4 — treatment that was
constitutionally impermissible. Expounding on this, it was
held: (SCC p. 504, para 10)
“10. … It is indeed unthinkable that in a
democracy governed by the rule of law the
executive Government or any of its officers
should possess arbitrary power over the interests
of the individual. Every action of the executive
Government must be informed with reason and
should be free from arbitrariness. That is the very
essence of the rule of law and its bare minimal
requirement. And to the application of this
principle it makes no difference whether the
exercise of the power involves affectation of
some right or denial of some privilege.”
(emphasis supplied)
36. Applying this principle to the present appeals, other
bidders and those who had not bid could very well contend
that if they had known that the prescribed format of the bank
guarantee was not mandatory or that some other term(s) of
59
NIT or GTC were not mandatory for compliance, they too
would have meaningfully participated in the bidding process.
In other words, by rearranging the goalposts, they were
denied the “privilege” of participation.
37. For JVC to say that its bank guarantee was in
terms stricter than the prescribed format is neither here nor
there. It is not for the employer or this Court to scrutinise
every bank guarantee to determine whether it is stricter than
the prescribed format or less rigorous. The fact is that a
format was prescribed and there was no reason not to
adhere to it. The goalposts cannot be rearranged or asked to
be rearranged during the bidding process to affect the right
of some or deny a privilege to some.
38. In G.J. Fernandez v. State of Karnataka, (1990) 2
SCC 488, both the principles laid down in Ramana Dayaram
Shetty were reaffirmed. It was reaffirmed that the party
issuing the tender (the employer) “has the right to
punctiliously and rigidly” enforce the terms of the tender. If a
party approaches a court for an order restraining the
employer from strict enforcement of the terms of the tender,
the court would decline to do so. It was also reaffirmed that
the employer could deviate from the terms and conditions of
the tender if the “changes affected all intending applicants
alike and were not objectionable”. Therefore, deviation from
the terms and conditions is permissible so long as the level
playing field is maintained and it does not result in any
arbitrariness or discrimination in Ramana Dayaram
Shetty sense.
42. Unfortunately, this Court in Poddar Steel
Corpn. v. Ganesh Engg. Works, (1991) 3 SCC 273 did not at
all advert to the privilege-of-participation principle laid down
in Ramana Dayaram Shetty and accepted in G.J.
Fernandez. In other words, this Court did not consider
whether, as a result of the deviation, others could also have
become eligible to participate in the bidding process. This
principle was ignored in Poddar Steel.
60
43. Continuing in the vein of accepting the inherent
authority of an employer to deviate from the terms and
conditions of an NIT, and reintroducing the privilege-ofparticipation principle and the level playing field concept, this
Court laid emphasis on the decision-making process,
particularly in respect of a commercial contract. One of the
more significant cases on the subject is the three-Judge
decision in Tata Cellular v. Union of India, (1994) 6 SCC 651
which gave importance to the lawfulness of a decision and
not its soundness. If an administrative decision, such as a
deviation in the terms of NIT is not arbitrary, irrational,
unreasonable, mala fide or biased, the courts will not
judicially review the decision taken. Similarly, the courts will
not countenance interference with the decision at the behest
of an unsuccessful bidder in respect of a technical or
procedural violation. This was quite clearly stated by this
Court (following Tata Cellular) in Jagdish Mandal v. State of
Orissa, (2007) 14 SCC 517] in the following words: (SCC p.
531, para 22)
“22. Judicial review of administrative action is
intended to prevent arbitrariness, irrationality,
unreasonableness, bias and mala fides. Its
purpose is to check whether choice or decision is
made “lawfully” and not to check whether choice
or decision is “sound”. When the power of judicial
review is invoked in matters relating to tenders or
award of contracts, certain special features
should be borne in mind. A contract is a
commercial transaction. Evaluating tenders and
awarding contracts are essentially commercial
functions. Principles of equity and natural justice
stay at a distance. If the decision relating to
award of contract is bona fide and is in public
interest, courts will not, in exercise of power of
judicial review, interfere even if a procedural
aberration or error in assessment or prejudice to
a tenderer, is made out. The power of judicial
review will not be permitted to be invoked to
protect private interest at the cost of public
interest, or to decide contractual disputes. The
61
tenderer or contractor with a grievance can
always seek damages in a civil court. Attempts
by unsuccessful tenderers with imaginary
grievances, wounded pride and business rivalry,
to make mountains out of molehills of some
technical/procedural violation or some prejudice
to self, and persuade courts to interfere by
exercising power of judicial review, should be
resisted. Such interferences, either interim or
final, may hold up public works for years, or
delay relief and succour to thousands and
millions and may increase the project cost
manifold.”
This Court then laid down the questions that ought to
be asked in such a situation. It was said: (Jagdish Mandal
case, SCC p. 531, para 22)
“22. … Therefore, a court before interfering in
tender or contractual matters in exercise of
power of judicial review, should pose to itself the
following questions:
(i) Whether the process adopted or decision
made by the authority is mala fide or intended to
favour someone;
or
Whether the process adopted or decision made
is so arbitrary and irrational that the court can
say: “the decision is such that no responsible
authority acting reasonably and in accordance
with relevant law could have reached”;
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no
interference under Article 226.”
44. On asking these questions in the present appeals,
it is more than apparent that the decision taken by CCL to
adhere to the terms and conditions of NIT and the GTC was
62
certainly not irrational in any manner whatsoever or intended
to favour anyone. The decision was lawful and not unsound.
47. The result of this discussion is that the issue of the
acceptance or rejection of a bid or a bidder should be looked
at not only from the point of view of the unsuccessful party
but also from the point of view of the employer. As held
in Ramana Dayaram Shetty the terms of NIT cannot be
ignored as being redundant or superfluous. They must be
given a meaning and the necessary significance. As pointed
out in Tata Cellular there must be judicial restraint in
interfering with administrative action. Ordinarily, the
soundness of the decision taken by the employer ought not
to be questioned but the decision-making process can
certainly be subject to judicial review. The soundness of the
decision may be questioned if it is irrational or mala fide or
intended to favour someone or a decision “that no
responsible authority acting reasonably and in accordance
with relevant law could have reached” as held in Jagdish
Mandal followed in Michigan Rubber.
48. Therefore, whether a term of NIT is essential or not
is a decision taken by the employer which should be
respected. Even if the term is essential, the employer has
the inherent authority to deviate from it provided the
deviation is made applicable to all bidders and potential
bidders as held in Ramana Dayaram Shetty. However, if the
term is held by the employer to be ancillary or subsidiary,
even that decision should be respected. The lawfulness of
that decision can be questioned on very limited grounds, as
mentioned in the various decisions discussed above, but the
soundness of the decision cannot be questioned, otherwise
this Court would be taking over the function of the tender
issuing authority, which it cannot.
49. Again, looked at from the point of view of the
employer if the courts take over the decision-making function
of the employer and make a distinction between essential
and non-essential terms contrary to the intention of the
employer and thereby rewrite the arrangement, it could lead
to all sorts of problems including the one that we are
63
grappling with. For example, the GTC that we are concerned
with specifically states in Clause 15.2 that “Any bid not
accompanied by an acceptable Bid Security/EMD shall be
rejected by the employer as non-responsive”. Surely, CCL ex
facie intended this term to be mandatory, yet the High Court
held that the bank guarantee in a format not prescribed by it
ought to be accepted since that requirement was a nonessential term of the GTC. From the point of view of CCL,
the GTC has been impermissibly rewritten by the High Court.
52. There is a wholesome principle that the courts
have been following for a very long time and which was
articulated in Nazir Ahmad v. King Emperor, AIR 1936 PC
253 (2), namely:
“… where a power is given to do a certain thing
in a certain way the thing must be done in that
way or not at all. Other methods of performance
are necessarily forbidden.”
There is no valid reason to give up this salutary principle or
not to apply it mutatis mutandis to bid documents. This
principle deserves to be applied in contractual disputes,
particularly in commercial contracts or bids leading up to
commercial contracts, where there is stiff competition. It
must follow from the application of the principle laid down
in Nazir Ahmad that if the employer prescribes a particular
format of the bank guarantee to be furnished, then a bidder
ought to submit the bank guarantee in that particular format
only and not in any other format. However, as mentioned
above, there is no inflexibility in this regard and an employer
could deviate from the terms of the bid document but only
within the parameters mentioned above.
55. On the basis of the available case law, we are of
the view that since CCL had not relaxed or deviated from the
requirement of furnishing a bank guarantee in the prescribed
format, insofar as the present appeals are concerned every
bidder was obliged to adhere to the prescribed format of the
bank guarantee. Consequently, the failure of JVC to furnish
64
the bank guarantee in the prescribed format was sufficient
reason for CCL to reject its bid.
56. There is nothing to indicate that the process by
which the decision was taken by CCL that the bank
guarantee furnished by JVC ought to be rejected was flawed
in any manner whatsoever. Similarly, there is nothing to
indicate that the decision taken by CCL to reject the bank
guarantee furnished by JVC and to adhere to the
requirements of NIT and the GTC was arbitrary or
unreasonable or perverse in any manner whatsoever.”
7.8.5 In the case of Maa Binda Express Carrier & Anr. Vs. North
Eastern Frontier Railway & Ors., (2014) 3 SCC 760, this Court had an
occasion to consider the scope of judicial review in the matters relating
to award of contracts by the State and its instrumentalities. In paras 8 to
10 this Court has observed and held as under:
“8. The scope of judicial review in matters relating to
award of contracts by the State and its instrumentalities is
settled by a long line of decisions of this Court. While these
decisions clearly recognise that power exercised by the
Government and its instrumentalities in regard to allotment
of contract is subject to judicial review at the instance of an
aggrieved party, submission of a tender in response to a
notice inviting such tenders is no more than making an offer
which the State or its agencies are under no obligation to
accept. The bidders participating in the tender process
cannot, therefore, insist that their tenders should be
accepted simply because a given tender is the highest or
lowest depending upon whether the contract is for sale of
public property or for execution of works on behalf of the
Government. All that participating bidders are entitled to is a
fair, equal and non-discriminatory treatment in the matter of
evaluation of their tenders. It is also fairly well settled that
award of a contract is essentially a commercial transaction
65
which must be determined on the basis of consideration that
are relevant to such commercial decision. This implies that
terms subject to which tenders are invited are not open to
the judicial scrutiny unless it is found that the same have
been tailor-made to benefit any particular tenderer or class
of tenderers. So also, the authority inviting tenders can enter
into negotiations or grant relaxation for bona fide and cogent
reasons provided such relaxation is permissible under the
terms governing the tender process.
9. Suffice it to say that in the matter of award of
contracts the Government and its agencies have to act
reasonably and fairly at all points of time. To that extent the
tenderer has an enforceable right in the court which is
competent to examine whether the aggrieved party has been
treated unfairly or discriminated against to the detriment of
public interest. (See Meerut Development Authority v. Assn.
of Management Studies [(2009) 6 SCC 171] and Air India
Ltd. v. Cochin International Airport Ltd. [(2000) 2 SCC 617].
10. The scope of judicial review in contractual matters was
further examined by this Court in Tata Cellular v. Union of
India, Raunaq International Ltd. case [Raunaq International
Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492] and
in Jagdish Mandal v. State of Orissa besides several other
decisions to which we need not refer.”
7.9 Thus, from the aforesaid decisions, it can be seen that a Court
before interfering in a contract matter in exercise of powers of judicial
review should pose to itself the following questions:-
(i) Whether the process adopted or decision made by the
authority is mala fide or intended to favour someone;
or whether the process adopted or decision made is so
arbitrary and irrational that the court can say: "the
decision is such that no responsible authority acting
reasonably and in accordance with relevant law could
have reached"? And
66
(ii) Whether the public interest is affected? If the answers
to the above questions are in negative, then there
should be no interference under Article 226."
7.10 Applying the law laid down by this Court in the aforesaid decisions
to the facts of the case on hand and when a conscious decision was
taken by the JICC/JICA holding the Bid submitted by the original writ
petitioner as non-responsive/non-compliant to the technical requirements
of the Bidding Documents and suffering from material deviation, we are
of the opinion that the High Court has erred in interfering with the tender
process and interfering with the decision of the JICC/JICA rejecting the
Bid submitted by the original writ petitioner at technical stage.
8. At the outset, it is to be noted that the Bid submitted by the original
writ petitioner was rejected at the first stage on the ground of material
deviation/non-responsive and having found that the tender submitted by
the original writ petitioner was not found to be as per the terms and
conditions of the tender document. However, the High Court by the
impugned judgment and order has set aside the conscious decision
taken by the JICA, JICC and the appellant by observing that the Bid
submitted by the original writ petitioner can be said to be in substantial
compliance and on the ground that though the other Bidders were given
opportunity to correct their errors/defects, however, the original writ
petitioner was not afforded the same opportunity and therefore the
67
decision not to give opportunity to correct the defects/errors can be said
to be discriminatory and violative of Article 14 of the Constitution of India.
However, it is required to be noted that a conscious decision was
taken by JICC/JICA holding that the Bid submitted by the original writ
petitioner suffers from material deviation and the same cannot be said to
be a substantially responsive Technical Bid. The decision was taken by
the employer – JICC/JICA and followed by the appellant considering the
relevant clauses of the ITB, more particularly, ITB Clause 33.2, which
defines a substantially responsive Technical Bid. The High Court ought
to have appreciated that other Bidders, who were granted opportunity to
cure the defects had cleared the first stage and they were granted
opportunity to cure the defects as per ITB Clause 34. As per the JICC
and JICA, with respect to those Bidders, who were given an opportunity
to cure the defects after they cleared Stage I, their defects were found to
be substantially responsive and, therefore, in exercise of the powers
under Clause 34, the opportunity was given to them to cure the defects,
which as such was found to be substantially responsive and nonmaterial compliance. The High Court ought to have appreciated that so
far as the original writ petitioner is concerned, its Bid was rejected at the
first stage itself having specifically found that the same constitute a
material deviation/non-conformity. Therefore, all the other Bidders who
were granted the opportunity to cure the defects were different than that
68
of the original writ petitioner and, therefore, the High Court has erred in
holding that not granting the opportunity to the original writ petitioner to
cure the defect is discriminatory.
9. Even otherwise it is required to be noted that once a conscious
decision was taken by the JICC and JICA, who can be said to be the
author of the terms and conditions of the tender document, taking a view
and stand that the Bid submitted by the original writ petitioner suffers
from material deviation and the said decision was taken after considering
the relevant clauses of the ITB, thereafter it was not open for the High
Court to interfere with such a conscious decision in exercise of powers
under Article 226 of the Constitution of India and take a view that the Bid
submitted by the original writ petitioner was in substantial compliance.
10. As observed hereinabove, there are as such no allegations of mala
fides and/or favouritism at all. Therefore, the High Court has erred in
holding that the Bid submitted by the original writ petitioner was in
substantial compliance. Whether the Bid submitted by a Bidder suffers
from any material deviation and/or any substantial deviation should be
left to the author of the Bid document and normally, the High Courts, in
exercise of the powers under Article 226 of the Constitution of India,
should not interfere with the same unless such a decision is found to be
mala fide and/or there are allegations of favouritism and/or such a
decision is arbitrary.
69
11. In the present case, as observed hereinabove, the decision to
reject the Bid of the original writ petitioner at the first stage on the ground
that the Bid submitted by the original writ petitioner suffers from material
deviation and the same cannot be said to be in substantial compliance
has been taken by the tender committee in concurrence with JICC and
JICA. The role of the JICA has been extensively dealt with by the
Gujarat High Court in the decision referred to hereinabove. Therefore,
when the JICA has agreed to fund such a huge amount and the terms
and conditions of the tender document are finalized by the JICC/JICA,
and, therefore, when conscious decision has been taken by the
JICC/JICA, the same was not required to be interfered with by the High
Court lightly and when such a decision of the High Court would have a
cascading effect on such a foreign funded Mega project. The scope of
judicial review in such foreign funded contract should be far much less
than the ordinary Government funded contracts funded from
Consolidated Fund of India. The scope of judicial review in such foreign
funded contracts/projects would be restricted and minimal. In such
foreign funded contracts, the only ground for judicial review ought to be
on a limited aspect, i.e., the action of the executing authority does not
suffer from favouritism or nepotism and based on the grounds which
have been concealed from the foreign financing authority, if disclosed,
would have persuaded the financing authority to cancel the contract.
70
12. The High Court ought to have appreciated that the Bullet Train
Project is a result of long-drawn deliberations between the Government
of India on the one hand and the Government of Japan on the other.
That thereafter a loan agreement came to be executed between the
Japan International Cooperation Agency (JICA) and Hon’ble the
President of India and the JICA agreed to fund approximately Rs.1 lakh
crores for the project on the terms and conditions mentioned in the loan
agreement and the other agreed terms including the terms and
conditions of the Bid document shall be finalized by the JICA/JICC. The
Bidding Documents are based on JICA’s Standard Bidding Documents
as well as based on JICA’s procurement guidelines, which form an
integral part of the loan agreement. Therefore, any decision contrary to
the terms and conditions of the Bidding Document would be altering the
terms and conditions of the loan agreement, which would not be
permissible. JICA has a vital role to play in such contracts. It is to be
noted that the foreign funded investment such as the present investment
in the form of concessional Official Development Assistance (ODA) loan
by the JICA are made on the basis of non-negotiated terms and
conditions where the sole discretion as to what will be the conditions of
investment and on what terms the contractors would be chosen to
implement the project vests with the investor – foreign developed nation.
The ultimate decision vests on the concerned parties, who
71
financed/invested in the project, i.e., in the present case JICA.
Therefore, the High Court has erred in interfering with the conscious
decision taken by the JICA and the JICC, which has been acted upon by
the tender committee.
13. Under the circumstances, the High Court has erred in interfering
with the conscious decision of the JICC / JICA / appellant / tender
committee to reject the Bid submitted by the original writ petitioner at
Stage I on the ground that the Bid submitted by the original writ
petitioner was suffering from material deviation.
14. Now so far as the view taken by the High Court in the impugned
judgment and order that Clause 28 under Clause (e) of Option A Section
1 and Clause 42.5 of ITB are patently illegal, inasmuch as they seek to
curtail the right of the bidders to challenge the rejection of their bid in a
multi-stage bidding process at the earliest, and before the award of the
contract is concerned, at the outset, it is required to be noted that as
such the aforesaid clauses of the ITB were not under challenge before
the High Court. Even otherwise, it is required to be noted that Clauses
28.1 and 42.5 of ITB were well within the knowledge of the original writ
petitioner at the time of participating in the tender process. The
aforesaid clauses of the ITB were put to the knowledge of all the
participants/bidders and the same applied to all. Despite the above
72
clauses in the ITB, original writ petitioner participated in the tender
process. Therefore, once having accepted the terms and conditions of
the tender process with the full knowledge of Clauses 28.1 and 42.5,
and participated with full knowledge, thereafter, it was not open for the
original writ petitioner to make a grievance with respect to such clauses.
14.1 Even otherwise, it is required to be noted that Clauses 28.1 and
42.5 are part of the instructions to the Bidders (ITB) and, therefore, part
of the Bidding Document. At this stage, it is required to be noted that
loan agreement was materialized after a detailed Memorandum of
Understanding and the loan agreement between the two Prime Ministers
and how the project would be financed and operated. That thereafter
followed by general consultancy of the project discussion, it was
culminated into a loan agreement with the specific condition that the
terms of the contract and the Bid document shall be finalised and
prepared by JICC and approved by JICA. It appears that the contents of
the Bidding Document are based on JICA’ Standard Bidding Documents
as well as JICA’s procurement guidelines and form an integral part of the
loan agreement. It is to be noted that such foreign funded investments
in the form of concessional Official Development Assistance (ODA) loan
by JICA are made on the basis of non-negotiated terms and conditions,
where the sole discretion as to what will be the terms and conditions of
the tender and on what terms and conditions the project would be
73
financed, vests with the investor foreign developed nation. Therefore,
the impugned judgment and order passed by the High Court on Clauses
28.1 and 42.5 would be altering the terms and conditions of the Bid
Document / ITB, which as such were finalized and approved by the
JICC/JICA and which were provided as per the JICA’s international
guidelines and which as such were to be complied with by all the
bidders/participants.
14.2 Even otherwise, the High Court has not at all appreciated the
purpose of the aforesaid clauses. The aforesaid clauses stated that
information relating to the evaluation of the Bids and recommendation of
the Contract award, shall not be disclosed to Bidders or any other
person, until information on Contract award is communicated to all the
Bidders in accordance with ITB 42 and as per Clause 42.5 “After
notification of award, unsuccessful Bidders may request, in writing, to the
Employer a debriefing seeking explanations on the grounds on which
their Bids were not selected”. It further provides that “the Employer shall
promptly respond, in writing, to any unsuccessful Bidders who, after the
notification of the award in accordance with ITB 42.1, request a
debriefing”. Thus, Clauses 28.1 and 42.5 read as under:-
“Option A – Section I. Instructions to Bidders
Clause E. Evaluation and Comparison of Bids
28. Confidentiality
“28.1 Information relating to the evaluation of Bids and
recommendation of Contract award, shall not be
74
disclosed to Bidders or any other persons not officially
concerned with such process until information on Contract
award is communicated to all Bidders in accordance with
ITB 42.
Clause F. Award of Contract
42. Notification of Award
42.5 After notification of award, unsuccessful Bidders
may request, in writing, to the Employer a debriefing
seeking explanations on the grounds on which their Bids
were not selected. The Employer shall promptly respond,
in writing, to any unsuccessful Bidders who, after the
notification of award in accordance with ITB 42.1, request
a debriefing.”
(emphasis supplied)
14.3 The purpose of the aforesaid clauses appears to be to prevent a
possible challenge to the multiple stage tender process midway. The
High Court has construed that the said clauses would restrict the right of
the bidders to seek judicial scrutiny of the tender process. However, the
High Court does not seem to be wholly true. The High Court ought to
have appreciated that first of all Clause 28 is a confidentiality clause. On
general reading of the aforesaid two clauses, it can be said that it does
not take away the right of the Bidders to seek judicial scrutiny at all.
Only the stage and time to know the reasons and thereafter if the
unsuccessful Bidder is aggrieved can seek the remedy, which is deferred
till the final decision on award of contract is taken and communicated.
As observed hereinabove, the object and purpose would be no
75
interference in the tender process in between till the final decision to
award the contract is taken. By no stretch of imagination, it can be said
that it takes away the right of the unsuccessful bidder to seek the judicial
scrutiny of the tender process. After the final decision is taken to award
the contract and the contract is awarded, thereafter it will always be
open for the unsuccessful bidders to ask for the reasons to which the
employer is required to furnish promptly and thereafter the unsuccessful
bidder may avail the legal remedy, which may be available to it, may be
claiming the damages. The High Court ought to have appreciated that it
is always advisable that in such a foreign funded Mega project, delay
may have a cascading effect and many a times have a financial burden
due to delay in projects and therefore, there shall be minimal
interference and/or no interference till the entire tender process or till the
award of contract is completed. The foreign funded agency therefore is
justified in providing such clauses to prevent challenge to the tender
process midway. A foreign funded agency, who invests/funds such a
huge amount for such a Mega project on bilateral talks between two
countries is justified in insisting such clauses and to insist that the
information relating to the evaluation of the Bids and recommendation of
contract award shall not be disclosed to Bidders or any other person until
information on contract award is communicated to all the Bidders and
the grounds on which the unsuccessful Bidders’ Bids are not selected
shall be provided thereafter.
76
14.4 The object and purpose of providing aforesaid clauses is very clear
namely no interference with respect to the tender process midway and
till the final decision on awarding the contract is taken. Even, we are
also of the opinion that in a Mega project, which is funded by a foreign
country, there shall not be any interference with the tender process
midway till the final decision is taken to award the contract. The reason
behind this is that any delay in such a project may increase the ultimate
project cost and it may affect the future investment by the foreign
country, which would never be in the larger nation’s interest.
14.5 Under the circumstances, the High Court has committed a grave
error in holding that Clauses 28.1 and 42.5 are patently illegal, more
particularly, in absence of any challenge to the same and also on the
ground that once the original writ petitioner participated having
knowledge of the aforesaid clauses in the ITB, thereafter it was not open
for the original writ petitioner to challenge the same. The original writ
petitioner was knowing right from the very beginning with respect to the
confidentiality clause contained in Clause 28 and that grounds on which
the Bids of unsuccessful Bidders are not selected shall be
communicated only after a final decision to award the contract is
communicated under Clause 42. If the original writ petitioner was
aggrieved either it would not have participated and/or ought to have
challenged such clauses before participating in the tender process.
77
Under the circumstances, the impugned judgment and order passed by
the High Court holding Clauses 28.1 and 42.5 as patently illegal cannot
sustain and the same also deserves to be quashed and set aside.
15. Before we part, we deem it proper to express few words of caution
to the High Courts while entertaining the writ petitions challenging the
tender process midway and/or while interfering with the tender process
in the contracts, more particularly, with respect to the contracts/projects
funded by the foreign countries and with respect to the Mega project like
the present one. Before entertaining the writ petition with respect to
such Mega projects funded by the foreign countries, one has to
appreciate that funds of such Mega projects by the foreign country is
followed by a detailed discussion between the Prime Ministers of both
the countries and to strengthen bilateral cooperation in the rail sector.
The foreign country is ready to invest/fund such a huge amount on nonnegotiated terms and the Bid Documents are prepared by the foreign
financial agency/country in accordance with the latest version of the
Standard Bidding Documents. These investments from developed
nations are made on the basis of non-negotiated terms and conditions,
where the sole discretion as to what would be the conditions of the
investments and on what terms the contractors would be chosen to
implement the project, vests with the investor foreign developed nation.
Considering the special peculiarities of such foreign sovereign funded
78
development contracts, which can be envisaged and exist only due to
the availability of the investment and willingness of the foreign sovereign
country to finance such infrastructure project, the said contracts assume
the different characteristics. Therefore, there shall be different
considerations so far as the judicial interference is concerned between
the foreign funded contracts and the ordinary public works contracts
funded from public exchequer. It is always to be borne in mind and as
observed by this Court in the case of Asia Foundation and Construction
Ltd. (supra), it is difficult for a developing country to go ahead with such
a high cost project unless the developed country grant loan/subsidy
and/or ready to fund such high cost projects, which are very important
projects for developing country, more particularly, when the developed
country is ready to fund a huge amount at a minimal concessional rate of
interest and on suitable terms and conditions of repayment. It is also to
be noted that any delay in execution of such a Mega project, which is
very important project for the developing country like India may not be in
the larger public interest and in the nation’s interest. Such an
interference by the Courts midway and delay in the projects like these
which is funded by the foreign countries on bilateral mutual
understanding/agreement by the developed country to a developing
country may affect the future investments/funding. Many a times, such a
delay in the execution of the project due to the intervention by the Courts
may have cascading effect on the project cost and ultimately may
79
increase the project cost and may impose heavy financial burden and
lead to increased and unbudgeted expenditure. Therefore, while
exercising the writ jurisdiction challenging the tender process midway
and/or while entertaining the writ petition challenging the award of
contract with respect to such Mega projects, more particularly, when
such Mega projects are funded by the foreign countries, the Courts have
to bear in mind the following principles laid down by this Court in the
case of Tata Cellular Vs. Union of India, 1994 6 SCC 651 in paragraph
94 as under:
“94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in
administrative action.
(2) The court does not sit as a court of appeal but
merely reviews the manner in which the decision
was made.
(3) The court does not have the expertise to
correct the administrative decision. If a review of
the administrative decision is permitted it will be
substituting its own decision, without the
necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot
be open to judicial scrutiny because the invitation
to tender is in the realm of contract. Normally
speaking, the decision to accept the tender or
award the contract is reached by process of
negotiations through several tiers. More often
than not, such decisions are made qualitatively
by experts.
80
(5) The Government must have freedom of
contract. In other words, a fair play in the joints is
a necessary concomitant for an administrative
body functioning in an administrative sphere or
quasi-administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facts pointed
out above) but must be free from arbitrariness
not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy
administrative burden on the administration and
lead to increased and unbudgeted expenditure.
Based on these principles we will examine the facts of this
case since they commend to us as the correct principles.
Even while entertaining the writ petition and/or granting the stay
which ultimately may delay the execution of the Mega projects, it must
be remembered that it may seriously impede the execution of the
projects of public importance and disables the State and/or its
agencies/instrumentalities from discharging the constitutional and legal
obligation towards the citizens. Therefore, the High Courts should be
extremely careful and circumspect in exercise of its discretion while
entertaining such petitions and/or while granting stay in such matters.
Even in a case where the High Court is of the prima facie opinion that
the decision is as such perverse and/or arbitrary and/or suffers from
mala fides and/or favouritism, while entertaining such writ petition and/or
pass any appropriate interim order, High Court may put to the writ
81
petitioner’s notice that in case the petitioner loses and there is a delay in
execution of the project due to such proceedings initiated by him/it,
he/they may be saddled with the damages caused for delay in execution
of such projects, which may be due to such frivolous litigations initiated
by him/it. With these words of caution and advise, we rest the matter
there and leave it to the wisdom of the concerned Court(s), which
ultimately may look to the larger public interest and the national interest
involved.
16. In view of the above and for the reasons stated above, the
impugned judgment and order passed by the High Court is clearly
unsustainable and the same deserves to be quashed and set aside and
is accordingly quashed and set aside. Present appeal is allowed
accordingly. The original writ petition before the High Court filed by the
original writ petitioner – respondent herein stands dismissed. No costs.
Pending application(s), if any, also stand disposed of.
………………………………….J.
 [M.R. SHAH]
NEW DELHI; ………………………………….J.
JANUARY 31, 2022. [A.S. BOPANNA]

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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