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.

2.1That 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”).

2.2That 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.

2.3Aggrieved 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.

2.4While 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 non-

responsive 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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2.5Feeling 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.

3.1It 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) Non-

Signing 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.

3.2Shri 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.

3.3It 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.

3.4It 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.

3.5Shri 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.

3.6It 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.

3.7It 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.

3.8It 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.

3.9Shri 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.

3.10It 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.

3.11It 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.

3.12It 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.

3.13It 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.

3.14It 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.

3.15It 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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3.16It 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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3.17It 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 re-

negotiations 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.

3.18It 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.

3.20It 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.

3.21It 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.

3.22It 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.

3.23It 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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3.24It 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.

4.1It 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.

4.2It 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.

4.3It 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

4.4It 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.

4.5It 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.

4.6It 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).

4.7It 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.

4.8It 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.

4.9It 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.

4.10It 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.

4.11It 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.

4.12It 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.

4.13It 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 non-

conformity 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

4.14Now, 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.

4.15Now 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.

4.16Making 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.

6.1Therefore, 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?

6.2While 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.

6.3The 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.

6.4A 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)”)

6.2Products (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

7.1Precondition 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.

7.3Implementation 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.

7.5Consultation

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.

8.2Adoption 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.”

6.5As 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 pre-

bid 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.”

6.6That 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.

6.7That 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.

6.8That 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.

6.9It 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.

6.10From 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 non-

compliant 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.

6.11From 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

6.12At 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

7.1While 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

7.2At 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.

7.3It 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.

7.4At 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

7.5From 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 non-

responsive/non-complaint and the same was found to be material

deviation.

7.6At 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.

7.7At 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.

7.8At this stage, few decisions of this Court on the interference by the

Courts in the tender matters are required to be referred to:-

7.8.1In 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 decision-

making 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 decision-

making 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.”

7.8.2In 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. SLL-

SML [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-of-

participation 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 non-

essential 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.”

7.8.5In 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

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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.”

7.9Thus, 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

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(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."

7.10Applying 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

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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 non-

material 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

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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.

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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.

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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

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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

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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.

14.1Even 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

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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

“28.1Information relating to the evaluation of Bids and

recommendation of Contract award, shall not be

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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

42.5After 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)

14.3The 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

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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.

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14.4The 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.

14.5Under 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.

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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 non-

negotiated 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.

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(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

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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]

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