‘Courts must exercise restraint in case of national importance projects’
Dismisses petition pertaining to mega power project in Kishtwar
JAMMU, May 30: In a landmark judgment which will lead to smooth execution of mega hydro-electric project in Kishtwar district, High Court of Jammu & Kashmir and Ladakh has dismissed a petition challenging rejection of Techno-Commercial Bid by the Chenab Valley Power Projects (P) Limited with the observation that judicial interference in the contractual matters should be minimal especially in case where there is propensity of negative impact on the public exchequer.
The High Court has further observed that courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the Government and Public Sector Undertakings in matters of contract and must also not interfere where such interference will cause unnecessary loss to the public exchequer.
These observations have been made by Justice Wasim Sadiq Nargal while dismissing a petition filed by M/s Om Infra Ltd, New Delhi challenging Communication No. CVPP/C&P/Kwar/HM-PKG/2023/230 dated 19.05.2023 whereby the Techno-Commercial Bid dated 21.11.2022 submitted by the petitioner-company in response to NIT dated 11.08.2022 has been declared as non-responsive.
It was submitted before the High Court by the petitioner company that in spite of the fact that the petitioner company was in continuous touch with the respondents by virtue of various communications yet the respondents by virtue of impugned order/communication dated 19.05.2023 have rejected the Techno-Commercial Bid of the petitioner being non-responsive and that too without assigning any reason and in utter violation and contravention of Clause 30.1 of the Bid Documents— Instructions to Bidders.
However, the respondents submitted that as per Clause 10.3.B.4, the available bid capacity of the bidder at the time of opening of the bids (Technical as well as Price Bid) calculated should not be less than INR 3036.30 million or equivalent US $ 39.01 million but admittedly, in the present case, the bid capacity of the bidder has fallen short of the figure and rightly so, the respondents have held the petitioner’s Techno Commercial Bid being non-responsive.
After hearing Senior Advocate Sunil Sethi with Advocate Navyug Sethi for the petitioner and Advocate A P Singh for the Chenab Valley Power Projects (P) Ltd, High Court observed, “it has come to fore that the Tender Evaluation Committee during the process of evaluation of the bid capacity found out that the calculation and document submitted by the petitioner were in contradiction to the calculation and document submitted by the bidder at the time of submission of bid and were misleading as false calculations and submissions were made by the petitioner to establish its Bid Capacity as per the NIT”.
“This aspect of the matter has not been rebutted or replied by the petitioner and in absence of the same, the decision of the Tender Evaluation Committee cannot be faulted/rejected”, High Court said, adding “in the light of the deliberations of the Tender Evaluation Committee, the petitioner-company did not meet the qualification criteria for bid capacity as stipulated in Clause 10.3.B.4 of NIT and has rightly been held as non-responsive”.
Stating that court in exercise of its power of judicial review cannot review the decision in a commercial matter even if an error in the assessment or prejudice to the tenderer is made out, Justice Nargal said, “I am supported by the judgment of the Apex Court that the author of the tender document is best person to understand and appreciate its requirements and thus its interpretation should not be second-guessed by a court in judicial review proceedings”.
“The essence of law laid down by the Supreme Court in various authoritative pronouncements leads to the irresistible conclusion that the court should give way to the opinion of the experts in matters concerning tenders involving technical evaluation by the Technical Evaluation Committee unless the decision is totally arbitrary or unreasonable”, High Court said, adding “where a decision is taken in consonance with the terms and conditions of the tender document and subserves the purpose for which the tender is floated, the court should follow the principle of restraint”.
Justice Nargal further said, “whether the tender pertains to an infrastructure project or any other project of public importance, approach of the court recently has been to relegate the parties to seek damages for wrongful exclusion even in case the court finds total arbitrariness”, adding “the court must refrain from granting injunction/stay even in cases where arbitrariness is established”.
“The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give fair play in the joints to the Government and Public Sector Undertakings in matters of contract. Moreover, courts must also not interfere where such interference will cause unnecessary loss to the public exchequer”, Justice Nargal said while placing reliance on the Supreme Court judgment in case of Tata Motors Versus the Brihan Mumbai Electric Supply & Transport Undertaking and Others.
High Court further observed, “before interfering in tender or contractual matter in exercise of power of judicial review, the court can examine the process adopted or whether the decision made by the authority is malafide or intended to favour someone”, adding “the instant case does not fall in the exception as the record does not reveal any arbitrariness which warrants interference especially in a matter involving such a commercial project of national importance, in which judicial restraint is advised”.
Stressing that judicial interference in the matters concerning contractual matters should be minimal especially in case where there is propensity of negative impact on the public exchequer, Justice Nargal said, “in the present case, judicial interference is not warranted as there is no arbitrariness or malafide being perpetuated or pleaded”.
The significant judgment of the High Court will go a long way in preventing huge negative impact on the project of national importance as any interim relief to the petitioner would have led to escalation of cost worth Rs 2.5 crore approximately per day, which is against the public interest and almost everyday’s delay to conclude the tendering process would lead to a financial burden on the UT of Jammu and Kashmir (having 49% share) and NHPC, a Government of India enterprise (having 51% share).