TATA MOTORS LIMITED versus THE BRIHAN MUMBAI ELECTRIC SUPPLY & TRANSPORT UNDERTAKING (BEST) AND OTHERS

[2023] 6 S.C.R. 695

TATA MOTORS LIMITED

THE BRIHAN MUMBAI ELECTRIC SUPPLY & TRANSPORTUNDERTAKING (BEST) AND OTHERS

(Civil Appeal No.3897 of 2023)

MAY 19, 2023

[DR. DHANANJAYA Y. CHANDRACHUD, CJI,PAMIDIGHANTAM SRI NARASIMHA AND

J. B. PARDIWALA, JJ.]

Constitution of India – Power of Judicial review – Contractual/commercial matters – Held: Courts should exercise lot of restraintwhile exercising Powers of judicial review in contractual orcommercial matters – In contracts involving technical issues thecourts should be even more reluctant – Courts must also not interferewhere such interference will cause unnecessary loss to the publicexchequer – In the present case, TATA Motors deviated from thematerial and the essential term of the Tender – High Court havingonce declared TATA Motors as non-responsive and having stooddisqualified from the Tender process should not have entered intothe fray of investigating into the decision of BEST to declare EVEYas the eligible bidder – High Court was not exercising its writjurisdiction in public interest – It looked into petition filed by aparty trying to assert its own rights – Grant of judicial relief at theinstance of party which does not fulfil the requisite criteria ismisplaced – BEST committed no error or cannot be held guilty offavoritism, etc. in allowing EVEY to submit revised Annexure Y asthe earlier one was incorrect on account of clerical error – Thisexercise itself was not sufficient to declare the entire bid offered byEVEY as unlawful or illegal – Writ court should refrain fromimposing its decision over the decision of the employer as to whetheror not to accept the bid of tenderer unless something very grossor palpable is pointed out – Initiating fresh tender process at thisstage may consume lot of time and also loss to the public exchequer– Part of the judgment of the High Court by which the decision ofBEST to accept the tender of EVEY was set aside and it was left tothe discretion of BEST to undertake fresh tender process, set aside.

[2023] 6 S.C.R.

Constitution of India – Exercise of power of judicial reviewin matters as to tenders or award of contracts – Special features tobe borne in mind – Discussed.

Silppi Constructions Contractors v. Union of India(2020) 16 SCC 489 : [2019] 10 SCR 932; Associationof Registration Plates v. Union of India and Others(2005) 1 SCC 679 : [2004] 6 Suppl. SCR 496;Air IndiaLtd. v. Cochin International Airport Ltd.(2000) 2 SCC617 : [2000] 1 SCR 505;Jagdish Mandal v. State ofOrissa and Others(2007) 14 SCC 517 – relied on.

W.B. State Electricity Board v. Patel Engineering Co.Ltd. & Ors. (2001) 2 SCC 451 : [2001] 1 SCR 352;Kanhaiya Lal Agrawal v. Union of India and Others(2002) 6 SCC 315 : [2002] 1 Suppl. SCR 284;N.G.Projects Limited v. Vinod Kumar Jain and Others (2022)6 SCC 127;Raunaq International Ltd. v. I.V.R.Construction Ltd. and Others (1999) 1 SCC 492 : [1998]3 Suppl. SCR 421;S.S. & Company v. Orrisa MiningCorporation Limited (2008) 5 SCC 772 : [2008] 5 SCR598; Poddar Steel Corporation v. Ganesh EngineeringWorks and Others(1991) 3 SCC 273 : [1991] 2 SCR696; Monarch Infrastructure (P) Ltd v. Commissioner,Ulhasnagar Municipal Corporation and Others (2000)5 SCC 287 : [2000] 3 SCR 1159;Meerut DevelopmentAuthority v. Association of Management Studies andAnother(2009) 6 SCC 171 : [2009] 6 SCR 663;MaaBinda Express Carrier and Another v. North-EastFrontier Railway and Others(2014) 3 SCC 760 : [2013]12 SCR 529; Jagannath Behera & Ors. v. RajaHarihar Singh Mardaraj Bhramarbara Roy [1958] SCR1067;Karanpura Development Co. Ltd v. RajaKamakshya Narain Singh Etc.[1956] SCR 325;Vasantkumar Radhakisan Vora v. Board of Trustees ofPort of Bombay(1991) 1 SCC 761 : [1990] 3 SCR825; Steel Authority of India Ltd v. Gupta Brother SteelTubes Ltd (2009) 10 SCC 63 : [2009] 14 SCR 253 –referred to.

TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY& TRANSPORT UNDERTAKING (BEST)

Case Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal No.3897of 2023.

From the Judgment and Order dated 05.07.2022 of the High Courtof Judicature at Bombay in WPL No.15548 of 2022.

With

Civil Appeal Nos.3899 And 3898 of 2023.

Tushar Mehta, SG, Mukul Rohatgi, Shyam Divan, Ajit S. Bhasme,Dr. Abhishek Manu Singhvi, K. V.Viswanathan, Gopal Jain, Sr. Advs.,Abhinav Mukerji, Akshay Shrivastava, Mrs. Bihu Sharma, Ms. PratishthaVij, Anjandas Gupta, Ms. Rimali Batra, Abhishek Lalwani, V. K. Patil,M/s. D.S.K. Legal Ms. Nandini Gore, Ms. Aditi Bhatt, Sarthak Gaur,Yash Dubey, Ms. Manvi Rastogi, Amit Bhandari, M/s. Karanjawala &Co., Advs. for the appearing parties.

AThe Judgment of the Court was delivered by

J. B. PARDIWALA, J.

1. Leave granted.

2. As the issues raised in all the captioned appeals are commonBand the challenge is also to the self-same order passed by the HighCourt of Judicature at Bombay dated 05.07.2022 in the Writ Petition (L)No. 15548 of 2022, those were taken up for hearing analogously and arebeing disposed of by this common judgment and order.

3. The Appeal arising out of SLP(C) No. 15708 of 2022 is at theCinstance of TATA Motors Limited (for short, “TATA Motors”) (OriginalWrit Petitioner before the High Court).

4. The Appeal arising out of SLP(C) No. 11871 of 2022 is at theinstance of EVEY Trans Pvt. Ltd. (for short, “EVEY”) (Originalrespondent No. 2 before the High Court).

5. The Appeal arising out of SLP(C) No. 11933 of 2022 is at theinstance of the Brihan Mumbai Electric Supply & Transport Undertaking(for short, “BEST”) (Original respondent No. 1 before the High Court),a statutory corporation operating under the provisions of the MumbaiMunicipal Corporation Act, 1888.

EFACTUAL MATRIX

6. BEST floated tender bearing No. DMM(T-II)/08/TCU/73169/2021-2022/Advt. dated 26.02.2022 for the supply, operation andmaintenance of 1400 (+50% variation) Single Decker AC Electric Buseswith driver, for the purpose of public transport service within the city ofFMumbai along with other civil infrastructure development at the BESTdepots for period of 12 years (hereinafter referred to as,‘the Tender’).

7. The Tender document provided for Technical specifications asstipulated under Clause 3.5(e) and Clause 12 of Section 2 of ScheduleIX, under which the bidders were required to provide Single DeckerGBuses which can run 200 Kms in single charge without interruption inactual conditions for the relevant Gross Vehicle Weight (GVW) with airconditioning with not more than 80% battery being consumed. Clause3.5(e) and Clause 12 respectively are reproduced hereunder:

“SCHEDULE IXTECHNICAL SPECIFICATIONS

Section 2: Technical specifications of SD AC Electric Busesunder Wet Lease Scheme

8. In all, eight market players participated in the Tender process,including EVEY and TATA Motors. In the pre-bid meeting held on11.03.2022, TATA Motors submitted its pre-bid points, wherein underPoint 1, it requested BEST to consider its bid for 200 Kms per day with75-minutes of opportunity charging time during the day operations andrange testing conditions as per AIS 040/FAME II.

9. On 15.03.2022, BEST published the minutes of the pre-bidmeeting. BEST revised certain specifications, however, the modificationsas requested by TATA Motors were rejected. BEST opted for specificreference to “in actual conditions” and excluded any reference to “AIS040” or “Standard Conditions” in the Tender specifications. It is pertinentto note that the AIS 040 certification would be upon standard testingconditions and not on the actual road conditions, which would accountfor passenger load, temperature, traffic conditions, etc.

10. On 27.04.2022, BEST issued Corrigendum No. 8 specifyingthe end of submission of bids for the Tender as 02.05.2022 and the dateof opening the technical bid as 04.05.2022.

11. TATA Motors submitted its bid on 25.04.2022, wherein itguaranteed operating range of 200 Kms with 80% State of Charge,B“SoC” (i.e. 20% reserve left upon running 200 Kms in single charge),however, the same was achieved “in standard test conditions as per AIS040”. This was deviation from the Tender specifications.

12. EVEY submitted its bid on 02.05.2022, claiming that the samewas submitted without any deviation from the Tender conditions includingCthe condition of minimum operating range of 200 Kms in single charge.EVEY claimed that the TATA Motors was the only bidder which,referenced “standard test conditions” instead of “actual road conditions”,while stating that it complied with the Tender requirement of minimumoperating range.

D13. Under Clause 5.1.1 of the Schedule II (Definitions andInstructions to Bidders) of the Tender, the mode and manner of submissionof the bid proposal has been provided. The said clause also provided forcertain annexures to be submitted along with the bid. Pertinently, AnnexureY, which is an undertaking to be given by the Operational EquipmentManufacturer (OEM) for the operating range of the buses, was notErequired to be submitted along with the bid but was only required to besubmitted by the successful bidder. The purpose of the undertakingsunder Clause 3.5 (e) and Clause 12 of Section 2 of Schedule IX(Technical Specifications) and Annexure Y is to confirm that therequirement of meeting the 200 Kms range in single charge is satisfied.

14. EVEY along with its bid dated 02.05.2022 submitted AnnexureY, wherein the OEM gave an undertaking for the operating range whichincluded table that mentioned that the operating range for singledecker bus would be 200 Kms with the opportunity charging time of 1hour. The same was done in accordance with the specifications of theGearlier tender dated 20.08.2021, which allowed for an opportunity timeof 60 minutes.

15. EVEY vide email dated 06.05.2022, provided revisedAnnexure Y as per the Single Charge Requirements mentioned in theTender along with an explanation for the same holding it to be mere“clerical error”.H

16. The Tender bids were opened on 04.05.2022 and the technicalsuitability evaluation was announced on 06.05.2022. BEST in its technicalsuitability evaluation dated 06.05.2022, held TATA Motors along withfour other bidders, to be “technically non-responsive”. TATA Motor’sbid was rejected on account of technical deviation with respect to theoperating range in its Annexure and Annexure Y, respectively. The bidoffered by EVEY in the said report was deemed to be “technicallyresponsive”.

17. Thereafter, on 06.05.2022, the price bids of the eligible bidderswere opened, and EVEY was declared to be the L1 bidder. The pricebid of TATA Motors was not opened in accordance with Sr. No. 7 of theSchedule I (Invitation for Proposal) and Sr. No. 15 of the Schedule II(Definitions and Instructions to Tenderers) of the Tender document. Sr.No. 7 of Schedule I reads as under:

“7. The Bidders/Tenderers who meet the mandatory technicaland commercial eligibility criteria as mentioned in ScheduleIII of Tender Document shall only be held eligible for openingof price bids.”

18. Sr. No. 15 of Schedule II (Definitions and Instructions toTenderers) of the Tender document, reads as under:

“15. The Bidders shall accept unconditionally BEST’s‘Conditions of Tender & Conditions of Supply’ in TOTO,failing which their financial bids shall not be considered for·opening. Bidders are requested to go through the samecarefully.”

19. Aggrieved by the technical suitability evaluation issued by BESTby which it rejected the bid of TATA Motors, the latter approached theHigh Court of Judicature at Bombay by way of writ petition bearingWP(L) No. 15548 of 2022 dated 10.05.2022. TATA Motors prayed forthe following reliefs:

“18. The Petitioners therefore pray that this Hon’ble Courtmay be pleased to:

(a) Issue writ of Certiorari or any other writ, order ordirection in the nature of Certiorari to call for the records ofthe case and quash and set aside the decision dated06.05.2022 taken by the Respondent No. 1 declaring the bid

submitted by the Petitioner No. 1 as “technically non-responsive”;

(b) Issue writ of mandamus or writ in the nature of mandamusor any appropriate writ, order or direction under Article 226of the Constitution of India directing Respondent No. 1 toBreconsider the bid submitted by the Petitioner No. 1 for thepurposes of the Tender;

(c) In the alternative to prayer (b) issue writ of mandamusor writ in the nature of mandamus or any appropriate writ,order or direction under Article 226 of the Constitution ofCIndia directing Respondent Nos. 1 to cancel the Tender andfloat fresh tender;

(d) During the pendency of the Petition, restrain RespondentNo. 1 from taking any steps towards award of contract underthe Tender;

(e) ad-interim reliefs in terms of prayers in clause (d) above;

(f) Cost of the present Petition; and

(g) such further and other reliefs as the nature and thecircumstances of the case may require be granted to thePetitioner.”

20. During the pendency of the aforesaid writ petition BESTawarded the Tender in favour of EVEY with the Letter of Acceptancedated 20.05.2022. EVEY accordingly submitted the requiredPerformance Bank Guarantee on 23.05.2022. An agreement for operationof Stage Carriage Services for public transport of Single Decker ACFElectric Buses with Driver in the city of Mumbai and its extended suburbson Gross Contract Cost (GCC) model for 12 years was entered intobetween the EVEY and BEST on 26.05.2022.

21. subsidy bank guarantee dated 02.06.2022 was submitted byEVEY and BEST released the requisite amount to the EVEY’s accountGtowards subsidy on 10.06.2022. The EVEY even provided the BESTwith 8 buses between 04.07.2022 and 05.07.2022.

22. The High Court vide its impugned order and judgment dated05.07.2022, took the view that the requirement for the operating rangeto be more than 200 Kms in single charge in “actual conditions” wasHunambiguous. Accordingly, the High Court upheld the disqualification of

TATA Motors and rejected their claim from being considered as an eligiblebidder as they failed to comply with the technical requirements of theTender. The High Court in paragraphs 9 and 13 respectively of theimpugned order observed thus:

“9. Reading the aforesaid, it is unambiguous that operatingrange provided in the tender document is that the electricvehicles manufacturers have to provide the vehicles whichcan run 200 kms in single charge for SD air conditioningbuses in actual conditions for relevant GVW air conditioning.The prima donna requirement of the tender document itappears is that the electric vehicle offered should run 200Kms in single charge for Single Decker air conditioningbus in actual conditions with 80% SoC without anyinterruption.

Xxx xxx xxx

13. Petitioner No.1 did not submit its bid for 200 Kms@ 80%SoC in single charge on actual condition but at standard testconditions as per AIS 040. As per the tender condition if aperson to whom the contract is awarded i.e. lessee does notcomply with the condition of achieving range of 200 Kms at80% SoC in single charge then he is penalized for the same.Meaning thereby, Respondent No.1 was conscious that thestandard test conditions as per AIS 040 is different than theactual condition. The tender of the Petitioner certainly wasnot compliant with the said clause. The Petitioner has deviatedfrom the material and the substantial term of the tender. ThePetitioner, as such, is rightly disqualified for deviating from”the material requirements stipulated in the tender.

(Emphasis supplied)

23. The High Court, after holding as above proceeded further todiscuss as to why the bid of EVEY also should have been rejected. TheHigh Court noted EVEY’s contention that Annexure Y submitted alongwith the technical bid was an incidental document, however, rejectedsuch contention. The High Court while referring to Clause 16 of ScheduleI held that once the final date for the submission of the bid expires, therecan be no additions/corrections/ submissions of documents by the bidders.Clause 16 of Schedule I of the Tender is produced hereinbelow:

“SCHEDULE I

Invitation for Proposal

16.Interested Bidders are advised to study this Tender document carefully before submitting their proposal in response to this Tender document. Submission of proposal in response to this tender shall be deemed to have been after careful study and examination of this document with full understanding of its terms, conditions and implications. No addition / correction, submission of documents will be allowed after opening of technical bid”

24. The High Court as result, held that the email dated 06.05.2022ought not to have been entertained, and the technical bid evaluation,which was released on the same day did not depict fairness in the actionsDof BEST. The High Court in paragraphs 20 – 22 respectively held asunder:

“20.It has been contended by Respondent No.1 that letterissued by Respondent No.2 on 6th morning did not influencethe decision to hold the bid of Respondent No.2 responsive inthe afternoon of 6th May 2022. The same is not borne-outfrom the facts and circumstances of the case. Clause-16, asstated above specifically and categorically prohibits additions/ corrections / submission of documents after opening oftechnical bid. Technical bids have been opened on 4th May2022. Thereafter no such letter could have been entertained.The proximity of the time i.e. 6th May at 11.35 am. the letterissued by Respondent No. 2 along with the modified Annexure-Y and after two hours, the bid of Respondent No.2 heldresponsive, does not support the contention of RespondentNo.1 that the said revised Annexure-Y and the letter writtenon 6th May morning did not weigh in holding RespondentNo.2’s bid responsive. First of all, accepting the letter fromRespondent No.2 by Respondent No.1 on 6 May morning itselfwas against the specific terms of the tender (clause 16). It isfurther the case of Respondent No.1 that on 6[th]morningrevised Annexure-Y forwarded by Respondent No.2 was sou

motu and not at the instance of Respondent No.1, may not berelevant here. The fact remains that Respondent No.2 wasallowed to submit the letter and revised Annexure-Y after twodays of the opening of technical bids. It is also the fact thaton 28th April Respondent No.2 had submitted the bid and on2nd May it had submitted the revised bid, however, with thesame Annexure-Y clearly stating that it would requireopportunity charging tune of one hour. The same would notbe in tune with the tender conditions.

21. From the aforesaid facts, it is clear that; (i) the tenderdocuments submitted by the Petitioner contained deviation inAnnexure-Y i.e. the undertaking from OEM stating that onehour charging time would be required for achieving operatingrange of 200 Kms.; and (ii) Respondent No.2 submitted therevised Annexure-Y on 6th morning i.e. two days after theopening of technical bids and after acceptance of revisedAnnexure-Y on 6tb May morning, the technical bid of

Respondent No.2 was accepted in the afternoon of the sameday.

22. The aforesaid does not depict fair play in action. Thefacts create doubt about, whether the decision was fair oneor was the decision reached fairly? The same does not appearto be so in view of the facts discussed above while acceptingthe bid of Respondent No.2 as responsive.”

(Emphasis supplied)

25. In view of the aforesaid, the High Court thought fit to declareEVEY also as an unsuccessful bidder. The High Court in paragraphs 23and 24 respectively held as under:

“23. We are aware that the principle of equity and naturaljustice stay at distance and no judicial interference iswarranted in case of an error in assessment. However, thesame holds good, if the decision is bona fide. We are alsoaware that interference of the Court would lead to some delay.It would be seen that earlier also the tenders were issued.However, because of non-sanction of subsidy, the earliertender process was scrapped and fresh tender process wasissued. For accepting the bid of Respondent No.2, 90 days’

Atime is provided to it for getting the prototype vehicle. Thesaid period is not over. It is not even one month. TheRespondent No.2’s tender is accepted. The Courts uponcoming to the conclusion that the decision making processwas not fair. The same lacked fair play in action and arbitrary,will have to step in.B

24. In the light of the above, we set aside the decision of theRespondents of acceptance of tender of Respondent No.2.Respondent No.1, if it so desires, may proceed with freshtender process.”

(Emphasis supplied)

26. In such circumstances referred to above, all the three partiesare here before this Court with their respective petitions.

27. It is pertinent to note that during the pendency of theproceedings before the High Court and after submitting the subsidyguarantee, EVEY had already supplied total 8 buses between 04.07.2022Dto 05.07.2022. However, this Court by an interim order dated 14.07.2022granted an interim stay of the impugned judgment insofar as EVEY isconcerned. This Court observed that, the supply of the buses, if any, byEVEY would be subject to the result of these petitions and EVEY shallnot claim any equity at later stage.

ESUBMISSIONS ON BEHALF OF THE “EVEY”

28. Mr. Rohatgi, the learned Senior counsel appearing for EVEYplaced strong reliance on the decision of this Court in W.B. StateElectricity Board v. Patel Engineering Co. Ltd. & Ors., reported in(2001) 2 SCC 451 to submit that the equitable relief can be granted tothe bidder where it has made material mistake of fact in the bid andFupon discovery of that mistake he has acted promptly and rectified hismistake. He submitted that, Clause 16 of Schedule I of the Tender wouldnot apply to document, like Annexure Y, which was originally requiredto be submitted by the “Successful Bidder’’ after the evaluation of thebid. Furthermore, the learned Senior counsel proceeded to submit that,Geven in the original Annexure Y as submitted on 02.05.2022, his clienthad mentioned that, “These offered buses will run above mentionedminimum Kms without any interruption”.

29. He submitted that, Annexure specifies that “If the variationsspecified herein, are found to be in nature of contradiction to BEST’sHrequirements/specifications then such Bids will be treated as Non-

responsive” and therefore, the bidder would have to essentially complywith the specifications mentioned in Annexure otherwise the bid wouldbe treated as “technically non-responsive”. He submitted that AnnexureF can be rightly termed as an essential condition of Tender. He placedstrong reliance on the decision of this Court in the case of KanhaiyaLal Agrawal v. Union of India and Others, reported in (2002) 6 SCC315, to submit that whether condition is essential, or collateral could beascertained by reference to the consequence of non-compliance thereto.It was submitted that if non-fulfilment of the requirement results inrejection of the tender, then it would be an essential part of the tenderotherwise it is only collateral term. He further submitted that, non-compliance of the conditions mentioned in Annexure Y would lead tolevy of penalty and if the instance keeps on recurring, it may lead totermination of contract and therefore, Annexure Y should be treated asa collateral term of the Tender. Under Clause 5.1.1 of Schedule II(Definitions and Instructions to Bidders) of the Tender documentAnnexure Y was not required to be submitted along with the bid documentsbut the same was to be submitted by the “Successful Bidder’’.

30. He submitted that, in view of the decision of this Court in,N.G. Projects Limited v. Vinod Kumar Jain and Others, reported in(2022) 6 SCC 127,the writ court should refrain itself from imposing itsdecision over the decision of the employer as to whether to accept thebid of tenderer and that contract of public service should not be interferedwith lightly. The injunction or interference in the Tender leads to additionalcosts on the State and is also against public interest.

31. He submitted that the allegations of favouritism levelled byTATA Motors by pointing towards the fact that apart from EVEY, therewere two more parties who were technically qualified and were L2 andL3 viz., Switch Mobility Automotive Limited and PMI Electro MobilitySolutions Private Limited respectively, EVEY was declared L1 andawarded the Tender only after opening of the price bids at later stageare reckless and baseless.

32. Relying on the decisions of this Court in Raunaq InternationalLtd. v. I.V.R. Construction Ltd. and Othersreported in (1999) 1 SCC492 and S.S. & Company v. Orrisa Mining Corporation Limitedreported in (2008) 5 SCC 772, he submitted that once the High Courtfound TATA Motors to be technically non-compliant, it ought not to haveentertained challenge to the tendering process at the instance of anunsuccessful party. The writ petition was filed against the technical

Aevaluation, whereas, the contract is now well underway at the stage ofperformance. He submitted that interfering with the technical evaluationat this stage would make the contract redundant and cause loss ofexchequer’s money.

33. In the last, the learned Senior counsel submitted that till dateBEVEY has supplied 20 tailor-made buses and the civil infrastructure forthese buses has also been put in place.

SUBMISSIONS ON BEHALF OF THE “TATA MOTORS”

34. Dr. Abhishek Manu Singhvi, the learned Senior counsel,appearing for TATA Motors vehemently submitted that the contractawarded by BEST to EVEY is per se illegal. The learned Senior counselCargued that the acceptance of the EVEY’s revised Annexure Y afterthe expiry of the bid submission end date and technical bid opening dateis contrary to the Tender conditions. Clause 16 of Schedule I (Invitationfor Proposal) of the Tender prohibits any addition, correction or submissionof document after the technical bid opening. However, the same wasDnot followed and by allowing bidder to correct errors at later stagemay lead to unequal treatment of bidders. The decisions of this Court inPoddar Steel Corporation v. Ganesh Engineering Works and Others,reported in (1991) 3 SCC 273 (Para 6); W.B. State Electricity Board(supra) (Paras 27 and 28), were relied upon to substantiate the aforesaidcontention.E

35. He submitted that the actions of BEST could be termed asarbitrary, discriminatory, unfair, and that his client has locus to challengethe same as no legitimacy should be granted to tender processes taintedwith malice. The learned Senior counsel relied upon the decision of thisCourt in Monarch Infrastructure (P) Ltd v. Commissioner,FUlhasnagar Municipal Corporation and Others, reported in (2000) 5SCC 287 (Paras 10 and 14);Meerut Development Authority v.Association of Management Studies and Another, reported in (2009)6 SCC 171 (Paras 27, 28, 45 and 76);Maa Binda Express Carrier andAnother v. North-East Frontier Railway and Others, reported in (2014)3 SCC 760 (Paras 8, 9 and 12)to fortify the submission.G

36. He argued that the High Court in paragraph 19 of the impugnedjudgment has rightly observed that the battery range guarantee can begiven only by the OEM from whom the bidder is purchasing the battery,and in such circumstances, the same cannot be said to be incidental.The same was considered as an important part of the technical evaluationHby BEST.

37. He vociferously submitted that Annexure Y was part of thebid document and once submitted, could not have been permitted to bealtered after the bid submission end date i.e., 02.05.2022. The argumentthat Annexure Y was optional and not required at the time of submissionof the bid is an afterthought, and the same being question of fact or atthe most mixed question of fact and law cannot be raised for the firsttime in Special Leave Petition. He relied on the decision of this Courtin Jagannath Behera & Ors. v. Raja Harihar Singh MardarajBhramarbara Roy, reported in 1958 SCR 1067 (Paras 17 and19);Karanpura Development Co. Ltd v. Raja Kamakshya NarainSingh Etc., reported in 1956 SCR 325 (Para 24); VasantkumarRadhakisan Vora v. Board of Trustees of Port of Bombay,reported in(1991) 1 SCC 761 (Para 24);Steel Authority of India Ltd v. GuptaBrother Steel Tubes Ltd, reported in (2009) 10 SCC 63 (Paras 32 and34).38. He submitted that the High Court was justified in saying thata fresh tender in the present matter is warranted more particularly inview of the arbitrary tender process and delay in supply of the buses asper the timeline prescribed under the Tender. He submitted that freshtender would be in public interest as there has been breach of deliverytimeline by EVEY as prescribed under the Tender. It is alleged thatthere is deficit in the supply of 1,030 buses till date. BEST has failed totake necessary steps against EVEY for the delay, and the sameshowcases that the two contracting parties have colluded with eachother. The fresh tender would allow for more competitive price bids andthere would not be any financial burden on BEST in the event oftermination, as the Tender provides for forfeiture of Earnest MoneyDeposit (EMD) and encashment of performance guarantee.

39. In the last, the learned Senior counsel submitted that the HighCourt while upholding the disqualification of his client on the sole basisthat it guaranteed the operating range in ‘standard test conditions as perAIS 040’ committed an error. It was submitted that TATA Motors hadcomplied with the essential conditions and certain departures under theTender were permissible.

SUBMISSIONS ON BEHALF OF THE “BEST”

40. Mr. Tushar Mehta, the learned Solicitor General, appearingfor BEST submitted that the Tender document provided for mandatoryeligibility conditions for being declared as qualified bidder at the stageof technical bid, and the said eligibility conditions were stipulated in sub

A– clauses (iv) and (v) of Clause 5.1.1 respectively of the TenderDocument.

41. He further submitted that Clause 5.1.1 (v), providing forAnnexure was mandatory condition for being qualified as bidder atthe Technical Bidding stage. The mandatory requirement reads as under:

B“5.1.1 The Proposal should be submitted in the following manner: Bid 1: Technical Submissions, which would include: i) Schedule of Guaranteed Performance & Other Technical Particulars as shown in the prescribed format in Annexure-A incorporated in the Tender document (in case of consortium that of Ca lead member), ii) Schedule of Performance of the Bidder (in case of consortium experience of any member) as in Annexure C, iii) Proforma for certification for Minimum Average Annual Turnover (“MAAT”) from Chartered Accountant as in Annexure D. (in case of consortium for lead member and in case of Aggregator, Networth Dcertificate or Investible fund certificate), iv) Aggregator have to submit back-to-back agreement with OEM for complete contract period for the maintenance of buses. Aggregator have also to submit Manufacturer Authorization Form (if aggregator is sole bidder or lead bidder then such bidder shall submit Manufacturer Authorization Form) from OEM, Ev) Schedule of Departures from technical specification as in Annexure F,vi) General details of Bidder with registration proof and credentials (in case of Consortium, this would need to be provided by the lead members) as in Annexure & H, vii) Bid Security/EMD as in Annexure I, Fviii) The Annexure-L. (undertaking of the Bidder not being involved/engaged in any corrupt or fraudulent malpractices or not being black-listed with any Government or Public Sector Units in India or outside India) ix) In case of Consortium, proforma of Consortium Agreement to be Gentered into between members as in Annexure N, x) Covering Letter cum Project Undertaking as per Annexure Q stating the Proposal Validity Period, xi) Power of Attorney for Signing of the Proposal (in case of Consortium, this would need to be provided by all the members) as in Annexure R.”

42. He submitted that TATA Motors deviated from the mandatoryrequirement while filing the said Annexure F. He highlighted the portionof the Annexure which states that if variations are found contradictingBEST’s requirements then such bids would be treated as non-responsive.The non-compliant deviation was as under:

“Shall meet the operating range requirement of 200 KMS @80% SOC in single charge as certified per AIS 040.”

43. He submitted that none of the bidders including EVEY(successful bidder) deviated from this mandatory condition. Hence, TATAMotors was declared non-responsive bidder at the technical stageitself. On 06.05.2022, BEST undertook the technical evaluation and tooka decision that of all the bidders found eligible and responsive, EVEYhad quoted the lowest rates and accordingly the contract was awardedin its favour.

44. The learned SG further submitted that the successful bidderwas required to fill up Annexure Y. However, Annexure Y was neither acondition precedent for being responsive bidder nor mandatorycondition for awarding the contract.

45. EVEY rectified its mistake, explaining that the Annexure Ysubmitted by it was inadvertently placed after doing cut-and-paste jobfrom the previous tender. EVEY filed revised/fresh Annexure Y strictlyin accordance with the Tender.

46. The learned SG vehemently submitted that to ask BEST toissue fresh tender notice would be against public interest. In the contractgiven to EVEY in May 2022, BEST was to pay Rs. 46.81/KM to EVEY.BEST examined the possibility of re-tendering and found that in therecent past, one similar tender was issued by the Convergency EnergyServices Limited (CESL), Government of India undertaking. As perthe recent contract awarded by CESL, it ended up paying Rs. 1,200Crore more than the present rate at which “BEST” awarded the instantcontract. Therefore, it would be commercially imprudent to opt for re-tendering.

ANALYSIS

47. Having heard the learned counsel appearing for the partiesand having gone through the materials on record, the only question thatfalls for our consideration is : Whether the High Court after upholding

Athe disqualification of TATA Motors from the Tender was justified inundertaking further exercise to ascertain whether EVEY also stooddisqualified and that BEST in its discretion may undertake fresh tenderprocess?48. This Court being the guardian of fundamental rights is duty-Bbound to interfere when there is arbitrariness, irrationality, mala fidesand bias. However, this Court has cautioned time and again that courtsshould exercise lot of restraint while exercising their powers of judicialreview in contractual or commercial matters. This Court is normallyloathe to interfere in contractual matters unless clear-cut case ofarbitrariness or mala fides or bias or irrationality is made out. One mustCremember that today many public sector undertakings compete with theprivate industry. The contracts entered into between private parties arenot subject to scrutiny under writ jurisdiction. No doubt, the bodies whichare State within the meaning of Article 12 of the Constitution are boundto act fairly and are amenable to the writ jurisdiction of superior courtsDbut this discretionary power must be exercised with great deal of restraintand caution. The courts must realise their limitations and the havoc whichneedless interference in commercial matters can cause. In contractsinvolving technical issues the courts should be even more reluctantbecause most of us in Judges’ robes do not have the necessary expertiseto adjudicate upon technical issues beyond our domain. The courts shouldEnot use magnifying glass while scanning the tenders and make everysmall mistake appear like big blunder. In fact, the courts must give“fair play in the joints” to the government and public sector undertakingsin matters of contract. Courts must also not interfere where suchinterference will cause unnecessary loss to the public exchequer. (See:FSilppi Constructions Contractors v. Union of India, (2020) 16 SCC489)

49. It is not in dispute that the first and the foremost requirementof the Tender was the prescribed operating range of the single deckerbuses which would operate for around and average of 200 Kms in aGsingle charge in “actual conditions” with 80% SoC without anyinterruption. Then materials on record would indicate that the TATAMotors in its bid deviated from this requirement and had informed BESTthat it could carry the operating range in the “standard test conditions”which was not in accordance with the Tender conditions. The High Courthas rightly observed in its impugned judgment that the bid of the TATAH

Motors failed to comply with the said clause. TATA Motors deviatedfrom the material and the essential term of the Tender. It may not be outof place to state at this stage that it is only TATA Motors who deviatedfrom the condition referred to above. However, we are of the view thatthe High Court having once declared TATA Motors as “non-responsive”and having stood disqualified from the Tender process should not haveentered into the fray of investigating into the decision of BEST to declareEVEY as the eligible bidder. We are saying so because the High Courtwas not exercising its writ jurisdiction in public interest. The High Courtlooked into petition filed by party trying to assert its own rights. Asheld by this Court in Raunaq International Ltd. (supra), that grant ofjudicial relief at the instance of party which does not fulfil the requisitecriteria is something which could be termed as misplaced. In RaunaqInternational Ltd. (supra), this Court observed as under:“27. In the present case, however, the relaxation waspermissible under the terms of the tender. The relaxation whichthe Board has granted to M/s Raunaq International Ltd. is onvalid principles looking to the expertise of the tenderer andhis past experience although it does not exactly tally with theprescribed criteria. What is more relevant, M/s I.V.R.Construction Ltd. who have challenged this award of tenderthemselves do not fulfil the requisite criteria. They do notpossess the prescribed experience qualification. Therefore,any judicial relief at the instance of party which does notfulfil the requisite criteria seems to be misplaced. Even if thecriteria can be relaxed both for M/s Raunaq InternationalLtd. and M/s I.V.R. Construction Ltd., it is clear that the offerof M/s Raunaq International Ltd. is lower and it is on thisground that the Board has accepted the offer of M/s RaunaqInternational Ltd. We fail to see how the award of tender canbe stayed at the instance of party which does not fulfil therequisite criteria itself and whose offer is higher than theoffer which has been accepted. It is also obvious that bystopping the performance of the contract so awarded, thereis major detriment to the public because the construction oftwo thermal power units, each of 210 MW, is held up onaccount of this dispute. Shortages of power have becomenotorious. They also seriously affect industrial developmentand the resulting job opportunities for large number of

Apeople. In the present case, there is no overwhelming publicinterest in stopping the project. There is no allegationwhatsoever of any mala fides or collateral reasons forgranting the contract to M/s. Raunaq International Ltd.”

(Emphasis supplied)

50. We take notice of the fact that Annexure Y was originallyrequired to be submitted by the “Successful Bidder” after the evaluationof the bid and the same did not figure in the list of documents andannexures to be included in the technical submissions, as provided underClause 5.1.1 of Schedule II of the Tender. Further the format providedCfor Annexure Y in the Tender documents in its heading states that the“Successful Bidders shall upload Letter of Undertaking on theirletter head as below”. Therefore, we are of the view that the restrictionon revision of documents under Clause 16 of Schedule I, which states,“No addition/correction, submission of documents will be allowedafter opening of technical bid,” is only limited to the documentsDnecessary to be included in the technical bid and would not be applicableto any such document which does not form part of the technical bid.

51. We are of the view that the High Court should have been bitslow and circumspect in reversing the action of BEST permitting EVEYto submit revised Annexure Y. We are of the view that the BESTEcommitted no error or cannot be held guilty of favoritism, etc. in allowingEVEY to submit revised Annexure Y as the earlier one was incorrecton account of clerical error. This exercise itself was not sufficient todeclare the entire bid offered by EVEY as unlawful or illegal.

52. Ordinarily, writ court should refrain itself from imposing itsFdecision over the decision of the employer as to whether or not to acceptthe bid of tenderer unless something very gross or palpable is pointedout. The court ordinarily should not interfere in matters relating to tenderor contract. To set at naught the entire tender process at the stage whenthe contract is well underway, would not be in public interest. Initiating aGfresh tender process at this stage may consume lot of time and also lossto the public exchequer to the tune of crores of rupees. The financialburden/implications on the public exchequer that the State may have tomeet with if the Court directs issue of fresh tender notice, should beone of the guiding factors that the Court should keep in mind. This isevident from three-Judge Bench decision of this Court in AssociationH

of Registration Plates v. Union of India and Others, reported in (2005)1 SCC 679.

53. The law relating to award of contract by the State and publicsector corporations was reviewed in Air India Ltd. v. CochinInternational Airport Ltd., reported in (2000) 2 SCC 617 and it washeld that the award of contract, whether by private party or by aState, is essentially commercial transaction. It can choose its ownmethod to arrive at decision and it is free to grant any relaxation forbona fide reasons, if the tender conditions permit such relaxation. Itwas further held that the State, its corporations, instrumentalities andagencies have the public duty to be fair to all concerned. Even whensome defect is found in the decision-making process, the court mustexercise its discretionary powers under Article 226 with great cautionand should exercise it only in furtherance of public interest and not merelyon the making out of legal point. The court should always keep thelarger public interest in mind in order to decide whether its interventionis called for or not. Only when it comes to conclusion that overwhelmingpublic interest requires interference, the court should interfere.

54. As observed by this Court in Jagdish Mandal v. State ofOrissa and Others, reported in (2007) 14 SCC 517, that while invokingpower of judicial review in matters as to tenders or award of contracts,certain special features should be borne in mind that evaluations of tendersand awarding of contracts are essentially commercial functions andprinciples of equity and natural justice stay at distance in such matters.If the decision relating to award of contract is bona fide and is in publicinterest, courts will not interfere by exercising powers of judicial revieweven if procedural aberration or error in assessment or prejudice to atenderer, is made out. Power of judicial review will not be invoked toprotect private interest at the cost of public interest, or to decidecontractual disputes.

55. In such circumstances referred to above, we set aside thatpart of the judgment and order passed by the High Court by which thedecision of BEST to accept the tender of EVEY was set aside and itwas left to the discretion of BEST to undertake fresh tender process.

56. The Appeal filed by TATA Motors accordingly fails and ishereby dismissed. Whereas the Appeals filed by EVEY and BEST areallowed to the aforesaid extent.

716SUPREME COURT REPORTS

[2023] 6 S.C.R.

A57. There shall be no order as to costs.

58. Pending application, if any, stands disposed of accordingly.

Divya Pandey

(Assisted by : Roopanshi Virang, LCRA)

Appeals disposed of.