Kwar Hydroelectric Project | Minimal Judicial Interference In Contractual Matters Especially If Public Exchequer At Stake: Jammu & Kashmir High Court

A bench of Justice Wasim Sadiq Nargal has observed,

"...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. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer".

Justice Nargal made these observations while hearing a plea through the medium of which the petitioner-bidding company had assailed a communication issued by respondent Chenab Valley Power Projects Ltd, a joint Venture Company of Government of India & J&K Govt to harness the vast hydro potential of river Chenab, whereby it had rejected the Techno Commercial Bid of the petitioner for Kwar Hydroelectric Project as being non-responsive.

The petitioner assailed his bid rejection on the ground that impugned communication does not in any manner disclose the reasons as to why the Techno Commercial Bid of the petitioner has been found to be non-responsive notwithstanding the fact that the petitioner company fulfilled all the eligibility requirements and conditions.

Petitioner further submitted that the Techno Commercial Bid of the petitioner-company by no set of circumstances can be declared as non-responsive when the petitioner-company fully meets the eligibility criteria as per the terms and conditions of the NIT. As per the terms and conditions of the tender document, the bid capacity should not be less than INR 3036.30 million and as per the stand of the petitioner, the respondents have wrongly and erroneously evaluated the Techno Commercial Bid of the petitioner-company and rejected the same by declaring as non-responsive and that too without assigning any reason.

Contesting the plea the respondents argued that as per a clause of NIT, one of the essential requirement i.e. qualification criteria in order to be techno commercially responsive was the Bid Capacity of the bidder at the time of opening of bids (technical as well as price bid) not being less than INR 3036.30 million equivalent to US $ 39.01 million. However the petitioner while submitting his online Bid vide bid form has shown his Bid capacity to be INR 2892.20 million, inclusive of GST.

Further the respondent submitted that the the Tender Evaluation Committee, during the process of the evaluation of Bid Capacity had found out that the calculation and documents submitted by the petitioner were in contradiction to the calculation and documents submitted by the bidder at the time of the submission of bid. The petitioner had tried to play mischief while submitting his Bid as he did not have the Bid Capacity as required under the terms & conditions of the NIT, the respondents countered.

Findings

After considering the rival contentions, Justice Nargal observed that one of the essential requirement i.e. qualification criteria in order to be “Techno commercially responsive” was the Bid Capacity of the bidder at the time of opening of bids (technical as well as price bid) not less than INR 3036.30 million. However, in the present case, the bid capacity of the bidder has fallen short of the aforesaid figure and rightly so, the respondents have held the petitioner’s Techno Commercial Bid being non-responsive, the bench pointed.

Highlighting the findings of the Tender Evaluation Committee 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, the bench observed that the decision of the expert Tender Evaluation Committee comprising five different Head of Departments of different fields being experts in the field of the company has rightly found the petitioner ineligible.

Stressing on the fact that Courts 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, the bench emphasised that it cannot act as a Court of appeal over the decision taken by the appropriate authority as the authority floating the tender is the best judge of its requirements and therefore, the interference of the Court should be minimal.

In order to outline the paradigm shift in the approach of the Courts, especially Constitutional Courts, in matters involving staying of tendering process undertaken for the welfare of public, the bench found it worthwhile to record the following observations of supreme court in Tata Motors Limited v The Brihan Mumbai Electric Supply & Transport Undertaking (Best) And Ors 2023:

"..The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain".

In view of the said legal position the bench found the petition devoid of any merit and dismissed the same.

Case Title: M/s Om Infra Ltd. New Delhi Vs Chenab Valley Power Projects P Ltd and ors.

Citation: 2023 LiveLaw (JKL) 141

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