Owner/Employer Who Authored Tender Documents Is The Best Person To Understand & Appreciate It : Supreme Court

The Supreme Court observed that the owner or the employer of a project, who 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 by the employer unless there is mala fide or perversity in the understanding or appreciation, the bench of Justices JK Maheshwari and KV Viswanathan observed in Om Gurusai Construction Company vs V.N. Reddy.

In this case, the Executive Engineer, Lower Wardha Project Division, Wardha issued a tender calling upon interested bidders to submit their bid. Under a tender clause, the appellant was to furnish the additional performance security within a period of two working days. The additional performance security was submitted on a day after the prescribed period. The tendering authority accepted the bid of the appellant and issued work order. Allowing a writ petition challenging this, the High Court, on interpretation of a tender clauseheld that the tender issuing authority could not have accepted the additional performance security.

In appeal, the Apex Court bench disagreed with this view and observed:

"The tendering authority, after due verification, about the non-operation of the banks on 15.03.2021 and 16.03.2021 due to the strike by the bank employees, had accepted the additional performance security on 17.03.2021 and awarded the work to the appellant. It is well settled by a long line of judgments 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. It has also been held that the constitutional courts must defer to this understanding and appreciation of the tender documents by the employer unless there is mala fide or perversity in the understanding or appreciation."

Observing thus, the bench allowed the appeal and set aside the High Court Judgment.

Om Gurusai Construction Company vs V.N. Reddy - 2023 LiveLaw (SC) 694 - 2023 INSC 760

Constitution of India, 1950 ; Article 226 - Writ Petition in tender matters - The owner or the employer of a project, who 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 by the employer unless there is mala fide or perversity in the understanding or appreciation. (Para 25)

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