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Civil · Reportable judgment

Case Details Btl Epc Ltd. vs Macawber Beekay Pvt Ltd and Others

Court
Supreme Court of India
Date
18 September 2023
Case No.
Civil Appeal No. 5968 of 2023
Result
Allowed
Bench
D.Y. Chandrachud, J.B. Pardiwala, Manoj Misra
Citation
[2023] 13 S.C.R. 152 : 2023 INSC 864
Supreme Court Reports [2023] 13 S.C.R. 152 : 2023 INSC 864
Issue for consideration
The issue pertains to the pre-qualification requirement for bidders, notified by the contractor; and whether the bid submitted by the successful bidder was liable to be rejected on the ground that the Chinese company with whom it had entered into a consortium agreement was not registered with the competent authority in terms of the Public Procurement Order.
Headnote

Contract – Complex technical contract – Power of judicial review – Writ petition by the competing bidder challenging the contract awarded to the successful bidder on the ground that it was in breach of conditions, the tender submitted did not meet the technical requirements – Dismissed by the Single Judge of the High Court, however the Division Bench set aside the order – Interference with:

Read the full headnote (6 more paragraphs)

Held: In contracts involving complex technical issues, the Court should exercise restraint in exercising the power of judicial review – Even if a party to the contract is ‘State’ within the meaning of Art. 12 of the Constitution, amenable to the writ jurisdiction of the High Court or the Supreme Court, the Court should not readily interfere in commercial or contractual matters – Court ought to defer to the discretion of the tender inviting authority which is best placed to interpret their terms – Courts to review the decision-making process and examine arbitrariness or mala fides, if any – Neither the State Power Generation Company nor the contractor raised any dispute as regards the eligibility of the successful bidder to bid for the contract – Challenge was addressed by the competing bidder whose bid was much higher than the successful bidder – Primary decision on whether the successful bidder meets the technical requirements of the tender on account of its collaborator being a Chinese company that was not registered had to be determined by the contractor – Contractor has not found that there was any breach – Contractor and the State Power Generation Company found that the agreement with the Chinese company was in the nature of a service agreement and not a “consortium” under the pre-qualification requirements, thus, the registration requirement did not apply – Division Bench ought to have proceeded with circumspection and interfered only when the order sufferred from perversity or error – Interference of the Division Bench in the judgment of the Single Judge not warranted – Furthermore, setting aside the award of the contract would cause insuperable difficulties in the implementation of the contract since the work under the contract has progressed, and both the State Power Generation Company and the contractor, being public entities have invested funds for the realization of the project – Thus, the judgment of the Division Bench set aside and that of the Single Judge restored – Judicial restraint – Constitution of India. [Paras 33-40]

LIST OF CITATIONS AND OTHER REFERENCES

Tata Motors Limited v. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Others, 2023 SCC OnLine SC 671; Monte Carlo Limited v. National Thermal Power Corporation Limited, (2016) 15 SCC

272 : [2016] 8 SCR 224 – referred to.

OTHER CASE DETAILS INCLUDING IMPUGNED

ORDER AND APPEARANCES

As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

JUDGMENT / ORDER OF THE SUPREME COURT JUDGMENT DR DHANANJAYA Y CHANDRACHUD, CJI 1. Leave granted. 2. These appeals arise from a judgment dated 27 July 2023 of a Division Bench of the High Court of Karnataka. The High Court set aside a judgment of a Single Judge, in a writ appeal1. As a consequence of the impugned judgment, a Letter of Intent2 which was issued by Bharat Heavy Electricals Limited3, in favour of the appellant has been quashed and BHEL has been directed to consider the bid submitted by the first respondent in terms of a Notice Inviting Tenders dated 24 June 2022. 3. BHEL was
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