Tender – Scope of judicial review – Notice inviting tenders (NIT) issued by Navodaya Vidyalaya samite (NVS) on Govt. Portal (GeM) for supply of tablets for school children with specific ‘past performance’ criterion that bidder ought to have supplied ‘same or similar category’ products to the extent of 80% of bid quantity (which was changed to 60% by corrigendum) in at least one of the last three financial years before bid opening – Respondent offered its bid for the product and was declared disqualified for having fallen short in ‘past performance’ criterion by 10.20% - Representation made by the Respondent seeking clarification of the reason for rejection which was rejected by the NVS on the ground that only smart phones were supplied by the Respondent and the product smart phone does not fall within the description of ‘same or similar category product’ vis-a-vis the product required i.e., ‘Tablet’- Being aggrieved, the Respondent preferred the writ petition contending that ‘Tablet’ was an electronic product belonging to the ‘same or similar category’ as a ‘Smart Phone’ and that the decision of the NVS, excluding “Smart Phones” from “same or similar category products” was unreasonable and against the principles of fair play and logic - during the pendency of the writ, the successful bidder AGMATEL/appellant herein was awarded the tender – High Court allowed the writ petition and disapproved the technical disqualification – On appeal, held: Technical evaluation or comparison by the Court is impermissible and the author of the tender document is taken to be the best person to understand and appreciate its requirements and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender – Court would prefer to keep restraint and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given – The only requirement of law, for such process of decision making by the tender inviting authority, is that it should not be suffering from illegality, irrationality, mala fide, perversity, or procedural impropriety – No such case being made out, the decision of the tender inviting authority (NVS) in the present case was not required to be interfered with on the reasoning that according to the writ Court.
Principles/Doctrines – Doctrine of ‘Contra proferentem’ – Applicabilty of – It is applied in the case of ambiguity in the insurance policy because the policies are made by the insurer and its ambiguity cannot be allowed to operate against the insured- However, this rule cannot be applied to lay down that in case of any ambiguity in a tender document, it has to be construed in favour of a particular person who projects a particular view point- The obvious inapplicability of this doctrine to the eligibility conditions in a notice inviting tender could be visualised from a simple fact that in case of ambiguity, if two different tenderers suggest two different interpretations, the question would always remain as to which of the two interpretation is to be accepted?- Obviously, to avoid such unworkable scenarios, the principle is that the author of the tender document is the best person to interpret its documents and requirements.
Allowing the appeals, the Court
Held: 1.1. The author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given. [Para 17][886-H; 887-A-B]
1.2.Even if some organisations/institutions, with reference to their requirements or other relevant factors, had assumed these two products, i.e., “Tablets” and “Smart Phones” akin to each other, the facts do remain that these very products have been placed under different categories on the online portal GeM and have also been taken as classifiable differently by the customs authority. In the given set of facts and classifications, the decision, as taken by NVS and its TEC, cannot be said to be suffering from irrationality, absurdity or mala fide. The analysis of the writ Court needs to stop at that. Beyond this point, the writ Court would not be substituting its preferred interpretation of the tender condition with the one adopted by the author of the tender document and the person procuring the product, who has to be regarded as the best person to understand its requirements. [Para 21.1][888-DE]
1.3. Neither the excessive analysis, as entered into by the High Court, was required in this case nor we would be evaluating all the specifications of these two products, namely, “Smart Phones” and “Tablets”. Suffice it to notice for the present purpose that even if both are electronic devices and even if several of their utility features are the same or similar, their categorisation under different headings is also a fact not unknown to the parties, as would appear from the categorisation on the Government online portal itself. No adjudicatory process is called for and the interpretation as put by the tender inviting authority-NVS does not deserve interference. [Para 21.2][888-F-H]
1.4 Even if some of the organisations, in relation to their requirements, procured tablets and smart phones both under the same tender process or even used these expressions “interchangeably” or “interconnected”, that by itself cannot lead to a definite conclusion by the Court that “Smart Phones” and “Tablets” are to be taken as similar category products for the tender process in question. [Para 22.4][896-G-H]
1.5. Interference by the High Court in this matter does not appear justified, particularly when no case of mala fide or bias is alleged. [Para 23][897-A]
1.6. The process of interpretation of terms and conditions is essentially left to the author of the tender document and the occasion for interference by the Court would arise only if the questioned decision fails on the salutary tests laid down and settled by this Court in consistent decisions, namely, irrationality or unreasonableness or bias or procedural impropriety. [Para 24][897-D-E]
1.7. Even from the extracted part of the principles related with the ‘contra proferentem rule’, as reproduced by this Court from the Halsbury’s Laws of England, it is clear that the said rule was applied in the case of ambiguity in the insurance policy because the policies are made by the insurer and its ambiguity cannot be allowed to operate against the insured. This rule, in our view, cannot be applied to lay down that in case of any ambiguity in a tender document, it has to be construed in favour of a particular person who projects a particular view point. The obvious inapplicability of this doctrine to the eligibility conditions in a notice inviting tender could be visualised from a simple fact that in case of ambiguity, if two different tenderers suggest two different interpretations, the question would always remain as to which of the two interpretation is to be accepted? Obviously, to avoid such unworkable scenarios, the principle is that the author of the tender document is the best person to interpret its documents and requirements. [Para 24.2][898-B-E]
1.8. It had not been a case of post facto interpretations by the tender inviting authority-NVS. Certain suggestions made on behalf of the writ petitioner about the tender inviting authority changing the terms to suit a particular bidder remain baseless. No such case of mala fide has been made out; rather, as pointed out on behalf of the appellant, all the other tenderers clearly understood the meaning and requirement of the past performance criterion and stated the particulars of tablets supplied by them in the past. Such contentions of the writ petitioner have only been noted to be rejected. [Para 26][899-C-D]
1.9. Consequently, these appeals succeed and are allowed; the impugned judgment and order dated 27.09.2021 is set aside; Writ Petition (C) No. 6676 of 2021, as filed by the writ petitioner, is dismissed with no order as to costs. [Para 29][899-H; 900-A] Reliance Energy & Anr. v. Maharashtra State Road Development Corporation Ltd & Ors. (2007) 8 SCC 1 : [2007] 9 SCR 853 – inapplicable.
Nabha Power Ltd. v. Punjab SPCL (2018) 11 SCC 508 : [2017] 14 SCR 301; United India Insurance Co. Ltd. v. Orient Treasures (P) Ltd. (2016) 3 SCC 49 : [2016] 1 SCR 1 – distinguished.
Tata Cellular v. Union of India (1994) 6 SCC 651 : [1994] 2 Suppl. SCR 122 – referred to.
Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & Anr. (2016) 16 SCC 818 : [2016]
3 SCR 551; Galaxy Transport Agencies v. New J K Roadways 2020 SCC OnLine SC 1035 – relied on.
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.
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