Supreme Court: No one can be compelled to perform an impossible task

 This is a case where the appellant has complied with the

condition of furnishing the additional performance security at

the earliest possible time, that it could possibly comply. That

no one can be compelled to perform an impossible task - Lex

non cogit ad impossibilia - is a well-accepted legal principle.

{Para 19}

20. This Court in Raj Kumar Dey and Others vs. Tarapada

Dey and Others, (1987) 4 SCC 398, while quoting, approving

and applying the maxim to the facts of that case, had the

following to say:

“6. … The other maxim is lex non cogit ad

impossibilia (Broom’s Legal Maxims – page 162) –

The law does not compel a man to do that which he

cannot possibly perform. 

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5375 OF 2023

M/s Om Gurusai Construction Company Vs M/s V.N. Reddy & Ors.

Author: K.V. Viswanathan, J.

Citation:  2023INSC760.

Dated: August 23, 2023.

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Whether bidder can insist the Authority inviting tenders to enter into further negotiations?

  In Meerut Development Authority vs Association of Management Studies and Anr., 2009(6) SCC 171 the Supreme Court has clarified the rights of a Tenderer participating in the Tender Process as under: "17. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations."(emphasis supplied). {Para 14}

 IN THE HIGH COURT OF DELHI AT NEW DELHI

  W.P.(C) 8939/2022 & C.M. No. 26865/2022

 M/S COSMO ENTERPRISE Vs UNION OF INDIA 

 CORAM: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE SACHIN DATTA SACHIN DATTA, J. 

Date of Decision: 03.06.2022 

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Supreme Court: Court should not grant an injunction in case of tender of infrastructure project; Instead, Relegate Party To Seek Damages

If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfer- ing in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work.

26. A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.

IN THE SUPREME COURT OF INDIA 

CIVIL APPELLATE JURISDICTION 

CIVIL APPEAL NO. 1846 OF 2022 

 M/S. N.G. PROJECTS LIMITED VERSUS M/S. VINOD KUMAR JAIN & ORS.

Coram: HEMANT GUPTA; V. RAMASUBRAMANIAN, JJ.

HEMANT GUPTA, J.

Dated: MARCH 21, 2022

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Whether Breach Of Contract U/S 74 of The Contact Act is Applicable At Pre-Formation of contract Stage?

The writ petitioner has approached this Court aggrieved by the action of the second respondent in forfeiting the bid security which was submitted by it in the course of a process for award of contract initiated by that respondent. The challenge essentially is to the communication of 18 March 2019 & 28 May 2019 pursuant to which the second respondent apprised the petitioner of its decision to forfeit the bid security which had been submitted.

 40. In the light of the foregoing discussion, we are of the considered opinion that the appellant did not commit any breach of the term(s) and condition(s) of the notice inviting bids and on the other hand, it was the respondents who committed breaches. In these circumstances, the State had no right to forfeit the security amount and instead it should have been returned when demanded by the appellant.”

 Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application.”

 IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment pronounced on: 31 March 2022 

 W.P.(C) 8779/2019, 

CM APPLs. 36308/2019 & 44738/2019

 THE INDIAN HOTELS COMPANY LTD. Vs  UNION OF INDIA AND ORS.

CORAM:  MR. JUSTICE YASHWANT VARMA 

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Whether the government can waive non-essential term in the tender if there is substantial compliance with tender terms?

 In Jal Mahal Resorts (P) Ltd. v. K.P. Sharma (2014) 8 SCC 804, the Supreme Court has quoted with approval B.S.N. Joshi & Sons Ltd. It has held that when there is substantial compliance with the terms of tender, the Government is entitled to waive any non-essential term in the tender for the bona fide reasons and in public interest. To conclude, the Court has held that if there were no mala fides in the decision-making process, literal compliance cannot be insisted upon. {Para 51}

IN THE HIGH COURT OF BOMBAY AT GOA

WRIT PETITION NOS.1114 of 2016 & 718 of 2018

Dr. R. Venkatesh  V/s  State of Goa,

Coram:- DAMA SESHADRI NAIDU &

NUTAN D. SARDESSAI, JJ.

Date:- 5th MARCH 2020

ORAL JUDGMENT: (Per Dama Seshadri Naidu, J.)

Citation: 2021(1) MHLJ 105

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Questions and answers on law part 16

Q. 1:-Whether Tender contract comes under commercial dispute under Commercial Courts Act?

Ans:  Commercial Courts Act

2. Definitions.—(1) In this Act, unless the context otherwise requires,—(c) “commercial dispute” means a dispute arising out of—

(vi) construction and infrastructure contracts, including tenders;

Q. 2 :- Whether civil revision is tenable if court fails to award costs while deciding suit?

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Whether manual intervention is permissible if anything goes wrong in technical processes?

The   impact     of   technology   in   our   life   today,   is

unimaginable.  We use technology  every day and it has saved

us of time and efforts.   Introduction  of the e­tendering system

has made the cumbersome process of tenders simple, faster and

also free from unnecessary  human intervention.  However,  in

a situation with which we have  dealtwith above, the question

is whether  the use of the technology  has offered solutions  or

it has created issues.  The increased  dependency   on modern

technology   has reduced our creativity and human being is

dependent upon the said technology   which  undisputedly  is

an useful servant  but a dangerous master.   In words of Albert

Einstein “human spirit  must  prevail over technology”.  In the

present     case   in   hand   we   have   observed   that   uncertainty

prevails   in   certain   areas   and   no   technology   can   make   the

system   'full   proof'     and   as   such   a   situation   where   the

technology  can err, we cannot completely  exclude the element

of   human   intervention   in   exceptional   circumstances.

Ultimately, it is the human being who controls the technology

and when it errs, it is for the human being to rectify it.   No

solution   is   coming   from   the   expert   and   the   technology

operator­NIC as to what happens if the “freeze button is not

clicked”.   On the other hand, the NIC itself  shows that  once

the bids are uploaded,  they remain  safe and saved and human

intervention  is not possible.  In this background  and for the

reasons which we have already discussed above,   we feel   it

expedient   to  intervene in the technological procedure since

we feel that the technology   has failed to serve   its intended

purpose   in   the   present   case   and   interest   of   justice   call   for

intervention. Every citizen has legal and fundamental rights

which are required to be protected and in a digital world the

said rights     cannot be lost sight   of but the same   are to be

protected  by providing alternative  and effective solutions, to

be introduced  into the modern technology/web­system and in

the process of tender it is very much necessary to ensure that

the bidders   are not shunted out of the procedure only on

account of any technical glitch and technology   needs to be

developed   in   a   manner    to   cater  to   their    needs     without

causing   any delay in the scheduled time.   We also makes it

clear that we are inclined to grant relief to the petitioners,

considering   'public   interest   and   the   fact   that   the   bid   of

petitioners (technical/financial) are already sealed  after their

uploading  and no changes  are possible now, and we treat this

as sealed packets  submitted within date and time as per tender

document. 

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION (L) NO.  2070    OF    2017

 Shapoorji Pallonji & Company Private  V/s. State of Maharashtra, 

   CORAM :  ANOOP V. MOHTA       AND

                     SMT. BHARATI H. DANGRE,JJ.

                        DATE  :  28th SEPTEMBER,   2017

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Whether Bidders participating in tender process can insist that their bids/tenders should be accepted?

 In Maa Binda Express Carrier (supra) the apex Court held that submission of a bid or tender in response to a notice inviting tender is only an offer, which the State or its agencies are under no obligation to accept. Bidders participating in the tender process cannot insist that their bids/tenders should be accepted simply because a bid is the highest or lowest. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in evaluation of their bids/tenders. When the power is vested with the Government to fix its modalities, the same cannot be challenged before this Court, unless it comes within the parameters of arbitrariness or unreasonableness and, as such, in a matter of contract, it is within the complete domain of the Government to frame its own policies. In view of that, the Government has to be given a free hand to act fairly, reasonably and non-discriminatorily, so as to achieve the avowed objective of tender process.

IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P.(C) Nos. 11817 and 12427 of 2016

Decided On: 13.01.2017

 Mohapatra Binders and Ors.

Vs.

State of Odisha and Ors.

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Whether decision relating to validity of tender of one year will govern subsequent tender?

 We have already clarified hereinabove that the judgments in the cases of Orissa Printers (supra) and Mohapatra Binders (supra) have not been pronounced on principles of law, after considering the legal objections raised by the State Government, but on the basis of misplaced sympathy. The same would, thus, not be binding. Even otherwise, said judgments relate to the tenders of particular years and would not be binding for subsequent years, unless any ratio has been laid down which would bind the parties on the legal principles, which is not so.

IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P.(C) Nos. 11817 and 12427 of 2016

Decided On: 13.01.2017

 Mohapatra Binders and Ors.

Vs.

State of Odisha and Ors.

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Whether government can terminate contract without assigning any reason?

 We agree with the contentions advanced by
Mr. Sibal that condition no.8 of the letter of
allotment is unconscionable as it gives IOCL an
unfettered right to terminate the distributorship
without assigning any reason. In the instant case,
respondent no.2 is far weaker in economic strength
and has no bargaining power with IOCL. At the time
when the letter of allotment was issued, respondent
no.2 had no other means of livelihood and was
dependent on the grant of Indane Gas agency by IOCL
for sustenance of himself and family members. The
letter of allotment contains standard terms and
respondent nos. 2 and 3 had no opportunity to vary
the same. Condition no.8 of letter of allotment
provides for unilateral termination of
distributorship without assigning any reason which is
liable to be read down in the light of Article 14 of
Constitution of India as well as observations made by
this court in Central Inland Water Corporation
Limited’s case (supra). The relevant paragraph cited
by the learned senior counsel is reproduced
hereunder:
“89. Should then our courts not advance with
the times? Should they still continue to cling
to outmoded concepts and outworn ideologies?
Should we not adjust our thinking caps to match
the fashion of the day? Should all
jurisprudential development pass us by, leaving
us floundering in the sloughs of 19th century
theories? Should the strong be permitted to
push the weak to the wall? Should they be
allowed to ride roughshod over the weak? Should
the courts sit back and watch supinely while
the strong trample underfoot the rights of the
weak? We have a Constitution for our country.
Our judges are bound by their oath to “uphold
the Constitution and the laws”. The
Constitution was enacted to secure to all the
citizens of this country social and economic
justice. Article 14 of the Constitution
guarantees to all persons equality before the
law and the equal protection of the laws. The
principle deducible from the above discussions
on this part of the case is in consonance with
right and reason, intended to secure social and
economic justice and conforms to the mandate of
the great equality clause in Article 14. This
principle is that the courts will not enforce
and will, when called upon to do so, strike
down an unfair and unreasonable contract, or an
unfair and unreasonable clause in a contract,
entered into between parties who are not equal
in bargaining power. It is difficult to give an
exhaustive list of all bargains of this type.
No court can visualize the different situations
which can arise in the affairs of men. One can
only attempt to give some illustrations. For
instance, the above principle will apply where
the inequality of bargaining power is the
result of the great disparity in the economic
strength of the contracting parties. It will
apply where the inequality is the result of
circumstances, whether of the creation of the
parties or not. It will apply to situations in
which the weaker party is in a position in
which he can obtain goods or services or means
of livelihood only upon the terms imposed by
the stronger party or go without them. It will
also apply where a man has no choice, or rather
no meaningful choice, but to give his assent to
a contract or to sign on the dotted line in a
prescribed or standard form or to accept a set
of rules as part of the contract, however
unfair, unreasonable and unconscionable a
clause in that contract or form or rules may
be. This principle, however, will not apply
where the bargaining power of the contracting
parties is equal or almost equal. This
principle may not apply where both parties are
businessmen and the contract is a commercial
transaction. In today’s complex world of giant
corporations with their vast infrastructural
organizations and with the State through its
instrumentalities and agencies entering into
almost every branch of industry and commerce,
there can be myriad situations which result in
unfair and unreasonable bargains between
parties possessing wholly disproportionate and
unequal bargaining power. These cases can
neither be enumerated nor fully illustrated.
The court must judge each case on its own facts
and circumstances.”
31. Further, it has been rightly contended by the
learned senior counsel Mr. Sibal by placing reliance
upon Mahabir Auto Stores’s case (supra) that IOCL
being a Government of India Undertaking is bound to
act fairly, reasonably and its conduct is subject to
scrutiny on the touchstone of Article 14 of the
Constitution of India.
REPORTABLE
 IN THE SUPREME COURT OF INDIA
 CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO.7266 OF 2009
INDIAN OIL CORPORATION LTD
 V
NILOUFER SIDDIQUI & ORS
Dated:December 1, 2015
Citation:(2015) 16 SCC125

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Whether tender can be cancelled without following principles of natural justice?

In Commissioner of Police, Bombay v.
Gordhandas Bhanji, AIR 1952 SC 16, the Apex Court held as
follows :
“Public orders publicly made, in exercise of a
statutory authority cannot be construed in the light
of explanations subsequently given by the officer
making the order of what he meant, or of what was
in his mind, or what he intended to do. Public orders
made by public authorities are meant to have public
effect and are intended to affect the acting and
conduct of those to whom they are addressed and
must be construed objectively with reference to the
language used in the order itself. Orders are not like
old wine becoming better as they grow older.”
Similar view has also been taken in Bhikhubhai Vithlabhai Patel and
others v. State of Gujarat and another, (2008)4 SCC 144.
9. In view of the law laid down by the Apex Court
mentioned supra and looking at the impugned order in Annexure-
4, a conclusion can be drawn that by a cryptic order the 
cancellation of tender has been made, which has been explained by
filing subsequent affidavit, the same is not permissible under law.
10. Relying on Air India Ltd. (supra), learned counsel
for the State has urged that in exercise of judicial review, the Court
cannot interfere with the decision, but it can interfere with the
decision-making process on grounds of mala fides,
unreasonableness or arbitrariness and Court should exercise its
discretionary power with great caution and only in furtherance of
overwhelming public interest.
11. In Maa Binda Express Carrier(supra), it is held
that submission of a bid/ tender in response to a notice inviting
tenders is only an offer which State or its agencies are under no
obligation to accept and bidders participating in the tender process
cannot insist that their bids/ tenders should be accepted simply
because a bid is the highest or lowest.
12. None of the judgments referred to by the learned
Addl. Govt. Advocate for the State is applicable to the present
context.
13. In view of the reasons assigned in the foregoing
paragraphs, it appears that since no reasons have been assigned in
the order impugned in Annexure-4 and subsequently by filing
affidavit, the opposite parties have tried to justify their action by 
giving explanation, this Court is inclined to interfere with the same.
Thus, the order impugned in Annexure-4 dated 5.2.2016 and the
consequential invitation of bid in Annexure-5 also cannot sustain
and accordingly, the same are hereby quashed.
ORISSA HIGH COURT: CUTTACK
W.P.(C) No. 2656 of 2016

M/s.Shree Ganesh Construction  v State of Orissa and others 
P R E S E N T :
THE HON’BLE THE CHIEF JUSTICE MR. VINEET SARAN
AND
THE HON’BLE DR. JUSTICE B.R.SARANGI
 Dated : 18.05.2016

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When rejection of tender bid is not permissible?

In the present case, taking note of the observations and the
purpose for which the EMD has to be deposited, we find that it cannot be

said that failure to upload the scanned copy is an essential term of the
tender process especially considering that there is nothing on record to show
that at any point of time, the Petitioners who were otherwise holding a draft
in favour of the concerned Department had failed to produce the proof of the
scanned copy when demanded. In such circumstances, the action of the
concerned Department in refusing to open the bid of the Petitioners is
arbitrary, unreasonable and cannot be sustained.
 IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NO. 479 OF 2015
 Bharat Conductors Pvt. Ltd.,

V 
The Executive Engineer,

 CORAM :- F.M. REIS &
 NUTAN D. SARDESSAI, JJ.
 Date : 7/8th September, 2016.
Citation: 2016(6) MHLJ 408

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Whether payment of earnest money can be considered to be an essential term of tender process?

Apart from that, the payment of earnest money cannot be
considered to be an essential term of the tender process. The Apex
Court, in a Judgment reported in (1991) 3 SCC 273 in the case of
Poddar Steel Corporation vs. Ganesh Engineering Works and others,
has observed at paras 6 and 8, thus :
“6. It is true that in submitting its tender accompanied
by a cheque of the Union Bank of India and not of the
State Bank clause 6 of the tender notice was not
obeyed literally, but the question is as to whether the
said non-compliance deprived the Diesel Locomotive
Works of the authority to accept the bid. As a matter of
general proposition it cannot be held that an authority
inviting tenders is bound to give effect to every term
mentioned in the notice in meticulous detail, and is not
entitled to waive even a technical irregularity of little
or no significance. The requirements in a tender notice
can be classified into two categories — those which
lay down the essential conditions of eligibility and the
others which are merely ancillary or subsidiary with
the main object to be achieved by the condition. In the
first case the authority issuing the tender may be 
required to enforce them rigidly. In the other cases it
must be open to the authority to deviate from and not
to insist upon the strict literal compliance of the
condition in appropriate cases. This aspect was
examined by this Court in C.J. Fernandez v. State of
Karnataka (1990) 2 SCC 488, a case dealing with
tenders. Although not in an entirely identical situation
as the present one, the observations in the judgment
support our view. The High Court has, in the impugned
decision, relied upon Ramana Dayaram Shetty v.
International Airport Authority of India (1979) 3 SCC
489, but has failed to appreciate that the reported case
belonged to the first category where the strict
compliance of the condition could be insisted upon.
The authority in that case, by not insisting upon the
requirement in the tender notice which was an
essential condition of eligibility, bestowed a favour on
one of the bidders, which amounted to illegal
discrimination. The judgment indicates that the court
closely examined the nature of the condition which
had been relaxed and its impact before answering the
question whether it could have validly condoned the
shortcoming in the tender in question. This part of the
judgment demonstrates the difference between the two
categories of the conditions discussed above. However
it remains to be seen as to which of the two clauses,
the present case belongs.
8. In the present case the certified cheque of the Union 
Bank of India drawn on its own branch must be treated
as sufficient for the purpose of achieving the object of
the condition and the Tender Committee took the
abundant caution by a further verification from the
bank. In this situation it is not correct to hold that the
Diesel Locomotive Works had no authority to waive
the technical literal compliance of clause 6, specially
when it was in its interest not to reject the said bid
which was the highest. We, therefore, set aside the
impugned judgment and dismiss the writ petition of
respondent 1 filed before the High Court. The appeal is
accordingly allowed with costs throughout.”
In the present case, considering the purpose for which the earnest
money is being deposited, we find that it is not an essential term of the
tender process. On going through the terms of the tender, it appears
that the earnest money would be adjusted as security deposit if the bid
of the tenderer is accepted. Hence, once the tender documents, along
with the demand draft, were accepted by the respondent-Corporation, it
was not open to the respondent-Corporation to unilaterally reject the
bid of the petitioner. In such circumstances, we find that the rejection
of the bid of the petitioner cannot be sustained and deserves to be
quashed and set aside. 
 IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NO. 79/2016
Sudha Facility Management Service,

V/s.
 The Managing Director,
Citation: 2016(6) MHLJ 96

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When court can set aside arbitration award as per S 34 of Arbitration Act?

On perusal of the judgment relied upon by the learned
counsel for the respondents in Associate Builders vs. Delhi
Development Authority (supra), it is clear that the Court can set-aside
the award if the award is against justice or morality, discloses patent
illegality, contrary to the terms of the contract and not in accordance
with the substantive law of India. In my view, the petitioners have
made out a case that the award is patently illegal on the face of
record and the learned arbitrator has decided contrary to the terms of
the tender documents and has also decided contrary to the law laid
down by the Supreme Court and this Court and thus this Court has
ample power to set-aside such award under section 34 of the said
Act.
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.240 OF 2013
Maharashtra State Electricity
Distribution Company Limited,

V
Vijai Electricals Limited

 CORAM : R.D. DHANUKA, J.

 PRONOUNCED ON : 4TH FEBRUARY, 2015
Citation:2016 (5) ALLMR74

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Whether condition can be imposed subsequently if not mentioned in notice inviting tender?

 On behalf of the Petitioner, it is submitted that neither in the NIT nor
in the tender conditions or in any rules/regulations is there any condition
that the spouse of a Councillor of a Nagar Panchayat cannot bid for a
tender or cannot be awarded a contract by the said Nagar Panchayat.
We have specifically asked Learned Counsel appearing for the
State/Respondents No.1 and 2 and Learned Counsel appearing for
Respondent No.3 about existence of any such condition. They have
admitted that there is no such condition, but this healthy practice is
adopted to avoid corruption. According to the Learned Counsel, a
Councillor can influence award or non-award of a contract and, therefore,
this decision was taken.
6. We are clearly of the view that the condition as such cannot be said
to be illegal. However, if any such condition had to be imposed, the same
should have been clearly mentioned in the NIT or appropriate guidelines
should have been issued in this regard that tenders submitted by persons,
who are relatives of the officers, employees, Councillor or of other elected
office bearers of the Nagar Panchayat will not be accepted. Had such a
condition been imposed, we would have no trouble in upholding the same.
However, we are clearly of the view that the rules of a game cannot be
changed after it has begun. When the NIT was issued, tender was
submitted by the Petitioner and his tender was approved by the Tender
Committee and forwarded to Respondent No.2, the Executive Engineer
for his approval, this condition was neither there nor brought to the notice
of any authority or the Petitioner. It is only after the wife of the Petitioner
lost the election, the Petitioner was denied the allotment of the works for
which he was the successful bidder.
7. We have, therefore, no hesitation in holding that Respondent No.2,4
the Executive Engineer took a decision beyond his jurisdiction in rejecting
the tender of the Petitioner on a ground which did not find mention either
in the NIT or in the tender documents or any of the rules or regulations of
the Nagar Panchayat. The decision of rejecting the tender of the
Petitioner is accordingly set aside.
HIGH COURT OF CHHATTISGARH, BILASPUR
Writ Petition (C) No.663 of 2016
Roshan Gupta,
v
 State of Chhattisgarh 
Dated:18.7.2016
Citation:AIR 2016 (NOC)656 Chh

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Whether tender is liable to be cancelled for non submission of photocopy of pan card?

 In the above quoted condition, list of documents to be submitted along
with the tender is given. One of the documents in the list is photocopy of Pan
Card of Income Tax Department ( 4 chh). Admittedly, the 3rd highest bidder did
not submit the photocopy of Pan Card of Income Tax Department. But he did
submit the Income Tax Clearance Certificate. The purpose of submitting
photocopy of the Pan Card of Income Tax Department is only to ensure that
tenderer is an income tax assessee. This purpose can also be served by filing
the Income Tax Clearance Certificate. There is no mention in the terms and
conditions of the NIT that in the event of failure to submit photocopy of the Pan
Card of Income Tax Department, the tender shall be rejected. In the context of
the condition in question, the object is that the fishery is settled to an income
tax assessee. And that the 3rd highest bidder has fulfilled by submitting the
Income Tax Clearance Certificate. The Assam Fishery Rules, 1953 (in short
“Rules”), which are statutory and regulate the settlement of fishery in favour of
fishermen, do not provide for a condition of submitting photocopy of Pan Card
of Income Tax Department along with tender documents. The purpose of
settlement of fishery to fishermen, in our considered view, does not get
defeated in any manner due to non-submission of the photocopy of Pan Card of
Income Tax Department by the 3rd highest bidder. The authorities were thus
justified in accepting the tender of 3rd highest bidder as he had submitted the
Income Tax Clearance Certificate instead of Pan Card of Income Tax
Department. For these reasons, we are unable to agree with the learned Single
Judge that merely because the 3rd highest bidder did not submit the Pan Card  
of Income Tax Department, his tender deserved to be cancelled. In fact, the 3rd
highest bidder had substantially complied with the condition. 
IN THE GAUHATI HIGH COURT

WRIT APPEAL NO. 44 of 2015

No.11 Part-V Kallong Nadi Anchalik Meen Samabay Samity Ltd., 
Vs
 The State of Assam,
BEFORE
MR. JUSTICE AJIT SINGH, THE CHIEF JUSTICE
 MR. JUSTICE SUMAN SHYAM
Date of hearing & judgment : 14.6.2016

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When court should interefere in tender process?

 Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium)[2] it was held by this Court, relying on a host of decisions that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us.

12. In Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay[3] it was held that the constitutional Courts are concerned with the decision making process. Tata Cellular v. Union of India[4] went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional Courts can interfere if the decision is perverse. However, the constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. This was confirmed in Jagdish Mandal v. State of Orissa[5] as mentioned in Central Coalfields.

13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision.

SUPREME COURT OF INDIA

Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. & ANR.

[Civil Appeal No. 9078 of 2016]

[Civil Appeal No. 9079 of 2016]

[Civil Appeal Nos. 9080-9081 of 2016]

Madan B. Lokur, J.

Dated:September 15, 2016

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When court should not interfere in interpretation of terms of tender document given by owner or employer of a project?

 Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium)[2] it was held by this Court, relying on a host of decisions that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us.

12. In Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay[3] it was held that the constitutional Courts are concerned with the decision making process. Tata Cellular v. Union of India[4] went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional Courts can interfere if the decision is perverse. However, the constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. This was confirmed in Jagdish Mandal v. State of Orissa[5] as mentioned in Central Coalfields.

13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision.

14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India[6] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. In this context, the use of the word 'metro' in Clause 4.2 (a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.

15. We may add 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. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given.

16. In the present appeals, although there does not appear to be any ambiguity or doubt about the interpretation given by NMRCL to the tender conditions, we are of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by NMRCL was perverse or mala fide or intended to favour one of the bidders. This was certainly not the case either before the High Court or before this Court.

SUPREME COURT OF INDIA

Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. & ANR.

[Civil Appeal No. 9078 of 2016]

[Civil Appeal No. 9079 of 2016]

[Civil Appeal Nos. 9080-9081 of 2016]

Madan B. Lokur, J.

Dated:September 15, 2016

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Whether Essentiality of a term in Notice Inviting Tender can be decided by Employer?

Yet another problem could be faced by an employer (such
as CCL) if the language used in the terms of the NIT or the GTC
is not adhered to and its plain meaning discarded. A problem
could be faced by an employer if every bidder furnishes a bank
guarantee in a different format or one that it is comfortable with.
In such a situation, CCL would have to scrutinize each bank
guarantee to ascertain whether it meets with its requirements
and the NIT and the GTC. Apart from the text of the bank
guarantee, minor changes could be made by a bidder such as
enforceability in a place other than Ranchi (but in Jharkhand)
etc. This would place an avoidable and undue burden on the
employer particularly if there are a large number of bidders.
. Not only this, any decision taken by the employer in
accepting or rejecting a particular bank guarantee in a format
not prescribed by it could lead to (avoidable) litigation requiring
the employer to justify the rejection or acceptance of each bank
guarantee. This is hardly conducive to a smooth and hassle-free
bidding process.
52. There is a wholesome principle that the Courts have been
following for a very long time and which was articulated in Nazir
Ahmad v. King EmperorAIR 1936 PC 253 namely“Where a power is given to
do a certain thing in a certain way the thing must be done in
that way or not at all. Other methods of performance are
necessarily forbidden.” There is no valid reason to give up this
salutary principle or not to apply it mutatis mutandis to bid
documents. This principle deserves to be applied in contractual
disputes, particularly in commercial contracts or bids leading up
to commercial contracts, where there is stiff competition. It must
follow from the application of the principle laid down in Nazir
Ahmed that if the employer prescribes a particular format of the
bank guarantee to be furnished, then a bidder ought to submit
the bank guarantee in that particular format only and not in any
other format. However, as mentioned above, there is no

inflexibility in this regard and an employer could deviate from
the terms of the bid document but only within the parameters
mentioned above.
53. Nazir Ahmed has been followed in dozens of decisions
rendered by this Court and by other constitutional Courts in the
country. The Central Vigilance Commission has accepted this
principle in a modified form as a guiding principle in its circular
dated 31st December, 2007 wherein it is mentioned that all
organizations ought to evolve a procedure for acceptance of bank
guarantees that is compatible with the guidelines of banks and
the Reserve Bank of India. One such requirement is that the
bank guarantee should be in a proper prescribed format and
should be verified verbatim on receipt with the original.
Adherence to this principle of verbatim verification would not
only avoid undue problems for the employer but would also
virtually eliminate subjectivity on the part of the employer.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8004 OF 2016
Central Coalfields Limited & Anr. .
V
SLL – SML (Joint Venture Consortium) &
Ors. 
Dated:August 17, 2016
Citation: AIR 2016 SC 3814,(2016) 8 SCC622

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Whether contractor can compel authority to award contract in his favour by offering better price after opening of sealed tenders?

In the light of the above contentions and from a perusal of the material on record, it is evident that respondents No. 1 to 4 had opened the sealed tenders in the presence of all the bidders, including the petitioner. The offer of respondent No. 5 was found to be most competitive. It was accordingly recommended for acceptance by the Central Purchase Committee of respondents No. 1 to 4. A letter of Intent was issued to respondent No. 5 as on 25.6.2015. It is noticed that the said respondent has, on receipt of the LOI, volunteered to offer a further discount of Rs. 200/KL over and above the discount of Rs. 850/KL, which was finalized by acceptance, apart from offering 30 days' credit facility and other value additions as seen from column 8 of the LOI.

On the other hand, the petitioner is found to have made more than one revised offer, after the opening of sealed tenders. This would render the sanctity and competitiveness of the closed bidding system meaningless. The petitioner's offer of a discount @ Rs. 1100/KL and other benefits ought to have been made in the first instance. The insistence that the respondents should accommodate the petitioner notwithstanding the process of acceptance of a tender of respondent No. 5, as the petitioner is now ready to better the offer of respondent No. 5 - is not tenable and may indeed result in an unfair trade practice, exposing respondents No. 1 to 4 to legal action.

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

Writ Petition No. 27719 of 2015 (GM-RES)

Decided On: 05.01.2016

Indian Oil Corporation Limited 

Vs.

 Karnataka State Road Transport Corporation and Ors.

Hon'ble Judges/Coram:Anand Byrareddy, J.

Citation: AIR 2016 (NOC)398

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