2016 (10) TMI 1082 - SC - Indian Laws

Invitation for bids for development and operation of three coal mines - Exercise of power of judicial review - escape from scrutiny of judicial review - whether the appellant meets the qualification criteria as provided under the heading Technical Criteria that occurs in Clauses 7.1 and 7.2 of QR? - Held that - We have already referred to the certificate issued by GMDC in favour of the appellant and the documents filed by the appellant. The High Court has considered the documents and opined that the documents filed in support of the QR are substantially inadequate. Adverting to the facet of drilling the writ court has opined that there is specific use of the words drilling for the purposes of blasting . In Sterling Computers Limited v. M/s M highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But that does not mean these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or malafide or procedure adopted is meant to favour one. The decision making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.

Summary

Issues Involved:
1. Qualification Requirements (QR) and Technical Criteria
2. Interpretation of "Operated" and "Drilling" in the context of QR
3. Evaluation of Techno-Commercial Proposals
4. Judicial Review of Administrative Decisions in Tender Processes

Issue-Wise Detailed Analysis:

1. Qualification Requirements (QR) and Technical Criteria:
The primary issue revolves around whether the appellant meets the qualification criteria stipulated under Clauses 7.1 and 7.2 of the QR in the Invitation For Bids (IFB). Clause 7.1.2 outlines the technical criteria, requiring bidders to have operated and produced specific volumes of overburden and coal/lignite. The appellant submitted its bid referring to three mines, but the respondent-owner found the bid non-responsive due to insufficient evidence of drilling for blasting purposes.

2. Interpretation of "Operated" and "Drilling" in the context of QR:
The term "operated" is defined to include activities of drilling and excavation. The appellant argued that it satisfied the QR by engaging in drilling in lignite mines, which should meet the requirement. However, the respondent-owner insisted that the QR specifically required drilling for blasting purposes. The High Court upheld this interpretation, noting that the tender documents and the nature of mining operations inherently included blasting as part of the drilling activities.

3. Evaluation of Techno-Commercial Proposals:
The respondent-owner's evaluation process involved scrutinizing the Techno-Commercial Proposals to establish "responsiveness" as per Clause 6.3.1. The appellant's bid was found non-responsive due to the lack of evidence for drilling for blasting purposes. The High Court supported this decision, emphasizing that the owner has the discretion to determine the technical requirements and the adequacy of the submitted documents.

4. Judicial Review of Administrative Decisions in Tender Processes:
The Supreme Court reiterated the principles of judicial restraint in administrative actions, particularly in tender processes. Citing precedents like Tata Cellular v. Union of India and Michigan Rubber (India) Ltd. v. State of Karnataka, the Court emphasized that judicial review should be limited to examining the decision-making process for arbitrariness, mala fides, or procedural unfairness. The Court found no such infirmities in the respondent-owner's decision and upheld the High Court's judgment.

Conclusion:
The Supreme Court dismissed the appeal, affirming that the appellant did not meet the QR due to the lack of drilling for blasting purposes. The Court underscored the importance of allowing technical experts to evaluate bids and the necessity of judicial restraint in such matters, provided the decision-making process is free from arbitrariness and mala fides.