.
In Silppi Constructions Contractors vs. Union of India and Anr., (2020) 16 SCC 489, the Apex Court has observed as under:-
“19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias.
However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges’ robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
- The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court’s interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case.” (emphasis supplied)
- In N.G. Projects Limited v. Vinod Kumar Jain and Ors., (2022) 6 SCC 127, the Apex Court has held as under:-
“23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering 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.
(emphasis supplied)
- A perusal of the abovementioned judgments would show that the author of the tender documents is the best judge to decide as to whether the bidder has qualified the conditions prescribed in the tender document or not. The Court should not sit as an appellate authority over the decision taken by the employer and come to a conclusion that the decision taken by the employer on technical aspects should be interfered with or not. The interference as stated by the Apex Court in such matters is extremely narrow and the courts should refrain from exercising their jurisdiction under Article 226of the Constitution of India unless there is mala fide or the decision was intended to favour someone or is so perverse that no prudent person could have come to that decision or if it violates Wednesbury’s principle of reasonableness.
In the matter of Plasmagen Biosciences Private … vs Govt. Of Nct Of Delhi & Ors
The Hon’ble Delhi High Court held that:
- Applying the law laid down by the Apex Court in the facts of the present case, this Court is of the opinion that admittedly the GMP certificate submitted by the Respondent No.3 herein does not specify as to whether the facilities and operations of the Chinese manufacturer, from which the Respondent No.3 intends to imports the medicines, conforms to the WHO- GMP standards, however, the certificate does state that the certificate itself conforms to the format recommended by the WHO and in the wisdom of Respondent No.2, which has floated the tender, Respondent No.3 was eligible to participate in the tender process.
- In view of the above, this Court does not find any reason to interfere with the decision of the Respondent No.2 in awarding tender to the Respondent No.3 herein. Resultantly, the Writ Petition is dismissed, along with pending application(s), if any.
- The argument of the learned Counsel for the Petitioner that since the Chinese manufacturer of the products, from which Respondent No.3 intends to import the medicines, does not conform to the WHO-GMP, and, therefore, Respondent No.3 ought not have been awarded the tender cannot be accepted by this Court for the reason that the Respondent No.2, which is the tender issuing authority, has in its wisdom arrived at the conclusion that the GMP certificate submitted by the Respondent No.3 conform to the GMP requirement for the award of the tender.
- This Court, which is not an expert in pharmacy, does not intend to sit over the decision made by the experts, and substitute its own conclusions to the one arrived at by the experts. Further, it cannot be said that the decision making process has not been fair. Both, the Petitioner and the Respondent No.3 herein, have been held to be eligible for the tender process, and the Respondent No.3 has been declared L1 bidder. Therefore, it cannot be said that the process adopted and the decision taken by the Respondent No.2 is so arbitrary and irrational that the Court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”. It also cannot be said that public interest has been affected by award of tender to the Respondent No.3.
- In view of the above, this Court does not find any reason to interfere with the decision of the Respondent No.2 in awarding tender to the Respondent No.3 herein. Resultantly, the Writ Petition is dismissed, along with pending application(s), if any.