AFCONS INFRASTRUCTURE LTD. versus NAGPUR METRO RAIL CORPORATION LTD. & ANR.

Citation: [2016] 3 S.C.R. 551 · Decided: 15-09-2016 · Supreme Court of India · Bench: MADAN B. LOKUR · Disposal: Appeal(s) allowed

Cited by 15 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

l j 
[2016] 3 S.C.R. 551 
AFCONS INFRASTRUCTURE LTD. 
v. 
NAGPUR METRO RAIL CORPORATION LTD. & ANR. 
(Civil Appeal No. 9078of2016) 
SEPTEMBER 15, 2016 
[MADAN B. LOKUR AND R.K. AGRAWAL, JJ.) 
Contract: Tender - Bids invited for design and construction 
of a viaduct for Nagpur Metro Rail Project - GYT-TPL JV having 
experience of executing Inter-City High Speed Railway Project in 
China, gave its bid - Bid was disqualified on the ground that Inter-
City High Speed Railway Project did not meet the requirements of a 
Metro civil construction work -
High Court held that 
disqualification of bid was arbitrmy - Held: 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 - Although, there did not appear to be any 
ambiguity or doubt about the inte1pretation given by owner ofthe 
project to the tender conditions, however, even if there was any 
ambiguity or doubt, High Court ought to have refrained from giving 
its own interpretation unless it had come to a conclusion that the 
interpretation given by owner of project ·was perverse or ma/a fide 
or intended to favour one of the bidders - This was certainly not 
the case either before the High Court or before the Supre111e Court 
- Therefore, GYT-TPL JV was rightly held to be not eligible to bid 
for the contract under consideration. 
Administrative law: Decision 111aking process - Scope of 
interference - Held: Interference is permissible only if the decision 
making process is ma/a fide or is intended to favour someone -
Mere disagreement with the decision making process or the decision . 
of the ad111inistrative authority is no reason for a constitutional Court 
to interfere - Constitution of India, 1950 - Article 226. 
Deeds and documents: Tender docu111e11ts - Interpretation of 
- Held: Author of tender document is best person to illterprel it. 
Allowing the appeals, the Court 
A 
B 
c 
D 
E 
F 
G 
HELD: 1. Interference is permissible only if the decision 
H 
551 
552 
A 
8 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016] 3 S.C.R. 
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 the Supreme Court. [Para 11] [557-F-G] 
Central Coalfields Ltd. v. SLL-SML (Joint Venture 
Consortium) 2016 (8) SCALE 99; Dll'arkadas Mmfatia 
and Sons v. Board of Trustees of the Port of Bombay 
(1989) 3 SCC 293 : 1989 (2) SCR 751; Tata Cellular 
1~ Union of India (1994) 6 SCC 651 : 1994 (2) Suppl. 
SCR 122; Jagdish Manda! v. State of Orissa (2007) 14 
SCC 517 : 2006 (10) Suppl. SCR 606 - relied on. 
2. 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. 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. 
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. lt is possible 
that the owner or employer ofa 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. 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, 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 eithe

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