CARETEL INFOTECH LTD. versus HINDUSTAN PETROLEUM CORPORATION LIMITED & ORS.

Citation: [2019] 6 S.C.R. 950 · Decided: 09-04-2019 · Supreme Court of India · Bench: S.A. BOBDE · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 6 S.C.R.
CARETEL INFOTECH LTD.
v.
HINDUSTAN PETROLEUM CORPORATION LIMITED & ORS.
(Civil Appeal No. 3588 of 2019)
APRIL 09, 2019
[S.A. BOBDE AND SANJAY KISHAN KAUL, JJ.]
Tender: Tender contracts – e-public tender floated by
respondent no. 1 for setting up call centres – Declaration to be
made in terms of clause 20(ii), if the bidder had been banned or
black listed or delisted or holiday listed – Issuance of show cause
notice to the appellant, one of the bidder, for blacklisting on
allegation of furnishing false information and bid documents in
respect of  another tender – Notice was issued after floating of the
tender by respondent no. 1 but before submission of the bid –
Appellant declared L-1 and awarded letter of acceptance –
Respondent No.3 declared  L-2 -  Writ petition by  Respondent No.3
challenging declaration of appellant as L-1 – Subsequently, pur-
chase order issued in favour of appellant – However, next day it-
self,  order passed blacklisting and debarring the appellant from
participating in any tender process for two years  – Respondent
No.3 having   become aware of the factum of  blacklisting of the
appellant amended the petition to incorporate the said fact – Writ
Petition allowed by the High  Court – Sustainability of – Held: Not
sustainable – Impugned order misread the blacklisting clause – Show
cause notice itself did not amount to the process of blacklisting
having already been  initiated – Appellant would not be disentitled
to contract – As  regards, the effect of the blacklisting order, the
ban would have prospective effect, for  future business dealings –
It would have no application to the  tender awarded – As regards,
the  business continuity certificate doubted by respondent no. 3,
the High Court in the course of  inquiry expressed its doubts over
the   certificate – Such a course of action was not permissible –
Directions of the High Court to take appropriate decisions, really
amounts to  directing respondent no.1 to breach its contract with
the appellant – No such direction ought to have been issued to
compel a breach of the contract by the appellant.
[2019] 6 S.C.R. 950
  950
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Constitution of India: Art. 226 – Writ proceedings under –
Scrutiny of tenders – Permissibility – Held: Normally parties would
be governed by their contracts and the tender terms, and no writ
would be maintainable u/Art. 226 – In view of Government and
Public Sector Enterprises venturing into economic activities, the
Court found it appropriate to build in certain checks and balances
of fairness in procedure – This approach has given rise to scrutiny
of tenders in writ proceedings – Every small or big tender sought to
be challenged, affects the efficacy of commercial activities of the
public sectors, in competition with the private sector –
Unnecessary, close scrutiny of minute details, contrary to the view
of the tendering authority, makes awarding of contracts by
Government and Public Sectors a cumbersome exercise –
Promptness and  efficiency levels in private contracts, often tend to
make tenders of public sector a non-competitive exercise.
 Deeds and documents: Tender – Interpretation of – Held:
Author of the document is the best person to understand and
appreciate its requirements – On, facts, view of respondent No.1-
company which floated the tender, must prevail – Respondent No.1
itself, appreciative of the wording of clause 20 and the format, took
a considered view – Respondent No.3, one of the bidder cannot
compel its own interpretation of the contract to be thrust on
respondent No.1, or ask the court to compel respondent No.1 to
accept that interpretation – It is possible that the author of the
tender may give an interpretation that is not acceptable to the court,
but that itself would not be a reason for interfering with the
interpretation given.
Allowing the appeal, the Court
HELD: 1.1 Both the aspects-the interpretation of clause
20 read with the format, as well as with the effect of the show
cause notice is concurred with. Clause 20 does provide for four
eventualities. The instant case is not one where on the date of
submission of the tender the appellant had been banned,
blacklisted or put on holiday list. The declaration to be given by
the bidder is specified in clause 20(ii), which deals with the first
three aspects. The format enclosed with the tender documents
also refers only to these three eventualities. It is not a case where
no 

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