HIGHWAYS AUTHORITY OF INDIA versus GWALIOR JHANSI EXPRESSWAY LIMITED

Citation: [2018] 9 S.C.R. 1024 · Decided: 13-07-2018 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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1024
SUPREME COURT REPORTS
[2018] 9 S.C.R.
NATIONAL HIGHWAYS AUTHORITY OF INDIA
v.
GWALIOR JHANSI EXPRESSWAY LIMITED
(Civil Appeal No. 3288 of 2018)
JULY 13, 2018
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND
DR. D. Y. CHANDRACHUD, JJ.]
Tenders – Agreement between the appellant and the
respondent for widening the existing two-la ne portion of National
Highway No.75 to four lanes – Appellant alleged breaches on part
of the respondent – Arbitral Tribunal constituted – Appellant moved
application u/s.17 of the 1996 Act before the Tribunal seeking
permission to complete the balance work of the project in view of
loss to the public at large – Respondent also filed application u/
s.17 – Arbitral Tribunal disposed of the applications by common
interim order dtd. 23rd July 2016 – Appellant issued a tender for
the balance work – In consonance with the tender documents,
technical  and financial bids were opened – Respondent moved
application before the Tribunal u/s.17, seeking, inter alia,  permission
of the Tribunal to complete the balance work at its risk and cost–
Tribunal allowed the application – Appeal filed by appellant before
the High Court, dismissed – Plea of appellant that the respondent
cannot be permitted to exercise Right Of First Refusal (ROFR)
without participating in the bidding process – On appeal, held:
Right of the respondent to match the bid of L-1 or to exercise ROFR
would come into play only if the respondent was to participate in
the tender process pursuant to the notice inviting tenders from the
interested parties – Respondent was required to participate in the
tender process by submitting its sealed bid (technical and financial)
– Having failed to participate in the tender process, despite the
express terms in the tender documents, validity whereof was not
challenged, the respondent cannot be heard to contend that it had
acquired any right whatsoever – There was nothing in the
application (filed by the respondent u/s.17) to even remotely suggest
that the respondent had prayed that it be exempted from participating
in the proposed tender process as such, and could yet exercise ROFR
before the letter of intent was to be issued to the lowest bidder –
1024
[2018] 9 S.C.R. 1024
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Exemption in this regard cannot be inferred and has to be express –
No express exemption was granted to the respondent vide order of
the Tribunal dtd. 23rd July, 2016 to exercise ROFR or match the
lowest bid without participating in the bidding process – Decision
of the Tribunal as confirmed by the High Court cannot be
countenanced – Arbitration and Conciliation Act, 1996 – ss.9, 17
and 37(2)(b).
Allowing the appeal, the Court
HELD: 1.1  By the terms and conditions in the tender
documents, the right of the respondent to match the bid of L-1 or
to exercise ROFR would come into play only if the respondent
was to participate in the tender process pursuant to the notice
inviting tenders from the interested parties. The objective of
tender process is not only to adhere to a transparent mechanism
but to encourage competition and give equal opportunity to all
tenderers with the end result of getting a fair offer or value for
money. The plain wording of the eligibility clause in the tender
documents and the incidental stipulations  make it explicit that
the respondent was required to participate in the tender process
by submitting its sealed bid (technical and financial).  The fact
that a deeming clause has been provided in the tender document
that if the respondent was to participate in the bidding process, it
shall be deemed to fulfill all the requirements of the tender clauses
3 to 6 of the RFP, being the existing concessionaire of the Project,
does not exempt the respondent from participating in the tender
process; rather the tenor of the terms of the documents made it
obligatory for the respondent to participate in the tender process
to be considered as a responsive bidder, along with others.
Having failed to participate in the tender process and, more so,
despite the express terms in the tender documents, validity
whereof has not been challenged, the respondent cannot be heard
to contend that it had acquired any right whatsoever. Only the
entities who participate in the tender process pursuant to a tender
notice can be allowed to make grievances about the non-fulfillment
or breach of any of the terms and conditions of the concerned
tender documents. The respondent who chose to stay away from
the tender p

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