M/S. MASTER MARINE SERVICES PVT. LTD. versus METCALFE AND HODGKINSON PVT. LTD. AND ANR.

Citation: [2005] 3 S.C.R. 666 · Decided: 19-04-2005 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
MIS. MASTER MARINE SERVICES PVT. LTD. 
v. 
METCALFE AND HODGKINSON PVT. LTD. AND ANR. 
B 
APRIL 19, 2005 
[R.C. LAHOTI, CJ. AND G.P. MATHUR, J.] 
Contract-Award of-For professional work-To a Company-After 
C opening the tender-Another company-tenderer objecting to the award of 
contract as the Company did not hold licence for carrying out the work-
Licence was in the name ofCliairman of the Company who was also appointed 
as consultant by the Company-Contract awarded in discretion to relax the 
tender conditions~98% of the work did not require licence-The financial bid 
D of the Company was 25% lower than that of the other company-Writ Petition--
Award of contract quashed by High Court-In appeal, held: High C.ourt was 
not justified in quashing the contract-In the facts of the case, no such public 
interest was involved which may warrant interference by High Court in exercise 
of its extraordinary jurisdiction while undertaking judicial review of an 
administrative action relating to award of a contract-Constitution of India, 
E Article 226. 
The second respondent floated a limited tender for hiring professional 
services.for survey of container and cargo. The contract was to be awarded 
through two bid process i.e. 'Technical bid' and 'Financial bid'. After opening 
F the Technical bid, the bid of appellant and first respondent was accepted. 
Before awarding the contract, the Tender Evaluating Committee had doubt 
with regard to surveyors licence of appellant Company under Insurance Act, 
1938, as the same was not in the name ~f the Company. The appellant 
informed that the licence had been issued in the name of Chairman of the 
Company. After reconsidering the matter second respondent qualified both 
G the tenderers for their technical capabilities. On opening of financial bid, the 
bid of appellant was accepted as his bid was 25% lower than that submitted 
by first respondent. Second respondent was also of the view that the major 
work (98%) under the contract was of such nature for which no licence was 
required. Hence, work was awarded to appellant. 
H 
666 
) -
MASTER MARINE SER. PVT. LTD. v. METCALFE AND HODGKINSON PVT. LTD. 
667 
---
First respondent had initially filed Writ Petition challenging the A 
eligibility of the appellant to participate in the tender process on the ground 
that the appellant did not have licence to act as a surveyor/loss assessor under 
the Insurance Act. High Court dismissed the petition. Special Leave Petition 
against it was also dismissed. 
Thereafter first respondent filed another Writ Petition seeking quashing B 
the award of contract to the appellant High Court allowed the petition holding 
that the appellant did not fulfil an essential pre-qualification norm by not 
having a licence as surveyor/loss assessor in its name; and thus the decision 
of second respondent in accepting the tender of the appellant, being violative 
of the equity clause of the Constitution, suffers from vice of arbitrariness. 
c 
In appeal to this Court, appellant contended that in view of the fact that 
the licence-holder was the Chairman and Managing Director of the appellant 
Company, holding 40.02% shares of the Company, and that the appellant 
company had entered into an agreement whereunder the licence - holder·was 
employed as consultant, it could not be said that the appellant did not hold D 
the licence; and that High Court while exercising jurisdiction under Article 
226 of the Constitution, had not acted under the well defined parameters of 
judicial review of administrative action in setting aside the order of second 
respondent in awarding the contract. 
Allowing the appeal, the Court 
E 
HELD : The High Court erred in setting aside the order of the second 
respondent awarding the contract to the appellant The only ground on which 
the High Court has quashed the decision of second respondent awarding the 
contract to the appellant is that there was no licence to act as surveyor/loss F 
assessor under the Insurance Act, 1938 in favour of the appellant which is a 
company. This question was considered by the Tender Evaluation Committee 
and it also took notice of the fact that there were only two bidders (the 
appellant and the first respondent) in the tender and it would be desirable to 
prevent the tender from lapsing into a single bidder tender. After receipt of 
the reply from the appellant, the Committee again evaluated the tenders for G 
pre-qualification bid and after noting that ap

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