LexM/S SIEMENS AKTIENGESELISCHAFT & S. LTD. versus DMRC LTD. & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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[2014] 2 S.C.R. 824
M/S SIEMENS AKTIENGESELISCHAFT & S. LTD.
v.
DMRC LTD. & ORS.
(Civil Appeal No. 2068 of 2014)
FEBRUARY 14, 2014
[T.S. THAKUR AND C. NAGAPPAN, JJ.]
CONSTITUTION OF IND/A, 1950:
c .
Art. 32 r/w Arts. 13 and 299 - Government contracts -
Contract for supply of Standard Gauge Cars Electrical
Multiple Units for use in Mass Rapid transit system - Award
of contract to lowest bidder (L-1) - Challenged - Held: In any
challenge to award of contract, the legality and regularity of
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the process leading to the award of contract is to be examined
-- Court has to constantly keep in mind that it does not sit in
appeal over the soundness of the decision - Court can only
examine whether the decision making process was fair,
reasonable and transparent - In cases involving award of
E contracts, court ought to exercise judicial restraint where the
decision is bonafide with no perceptible injury to public
interest - High Court has, in the case at hand, undertaken that
exercise and concluded that there was neither any illegality
nor any irregularity in the process of evaluation of the bids or
the final allotment of contract - The allotment of contract did
F not suffer from any illegality as it is understood in the matter
of judicial review of administrative action -- The process by
which the bids were evaluated and eventually accepted was
transparent, fair and reasonable and does not, therefore, call
for any interference Judicial review - Judicial restraint.
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ADMINISTRATIVE LAW:
Government contract - Award of contract challenged
before court - Thereafter, Government directing constitution
824
M/S SIEMENS AKTIENGESEUSCHAFT & S. 1-TD. v. 825
DMRC LTD. & ORS.
of a Committee - Held: Government ought to have stayed its
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hands once the matter landed in court - Inasmuch as
Government did nothing of this kind, it did not act properly -
Even otherwise, solong as the view taken by the experts of
the authority competent to take a final decision is a possible
view, the very fact that some other experts have expressed
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doubts about the sustainability of the GEC values wiH not be
enough to declare that the values offered by respondent no.
2 are unachievable.
The award of contract for the supply of 486 Standard
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Gauge Cars Electrical Multiple Units meant for use in
~hase-111 of the Mass Rapid Transit Sy~tem ('MRTS') for
Delhi and its extension corridors, in favour of the lowest
bidder (L-1), namely, respondent No.2(HR), was
challenged by the two unsuccessful bidders, namely, the
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appellant and another. The High Court held that the
process of evaluating the bids received and award of
contract in favour of respondent no. 2 was transparent
and did not suffer from any illegality, irregularity or
-perversity to warrant interference.
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In the instant appeal, it was contended for the
appellant that while the GEC value offered by the
appellant was the highest, the one offered by the
respondent successful bidder for 'X' factor was wholly
untenable. It was submitted that the terms of the tender
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notice required the GEC values offered by the bidders to
be validated before they could be used for processing the
bids; and that the report submitted by the Director,
Ministry of Urban Development, Government of India,
indicated that the stimulation test conducted by DMRC
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as a part of the process of verification and validation of
the GEC value offered by respondent. no. 2 was not
accurate. It was urged that the Government of India had
appointed a two-member Committee to check the
evaluation process of the bids and the report of the
H
826
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A Committee filed by the Government in the Court in a·
sealed cover could throw considerable light on the
subject and help in deci~ing whether an independent
verification of the GEC values was necessary.
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Dismissing the appeal, the Court
HELD: 1.1 Judicial review would apply even to
exercise of contractual powers by the Government and
Government instrumentalities in order to prevent
arbitrariness or favouritism. In any challenge to the award
C of contact before the High Court and so also before this
Court what is to be examined is the legality and regularity
of the process .leading to award of contract. What the
Court has to constantly keep in mind is that it does not
sit in appeal over the soundness of the decision. The
D Court can only examine whether the decision makExcerpt shown. Read the full judgment & AI analysis in Lexace.