LexMAA BINDA EXPRESS CARRIER AND ANR. versus NORTHEAST FRONTIER RAILWAY AND ORS.
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[2013] 12 S.C.R. 529 MAA BINDA EXPRESS CARRIER AND ANR. v. NORTHEAST FRONTIER RAILWAY AND ORS. (Civil Appeal No. 10751 of 2013) NOVEMBER 29, 2013 rr.s. THAKUR AND VIKRAMAJIT SEN, JJ.] Government Contracts: A B Tenders - Cancellation of tender process for deficiencies c therein - Held: Submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept - Bidders- participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because 0 a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of Government - All that participating bidders are entitled to is a fair, equal and non- discriminatory treatment in the matter of evaluation of their E tenders - To that extent the tenderer has an enforceable right - In the instant case, there were serious deficiencies in the entire tender process, which would have resulted in substantial financial Joss to Railw9ys and 'it'was neitl:ler in public interest nor necessitated by any legal compulsion ~ Therefore, the decision to cancel the tender process was in no way discriminatory or ma/a fide - It did not violate any fundamental right of the appellant nor could the action of respondent be termed unreasonable so as to warrant any interference from the Court - Costs. Tenders - ·Terms of - Judicial review of - Held: Power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party - Award of a contract is F G 529 H 530 SUPREME COURT REPORTS [2013) 12 S.C.R. A essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision - This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor B made to benefit any particular tenderer or class of tender~rs - Judicial review. In response to a notice dated 12.7.2011 inviting tenders for the grant of a three year lease of 23 tonnes C of space in VPH (Parcel Van) on train No.15960/15959 Kamrup Express, the bid of the appellant for a sum of Rs.1 ,46,872/- per trip for the proposed lease was found to be the highest. However, the tender process was discharged by the railway administration on account of technical and administrative reasons. The communication D dated 6.9.2011, in that regard sent to the appellant, was assailed in a writ petition before the High Court. The Single Judge allowed the writ petition with a direction that so long as the appellant undertook to accept the penalty clause as a part of the contract between the parties, the E railway administration would consider its bid for acceptance and resultant allotment of the contract. However, the writ appeal filed by the Railways was allowed and the writ petition of the appellant dismissed. F Dismissing the appeal, the Court HELD: 1. Submission of a tender in response to a notice inviting such tenders is no more than makiilg an offer which the State or its agencies are under no obligation to accept. The bidders participating in the G tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders H MAA BINDA EXPRESS CARRIER v. NORTHEAST 531 FRONTIER RAILWAY are entitled to is a fair, equal and non-discriminatory A treatment in the matter of evaluation of their tenders. [para 8] [537-A-C] 2.1. Power exercised by the Government and its instrumentalities in regard to allotment of contract is 8 subject to judicial review at the instance of an aggrieved ' party. In the matter of award of contr~_the Government and its agencies have to act reasonably and fairly at all points of tima. To that extent the tenderer has an enforceable right in the court competent to examine C wh~ther the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest. In Michigan Rubber (India) Ltd., principles of law applicable in this regard to the process for judicial review have been
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