LexMONTECARLO LTD. versus NTPC LTD.
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A B c [2016] 8 S.C.R. 224 MONTECARLO LTD. v. NTPC LTD. (Civil Appeal No. 10143 of2016) OCTOBER 18, 2016 [DIPAK MISRA AND UDAY UMESH LALIT, JJ.] Tenders - Judicial review - Invitation for bids for development and operation of coal mines - Respondent-NTPC found the bid by appellant technically non-responsive as appellant did not have necessary experience of drilling for blasting purposes - Appellant invoked jurisdiction of High Court challenging the determination made by respondent - Plea of appellant that the tender documents required experience of a bidder only in drilling, not drilling for . blasting purposes - High Court held that the assessment of the D . respondent-NTPC was correct as it did not affect public interest but subserved the public purpose - On appeal, held: Owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents - Constitutional Courts must defer to this E F G H understanding and appreciation of tender documents unless there is malafide or perversity in understanding - Technical evaluation or comparison by the court thus is impermissible - Principle to understand ordinary instrument relatable to contract has to be treated differently than tender documents relating to technical works and projects - In the instant case, tenders and offers are invited for highly technical subjects - It is to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic - It requires technical expertise - Therefore, respondent should be allowed to carry out technical evaluation freely - No infirmity in the judgment and order passed by the High Court. Dismissing the appeal, the Court HELD: 1. The Respondent-NTPC invited bids for development and operation of coal mines and had issued "Instructions to Bidders" (ITB) which contained clauses as to 224 MONTECARLO LTD. v. NTPC LTD. 225 bow the proposal shall be conducted. Clauses of Mine operations A are technical but they are fundamental to understand the Qualifying Requirements (QR). They clearly demonstrate that drilling is imperative. High Court has considered the documents filed by appellant and opined that the documents filed in support of the QR are substantially inadequate. Adverting to the facet of 8 drilling, the writ court bas opined that there is specific use of the words "drilling for the purposes of blasting". [Para l 7][243-D-F] 2. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the. nature of work and the C purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinized by the technical experts and sometimes third party assistance from those unconnected with the owner's organization is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be D assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender in present case, is not comparable to any scheme for allotment. This arena referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree E of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of F judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or nw/aji<le or procedure adopted is meant to favour one. The decision making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose G for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in - H 226 S
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