NATIONAL HIGH SPEED RAIL CORPORATION LIMITED versus MONTECARLO LIMITED & ANR

Citation: [2022] 12 S.C.R. 810 · Decided: 31-01-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 7 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 12 S.C.R.
   [2022] 12 S.C.R. 810
810
NATIONAL HIGH SPEED RAIL CORPORATION LIMITED
v.
MONTECARLO LIMITED & ANR.
(Civil Appeal No. 6466 of 2021)
JANUARY 31, 2022
[M. R. SHAH AND A. S. BOPANNA, JJ.]
Constitution of India – Judicial Review – Foreign funded
project – Bullet Train Project – Interference by High Court in Tender
Process – When not justified – Appellant, a government company
issued a tender notice calling for bids for works in relation to the
project of construction of Mumbai-Ahmedabad High Speed Rail
(Project) – Bids submitted by the respondent along with four other
bidders were declared unsuccessful at Technical Stage – High Court
allowed the writ petition filed by the respondent and quashed the
communications dated 27.04.2021 and 28.04.2021 and the
notification dated 28.04.2021 by which the technical Bid submitted
by the respondents was rejected on the ground that the same is non-
responsive – Whether w.r.t such a foreign funded project, the High
Court was justified in interfering with the tender process in absence
of any specific allegations of mala fides and/or favouritism – Held:
High Court ought to have appreciated that the Bullet Train Project
is a result of long-drawn deliberations between the Government of
India and the Government of Japan – A loan agreement came to be
executed between the Japan International Cooperation Agency
(JICA) and Hon’ble the President of India – JICA agreed to fund
approximately Rs.1 lakh crores for the project on the terms and
conditions mentioned in the loan agreement and the other agreed
terms including the terms and conditions of the Bid document
finalized by the JICA/JICC (Japan International Consultants
Consortium) – The Bidding Documents are based on JICA’s Standard
Bidding Documents as well as based on its procurement guidelines,
which form an integral part of the loan agreement – Therefore, any
decision contrary to the terms and conditions of the Bidding
Document would be altering the terms and conditions of the loan
agreement, which would not be permissible – JICA has a vital role
to play in such contracts – The foreign funded investment such as
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the present investment in the form of concessional Official
Development Assistance (ODA) loan by the JICA are made on the
basis of non- negotiated terms and conditions where the sole
discretion as to what will be the conditions of investment and on
what terms the contractors would be chosen to implement the project
vests with the investor- foreign developed nation – The ultimate
decision vests on the concerned parties, who financed/invested in
the project, i.e., in the present case JICA – The decision to hold that
the Bid was not responsive was of JICC – Under the contractual
mechanism,the appellant had no authority to deviate from the
evaluation done by JICC – Appellant acted as per the decision of
the JICC concurred by JICA – The JICC and JICA can be said to be
the final authority and no contrary decision to the decision of the
JICC/JICA could have been taken by the appellant, more
particularly, with respect to the Bidding Process etc. – Further, the
bidding procedure adopted was transparent, fair and does not
suffer from any arbitrariness – As such there were no allegations of
mala fides and/or favouritism either against the appellant or against
JICC and/or JICA – High Court erred in interfering with the
conscious decision taken by the JICA/JICC, followed by the
appellant – It erred in holding that the Bid submitted by the
respondent was in substantial compliance and in interfering with
the tender process and with the decision of the JICC/JICA rejecting
the Bid submitted by the original writ petitioner at technical stage –
Impugned judgment passed by the High Court is quashed and set
aside – Contracts.
Contracts – Foreign Funded Contracts – Constitution of India
– Judicial Review – Scope of – Held: Scope of judicial review in
foreign funded contract should be far much less than the ordinary
Government funded contracts funded from Consolidated Fund of
India – The scope of judicial review in such foreign funded
contracts/projects would be restricted and minimal – In such foreign
funded contracts, the only ground for judicial review ought to be
on a limited aspect, i.e., the action of the executing authority does
not suffer from favouritism or nepotism and based on the grounds
which have been concealed from the foreign financing authority, if
disclosed, 

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