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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL  NO. 9078  OF 2016

Afcons Infrastructure Ltd.                .…Appellant  

             versus

Nagpur Metro Rail Corporation Ltd. & Anr.      ….Respondents

WITH

C.A. NO. 9079 OF 2016  

WITH  

C.A. NOS. 9080-9081 OF 2016

J U D G M E N T

Madan B. Lokur, J.

1. In Civil Appeal No. 9078 of  2016 and Civil Appeal No. 9079 of 2016 filed by

Afcons Infrastructure Ltd., the challenge is to the judgment and orders dated 28th July,

2016 and 11th August, 2016 passed by the Bombay High Court.    In Civil  Appeal Nos.

9080-9081 of 2016filed by the Nagpur Metro Rail Corporation Ltd., the challenge is to

the judgment and orders dated 28th July, 2016 and 12th August, 2016 passed by the

Bombay High Court.  The combined effect of all the impugned orders is that the High

Court held that M/s. Guangdong Yuantian Engineering Company (GYT) of China and

C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 1 of 10

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M/s. TATA Projects Limited (TPL) as a Joint Venture (hereinafter referred to as the

‘GYT-TPL JV’)  are  eligible  to  bid for  a  tender  invited by the Nagpur  Metro Rail

Corporation Limited (for short ‘NMRCL’) on 12th May, 2016.

2. Bids were invited by NMRCL for the design and construction of a viaduct in

Reach-3 between Jhansi Rani Square and Lokmanya Nagar Stations from CH 7825M

to CH 18212M on the East-West Corridor of Nagpur Metro Rail Project.

3. GYT-TPL JV gave its bid for the contract but NMRCL, by an e-mail dated 23 rd

July,  2016  communicated  to  GYT-TPL  JV  that  its  bid  was  disqualified  at  the

technical bid opening.  The comment/remark relating to the disqualification stated

that the documents submitted by GYT-TPL JV do not meet the eligibility conditions

as stipulated in Clause 4.2 (a) of Section III of the bid documents.   

4. The controversy on the eligibility of GYT-TPL JV arises in view of Clause 4.2

(a) of Section III of the tender conditions which reads inter alia as follows:

4.2 (a) Specific Construction & Contract  Management experience

A minimum number of similar  contracts specified below that have been  satisfactorily  completed  as  a prime  contractor,  joint  venture member during last  10 (ten) years i.e. up till 31.05.2016 (a) Should have received

minimum INR 3200 Million from 1 contract in a metro civil construction work and should have completed viaduct length not less than 5 km in the same contract.

C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 2 of 10

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5. According to GYT-TPL JV, it had executed the Pearl River Delta intercity high

speed railway project in China; it had received INR 3200 million from that project

and it had constructed a viaduct of 7.284 km length under that contract. Before the

High Court and before us, there was no controversy that GYT-TPL JV had received a

minimum of  INR 3200  million  from its  Pearl  River  Delta  Intercity  High  Speed

Railway Project and that whether it had completed a viaduct having a length of not

less than 5 km. The sole question before the High Court was whether the Pearl River

Delta Intercity High Speed Railway Project met the requirement of a ‘metro civil

construction work’.  According to NMRCL, an inter-city high speed railway project

did not meet the requirements of a metro civil construction work.

6. The High Court disagreed with NMRCL in the following words:

“The civil construction work completed by the petitioner [GYT-TPL JV] in terms  of  condition  no.  4.2  (a)  was  for  an  intercity  high  speed  railway project in China and in the said contract, the petitioner had completed a viaduct of 7.284 km length….The petitioner has admittedly constructed a viaduct of not less than 5 km for the prestigious Pearl River Delta Intercity high speed railway project in China.  We find on a reading of the tender conditions and particularly clause 4.2(a) thereof that a contractor or a joint venture  company  is  required  to  have  the  experience  in  Metro  Civil Construction work and of completing a viaduct having a length of not less than  5  kms.   We  do  not  appreciate  the  submission  on  behalf  of  the respondent that since the petitioner had constructed the viaduct for a high speed  railway  project,  the  petitioner  would  not  have  the  experience  of constructing a viaduct for a metro.  It is not disputed by the respondent that ‘metro’ would mean a railway or an underground railway.  If that be so, we fail to fathom as to why the technical bid of the petitioner was disqualified though  the  petitioner  has  constructed  a  viaduct  for  Pearl  River  Delta Intercity high speed railway project in China of the length of 7.284 km.  In our view, the petitioner has the experience of constructing a viaduct of not less than 5 kms. in length in a Metro Civil Construction work contract and had also received more than INR 3200 million for satisfactorily completing

C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 3 of 10

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the said contract.   The distinction sought to be made by the respondent NMRCL between the construction of a viaduct for Intercity High Speed Railway Project and the construction of a viaduct for the metro rail project, is  illusory  and  not  real.   The  action  on  the  part  of  the  NMRCL  of disqualifying the petitioner’s technical bid is clearly arbitrary and is liable to be set aside…..”

7. There is no dispute before us that the Metro Railway (Construction of Works)

Act, 1978 and The Metro Railways (Operation and Maintenance) Act, 2002 extend

to  Nagpur  and are  applicable  to  the  Nagpur  Metro Rail  Project.  The expression

‘metro  railways’  has  been  defined  in  Section  2(i)  of  the  Metro  Railways

(Construction of Works) Act, 1978 in the following words:

“(i) “metro railway” means a metro railway or any portion thereof for the public carriage of passengers, animals or goods and includes,--

(a) all land within the boundary marks indicating the limits of the land appurtenant to a metro railway.

(b) all lines of rails, sidings, yards or branches worked over for the purposes of, or in connection with, a metro railway,

(c)  all  stations,  offices,  ventilation  shafts  and ducts,  ware-houses, workshops,  manufactories,  fixed  plants  and  machineries,  sheds, depots  and  other  works  constructed  for  the  purpose  of,  or  in connection with, a metro railway;”

A  clearer  definition  is  to  be  found  in  The Metro  Railways  (Operation  and

Maintenance) Act, 2002 in Section 2(i) thereof and this reads as follows:

C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 4 of 10

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“(i)  "metro railway" means rail-guided mass rapid transit  system having dedicated right-of-way, with steel wheel or rubber-tyred wheel coaches, but excluding tramways, for carriage of passengers, and includes--

(A) all land within the boundary marks indicating the limits of the land appurtenant to a metro railway,

(B) all  rail tracks, sidings, yards or branches worked over for the purposes of, or in connection with, a metro railway,

(C)  all  stations,  offices,  ventilation  shafts  and ducts,  warehouses, workshops,  manufactories,  fixed  plants  and  machineries,  sheds, depots  and  other  works  constructed  for  the  purpose  of,  or  in connection with, a metro railway;”

8.  In view of the extension of these two statutes to the city of Nagpur, there can

be no doubt that the definition of ‘metro railway’ or ‘metro’ would apply to the tender

conditions floated for the purposes of the metro rail project of NMRCL.

9. It is submitted before us that an inter-city rail is completely different from a

metro rail.  An inter-city rail  is  between two cities and the trains are usually high

speed trains.  A metro rail is intra-city, it has a dedicated right-of-way, normally it

does not have high speed trains and the frequency of trains is much greater that of

inter-city  trains.1  A metro  rail  may  extend,  in  some  cases,  to  a  suburb  of  a

metropolitan city but it essentially remains an intra-city project.  There is, therefore, a

qualitative  difference  between  an  inter-city  rail  and  a  metro  rail.  By  itself,  this 1

In Delhi the time duration is approximately to 2-3 minutes during peak hours  and  5-10  minutes  during  off  peak  duration  in  the  city.  Source: http://www.delhicapital.com/delhi-metro/metro-train-timings.html  C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 5 of 10

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indicates a qualitative difference in a railway project that is inter-city and a railway

project that is intra-city and the construction of a viaduct for a railway project that is

inter-city and a railway project that is intra-city.

10. The fact that GYT-TPL JV made constructions in a metropolitan city or in a

metropolitan area during the execution of the Pearl River Delta inter-city high speed

railway  project,  does  not  make  that  project  an  intra-city  metro  rail  project  -  it

continues to be an inter-city railway project.  However, it not necessary for us to

delve into these issues or even adjudicate on them.

11. Recently,  in  Central  Coalfields  Ltd. v.  SLL-SML  (Joint  Venture

Consortium)2 it  was held by this Court,  relying on a host of decisions that the

decision making process of the employer or owner of the project in accepting or

rejecting  the  bid  of  a  tenderer  should  not  be  interfered  with.  Interference  is

permissible  only  if  the decision  making process  is  mala fide or  is  intended to

favour someone. Similarly, the decision should not be interfered with unless the

decision is so arbitrary or irrational that the Court could say that the decision is one

which no responsible authority acting reasonably and in accordance with law could

have reached. In other words, the decision making process or the decision should

be perverse and not merely faulty or incorrect or erroneous. No such extreme case

was made out by GYT-TPL JV in the High Court or before us.

2

2016(8) SCALE 99. C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 6 of 10

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12. In  Dwarkadas  Marfatia  and  Sons v.  Board  of  Trustees  of  the  Port  of

Bombay3 it was held that the constitutional Courts are concerned with the decision

making process. Tata Cellular v. Union of India4 went a step further and held that

a  decision  if  challenged  (the  decision  having  been  arrived  at  through  a  valid

process),  the  constitutional  Courts  can  interfere  if  the  decision  is  perverse.

However, the constitutional Courts are expected to exercise restraint in interfering

with the administrative decision and ought not to substitute its view for that of the

administrative  authority.  This  was  confirmed  in  Jagdish  Mandal  v.  State  of

Orissa5 as mentioned in Central Coalfields.  

13. In other words, a mere disagreement with the decision making process or the

decision of the administrative authority is no reason for a constitutional Court to

interfere.  The threshold of mala fides, intention to favour someone or arbitrariness,

irrationality or perversity must be met before the constitutional Court interferes

with the decision making process or the decision.  

14. We must reiterate the words of caution that this Court has stated right from the

time when  Ramana Dayaram Shetty v. International Airport Authority of India6

was  decided  almost  40  years  ago,  namely,  that  the  words  used  in  the  tender

3

(1989) 3 SCC 293. 4

(1994) 6 SCC 651. 5

(2007) 14 SCC 517. 6

(1979) 3 SCC 489 C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 7 of 10

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documents cannot be ignored or treated as redundant or superfluous – they must be

given meaning and their necessary significance.  In this context, the use of the word

‘metro’ in Clause 4.2 (a) of Section III of the bid documents and its connotation in

ordinary parlance cannot be overlooked.  

15. We may add that the 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.  The  constitutional  Courts  must  defer  to  this

understanding and appreciation of the tender documents, unless there is mala fide or

perversity in the understanding or appreciation or in the application of the terms of

the tender conditions.  It is possible that the owner or employer of a project may give

an interpretation to the tender documents that is not acceptable to the constitutional

Courts but that by itself is not a reason for interfering with the interpretation given.   

16. In the present appeals, although there does not appear to be any ambiguity or

doubt about the interpretation given by NMRCL to the tender conditions, we are of

the view that even if there was such an ambiguity or doubt, the High Court ought to

have  refrained  from giving  its  own  interpretation  unless  it  had  come  to  a  clear

conclusion that the interpretation given by NMRCL was perverse or  mala fide or

intended to favour one of the bidders. This was certainly not the case either before the

High Court or before this Court.

17. Under the circumstances, we find merit in the appeals filed by the appellants

and set  aside the judgment and orders  passed by the High Court  and restore the C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 8 of 10

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decision of NMRCL to the effect that GYT-TPL JV was not eligible to bid for the

contract under consideration.

18. Before we conclude, it is necessary to point out that the High Court was of

opinion  that  the  eligible  bidders  were  not  entitled  to  be  either  impleaded  in  the

petition filed in the High Court by the ineligible bidder GYT-TPL JV or were not

entitled to be heard.  With respect, this is not the appropriate view to take in matters

such as the present. There are several reasons for this, one of them being that there

could be occasions (as in the present appeals) where an eligible bidder could bring to

the notice of  the owner or  employer of  the project  that  the ineligible bidder was

ineligible for additional reasons or reasons that were not within the contemplation of

the  owner  or  employer  of  the  project.   It  was  brought  to  our  notice  by  Afcons

Infrastructure in these appeals that GYT-TPL JV did not have any experience in the

construction  of  a  viaduct  by  the  segmental  construction  method  and  that  the

translations of documents in Mandarin language filed in the High Court were not true

English translations.  Submissions made by learned counsel for Afcons Infrastructure

in this regard are important and would have had a bearing on the decision in the writ

petition filed in the High Court but since Afcons Infrastructure was not a party in the

High Court, it  could not agitate these issues in the writ petition but did so in the

review petition which was not entertained.  It is to avoid such a situation that it would

be more appropriate for the constitutional Courts to insist on all eligible bidders being

made parties to the proceedings filed by an unsuccessful or ineligible bidder. C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 9 of 10

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19. We make  it  clear  that  we  have  not  considered  the  submissions  of  learned

counsel  for  Afcons Infrastructure on the two issues of the segmental  construction

method and faulty translation of documents  since they were not before the High

Court and also because we do not find it necessary to adjudicate on them in the view

that we have taken.

20. The appeals are allowed. The parties are left to bear their own costs.

.......………………….J.        (Madan B. Lokur)

.……….…………….J. New Delhi;                                (R.K. Agrawal) September  15, 2016

C.A. Nos.9078 of 2016 etc.                                                                                                                     Page 10 of 10