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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3330 OF 2018

(Arising out of SLP (Civil) No. 11967 of 2016)

MUNICIPAL CORPORATION, UJJAIN & ANR.   ....Appellants Versus

BVG INDIA LIMITED AND ORS.            .....Respondents WITH

Civil Appeal No. 3331 of 2018 arising out of SLP (C) No. 17201 of 2016

& Civil Appeal No. 3332 of 2018 arising out of SLP (C) No.

30776 of 2016

J U D G M E N T

MOHAN M. SHANTANAGOUDAR, J.

Leave granted.

2.  The Order dated 07.04.2016 passed by the High Court of

Madhya Pradesh, Bench at Indore, allowing the Writ Petition No.

4676 of  2015 filed  by  B.V.G.  India  Limited,  Pune (respondent

no.1 in the civil appeal arising out of SLP(C) No. 11967 of 2016),

consequently  setting  aside  the  contract  awarded  in  favour  of

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Global Waste Management Cell Private Limited (respondent no. 3

in the civil appeal arising out of SLP(C) No. 11967 of 2016) by

Ujjain  Municipal  Corporation  for  door  to  door  collection  and

transportation of Municipal Solid Waste, is the subject matter of

these appeals.  

3.  Heard Shri Vikas Singh, learned senior counsel appearing

for  Municipal  Corporation,  Shri  Shyam  Divan  and  Shri  Guru

Krishnakumar, learned senior counsel representing Global Waste

Management Cell Private Limited, Shri Kailash Vasdev, learned

senior  counsel  for  M/s  Eco  Save  Systems  Private  Limited

(Technical  Expert)  and  Shri  Gourab  Banerji,  learned  senior

counsel for BVG India Limited.  

4. Brief facts leading to these appeals are as under:

Ujjain  Municipal  Corporation  (Appellant  in  civil  appeal

arising  out  of  SLP(C)  No.  11967  of  2016)  had  issued  Notice

Inviting  Tender  (for  short,  “NIT”)  dated  01.05.2015  for  the

appointment of  an agency to carry out “Municipal Solid Waste

Door to Door Collection and Transportation” for a period of 10

years in the city of  Ujjain.   The tender notice was for  inviting

online  bids  from the  eligible  bidders  following  a  two  envelope

system i.e. one for technical bid and another for financial bid.

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The Municipal Corporation had appointed a technical expert in

Waste Management Solution viz. M/s Eco Save System Pvt. Ltd.

(respondent no. 2 in the civil  appeal arising out of  SLP(C) No.

11967 of 2016) for scrutinising and evaluating the technical &

financial  bids.   The  last  date  of  submission  of  tender  was

21.05.2015.  However, a corrigendum was issued and the date of

submitting online tenders was extended up to 01.06.2015.  The

opening of the technical  bid was fixed for 02.06.2015 and the

opening  of  the  financial  bid  on  04.06.2015.   Three  bidders

remained  for  consideration  of  the  award  of  tender  by  the

Municipal  Corporation.  The technical  bids of  the parties were

analysed  thoroughly  by  the  technical  expert  and  marks  were

awarded as per the specifications of the NIT.   

Clause 1 of the eligibility criteria of the NIT provided that

the  company  must  have  been  registered  five  years  prior  to

01.05.2010.   Clause  9  of  the  eligibility  criteria  of  the  NIT

permitted a consortium of two members, but with the distinct

experience requirement on the subject matter.  Article III of the

NIT specified that technical eligibility would have a weightage of

80% and  weightage  for  financial  score  was  20%.   The  marks

obtained in the technical evaluation would contribute to 80% and

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financial evaluation would contribute to 20% of the final marks

for deciding the L1 bidder.  The technical parameters which were

required to be measured were also indicated in Article III of the

NIT.   The financial  bids of  only  those bidders who secured at

least 60% marks in the technical evaluations would be opened.

The  tender  was  to  be  awarded  based  on  the  final  score

arrived at by taking the total of the weighted scores of technical

and financial evaluations as per the criteria mentioned in the NIT

at Article III.  Respondent no.1 scored low on technical evaluation

inasmuch as  it  got  58.94  in  the  weighted  score,  whereas  the

successful bidder i.e. respondent no. 3 got a weighted technical

score  of  67.36.  On  a  final  analysis  based  on  technical  and

financial  weighted  scores,  Global  Waste  Management  Cell  Pvt.

Ltd.  got  first  rank  (L1  bidder)  amongst  the  three  bidders  by

getting the highest score.  Hence, it was awarded the contract.

Such  award  of  contract  was  questioned  by  the  unsuccessful

bidder (B.V.G. India Limited, L2 bidder) before the High Court by

filing  the  Writ  Petition,  which  came  to  be  allowed  by  the

impugned judgment.  

During the pendency of these matters, on 26.04.2016, this

Court granted an interim order in favour of the successful bidder,

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namely respondent no. 3, staying the operation of the impugned

order of the High Court, consequent upon which the successful

bidder was awarded the contract and is discharging the duties

assigned.

5. The questions involved in these appeals are:

a  Whether  under  the  scope  of  judicial  review,  the  High

Court could ordinarily question the judgment of the expert

consultant  on  the  issue  of  technical  qualifications  of  a

bidder  when  the  consultant  takes  into  consideration

various factors including the basis of non-performance of

the bidder;  b  Whether a bidder who submits a bid expressly declaring

that it is submitting the same independently and without

any partners, consortium or joint venture can rely upon

the  technical  qualifications  of  any  third  party  for  its

qualification; c  Whether  the  High  Court  is  justified  in  independently

evaluating  the  technical  bids  and  financial  bids  of  the

parties,  as  an  appellate  authority,  for  coming  to  the

conclusion?

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6. The principles which have to be applied in judicial review of

administrative decisions, especially those relating to acceptance

of tender and award of contract, have been considered in great

detail by this Court in Tata Cellular v. Union of India, (1994) 6

SCC  651,  wherein  this  Court  observed  that  the  principles  of

judicial review would apply to the exercise of contractual powers

by  Government  bodies  in  order  to  prevent  arbitrariness  or

favouritism.  However, there are inherent limitations in exercise

of that power of judicial review. The Government is the guardian

of the finances of the State.  It is expected to protect the financial

interest of the State.  The right to refuse the lowest or any other

tender is always available to the Government.  But, the principles

laid down in Article 14 of the Constitution have to be kept in view

while accepting or refusing a tender.  There can be no question of

infringement of Article 14 if the Government tries to get the best

person or  the  best  quotation.   The  right  to  choose  cannot  be

considered to be an arbitrary power.  Of course, if the said power

is exercised for any collateral purpose, the exercise of that power

will be struck down.    

7. The  modern  trend  points  to  judicial  restraint  in

administrative  action.   The  Court  does  not  sit  as  a  Court  of

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Appeal but merely reviews the manner in which the decision was

made.   The  Court  does  not  have  the  expertise  to  correct  the

administrative decision.  If a review of the administrative decision

is permitted, it will be substituting its own decision without the

necessary expertise which itself may be fallible.  The government

must have freedom of contract.  In other words, a fair play in the

joints  is  a  necessary  concomitant  for  an  administrative  body

functioning in an administrative sphere or a quasi-administrative

sphere.  However, the decision must not only be tested by the

application of the Wednesbury principle of reasonableness, but

must also be free from arbitrariness and not affected by bias or

actuated by mala fides.  (See the judgment in the case of Master

Merin Services  (P)  Ltd. v.  Metcalfe  & Hodgkinson (2005)  6

SCC 138). 8. In  Sterling Computers Ltd. v.  M & N Publications Ltd.

(1993) 1 SCC 445, this Court held as under:  

“18. While  exercising  the  power  of  judicial review,  in  respect  of  contracts  entered  into  on behalf  of  the  State,  the  Court  is  concerned primarily  as  to  whether  there  has  been  any infirmity in the “decision making process”. In this connection reference  may be  made to  the  case of Chief  Constable  of  the  North  Wales Police v. Evans [(1982) 3 All ER 141] where it was said that: (p. 144a)

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“The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according  fair  treatment,  reaches  on  a matter which it  is authorised or enjoined by  law  to  decide  for  itself  a  conclusion which is correct in the eyes of the court.”

By  way  of  judicial  review  the  court  cannot examine the details of the terms of the contract which  have  been  entered  into  by  the  public bodies  or  the  State.  Courts  have  inherent limitations on the scope of any such enquiry. But at the same time as was said by the House of Lords  in  the  aforesaid  case, Chief  Constable  of the North Wales Police v. Evans [(1982) 3 All  ER 141]  the  courts  can certainly  examine  whether “decision-making  process”  was  reasonable, rational, not arbitrary and violative of Article 14 of the Constitution”.

19. If  the  contract  has  been  entered  into without  ignoring  the  procedure  which  can  be said to be basic in nature and after an objective consideration of different options available taking into  account  the  interest  of  the  State  and  the public,  then  Court  cannot  act  as  an  appellate authority by substituting its opinion in respect of selection made for  entering into  such contract. But, once the procedure adopted by an authority for purpose of entering into a contract is held to be  against  the  mandate  of  Article  14  of  the Constitution,  the  courts  cannot  ignore  such action  saying  that  the  authorities  concerned must have some latitude or liberty in contractual matters and any interference by court amounts

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to  encroachment  on  the  exclusive  right  of  the executive to take such decision.”

9. In  Raunaq International Limited v.  I.V.R. Construction

Limited, (1999) 1 SCC 492, this Court dealt with the matter in

some detail and held in (para 9) as under:

“9…..In  arriving  at  a  commercial  decision considerations  which  are  of  paramount importance are commercial considerations. These would be : (1) the price at which the other side is willing to do the work;  (2) whether the goods or services offered are of the requisite specifications;  (3) whether the person tendering has the ability to  deliver  the  goods  or  services  as  per specifications.  When  large  works  contracts involving  engagement  of  substantial  manpower or requiring specific skills are to be offered, the financial  ability  of  the  tenderer  to  fulfil  the requirements of the job is also important;  (4) the ability of the tenderer to deliver goods or services  or  to  do  the  work  of  the  requisite standard and quality;  (5) past experience of the tenderer and whether he  has  successfully  completed  similar  work earlier;  (6) time which will be taken to deliver the goods or services; and often  (7) the ability of  the tenderer to take follow up action,  rectify  defects  or  to  give  post  contract services.”

Whenever the State  or  public body or the Agency of  the State

enters  into  such contract,  an element  of  public  law or  public

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interest may be involved even in such a commercial transaction.

In  that  very  judgment,  i.e.,  Raunaq  International  Limited

(supra), the elements of public interest are also noted.  It is held

thus:

“10. What  are  these  elements  of  public interest? (1) Public money would be expended for the  purposes  of  the  contract;  (2)  The goods or services which are being commissioned could be for  a  public  purpose,  such  as,  construction  of roads,  public  buildings,  power  plants  or  other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so  that  the  services  become  available  to  the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work  or  goods  can  lead  to  tremendous  public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work - thus involving  larger  outlays  or  public  money  and delaying the availability of  services, facilities or goods,  e.g.  a  delay  in  commissioning  a  power project,  as  in  the  present  case,  could  lead  to power  shortages,  retardation  of  industrial development, hardship to the general public and substantial cost escalation.

11. When a writ petition is filed in the High court challenging the award of  a contract by a public authority or the State, the court must be satisfied  that  there  is  some  element  of  public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the  litigation.  A  mere  difference  in  the  prices

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offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute  in  favour  of  one  tenderer  or  the  other tenderer. Therefore, unless the court is satisfied that  there  is  a  substantial  amount  of  public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers.”

10. The judicial  review of administrative action is intended to

prevent  arbitrariness.  The  purpose  of  judicial  review  of

administrative action is to check whether the choice or decision

is made lawfully and not to check whether the choice or decision

is  sound.   If  the  process  adopted  or  decision  made  by  the

authority is not mala fide and not intended to favour someone; if

the process adopted or decision made is neither so arbitrary nor

irrational that under the facts of the case it  can be concluded

that  no  responsible  authority  acting  reasonably  and  in

accordance with relevant law could have reached such a decision;

and if  the public interest is  not  affected,   there should be no

interference under Article 226.

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11. It is well settled that the award of contract, whether it is by

a private party or by a public body or by the State, is essentially a

commercial transaction.  In arriving at a commercial decision, the

considerations  which  are  of  paramount  importance  are

commercial considerations.  These would include,  inter alia, the

price at which the party is willing to work; whether the goods or

services offered are of the requisite specifications; and whether

the person tendering the bid has the ability to deliver the goods

or services as per the specifications.  It is also by now well settled

that the authorities/State can choose its own method to arrive at

a  decision and it  is  free  to grant  any relaxation for  bona fide

reasons, if the tender conditions permit such a relaxation.  The

State,  its  corporations,  instrumentalities  and  agencies  have  a

public duty to be fair to all concerned.  Even when some defect is

found in the decision-making process, the Court must exercise

its discretionary power under Article 226 with great caution and

should exercise them only in furtherance of public interest and

not merely on the making out of a legal point.  The court should

always keep the larger public interest in mind in order to decide

whether its intervention is called for or not.  Only when it comes

to  a  conclusion  that  overwhelming  public  interest  requires

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interference, the Court should interfere. (See the judgment in the

case  of  Air  India  Limited v.  Cochin  International  Airport

Limited (2000) 2 SCC 617).

12. In U.P.  Financial  Corporation. v. Naini  Oxygen  &

Acetylene Gas Ltd. (1995) 2 SCC 754, this Court held that it was

not a matter for the courts to decide as to whether the Financial

Corporation should invest in the defaulting unit, to revive or to

rehabilitate it and whether even after such investment the unit

would  be  viable  or  whether  the  Financial  Corporation  should

realise its loan from the sale of the assets of the Company. The

Court  observed  that  a  Corporation  being  an  independent

autonomous statutory body having its own constitution and rules

to abide by, and functions and obligations to discharge, it is free

to act according to its own right in the discharge of its functions.

The views it  forms and the decisions it takes would be on the

basis  of  the  information  in  its  possession  and  the  advice  it

receives and according to its own perspective and calculations. In

such  a  situation,  more  so  in  commercial  matters,  the  Courts

should not risk their judgment for the judgments of the bodies to

which that task is assigned. The Court further held that:

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“Unless  its  action  is  mala  fide,  even  a  wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however more prudent, commercial or businesslike it may be, for the decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same  cannot  be  assailed  for  making  the Corporation liable.”

13. In  U.P. Financial Corporation  v. Gem Cap (India) Pvt.

Ltd. & Ors.  (1993) 2 SCC 299, it was observed that the High

Court while exercising its jurisdiction under Article 226 of  the

Constitution cannot sit as an appellate authority over the acts

and deeds of the corporation and seek to correct them, and that

the doctrine of fairness, evolved in administrative law, was not

supposed to  convert  the  writ  Courts  into  appellate  authorities

over  administrative  authorities.   It  is  further  observed by  this

Court that fairness is not a one way street, and fairness required

of the corporation cannot be carried to the extent of disabling it

from recovering what is due to it. 14. In Karnataka State Financial Corporation v. Micro Cast

Rubber & Allied Products (P) Ltd. & Ors. (1996) 5 SCC 65 the

issue  was  whether  the  financial  corporation  was  wrong  in

rejecting  the  offer  given  by  the  borrower  which,  after  proper

evaluation,  was  considered  lower  than  the  offer  made  by  the

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purchasers.   This  Court,  while  upholding  the  action  of  the

financial corporation, held that the action of the said financial

corporation should not be interfered with if it has acted broadly

in consonance with the guidelines.  15. In  Karnataka  State  Industrial  Investment  &

Development  Corporation  Limited v.  Cavalet  India  Ltd.  &

Ors. (2005) 4 SCC 456, this court after taking into consideration

various  questions  on  various  subjects  laid  down the  following

legal principles, viz.-

“(i)  The  High  Court  while  exercising  its jurisdiction under Article 226 of the Constitution does not  sit  as  an appellate  authority over the acts and deeds of the Financial Corporation and seek  to  correct  them.  The  doctrine  of  fairness does  not  convert  the  writ  courts  into  appellate authorities over administrative authorities.

(ii) In a matter between the Corporation and its debtor, a writ court has no say except in two situations:

a There  is  a  statutory  violation  on  the part of the Corporation, or

b Where  the  Corporation  acts  unfairly i.e. unreasonably.

(iii) In commercial matters, the courts should not risk their judgments for the judgments of the bodies to which that task is assigned.

(iv)  Unless  the  action  of  the  Financial Corporation is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the  courts  or  a  third  party  to  substitute  its decision, however, more prudent, commercial or businesslike  it  may be,  for  the  decision of  the Financial  Corporation.  Hence,  whatever  the

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wisdom (or the lack of it) of the conduct of the Corporation,  the  same  cannot  be  assailed  for making the Corporation liable.

(v)  In the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold and this could be achieved  only  when  there  is  maximum  public participation in the process of sale and everybody has an opportunity of making an offer.

(vi)  Public  auction is  not  the  only  mode to secure the best price by inviting maximum public participation, tender and negotiation could also be adopted.

(vii)  The  Financial  Corporation  is  always expected  to  try  and  realise  the  maximum sale price  by  selling  the  assets  by  following  a procedure which is transparent and acceptable, after due publicity, wherever possible and if any reason  is  indicated  or  cause  shown  for  the default,  the  same  has  to  be  considered  in  its proper perspective and a conscious decision has to be taken as to whether action under Section 29  of  the  Act  is  called  for.  Thereafter,  the modalities for disposal of the seized unit have to be worked out.

(viii)  Fairness  cannot  be  a  one-way  street. The  fairness  required  of  the  Financial Corporations cannot be carried to the extent of disabling  them from recovering  what  is  due  to them. While not insisting upon the borrower to honour  the  commitments  undertaken  by  him, the  Financial  Corporation  alone  cannot  be shackled hand and foot in the name of fairness.

(ix)  Reasonableness  is  to  be  tested  against the  dominant  consideration  to  secure  the  best price.

16. Likewise,  in  B.S.N.  Joshi  and  Sons  Ltd. v. Nair  Coal

Services Ltd. (2006) 11 SCC 548, this Court while summarising

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the  scope  of  judicial  review  and  the  interference  of  superior

courts in the matter of award of contracts, observed thus:

“65.  We  are  not  oblivious of  the  expansive role of the superior courts in judicial review.

66.  We  are  also  not  shutting  our  eyes towards  the  new  principles  of  judicial  review which  are  being  developed;  but  the  law  as  it stands now having regard to the principles laid down  in  the  aforementioned  decisions  may  be summarised as under:

(i)  if  there  are  essential  conditions,  the same must be adhered to;

(ii)  if  there  is  no  power  of  general relaxation, ordinarily the same shall not be exercised  and  the  principle  of  strict compliance  would  be  applied  where  it  is possible for all the parties to comply with all such conditions fully;

(iii)  if,  however,  a  deviation  is  made  in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;

(iv)  the  parties  who  have  taken  the benefit  of  such  relaxation  should  not ordinarily be allowed to take a different stand in relation to compliance with another part of tender  contract,  particularly  when  he  was also not in a position to comply with all the conditions of  tender fully,  unless the  court otherwise  finds  relaxation  of  a  condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;

(v)  when  a  decision  is  taken  by  the appropriate  authority  upon  due consideration  of  the  tender  document submitted by all the tenderers on their own merits  and  if  it  is  ultimately  found  that

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successful bidders had in fact substantially complied  with  the  purport  and  object  for which  essential  conditions  were  laid  down, the  same  may  not  ordinarily  be  interfered with;

(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer,  public interest would be given priority;

(vii)  where  a  decision  has  been  taken purely on public interest, the court ordinarily should exercise judicial restraint.”

17. In  Tata  Cellular (supra),  this  Court  referred  to  the

limitations  relating  to  the  scope  of  judicial  review  of

administrative  decisions  and  exercise  of  powers  in  awarding

contracts, by observing in para 94 thus:

“(1)  The  modern  trend  points  to  judicial restraint in administrative action.  

(2)  The Court does not sit as a court of appeal but  merely  reviews  the  manner  in  which  the decision was made.

(3)  The  court  does not  have  the  expertise  to correct the administrative decision.  If a review of the administrative decision is permitted it will be substituting  its  own  decision,  without  the necessary expertise which itself may be fallible.  

(4) The terms of the invitation to tender cannot be  open  to  judicial  scrutiny  because  the invitation to tender is in the realm of contract. Normally  speaking,  the  decision  to  accept  the tender  or  award  the  contract  is  reached  by process of negotiation through several tiers. More often  than  not,  such  decisions  are  made qualitatively by experts.  

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(5)  The  Government  must  have  freedom  of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative  sphere.   However,  the decision  must  not  only  be  tested  by  the application  of  Wednesbury  principle  of reasonableness (including its other facts pointed out above)  but must be free from arbitrariness not affected by bias or actuated by mala fides.

(6)  Quashing  decisions  may  impose  heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”

In that very judgment, this Court proceeded to observe that there

are inherent limitations in the exercise of the power of judicial

review of contractual powers.  This Court observed that the duty

to act fairly will vary in extent, depending upon the nature of the

cases to which the said principle is sought to be applied.   The

State  has  the  right  to  refuse  the  lowest  or  any  other  tender,

provided that it tries to get the best person or the best quotation.

18. This  Court  in  Delhi  Science  Forum v. Union  of  India

(1996) 2 SCC 405 observed in para 13 as follows:

“13…..While  exercising  the  power  of  judicial review  even  in  respect  of  contracts  entered  on behalf of the Government or authority, which can be  held  to  be  State  within  meaning  of Article 12 of  the  Constitution  courts,  have  to  address while examining the grievance of any petitioner

20

as to whether the decision has been vitiated on one ground or the other. It is well-settled that the onus to demonstrate that such decision has been vitiated  because  of  adopting  a  procedure  not sanctioned  by  law,  or  because  of  bad  faith  or taking  into  consideration  factors  which  are irrelevant,  is  on the  person who questions the validity thereof. This onus is not discharged only by raising a doubt in the mind of the court, but by satisfying the court that the authority or the body which had been vested with the power to take  decision  has  adopted  a  procedure  which does  not  satisfy  the  test  of Article  14 of  the Constitution or which is against the provisions of the statute in question or has acted with oblique motive  or  has failed in its  function to examine each  claim  on  its  own  merit  on  relevant considerations. Under the changed scenarios and circumstances  prevailing  in  the  society,  courts are not following the rule of judicial self-restraint. But at the same time all decisions which are to be taken by an authority vested with such power cannot be tested and examined by the court. The situation is  all  the  more  difficult  so far  as the commercial contracts are concerned. Parliament has  adopted  and  resolved  a  national  policy towards  liberalisation  and  opening  of  the national gates for foreign investors…….”

(emphasis supplied)

19. In  Central  Coalfields  Ltd. v.  SLL-SML  (Joint  Venture

Consortium) (2016) 8 SCC 622, it was observed as follows:

“38.  In  G.J.  Fernandez  v.  State  of  Karnataka [(1990) 2 SCC 488] both the principles laid down in Ramana Dayaram Shetty  (1979)  3 SCC 489 were reaffirmed. It was reaffirmed that the party issuing the tender (the employer) “has the right to punctiliously and rigidly” enforce the terms of the tender. If a party approaches a court for an

21

order  restraining  the  employer  from  strict enforcement of the terms of the tender, the court would  decline  to  do  so.  It  was  also  reaffirmed that the employer could deviate from the terms and  conditions  of  the  tender  if  the  “changes affected all  intending applicants alike and were not objectionable".  Therefore, deviation from the terms and conditions is  permissible  so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination in Ramana Dayaram Shetty sense.

47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram  Shetty  the  terms  of  NIT  cannot  be ignored as being redundant or superfluous. They must  be  given  a  meaning  and  the  necessary significance. As pointed out in Tata Cellular there must  be  judicial  restraint  in  interfering  with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to  be  questioned  but  the  decision-making process  can  certainly  be  subject  to  judicial review.  The  soundness  of  the  decision  may  be questioned  if  it  is  irrational  or  mala  fide  or intended to favour someone or a decision “that no responsible  authority  acting reasonably  and in  accordance  with  relevant  law  could  have reached” as held in Jagdish Mandal followed in Michigan Rubber.”

(emphasis supplied)

20. This Court also made an observation on judicial interference

in  Afcons  Infrastructure  Ltd.  v. Nagpur  Metro  Rail

Corporation Ltd. and Ors. (2016) 16 SCC 818, as hereunder:

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“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.”

Similar  observations  were  made in  the  cases  of  Jagdish

Mandal v.  State of Orissa and Ors. (2007) 14 SCC 517, and

Meerut  Development  Authority v.  Assn.  of  Management

Studies (2009) 6 SCC 171. 21. Thus, only when a decision making process is so arbitrary or

irrational that no responsible authority proceeding reasonably or

lawfully could have arrived at such decisions, power of judicial

review can be exercised.  However, if it is bona fide and in public

interest, the Court will not interfere in the exercise of power of

judicial  review  even  if  there  is  a  procedural  lacuna.   The

principles of equity and natural justice do not operate in the field

of commercial transactions.  Wherever a decision has been taken

appropriately  in  public  interest,  the  Court  ordinarily  should

exercise  judicial  restraint.   When  a  decision  is  taken  by  the

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concerned  authority  upon  due  consideration  of  the  tender

document submitted by all tenderers on their own merits and it

is  ultimately  found  that  the  successful  bidder  had  in  fact

substantially complied with the purpose and object for which the

essential conditions were laid down, the same may not ordinarily

be interfered with.   

22. As mentioned supra, the Ujjain Municipal Corporation with

the  object  of  keeping  Ujjain  city  clean  wanted  to  appoint  a

suitable agency for “municipal solid waste door to door collection

and  transportation”.   In  that  regard,  NIT  was  issued.   There

cannot be any dispute that urbanization contributes to enhanced

municipal  solid  waste  generation;  unscientific  handling  of

municipal  solid  waste  degrades  the  urban  environment  and

causes health hazards.  Various studies have been conducted in

respect of municipal solid waste management in urban India, and

reports  have  been  filed.  Despite  the  same,  municipalities  are

finding  it  difficult  for  proper  management  of  municipal  solid

waste.   Municipal  solid  waste  management,  a  critical  element

towards  sustainable  metropolitan  development,  comprises

segregation,  storage,  collection,  relocation,  carriage,  processing

and disposal of solid waste to minimize its adverse impact on the

24

environment.   Unmanaged,  municipal  solid  waste  becomes  a

factor for the propagation of innumerable ailments.  Each of the

leading municipal corporations/municipalities in India is trying

its  best  to  minimize  the  adverse  impact  on  the  environment

through planning of its own to manage the solid waste.  Certain

cities  started  door  to  door  collection  of  solid  waste  through

agencies appointed by them.  The studies made so far disclose

that most cities in India cannot claim 100% segregation of waste

at the dwelling unit and on an average only 70% waste collection

is observed, while the remaining 30% is again mixed up and lost

in the urban environment.  Be that as it may, the waste collected

will have to be scientifically processed.  Environment friendliness,

cost effectiveness, and acceptability to the local community are

major attributes to achieve an efficient solid waste management

system. Waste  produced by houses is  usually  transferred into

communal  bins.   Street  sweepings  also  find  their  way  to

community bins.  These community waste bins are also used by

other essential commercial sectors in the vicinity of disposal bins

along  with  household  wastes  except  where  some  commercial

complexes or  industrial  units  engage municipal  authorities  for

the transfer of their waste to disposal sites on payment.  Keeping

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in  mind  the  adverse  impact  of  health  hazards  in  case  the

municipal  solid  waste  is  not  managed properly,  the  municipal

corporation might plan to float tenders to appoint an agency for

municipal solid waste door to door collection and transportation.

Necessarily,  while  choosing  the  appropriate  agency,  the

afore-mentioned object has to be kept in mind by the municipal

corporation. So also, it is the duty of the Courts to keep such

factors in mind while deciding the subject matter of allocation of

contract by the municipal corporation.  

The  Solid  Waste  Management  Rules,  2016  (hereinafter

referred to as the ‘2016 Rules’) apply to every urban local body

etc., and the areas under the control of Indian Railways, airports,

airbases,  ports,  harbours etc.   They are also applicable to the

notified  industrial  townships,  places  of  pilgrims,  religious  and

historical  importance  as  may  be  notified  by  respective  State

Governments  from time  to  time.   Rule  22  of  the  2016  Rules

mandate the time frame for implementation. It is specified under

Rule  22  of  the  2016  Rules  that  necessary  infrastructure  for

implementation of these rules shall be created by the local bodies

and other concerned authorities by directly or engaging agencies

within the time frame specified in the said rules.  The rule further

26

mandates that the local bodies and other concerned authorities

shall ensure door to door collection of segregated waste and its

transportation  in  covered  vehicles  to  processing  or  disposal

facilities.  This task has to be completed within two years from

the date of coming into force of the Rules. Prior to these Rules,

Schedule  II  to  the  Municipal  Solid  Waste  (Management  and

Handling)  Rules,  2000  provided  that  the  municipality  shall

undertake  the  house-to-house  collection  of  municipal  solid

wastes  through  community  bin  collection,  house-to-house

collection,  or  collection  on  regular  pre-informed  timings  and

scheduling by using the bell-ringing of a musical vehicle without

exceeding the permissible noise levels.

23 Shri  Vikas Singh,  representing the Municipal  Corporation

contends, that the High Court has erred on four points, (i) Pimpri

Chinchwad Municipal Corporation (PCMC) Certificate submitted

by BVG India Limited (appellant before the High Court) has been

relied  upon  by  the  High  Court  erroneously  inasmuch  as  the

purported experience certificate is not that of BVG India Limited

but the same was of  BVG Kshitij  Waste Management Services

Private Limited and no information whatsoever was given of the

relationship/linkage of BVG Kshitij Waste Management Services

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Private Limited with BVG India Limited; (ii) the High Court itself

has acted as an appellate authority in evaluating the tenders and

has erred in increasing the marks for responsiveness from 5 to

10; (iii)method and formulae for evaluation of financial bid has

been wrongly applied by the High Court; and (iv) The High Court

has  wrongly  recorded  that  the  Mira  Bhayander  certificate

produced  by  the  successful  bidder,  namely,  Global  Waste

Management Cell  Private Limited, was subsequent to technical

evaluation.   Shri  Shyam Divan and Shri  Guru Krishnakumar,

appearing  on  behalf  of  the  appellants,  while  supporting  the

arguments of Shri Vikas Singh, vehemently contended that the

High Court practically has stepped into the shoes of the technical

expert  for  coming to  a  different  conclusion by  allotting  marks

inconsistent  with  the  spirit  of  the  tender  document  and  the

established principle followed by the experts in the field in such

matters.

24. Per  contra,  Shri  Gourab  Banerji,  learned  senior  counsel

argued  in  support  of  the  judgment  of  the  High  Court  and

contended that the High Court is justified in correcting the errors

committed by the technical expert while rejecting the bid of BVG

India Limited.

28

Shri  Gourab  Banerji,  relying  upon  the  financial  bid

submitted  by  BVG  India  Limited,  which  is  the  lowest  one,

contends that the bid of  BVG India Limited should have been

accepted by the committee inasmuch as the said bid if accepted

would  safeguard  the  financial  interest  of  the  corporation.   In

other  words,  he  submits  that  the  work  to  be  carried  out,  if

assigned to BVG, India Limited would be carried out at cheaper

rates as compared to the successful bidder.   

25.       Shri  Kailash  Vasdev,  arguing  on  behalf  of  technical

expert,  contends  that  the  expert  has  acted  in  fairest  of  fair

manner  and has kept  in  mind the  public  interest;  one  of  the

Directors of  respondent no.2  is  an Agro-Environment  Scientist

and has 22 years of  experience in the field of  Municipal Solid

Waste  Management  Projects.  The  technical  expert  provides

Technical Consultancy to various Municipal Corporations all over

India,  State  Governments,  Nodal  Agencies  etc.  The  technical

expert has already successfully commissioned over 77 Municipal

Solid Waste Management assignments.  The respondent has duly

applied its mind while evaluating the technical bids and financial

bids.  It  has  meticulously  and carefully  considered all  relevant

aspects and given a report.  There are no allegations of mala fides

29

or bias against the expert wherever it has carried on its work as

an expert.  In the matter on hand also, the expert has acted true

to the office it held and has not acted contrary to the confidence

reposed on it by the corporation and by parties.

26. The contentions of Shri Banerji cannot be accepted, because

the bid should be accepted not only based on the outcome of the

financial bid, but also based on the evaluation of the technical

bid.  Moreover, in the matter on hand, the technical bid will have

80% marks whereas the financial bid will have 20% marks.  This

clearly  shows  that  the  municipal  corporation  has  given  due

importance to the quality and not the financial aspect, keeping in

mind the object for which bids are invited. A Constitution Bench

of this Court in Trilochan Mishra Etc v. State of Orissa & Ors

(1971) 3 SCC 153 held that the Government most certainly has a

right to enter into a contract with a person well known to it, and

especially one who has faithfully performed its contracts in the

past  in  preference  to  an undesirable  or  unsuitable  or  untried

person.

27.  In  Ramana  Dayaram  Shetty v. International  Airport

Authority of India (1979) 3 SCC 489, this Court spoke of the

interpretation of essential conditions in a tender as follows:

30

“7…It  is  a  well  settled  rule  of  interpretation applicable alike to documents as to statutes that, save for compelling necessity, the Court should not  be  prompt  to  ascribe  superfluity  to  the language of a document “and should be rather at the  outset  inclined  to  suppose  every  word intended to have some effect or be of some use”. To reject words as insensible should be the last resort  of  judicial  interpretation,  for  it  is  an elementary rule based on common sense that no author  of  a  formal  document  intended  to  be acted upon by the others should be presumed to use words without a meaning. The court must, as  far  as  possible,  avoid  a  construction  which would render the words used by the author of the document  meaningless  and  futile  or  reduce  to silence  any part  of  the  document  and make it altogether inapplicable….”

28. It may also be pertinent to note the judgment of this Court in

Delhi Science Forum (supra), where it observed as follows:

“13…...The  question  of  awarding  licences  and contracts  does  not  depend  merely  on  the competitive rates offered; several factors have to be  taken into  consideration by  an expert  body which is more familiar with the intricacies of that particular  trade.  While  granting  licences  a statutory  authority  or  the  body so constituted, should have latitude to select the best offers on terms and conditions to be prescribed taking into account the economic and social interest of the nation. Unless any party aggrieved satisfies the court that the ultimate decision in respect of the selection  has  been  vitiated,  normally  courts should be reluctant to interfere with the same.”

(emphasis supplied)

31

29. In  Montecarlo Ltd.  v. NTPC Ltd. (2016) 15 SCC 272, this

Court highlighted the freedom of the owner to decide in matters

of tenders as follows:

“26.  We  respectfully  concur  with  the  aforesaid statement of law. We have reasons to do so. 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 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 scrutinised by the technical experts  and  sometimes  third-party  assistance from  those  unconnected  with  the  owner's organisation  is  taken.  This  ensures  objectivity. Bidder's  expertise  and  technical  capability  and capacity must be 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  with  which  we  are concerned, is not comparable to any scheme for allotment.  This  arena  which  we  have  referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide 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

32

decision  is  taken  that  is  manifestly,  in consonance  with  the  language  of  the  tender document  or  subserves  the  purpose  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  other  spheres  has  to  be  treated differently  than  interpreting  and  appreciating tender  documents  relating  to  technical  works and projects requiring special skills.  The owner should be allowed to carry out the purpose and there  has  to  be  allowance  of  free  play  in  the joints.”

(emphasis supplied)

30.  In  Central  Coalfields (supra),  the  Court  held  that  the

employer can decide to even deviate from the NIT:

“48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should  be  respected.  Even  if  the  term  is essential,  the  employer  has  the  inherent authority to deviate from it provided the deviation is  made applicable  to all  bidders and potential bidders  as  held  in  Ramana  Dayaram  Shetty. However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be  questioned  on  very  limited  grounds,  as mentioned  in  the  various  decisions  discussed above, but the soundness of the decision cannot be  questioned,  otherwise  this  Court  would  be taking  over  the  function  of  the  tender  issuing authority, which it cannot.”

(emphasis supplied)

33

31. The reason for allowing public authorities such wide leeway

in matters of contracts and tenders was elucidated in  Sterling

Computers (supra). Therein, the Court observed as follows:

“12.  At  times  it  is  said  that  public  authorities must  have  the  same  liberty  as  they  have  in framing  the  policies,  even  while  entering  into contracts  because  many  contracts  amount  to implementation  or  projection  of  policies  of  the Government.  But  it  cannot  be  overlooked  that unlike  policies,  contracts  are  legally  binding commitments  and  they  commit  the  authority which  may  be  held  to  be  a  State  within  the meaning of Article 12 of the Constitution in many cases  for  years.  That  is  why  the  courts  have impressed that even in contractual matters the public  authority  should  not  have  unfettered discretion.  In  contracts  having  commercial element,  some  more  discretion  has  to  be conceded  to  the  authorities  so  that  they  may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such  matters  they  have  to  follow  the  norms recognised  by  courts  while  dealing  with  public property. It is not possible for courts to question and  adjudicate  every  decision  taken  by  an authority,  because  many  of  the  Government Undertakings which in due course have acquired the  monopolist  position in  matters  of  sale  and purchase of products and with so many ventures in hand, they can come out with a plea that it is not  always  possible  to  act  like  a  quasi-judicial authority while awarding contracts. Under some special  circumstances  a  discretion  has  to  be conceded  to  the  authorities  who  have  to  enter into  contract  giving  them liberty  to  assess  the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona

34

fide  manner  although not  strictly  following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice Holmes,  that  courts  while  judging  the constitutional  validity  of  executive  decisions must grant certain measure of freedom of "play in the joints" to the executive.”

32.  That  the  authorities  should be given latitude in making a

decision on the offers was also observed in Sterling Computers

(supra). Therein, the Court observed that any judicial interference

amounts to encroachment on the exclusive right of the executive

to take a decision.  

33. In the matter on hand, admittedly, the successful bidder was

more technically qualified and it got more marks.  Normally, the

contract  could  be  awarded to  the  lowest  bidder  if  it  is  in the

public interest.  Merely because the financial bid of BVG India

Ltd. is the lowest, the requirement of compliance with the Rules

and conditions cannot be ignored.  

34. As  rightly  contended  by  respondent  no.  3,  a  statutory

authority granting licences should have the latitude to select the

best offer on the terms and conditions prescribed. The technical

expert  in  his  report  categorically  stated  that,  “All  the  above

aspects demand high level of Technicalities and Expertise rather

35

than just depending on lowest financial price quote for a material

transport.” As clarified earlier, the power of judicial review can be

exercised  only  if  there  is  unreasonableness,  irrationality  or

arbitrariness  and  in  order  to  avoid  bias  and  mala fides.  This

Court  in  Afcons Infrastructure (supra)  held  the  same in  the

following manner:

“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.”

35.  Evaluating  tenders  and awarding  contracts  are  essentially

commercial  transactions/contracts.   If  the  decision relating  to

award of contract is in public interest,  the Courts will  not,  in

exercise  of  the  power  of  judicial  review,  interfere  even  if  a

procedural aberration or error in awarding the contract is made

out.   The power of  judicial  review will  not  be permitted to be

invoked  to  protect  private  interest  by  ignoring  public  interest.

Attempts by unsuccessful bidders with an artificial grievance and

to get the purpose defeated by approaching the Court on some

36

technical  and procedural  lapses, should be handled by Courts

with firmness.  The exercise of the power of judicial review should

be avoided if  there is  no irrationality  or  arbitrariness.   In the

matter  on  hand,  we  do  not  find  any  illegality,  arbitrariness,

irrationality or unreasonableness on the part of the expert body

while in action.  So also, we do not find any bias or  mala fides

either  on  the  part  of  the  corporation  or  on  the  part  of  the

technical  expert  while  taking  the  decision.   Moreover,  the

decision is  taken keeping in  mind the  public  interest  and the

work experience of the successful bidder.   

36. As held in  Tata Cellular  (supra), the terms of the tender

are not open to judicial scrutiny as the invitation to tender is a

matter  of  contract.  Decisions  on  the  contract  are  made

qualitatively by experts. M/s Eco Save Systems Private Limited

[respondent  no.2  in  Civil  Appeal  arising  from  SLP  (C)  No.

11967/2016] is a project consultant and technical advisor of the

Ujjain Municipal Corporation.  It provides technical consultancy

and advisory services.  The documents produced along with the

counter  affidavit  filed  by  respondent  no.2  would  show  that

respondent  no.2  is  an  expert  in  municipal  solid  waste

management.  It is brought to our notice that respondent no.2

37

has developed a Detailed Project Report (DPR) cum Master Plan of

Ujjain City for up-gradation, systematization and abidance of the

Municipal Solid Waste Rules, 2000 for the period 2012 to 2042,

and the  Jawaharlal  Nehru National  Urban Renewal  Mission is

stated to have sanctioned 35.88 crores for the purpose.  There is

no dispute by any of the parties that respondent no.2 is an expert

in municipal solid waste management.  We also hasten to add

that there are no allegations of  bias or  mala fides against  the

technical  committee,  though grounds  are  taken by  BVG India

Limited before  the  High Court  that  the  decision of  the  expert

committee is not proper.  

37. In the subject NIT, out of the 9 eligibility criteria governing

capability,  expertise  and efficiency of  tenderers,  criteria 1 to 5

have a graded marking system based on unit-measurement of

municipal solid waste quantities handled and the time period of

such  work,   duly   supported  by  certificates  mentioned  in

Annexure-7 of the tender document.  All the participants in the

tender  process  have  followed  the  said  procedure  for  technical

eligibility  evaluation.   The  eligibility  parameters  for  the

participants are prescribed in Article III of NIT and criteria 6 and

38

7 mentioned  therein  are  based  on the  submission of  relevant

information, required data, write ups and disclosures proving the

tenderer’s expertise, experiences and responsiveness to the NIT.

The  eligibility  criteria  is  based  on  “track  record  of  good

performance, responsiveness for SWM tender obligations and free

of backouts/defaults during last 3 years”, for which details have

to  be  furnished  by  the  participants  in  the  process  as  per

Annexures 12 and 13.  Furthermore, Annexure 13 is very specific

regarding information on litigations, show-cause notices, delays,

work  suspension  etc.,  and  is  required  in  the  form  of  an

undertaking  duly  stamped  on  a  Non-Judicial  Stamp  Paper  of

Rs.100/-.

38. Records reveal that the evaluation of technical eligibility was

completed  by  the  technical  expert  between  3.6.2015  and

6.6.2015 and copies were submitted to the Executive Engineer,

Ujjain Municipal Corporation.  Thereafter, financial bids of all the

three technical qualified bidders were opened on 16.06.2015 and

financial results were communicated to the project consultant for

further analysis.  The final scores dated 18.06.2015 arrived at by

the technical expert of all the three bidders are as under:

39

1. Evaluation of Technical Bid:      

Sl.No. Name  of Tenderer

Marks obtained out  of 95

On 100% basis

After weightage Factor  of 80%

Rating as Technical score TL

1. M/s  Global Waste Mgt.

80.00 84.21 67.36 TL1

2. M/s  BVG India Ltd.

70.00 73.68 58.94 TL2

3. M/s  Earth Connect Transway

65.00 68.42 54.73 TL3

Evaluation of financial bid:

Sl.No. Parameters Tenderer: M/s Global Waste Mgt.

Tendererer: M/s  BVG India Ltd.

Tendererer: M/s  Earth Connect Transway

1. Price  quote Rs./NT  of MSW

1710.00 1454.00 1978.00

2. Marks obtained  in out of 20 max

17.00 20.00 14.67

2. Combined overall score:

Sl.No. Parameters Tenderer: M/s Global Waste Mgt.

Tendererer: M/s  BVG India Ltd.

Tendererer: M/s  Earth Connect Transway

5. Combined 84.36 78.94 69.40

40

overall  score (Tech + Fin)

6. Highest  marks = L1

L1 L2 L3

39. Since Global Waste Management Cell Private Limited, i.e.,

Appellant in Civil Appeal arising from SLP (C) No. 11967 of 2016

secured the highest score, i.e., 84.36, it emerged as the overall

eligible bidder for awarding the project as per the terms of NIT.

Global Waste Management Cell Private Limited has experience of

10  years  and  has  demonstrated  an  ability  for  good

responsiveness to tender.  Consequently, it was declared L 1 as

per the terms of the NIT. As a decision was qualitatively arrived

at by the technical expert respondent no. 2, the High Court need

not have gone into the merits of such decision as an appellate

authority, especially when there was no bias or mala fide.

40. It  is  necessary to  note  that  in Annexure  1 to  the  NIT at

serial no. 11, the bidder was required to set out details of any

other company/firm involved as a consortium member to which

respondent  no.1  –  BVG India  Limited  replied  in  the  negative,

which  means  no  other  company/firm  was  involved  as  a

consortium member with BVG India Limited in the process in

question. In other words, BVG India Limited submitted the bid on

41

its  own  unaccompanied  by  any  of  the  consortium  member.

Despite the same, BVG India Limited (respondent no.1) furnished

the  experience  certificate  of  BVG  Kshitij  Waste  Management

Services Private Limited.  No information whatsoever was given of

the relationship/linkage of  BVG Kshitij  and respondent no.1 –

BVG India Limited.  Therefore, reliance placed by the respondent

no.1 on the purported experience certificate issued in the name

of BVG Kshitij  Waste Management Services Pvt. Limited would

not come to the help of the respondent no.1 to show its work

experience.   The  Pimpri  Chinchwad  Municipal  Corporation

(PCMC) Certificate dated 24.10.2013 is in Marathi and the same

discloses that the work order was issued on 2.3.2012.  The PCMC

Certificate  thus  neither  shows  three  years’  experience  of  BVG

India  Limited  nor  that  BVG  India  Limited  was  carrying  out

garbage/waste collection of more than 300 MT per day.  Since

respondent no.1 has categorically mentioned in its bid under the

column  “basic  information  about  tenderer”  that  no  other

company  (either  joint  venture  or  consortium)  is  involved  with

BVG India Limited, respondent no.1 – BVG India Limited could

not have relied upon the purported experience certificate issued

in the name of BVG Kshitij Waste Management Services Pvt. Ltd.

42

Other certificates submitted by the respondent no.1 also did not

satisfy the eligibility requirement.

41. Moreover, the certificate dated 21.4.2015 relied upon by the

High Court in paragraph 16 of the impugned judgment was not

part  of  the  original  bid  document  submitted  by  BVG  India

Limited and it was submitted before the High Court for the first

time  as  per  annexure  P6  of  the  writ  petition.   Since  such

certificate was not part of the original bid document, the High

Court was not correct in relying upon such certificate produced

by BVG India Limited for the first time before it.  The Courts will

not permit any of the participants in the tender process to alter

or  supplement  the  bid  document.   In  the  absence  of  any

document evidencing the experience in the field in question in

favour  of  BVG  India  Ltd.,  the  appellants  are  justified  in

contending that the High Court is not correct in increasing the

marks  from  5  to  7  under  the  head  of  number  of  years  of

experience  and  expertise.   So  also,  the  High  Court  was  not

correct  in  increasing  the  marks  from 10  to  15  so  far  as  the

quantity of municipal solid waste handled per day through door

to  door  collection  is  concerned.   In  para  26  of  the  impugned

order,  the High Court has evaluated technical  eligibility  on its

43

own as if the appellate authority and has increased the marks of

respondent  no.1  for  experience  from  5  to  7  and  for  quantity

handled per day from 10 to 15, as mentioned  supra. The High

Court’s  observation  in  para  18  that  the  certificate  issued  by

PCMC  ought  to  have  been  considered  because  it  shows  the

collection of 335 MT per day of municipal solid waste, appears to

be  incorrect  in  the  light  of  our  discussion  made  in  the

afore-mentioned  paragraphs.   So  far  as  the  three  documents

relied  upon  by  respondent  no.1  in  respect  of  CIDCO  are

concerned, those documents do not state that BVG India Limited

was handling 300 MT per day municipal solid waste on door to

door basis.  

42. The  High  Court  was  also  not  justified  in  increasing  the

marks for responsiveness from 5 to 10.  The High Court relied

upon the  documents  pertaining  to  BBMP and PCMC and has

increased the marks from 5 to 10.   In our considered opinion,

the  High  Court  could  not  have  increased  the  marks  for

responsiveness as BVG India Limited had suppressed the  fact

that it had received show cause notices from BBMP and other

corporations.  The format of Annexure-13 on page 26 of the NIT

indicates  that  the  fourth  column  is  reserved  for  “nature  of

44

litigation” that the tenderer is or has been involved in. Point 4- of

the same Annexure-13 states as follows, “In how many of your

MSW  handling/processing  projects,  show  cause  notices  have

been issued for  breach of  contract:”  BVG India  Limited,  while

submitting Annexure-13, left the litigation column blank, despite

the fact that admittedly, 73 show-cause notices were issued to it

by  the  BBMP.  The  fact  that  these  notices  were  issued  is  not

disputed  by  BVG  India  Limited.  It  instead  claimed  that  the

issuance  of  show-cause  notices  does  not  form  part  of  the

litigation.

43. The  technical  expert,  after  an  objective  evaluation  of  the

tender submitted by BVG India Limited, observed that BVG India

Limited fell under the “average category”. It noted thus:

vi) Responsiveness to tender and submissions:

The  Tender  submission  by  M/s  BVG India  is  very  poor,

leaving  many  annexures  unfilled  up  and  referring  as

“information given separately”. Not filling up even statutory

and financial information in the prescribed formats.

Suppression of information regarding litigations (Annex-13)

and track record of Performance (Annex 12). Casualness in

45

description  of  Approach  and Methodology.  In  view  of  the

above, the tender gets marks for Average category i.e.  5.00

Marks.

44. It  was  clearly  stated  in  the  NIT  that  the  tenderer  was

required to reveal the show-cause notices against it.  Despite the

specific column  pertaining  to  the same  in  the  bid  document,

respondent no.1 had left the said column blank.  Once there is a

specific  clause  requiring  the  mentioning  of  the  show-cause

notices for the breach of contract,  it  was incumbent upon the

tenderer to provide accurate information. As respondent no.1 has

not done so, and has suppressed vital information, respondent

no.  2  has  rightly  allotted   it   5  marks   for   the   same.  As

mentioned  supra,  respondent  no.1  submitted  an  experience

certificate issued by the PCMC in favour of one M/s BVG Kshitij

Waste Management Services Pvt.  Ltd.  No material  is  produced

before  the  Court  to  show  that  M/s  BVG  Kshitij  Waste

Management Services Pvt. Ltd. is the same as BVG India Limited

or that it is a consortium member. In light  of  specific  averment

in the bid  document by respondent no.1 that there is no other

consortium member which has participated in the tender process

along with BVG India Limited, the experience certificate issued in

46

favour  of  BVG  Kshitij  Waste  Management  Services  Pvt.  Ltd

cannot be relied upon to fulfil the eligibility criteria by the BVG

India  Limited.   Respondent  no.1  has  submitted  its  bid  as  an

individual  bidder  and  not  as  a  consortium  and  hence  the

certificate of a third party could not be considered for the benefit

of  meeting  the  technical   qualification  of  respondent  no.1.  In

addition to the  same, the  respondent no.1 had suppressed 73

show  cause  notices  issued  against  it  by  BBMP  and  District

Panchayat,  Dadra  and Nagar  Haveli,  Silvasa  in  respect  of  the

work relating to solid waste management.  Despite suppression

by the respondent no.1, the technical expert from its own sources

gathered information and found that 73 show cause notices were

issued by the BBMP and others against respondent no.1, which

reveal that respondent no.1 had not shown due diligence in the

work  of  door  to  door  collection  of  solid  waste.   Hence,  the

conclusion reached by the High Court that it was not open for the

technical  committee  to  suo  motu take  into  consideration  the

afore-mentioned  73  show  cause  notices  issued  against the

respondent no.1 while evaluating the technical bid is not correct.

The due diligence and experience of the expert consultant ought

to have been appreciated by the High Court keeping in mind the

47

object to which bids were invited.  73 show cause notices issued

to respondent no.1 establish that respondent no.1 did not have a

good track record and therefore  such notices were  necessarily

taken into consideration by the technical expert.  In all fairness,

respondent no.1 ought to have disclosed these factors in its bid.

In view of the same, in our considered opinion, the High Court

was not  justified in  increasing the  marks  for  responsiveness

from 5 to 10.

2.  Evaluation of financial bid:

45. The method for evaluation of the financial bid as applied by

the High Court is also not proper, and is illogical.  As mentioned

supra, the technical expert, in our considered opinion, has rightly

applied the following formula in respect of the bidders so far as

financial bids are concerned:

FL1 x 20 FL2/FL3/FL4

On the other hand, the High Court has redone the evaluating

formula in which multiplication of 20 is not adopted:

FL1 FL2/FL3/FL4

48

Since the multiplication of 20 is not adopted by the High Court

(the same rightly adopted by the technical expert in respect of the

bidders), the same has led to unreasonableness and a travesty of

justice.  The formula adopted by the High Court does not stand

to reason at all. The NIT has prescribed the method of calculation

of marks for the financial bid.  The lowest bid, i.e., FL1 will be

granted 20 marks. Other parties will thereafter be given scores by

the formula (prescribed in Clause 3.1.3 of Article III of the NIT),

i.e., FL1/FL2 x 20 = FL2’s financial score.  In the matter on hand,

FL1 of  BVG India  Limited was 1454,  whereas  FL2 was  1710,

which  was  of  the  successful  bidder,  i.e.,  Global  Waste

Management  Cell  Pvt.  Ltd.  Thus,  1454  (FL1)  divided  by

1710(FL2),  multiplied  by  20  marks,  gives  17  marks  to  Global

Waste Management Cell Pvt. Ltd., so far as the financial bid is

concerned.  Per contra, the High Court has failed to multiply the

ratio of financial bids with marks of 20 and thus has erroneously

arrived at the score of 0.85 marks instead of 17 marks.

46. The  High  Court  observed  in  para  25  of  the  impugned

judgment that the technical consultant had wrongly relied upon

the  certificate  dated  16.07.2015 issued by  Mira  Bhayandar  to

qualify  the  successful  bidder  as  the  technical  expert  had

49

prepared  the  technical  evaluation  report  on  6.6.2015.   The

observation of the High Court was that, on the date of technical

evaluation, the certificate issued by Mira Bhayandar was not in

existence.  Records reveal that the technical expert had not relied

upon the certificate dated 16.07.2015.  The said certificate was

an additional document submitted for the first time before the

High Court along with the reply affidavit as per annexures R4 to

R6.   Whereas,  the  document  submitted  in  respect  of  Mira

Bhayandar  by  the  successful  bidder  was  a  certificate  dated

15.1.2015,  which  was  much  prior  to  the  technical  evaluation

report dated 6.6.2015.  The same is clear from Annexure R-21 of

the  counter  affidavit  filed  on  behalf  of  the  successful  bidder.

Therefore, the observations and the findings of the High Court in

respect  of  the  certificate  issued  by  Mira  Bhayandar  are  not

correct.

47. In  the  matter  on  hand,  we  do  not  find  either  the

decision-making  process  or  the  decision  to  be  arbitrary  or

irrational.  

48. The authority concerned is in the best position to find out

the best person or the best quotation depending on the work to

50

be entrusted under the contract.  If a bidder had faced a number

of show-cause notices from various municipal corporations in the

matter of non-performance of door to door collection of garbage

etc.,  the  Court  cannot  compel  the  authority  to  choose  such

undeserving person/company to carry out the work.  Ultimately,

the public interest must be safeguarded.  The public would be

directly interested in the timely fulfilment of the contract so that

the  services  become  available  to  the  public  expeditiously  and

effectively.  The public would also be interested in the quality of

work  undertaken.  Poor  quality  of  work  or  goods  can  lead  to

tremendous  public  hardship  and  substantial  financial  outlay

either in correcting mistakes or in rectifying defects or even at

times  in  re-doing  the  entire  work.   Lethargy  or  tardiness  in

collecting  door  to  door  garbage  on  a  day-to-day  basis  would

definitely lead to increase collection of garbage on the roads and

public properties, which leads to health hazards and also reduces

the cleanliness of the city.  Since the public is directly interested

and would be affected if  the work entrusted is not carried out

appropriately,  and  as  the  technical  expert  has  found  that

respondent  no.1  would  not  be  a  suitable  company  to  be

entrusted  the  work  inasmuch  as  it  had  faced  73  show-cause

51

notices  from different  Municipal  Corporations,  the  High  Court

could  not  have  interfered  with  the  decision  taken  by  the

authority.  In our considered opinion, the High Court has ignored

the element of public interest involved in the matter.  

49.  As  aforementioned,  unless  the  Court  concludes  that  the

decision making process or the decision taken by the authority

bristles with  mala fides, arbitrariness, or perversity, or that the

authority  has  intended  to  favour  someone,  the  Constitutional

Court will not interfere with the decision-making process or the

decision.

50. Thus,  the  questions  to  be  decided  in  this  appeal  are

answered as follows:  

(a)Under the scope of judicial review, the High Court could

not  ordinarily  interfere  with  the  judgment  of  the  expert

consultant  on the  issues of  technical  qualifications of  a

bidder  when  the  consultant  takes  into  consideration

various factors including the basis of non-performance of

the bidder;  

(b)  A bidder who submits a bid expressly declaring that it is

submitting  the  same  independently  and  without  any

52

partners,  consortium or  joint  venture,  cannot  rely  upon

the  technical  qualifications  of  any  3rd Party  for  its

qualification.

(c) It is not open to the Court to independently evaluate the

technical  bids  and  financial  bids  of  the  parties  as  an

appellate authority for coming to its conclusion inasmuch

as unless the thresholds of mala fides, intention to favour

someone or bias, arbitrariness, irrationality or perversity

are  met,  where  a  decision  is  taken  purely  on  public

interest,  the  Court  ordinarily  should  exercise  judicial

restraint.  

51. In view of the above, the impugned judgment and order of

the High Court cannot be sustained and the same is set aside.

52. The instant appeals are allowed.  There shall be no order as

to costs.   

………………………………….J. (Ranjan Gogoi)

…..……………………………..J. (R. Banumathi)

…………………………………..J (Mohan M. Shantanagoudar)

New Delhi, March 27, 2018.

53

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3330 OF 2018 (Arising out of SLP (Civil) No. 11967 of 2016)

MUNICIPAL CORPORATION, UJJAIN & ANR.   ....Appellants

Versus

BVG INDIA LIMITED AND ORS.             ....Respondents

WITH Civil Appeal No. 3331 of 2018

(Arising out of SLP (C) No. 17201 of 2016) &

Civil Appeal No. 3332 of 2018  (Arising out of SLP (C) No. 30776 of 2016)

O R D E R

MOHAN M. SHANTANAGOUDAR, J.

After pronouncement of  the judgment learned counsel for

the appellant while mentioning in the court drew the attention of

the  Court  to  typographic  mistake,  that  while  allowing  Civil

Appeal Nos. 3330 of 2018 and 3331 of 2018, the dismissal of the

Civil Appeal No. 3332 of 2018 filed by BVG India Limited is not

54

mentioned in  the  said  judgment,  therefore,  the  same is  to  be

corrected.  On verification, we find that the said submission is

justified.   

Hence, Para 52 of the judgment (operative portion) is to be

substituted by the following:

Accordingly, it is made clear that Civil Appeal Nos. 3330 of

2018 and 3331 of 2018 are allowed.  Consequently, Civil Appeal

No. 3332 of 2018 filed by BVG India Limited stands dismissed.

There shall be no order as to costs.

The  aforementioned  clarification  shall  be  noted  by  the

Registry in the main judgment and necessary corrections may be

effected in the judgment.  

………………………………….J. (Ranjan Gogoi)

…..……………………………..J. (R. Banumathi)

…………………………………..J (Mohan M. Shantanagoudar)

New Delhi, March 28, 2018.