Judges not technical experts; courts should refrain from interfering with technical contracts/ tenders: Supreme Court

The Supreme Court on Monday held that courts should be reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues [M/S NG Projects Limited v. M/S Vinod Kumar Jain]..A bench of Justices Hemant Gupta and V Ramasubramanian said that courts do not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view when dealing with cases arising from such contracts/ tenders.It should, therefore, not pass interim orders in such matters which could derail services and projects which are meant for larger public good, the Bench emphasised.“A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good," the Court held. Injunctions or interference by High Courts in tenders is against public interest and such interference leads to additional costs on the State, the Court added."Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions," the judgment said. Even if the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interference but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract."The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work," the Bench said..In the instant case, the Road Construction Department of Jharkhand had invited tenders in 2019 for reconstruction of the Nagaruntari-Dhurki-Ambakhoriya road. The first respondent participated in the bidding process and submitted a bank guarantee as bid security. However, the tender bid was cancelled and a fresh 'notice inviting tender' was issued..A technical evaluation committee then held a meeting for evaluation of bids wherein 13 bids including that of the first respondent were held to be non-responsive in terms of the Standard Bidding Document (SBD) as an amended bank guarantee that was not in the valid format was submitted. The bid capacity of the first respondent, i.e. ₹60.66 crores, was less than the estimated cost of work of ₹100 crores and the affidavit and undertaking supporting the bid were not properly notarised, it was found..On the other hand, the technical bid of the present appellant was declared to be substantially responsive and work contract was issued to the appellant. The construction work was started by the appellant and it had completed work of approximately ₹8.5 crores and had mobilised the plants and machinery..The first respondent filed a writ petition before the Jharkhand High Court for quashing the decision of the evaluation committee. A single-judge ruled in their favour and set aside the work contract granted to the appellant. The High Court had ordered a fresh tender, after which the appellant appealed to Division Bench of the High Court but their case was dismissed.This led to the appeal before the Supreme Court. .The apex court observed that construction of roads is an essential part of development of infrastructure in any State. Therefore, any ”unwarranted” interference in the contract awarded to any party by the High Courts is wholly illegal and causes loss to public interest.“In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference would cause unnecessary loss to the public exchequer," the Bench underscored..In the matters of tender bidding, especially from the public exchequer, whether or not a bidder has satisfied the tender condition is to be primarily decided by the authority inviting the bids as they are aware of the expectations from the tenderers, the Bench observed. .On merits of the case, the top court said that the original writ petitioner had not made any contention of malafide against the technical evaluation committee.“It is not the case of the writ petitioner that action of the technical evaluation committee was actuated by extraneous considerations or was malafide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the technical evaluation committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder,” the Court stated.The apex court, in overruling the judgment of the High Court, held that "in contracts involving technical issues, the Court should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain."The grant of interim injunction by the single-judge has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone, the Court ruled..The State was, therefore, directed to allow the appellant to resume and complete the work by excluding the period spent towards a stay on the work contract. .Advocate Sunny Choudhary appeared for the petitioner. Advocate Pallavi Langar appeared for the respondents..[Read Judgment]

Judges not technical experts; courts should refrain from interfering with technical contracts/ tenders: Supreme Court

Chaitanya Singh

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