Court cannot exercise judicial review to examine commercial viability of bid: Delhi High Court

The power of judicial review cannot be exercised to examine the commercial viability of a bid, the Delhi High Court said on Tuesday while dismissing a plea seeking cancellation of the tender awarded by the Ministry of External Affairs (MEA) [VF Worldwide Holdings vs. Ministry of External Affairs, Govt. of India & Ors.]..A Division Bench of Justices Vipin Sanghi and Jasmeet Singh observed that the analysis and opinion of the experts should be relied upon and should not be lightly interfered with by courts, while undertaking judicial scrutiny in tender matters."We cannot examine the commercial viability of a bid, in judicial review. It is the tender floating authority who is best suited to examine the same, as the said authority is aware of the ground realities, and is dealing with, and functioning in the relevant field."The Bench, therefore, dismissed a plea filed by a Dubai-based company, VF Worldwide Holdings, challenging the tender for providing consular, visa, and passport services at three sites in Kuwait.The Court in this case was of the view that the contract awarded in favour of respondent, did not amount to an arbitrary, illegal, or malafide act.Further, the Court stated that the company which was awarded the tender, had duly complied with all the terms of the request for proposal (RFP) for inviting bids for consular services. Therefore, the Court saw no reason to interfere with the award of the tender to the company.The Court also stated that the viability of the bid had been evaluated by the outsourcing committee, which is an independent committee, constituted for evaluating the commercial and economic viability of bids."The Outsourcing Committee duly evaluated the bid of Respondent no.3 and found it to be commercially viable," the Bench observed.In its order, the Court also made reference to a judgement passed by the Supreme Court in Sam Built Well (P) Ltd. v. Deepak Builder, where it was stated,"Not having found malafides or perversity in the technical expert reports, the principle of judicial restraint kicks in, and any appreciation by the Court itself of technical evaluation, best left to technical experts, would be outside its ken. As a result, we find that the learned Single Judge was correct in his reliance on the three expert committee reports. The Division Bench, in setting aside the aforesaid judgment, has clearly gone outside the bounds of judicial review."Another question the Court set out to answer in this case was whether quoting “zero” against providing certain biometric services was commercially unviable, impermissible for the bidders and called for judicial interference. The Court answered this in the negative by stating that the same was an industry practice."Zero is a value that has been accepted as economically and commercially viable for certain heads - for this and similar tenders, and has been quoted by various successful bidders, we see no room for interference. Even more pertinently, the Petitioner itself has participated in past tender while quoting “zero” for certain services. Therefore, the Petitioner cannot blow hot and cold."Senior Advocate Rajiv Nayar along with advocates Rohit Kochhar and Nishant Menon appeared for the petitioner company, VF Worldwide Holdings. Additional Solicitor General Chetan Sharma along with advocates Apoorva Kurup and Akshata Singh appeared for the MEA.Senior Advocate Parag Tripathi and advocates Tanmaya Mehta and Mishika Bajpai appeared for respondent company which had won the bid. .Read full order here:

Court cannot exercise judicial review to examine commercial viability of bid: Delhi High Court

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