What are the limits of Court interference in Tender Award disputes? Gujarat High Court explains [Read Judgment]

While declining to interfere with a tender award decision taken by the Gujarat Rail Infrastructure Development Corporation Limited (G-RIDE), the Gujarat High Court recently had occasion to comment on the limited scope of court interference when it comes to such disputes. [Montecarlo Limited and anr v. Gujarat Rail Infrastructure Development Corporation Limited (G-RIDE)].A Bench of Justices JB Pardiwala and Vaibhavi D Nanavati noted that courts would be slow to interfere in such disputes unless the decision challenged is found to be arbitrary and against public interest..In this regard, the Court further made note of the following principles:.What is discernible is that the court must, as far as possible, avoid a construction (of a tender document) that would render the words used by the author of the tender document meaningless and futile. The court would not ascribe superfluity to the language of a document. The court would necessarily examine the decision-making process to ascertain whether the process adopted or decision made by the authority is malafide or arbitrary and irrational or is such that no such authority acting reasonably and in accordance with the relevant law could have reached, and whether the decision is against the public interest. If an administrative decision, even a deviation in the terms of the notice inviting tender, if it is not arbitrary, irrational, unreasonable, malafide or biased, the courts would be loath to undertake judicial review of such decision. The courts would not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. 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 malafide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions..Case background.The case before the Court concerned a tender notice dated January 16, 2021, calling for bids in relation to a project for “Gauge Conversion of Becharaji (63.83 KM) - Ranuj (101.983 KM) Section, total length of 38.153 KM Meter Gauge to Broad Gauge with 25 KV AC Electrification in the Ahmadabad Division of the Western Railway.”.Montecarlo Limited was one of the bidders. However, its bid was rejected at the technical stage for failing to submit physical copies of certain volumes of the bid document, which was part of the tender conditions. The price offered by Montecarlo was not opened and it was submitted that this estimate was lower than the price quoted by the bidder ultimately chosen by G-RIDE for the project. .Aggrieved, Montecarlo moved the High Court for relief, contending that the failure to submit physical copies was an inadvertent mistake. It was further argued that such physical submission was only a formal process and that inadvertent non-submission was of no consequence. .G-RIDE opposed the plea, arguing that Montecarlo had failed to submit critical, essential, pre-qualification documents. Having accepted the lapse, Montecarlo could not turn around and argue that such a document was not essential, it was submitted..Court's decision .The Court, ultimately, ruled against Montecarlo, opining that it was not impressed with Montecarlo's stance that submission of physical copies was just a formal process. .The Bench said that it does not agree with the argument that such a lapse would only concern a requirement that was ancilliary or subsidiary to the main condition or object ("the second category as laid in the case of Poddar Steel Corporation"), since Montecarlo had categorically agreed to abide by all terms and conditions..The Court went on to rule that G-RIDE was right in its stance that the bids were required to be submitted in the 'required formats.' The tender had stipulated the exact manner in which the documents were to be submitted with specific emphasis on the manner of printing, use of specific colour of pen-ink, page numbering, and binding of the documents, the Court found.."To exempt, the writ-applicant from undertaking the stipulated exercise would be as good as modifying or substituting the tender conditions which is even otherwise not permissible in law," the Court added. .The Bench proceeded to reject Montecarlo's plea, observing, "In the overall view of the matter, we are convinced that we should not interfere with the decision taken by the respondent no.1 ... In the result, this writ-application fails and is hereby rejected. The interim relief, earlier granted, stands vacated forthwith.".Senior advocate SN Soparkar, assisted by advocate Parth Contractor appeared for Montecarlo. Advocates Gursharan H Virk and Vivek V Bhamare represented G-RIDE. Advocates Jay Savla and Harmish K Shah appeared for the second respondent in the matter, which was the successful bidder. .[Read Judgment]