# NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v. MONTECARLO LIMITED & ANR

- **Citation:** [2022] 12 S.C.R. 810
- **Court:** Supreme Court of India
- **Decided:** 2022-01-31
- **Case number:** Civil Appeal No. 6466 of 2021
- **Bench:** M. R. Shah, A. S. Bopanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/national-high-speed-rail-corporation-limited-v-montecarlo-limited-anr-35480
- **Pages:** 63

## Headnote

Constitution of India - Judicial Review - Foreign funded
project - Bullet Train Project - Interference by High Court in Tender
Process - When not justified - Appellant, a government company
issued a tender notice calling for bids for works in relation to the
project of construction of Mumbai-Ahmedabad High Speed Rail
(Project) - Bids submitted by the respondent along with four other
bidders were declared unsuccessful at Technical Stage - High Court
allowed the writ petition filed by the respondent and quashed the
communications dated 27.04.2021 and 28.04.2021 and the
notification dated 28.04.2021 by which the technical Bid submitted
by the respondents was rejected on the ground that the same is nonresponsive - Whether w.r.t such a foreign funded project, the High
Court was justified in interfering with the tender process in absence
of any specific allegations of mala fides and/or favouritism - Held:
High Court ought to have appreciated that the Bullet Train Project
is a result of long-drawn deliberations between the Government of
India and the Government of Japan - A loan agreement came to be
executed between the Japan International Cooperation Agency
(JICA) and Hon'ble the President of India - JICA agreed to fund
approximately Rs.1 lakh crores for the project on the terms and
conditions mentioned in the loan agreement and the other agreed
terms including the terms and conditions of the Bid document
finalized by the JICA/JICC (Japan International Consultants
Consortium) - The Bidding Documents are based on JICA's Standard
Bidding Documents as well as based on its procurement guidelines,
which form an integral part of the loan agreement - Therefore, any
decision contrary to the terms and conditions of the Bidding
Document would be altering the terms and conditions of the loan
agreement, which would not be permissible - JICA has a vital role
to play in such contracts - The foreign funded investment such as
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the present investment in the form of concessional Official
Development Assistance (ODA) loan by the JICA are made on the
basis of non- negotiated terms and conditions where the sole
discretion as to what will be the conditions of investment and on
what terms the contractors would be chosen to implement the project
vests with the investor- foreign developed nation - The ultimate
decision vests on the concerned parties, who financed/invested in
the project, i.e., in the present case JICA - The decision to hold that
the Bid was not responsive was of JICC - Under the contractual
mechanism,the appellant had no authority to deviate from the
evaluation done by JICC - Appellant acted as per the decision of
the JICC concurred by JICA - The JICC and JICA can be said to be
the final authority and no contrary decision to the decision of the
JICC/JICA could have been taken by the appellant, more
particularly, with respect to the Bidding Process etc. - Further, the
bidding procedure adopted was transparent, fair and does not
suffer from any arbitrariness - As such there were no allegations of
mala fides and/or favouritism either against the appellant or against
JICC and/or JICA - High Court erred in interfering with the
conscious decision taken by the JICA/JICC, followed by the
appellant - It erred in holding that the Bid submitted by the
respondent was in substantial compliance and in interfering with
the tender process and with the decision of the JICC/JICA rejecting
the Bid submitted by the original writ petitioner at technical stage -
Impugned judgment passed by the High Court is quashed and set
aside - Contracts.
Contracts - Foreign Funded Contracts - Constitution of India
- Judicial Review - Scope of - Held: Scope of judicial review in
foreign funded contract should be far much less than the ordinary
Government funded contracts funded from Consolidated Fund of
India - The scope of judicial review in such foreign funded
contracts/projects would be restricted and minimal - In such foreign
funded contracts, the only

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SUPREME COURT REPORTS
[2022] 12 S.C.R.
 [2022] 12 S.C.R. 810
810
NATIONAL HIGH SPEED RAIL CORPORATION LIMITED
v.
MONTECARLO LIMITED & ANR.
(Civil Appeal No. 6466 of 2021)
JANUARY 31, 2022
[M. R. SHAH AND A. S. BOPANNA, JJ.]
Constitution of India - Judicial Review - Foreign funded
project - Bullet Train Project - Interference by High Court in Tender
Process - When not justified - Appellant, a government company
issued a tender notice calling for bids for works in relation to the
project of construction of Mumbai-Ahmedabad High Speed Rail
(Project) - Bids submitted by the respondent along with four other
bidders were declared unsuccessful at Technical Stage - High Court
allowed the writ petition filed by the respondent and quashed the
communications dated 27.04.2021 and 28.04.2021 and the
notification dated 28.04.2021 by which the technical Bid submitted
by the respondents was rejected on the ground that the same is nonresponsive - Whether w.r.t such a foreign funded project, the High
Court was justified in interfering with the tender process in absence
of any specific allegations of mala fides and/or favouritism - Held:
High Court ought to have appreciated that the Bullet Train Project
is a result of long-drawn deliberations between the Government of
India and the Government of Japan - A loan agreement came to be
executed between the Japan International Cooperation Agency
(JICA) and Hon'ble the President of India - JICA agreed to fund
approximately Rs.1 lakh crores for the project on the terms and
conditions mentioned in the loan agreement and the other agreed
terms including the terms and conditions of the Bid document
finalized by the JICA/JICC (Japan International Consultants
Consortium) - The Bidding Documents are based on JICA's Standard
Bidding Documents as well as based on its procurement guidelines,
which form an integral part of the loan agreement - Therefore, any
decision contrary to the terms and conditions of the Bidding
Document would be altering the terms and conditions of the loan
agreement, which would not be permissible - JICA has a vital role
to play in such contracts - The foreign funded investment such as
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the present investment in the form of concessional Official
Development Assistance (ODA) loan by the JICA are made on the
basis of non- negotiated terms and conditions where the sole
discretion as to what will be the conditions of investment and on
what terms the contractors would be chosen to implement the project
vests with the investor- foreign developed nation - The ultimate
decision vests on the concerned parties, who financed/invested in
the project, i.e., in the present case JICA - The decision to hold that
the Bid was not responsive was of JICC - Under the contractual
mechanism,the appellant had no authority to deviate from the
evaluation done by JICC - Appellant acted as per the decision of
the JICC concurred by JICA - The JICC and JICA can be said to be
the final authority and no contrary decision to the decision of the
JICC/JICA could have been taken by the appellant, more
particularly, with respect to the Bidding Process etc. - Further, the
bidding procedure adopted was transparent, fair and does not
suffer from any arbitrariness - As such there were no allegations of
mala fides and/or favouritism either against the appellant or against
JICC and/or JICA - High Court erred in interfering with the
conscious decision taken by the JICA/JICC, followed by the
appellant - It erred in holding that the Bid submitted by the
respondent was in substantial compliance and in interfering with
the tender process and with the decision of the JICC/JICA rejecting
the Bid submitted by the original writ petitioner at technical stage -
Impugned judgment passed by the High Court is quashed and set
aside - Contracts.
Contracts - Foreign Funded Contracts - Constitution of India
- Judicial Review - Scope of - Held: Scope of judicial review in
foreign funded contract should be far much less than the ordinary
Government funded contracts funded from Consolidated Fund of
India - The scope of judicial review in such foreign funded
contracts/projects would be restricted and minimal - In such foreign
funded contracts, the only ground for judicial review ought to be
on a limited aspect, i.e., the action of the executing authority does
not suffer from favouritism or nepotism and based on the grounds
which have been concealed from the foreign financing authority, if
disclosed, would have persuaded the financing authority to cancel
the contract.
NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.
MONTECARLO LIMITED & ANR.
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Allowing the appeal, the Court
HELD: 1.1 It is required to be noted that as per the tender
documents, all the Bidders were required to adhere to the
requirements as per the terms and conditions mentioned in the
tender document. There cannot be any deviation by any Bidder.
The terms and conditions of the tender documents were settled
by the JICA as per JICA's International Guidelines, which are
required to be followed by all Bidders including the original writ
petitioner. Therefore, when the terms and conditions of the
tender document were settled by the JICA, it is ultimately for
the JICC/JICA to take a decision whether a Bid submitted by a
particular Bidder is non-responsive and/or non-compliant to the
technical requirements of the Bidding Documents. Therefore,
when a conscious decision has been taken by the JICC/JICA on
the Bid submitted by the original writ petitioner being nonresponsive/non-compliant to the technical requirements of the
Bidding Documents, unless there are specific allegations of mala
fides and/or favouritism, the same could not have been the subject
matter of scrutiny by the High Court in exercise of the powers
under Article 226 of the Constitution of India. [Para 7.3][849-FH; 850-A-B]
1.2 At this stage, it is to be noted that what can be said to
be substantially responsive Technical Bid has been defined under
Article 33.2. The High Court in the impugned order has observed
and held that the Bid submitted by the original writ petitioner
can be said to be substantially responsive Technical Bid.
However, it is required to be noted that when the author of the
tender document, in the present case, JICC/JICA, had taken a
conscious decision that the Bid submitted by the respondent -
original writ petitioner can be said to be non- responsive and
suffering from material deviation, it was not for the High Court
to consider/opine whether the Bid submitted by the original writ
petitioner is substantially responsive Technical Bid or not unless
the decision is found to be perverse and/or suffered from mala
fides and/or favoritism. At the cost of repetition, it is to be noted
that under the contractual obligation, it was not open for the
appellant - corporation and/or even the Republic of India to
deviate from any of the terms and conditions of the loan agreement
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and/or the decision of JICC/JICA. Therefore, in absence of any
allegation of mala fides/arbitrariness and/or favouritism, the High
Court has committed a grave error in interfering with a conscious
decision taken by the JICC/JICA, which has been followed by
the appellant. [Para 7.6 & 7.7][851-B-E]
1.3 It is required to be noted that a conscious decision was
taken by JICC/JICA holding that the Bid submitted by the original
writ petitioner suffers from material deviation and the same cannot
be said to be a substantially responsive Technical Bid. The
decision was taken by the employer - JICC/JICA and followed
by the appellant considering the relevant clauses of the ITB, more
particularly, ITB Clause 33.2, which defines a substantially
responsive Technical Bid. The High Court ought to have
appreciated that other Bidders, who were granted opportunity to
cure the defects had cleared the first stage and they were granted
opportunity to cure the defects as per ITB Clause 34. As per the
JICC and JICA, with respect to those Bidders, who were given
an opportunity to cure the defects after they cleared Stage I, their
defects were found to be substantially responsive and, therefore,
in exercise of the powers under Clause 34, the opportunity was
given to them to cure the defects, which as such was found to be
substantially responsive and non- material compliance. The High
Court ought to have appreciated that so far as the original writ
petitioner is concerned, its Bid was rejected at the first stage
itself having specifically found that the same constitute a material
deviation/non-conformity. Therefore, all the other Bidders who
were granted the opportunity to cure the defects were different
than that of the original writ petitioner and, therefore, the High
Court has erred in holding that not granting the opportunity to
the original writ petitioner to cure the defect is discriminatory.
Even otherwise it is required to be noted that once a conscious
decision was taken by the JICC and JICA, who can be said to be
the author of the terms and conditions of the tender document,
taking a view and stand that the Bid submitted by the original
writ petitioner suffers from material deviation and the said
decision was taken after considering the relevant clauses of the
ITB, thereafter it was not open for the High Court to interfere
with such a conscious decision in exercise of powers under Article
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226 of the Constitution of India and take a view that the Bid
submitted by the original writ petitioner was in substantial
compliance. [Paras 8, 9][863-F-H; 864-A-G]
1.4 As observed hereinabove, there are as such no
allegations of malafides and/or favouritism at all. Therefore, the
High Court has erred in holding that the Bid submitted by the
original writ petitioner was insubstantial compliance. Whether
the Bid submitted by a Bidder suffers from any material deviation
and/or any substantial deviation should be left to the author of
the Bid document and normally, the High Courts, in exercise of
the powers under Article 226 of the Constitution of India, should
not interfere with the same unless such a decision is found to be
mala fide and/or there are allegations of favouritism and/or such
a decision is arbitrary.[Para 10][864-G-H; 865-A]
1.5 In the present case, as observed hereinabove, the
decision to reject the Bid of the original writ petitioner at the
first stage on the ground that the Bid submitted by the original
writ petitioner suffers from material deviation and the same cannot
be said to be in substantial compliance has been taken by the
tender committee in concurrence with JICC and JICA. The role
of the JICA has been extensively dealt with by the Gujarat High
Court in the decision referred to hereinabove. Therefore, when
the JICA has agreed to fund such a huge amount and the terms
and conditions of the tender document are finalized by the JICC/
JICA, and, therefore, when conscious decision has been taken
by the JICC/JICA, the same was not required to be interfered
with by the High Court lightly and when such a decision of the
High Court would have a cascading effect on such a foreign funded
Mega project. The scope of judicial review in such foreign funded
contract should be far much less than the ordinary Government
funded contracts funded from Consolidated Fund of India. The
scope of judicial review in such foreign funded contracts/projects
would be restricted and minimal. In such foreign funded contracts,
the only ground for judicial review ought to be on a limited aspect,
i.e., the action of the executing authority does not suffer from
favouritism or nepotism and based on the grounds which have
been concealed from the foreign financing authority, if disclosed,
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would have persuaded the financing authority to cancel the
contract.[Para 11][865-B-E]
1.6 The High Court ought to have appreciated that the Bullet
Train Project is a result of long-drawn deliberations between the
Government of India on the one hand and the Government of
Japan on the other. That thereafter a loan agreement came to be
executed between the Japan International Cooperation Agency
(JICA) and Hon'ble the President of India and the JICA agreed
to fund approximately Rs.1 lakh crores for the project on the
terms and conditions mentioned in the loan agreement and the
other agreed terms including the terms and conditions of the Bid
document shall be finalized by the JICA/JICC. The Bidding
Documents are based on JICA's Standard Bidding Documents
as well as based on JICA's procurement guidelines, which form
an integral part of the loan agreement. Therefore, any decision
contrary to the terms and conditions of the Bidding Document
would be altering the terms and conditions of the loan agreement,
which would not be permissible. JICA has a vital role to play in
such contracts. It is to be noted that the foreign funded investment
such as the present investment in the form of concessional Official
Development Assistance (ODA) loan by the JICA are made on
the basis of non-negotiated terms and conditions where the sole
discretion as to what will be the conditions of investment and on
what terms the contractors would be chosen to implement the
project vests with the investor - foreign developed nation. The
ultimate decision vests on the concerned parties, who financed/
invested in the project, i.e., in the present case JICA. Therefore,
the High Court has erred in interfering with the conscious decision
taken by the JICA and the JICC, which has been acted upon by
the tender committee. Under the circumstances, the High Court
has erred in interfering with the conscious decision of the JICC
/ JICA / appellant / tender committee to reject the Bid submitted
by the original writ petitioner at Stage I on the ground that the
Bid submitted by the original writ petitioner was suffering from
material deviation. [Paras 12, 13][865-F-H; 866-A-D]
1.7 Now so far as the view taken by the High Court in the
impugned judgment and order that Clause 28 under Clause (e)
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of Option A Section1 and Clause 42.5 of ITB are patently illegal,
inasmuch as they seek to curtail the right of the bidders to
challenge the rejection of their bid in a multi-stage bidding process
at the earliest, and before the award of the contract is concerned,
at the outset, it is required to be noted that as such the aforesaid
clauses of the ITB were not under challenge before the High
Court. Even otherwise, it is required to be noted that Clauses
28.1 and 42.5 of ITB were well within the knowledge of the original
writ petitioner at the time of participating in the tender process.
The aforesaid clauses of the ITB were put to the knowledge of
all the participants/bidders and the same applied to all. Despite
the above clauses in the ITB, original writ petitioner participated
in the tender process. Therefore, once having accepted the terms
and conditions of the tender process with the full knowledge of
Clauses 28.1 and 42.5, and participated with full knowledge,
thereafter, it was not open for the original writ petitioner to make
a grievance with respect to such clauses.[Para 14][866-E-G]
1.8 Under the circumstances, the High Court has committed
a grave error in holding that Clauses 28.1 and 42.5 are patently
illegal, more particularly, in absence of any challenge to the same
and also on the ground that once the original writ petitioner
participated having knowledge of the aforesaid clauses in the ITB,
thereafter it was not open for the original writ petitioner to
challenge the same. The original writ petitioner was knowing right
from the very beginning with respect to the confidentiality clause
contained in Clause 28 and that grounds on which the Bids of
unsuccessful Bidders are not selected shall be communicated
only after a final decision to award the contract is communicated
under Clause 42. If the original writ petitioner was aggrieved
either it would not have participated and/or ought to have
challenged such clauses before participating in the tender process
Under the circumstances, the impugned judgment and order
passed by the High Court holding Clauses 28.1 and 42.5 as
patently illegal cannot sustain and the same also deserves to be
quashed and set aside.[Para 14.5][869-D-F]
1.9 It is deemed proper to express few words of caution to
the High Courts while entertaining the writ petitions challenging
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the tender process midway and/or while interfering with the tender
process in the contracts, more particularly, with respect to the
contracts/projects funded by the foreign countries and with
respect to the Mega project like the present one. Before
entertaining the writ petition with respect to such Mega projects
funded by the foreign countries, one has to appreciate that funds
of such Mega projects by the foreign country is followed by a
detailed discussion between the Prime Ministers of both the
countries and to strengthen bilateral cooperation in the rail sector.
The foreign country is ready to invest/fund such a huge amount
on non- negotiated terms and the Bid Documents are prepared
by the foreign financial agency/country in accordance with the
latest version of the Standard Bidding Documents. These
investments from developed nations are made on the basis of
non-negotiated terms and conditions, where the sole discretion
as to what would be the conditions of the investments and on
what terms the contractors would be chosen to implement the
project, vests with the investor foreign developed nation.
Considering the special peculiarities of such foreign sovereign
funded development contracts, which can be envisaged and exist
only due to the availability of the investment and willingness of
the foreign sovereign country to finance such infrastructure
project, the said contracts assume the different characteristics.
Therefore, there shall be different considerations so far as the
judicial interference is concerned between the foreign funded
contracts and the ordinary public works contracts funded from
public exchequer. It is always to be borne in mind and as observed
in the case of Asia Foundation and Construction Ltd., it is difficult
for a developing country to go ahead with such a high cost project
unless the developed country grant loan/subsidy and/or ready to
fund such high cost projects, which are very important projects
for developing country, more particularly, when the developed
country is ready to fund a huge amount at a minimal concessional
rate of interest and on suitable terms and conditions of repayment.
It is also to be noted that any delay in execution of such a Mega
project, which is very important project for the developing country
like India may not be in the larger public interest and in the
nation's interest. Such an interference by the Courts midway and
delay in the projects like these which is funded by the foreign
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countries on bilateral mutual understanding/agreement by the
developed country to a developing country may affect the future
investments/funding. Many a times, such a delay in the execution
of the project due to the intervention by the Courts may have
cascading effect on the project cost and ultimately may increase
the project cost and may impose heavy financial burden and lead
to increased and unbudgeted expenditure. Even while
entertaining the writ petition and/or granting the stay which
ultimately may delay the execution of the Mega projects, it must
be remembered that it may seriously impede the execution of
the projects of public importance and disables the State and/or
its agencies/instrumentalities from discharging the constitutional
and legal obligation towards the citizens. Therefore, the High
Courts should be extremely careful and circumspect in exercise
of its discretion while entertaining such petitions and/or while
granting stay in such matters. Even in a case where the High
Court is of the prima facie opinion that the decision is as such
perverse and/or arbitrary and/or suffers from mala fides and/or
favouritism, while entertaining such writ petition and/or pass any
appropriate interim order, High Court may put to the writ
petitioner's notice that in case the petitioner loses and there is a
delay in execution of the project due to such proceedings initiated
by him/it, he/they may be saddled with the damages caused for
delay in execution of such projects, which may be due to such
frivolous litigations initiated by him/it. The impugned judgment
and order passed by the High Court is clearly unsustainable and
the same is accordingly quashed and set aside. The original writ
petition before the High Court filed by the respondent herein
stands dismissed. [Paras 15, 16][869-G-H; 870-A-H; 871-G-H;
872-A-D]
Afcons Infrastructure Limited v. Nagpur Metro Rail
Corporation Limited, AIR 2016 SC 4305 : [2016] 3
SCR 551; Central Coalfields Limited & Anr. v. SLLSML [A Joint Venture Consortium], (2016) 8 SCC 622
: [2016] 4 SCR 890; Maa Binda Express Carrier &
Anr. v. North Eastern Frontier Railway & Ors., (2014)
3 SCC 760 : [2013] 12 SCR 529; Tata Cellular v. Union
of India, 1994 6 SCC 651 : [1994] 2 Suppl. SCR 122 -
relied on.
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Siemens Public Communication Networks Private
Limited and Anr. v. Union of India and Ors., (2008) 16
SCC 215 :[2008] 15 SCR 585; Poddar Steel
Corporation v. Ganesh Engineering Works and Others,
(1991) 3 SCC 273; B.S.N. Joshi and Sons Ltd. v. Nair
Coal Services Ltd. and Ors., (2006) 11 SCC 548 : [2006]
8 Suppl. SCR 11; Michigan Rubber (India) Limited v.
State of Karnataka, (2012) 8 SCC 216 : [2012] 8 SCR
128; Jagdish Mandal v. State of Orissa, (2007) 14 SCC
517 : [2006] 10 Suppl. SCR 606; Tejas Constructions
and Infrastructure (P) Ltd. v. Municipal Council,
Sendhwa, (2012) 6 SCC 464 : [2012] 4 SCR 90; CRRC
Corporation Limited v. Metro Link Express for
Gandhinagar and Ahmedabad (MEGA) Company
Limited, (2017) 8 SCC 282 : [2017] 5 SCR 87, Asia
Foundation and Construction Ltd. v. Trafalgar House
Construction (I) Ltd. and Ors., (1997) 1 SCC 738;
Central Coalfields Limited & Anr. v. SLL-SML [A Joint
Venture Consortium] and Ors., (2016) 8 SCC 622 :
[2016] 4 SCR 890 - referred to.
Case Law Reference
[2008] 15 SCR 585
referred to
Para 3.11
(1991) 3 SCC 273
referred to
Para 3.12
[2016] 3 SCR 551
relied on
Para 3.14
[2006] 8 Suppl. SCR 11
referred to
Para 3.14
[2012] 8 SCR 128
referred to
Para 3.14
[2006] 10 Suppl. SCR 606
referred to
Para 3.14
[2012] 4 SCR 190
referred to
Para 3.14
[2016] 4 SCR 890
relied on
Para 3.14
[2013] 12 SCR 529
relied on
Para 3.14
[2017] 5 SCR 87
referred to
Para 4.2
(1997) 1 SCC 738
referred to
Para 7.4
[2016] 4 SCR 890
referred to
Para 7.8
[1994] 2 Suppl. SCR 122
relied on
Para 15
NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.
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CIVIL APPELLATE JURISDICTION : Civil Appeal No.6466
of 2021.
From the Judgment and Order dated 23.08.2021 of the High Court
of Delhi at New Delhi in Writ Petition (Civil) No.5127 of 2021.
Tushar Mehta, SG, Kunal Chatterji, Sanjeet Ranjan, Rajat Nair,
Yash Kumar, Advs. for the Appellant.
Anshin H. Desai, Sr. Adv., Monish Panda, Parth J. Contractor,
Ayush Sharma, Ms. Priyamwada Sinha, Advs. for the Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 23.08.2021 passed by the High Court of Delhi in Writ
Petition (C) No. 5127 of 2021 by which the High Court has allowed the
said writ petition preferred by the respondent herein - original writ
petitioner (hereinafter referred to as the "original writ petitioner") and
has quashed the communications dated 27.04.2021 and 28.04.2021 and
the notification dated 28.04.2021 by which the original writ petitioner
was informed that its technical Bid has been rejected on the ground that
the same is non-responsive and consequently has directed the appellant
herein to proceed in accordance with law qua the tender process by
further examining the Bid of the original writ petitioner, the original
respondent - National High Speed Rail Corporation Limited (hereinafter
referred to as "NHSRCL") has preferred the present appeal.
2. That the appellant herein - NHSRCL is a Government Company
incorporated under the Companies Act, 2013 with equity participation of
the Government of India, Government of Gujarat and Government of
Maharashtra, incorporated with the object to finance, construct, maintain
and manage the upcoming High Speed Rail Corridor in India.
2.1 That the NHSRCL issued a tender notice on 22.10.2020 calling
for bids in relation "to the Bid Package No. MAHSR-8 for the - Design
and Construction of Civil and Building Works for the Depot on Design
Build Lump Sum Price Basis for Double Line High Speed Railway
involving works for Site Formation, Abutment, Retaining Walls, Roadbed
for track, Box Culvert, Roads, Cable Duct, Foundations of OHE Masts,
Piping, Drainage, Water Supply, Water Harvesting, Fire Fighting, Landscraping, Boundary Wall, General Inspection Train Shed, Maintenance
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Depot and other Associated Works at Sabarmati between MAHSR Km.
507.599 and MAHSR Km. 509.726 in the State of Gujarat for the Project
of Construction of Mumbai-Ahmedabad High Speed Rail, (hereinafter
referred to as "the Project").
2.2 That the Technical Bids submitted by various bidders including
the original writ petitioner, were opened by the NHSRCL on 19.02.2021.
The original writ petitioner alongwith four other bidders were declared
unsuccessful. The NHSRCL informed the original writ petitioner through
uploading of Technical Proposal Evaluation Summary on 27.04.2021 on
CPPP that the Bid of the original writ petitioner alongwith four other
bidders have been rejected at Technical Stage. The original writ petitioner
sought the reasons for rejection of its Bid. In response, NHSRCL vide
its communication dated 28.04.2021 addressed to original writ petitioner
informed that its Bid was not substantially responsive. A reference was
made to Clauses ITB 28.1 and 42.5. Under clause 28.1 "information
relating to the evaluation of the Bids and recommendation of the Contract
award shall not be disclosed to bidders or any other persons, not officially
concerned, with such process until information on Contract award is
communicated to all bidders in accordance with ITB 42." As per clause
42.5, "only after notification of award, unsuccessful Bidders may request,
in writing, to the Employer a debriefing seeking explanations on the
grounds on which their Bids were not selected and the Employer shall
promptly respond, in writing, to any unsuccessful Bidders who, after the
notification of the award in accordance with ITB 42.1, request a
debriefing." It appears that NHSRCL acted as per the aforesaid two
clauses.
2.3 Aggrieved by the aforesaid communication/notification dated
27.04.2021 and 28.04.2021 respectively and aggrieved by the
disqualification of its Bid, the original writ petitioner approached the High
Court by way of writ petition being Writ Petition (C) No. 5127 of 2021
and by the impugned judgment and order, the High Court has allowed
the said writ petition and has quashed and set aside the communications
dated 27.04.2021 and 28.04.2021 and the notification dated 28.04.2021
rejecting the Bid of original writ petitioner at Technical Stage.
2.4 While allowing the writ petition, the High Court has commented
upon Clauses 28.1 and 42.5 of ITB and has observed that not to give
reasons at that stage would tantamount to depriving the bidders to
approach the Court and know the reasons for rejection of their Bid.
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That thereafter the High Court has considered the reasons for which
the Bid submitted by the original writ petitioner was found to be technically
non-responsive and has overruled the objections while treating the Bid
as technically non-responsive and has observed and held that the Bid
submitted by the original writ petitioner was substantially responsive and
that there was a substantial compliance of the terms and conditions of
the Bid document. Consequently, the High Court has quashed and set
aside the aforesaid communications rejecting the original writ petitioner's
Bid at Technical Stage as a technically non-responsive and has directed
the NHSRCL to consider and evaluate the Bid submitted by the original
writ petitioner alongwith the Bids submitted by four other bidders.
2.5 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the NHSRCL has preferred the
present appeal.
3. Shri Tushar Mehta, learned Solicitor General appearing on
behalf of the appellant - NHSRCL has submitted that the present matter
pertains to the tender floated for works in Package C8, which is a part
of various other packages being finalized for the implementation of
Mumbai-Ahmedabad High Speed Rail popularly known as Bullet Train
Project. It is submitted that the Mumbai-Ahmedabad Project is a fully
foreign funded project, which was envisaged when the Japanese and
the Indian Governments entered into a Memorandum of Understanding,
pursuant to which it was agreed that the said project would be fully
funded by the Concessional Official Development Assistance Loan of
over Rs.80,000/- crores by the Japan International Cooperation Agency
(JICA). It is submitted that thus, the Bullet Train Project is a Foreign
Sovereign Funded Contract distinct from Contracts Funded from
Consolidated Fund of India. It is submitted that as per the Memorandum
of Corporation, and when the said project is fully funded by JICA for an
amount of Rs.1 lakh crore with a very negligible rate of interest and by
providing repayment in installments of 27 years and above, as per the
Memorandum of Corporation, the process of bidding and the subsequent
decisions are to be vetted by JICA. It is submitted that the content of the
bidding documents was based on JICA's Standard Bidding Documents
(SBD) as well as JICA's procurement guidelines and the same form an
integral part of the loan agreement. It is submitted that in the present
case, JICA appointed JICC as consultant.
3.1 It is further submitted by Shri Mehta, learned Solicitor General
that in the present case when the original writ petitioner submitted its
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Bid / Technical Bid and when the same was evaluated at the Technical
Evaluation Stage, the Technical Bid submitted by the original writ
petitioner was found to be non-responsive on the ground of (i) NonSigning of Form CON: 2.0 Pending Litigation and (ii) Non-Signing of 3.0
Litigation History in the physically submitted Bid by the authorised
representative of the original writ petitioner. It is submitted that as such
the Bid document was prepared by JICC and approved by JICA. It is
submitted that in the present case when the Bids submitted by the
respective bidder was evaluated by JICC as per the JICA'S International
Guidelines, the same was approved by the Tender Committee of the
appellant, which was finally concurred and approved by JICA. It is
submitted that the decision to hold that the Bid was non-responsive was
of JICC, which has been approved by the JICA. It is submitted that
appellant under the contractual mechanism cannot in its discretion deviate
from the evaluation done by JICC and any deviation unilaterally made
by the Appellant/Government of India may not be acceptable/concurred
by JICA. It is submitted that the same shall also be violative of "privilege
participation principle" as implementing the High Court's order will enable
the other bidders whose Bids have been rejected by the appellant on the
same ground to participate in the tender. It is submitted that the High
Court's evaluation of the other bidders will also render their bids
responsive and therefore any such action will render the entire bidding
un-competitive and shall have cascading effect on the other Packages.
3.2 Shri Mehta, learned Solicitor General has taken us to the
relevant clauses of the Memorandum of Corporation or Understanding
as entered between JICA and the President of India; JICA's Standard
Bidding Guidelines and the Guidelines for procurement under Japanese
ODA Loans. He has also taken us to the various clauses of the Bid
documents and to satisfy the Court's conscience that the appellant acted
just in accordance with the Memorandum of Understanding, Loan
Agreement entered between JICA and Government of India and as per
the relevant terms and conditions of the Bid document.
3.3 It is submitted that in the present case, Technical Bid Evaluation
was done by JICC (consultant appointed by JICA). It is submitted that
there was a detailed deliberation / discussion by the Technical Consultant
(TC) on Technical Bid evaluation. It is submitted that Stage 1 was
Evaluation of Administrative Requirements and Stage 3 was Evaluation
of Compliance with Technical Requirements. It is submitted that the
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conformities and were not in compliance with the technical requirements
of the Bidding Documents and so they were disqualified. It is submitted
that the Bid submitted by the original writ petitioner was also found to be
non-responsive/found to be had material non-conformities. It is submitted
that by letter dated 10.04.2021, the appellant - NHSRCL sought the
concurrence of JICA to Technical Bid Evaluation Report. It is submitted
that vide communication dated 23.04.2021, JICA confirmed the Technical
Bid Evaluation Report.
3.4 It is submitted that when JICA, JICC and the Technical
Evaluation Committee took a conscious decision that the Bid submitted
by the original writ petitioner was non-responsive and was not in
conformity with the relevant clauses of the Bidding Document, and
therefore, when the appellant acted upon the said recommendation/
Technical Bid Evaluation Report and rejected the Bid submitted by original
writ petitioner at Technical Stage, the High Court has materially erred in
interfering with such a fair and conscious decision in exercise of powers
under Article 226 of the Constitution of India.
3.5 Shri Tushar Mehta, learned Solicitor General appearing on
behalf of the appellant has vehemently submitted that in the present
case and with greatest respect, the High Court has not at all considered
the distinction between Foreign Sovereign Funded Contracts and the
contracts funded from the Consolidated Fund of India.
3.6 It is submitted that Foreign Sovereign Funded Contracts, like
the present one, are sui generis specie of contracts and are completely
different and distinct from Government Contracts/ Public Works
Department Contracts / Public Private Partnership Contracts, which
are either wholly or partially funded from public money, i.e., Consolidated
Fund of India or of the State and implemented by a statutory/local authority
of the State. It is submitted that in such foreign funded contracts, it is the
investor, which normally is the friendly sovereign country (a developed
nation, like in the present case Japan) which takes a decision to invest in
a friendly State (a developing nation, like in the present case India) and
finances and implements projects meant for development of the recipient
developing nation.
3.7 It is submitted that these investments from developed nations
are made on the basis of non-negotiated terms and conditions, where
the sole discretion as to what would be the conditions of the investments
and on what terms the contractors would be chosen to implement the
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project, vests with the investor foreign developed nation. Thus, all crucial
aspects of decision making and the terms and conditions on which such
investment has to be made and how the contractors have to be chosen
to implement the said project remains with the instrumentality/agency of
the sovereign which has proposed to make investments in developing
nation. It is submitted that so far as role of Indian authorities / local
authorities is concerned, they theoretically act as an intermediary and
are technically only given the role of performing 'first level scrutiny' that
the investment made would be expended/contractors would be chosen
as per the terms and conditions proposed by the investor State. It is
submitted that in such a case, the local authority/instrumentality of the
State acts as a facilitator and for all purposes the final decision-making
authority regarding selection of the contractors etc. remains with the
entity of the foreign State through whom the investments are made. It is
submitted that in the present case, the scrutiny of the Bids was not done
by the NHSRCL. It was done by JICC which is an independent body
authorised by JICA to evaluate the bids as per its terms and conditions
and thereafter on the basis of recommendations given by JICC, the final
decision to select a contractor is of JICA. It is, therefore, submitted that
the discretion with the Indian authority - appellant - NHSRCL to vary
any term is not at all permissible and even advisable.
3.8 It is submitted that the Hon'ble Gujarat High Court in its
judgment and order in the case of CRRC Corporation Ltd. Vs. MetroLink Express for Gandhinagar and Ahmedabad (MEGA)
Company Ltd. in Special Civil Application No.12833 of 2017 has
dealt with and considered in detail role of JICA and role of the
implementing agency of the project in India and the scope of the judicial
review of the Indian Courts while exercising the power under Article
226 of the Constitution of India. It is submitted that the decision of the
Gujarat High Court in the case of CRRC Corporation Ltd. Vs. MetroLink Express for Gandhinagar and Ahmedabad (MEGA)
Company Ltd. (supra) has been confirmed by this Court. Heavy reliance
is placed upon the decision of this Court in the case of M/s CRRC
Corporation Ltd. Vs.Metro Link Express for Gandhinagar and
Ahmedabad (MEGA) Company Ltd. passed in Special Leave Petition
(Civil) Diary No.35385 of 2017.
3.9 Shri Mehta, learned Solicitor General has further vehemently
submitted that in the facts and circumstances of the case, the High Court
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has materially erred in interfering with the tender process in exercise of
powers under Article 226 of the Constitution of India. It is submitted that
in the present case the High Court has exceeded in its jurisdiction in
exercise of powers under Article 226 of the Constitution of India and
has deviated the scope of judicial review in contractual matters.