Judgment · Supreme Court

509.726 in the State of Gujarat for the Projectof Construction of Mumbai-Ahmedabad High Speed Rail, (hereinafterreferred to as “the Project”).2.2 That the Technical Bids submitted by various bidders includingthe original writ petitioner, were opened by the NHSRCL on 19.02.2021.The original writ petitioner alongwith four other bidders were declaredunsuccessful. The NHSRCL informed the original writ petitioner throughuploading of Technical Proposal Evaluation Summary on 27.04.2021 onCPPP that the Bid of the original writ petitioner alongwith four otherbidders have been rejected at Technical Stage. The original writ petitionersought the reasons for rejection of its Bid. In response, NHSRCL videits communication dated 28.04.2021 addressed to original writ petitionerinformed that its Bid was not substantially responsive. A reference wasmade to Clauses ITB 28.1 and 42.5. Under clause 28.1

informationrelating to the evaluation of the Bids and recommendation of the Contractaward shall not be disclosed to bidders or any other persons, not officiallyconcerned, with such process until information on Contract award iscommunicated to all bidders in accordance with ITB 42.

As per clause42.5,

only after notification of award, unsuccessful Bidders may request, in writing, to the Employer a debriefing seeking explanations on thegrounds on which their Bids were not selected and the Employer shallpromptly respond, in writing, to any unsuccessful Bidders who, after thenotification of the award in accordance with ITB 42.1, request adebriefing.

It appears that NHSRCL acted as per the aforesaid twoclauses.2.3 Aggrieved by the aforesaid communication/notification dated27.04.2021 and 28.04.2021 respectively and aggrieved by thedisqualification of its Bid, the original writ petitioner approached the HighCourt by way of writ petition being Writ Petition (C) No.

5127 of 2021and by the impugned judgment and order, the High Court has allowedthe said writ petition and has quashed and set aside the communicationsdated 27.04.2021 and 28.04.2021 and the notification dated 28.04.2021rejecting the Bid of original writ petitioner at Technical Stage.2.4 While allowing the writ petition, the High Court has commentedupon Clauses 28.1 and 42.5 of ITB and has observed that not to givereasons at that stage would tantamount to depriving the bidders toapproach the Court and know the reasons for rejection of their Bid.NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH822SUPREME COURT REPORTS[2022] 12 S.C.R.That thereafter the High Court has considered the reasons for whichthe Bid submitted by the original writ petitioner was found to be technicallynon-responsive and has overruled the objections while treating the Bidas technically non-responsive and has observed and held that the Bidsubmitted by the original writ petitioner was substantially responsive andthat there was a substantial compliance of the terms and conditions ofthe Bid document.

Consequently, the High Court has quashed and setaside the aforesaid communications rejecting the original writ petitioner’sBid at Technical Stage as a technically non-responsive and has directedthe NHSRCL to consider and evaluate the Bid submitted by the originalwrit petitioner alongwith the Bids submitted by four other bidders.2.5 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the NHSRCL has preferred thepresent appeal.

It is submitted that in the presentcase, JICA appointed JICC as consultant.3.1 It is further submitted by Shri Mehta, learned Solicitor Generalthat in the present case when the original writ petitioner submitted its ABCDEFGH823Bid / Technical Bid and when the same was evaluated at the TechnicalEvaluation Stage, the Technical Bid submitted by the original writpetitioner was found to be non-responsive on the ground of (i) Non-Signing of Form CON: 2.0 Pending Litigation and (ii) Non-Signing of 3.0Litigation History in the physically submitted Bid by the authorisedrepresentative of the original writ petitioner. It is submitted that as suchthe Bid document was prepared by JICC and approved by JICA. It issubmitted that in the present case when the Bids submitted by therespective bidder was evaluated by JICC as per the JICA’S InternationalGuidelines, the same was approved by the Tender Committee of theappellant, which was finally concurred and approved by JICA. It issubmitted that the decision to hold that the Bid was non-responsive wasof JICC, which has been approved by the JICA. It is submitted thatappellant under the contractual mechanism cannot in its discretion deviatefrom the evaluation done by JICC and any deviation unilaterally madeby the Appellant/Government of India may not be acceptable/concurredby JICA. It is submitted that the same shall also be violative of “privilegeparticipation principle” as implementing the High Court’s order will enablethe other bidders whose Bids have been rejected by the appellant on thesame ground to participate in the tender.

It is submitted that the HighCourt’s evaluation of the other bidders will also render their bidsresponsive and therefore any such action will render the entire biddingun-competitive and shall have cascading effect on the other Packages.3.2 Shri Mehta, learned Solicitor General has taken us to therelevant clauses of the Memorandum of Corporation or Understandingas entered between JICA and the President of India; JICA’s StandardBidding Guidelines and the Guidelines for procurement under JapaneseODA Loans. He has also taken us to the various clauses of the Biddocuments and to satisfy the Court’s conscience that the appellant actedjust in accordance with the Memorandum of Understanding, LoanAgreement entered between JICA and Government of India and as perthe relevant terms and conditions of the Bid document.3.3 It is submitted that in the present case, Technical Bid Evaluationwas done by JICC (consultant appointed by JICA).

It is submitted thatthere 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 Evaluationof Compliance with Technical Requirements. It is submitted that theJICC recommended that the Bids of the five bidders had material non-NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH824SUPREME COURT REPORTS[2022] 12 S.C.R.conformities and were not in compliance with the technical requirementsof the Bidding Documents and so they were disqualified. It is submittedthat the Bid submitted by the original writ petitioner was also found to benon-responsive/found to be had material non-conformities. It is submittedthat by letter dated 10.04.2021, the appellant – NHSRCL sought theconcurrence of JICA to Technical Bid Evaluation Report.

It is submittedthat vide communication dated 23.04.2021, JICA confirmed the TechnicalBid Evaluation Report.3.4 It is submitted that when JICA, JICC and the TechnicalEvaluation Committee took a conscious decision that the Bid submittedby the original writ petitioner was non-responsive and was not inconformity with the relevant clauses of the Bidding Document, andtherefore, when the appellant acted upon the said recommendation/Technical Bid Evaluation Report and rejected the Bid submitted by originalwrit petitioner at Technical Stage, the High Court has materially erred ininterfering with such a fair and conscious decision in exercise of powersunder Article 226 of the Constitution of India.3.5 Shri Tushar Mehta, learned Solicitor General appearing onbehalf of the appellant has vehemently submitted that in the presentcase and with greatest respect, the High Court has not at all consideredthe distinction between Foreign Sovereign Funded Contracts and thecontracts funded from the Consolidated Fund of India.3.6 It is submitted that Foreign Sovereign Funded Contracts, likethe present one, are sui generis specie of contracts and are completelydifferent and distinct from Government Contracts/ Public WorksDepartment Contracts / Public Private Partnership Contracts, whichare either wholly or partially funded from public money, i.e., ConsolidatedFund of India or of the State and implemented by a statutory/local authorityof the State.

It is submitted that in such foreign funded contracts, it is theinvestor, which normally is the friendly sovereign country (a developednation, like in the present case Japan) which takes a decision to invest ina friendly State (a developing nation, like in the present case India) andfinances and implements projects meant for development of the recipientdeveloping nation.3.7 It is submitted that these investments from developed nationsare made on the basis of non-negotiated terms and conditions, wherethe sole discretion as to what would be the conditions of the investmentsand on what terms the contractors would be chosen to implement the ABCDEFGH825project, vests with the investor foreign developed nation. Thus, all crucialaspects of decision making and the terms and conditions on which suchinvestment has to be made and how the contractors have to be chosento implement the said project remains with the instrumentality/agency ofthe sovereign which has proposed to make investments in developingnation.

It is submitted that so far as role of Indian authorities / localauthorities is concerned, they theoretically act as an intermediary andare technically only given the role of performing ‘first level scrutiny’ thatthe investment made would be expended/contractors would be chosenas per the terms and conditions proposed by the investor State. It issubmitted that in such a case, the local authority/instrumentality of the State acts as a facilitator and for all purposes the final decision-makingauthority regarding selection of the contractors etc. remains with theentity of the foreign State through whom the investments are made. It issubmitted that in the present case, the scrutiny of the Bids was not doneby the NHSRCL. It was done by JICC which is an independent bodyauthorised by JICA to evaluate the bids as per its terms and conditionsand thereafter on the basis of recommendations given by JICC, the finaldecision to select a contractor is of JICA. It is, therefore, submitted thatthe discretion with the Indian authority - appellant - NHSRCL to varyany term is not at all permissible and even advisable.3.8 It is submitted that the Hon’ble Gujarat High Court in itsjudgment and order in the case of CRRC Corporation Ltd.

Vs. Metro-Link Express for Gandhinagar and Ahmedabad (MEGA)Company Ltd. in Special Civil Application No.12833 of 2017 hasdealt with and considered in detail role of JICA and role of theimplementing agency of the project in India and the scope of the judicialreview of the Indian Courts while exercising the power under Article226 of the Constitution of India. It is submitted that the decision of the Gujarat High Court in the case of CRRC Corporation Ltd. Vs. Metro-Link Express for Gandhinagar and Ahmedabad (MEGA)Company Ltd. (supra) has been confirmed by this Court. Heavy relianceis placed upon the decision of this Court in the case of M/s CRRCCorporation 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 vehementlysubmitted that in the facts and circumstances of the case, the High CourtNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH826SUPREME COURT REPORTS[2022] 12 S.C.R.has materially erred in interfering with the tender process in exercise ofpowers under Article 226 of the Constitution of India.

It is submitted thatin the present case the High Court has exceeded in its jurisdiction inexercise of powers under Article 226 of the Constitution of India andhas deviated the scope of judicial review in contractual matters. It issubmitted that the High Court while exercising the powers under Article226 of the Constitution of India and interfering with the administrativeprocess with respect to the Foreign Sovereign Funded Contract/Projecthas not at all appreciated and/or considered the difference between theforeign funded contracts and the ordinary Public Works contracts fundedfrom Public Exchequer.3.10 It is submitted that considering the special peculiarity of suchForeign Sovereign Funded Development Contracts, which can beenvisaged and exist only due to the availability of the investment andwillingness of the foreign sovereign country to finance such infrastructuralproject, the said contract assumes the characteristics, which are moreof private in nature rather than being a full-fledged Public WorksContracts/Government Contracts where the Government of India is thesole authority of funding and implementing the project and in which theelement of public law and judicial review parameters are applicable inits full vigour.

It is submitted that being in the nature of an investment bya friendly sovereign country on concession, the decision remains withthe investor as to through whom the said investments are transformedinto public infrastructural projects and as to on what terms and conditionsthe contractors are to be chosen who would transform their project intopublic infrastructural projects.3.11 It is submitted that the terms of NIT proposed by the investorassumes a sacrosanct effect as any deviation from the same canperpetrate a detrimental effect on the funding of the infrastructural project. Such Contracts have ramification which are international in nature, farbeyond the decision-making power of the local Government situated in India and therefore, the decision making with regard to such contract isdependent upon larger consideration of international fiscal policy wherea developed country decides to finance an infrastructural project for adeveloping country.

It is submitted that considering the aforesaid factors, the scope of judicial review in these foreign funded contracts is far muchless than the ordinary Government Funded Contracts, i.e., funded fromthe Consolidated Fund of India, whose scope of judicial review is ABCDEFGH827otherwise held to be restricted and limited by this Court. Reliance isplaced upon the decision of this Court in the case of Siemens PublicCommunication Networks Private Limited and Anr. Vs. Union of India and Ors.,(2008) 16 SCC 215 @ paras 20-24.3.12 It is further submitted that in such foreign funded contracts, there is no room of any deviation from essential conditions of tenderproposed by the investor. Signing of the forms to the Bid in indelible ink, thus, formed an essential condition of the NIT. It is submitted that deviationfrom the essential conditions of NIT is not at all permissible in the contractof present nature and the doctrine of substantial compliance, which maybe applicable in the case of domestic tender matters shall not be applicableat all with respect to the contract of present nature having internationalramification and foreign funding.

Reliance is placed upon the decision ofthis Court in the case of Poddar Steel Corporation Vs. GaneshEngineering Works and Others, (1991) 3 SCC 273. It is submittedthat when the final decision-making authority is under the jurisdictionalcontrol of a governmental body in India, the State may adopt a positionwherein it allows tender participant to participate in case there issubstantial compliance. However, the same may not be a position withcontracts issued for implementing foreign funded infrastructural projectsas the same would amount to changing the terms on which the investmentis agreed to be made. It is submitted that in the present case as such, theappellant has complied with and/or followed the conditions as envisagedby the foreign funding party and there cannot be any deviation from theterms and conditions of the NIT by the appellant; as such which can besaid to be a facilitating party and/or implementing agency only.

It issubmitted that in the present case, as one of the essential conditions ofsigning the forms in indelible ink has not been complied with, therefore,a conscious decision was taken by the investor – JICA and the consultant– JICC, which has been applied by the appellant.3.13 It is submitted that in the impugned judgment and order the High Court has applied the doctrine of substantial compliance, equityand fair play. It is submitted that however the doctrine of substantialcompliance shall not be applicable in commercial contracts. It is submittedthat it would tantamount to violation of the essential conditions of thecontract. It is submitted that when a condition which is specificallyimposed by a foreign funding party for an infrastructural project, suchcondition being non-negotiable in nature and forms an integral part to theNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH828SUPREME COURT REPORTS[2022] 12 S.C.R.contract, the adherence of such condition has to be in totality as it is notpermissible either for the executing authority in India to approve a Biddocument despite there being a clear breach of a condition imposed bythe foreign funding party.

It is submitted that doctrine of substantialcompliance, thus, cannot be negotiated with the foreign funding party; though in public works which are funded from Consolidated Fund of India/public money the same may be possible and/or may be permissible. It is submitted that the High Court has not properly appreciated the factswhile allowing the doctrine of substantial compliance to creep in suchforeign funded international projects which would result in seriouslyjeopardizing the willingness of the foreign State to finance an infrastructureproject of this magnitude. It is submitted that as such the scope of judicialreview on the parameters laid down for judicial review of contractualmatters and projects funded solely from the Consolidated Fund of Indiawhere the decision-making authority is solely an Indian Governmentalauthority will not be applicable in such cases. It is submitted that incases like the present one, the terms offered by the foreign sovereign, on the basis of which it proceeds to finance an infrastructural project, becomes sacrosanct and cannot be deviated from and in such cases, thecompliance has to be strict and not substantial.

It is submitted that anyinsistence on substantial compliance may affect the willingness of theforeign sovereign to finance such a project and to share technical know-how regarding the same.3.14 It is further submitted by Shri Mehta, learned Solicitor Generalthat as per the settled preposition of law laid down by this Court, thescope of judicial review in contractual matters is extremely limited. It issubmitted that only in a case where the process adopted or decisionmade by the authority is mala fide or intended to favour someone; orwhere the process adopted or decision made is arbitrary and irrationalthat the court can say: “the decision is such that no responsible authorityacting reasonably and in accordance with relevant law would havereached”; and in cases where the public interest is affected, the Courtswill be justified in interfering such decision in exercise of powers under Article 226 of the Constitution of India.

Reliance is placed upon thefollowing decisions:-Afcons Infrastructure Limited Vs. Nagpur Metro RailCorporation Limited, AIR 2016 SC 4305; B.S.N. Joshi and SonsLtd. Vs. Nair Coal Services Ltd. and Ors., (2006) 11 SCC 548; ABCDEFGH829Michigan Rubber (India) Limited Vs. State of Karnataka, (2012)8 SCC 216; Jagdish Mandal Vs. State of Orissa, (2007) 14 SCC517; Tejas Constructions and Infrastructure (P) Ltd. Vs.Municipal Council, Sendhwa, (2012) 6 SCC 464; CentralCoalfields Limited & Anr. Vs. SLL-SML [A Joint VentureConsortium], (2016) 8 SCC 622; and Maa Binda Express Carrier& Anr. Vs. North Eastern Frontier Railway & Ors., (2014) 3 SCC760.3.15 It is further submitted that with the aforesaid limited scopeof judicial interference/intervention in exercise of the powers under Article 226 of the Constitution of India, the decision taken in the presentcase to reject the Bid of original writ petitioner at Technical Stage on theground that the same is non-responsive is to be considered.

It is submittedthat considering the relevant clauses of the ITB/Bid document, it isultimately for the investor and/or the appropriate authority to considerwhether the Bid complies with the terms and conditions of the Biddocument and/or whether there is a substantial compliance and/orwhether there is any material deviation or not. Once there is an applicationof mind on the aforesaid aspects and the appropriate authority/investorcomes to the conclusion that there is a material deviation in the Bidsubmitted by the bidder, unless there are allegations of mala fide and thesame are established and proved, the interference of the Court in exerciseof powers under Article 226 of the Constitution of India with respect tosuch a conscious decision is not warranted. It is submitted that it isultimately for the Employer to have a conscious call or decision whetherthe Bid is technically responsive or there is a material deviation or not.3.16 It is further submitted by Shri Mehta, learned Solicitor Generalthat observations made by the High Court that applying Clauses ITB28.1 and 42.5 it affects the fairness in the tender process and it affectsthe rights of the bidders to challenge the decision rejecting their bids, the High Court has not at all appreciated and/or considered the object andpurpose of the said clauses.

It is submitted that the object and purposeof the said clauses cannot be said to be taking away the rights of thebidders to challenge the decision rejecting its bids. It is submitted that itonly differs the challenge. It is submitted that the main object and purposeof the aforesaid clauses is that there is no interference at the stagewhere the tender process is going on. It is submitted that if at everystage the bidder approaches the Court and/or makes grievance, it mayNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH830SUPREME COURT REPORTS[2022] 12 S.C.R.further delay the completion of the tender process and which mayultimately result in delay in execution of the Mega project / public project. It is submitted that after the entire tender process is completed and thework order is issued, on the request made, the reasons for rejecting the Bid can be supplied and thereafter it will be open for the bidder to takerecourse to law at that stage and even after the contract is awarded; thebidder is not rendered remediless.

It is, therefore, submitted that theobservations made by the High Court with respect to the aforesaid twoclauses are absolutely unwarranted and beyond the scope of judicialreview in exercise of powers under Article 226 of the Constitution of India.3.17 It is submitted that the findings recorded by the High Courtin the impugned judgment and order that ITB Clauses 28.1 and 42.5 arepatently illegal may lead to altering the tender conditions as these are asper JICA SBD and can be altered only with JICA’s concurrence. It issubmitted that seeking alterations in JICA ITB will tantamount to re-negotiations between the tendering authorities and JICA. This will notonly delay the BID-Package No.C8 but also the other 17 Bid Packageswhich are yet to be awarded for this project, valued at approximatelyRs.50,000 crores.3.18 It is submitted that the confidentiality clauses are a part ofJICA guidelines and the appellant as well as the participating bidders arebound by the same.

It is submitted that as a consequence of the findingsof the High Court, the confidentiality clauses will have to be removedfrom all the on-going and future tenders. JICA being an internationalfunding agency may or may not agree to altering of the tendering rulesand this may take substantial period of time for negotiations, whicheventually may lead to a deadlock in all the JICA funded projects. It issubmitted that JICA SBD shall apply to all JICA funded projects in Indiaand, therefore, this change will have to be implemented across all theprojects including but not limited to the Bullet Train Project. It is submittedthat between 2016-2021, JICA has approved 49 loan agreementsamounting to JPY 1975 Billion (INR 132,300 crores) for different projectsin India. It is submitted that therefore the impugned judgment and orderpassed by the High Court would have a far-reaching cascading effect, which has not been considered by the High Court at all.3.19 It is submitted that the Bullet Train Project is a highlyprestigious project and it is imperative and in the interest of public welfare ABCDEFGH831that the contract ought to be concluded at the earliest.

It is, therefore, submitted that if every unsuccessful bidder is granted liberty to approacha court of law as per their whims and fancies seeking remedy against itsindividual grievances, the whole intent and approach behind the projectwill get throttled. It is submitted that bearing in mind that, clause Nos.28.1and 42.5 are enacted which are as per JICA ITB.3.20 It is further submitted that in the present case as such theterms of the tender has been applied uniformly to all the bidders andthere is no discrimination at all. It is submitted that the entire tenderprocess has been conducted absolutely in fair and transparent manner. It is submitted that as such there are no specific allegations of eithermala fides or favouritism and, therefore, the tender process is not vitiated.3.21 It is submitted that ITB 29.1 in order to enable examination, evaluation and comparison of the Bids, permits the Appellant to ask anyBidder for a clarification of its Bid, provided the same does not result ina change in the substance of the Bid.

It is submitted that the submissionon behalf of the original writ petitioner that the discretion of seekingclarifications from other Bidders except the original writ petitioner isdiscriminatory and arbitrary is wrong and misplaced. It is submitted thatthe appellant has treated all the Bidders at equal footing. It is submittedthat the High Court has wrongly observed and held that the clarificationsought by the appellant only from other bidders is discriminatory. It issubmitted that procedure followed by the appellant in disqualifying thebidder and nature of clarifications sought from other bidders were strictlyas per the protocols laid down by JICA. It is submitted that evaluation ofthe bids is done in various stages. In the present case, the original writpetitioner was disqualified at stage 1 and only the bidders who passStage 1 were to proceed to next stage and given their disqualification at Stage 1, no clarifications were sought from original writ petitioner.3.22 It is submitted that on the issue of clarifications, the HighCourt has wrongly concluded that seeking clarifications from otherbidders was discriminatory.

It is submitted that other bidders from whomclarifications were sought had cleared stage 1 and pursuant to that theclarifications were sought from them. It is submitted that the submissionon behalf of the respondent - original writ petitioner that the appellantwould have granted the liberty to cure the defect cannot be sustained. Itis submitted that at Stage 1.1 (b) (iii) read with Clause A.4 (b), theappellant was not obliged to provide opportunity to Montecarlo- originalNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH832SUPREME COURT REPORTS[2022] 12 S.C.R.writ petitioner for curing the defects of non-signing of the forms andJICA was justified in holding the said omission as material and holdingthe Bid as non-compliant/non-responsive. It is submitted that as per clauseA.4 (b), all the forms must be reviewed exactly as submitted and errorsor omissions may count against the bidder.3.23 It is submitted that the High Court has failed to appreciatethat the Technical Bids of four bidders – Bidder Nos.

1, 3, 7 and 9 were“Substantially Responsive” as they adhered to the requirements laid downin Stage 1 evaluation. It is submitted that therefore an opportunity wasaccorded to them for clarification. It is submitted that clarifications tore-confirm compliance to the Bidding Documents were sought by theappellant on the recommendations of JICC in terms of ITB clause 29.1for rectification of the non-conformities. The said decision was affirmedby the Tender Committee of the appellant in its meeting dated 09.04.2021.Therefore, clarifications were sought only from those bidders whosebids were found to be ‘Substantially Responsive’ and were in conformitywith the evaluation process laid down in Stages 1 & 2. It is submittedthat the High Court has erred in concluding that such opportunity wasdiscriminatory.3.24 It is further submitted by learned Solicitor General that if theimpugned judgment and order passed by the High Court in thesecircumstances is interfered by this Court, the same would have acascading effect.

It will not only affect the fundings to the Nationalprojects by the foreign country/foreign agency, it would further delaythe MEGA project like Bullet Train Project. It is submitted that pursuantto the impugned judgment and order, the Package C8 has been delayedwhich has a cascading effect on implementation of other packages andthus eventually delaying the entire project. It is submitted that halting ofwork of C8 Package which concerns the construction of depot at Sabarmati will have a cascading effect on another linked package, package D2 which pertains to the design, construction, installation, testingand commissioning of Sabarmati Depot consisting of workshop, inspectionshed, maintenance facilities and associated works. It is submitted thatthe Bullet Train Project is of national importance and the appellant/Government /Union Government’s ultimate object is catering to aspirationsof the people of India.

It is submitted that the total cost of the BulletTrain Project is Rs.1,08,000 crores and the substantial amount with theconcessional rate of interest is to be funded by JICA and, therefore, the ABCDEFGH833project is a foreign funded project due to the relations between thedeveloped country and developing country. It is submitted that thereforeany delay in such a project due to frivolous litigation and baselesschallenges to the tendering clauses may render the project commerciallyand transactionally unviable as it may affect the willingness of the investor/financing State to go ahead with the project.3.25 Making above submissions and relying upon above decisions, it is prayed to allow the present appeal and quash and set aside theimpugned judgment and order passed by the High Court.

Shri Desai, learned Senior Advocateappearing on behalf of the respondent has taken us to the ITB Clauses1.1, 22.1, 22.2, 29.1, 33.2, 34 and 1.3, the relevant clauses of the tender. It is submitted that the evaluation sequence comprises of five stages ofevaluation as under:-i.Stage 1 – Evaluation of Administrative Requirementsii. Stage 2 – Evaluation of Compliance and Responsivenessiii. Stage 3 – Evaluation of Compliance with QualificationRequirementsiv. Stage 4 – Technical Evaluationv. Stage 5 – Evaluation of Price Bid4.4 It is submitted that in the present case, the respondent submittedForm CON 2.0 with the requisite details filled in. It is submitted that the Form was duly stamped, however, inadvertently, the same was not signed. It is submitted that the respondent also submitted Form CON 3.0 withthe requisite details filled in. The said form was also duly stamped, however, inadvertently, the same was also not signed.

ABCDEFGH8354.5 It is submitted that the respondent Bidder had also filed FormACK with specific declaration that all information provided in the Bid bythe respondent is true, correct and accurate as per Para A(i). It issubmitted that the said Form is also duly signed and stamped. It issubmitted that as rightly observed by the High Court, the evaluationprocess and holding the respondent non-compliance at Stage 1 isdiscriminatory.4.6 It is submitted that JICC Evaluation Report, which wasconfirmed by the Ministry of Railways and acted upon, in Para 2.1.1,there is a specific observation pursuant to a Preliminary Examinationthat there are no material non-conformities as regards the respondent(5/9) and others, except 2 Bidders. It is submitted that in Para 2.1.3, it isspecifically observed that there were a number of non-conformities inthe Bids submitted by Bidders 1/9, 3/9, 7/9 and 9/9 creating inconsistencieswith the stated position in their Letter of Technical Bid which is an essentialdocument as per ITB 31.2(a).4.7 It is submitted that clarifications were sought from the aboveBidders and they were given opportunity to rectify the non-conformitiesin accordance with ITB 29.1 so as to re-confirm compliance to the BiddingDocument.

However, so far as the respondent is concerned, no suchopportunity and/or clarification has been sought for contrary to ITB 33.2which defines Material Deviation and arbitrarily, the respondent’s non-conformity has been held to be as material non-conformities. It issubmitted therefore that the action of the appellant is rightly held to bediscriminatory.4.8 It is submitted by Shri Desai, learned Senior Advocateappearing on behalf of the respondent that in the present case, the solereason provided for rejection is that “without signature, it is unknownwhether it has been submitted with the Bidder’s knowledge andapproval”. No other reason has been ascribed for the rejection. It issubmitted that even the said reasoning is provided to the respondentafter the respondent approached the Hon’ble High Court. It is submittedthat all the appellant had to do was to call upon the respondent to providea signed copy, or to seek a clarification that the respondent confirms the Form CON 2.0 and CON 3.0.

It is submitted that the respondent is notresiling from the declaration made in the said Forms and stands by iteven today and the stage to evaluate whether the declaration made bythe respondent is correct or not has not come and still the Bid is rejectedNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH836SUPREME COURT REPORTS[2022] 12 S.C.R.on the sole ground that it is not signed. It is further submitted thatsurprisingly, in relation to ‘Material Deviations’ and non-conformities offar more serious nature, the appellant has permitted select Bidders torectify and/or clarify.4.9 It is submitted that so far as the Bidder No.9/9 (L2) isconcerned, he had made an identical error whereby the said Bidderfailed to put its signature and stamp on the Site Organization Chart inaccordance with ITB 22.2. In the case of the said Bidder, the appellantexercised discretion and called upon the said Bidder to rectify the same.4.10 It is submitted that even with respect to Bidder No.7/9 (L1),though it failed to provide details qua the Site Organization Chart, MethodStatement qua Earthwork and other details, the appellant exerciseddiscretion in terms of ITB 29.1 and permitted the Bidder to rectify alldefects.

It is submitted that the said Bidder also did not submit Bid SecurityForm in accordance with ITB 12.1. It is submitted that despite notingthat the submission was in contravention of ITB 12.1, which does notpermit alteration to the Bidding Form, the defect was waived as beingnon-material.4.11 It is submitted that so far as Bidder 3/9 is concerned, thoughit failed to submit details of Key Personnel and also failed to give anundertaking as required in Form ACK, the appellant has given theopportunity to rectify the defects. It is submitted that the aforesaid errors/non-conformities are far more serious than the inadvertent error of therespondent. It is submitted that though the aforesaid Bidders were giventhe opportunity to rectify the defects, no such opportunity was given tothe respondent.4.12 It is submitted that so far as the respondent is concerned, notsigning of Forms CON 2.0 and Con 3.0 is an inadvertent error, whichcan be said to be a non-material, non-conform in terms of ITB 33.2 readwith ITB 34, which ought to have been waived as has been done in thecase of other Bidders with more serious non-conformities.4.13 It is further submitted that even otherwise as held by this Court in the case of Poddar Steel Corporation Vs.

GaneshEngineering Works and Others (supra) and B.S.N. Joshi and SonsLtd. Vs. Nair Coal Services Ltd. and Ors., (2006) 11 SCC 548,non-material non-conformity can be waived even if there is no clausepermitting such waiver. It is submitted that even if ITB 28.1 and ITB ABCDEFGH83742.5 provide for no reasons to be given, the respondent where it perceivesfoul play in the tendering process, can always approach the Court. It issubmitted that in the present case, the High Court having examined thefacts and the record, has categorically observed that the appellant hasindulged in ‘changing the goal posts’ and ‘giving a long rope to the otherBidders’, while adopting ‘an allergic attitude towards the respondent’. Itis submitted that before the High Court, the respondent also specificallyalleged ‘mala fide’ on the part of the appellant.4.14 Now, so far as the submission on behalf of the appellant thatthere would be a cascading effect of the impugned order is concerned, it is submitted that the aforesaid is not sustainable, in view of the factthat after the impugned order, till date the appellant has awarded or is inthe process of awarding contracts for other Packages cumulating toabout Rs.

5,000 crores already.4.15 Now so far as the documents produced by the appellantbefore this Court by way of I.A. No.128406 of 2021 and I.A. No.132078of 2021 are concerned, it is submitted that as they do not form part ofthe record before the High Court and therefore, the same may not beconsidered by this Hon’ble Court. It is submitted that nothing has beenstated why the same could not be placed before the Hon’ble High Court.4.16 Making above submissions, it is prayed to dismiss the presentappeal and direct the appellant to proceed and further evaluate the Bidsubmitted by the respondent in accordance with the terms of the BidDocument.5. Heard learned counsel for the respective parties at length.

It cannot be disputed that the Bullet Train Project is very important and National project. The BulletTrain Project is a fully foreign funded project, which was envisagedwhen the Japanese and Indian Governments entered into a Memorandumof Understanding, pursuant to which it was agreed that the said projectwould be fully funded by a Concessional Official Development Assistance(ODA) loan of Rs.1 lakh crores by the Japan International CooperationAgency. It appears that before the loan agreement was entered into, aMemorandum of Understanding / Agreement was entered into betweenthe two Prime Ministers - Japan and the India, which provided how theproject would be financed and operated. From the Memorandum of Understanding, it appears that the loan was on diplomatic considerationand was based on Republic of India’s position in commodity of nationsdue to which a huge loan was granted to India with provisions of:- (i)technology transfer (which is unavailable in India); (ii) Indian Humanresource training/development by Japan International CooperationAgency and its consultant for operation of the said projects; and (iii)provision to ‘Make in India’ the bullet train which would be operatingunder the said project.

That thereafter a discussion was held betweenthe JICA and the Ministry of Railways, Government of India on 26.09.2016and the discussion was recorded on various aspects including the projectobjectives, selection of the consultant(s), implementation schedule, Products (Draft and final documents for adoption by the Ministry of Railways), which included:- (1) Technical specifications and standards, as required for the project (excluding those prepared under the Follow-up Study); (2) Basic Design Documents including drawings and DesignBasis Reports necessary for bidding or implementation of the Project; (3) Standard Design Documents including drawings and Design BasisReports necessary for bidding or implementation of the Project; (4)Detailed Design Documents including drawings and Design Basis Reports ABCDEFGH839necessary for bidding or implementation of the Project; (5) BiddingDocuments, including Prequalification Documents (hereinafter referredto as “Bidding Documents”); (6) General Arrangements Drawings(hereinafter referred to as “GAD”); (7) Cost Estimate of the Project; (8) Construction Standards; and (9) Updated Resettlement Action Pion, Environment Impact Assessment and Environmental Management Planwhich were prepared under the Joint F/S.6.4 A detailed discussion took place with respect to the role ofJICA, Consultant (JICC) and the Ministry of Railways.

The relevantclauses of the record of discussion for General Consultancy (excludingsupervision) of the Bullet Train Project between JICA and Ministry of Railways are as under:-“1. Project ObjectivesWith the Final Alignment Design (FAD) being preparedas part of the Follow-up Study, the objectives of the GeneralConsultancy (hereinafter referred to as “the Study”) are to preparetechnical specification and standards (excluding those preparedunder the Follow-up study), Basic Design Documents, StandardDesign Documents, Detailed Design Documents (along with Design Basis Reports (set of conditions and requirements takeninto account in designing) necessary for bidding or implementationof the Project, Bidding Documents, Engineering Cost Estimationand Construction Standard for the Project which are to be adoptedby the Ministry of Railways (hereinafter referred to as “theMOR”), to prepare General Arrangement Drawings (hereinafterreferred to as “GAD”), Environment and Social ImpactAssessment and to support the MOR for procurement ofcontractors.

It is confirmed by the MOR that the drawings anddocuments to be formulated by the Study will be utilized forprocurement of the Project, only after they are adopted andendorsed by the MOR.3.Selection of the Consultant(s)A Japanese consultant firm(s) will be selected and engaged byJICA for the implementation of the Study (hereinafter referred toas “the JICA Consultant (s)”)6.2 Products (Draft and final documents for adoption by theMoR)NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH840SUPREME COURT REPORTS[2022] 12 S.C.R.(1)Technical specifications and standards, as required for theproject (excluding those prepared under the Follow-upStudy);(2)Basic Design Documents including drawings and DesignBasis Reports necessary for bidding or implementation ofthe Project; (3)Standard Design Documents including drawings and DesignBasis Reports necessary for bidding or implementation ofthe Project; (4)Detailed Design Documents including drawings and DesignBasis Reports necessary for bidding or implementation ofthe Project; (5)Bidding Documents, including Prequalification Documents(hereinafter referred to as “Bidding Documents”);(6)General Arrangements Drawings (hereinafter referred toas “GAD”);(7)Cost Estimate of the Project; (8)Construction Standards; and(9)Updated Resettlement Action Pion, Environment ImpactAssessment and Environmental Management Plan whichwere prepared under the Joint F/S.7.Implementing Arrangements7.1Precondition for the Commencement of the StudyThe MOR will complete the items described in Annex 2 atits own cost and expense, and submit them to JICA, in asatisfactory manner, prior to the commencement of the Study, Neither JICA nor JICA Consultant(s) will have anyobligation to commence the Study unless such preconditionsare satisfied.7.3Implementation ArrangementThe MOR and the JICA Consultant(s) will be responsiblein the following manner for completing the Study in orderto ensure a smooth procurement procedure of the Protect.

ABCDEFGH841(1)The JICA Consultant(s) will prepare the Draft DesignDocuments and technical specification and standardsas required under this study and submit them to theMOR.(2)The MOR will review the Draft Design Documentsas well as technical specification and standards. Itwill give comments, if any, within 15 days ofsubmission of the Draft Design Documents by theJICA Consultant(s). The JICA Consultant(s) willconsider these comments and incorporate themappropriately, wherever the JICA Consultant(s)consider it necessary. If no comments are submittedby the MOR by the said deadline, it will be deemedthat the MOR has no comments to offer. (3)The JICA Consultant(s) will then forward thesedocuments and technical specification and standardsalong with the comments from the MOR to thecommittee for their review, as mentioned in paragraph8.2.(4)The MOR will adopt the outcomes of the study basedon the recommendations of the committee within 15days of receiving the final documents dulyrecommended.

If the intimation for adoption by theMOR is not issued by the said deadline, thedocuments/outcomes will be deemed to be adoptedby the MOR. JICA will notify the MOR in a writtenform after such deemed adoption.7.4The JICA Consultant(s)The JICA Consultant(s) will work on the comments andrequests of the MOR with all due technical diligence to theextent of the TOR stipulated in this Record of Discussionbetween the MOR and JICA.7.5ConsultationJICA, the JICA Consultant(s) and the MOR will consulteach other in good faith in respect of any matter that mayarise from or in connection with the Study, including anyNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH842SUPREME COURT REPORTS[2022] 12 S.C.R.disputes among from this document. When a dispute thatcannot be solved through an amicable consultation amongthe three parties arises, both sides will consult their relevantgovernment authorities to solve such dispute.

TheCommittee offer its review may require the JICAConsultant(s) to revise the documents. The JICAConsultant(s) will revise the documents as advised by thecommittee and resubmit them for the Committee’s review. The Committee, when satisfied, will issue a letter to theMOR recommending the Draft Design Documents foradoption by the MOR.The MOR will conduct technical inspection to review thetechnical aspects of the Final Design Documents and Construction Standard and adopt the Final DesignDocuments. the Bidding Documents, the Engineering CostEstimation, and the Construction Standard in a written form, as the executing agency of the Project, for use of thesedocuments on the Project, at its own expense. The MOR acknowledges and confirms that the JICA andthe Committee, or the Committee members will not bearany liability and responsibility in connection with their reviewof the Draft Design Documents and technical specificationand standards.

The MOR will indemnify and hold harmlessJICA, the Committee and the Committee members againstany claim from any third parties that may arise from or inconnection with such review.” 6.5 As per Annexure I to the said Record of Discussion, the JICAconsultant was to prepare GAD on all aspects mentioned in Clause 2,which included preparation of Bidding Documents. Clause 2.8 and Clause3, which are relevant for our purpose are as under:-NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH844SUPREME COURT REPORTS[2022] 12 S.C.R.

2.8 Preparation of Bidding DocumentsThe JICA Consultant(s) will prepare the Draft Bidding Documentsfor each contract package in accordance with the latest versionof Standard Bidding Documents under Japanese ODA Loanstogether with all relevant specifications, drawings and otherdocuments, which are consisting of the following documents:-a.Instruction to Bidders;b.Bid Form;c.General Conditions of Contract;d.Particular Conditions of Contract;e.General Specifications;f.Technical Specifications;g.Bill of Quantities based on the design drawings for detaileddesign packages and price schedule for design and builtpackages;h.Design Drawing;i.Contract Form;j.Bid Security Form;k.Performance Security Form: andI.Employer’s Requirement.3) Tender Assistance3)-1 Assistance in Pre-Qualification (P/Q)The JICA Consultant(s) will:a.define technical and financial requirements, capacity and/or experience for P/Q criteria taking into considerationtechnical features of the Project and the capabilities ofindustry in both countries;b.prepare draft P/Q documents in accordance with the latestversion of Standard Prequalification Documents under Japanese ODA Loans,c.assist the MOR in P/Q announcement, addendum/corrigendum, and clarifications to the applicants’ queries,d.assist the MOR in evaluating P/Q applicants in accordancewith the criteria set forth in PQ documents; and ABCDEFGH845e.prepare a draft P/Q evaluation report for approval by theP/Q evaluation committee of the MOR.3)-2 Assistance in the Bidding ProcedureThe JICA Consultant(s) will:-a.assist the MOR in issuing bid invitation, conducting pre-bidmeetings, issuing addendum/corrigendum, and clarificationsto bidders’ queries;b.assist the MOR in evaluating bids in accordance with thecriteria set forth in the bidding documents;c.prepare a draft bid evaluation report for approval by the bidevaluation committee of the MOR;d.assist the MOR in contract negotiation by preparing agendaand facilitating negotiations. including preparation of minutesof negotiation meetings; ande.prepare a draft contract agreement.

6.6 That the Japan International Consultants Consortium (JICC)was appointed by JICA. That thereafter a loan agreement No.ID-P277came to be entered into between JICA and the President of India dated28.09.2018 under which the JICA agreed to lend the Republic of Indiaapproximately Rs.1 Lakh Crores on the terms and conditions mentionedin the loan agreement.

Article 1 provided for loan amount; Article IIprovided for repayment, interest and Front-End Fee; Article III providedfor Particular Covenants, which included, Section 1 – General Termsand Conditions, Section 2 – Procurement Procedure and Section 3 –Disbursement Procedure. Thereafter the Bidding Documents wereprepared based on JICA’s Standard Bidding Documents as well as JICA’sprocurement guidelines, which was an integral part of the loan agreement. The Bidding Documents were prepared by the JICC – consultantapproved/weighed by the JICA. From the aforesaid, it appears that theentire tender process was to be carried out by the Consultant – JICC,approved by JICA and the Ministry of Railways can be said to be onlyan implementing agency.6.7 That thereafter the tenders came to be invited taking intoconsideration the Record of Discussion for General Consultancy of the Project and Loan Agreement and JICA’s Standard Bidding Guidelinesand Guidelines for procurement under the Japanese ODA Loans.

TheBidding Documents were prepared by the JICC (consultant) andNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH846SUPREME COURT REPORTS[2022] 12 S.C.R.approved by JICA. That evaluation of the Technical Bids was carriedout by JICC (consultant), which was appointed by JICA. At this stage, itis required to be noted that the JICC was appointed in terms of thespecific understanding between the Borrower (Republic of India) andJICA with the specific mandate to support the Ministry of Railways forpreparation of Bidding Documents including Prequalification Documentsand procurement of contractors for the construction of the Project. It isrequired to be noted that the Bidding Documents were prepared as perJICA’s International Guidelines and as per the terms and conditions ofthe Loan Agreement as observed hereinabove.6.8 That Nine Bidders including the respondent herein – originalwrit petitioner submitted their Bids.

That Technical Bid of Nine Bidderswas evaluated by JICC as per JICA’s International Guidelines. Theevaluation of the Technical Bids was carried out as per Evaluation and Qualification Criteria in four stages namely, (i) - Stage 1 – Evaluation of Administrative Requirements; (ii) Stage 2 – Evaluation of Complianceand Responsiveness; (iii) Stage 3 – Evaluation of Compliance with Qualification Requirements; and (iv) Stage 4 – Technical Evaluation.6.9 It appears that during the course of technical evaluation, clarification was sought from four Bidders (other than the respondentherein - original writ petitioner, who was Bidder No.5/9). It was foundthat respondent herein – original writ petitioner had material deviation inits Bid and therefore it was disqualified at Stage 1. The Bid submitted byother Bidders, i.e., 2/9, 4/9, 6/9 and 8/9, which also had material deviation, their respective Bids were not further evaluated.

A conscious decisionwas taken by the consultant – JICC holding that the Bid submitted bythe original writ petitioner was non-responsive and was suffering frommaterial deviation. By communication dated 23.03.2021, accepting thereport, which was prepared as per the Evaluation and QualificationCriteria, a conscious decision was taken by the JICC (Consultant) thatfive Bidders namely Bidder Nos. 2/9, 4/9, 5/9, 6/9 and 8/9 be disqualified. Thereafter, the JICC took a conscious decision accepting the Draft FinalTechnical Bid Evaluation Report and it was observed that JICC hasdetermined that the Technical Bids of Bidder Nos. 1/9, 3/9, 7/9 and 9/9are substantially responsive. That thereafter JICA concurred with thedecision of the JICC holding that the Technical Bids of the above fourBidders are substantially responsive and compliant to the TechnicalRequirements of the Bidding Documents. That thereafter the JICCrecommended the NHSRCL, the opening of the Price Bid of the aforesaid ABCDEFGH847four Bidders after JICA’s concurrence of the Final Technical BidEvaluation Report, which as observed hereinabove, the JICA concurred.6.10 From the aforesaid, it appears that a conscious decision hasbeen taken by the JICC (consultant) approved/concurred by the JICAon the Bid submitted by the original writ petitioner as non-responsiveand non-compliant to the technical requirements of the BiddingDocuments.

The decision of the JICC and JICA has been followed bythe appellant herein – Corporation, which otherwise, they were bound toas per the terms and conditions of the loan agreement as well as thegeneral terms and conditions referred to hereinabove.6.11 From the aforesaid, it can be seen that the decision to holdthat the Bid was not responsive was of JICC. Under the contractualmechanism, the appellant had no authority to deviate from the evaluationdone by JICC. Any deviation by the appellant or Government of Indiamay not be acceptable by JICA, who has agreed to fund a huge sum ofapproximately Rs. 1 lakh crores for the Bullet Train Project, which wasfunded on the terms and conditions agreed between the JICA and the Republic of India / Hon’ble the President of India. It is ultimately for theJICC/JICA to take a decision whether the Bid submitted by a particularBidder is responsive or not and/or compliant or not to the technicalrequirements of the Bidding Documents.

From the impugned judgmentand order passed by the High Court, it appears that what is weighed bythe High Court is that some of the Bidders were called for negotiationand the original writ petitioner was not called for the negotiation andtherefore the High Court has held that the action of the appellant isdiscriminatory and violative of Article 14 of the Constitution of India. However, the High Court has not appreciated that it was the decision ofthe JICC concurred by the JICA that the Bid submitted by the originalwrit petitioner was non-responsive and non-compliant to the technicalrequirements of the Bidding Documents. It appears that the JICC thoughtit fit to call clarification from some of the Bidders at the initial stage, however, it was found that the Bid submitted by the respondent – originalwrit petitioner was suffering from material deviation, the JICC thought itfit not to call for any explanation and/or clarification from the originalwrit petitioner and the Bid submitted by the respondent – original writpetitioner was rejected at the first stage itself, i.e., at the stage of TechnicalEvaluation.6.12 At the cost of repetition, it is observed that the appellantherein acted as per the decision of the JICC concurred by JICA. As perNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH848SUPREME COURT REPORTS[2022] 12 S.C.R.the contractual obligation and the terms and conditions of the loanagreement as well as the Guidelines for procurement under the JapaneseODA loans and the Memorandum of Understanding and the terms andconditions on which the JICA agreed to fund a huge sum of approximatelyRs.1 lakh crores, the JICC and JICA can be said to be the final authorityand no contrary decision to the decision of the JICC/JICA could havebeen taken by the appellant, more particularly, with respect to the BiddingProcess etc.

It cannot be disputed that being the funding agency, whohas agreed to fund such a huge amount, role of the JICA is very importantand the JICA would always have an upper hand and the say in the entireProject. From the material on record, we are satisfied that the BiddingProcedure adopted is transparent, fair and does not suffer from anyarbitrariness. It is required to be noted that as such there are no allegationsof mala fides and/or favouritism either against the appellant or againstJICC and/or JICA.7. In light of the above, it is required to be considered whether inthe facts and circumstances of the case, the High Court is justified insetting aside the decision of the appellant / JICC / JICA in rejecting the Bid submitted by the respondent – original writ petitioner on the groundthat it is non-responsive / non-compliant to the technical requirements ofthe Bidding Documents.7.1 While considering the aforesaid issue, few decisions of this Court are required to be referred to and considered coupled with thefact that Bullet Train Project is a high cost and MEGA GovernmentProject and is funded by a foreign country and which is one of the biggestNational Project.

It is to be noted that foreign sovereign funded contracts, like the present one, are completely different and distinct from the Government Contracts/ Public Works Department Contracts / PublicPrivate Partnership Contracts, which are either wholly or partially fundedfrom public money, i.e., Consolidated Fund of India or of the State andimplemented by a statutory/local authority of the State. It cannot bedisputed that in the present case, Japan being friendly sovereign country– a developed nation has agreed to fund a huge amount for a NationalProject in favour of another friendly State – developing nation – in thepresent case, the Republic of India. Such a huge sum/amount is fundedby the developed nation to implement the Project meant for developmentof the developing nation – the Republic of India. The contracts are enteredinto and the huge sum is funded on the basis of non-negotiated termsand conditions and therefore, the foreign developed nation, who has agreed ABCDEFGH849to invest/fund such a huge amount is always justified in insisting for theirown terms and conditions on which such a huge amount is funded.7.2 At this stage, a decision of the Gujarat High Court, which hasbeen confirmed by this Court in the case of CRRC Corporation Ltd.

Vs. Metro-Link Express for Gandhinagar and Ahmedabad(MEGA) Company Ltd. in Special Civil Application No.12833 of2017 is required to be referred to. In that case the Metro Rail Projectwas financed by the JICA. One GEC was appointed as consultant. Bidsubmitted by one of the Bidders was rejected on the ground that thesame was non-responsive. The decision was taken by the Metro RailCorporation after consulting JICA. Rejection of the Bid at TechnicalStage was the subject matter of writ petition before the High Court. One of the submissions made on behalf of the Bidder was that the JICAought not to have been consulted and that decision could not have beentaken on the basis of the opinion of the JICA. While rejecting thesubmission on behalf of the original writ petitioner that JICA ought not tohave been consulted, it was observed that when the entire project isbeing financed by the JICA, and when JICA is going to fund the entireproject, the cost of which is Rs.

10,773 Crores, it is expected of theJICA that the whole process of awarding tender has to be done and isbeing done, after obtaining JICA’s concurrence at all stages. It was heldthat there is nothing wrong in involving JICA at every stage of tenderprocess and in obtaining JICA’s concurrence on it. In the present casealso, no wrong has been committed by the appellant corporation inaccepting and/or taking decision to reject the original writ petitioner’sBid at Technical Stage on the basis of the decision of the JICC approved/concurred by JICA.7.3 It is required to be noted that as per the tender documents, allthe Bidders were required to adhere to the requirements as per theterms and conditions mentioned in the tender document. There cannotbe any deviation by any Bidder. The terms and conditions of the tenderdocuments were settled by the JICA as per JICA’s InternationalGuidelines, which are required to be followed by all Bidders includingthe original writ petitioner.

Therefore, when the terms and conditions ofthe tender document were settled by the JICA, it is ultimately for theJICC/JICA to take a decision whether a Bid submitted by a particularBidder is non-responsive and/or non-compliant to the technicalrequirements of the Bidding Documents. Therefore, when a consciousdecision has been taken by the JICC/JICA on the Bid submitted by theNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH850SUPREME COURT REPORTS[2022] 12 S.C.R.original writ petitioner being non-responsive/non-compliant to the technicalrequirements of the Bidding Documents, unless there are specificallegations of mala fides and/or favouritism, the same could not havebeen the subject matter of scrutiny by the High Court in exercise of thepowers under Article 226 of the Constitution of India.7.4 At this stage, the decision of this Court in the case of AsiaFoundation and Construction Ltd.

Vs. Trafalgar HouseConstruction (I) Ltd. and Ors., (1997) 1 SCC 738 is required to bereferred to. In that case, before this Court, the offer made by the Bidder, who was found to be L1 was not accepted after consulting theinternational financial institutions such as Asian Development Bank/WorldBank, approving the same, this Court observed that it is difficult for acountry to go ahead with such a high-cost projects unless the financialinstitutions the Asian Development Bank and/or the World Bank grantloan/subsidy. It is further observed that when such financial institutionsgrant such huge loan, they always insist that for any project for whichloan has been sanctioned must be carried out in accordance with thespecifications and within the scheduled time and the procedure forgranting the award must be duly adhered to. In the case before this Court, there was some dispute between the Bank on the one hand andthe consultant, who was called upon to evaluate bids on the questionwhether there is any power of making any correction to the bid documentsafter a specified period.

The High Court after construing certain clausesof the bid documents came to the conclusion that such a correction waspermissible, and therefore, the Bank could not have insisted upon grantingthe contract in favour of the appellant therein. This Court did not acceptthe view taken by the High Court by observing that it was not within thepermissible limits of interference for a court of law, particularly whenthe Court has not found any mala fides / favouritism in the grant ofcontract.7.5 From the impugned judgment and order passed by the HighCourt and as observed hereinabove, the High Court has set aside thedecision of the appellant to reject the Bid submitted by the original writpetitioner as non-responsive and suffering from material deviation onthe ground of violation of Article 14 of the Constitution of India byobserving that other Bidders were called for clarification but the originalwrit petitioner was not called.

However, as observed hereinabove, theappellant had taken a decision as per the decision taken by the JICC/JICA. JICC/JICA took a conscious decision to reject the Bid of the ABCDEFGH851original writ petitioner as non-responsive/non-complaint and the samewas found to be material deviation.7.6 At this stage, it is to be noted that what can be said to besubstantially responsive Technical Bid has been defined under Article33.2. The High Court in the impugned order has observed and held thatthe Bid submitted by the original writ petitioner can be said to besubstantially responsive Technical Bid. However, it is required to benoted that when the author of the tender document, in the present case, JICC/JICA, had taken a conscious decision that the Bid submitted bythe respondent – original writ petitioner can be said to be non-responsiveand suffering from material deviation, it was not for the High Court toconsider/opine whether the Bid submitted by the original writ petitioneris substantially responsive Technical Bid or not unless the decision isfound to be perverse and/or suffered from mala fides and/or favoritism.7.7 At the cost of repetition, it is to be noted that under thecontractual obligation, it was not open for the appellant – corporationand/or even the Republic of India to deviate from any of the terms andconditions of the loan agreement and/or the decision of JICC/JICA.Therefore, in absence of any allegation of mala fides/arbitrariness and/or favouritism, we are of the opinion that the High Court has committeda grave error in interfering with a conscious decision taken by the JICC/JICA, which has been followed by the appellant.7.8 At this stage, few decisions of this Court on the interferenceby the Courts in the tender matters are required to be referred to:-7.8.1 In the case of Afcons Infrastructure Limited Vs.

NagpurMetro Rail Corporation Limited, AIR 2016 SC 4305, this Court inparas 11 to 13 and 15 has observed and held as under :-“11. Recently, in Central Coalfields Ltd. v. SLL-SML (JointVenture Consortium), (2016) 8 SCC 622, it was held by this Court, relying on a host of decisions that the decision-making process ofthe employer or owner of the project in accepting or rejecting thebid of a tenderer should not be interfered with. Interference ispermissible only if the decision-making process is mala fide or isintended to favour someone. Similarly, the decision should not beinterfered with unless the decision is so arbitrary or irrational thatthe Court could say that the decision is one which no responsibleauthority acting reasonably and in accordance with law could havereached. In other words, the decision-making process or theNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH852SUPREME COURT REPORTS[2022] 12 S.C.R.decision should be perverse and not merely faulty or incorrect orerroneous.

No such extreme case was made out by GYT-TPLJV in the High Court or before us.12. In Dwarkadas Marfatia and Sons v. Port of Bombay,(1989) 3 SCC 293, it was held that the constitutional courts areconcerned with the decision-making process. TataCellular v. Union of India, (1994) 6 SCC 651 went a step furtherand held that a decision if challenged (the decision having beenarrived at through a valid process), the constitutional courts caninterfere if the decision is perverse. However, the constitutionalcourts are expected to exercise restraint in interfering with theadministrative decision and ought not to substitute its view forthat of the administrative authority. This was confirmed in JagdishMandal v. State of Orissa, (2007) 14 SCC 517, as mentionedin Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium),(2016) 8 SCC 622.13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority isno reason for a constitutional court to interfere.

The threshold ofmala fides, intention to favour someone or arbitrariness, irrationalityor perversity must be met before the constitutional court interfereswith the decision-making process or the decision.15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person tounderstand and appreciate its requirements and interpret itsdocuments. The constitutional courts must defer to thisunderstanding and appreciation of the tender documents, unlessthere is mala fide or perversity in the understanding or appreciationor in the application of the terms of the tender conditions. It ispossible that the owner or employer of a project may give aninterpretation to the tender documents that is not acceptable tothe constitutional courts but that by itself is not a reason forinterfering with the interpretation given.” 7.8.2 In the case of B.S.N. Joshi & Sons Ltd.

Vs. Nair CoalServices Ltd. and Ors., (2006) 11 SCC 548, after considering thevarious decisions of this Court on the point enumerated in para 66, this Court has observed and held as under: ABCDEFGH853“66. We are also not shutting our eyes towards the newprinciples of judicial review which are being developed; but thelaw as it stands now having regard to the principles laid down inthe aforementioned decisions may be summarised as under: (i) if there are essential conditions, the same must be adheredto; (ii) if there is no power of general relaxation, ordinarily thesame shall not be exercised and the principle of strict compliancewould be applied where it is possible for all the parties to complywith all such conditions fully; (iii) if, however, a deviation is made in relation to all theparties in regard to any of such conditions, ordinarily again a powerof relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxationshould not ordinarily be allowed to take a different stand in relationto compliance with another part of tender contract, particularlywhen he was also not in a position to comply with all the conditionsof tender fully, unless the court otherwise finds relaxation of acondition which being essential in nature could not be relaxed andthus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authorityupon due consideration of the tender document submitted by allthe tenderers on their own merits and if it is ultimately found thatsuccessful bidders had in fact substantially complied with thepurport 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 thesame, their bids are considered and they are given an offer tomatch with the rates quoted by the lowest tenderer, public interestwould be given priority; (vii) where a decision has been taken purely on publicinterest, the court ordinarily should exercise judicial restraint.” 7.8.3 In the case of Michigan Rubber (India) Limited Vs.State of Karnataka, (2012) 8 SCC 216, after considering variousother decisions of this Court on the point, more particularly, afterconsidering the decisions in the case of Jagdish Mandal (supra) and Tejas Constructions and Infrastructure (P) Ltd. (supra), in paras23 and 24, this Court has observed and held as under:NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH854SUPREME COURT REPORTS[2022] 12 S.C.R.“23. From the above decisions, the following principlesemerge: (a) The basic requirement of Article 14 is fairness in actionby the State, and non-arbitrariness in essence and substanceis the heartbeat of fair play.

These actions are amenable tothe judicial review only to the extent that the State must actvalidly for a discernible reason and not whimsically for anyulterior purpose. If the State acts within the bounds ofreasonableness, it would be legitimate to take intoconsideration the national priorities; (b) Fixation of a value of the tender is entirely within thepurview of the executive and the courts hardly have anyrole to play in this process except for striking down suchaction of the executive as is proved to be arbitrary orunreasonable. If the Government acts in conformity withcertain healthy standards and norms such as awarding ofcontracts by inviting tenders, in those circumstances, theinterference by courts is very limited; (c) In the matter of formulating conditions of a tenderdocument and awarding a contract, greater latitude isrequired to be conceded to the State authorities unless theaction of the tendering authority is found to be maliciousand a misuse of its statutory powers, interference by courtsis not warranted; (d) Certain preconditions or qualifications for tenders haveto be laid down to ensure that the contractor has the capacityand the resources to successfully execute the work; and(e) If the State or its instrumentalities act reasonably, fairlyand in public interest in awarding contract, here again, interference by court is very restrictive since no personcan claim a fundamental right to carry on business with the Government.24.

Therefore, a court before interfering in tender orcontractual matters, in exercise of power of judicial review, shouldpose to itself the following questions: (i) Whether the process adopted or decision made by the authorityis mala fide or intended to favour someone; or whether the processadopted or decision made is so arbitrary and irrational that the ABCDEFGH855court can say: “the decision is such that no responsible authorityacting reasonably and in accordance with relevant law could havereached”? and(ii) Whether the public interest is affected?If the answers to the above questions are in the negative, thenthere should be no interference under Article 226.” 7.8.4 In the case of the Central Coalfields Limited & Anr. Vs. SLL-SML [A Joint Venture Consortium] and Ors., (2016) 8SCC 622, it is specifically observed and held by this Court that the Court must, as far as possible, avoid a construction which would renderthe words used by the author of the document meaningless and futile orreduce to silence any part of the document and make it altogetherinapplicable.

It is further observed that whether a term of NIT is essentialor not is a decision taken by the employer, which should be respectedand soundness of that decision cannot be questioned by Court. In thecase before this Court, the bid was rejected for non furnishing of bankguarantee in prescribed format. While submitting EMD by furnishingbank guarantee in format prescribed by GTC of another tender and thebidder took the plea that bank guarantee format of present tender wasambiguous. Rejecting the claim of the bidder and upholding the decisionof the employer of rejection of bid for non-compliance of submitting thebank guarantee in prescribed format, this Court in paras 31 to 38, 42 to44, 47 to 49, 52, 55 and 56 has observed and held as under: “31. We were informed by the learned Attorney Generalthat 9 of the 11 bidders furnished a bank guarantee in the prescribedand correct format. Under these circumstances, even afterstretching our credulity, it is extremely difficult to understand whyJVC was unable to access the prescribed format for the bankguarantee or furnish a bank guarantee in the prescribed formatwhen every other bidder could do so or why it could not seek aclarification or why it could not represent against any perceivedambiguity.

The objection and the conduct of JVC regarding theprescribed format of the bank guarantee or a supposed ambiguityin NIT does not appear to be fully above board.32. The core issue in these appeals is not of judicial reviewof the administrative action of CCL in adhering to the terms ofNIT and the GTC prescribed by it while dealing with bids furnishedby participants in the bidding process. The core issue is whetherNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH856SUPREME COURT REPORTS[2022] 12 S.C.R.CCL acted perversely enough in rejecting the bank guarantee ofJVC on the ground that it was not in the prescribed format, therebycalling for judicial review by a constitutional court and interferingwith CCL’s decision.33. In Ramana Dayaram Shetty v. International AirportAuthority of India, (1979) 3 SCC 489, this Court held that thewords used in a document are not superfluous or redundant butmust be given some meaning and weightage: (SCC p.

500, para7)“7. … It is a well-settled rule of interpretation applicablealike to documents as to statutes that, save for compellingnecessity, the Court should not be prompt to ascribesuperfluity to the language of a document “and should berather at the outset inclined to suppose every word intendedto have some effect or be of some use”. To reject wordsas insensible should be the last resort of judicialinterpretation, for it is an elementary rule based on commonsense that no author of a formal document intended to beacted upon by the others should be presumed to use wordswithout a meaning. The court must, as far as possible, avoida construction which would render the words used by theauthor of the document meaningless and futile or reduce tosilence any part of the document and make it altogetherinapplicable.” 34. In Ramana Dayaram Shetty case, the expression“registered IInd Class hotelier” was recognised as being inaptand perhaps ungrammatical; nevertheless common sense was notoffended in describing a person running a registered IInd gradehotel as a registered IInd class hotelier.

Despite this constructionin its favour, Respondent 4 in that case were held to be factuallyineligible to participate in the bidding process.35. It was further held that if others (such as the appellantin Ramana Dayaram Shetty case) were aware that non-fulfilmentof the eligibility condition of being a registered IInd class hotelierwould not be a bar for consideration, they too would havesubmitted a tender, but were prevented from doing so due to theeligibility condition, which was relaxed in the case of Respondent4. This resulted in unequal treatment in favour of Respondent 4 ABCDEFGH857— treatment that was constitutionally impermissible. Expoundingon this, it was held: (SCC p. 504, para 10)“10. … It is indeed unthinkable that in a democracygoverned by the rule of law the executive Government orany of its officers should possess arbitrary power over theinterests of the individual. Every action of the executiveGovernment must be informed with reason and should befree from arbitrariness.

That is the very essence of the ruleof law and its bare minimal requirement. And to theapplication of this principle it makes no difference whetherthe exercise of the power involves affectation of some rightor denial of some privilege.”(emphasis supplied)36. Applying this principle to the present appeals, otherbidders and those who had not bid could very well contend that ifthey had known that the prescribed format of the bank guaranteewas not mandatory or that some other term(s) of NIT or GTCwere not mandatory for compliance, they too would havemeaningfully participated in the bidding process. In other words, by rearranging the goalposts, they were denied the “privilege” ofparticipation.37. For JVC to say that its bank guarantee was in termsstricter than the prescribed format is neither here nor there. It isnot for the employer or this Court to scrutinise every bank guaranteeto determine whether it is stricter than the prescribed format orless rigorous.

The fact is that a format was prescribed and therewas no reason not to adhere to it. The goalposts cannot berearranged or asked to be rearranged during the bidding processto affect the right of some or deny a privilege to some.38. In G.J. Fernandez v. State of Karnataka, (1990) 2 SCC488, both the principles laid down in Ramana Dayaram Shettywere reaffirmed. It was reaffirmed that the party issuing the tender(the employer) “has the right to punctiliously and rigidly” enforcethe terms of the tender. If a party approaches a court for an orderrestraining the employer from strict enforcement of the terms ofthe tender, the court would decline to do so. It was also reaffirmedthat the employer could deviate from the terms and conditions ofthe tender if the “changes affected all intending applicants alikeNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH858SUPREME COURT REPORTS[2022] 12 S.C.R.and were not objectionable”.

Therefore, deviation from the termsand conditions is permissible so long as the level playing field ismaintained and it does not result in any arbitrariness ordiscrimination in Ramana Dayaram Shetty sense.42. Unfortunately, this Court in Poddar SteelCorpn. v. Ganesh Engg. Works, (1991) 3 SCC 273 did not at alladvert to the privilege-of-participation principle laid downin Ramana Dayaram Shetty and accepted in G.J. Fernandez. Inother words, this Court did not consider whether, as a result of thedeviation, others could also have become eligible to participate inthe bidding process. This principle was ignored in Poddar Steel.43. Continuing in the vein of accepting the inherent authorityof an employer to deviate from the terms and conditions of anNIT, and reintroducing the privilege-of-participation principle andthe level playing field concept, this Court laid emphasis on thedecision-making process, particularly in respect of a commercialcontract.

One of the more significant cases on the subject is thethree-Judge decision in Tata Cellular v. Union of India, (1994) 6SCC 651 which gave importance to the lawfulness of a decisionand not its soundness. If an administrative decision, such as adeviation in the terms of NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the courts will not judiciallyreview the decision taken. Similarly, the courts will not countenanceinterference with the decision at the behest of an unsuccessfulbidder in respect of a technical or procedural violation. This wasquite clearly stated by this Court (following Tata Cellular) in JagdishMandal v. State of Orissa, (2007) 14 SCC 517] in the followingwords: (SCC p. 531, para 22)“22. Judicial review of administrative action is intended toprevent arbitrariness, irrationality, unreasonableness, biasand mala fides. Its purpose is to check whether choice ordecision is made “lawfully” and not to check whether choiceor decision is “sound”.

When the power of judicial reviewis invoked in matters relating to tenders or award ofcontracts, certain special features should be borne in mind.A contract is a commercial transaction. Evaluating tendersand awarding contracts are essentially commercialfunctions. Principles of equity and natural justice stay at adistance. If the decision relating to award of contract is ABCDEFGH859bona fide and is in public interest, courts will not, in exerciseof power of judicial review, interfere even if a proceduralaberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not bepermitted to be invoked to protect private interest at thecost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can alwaysseek damages in a civil court. Attempts by unsuccessfultenderers with imaginary grievances, wounded pride andbusiness rivalry, to make mountains out of molehills of sometechnical/procedural violation or some prejudice to self, andpersuade courts to interfere by exercising power of judicialreview, should be resisted.

Such interferences, eitherinterim or final, may hold up public works for years, or delayrelief and succour to thousands and millions and mayincrease the project cost manifold.” This Court then laid down the questions that ought to beasked in such a situation. It was said: (Jagdish Mandal case, SCCp. 531, para 22)“22. … Therefore, a court before interfering in tender orcontractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone; or Whether the process adopted or decision made is soarbitrary and irrational that the court can say: “the decisionis such that no responsible authority acting reasonably andin accordance with relevant law could have reached”;(ii) Whether public interest is affected. If the answers are in the negative, there should be no interferenceunder Article 226.” 44.

On asking these questions in the present appeals, it ismore than apparent that the decision taken by CCL to adhere tothe terms and conditions of NIT and the GTC was certainly notirrational in any manner whatsoever or intended to favour anyone.NATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH860SUPREME COURT REPORTS[2022] 12 S.C.R.The decision was lawful and not unsound.47. The result of this discussion is that the issue of theacceptance or rejection of a bid or a bidder should be looked atnot only from the point of view of the unsuccessful party but alsofrom the point of view of the employer. As held in RamanaDayaram Shetty the terms of NIT cannot be ignored as beingredundant or superfluous. They must be given a meaning and thenecessary significance. As pointed out in Tata Cellular there mustbe judicial restraint in interfering with administrative action.

Ordinarily, the soundness of the decision taken by the employerought not to be questioned but the decision-making process cancertainly be subject to judicial review. The soundness of thedecision may be questioned if it is irrational or mala fide or intendedto favour someone or a decision “that no responsible authorityacting reasonably and in accordance with relevant law could havereached” as held in Jagdish Mandal followed in Michigan Rubber.48. Therefore, whether a term of NIT is essential or not isa decision taken by the employer which should be respected. Evenif the term is essential, the employer has the inherent authority todeviate from it provided the deviation is made applicable to allbidders and potential bidders as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be ancillary orsubsidiary, even that decision should be respected. The lawfulnessof that decision can be questioned on very limited grounds, asmentioned in the various decisions discussed above, but thesoundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuingauthority, which it cannot.49.

Again, looked at from the point of view of the employerif the courts take over the decision-making function of the employerand make a distinction between essential and non-essential termscontrary to the intention of the employer and thereby rewrite thearrangement, it could lead to all sorts of problems including theone that we are grappling with. For example, the GTC that weare concerned with specifically states in Clause 15.2 that “Anybid not accompanied by an acceptable Bid Security/EMD shallbe rejected by the employer as non-responsive”. Surely, CCL exfacie intended this term to be mandatory, yet the High Court heldthat the bank guarantee in a format not prescribed by it ought to ABCDEFGH861be accepted since that requirement was a non-essential term ofthe GTC. From the point of view of CCL, the GTC has beenimpermissibly rewritten by the High Court.52. There is a wholesome principle that the courts havebeen following for a very long time and which was articulatedin Nazir Ahmad v.

King Emperor, AIR 1936 PC 253 (2), namely: “… where a power is given to do a certain thing in a certainway the thing must be done in that way or not at all. Othermethods of performance are necessarily forbidden.” There is no valid reason to give up this salutary principle ornot to apply it mutatis mutandis to bid documents. This principledeserves to be applied in contractual disputes, particularly incommercial contracts or bids leading up to commercial contracts, where there is stiff competition. It must follow from the applicationof the principle laid down in Nazir Ahmad that if the employerprescribes a particular format of the bank guarantee to befurnished, then a bidder ought to submit the bank guarantee inthat particular format only and not in any other format. However, as mentioned above, there is no inflexibility in this regard and anemployer could deviate from the terms of the bid document butonly within the parameters mentioned above.55.

On the basis of the available case law, we are of theview that since CCL had not relaxed or deviated from therequirement of furnishing a bank guarantee in the prescribedformat, insofar as the present appeals are concerned every bidderwas obliged to adhere to the prescribed format of the bankguarantee. Consequently, the failure of JVC to furnish the bankguarantee in the prescribed format was sufficient reason for CCLto reject its bid.56. There is nothing to indicate that the process by whichthe decision was taken by CCL that the bank guarantee furnishedby JVC ought to be rejected was flawed in any mannerwhatsoever. Similarly, there is nothing to indicate that the decisiontaken by CCL to reject the bank guarantee furnished by JVC andto adhere to the requirements of NIT and the GTC was arbitraryor unreasonable or perverse in any manner whatsoever.” 7.8.5 In the case of Maa Binda Express Carrier & Anr.

Vs.North Eastern Frontier Railway & Ors., (2014) 3 SCC 760, thisNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH862SUPREME COURT REPORTS[2022] 12 S.C.R.Court had an occasion to consider the scope of judicial review in thematters relating to award of contracts by the State and its instrumentalities. In paras 8 to 10 this Court has observed and held as under: “8. The scope of judicial review in matters relating to awardof contracts by the State and its instrumentalities is settled by along line of decisions of this Court. While these decisions clearlyrecognise that power exercised by the Government and itsinstrumentalities in regard to allotment of contract is subject tojudicial review at the instance of an aggrieved party, submissionof a tender in response to a notice inviting such tenders is no morethan making an offer which the State or its agencies are under noobligation to accept.

The bidders participating in the tender processcannot, therefore, insist that their tenders should be accepted simplybecause a given tender is the highest or lowest depending uponwhether the contract is for sale of public property or for executionof works on behalf of the Government. All that participating biddersare entitled to is a fair, equal and non-discriminatory treatment inthe matter of evaluation of their tenders. It is also fairly well settledthat award of a contract is essentially a commercial transactionwhich must be determined on the basis of consideration that arerelevant to such commercial decision. This implies that termssubject to which tenders are invited are not open to the judicialscrutiny unless it is found that the same have been tailor-made tobenefit any particular tenderer or class of tenderers. So also, theauthority inviting tenders can enter into negotiations or grantrelaxation for bona fide and cogent reasons provided suchrelaxation is permissible under the terms governing the tenderprocess.9.

Suffice it to say that in the matter of award of contractsthe Government and its agencies have to act reasonably and fairlyat all points of time. To that extent the tenderer has an enforceableright in the court which is competent to examine whether theaggrieved party has been treated unfairly or discriminated againstto the detriment of public interest. (See Meerut DevelopmentAuthority v. Assn. of Management Studies [(2009) 6 SCC 171]and Air India Ltd. v. Cochin International Airport Ltd. [(2000) 2SCC 617].10. The scope of judicial review in contractual matters wasfurther examined by this Court in Tata Cellular v. Union of ABCDEFGH863India, Raunaq International Ltd. case [Raunaq InternationalLtd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492] and in JagdishMandal v. State of Orissa besides several other decisions to whichwe need not refer.” 7.9 Thus, from the aforesaid decisions, it can be seen that a Courtbefore interfering in a contract matter in exercise of powers of judicialreview should pose to itself the following questions:-(i)Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone; orwhether the process adopted or decision made is soarbitrary and irrational that the court can say: “the decisionis such that no responsible authority acting reasonably andin accordance with relevant law could have reached”?

And(ii)Whether the public interest is affected? If the answers tothe above questions are in negative, then there should beno interference under Article 226.” 7.10 Applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand and when a conscious decisionwas taken by the JICC/JICA holding the Bid submitted by the originalwrit petitioner as non-responsive/non-compliant to the technicalrequirements of the Bidding Documents and suffering from materialdeviation, we are of the opinion that the High Court has erred ininterfering with the tender process and interfering with the decision ofthe JICC/JICA rejecting the Bid submitted by the original writ petitionerat technical stage.8. At the outset, it is to be noted that the Bid submitted by theoriginal writ petitioner was rejected at the first stage on the ground ofmaterial deviation/non-responsive and having found that the tendersubmitted by the original writ petitioner was not found to be as per theterms and conditions of the tender document.

However, the High Courtby the impugned judgment and order has set aside the conscious decisiontaken by the JICA, JICC and the appellant by observing that the Bidsubmitted by the original writ petitioner can be said to be in substantialcompliance and on the ground that though the other Bidders were givenopportunity to correct their errors/defects, however, the original writpetitioner was not afforded the same opportunity and therefore thedecision not to give opportunity to correct the defects/errors can be saidNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH864SUPREME COURT REPORTS[2022] 12 S.C.R.to be discriminatory and violative of Article 14 of the Constitution of India. However, it is required to be noted that a conscious decision wastaken by JICC/JICA holding that the Bid submitted by the original writpetitioner suffers from material deviation and the same cannot be said tobe a substantially responsive Technical Bid.

The decision was taken bythe employer – JICC/JICA and followed by the appellant consideringthe relevant clauses of the ITB, more particularly, ITB Clause 33.2,which defines a substantially responsive Technical Bid. The High Courtought to have appreciated that other Bidders, who were grantedopportunity to cure the defects had cleared the first stage and they weregranted opportunity to cure the defects as per ITB Clause 34. As perthe JICC and JICA, with respect to those Bidders, who were given anopportunity to cure the defects after they cleared Stage I, their defectswere found to be substantially responsive and, therefore, in exercise ofthe powers under Clause 34, the opportunity was given to them to curethe defects, which as such was found to be substantially responsive andnon-material compliance. The High Court ought to have appreciatedthat so far as the original writ petitioner is concerned, its Bid was rejectedat the first stage itself having specifically found that the same constitutea material deviation/non-conformity. Therefore, all the other Bidders whowere granted the opportunity to cure the defects were different thanthat of the original writ petitioner and, therefore, the High Court haserred in holding that not granting the opportunity to the original writpetitioner to cure the defect is discriminatory.

Therefore, once having accepted the terms and conditions ofthe tender process with the full knowledge of Clauses 28.1 and 42.5,and participated with full knowledge, thereafter, it was not open for theoriginal writ petitioner to make a grievance with respect to such clauses.14.1 Even otherwise, it is required to be noted that Clauses 28.1and 42.5 are part of the instructions to the Bidders (ITB) and, therefore, part of the Bidding Document. At this stage, it is required to be notedthat loan agreement was materialized after a detailed Memorandum of ABCDEFGH867Understanding and the loan agreement between the two Prime Ministersand how the project would be financed and operated. That thereafterfollowed by general consultancy of the project discussion, it wasculminated into a loan agreement with the specific condition that theterms of the contract and the Bid document shall be finalised and preparedby JICC and approved by JICA. It appears that the contents of the Bidding Document are based on JICA’ Standard Bidding Documents aswell as JICA’s procurement guidelines and form an integral part of theloan agreement.

It is to be noted that such foreign funded investments inthe form of concessional Official Development Assistance (ODA) loanby JICA are made on the basis of non-negotiated terms and conditions, where the sole discretion as to what will be the terms and conditions ofthe tender and on what terms and conditions the project would befinanced, vests with the investor foreign developed nation. Therefore, the impugned judgment and order passed by the High Court on Clauses28.1 and 42.5 would be altering the terms and conditions of the BidDocument / ITB, which as such were finalized and approved by theJICC/JICA and which were provided as per the JICA’s internationalguidelines and which as such were to be complied with by all the bidders/participants.14.2 Even otherwise, the High Court has not at all appreciatedthe purpose of the aforesaid clauses. The aforesaid clauses stated thatinformation relating to the evaluation of the Bids and recommendationof the Contract award, shall not be disclosed to Bidders or any otherperson, until information on Contract award is communicated to all the Bidders in accordance with ITB 42 and as per Clause 42.5 “Afternotification of award, unsuccessful Bidders may request, in writing, tothe Employer a debriefing seeking explanations on the grounds on whichtheir Bids were not selected”.

It further provides that “the Employershall promptly respond, in writing, to any unsuccessful Bidders who, after the notification of the award in accordance with ITB 42.1, requesta debriefing”. Thus, Clauses 28.1 and 42.5 read as under:-“Option A – Section I. Instructions to BiddersClause E. Evaluation and Comparison of Bids28. Confidentiality“28.1 Information relating to the evaluation of Bids andrecommendation of Contract award, shall not be disclosed to Bidders or any other persons not officially concerned with suchNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH868SUPREME COURT REPORTS[2022] 12 S.C.R.process until information on Contract award is communicated toall Bidders in accordance with ITB 42. Clause F. Award of Contract42. Notification of Award42.5 After notification of award, unsuccessful Bidders may request, in writing, to the Employer a debriefing seeking explanations onthe grounds on which their Bids were not selected.

The Employershall promptly respond, in writing, to any unsuccessful Bidderswho, after the notification of award in accordance with ITB 42.1,request a debriefing.”(emphasis supplied)14.3 The purpose of the aforesaid clauses appears to be to preventa possible challenge to the multiple stage tender process midway. TheHigh Court has construed that the said clauses would restrict the right ofthe bidders to seek judicial scrutiny of the tender process. However, the High Court does not seem to be wholly true. The High Court ought tohave appreciated that first of all Clause 28 is a confidentiality clause. Ongeneral reading of the aforesaid two clauses, it can be said that it doesnot take away the right of the Bidders to seek judicial scrutiny at all. Only the stage and time to know the reasons and thereafter if theunsuccessful Bidder is aggrieved can seek the remedy, which is deferredtill the final decision on award of contract is taken and communicated.

As observed hereinabove, the object and purpose would be nointerference in the tender process in between till the final decision toaward the contract is taken. By no stretch of imagination, it can be saidthat it takes away the right of the unsuccessful bidder to seek the judicialscrutiny of the tender process. After the final decision is taken to awardthe contract and the contract is awarded, thereafter it will always beopen for the unsuccessful bidders to ask for the reasons to which theemployer is required to furnish promptly and thereafter the unsuccessfulbidder may avail the legal remedy, which may be available to it, may beclaiming the damages. The High Court ought to have appreciated that itis always advisable that in such a foreign funded Mega project, delaymay have a cascading effect and many a times have a financial burdendue to delay in projects and therefore, there shall be minimal interferenceand/or no interference till the entire tender process or till the award ofcontract is completed.

The foreign funded agency therefore is justifiedin providing such clauses to prevent challenge to the tender process ABCDEFGH869midway. A foreign funded agency, who invests/funds such a huge amountfor such a Mega project on bilateral talks between two countries is justifiedin insisting such clauses and to insist that the information relating to theevaluation of the Bids and recommendation of contract award shall notbe disclosed to Bidders or any other person until information on contractaward is communicated to all the Bidders and the grounds on which theunsuccessful Bidders’ Bids are not selected shall be provided thereafter.14.4 The object and purpose of providing aforesaid clauses isvery clear namely no interference with respect to the tender processmidway and till the final decision on awarding the contract is taken. Even, we are also of the opinion that in a Mega project, which is fundedby a foreign country, there shall not be any interference with the tenderprocess midway till the final decision is taken to award the contract.

Thereason behind this is that any delay in such a project may increase theultimate project cost and it may affect the future investment by the foreigncountry, which would never be in the larger nation’s interest.14.5 Under the circumstances, the High Court has committed agrave 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 onthe ground that once the original writ petitioner participated havingknowledge of the aforesaid clauses in the ITB, thereafter it was notopen for the original writ petitioner to challenge the same. The originalwrit petitioner was knowing right from the very beginning with respectto the confidentiality clause contained in Clause 28 and that grounds onwhich the Bids of unsuccessful Bidders are not selected shall becommunicated only after a final decision to award the contract iscommunicated under Clause 42.

If the original writ petitioner wasaggrieved either it would not have participated and/or ought to havechallenged such clauses before participating in the tender process. Underthe circumstances, the impugned judgment and order passed by the HighCourt holding Clauses 28.1 and 42.5 as patently illegal cannot sustainand the same also deserves to be quashed and set aside.

These investments from developed nations are madeon the basis of non-negotiated terms and conditions, where the solediscretion as to what would be the conditions of the investments and onwhat terms the contractors would be chosen to implement the project, vests with the investor foreign developed nation. Considering the specialpeculiarities of such foreign sovereign funded development contracts, which can be envisaged and exist only due to the availability of theinvestment and willingness of the foreign sovereign country to financesuch infrastructure project, the said contracts assume the differentcharacteristics. Therefore, there shall be different considerations so faras the judicial interference is concerned between the foreign fundedcontracts and the ordinary public works contracts funded from publicexchequer. It is always to be borne in mind and as observed by this Court in the case of Asia Foundation and Construction Ltd.

(supra), it isdifficult for a developing country to go ahead with such a high costproject unless the developed country grant loan/subsidy and/or ready tofund such high cost projects, which are very important projects fordeveloping country, more particularly, when the developed country isready to fund a huge amount at a minimal concessional rate of interestand on suitable terms and conditions of repayment. It is also to be notedthat any delay in execution of such a Mega project, which is veryimportant project for the developing country like India may not be in thelarger public interest and in the nation’s interest. Such an interferenceby the Courts midway and delay in the projects like these which is fundedby the foreign countries on bilateral mutual understanding/agreement bythe developed country to a developing country may affect the futureinvestments/funding. Many a times, such a delay in the execution of theproject due to the intervention by the Courts may have cascading effecton the project cost and ultimately may increase the project cost and mayimpose heavy financial burden and lead to increased and unbudgetedexpenditure.

Therefore, while exercising the writ jurisdiction challengingthe tender process midway and/or while entertaining the writ petitionchallenging the award of contract with respect to such Mega projects, ABCDEFGH871more particularly, when such Mega projects are funded by the foreigncountries, the Courts have to bear in mind the following principles laiddown by this Court in the case of Tata Cellular Vs. Union of India,1994 6 SCC 651 in paragraph 94 as under: “94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrativeaction. (2) The court does not sit as a court of appeal but merelyreviews the manner in which the decision was made. (3) The court does not have the expertise to correct theadministrative decision. If a review of the administrativedecision 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 tojudicial scrutiny because the invitation to tender is in the realmof contract. Normally speaking, the decision to accept thetender or award the contract is reached by process ofnegotiations through several tiers. More often than not, suchdecisions are made qualitatively by experts. (5) The Government must have freedom of contract. In otherwords, a fair play in the joints is a necessary concomitant foran administrative body functioning in an administrative sphereor quasi-administrative sphere. However, the decision mustnot only be tested by the application of Wednesbury principleof reasonableness (including its other facts pointed out above)but must be free from arbitrariness not affected by bias oractuated by mala fides. (6) Quashing decisions may impose heavy administrative burdenon the administration and lead to increased and unbudgetedexpenditure.

Based on these principles we will examine the facts of this casesince they commend to us as the correct principles. Even while entertaining the writ petition and/or granting the staywhich ultimately may delay the execution of the Mega projects, it mustbe remembered that it may seriously impede the execution of the projectsof public importance and disables the State and/or its agencies/instrumentalities from discharging the constitutional and legal obligationNATIONAL HIGH SPEED RAIL CORPORATION LIMITED v.MONTECARLO LIMITED & ANR. [M. R. SHAH, J.] ABCDEFGH872SUPREME COURT REPORTS[2022] 12 S.C.R.towards the citizens. Therefore, the High Courts should be extremelycareful and circumspect in exercise of its discretion while entertainingsuch petitions and/or while granting stay in such matters. Even in a casewhere the High Court is of the prima facie opinion that the decision is assuch perverse and/or arbitrary and/or suffers from mala fides and/orfavouritism, while entertaining such writ petition and/or pass anyappropriate interim order, High Court may put to the writ petitioner’snotice that in case the petitioner loses and there is a delay in executionof the project due to such proceedings initiated by him/it, he/they may besaddled with the damages caused for delay in execution of such projects, which may be due to such frivolous litigations initiated by him/it. Withthese words of caution and advise, we rest the matter there and leave itto the wisdom of the concerned Court(s), which ultimately may look tothe larger public interest and the national interest involved.