Government Bodies Are Expected To Act In Absolutely Fair, Reasonable & Transparent Manner, Particularly In Award Of Contracts For Mega Projects: SC
The Supreme Court reiterated that the government bodies/instrumentalities are expected to act in an absolutely fair, reasonable and transparent manner, particularly in the award of contracts for Mega projects.
While holding that the rejection of the technical bid by Bharat Coking Coal Limited (BCCL) was “grossly arbitrary, illegal, discriminatory and violative of Article 14 of the Constitution,” the Court also reiterated the scope of judicial intervention in Government contracts.
A Bench of Justice Bela M. Trivedi and Justice Satish Chandra Sharma observed, “Government bodies/ instrumentalities are expected to act in absolutely fair, reasonable and transparent manner, particularly in the award of contracts for Mega projects. Any element of arbitrariness or discrimination may lead to hampering of the entire project which would not be in the public interest.”
Senior Advocates Ravi Shankar Prasad and Naviniti Singh represented the appellant, while Solicitor General Tushar Mehta and Senior Advocates Balbir Singh and Anupam Lal Das appeared for the respondents.
Banshidhar Construction (appellant) submitted that their Technical bid was rejected on the extraneous ground by the Technical Bid Committee of the BCCL, a subsidiary of Coal India Limited.
The Supreme Court found that BCCL had arbitrarily rejected the technical bid of the appellant while accepting the bid of another respondent which had not complied with the conditions of the Notice Inviting Tender (NIT). The decision of the Tender Evaluation Committee of BCCL, which declared the other respondent as a successful bidder, was also set aside.
The Court rejected a “lame submission” made on behalf of BCCL that the Tender Evaluation Committee could call for the shortfall of documents and could not allow replacement of the documents.
“Thus, the said action of the Respondent BCCL in rejecting the Technical bid of the Appellant on absolutely extraneous ground and accepting the Technical bid of the Respondent no.8 though submitted in utter noncompliance of the mandatory requirement of Clause 10 of the NIT, and subsequently calling upon the Respondent no.8 to furnish the shortfall of documents after the opening of technical bids of the Bidders, was totally arbitrary and illegal,” the Court remarked.
The Bench reiterated that “the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. Right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that no bias, favouritism or arbitrariness are shown during the bidding process and that the entire bidding process is carried out in absolutely transparent manner.”
Consequently, the Court set aside the impugned decision of BCCL for rejecting the Technical bid of the appellant and further declaring the other respondent as successful.
Accordingly, the Supreme Court allowed the appeal.
Cause Title: Banshidhar Construction Pvt. Ltd. v. Bharat Coking Coal Limited & Ors. (Neutral Citation: 2024 INSC 757)
Appearance:
Appellant: Senior Advocates Ravi Shankar Prasad and Naviniti Singh; AOR Pankaj Bhagat
Respondents: Solicitor General Tushar Mehta; Senior Advocates Balbir Singh and Anupam Lal Das; ASG Vikramjeet Banerjee; AOR Ankur Kashyap and Amit Sharma