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Courts should show restraint from interpretation of tender documents: Supreme Court [Read Judgment]

By Dolly Chhabda      Feb 03, 2022      0 Comments      2,853 Views
Courts tender documents Supreme Court

The author of the tender document is the best person to interpret its documents and requirements, the Supreme Court reiterated in a judgment delivered on Monday (31 Jan 2022). The bench comprising Justices Dinesh Maheshwari and Vikram Nath observed that the interference by the Court would only arise if the questioned decision suffers from the illegality, irrationality, mala fide, perversity, or procedural impropriety. 

The court, added that a decision of the administrative authority cannot be called arbitrary or whimsical merely because it does not appear plausible to the court. The court was considering an appeal filed against the Delhi High Court Judgment which had allowed the writ petition filed by 'Resoursys Telecom' and disapproved of the technical disqualification and consequential rejection of the technical bid of 'Resoursys Telecom' (writ petitioner) in respect of a tender floated by the Navodaya Vidyalaya Samiti(NVS).

The tender inviting authority, i.e., NVS, had rejected the technical bid of writ petitioner for want of fulfilment of 'Past Performance' criterion about the supply of 'same or similar Category Products' of 60% of bid quantity in at least one of the last three financial years. The tender notice in question was issued for the supply of Tablets for the students of Class XI and XII.

The bench referred to earlier judgments on the scope of judicial review in contractual matters, particularly concerning the process of interpretation of the tender document. The court observed: 

“The above-mentioned statements of law make it amply clear that the author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given.”


“Taking note of various factual aspects, the bench found that the decision, as taken by the NVS and its TEC, cannot be said to be totally baseless or absurd or irrational or illogical. The court noted that the high Court has referred to the doctrine of 'Contra proferentem', whereby, any ambiguity in an insurance policy would be resolved by a construction favourable to the insured. In this regard, the bench observed:” 


“…..This rule, in our view, cannot be applied to lay down that in case of any ambiguity in a tender document, it has to be construed in favour of a particular person who projects a particular view point. The obvious inapplicability of this doctrine to the eligibility conditions in a notice inviting tender could be visualised from a simple fact that in case of ambiguity, if two different tenderers suggest two different interpretations, the question would always remain as to which of the two interpretation is to be accepted? Obviously, to avoid such unworkable scenarios, the principle is that the author of the tender document is the best person to interpret its documents and requirements. The only requirement of law, for such process of decision making by the tender inviting authority, is that it should not be suffering from illegality, irrationality, mala fide, perversity, or procedural impropriety.”


[Read Judgment]

Supreme Court of IndiaJustices Dinesh MaheshwariJustices Vikram Nath Delhi High CourtNavodaya VidyalayaConstitution of India
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