The Supreme Court set aside the Gujarat High Court’s decision cancelling a power plant operation and maintenance contract, holding that judicial interference in tender matters is limited and cannot be based on marginal differences in bid evaluation.
The dispute arose from a QCBS-based tender where the appellant was initially declared the successful bidder. Following re-evaluation, both bidders were tied on technical scores, with a minuscule difference in final scores. The High Court had set aside the contract solely on this marginal difference and directed an award in favour of the rival bidder. This led to the present appeal before the Supreme Court.
The Bench of Justice Pamidighantam Sri Narasimha & Justice Alok Aradhe held that such interference was unwarranted, emphasising that courts should not substitute their decision for that of the tendering authority unless the process is shown to be arbitrary, mala fide, or perverse. It reiterated that minor or negligible differences in scoring do not justify judicial intervention.
The Court also stressed that the final decision in tender evaluation lies with the owner, who must be allowed “fair play in the joints” to exercise commercial judgment, especially in technically complex matters.
Highlighting the need for restraint, the Court cautioned against courts “using a magnifying glass” to scrutinise tender evaluations and disrupting ongoing contracts, particularly when work has already commenced.
Accordingly, the Court upheld the Letter of Award and the executed contract in favour of the appellant, allowing the project to proceed without interference.
Appearances
Appellant- Mr. DVS Somayajulu, Sr. Adv. Mr. AVS Subramanyam, Adv. Mr. Niraj Kumar, Adv. Mr. P. Srinivasan, AOR
Respondents- Mr. Priyabrat Tripathy, Adv. Mrs. Prabhleen Apoorv Shukla, AOR Mr. Ayush Acharjee, Adv. Mr. Nahush Khera, Adv. Mr. Aspi Kapadia, Adv. Ms. Anushree Prashit Kapadia, AOR Mr. Pranay Bhardwaj, Adv. Ms. Pragya Jaishwal, Adv.
