The Supreme Court, recently, while setting aside two judgements passed by the Single Bench and the Division Bench of the Jharkhand High Court made a critical observation regarding the interference of the Courts in matters pertaining to infrastructure projects such as that of road construction.
The Road Construction Department of Jharkhand had invited tenders for reconstruction of Nagaruntari – Dhurki – Ambakhoriya Road. Mr. Vinod Kumar Jain (Respondent No.1) participated in this process whilst submitting a Bank Guarantee as security. However, this tender was later cancelled and a fresh Notice Inviting Tender (NIT) was invited. The Committee after evaluating the bids came to the conclusion that 13 out of the 15 bids, including that of the Respondent No.1’s, were non – responsive as per the terms stated in Standard Bidding Document (SBD).
The technical and financial bid of M/S. N.G. Projects Limited (Appellant) was declared “substantially responsive” and was thereby granted the tender. They completed 21.9 kms out of 24 kms of the proposed road when the Respondent No.1, unsatisfied by the Technical Evaluation Committee’s decision, filed a Writ in the High Court where the Single Bench passed an order setting aside the award of contract that was granted to the Appellant.
The matter was then placed before the Supreme Court where the Division Bench of Justices Hemant Gupta and V. Ramasubramaniam categorically stated that the interference in contract award is “wholly unwarranted” and has caused “loss to public interest”.
Moreover, “since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project”, the Bench said.
The Court relied on a catena of judgements and explained that when a contracts’ technicality is in question, the court should be more reluctant in adjudicating the matters as necessary expertise is required. Further, it observed that, despite there being “total arbitrariness” and even if the “tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract”.
“A word of caution ought to be mentioned that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good,” the Court said.
Finally, setting aside the decision of the High Court, the Apex Court noted that since a contract of ₹3.98 crores was awarded by the State Government, terminating it at such a later stage is not feasible and will only incur additional financial burden to the State and deprive the people of the amenities.
“Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work” and “since multiple layers of exercise of jurisdiction also delay the final adjudication challenging the grant of tender, it would be open to the High Courts or the Hon’ble Chief Justice to entrust these petitions to a Division Bench of the High Court, which would avoid at least hearing by one of the forums”, the Supreme Court said.
Read the Judgement:
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