Case Note & Summary
The Supreme Court allowed the appeals filed by Bharat Coking Coal Ltd. (BCCL) against the judgment of the Jharkhand High Court, which had quashed the tender award in favor of M/s RK Transport Co. The dispute arose from an e-auction conducted by BCCL for hiring heavy earth moving machinery and transportation of coal. The auction, scheduled for May 4-5, 2015, experienced a technical glitch on the second day due to a fiber cut in the network of Tata Communications Ltd (TCL), the internet service provider for the auction platform. This caused the auction to close prematurely at 1:03 PM, with M/s AMRDev Prabha as the last bidder. C1 India, the auction facilitator, after confirming the technical issue with TCL, resumed the auction at 2:30 PM, extending the time by the period of interruption. The resumed auction resulted in M/s RK Transport Co emerging as the lowest bidder with a bid of Rs 2043 crores, significantly lower than AMRDev Prabha's bid of Rs 2345 crores. BCCL issued a Letter of Acceptance to RK Transport, which later submitted the required performance bank guarantee after a delay of 49 days, which BCCL condoned. AMRDev Prabha challenged the award before the Jharkhand High Court, which initially dismissed the writ petition. However, a Division Bench allowed the appeal, quashing the award and directing a fresh auction and vigilance inquiry. The Supreme Court reversed the High Court's decision, holding that the High Court exceeded its limited scope of judicial review in tender matters. The Court noted that the technical glitch was confirmed by an independent report from CERTIn, and the resumption of the auction was in accordance with the NIT terms. The Court also held that AMRDev Prabha's participation in the resumed auction amounted to acquiescence, and the condonation of delay in submitting the bank guarantee was permissible. The Supreme Court set aside the High Court's order and restored the award of tender to RK Transport.
Headnote
A) Administrative Law - Judicial Review of Tender Matters - Scope of Writ Jurisdiction - The court reiterated that judicial review in contractual matters of the State is limited to examining the decision-making process for arbitrariness, irrationality, or procedural illegality, and not the merits of the decision itself. The High Court exceeded its jurisdiction by substituting its own view on technical aspects of the auction process. (Paras 18-20) B) Contract Law - E-Auction - Technical Glitch and Resumption - Terms of NIT - Where a technical glitch at the service provider's end caused premature closure of the auction, resumption of the auction after rectification was permissible under the NIT. The court held that the connectivity issue was established by CERTIn report, and the resumption was in consonance with specified procedure. (Paras 6-7, 12) C) Contract Law - Acquiescence - Participation in Resumed Auction - A bidder who participates in a resumed auction without protest cannot later challenge the validity of the process. The respondent's participation in the resumed auction amounted to acquiescence to any alleged irregularity. (Para 13) D) Contract Law - Condonation of Delay - Performance Bank Guarantee - The condonation of delay in submission of bank guarantee by the successful bidder was permissible and in public interest, as it allowed the contract to be awarded at a lower price. (Para 13) E) Evidence - Technical Reports - CERTIn Report - The CERTIn report, an independent body, confirmed the existence of connectivity problems and absence of collusion, which was binding on the court in the absence of contrary evidence. (Para 12)
Issue of Consideration
Whether the High Court was justified in quashing the tender award and directing a fresh auction on grounds of procedural irregularities, given the technical glitch and subsequent resumption of the e-auction process.
Final Decision
Appeals allowed; impugned order of the High Court set aside; award of tender to M/s RK Transport Co restored.
Law Points
- Judicial review in tender matters is limited to decision-making process
- not merits
- terms of NIT govern auction process
- technical glitch at service provider's end justifies resumption
- participation in resumed auction amounts to acquiescence
- condonation of delay in submitting bank guarantee is permissible if in public interest.
