Holding

In the absence of malafides or perversity, courts must not interfere with the technical evaluation of tenders, and the Single Judge's reliance on expert committee reports was correct.

Summary

The dispute concerned a notice inviting tenders (NIT) for constructing an educational campus, which required bidders to have completed similar large‑scale projects. Respondent No. I was found ineligible by three expert committees, a finding upheld by the Single Judge of the High Court. The Division Bench, however, set aside that judgment, held that Respondent No. I was eligible and directed the award of the contract to it. On appeal, the Supreme Court examined whether the court could intervene in the technical evaluation of tenders absent any malafides or perversity. Relying on precedents, the Court held that judicial review in tender matters is limited and courts must defer to the technical expertise of the evaluating committees. Consequently, the Division Bench had exceeded its jurisdiction, the Single Judge’s decision was affirmed, and the award of the tender was restored to the appellant, who is willing to match the lower bid.

Issues considered

Whether the High Court Division Bench erred in setting aside the Single Judge's decision on the eligibility of Respondent No. I in a tender process.
Whether courts may interfere with technical evaluation of tenders when no malafides or perversity is evident.
Whether the principle of judicial restraint applies to the appraisal of expert committee reports in tender evaluations.

Subjects

tendereligibility criteriatechnical evaluationjudicial reviewjudicial restraintexpert committeecontract awardadministrative law

Judgment

[2017] 14 S.C.R. 479

M/S SAM BUILT WELL PVT. LTD. A
v.
DEEPAK BUILDERS & ORS.
(Civi!Appea!No. 21858of2017)
DECEMBER 14, 2017 B

[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Contract - Tender - In the instant case, the NIT invited bids
from contractors who had engaged in construction of educational
buildings - The technical evaluation report stated that the eligibility
criteria contained in NIT was not met by respondent no. I - The
c
other two expert bodies also reiterated the ineligibility of respondent
no. I - Respondent no. I filed writ petition which was dismissed by
the single judge of High Court - However. Division Bench of High
Court allowed the appeal of respondent no. I holding that there
was no malafides in the instant case and respondent no.I was D
eligible qnd directing the respondent no.2 to consider the case of
respondent no. I along with other eligible bids - Ultimately, award
was given to respondent no.I since it quoted amount less than that
of appellant - On appeal, held: The three expert committees
scrutinized the tender of respondent no.I and found him ineligible E
- The impugned judgment of the Division Bench of the High Court
expressly stated that no malafides were involved in the instant case
- Equally, while setting aside the judgment of the single judge. the
Division Bench did not state that the three expert committees have
arrived at a perverse conclusion - In tender matters, s'cope of
judicial review is limited - Not having found malafides or perversity F
in the technical· expert reports. any appreciation by the Court itself
of technical evaluation, best left to technical experts, would be
outside its ken - As a result. the single judge was correct in placing
reliance on the three expert committee reports - The Division Bench.
in setting aside the said judgment. has clearly gone outside the G
bounds ofjudicial review - Award of tender to the appellant is.
restored as it is willing to match the offer of respondent no.I -
Administrative law - Judicial review.

H
479
480 SUPREME COURT REPORTS [2017] 14 S.C.R.

A Allowing the appeal, the Court
HELD: 1. Not having found malafides or perversity in the
technical expert reports, the principle of judicial restraint kicks
in, and any appreciation by the Court itself of technical evaluation,
best left to technical experts, would be outside its ken. As a
B result, the Single Judge was correct in his reliance on the three
expert committee reports. The Division Bench, in setting aside
the said judgment, has clearly gone outside the bounds of judicial
review. [Para 1111486-E-F)
2. The appellant, has stated that the appellant is willing to
C match the offer of Respondent No.1. The said statement is
recorded and it is ordered that the tender awarded to Respondent
No.1 based upon the Division Bench judgment, must be set aside,
and the award of the tender to the Appellant must be restored. It
will be open to Respondent No.2 to accept appellant's offer that
the project will be executed at the amount indicated by
D Respondent No.1. [Para 12)(486-G-H)
A/cons Infrastructure Ltd. v. Nagpur Metro Rail Corpn.
Ltd. (2016) 16 sec 818 : [2016) 3 SCR 551;
Montecarlo Ltd. v. NTPC Ltd. (2016) 15 SCC 272 :
12016) 8 SCR 224 - referred to.
E
Case Law Reference
[2016] 3 SCR 551 referred to Para9
[2016) 8 SCR 224 referred to Para 10
F CIVIL APPELLATE JURISDICTION: Civil Appeal No. 21858
of2017.
From the final Judgment and Order dated 04.08.2017 of the High
Court of Punjab and Haryana at Chandigarh in CA CWP No.14/2017.
K.V. Vishwanathan, Sr. Adv., Sridhar Potaraju, Arjun Singh, Mrs.
G Arnita Gupta, Ms. Madhvi Khanna, Ms. Vrinda Bhandari, Advs. for the
Appellant.
Mukul Rohatgi, Sr. Adv., Ms. Ranjeeta Rohatgi, Ashish Batra,
S.S. Shamshery, V. Balaji, G. S. Makker, Advs. for the Respondents.

H
MIS SAM BUILT WELL PVT. LTD. v. DEEPAK BUILDERS 481

The Judgment of the Court was delivered by A
R. F. NARIMAN, J. 1. Leave granted.
2. The present appeal involves a notice inviting tenders (NIT)
dated 16'h March, 2017 by which the director of the Institute ofNano
Science and Technology, Mohali, invited percentage rate composite bids
from eligible firrriS/contractors in a two bid system for construction of B
the Institute of Nano Science and Technology Campus at knowledge
City, Sector 81, Mohali, consisting of research, academic and
administrative buildings together withhoste~ residential, amenity and utility
buildings. The estimated cost of the said project was Rs.162.18 crores,
with earnest money payable being Rs.1.72 crores. The period of C
completion was stated to be 20 months and the last date for submission
of tender was 1O•h April, 2017. Clause 8 of the said NIT is important and
states as under:
"8. Contractors/bidders who fulfill the following minimum criteria
shall be eligible to apply. Joint ventures/consortium are not
accepted. D
(a) Should have satisfactorily completed the works as mentioned
below during the last date of submission of bids.
(i) Three similar completed works each costing not less than
Rs.64.9 crores, or
E
(ii) Two similar completed works each costing not less than Rs.97.3
crores,
(iii) One similar completed work of aggregate cost not less than
Rs.129.7 crores.
Similar work shall mean work of "construction of institutional/
F
educational buildings campus with minimum five storeys RCC framed
structure building including electric~ plumbing, fire fighting, HVAC works
under composite contract executed in India in a single contract."
3. Several persons submitted their bids, including Respondent No. I,
who claimed that it had done "similar work" as follows:
Sr. Name of work Completion date Current cost Remarks
G
No. • fter addition of
1•1. ner annum
I Construction ot' 31.03.2016 Rs. 97.76 Cr. It has
District Current enhanced basement
Administrative value as per plus S storeys
complex at clause 2.2.4 RCC framed
S ector-76, SAS Rs. 97 .76 er x structure
Nagar, Mohali 107%"'
Rs.104.60 Cr. H
482 SUPREME COURT REPORTS [2017] 14 S.C.R.

A '2. Coostrnction of 05.10.2011 Rs.62.65 er. Qment It has oosement
Office Building enhanced value as pl us six storeys
of PlUlj ab Mandi per clause 2.2.4 RCCfrmncd
Board, Phase-11, Rs. 6225cr x 114% structure
SANagar, =70.96cr.
Mohali
,3 Construction of 16.03.2015 Rs. 172.32 er It has height of
B ' Jang-e-Azadi 42 meters i.e.
Memorial Project IIXlre than 8
at Kartaipur, storeys RCC
J alandhar (Phase- framed
!) structm·e
4 Construction of 23. J 22015: 14 Wotk of Phase 2 for It has oosenent
c Judicial Court
Ccmplex at
courts out of 25
courts were
remaining courts in
progress. Work of
pl us 5 storeys
RCCfrmncd
Sector 76, SAS imugurated on Rs. 75 28 er. was structure
Nagai; Mohali 23•d Dec., 2015 corr;ileted upto
-
and are 31.03.2017 and
functioning balance work in
from the progress
D btri !ding Work
of Phase 2 for
remaining
courts in
proo:ress.
5 Total Value Rs.423.16 Cr.
4. Pre-bid meetings were conducted in March, 2017 and ultimately
E
Respondent No.I submitted its tender on 7th April, 2017. 5 out of 16
bidders, who initially came forward, participated in the tender process.
Admittedly, a technical evaluation report dated 24'h April, 2017 stated
that the eligibility criteria contained in Clause 8 of the NIT was not met
by Respondent No. l. This was reiterated by two other expert bodies,
F namely, Tata Consultancy Services and the Building Works Committee
of the Institute. Respondent No.2 then addressed a letter to Respondent
No. I informing it about its ineligibility. On 3rd May, 2017, Respondent
No.I filed a Writ Petition which was dismissed by the learned Single
Judge stating that "similar work", which requires to be considered under
G Clause 8 of the NIT, would be work which involves not only construction
ot administrative blocks, but also several other buildings. Looking at the
four projects, the last of which was admittedly kept out of consideration,
it was found that none of the work could be said to be "similar" in nature
and referring to the fact that three specialists had stated that Respondent
No. l was ineligible, the Court adopted the hands-offposture, considering
H
M/S SAM BUILT WELL PVT. LTD. v. DEEPAK BUILDERS 483
'. [R. F. NARIMAN, J.]

the limited parameters of judicial review. However, by the impugned A
judgment dated 4'h August, 2017, the Division Bench of the High Court
allowed the appeal of Respondent No. I and set aside the judgment of
the learned Single Judge stating that though there was no malafides in
the present case, the judgment of the learned Single Judge was incorrect
and that, therefore, Respondent No. I was clearly eligible. The appeal B
was then disposed of by directing Respondent No. 2 to consider
Respondent No.l's bid, along with other eligible bids, and award the
contract after assessing the bids on all permissible criteria.
5. Pursuant to the said judgment, we have been informed that the
tender was ultimately awarded on 20'h August, 2017 to Respondent No. I,
inter alia, for the reason that Respondent No. l quoted a figure of roughly C
4 to 5 crores less than that of the Appellant. Further, even though we
are in December, 2017, the Appellant has, admittedly, not yet left the site
of construction and resultantly Respondent No. I has not yet commenced
work. .
6. Dr. A.M. Singhvi, learned senior counsel appearing on behalf D
of the Appellant, has taken us through three expert committee reports in
the present case. According to the learned senior counsel, it is incorrect
to state that the National Building Code of India, 2016, which is framed
by the Bureau oflndustrial Costs and Prices, does not apply to the facts
of the present case inasmuch as the special conditions of the tender E
specifically make the said Code applicable and that, therefore, the expert
committee reports based, inter alia, on the provisions of the Code, cannot
be interfered with. Also, according to the learned senior counsel, the
·learned Single Judge correctly appreciated that in tender matters, judicial
review \s very limited and argued before us that the Division Bench,
while setting aside the judgment of the learned Single Judge, has not F
kept in view the parameters _of judicial review of tenders. Equally,
according to the learned senior counsel, it being clear that there arc no
rnalafides or perversity involved, it would not be possible for a Writ Court,
sitting in judicial review, to interfere with the tender process as has been
done by the Division Bench. G
7. Per contra, Shri Mukul Rohatgi, learned senior counsel
appearing for Respondent No. I, supported the impugned judgment and
stated that the National Building Code oflndia was only made applicable
,in so far as safety aspects of the buildings are concerned. This being
H
484 SUPREME COURT REPORTS [2017] 14 S.C.R.

A the case, according to him, all the expert committee reports in relying
upon the provisions of the said Code could not have done so. Also,
according to him, one look at the three projects that have been carried
out by Respondent No. I would show that they are all projects consisting
of buildings which have basement plus 5 or more storeys and that,
therefore, it is clear that they were "similar works" within the meaning
B
of the expression contained in Clause 8 of the NIT, as these were nothing
other than institutional buildings that were constructed by Respondent
No.I.
8. Dr. Singhvi, in rejoinder, stated that none of the three works
could possibly be called "similar work" because an entire complex had
C to be constructed, and similar work was also defined to mean,
"construction ofinstitutional/educational buildings campus with minimum
five storeys RCC framed structure building ... ". According to the
Iearned senior counsel, one building, albeit of 5 storeys or more, would
not suffice.
D 9. Having heard learned counsel for both parties, it is important to
set out the parameters for judicial review in cases like the present one.
In a similar case, namely, Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corpn. Ltd., (2016) 16 SCC 818 at 825-26, paragraph
4.2(a) of Section Ill of the tender conditions in that case again spoke of
E a certain minimum number of "similar contracts" as previous work
experience. The question before this Court was whether an inter-state
high speed railway project could be similar to metro civil construction
work. After laying down the parameters ofjudicial review and referring
to various judgments for the same, this Court held:
F "15. We may add that the owner or the employer of a project,
having authored· the tender documents, is the best person to
understand and appreciate its requirements and interpret its
documents. The constitutional courts must defer to this
understanding and appreciation of the tender documents, unless
there is mala fide or perversity in the understanding or appreciation
G or in the application of the terms of the tender conditions. It is
possible that the owner or employer of a project may give an
interpretation to the tender documents that is not acceptable to
the constitutional courts but that by itself is not a reason for
interfering with the interpretation given.
H
M/S SAM BUILT WELL PVT. LTD. v. DEEPAK BUILDERS 485
[R. F. NARIMAN, J.]

16. In the present appeals, although there does not appear to be A
any ambiguity or doubt about the interpretation given
by NMRCL to the tender conditions, we are of the view that even
i£Jhere was such an ambiguity or doubt, the High Court ought to
have refrained from giving its own interpretation unless it had
come to a clear conclusion that the interpretation given B
by NMRCL was perverse or mala fide or intended to favour one
of the bidders. This was certainly not the case either before the
High Court or before this Court."
10. In Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272 at
288, this Court referred to various judgments, including the judgment in
Afcons Infrastructure Ltd. (supra), and concluded as follows: c
"26. We respectfully concur with the aforesaid statement oflaw.
We have reasons to do so. In the present scenario, tenders are
floated and offers are invited for highly complex technical subjects.
It requires understanding and appreciation of the nature of work
and the purpose it is going to serve. It is common knowledge in D
the competitive commercial field that technical bids pursuant to
the notice inviting tenders are scrutinised by the technical experts
and sometimes third-party assistance from those unconnected with
the owner's organisation is taken. This ensures objectivity. Bidder's
expertise and technical capability and capacity must be assessed E
by the experts. In the matters of financial assessment, consultants
are appointed. It is because to check and ascertain that technical
ability and the financial feasibility have sanguinity and are workable
and realistic. There is a.multi-prong complex approach; highly
technical in nature. The tenders where public largesse is put to
auction stand on a different compartment. Tender with which we F
are concerned, is not comparable to any scheme for allotment.
This arena which we have referred requires technical expertise.
Parameters applied are different. Its aim is to achieve high degree
of perfection in execution and adherence to the time schedule.
But, that does not mean, these tenders will escape scrutiny of G
judicial review. Exercise of power of judicial review would be
called for if the approach is arbitrary or mala fide or procedure
adopted is meant to favour one. The decision-making process
should clearly show that the said maladies are kept at bay. But

H
486 SUPREME COURT REPORTS [2017] 14 S.C.R.

A where a decision is taken that is manifestly in consonance with
the language of the tender document or subserves the purpose
for which the tender is floated, the court should follow the principle
of restraint. Technical evaluation or comparison by the court would
be impermissible. The principle that is applied to scan and
understand an ordinary instrument relatable to contract in other
B
spheres has to be treated differently than interpreting and
appreciating tender documents relating to technical.works and
projects requiring special skills. The owner should b~ allowed to
carry out the purpose and there has to be allowance of free play
in the joints."
c 11. We have already noticed that three expert committees have
scrutinized Respondent No. I's tender and found Respondent No. I to be
ineligible. The impugned judgment of the Division Bench of the High
Court expressly states that no malafides are involved in the present case.
Equally, while setting aside the judgment of the learned Single Judge, the
D Division Bench does not state that the three expert committees have
arrived at a perverse conclusion. To merely set aside the judgment of
the learned Single Judge and then jump to the conclusion that Respondent
No.l's tender was clearly eligible, would be directly contrary to the
judgments aforestated. Not having found malafides or perversity in the
technical expert reports, the principle of judicial restraint kicks in, and
E any appreciation by the Court itself of technical evaluation, best left to
technical experts, would be outside its ken. As a result, we find that the
learned Single Judge was correct in his reliance on the three expert
committee reports. The Division Bench, in setting aside the aforesaid
judgment, has clearly gone outside the bounds of judicial review. We,
F therefore, set aside the judgment of the Division Bench and restore that
of the learned Single Judge.
12. Dr. Singhvi, learned senior counsel appearing for the Appellant,
has stated that the Appellant is willing to match the offer of Respondent
No.l. We record the aforesaid statement and order that the tender
G · awarded to Respondent No. I dated 20th August, 2017, based upon the
Division Bench judgment, must be set aside, and the award of the tender
to the Appellant must be restored. We hasten to add that it will be open
to Respondent No.2 to accept Dr. Singhvi's offer that the project will be
executed at the amount indicated by Respondent No. l.

H
MIS SAM BUILT WELL PVT. LTD. v. DEEPAK BUILDERS 487
[R. F. NARIMAN, J.]

13. The appeal is allowed in the aforesaid terms with no order as A
to costs.

Devika Gujral Appeal allowed.