Holding

The owner’s interpretation of technical tender requirements is entitled to deference, and NTPC’s determination that Montecarlo’s bid was non‑responsive for lacking drilling‑for‑blasting experience was correct.

Summary

Montecarlo Ltd. submitted a techno‑commercial bid for NTPC Ltd.'s coal‑mine development project, but NTPC declared the bid technically non‑responsive because Montecarlo lacked experience in drilling for blasting. Montecarlo challenged this decision before the High Court, arguing that the qualification requirement only required drilling, not drilling for blasting. The High Court upheld NTPC's assessment, and Montecarlo appealed to the Supreme Court. The Supreme Court examined whether the court could scrutinise the technical evaluation and whether the phrase "drilling for the purposes of blasting" was a mandatory condition. Relying on principles of judicial restraint and deference to the owner’s expertise in interpreting technical tender documents, the Court found no mala‑fide or arbitrariness in NTPC's decision. Consequently, the Court affirmed the High Court’s judgment and dismissed the appeal.

Issues considered

The interpretation of the qualifying requirement "drilling for the purposes of blasting" in the tender documents.
Whether Montecarlo's experience satisfied the technical qualification criteria.
Whether the High Court erred in upholding NTPC's technical evaluation of the bid.
Whether judicial review can intervene in the technical assessment of a highly specialised tender.

Subjects

tenderjudicial reviewtechnical evaluationqualification requirementspublic procurementdeferencenon‑responsive biddrilling for blastingcontract interpretation

Judgment

[2016] 8 S.C.R. 224

A MONTECARLO LTD.
v.
NTPC LTD.
(Civil Appeal No. 10143 of2016)
B OCTOBER 18, 2016
[DIPAK MISRA AND UDAY UMESH LALIT, JJ.]
Tenders - Judicial review - Invitation for bids for development
and operation of coal mines - Respondent-NTPC found the bid by
c appellant technically non-responsive as appellant did not have
necessary experience of drilling for blasting purposes - Appellant
invoked jurisdiction of High Court challenging the determination
made by respondent - Plea of appellant that the tender documents
required experience of a bidder only in drilling, not drilling for
. blasting purposes - High Court held that the assessment of the
D . respondent-NTPC was correct as it did not affect public interest but
subserved the public purpose - On appeal, held: 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 - Constitutional Courts must defer to this
understanding and appreciation of tender documents unless there
E
is malafide or perversity in understanding - Technical evaluation
or comparison by the court thus is impermissible - Principle to
understand ordinary instrument relatable to contract has to be
treated differently than tender documents relating to technical works
and projects - In the instant case, tenders and offers are invited for
F highly technical subjects - It is to check and ascertain that technical
ability and the financial feasibility have sanguinity and are
workable and realistic - It requires technical expertise - Therefore,
respondent should be allowed to carry out technical evaluation
freely - No infirmity in the judgment and order passed by the High
Court.
G
Dismissing the appeal, the Court
HELD: 1. The Respondent-NTPC invited bids for
development and operation of coal mines and had issued
"Instructions to Bidders" (ITB) which contained clauses as to
H
224
MONTECARLO LTD. v. NTPC LTD. 225

bow the proposal shall be conducted. Clauses of Mine operations A
are technical but they are fundamental to understand the
Qualifying Requirements (QR). They clearly demonstrate that
drilling is imperative. High Court has considered the documents
filed by appellant and opined that the documents filed in support
of the QR are substantially inadequate. Adverting to the facet of
8
drilling, the writ court bas opined that there is specific use of the
words "drilling for the purposes of blasting". [Para l 7][243-D-F]
2. 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 C
purpose it is going to serve. It is common knowledge in the
competitive commercial field that technical bids pursuant to the
notice inviting tenders are scrutinized by the technical experts
and sometimes third party assistance from those unconnected
with the owner's organization is taken. This ensures objectivity.
Bidder's expertise and technical capability and capacity must be D
assessed 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. E
Tender in present case, is not comparable to any scheme for
allotment. This arena 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 F
judicial review. Exercise of power of judicial review would be
called for if the approach is arbitrary or nw/aji<le or procedure
adopted is meant to favour one. The decision making process
should clearly show that the said maladies are kept at bay. But
where a decision is taken that is manifestly in consonance with
the language of the tender document or subserves the purpose G
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

- H
226 SUPREME COURT REPORTS [2016) 8 S.C.R.

A other spheres has to be treated differently than interpreting and
appreciating tender documents relating to technical works and
projects requiring special skills. The owner should be allowed to
carry out the purpose and there has to be allowance of free play
in the joints. There is no infirmity in the judgment and order
passed by the High Court. [Paras 24, 25][245-H; 246-A-F]
B
Tata Cellular v. Union of India (1994) 6 SCC 651: 1994
(2) Suppl. SCR 122; Michigan Rubber (India) Ltd. v.
State of Karnataka and Ors. (2012) 8 SCC 216: 2012
(8) SCR 128; Sterling Computers Limited v. Mis M &
N Publications Limited & Ors. (1993) 1 SCC 445: 1993
c (1) SCR 81; Jagdish Manda! v. S1a1e of Orissa and
Ors (2007) 14 SCC 517: 2006 (10) Suppl. SCR 606;
Master Marine Services (P) Ltd. v. Metca(fe &
Hodgkinson (P) Ltd and Am: (2005) 6 SCC 138: 2005
(3) SCR 666; B.S.N. Joshi & Sons Ltd. v. Nair Coal
D Services Ltd. and Ors. (2006) 11 SCC 548: 2006 (8)
Suppl. SCR 11; Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corporation Ltd. 2016 (8) SCALE 765 -
relied 011.
Case Law Reference
E 1994 (2) Suppl. SCR 122 relied on Para 12
2012 (8) SCR 128 relied on Para 12
1993 (1) SCR 81 relied 011 Para 17
2006 (10) Suppl. SCR 606 relied on Para 19
F
2005 (3) SCR 666 relied on Para 20
2006 (8) Suppl. SCR 11 relied 011 Para 21
2016 (8) SCALE 765 relied on Para 22
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10143
G of2016.
From the Judgment and Order dated 30.09.2016 of the High Cou11
of Delhi at New Delhi in Writ Petition (Civil) No. 7726 of2016.
P. Chidambram, Harish P. Raval, Vikas Singh, Sr. Adv., Sandeep
Singh, Mahesh Agarwal, Shamik Bhat, Shashank Mani sh, E. C. Agrawala,
H
MONTECARLO LTD. v. NTPC LTD. 227

Ankit Jain, Ms. !ti Agarwal, Ravi Prakash, Chandra Prakash, Advs. for A
appearing pa1iies.
The Judgment of the Court was delivered by
DIPAK MISRA, J. 1. The respondent, NTPC Limited, had
issued separate invitation for bids for development and operation of three
coal mines, viz., Dulanga Coal Block, Chatti Bariatu and Talaipalli in the B
State ofOdisha. Online bids were invited on Single Stage Two Envelope
Bidding basis (Envelope-I: Techno-Commercial Bid and Envelope-II:
Price Bid). There was stipulation for Reverse Auction from the eligible
bidders. It was also stated in the Invitation For Bids (IFB) issued on
22.01.2016 that the bids shall be received on 17.03.2016 and Envelope- c
!, that is, Techno-Commercial Bid will be opened on 17.03.2016. The
date of opening of Envelope-II, that is, Price Proposal shall be intimated
separately. Clause 5 of the IFB stipulated Qualifying Requirements (QR).
Clauses 5.1 and 5.1.2 dealt with technical criteria.
2. The respondent had also issued "Instructions To Bidders" (!TB) D
which contain clauses as to how the proposal shall be conducted. Clause
6.3. l of!TB deals with Preliminary Examination ofTechno-Commercial
Proposals. We think it appropriate to reproduce the same:-
"6.3. l Preliminary Examination of Techno-Commercial
Proposals: E
(a) OWNER will examine the Project Proposals to
determine whether they are complete, whether required
securities have been furnished, whether the documents have
been properly signed and whether the bids are generally in
order.
F
(b) Prior to the detailed evaluation, OWNER will initially
determine whether each Techno Commercial Proposal is
of acceptable quality, is generally complete and is
substantially responsive to the bidding documents. For
purposes of this determination, a substantially responsive
G
Proposal is one that conforms to all the terms, conditions
and specifications of the bidding documents without material
deviations, objections, conditionalities or reservations. A
material deviation, objection, conditionality or reservation is
one (i) that affects in any substantial way the scope, quality
H
228 SUPREME COURT REPORTS [20 I 6] 8 S.C.R.

A or performance of the contract; (ii) that limits in any
substantial way, inconsistent with the bidding documents,
the Owner's rights or the successful Bidder's obligations
under the contract; or (iii) whose rectification would unfairly
affect the competitive position of other Bidders who are
presenting substantially responsive Proposals.
B
(c) OWNER's determination of a Techno Commercial
Proposal's responsiveness is to be based on the contents of
the Techno Commercial Proposal itself without recourse to
extrinsic evidence. If a Techno Commercial Proposal is
not substantially responsive, it will be rejected by OWNER,
c and may not subsequently be made responsive by the Bidder
by correction of the nonconformity."
3. Clauses 6.3.2 6.3.2.1, 6.3.2.2 and 6.3.4 provide for Evaluation
of Responsive Techno-Commercial Proposal, Evaluation of Qualification
Proposals, Evaluation of Technical Proposals and Clarification Meeting.
D Clause 6.3.5 deals with the steps where the responsive Techno-
Commercial Proposal which meets the QR specified in Chapter 7 and
Technical Requirements specified in Chapter 8 of REF Documents and
stipulates that they shall be considered cor Price Proposal Phase of the
Bidding Process. It has also been provided therein that the bidders who
E meet QR specified in Chapter 7 and Technical Requirements specified
in Chapter 8 of REP documents shall be terms as "shortlisted bidders".
Chapter 7 ofITB deals with technical criteria. Clauses 7.1.1 and 7.1.2,
being significant, are extracted below:-
"7.1.1 The Bidder should have, in the preceding 7 (seven)
F· years reckoned from the date of opening of the Techno-
commercial Bids developed & operated single coal/lignite
mine having coal/lignite reserves of at least 150 million
tonnes & annual capacity of at least 6 MTPA and produced
at least 2 million tonnes of coal/lignite from such mine.

. G OR
7.1.2 The Bidder should have, in the.preceding 7 (seven)
years reckoned from the date of opening of the Techno-
commercial Bids, operated and produced:
a) At least 23 Million SCM of aggregated volume of
H
MONTECARLO LTD. v. NTPC LTD. 229
[DIPAK MISRA, J.]

overburden and/or coal/lignite from a maximum of seven A
open cast mines of Coal/Lignite, in any year.
b) At least 11.5 Million SCM of composite volume of
overburden and coal/lignite from single open cast mine in
any year, out of which at least 3 million tonnes shall be
coal/lignite. B
The qualifying works at clause 7 .1.2(a) can be from same
mine or different mines including the mine considered to
meet qualifying requirement at clause 7. l .2(b)."
4. At this stage, it is necessary to refer to Notes appended to
Clause 7.3.3 that deals with route-3. Notes are as under:- c
"i. The word "operated" means that the Bidder should have
performed the necessary activities of drilling, excavation,
hauling etc. on its own or through sub-contracting.
ii. The word "developed" means that the Bidder should have D
performed the necessary activities of Land Acquisition/
assisted in Land Acquisition, Statutory clearances/assisted
in Statutory clearances and carried out 'Infrastructure
development' on its own or through sub-contracting."
5. Chapter 9 of the ITB deals with Evaluation Methodology for
E
Techno- Commercial Proposal (Qualification Proposal and Technical
Proposal). Clause 9. I deals with Evaluation of Qualification Proposal
and Clause 9.2 deals with Evaluation of Technical Proposal. They read
as under:-
"9. Evaluation Methodology for Techno Commercial
F
Proposal (Qualification Proposal and Technical Proposal)
9.1 Evaluation of Qualification Proposal:
The Techno-Commercial Proposal shall be scrutinized to
establish "responsiveness" as per Clause 6.3.1.
The Responsive Techno-Commercial Proposal shall be G
evaluated in detail to determine their fulfillment ofQualifring
requirements specified in Chapter 7 of this RFP document.
During the bid evaluation, NTPC may, at its discretion, ask
the Bidder for a clarification of its Qualification Proposal
H
230 SUPREME COURT REPORTS [2016] 8 S.C.R.

A including documentary evidence pertaining to only the;:
reference mines declared in the Qualification Proposal for
the purpose of meeting Qualifying Requirement specified
in Chapter 7 of this RFP document. The request for
clarification and the response shall be in writing and no
change in the substance of the TECHNO-COMMERC!AL
B
Proposal including substitution of reference mines in the
Qualification Proposal by new/additional mines for
conforming to Qualifying Requirement shall be sought,
offered or permitted.
The Qualification Proposals which meets the g_t!alification
c criteria shal I be considered for Technical Proposal
Evaluation Phase of the Bidding Process. The Bidders who
meet tl~ualification criteria shall be termed as Qualified
Bidders.
9.2 Evaluation ofTechnical Proposal:
D
The Technical Proposals shall be evaluated to determine
their compliance with the Technical Proposal Requirements.
For this purpose, NTPC shall use the suppo1ting documents
and/or information available with or obtained by NTPC.
E 9.2.1 During evaluation NTPC may seek clarification from
the Bidders, may conduct discussions with the Bidders, and
may ask the bidder to make Technical presentation.
Technical proposal shall include details as has been sought
vide Chapter 8.
F 9.2.2 The Technical Proposals without sufficient information
as per the terms of Chapter 8 of this document shall be
deemed "Non Responsive Technical Proposal".
9.2.3 The Responsive Technical Proposals meeting the
requirements to the satisfaction of Owner shall be
G considered for further detailed Technical Evaluation."
[emphasis added]
6. Clause 9.3 provides how detailed evaluation of technical
proposals submitted by the bidder shall take place. Clauses 9.3. I and
9.3 .2 which are relevant for the present purpose are reproduced below:-
H
MONTECARLO LTD. v. NTPC LTD. 231
[DIPAK MISRA, J.]

"9.3.1 The purpose' of technical evaluation is to check A
J:§P-Onsive and assess the compliance with the requirements
of NTPC.
9.3.2 To ensure effective evaluation ofTechnical Proposals
the Bidders shall provide the necessary details as specified
in Clause 8.4. The Technical evaluation will be for evaluating B
whether the Technical Proposal of the Bidder meets the
following criteria.
(a) Time Schedule to Achieve First Year Coal Production
Target - NTPC shall evaluate the PERT chart submitted
by the Bidder, to determine its completeness; c
reasonableness; and achievability.
(b) Adequacy of the Equipment Plan -The Bidder shall
submit an equipment plan giving details of the equipment
that shall be used by the Mine Operator to provide Mining
Services which sh:fll be not less than the Minimum D
Equipment to be deployed as specified by NTPC at
Schedule 6 of Project Agreement. NTPC shall evaluate
the adequacy of equipment to meet the criteria imposed by
NTPC in terms of quantity of production, quality of coal
produced etc."
E
[emphasis supplied]
7. The controversy in the instant case basically pertains to whether
the appellant meets the qualification criteria as provided under the heading
Technical Criteria that occurs in Clauses 7. I and 7.2 of QR. To appreciate
the same, it is essential to have a look at the bid submitted by the appellant.
F
The appellant had uploaded the proposal on 26.4.2016 by referring to
three mines in support of its stand to meet the QR. The three mines that
have been referred to in the proposal are (i) Mata No Madh, Lignite
Mine, Kutch, GMDC (Mine I); (ii) June Kundada OCP of Western
Coalfield Limited (Mine 2) and (iii) Khadia OCP, Northern Coalfield
Limited (Mine 3). As regards the Mine No. I, the appellant declaring the G
scope of work in the aforesaid Mine had furnished the following details:-

H
232 SUPREME COURT REPORTS [2016] 8 S.C.R.

A
"SI. Particulars Mine 1 (Lignite Project, Mata No
No. Ma.db, Kutch)
10. Bncf descnption of scope ot Turnkey mining Contract involving
work overburden,-intcr burden removal,
cxcavaticm and'or loading oflignite from
B mines face and ancillary activities

11. Drilling ~o
Carried out Drilling on our Qilf eWflisu8eee:lfae!ieg
c own or through subcootrac1ing

Excavation Yes/Ne
Canied out Excavation on our Our ownjsueee&aetleg
own or through subcootractng
D
Hauling Yes/Ne.
Carried out Excavation on our Our own:sueeea1iaeti!l(
own or through subcootrac1ing

E

8. As the proposal would reflect, the appellant had not provided
the information that it had carried out the drilling in the aforesaid Mine,
namely, Mata No Madh. The respondent-owner sent a communication
F on 17.5.2016 seeking certain clarification pertaining to the QR and other
aspects. The High Court has referred to the said communication and we
think it necessary to reproduce the same:-
"Ref:O I/CS-70 l 4-602(Rl )-9-PAA Dated: 17 .OS .2016
To,
G Mis. Montecarlo Limited,
706, Ship Building, Near Municipal Market,
C.G. Road, Navrangpura,Ahmedabad-380 009,
Gujarat, India

H
MONTECARLO LTD. v. NTPC LTD. 233
[DIPAK MISRA, J.)

Kind Attn. Sh. Shekhar Shanna, Sr. General Manager A
Sub: Development and Operation of Dulanga Coal Block
as per IFB No. 40051319; Bid Doc. No.CS-7014-802(Rl)-
9
Dear Sir,
B
1.0 This has reference to your Project Proposal (Techno-
Commercial Bid) against IFB No.40051319 for the subject
package. You are requested to furnish the following
information with respect to the details/documents furnished
in the bid for qualification requirement data:
c
(i) Against QR requirement of Clause 7.1.2 of ITB: It
is observed in the Contract Agreement dtd. 11.02.2014
submitted by the bidder in support of meeting qualifying
requirement for Lignite project Mata No Madh, Kutch,
Gujrat that the necessary activity of drilling as per stipulations
of QR (sr.no. i ofNotes) is not mentioned. The same may D
please be clarified with supporting documents.
(ii) Against QR requirement of Clause 7.2 of ITB:
Details of Other non cash expenses in Million for calculating
Annual Cash Accrual for three year viz. 2013-14, 2014-15
&2015-16 E
2.0 It is requested that the requisite information along with
necessary documents be furnished to us at the earliest,
preferably by 24.05.2016.
3.0 It may please be noted that seeking the above
F
clarifications should not be construed that the bid submitted
by you is considered techno commercially responsive and/
or meeting the Qualification requirements (QR)."
9. The response that was given by the appellant on 21.5.2016 is to
fbe following effect:-
G
"A) Para 1.0 (i) of your above letter against QR of Clause
7.1.2 ofITB: We are attaching the followings:
a)A certificate from GMDC (client of our Lignite Project
at Mata No Math) Vide No.GMDC/MMLG/298/2016-17
H
234 SUPREME COURT REPORTS (2016] 8 S.C.R.

A dated 18.05.2016 mentioning our scope on this Turnkey
Project which includes activities of Mine Planning, Quality
Control, Drilling, Ripping, Dust suppression, Nala Diversion,
preparation of Garland drain, dewatering of Monsoon and
seepage water, preparation and monitoring of haul road for
better hauling as required to complete the mining process.
B
b) Certificates from Northern Coalfields Ltd. (NCL) and
Western Coalfields Ltd. (WCL) are also attached herewith
mentioning drilling as pa11 of the Mining Process of these
projects as ready reference:
C i) NCL Ce11ificate No.GM/KSL/2016/460 dated 31.03.2016
ii) NCL Ce11ificate No.GM/KSL/25 dated 24.04.2016
iii)NCL Certificate No.GM/KHD/OS/2016/43 dated
23.04.2015

D iv)WCL Certificate No. WCL/MA/MGR/JKOC/2015/400
dated 04.12.2015
v) WCL Certificate No. WCL/MA/MGR/JKOC/2015/27
dated 14.04.2016
Ft111her, as you are kindly aware that Indian Lignite deposits
E occur in the Te11iary sediments in southern and western
parts of peninsular shield pai1icularly in Tamilnadu, Rajasthan
and Gujarat. The Overburden and interburden comprises
of Clay, Claystone, mudstone and as well as lignite
[Geologically younger sediments (Formations) then
occurrences of Coal] which can be excavated by hydraulic
F
Shovel dumper combination. As such, in lignite deposits of
Tamilnadu, Gujarat and Rajasthan, Blast hole drilling is
normally not required.
B) Para 1.0 (ii) of your above letter against QR of
Clause 7.2 of ITB:
G
We are attaching the following:
a) Financial certificate of last 3 years
We hope that the above submission clarifies your points on
QR requirement;
H
MONTECARLO LTD. v. NTPC LTD. 235
[DIPAK MISRA, J.]

Ifyour require further clarification/information in this regard, A
kindly inform us. We shall be pleased to provide the same
at your convenience."
I 0. To the said letter, a document issued by the Gujarat Mineral
Development Corporation Ltd (GMDC) dated 18.5.2016 was enclosed.
The said certificate reads as follows:- B
"GMDC/MMLG/298/2016-17 Dated: 18.05.2016
To Whom It May Concern
This is to certify that the Turnkey Mining Contract involving
Overburden/Inter burden removal, Excavation and/or C
Loading of Lignite from mining face and ancillary activities
at Lignite project, Mata No Madh Vide Tender Notice No.
(Rl)/LP/Ol/13-14 dated 30.08.2013, has been awarded to
M/s. Montecarlo Limited, having registered office at 7' 11
Floor, Shilp Building, Nr. Municipal Market, C.G. Road,
Navrangpura, Ahmedabad- 380009, Gujarat, India. D
Name of Work: Turnkey Mining Contract involving
Overburden/Inter burden removal, Excavation and/or loading
of Lignite from mines face and ancillary activities at Lignite
project, Mata No Madh.
E
Name of Contractor : M/s. Montecarlo Limited
LOI No. : GMDC/LP/13306/13-14
Dated: 15/01/2014
Estimated Cost/
Contract Value : 663.04 Cr. F
Awarded Quantity : Over Burden (I I 09.00)
Lac CUM
Lignite (148.00) Lac MT
Contract Period : 28.01.2014 to 27.01.2019
The scope of Project is to carry out mining operation on G
Turnkey basis comprising ofremoval ofover burden, inter
burden and lignite and/or loading from mines faces using
hydraulic showel and dumper combination and other
activities like Mine Planning, Quality control, Drilling,
H
236 SUPREME COURT REPORTS [2016] 8 S.C.R.

A Ripping, Dust suppression, Nala Diversion, preparation of
Garland drain, dewatering of Monsoon and seepage water,
preparation and monitoring of haul road for better hauling
etc. as required to complete the mining process.
Quantities Executed (year-wise) by Mis. Montecarlo
B Limited are shown below:
Sr. Period Over Burden Lignite Total Work Done
No Removal (cum) Dispatched Amount (Rs.)
(MT)
1 28.01.2014 18,24,674.03 7,64,791.18 33,59,23,240.00
c To
31.03.2014
2 01.04.2014 1,37,54,520.76 32,10,961.46 135,57,06,364.00
To
31.03.2015
D 3 01.04.2015 1,45,66,445.22 13,68,861.67 55,38,02.,253.00
To
31.03.2016

Mis. Montecarlo Limited successfully carried out Dewatering of
E Mine. Yearwise details are shown for dewatering by deploying high
capacities of Diesel and Electrical operated pump:

Sr. No. Period Dewatering in Lac m'
1. 01.04.2015 65.0
F To
31.03.2016

G This certificate is issued as per their request vide letter no. ML(P)I
mnl4J901clt/2016-171020 date: 18.05.16 for applying tender."
11. On the basis of the said communications, the respondent formed
an opinion that the bid of the appellant was technically non-responsive.
The reason for arriving at the said conclusion by the respondent was
H
MONTECARLO LTD. v. NTPC LTD. 237
[DIPAK MISRA, J.]

that the appellant did not have necessary experience of drilling for blasting A
purposes. As the appellant was regarded as technically non-responsive,
it invoked the jurisdiction of the High Court challenging the said
determination made by the respondent. It was contended before the
High Court that the tender documents that contained QR was of the
experience of a bidder in only drilling, excavation and hauling, etc. and
B
not blasting or drilling for blasting purposes. It was further urged that
the scope of work for Dulanga Mines projects which was taken into
consideration by the respondent in evaluating the technical proposal of
the petitioner as being non-responsive had,been wrongly understood.
The stand of NTPC before the High Court was that the assessment by
the Technical Committee was absolutely justified and the writ petitioner c
therein did not meet the QR and, therefore, was treated as non-
responsive.
12. The High Court referred to how tender documents that
reflected the nature of mine operations, how blasting is an inherent part
and drilling is differently understood in the sense that the appellant had D
understood. Thereafter, placing reliance on Tata Cellular v. Union of
lndia 1 and Michigan Rubber (India) Ltd. v. State of Karnataka and
Ors. 1 , it came to hold that the decision taken by the owner was correct
and did not adversely affect public interest but subserved the public
purpose. Being of this view, the High Court dismissed the writ petition.
Hence, the present appeal by special leave. E

13. We have heard Mr. P. Chidambram and Mr. Harin P. Raval,
learned senior counsel with Mr. Sandeep Singh, learned counsel for the
appellant and Mr. Vikas Singh, learned senior counsel with Mr. Ankit
Jain, learned counsel for the respondent.
F
14. The dispute and the dissention between the parties rest on
how the Chapter 7 (QR) ofITB that contains Clause 7 .2 that deals with
technical criteria is to be understood. We are not really concerned with
Clause 7.1. The centrality of controversy hinges on the interpretation to
be placed on Clause 7 .1.2. It is submitted by Mr. Chidambram, learned
senior counsel appearing for the appellant that the appellant satisfied the G
condition as postulated in the QR under Clause 7.1.2 (a) and Clause
7.1.2 (a) stipulates that 23 Million BCM of aggregated volume of
overburden and/or coal/lignite from a maximum of seven open cast mines
1
(1994)6 sec 651
2 (2012) s sec 216 H
238 SUPREME COURT REPORTS [2016] 8 S.C.R.

A of coal/Lignite, in any year and clause 7.1.2. (b) lays down that at least
11.5 Million BCM ofcomposite volume of overburden and coal/lignite
from single open cast mine in any year, out of which at least 3 million
tones shall be coal/lignite. Learned senior counsel would lay emphasis
on the documents which the appellant had filed to show that it had
operated and produced from single mine 11.5 Million BCM of composite
8
volume of overburden and coal/lignite from single open cast mine in a
year. Mr. Singh, learned senior counsel resisting the said stance would
urge that the appellant does not satisfy the condition of drilling as is
· required under the QR regard being had to the nature of work. In this
context, we may usefully take note of the definition of"operated". The
c said term, as defined, means activities of drilling and excavation. The
documents produced by the appellant indicate the scope of work including
activities ofopcration of coal/lignite mine. It reads as follows:-

"l 0. The scope of work includes the following activities of
D operation of the Coal Lif;nitr ~line
Drilling ¥es.No Yes.N<i Yes•Ne
CatTied out Guf (1Wtt:'sfih Our ewa' Gm
Drilling on e<int-rae#ttg sub ewftiSUb
our own or contracting contracting
E throucrh sub
"'
contracting
Exca\·a ti on YesiNe Yes•Ne Yes:Ne
Carried out Our own/~ Our own/sub Our OW!l1
Excavation on eetttraeting eontraetiag ~
our own or ~
F 0
through sub
contracting
Hauling Yes·'NB Yes No Yes Nu
Carried out Om own sub ' Our O\\'Jl. Our own·
G
Hauling on et7!:lffattttl~
- soo suh
our 0\\'11 or ~~ eootraeting
through sub
contracting

H
MONTECARLO LTD. v. NTPC LTD. 239
[DIPAK MISRA, J .]

---·~---~-- -·-- A
rs.N
o.
Particulars Mine l Mine2 Mine3

11 Annual Year (From Ol.04.W14 Year(from 01.04.2014 Year(From 01.04.2014
Production to 31.03.2015) to 3!.0l.2015) to 31.03.2015)
in Million
Bank Cubic
Meters. B
Bidder ro
refer Note (?ool,i Overburden Coal1 j Overburden Gwlibignite j Over

~ '.
OualifYtnu (in MT) BCM) (in
I
(vii) of the Lignite (in Million bigriite (in Million ~
BCM)
burden
(in
Requirement MT) Million
s of Chapter BCM)
7 c

3.210 13.i54 \.l21 • 3.386 . I 12. iQJ"
Million Millien
Tonne Tonne D

I
15. We have already analysed what is covered by the word
"operated" as per !TB. In this regard, the High Court has referred to
Schedule II that deals with description of mining services. Clause 5 E
deals with the Mine Operations. We think it appropriate to reproduce
Clauses 5.1, 5.9 and 5.10 of the same:-
"5. I. The Mine Operator shall construct and operate the
Site in accordance with the followi.ng scope:
(a) Plan the mine (Site), its development and construction F

(b) Strip OB and store such OB on dumps
(c) Mi.ne and extract coal in accordance with the
requirements of Owner
(d) Make provisions for HEMM, other mining machinery G
and its effective maintenance
(e) Implement, and comply with EMP and environmental
clearances;
(f) Construction, maintenance and operation of mine
H
240 SUPREME COURT REPORTS [2016] 8 S.C.R.

A dewatering plant, sump, and garland drains with de-silting
provisions
(g) Construct and maintain all access ways and haul roads
(h) Arrangement and use of explosives, as per Indian
Explosives Act
B
(i) Drilling and blasting
(j) Construction and maintenance ofwokshops, stores etc
as per the requirement.
(k) Construction, Operation and maintenance of complete
C power supply system.
(I) Mine illumination as per prevalent laws
(m)Arrangement of petrol/diesel, oil and lubricants.
(n) (if applicable) control any spontaneous combustion on
D Site
(o) Conduct advance infill drilling.
(p) OB dump management including rehandling of internal
dump as per Environmental Clearance.
E (q) Progressive mine closure with effective land reclamation
plan in accordance with approved mine closure plan. The
Mine Operator shall submit to the Owner the annual financial
statement of cost incurred towards progressive mine closure
activities duly certified by National Environmental
Engineering Research Institute (NEER!) or Central Mine
F Planning & Design Institute Limited (CMPDIL) or any
other institute as may be notified by the Government for
these purpose to an acceptable level by the Coal Controller.
(r) POL Store shed
(s) Development of Power Supply Distribution System
G
beyond 33KV switchgear breaker terminals of Darlipalli
STPP for various equipments/facilities included in Mine
0.perator's scope.
x x x
H
MONTECARLO LTD. v. NTPC LTD. 241
[DIPAK MISRA, J.]

5.9 Blasting: A
Blasting shall be required for coal and selectively for
overburden with the objective of achieving good
fragmentation so that the excavators can operate at high
levels of efficiency.
5.10 Overburden and Inter burden Removal: B

The terms overburden and interburden are each included
in the term overburden below unless noted otherwise. The
Mine Operator shall ensure the following in respect of
Overburden removal:
c
(a) The Mine Operator shall assess the admissibility of
accommodation of OB volume in the external dump/in-pit-
dump and accordingly if warranted, notify or seek necessary
clearances/ approvals from appropriate authority, keeping
in view the stipulation of MoEF, contained in Forest
Clearance Stage - 1, dated 10.01.2014. D
(b) The Mine Operator's daily and weekly scheduling shall
be consistent with the AAPP. All levels, benches, haul roads,
and highwalls shall be consistent with the Monthly Production
Plans and the statutory requirements.
E
(c) Weekly digging plans shall contain recommended
methods for excavation and removal of overburden including
blasting plans ifneeded.
(d) The Owner shall not be responsible for any costs
associated with the Mine Operator inefficiently scheduling
F
daily and weekly activities.
(e) The Mine Operator considers itself fully aware of
conditions of the Overburden in the mining area. No claim
for lack of knowledge of the site conditions shall be allowed.
(f) Reasonable efforts shall be made to keep coal clean G
and free from soil, overburden, rock, clay, parting bands,
steel, stones, timber, rags, equipment parts or any other
deleterious material.
(g) The Mine Operator shall ensure the quality of the coal
H
242 SUPREME COURT REPORTS [2016] 8 S.C.R.

A is not affected by its mining methods which cause coal ash
to rise above the target levels presented in AAPP.
(h) Water in the pit shall be kept to a minimum.
(i) Fires or hot spots in the coal shall be handled expeditiously
and not transported to the crusher. The Owner shall be
B notified of any significant occurrence. Oxidized coal shall
be treated as Overburden for compensation purposes.
(j) Any equipment repairs on the coal bench shall be cleaned
after use to prevent contamination.
C (k)All equipment shall undergo pre shift inspections including
loose bucket teeth or other parts.
(I) The Mine Operator shall be responsible to provide
equipment to suit the varying thickness of the seams and
partings which must be mined.
D (m) The Owner may instruct the Mine Operator to maintain
an overburden or inter burden cover over in-pit coal
inventory prior to mining.
(n) If, during the excavation oroverburden, any coal is found,
the Mine Operator shall inform the Owner and seek
E instructions before proceeding. Overburden shall be hauled
and placed in areas as shown in the Mining Plan.
(o) Reject coal placed in overburden or interburden dumps
shall be buried in 5 meter lifts and compacted to ensure no
ingress of air which could cause spontaneous combustion.
F The Mine Operator shall be required, at its own expense,
to dig out, compact and replace any smouldering dump area.
(p) Placement of overburden shall be carried out with due
regard to water run off, final topography, and Jong term
ground stabilization.
G (q) Any erosion or land slip in areas of placed materials
shall be rectified by the Mine Operator at its own expense."
I 6. Clause 5.7.2. deals with drilling and blasting. It is as follows:-
"5.7.2. Drilling & Blasting
H
MONTECARLO LTD. v. NTPC LTD. 243
[DIPAK MISRA, J.]

Crawler-mounted pneumatically operated down the hold A
drilling rigs are capable to meet the future requirement of 8
m/hrwill be deployed for OB. R.B.H. drills will be used for
drilling about 160 mm dia. holes in coal.
After shot holes are drilled into the horizontal bench cut by
the shovel, the faces are blasted using explosives and B
detonators. Coal is also extracted after blasting off the coal
faces.
Drilling & Blasting would be required both in OB and Coal,
benches, before excavation by shovel. Except for coal
benched which will be mined by CSMs Heavy ANFO type/ c
Slurry Emulsion is proposed to be used based on the daily
requirement. However, flexibility may have to be provided
for usage of suitable alternative/available explosives as per
the requirement."
17. We have referred to these clauses which are technical but D
hey are fundamental to understand the QR. They clearly demonstrate
that drilling is imperative. Mr. Chidambram, learned senior counsel for
the appellant would argue with all the conviction at his command that
the appellant is engaged in drilling in Lignite and the tender requirement
was coal/lignite. According to the learned senior counsel, drilling in lignite
would meet the requirement but the owner has travelled beyond the E
postu Iates of the QR to insist on drilling for the purpose of blasting. We
have already referred to the certificate issued by GMDC in favour of
the appellant and the documents filed by the appellant. The High Court
has considered the documents and opined that the documents filed in
rnpport of the QR are substantially inadequate. Adverting to the facet of F
:!rilling, the writ court has opined that there is specific use of the words
'drilling for the purposes of blasting". It is urged by Mr. Chidambram
md Mr. Raval, learned senior counsel that in the absence of a definitive
prescription, the court cannot add an attribute or quality component to ·
the qualifying clause. Jn this regard, we may usefully refer to certain
authorities. In Sterling Computers Limited v. Mis M & N Public"tio11s G
Limited & Ors 3 , the Court has held that under some special
circumstances a discretion has to be conceded to the authorities who
have to enter into contract giving them liberty to assess the overall
:;ituation for purpose of taking a decision as to whom the contract be
'(1993) 1sec445
H
244 SUPREME COURT REPORTS [2016] 8 S.C.R.

A awarded and at what terms. It has also been observed that by way of
judicial review the court cannot examine the details of the terms of the
contract which have been entered into by the public bodies or the State.
Courts have inherent limitations on the scope of any such enquiry.
18. Jn Tata Cellular (supra) a three-Judge Bench after referring
B to earlier decisions culled out certain principles, namely, (a) the modern
trend points to judicial restraint in administrative action, (b) the court
does not sit as a court of appeal but merely reviews the manner in which
the decision was made, (c) the court does not have the expertise to
correct the administrative decision. If a review of the administrative
decision is permitted it will be substituting its own decision, without the
c necessary expertise which itself may be fallible, and (d) the Government
must have freedom of contract and that permits a fair play in the joints
as a necessary concomitant for an administrative body functioning in an
administrative sphere or quasi-administrative sphere. Hence, the Court
has laid down that the decision must not only be tested by the application
D of Wednesbury principle of reasonableness (including its other facts
pointed out above) but must be free from arbitrariness not affected by
bias or actuated by mala fides.
19. In Jagdisli Manda/ v. State of Orissa and Ors' the Court
has held that a contract is a commercial transaction. Evaluating tenders
E and awarding contracts are essentially commercial functions. Principles
of equity and natural justice stay at a distance. If the decision relating to
award of contract is bona fide and is in public interest, courts will not, in
exercise of power of judicial review, interfere even if a procedural
aberration or error in assessment or prejudice to a tenderer, is made out.

F 20. In Master Marine Services (P) Ltd. v. Metca(fe &
Hodgkinson (P) Ltd and Anr5, it has been ruled that the State can
choose its own method to arrive at a decision and it is free to grant any
relaxation for bona fide reasons, ifthe tender conditions permit such a
relaxation. It has been further held that the State, its corporations,
instrumentalities and agencies have the public duty to be fair to all
G concerned. Even when some defect is found in the decision-making
process, the court must exercise its discretionary powers under Article
226 with great caution and should exercise it only in furtherance of public
interest and not merely on the making out of a legal point.
'· (2007) 14 sec 517
H '(2005) 6 sec 138
MONTECARLO LTD. v. NTPC LTD. 245
[DIPAK MISRA, J.]

21. In B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. A
mu/ Ors. 6 a two-Judge Bench, after referring to series of judgments
has culled out certain principles which include the one that where a
decision has been taken purely on public interest, the court ordinarily
should apply judicial restraint.
22. In Michixan Rubber (India) Ltd. (supra) the Court referred B
to the earlier judgments and opined that before a court interferes in
tender or contractual matters, in exercise of power of judicial review
should pose to itself the question whether the process adopted or decision
made by the authority is mala fide or intended to favour someone or
whether the process adopted or decision made is so arbitrary and
irrational that the judicial conscience cannot countenance. Emphasis c
was laid on the test, that is, whether award of contract is against public
interest.
2~. Recently in ~{cons li!frastructure Ltd. v. Nagpur Metro
Rail Corporation Ltd. 7 a two-Judge Bench eloquently exposited the
test which is to the following effect:- D
" 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, E
unless there is mala fide or perversity in the understanding
or appreciation or in the application of the terms of the
tender conditions. his 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 F
but that by itself is not a reason for interfering with the
interpretation given:''
24. We respectfully concur with the aforesaid statement of law.
We have reasons to do so. In the present scenario, tenders are floated
and offers are invited for highly complex technical subjects. It requires
G
understanding and appreciation of the nature of work and the purpose it
is going to serve. It is common knowledge in the competitive commercial
field that technical bids pursuant to the notice inviting tenders are
, r2006J 11 sec 548
7
2016 (8) SCALE 765
H
246 SUPREME COURT REPORTS [2016] 8 S.C.R.

A scrutinized by the technical experts and sometimes third party assistance
from those unconnected with the owner's organization is taken. This
ensures objectivity. Bidder's expertise and technical capability and
capacity must be assessed 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
B
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 are
concerned, is not comparable to any scheme for allotment. This arena
which we have referred requires technical expe1tise. Parameters applied
c 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 judicial review. Exercise of power of
judicial review would be called for if the approach is arbitrary or malajide
or procedure adopted is meant to favour one. The decision making
process should clearly show that the said maladies are kept at bay. But
D
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 impennissible.
The principle that is applied to scan and understand an ordinaiy instrument
E relatable to contract in other spheres has to be treated differently than
interpreting and appreciating tender documents relating to technical works
and projects requiring special skills. The owner should be allowed to
carry out the purpose and there has to be allowance of free play in the
joints.
F 25. In view of t11e aforesaid analysis, we do not perceive any
infirmity in the judgment and order passed by th'< High Court and,
accordingly, the appeal stands dismissed. In the facts and circumstances
of the case, there shall be no order as to costs.

Kalpana K. Tripathy Appeal dismissed.