Holding

The Authority, not the Executive Committee, may lawfully alter its policy and cancel tenders, and no reason need be assigned for rejection in a contractual tender context.

Summary

The Mumbai Metropolitan Region Development Authority (MMRDA) invited bids for a Convention and Exhibition Centre and the appellant submitted the highest bid, but the Authority later cancelled all bids and re‑tendered, awarding the contract to another bidder. The appellant challenged the cancellation, arguing that the Authority lacked power to alter its policy, that the Executive Committee was the sole body to reject bids, and that reasons for rejection were required. The Supreme Court held that the Executive Committee’s jurisdiction is limited to accepting or rejecting a tender, while the Authority, as a statutory body, may change policy and cancel tenders to re‑examine the project. The Court found that no statutory prohibition existed against the Authority’s policy shift and that reasons need not be given in a purely contractual context. Consequently, the Court concluded that the Authority acted within its legal powers and dismissed the appeals. The decision affirmed that policy decisions of statutory authorities can be altered over time unless they contravene a specific statutory provision or public policy.

Issues considered

The extent of the MMRDA Authority’s power to cancel and re‑tender bids under the Mumbai Metropolitan Region Development Authority Act, 1974.
Whether the Executive Committee is the sole adjudicator for acceptance or rejection of tenders.
The requirement, if any, to assign reasons for rejecting a bid in a contractual tender process.
Whether a change in policy regarding disposal of property vitiates the Authority’s earlier decisions.

Legislation cited

Mumbai Metropolitan Region Development Authority Act, 1974s. 12, s. 14, s. 4, s. 4A, s. 50, s. 7

Subjects

tender cancellationpolicy changestatutory authorityjudicial reviewexecutive committeecontractual obligationsMMRDApublic procurement

Judgment

A RAMCHANDRA MURA RI LAL BHATIAD AND ORS.
v.
STATE OF MAHARASHTRA AND ORS.

DECEMBER 5, 2006

B [S.B. SINHA AND DAL VEER BHANDARI, JJ.]

Mumbai Metropolitan Region Development Authority Act, I974

Bids invited by Authority for development of Convention and Exhibition
-
C Centre-A II bids in response thereto, including the highest, rejected by
Authority, project rendered and granted to highest bidder therein-Correctness
of -Held-Only because there was change in computation of total price
under new tender, it could not be said to be invalid in law-It was a case
where the highest offer was not rejected, but a new policy decision was taken-
D The Authority in law could alter its policy in regard to disposal of its
properties-It exercised its power in canceling tenders to have a re-look at
entire project-Entire policy decision could not be said to be vitiated in law
merely because Authority at one point of time took a stand in Court that it had
thought of setting up Convention Centre of their own without any private
participation-Reasons for rejecting bids were not required to be given as it
E was a ca,.se of decision involving policy change.

Section 7-Executive Committee-Power of approval or rejection of
tenders for projects and schemes of Authority-Scope of-Held-Jurisdiction
of Committee was lif1Jited-It could not (i) cancel entire tender (ii) change
F entire scheme or policy (iii) make alterations in methodology of tender (iv) go
into working of project (v) go into question as to whether project would be
financially v_iable if method of calculation was changed (vi) exercise any
special power.

Power of Authority-Scope of-Held-Authority was a statutory
G authority, consisting of politicians and other responsible officers-While
exercising its power under the Act, it must necessarily take policy decisions-
Though its power was larger and different from that of Executive Committee,
it could not usurp functions of latter.

Statutory authority-Power to deal with contractual matter-Scope of-
H IM
RAMCHANDRA MURARILAL BHATIAD v. STATE OF MAHARASHTRA } 07

~ Held-It is distinct and different from its power in determining rights and A
liabilities of parties-Whereas reasons are required to be assigned in a case
where civil or evil consequences may ensue, same may not be necessary where
it is contractual in nature, save and except in some cases.

Judicial review-Policy decision-Held-It may be changed from time
to time-Only because a change is effected, decision cannot be termed as B
illegal or otherwise vitiated in law-It is more so where ex facie, policy
decision was not contrary to any statute or against a public policy, or Court
was not called upon to exercise its equity jurisdiction.

MMRDA is an authority created under the Mumbai Metropolitan C.
Region Development Authority Act, 1974. Section 7 therefore provided
for constitution and powers of Executive Committee, inter alia, for approval
.. or rejection of tenders for projects and schemes of the Authority. The
Authority invited bids for development of a Convention and Exhibition Centre.
Appellant was one of the several entitles who put in their bids in response.
Their bid wasfound to be the highest. The Authority, however rejected all the D
bids, r~tendered and granted contract to the highest bidder therein. Appellant
filed a writ petition before High Court questioning the right and power of the
Authority to reject at any stage all or any of the bids without assigning any
reason. In response, the Authority conteuded that (i) its decision was in
pursuance of power conferred by the terms of the contract (ii) in view of E
sections 12(1)(b)(d) and (h) and the power to issue directions under S.14 of
the Act, it could, at any stage, review any decision including the decision of
the executive committee and direct either rejection of all bids or issuance of
fresh bids (c) it had decided to set up the convention Centre on its own without
any private participation. The High Court dismissed the Writ Petition holding
that (i) under various provisions of the Act, the authority was entitled to F
acquire, hold and dispose of the property, so it could not be said that its power
in such matters did not include the power to reject a bid invited for projects
and schemes framed by it (ii) the Executive Committee was not sole judge in
matters of approval or rejection of tenders for projects and schemes of the
authorities. Aggrieved by this, the appellant filed the present appeal. G
Appellant contended that (i) the purported major shift in the policy by
the Authority was impermissible in law (ii) the Executive Committee alone
was the sole judge in relation to rejection of bids (iii) in rejecting their bid,
as sufficient and valid reasons were not assigned, the impugned order was
vitiated in law (iv) in accepting the bid of the highest bidder in r~tender, their H
i08 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A offer to pay@ 21120/o per year from the annual turnover from the 21st year
was not considered.

Successful bidder in re-tender, subsequently added as respondent,
contended that (i) the Executive Committee could not have taken a decision
in regard to the change of policy (ii) in re-tender, appellant did not take
B part (iii) procedural lapses, if any, cannot be a ground for judicial review.

The Authority contended that (i) judicial review is not maintainable
as appellant has not disclosed infringement of any constitutional or
statutory right (ii) it was entitled to reject the tender on appreciation of
C professional competence and capacity of appellant to run the centre •
profitably, as well as the fact that prices offered by them were
competitively low, and (iii) the policy being in relation to a mega project
and its judgment being objective, no interference by Court was called for.

Dismissing the appeals, the Court
D
HELD I.I. The Executive Committee is a statutory functionary. The
powers and functions of the authority and the respective committees are
governed by the provisions of the statute, but, then the jurisdiction of the
Executive Committee is limited. It is confined to rejection or acceptance of
the tender. The Authority exercise a larger power. For the said purpose one
E would assume that the Authority had no incidental or a1_1cillary power, but
there cannot be any doubt or dispute that the Executive Committee could not
cancel the entire tender. It could not have caused any change in the entire
scheme or policy. It could not make alterations in the methodology of tender.
It could not have gone into the working of the project It also could not have
F gone into the question as to whether the project would be financially viable if
the method of calculation is changed. 1123-F, G, HJ

Marathwada University v. Seshrao Ba/want Rao Chavan, 11989] 3 SCC
132, referred to.

G 1.2. Further assumption has to be made that the power of the
Executive Committee and the Authority under the Act are diffrent and
the latter for all intent and purport could not usurp the functions of the former.
But in this case, it has not been so done. 1124-BJ

t.3. Executive Committee does not exercise any special power.1125-GI
H
RAMCHANDRA MURAR!LAL BHATTAD v. ST ATE OF MAHARASHTRA 109

Bhavnagar University v. Palitana Sugar Mill Pvt. ltd. & Ors., (2003) 2 A
SCC 111, State of Uttar Pradesh v. Singhara Singh & Ors., 11964) 4 SCR
485, held inapplicable.

Taylor v. Taylor, (1875) 1 Ch. D. 426, 431, referred to.

1.4. The action on the part of the Authority was neither illigal nor without B
jurisdiction. (124-CI

JK. Cotton Spinning & Weaving Mills Co., Ltd. v. State of Uttar Pradesh
& Ors., (1961) 3 SCR 185, distinguished.

1.5. The Authority has not exercised any power forbidden by law. C
The Authority has also not exercised its power in the manner which is not
in accordance with law. (126-D)

2.1. The Authority is a statutory authority. It consists of not only
politicians but also various other responsible officers. It, while exercising
its power under the Act, must necessarily take policy decisions. (127-G) D
2.2. Where as under the 2002 tender the bidder had to quote the rate
of premium in terms of rupees per square meter of FSI and the total
premium separately for C&EC and the Real Estate component subject to
the condition that the rate quoted for the Real Estate component should E
be greater than that quoted for the C&EC, upon having come to know
that the value of the land would be much more, the Authority in the 2005
tender decided that the bidders should be required to quote a fixed rate
of 20,000 per sq.m. of built-up area for total built-up area 65,000 sq.m.
for Convention & Exhibition Centre. Economic viability of the entire
project component, taking into consideration two different compoenents for F
C&EC and the Commearcial Complex, could have been taken differently. The
premium amount was to be quoted higher than Rs. 350 crores for the
Commercial Complex. (127-G, H; 128-A, B)

2.3. It cannot be said that only because a change has been effected
in computation of total price under the new tender, the same was invalid G
in law. (131-F)

3.1. The highest offer has not been rejected. A new policy decision
has been taken. Question is not as to whether the offer of the appellants should
have been rejected but is as to whether the Authority in law could
H
'
I '
110 SUPREME COURT REPORTS (2006] SUPP. 10 S.C.R.

A have altered its policy in regard to disposal of its properties. (129-EJ
Bangalore Medical Trust v. B.S. Muddappa & Ors., (199114 SCC 54,
referred to.

3.2. The Executive Committee in rejecting the tender has not
B exercised its power to reject bid. The power has been exercised by the
Authority in cancelling the tenders so as to enable it to have a re-look of
the entire project. (130-FI

Star Enterprises & Ors. v. City and Industrial Development Corporation
of Maharashtra & Ors., (1990] 3 SCC 280, distinguished.
c
Rajesh Kumar & Ors. v. D.C./. T. & Ors., (20061 11 SCALE 409,
CommissiQner of Police, Bombay v. Gordhardas Bhanji, (19521 1 SCR 135
and Union of India & Ors. v. Dinesh Enginering Corporation & Anr. etc.,
1200118sec491, referred to.

D 3.3. It may be true that the Authorities at one point of time, as was
disclosed in the Counter Affidavit, had thoght of setting up a Convention
Centre of their own and without any private participation, but only
because.there has been a deviation from the said stand would not render
the entire policy decision vitiated in law. (131-A, Bl
E 4. t. A power to deal with a contractual matter and a power of a
statutory authority to exercise its statutory power in determining the rights
and liabilities of the perties are distinct and different. Whereas reasons
are required to be assigned in a case where civil or evil consequenses may
ensue, the same may not be necessary where it is contractual in nature,
F save and except in some cases. (130-B, CJ

4.2. Some reasons may be required to be assigned for rejecting the
bid, but in the instant case, no reason was required to be assigned as there
has been a change in the policy decision. (130-GI

G 5.1. While exercising its jurisdiction of judicial review, the Court is
required to decide the cases before it, keeping the well known principles
therefor in mind and having regard to the fact situation obtaining therein.
No hard and fast rule can be laid down therefor. 1128-BI

Noble Resources Ltd v. State of Orissa and Anr., (200619 SCALE 181,
H relied on.
RAMCHANDRA MURARILAL BHATIAD v. STATE OF MAHARASHTRA 111

Star Enterprises & Ors. v. City and Industrial Development Corporation A
of Maharashtra & Ors., (1990) 3 SCC 280, held inapplicable.

5.2. It is not a case where the Court is called upon to exercise its
equity jurisdiction. It is also not a case where ex facie the policy decision
can be held to be contrary to any statute or against a public policy. A policy
decision may be subjected to change from time to time. Only because a B
change is effected, the same by itself does not render a policy decision to
be illegal or otherwise vitiated in law. (131-DJ

Harminder Singh Arora v. Union of India & Ors., (1986) 3 SCC 247,
distinguised.
c
New Horizons Ltd & Anr. v. Union ofIndia & Ors., {1995J 1SCC478,
and Ram and Shyam Company v. State of Haryana and Ors.,(1985) 3 SCC
267, referred to.

6.1. Appellant stated before the Court that he is ready and willing
to take a part of the contract, viz., construction of the C&EC and pay the same D
amount as has been done by Reliance Industries Ltd. and in addition it would
pay 2.5% of its annual turnover from the Convention Centre from the 21st
year, as was initially offered. [132-C)

6.2. Appellant did not participate in the second bid. The tender E
process is complete. Before the Court only a higher bid has been given.
Appellants could have submitted its bids pursuant to the new tender and
new conditions, even without prejudice to its rights and contentions in this
appeal. The stipulations made in 2002 tender could have been repeated
by it so as to demonstrate before the experts comprising members of the
· Executive Committee that its bid was the highest. If, in view of the change F
in the policy decision, the Authority does not intend to become a partner
in the profit making and opt for having the entire bid amount at one go
instead of waiting for 20 years, it cannot be faulted. (132-D, E, F)

6.3. It, however would not mean that the Authority or the Executive
Committee would not be entitled to take note of the offer of Appellant. It G
may do so. It would not further mean that if the terms of new tender are
violative of the provisions of the master plan, the same would not be-
suitably dealt with. (134-B)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5610 of2006.
H
112 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A From the final Judgment and Order dated 20.1.2004 of the High Court
of Judicature at Bombay in W.P. No. 2942/2003.

R.F. Nariman, Dr. AM. Singhvi, P.N. Gupta, H. Devarajan and N.V.
Vimadalal for the Appellants.

B Shekhar Naphade, Harish N. Salve, Milind Sathe, A.S. Bhasme, Ravindra
Keshavrao Adsure, Atul S. Dayal, K.R. Sasiprabhu,_ Ashwin Dave, Meenakshi
Grover and Chandarchud for the Respondents.

The Judgment of the Court was delivered by

C S.B. SINHA, J. Leave granted.

The Mumbai Metropolitan Region Development Authority (for short,
'the Authority') was created under the Mumbai Metropolitan Region
Development Authority Act, 1974 ('the Act'). It conceptualized the idea of
establishing a Convention and Exhibition Centre_ ('C&EC'). Pursuant thereto
D and in furtherance thereof it called for "Expression of Interest for development
of C&EC" in Sandra Kurla Complex. An advertisement was issued inviting
'Expression of Interest for development of C&EC. Appellant No. I, pursuant
whereto and in furtherance whereof, entered into a Memorandum of
Understanding (MoU) with Mis. Larsen & Toubro Ltd. (L&T) for setting up
E such a complex. It also conducted conference of investors therefor. It
submitted its tender on 7.4.2003, highlighting :

(a) Entire ground of75,000 sq.m. would be required for international
standard C&EC.
(b) They have formed a consortium for bidding for the said project
F and giving the names of the members of the consortium as
including L&T and IMAG (Germany).
(c) Letters of acceptance from L&T was also annexed to show its
participation.
(d) The Authority was offered equity participation to the extent of
G 5% of the total equity base.

Several other companies also submitted their tenders.

The tenders were to be considered at three stages and thus, three different
covers were to be submitted along with tenders. The first cover contained
H
RAMCHANDRA MURARILAL BHAITAD v. STATE OF MAHARASHTRA [S.B. SINHA,J.] 113

compliance with minimum eligibility criteria, the second cover contained A
financial bid and the third one contained technical and business proposals.
The technical bid was opened on 7.5.2003. The financial bid was thereafter
opened which was contained in second cover, on 8.5.2003. Appellant was
the highest bidder having offered 91.514 crores. Mis. Reliance Capitals Ltd.
was said to be the lowest bidder therein. The offer of the bidders thereof are
as under : B

I. Mis. Shapurji Pallonji & Co. Ltd. Rs.50.005 Crores.
2. Mis. Reliance Capitals Ltd. Rs.13.032 Crores.

3. Mis: R.M. Bhuther & Co. Ltd. and
its Associate companies in consor- c
tium with L&T Ltd. Rs. 91.514 Crores.
3rd Cover thereof was opened thereafter and the Authority, on 26.6.2003
informed Appellants that it had decided to arrange a presentation on the
business proposal by them on 3.7.2003. Pursuant thereto they made a
presentation on 4.7.2003. D
Appellants, by a letter dated 29.8.2003, informed the Authority that :

(a) reputed concerns like L&T and IMAG were associated in the
project.

(b) A presentation was made on 4th July, 2003, a copy whereof was
E
enclosed.
(c) Thereafter it did not receive any query from the Authority.

(d) List of business partners shown with details of Convention projects
of L&T and business of IMAG. F
(e) Role of IMAG was also set out.

The Authority, however, took a decisio.n to reject all the bids on 1.9.2003,
which was said to have been communicated to Appellants by a fax message
on 22. 10.2003.
G
Allegedly, the news item appeared in the 'Economic Times' on
2.10.2003, wherein, inter alia, it was reported that :

(a) The Authority is close to finalizing the much talked about
Convention centre in Bandra Kurla Complex.
H
114 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R. ~·

A (b) An official of the Authority had stated that they were trying to
get private participation and three bidders had been finalized and
in a few days the plans for the Centre would be finalized in an
area of 5.5 hectares.

Appellant issued a letter to the Chairman of the Authority, in terms
B whereof he was, inter alia, informed that the project would start getting yield
only after 12 years from the date of commencement thereof. It was furthermore
_,,/informed that its consortium members included L&T and IMAG.
(/
It was contended :

c (i) The company has offered highest bid price for the land at BKC for
a reserved plot for C&EC since the company is interested in bringing
up an international standard Exhibition Centre, a long over-due
infrastructure asset for a city like Mumbai inspite of reserved plot
(restricted utility) area with high gestation period and longest break
even which is almost about 7 years. In all, the project starts getting
D yield only after 12 year5 from date of commencement of construction.

(ii) It has also been the contention of the company to relocate the
asset base of the company on account of core competency of the
company in the field for more than 50 years and intending to continue
to command on industry.
E
(iii) As per the press release for a commercial block bidding invited
by the Authority, it was awarded at Rs. 25,000/- per square metre in
spite of having a total flexibility to exploit the commercial aspect vis-
a-vis an offer given by the company for the reserved plot for
convention centre at the rate of Rs.14,642/- per square metre.
F
(iv) Company also expressed that the projects of such type are always
being given land at very concessional rate. Statistics indicates that
world over such exhibition centres are either funded by way of
concessional land price or absolute government contribution by way
of land to make the project to early break even.
G
The expertise of L&T and IMAG in setting up Exhibition Centres was
again highlighted by a letter dated 20.10.2002, therein it was alleged:

(a) The Authority had informed in the presence of other bidders that

H
.. RAMCHANDRA MURARilAL BHAITADv. STATE OF MAHARASHTRA [S.B. SINHA, J.J 115

the consortium led by the appellants were the successful bidders. A
(b) Sorrie committee members informed that the matter had not been
decided on 1.9.2003 and the matter was deferred till the next meeting
to be held on 27.10.2003.

(c) The detailed history was set out including the fact that Reliance B
Capital had quoted Rs.13.032 crores against Rs.91.514 crores quoted
by Appellants.

(d) L&T and IMAG were the consortium members and the decision
would have an international impact.

A writ petition was filed before the Bombay High Court by Appellants, C
inter a/ia, questioning :

(a) the validity of clause 2.4 of the Request for Proposal in which the
Authority reserved the right to reject at any stage all or any of the
bids without assigning any reason.
D
(b) the power of the Authority to cancel or reject the bids.

(c) the cancellation of the bid by the decision purported to have been
made on 1.9.2003.

The contentions of Respondents before the High Court were : E
(a) the decision to reject all bids is in pursuance of the power was
conferred by the terms of the contract.

(b) the authorities acted reasonably and fairly and have now reached
a decision to set up the convention centre on their own without any F
private participation.

(c) By virtue of section 12(l)(b)(d) and (h) and the power to issue
directions under S.14 of the Act, it could, at any stage, review any
decision including the decision of the executive committee and direct
either rejection of all bids or issuance of fresh bids. G
The writ petition filed by Appellants was dismissed by the High Court
holding:

A. The Executive Committee is not the sole judge in matters of
approval or rejection of tenders for projects and schemes of the H
.
116 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A authorities.

B. In view of sections 12, 13, 14 and other provisions of the Chapter,
the power of the Authority cannot be whittled down or restricted.

C. It being the authority entitled to acquire, hold and dispose of the
property it cannot be said that its power in such mattes will not
B
include the power to reject a tender or bid which is invited for projects
and schemes framed by it.

D. In exercise of the powers under Article 226 it could not act as an
Appellate Authority to review of supervise the functions of authorities
C like the Mumbai Metropolitan Region Development Authority.

E. Considering the material on record it cannot be held that the
Authority acted unreasonably unfairly or in an unjust manner.

F. The Authority consisting of people possessing expertise and skill
in the field its decision to develop the property as a C&EC by itself
D cannot be faulted with.

G. It is not a case where Article 14 can be said to have been infringed.

H. Jt cannot be said the facts which are pleaded are not based on
evidence or materials which are not annexed to the counter affidavit.
E
I. Reasons in such matters can. be gathered from files/records
maintained by the authorities.

A review petition filed thereagainst was dismissed.

F Appellants filed the special leave petition on 29.10.2004 against the
order dated 20.1.2004 as also against the order dated 11.10.2004 dismissing
the review petition.

In its counter affidavit filed before this Court the Authority, inter a/ia,
disclosed that the rate of premium for the commercial properties was increased
G from Rs.25,000/- per square metre to Rs.42,500/- per square metre. It was
further disclosed that the Authority called for fresh tenders for development
of 5.5 hectares as C&EC and 2.0 hectares for a commercial complex, in
terms whereof the bidders were required to quote separately for C&EC and
Real Estate Components. Whereas the rate for C&EC was fixed at 130
crores (Rs.20,000/- per square metre); for the Real Estate Component the
H
RAMCHANDRAMURARILALBHATIADv. STATEOFMAHARASHTRA[S.B. SINHA,J.] l l 7

bidder was required to quote higher than 350 crores (i.e. higher than Rs. 70,000/ A
- per square metre). It was further stipulated that the successful bidder was
required to pay 50% of the compensation amount within one month of
acceptance thereof and the rest 50% within three months thereof. The other
terms and conditions and procedure for evaluating bids, however, remained
the same. A supplementary affidavit was filed by Respondents on 20th
February, 2006, wherein it was brought to this Court's notice that in response
B
to the tender floated in 2005, Reliance Industries Ltd. had bid
Rs.974,00,00, 111/- for the commercial portion and the fixed price of Rs.130
crores for the C&EC. Reliance Industries Limited thereafter was directed to
be impleaded as a party by an order dated 24.4.2006, wherein this Court
recorded : ~

"These matters pertain to the construction of a Convention-cum-
Exhibition Centre and commercial complex at Bandra Kurla, Mumbai.
The petitioner before us is the unsuccessful bidder who has challenged
the action of the Mumbai Metropolitan Region Development Authority
(MMRDA) cancelling all the bids at an earlier stage. Despite the D
application made by the petitioner, we declined to grant injunction in
the matter. As a result, MMRDA re-tendered and we are informed
that the highest bid was by Reliance Industries Limited, which is said
to have been granted the contract and paid a sum of Rs.552 crores.

The petitioner desires to demonstrate to this Court (a) that the bid E
was cancelled by the MMRDA, which had no jurisdiction to do so
under the Act; and (b) that there was ma/a fides in cancelling all the
bids as it was intended to engineer the re-tendering process to favour
the party who has now succeeded. To demonstrate his bonafides, the
petitioner's counsel states that the petitioner would not only match
F
the bid of the presently successful party only for the Convention
Centre, but that he would also pay the amount at one go instead of
paying it over a period of time.

We are informed that there is another party who is involved. Mr.
R.F. Nariman, the learned senior counsel, states that the petitioner
G
would move an application to implead that other party (Reliance
Industries Limited)."

The Reliance Industries Limited was impleaded as a party to this appeal
thereafter.
H
118 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A Mr. R.F. Nariman, learned Senior Counsel appearing on behalf of
Appellant- in support of this appeal would contend that-

(i) the purported major shift in the policy by the Authority was
impermissible in law;

B (ii) rejection of the bid offered by the Authority was wholly illegal
as the Executive Committee alone was the sole judge in relation
. thereto;

(iii) in accepting the bid of Reliance Industries Ltd., the offer of the
appellants that they would pay @2 112% per year from the annual
C turnover from the 21st year had not been considered;

(iv) in rejecting the tender of the appellant, the Executive Committee/
Mumbai Metropolitan Region Development Authority was required
to assign sufficient and valid reason; and the same having not been
done, the order impugned in the writ petition was vitiated in law.
D
Mr. Harish N. Salve, learned Senior Counsel appearing on behalf of the
Reliance Industries Ltd., on the other hand, would submit that-

(i) th~ Executive Committee could not have taken a decision in regard
to the change of policy;
E (ii) when the second tender was floated, Appellant did not take part
therein;

(iii) procedural lapses, if any, cannot be a ground for judicial review.

Contentions of Mr. Shekhar Naphade, learned Senior Counsel'appearing
F on behalf of the Authority were-

(i) judicial review is not maintainable as Appellant has not disclosed
infringement of any constitutional or statutory right;

(ii) the Authority was entitled to reject the tender on appreciation of
G professional competence and capacity of Appellant to run the centre
profitably, as well as the fact that prices offered by them were
competitively low; and

(iii) the policy being in relation to a mega project and the judgment
of the authority being objective criterion, no interference is called for
H
RAMCHANDRA MURARILAL BHATT AD v. STATE OF MAHARASHTRA [S.B. SINHA,J.) 119

by this Court. A
The Act was enacted for forming Brihan Mumbai and certain areas
round about into a Mumbai Metropolitan Region. Section 4 thereof deals
with the composition of the Authority. Section 4A provides for powers and
functions, inter alia, of its Chairman and Metropolitan Commissioner. Section
7 provides for constitution and powers of Executive Committee. Clause (iii) B
of Sub-Section (3) of Section 7 reads as under :

"7. (3)(iii) Approval or rejection of tenders for projects and
schemes of the Authority;"

Section 12 of the Act provides for powers and functions of the Authority. C
Clause (b) of Sub-Section (I) of Section 12 deals with the power ofreviewing
any project or scheme for development which may be proposed or may be
in the course of execution or may be completed in the Metropolitan Region.
Clause (d) thereofrefers to execution of projects and schemes and Clause (h)
provides for co-ordination in execution of the project or schemes for the D
development of the Metropolitan Region. Pursuant to or in furtherance of its
regulation making power contained in Section 50 of the Act, regulations
were framed by the Authority, known as the Mumbai Metropolitan Region
Development Authority (Disposal of Land) Regulations, 1977 (Regulations).
Regulations 7 and 9 of the Regulations are as under :
E
"7. Disposal of land by offers to Government, Local Authority or
Public Sector Undertaking

Where the Authority determines to dispose of land by making
.offers to the Government, Local Authority or Public Sector
Undertaking, the offers shall be made by the Metropolitan F
Commissioner in such form as he may decide, incorporating the terms
and conditions of offers determined by the Authority which shall
include the condition that the offer shall remain open and valid for
acceptance for a period of 30 days and shall lapse if it remains
unaccepted by the expiry of this period; provided that it shall be
lawful for the Metropolitan Commissioner to renew any lapsed offer G
on an additional condition that the Government, Local Authority or
Public Sector Undertaking, as the case may be, shall pay interest at
the rate of 18% per annum over the premium specified in the lapsed
offer with effect from the date on which the lapsed offer was made;
provided further that nothing contained herein shall authorize the H
120 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.
..
A Metropolitan Commissioner to renew any lapsed offer after three
months of its lapse."

Regulation 9 provides for the mode and manner of payment of premium.

Sub-Regulation (ii) of Regulation 9 reads as under :
B
"9(ii) Notwithstanding anything contained in the foregoing Clause
to contrary, if there shall a scheme fonnulated and sanctioned by the
Authority to erect or to finance erection of a building or buildings on
land agreed to be leased to the Government, a Local Authority or a
Public Sector Undertaking to subserve the development of the
c Metropolitan Region or any part thereof and to grant in lease such
building or buildings to th.e concerned government, Local Authority
or Public Sector Undertaking it shall be lawful to agree with the
concerned Government local authority or Public Sector Undertaking
to recover the premium agreed to be paid in consideration of the
lease of such building or buildings in yearly installments, not exceeding
D ten in number."

We may also notice some of the provisions of "Request for Proposal
for Grant of Lease of Land for developing and operating a Convention and
Exhibition Centre". Clause 3.15 defines "successful bidder" to mean the
E bidder selected according to the evaluation criteria as detailed in Section 7
for grant of lease of land. The concept of Convention and Exhibition Centre
is contained in Clause 4.3 thereof. Clause 5 provides for specification of
C&EC. Clause 5.1 reads as under :

"5.1. The C&EC facility for Phase I is estimated to require
F approximately 35,750 sq.m. of built up area which will be reckoned
as 44,525 sq.m. for computation of FSI after allowing for height in
excess of 4.20 m. for exhibitions areas. In Phase II there is a provision
of a further I 0,650 sq.m. of built up area (which will be reckoned as
15,975 sq.m. for computation of FSI for Exhibition areas having
height in excess of 4.20 m) that is to be used for further expansion
G of exhibition areas having at least 2 additional exhibition halls having
an area of 5000 sq.m. each."

The total built-up area comes to about 60,500 sq,m.

Provision of Convention Auditorium was made in Clause 5.3. Clause
H 7 provides for submission and evaluation of bids stating that interested parties
- RAMCHANDRA MURARILAL BHA ITAD v. STA TE OF MAHARASHTRA [S.B. SINHA, J.] J 2 J

shall submit their bids in three separate sealed covers : (1) Cover 1 should A
contain compliance in regard to minimum eligibility criteria. Evaluation of
minimum eligibility criteria is contained in clause 7.15 in the following terms:

"7.15 The objective of the minimum eligibility criteria is to short list
Bidders who have :
B
e The financial strengths necessary to contribute and/or arrange
the funds required to execute the Project in the desired time
frame.
e The technical skills necessary to design, construct, operate and
maintain the Facility as per the Principles of Good Industry C
Practice.
e The commercial skills necessary to market the Facility and
successfully develop business.

Clause 7.17 provides for the eligibility criteria being :
D
e "Tangible Net worth not less than Rs. 750 Million as per the
latest audited financial statement.
• Annual turnover not less than Rs.500 Million as per the latest
audited financial statement.

• Net Profit not less than Rs. 50 Million as per the latest audited E
financial statement or Average annual net profit of the last three
financial years not less than Rs.50 Million."

Category "I", related to field of activity defined as Convention &
Exhibition Centres, Hotels, Restaurants and Banquet Halls.
F
Clause 7.22 provides for Category "II" to include an indirectly related
field of activity defined as shopping centers, commercial complexes, housing
or office complexes, retail stores, entertainment centres and amusement parks.
Clause 7.23 provides for the eligibility criteria to show that the bidding
company must have developed during last five years at least one Project
having Capital Cost not less than Rs.1,000 Million. Clauses 7.24 and 7.25 G
thereof read as under :

"7.24 The turnover of the Bidding Company or the combined turnover
of the Financially Significant Members of the Bidding Consortium
from the directly related field of activities shall not be less than H
122 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A Rs.500 million.
725 Format for Cover I compliance to minimum eligibility criteria
Bidders are required to organize "Cover I Companies with
Minimum Eligibility Criteria'' according to the following checklist:
B Cover I Compliance to Minimum Eligibility Criteria

:::iect1on 1 ················
:::iect1on L. taJ ............

c (b) .............

(c) Letters of Acceptance, as per the format specified in Exhibi1
4, from each of the Consortium Members in case of a Bidding
Consortium.

D Section 3 (a) ................

(b) Letters of Commitment as per the format specified in Exhibi1
3, from each of the entities which are Financially Significan1
Consortium Member, the strengths of which is to be considered
for the purpose of evaluation.
E
Clause 7.26 reads as under :

"7 .26 ·MMRDA on demand will return unopened Financial Bids and
Technical Bids (Covers 2 and 3) of the Bidders who do not
comply with the minimum eligibility criteria."
F
Step 2 (Cover 2) provides for financial bid. Clause 7.30 provh.!es for
methodology for evaluation of bids.

Clause 7.30 deals with the manner in which the bids would be dealt
with.
G
Clause 7.34 provides for technical and business proposal evaluation
criteria. Clauses 7.38 and 7.39 are as under :

"7.38 In evaluating the Business Proposal, MMRDA reserves the right
to seek clarificati~ns from the Bidders. The Bidders shall be
H required to furnish such clarifications.
RAMCHANDRA MURARILALBHATIAD v. STATE OF MAHARASHTRA [S.B. SINHA, J.] 123

139 The Technical and Business Proposal of only the Rank I bidder A
will be opened. He may also be requested to make a presentation
at his own cost, for clarifications and additional information on
bidder's capability, concept plan and the business proposal in
this regard to the evaluation committee appointed by the
Metropolitan Commissioner, MMRDA. The Committee may seek
further clarifications and make suggestions in respect of the B
proposal, within the permitted built-up area, which will not include
any change in the premium or the manner in which it is to be
paid. These suggestions will have to be incorporated by the
bidder."

The Bidding Companies/Bidding Consortium of Appellants included :
c
I. Mis. R.M. Bhuther & Co. Ltd.
2. Mis. Larsen & Toubro Ltd.
3. Mis. R.M. Bhuther & Co.
D
4. Mis. M.B. Development Corporation
5. Mis. M.B. Constructions
6. Mis. Bhattad Bros.
7. Mis. Alusett System (India) Pvt. Ltd.

The principal question which arises for consideration is as to whether
the Authority had any jurisdiction to cancel the bid.

The Executive Committee is a statutory functionary. The powers and
functions of the authority and the respective committees concededly are F
governed by the provisions of the statute, but, then the jurisdiction of the
Executive Committee is limited. It was confined to rejection or acceptance
of the tender. The Authority exercises a larger power. For the sai!i purpose
we would assume that the Authority had no incidental or ancillary power, but
there cannot be any doubt Cir dispute that the Executive Committee could not
cancel the entire tender. It could not have caused any change in the entire G
scheme or policy. It could not make alterations in the methodology of
tender. It could not have gone into the working of the project. It also could
not have gone into the question as to whether the project would be financially
viable if the method of calculation is changed.
H
124 SUPREME COURT REPORTS (2006] SUPP. IO S.C.R.

A Strong reliance has been placed by Mr. Nariman on Marathwada
University v. Seshrao Ba/want Rao Chavan, [1989) 3 SCC 132: AIR (1989)
SC 1582 to contend that as therein the power of the Vice Chancellor and the
Executive Council was different, the former's power could not have been
exercised by the latter.

B We do not dispute the proposition of law laid down therein.

We would assume that the power of the Executive Committee and the
Authority under the Act are different and the latter for all intent and purport
could not usurp the functions of the fonner. But in this case, it has not been
so done.
c
Jurisdiction of the Authority being larger, and the power to cancel the
tender being not vested in the Executive Committee, the action on the part
of the fonner was neither illegal nor without jurisdiction.

This Court rejected the contention that the power of the Vice Chancellor
D to regulate work also included the power to initiate disciplinary action, stating:

"This takes us to the second contention urged for the appellants.
The contention relates to the legal effect of ratification done by the
Executive Council in its meeting held on December 26/27, 1985. The
decision taken by the Executive Council is in the fonn of a resolution
E and it reads as follows :

"Considering the issues, the Executive Council resolved as follows:

l. The Executive Council at its meeting held on 22-3-1979, had
by a resolution given full authority to the Vice-Chancellor for taking
F further proceedings and decision in both the cases of the defaulting
officers.

2. In exercise of above authority, the Vice-Chancellor appointed
an Inquiry-Officer and as suggested by the Inquiry Officer issued
show-cause notices, obtained replies from the officers and lastly issued
G orders for terminating their services;

* * *
It was further resolved that-

(i) There has been no inadequacy in the proceedings against both
H
RAMCHANDRA MURARILAL BHA ITAD v. STATE OF MAHARASHTRA [S.B. SINHA, J.] 125

the officers; A
(ii) The punishment ordered against both the officers is
commensurate with the defaults and allegations proved against both
the officers; and

(iii) The Executive Council, therefore, wholly, endorses the actions B
taken by the then Vice-Chancellor against both the officers."

By this resolution, we are told that the Executive Council has
ratified the action taken by the Vice-Chancellor. Ratification is
generally an act of principal with regard to a contract or an act done
by his agent. In Friedman's Law of Agency (5th edn.) Chapter 5 at p. C
73, the principle of ratification has been explained:

"What the 'agent' does on behalf of the 'principal' is done at a
time when the relation of principal and agent does not exist:
(hence the use in this sentence, but not in subsequent ones, of
inverted commas). The agent, in fact, has no authority to do D
what he does at the time he does it. Subsequently, however, the
principal, on whose behalf, th~ugh without whose authority, the
agent has acted, accepts the agent's act, and adopts it, just as if
there had been a prior authorisation by the principal to do exactly
what the agent has done."
E
As noticed hereinbefore, we have proceeded on the basis that the powers
of the Executive Committee and the Authority are separate and distinct and
we have pointed out that the powers vested in the Executive Committee
being limited, the decision taken by the Authority cannot be said to be illegal.

It was furthermore contended that the Executive Committee had a special F
power which would prevail over general power vested in the Authority. In
J.K. Cotton Spinning & fVeaving Mills Co., Ltd v. The State of Uttar Pradesh
& Ors., [1961) 3 SCR 185, this Court applied the rule of construction that
general provisions yield to special provisions, but, the said rule has no
application in the facts and circumstances of the present case. Executive G
Committee does not exercise any special power. The jurisdictions of both
the authorities are separate and distinct.

Dr. A.M. Singhvi, learned Senior Counsel appearing for Appellants in
the connected appeal relied upon Bhavnagar University v. Palitana Sugar
Mill Pvt. Ltd & Ors., [2003) 2 SCC 111, wherein it was held : H
126 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A "It is the basic principle of construction of statute that the same
should be read as a whole then chapter by chapter, section by section
and words by words. Recourse to construction or interpretation of
statute is necessary when there is ambiguity, obscurity, or inconsistency
therein and not otherwise. An effort must be made to give effect to
all parts of statute and unless absolutely necessary, no part thereof
B shall be rendered surplusage or redundant."

We fail to understand as to how the principle laid down therein can be
said to have been violated.

Reliance has also been placed on State of Uttar Pradesh v. Singhara
C Singh and Ors., AIR (1964) SC 358: [1964] 4 SCR 485, wherein this Court
quoted with approval the decision in Taylor v. Taylor, [1875] I Ch. D. 426,
431] for the proposition that where a power is given to do a certain thing in
a certain way, the thing must be done in that way or not at all and that other
methods of performance are necessarily forbidden. There is again no quarrel
D over the aforementioned proposition of Jaw. Here the Authority has not
exercised any power forbidden by law. The Authority has also not exercised
its power in the manner which is not in accordance with law.

On merit of the matter, Mr. Nariman has pointed out, the distinction
between 2002 and 2005 tenders to show that such a policy decision as laid
E down in the 2005 tender was not in pari materia with 2002 tender. The
comparison of methodology for evaluation of bids is as under :

2005TENDER 2002 TENDER METHODOLOGY
FOR EVALUATION OF BIDS
METHODOLOGY FOR
F EVALUATION OF BIDS

7.30 The bidder will have to 7.30 The bidder will have to quote
quote separately for the separately for the C&EC and the
Convention & Exhibition Centre Real Estate component. The built-
and the Commercial Complex. up area (considered for FSI
G The built-up area (considered for computation) of C&EC shall be
FSI computa-tion) of the considered as 60,500 sq.m. (Phase
Convention & Exhibi- tion Centre I and II) irrespective of the
shall be considered as 65,000 reduction that may be possible on
sq.m. irrespective of the reductio~ finalization of detailed architectural
that may be possible on designs. Similarly the floor space
H
RAMCHANDRA MURARILAL BHATIAD v. STATE OF MAHARASHTRA [S.B. SINHA, J.] 127

finalization of detailed considered in FSI computation for A
architectural designs. Similarly the Real Estate component shall be
the floor space considered for FSI 15,000 sq.m. The bidder has the
computation for the commercial option of bidding only for the
Complex will be 50,000 sq.m. C&EC without the Real Estate
The bidder will have to quote a component. The bidder has to
fixed rate of Rs.20,000 per sq.m. quote a rate of premium in terms B
of built up area for total built-up of Rs. per sq.m. of FSI and the
area 65,000 sq.m. for Convention total premium, separately for the
& Exhibition Centre. The amount C&EC and the Real Estate
will be Rs.130 crores. The bidder component subject to the condition
will also have to quote a rate of that the rate quoted for the Real c
premium higher than Rs.70,000 Estate component shall be greater
per sq.m. of built-up area for than that quoted for the C&EC.
50,000 sq.m. of total built-up area
for Commercial Complex. The
premium amount will be higher
than Rs.350 crores. The total D
minimum amount of lease
premium to be quoted by the
bidder will be higher than Rs.480
crores of the total amount of lease
premium that will be payable to E
MMRDA 50% will have to be
paid within one month and the
balance will have to be paid within
two months i.e. within three
months from the time the bid is
accepted. The lease period is of F
80 years as is indicated in the
MMRDA (Disposal of Land)
Regulation 1977.

The Authority is a statutory authority. It consists ofnot only politicians G
but also various other responsible officers. It, while exercising its power
under the Act, must necessarily take policy decisions. Whereas under the
2002 tender the bidder had to quote the rate of premium in terms of rupees
per square meter of FSl and the total premium separately for C&EC and the
Real Estate component subject to the condition that the rate quoted for the
Real Estate component should be greater than th.at quoted for the C&EC, H
128 SUPREME COURT REPORTS [2006) SUPP. 10 S.C.R.

A upon having come to know that the value of the land would be much more,
the Authority in the 2005 tender decided that the bidders should be required
to quote a fixed rate of 20,000 per sq.m. of built-up area for total built-up
area 65,000 sq.m. for Convention & Exhibition Centre. Economic viability
of the entire project component, taking into consideration two different
B components for C&EC and the Commercial Complex, could have been taken
differently. The premium amount was to be quoted higher than Rs. 350
crores for the Commercial Complex. While exercising its jurisdiction of
judicial review, the Court is required to decide the cases before it, keeping
the well known principles therefor in mind and having regard to the fact
situation obtaining therein. No hard and fast rule can be laid down therefor.
C Recently, in Noble Resources Ltd v. State of Orissa and Anr., (2006) 9
SCALE 181 this Court has noticed the power of judicial review vis-a-vis
contractual disputes, opining .:

"Although terms of the invitation to tender may not be open to
judicial scrutiny, but the courts can scrutinize the award of contract
D by the Government or its agencies in exercise of their power of
judicial review to prevent arbitrariness or favouritism. [See Directorate
of Education and Ors. v. Educomp Datamatics Ltd. and Ors., [2004]
4 SCC 19]. However, the court may refuse to exercise its jurisdiction,
if it does not involve any public interest.

E Although the scope of judicial review or the development of law
in this field has been noticed hereinbefore particularly in the light of
the decision of this Court in ABL International Ltd (supra), each
case, however, must be decided on its own facts. Public interest as
noticed hereinbefore, may be one of the factors to exercise power of
judicial review. In a case where a public law element is involved,
F
judicial review may be permissible."

Noticing some of the areas where judicial review would be permissible,
this Court opined that ordinarily, this Court would not enforce specific
performance of contract where damages would be adequate remedy. It was
G also held that conduct pf the parties would also play an important role. The
expansive role of Courts in exercising its power of judicial review is not in
dispute. But as indicated hereinbefore, each case must be decided on its own
facts.

Dr. Singhvi placed reliance upon Star Enterprises & Ors. v. City and
H Industrial Development Corporation of Maharashtra & Ors., [1990] 3 SCC
RAMCHANDRAMURARILALBHATIADv.STATEOFMAHARASHTRA[S.B.SINHA,J.] 129

280, wherein Ranganath Misra, J., as His Lordship then was, opined : A
"In recent times, judicial review of administrative action has
become expansive and is becoming wider day by day. The traditional
limitations have been vanishing and the sphere of judicial scrutiny is
being expanded. State activity too is becoming fast pervasive. As the
State has descended into the commercial field and giant public sector B
undertakings have grown up, the stake of the public exchequer is also
large justifying larger social audit, judicial control and review by
opening of the public gaze; these necessitate recording of reasons for
executive actions including cases of rejection of highest offers. That
very often involves long stakes and availability of reasons for action C
on the record assures credibility to the action; disciplines public
conduct and improves the culture of accountability. Looking for
reasons in support of such action provides an opportunity for an
objective review in appropriate cases both by the administrative
superior and by the judicial process. The submission of Mr. Dwivedi,
therefore, commends itself to our acceptance, namely, that when D
highest offers of the type in question are rejected reasons sufficient
to indicate the stand of the appropriate authority should be made
available and ordinarily the same should be communicated to the
concerned parties unless there be any specific justification not to do
so."
E
In this case, highest offer has not been rejected. A new policy decision
has been taken. Question as noticed herein is not as to whether the offer of
the Appellants should have been rejected but is as to whether the Authority
in law could have altered its policy in regard to disposal of its properties.
'Public Trust· Doctrine' was also sought to be invoked by Mr. Nariman against F
the Authority and in this behalf reliance has been placed on Bangalore Medical
Trust v. B.S. Muddappa & Ors., [1991] 4 SCC 54. This Court therein was
dealing with a master plan in the light of justifiability of exercise of
discretionary jurisdiction under the Town Planning Act. Having regard to
the provisions contained in Sub-Section (4) of Section 19 of the Bangalore
Development Authority Act, 1976 as also the fact that the discretionary G
jurisdiction had been arbitrarily exercised, this Court invoked the 'public
trust doctrine' saying that although the State is required to keep a vigil on the
local body, but, thereby the power thereunder cannot be stretched so as to
entitle the Government to alter any scheme and convert any site or power
specifically reserved in the statute in the Authority.
H
130 SUPREME COURT REPORTS [2006] SUPP. IO S.C.R.

A By floating a tender in furtherance of a public project, the Authority
was not truly concerned with the enforcement of its master plan. No such
argument was advanced. before the High Court. Such an argument has been
advanced for the first time before us. We would consider the efficacy of said
contention a little later.

B The next question which arises for consideration is as to whether any
reason was required to be assigned. A power to deal with a contractual
matter and a power of a statutory authority to exercise its statutory power in
determining the rights and liabilities of the parties are distinct and different.
Whereas reasons are required to be assigned in a case where civil or evil
C consequences may ensue, the same may not be necessary where it is contractual
in nature, save and except in some cases, e.g., Star Enterprises (supra).

Whether assignment of reasons forms third pillar of principle of natural
justice, is not free from doubt. There is a diversity of opinion as has been
noticed by this Court in Rajesh Kumar & .Ors. v. D.C./. T. & Ors., (2006) 11
D SCALE 409.

Reliance has also been placed by Mr. Nariman on Commissioner of
Police, Bombay v. Gordhardas Bhanji, [1952] I SCR 135 and Union of India
& Ors. v. Dinesh Enginering Corporation & Anr. etc., [2001] 8 SCC 491. In
Commissioner of Police (supra) the Court was concerned with a situation
E where a statutory authority had acted on dictation of an Appellate Authority,
which was found to be illegal. In Dinesh Enginering (supra), this Court
opined that the Railways have no arbitrary power to reject the bid offered by
a party merely because it has that power, particularly, when the same can be
exercised only on the existence of certain conditions which in the opinion of
F the Railways are not in the interest of the Railways to accept the offer.

We have noticed hereinbefore that power has not been exercised by the
Executive Committee in rejecting the tender. The power has been exercised
by the Authority in canceling the tenders so as to enable it to have a re-look
of the entire project.
G
Some reasons may be required to be assigned for rejecting the bid, but
in the instant case, in our opinion, no reason was required to be assigned as
there has been a change in the policy decision.

The news item appearing in the Economic Times is not of much
H significance. No affidavit has been affirmed as regards the correctness or
RAMCHANDRAMURARILALSHATIADv.STATEOFMAHARASITTRA[S.RSINHA,J.J 131

otherwise of the said news item. A
It may be true that the Authorities at one point of time, as was disclosed
in the Counter Affidavit, had thought of setting up a Convention Centre of
their own and without any private participation, but only because there has
been a deviation from the said stand would not, in our considered opinion,
render the entire policy decision vitiated in law. B
It had set up its Evaluation Committee. The decision presumably has
been reached by experts.

The reasons as regards purported unsatisfactory performance of
Appellants, take a back seat once having a re-look to the entire situation was C
thought of.

It is not a case where the Court is called upon to exercise its equity
jurisdiction. It is also not a case where ex facie the policy decision can be
held to be contrary to any statute or against a public policy. A policy D
decision may be subjected to change from time to time. Only because a
change is effected, the same by itself does not render a policy decision to be
illegal or otherwise vitiated in law.

In Harminder Singh Arora v. Union of India & Ors., [1986] 3 SCC
247, whereupon Dr. Singhvi relied upon, the tender was arbitrarily rejected. E
Therein the writ petition was dismissed in limine only on the premise that the
question involved therein related to contractual obligations and the policy
decision could not be tenned as unfair or arbitrary. It was opined that therein
no question of policy decision arose and as such contract was to be given to
the lowest bidder in tenns of the tender notice and the contract should have
been awarded to the appellant therein, especially when he had been doing the F
job for many years. As to how the said decision is applicable to the facts
of the present case, we fail to understand. For the self-same reasons we are
unable to appreciate the contention that only because a change has been
effected in computation of total price under the new tender, the same was
invalid in law.
G
In New Horizons ltd. & Anr. v. Union of India & Ors., [1995] I SCC
478, this Court opined that in the matter of grant of tender the State cannot
act as a private person having regard to Article 14 of the Constitution of
India. It was categorically opined that departing from the narrow legalistic
view the Courts have taken note of the realities of the situation which, by no H
132 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A stretch of imagination, would mean that the Court would substitute itself in
the place of a statutory authority. The Court in a case of this nature must
exercise judicial restraint. It may be one thing to say that having regard to
the public interest, the Court may itself invite bids so as to verify the
justification of accepting a palpably lower bid as was done in Ram and
B Shyam Company v. State of Haryana and Ors., [1985] 3 SCC 267, but it is
another thing to say the Court would under all circumstances not allow a play
in joint in favour of the employer.

However, if the Court in a given situation is not in a position to allow
a bid to take place before, it may not still venture to strike down an Act in
C the name of public interest, although, no such public interest exists.

Appellant stated before us that he is ready and willing to take a part of
the contract, viz., construction of the C&EC and pay the same amount as has
been done by ReFance Industries Ltd. and in addition it would pay 2.5% of
its annual turnover from the Convention Centre from the 21st year, as was
D initially offered.

Appellant did not participate in the second bid. The tender process is
complete. Before us only a higher bid has been given. We do not intend
to enter into the intricacies of the question. Appellants could have submitted
its bids pursuant to the new tender and new conditions, even without prejudice
E to its rights and contentions in this· appeal. The stipulations made in 2002
tender could have been repeated by it so as to demonstrate before the experts
comprising members of the Executive Committee that its bid was the highest.
If, in view of the change in the policy decision, the Authority does not intend
to become a partner in the profit making and opt for having the entire bid
amount at one go instead of waiting for 20 years, we do not find any fault
F therewith.

Before us comparative bids of the bidders have been placed on the
second tender, which are as follows :
SR Name of the Bidder Bid Amount Rate per sq.
No. Rs. m.
G . (approx.) Rs .

1. Reliance Industries Ltd. l l ,04,00,00, l l l 96000

2. DLF 1050 crores 91304
H
RAMCHANDRA MURARILAL BHATTAD v. STATE OF MAHARASHTRA [S.B. SINHA, J.] 133
A
3. Reliance Communications & 1011.12 crores 87913
Infrastructure Ltd.

4. Gammon India 1011 crores 87913

5. EMAR 911.07 crores 79217 B

The comparative statistics reads as under
l. Rate offered by the Petitioners Rs. Rs. 12,121 per sq. mtrs.
91.514 crores (divided by)
75,500 sq.mtrs. c
2. Rate expected by MMRDA Rs. 25,000 per sq.mtrs.

3. Amount for 75,500 sq. mtrs Rs. 188.75 crores
@ Rs.25,000/- per sq.mtrs. (This should
have been the minimum bid in 2003) D
4. Amount for 1,15,000 sq.mtrs Rs.287.50 crores
@ Rs.25,000/- per sq.mtrs. (This would
have been the reserve price at old
rate in 2005)
E
5. Reserve Bid of MMRDA in 2005 Rs.480 crores
(Minimum price revised as below)
6. Rate per sq. mtrs in the Reserve Rs.41, 739/- per sq. mtrs.
bid Rs.480 crores (divided by)
1,15,000 sq.mtrs.
F
7. Bid by Reliance Industries Ltd. Rs.1104,00,00, 111/-

8. Rate per sq.mtrs of RIL Bid Rs.96,000/- per sq. mtrs.
Rs.11,04,00.00.111/- (divided by)
1,15,000 sq. mtrs.
G
Appellant complains that whereas the bid of Sister concern of Reliance
Industries Ltd. was very low; now it has offered a bid of Rs.1104,00,00, 111/
-. From the chart placed before us it would appear that there had been a stiff
computation. The Reliance Industries Ltd. has become the highest bidder. Its
competitors had taken part in the earlier contracts. No ma/a fide in accepting H
134 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A the tender has been alleged nor do we find any.

We, therefore, in the facts and circumstances of this case and having
regard to the subsequent events, are of the opinion that it is not a case where
we should interfere with the judgment of the High Court.

B It, however, would not mean that the Authority or the Executive
Committee would not be entitled to take note of the offer of Appellant. It.
may do so. It would not further mean that if the terms of new tender are
violative of the provisions of the master plan, the same would not be suitably
dealt with. We merely place on record that we have not gone into the said
C questions, although raised before us by the learned counsel for the appellant,
simply on the ground that no such plea had been taken before the High
Court. In the absence of any plea that the policy decision adopted by the
Authority. would be violative of the provisions of the Act or any master plan,
the same cannot be entertained. The question, however, is left open.

D For the reasons aforementioned, there is no merit in these appeals,
which are accordingly dismissed. There shall, however, be no order as to
costs.

vs Appeals dismissed.