TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD.versusMUNICIPAL COUNCIL, SENDHWA & ANR.

                        [2012] 4 S.C.R. 190


A    TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT.
                       LTD.
                                  v.
            MUNICIPAL COUNCIL, SENDHWA & ANR.
                (Civil Appeal No. 4195 of 2012)
B
                            MAY 4, 2012

        [T.S. THAKUR AND GYAN SUDHA MISRA, JJ.]

        Administrative Law:
c
       Judicial review of award of contract by municipality -
  Scope of - Acceptance of bid of a contractor for construction
  of Integrated water supply scheme by Municipal Council
  challenged by the unsuccessful bidder - Held: The findings
0 recorded by the High Court with regard to the requirements
  as per the notice inviting tenders and the eligibility and
  experience of the successful bidder, are in no way irrational
  or absurd - Besides, the Municipal Council had the
  advantage of aid and advice of an empanelled consultant, a
E technical hand, who could well appreciate the significance of
  the tender condition regarding the bidder executing the single
  integrated water supply scheme and fulfilling that condition of
  tender by reference to the work undertaken by them -
  Therefore, there is no reason to interfere with the view taken
  by the High Court of the allotment of work made in favour of
F the successfully bidder - In the light of the settled legal
  position and in the absence of any ma/a fide or arbitrariness
  in the process of evaluation of bids and the determination of
  the eligibility of the bidders, the Court does not consider it to
  be a fit case for interference - Tenders -Award of construction
G contract.

      The respondent-Municipal Council invited tenders for
  construction of an Integrated Water Supply Scheme, in
  terms of the conditions stipulated in the notice inviting
H                           190
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 191
         v. MUNICIPAL COUNCIL, SENDHWA
tenders (NIT). Out of the four bidders, including the               A
appellant and respondent no. 2, found eligible,
respondent no. 1 accepted the bid offered by respondent
no. 2.· The appellant filed a writ petition challenging the
eligibility of respondent no. 2 on the grounds: (1) that
respondent no. 2 had not filed the requisite certified              B
balance-sheets for five years immediately preceding the
issue of NIT; and (2) that respondent no. 2 did not have
the requisite experience of executing a single integrated
water supply scheme of the required value. The High
Court dismissed the writ petition.                                  c
     Dismissing the appeal, the Court

     HELD: 1. A challenge to the award of the project work
in favour of respondent No.2 involved judicial review of
administrative action. The scope and approach to be                 D
adopted in the process of any such review is well settled.
[para 8] [198-D]

      Tata Cellular v. Union of India 1994 (2) Suppl. SCR
     =
122 (1994) 6 SCC 651; Raunaq International Limited v.               E
I. V.R. Construction Ltd. & Ors. (1999) 1 SCC 49; Reliance
Airport Developers (P) Ltd. v. Airports Authority of India & Ors.
2006 (8) Suppl. SCR 398 = (2006) 10 SCC 1; Sterling
Computers Ltd. v. M & N Publication Ltd. 1993 (1) SCR 81       =
(1993) 1 SCC 445; Air India Ltd. v. Cochin International            F
Airport Ltd. & Ors. 2000 (1) SCR 505 = (2000) 2 sec 617;
Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P)
Ltd. & Ors. 2005 (3) SCR 666 = (2005) 6 sec 138 and
Jagdish Manda/ v. State of Orissa 2006 (10) Suppl.
SCR 606    =(2007) 14 SCC 517 - referred to.                        G
     1.2. As regards the plea that respondent No.2 had not
satisfied the requirement of filing audited balance sheets
for the five years preceding award of the contract, it is
significant to note that the date of submission of tender
was initially fixed upto 25.3.2011 but the same was                 H
   192      SUPREME COURT REPORTS             [2012] 4 S.C.R.

A extended upto 7.4.2011. That being so, 5 years
  immediately preceding the issue of the tender notice
  would have included the year 2010-2011 also for which
  financial year, audit of the company's books, accounts
  and documents had not been completed. Such being the
B case, respondent No.2 could not possibly comply with
  the requirement of the tender notice or produce certified
  copy of the audited balance-sheet for the said year. All
  that it could possibly do was to obtain a certificate based
  on the relevant books, registers, records accounts etc.
c of the company, which certificate was indeed produced
  by the said respondent. The High Court has rightly
  observed that the appellant had not disputed the
  correctness of the turnover certified by the Chartered
  Accountant for the year 2010-2011 nor was it disputed that
  the same satisfied the requirement of the tender notice.
0
  In that view, therefore, there was no question of
  respondent No.2 being ineligible or committing a
  deliberate default in producing the requisite documents
  to establish its eligibility to offer a bid. [para14-15] [204-
E F-H; 205-A-B; 203-A]

       1.3. The High Court has, while examining the
  question of eligibility of respondent No.2 by reference to
  the execution of the single integrated watf~r supply
  scheme, recorded a finding that the nature of the work
F executed by respondent No.2 for Upleta satisfied the
  requirement of the tender notice. That finding is in no way
  irrational or absurd. The certificate sufficiently
  demonstrates that respondent No.2 had designed, and
  executed an integrated water supply scheme for Upleta
G which included raw water transmission from intake wells
  and transmission of treated clear water from WTP
  including providing, supplying and laying of pipelines,
  construction of E.S.Rs, Sumps, Pump houses and
  providing erecting pumping machinery. [para 18) [207-E-
H G]
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 193
         v. MUNICIPAL COUNCIL, SENDHWA
    1.4. It is also noteworthy that in the matter of               A
evaluation of bids and determination of eligibility of the
bidders, Municipal Council had the advantage of the aid
and advice of an empanelled consultant, a technical
hand, who could well appreciate the significance of the
tender condition regarding the bidder executing the                B
single integrated water supply scheme and fulfilling that
condition of tender by reference to the work undertaken
by them. Therefore, there is no reason to interfere with
the view taken by the High Court of the allotment of work
made in favour of respondent No.2. [para 19] [207-H; 208-          c
A-BJ
     1.5. It is pertinent to note that out of a total of Rs.19.5
crores representing the estimated value of the contract,
respondent No.2 is certified to have already executed
work worth Rs.11.50 crores and received a sum of                   D
Rs.8.79 crores towards the said work. More importantly
the work in question relates to a drinking water supply
scheme for the residents of a scarcity stricken
municipality. The project is sponsored with the Central
Government assistance under its urban infrastructure               E
scheme for small and middle towns. The completion
target of the scheme is September 2012. Any interference
with the award of the contract at this stage is bound to
delay the execution of the work and put the inhabitants
of the municipal area to further hardship. Interference            F
with the on-going work is, therefore, not conducive to
public interest which can be served only if the scheme
is completed as expeditiously as possible giving relief to
the thirsting residents of the area concerned. This is
particularly so when the allotment of work in favour of            G
respondent No.2 does not involve any .extra cost in
comparison to the cost that may be incurred if the
contract was allotted to the appellant-company. [para 20)
[208-C-F)
                                                                   H
    194       SUPREME COURT REPORTS                 [2012] 4 S.C.R.


A        1.6. In the light of the settled legal position and in the
    absence of any mala fide or arbitrariness in the process
    of evaluation of bids and the determination of the
    eligibility of the bidders, this Court does not consider it
    to be a fit case for interference. [para 21] [208-G-H]
B
                         Case Law Reference:
     1994 (2) Suppl. SCR 122         referred to          para 9
     (1999) 1 sec 49                 referred to          para 10
c    2006 (8) Suppl. SCR 398         referred to          para 11
     1993 (1) SCR 81                 referred to          para 12
     2000 (1) SCR 505                referred to          para 12
     "2005 (3) SCR 666               referred ·to         para 13
D
     2006 (10) Suppl. SCR 606 referred to                 para 13
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    4195 of 2012.
E       From the Judgment & Order dated 20.05.2011 of the High
    Court of Madhya Pradesh bench at Indore in W.P. No. 3427 of
    2011.

      Vikas Singh, Samit Malik, Lakshmi Raman Singh for the
F Appellant.

        Jayant Bhushan, K.V. Vishwanathan, Pragati Neekhra,
    Suryanarayanm Singh, Ajay, Dharmendra Kumar Sinha,
    Adeeba Mujahid for the Respondents.

G         The Judgment of the Court was delivered by

          T.S. THAKUR, J. 1. Leave granted.

      2. This appeal arises out of an order passed by the High
  Court of Madhya Pradesh at Indore whereby Writ Petition
H No.3427 of 2011 filed by the appellant was dismissed and the
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 195
  v. MUNICIPAL COUNCIL, SENDHWA [T.S. THAKUR, J.]
allotment of the project work involving design, construction and     A
commissioning of a single integrated water supply at Sendhwa
(Madhya Pradesh) in favour of M/s P.C. Snehal Construction
Company-respondent No.2 upheld.

     3. In terms of notice inviting tenders (NIT for short)
                                                                     B
Municipal Council Sendhwa, in the State of M.P., invited
tenders from eligible contractors for the construction of an
Integrated Water Supply Scheme at an estimated cost of nearly
rupees twenty crores. Clause (1) of the said NIT as amended
by addendum dated 23rd March, 2011, stipulated the following
essential conditions of eligibility for the intending bidders:       C

      "1.   Registered Contractors have to produce valid
            Registration certificate in the category of S-V or
            equivalent in any State/Central Government
            Department or Government undertaking.                    D

      (a)   Registered Contractors/Firms of Repute/Joint
            Venture firms have to produce certificate for
            executing single work of integrated water supply
            scheme comprising of intake well, raw/clear water        E
            pumping main, pumps, OHTS, Distribution system
            completed and running successfully at present,
            having value equal to 60% of the cost of the
            proposed works in last 5 years. This certificate
            should clearly mention amount of contract,
                                                                     F
            completion period as per Tender and actual
            completion period. (In case of WPI adjustment for
            cost of works the same may be furnished along with
            a certificate of Chartered Accountant). The
            certificate shall be issued from the officer not below
            the rank of Executive Engineer or equivalent.            G

      (b)   Certified copy of audited balance sheet of last 5
            years showing annual turnover equal to estimated
            cost of the work and average net worth equal to
            40% of the cost of works."                               tt
     196      SUPREME COURT REPORTS                   (2012) 4 S.C.R.


A       4. In response to the above NIT several applications were
  received by respondent No.1 for purchase of the tender forms.
  It is common ground that only six out of the said applicants
  eventually participated in the pre-bid meeting arranged by
  respondent No.1. It is also not in dispute that out of the said
B six bidders only four were eventually found to be eligible. These
  four included the appellant-Tejas Construction & Infrastructure
  Pvt. ltd. and respondent No.2-M/s P.C. Snehal Construction
  Company, Ahmedabad.

          5. The tender conditions, inter alia, provided that the bid
C    documents shall comprise three envelopes to be submitted by
     each of the bidders. Envelope A was to contain the earnest
     money deposited, Envelope B was to contain the technical bid
     including qualification documents while Envelope C was to
     contain the price bid of the bidders. The process of evaluation
D   of the bids started on 7th April, 2011 with the opening of
    envelopes in the above order. Opening of envelope A was
     uneventful as all the bidders had furnished the earnest money
    stipulated under the terms of NIT. The appellant's case,
     however, is that when envelope B was opened a request was
E   made to respondent No.1 to show the technical bid received
    from respondent No.2 which request was granted. The
    appellant's further case is that upon perusal of the technical bid
    of respondent No.2, the appellant had raised an objection as
    to the eligibility of the said to participate in the bid process on
F   the ground that it did not have the requisi~e experience of
    executing a single integrated water supply scheme of the
    requisite value. Respondent No.2 is said to have claimed
    eligibility to offer a bid on the basis of clubbing of different water
    supply scheme projects at Vyara and Songadh which was
G   impermissible according to the appellant. The appellant also
    raised an objection to the effect that respondent No.2 had not
    submitted certified copies of audited balance-sheets for the last
    five years and that the net-worth certificate produced from a
    Chartered Accountant for the financial year 2010-2011, did not
H   according to the appellant, satisfy the said requirement.
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 197
  v. MUNICIPAL COUNCIL, SENDHWA [T.S. THAKUR, J.]

Despite the objection raised by the appellant, respondent No.1      A
considered all the bids and accepted the bid offered by
respondent No.2. The appellant appears to have approached
the concerned authorities in Gujarat and obtained a certificate
to the effect that Vyara and Songadh projects were two different
projects and not a single integrated water supply scheme and        B
based thereon dispatched a telegram to respondent No.1
asking for rejection of the bid offered by respondent No.2, but
to no avail.
     6. Aggrieved by the allotment of work in favour of
respondent No.2, the appellant filed Writ Petition No.3427 of       C
2011 before the Indore Bench of the High Court of Madhya
Pradesh. The challenge to the eligibitity of respondent No.2 and
eventually to the allotment of the project work to the said
respondent in the Writ Petition was confined to two distinct
grounds, namely (1) that respondent No.2 had not filed the          D
requisite certified balance-sheets for five years immediately
preceding the issue of tender notice and (2) that respondent
No.2 did not have the requisite experience of executing a single
integrated water supply scheme of the required value.
                                                                    E
      7. The Writ Petition was opposed by the respondents who
asserted in their respective affidavits that requirement of
submission of requisite balance-sheets was substantially
complied with inasmuch as certified copies of the balance-
sheets for four years had been filed but since the audit for the
                                                                    F
fifth year i.e. 2010-2011 had not been completed, the certificate
issued by the Chartered Accountant for the said year sufficiently
complied with the said requirement. It is also asserted that
respondent No.2 satisfied the requirement of having executed
single integrated water supply scheme for Upleta which
included raw water transmission from intake well and                G
transmission of treated clear water from WTP including
providing, supplying and laying of pipelines, construction of
E.S.R.s, Sumps, Pump houses and providing and erecting
pumping machinery. The certificate issued by the Upleta
Municipal Council and by the Gujarat Urban Development              H
    198        SUPREME COURT REPORTS               [2012] 4 S.C.R.


A Mission (GUDM) was relied upon in support of that claim. The
  High Court has, by the judgment and order under challenge
  before us, examined both the grounds urged in support of the
  writ petition and clearly come to the conclusion that respondent
  No.2 was eligible to offer a bid in as much as it had substantially
B complied with the requirement of filing the certified copies of
  audited balance-sheets for the previous period of five years
  immediately preceding the issue of tender notice and that it had
  the requisite experience of executing a single integrated water
  supply project of the requisite value.
c      8. We have heard learned counsel for the parties at
  considerable length. A challenge to the award of the project
  work in favour of respondent No.2 involved judicial review of
  administrative action. The scope and the approach to be
  adopted in the process of any such review, has been settled
D by a long line of decisions of this Court. Reference of all such
  decisions is in our opinion is unnecessary as the principle of
  law settled thereof are fairly well recognised by now. We may,
  therefore, refer to some of the said decisions only to
  recapitulate and refresh the tests applicable to such cases and
E the approach which a Writ Court has to adopt while examining
  the validity of an action questioned before it.

       9. In Tata Cellular v. Union of India (1994) 6 SCC 651,
  this Court emphasized the need to find the right balance
F between administrl3tive discretion to decide matters on the one
  hand and the need to remedy any unfairness on the other and
  observed:

          "(1) The modern trend points to judicial restraint in
          administrative action.
G
          (2) The court does not sit as a court of appeal but merely
          reviews the manner in which the decision was made.

          (3) The court does not have the expertise to correct the
          administrative, decision. If a review of the administrative
H
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 199
  v. MUNICIPAL COUNCIL, SENDHWA [TS. THAKUR, J.]

    decision is permitted it will be substituting its own decision,   A
    without the necessary expertise, which itself may be
    fallible.

     (4) The terms of the invitation to tender cannot be open to
    judicial scrutiny because the invitation to tender is in the
                                                                      B
    realm of contract.

    (5) The Government must have freedom of contract. In other
    words, a fair play in the joints is a necessary concomitant
    for an administrative body functioning in an administrative
    or quasi-administrative sphere. However, the decision can         C
    be tested by the application of the "Wednesbury principle"
    of reasonableness and the decision should be free from
    arbitrariness, not affected by bias or actuated by mala
    tides.                                     ·
                                                                      D
    (6) Quashing decisions may impose heavy administrative
    burden on the administration and lead to increased and
    unbudgeted expenditure."

     10. In Raunaq International Limited v. I. V.R. Construction
Ltd. & Ors. (1999) 1 SCC 492, this Court reiterated the principle     E
governing the process of judicial review and held that the Writ
Court would not be justified in interfering with commercial
transactions in which the State is one of the parties to the same
except where there is substantial public interest involved and
in cases where the transaction is mala fide. The court observed:      F

    "10. What are these elements of public interest? (1) Public
    money wou Id be expended for the purposes of the contract.
    (2) The goods or services which are being commissioned
    could be for a public purpose, such as, construction of           G
    roads, public buildings, power plants or other public
    utilities. (3) The public would be directly interested in the
    timely fulfilment of the contract so that the services become
    available to the public expeditiously. (4) The public would
    also be interested in the quality of the work undertaken or       H
    200        SUPREME COURT REPORTS                   [2012] 4 S.C.R.


A         goods supplied by the tenderer. Poor quality of work or
          goods can lead to tremendous public hardship and
          substantial financial outlay either in correcting mistakes or
          in rectifying defects or even at times in redoing the entire
          work - thus involving larger outlays of public money and
B         delaying the availability of services, facilities or goods, e.g.,
          a delay in commissioning a power project, as in the
          present case, could lead to power shortages, retardation
          of industrial development, hardship to the general public
          and substantial cost escalation.
c         11. When a writ petition is filed in the High Court
          challenging the award of a contract by a public authority
          or the State, the court must be satisfied that there is some
          element of public interest involved in entertaining such a
          petition. If, for example, the dispute is purely between two
D         tenderers, the court must be very careful to see if there is
          any element of public interest involved in the litigation. A
          mere difference in the prices offered by the two tenderers
          may or may not be decisive in deciding whether any public
          interest is involved in intervening in such a commercial
E         transaction. It is important to bear in mind that by court
          intervention, the proposed project may be considerably
          delayed thus escalating the cost far more than any saving
          which the court would ultimately effect in public money by
          deciding the dispute in favour of one tenderer or the other
F         tenderer. Therefore, unless the court is satisfied that there
          is a substantial amount of public interest, or the transaction
          is entered into mala fide, the court should not intervene
          under Article 226 in disputes between two rival tenderers."

       11. In Reliance Airport Developers (P) Ltd. v. Airports
G Authority of India & Ors. (2006) 10 SCC 1, this Court held that
  while judicial review cannot be denied in contractual matters
  or matters in which the Government exercises its contractual
  powers, such review is intended to prevent arbitrariness and
  must be exercised in larger public interest.
H
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 201
  v. MUNICIPAL COUNCIL, SENDHWA [T.S. THAKUR, J.]
     12. Reference may also be made to Sterling Computers             A
Ltd. v. M & N Publication Ltd. (1993) 1 SCC 445 where this
Court held that power of judicial review in respect of contracts
entered into on behalf of the State primarily involves
examination of the question whether there was any infirmity in
the decision-making process if such process was reasonable,           B
rational and non-arbitrary, the Court would not interfere with the
decision. In Air India Ltd. v. Cochin International Airport Ltd.
& Ors. (2000) 2 sec   617, this Court held that award of contract
was essential in commercial transactions which involves
commercial consideration and results in commercial decision.          c
While taking such decision the State can choose its own
method on terms of invitation to tender and enter into
negotiations. The following passage from the decision is
apposite:

    "The award of contract, whether it is by a private party or       D
    by a public body or the State, is essentially a commercial
    transaction. In arriving at a commercial decision
    considerations which are of paramount are commercial
    considerations. The State can choose its own method to
    arrive at a decision. It can fix its own terms of invitation to   E
    tender and that is not open to judicial scrutiny. It can enter
    into negotiations before finally deciding to accept one of
    the offers made to it. Price need not always be the sole
    criterion for awarding a contract. It is free to grant any
    relaxation, for bona fide reasons, if the tender conditions       F
    permit such a relaxation. It may not accept the offer even
    though it happens to be the highest or the lowest. But the
    State, its corporations, instrumentalities and agencies are
    bound to adhere to the norms, standards and procedures
    laid down by them and cannot depart from them arbitrarily.        G
    Though that decision is not amenable to judicial review,
    the Court can examine the decision making process and
    interfere if it is found vitiated by mala fides,
    unreasonableness and arbitrariness.
     Even when some defect is found in the de9isien-making            H
    202        SUPREME COURT REPORTS                  [2012] 4 S.C.R.


A         process the Court must exercise its discretionary power
          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. The Court should always
          keep the larger public interest in mind in order to decide
B         whether its intervention is called for or not. Only when it
          comes to a conclusion that overwhelming public interest
          requires interference, the Court should intervene."

       13. To the same effect is the decision of this Court in
C Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P)
  Ltd. & Ors. (2005) 6 SCC 138 and Jagdish Manda/ v. State
  of Orissa (2007) 14 SCC 517 where this Court laid down the
  following tests for judicial interference in exercise of power of
  judicial review of administrative action:

D         "Therefore, a court before interfering in tender or
          contractual matters in exercise of power of judicial review,
          should pose to itself the following questions :

          (i) Whether the process adopted or decision made by the
          authority is mala fide or intended to favour someone.
E
          OR

          Whether the process adopted or decision made is so
          arbitrary and irrational that the court can say : 'the decision
F         is such that no responsible authority acting reasonably and
          in accordance with relevant law could have reached.'

          (ii) Whether public interest is affected.

          If the answers are in the negative, there should be no
G         interference under Article 226."

       14. Let us examine the challenge to the award of the
  contract in favour of respondent No.2 in the light of the above
  legal position. In the earlier part of this judgment the challenge
H to the allotment of the work in question was primarily based on
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD. 203
  v. MUNICIPAL COUNCIL, SENDHWA [TS. THAKUR, J.]
a two-fold contention. Firstly, it was argued that respondent      A
No.2, successful bidder, had not satisfied the requirement of
filing audited balance sheets for the five years preceding award
of the ·contract. That the said respondent had filed certified
copies of the audited balance sheets for the years 2006-07,
2007-08, 2008-09 and 2009-10, was not in dispute. What was         B
disputed was that the balance sheet for the year 2010-11 had
not been filed, instead a certificate from the Chartered
Accountant concerned, relating to the period 1.4.2010 to
22.3.2011, had been produced which did not, according to the
writ-petitioner before us, satisfy the requirement of the NIT.     c
Rejecting that contention the High Court held that since the
balance sheet for the year 2010-11 had not been audited the
production of relevant record of the company was a substantial
compliance with the stipulation contained in the NIT. The High
Court observed:
                                                                   D
    "As regards audited balance sheet, it has not been
    disputed that respondent No.2 submitted audited balance
    sheets for years 2006-07, 2007-08, 2008-09 and 2009-
    2010. Respondent No.2 has further submitted certificate
    issued by its Chartered Accountant in respect of period        E
    from 1.4.2010 to 22.3.2011. Certificate is at page 66,
    which has been issued on the basis of audited books,
    documents, registers, records, bills and evidences
    produced before it for verification. Certificate is dated
    23.3.2011. It has been pointed out by Shri Vijay Assudani,     F
    learned advocate appearing for respondent No.2 that by
    that time, the financial year 2010-11 was not complete and
    it was not possible to obtain certified copy of the audited
    balance sheet. It could not be disputed on behalf of the
    petitioner that the turnover as shown in the certificate of    G
    Chartered Accountant and other documents for last five
    years, was meeting the requirement as per the NIT.
    Further, it is not the case of the petitioner that the
    particulars and the figures mentioned in the certificate are
    incorrect. Petitioner, by virtue of Sections 159 and 163 of    H
     204       SUPREME COURT REPORTS                 [2012] 4 S.C.R.


A          the Companies Act, could have obtained certified copy of
           balance sheets of respondent No.2 to demonstrate
           incorrectness, if any. The petitioner, having not chosen to
           place any such documents on record, cannot successfully
           raise any objection, when there is substantial compliance
·B         of the NIT in relation to turnover.

                 )()()(                 )()()(            )()()(


           Audit for the year 2010-11 was not completed by that time.
           However, certificate was issued on the basis of the audit
C          books, documents, register, records, bills and evidences
           produced before the Chartered Accountant for verification.
           This amounts to substantial compliance of the requirement
           with regard to submission of certified copy of balance
           sheet, more so, the petitioner himself could have obtained
D          copies of audited balance sheet of respondent No.2 and
           could have demonstrated incorrectness. It is not the case
           of the petitioner that the said certificate depicts incorrect
           turnover or net worth. This being so, the process adopted
           by respondent No.1 cannot be said to be arbitrary or
E          irrational."
        15. There is, in our opinion, no legal flaw in the above
  finding or the line of reasoning adopted by the High Court. It is
  true that the date of submission of tender was initially fixed upto
  25th March, 2011 but the same was extended upto 7th April,
F 2011. That being so, 5 years immediately preceding the issue
  of the tender notice would have included the year 2010-2011
  also for which financial year, audit of the company's books,
  accounts and documents had not been completed. Such being
  the case, respondent No.2 could not possibly comply with the
G requirement of the tender notice or produce certified copy of
  the audited balance-sheet for the said year. All that it could
  possibly do was to obtain a certificate based on the relevant
  books, registers, records accounts etc., of the company, which
  certificate was indeed produced by the said respondent. The
H High Court has rightly observed that the appellant had not
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT: LTD. 205
  v. MUNICIPAL COUNCIL, SENDHWA [TS. THAKUR, J.]
disputed the correctness of the turnover certified by the            A
Chartered Accountant for the year 2010-2011 nor was it
disputed that the same satisfied the requirement of the tender
notice. In that view, therefore .. there was no question of
respondent No.2 being ineligible or committing a deliberate
default in producing the requisite documents to establish its        B
eligibility to offer a bid. The first limb of the challenge to the
finding of the High Court on the above aspect must, therefore,
fail and 1s accordingly rejected.
     16. That leaves us with the second ground on which the
appellant questioned the eligibility of respondent No.2 to offer     C
a bid, namely, the non-execution by respondent No.2 of a single
integrated water supply scheme for the requisite value. The
appellant's case, in this connection, is two-fold. Firstly, it is
contended that the works executed by respondent No.2 for
Vyare and Songadh were distinct and different works which did        D
not constitute a single integrated water supply scheme hence
could not be pressed into service to show satisfaction of the
condition of eligibflity stipulated under the tender notice. The
alternative submission made by learned counsel appearing for
the appellant in connection with this ground is that the work        E
executed by respondent No.2 for Upleta also did not satisfy the
requirement of the tender notice inasmuch as the said work did
not involve the construction of intake wells, which was an
essential item of work for any integrated water supply scheme.
In the Counter Affidavits filed by the Municipal Council and         F
respondent No.2, the contention that the latter was not eligible
on the ground stated by the appellant has been stoutly denied.
Respondent-Council has, inter a/ia, stated:
    "To satisfy this condition, respondent no.2 has placed on
    record the certificate issued by Municipal Council Upleta,       G
    whereby respondent No.2 was awarded construction of
    similar work and has completed the work on 15.8.2010 for
    a sum of Rs.14,96,78,721/-. Not merely this, to show his
    experience, respondent No.2 has filed various certificates
    relating to work at Bardoli, as well as certificate issued by    H
    206        SUPREME COURT REPORTS                (2012] 4 S.C.R.


A         Gujarat Urban Development Mission, demonstrating that
          he has undertaken the work of 87,21,36,172/- of the
          similar/somewhat similar nature.
          In this regard it is worth noticing that the only requirement
          under this clause was to have executed single work of
B         integrated water supply scheme having above referred
          components in it and it was not at all necessary for a bidder
          to have constructed all the components himself but he
          could have used the existing components, as such it is
          inconsequential as to whether respondent No.2 has infact
c         constructed intake well and water treatment plant in Upleta,
          but it is of utmost importance that Respondent No.2 should
          have experience of having executed integrated water
          supply scheme."
        17. To the same effect is the case set up by respondent
0
    No.2 who has stated as under:
          "I say and submit that the only requirement as per the said
          eligibility condition was to have executed a single work of
          integrated water supply scheme comprising of all the
E         components, such as intake well, raw/clean water,
          pumping main, pumps, water treatment plants, over head
          tanks, distribution system etc., but it was not necessary for
          the bidder to have himself constructed all the components
          of integrated water supply scheme. As such to show his
          experience in the said matter, respondent No.2 also has
F
          placed on record certificate issued by Bardoli Nagar Seva
          Sadan, (Annexure P/10 Page 78 of SLP), wherein
          respondent No.2 has constructed water treatment plant of
          13.5 MLD capacity .................. "
G         They have carried out the work of integrated water supply
          for Upleta Municipal Council for a sum of Rs.14.97 crores,
          similarly respondent No.2 have also carried augmentation
          water supply scheme for Bardoli Incorporation Seva Sadan
          of Rs.4.35 crores, integrated drinking water supply scheme
H         for Vyara project of Rs.6.84 crores, Unjha Water Supply
          Proiect of Rs.13.19 crores. Jaitour Water Proiect Rs.
TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT LTD. 207
  v. MUNICIPAL COUNCIL, SENDHWA [T.S. THAKUR, J.)
    16.25 crores, Songarh Integrated Drinking Water Supply          A
    Scheme Rs.5.21 crores, Vapi Water Works of Rs.4.00
    crores, Jasadan Water Suppply Scheme of Rs.3.05
    crores, Rajula Water Supply Scheme of Rs.3.83 crores,
    ldar Water Supply Scheme of Rs.4.74 crores, Viramgam
    Water Supply Project Rs.6.92 crores, Amreli City Pipeline       B
    Distribution Work Rs.6.49 crores, thus the respondent No.2
    have executed works of similar nature of Rs.87.21 crores,
    whereas the present work was for only Rs.20.80 crores,
    additionally respondent No.2 is executing similar work of
    about Rs.40.50 crores at Dholka, Dhandhuka, Ankleshwar,         c
    Gondal, Jasdan and Dhorangdhra. Thus respondent No.2
    is competent to execute the present work, a copy of list of
    works executed by respondent No.2 under Gujarat Urban
    Development Mission duly certified by the G.M. (Technical)
    of said organization are already annexed as Annexure P/         D
    8 (Page 69 of SLP). It is worth mentioning here that
    average turnover of respondent No.2 during last 5 years
    ignoring figures of 2010-11 is Rs.45.14 crores and
    average net worth of respondent No.2 for last 5 years
    ignoring figures of 2010-11 is Rs. 9.018 crores."
                                                                    E
      18. The High Court has, while examining the question of
eligibility of respondent No.2 by reference to the execution of
the single integrated water supply scheme, recorded a finding
that the nature of the work executed by respondent No.2 for
Upleta satisfied the requirement of the tender notice. That         F
finding, in our view, is in no way irrational or absurd. We say
so because the certificate relied upon by respondent No.2
sufficiently demonstrates that respondent No.2 had designed,
and executed an integrated water supply scheme for Upleta
which included raw water transmission from intake wells and         G
transmission of treated clear water from WTP including
providing, supplying and laying of pipelines, construction of
E.S.R.s, Sumps, Pump houses and providing erecting pumping
machinery.
    19. It is also noteworthy that in the matter of evaluation of   H
    208      SUPREME COURT REPORTS               [2012] 4 S.C.R.


A the bids and determination of the eligibility of the bidders
  Municipal Council had the advantage of the aid & advice of an
  empanelled consultant, a technical hand, who could well
  appreciate the significance of the tender condition regarding
  the bidder executing the single integrated water supply scheme
B and· fulfilling that condition of tender by reference to the work
  undertaken by them. We, therefore, see no reason to interfere
  with the view taken by the High Court of the allotment of work
  made in favour of respondent No.2.
       20. We may while parting point out that out of a total of
C Rs.19.5 crores representing the estimated value of the contract,
  respondent No.2 is certified to have already executed work
  worth Rs.11.50 crores and received a sum of Rs.8. 79 crores
  towards the said work. More importantly the work in question
  relates to a drinking water supply scheme for the residents of
D a scarcity stricken municipality. The project is sponsored with
  the Central Government assistance under its urban infrastructure
  scheme for small and middle towns. The completion target of
  the scheme is September 2012. Any interference with the award
  of the contract at this stage is bound to delay the execution of
E the work and put the inhabitants of the municipal area to further
  hardship. Interference with the on-going work is, therefore, not
  conducive to public interest which can be served only if the
  scheme is completed as expeditiously as possible giving relief
  to the thirsting residents of Sendhwa. This is particularly so
F when the allotment of work in favour of respondent No.2 does
  not involve any extra cost in comparison to the cost that may
  be incurred if the contract was allotted to the appellant-
  company.
       21. In the light of the above settled legal position and in
G the absence of any mala fide or arbitrariness in the process of
  evaluation of bids and the determination of the eligibility of the
  bidders, we do not consider the present to be a fit case for
  interference of this Court. This appeal accordingly fails and is
  hereby dismissed with cost assessed at Rs.25,000/-.
H   R.P.                                       Appeal dismissed.