M/S AGMATEL INDIA PVT. LTD. versus M/S RESOURSYS TELECOM & ORS. on 31 January 2022

[2022] 18 S.C.R. 861

M/s AGMATEL INDIA PVT. LTD.

v.

M/s RESOURSYS TELECOM & ORS.

(Civil Appeal No. 786 of 2022)

JANUARY 31, 2022

[DINESH MAHESHWARI AND VIKRAM NATH, JJ.]

Tender – Scope of judicial review – Notice inviting tenders(NIT) issued by Navodaya Vidyalaya samite (NVS) on Govt. Portal(GeM) for supply of tablets for school children with specific ‘pastperformance’ criterion that bidder ought to have supplied ‘same orsimilar category’ products to the extent of 80% of bid quantity (whichwas changed to 60% by corrigendum) in at least one of the lastthree financial years before bid opening – Respondent offered itsbid for the product and was declared disqualified for having fallenshort in ‘past performance’ criterion by 10.20% - Representationmade by the Respondent seeking clarification of the reason forrejection which was rejected by the NVS on the ground that onlysmart phones were supplied by the Respondent and the productsmart phone does not fall within the description of ‘same or similarcategory product’ vis-a-vis the product required i.e., ‘Tablet’- Beingaggrieved, the Respondent preferred the writ petition contendingthat ‘Tablet’ was an electronic product belonging to the ‘same orsimilar category’ as a ‘Smart Phone’ and that the decision of theNVS, excluding “Smart Phones” from “same or similar categoryproducts” was unreasonable and against the principles of fair playand logic - during the pendency of the writ, the successful bidderAGMATEL/appellant herein was awarded the tender – High Courtallowed the writ petition and disapproved the technicaldisqualification – On appeal, held: Technical evaluation orcomparison by the Court is impermissible and the author of thetender document is taken to be the best person to understand andappreciate its requirements and if its interpretation is manifestly inconsonance with the language of the tender document or subservingthe purchase of the tender – Court would prefer to keep restraintand even if the interpretation given to the tender document by theperson inviting offers is not as such acceptable to the ConstitutionalCourt, that, by itself, would not be a reason for interfering with the

A

B

C

D

E

F

G

H

Ainterpretation given – The only requirement of law, for such processof decision making by the tender inviting authority, is that it shouldnot be suffering from illegality, irrationality, mala fide, perversity,or procedural impropriety – No such case being made out, thedecision of the tender inviting authority (NVS) in the present casewas not required to be interfered with on the reasoning that accordingBto the writ Court.

Principles/Doctrines – Doctrine of ‘Contra proferentem’ –Applicabilty of – It is applied in the case of ambiguity in the insurancepolicy because the policies are made by the insurer and its ambiguitycannot be allowed to operate against the insured- However, thisCrule cannot be applied to lay down that in case of any ambiguity ina tender document, it has to be construed in favour of a particularperson who projects a particular view point- The obviousinapplicability of this doctrine to the eligibility conditions in a noticeinviting tender could be visualised from a simple fact that in case ofDambiguity, if two different tenderers suggest two differentinterpretations, the question would always remain as to which ofthe two interpretation is to be accepted?- Obviously, to avoid suchunworkable scenarios, the principle is that the author of the tenderdocument is the best person to interpret its documents andrequirements.E

Allowing the appeals, the Court

Conclusion

Allowing the appeals, the Court

Held: 1.1. The author of the tender document is taken tobe the best person to understand and appreciate its requirements;and if its interpretation is manifestly in consonance with theFlanguage of the tender document or subserving the purchase ofthe tender, the Court would prefer to keep restraint. Further tothat, the technical evaluation or comparison by the Court isimpermissible; and even if the interpretation given to the tenderdocument by the person inviting offers is not as such acceptableto the Constitutional Court, that, by itself, would not be a reasonGfor interfering with the interpretation given. [Para 17][886-H;887-A-B]

1.2. Even if some organisations/institutions, with referenceto their requirements or other relevant factors, had assumedthese two products, i.e., “Tablets” and “Smart Phones” akin toH

each other, the facts do remain that these very products havebeen placed under different categories on the online portal GeMand have also been taken as classifiable differently by the customsauthority. In the given set of facts and classifications, the decision,as taken by NVS and its TEC, cannot be said to be suffering fromirrationality, absurdity or mala fide. The analysis of the writ Courtneeds to stop at that. Beyond this point, the writ Court would notbe substituting its preferred interpretation of the tender conditionwith the one adopted by the author of the tender document andthe person procuring the product, who has to be regarded as thebest person to understand its requirements. [Para 21.1][888-D-E]

1.3. Neither the excessive analysis, as entered into by theHigh Court, was required in this case nor we would be evaluatingall the specifications of these two products, namely, “SmartPhones” and “Tablets”. Suffice it to notice for the present purposethat even if both are electronic devices and even if several oftheir utility features are the same or similar, their categorisationunder different headings is also a fact not unknown to the parties,as would appear from the categorisation on the Governmentonline portal itself. No adjudicatory process is called for and theinterpretation as put by the tender inviting authority-NVS doesnot deserve interference. [Para 21.2][888-F-H]

1.4 Even if some of the organisations, in relation to theirrequirements, procured tablets and smart phones both under thesame tender process or even used these expressions“interchangeably” or “interconnected”, that by itself cannot leadto a definite conclusion by the Court that “Smart Phones” and“Tablets” are to be taken as similar category products for thetender process in question. [Para 22.4][896-G-H]

1.5. Interference by the High Court in this matter does notappear justified, particularly when no case of mala fide or bias isalleged. [Para 23][897-A]

1.6. The process of interpretation of terms and conditionsis essentially left to the author of the tender document and the A

B

C

D

E

F

G

Aoccasion for interference by the Court would arise only if thequestioned decision fails on the salutary tests laid down andsettled by this Court in consistent decisions, namely, irrationalityor unreasonableness or bias or procedural impropriety. [Para24][897-D-E]

B1.7. Even from the extracted part of the principles relatedwith the ‘contra proferentem rule’, as reproduced by this Courtfrom the Halsbury’s Laws of England, it is clear that the said rulewas applied in the case of ambiguity in the insurance policy becausethe policies are made by the insurer and its ambiguity cannot beallowed to operate against the insured. This rule, in our view,Ccannot be applied to lay down that in case of any ambiguity in atender document, it has to be construed in favour of a particularperson who projects a particular view point. The obviousinapplicability of this doctrine to the eligibility conditions in anotice inviting tender could be visualised from a simple fact thatDin case of ambiguity, if two different tenderers suggest twodifferent interpretations, the question would always remain as towhich of the two interpretation is to be accepted? Obviously, toavoid such unworkable scenarios, the principle is that the authorof the tender document is the best person to interpret itsdocuments and requirements. [Para 24.2][898-B-E]E

1.8. It had not been a case of post facto interpretations bythe tender inviting authority-NVS. Certain suggestions made onbehalf of the writ petitioner about the tender inviting authoritychanging the terms to suit a particular bidder remain baseless.No such case of mala fide has been made out; rather, as pointedFout on behalf of the appellant, all the other tenderers clearlyunderstood the meaning and requirement of the past performancecriterion and stated the particulars of tablets supplied by them inthe past. Such contentions of the writ petitioner have only beennoted to be rejected. [Para 26][899-C-D]

G

1.9. Consequently, these appeals succeed and are allowed;the impugned judgment and order dated 27.09.2021 is set aside;Writ Petition (C) No. 6676 of 2021, as filed by the writ petitioner,is dismissed with no order as to costs. [Para 29][899-H; 900-A]

H

M/s AGMATEL INDIA PVT. LTD. v. M/s RESOURSYSTELECOM & ORS.

Reliance Energy & Anr. v. Maharashtra State RoadDevelopment Corporation Ltd & Ors. (2007) 8 SCC 1: [2007] 9 SCR 853 – inapplicable.

A

Nabha Power Ltd. v. Punjab SPCL (2018) 11 SCC 508: [2017] 14 SCR 301; United India Insurance Co. Ltd.v. Orient Treasures (P) Ltd. (2016) 3 SCC 49 : [2016] 1SCR 1 – distinguished.

B

Tata Cellular v. Union of India (1994) 6 SCC 651 :[1994] 2 Suppl. SCR 122 – referred to.

Afcons Infrastructure Limited v. Nagpur Metro RailCorporation Limited & Anr. (2016) 16 SCC 818 : [2016]3 SCR 551; Galaxy Transport Agencies v. New J KRoadways 2020 SCC OnLine SC 1035 – relied on.

C

E

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 786 of2022.

From the Judgment and Order dated 27.09.2021 of the High Courtof Delhi at New Delhi in Writ Petition (C) No. 6676 of 2021.

F

With

Civil Appeal No. 787 of 2022.

Tushar Mehta, SG, T. Sundar Ramanathan, Udayaditya Banerjee,Vivek Pandey, Ishaan Chakrabarti, Ms. Harshpreetha, Rupesh Kumar,Aditya Manubarwala, Ms. Neelam Sharma, Ms. Pankhuri Shrivastava,Dhananjai Jain, Advs. for the appearing parties.

G

H

AThe Judgment of the Court was delivered byDINESH MAHESHWARI, J.

Contents*

Preliminary .......................................................................................... 1BRelevant Factual Matrix and Background .......................................... 3High Court disapproves the decision of tender inviting authority........ 7Rival Submissions.............................................................................. 16Interpretation of Tender Document: Relevant Principles ................. 23CApplication of relevant principles to the case at hand ...................... 28

Conclusion ......................................................................................... 44

Preliminary

Leave granted.2. These two appeals against the same judgment and order datedD27.09.2021, as passed by the High Court of Delhi at New Delhi in WritPetition (C) No. 6676 of 2021, have been considered together and aretaken up for disposal by this common judgment.

2.1. By the impugned judgment and order dated 27.09.2021, theHigh Court has accepted the writ petition filed by the respondent No. 1Eof these appeals (M/s. Resoursys Telecom- hereinafter referred to as‘the writ petitioner’) and has disapproved the technical disqualificationand consequential rejection of the technical bid of writ petitioner in respectof a tender floated by the appellant of the appeal arising out of SLP(C)No. 16672 of 2021 (Navodaya Vidyalaya Samiti – hereinafter referredFto as ‘NVS’). The appellant of the other appeal arising out of SLP(C)No. 16671 of 2021 (Agmatel India Pvt. Ltd. – hereinafter referred to as‘Agmatel’) is said to be the bidder whose offer was accepted by NVSafter technically disqualifying the writ petitioner.

3. The crux of the matter involved in these two appeals is as to Gwhether the High Court has been justified in interfering with the viewtaken by the tender inviting authority, i.e., NVS, in rejection of the technicalbid of writ petitioner for want of fulfilment of ‘Past Performance’ criterionabout supply of ‘same or similar Category Products’ of 60% of bidquantity in at least one of the last three financial years?

*Ed. Note : Pagination in the contents is as per the original Judgment.H

3.1. It may be observed at the outset that a contention had alsobeen urged, particularly on behalf of Agmatel, that the High Court ofDelhi had no jurisdiction to entertain the subject writ petition when allthe material events took place in the State of Uttar Pradesh and whenthe tender inviting authority was also in the State of Uttar Pradesh. TheHigh Court has rejected this objection with reference to the fact thatsuch an objection was not taken by the tender inviting authority-NVS,who was even otherwise operating under the Department of SchoolEducation and Literacy, Ministry of Human Resources Development,New Delhi. This aspect has not been given much emphasis before usand we would also leave it at that only, while dealing with the matter onits merit.

4. It may also be observed that while considering these appealsinitially on 29.10.2021, we had considered it appropriate to take up thematters for final hearing at the admission stage itself, particularly lookingto the object of the tender process in question, for that being related witheducation of the children. However, in the circumstances of the case,we had stayed the operation of the impugned order of the High Courtwhile providing that status quo in relation to the tender process in questionshall be maintained by all the concerned. After completion of pleadings,we have heard learned counsel for the parties finally at the admissionstage.

5. After the foregoing preliminary comments, we may take noteof the factual aspects in brief, and insofar as relevant for the issues athand.

RelevantFactualMatrixandBackground

6. The dispute in the present appeals has its genesis in a NoticeInviting Tenders (‘NIT’) bearing No. GEM/2021/b/1032762, as issuedby the appellant-NVS on 12.02.2021 on the Government online portali.e., Government e-market Place (‘GeM’) for supply of 68,940 Tabletsfor school children. The NIT carried with it several of the terms andconditions but, we are concerned in the present appeals with the termsand conditions pertaining to ‘Experience’ and ‘Past Performance’ of thebidders. The relevant terms and conditions may be extracted as under: - “1. Experience Criteria: In respect of the filter applied forexperience criteria, the Bidder or its OEM {themselves or throughreseller(s)} should have regularly, manufactured and supplied same A

B

C

D

E

F

G

H

868SUPREME COURT REPORTS

Aor similar Category Products to any Central / State GovtOrganization / PSU / Public Listed Company for number ofFinancial years as indicated above in the bid document before thebid opening date. Copies of relevant contracts to be submittedalong with bid in support of having supplied some quantity duringeach of the Financial year. In case of bunch bids, the category ofBprimary product having highest value should meet this criterion.

****** ***** ******

4. Past Performance: The Bidder or its OEM {themselves orthrough re-seller(s)} should have supplied same or similarCCategory Products for 80% of bid quantity[1], in at least oneof the last three Financial years before the bid opening dateto any Central/State Govt Organization / PSU / Public ListedCompany. Copies of relevant contracts (proving supply ofcumulative order quantity in anyone financial year) to be submittedalong with bid in support of quantity supplied in the relevantDFinancial year. In case of bunch bids, the category related toprimary product having highest bid value should meet this criterion.”

Bid Specific Additional Terms and Conditions “****** ***** ******

E3. The Bidder / OEM {themselves or through reseller(s)}, shouldhave executed project for supply and installation/ commissioningof same or similar Category Products during preceding 3financial years (i.e. current year and three previous financial years)as on opening of bid, as per following criteria:

F(i) Single order of at least 35% of estimated bid value; or

(ii) Two orders of at least 20% each of estimated bid value; or

(iii) Three orders of at least 15% each of estimated bid value.

****** ***** ******

G14. Experience Criteria: The Bidder or its OEM

{themselves or through reseller(s)} should have regularly,manufactured and supplied same or similar Category Products 1 This quantity requirement of 80% was admittedly reduced to 60% by way of aHcorrigendum issued by the tender inviting authority.

to any Central/ State Govt Organization / PSU / Public ListedCompany for 3 years before the bid opening date. Copies ofrelevant contracts to be submitted along with bid in support ofhaving supplied some quantity during each of the year. In case ofbunch bids, the primary product having highest value should meetthis criterion.”

(emphasis in bold supplied)

6.1. It is the requirement concerning “same or similar CategoryProducts” in the aforesaid conditions which forms the bone of contentionin these appeals.

7. The writ petitioner M/s. Resoursys Telecom responded to thesaid NIT and offered its bid for the product i.e., “Tablet” which is beingmanufactured by an Indian company namely, Lava International Limited,after having necessary approvals from the manufacturer (OEM). Afteropening the technical bids on 08.05.2021, the appellant-NVS rejectedthe bid of the writ petitioner on 25.06.2021, while stating the reason ofrejection as ‘technical specification mismatch’. The writ petitioner feltthat the grounds for rejection were not discernible and the rejection wasvague and ambiguous; and, therefore, made a representation dated27.06.2021 seeking clarification of the reason for rejection. The appellant-NVS, in its reply dated 29.06.2021, inter alia, stated as under: - “1. Does not qualify past Performance (Page 124) of tenderdocument for any of the FY 2018-19, 2019-20, 2020-21. WorkOrders of Smart Phones, Laptops, Aadhar Kits, Printers, Power-bank, etc are not considered as same or similar category productsof tablets.”

7.1. The writ petitioner M/s. Resoursys Telecom, as also the saidOEM Lava International Limited submitted further representations whilemaintaining that they were duly complying with the Past Performanceclause of the tender document. The appellant-NVS stated in its responsedated 01.07.2021 that they were procuring “Tablets” for learningmanagement and the Technical Evaluation Committee (‘TEC’) hasconsidered only “Tablets” under similar category ‘to ensure provenproducts’.

8. At this juncture, we may take note of the facts emerging onrecord that the writ petitioner, in order to assert its fulfilment of the abovereferred Past Performance criterion, has relied upon the statements made A

B

C

D

E

F

G

H

Aby its OEM in the letter dated 16.04.2021, wherein the supplies made inthe financial year 2019-2020 to Punjab Infotech, Directorate of Welfareof Scheduled Castes-Assam, Directorate of Welfare of Plain Tribes &Backward Classes–Assam, and Directorate of Women and ChildDevelopment Kerala were referred and it was also stated that they hadreceived the biggest purchase order of 1,75,443 units of “Smart Phones”Bfrom Punjab Infotech and supplied the device successfully. We shall beadverting to the relevant details of the said letter dated 16.04.2021hereafter later, in the segment of discussion.

8.1. It has been the case of the appellants that in the aforesaidsupplies, only smart phones were supplied to Punjab Infotech and to theCDirectorate of Women and Child Development, Kerala; and the product “Smart Phone” does not fall within the description of “same orsimilar Category Product” vis-à-vis the product required underthe NIT in question, i.e., “Tablet”.

D9. Being aggrieved by the decision taken by the tender invitingauthority, the writ petitioner M/s. Resoursys Telecom preferred the writpetition leading to these appeals with the submissions, inter alia, thatthe process in question was vitiated due to an arbitrary and whimsicaldecision taken by the tender inviting authority. During the pendency ofwrit petition, it was informed by the tender inviting authority that theEcontract in question had been awarded to the other bidder who wasfound qualified and successful; and the application for impleadment madeby the said successful bidder-Agmatel was allowed by the High Court.

High Court disapproves the decision of tender invitingauthorityF

High Court disapproves the decision of tender invitingauthorityF

10. In essence, the submission of the writ petitioner before theHigh Court was that a “Tablet” was an electronic product belonging tothe “same or similar category” as a “Smart Phone”; and that the decisionof the NVS, excluding “Smart Phones” from “same or similar CategoryProducts” was unreasonable and against the principles of fair play andGlogic. On behalf of the writ petitioner, strong reliance was placed onvarious tender notices issued by other departments and institutions,including the Electronic and Information Technology Departments ofthe States of Kerala, Himachal Pradesh, Bihar and Meghalaya; and itwas submitted that in all such tender notices, the past experience ofsupply of tablets and smart phones had been treated alike. On the otherH

hand, it was submitted on behalf of the tender inviting authority-NVSthat the products like tablets, computers and smart phones were electronicgoods, distinguishable on the basis of their technical, commercial andtrade- related definitions, norms, and regulations provided by theauthorities concerned. It was also argued that the tender inviting authoritywas the best person to interpret the terms of tender, and its decisioncould only be examined in case of it being arbitrary, biased or mala fide;and no such case being alleged, no interference was called for. Thesame contentions were urged on behalf of the impleaded party-Agmatel,while also raising the objection of jurisdiction.

11. While dealing with the rival contentions, the High Court ofDelhi, after rejecting the contention on jurisdiction, formed the view thatthe product “Smart Phone” was definitely a similar category product as“Tablet”; and the tender inviting authority as also its TEC had beenunjustified in giving a restrictive meaning to the terms of NIT; and if atall there was any ambiguity, the tender inviting authority cannot be left tothe option of interpreting the terms contrary to their plain meaning. TheHigh Court, therefore, proceeded to allow the writ petition anddisapproved the rejection of technical bid of the writ petitioner. It shallbe appropriate to summarise the relevant aspects of the reasons thatprevailed with the High Court in allowing the writ petition.

11.1. The High Court took note of the contentions that the tenderfloating authority was the best judge to determine the conditions of atender but, in that regard, referred to a passage from the decision of thisCourt in the case of Reliance Energy & Anr. v. Maharasthra StateRoad Development Corporation Ltd & Ors.: (2007) 8 SCC 1 to theeffect that in invitation to tenders, the terms and conditions must indicatethe norms and benchmarks with legal certainty; and if there be anyvagueness and subjectivity in the said norms, it may result in unequaland discriminatory treatment and violate the doctrine of “level playingfield”. The High Court, thereafter, observed that it was nobody’s casethat “Smart Mobile Phones” were the “same” category products as“Tablets”; and that the issue was as to whether under the terms of NIT,“Smart Mobile Phones” could be called “similar Category Products” as“Tablets”.

11.2. Thereafter, the High Court referred to the aforementionedterms and conditions of NIT and opined that when the expression usedhad been “category” before the word “product” and with the qualifying A

B

C

D

E

F

G

H

Aexpression “similar”, the intendment was not to exclude such productswhich were of “similar category”; and the intention had not been toinsist only for “same” category products. Having thus minutely analysedthe expressions “same”, “similar” and “category” as also the relatedsemantics, the High Court proceeded to indicate the perceived similaritiesof the two products, i.e., “Smart Phones” and “Tablets” including thatBboth were electronic products; were used for audio-visual reception/transmission of data; were having facilities of running programmes andapplications; were sold and traded through the same channels and werelikely to be found in the same shop; and were being sold by the largemanufacturers and producers under the same brand. The High Court,Cthus, concluded that even if the said two products were not the “same”,it would not mean that they do not belong to “similar Category ofProducts”. The High Court further said that the interpretation prevalentin the market, where these products were treated as falling in “similar”category, was demonstrated by the writ petitioner with reference to fivetenders floated by different Governments/PSUs in different parts of theDcountry. Applying such test, the High Court concluded that NVS couldnot have excluded the product “Smart Mobile Phones” from the “similar”category vis-a-vis the product “Tablets”. According to the High Court,the clause in question had been so worded as to provide maximumcompetition. These observations and findings of the High Court, formingEthe core of its decision, could be usefully reproduced as under: - “29. From the above, it would be seen that the author of the tenderin question has consciously and repeatedly used the expression“Category” before the word “Product”. Thus, the use of theexpression “Category” is not inadvertent, or unintentional.FSecondly, the author has also repeatedly used the words “same orsimilar” in relation to – not the product in question, but in relationto the category of products to which “Tablet” belongs. The use ofthe plural i.e. “Products”, and not “Product” also shows that theauthor was conscious that within the same or similar category ofproducts, there would be products other than “Tablets”. Pertinently,Gthe expression used is not “same products”, or even “sameCategory Products”. It is “same or similar Category Products”.Firstly, the use of the word “Category” shows that not just thesame product, but all products which fall in the same categorywhich are covered. Thus, if the expression used would have beenH“same Category Products”, other products which fall in the same

category – as a Tablet, would be covered. The respondents havethemselves enlisted other products which fall in the same categoryof products, as Tablets. They are “Slate tablets, ConvertibleTablets, Hybrid Tablets, Phablets, Rugged tablets, ToughTablets, Booklet, Microsoft Surface, Amazon Kindle Fire,Surface Pro Tablet PC, iPad, iPad Air, iPad Pro, iPad Mini,Samsung Galaxy Tab, and ThinkPad.” However, the respondentNVS has further enlarged the scope, by using the expression“similar Category Products”. By using this expression, all productswhich fall in similar categories – to the category in which Tabletsfall, are also covered. The expression “similar” does not mean“same”. Therefore, a thing which is “similar” to another, wouldnot be the same as that other. In the present context, the word“similar Category” has to be understood in relation to the natureand usage of the categories of products being compared.According to the Cambridge Dictionary, the word “same” means“exactly like another or each other”, whereas the word“similar” means “looking or being almost, but not exactly, thesame”. Thus, if it was indeed the intent of the Respondent toexclude similar category products, from the category of productsin which “Tablet” falls, they need not have used the words “sameor similar category products”. They would have simply said“same products”, or “same category products”

30. Both smart mobile phones, and Tablets, are electronic products.Both are used for audio-visual reception/ transmission of data.Both have facility of running programmes and applications toperform varied tasks, such as, receiving and sending messages/e-mails, surfing internet, downloading content from the internet,viewing audio-visual content, transmitting audio-visual and the like.Both also have the facility to make audio calls through datanetworks – though, mobile phones use the mobile call network forregular calls. Both these products are sold and traded through thesame channels. In the same shop, which sells smart mobile phones,one is likely to find Tablets, and vice versa. In fact, the largermanufacturers and producers of electronic goods produce andsell both – smart mobile phones, and tablets under the same brand.There are bound to be differences, since these two products arenot “same”. They may not even belong to the “same category” of AB

C

D

E

F

G

H

Aproducts. However, merely because they are not “same”, it doesnot mean that they do not belong to “similar category of products”.

31. The terms of tender must receive the natural and commonlyunderstood interpretation, which has been prevalent in the trade.What is prevalent in the trade has been demonstrated by theBpetitioner – by reference to the 5 tenders floated by differentGovernment/ PSUs in different parts of the country for same/similar products.

32. Applying the said test, can it be said that the respondent NVScould exclude smart mobile phones from the similar category ofCproducts, as Tablets? The answer is an emphatic “No”. TheClause, intentionally, has been worded loosely in order to havemaximum competition amongst bidders.”

11.3. Thereafter, the High Court took note of the stand taken byNVS in its reply dated 01.07.2021 and that taken in the counter affidavitDfiled before the Court and observed that the TEC of NVS, on its own,had decided to curtail the competition by narrowing the scope of theeligibility criteria by taking only tablets as falling under “similar” categoryand not considering the past supplies of other products like smart mobilephones, laptops etc. The High Court, however, observed that exclusionof the products like Aadhaar kits, printers, power-banks etc. was notEbeing considered and the TEC might have been justified in not consideringthem as falling under “similar” category products but, the TEC could nothave gone outside the scope of tender. The Court further observed thatin the counter affidavit, the averment had been to the effect that the“Tablets” and “Smart Mobile Phones” were not of “same” product orF“similar” product but the criterion had been of “similar Category ofProducts” and these words were not of surplusage. The High Courtdisapproved the stance of NVS, as being not in conformity with opencompetition and found it unacceptable in public interest. The High Courtobserved and held thus: - G“36. Thus, it is evident to us that the Technical EvaluationCommittee (TEC) of the respondent NVS, on its own decided tocurtail the competition by narrowing the scope of the eligibilitycriteria, by consideration of only Tablets as falling under similarcategory, and not to consider past supplies for other products likesmart phones, laptops, etc, which are covered under “same orH

similar category products”, as tablets. We are not concernedwith the exclusion of products like Aadhar kits, printers, powerbank, etc. in the facts and circumstances of the present case.The TEC of the respondent NVS may have been justified in notconsidering past experience/ turnover of supply of products likeaadhar kits, printers, power banks, etc., as falling under similarcategory products, as that of the tablets. However, the TEC ofthe respondent NVS could not have gone outside the scope ofthe tender to lay down its own criteria to determine the eligibilityof the bidders. They were bound to adhere to, and strictly complywith the terms and conditions stipulated in the tender floated byNVS. The decision taken by the TEC to exclude from considerationall other similar category products – for the purpose of evaluatingpast performance of the bidders, was wholly incompetent andbeyond the authority of the TEC.

37. From the counter affidavit, we also find that at various places,the respondent has averred that Tablets and smart mobile phonesare not the same product, or similar product. It appears to us thatthe respondent has forgotten the eligibility criteria set out in theNIT, which is, “same or similar category products”, and not“same product” or even “similar products.”

38. If that interpretation as given by the respondent NVS were tobe accepted, the word “similar category of products” becomes asurplusage, which cannot be the intention attributed to the tenderframing authority.

39. To arbitrarily and whimsically change the goalpost, anddetermine what can, and cannot, be considered a “similar product”,at the time of evaluation of bids, disrupts the level playing fieldfor bidders and extinguishes healthy competition. The respondentshave argued that smartphones and tablets are separate products,and there can be no doubt about it. This is a no brainer. However,they don’t say that these two products are not even falling undertwo different similar categories of products.

40. The restrictive interpretation given by the respondent NVS tothe aforesaid tender conditions – not borne out from the tenderterms and conditions, which would curb competition, does not findfavour with the Court, in Public Interest. The whole purpose of AB

C

D

E

F

G

H

876SUPREME COURT REPORTS

Aissuing a tender is to invite maximum bids from bidders meetingthe technical qualification so that the employer/ tender floatingauthority gets the most favourable product/services, at the mostcompetitive price.”

11.4. The High Court, thereafter, referred to a decision of thisBCourt in Nabha Power Ltd. v. Punjab SPCL: (2018) 11 SCC 508 forapplication of the “five condition test” for an implied condition to be readinto the contract, including the “business efficacy test” and highlightedthe principles laid down by this Court that “implied term” was a conceptnecessitated when the referred five conditions were satisfied and therewas a strict necessity for it. On that basis, the High Court observed thatCNVS could have neither implied any term in the tender nor given restrictivemeaning to the clear language of the tender. The High Court, thereafter,referred to the doctrine of ‘Contra proferentem’, as referred to in thecase of United India Insurance Co. Ltd. v. Orient Treasures (P)Ltd.: (2016) 3 SCC 49, whereby, any ambiguity in an insurance policyDwould be resolved by a construction favourable to the insured. The HighCourt observed and held that if at all there was an ambiguity, it would beconstrued against the drafter of the tender; and in the absence of ambiguity,the plain meaning of the condition must be complied with. Having saidso, the High Court observed that each and every word of a tender mustbe given a meaning, for it being a serious exercise; and TEC cannotEevolve its own criteria to evaluate the eligibility of bidders, contrary tothe terms and conditions of the tender.

11.5. Before concluding on the matter, the High Court observed,with reference to the decision of this Court in Tata Cellular v. Union ofIndia: (1994) 6 SCC 651, that the tender floating authority was theFbest person to interpret the terms of the tender but the said authoritycannot act arbitrarily, whimsically or contrary to the terms and conditionsof the tender. The High Court reiterated that in the first place, the termsand conditions were clear and if at all they were ambiguous, it could notbe left to the option of tender floating authority to interpret it in a mannerGwhich is contrary to their plain meaning. The High Court said thus: - “47. We are conscious of the scope of judicial scrutiny in tendermatters. We are also conscious that the tender floating authorityis best person to interpret the terms of the tender, as they knowwhat best is the requirement and how to achieve the same. (seeHTata Cellular v. UOI (1994) 6SCC 651) However, the authorities cannot act arbitrarily, whimsically and contrary to the terms andconditions of the tender. As noticed hereinabove, the terms andconditions of the tender are clear. However, even if the terms ofthe tender are unclear and ambiguous, can it be left to the optionof the tender floating authority to interpret it in a manner which iscontrary to their plain meaning? The answer is “No”.”

11.6. With the aforementioned reasons, findings and observations,the High Court proceeded to allow the writ petition and held the rejectionof the technical bid of the writ petitioner as unreasonable and arbitrary,while holding that “Smart Mobile Phones” fall in “similar CategoryProducts’. Accordingly, the High Court directed the appellant-NVS toprocess the technical bid of the writ petitioner and thereafter proceed inaccordance with law.

11.7. Feeling aggrieved by the aforesaid judgment and order dated27.09.2021, the tender inviting authority-NVS as also the bidder who isdeclared successful-Agmatel have preferred these appeals.

RivalSubmissions

12. Assailing the judgment and order so passed by the High Court,learned Solicitor General of India appearing for the appellant-NVS hasreferred to the facts that the tender notice in question was issued forsupply of Tablets for the students of Class XI and XII, with specific pastperformance criterion that the bidder or its OEM, themselves or throughresellers, ought to have supplied same or similar category products tothe extent of 80% of bid quantity (which was changed to 60% bycorrigendum) in at least one of the last three financial years before bidopening date to any Central/State Government Organisation/PSU/PublicListed Company; and when the technical bids were opened, the writpetitioner was declared disqualified for having fallen short in pastperformance criterion by 10.20%. In this regard, the learned SolicitorGeneral has particularly referred to the details stated in the additionalaffidavit filed on behalf of the appellant-NVS. We shall refer to therelevant part of these details too, in the segment of discussion.

12.1. The learned Solicitor General would argue that the writpetitioner had erroneously added its past supplies towards “Smart Phones/Mobile Handsets” and “Power Banks” so as to fulfil the past performancecriterion required for awarding the tender for “Tablets” and hence, suchsupplies were not counted towards the requisite 60% of the bid quantity.

A

B

C

D

E

F

G

H

A12.2. The learned Solicitor General has contended that “SmartPhones” and “Tablets” are two different products and belong to differentcategories and in this regard, has particularly referred to GeM portal ofthe Ministry of Commerce and Industry, Government of India. It hasbeen submitted that on the said portal, “Smart Phones” and “Tablets”have been placed in totally different categories inasmuch as “Tablets”Bfall under the category “Computer Equipment and Accessories” withinsub-category “Computers” whereas “Smart Phones” fall under thecategory “Communication Devices and Accessories” within sub-category“Personal Communication Devices”. The “Smart Phones” also fall underthe category “Data Voice or Multimedia Network Equipment or PlatformsCand Accessories” within sub- category “Digital Mobile Equipment andComponents”. With such categorisation, the learned Solicitor Generalwould argue, the stand of the appellant-NVS is fortified that “SmartPhones” do not fall under same or similar category products as “Tablets”.It has further been argued that the terms were clear and none of theparticipating bidder found any ambiguity therein and hence, provided theDrequisite details of the supplies pertaining to “Tablets” only, except thewrit petitioner. There was neither any ambiguity nor anyone asked forany clarification including the writ petitioner and only request was forreducing the past performance quantity from 80% to 40% whereupon,the quantity was reduced by corrigendum to 60%. The contention, thus,Ehas been that everyone including the writ petitioner well understood therequirement in the past performance criterion as being that of supply of“Tablet” computers only.

12.3. It has further been submitted that the expressions “same” or“similar” category products in the tender condition were obviously inFreference to different varieties and types of “Tablets”, like Slate Tablets,Convertible Tablets, Hybrid Tablets, Phablets, Rugged Tablets, ToughTablets, Booklet, Microsoft Surface, Amazon Kindle Fire, Surface ProTablet PC, iPad, iPad Air, iPad Pro, iPad Mini, Samsung Galaxy Tab,ThinkPad etc.G12.4. With reference to the decision of this Court in AfconsInfrastructure Limited v. Nagpur Metro Rail Corporation Limited& Anr.: (2016) 16 SCC 818, the learned Solicitor General has arguedthat author of the tender document is the best person to understand andappreciate its requirements; and that the Courts must defer to suchunderstanding and appreciation of tender documents by the tender invitingH

authority, unless there be any allegation of mala fide or perversity. Thelearned Solicitor General has particularly referred to the enunciation bythis Court that even if an interpretation to the tender document by theauthor of the tender is not acceptable to the Constitutional Court, that, byitself, would not be a reason for interfering with the interpretation given.

12.5. It has further been contended that the threshold of mala fideintention to favour someone or arbitrariness or irrationality or perversitymust be met before the Court would interfere with the decision-makingprocess or the decision itself. Even in the case of ambiguity or doubt, theCourt would be refraining from giving its own interpretation unless theinterpretation given by the administrative authority is shown to be perverseor mala fide or intended to favour someone. The learned Solicitor Generalhas contended that there being no finding about any mala fide or perversityor bias, the High Court has erred in interfering in the present tenderprocess. It has been argued that even if the interpretation of tenderdocument by the appellant was not found acceptable by the High Court,that, by itself, was not a sufficient reason for interference. It has alsobeen submitted that the interpretation of the appellant-NVS is based onthe pre-dominant purpose of the goods sought to be procured and noarbitrariness or irrationality could be imputed therein.

12.6. In its written submissions, the appellant-NVS has alsoadverted to the other purchases/tenders referred by the writ petitionerin a tabular form; and has pointed out the distinguishing features. Weshall refer to the relevant contents of this table too hereafter later.

13. More or less similar submissions have been made by the learnedsenior counsel appearing on behalf of the appellant-Agmatel (successfulbidder) while supplementing that the High Court has erred in going intothe technical evaluation of two products and their similarity; and thisremains an impermissible area for judicial review, as held by this Courtin the case of Galaxy Transport Agencies v. New J K Roadways:2020 SCC OnLine SC 1035. The learned senior counsel has furtherargued that the view taken by the tender inviting authority and its evaluationcommittee remains a reasonable view that “Smart Phones” are not similarto “Tablets”. In this regard, the learned senior counsel has, apart fromreiterating the categories specified on the online portal GeM, has alsoreferred to the classification of “Tablet” computers by the Central Boardof Excise and Customs under Section 151A of the Customs Act, 1950while specifically noting that a “Tablet” computer is different from a A

B

C

D

E

F

G

H

A“Smart Phone”, as it is an automatic data processing machine classifiableunder the heading 847130 and not 8517. Learned senior counsel hasfurther referred to the fact that various other authorities have considered“Tablet” computers as computing devices similar to Laptops, PCs etc.,while taking “Mobile Phones” under a different category. Thus, accordingto the learned senior counsel, there being a reasonable view taken byBNVS and there being no mala fide or bias, there was no case forinterference by the High Court.

14. While countering the submissions so made on behalf of theappellants, the learned counsel for the contesting respondent-writpetitioner, has in the first place, submitted that its bid was rejected onCrather specious grounds inasmuch as even the reasons for rejection hadnot been consistent, as noticeable from different stands taken in theinitial rejection dated 25.06.2021, in the clarification dated 29.06.2021, inthe other response dated 01.07.2021 and in the submissions made beforethe High Court and this Court.

D

D

14.1. The main plank of the submissions of the learned counselfor the writ petitioner has been that various similarly placed PSUs andGovernment Agencies, in various tender documents, have used the terms“Tablets” and “Smart Phones” rather interchangeably. In this regard,the learned counsel has referred to the prescriptions in tender documentsEby Meghalaya Information Technology Society, REC Power DistributionCo. Ltd., Department of Education, Government of Bihar, and theHimachal Pradesh State Electronics Development Corporation Ltd. Thelearned counsel has further submitted that, wherever the tender invitingauthority wanted to restrict the past performance only to “Tablets”, thesame was stated in unambiguous terms and has referred to the tenderFdocuments issued by Keltron and the Government of Maharashtra. Thelearned counsel has further submitted that not only tender issuingauthorities have interchangeably used the products “Tablets” and “SmartPhones” but, even the utility based application issued by variousGovernments do not make any distinction between “Tablets” and “SmartGPhones”; and has referred to the Government portal e-pathshala whichprovides for e-pub, an android based application, which is required fortablets and smart phones alike whereas for laptops and desktops, itprovides for flip-book, which is a Windows based programme. It hasalso been pointed out that MSME, Kolkata has issued common trainingprogramme for repair and working of smart phones and tablets.H

14.2. With the aforesaid details and comparisons, it has beencontended on behalf of the writ petitioner that the interpretation soughtto be suggested by the tender inviting authority in the present case isentirely unreasonable and has rightly been interfered with by the HighCourt. It has also been submitted that in the present case, the tenderinviting authority has attempted to exercise its discretion to suit a particularbidder and to curb the competition on rather inconsistent grounds byattempting to distinguish between otherwise identical products. It iscontended that when the tender inviting authority was conscious of theterms stated in a particular manner, it cannot be permitted to changesuch terms by way of interpretation to suit a particular bidder or bytaking away the level playing field. The submission has been that “SmartPhones” and “Tablets” are rather synonymous terms and the stand ofthe appellants deserves to be disapproved.

14.3. It has also been submitted on behalf of the writ petitionerthat in fact, it has been awarded another contract for supply of 3,00,000tablets and it had been regularly supplying various electronic products,including tablets.

14.4. Yet further, it has been submitted that a caution was soundedby the Central Vigilance Commission (‘CVC’) to the effect that the termsof tender must be clear and ascertainable with specificity; and postfacto interpretations must be avoided to bring in transparency in tenderingmatters. Thus, the learned counsel has supported the order impugnedand submitted that the appeals deserve to be dismissed.

15. We have given thoughtful consideration to the rival submissionsand have examined the record with reference to the law applicable.

InterpretationofTenderDocument:RelevantPrinciples

16. The scope of judicial review in contractual matters, andparticularly in relation to the process of interpretation of tender document,has been the subject matter of discussion in various decisions of thisCourt. We need not multiply the authorities on the subject, as suffice itwould be refer to the 3-Judge Bench decision of this Court in GalaxyTransport Agency (supra) wherein, among others, the said decision inAfcons Infrastructure Limited (supra) has also been considered; andthis Court has disapproved the interference by the High Court in theinterpretation by the tender inviting authority of the eligibility term relatingto the category of vehicles required to be held by the bidders, in the A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

Atender floated for supply of vehicles for the carriage of troops andequipment. This Court referred to various decisions on the subject andstated the legal principles as follows: - “14. In a series of judgments, this Court has held that theauthority that authors the tender document is the bestBperson to understand and appreciate its requirements, andthus, its interpretation should not be second-guessed by acourt in judicial review proceedings. In Afcons InfrastructureLtd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC818, this Court held:

C“15. We may add that theownerortheemployerof a project,having authored the tender documents, is the best person tounderstand and appreciate its requirementsandinterpretitsdocuments. The constitutional courts must defer to thisunderstanding and appreciation of the tender documents, unlessthere is mala fide or perversity in the understanding orDappreciation or in the application of the terms of the tenderconditions. It is possible that the owner or employer of aproject may give an interpretation to the tenderdocuments that is not acceptable to the constitutionalcourts but that by itself is not a reason for interferingEwith the interpretation given.”

E

(page 825)

15. In the judgment in Bharat Coking Coal Ltd. v. AMR DevFPrabha 2020 SCC OnLine SC 335, under the heading “Deferenceto authority’s interpretation”, this Court stated:

“51. Lastly, we deem it necessary to deal with anotherfundamental problem. It is obvious that Respondent No. 1 seeksto only enforce terms of the NIT. Inherent in such exercise isinterpretation of contractual terms. However, it must be notedthat judicial interpretation of contractsinthesphereofcommercestandsona distinctfooting than while interpretingstatutes.

G

52. In the present facts, it is clear that BCCL and India havelaid recourse to Clauses of the NIT, whether it be to justifycondonation of delay of Respondent No. 6 in submitting H

performance bank guarantees or their decision to resumeauction on grounds of technical failure. BCCLhavingauthoredthesedocuments,isbetterplacedtoappreciatetheirrequirementsand interpretthem. (Afcons Infrastructure Ltd.v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818)

53. The High Court ought to have deferred to thisunderstanding, unless it was patently perverse or mala fide.Given how BCCL’s interpretation of these clauses was plausibleand not absurd, solely differences in opinion of contractualinterpretation ought not to have been grounds for the High Courtto come to a finding that the appellant committed illegality.”

16. Further, in the recent judgment in Silppi ConstructionsContractors v. Union of India, 2019 SCC OnLine SC 1133, thisCourt held as follows:

“20. The essence of the law laid down in the judgments referredto above is the exercise of restraint and caution; the need foroverwhelming public interest to justify judicial intervention inmatters of contract involving the state instrumentalities; thecourts should give way to the opinion of the experts unless thedecision is totally arbitrary or unreasonable; the court does notsit like a court of appeal over the appropriate authority; thecourt must realise that the authority floating the tender is thebest judge of its requirements and, therefore, the court’sinterference should be minimal. Theauthoritywhichfloatsthecontractor tender, and has authored the tender documents isthe bestjudgeastohowthedocumentshavetobe interpreted.If two interpretations are possible then theinterpretationoftheauthormustbeaccepted. The courts will only interfere toprevent arbitrariness, irrationality, bias, mala fides or perversity.With this approach in mind we shall deal with the present case.”

17. In accordance with these judgments and noting that theinterpretation of the tendering authority in this case cannot besaid to be a perverse one, the Division Bench ought not to haveinterfered with it by giving its own interpretation and not givingproper credence to the word “both” appearing in Condition No.

A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

31 of the N.I.T. For this reason, the Division Bench’s conclusionthat JK Roadways was wrongly declared to be ineligible, is setaside.

18. Insofar as Condition No. 27 of the N.I.T. prescribing workexperience of at least 5 years of not less than the value of Rs. 2crores is concerned, suffice it to say that the expert body, beingthe Tender Opening Committee, consisting of four members, clearlyfound that this eligibility condition had been satisfied by theAppellant before us. Without therefore going into theassessment of the documents that have been supplied tothis Court, it is well settled that unless arbitrariness ormala fide on the part of the tendering authority is alleged,the expert evaluation of a particular tender, particularlywhen it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State ofOrissa, (2007) 14 SCC 517, this Court noted:

“22. Judicial review of administrative action is intended toprevent arbitrariness, irrationality, unreasonableness, bias andmala fides. Its purpose is to check whether choice or decisionis made “lawfully” and not to check whether choice or decisionis “sound”. When the power of judicial review is invoked inmatters relating to tenders or award of contracts, certain specialfeatures should be borne in mind. A contract is a commercialtransaction. Evaluatingtendersandawardingcontractsareessentially commercial functions. Principles of equity andnatural justice stay at a distance. If the decision relating toaward of contract is bona fide and is in public interest, courtswill not, in exercise of power of judicial review, interfere evenif a procedural aberration or error in assessment or prejudiceto a tenderer, is made out. The power of judicial review willnot be permitted to be invoked to protect private interest at thecost of public interest,ortodecidecontractualdisputes. Thetenderer or contractor with a grievance can always seekdamages in a civil court. Attempts by unsuccessful tendererswith imaginary grievances, wounded pride and business rivalry,to make mountains out of molehills of some technical/proceduralviolation or some prejudice to self, and persuade courts tointerfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may holdup public works for years, or delay relief and succour tothousands and millions and may increase the project costmanifold. Therefore, a court before interfering in tender orcontractual matters in exercise of power of judicial review,should pose to itself the following questions:

(i) Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone; or Whether the process adopted or decision made is so arbitraryand irrational that the court can say:“the decision is such thatno responsible authority acting reasonably and in accordancewith relevant law could have reached”;

(ii) Whether public interest is affected.

If the answers are in the negative, there should be nointerference under Article 226. Cases involving blacklisting orimposition of penal consequences on a tenderer/contractor ordistribution of State largesse (allotment of sites/shops, grant oflicences, dealerships and franchises) stand on a different footingas they may require a higher degree of fairness in action.”

(pages 531-532)

19. Similarly, in Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC272, this Court stated as follows:

“26. We respectfully concur with the aforesaid statement oflaw. We have reasons to do so. In the present scenario, tendersare floated and offers are invited for highly complex technicalsubjects. It requires understanding and appreciation of thenature of work and the purpose it is going to serve. It iscommon knowledge in the competitive commercial field thattechnical bids pursuant to the notice inviting tenders arescrutinised by the technical experts and sometimes third-partyassistance from those unconnected with the owner’sorganisation is taken. This ensures objectivity. Bidder’sexpertise and technical capability and capacity must be assessed A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

by the experts. In the matters of financial assessment,consultants are appointed. It is because to check and ascertainthat technical ability and the financial feasibility have sanguinityand are workable and realistic. There is a multi-prong complexapproach; highly technical in nature. The tenders where publiclargesse is put to auction stand on a different compartment.Tender with which we are concerned, is not comparable toany scheme for allotment. This arena which we have referredrequires technical expertise. Parameters applied are different.Its aim is to achieve high degree of perfection in execution andadherence to the time schedule. But, that does not mean, thesetenders will escape scrutiny of judicial review. Exercise ofpower of judicial review would be called for if the approach isarbitrary or mala fide or procedure adopted is meant to favourone. The decision-making process should clearly show thatthe said maladies are kept at bay. But where a decision istaken that is manifestly in consonance with the languageof the tender document or subserves the purpose forwhich the tender is floated, the court should follow theprinciple of restraint. Technical evaluation or comparisonby the court would be impermissible. The principle that isapplied to scan and understand an ordinary instrument relatableto contract in other spheres has to be treated differently thaninterpreting and appreciating tender documents relating totechnical works and projects requiring special skills. The ownershould be allowed to carry out the purpose and there has to beallowance of free play in the joints.”

(page 288)

20. This being the case, we are unable to fathom how the DivisionBench, on its own appraisal, arrived at the conclusion that theAppellant held work experience of only 1 year, substituting theappraisal of the expert four- member Tender Opening Committeewith its own.”

(Underlining emphasis in the original; emphasis in bold supplied)

17. The above-mentioned statements of law make it amply clearthat the author of the tender document is taken to be the best person tounderstand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document orsubserving the purchase of the tender, the Court would prefer to keeprestraint. Further to that, the technical evaluation or comparison by theCourt is impermissible; and even if the interpretation given to the tenderdocument by the person inviting offers is not as such acceptable to theConstitutional Court, that, by itself, would not be a reason for interferingwith the interpretation given.

Applicationofrelevantprinciplestothecaseathand

18. Applying the aforesaid principles to the case at hand, we areclearly of the view that the impugned order cannot be sustained.

19. In relation to the contention that the tender inviting authoritywas the best judge to interpret the conditions of tender and the Courtshould not interfere, the High Court referred to an observation by thisCourt in the case of Reliance Energy Ltd. (supra) that when tendersare invited, terms and conditions must indicate norms and benchmarkswith legal certainty. In that case, the said observations came in thebackdrop of the facts that in the eligibility conditions of the tender beforethe Court, one of the criteria had been of the consortium net cash profitof Rs. 200 crores but, the State had not specified the accounting normswith clarity for calculation of net cash profit; and one of the twoacceptable methods of calculation of net cash profit was not taken intoaccount without any reason. In the given facts, the decision of theauthority concerned was found to be arbitrary, whimsical andunreasonable. The said decision in Reliance Energy Ltd. (supra) hasno direct application to the facts of the present case and even otherwise,it has not been the finding of the High Court that the term stated by thetender inviting authority-NVS was lacking in certainty. However, beyondthis, as to which particular product was to be treated as similar categoryproduct, could not have been a matter of interpretative exercise by theCourt, particularly when the view taken by the tender inviting authorityand its evaluation committee has not been shown to be absurd or irrationalor suffering from mala fide.

20. It has also rightly been pointed out by the appellants, withreference to the decision in Afcons Infrastructure Limited (as extractedin the quotation hereinabove), that an interpretation by owner or employerof a project to the tender document may not be acceptable to theConstitutional Courts but that, by itself, would not be a reason for AB

C

D

E

F

G

H

Ainterfering with the interpretation given. In the aforesaid view of matter,the long-drawn exercise by the High Court on the dictionary meaning ofthe words and on semantics, in our view, had been entirely unnecessary.

21. The High Court has even proceeded to find the elements ofsimilarity between “Smart Phones” and “Tablets” (vide paragraph 30Bof the impugned order). The writ petitioner has also made elaboratesubmissions to suggest that “Smart Phones” and “Tablets” are of similarcategory. The respondents, per contra, have also made detailedsubmissions that these two products are neither the same nor of similarcategory. In our view, an elaborate and in-depth analysis of the featuresand categorisation of these two products is not called for but, for theCreason that the High Court has adopted such a course, a few commentson this aspect would also be apposite.

21.1. Even if some organisations/institutions, with reference to theirrequirements or other relevant factors, had assumed these two products,i.e., “Tablets” and “Smart Phones” akin to each other, the facts do remainDthat these very products have been placed under different categories onthe online portal GeM and have also been taken as classifiable differentlyby the customs authority. In the given set of facts and classifications, thedecision, as taken by NVS and its TEC, cannot be said to be sufferingfrom irrationality, absurdity or mala fide. In our view, the analysis of theEwrit Court needs to stop at that. Beyond this point, the writ Courtwould not be substituting its preferred interpretation of the tender conditionwith the one adopted by the author of the tender document and theperson procuring the product, who has to be regarded as the best personto understand its requirements.F21.2. Putting it differently, neither the excessive analysis, as enteredinto by the High Court, was required in this case nor we would beevaluating all the specifications of these two products, namely, “SmartPhones” and “Tablets”. Suffice it to notice for the present purpose thateven if both are electronic devices and even if several of their utilityfeatures are the same or similar, their categorisation under differentGheadings is also a fact not unknown to the parties, as would appear fromthe categorisation on the Government online portal itself. Beyond thisaspect, in our view, no adjudicatory process is called for and theinterpretation as put by the tender inviting authority-NVS does not deserveinterference. Similarly, if in some of the notice inviting tenders, bothHsmart phones and tablets were stated, or in some of the tenders, specific product tablet alone was stated, that would also not be decisive becausethat would, obviously, depend on the purpose for which the procurementwas being made; and the procuring party, i.e., the tender inviting authority,ought to be extended the latitude to decide on its requirements.

A

22. In the same context, we may also deal with another feature ofthis case related with the supplies made by the writ petitioner to differentBorganisations pursuant to different tender notices.

22.1. As noticed, the writ petitioner, in order to assert its fulfilmentof the above referred Past Performance criterion, has relied upon thestatements made by its OEM in the letter dated 16.04.2021. That readsas under: - C

“PO details in FY 2019-20 (Single Year): Past Performance Clause D

E

F

G

H

We have even received the Biggest Purchase order of round175443 Units of Smart phones by Punjab Infotech for EducationPurpose and supplied the device successfully. PO and CompletionCertificate is enclosed.”

A

22.2. In regard to the supplies shown by the writ petitioner, detailsBhave been stated by the appellant-NVS in the additional affidavit in thefollowing terms: - “3…..Quantity supplied by Ms. Lava International Ltd. (OEM ofrespondent no. 1) during last 3 financial years before the bidopening date are as under:

C

D

E

F

4. I submit that the Committee for Technical Evaluation had openedthe bids on 12.05.2021 and, after scrutinizing the documentssubmitted by Respondent No. 1 with regard to past performancementioned at clause 4 of bid document found that Power banksand Smart Phones could not be considered as “same or similarcategory products” and, only work orders for Tablets could beconsidered as per the clause 4 of the bid document. Further itwas found that the data and documents provided by the Respondent G

H

No. 1 for the three Financial Years viz., FY 2018-19, 2019-20 and2020-21, maximum quantities of Tablets supplied by the RespondentNo. 1 were in the FY 2019-20 i.e. 37141 nos. which was short by10.20% of the 60% criterion [60% of 68490 = 41364] for satisfyingthe past performance clause 4 of the bid document.

5. I submit that due to shortfall of 10.2% of the required quantityof same or similar category products as per past performanceclause, the Respondent No. 1 was declared disqualified in technicalbid.”

22.3. The writ petitioner has also referred to the several suchcontracts where both the products, tablets and smart phones, have beenprocured simultaneously while suggesting that these terms have evenbeen used interchangeably. On the other hand, the appellant-NVS hasstated in detail that the supplies of Tablets by the writ petitioner fell shortby 10.20% to 60% criterion and the writ petitioner was, in fact, largelysupplying smart phones and not tablets. As regards the organisationsand their tender processes referred by the writ petitioner, variouscomments have been offered by the appellant-NVS in a tabular form;the relevant parts thereof read as under: - “Purchases/Tenders referred by Resoursys Telecom throughits WP no. 6676/2021 and additional affidavit filed therein A

B

C

D

E

F

G

H

892SUPREME COURT REPORTS[2022] 18 S.C.R.ABCDEFGH

893ABCDEFGH

894SUPREME COURT REPORTS[2022] 18 S.C.R.ABCDEFGH

895ABCDEFGH

A

B

C

D

E

F

G

H

**In all aforesaid purchases referred by the respondents ResoursysTelecom, incomplete documents are attached with the Writ andadditional affidavit.

**NVS in its bid documents specifically mentioned that Tender isfloated for Tablet Computers only.

**NVS has floated the bid through the GeM portal.

**No prospective bidders raised any query regarding inclusion ofsmartphones under similar category. Only OEM of the R-1 i.e.Ms. Lava OEM has requested to reduce the past performancefrom 80% to 40% and technical committee has considered therequest of the Ms. Lava positively and reduced the requirementof past performance from 80% to 60%.

**There is not a single case where bid condition is same andsmartphones added in the similar category products.

**Referred purchases consists different clause and purposes,hence, the same are not squarly covered in the instant case i.e.tender floated by the NVS for Tablet Computer only whereinspecifically mentioned under clause 4 of past performance thatthe experience under same or similar category will be considered.

**In the aforesaid purchase referred by the respondent, no matteron GeM wherein smartphones is considered under same or similarcategory of Tablet Computer unless specifically and unequivocallymentioned to this effect. It axiomatically demonstrates that theSmartphones are not comes under the purview of same or similarcategory of Tablet Computers.”

22.4. The aforesaid submissions on facts make this much clearthat the decision, as taken by the appellant-NVS and its TEC, cannot besaid to be totally baseless or absurd or irrational or illogical. It getsperforce reiterated that even if some of the organisations, in relation totheir requirements, procured tablets and smart phones both under thesame tender process or even used these expressions “interchangeably”or “interconnected”, that by itself cannot lead to a definite conclusion bythe Court that “Smart Phones” and “Tablets” are to be taken as similarcategory products for the tender process in question.

23. Viewed from any angle, interference by the High Court in thismatter does not appear justified, particularly when no case of mala fideor bias is alleged. Every decision of the administrative authority whichmay not appear plausible to the Court cannot, for that reason alone, becalled arbitrary or whimsical. The High Court, in the present matter hasobviously proceeded with an assumption that the view as being taken byit, in acceptance of the case of the writ petitioner, was required to besubstituted in place of the views of the tender inviting authority. That hasbeen an error of law and cannot sustain itself in view of the consistentbinding decisions of this Court, including the 3-Judge Bench decision in Galaxy Transport (supra).

24. The High Court, while supporting its process of reasoning, hasreferred to such principles which, with respect, we find entirely inappositeand beyond the periphery of the question involved in the present case.As noticed, in such matter of contracts, the process of interpretation ofterms and conditions is essentially left to the author of the tender documentand the occasion for interference by the Court would arise only if thequestioned decision fails on the salutary tests laid down and settled bythis Court in consistent decisions, namely, irrationality or unreasonablenessor bias or procedural impropriety.

24.1. In the case of Nabha Power Limited (supra), as referredby the High Court, this Court, while referring to the concept of ‘Pentatest’ for ‘business efficacy’, made it clear that such a test and therebyreading an “implied term”, would come in play only when the fiveconditions are satisfied. Even in that case, the Court, while dealing withthe question of reimbursement of cost incurred by the successful bidder/power supplier towards washing of coal in a power procurement project,analysed as to what charges would be payable by interpretation of allthe terms of the contract and held the appellant entitled to certain chargesas the formula for energy charges was clear. In the present case too,neither the High Court was reading any “implied term” in the pastperformance criterion nor NVS had done so. It is difficult to find anycorrelation of the decision in Nabha Power Limited (supra) to the caseat hand or even to the analysis by the High Court.

24.2. The same aspects apply to the observations regarding ‘contraproferentem rule’ as referred by the High Court with reference to the A

B

C

D

E

F

G

H

Acase of United India Insurance Company Limited (supra). The saidrule was referred by this Court while not accepting the argument madeon behalf of the insured and while observing that the said rule had noapplication, when the language of the relevant clauses was plain, clearand unambiguous. We may, however, observe that even from theextracted part of the principles related with the ‘contra proferentemBrule’, as reproduced by this Court from the Halsbury’s Laws of England,it is clear that the said rule was applied in the case of ambiguity in theinsurance policy because the policies are made by the insurer and itsambiguity cannot be allowed to operate against the insured. This rule, inour view, cannot be applied to lay down that in case of any ambiguity inCa tender document, it has to be construed in favour of a particular personwho projects a particular view point. The obvious inapplicability of thisdoctrine to the eligibility conditions in a notice inviting tender could bevisualised from a simple fact that in case of ambiguity, if two differenttenderers suggest two different interpretations, the question would alwaysremain as to which of the two interpretation is to be accepted? Obviously,Dto avoid such unworkable scenarios, the principle is that the author ofthe tender document is the best person to interpret its documents andrequirements. The only requirement of law, for such process of decision-making by the tender inviting authority, is that it should not be sufferingfrom illegality, irrationality, mala fide, perversity, or procedural impropriety.ENo such case being made out, the decision of the tender inviting authority(NVS) in the present case was not required to be interfered with on thereasoning that according to the writ Court, the product “Smart Phone”ought to be taken as being of similar category as the product “Tablet”.

25. It has also been argued on behalf of the writ petitioner that theFreasons for rejection by NVS have not been consistent. We are unableto find any inconsistency in the reasons assigned by the appellant-NVSin rejection of the bid of the writ petitioner. In the initial information, onlythis much was stated that there was a mismatch of technical specificationbut, when required further by the writ petitioner, the appellant-NVSelaborated, in its reply dated 29.06.2021, on the fact that the work ordersGconcerning smart phones, laptops, Aadhaar kits, printers, power-bankswere not considered to be as same or similar category products to thatof tablets. Yet further, the representations made by the writ petitionerand its OEM were responded with the assertion that the TEC had H

considered only “Tablets” under similar category to ensure provenproducts. Same has been the stand of NVS before the High Court andbefore us. Mere elaboration by the tender inviting authority as regardsits reasons and basis of the decision cannot be said to be that of anyinconsistency.

26. We may also observe that the other submission made on behalfof the writ petitioner about the caution sounded by CVC that the termsof tender must be clear and post facto interpretations must be avoidedto bring in transparency in the tendering matters, carry no implication inthe facts of the present case. The terms of tender in the present casehad been clear, and they were ascertainable with specificity available onthe very portal on which NIT was issued. It had not been a case of postfacto interpretations by the tender inviting authority-NVS. Certainsuggestions made on behalf of the writ petitioner about the tender invitingauthority changing the terms to suit a particular bidder remain baseless.No such case of mala fide has been made out; rather, as pointed out onbehalf of the appellant, all the other tenderers clearly understood themeaning and requirement of the past performance criterion and statedthe particulars of tablets supplied by them in the past. Such contentionsof the writ petitioner have only been noted to be rejected.

27. Similarly, the submission made on behalf of the writ petitioner,that it had been awarded another contract for supply of 3,00,000 tablets,carries no meaning at all. Such a supply contract had not been a matterof evaluation in the tender process in question, where the quantity in thelast three financial years before the bid opening date was to be considered.Any subsequent event could neither invest the writ petitioner with anyright in the present matter nor the impugned order could be sustained onthat basis.

Conclusion

28. For what has discussed hereinabove, we are clearly of theview that the petition filed by the writ petitioner was required to bedismissed. The High Court having allowed the writ petition on ratherirrelevant considerations, the impugned order is required to be set aside

29. Consequently, these appeals succeed and are allowed; theimpugned judgment and order dated 27.09.2021 is set aside; Writ Petition A

B

C

D

EF

G

H

A(C) No. 6676 of 2021, as filed by the writ petitioner, is dismissed with noorder as to costs.

B

Ankit Gyan and Amarendra Kumar

(Assisted by : Pragya Samal, LCRA)

Appeals allowed.

C

D

E

F

G

H