By Adv. R. S. Agrawal :
Allegations of illegality, irrationality and procedural impropriety would be enough grounds for courts to assume jurisdiction and remedy such ills. But, merely because the accusations are made against the State or its instrumentalities does not mean that an aggrieved person can bypass established civil adjudicatory processes and directly seek writ relief.
IN THE judgement of the case – The Bharat Coking Coal Ltd. & Others v. AMR Dev Prabha & Others and 3 other civil appeals, delivered on March 18, 2020, a 3-judge bench of the Supreme Court, consisting of the Chief Justice of India Sharad Bobde, Justice Bhushan Gavai and Justice Surya Kant have underscored the importance of presence of element of public interest in a contractual case for its maintainability before the Court. The Court has pointed out that two clear issues in dispute arise in the case. One pertains to the maintainability of the writ considering the nature of tender processes and the second concerns application of that standard to the facts of this case to determine whether there were lapses on part of BCCL and C1 India.
Maintainability of writ petitions: The scope of judicial review in tenders has been explored in-depth in several cases. It is settled that constitutional courts are concerned only with lawfulness of a decision, and not its soundness- Central Coalfields Ltd. v. SLL-SML – (2016) 8 SCC 622. Phrased differently, Courts ought not to sit in appeal over decisions of executive authorities or instrumentalities. Plausible decisions need not be overturned, and latitude ought to be granted to the State in exercise of executive power so that the constitutional separation of powers is not encroached upon – Air India Ltd. v. Cochin International Airport Ltd.(2000) 2 SCC 617. However, allegations of illegality, irrationality and procedural impropriety would be enough grounds for courts to assume jurisdiction and remedy such ills.
This is especially true given our unique domestic circumstances, which have demonstrated the need for judicial intervention numerous times. Hence, it would be the decision making process which would be the subject of judicial enquiry, and not the end result (save as may be necessary to guide determination of the former).This position of law has been amply demonstrated through the judgement in the case of Tata Cellular v. Union of India-(1994) 6 SCC 651. But merely because the accusations are made against the State or its instrumentalities does not mean that an aggrieved person can bypass established civil adjudicatory processes and directly seek writ relief. In determining whether to exercise their discretion, writ courts ought not only confine themselves to the identity of the opposite party but also to nature of the dispute and of the relief prayed for.
Thus, although every wrong has a remedy, depending upon the nature of the wrong there would be different forums for redress. In cases, where a constitutional right is infringed, writs would ordinarily be appropriate remedy. In tender cases, such can be either when a party seeks to hold the State to its duty of treating all persons equally or prohibit it from acting arbitrarily; or when executive actions or legislative instruments are challenged for being in contravention to the freedom of carrying on trade and commerce. However, writs are impermissible when the allegation is solely with regard to violation of a contractual right or duty. Hence, the persons seeking writ relief must also actively satisfy the Court that the right it is seeking is one in public law, and not merely contractual. In doing so, a balance is maintained between the need for commercial freedom and the very real possibility of collusion, illegality and squandering of public resources.
According to the apex court, it feels on the basis of concurrent findings of the several bodies including the CVC, that the Jharkhand HC division bench at Ranchi erred in holding that there were no technical difficulties. Furthermore, such a conclusion is at odds with subsequent occurrences. A finding that there were no internet problems implies that no other bidder deemed it appropriate to counter the bid of Rs 2,345 crores offered by the first respondent at 12.33 pm and that it was the competitively determined lowest price. However, it is obvious that minutes into the resumption of the auction process bids started coming in more than a dozen bids were received subsequently , with the last bid of Rs 2,043 crores having been made mere seconds before closure of the auction at 7.27 pm. Quoting from its judgment in the case –Shobikka Impex (P) Ltd. v.
Central Medical Services Society – (2016) 16 SCC 233, The court has noted that there is no prohibition in law against public authorities granting relaxations for bona fide reasons. Even if there had been a minor deviation from explicit terms of Notice Inviting Tender (NIT), it would not be sufficient by itself in the absence of mala fide for courts to set aside the tender at the behest of an unsuccessful bidder. – CCL v. SLL-SML (J.V. Consortium) –(2016) 8 SCC 622. This is because notice must be kept of the impact of overturning an executive decision and its impact on the larger public interest in the form of cost overruns or delays. The court also did not see merit in the justification for delay in filing writ proffered by the first respondent. It was claimed that the cause of action arose when one of the respondents failed to submit guarantees within a period of 28 days.
However, the Court could not see as to how that would allow AMR-Dev Prabha to challenge the entire process of auction, or overcome the settled legal Principle of privities of contract between the respondent-6 and the appellant. Dealing with another fundamental problem, the court has pointed out that it is obvious that the first respondent seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes. In the present facts, it is clear that BCCL and C1-India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent -6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical Failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them.- Afcons Infrastructure Ltd. v. Nagpur Metro Rail Ltd. – (2016) 16 SCC 818. The HC ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL’s interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the HC to come to a finding that the appellant committed illegality. In light of the discussion the Supreme Court has allowed the appeal filed by Bharat Coking Coal Ltd.as well as connected appeals filed by M/s R.K. Transport and M/s C1-India Pvt. Ltd. Resultantly, the appeal filed by AMR Dev Prabha has been dismissed. The impugned Jharkhand HC division bench judgement has been set aside and the writ petition filed by AMR- Dev Prabha has been dismissed.