TATA MOTORS LIMITED versus THE BRIHAN MUMBAI ELECTRIC SUPPLY & TRANSPORT UNDERTAKING (BEST) AND OTHERS
[2023] 6 S.C.R. 695, Supreme Court of India, 2023
Outcome: Disposed off
Segment: Issues
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   [2023] 6 S.C.R. 695
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TATA MOTORS LIMITED
v.
THE BRIHAN MUMBAI ELECTRIC SUPPLY & TRANSPORT
UNDERTAKING (BEST) AND OTHERS
(Civil Appeal No.3897 of 2023)
MAY 19, 2023
[DR. DHANANJAYA Y. CHANDRACHUD, CJI,
PAMIDIGHANTAM SRI NARASIMHA AND
J. B. PARDIWALA, JJ.]
Constitution of India – Power of Judicial review – Contractual/
commercial matters – Held: Courts should exercise a lot of restraint
while exercising Powers of judicial review in contractual or
commercial matters – In contracts involving technical issues the
courts should be even more reluctant – Courts must also not interfere
where such interference will cause unnecessary loss to the public
exchequer – In the present case, TATA Motors deviated from the
material and the essential term of the Tender – High Court having
once declared TATA Motors as non-responsive and having stood
disqualified from the Tender process should not have entered into
the fray of investigating into the decision of BEST to declare EVEY
as the eligible bidder – High Court was not exercising its writ
jurisdiction in public interest – It looked into a petition filed by a
party trying to assert its own rights – Grant of judicial relief at the
instance of a party which does not fulfil the requisite criteria is
misplaced – BEST committed no error or cannot be held guilty of
favoritism, etc. in allowing EVEY to submit a revised Annexure Y as
the earlier one was incorrect on account of a clerical error – This
exercise itself was not
sufficient to declare the entire bid offered by
EVEY as unlawful or illegal – Writ court should refrain from
imposing its decision over the decision of the employer as to whether
or not to accept the bid of a tenderer unless something very gross
or palpable is pointed out – Initiating a fresh tender process at this
stage may consume lot of time and also loss to the public exchequer
– Part of the judgment of the High Court by which the decision of
BEST to accept the tender of EVEY was set aside and it was left to
the discretion of BEST to undertake a fresh tender process, set aside.
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SUPREME COURT REPORTS
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Constitution of India – Exercise of power of judicial review
in matters as to tenders or award of contracts – Special features to
be borne in mind – Discussed.
Silppi Constructions Contractors v. Union of India
(2020) 16 SCC 489 : [2019] 10 SCR 932; Association
of Registration Plates v. Union of India and Others
(2005) 1 SCC 679 : [2004] 6 Suppl. SCR 496; Air India
Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC
617 : [2000] 1 SCR 505; Jagdish Mandal v. State of
Orissa and Others (2007) 14 SCC 517 – relied on.
W.B. State Electricity Board v. Patel Engineering Co.
Ltd. & Ors. (2001) 2 SCC 451 : [2001] 1 SCR 352;
Kanhaiya Lal Agrawal v. Union of India and Others
(2002) 6 SCC 315 : [2002] 1 Suppl. SCR 284; N.G.
Projects Limited v. Vinod Kumar Jain and Others (2022)
6 SCC 127; Raunaq International Ltd. v. I.V.R.
Construction Ltd. and Others (1999) 1 SCC 492 : [1998]
3 Suppl. SCR 421; S.S. & Company v. Orrisa Mining
Corporation Limited (2008) 5 SCC 772 : [2008] 5 SCR
598; Poddar Steel Corporation v. Ganesh Engineering
Works and Others (1991) 3 SCC 273 : [1991] 2 SCR
696; Monarch Infrastructure (P) Ltd v. Commissioner,
Ulhasnagar Municipal Corporation and Others (2000)
5 SCC 287 : [2000] 3 SCR 1159; Meerut Development
Authority v. Association of Management Studies and
Another (2009) 6 SCC 171 : [2009] 6 SCR 663; Maa
Binda Express Carrier and Another v. North-East
Frontier Railway and Others (2014) 3 SCC 760 : [2013]
12 SCR 529; Jagannath Behera &amp; Ors. v. Raja
Harihar Singh Mardaraj Bhramarbara Roy [1958] SCR
1067; Karanpura Development Co. Ltd v. Raja
Kamakshya Narain Singh Etc. [1956] SCR 325;
Vasantkumar Radhakisan Vora v. Board of Trustees of
Port of Bombay (1991) 1 SCC 761 : [1990] 3 SCR
825; Steel Authority of India Ltd v. Gupta Brother Steel
Tubes Ltd (2009) 10 SCC 63 : [2009] 14 SCR 253 –
referred to.
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Case Law Reference
[2001] 1 SCR 352
referred to
Para 28
[2002] 1 Suppl. SCR 284
referred to
Para 29
[1998] 3 Suppl. SCR 421
referred to
Para 32
[2008] 5 SCR 598
referred to
Para 32
[1991] 2 SCR 696
referred to
Para 34
[2000] 3 SCR 1159
referred to
Para 35
[2009] 6 SCR 663
referred to
Para 35
[2013] 12 SCR 529
referred to
Para 35
[1958] SCR 1067
referred to
Para 37
[1956] SCR 325
referred to
Para 37
[1990] 3 SCR 825
referred to
Para 37
[2009] 14 SCR 253
referred to
Para 37
[2019] 10 SCR 932
relied on
Para 48
[2004] 6 Suppl. SCR 496
relied on
Para 52
[2000] 1 SCR 505
relied on
Para 53
CIVIL APPELLATE JURISDICTION : Civil Appeal No.3897
of 2023.
From the Judgment and Order dated 05.07.2022 of the High Court
of Judicature at Bombay in WPL No.15548 of 2022.
With
Civil Appeal Nos.3899 And 3898 of 2023.
Tushar Mehta, SG, Mukul Rohatgi, Shyam Divan, Ajit S. Bhasme,
Dr. Abhishek Manu Singhvi, K. V.Viswanathan, Gopal Jain, Sr. Advs.,
Abhinav Mukerji, Akshay Shrivastava, Mrs. Bihu Sharma, Ms. Pratishtha
Vij, Anjandas Gupta, Ms. Rimali Batra, Abhishek Lalwani, V. K. Patil,
M/s. D.S.K. Legal Ms. Nandini Gore, Ms. Aditi Bhatt, Sarthak Gaur,
Yash Dubey, Ms. Manvi Rastogi, Amit Bhandari, M/s. Karanjawala &
Co., Advs. for the appearing parties.
TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY
& TRANSPORT UNDERTAKING (BEST)
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The Judgment of the Court was delivered by
J. B. PARDIWALA, J.
1. Leave granted.
2. As the issues raised in all the captioned appeals are common
and the challenge is also to the self-same order passed by the High
Court of Judicature at Bombay dated 05.07.2022 in the Writ Petition (L)
No. 15548 of 2022, those were taken up for hearing analogously and are
being disposed of by this common judgment and order.
3. The Appeal arising out of SLP(C) No. 15708 of 2022 is at the
instance of TATA Motors Limited (for short, “TATA Motors”) (Original
Writ Petitioner before the High Court).
4. The Appeal arising out of SLP(C) No. 11871 of 2022 is at the
instance of EVEY Trans Pvt. Ltd. (for short, “EVEY”) (Original
respondent No. 2 before the High Court).
5. The Appeal arising out of SLP(C) No. 11933 of 2022 is at the
instance of the Brihan Mumbai Electric Supply & Transport Undertaking
(for short, “BEST”) (Original respondent No. 1 before the High Court),
a statutory corporation operating under the provisions of the Mumbai
Municipal Corporation Act, 1888.
FACTUAL MATRIX
6. BEST floated a tender bearing No. DMM(T-II)/08/TCU/73169/
2021-2022/Advt. dated 26.02.2022 for the supply, operation and
maintenance of 1400 (+50% variation) Single Decker AC Electric Buses
with driver, for the purpose of public transport service within the city of
Mumbai along with other civil infrastructure development at the BEST
depots for a period of 12 years
(hereinafter referred to as,‘the Tender’).
7. The Tender document provided for Technical specifications as
stipulated under Clause 3.5(e) and Clause 12 of Section 2 of Schedule
IX, under which the bidders were required to provide Single Decker
Buses which can run 200 Kms in single charge without interruption in
actual conditions for the relevant Gross Vehicle Weight (GVW) with air
conditioning with not more than 80% battery being consumed. Clause
3.5(e) and Clause 12 respectively are reproduced hereunder:
“SCHEDULE IX
TECHNICAL SPECIFICATIONS
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Section 2: Technical specifications of SD AC Electric Buses
under Wet Lease Scheme
….
Sr. 
No. 
Description 
Specifications 
3.5 
Electric Propulsion 
System 
Electric propulsion system motor rating/power sufficient to 
provide: 
(e) 
Minimum Operation 
Range per bus per 
day 
The minimum operating Km of the buses offered in single charge 
will be 200 Km, for SD buses respectively with (80% SoC). These 
offered buses should run above mentioned minimum Km without 
any interruption.  
xxx xxx xxx 
12 
Operating range 
Presently the BEST buses operate for around an average of 200 
km. per day (mostly uninterrupted). Keeping the above in mind, the 
EV manufacturers have to provide vehicles which can run 200 km. 
in single charge for SD AC Buses in actual conditions for the 
relevant GVW with Air Conditioning. The Operating schedule 
shall be provided by BEST and the successful bidder has to ensure 
the uninterrupted operation of the schedules through adequate 
spare buses.
In case the successful bidder is unable to maintain uninterrupted 
operation of schedules for want of charging, then BEST shall take 
suitable action by levying additional penalty by non-payment 
towards assured kms for that entire day per instance and if the 
instance keeps on recurring for a long period of time then the 
BEST may resort to even termination of Contract.”
8.  In all, eight market players participated in the Tender process,
including EVEY and TATA Motors. In the pre-bid meeting held on
11.03.2022, TATA Motors submitted its pre-bid points, wherein under
Point 1, it requested BEST to consider its bid for 200 Kms per day with
75-minutes of opportunity charging time during the day operations and
range testing conditions as per AIS 040/FAME II.
9. On 15.03.2022, BEST published the minutes of the pre-bid
meeting. BEST revised certain specifications, however, the modifications
as requested by TATA Motors were rejected. BEST opted for a specific
reference to “in actual conditions” and excluded any reference to “AIS
040” or “Standard Conditions” in the Tender specifications. It is pertinent
to note that the AIS 040 certification would be upon standard testing
conditions and not on the actual road conditions, which would account
for passenger load, temperature, traffic conditions, etc.
TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY
& TRANSPORT UNDERTAKING (BEST) [J. B. PARDIWALA, J.]
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10.  On 27.04.2022, BEST issued Corrigendum No. 8 specifying
the end of submission of bids for the Tender as 02.05.2022 and the date
of opening the technical bid as 04.05.2022.
11. TATA Motors submitted its bid on 25.04.2022, wherein it
guaranteed operating range of 200 Kms with 80% State of Charge,
“SoC” (i.e. 20% reserve left upon running 200 Kms in single charge),
however, the same was achieved “in standard test conditions as per AIS
040”. This was a deviation from the Tender specifications.
12. EVEY submitted its bid on 02.05.2022, claiming that the same
was submitted without any deviation from the Tender conditions including
the condition of minimum operating range of 200 Kms in a single charge.
EVEY claimed that the TATA Motors was the only bidder which,
referenced “standard test conditions” instead of “actual road conditions”,
while stating that it complied with the Tender requirement of minimum
operating range.
13. Under Clause 5.1.1 of the Schedule II (Definitions and
Instructions to Bidders) of the Tender, the mode and manner of submission
of the bid proposal has been provided. The said clause also provided for
certain annexures to be submitted along with the bid. Pertinently, Annexure
Y, which is an undertaking to be given by the Operational Equipment
Manufacturer (OEM) for the operating range of the buses, was not
required to be submitted along with the bid but was only required to be
submitted by the
successful bidder. The purpose of the undertakings
under Clause 3.5 (e) and Clause 12 of Section 2 of Schedule IX
(Technical Specifications) and Annexure Y is to confirm that the
requirement of meeting the 200 Kms range in single charge is satisfied.
14. EVEY along with its bid dated 02.05.2022 submitted Annexure
Y, wherein the OEM gave an undertaking for the operating range which
included a table that mentioned that the operating range for a single
decker bus would be 200 Kms with the opportunity charging time of 1
hour. The same was done in accordance with the specifications of the
earlier tender dated 20.08.2021, which allowed for an opportunity time
of 60 minutes.
15. EVEY vide email dated 06.05.2022, provided a revised
Annexure Y as per the Single Charge Requirements mentioned in the
Tender along with an explanation for the same holding it to be a mere
“clerical error”.
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16. The Tender bids were opened on 04.05.2022 and the technical
suitability evaluation was announced on 06.05.2022. BEST in its technical
suitability evaluation dated 06.05.2022, held TATA Motors along with
four other bidders, to be “technically non-responsive”. TATA Motor’s
bid was rejected on account of technical deviation with respect to the
operating range in its Annexure F and Annexure Y, respectively. The bid
offered by EVEY in the said report was deemed to be “technically
responsive”.
17. Thereafter, on 06.05.2022, the price bids of the eligible bidders
were opened, and EVEY was declared to be the L1 bidder. The price
bid of TATA Motors was not opened in accordance with Sr. No. 7 of the
Schedule I (Invitation for Proposal) and Sr. No. 15 of the Schedule II
(Definitions and Instructions to Tenderers) of the Tender document. Sr.
No. 7 of Schedule I reads as under:
“7. The Bidders/Tenderers who meet the mandatory technical
and commercial eligibility criteria as mentioned in Schedule
III of Tender Document shall only be held eligible for opening
of price bids.”
18.  Sr. No. 15 of Schedule II (Definitions and Instructions to
Tenderers) of the Tender document, reads as under:
“15. The Bidders shall accept unconditionally BEST’s
‘Conditions of Tender & Conditions of Supply’ in TOTO,
failing which their financial bids shall not be considered for
·opening. Bidders are requested to go through the same
carefully.”
19. Aggrieved by the technical suitability
evaluation issued by BEST
by which it rejected the bid of TATA Motors, the latter approached the
High Court of Judicature at Bombay by way of a writ petition bearing
WP(L) No. 15548 of 2022 dated 10.05.2022. TATA Motors prayed for
the following reliefs:
“18. The Petitioners therefore pray that this Hon’ble Court
may be pleased to:
(a) Issue a writ of Certiorari or any other writ, order or
direction in the nature of Certiorari to call for the records of
the case and quash and set aside the decision dated
06.05.2022 taken by the Respondent No. 1 declaring the bid
TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY
& TRANSPORT UNDERTAKING (BEST) [J. B. PARDIWALA, J.]
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submitted by the Petitioner No. 1 as “technically non-
responsive”;
(b) Issue a writ of mandamus or writ in the nature of mandamus
or any appropriate writ, order or direction under Article 226
of the Constitution of India directing Respondent No. 1 to
reconsider the bid submitted by the Petitioner No. 1 for the
purposes of the Tender;
(c) In the alternative to prayer (b) issue a writ of mandamus
or writ in the nature of mandamus or any appropriate writ,
order or direction under Article 226 of the Constitution of
India directing Respondent Nos. 1 to cancel the Tender and
float a fresh tender;
(d) During the pendency of the Petition, restrain Respondent
No. 1 from taking any steps towards award of contract under
the Tender;
(e) ad-interim reliefs in terms of prayers in clause (d) above;
(f) Cost of the present Petition; and
(g) such further and other reliefs as the nature and the
circumstances of the case may require be granted to the
Petitioner.”
20.  During the pendency of the aforesaid writ petition BEST
awarded the Tender in favour of EVEY with the Letter of Acceptance
dated 20.05.2022. EVEY accordingly submitted the required
Performance Bank Guarantee on 23.05.2022. An agreement for operation
of Stage Carriage Services for public transport of Single Decker AC
Electric Buses with Driver in the city of Mumbai and its extended suburbs
on Gross Contract Cost (GCC) model for 12 years was entered into
between the EVEY
and BEST on 26.05.2022.
21. A subsidy bank guarantee dated 02.06.2022 was submitted by
EVEY and BEST released the requisite amount to the EVEY’s account
towards subsidy on 10.06.2022. The EVEY even provided the BEST
with 8 buses between 04.07.2022 and 05.07.2022.
22. The High Court vide its impugned order and judgment dated
05.07.2022, took the view that the requirement for the operating range
to be more than 200 Kms in a single charge in “actual conditions” was
unambiguous. Accordingly, the High Court upheld the disqualification of
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TATA Motors and rejected their claim from being considered as an eligible
bidder as they failed to comply with the technical requirements of the
Tender. The High Court in paragraphs 9 and 13 respectively of the
impugned order observed thus:
“9. Reading the aforesaid, it is unambiguous that operating
range provided in the tender document is that the electric
vehicles manufacturers have to provide the vehicles which
can run 200 kms in single charge for SD air conditioning
buses in actual conditions for relevant GVW air conditioning.
The prima donna requirement of the tender document it
appears is that the electric vehicle offered should run 200
Kms in a single charge for Single Decker air conditioning
bus in actual conditions with 80% SoC without any
interruption.
 Xxx    xxx   xxx
13. Petitioner No.1 did not submit its bid for 200 Kms@ 80%
SoC in single charge on actual condition but at standard test
conditions as per AIS 040. As per the tender condition if a
person to whom the contract is awarded i.e. lessee does not
comply with the condition of achieving range of 200 Kms at
80% SoC in single charge then he is penalized for the same.
Meaning thereby, Respondent No.1 was conscious that the
standard test conditions as per AIS 040 is different than the
actual condition. The tender of the Petitioner certainly was
not compliant with the said clause. The Petitioner has deviated
from the material and the substantial term of the tender. The
Petitioner, as such,
is rightly disqualified for deviating from
the material requirements stipulated in the tender.”
       (Emphasis supplied)
23.  The High Court, after holding as above proceeded further to
discuss as to why the bid of EVEY also should have been rejected. The
High Court noted EVEY’s contention that Annexure Y submitted along
with the technical bid was an incidental document, however, rejected
such contention. The High Court while referring to Clause 16 of Schedule
I held that once the final date for the submission of the bid expires, there
can be no additions/corrections/ submissions of documents by the bidders.
Clause 16 of Schedule I of the Tender is produced hereinbelow:
TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY
& TRANSPORT UNDERTAKING (BEST) [J. B. PARDIWALA, J.]
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   “SCHEDULE I
   Invitation for Proposal
 …
16.
Interested Bidders are advised to study this Tender document 
carefully before submitting their proposal in response to this Tender 
document. Submission of a proposal in response to this tender shall 
be deemed to have been after careful study and examination of this 
document with full understanding of its terms, conditions and 
implications. No addition / correction, submission of documents will 
be allowed after opening of technical bid”  
24. The High Court as a result, held that the email dated 06.05.2022
ought not to have been entertained, and the technical bid evaluation,
which was released on the same day did not depict fairness in the actions
of BEST. The High Court in paragraphs 20 – 22 respectively held as
under:
“20.It has been contended by Respondent No.1 that letter
issued by Respondent No.2 on 6th morning did not influence
the decision to hold the bid of Respondent No.2 responsive in
the afternoon of 6th May 2022. The same is not borne-out
from the facts and circumstances of the case. Clause-16, as
stated above specifically and categorically prohibits additions
/ corrections / submission of documents after opening of
technical bid. Technical bids have been opened on 4th May
2022. Thereafter no such letter could have been entertained.
The proximity of the time i.e. 6th May at 11.35 am. the letter
issued by Respondent No. 2 along with the modified
Annexure-
Y and after two hours, the bid of Respondent No.2 held
responsive, does not support the contention of Respondent
No.1 that the said revised Annexure-Y and the letter written
on 6th May morning did not weigh in holding Respondent
No.2’s bid responsive. First of all, accepting the letter from
Respondent No.2 by Respondent No.1 on 6 May morning itself
was against the specific terms of the tender (clause 16). It is
further the case of Respondent No.1 that on 6thmorning
revised Annexure-Y forwarded by Respondent No.2 was sou
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motu and not at the instance of Respondent No.1, may not be
relevant here. The fact remains that Respondent No.2 was
allowed to submit the letter and revised Annexure-Y after two
days of the opening of technical bids. It is also the fact that
on 28th April Respondent No.2 had submitted the bid and on
2nd May it had submitted the revised bid, however, with the
same Annexure-Y clearly stating that it would require
opportunity charging tune of one hour. The same would not
be in tune with the tender conditions.
21. From the aforesaid facts, it is clear that; (i) the tender
documents submitted by the Petitioner contained deviation in
Annexure-Y i.e. the undertaking from OEM stating that one
hour charging time would be required for achieving operating
range of 200 Kms.; and (ii) Respondent No.2 submitted the
revised Annexure-Y on 6th morning i.e. two days after the
opening of technical bids and after acceptance of revised
Annexure-Y on 6tb May morning, the technical bid of
Respondent No.2 was accepted in the afternoon of the same
day.
22. The aforesaid does not depict fair play in action. The
facts create doubt about, whether the decision was a fair one
or was the decision reached fairly? The same does not appear
to be so in view of the facts discussed above while accepting
the bid of Respondent No.2 as responsive.”
(Emphasis supplied)
25. In view of the aforesaid, the High Court thought fit to declare
EVEY also as an unsuccessful bidder. The High Court in
paragraphs 23
and 24 respectively held as under:
“23. We are aware that the principle of equity and natural
justice stay at a distance and no judicial interference is
warranted in case of an error in assessment. However, the
same holds good, if the decision is bona fide. We are also
aware that interference of the Court would lead to some delay.
It would be seen that earlier also the tenders were issued.
However, because of non-sanction of subsidy, the earlier
tender process was scrapped and fresh tender process was
issued. For accepting the bid of Respondent No.2, 90 days’
TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY
& TRANSPORT UNDERTAKING (BEST) [J. B. PARDIWALA, J.]
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time is provided to it for getting the prototype vehicle. The
said period is not over. It is not even one month. The
Respondent No.2’s tender is accepted. The Courts upon
coming to the conclusion that the decision making process
was not fair. The same lacked fair play in action and arbitrary,
will have to step in.
24. In the light of the above, we set aside the decision of the
Respondents of acceptance of tender of Respondent No.2.
Respondent No.1, if it so desires, may proceed with a fresh
tender process.”
(Emphasis supplied)
26. In such circumstances referred to above, all the three parties
are here before this Court with their respective petitions.
27. It is pertinent to note that during the pendency of the
proceedings before the High Court and after submitting the subsidy
guarantee, EVEY had already supplied total 8 buses between 04.07.2022
to 05.07.2022. However, this Court by an interim order dated 14.07.2022
granted an interim stay of the impugned judgment insofar as EVEY is
concerned. This Court observed that, the supply of the buses, if any, by
EVEY would be subject to the result of these petitions and EVEY shall
not claim any equity at a later stage. 
SUBMISSIONS ON BEHALF OF THE “EVEY”
28. Mr. Rohatgi, the learned Senior counsel appearing for EVEY
placed strong reliance on the decision of this Court in W.B. State
Electricity Board v. Patel Engineering Co. Ltd. & Ors., reported in
(2001) 2 SCC 451 to submit
that the equitable relief can be granted to
the bidder where it has made a material mistake of fact in the bid and
upon discovery of that mistake he has acted promptly and rectified his
mistake. He submitted that, Clause 16 of Schedule I of the Tender would
not apply to a document, like Annexure Y, which was originally required
to be submitted by the “Successful Bidder’’ after the evaluation of the
bid. Furthermore, the learned Senior counsel proceeded to submit that,
even in the original Annexure Y as submitted on 02.05.2022, his client
had mentioned that, “These offered buses will run above mentioned
minimum Kms without any interruption”.
29. He submitted that, Annexure F specifies that “If the variations
specified herein, are found to be in nature of contradiction to BEST’s
requirements/specifications then such Bids will be treated as Non-
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responsive” and therefore, the bidder would have to essentially comply
with the specifications mentioned in Annexure F otherwise the bid would
be treated as “technically non-responsive”. He submitted that Annexure
F can be rightly termed as an essential condition of Tender. He placed
strong reliance on the decision of this Court in the case of Kanhaiya
Lal Agrawal v. Union of India and Others, reported in (2002) 6 SCC
315, to submit that whether a condition is essential, or collateral could be
ascertained by reference to the consequence of non-compliance thereto.
It was submitted that if non-fulfilment of the requirement results in
rejection of the tender, then it would be an essential part of the tender
otherwise it is only a collateral term. He further submitted that, non-
compliance of the conditions mentioned in Annexure Y would lead to
levy of penalty and if the instance keeps on recurring, it may lead to
termination of contract and therefore, Annexure Y should be treated as
a collateral term of the Tender. Under Clause 5.1.1 of Schedule II
(Definitions and Instructions to Bidders) of the Tender document
Annexure Y was not required to be submitted along with the bid documents
but the same was to be submitted by the “Successful Bidder’’.
30. He submitted that, in view of the decision of this Court in,
N.G. Projects Limited v. Vinod Kumar Jain and Others, reported in
(2022) 6 SCC 127,the writ court should refrain itself from imposing its
decision over
the decision of the employer as to whether to accept the
bid of a tenderer and that contract of public service should not be interfered
with lightly. The injunction or interference in the Tender leads to additional
costs on the State and is also against public interest.
31. He submitted that the allegations of favouritism levelled by
TATA Motors by pointing towards the fact that apart from EVEY, there
were two more parties who were technically qualified and were L2 and
L3 viz., Switch Mobility Automotive Limited and PMI Electro Mobility
Solutions Private Limited respectively, EVEY was declared L1 and
awarded the Tender only after opening of the price bids at a later stage
are reckless and baseless.
32. Relying on the decisions of this Court in Raunaq International
Ltd. v. I.V.R. Construction Ltd. and Othersreported in (1999) 1 SCC
492 and S.S. & Company v. Orrisa Mining Corporation Limited
reported in (2008) 5 SCC 772, he submitted that once the High Court
found TATA Motors to be technically non-compliant, it ought not to have
entertained a challenge to the tendering process at the instance of an
unsuccessful party. The writ petition was filed against the technical
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evaluation, whereas, the contract is now well underway at the stage of
performance. He submitted that interfering with the technical evaluation
at this stage would make the contract redundant and cause loss of
exchequer’s money.
33. In the last, the learned Senior counsel submitted that till date
EVEY has supplied 20 tailor-made buses and the civil infrastructure for
these buses has also been put in place.
SUBMISSIONS ON BEHALF OF THE “TATA MOTORS”
34.  Dr. Abhishek Manu Singhvi, the learned Senior counsel,
appearing for TATA Motors vehemently submitted that the contract
awarded by BEST to EVEY is per se illegal. The learned Senior counsel
argued that the acceptance of the EVEY’s revised Annexure Y after
the expiry of the bid submission end date and technical bid opening date
is contrary to the Tender conditions. Clause 16 of Schedule I (Invitation
for Proposal) of the Tender prohibits any addition, correction or submission
of document after the technical bid opening. However, the same was
not followed and by allowing a bidder to correct errors at a later stage
may lead to unequal treatment of bidders. The decisions of this Court in
Poddar Steel Corporation v. Ganesh Engineering Works and Others,
reported in (1991) 3 SCC 273 (Para 6); W.B. State Electricity Board
(supra) (Paras 27 and 28), were relied upon to substantiate the aforesaid
contention.
35. He submitted that the actions of BEST could be termed as
arbitrary,
discriminatory, unfair, and that his client has locus to challenge
the same as no legitimacy should be granted to tender processes tainted
with malice. The learned Senior counsel relied upon the decision of this
Court in Monarch Infrastructure (P) Ltd v. Commissioner,
Ulhasnagar Municipal Corporation and Others, reported in (2000) 5
SCC 287 (Paras 10 and 14);Meerut Development Authority v.
Association of Management Studies and Another, reported in (2009)
6 SCC 171 (Paras 27, 28, 45 and 76);Maa Binda Express Carrier and
Another v. North-East Frontier Railway and Others, reported in (2014)
3 SCC 760 (Paras 8, 9 and 12)to fortify the submission.
36. He argued that the High Court in paragraph 19 of the impugned
judgment has rightly observed that the battery range guarantee can be
given only by the OEM from whom the bidder is purchasing the battery,
and in such circumstances, the same cannot be said to be incidental.
The same was considered as an important part of the technical evaluation
by BEST.
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37. He vociferously submitted that Annexure Y was a part of the
bid document and once submitted, could not have been permitted to be
altered after the bid submission end date i.e., 02.05.2022. The argument
that Annexure Y was optional and not required at the time of submission
of the bid is an afterthought, and the same being a question of fact or at
the most a mixed question of fact and law cannot be raised for the first
time in a Special Leave Petition. He relied on the decision of this Court
in Jagannath Behera & Ors. v. Raja Harihar Singh Mardaraj
Bhramarbara Roy, reported in 1958 SCR 1067 (Paras 17 and
19);Karanpura Development Co. Ltd v. Raja Kamakshya Narain
Singh Etc., reported in 1956 SCR 325 (Para 24); Vasantkumar
Radhakisan Vora v. Board of Trustees of Port of Bombay,reported in
(1991) 1 SCC 761 (Para 24);Steel Authority of India Ltd v. Gupta
Brother Steel Tubes Ltd, reported in (2009) 10 SCC 63 (Paras 32 and
34).
38. He submitted that the High Court was justified in saying that
a fresh tender in the present matter is warranted more particularly in
view of the arbitrary tender process and delay in supply of the buses as
per the timeline prescribed under the Tender. He submitted that a fresh
tender would be in public interest as there has been a breach of delivery
timeline by EVEY as prescribed under the Tender. It is alleged that
there is a deficit in the supply of 1,030 buses till date. BEST has failed to
take necessary steps against EVEY for
the delay, and the same
showcases that the two contracting parties have colluded with each
other. The fresh tender would allow for more competitive price bids and
there would not be any financial burden on BEST in the event of
termination, as the Tender provides for forfeiture of Earnest Money
Deposit (EMD) and encashment of performance guarantee.
39. In the last, the learned Senior counsel submitted that the High
Court while upholding the disqualification of his client on the sole basis
that it guaranteed the operating range in ‘standard test conditions as per
AIS 040’ committed an error. It was submitted that TATA Motors had
complied with the essential conditions and certain departures under the
Tender were permissible.
SUBMISSIONS ON BEHALF OF THE “BEST”
40. Mr. Tushar Mehta, the learned Solicitor General, appearing
for BEST submitted that the Tender document provided for mandatory
eligibility conditions for being declared as a qualified bidder at the stage
of technical bid, and the said eligibility conditions were stipulated in sub
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– clauses (iv) and (v) of Clause 5.1.1 respectively of the Tender
Document.
41. He further submitted that Clause 5.1.1 (v), providing for
Annexure F was a mandatory condition for being qualified as a bidder at
the Technical Bidding stage. The mandatory requirement reads as under:
“5.1.1 
The Proposal should be submitted in the following manner: 
Bid 1: Technical Submissions, which would include: 
i) Schedule of Guaranteed Performance & Other Technical 
Particulars as shown in the prescribed format in Annexure-A 
incorporated in the Tender document (in case of a consortium that of 
a lead member), 
ii) Schedule of Performance of the Bidder (in case of consortium 
experience of any member) as in Annexure C, 
iii) Proforma for certification for Minimum Average Annual Turnover 
(“MAAT”) from Chartered Accountant as in Annexure D. (in case of 
consortium for lead member and in case of Aggregator, Networth 
certificate or Investible fund certificate), 
iv) Aggregator have to submit back-to-back agreement with OEM for 
complete contract period for the maintenance of buses. Aggregator 
have also to submit Manufacturer Authorization Form (if aggregator 
is a sole bidder or lead bidder then such bidder shall submit 
Manufacturer Authorization Form) from OEM,  
v) Schedule of Departures from technical specification as in 
Annexure F, 
vi) General details of Bidder with registration proof and credentials 
(in case of Consortium,
this would need to be provided by the lead 
members) as in Annexure G & H,  
vii) Bid Security/EMD as in Annexure I, 
viii) The Annexure-L. (undertaking of the Bidder not being 
involved/engaged in any corrupt or fraudulent malpractices or not 
being black-listed with any Government or Public Sector Units in 
India or outside India) 
ix) In case of Consortium, proforma of Consortium Agreement to be 
entered into between members as in Annexure N, 
x) Covering Letter cum Project Undertaking as per Annexure Q 
stating the Proposal Validity Period,  
xi) Power of Attorney for Signing of the Proposal (in case of 
Consortium, this would need to be provided by all the members) as in 
Annexure R.”
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42. He submitted that TATA Motors deviated from the mandatory
requirement while filing the said Annexure F. He highlighted the portion
of the Annexure which states that if variations are found contradicting
BEST’s requirements then such bids would be treated as non-responsive.
The non-compliant deviation was as under:
“Shall meet the operating range requirement of 200 KMS @
80% SOC in single charge as certified per AIS 040.”
43. He submitted that none of the bidders including EVEY
(successful bidder) deviated from this mandatory condition. Hence, TATA
Motors was declared a non-responsive bidder at the technical stage
itself. On 06.05.2022, BEST undertook the technical evaluation and took
a decision that of all the bidders found eligible and responsive, EVEY
had quoted the lowest rates and accordingly the contract was awarded
in its favour.
44. The learned SG further submitted that the successful bidder
was required to fill up Annexure Y. However, Annexure Y was neither a
condition precedent for being a responsive bidder nor a mandatory
condition for awarding the contract.
45. EVEY rectified its mistake, explaining that the Annexure Y
submitted by it was inadvertently placed after doing a cut-and-paste job
from the previous tender. EVEY filed a revised/fresh Annexure Y strictly
in accordance with the Tender.
46. The learned SG vehemently submitted that to ask BEST to
issue a fresh tender notice would be against public interest. In the contract
given to
EVEY in May 2022, BEST was to pay Rs. 46.81/KM to EVEY.
BEST examined the possibility of re-tendering and found that in the
recent past, one similar tender was issued by the Convergency Energy
Services Limited (CESL), a Government of India undertaking. As per
the recent contract awarded by CESL, it ended up paying Rs. 1,200
Crore more than the present rate at which “BEST” awarded the instant
contract. Therefore, it would be commercially imprudent to opt for re-
tendering.
ANALYSIS
47. Having heard the learned counsel appearing for the parties
and having gone through the materials on record, the only question that
falls for our consideration is : Whether the High Court after upholding
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the disqualification of TATA Motors from the Tender was justified in
undertaking further exercise to ascertain whether EVEY also stood
disqualified and that BEST in its discretion may undertake a fresh tender
process?
48. This Court being the guardian of fundamental rights is duty-
bound to interfere when there is arbitrariness, irrationality, mala fides
and bias. However, this Court has cautioned time and again that courts
should exercise a lot of restraint while exercising their powers of judicial
review in contractual or commercial matters. This Court is normally
loathe to interfere in contractual matters unless a clear-cut case of
arbitrariness or mala fides or bias or irrationality is made out. One must
remember that today many public sector undertakings compete with the
private industry. The contracts entered into between private parties are
not subject to scrutiny under writ jurisdiction. No doubt, the bodies which
are State within the meaning of Article 12 of the Constitution are bound
to act fairly and are amenable to the writ jurisdiction of superior courts
but this discretionary power must be exercised with a great deal of restraint
and caution. The courts must realise their limitations and the havoc which
needless interference in commercial matters can cause. In contracts
involving technical issues the courts should be even more reluctant
because most of us in Judges’ robes do not have the necessary
expertise
to adjudicate upon technical issues beyond our domain. The courts should
not use a magnifying glass while scanning the tenders and make every
small mistake appear like a big blunder. In fact, the courts must give
“fair play in the joints” to the government and public sector undertakings
in matters of contract. Courts must also not interfere where such
interference will cause unnecessary loss to the public exchequer. (See:
Silppi Constructions Contractors v. Union of India, (2020) 16 SCC
489)
49. It is not in dispute that the first and the foremost requirement
of the Tender was the prescribed operating range of the single decker
buses which would operate for around and average of 200 Kms in a
single charge in “actual conditions” with 80% SoC without any
interruption. Then materials on record would indicate that the TATA
Motors in its bid deviated from this requirement and had informed BEST
that it could carry the operating range in the “standard test conditions”
which was not in accordance with the Tender conditions. The High Court
has rightly observed in its impugned judgment that the bid of the TATA
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Motors failed to comply with the said clause. TATA Motors deviated
from the material and the essential term of the Tender. It may not be out
of place to state at this stage that it is only TATA Motors who deviated
from the condition referred to above. However, we are of the view that
the High Court having once declared TATA Motors as “non-responsive”
and having stood disqualified from the Tender process should not have
entered into the fray of investigating into the decision of BEST to declare
EVEY as the eligible bidder. We are saying so because the High Court
was not exercising its writ jurisdiction in public interest. The High Court
looked into a petition filed by a party trying to assert its own rights. As
held by this Court in Raunaq International Ltd. (supra), that grant of
judicial relief at the instance of a party which does not fulfil the requisite
criteria is something which could be termed as misplaced. In Raunaq
International Ltd. (supra), this Court observed as under:
“27. In the present case, however, the relaxation was
permissible under the terms of the tender. The relaxation which
the Board has granted to M/s Raunaq International Ltd. is on
valid principles looking to the expertise of the tenderer and
his past experience although it does not exactly tally with the
prescribed criteria. What is more relevant, M/s I.V.R.
Construction Ltd. who have challenged this award of tender
themselves do not fulfil the requisite criteria. They do not
possess the prescribed experience qualification. Therefore,
any judicial relief at the instance of a party which does not
fulfil the requisite criteria seems to be misplaced. Even if the
criteria can be relaxed both for M/s Raunaq International
Ltd. and M/s I.V.R. Construction Ltd., it is clear that the offer
of M/s Raunaq International Ltd. is lower and it is on this
ground that the Board has accepted the offer of M/s Raunaq
International Ltd. We fail to see how the award of tender can
be stayed at the instance of a party which does not fulfil the
requisite criteria itself and whose offer is higher than the
offer which has been accepted. It is also obvious that by
stopping the performance of the contract so awarded, there
is a major detriment to the public because the construction of
two thermal power units, each of 210 MW, is held up on
account of this dispute. Shortages of power have become
notorious. They also seriously affect industrial development
and the resulting job opportunities for a large number of
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people. In the present case, there is no overwhelming public
interest in stopping the project. There is no allegation
whatsoever of any mala fides or collateral reasons for
granting the contract to M/s. Raunaq International Ltd.”
 (Emphasis supplied)
50. We take notice of the fact that Annexure Y was originally
required to be submitted by the “Successful Bidder” after the evaluation
of the bid and the same did not figure in the list of documents and
annexures to be included in the technical submissions, as provided under
Clause 5.1.1 of Schedule II of the Tender. Further the format provided
for Annexure Y in the Tender documents in its heading states that the
“Successful Bidders shall upload a Letter of Undertaking on their
letter head as below”. Therefore, we are of the view that the restriction
on revision of documents under Clause 16 of Schedule I, which states,
“No addition/correction, submission of documents will be allowed
after opening of technical bid,” is only limited to the documents
necessary to be included in the technical bid and would not be applicable
to any such document which does not form a part of the technical bid.
51. We are of the view that the High Court should have been a bit
slow and circumspect in reversing the action of BEST permitting EVEY
to submit a revised Annexure Y. We are of the view that the BEST
committed no error or cannot be held guilty of favoritism, etc. in allowing
EVEY to
submit a revised Annexure Y as the earlier one was incorrect
on account of a clerical error. This exercise itself was not sufficient to
declare the entire bid offered by EVEY as unlawful or illegal.
52. Ordinarily, a writ court should refrain itself from imposing its
decision over the decision of the employer as to whether or not to accept
the bid of a tenderer unless something very gross or palpable is pointed
out. The court ordinarily should not interfere in matters relating to tender
or contract. To set at naught the entire tender process at the stage when
the contract is well underway, would not be in public interest. Initiating a
fresh tender process at this stage may consume lot of time and also loss
to the public exchequer to the tune of crores of rupees. The financial
burden/implications on the public exchequer that the State may have to
meet with if the Court directs issue of a fresh tender notice, should be
one of the guiding factors that the Court should keep in mind. This is
evident from a three-Judge Bench decision of this Court in Association
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of Registration Plates v. Union of India and Others, reported in (2005)
1 SCC 679.
53. The law relating to award of contract by the State and public
sector corporations was reviewed in Air India Ltd. v. Cochin
International Airport Ltd., reported in (2000) 2 SCC 617 and it was
held that the award of a contract, whether by a private party or by a
State, is essentially a commercial transaction. It can choose its own
method to arrive at a decision and it is free to grant any relaxation for
bona fide reasons, if the tender conditions permit such a relaxation. It
was further held that the State, its corporations, instrumentalities and
agencies have the public duty to be fair to all concerned. Even when
some defect is found in the decision-making process, the court must
exercise its discretionary powers under Article 226 with great caution
and should exercise it only in furtherance of public interest and not merely
on the making out of a legal point. The court should always keep the
larger public interest in mind in order to decide whether its intervention
is called for or not. Only when it comes to a conclusion that overwhelming
public interest requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v. State of
Orissa and Others, reported in (2007) 14 SCC 517, that while invoking
power of judicial review in matters as to tenders or award of contracts,
certain special features should be borne in mind that evaluations
of tenders
and awarding of contracts are essentially commercial functions and
principles of equity and natural justice stay at a distance in such matters.
If the decision relating to award of contract is bona fide and is in public
interest, courts will not interfere by exercising powers of judicial review
even if a procedural aberration or error in assessment or prejudice to a
tenderer, is made out. Power of judicial review will not be invoked to
protect private interest at the cost of public interest, or to decide
contractual disputes.
55. In such circumstances referred to above, we set aside that
part of the judgment and order passed by the High Court by which the
decision of BEST to accept the tender of EVEY was set aside and it
was left to the discretion of BEST to undertake a fresh tender process.
56. The Appeal filed by TATA Motors accordingly fails and is
hereby dismissed. Whereas the Appeals filed by EVEY and BEST are
allowed to the aforesaid extent.
TATA MOTORS LTD. v. THE BRIHAN MUMBAI ELECTRIC SUPPLY
& TRANSPORT UNDERTAKING (BEST) [J. B. PARDIWALA, J.]

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57. There shall be no order as to costs.
58. Pending application, if any, stands disposed of accordingly.
Divya Pandey
Appeals disposed of.
(Assisted by : Roopanshi Virang, LCRA)