Supreme Court Dismisses Appeal, Upholds BEST's Decision to Award Tender

Date: May 19, 2023

The Supreme Court, in a significant verdict, dismissed an appeal filed by Tata Motors and upheld the decision of the Brihanmumbai Electric Supply and Transport (BEST) undertaking to award a tender to EVEY Pvt. Ltd. The judgment, delivered by a bench comprising Hon'ble Dr. Dhananjaya Y. Chandrachud, Hon'ble Pamidighantam Sri Narasimha, and Hon'ble J.B. Pardiwala, settled the dispute surrounding the tender process for the procurement of electric buses.

The case revolved around the eligibility of EVEY Pvt. Ltd. and Tata Motors in the tender process conducted by BEST. Tata Motors argued that the acceptance of a revised document by EVEY after the bid submission end date and technical bid opening date was contrary to the tender conditions. However, the court held that the restriction on revising documents only applied to those forming part of the technical bid and did not extend to documents like Annexure Y, which were not mandatory at the time of bid submission.

The court further noted that Tata Motors had deviated from the mandatory requirement of operating range specified in the tender. As a result, Tata Motors was declared a non-responsive bidder at the technical stage. The court upheld BEST's decision to disqualify Tata Motors on this ground.

Regarding the revised Annexure Y submitted by EVEY, the court found that it was a clerical error and allowed BEST's discretion in accepting the revised document. The court emphasized that interfering with the tender process at this stage would be against public interest, leading to additional costs for the state and causing delays in the project's implementation.

The judgment highlighted the need for courts to exercise restraint in contractual and commercial matters, intervening only in cases of arbitrariness, mala fides, bias, or irrationality. It emphasized that the court's role should be limited, especially in matters involving technical expertise beyond the court's domain.

The court also considered the financial implications of issuing a fresh tender notice. It noted that a fresh tender would not be in the public interest, as it could result in higher costs and delays. The court pointed out that similar tenders had been issued in the past, leading to substantial additional expenses for the state. Therefore, it was commercially imprudent to opt for re-tendering.

Supreme Court dismissed Tata Motors' appeal and allowed the tender awarded to EVEY to stand. The judgment highlighted the importance of adhering to tender conditions, the discretionary powers of employers in accepting bids, and the need to consider public interest and financial implications in tender processes.

Date of Decision: May 19, 2023

TATA MOTORS LIMITED vs THE BRIHAN MUMBAI ELECTRIC 

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