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Service & Administrative LawSupreme Court of India

M/s Galaxy Transport Agencies v. M/s New J.K. Roadways

Special Leave Petition (Civil) · 2020 INSC 712Decided 18 Dec 2020
Special Leave Petition (Civil) No. 12766 of 2020
Justice Rohinton Fali Nariman · Justice Navin Sinha · Justice K.M. Joseph

Background

The Jammu & Kashmir police invited tenders for supplying vehicles to transport troops and equipment. The appellant's bid was accepted as the lowest among technically qualified bidders and it was awarded the contract, but a rival bidder (J.K. Roadways) challenged this in the High Court, arguing it had been wrongly disqualified and that the appellant did not actually meet the tender's eligibility conditions on vehicle ownership and work experience. A Single Judge upheld the contract award, but the High Court's Division Bench reversed this, quashing the appellant's contract and ordering fresh tenders.

Decision Breakdown

The Supreme Court held that courts must generally defer to the tendering authority's own reasonable interpretation of its tender conditions unless that interpretation is perverse or made in bad faith, and that the Division Bench had wrongly substituted its own reading of a technical condition (requiring vehicles of "both HMV/LMV" type) for the tendering authority's plausible interpretation. Similarly, the Division Bench had improperly second-guessed the expert four-member Tender Opening Committee's assessment that the appellant met the required work-experience condition. Because neither of the Division Bench's grounds for disqualifying the appellant held up, the Supreme Court set aside the Division Bench's judgment and restored the Single Judge's ruling upholding the contract award to the appellant.

Lesson Learnt

When a dispute arises over who qualifies for a government contract, courts will usually step back and respect the tendering authority's own technical judgment and interpretation of its tender conditions, intervening only where the decision is clearly arbitrary, irrational, or made in bad faith, not merely because a different interpretation was also possible.

M/s Galaxy Transport Agencies v. M/s New J.K. Roadways – Legal Case Shots | LegalAware