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M/S N.G. Projects Limited vs M/S Vinod Kumar Jain & Ors.

Civil Appeal · 2022 INSC 319Decided 21 Mar 2022
Civil Appeal No. 1846 of 2022
Hemant Gupta · V. Ramasubramanian

Background

Jharkhand's Road Construction Department invited tenders for reconstruction of a road, and N.G. Projects Limited's bid was accepted after a rival bidder, Vinod Kumar Jain, was found technically non-responsive (his bank guarantee did not match the prescribed format and other conditions). Jain challenged the award in a writ petition, and the High Court's Single Judge and Division Bench both quashed the contract awarded to N.G. Projects, even though the company had already started construction and completed a substantial part of the work. N.G. Projects then appealed to the Supreme Court, arguing that the tender authority's own technical evaluation should not have been second-guessed by the courts.

Decision Breakdown

The Supreme Court allowed the appeal and set aside the High Court's orders, holding that courts exercising judicial review over tender decisions must confine themselves to checking whether the decision-making process was illegal, irrational, or procedurally improper. They cannot sit as an appellate authority re-evaluating technical bids themselves. Since there was no allegation of mala fide or favouritism, and the Tender Evaluation Committee's assessment was a plausible, good-faith view of a genuinely deficient bank guarantee, the High Court had wrongly substituted its own judgment for that of the technical experts. The Court also stressed that infrastructure and public-works contracts deserve special restraint from judicial interference because delays inflate costs and deprive the public of the project, and noted the 2018 amendment to the Specific Relief Act reflects this policy of not letting court intervention stall infrastructure works; it directed that N.G. Projects be permitted to resume and complete the road, without claiming cost escalation for the stayed period.

Lesson Learnt

Courts will generally not overturn a fair, good-faith technical evaluation of a government tender merely because a losing bidder disagrees with it; interference is reserved for cases of actual illegality, arbitrariness, or mala fide conduct, since disputes over public infrastructure contracts should ordinarily be resolved through damages rather than injunctions that stall the project.

Official source (sci.gov.in)View Judgment (PDF)

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