Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO) v. CSEPDI - Trishe Consortium
Background
TANGEDCO floated a tender for setting up two 660 MW thermal power units at Ennore, Chennai. After price bids were opened, one bidder (CSEPDI) made repeated representations alleging irregularities in the evaluation process, which led to writ litigation in the Madras High Court. The Single Judge and then the Division Bench directed TANGEDCO to consider CSEPDI's representations before finalising the tender, and ultimately the Division Bench found fault with how TANGEDCO's financial consultant had evaluated the competing bids. TANGEDCO (and the rival bidder BHEL, to whom the contract had been awarded) appealed to the Supreme Court.
Decision Breakdown
The Supreme Court held that the Division Bench had overstepped the limited scope of judicial review by effectively sitting in appeal over the financial consultant's technical/commercial evaluation of the bids. The Court reiterated that in complex fiscal evaluations involving expert financial judgment, courts must exercise restraint and cannot substitute their own assessment for that of qualified financial consultants unless the evaluation is ex facie erroneous, perverse, or absurd, which it found was not the case here. It also criticised the High Court for entertaining representations and interim relief at a stage when the bid process was still underway, holding this risks causing confusion and is not in the public interest; an aggrieved bidder should approach the court only at the appropriate stage. The Division Bench's judgment was accordingly set aside and the appeals of TANGEDCO/BHEL were allowed, with no order as to costs.
Lesson Learnt
Courts will not act as an appellate authority over technical or financial evaluations made by qualified experts in a government tender process; judicial review in such matters is confined to checking for illegality, arbitrariness, or perversity, not for re-assessing the merits of the financial analysis itself.