Smec International Pty LTD And Anr vs. Assam Electricity Grid Corporation LTD And 2 Ors

Held

The Court held that there was no arbitrariness, irrationality, unreasonableness, perversity, favoritism, bias, or mala fide on the part of AEGCL in selecting and appointing respondent No. 3 as the Consultant. The Court relied on established legal principles regarding judicial review in contractual matters involving state instrumentalities, emphasizing that courts should exercise restraint and not interfere unless there is clear arbitrariness, irrationality, or mala fides. The Court noted that evaluating tenders and awarding contracts are commercial functions where principles of equity and natural justice stay at a distance. It also highlighted that interference in tender processes can lead to additional costs for the State and delay public works. The Court found that the petitioners had not demonstrated any such grounds for interference. Therefore, the writ petition was dismissed. The interim order was vacated, and the petitioners were advised to approach the Civil Court for damages if they remained aggrieved.

Facts

The Assam Electricity Grid Corporation Limited (AEGCL) issued a Request for Proposal (RFP) on March 7, 2020, for consulting services for the "Assam Intra State Transmission System Enhancement Project." SMEC International Pty Ltd and SMEC India Pvt. Ltd. (petitioners) were among the seven shortlisted consultants. AEGCL issued a Notification of Intention to Award on October 13, 2020, favoring PT Feedback Infra Limited (respondent No. 3). A draft contract was signed on November 1, 2020, and a formal Notification of Award was issued on November 2, 2020, to respondent No. 3. The petitioners filed a writ petition on December 10, 2020, challenging the award, alleging illegal evaluation of their technical proposal and violation of the RFP terms. An interim order restricted respondent No. 3's work to seven sub-stations already handed over, which remains in force.

Key Issues

1. Whether the Assam Electricity Grid Corporation Limited (AEGCL) acted illegally and arbitrarily in issuing the Notification of Intention to Award dated 13.10.2020 and the Notification of Award dated 02.11.2020 in favour of respondent No. 3, thereby violating the principles of a level playing field and equal opportunity, contrary to Clause 23 of the RFP dated 07.03.2020? 2. Whether AEGCL failed to adhere to the mandatory requirements of Clause 21.1 of the RFP dated 07.03.2020, which mandates the evaluation of technical bids based on specified criteria and the provision of detailed scores to consultants? Petitioner's arguments: The petitioners contended that AEGCL violated mandatory terms of the RFP by not evaluating technical proposals as per the Quality cum Cost Based Selection (QCBS) method (80% technical, 20% financial) and by issuing the Notification of Intention to Award without proper evaluation. They argued that Clause 21.1 of the RFP, requiring evaluation of each technical bid and provision of scores, was also violated. They sought to declare the award illegal, arbitrary, unconstitutional, and prayed for the work to be awarded to them. Respondent's arguments: The judgment does not explicitly record arguments made by the respondents. However, the court's reasoning suggests that the respondents likely defended the award process as being non-arbitrary and in public interest, relying on established principles of judicial review in contractual matters.