REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6978  OF 2009            (Arising out of SLP(C) No.5461 of 2009)

M/s. BECIL ..Appellant

versus

Arraycom India Ltd. & Others ..Respondents

WITH

CIVIL APPEAL NO.6979 OF 2009           (Arising out of SLP(C) No.9381 of 2009)

O R D E R

Civil Appeal No.6978 of 2009 @ SLP(C) 5461/2009  

Leave granted.

This  Appeal  has  been  filed  against  the  impugned  

judgment of the Division Bench of the High Court of Delhi  

dated 02nd February, 2009 passed in Writ Petition(C) No.7865  

of 2008.

The facts in brief are:

Respondent  No.2  (Prasar  Bharti)  issued  a  Notice  

Inviting Tender (NIT) on 20th October, 2006 for the supply  

of two transmitters of 1000 KW (or 1 MW) each.  The bidding  

was a two-stage process involving a technical bid and a  

financial bid.  There is no dispute that the respondent  

No.1(Arraycom)  and  the  appellant  (BECIL)  were  both

technically qualified.

In respect of the financial bid which was opened on  

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30th July, 2007, the quotation given by Arraycom was for a  

sum of Rs.51.57 crores and it was stated therein that:

“1.  Prices  at  INR  including  Custom  Duty,  Packaging, Forwarding, Freight & Insurance. 2. CST (Central Sales Tax) is inclusive in  the above prices.  AIR will have to give  concessional forms C/D. 3.Billing  will  be  done  from  our  Noida  office. 4.Validity of offer upto 120 days from the  date of opening (I.e. up to 16.06.2007).”

The quotation given by BECIL was for Rs.47.35 crores  

and it was stated that:

“1.  Prices  in  INR.  FOR  destination,  including Freight, Insurance & Customs Duty.  2. Sales Tax extra @ 4% against form C/D. 3. Sales Tax extra @ 12.5% in case form C/D  is not provided. 4. Validity of offer upto 31.05.2007.”

For  the  purposes  of  this  decision,  we  are  only  

concerned with the sales tax element in the price bid.  We  

may note, as a matter of fact, that there is no dispute  

that Form C under the Central Sales Tax Act, 1956 is not  

relevant to the facts of the case and Form D under the  

Central Sales Tax Act, 1956 was abolished with effect from  

1st April, 2007.  There is also no dispute that the bids of  

Arraycom  and  BECIL  were  valid  and  subsisting  at  all  

material times.

Based on the quotations, quoted above, Prasar Bharti

submitted the following chart of quoted prices before the  

High Court:

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Arraycom BECIL

Basic  price  (in  Rs.)

49,58,65,385 47,37,48,792

With 4% sales tax  (in Rs.)

51,57,00,000 49,24,90,743

With  12.5%  sales  tax (in Rs.)  

55,78,00,000 53,66,00,000

In contracts to be given by Government authorities  

or  statutory  bodies  or  instrumentalities  of  the  State,  

Article 14 of the Constitution applies. Hence, there should  

be transparency by holding an open public auction/tender  

because such contracts often involve huge amounts of public  

money.  Ordinarily, the lowest bidder should be given the  

contract,  although  it  is  not  an  invariable  rule  in  all  

cases.  In the present case, the Prasar Bharti found that  

the appellant's bid was the lowest bid on the basis of the  

chart which we have quoted above.

Respondent No.1 before us filed a writ petition in  

the  High  Court  of  Delhi  which  has  been  allowed  by  the  

impugned judgment and hence this appeal before us.

In our opinion, the whole controversy is about the  

interpretation  of  the  second  paragraph  submitted  by  

respondent No.1(Arraycom).  According to the High Court,  

the bid of Rs.51.57 crores was an inclusive bid and no

amount of central sales tax could have been added to that  

amount. We regret we cannot agree.  

It  may  be  seen  that  paragraph  2  of  the  bid  of  

Arraycom consists of two sentences.  The first sentence, no  

doubt, states that the central sales tax is inclusive in  

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the  price  of  Rs.51.57  crores.   Had  paragraph  2  stopped  

there, the submission of learned counsel for Arraycom would  

have been correct.  However, in paragraph 2, there is a  

second sentence to the effect that AIR (All India Radio)  

will have to give concessional forms C/D.  Thereafter there  

is no third sentence in paragraph 2 of the bid that even if  

the  concessional  forms  are  not  given,  yet  the  bid  of  

Rs.51.57  crores  is  an  inclusive  bid  and  nothing  can  be  

added to the bid.

Thus,  in  our  opinion,  paragraph  2  of  the  bid  of  

Arraycom is ambiguous and this is the fault of Arraycom  

itself by giving such an ambiguous proposal.  Respondent  

No.1 should have given a clear cut bid either by stopping  

after the  first sentence,  or by  adding another  sentence  

after the second  sentence that even if the concessional  

forms C/D are not given the bid of Rs.51.57 crores is an  

inclusive bid.

Thus,  paragraph  2  of  Arraycom's  bid  has  two  

interpretations (i) it is an inclusive bid; and (ii) that  

sales tax can be added to that bid.

Prasar  Bharti,  who  has  to  make  the  payment,  has  

taken the second interpretation which, in our opinion, is a  

reasonable and possible interpretation.   

In  administrative  matters,  the  scope  of  judicial  

review is limited and the judiciary must exercise judicial  

restrain in such matters, as held by this Court in  Tata  

Cellular vs. Union of India AIR 1996 SC 11 = (1994) 6 SCC  

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651.   Moreover,  the  view  of  Prasar  Bharti  also  appears  

reasonable  because  Prasar  Bharti  has  to  pay  the  amount  

inclusive  of  sales  tax,  since  there  is  no  concessional  

forms.  If  Prasar  Bharti  has  taken  up  one  possible  

interpretation, the High Court should not have intervened.  

The scope of judicial review in administrative matters is  

limited.  

For the reasons given above, this appeal is allowed  

and the impugned judgment of the High Court is set aside.  

No order as to costs.

Civil Appeal No.6979 of 2009 @ SLP(C) No.9381 of 2009

Leave granted.

This  Appeal  has  been  filed  challenging  the  same  

impugned judgment dated 02nd February, 2009 passed by the  

High Court of Delhi.  

Since, we have allowed the Civil Appeal No.6978 of  

2009 arising from S.L.P.(C) No.5461 of 2009, this appeal is

also allowed on the same terms. No order as to costs.

...........................J. [MARKANDEY KATJU]

NEW DELHI; ...........................J. OCTOBER 20, 2009. [ASOK KUMAR GANGULY]