A Bench comprising justice Hemant Gupta and V Ramasubramanian said that construction of roads is an essential part of development of infrastructure in any State and the courts must realize their limitations and the havoc which needless interference in commercial matters could cause.
The Supreme Court on Monday cautioned the courts below against interfering in the commercial matters related to development of infrastructure projects, saying they do not have expertise to examine the present-day economic activities of the State. Also, such interference by courts could lead to additional costs on the state and even go against public interest, the apex court observed.
A Bench comprising justice Hemant Gupta and V Ramasubramanian said that construction of roads is an essential part of development of infrastructure in any State and the courts must realize their limitations and the havoc which needless interference in commercial matters could cause. In contracts involving technical issues, the courts should be even more reluctant, it said, while citing various SC rulings in this regard. Besides, the termination of contract would cause additional financial burden on the State and also deprive people of the amenity for a longer period, the top court said.
“Since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project. Such provision should be kept in view even by the writ court while exercising its jurisdiction under Article 226 of the Constitution of India,” the SC said, while setting aside the Jharkhand High Court’s judgment that ordered fresh tendering process. Unsuccessful party had sought cancellation of the 2019 tender after N.G projects, the successful bidder, had completed some work on reconstruction of the Nagaruntari-Dhurki-Ambakhoriya Road in the state.
“A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the HC “has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone,” the judges said.
Allowing the successful bidder, NG Projects, to resume and complete reconstruction of the road project, the apex court said that the approach of the court should be not to find fault with magnifying glass in its hands, rather the court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions.
“If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day governments are expected to work,” the judgement stated.