Adopted for transparency but no tender goes unchallenged: SC

New Delhi: The Supreme Court on Friday said that the enlarged role of the Government in economic activity and its corresponding ability to give economic largesse' was the bedrock of creating a tender system with an objective to have greater transparency but the ground reality is that almost no tender remains unchallenged.

Observing "mindless appeals should not be the rule", the top court in a first of its kind devised a methodology for imposing cost on commercial entities indulging in such litigations and said The tender jurisdiction was created for scrutiny of commercial matters and, thus, where continuously parties seek to challenge award of tenders, we are of the view that the succeeding party must get costs and the party which loses must pay costs .

A bench of Justices Sanjay Kishan Kaul and Hrisikesh Roy, while deciding commercial dispute between corporate entities over the dispute on terms and conditions of tender issued by Tamil Nadu government, said that the judicial review of such contractual matters has its own limitations.

The enlarged role of the Government in economic activity and its corresponding ability to give economic largesse' was the bedrock of creating what is commonly called the tender jurisdiction'. The objective was to have greater transparency and the consequent right of an aggrieved party to invoke the jurisdiction of the High Court , beyond the issue of strict enforcement of contractual rights under the civil jurisdiction. However, the ground reality today is that almost no tender remains unchallenged , the bench said.

It said that the burgeoning litigation in this field and the same being carried to this Court has made the top court make observations in the catena of verdicts over the period of time.

The top court passed the order on an appeal filed by Uflex Ltd against the Madras High Court order of April 29, giving Tamil Nadu government four months' time to float a fresh tender for production and supply of polyester based hologram stickers to be pasted across the caps of bottles of liquor sold by the Tamil Nadu State Marketing Corporation (TASMAC).

The High Court had passed the order on a plea filed by two other competing firms, who were not selected in the tender process.