Undoubtedly, ‘motive’ plays significant role in a case based on circumstantial evidence where the purpose would be to establish this important link in the chain of circumstances in order to connect the accused with the crime. But, for the case on hand, proving motive is not an important factor when abundant direct evidence is available on record. The confessional statement of the appellant itself depicts the 15 motive of the team of accused in pursuit of which they committed the robbery at the house of informant and the appellant being part of it. It is also clear from the statement of the accused—appellant that the inmates of the house suffered injuries at the hands of the accused party as they had beaten them with the pieces of wood (sticks) and created terror among them. The recovery of bloodstained sticks from the orchard of Kamal Jain and the FSL report (Ext.X) proves the circumstance with no manner of doubt. Another facet of the case as portrayed by the appellant in his defense is that the informant implicated the appellant in the crime with the connivance of I.O. due to old enmity. However, we do not find any evidence or material on record in support of such claim made by the appellant. On the other hand, not only by the recovery of Rs.400/­ from the house of appellant his participation stands proved, with the other incriminating evidence available on record.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1333 of 2009
RAJU MANJHI      APPELLANT
VERSUS
STATE OF BIHAR           RESPONDENT
JUDGMENT
N.V. RAMANA, J.
1. This appeal is directed against the judgment dated 3rd August,
2005 passed by the High Court of Judicature at Patna in
Criminal Appeal (D.B.) No. 447 of 2001, whereby the High
Court dismissed the appeal filed by the accused—appellant
herein and upheld the order of conviction and sentence passed
by the learned Additional District & Sessions Judge, Gaya.
2. Briefly stated, the facts of the case as culled out from the case
of prosecution are that in the intervening night of 11th and 12th
2
January,   1999   a   group   of   assailants   consisting   10   to   12
persons including the appellant herein, all aged between 20 to
25 years, barged into the house of one Kamdeo Singh of the
village Banbareya, P.S. Moffasil, District Gaya and decamped
with golden ornaments, pants and cash. In the protest by the
inmates   of   the   house,   the   assailants   caused   injuries   to
Kamdeo Singh, his father­in­law Kameshwar Singh, son Niraj
Kumar (PW2), wife Sita Devi and daughter­in­law Reena Devi.
The stolen items include golden bangle, golden rings, cash of
Rs.5,000/­ and altogether the worth of stolen property would
be Rs.25,000/­. At about 2 am in the night, Kamdeo Singh
lodged a complaint with the Moffasil police, on the basis of
which   a   case   under   Section   395/412,   IPC   was   registered
against unknown persons. Zamil Ashgar (PW10)—Officer incharge
  of   the   Muffasil   P.S.   took   up   the   investigation   and
rushed to the place of occurrence. He recorded statement (Ext.
4) of Kamdeo Singh (PW3), prepared injury reports in respect
of the inmates of the house and sent them to hospital for
treatment. As the injured Kameshwar Singh had succumbed
3
to the injuries, charged under Section 396, IPC was replaced
for the offence under Section 395, IPC against the accused. In
the course of further investigation, police arrested some of the
accused,  recorded   their   statements,   recovered   some  money
from them. Out of the six accused persons charged with the
offence, one Rameshwari Manjhi @ Umeshwari Manjhi has
been declared as absconder. The accused pleaded not guilty
and claimed to have been implicated falsely, therefore, wanted
to be tried.
3. At the trial, the prosecution in support of its case examined as
many   as   eleven   witnesses.   Relying   upon   the   incriminating
material as well as depositions and confessional statements of
the accused, the trial Court came to the conclusion that the
prosecution   could   prove   the   guilt   of   the   accused   beyond
reasonable doubt. Accordingly, the trial Court convicted the
accused for the offence punishable under Section 396, IPC
and sentenced them to suffer rigorous imprisonment for life
and also to pay a fine of Rs.1,000/­ each, failing which to
4
further   suffer   rigorous   imprisonment   for   a   period   of   six
months.
4. All   the   aggrieved   accused   persons,   including   the   appellant
herein, carried the matter by way of separate appeals before
the High Court. By an elaborate judgment which is impugned
herein,   the  High   Court   dismissed   the   appeal   affirming  the
conviction and sentence awarded by the trial Court. That is
how the accused Raju Manjhi is in appeal before us.
5. At  the  outset, we  would  like  to  record that  whenever  this
appeal came up for hearing before us, learned counsel for the
appellant   remained   absent.   Therefore,   in   the   interest   of
justice,   we   directed   the   Supreme   Court   Legal   Services
Committee   to   appoint   an   advocate   to   defend   the   case   of
appellant. In accordance therewith, Ms. Nidhi, learned counsel
appeared and argued on behalf of the appellant.
6. We have heard learned counsel appearing for the parties on
either side and carefully perused the material available on
record.
5
7. A specific argument has been put forward on behalf of the
appellant that though there was no concrete proof to establish
the participation of the appellant in the alleged crime, the trial
Court as well as the High Court believed the prosecution story
on flimsy grounds and convicted him. Merely on the basis of
prosecution story that when the police raided the house of
appellant, he was available in the house and an amount of
Rs.400/­   has   been   recovered   from   his   possession,   the
appellant   cannot   be   stamped   as   an   accused   and   being
involved in the crime. As a matter of fact, there was no act of
dacoity   or   burglary   took   place   on   the   alleged   place   of
occurrence in which the accused—appellant was a participant.
Moreover, the appellant was not identified by any witness in
the   test   identification   parade   and   also   in   the   Court.   This
circumstance itself points at the innocence of the appellant.
The case was fastened against the accused out of enmity and
it   is   with   the   connivance   of   the   informant   and   I.O.   who
dragged the accused into the alleged crime. The recovery made
by the police, of a petty amount of Rs.400/­ from the house of
6
the appellant could not be an incriminating factor. One cannot
claim it to be the looted money connecting him to the crime,
more so when there was no claim for such money by the
informant or any other prosecution witness. Even the alleged
confessional statement of the appellant, cannot be given legal
validity as it was not made before a Magistrate.  Particularly
when the trial Court itself expressed doubt on the genuineness
of   the   confessional   statement   as   the   alleged   confessional
statements   of   other   accused   were   also   under   the   same
handwriting and drawn by the police, they cannot be taken
into account.
8. It is further case of the appellant that the prosecution could
not prove the motive of the appellant in committing the crime.
There was no injury report brought on record in respect of
PWs 1, 2 and 3 who were stated to have sustained injuries in
the occurrence when the I.O. said to have drawn their injury
reports. There were so many latches on the part of prosecution
and the appellant herein had no criminal antecedents, yet the
Courts below without taking into account the importance of all
7
these circumstances simply believed the prosecution story and
held   the   appellant   guilty   of   the   offence.   Therefore,   the
impugned judgment calls for the interference of this Court and
deserves to be set aside.
9. On the other hand, learned counsel appearing for the State of
Bihar supported the view taken by the Courts below.   He
submitted that there was enough material on record which
clearly establishes the guilt of the accused beyond reasonable
doubt.   There   was   credible   evidence   available   on   record   to
believe that the appellant was a party to the accused group
and was guarding at the entrance of the victim’s house when
the other participants were on the spree of ransacking the
households of the victim. The statement of confession recorded
at the instance of the accused—appellant not only proves his
guilt but also led to the discovery of new facts in the case. It
helped the I.O. for the recovery of incriminating material and
looted cash from his house. The accused—appellant had by
participating in the crime, shared the looted articles and there
8
is no bar to validate his confessional statement under the
provisions of Indian Evidence Act.
10. Having heard learned counsel on either side we have given our
intense consideration to the facts and circumstances of the
case and taken note of the analysis adopted by the Courts
below   in   reaching   to   the   conclusion.   First   and   foremost,
considering the primary contention advanced on behalf of the
appellant that there was no instance of alleged dacoity on the
time and place of occurrence wherein the accused was a party,
we find from the deposition of Reena Devi (PW1), daughter­inlaw
of the informant that on the intervening night of 11th and
12th January, 1999 on hearing some disturbance, she woke up
and found the assailants armed with sticks, looting articles in
the house. When she tried to resist, they assaulted her and
took away her ornaments including golden bangle and a chain
and also tried to snatch her child. A brief case of her husband
Neeraj Kumar (PW2) containing clothes and cash of Rs.5,200/­
has also been stolen. Altogether the worth of stolen property
would be Rs.25,000/­. In that commotion, hearing her hue
9
and cry her father­in­law—PW3 (informant) and mother­in­law
came there who objected the assailants and they too were
assaulted by the accused.
11. Corroborating   the   statement   of   PW1,   PW2—Neeraj   Kumar,
stated that the accused caused injuries to Kameshwar Singh
due   to   which   he   fell   down   on   the   ground   and   later   on
succumbed to the injuries in the hospital. The evidence of
PW3—informant also on the same lines as that of PWs 1 and
2.   According   to   Zamil   Asghar—the   Investigating   Officer
(PW10),   on   receiving   information   about   the   occurrence   of
dacoity, the FIR (Ext.5) was registered and thereafter he visited
the place of occurrence and recorded the statement of the
informant and other inmates of the house and sent the injured
to Piligrim Hospital, Gaya for their treatment.  Upon knowing
that the alleged assailants were at Mohalla Balapar where they
were consuming wine, he proceeded to that place and then
rushed   to   the   house   of   main   accused   Munna   Manjhi   and
apprehended   him   at   Samitee   Bhawan.   On   his   confession
about the commission of the offence and disclosure of the
10
names of other assailants, the I.O. raided the houses of other
accused and apprehended them. He categorically stated that
the appellant herein has made confessional statement which
was   prepared   by   him   (Ext.   7/1).   He   has   also   visited   one
orchard   belonging   to   Kamal   Jain   situated   near   Jag   Jiwan
College and from there he recovered two bloodstained wooden
pieces (sticks) under Exts. III and III/1 allegedly used in the
crime and also seized polythene wine bags under Exts. I to
I/V, besides recovering money from the possession of accused
in   the   denomination   of   Rs.100   x   3   and   Rs.   50   x   4.   The
evidence   of   other   prosecution   witnesses   and   also   the
confessionals   statements   of   accused   assailants   and   the
recoveries made by the police substantiate the act of dacoity
took place at the house of the informant and the injuries
sustained by the inmates.
12. The other ground urged on behalf of the appellant is that the
so   called   confessional   statement   of   the   appellant   has   no
evidentiary   value   under   law   for   the   reason   that   it   was
extracted from the accused under duress by the police.  It is
11
true, no confession made by any person while he was in the
custody   of   police   shall   be   proved   against   him.   But,   the
Evidence Act provides that even when an accused being in the
custody   of   police   makes   a   statement   that   reveals   some
information leading to the recovery of incriminating material or
discovery of any fact concerning to the alleged offence, such
statement can be proved against him. It is worthwhile at this
stage to have a look at Section 27 of the Evidence Act.
27.   How   much   of   information   received   from
accused may be proved.—Provided that, when any
fact is deposed to as discovered in consequence of
information received from a person accused of any
offence, in the custody of a police officer, so much of
such   information,   whether   it   amounts   to   a
confession or not, as relates distinctly to the fact
thereby discovered may be proved.
13. In   the   case   on   hand,   before   looking   at   the   confessional
statement   made   by   the   accused—appellant   in   the   light   of
Section 27 of the Evidence Act, may be taken into fold for
limited   purposes.   From   the   aforesaid   statement   of   the
appellant, it is clear that he had explained the way in which
the accused committed the crime and shared the spoils. He
disclosed the fact that Munna Manjhi was the Chief/Head of
12
the team of assailants and the crime was executed as per the
plan made by him. It is also came into light by his confession
that the accused broke the doors of the house of informant
with the aid of heavy stones and assaulted the inmates with
pieces of wood (sticks). He categorically stated that he and
Rampati   Manjhi   were   guarding   at   the   outside   while   other
accused were committing the theft. The recoveries of used
polythene pouches of wine, money, clothes, chains and bangle
were   all   made   at   the   disclosure   by   the   accused   which
corroborates his confessional statement and proves his guilt.
Therefore, the confessional statement of the appellant stands
and satisfies the test of Section 27 of the Evidence Act.
14. As regards the claim of appellant that non­identification of the
accused   by   the   witness   would   not   substantiate   the
prosecution   case,   admittedly   no   prosecution   witness   has
identified the accused—appellant which does not mean that
the prosecution case against the accused is on false footing.
As   a   general   rule,   identification   tests   do   not   constitute
substantive evidence. The purpose of identification test is only
13
to help the investigating agency as to whether the investigation
into the offence is proceeding in a right direction or not. In our
view, non­identification of the appellant by any prosecution
witness would not vitiate the prosecution case. It is evident
from the confessional statement of the accused that at the
time of occurrence he and another accused Rampati Manjhi
were   guarding   outside   the   informant’s   house   while   other
accused were committing dacoity inside. We do not think that
there is any justification to the argument that as none of the
prosecution witnesses could be able to identify the appellant,
he   cannot   be   termed   as   accused.   In   our   view,   such   nonidentification
would not be fatal to the prosecution case in the
given facts and circumstances.
15. The identification parade belongs to the stage of investigation,
and   there   is   no   provision   in   the   Code   which   obliges   the
investigating   agency   to   hold   or   confers   a   right   upon   the
accused to claim, a test identification parade. They do not
constitute   substantive   evidence   and   these   parades   are
essentially governed by Section 162 of the Code. Failure to
14
hold a test identification parade would not make inadmissible
the   evidence   of   identification   in   Court.   The   weight   to   be
attached to such identification should  be a matter for the
Courts of fact. In appropriate cases it may accept the evidence
of identification even without insisting on corroboration [See :
Kanta   Prashad  v.  Delhi   Administration,  1958 CriLJ 698
and Vaikuntam Chandrappa and Ors. v. State of Andhra
Pradesh, AIR 1960 SC 1340].
16. Moving on to the other limb of argument advanced on behalf of
the appellant that the accused—appellant had no motive and
the Courts below have failed to consider the fact that the
evidence on record is not sufficient to establish motive of the
accused. Undoubtedly, ‘motive’ plays significant role in a case
based on circumstantial evidence where the purpose would be
to establish this important link in the chain of circumstances
in order to connect the accused with the crime. But, for the
case on hand, proving motive is not an important factor when
abundant   direct   evidence   is   available   on   record.   The
confessional   statement   of   the   appellant   itself   depicts   the
15
motive   of   the   team   of   accused   in   pursuit   of   which   they
committed  the  robbery  at  the  house  of  informant   and  the
appellant being part of it.
17. It is also clear from the statement of the accused—appellant
that the inmates of the house suffered injuries at the hands of
the accused party as they had beaten them with the pieces of
wood (sticks) and created terror among them. The recovery of
bloodstained sticks from the orchard of Kamal Jain and the
FSL report (Ext.X) proves the circumstance with no manner of
doubt. Another facet of the case as portrayed by the appellant
in his defense is that the informant implicated the appellant in
the   crime   with   the   connivance   of   I.O.   due   to   old   enmity.
However, we do not find any evidence or material on record in
support of such claim made by the appellant. On the other
hand, not only by the recovery of Rs.400/­ from the house of
appellant   his   participation   stands   proved,   with   the   other
incriminating evidence available on record.
16
18. In view of the foregoing discussion and having regard to the
facts and circumstances of the case we have no hesitation to
conclude that the prosecution has proved the case against the
accused—appellant   beyond   all   reasonable   doubts.   We,
therefore,   find   no   infirmity   or   illegality   in   the   impugned
judgment passed by the High Court. Consequently, the appeal
preferred by the accused being bereft of any substance, the
same stands dismissed.
…………......................J.
 (N.V. RAMANA)
..................................J.
        (S. ABDUL NAZEER)
NEW DELHI,
August 02, 2018.

We hold that the University was not entitled and competent to devise its own fee structure in the present matter without having the fee fixed by the Committee on Fixation of Fee as contemplated under 1992 Act.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6654 OF 2018
(Arising out of Special Leave Petition (Civil) No.30567 of 2016)
M. Aamira Fathima and Others ………Appellants
VERSUS
Annamalai University and Others ..…. Respondents
WITH
CIVIL APPEAL NOS. 6655-56 OF 2018
(Arising out of Special Leave Petition (Civil) No.30658-30659 of 2016)
WITH
CIVIL APPEAL NO.6657-59 OF 2018
(Arising out of Special Leave Petition (Civil) No.31078-31080 of 2016)
WITH
CIVIL APPEAL NO.6660 OF 2018
(Arising out of Special Leave Petition (Civil) No.9806 of 2017)
WITH
CIVIL APPEAL NO.6661 OF 2018
(Arising out of Special Leave Petition (Civil) No.28543 of 2017)
2
JUDGMENT
Uday Umesh Lalit, J.
Special leave to appeal granted in all matters.
These appeals are directed against the common judgment and order
dated 26.09.2016 passed by the High Court of Judicature at Madras in Writ
Appeal No.1637 of 2014 and other connected matters. Matter arising from
Writ Appeal No.1637 of 2014 which in turn arose from Writ Petition
No.20720 of 2014, namely M. Aamira Fathima and others v. Annamalai
University and others is taken to be the lead matter and the facts leading to
the filing of the said writ appeal are set out in detail hereunder.
2. Annamalai University (hereinafter referred to as “the University”) was
constituted under the Annamalai University Act, 1928 (Madras Act No.1 of
1929)1
. This Act received the assents of Governor and Governor General on
03.11.1928 and 11.12.1928 respectively and was first published in the Fort
of St. George Gazette dated 01.01.1929. The University established
Respondent No.2 College, namely, Rajah Muthiah Medical College in the
year 1985.
1Words “Tamil Nadu” were substituted for the word “Madras” by Tamil Nadu Adaptation
of Law and Order, 1969
3
3. In 1992 the State legislature enacted the Tamil Nadu Educational
Institutions (Prohibition of Collection of Capitation Fee) Act, 1992
(hereinafter referred to as “1992 Act”). Section 2(b) defined Educational
Institution as under:-
“(b) “educational institution” means any institution by
whatever name called, whether managed by any person, private
body, local authority, trust or University, carrying on the
activity of imparting education leading to a degree or diploma
(including a degree or diploma in law, medicine or engineering)
conferred by any University established under any law made by
the Legislature of the State of Tamil Nadu and any other
educational institution or class or classes of educational
institutions (other than any educational institution established
by the Central Government or under any law made by
Parliament) as the Government may, by notification, specify;”
Section 4 dealt with regulation of tuition fee or other fees or deposits
and was initially as under:-
“4. (1) Notwithstanding anything contained in any other law for
the time being in force, the Government may, by notification,
regulate the tuition fee or any other fee or deposit that may be
received or collected by any educational institution or class or
classes of such educational institutions in respect of any or all
class or classes of students :
Provided that before issuing a notification under this subsection,
the draft of which shall be published in the Tamil Nadu
Government Gazette stating that any objection or suggestion
which may be received by the Government, within such period
as may be specified therein, shall be considered by them.
4
(2) No educational institution shall receive or collect any fee or
accept deposit in excess of the amount notified under subsection
(1).
(3) Every educational institution shall issue an official receipt
for the fee or deposit received or collected by it.”
4. After the judgment of this Court in Islamic Academy of Education
and another v. State of Karnataka and others2
, sub-section (2-A) was
added along with an Explanation in Section 4 of 1992 Act by the State
Legislature vide Tamil Nadu Educational Institutions (Prohibition of
Collection of Capitation Fee) Amendment Act, 2007. As a result of the
aforesaid insertion of sub-section (2-A) and Explanation, Section 4 of 1992
Act now reads as under:
“4. (1) Notwithstanding anything contained in any other law for
the time being in force, the Government may, by notification,
regulate the tuition fee or any other fee or deposit that may be
received or collected by any educational institution or class or
classes of such educational institutions in respect of any or all
class or classes of students :
Provided that before issuing a notification under this subsection,
the draft of which shall be published in the Tamil Nadu
Government Gazette stating that any objection or suggestion
which may be received by the Government, within such period
as may be specified therein, shall be considered by them.
(2) No educational institution shall receive or collect any fee or
accept deposit in excess of the amount notified under subsection
(1).
2
(2003) 6 SCC 697
5
(2-A) Notwithstanding anything contained in sub-section (1) or
sub-section (2), no educational institution imparting education
leading to a degree in medicine or engineering shall receive or
collect any fee in excess of the amount fixed by the ‘Committee
on fixation of fee’ constituted by the Government.
Explanation – For the purpose of this sub-section ‘Committee
on fixation of fee’ means the Committee constituted in
pursuance of the direction of the Supreme Court in Islamic
Academy of Education and another v. State of Karnataka and
others [(2002) 6 SCC 697].
(3) Every educational institution shall issue an official receipt
for the fee or deposit received or collected by it.”
5. The University, though originally established as a private University
had always received contributions and funding from the State Government.
But the University never adhered to the statutory provisions or the norms set
by the State Government or the University Grants Commission resulting in
financial losses during the years 2009-10 and 2010-11. Under the orders
passed by the Government of Tamil Nadu a Special Local Fund Audit Team
was appointed which found various irregularities, whereafter by another
order dated 14.12.2012 a High Level Committee was constituted to analyze
the audit report submitted by the Special Local Fund Audit Team. The
events which took place thereafter were summed up by the Single Judge in
the instant matters and the relevant observations in paragraphs 17 to 19 are
quoted hereunder:
6
“17. After examining the report and the supporting material,
this High Level Committee concluded that the Founder had
grossly abused the privileges conferred upon him and that
despite receiving grants from the State Government to the tune
of Rs.427.98 crores during the period from 1998-99 to 2012-13,
the University had landed up in serious financial crisis.
Therefore, the Committee recommended that the Government
shall issue necessary directions to the Senate and the Syndicate
and also to appoint some person to carry out those directions.
18. In pursuance of the aforesaid recommendations, the
Government issued a letter dated 7.3.2013 to the Vice
Chancellor, to convene the meeting of the Syndicate and
Senate, to respond to the report of the Special Local Fund Audit
Team. A special meeting of the Senate was held on 13.3.2013
and the meeting of the Syndicate was held on 14.3.2013. The
report of the Syndicate showed that by and large, the findings of
the Special Local Fund Audit Team were correct. Therefore,
the Government issued a directive on 26.3.2013 to convene a
special meeting of the Senate and the Syndicate. This was
opposed by the Vice-Chancellor by a reply dated 1.4.2013 on
the ground that a second meeting will serve no purpose.
19. Therefore, the Government, by G.O. Rt. No.1401, Public
Department dated 4.4.2013, appointed an Administrator in
exercise of the powers conferred by Section 28(4) of the
Annamalai University Act, 1928. ……. ”
6. In 2013, the State Legislature enacted the Annamalai University Act,
2013 (hereinafter referred to as “2013 Act”) which came into force w.e.f.
25.09.2013 and repealed the Annamalai University Act, 1928. Sections 3(1),
4(13) and 20(1)(m) and (ab) of said 2013 Act were as under:
“3(1) On and from the date of commencement of this Act, the
Annamalai University established under the Annamalai University
Act, 1928 shall be deemed to have been established and incorporated
7
under this Act and is hereby declared to be the University by the
aforesaid name.
4. The University shall have the following objects and powers,
namely:-
(1) to (12)…………………
(13) to fix fees and to demand and receive such fees as may be
prescribed;
“20. (1) The Syndicate shall have the following powers, namely:-
(a) to (l)……………….
 (m) to prescribe the fees to be charged for admission to the
examinations, degrees, titles and diplomas of the University and
for all or any of the purposes specified in section 4:
(n) to (z)(aa)…………….
(ab) to charge and collect such fees as may be prescribed;
(ac) to (an)……………”
7. 150 students who had taken admission in First MBBS Course in
Respondent No.2 College for the Academic Session 2013-14 preferred Writ
Petition No.20720 of 2014 in the High Court of Judicature at Madras
questioning fees of more than Rs.5.54 lakhs per annum imposed by the
University. Similar challenge was raised by students studying in Dental
Courses which petitions were heard and dealt with by the High Court along
with the main matter. It was urged by the petitioners that the fees fixed in
8
Government Colleges in the State were Rs.12,290/- for MBBS Course and
Rs.10,290/- for BDS Course; that the Committee on Fixation of Fee
constituted in terms of 1992 Act had fixed the tuition fees for MBBS Course
at Rs.2.30 lakhs for two self-financing colleges, Rs.2.60 lakhs for one selffinancing
college and Rs.2.80 for other self-financing colleges and that in so
far as ESI Medical Colleges were concerned, it had fixed the tuition fees at
Rs.24,000/-. Highlighting the enormous difference between the fees charged
by the University on one hand and the scale fixed by the Government as well
as the Committee on Fixation of Fee on the other, it was prayed that the
matter for fixation of fee be referred to the Committee in terms of 1992 Act.
8. While opposing the aforesaid submissions, it was contended on behalf
of the University that the fees stipulated by the University were in terms of
its statutes and the provisions of 2013 Act: that the object of 1992 Act was to
curtail the menace of self-financing colleges imposing high fees and that the
Government Colleges and State Universities did not come within the
purview of 1992 Act: that presently the University was running in deficit and
if the fee structure was reduced it would put the financial condition of the
University in great jeopardy.
9
9. The Single Judge of the High Court by his common Judgment and
Order dated 02.12.2014 dismissed the challenge raised by the petitioners. It
was observed that the petitioners having been admitted to MBBS and BDS
Courses in pursuance of the prospectus for the year 2013-14, were bound by
the terms and conditions contained therein and were therefore estopped from
raising any challenge. Reliance in that behalf was placed on the decision of
this Court in Cochin University of Science and Technology and another v.
Thomas P. John and others3
. The Single Judge then proceeded to consider
whether the provisions of 1992 Act would apply and get attracted in the
present case. After considering the definition of Educational Institution
under Section 2(e) of 1992 Act, he observed that for the purposes of
application of the provisions of 1992 Act, the concerned Institution must
have been notified by the State Government under the said 1992 Act. It was
further observed that the University was initially established in preindependence
days and merely because the earlier Act was repealed and
replaced by 2013 Act, the first limb of Section 2(b) would not apply without
the State Government referring the University to the Fee Fixation
Committee.
3
(2008) 8 SCC 82
10
10. The correctness of the decision of the Single Judge was questioned by
the students by filing Writ Appeal Nos.1637 and 1638 of 2014. Writ Petition
Nos.6909, 6910, 12515, 27098 and 31848 of 2015 and 14562, 22911 and
26388 of 2016 preferred by some of the students were also heard along with
said writ appeals by the Division Bench of the High Court. By its common
judgment and order dated 26.09.2016 the Division Bench rejected the
challenge and dismissed the appeals. The Division Bench affirmed the
reasoning which weighed with the Single Judge. It went on to observe that
the University was empowered under 2013 Act to fix, demand and receive
such fees as were prescribed.
11. These appeals by special leave question the correctness of the decision
rendered by the Division Bench of the High Court. Mr. Ranjit Kumar,
learned Senior Advocate while leading the arguments on behalf of the
petitioners, submitted that it was completely erroneous on part of the High
Court to observe that the provisions of 1992 Act would not apply in the
present case. He further submitted that on plain reading of its provisions,
1992 Act must apply and get attracted in the present case. These
submissions were countered by Mr. S. Nandakumar, learned Advocate who
appeared for the University. In his submission, the provisions of 1992 Act
11
would not get attracted without an appropriate reference having been made
by the State Government to the Fee Fixation Committee.
12. In the present case the Single Judge considered the definition of
Educational Institution as appearing in Section 2(e) of 1992 Act and came to
the conclusion that for the purposes of application of the provisions of 1992
Act the concerned institution ought to have been notified by the State
Government and an appropriate reference must be made to the Fee Fixation
Committee. This reasoning has been affirmed by the Division Bench. It is,
therefore crucial to consider the scope and ambit of the said provision. For
facility the definition of “educational institution” can be divided in two parts
as under:
Section 2(b) “educational institution” means:
(I) any institution by whatever name called, whether managed by any
person, private body, local authority, trust or University, carrying on
the activity of imparting education leading to a degree or diploma
(including a degree or diploma in law, medicine or engineering)
conferred by any University established under any law made by the
Legislature of the State of Tamil Nadu.
and
12
(II) any other educational institution or class or classes of educational
institutions (other than any educational institution established by the
Central Government or under any law made by Parliament) as the
Government may, by notification, specify.
According to (I) part, the activity must lead to award of degree or
diploma conferred by any University established under any law made by the
Legislature of the State. There is element of certainty about this first part of
definition and it is not left to the discretion of the Government in any
manner. If there is a course which leads to award of degree or diploma by
any University as specified, the concerned institution carrying on the activity
of imparting education would be an educational institution within the
meaning of said Section 2(b).
The definition has an inclusive provision which is specified in the (II)
part and empowers the Government to specify any other educational
institution or class or classes of educational institutions. Upon such
specification by notification, such institution or class or classes of
institutions would also stand covered by the definition. The (II) part also
contains a bracketed portion which is an exclusionary aspect of the
definition. This bracketed portion excludes any institution established by the
13
Central Government or under any law made by the Parliament with respect
to which the State Government cannot, even by exercising power of
specification include such institution.
13. The aforesaid analysis thus conclusively establishes that in so far as
cases covered under (I) Part are concerned, no specification by the
Government is required or necessary. If the concerned activity leads to
award of degree or diploma by any University established under any law
made by the State Legislature, such institution shall be “educational
institution” within the meaning of provisions of Section 2(b). The
specification by notification is a pre-requisite only if the institution
concerned is otherwise not covered under (I) Part. The High Court was
completely in error in observing that for the application by the provisions of
1992 Act an educational institution must always be specified by the
Government by notification. In our view, the requirement of specification of
notification is only in respect of “any other educational institution or class or
classes of educational institutions” and has not to be read with (I) part of
definition, which part of the definition is an independent and stand alone
provision and does not require any specification by the Government.
14
14. The next question which must be considered is whether University in
the present case answers the description in (I) Part of Section 3(b) of 1992
Act. According to Section 3(1) of 2013 Act, on and from the
commencement of said Act the University established under the Annamalai
University Act, 1928 shall be deemed to have been established and
incorporated under the provisions of 2013 Act. It is well settled that
whenever a Legislation deems, by way of legal fiction that a particular state
of affairs has to be assumed, that legal fiction has to be given full effect.
After quoting famous passage of Lord Asquith in East End Dwellings Co.
Ltd. v. Finsbury Borough Council4
, this Court in Gurupad Khandappa
Magdum v. Hirabai Khandappa Magdum and others5
 held that the legal
fiction engrafted in Explanation I to Section 6 of the Hindu Succession must
be given due and full effect. There is thus no escape from the situation that
the University in the present case is the one established under any law made
by the Legislature of the State of Tamil Nadu.
41952 AC 109, 132 =(1951) 2 All ER 587
“If you are bidden to treat an imaginary state of affairs as real, you must
also imagine as real the consequences and incidents which, if the putative state of
affairs had in fact existed, must inevitably have flowed from or accompanied it;
and if the statute says that you must imagine a certain state of affairs, it cannot be
interpreted to mean that having done so, you must cause or permit your
imagination to boggle when it comes to the inevitable corollaries of that state of
affairs.”
5
(1978) 3 SCC 383
15
15. In Islamic (supra), this Court directed constitution of two
Committees, namely, Fee Fixation Committee and Admissions Committee.
Paragraph 7 of the decision dealt with the concept of Fixation of Fee by the
Committee and said paragraph was as under:
“7. So far as the first question is concerned, in our view the
majority judgment is very clear. There can be no fixing of a
rigid fee structure by the Government. Each institute must have
the freedom to fix its own fee structure taking into
consideration the need to generate funds to run the institution
and to provide facilities necessary for the benefit of the
students. They must also be able to generate surplus which must
be used for the betterment and growth of that educational
institution. In paragraph 56 of the judgment it has been
categorically laid down that the decision on the fees to be
charged must necessarily be left to the private educational
institutions that do not seek and which are not dependent upon
any funds from the Government. Each institute will be entitled
to have its own fee structure. The fee structure for each institute
must be fixed keeping in mind the infrastructure and facilities
available, the investments made, salaries paid to the teachers
and staff, future plans for expansion and/or betterment of the
institution etc. Of course there can be no profiteering and
capitation fees cannot be charged. It thus needs to be
emphasized that as per the majority judgment imparting of
education is essentially charitable in nature. Thus the
surplus/profit that can be generated must be only for the
benefit/use of that educational institution. Profits/surplus cannot
be diverted for any other use or purpose and cannot be used for
personal gain or for any other business or enterprise. As, at
present, there are statutes/regulations which govern the fixation
of fees and as this Court has not yet considered the validity of
those statutes/regulations, we direct that in order to give effect
to the judgment in T.M.A. Pai case the respective State
Governments/concerned authority shall set up, in each State, a
committee headed by a retired High Court Judge who shall be
16
nominated by the Chief Justice of that State. The other member,
who shall be nominated by the Judge, should be a Chartered
Accountant of repute. A representative of the Medical Council
of India (in short “MCI”) or the All India Council for Technical
Education (in short “AICTE”), depending on the type of
institution, shall also be a member. The Secretary of the State
Government in charge of Medical Education or Technical
Education, as the case may be, shall be a member and Secretary
of the Committee. The Committee should be free to
nominate/co-opt another independent person of repute, so that
the total number of members of the Committee shall not exceed
five. Each educational institute must place before this
Committee, well in advance of the academic year, its proposed
fee structure. Along with the proposed fee structure all relevant
documents and books of accounts must also be produced before
the Committee for their scrutiny. The Committee shall then
decide whether the fees proposed by that institute are justified
and are not profiteering or charging capitation fee. The
Committee will be at liberty to approve the fee structure or to
propose some other fee which can be charged by the institute.
The fee fixed by the Committee shall be binding for a period of
three years, at the end of which period the institute would be at
liberty to apply for revision. Once fees are fixed by the
Committee, the institute cannot charge either directly or
indirectly any other amount over and above the amount fixed as
fees. If any other amount is charged, under any other head or
guise e.g. donations, the same would amount to charging of
capitation fee. The Governments/appropriate authorities should
consider framing appropriate regulations, if not already framed,
whereunder if it is found that an institution is charging
capitation fees or profiteering that institution can be
appropriately penalised and also face the prospect of losing its
recognition/affiliation.”
16. The directions issued in Islamic (supra) including one regarding
constitution of Fee Fixation Committee came up for consideration in P.A.
17
Inamdar and others v. State of Maharashtra and others6
 and the matter
was settled in following terms:
“151. On Question 4, our conclusion, therefore, is that the
judgment in Islamic Academy insofar as it evolves the scheme
of the two Committees, one each for admission and fee
structure, does not go beyond the law laid down in Pai
Foundation and earlier decisions of this Court, which have been
approved in that case. The challenge to setting up of the two
Committees in accordance with the decision in Islamic
Academy therefore, fails……….....”
17. But the situation in the present matter stands on a slightly different
footing inasmuch as by inserting sub-section (2-A) along with an
explanation in Section 4 in 1992 Act, Fee Fixation Committee is a statutory
mechanism in terms of said provisions of 1992 Act. Said Section 4 shows
that under sub-section (1) the Government is empowered to regulate the
tuition fee or any other fees or deposits in the manner prescribed therein.
But in relation to imparting of education leading to a degree in medicine or
engineering, sub-section (2-A) has been given an overriding effect by
incorporating non-obstante provision. Sub-section (2-A), unlike sub-section
(1), does not require any notification by the Government. If an institution
carries on activity of imparting education leading to a degree or diploma as
spoken of in sub-section (2-A) of said Section 4, the fee structure has to be
that which is fixed by the Committee. The legislative intent is very clear and
6
(2005) 6 SCC 537
18
no educational institution which comes within the scope of sub-section (2-A)
can receive or collect any fees in excess of the amount fixed by the
“Committee on Fixation of Fee”.
18. We now have to deal with the submission whether the University by
virtue of Section 4(13) and 20(1)(m) of 2013 Act could charge, collect and
receive tuition fee without the intervention of “Committee on Fixation of
Fee” as contemplated by Section 4(2-A) of 1992 Act. The University by its
very nature of activities would be running numerous courses and to that
extent provisions of 2013 Act are general in nature. The provisions of
Section 4(2-A) of 1992 Act are specific and special and apply to courses
leading to degrees in Medicine and Engineering. Therefore, insofar as
professional courses leading to degrees in Medicine and Engineering are
concerned, the matter must be screened and assessed by Committee on
Fixation of Fee and the submission that the University was entitled to fix
fees on its own without the intervention of such Committee has to be
rejected. The other submission that the students were estopped from raising
a challenge must also fail. If a particular modality is prescribed by the
Legislature any action in defiance or ignorance of such modality cannot be
protected or preserved on the plea of estoppel. The reliance placed on the
decision of this Court in Cochin University of Science and Technology
19
(supra) was also misplaced. In that case students who had taken admission
in NRI Quota, thereafter contended that their fee structure be slashed to the
same level as applicable to non NRI students. The concept of estoppel was
pressed into service while rejecting said submission but that cannot be a
ground to deny the express protection available under a legislation.
19. We, therefore, allow these appeals and set aside the judgments and
orders under appeal. We hold that the University was not entitled and
competent to devise its own fee structure in the present matter without
having the fee fixed by the Committee on Fixation of Fee as contemplated
under 1992 Act. The matters shall therefore have to be referred to said
Committee and the University is directed to place the entire material
including its balance-sheet and accounts before the Committee on Fixation
of Fee within two weeks from the date of this Judgment. The Committee
shall thereafter bestow attention and fix appropriate fee structure for the
academic year 2013-14 onwards. It goes without saying that if the fee
structure fixed by the University is found by the Committee to be
inappropriate, consequential benefit and advantage shall be given to each
and every student. The Committee shall fix the appropriate fee structure for
the current academic Session 2018-19 as well. The entire exercise shall be
completed by 31.08.2018.
20
20. These appeals stand allowed in aforesaid terms. No costs.
……………..…………J.
(Arun Mishra)

………………..………J.
(Uday Umesh Lalit)
New Delhi,
July 13, 2018

whether the petitioner had preferential right to match the lowest bid without pre-qualifying or participating in the bidding process.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3288 OF 2018
NATIONAL HIGHWAYS AUTHORITY OF INDIA …..Appellant(s)
:Versus:
GWALIOR JHANSI EXPRESSWAY LIMITED ....Respondent(s)
J U D G M E N T
A.M. Khanwilkar, J.
1. This appeal emanates from the decision of the High Court
of Delhi at New Delhi dated 21st August, 2017 in Appeal ARB.A
(Comm.) No.20 of 2017 whereby the appeal filed by the
appellant under Section 37(2)(b) of the Arbitration and
Conciliation Act, 1996 (for short, “the Act”) seeking to quash
the order dated 24th May, 2017 passed by the Arbitral Tribunal
under Section 17 of the Act came to be dismissed. The Arbitral
Tribunal vide order dated 24th May, 2017 allowed the
2
application preferred by the respondent (claimant) under
Section 17 of the Act seeking a direction to the appellant to
allow the respondent to exercise an option to match the lowest
bid in terms of the order dated 23rd July, 2016 passed by the
Arbitral Tribunal and including to exercise Right of First
Refusal (“ROFR”) and for other consequential reliefs.
2. Shorn of unnecessary details, some of the relevant facts
are that the appellant (a body corporate, constituted under
the National Highways Authority of India Act, 1988) entered
into a Concession Agreement dated 17th December, 2006 with
the respondent (a consortium comprising of Apollo Enterprises
Limited and D.S. Construction Limited) for works of widening
the existing two-lane portion of Km 16.000 to Km 96.127 on
National Highway No.75 to four lanes in the States of Uttar
Pradesh and Madhya Pradesh on the terms and conditions
specified therein. The appellant asserts that the respondent
failed to undertake the project work at the requisite pace, inter
alia, due to inadequate deployment of machinery, plant,
material and manpower. The respondent had merely achieved
3
62% progress and eventually abandoned the project site in
March, 2012. The appellant, therefore, had to issue a Cure
Period Notice dated 19th October, 2013 requiring the
respondent to cure the breaches within 30 days from receipt of
the notice, failing which the appellant may be forced to initiate
further action to terminate the contract in terms of the
Concession Agreement. The respondent denied the correctness
of the stated notice by a written reply. The appellant then
issued letters dated 27th February, 2014 and 7th March, 2014
expressing its intention to issue termination notice of the
Concession Agreement. The respondent immediately rushed to
the court by filing a petition under Section 9 of the Act seeking
stay of the Cure Period Notice dated 19th October, 2013 as well
as the notice expressing the intention to issue termination
notice. The High Court of Delhi passed an interim stay on 12th
March, 2014 restraining the appellant from taking any
coercive action. The petition under Section 9 of the Act was
finally disposed of on 22nd April, 2015 with a direction to the
Arbitral Tribunal, which was already constituted in the
meantime, that the interim order dated 12th March, 2014
4
would continue during the pendency of the arbitral
proceedings with liberty to the parties to seek its modification
or revocation before the Arbitral Tribunal.
3. The appellant accordingly moved an application dated 8th
April, 2016 under Section 17 of the Act before the Arbitral
Tribunal seeking permission to complete the balance works of
the project as it was causing huge distress due to traffic
congestion, unsafe highway, increase in expenditures, higher
wear and tear of the vehicles and, in particular, national loss
to the public at large. The respondent also filed an application
under Section 17 of the Act on 17th May, 2016 seeking interim
directions against the appellant to pay Rs.400 crores to the
respondent at the risk and costs of the respondent for
completing the balance works of the project. The reliefs
claimed in the application filed by the respondent read thus:
“a) Allow the present application and as an interim
measure direct the Respondent to pay a sum of Rs.400
Crores to the Claimant at the risk and cost of the Claimant
so as to complete balance/remnant works of the project;
b) In the alternative and strictly without prejudice to
the prayer (a), as an interim measure permit the
Respondent to invite tender/bid for executing the
5
balance work under the Concession Agreement on
Engineering Procurement and Construction basis subject
to Claimant being granted the right of First Refusal for
matching the lowest bid and in the event the Claimant
matches the said lowest bid permit the Claimant to
complete the said balance/remnant works on the terms
and conditions of the tender/bid invited on Engineering
Procurement and Construction basis except for the
provision, if any, for furnishing Bank Guarantees;
c) In alternative and strictly without prejudice to the
prayer (a) & (b), direct the Respondent to act in terms of their
letter dated 19.01.2016 and the Circular dated 09.06.2015
in the event prior to the award of contract of the balance
work on Engineering Procurement and Construction basis
the Project Lenders of the Claimant agree to provide first
charge to the Respondent;
d) Pass such further order and other relief(s) as this
Hon‟ble Tribunal may be deem fit, just, necessary and
appropriate in the facts and circumstances of the case.”
(emphasis supplied)
4. During the pendency of the aforementioned proceedings
before the Arbitral Tribunal, a meeting was held on 19th April,
2016 in the Chamber of Member (P) at NHAI – HQ to discuss
and conclude the issues of Gwalior-Jhansi project pursuant to
Ministers‟ meeting dated 15th March, 2016 in order to get the
work restarted without further delay. Another meeting was
convened on 27th April, 2016 before the said Authority, as a
result of which the hearing of the matter was deferred till 18th
6
May, 2016. On the adjourned date, the advocate appearing
for the appellant placed reliance on the minutes of the
meetings held on 19th April, 2016 and 27th April, 2016. The
hearing of the applications was then deferred till 29th May,
2016, as the respondent submitted a construction-linked
financial plan for completing the balance work within a
maximum period of 24 months from the date of receipt of
advance payment from the appellant. The appellant filed its
response on 28th May, 2016 to the proposal submitted by the
respondent. The appellant asserted that the financial plan
submitted by the respondent was not in accord with the NHAI
Circular dated 19th June, 2015. In the meantime, on 25th
May, 2016, the respondent filed its reply to the application
filed by the appellant under Section 17 of the Act. The
appellant had stated that it was agreeable to infuse funds for
completion of the project as per the policy with condition of
first charge of NHAI, considering the larger public interest.
The respondent accepted the offer given by the appellant
including the conditions specified by the appellant.
7
The conditions suggested by the appellant have been noted by
the Arbitral Tribunal as under:
“(i) As the Respondent is a public body, in the event of the
lowest bidder being denied the work, it will require to be
compensated. For this purpose Claimant/Concessionaire
shall pay to the authority a sum of Rs.2% of the bid amount,
out of which 75% shall be paid to the lowest bidder. This is
on the lines agreed by the parties and provided in the
Concession Agreement based on Model Concession
Agreement (MCA).
(ii) The Respondent shall not pay any „Mobilization
Advance‟ without Bank Guarantee being furnished for the
equivalent amount. The advance shall be at the interest at
the rate of 2% more than the prevailing bank interest.
(iii) The work shall be completed by the Claimant in a
period of 24 months from the date of LOA for the
Construction Contract.
(iv) The terms and conditions of the Construction
Agreement shall be in addition to and not in substitution of
any terms and condition of the Concession Agreement. In the
event of any disparity the terms of the Concession Contract
shall prevail.
(v) The specifications and quality of construction shall not
be lower than stipulated in the Concession Agreement.
(vi) The Respondent shall be free to bring forward
consequential additional claims for the expenses incurred
and damages suffered.”
The respondent, through counsel, informed the Arbitral
Tribunal that the respondent would accept the
aforementioned conditions except condition No.(ii).
8
5. The arguments were heard by the Arbitral Tribunal
on 28th May, 2016. Before the application filed by the
parties under Section 17 of the Act could proceed further,
the appellant filed an application under Section 23 of the
Act for amendment of its reply dated 25th May, 2016 so
as to withdraw its acceptance of prayer (b) for
modification of procedure order No.9 dated 28th May,
2016, for the reasons mentioned therein. Finally, the
Arbitral Tribunal disposed of the applications by a
common order dated 23rd July, 2016. It accepted the
relief claimed by the respondent in terms of prayer clause
(b) of its application, reproduced in paragraph 3 above.
6. The Arbitral Tribunal rejected the plea of the
appellant to withdraw from its earlier offer noted in the
reply affidavit. The Arbitral Tribunal inter alia observed
thus:
“ . . . . .
NHAI had taken a specific stand before us that it would not
agree to prayer (a) made by the Claimant. Tribunal therefore
granted time to NHAI to examine and come out with concrete
proposals in respect of prayer (b) and on the unilateral
conditions suggested by NHAI itself, an order to that effect
9
was passed by the Tribunal on May 18, 2016. Conditions
stipulated by NHAI, it is seen, are more stringent than what
were suggested by CCEA in its meeting held on May 13,
2015, particularly in the CCEA decision made on October
14, 2015, where in CCEA stated that after the constructions,
loans can be recovered bi-annually through execution of a
tripartite agreement between NHAI, lender and
concessionaire. Policy endorsed by CCEA takes note of the
comfort level of not only that of NHAI, citizens and travellers,
but also of the concessionaire. We have to take it, that it was
after taking into consideration all those aspects including
the policy decisions taken by CCEA and the Claimant‟s
eligibility for one time fund infusion in terms of the Circular
dated June 9, 2015, the NHAI suggested various conditions
and all those conditions were accepted by the Claimant
including the furnishing, of Bank Guarantee for the
mobilization advance to be made by NHAI. We are of the view
that by furnishing the unconditional Bank Guarantee, the
interest of NHAI is also protected.
We find that NHAI has no case that the Claimant has been
blacklisted or that it is incapable of completing the balance
work. In our view, it would not be in public interest if the
remaining work is allotted to a third party and in the facts
and circumstances, one cannot rule out the possibility of
passing the same order, even if NHAI is allowed to withdraw
the unilateral conditions suggested by it.
The Tribunal in its order dated May 25, 2016, also made it
clear that only if the Claimant would agree to all the
conditions stipulated by NHAI, the Claimant would be
granted permission to complete the balance work. The
Claimant has now filed an affidavit before the Tribunal that
all the conditions stipulated by NHAI are acceptable to it,
that being the factual position, we find no reason to
entertain the application preferred by NHAI under Section 23
of the Act seeking amendment in its reply dated May 25,
2016, to the Claimant‟s Sec 17 application, so as to
withdraw the conditions unilaterally suggested by it.
We are also of the view that the reasons stated for
modification of Procedural Order No.9 dated May 28, 2016,
cannot be sustained in the facts and circumstances of the
case and we find it difficult to accept the contention that the
specific conditions stipulated by NHAI to the alternative
prayer (b) made by the Claimant in Sec 17 Application have
been made without application of mind or that the so called
„higher management‟ was unaware of the pendency of this
arbitration proceedings as well as the pendency of the Sec 17
10
applications filed by the parties and the various meetings
held in respect of this matter at HQ of NHAI and the
participation of Lead Bank, the Claimant and the officials of
NHAI and the meaning and content of the policy laid down
by CCEA. Sec 17 Application preferred by NHAI would
therefore stand dismissed and prayer (b) made by the
Claimant in its Sec 17 Application stands allowed subject to
the conditions stipulated by NHAI.
NHAI is directed to take up follow up action on the basis of
this order, within two weeks from today and submit a report
to that effect within a month. Claimant is directed to
scrupulously follow the conditions imposed by NHAI for
accepting prayer (b). Claimant is further directed to submit
quarterly reports before the Tribunal of the progress of the
balance work undertaken by it on the basis of the order of
this Tribunal. The Claimant is directed to furnish Bank
Guarantee from a nationalised bank on the mobilization
advance to be made by NHAI within the time stipulated. Both
sec 17 Applications and the Application made by NHAI under
Sec 23 of the Act are disposed of as above, reserving all the
contentions raised by the parties in the main matter.
This order as well as the observations and findings recorded
will have no bearing on the ultimate disposal of the main
matter.”
7. The appellant acquiesced to the aforementioned interim
order passed by the Arbitral Tribunal and allowed it to attain
finality. For, the subject project was on Build Operate and
Transfer (“BOT”) basis, any amount incurred by the Authority
with regard to the project or in relation to the completion of
the balance work was liable to be reimbursed by the
Concessionaire (respondent).
11
8. The appellant accordingly issued a tender for the balance
work vide Notice dated 28th November, 2016 which fact was
brought to the notice of the Arbitral Tribunal during the
hearing on 10th December, 2016. The tender notice was placed
in the public domain, as is done in the case of other tender
process. Some of the pertinent clauses of the tender
documents may be appositely reproduced for considering the
matter in issue before us. In the bidding document, Volume I,
regarding Invitation for Bids (“IFB”), it was noted that sealed
bids were invited (technical and financial) from eligible bidders
for the construction and completion of the balance work
detailed in the table given in the said document. Clause (1)
postulated that eligibility of bidders would be assessed on post
qualification basis, amongst others. The financial bid in the
second part would be opened of only those bidders whose
technical bids were responsive to eligibility and qualification
requirements as per the Request for Proposal (“RFP”). Further,
clause (7) of the IFB reads thus:
“7. The Bidders may take notice of the following:
Notwithstanding anything to the contrary contained in this
RFP, as per the direction of Hon‟ble Arbitral Tribunal, if the
12
BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.) of Four lane project (Gwalior-Jhansi
section of NH-75, is also a responsive bidder, the
Concessionaire shall have the option of matching the
lowest bid in terms of the selection criteria, subject to
payment of 2% (two per cent) of the bid amount to the
Authority and thereupon becomes the selected Bidder.
……………...”
 (emphasis supplied)
In Section I of the bid document providing for procedure
for tender document of the Instructions to Bidders, the
eligibility of bidders has been specified in clause (3)
thereof which reads thus:
“3. Eligible Bidders
3.1 Eligibility of bidders is based on bidder meeting the
pass/fail criteria regarding their general and particular
experience, financial position, personnel and equipment
capabilities and other relevant information as demonstrated
by the applicant‟s responses on the forms attached.
3.2. This invitation for bids is open to bidders meeting the
following requirements:-
a) xxx xxx xxx
b) xxx xxx xxx
c) xxx xxx xxx
d) xxx xxx xxx
“(e) Notwithstanding anything to the contrary contained in
this REP, as per the direction of Hon‟ble Arbitral Tribunal, if
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.) of Four lane project (Gwalior-Jhansi
section of NH-75, is also a responsive bidder, the
Concessionaire shall have the option of matching the
lowest bid in terms of the selection criteria, subject to
payment of 2% (two per cent) of the bid amount to the
Authority and thereupon becomes the selected Bidder. Out
of the amount so received by the Authority (ILLEGIBLE) 5%
13
of the amount shall be paid by the Authority to the lowest
bidder. For the avoidance of doubt, it is clarified that no
claim for compensation, damages, loss of profits etc. by the
lowest bidder for unbecoming selected bidder, shall be
admissible from the Authority.
(f) Notwithstanding anything to the contrary contained in
this RFP, for the purposes of eligibility and qualification of
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.), if it has participated in the bidding
process, it shall be deemed to fulfill all the requirements
of Clauses 3 to 6 of the RFP, being the existing
concessionaire of the Four lane project (Gwalior-Jhansi
section of NH-75.”
 (emphasis supplied)
Again in clause 26, it is stated thus:
“26. Examination of Technical Bids and Determination of
Responsiveness of Technical Bids
x x x x x x x x x x x x
26.8 Notwithstanding anything to the contrary contained in
this RFP, as per the direction of Hon‟ble Arbitral Tribunal, if
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.) of Four Lane project (Gwalior-Jhansi
section of NH-75, is also a responsive bidder, the
Concessionaire shall have the option of matching the
lowest bid in terms of the selection criteria, subject to
payment of 2% (two per cent) of the bid amount to the
Authority and thereupon becomes the selected bidder, Out of
the amount so received by the Authority, 75% of the amount
shall be paid by the Authority to the lowest bidder. For the
avoidance of doubt, it is clarified that no claim for
compensation, damages, loss of profits etc. by the lowest
bidder for unbecoming selected bidder, shall be admissible
from the Authority.
26.9 Notwithstanding anything to the contrary contained in
this RFP, for the purposes of eligibility and qualification of
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.), if it has participated in the bidding
14
process, it shall be deemed to fulfill all the requirements
of Clauses 3 to 6 of the RFP, being the existing
concessionaire of the Four lane project (Gwalior -Jhansi
section of NH-75).
27. Opening of Financial Bids.
xxx xxx xxx xxx
27.5 Notwithstanding anything to the contrary contained in
this RFP, as per the direction of Hon‟ble Arbitral Tribunal, if
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.) of Four lane project (Gwalior-Jhansi
section of NH-75, is also a responsive bidder, the
Concessionaire shall have the option of matching the
lowest bid in terms of the selection criteria, subject to
payment of 2% (two per cent) of the bid amount to the
Authority and thereupon becomes the selected Bidder. Out
of the amount so received by the Authority, 75% of the
amount shall be paid by the Authority to the lowest bidder.
For the avoidance of doubt, it is clarified that no claim for
compensation, damages, loss of profits etc. by the lowest
bidder for unbecoming selected bidder admissible from the
Authority.
27.6 Notwithstanding anything to the contrary contained in
this RFP, for the purposes of eligibility and qualification of
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.), if it has participated in the bidding
process, it shall be deemed to fulfill all the requirements of
Clauses 3 to 6 of the RFP, being the existing concessionaire
of the Four lane project (Gwalior-Jhansi section of NH-75).”
 (emphasis supplied)
In clause 30, it is observed thus:
“30. Examination of Financial Bids and Determination of
Responsiveness of Financial Bids
xxx xxx xxx xxx
15
30.4 Notwithstanding anything to the contrary contained in
this RFP, as per the direction of Hon‟ble Arbitral Tribunal, if
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.) of Four lane project (Gwalior Jhansi
section of NH-75, is also a responsive bidder, the
Concessionaire shall have the option of matching the lowest
bid in terms of the selection criteria, subject to payment of
2% (two per cent) of the bid amount to the Authority and
thereupon becomes the selected Bidder. Out of the amount
so received by the Authority, 75% of the amount shall be
paid by the Authority to the lowest bidder. For the avoidance
of doubt, it is clarified that no claim for compensation,
damages, loss of profits etc. by the lowest bidder for
unbecoming selected bidder, shall be admissible from the
Authority.
30.5 Notwithstanding anything to the contrary contained in
this RFP, for the purposes of eligibility and qualification of
the BOT-Annuity concessionaire (M/s Gwalior Jhansi
Expressway Ltd.), if it has participated in the bidding
process, it shall be deemed to fulfill all the requirements
of Clauses 3 to 6 of the RFP, being the existing
concessionaire of the Four lane project (Gwalior-Jhansi
section of NH-75).”
 (emphasis supplied)
9. In consonance with the tender documents as uploaded
on E-Tender Portal 2016, technical bids were opened on 5th
January, 2017 and financial bids were opened on 29th March,
2017. It is only thereafter on 25th April, 2017, the respondent
moved an application before the Arbitral Tribunal under
Section 17 of the Act, seeking, inter alia, permission of the
Arbitral Tribunal to complete the balance work at its risk and
16
cost. In the said application, it was asserted that the
respondent verily believed that it would get an opportunity to
exercise the option of ROFR and match the lowest bid, in
terms of the order dated 23rd July, 2016. However, to its utter
shock, surprise and dismay, it was reliably learnt on the
previous day (to the filing of the application) that the
appellant was proceeding to conclude the tender process by
issuing LOI/LOA in favour of the L-1 bid behind the back of
the respondent and in a highly surreptitious and opaque
manner. On the basis of the said assertions, the respondent
in its application filed under Section 17 of the Act prayed thus:
“a) Allow the present application and direct the
respondent to grant first right of refusal to the claimant for
matching the lowest bid, in terms of the order dated
23.07.2016 passed by this Hon‟ble Tribunal;
b) Pending hearing and disposal of the present
Application, pass an ex-parte ad-interim Order, directing the
Respondent to not issue LoI/LoA or award the works or take
any further steps, in any manner, directly or indirectly, in
favour of any party, pursuant to the Notice Inviting Tender
published by the Respondent on 28.11.2016;
c) Confirm prayer (b) upon issuance of notice;
d) Pass such further order and other relief(s) as this
Hon‟ble Tribunal may be deemed fit, just, necessary and
appropriate in the facts and circumstances of the case.”
17
10. This application was resisted by the appellant by filing a
reply affidavit. The appellant asserted that the respondent
chose to remain silent during the entire period and only at the
belated stage when the tender process was nearing
completion, it has chosen to file the application with the
intention of stalling the entire process. This approach cannot
be countenanced. The appellant also asserted that it was
unfathomable that the respondent would get the right to
match the lowest bid without participating in the bidding
process. Further, an application such as this would delay the
progress of the main arbitration proceedings which was
required to be completed within one year. It was thus asserted
by the appellant that the ROFR could be invoked by the
respondent only if it had participated in the bidding process.
The appellant adverted to the terms and conditions of the
tender documents which unambiguously mandated the
respondent to participate in the tender process, coupled with
the fact that there was no express direction given by the
Arbitral Tribunal so as to give any right or cause of action to
the respondent to contend to the contrary. The appellant
18
beseeched the Arbitral Tribunal to allow it to take the tender
process to its logical end.
11. Admittedly, no rejoinder was filed by the respondent to
the specific plea taken by the appellant in the reply affidavit
that despite having knowledge of the condition in the tender
documents requiring the respondent to participate in the
tender process, it failed to do so for reasons best known to the
respondent.
12. The Arbitral Tribunal vide order dated 24th May, 2017
allowed the application preferred by the respondent by inter
alia observing as follows:
“The Tribunal while examining both the 17 Applications
preferred by the parties specifically noticed that the
Claimant had completed more than 65% of the work though,
NHAI took the stand that the physical progress was only
62.13%. Claimant took the stand that it had completed more
than 73% work. Considering the fact that so much of money
and labour had been invested by the Claimant, and at the
same time safeguarding the interest of NHAI, the Tribunal
passed the order dated 23.7.2016 directing the Respondent
to grant the Claimant the right of first refusal for matching
the lowest bid. The Tribunal also felt that involvement of
third parties would also create more problems. The Tribunal,
therefore, ordered in the event Claimant matches the lowest
bid, Claimant be permitted to complete the balance work
that too by periodically submitting reports before the
Tribunal so that the Tribunal can examine whether the
19
Claimant is successfully completing the balance work to the
satisfaction of NHAI. In our view, the stand taken by the
Respondent that the first right of refusal can be granted to
the Claimant only if it had participated in the bidding
process cannot be sustained. Accordingly, reliefs sought for
by the Claimant in the Application dated 25.4.2017 are
granted”.
13. Against this decision, the appellant filed an appeal under
Section 37(2)(b) of the Act before the High Court of Delhi at
New Delhi. The same was dismissed on 21st August, 2017. The
High Court upheld the view taken by the Arbitral Tribunal by
inter alia observing thus:
“12. It is quite clear from a perusal of the earlier order
dated 23.07.2016 that the respondent was granted right of
first refusal by matching the lowest bid, and if it matched the
bid the respondent was to be permitted to complete the
balance work as stated. There was no directions that the
respondent was obliged to participate in the bid. They had
been given the right to match the lowest bidder, subject to
terms and conditions and in that eventuality of their
matching the lowest bid, they were to be given the right to
carry out the balance work. The insistence of the appellant
that the respondent ought to have participated in the bid
floated pursuant to the order of the learned Arbitral Tribunal
dated 23.07.2017 is misplaced.
13. Learned counsel for the appellant was, several times
asked as to what prejudice is caused by the respondent by
not participating in the bid. The only reply made by the
learned counsel for the appellant was that in the absence of
participation in the bid by the respondent, the appellant is
unable to ascertain whether the respondent was eligible to
be a bidder or not. In my opinion in the light of the orders of
the Learned Arbitral Tribunal dated 23.07.2016 the
20
appellant was not to participate in the bid. The apprehension
of the appellant are entirely misplaced.
14. No prejudice is caused to the appellant. It is manifest
that other than insistence on compliance by the respondent
of a procedural requirement, there is no prejudice caused to
the appellant by non participation of the respondent in the
bidding process. Further the impugned directions are passed
in accordance with the earlier orders of the Learned Arbitral
Tribunal dated 23.07.2016 which has not been challenged
and attained finality. There is no merit in the present appeal
and the same is dismissed.”
14. The appellant has assailed the decision of the Arbitral
Tribunal dated 24th May, 2017 and of the High Court dated
21st August, 2017 on the argument that the respondent
cannot be permitted to exercise ROFR sans participating in
the bidding process and in the teeth of the terms and
conditions of the tender documents. According to the
appellant, the Court cannot interfere with the tender process
and in particular with the modalities adopted for re-tendering
of the balance work of the project. The process of evaluation
of tender and awarding the contract are essentially commercial
functions for which reason the Courts should refrain from
exercising judicial review, especially when the decision taken
by the statutory authority is bona fide and taken in public
interest. Further, the order of the Arbitral Tribunal dated 23rd
21
July, 2016 in no way, much less expressly, exempts the
respondent from participating in the bidding process nor has
any stipulation been placed on the appellant to refrain from
incorporating a condition requiring the respondent to
participate in the tender process along with others. In that
case, all concerned including the respondent, were bound by
the terms and conditions specified in the tender documents.
The fact that the respondent was deemed to possess technical
qualifications would not and does not do away with the
essentiality of participating in the subject bidding process, the
purpose whereof is to ensure a fair competition amongst the
participants and, more particularly, to get a fair offer and the
best value for money in a scientific and transparent manner,
encouraging competition between the participants and also to
give them equal opportunity. It is contended that the order of
the Arbitral Tribunal, be it dated 23rd July, 2016 or dated 24th
May, 2017, is in excess of jurisdiction as it transcends beyond
the purport of Section 17 of the Act. For, it was not open to
the Arbitral Tribunal to pass an interim order concerning a
separate contract albeit facilitating completion of the
22
unfinished and incomplete works of the project. It is
contended that it is well settled position that the prerogative to
formulate the terms and conditions of the tender document is
that of the employer and the Court cannot sit in appeal over
such conditions. Nor can the same be re-written or modified
much less when it has not been challenged by the respondent.
It is contended that the fact that the respondent qualified the
technical bids in 2006, will not by itself qualify it for retendering
bid process in 2016. Having failed to participate in
the bid process in 2016, it was not possible to examine the
eligibility and qualification of the respondent in the context of
tender documents of 2016. Further, a person or entity who
stands out of the tender process or fails to comply with the
terms and conditions of the tender documents cannot acquire
any right or interest much less actionable claim in respect of
such tender process. According to the appellant, the
respondent must take the consequences of non-participation
in the subject tender process and cannot be allowed to
interdict the same in absence of an express exemption granted
by the competent forum/Authority to the respondent not to
23
participate in the tender process and yet exercise ROFR. To
buttress the aforesaid submission, reliance has been placed
on the decision of the Delhi High Court in VHCPL-ADCC
Pingalai Infrastructure Pvt. Ltd. & Anr. Vs. Union of India
& Ors.1 and on the decision of the Appellate Tribunal for
Electricity in M/s. Raj West Power Limited & Anr. Vs.
Rajasthan Electricity Regulatory Commission & Ors.2
15. The respondent on the other hand, would contend that
no interference in this appeal is warranted in view of the
concurrent view taken by the Arbitral Tribunal as well as the
High Court that it was not necessary for the respondent to
participate in the tender process to exercise ROFR. For, the
order dated 23rd July, 2016 does not prescribe such a precondition
nor does it prohibit the respondent from exercising
the ROFR without participation in the bidding process. It is
contended that the order dated 23rd July, 2016 is based on
consent of the parties and has never been challenged by the
appellant and as such, the appellant was obliged to comply

1
 2010 SCC Online Del 2687
2
 2013 SCC Online APTEL 46
24
with the same in its letter and spirit. According to the
respondent, having completed 78% work of the Project (which
according to the appellant, is only around 62%) and having
invested Rs.715 crores on the Project, by no stretch of
imagination can the respondent be termed as a non-serious
contender. According to the respondent, the appellant cannot
be heard to challenge the order dated 23rd July, 2016, which
confers ROFR, as it was based on consent of the parties and
also attained finality. Further, the purpose of participating in
the bidding process was only to ascertain as to whether the
offer given by the bidder was a responsive offer. The
respondent having already completed substantial work of the
Project, by no stretch of imagination, can be said to be
incapable of completing the balance work. This aspect had
commended to the Arbitral Tribunal, as can be discerned from
the order dated 23rd July, 2016. The Arbitral Tribunal in that
order also unambiguously recorded that it was not the case of
the appellant herein that the respondent had been black listed
or was incapable of completing the balance work. Not only
that, the Arbitral Tribunal went on to observe that it would not
25
be in the public interest to allow a third party to take over the
balance work of the project. On that basis, direction was given
to the appellant to allow the respondent to exercise ROFR,
subject to certain conditions. The order passed by the Arbitral
Tribunal, in essence, was on the basis of consent of the
respondent with unilateral conditions imposed by the
appellant, which the appellant should not be allowed to resile.
According to the respondent, it was impermissible for the
appellant to incorporate conditions such as clauses 3, 26, 27
and 30 in the tender documents, as the same are in the teeth
of order dated 23rd July, 2016 passed by the Arbitral Tribunal
and, more so, without seeking liberty from the Arbitral
Tribunal in that behalf. It is contended that the purpose of the
tender process is only to evoke responsive offers. There would
be no logic or rationale for participation of the respondent in
the backdrop of clause 3.2(f) which is a deeming provision
virtually declaring the respondent as eligible and qualified for
the work. The capability of the respondent to complete the
balance work was never in doubt as has been recorded by the
Arbitral Tribunal. In any case, in the absence of liberty given
26
by the Arbitral Tribunal, it was not open to the appellant to
incorporate such a pre-condition in the tender document. It is
contended that such pre-condition would require the
respondent to furnish bid security amount in which case it
would be a fait accompli situation for the respondent if it were
to refuse or fail to match the lowest bid. For, it would result in
forfeiture of its bid security and also entail in black listing. The
order dated 23rd July, 2016, is one of ROFR and not for right
to participate in the bidding process as such. Further, the
submission of financial bid by the respondent was not to find
out whether it is L-1. In that, all the bidders participating in
the subject tender process pursuant to tender notice, were
made fully aware in the bid document itself that the
respondent had ROFR and L-1 would be compensated by the
respondent as provided in the order dated 23rd July, 2016.
Therefore, the respondent was not expected to bid with itself
by submitting a financial bid and then matching the same.
The respondent would contend that the appellant has wrongly
asserted that the respondent was aware of the conditions
prescribed in the tender documents and yet did not choose to
27
participate in the bidding process. For, the bid documents
were neither furnished to the respondent nor placed on record
before the Arbitral Tribunal. Thus, the conditions on which
reliance has now been placed by the appellant were never
pointed out to the respondent or to the Arbitral Tribunal at
any point of time. In any case, the appellant had completely
failed to show as to what prejudice would be caused by
allowing the respondent to exercise ROFR without
participating in the tender process. The learned Single Judge
of the High Court repeatedly made queries in that behalf
which was not explained by the appellant, as is noted in the
impugned judgment. Resultantly, the High Court rejected the
plea of the appellant and held that it was not necessary for the
respondent to participate in the bidding process in terms of
order dated 23rd July, 2016, to exercise ROFR. The respondent
has distinguished the two decisions relied upon by the
appellant and would contend that the same do not lay down
any legal principle that participation in the bidding process is
a condition precedent for exercise of ROFR. It is contended, in
the present case, the ROFR, without condition of participation
28
in the bid, was granted by the Arbitral Tribunal on the basis of
consent of the parties. It is contended that in view of the
concurrent view taken by the Arbitral Tribunal as also the
High Court, this Court should be slow in entertaining this
appeal.
16. We have heard Mr. K.K. Venugopal, learned Attorney
General for India and Mr. Mukul Rohatgi, learned senior
counsel appearing for the respondent.
17. The issue involved in the present appeal ostensibly
concerns the justness of the order passed by the Arbitral
Tribunal and affirmed by the High Court on an application
moved by the respondent (claimant) under Section 17 of the
Act in the pending arbitral proceedings. However, in essence,
the subject matter of the application under consideration
relates to the rights and liabilities of the parties in respect of a
tender process for awarding of a contract in relation to the
unfinished and balance work of the Highway Project.
29
18. While considering the relief claimed by the respondent
(claimant), the same should have been tested on the
touchstone of the principle governing the tender process,
especially when the validity of the tender document has not
been put in issue or challenged before any competent forum.
Going by the terms and conditions in the tender documents,
as already alluded to in paragraph 8 above, there is no tittle of
doubt that the right of the claimant (respondent) to match the
bid of L-1 or to exercise ROFR would come into play only if the
respondent was to participate in the tender process pursuant
to the notice inviting tenders from the interested parties. The
objective of tender process is not only to adhere to a
transparent mechanism but to encourage competition and give
equal opportunity to all tenderers with the end result of
getting a fair offer or value for money. The plain wording of the
eligibility clause in the tender documents and the incidental
stipulations make it explicit that the respondent was required
to participate in the tender process by submitting its sealed
bid (technical and financial). The fact that a deeming clause
has been provided in the tender document that if the
30
respondent was to participate in the bidding process, it shall
be deemed to fulfill all the requirements of the tender clauses
3 to 6 of the RFP, being the existing concessionaire of the
Project, does not exempt the respondent from participating in
the tender process; rather the tenor of the terms of the
documents made it obligatory for the respondent to participate
in the tender process to be considered as a responsive bidder,
along with others. Having failed to participate in the tender
process and, more so, despite the express terms in the tender
documents, validity whereof has not been challenged, the
respondent cannot be heard to contend that it had acquired
any right whatsoever. Only the entities who participate in the
tender process pursuant to a tender notice can be allowed to
make grievances about the non-fulfillment or breach of any of
the terms and conditions of the concerned tender documents.
The respondent who chose to stay away from the tender
process, cannot be heard to whittle down, in any manner, the
rights of the eligible bidders who had participated in the
tender process on the basis of the written and express terms
and conditions. At the culmination of the tender process, if
31
the respondent had not participated, in law, the offer
submitted by the eligible bidders is required to be considered
on the basis of the stated terms and conditions. Thus, if the
claim of the respondent was to be strictly adjudged on the
basis of the terms and conditions specified in the subject
tender document, the respondent has no case whatsoever.
19. The gravamen of the plea taken by the respondent is on
the assumption that the interim order passed by the Arbitral
Tribunal on 23rd July, 2016 bestows unconditional right on
the respondent to exercise ROFR, in the event tender process
in respect of the balance work is resorted to. For that, we may
straightway advert to the order dated 23rd July, 2016. That is
an order granting prayer clause (b) in the application preferred
by the respondent under Section 17 of the Act. The same has
been reproduced in paragraph 3 above. Notably, there is
nothing in the entire application (filed by the respondent
under Section 17 of the Act) to even remotely suggest that the
respondent had prayed in clause (b) that it be exempted from
participating in the proposed tender process as such, and
32
could yet exercise ROFR before the letter of intent was to be
issued to the lowest bidder. The exemption in this regard
cannot be inferred. It has to be an express exemption sought
and so granted and disclosed in the tender documents. The
respondent may be right in contending that the interim order
passed by the Arbitral Tribunal dated 23rd July, 2016 neither
prescribes that the respondent must participate in the bidding
process as a condition precedent for exercise of ROFR nor does
it prohibit the respondent from exercising ROFR without
participation in the bidding process. The order is, indeed,
silent in that behalf. But, that will be of no avail to the
respondent. For, such exemption ought to have been prayed
and expressly granted by the Court. In absence of such
express exemption, the respondent was obliged to comply with
the terms and conditions of the tender documents publicly
notified by the appellant as per its understanding of the order
of the High Court. Having failed to participate in the bidding
process in consonance with such notified terms and
conditions, the respondent lost the opportunity granted under
the order dated 23rd July, 2016 to match the lowest bid or to
33
exercise ROFR. Any other view would fall foul of the
fundamental policy of the Indian law and cannot be
countenanced.
20. It is not the case of the respondent that an express
exemption has been granted to the respondent, from
participating in the bidding process. In the matter of tender
process, there can be no tacit or implied exemption from
participating. In the first place, whether such direction can be
issued by the Arbitral Tribunal under Section 17 of the Act
itself is debatable. However, since the order dated 23rd July,
2016 has remained unchallenged, we do not wish to dilate on
that aspect. Indeed, the appellant accepted the order with a
sanguine hope that a proper tender process can be resorted to,
wherein the respondent would also participate, for awarding
the contract of unfinished and balance works of the subject
Project. For effectuating that order, tender documents were
issued by the appellant on 28th November, 2016 which, as
aforesaid, explicitly stipulated that the respondent was
expected to submit its bid within the specified time.
34
Admittedly, the fact that tender notice was issued, came to be
disclosed before the Arbitral Tribunal on 10th December, 2016.
Surprisingly, the respondent neither took any clue nor
bothered to follow up the tender documents which were placed
in public domain (as is done in respect of any other tender
process). Further, the respondent waited till the opening of
technical bids on 5th January, 2017 and financial bids on 29th
March, 2017 and rushed to the Arbitral Tribunal by way of an
application under Section 17 of the Act, only on 25th April,
2017 stating that on the previous day, it had come to its
notice that the appellant was likely to issue letter of intent to
the lowest bidder, without giving opportunity to the
respondent to match the lowest bid or exercise ROFR. To
oppose the said application, the appellant in the reply affidavit
had asserted that the respondent was fully aware about the
terms and conditions of the tender documents and yet chose
not to participate in the bidding process. The respondent did
not think it necessary to counter the said assertion by filing
any rejoinder thereto. Notwithstanding that, the Arbitral
Tribunal was impressed by the plea taken by the respondent
35
and allowed the application of the respondent vide order dated
24th May, 2017. The relevant extract of the said order has been
reproduced in paragraph 12 above. The Arbitral Tribunal was
more impressed by the fact that the respondent had completed
substantial works of the Project and it would be just and
proper to allow the respondent to complete the balance work.
The Arbitral Tribunal made no effort to ascertain as to whether
the order dated 23rd July, 2016 was a blanket and
unconditional order entitling the respondent to straightaway
exercise ROFR without participating in the bidding process.
The Arbitral Tribunal merely adverted to the objection of the
appellant and rejected the same on the finding that
involvement of a third party in the Project would create serious
problems. It took the view that giving option to the respondent
to match the lowest bid and to complete the balance work,
with a condition to periodically submit the progress report to
the Arbitral Tribunal for monitoring whether the balance work
was successfully completed to the satisfaction of the NHAI,
would be a proper and equitable arrangement. This approach
36
is not in conformity with the fundamental policy of Indian
law.
21. The approach of the High Court in the appeal preferred
by the appellant was no different. The relevant extract of the
High Court decision has been reproduced in paragraph 13
above. The High Court did not find any error, much less
manifest error, in the view taken by the Arbitral Tribunal.
Further, it can be gleaned from the observations of the High
Court in the impugned judgment that the High Court was
more eager to know as to what prejudice would be caused to
the appellant if the respondent had not participated in the
bidding process. This query of the High Court is begging the
question. For, that cannot be the primary basis to answer the
relief claimed by the respondent in the application under
Section 17 of the Act. An entity who stays away from the
bidding process and fails to comply with the express terms
and conditions of the tender documents cannot claim any
right to match the lowest bid or exercise ROFR. Only a
responsive bidder could do so. The High Court has overlooked
37
the fact that the appellant is a body corporate under the 1988
Act. It has to act in a just and fair manner in the matter of
allocation of contract albeit the balance and unfinished work
of the Project. No express exemption has been granted to the
respondent vide order of the Arbitral Tribunal dated 23rd July,
2016 – to exercise ROFR or match the lowest bid without
participating in the bidding process. The respondent had the
option to participate in the bidding process which was not
availed of for reasons best known to the respondent. The High
Court also overlooked the fact that the tender process was not
an empty formality and with the initiation of the same, third
parties, who participated in the bidding process, were likely to
be prejudiced by allowing the respondent to match the lowest
bid or exercise ROFR, without participating in the bidding
process despite the express stipulation in that behalf in the
tender documents. Suffice it to observe that the High Court
committed the same error as committed by the Arbitral
Tribunal in not examining the core issues for grant or
non-grant of the relief to the respondent, in conformity with
the fundamental policy of Indian law.
38
22. The argument of the respondent that the order dated 23rd
July, 2016 passed by the Arbitral Tribunal was based on
consent of the parties and was never challenged by the
appellant, does not take the matter any further. The
respondent on the one hand, contends that the said order was
based on consent of the parties and also in the same breath
contends that the respondent consented to the unilateral
conditions stipulated by the appellant, which the appellant
should not be allowed to resile as prayed by it. Be that as it
may, on a fair reading of the order dated 23rd July, 2016, it is
noticed that the same is the outcome of a contest and not
founded on any concession. In any case, the order makes no
express mention about granting of exemption to the
respondent from participating in the proposed bidding
process. The fact that the respondent has already invested a
substantial amount in the subject Project and has also
completed substantial work can be no basis to overlook the
fundamental policy of Indian law regarding the subject of
tender process and the rights and obligations of the parties
39
involved. We are also not impressed by the argument of the
respondent that the respondent was not expected to refuse to
match its own bid or that if it had participated in the bidding
process and exercised ROFR, then it would have resulted in
consequence of black listing and forfeiture of bid security
amount. The fact that the respondent would exercise ROFR
would mean that the bid given by the respondent was not L-1.
If it was not L-1, exercising ROFR would obviously neither
entail in forfeiture of the bid security nor would visit the
consequence of black listing. This plea is obviously an
argument of desperation and belated one to justify the failure
to participate in the bidding process.
23. The appellant invited our attention to the dictum in
VHCPL-ADCC Pingalai Infrastructure Pvt. Ltd., (supra). In
that case, the Court considered the question whether the
petitioner had preferential right to match the lowest bid
without pre-qualifying or participating in the bidding process.
In that case, Article 14.1(c) of the concession agreement
stipulated that the respondent No.1 could invite proposals
40
from eligible persons for capacity augmentation of the project
which required the petitioner to give an option to submit its
proposal. The Court after noticing the precedents on the
relevant aspects, went on to observe that if the concessionaire
chose not to submit its proposal, it did not have the right to
match the preferred offer as would be the case of the
respondent herein, in view of the express stipulation in the
tender documents requiring the respondent to participate in
the bidding process. The appellant has also placed reliance on
the decision in M/s. Raj West Power Limited, (supra). We
agree with the respondent that this decision does not lay down
any principle which may have any bearing on the case in
hand.
24. In view of the above, we have no hesitation in concluding
that the decision of the Arbitral Tribunal as confirmed by the
High Court, falls foul of the fundamental policy of Indian law
and cannot be countenanced.
25. Accordingly, the order passed by the Arbitral Tribunal
dated 24th May, 2017 as also the order dated 21st August,
41
2017 passed by the learned Single Judge of the High Court,
deserve to be quashed and set aside and resultantly, the
application preferred by the respondent under Section 17 of
the Act dated 24th April, 2017 ought to be dismissed. We
order accordingly.
26. The appeal is allowed in the above terms with no order
as to costs.
.………………………….CJI.
(Dipak Misra)
…………………………..….J.
 (A.M. Khanwilkar)
…………………………..….J.
 (Dr. D.Y. Chandrachud)
New Delhi;
July 13, 2018.