December 8, 2022

Fully foreign-funded projects get ‘shield’ against High Court scrutiny | India News – Times of India

NEW DELHI: In a important judgment that will have a bearing on all foreign funded developmental projects, the Supreme Court on Monday disapproved the casual manner in which the Delhi high court ordered the National High Speed Rail Corporation (NHSRC) to reconsider the bid of a Gujarat-based construction firm disqualified from participating in the Bullet Train project.
Montecarlo Ltd’s bid was rejected by the Japan International Consultants Consortium, the technical body appointed for evaluation of bids by Japan International Cooperation Agency (JICA), which has granted Rs 1 lakh crore for the Mumbai-Ahmedabad Bullet Train project.
A bench of Justices M R Shah and A S Bopanna said, “The terms and conditions of the tender documents were settled by JICA as per JICA’s international guidelines, which are required to be followed by all bidders, including Montecarlo. Therefore, when the terms and conditions of the tender document were settled by JICA, it is ultimately for JICC/JICA to take a decision whether a bid submitted by a particular bidder is non-responsive and/or non-compliant to the technical requirements of the bidding documents.”
“…unless there are specific allegations of mala fides and/or favouritism, the same could not have been the subject matter of scrutiny by the HC in exercise of powers under Article 226 of the Constitution of India,” Justice Shah said writing the judgment.
The bench asked all HCs to be careful in entertaining challenges to fully foreign-funded projects and said such challenges and interference by courts often result in delay, cost escalation and sometimes scrapping of the project as unviable.
“These investments from developed nations are made on the basis of non-negotiated (sic) terms and conditions, where the sole discretion as to what would be the conditions of the investments and on what terms the contractors would be chosen to implement the project, vests with the investor foreign developed nation,” the SC said.
“It is difficult for a developing country to go ahead with such a high cost project unless the developed country grants loan/subsidy and/or is ready to fund such high cost projects… any delay in execution of such mega projects, which are very important for a developing country like India, may not be in the larger public interest and in the nation’s interest,” the Supreme Court bench said.
Interference by courts midway and delay in projects like these… may affect future investments/funding, it said.
“Therefore, high courts should be extremely careful and circumspect in exercise of their discretion while entertaining such petitions and/or while granting stay in such matters,” it said.

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