The court directed the Central Public Works Department (CPWD) to refund to Bangalore-based Flying Elephant Studio the amounts incurred on tender

The Delhi High Court has directed CPWD to pay Rs 1.5 lakh to an architectural firm for unjustifiably rejecting its bid for constructing a museum for India's Prime Ministers on the premises of Nehru Memorial at Teen Murti Bhawan. The court, however, did not quash the contract citing the substantial outlay of expenditure, which has already occurred pursuant to the award of tender, and the work progress at the site. 

"We do not consider it to be in the larger public interest to quash the award of the project and direct further processing of the petitioner's (firm) bid, or to mandate that a de novo exercise be carried out in the present case by calling for fresh tenders," said a bench of Justices S Ravindra Bhat and Prateek Jalan. 

The court directed the Central Public Works Department (CPWD) to refund to Bangalore-based Flying Elephant Studio the amounts incurred on tender documents and fee. 


The firm's counsel submitted that it fulfilled all the eligibility criteria set out i n the 'Initial Eligibility Criteria' provided by CPWD in the tender notice. 

The court rejected the contention that the eligibility clause in the NIT was required to be read with the definitions contained in the National Building Code of India and the DDA Bye-Laws. 

"While a tendering authority has substantial leeway in the interpretation of the eligibility criteria, the court's interference is certainly warranted when the interpretation placed by the authority is manifestly arbitrary or perverse," it said. 


The court said the CPWD's contention reveals "complete non-application of mind" and discern an attempt to justify the rejection of the petitioner's bid on an entirely untenable interpretation. 

"The tender documents reveal that the authorities regard the project in question as a prestigious one for the nation, significant for its cultural, academic and historical importance. It is quite alarming that an authority entrusted with such a project should limit the range of choices available to it by resorting to such specious logic," the court said.