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Supreme Court on contract law and judicial review when dealing with contractual matters

The Supreme Court in JSW Infrastructure Limited Versus Kakinada Seaports Limited, held that:-

a) This Court in Ramana Dayaram Shetty vs. International Airport Authority of India, (1979) held that the words used in documents cannot be treated to be surplusage or superfluous or redundant and must be given some meaning and weightage.

b) The law is well settled that superior courts while exercising their power of judicial review must act with restraint while dealing with contractual matters. A Three Judge Bench of this Court in Tata Cellular vs. Union of India, (1994) held that (i) there should be judicial restraint in review of administrative action; (ii) the court should not act like court of appeal; it cannot review the decision but can only review the decision making process (iii) the court does not usually have the necessary expertise to correct such technical decisions.; (iv) the employer must have play in the joints i.e., necessary freedom to take administrative decisions within certain boundaries.

c) In Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. & Anr., 2016 & Monte Carlo Ltd. Vs. NTPC Ltd., 2016, the Supreme  Court held that a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision.

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