Bombay High Court
Siemens Ltd. & Anr vs Mumbai Railway Vikas Corporation ... on 7 December, 2010
Bench: Dr. D.Y. Chandrachud, Anoop V.Mohta
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dgm
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2449 OF 2010
1 Siemens Ltd. & anr. .... Petitioners
vs
1 Mumbai Railway Vikas Corporation Ltd. & anr. .... Respondents
Mr. Aspi Chinoy, Sr. Advocate with Mr. V. R. Dhond with Mr. Shailesh
Mendon with Mr. Shahezdad Kazi i/by Negandhi Shah & Himayatullah for
the petitioners.
Mr. Nitin Thakkar, Sr. Advocate with Ms. Usha Srivastava i/by Consulta
Juris for respondent no.1.
Mr. Suresh Kumar with Mr. Deepak Rai for respondent no.2.
CORAM: DR. D.Y. CHANDRACHUD &
ANOOP V. MOHTA, JJ.
DATE : December 07, 2010
ORAL JUDGMENT (Per Dr. D. Y. Chandrachud, J.):
Leave to amend in terms of the draft amendment tendered is granted.
Amendment be carried out during the course of the day.
2 MUTP-II is a project aided by the World Bank and is being
implemented by the First Respondent. The First Respondent floated a
tender for the supply of 72 trains, each of 12 coaches. The bids are to be
opened this morning. The First Petitioner has not been permitted to bid in
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view of a settlement that was entered into by the First Petitioner with the
World Bank under which the First Petitioner agreed to voluntarily desist
from bidding for any World Bank aided project, across the world, for a
period of two years and to make a financial commitment of US Dollars 100
million over fifteen years to support anti-corruption work. This followed,
what the World Bank described as the Petitioner's, "acknowledged past
mis-conduct in its global business and a World Bank investigation into
corruption in a project in Russia involving a Siemens subsidiary". The
decision of the World Bank was communicated to the Union Ministry of
Finance which, in turn, informed the First Respondent of the debarment by
a letter dated 24 August 2009.
3 The position as it exists is that the First Petitioner is debarred from
bidding for the project in question. Tenders have been invited under the
MUTP-II project of the First Respondent, which is entirely aided and
financed by the World Bank. The First Respondent is, therefore, obligated
not to entertain a bid of a bidder who is precluded from bidding until 31
December 2010. These facts are adverted to in a World Bank letter dated
31 July 2009 to the Joint Secretary in the Department of Economic Affairs,
Union Ministry of Finance of the Government of India.
4 The Petitioners seek to challenge a communication of the First
Respondent dated 3 June 2010 stating that under the guidelines issued by
the Union Ministry of Finance and the World Bank, the bid documents for
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this bid could not be issued to the First Petitioner. The First Respondent
had sought a clarification from the World Bank by a letter dated 11
November 2010. The World Bank informed the First Respondent by its
letter dated 15 November 2010 that it had nothing further to add. On 18
November 2010 the World Bank responded to a representation by the
Petitioner and found no reason to make an exception from the voluntary
restraint imposed under the settlement agreement. The World Bank, in its
letter to the Petitioner furnished the following reasons for not making an
exception:
"While we recognize the potential benefits that may
accrue to the borrower and the project if Siemens were allowed
to bid, in our view, it has not been established that the loss of
those potential benefits would constitute `disproportionate
harm' to the borrower, as required by the settlement
agreement. We would note, among other things, that there are
a number of other potential bidders that have expressed
interest in the tender, so that the borrower has not been
deprived of a competitive process, nor is there any indication
from the borrower itself that Siemens' absence from the
bidding would have a material adverse effect on project
implementation. Indeed, our borrower has not communicated
any concern to us in connection with this tender or Siemens'
participation, which we would view as a sine qua non for any
exception. We are also conscious of the precedent that an
exception would create for future bidding as the voluntary
restraint period draws to a close."
The World Bank stated that the question as to whether the deadline for the
bid should be extended is a matter for the borrower to decide. The First
Respondent has declined to extend the deadline for the submission of bids.
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5 Counsel for the Petitioners has adverted to the averments made in
paragraph 19 of the Petition and submitted that there is an element of
public interest involved in extending the time for the submission of bids.
Among the factors to which a reference has been made is that (i) the
Petitioner has successfully completed three years of project experience, in
integrating over the Chassis, IGBT traction EMU units on trains; (ii) the
Petitioner already has two dedicated units at Kalwa and Nashik which no
other competitor possesses for manufacturing the equipment/trains for
which tenders have been invited; (iii) other bidders would either have to
set up a new facility or to incur import costs; (iv) the bid submitted by the
Petitioner in an earlier tender was substantially lower, envisaging a saving
of nearly Rs.120 crores and (v) the petitioner is in a position to supply the
final product within twelve to fourteen months.
6 The only relief that has been sought in these proceedings, at the
hearing,is that this Court should direct the First Respondent to extend the
dead line for the submission of bids to a date beyond 31 December 2010, in
order to facilitate the Petitioner to submit a bid. The jurisdiction under
Article 226 of the Constitution of India is invoked on the ground that
having regard to the experience and the past performance of the Petitioner
it is in the public interest to extend the deadline for submission of bids. That is
the only relief which Learned Senior Counsel pressed at the hearing.
7 We have already noted the circumstance that the MUTP-II project
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under which bids have been invited is entirely funded by the World Bank.
The Petitioner is under a voluntary agreement of restraint not to bid for any
project financed by the World Bank globally until 31 December 2010. The
World Bank, while evaluating a representation submitted by the Petitioner
noted that it was unable to come to a conclusion that the First Respondent
would suffer disproportionate harm by excluding the Petitioner from the
bidding process. That was on the basis of several other potential bidders
having expressed interest in the tender and that the First Respondent
would not be deprived of a competitive process. The World Bank was of the
view that the exclusion of the Petitioner would not have a material adverse
effect on the implementation of the project. These are of course
observations of the World Bank and by no means conclude the Court on the
question as to whether it is in the public interest to grant relief in terms
prayed for extending the deadline for submission of bids. The views of
the World Bank do not bind the Court, particularly when it is exercising its
jurisdiction under Article 226 of the Constitution of India.
8 During the course of the hearing, counsel on behalf of the First
Respondent, on a query by the Court, stated that four bidders have
submitted their bids by the dead line which expired at 11 am this morning.
These bidders are (i) M/s.Alstom, Transport SA, France in joint venture
with BHEL, (ii) Sumitomo Corporation of Japan in joint venture with
Mitsubishi, (iii) M/s.Zhuzhou CSR Times Electric Co.Ltd., China and (iv)
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Bombardier, Germany. We have allowed the statement which has been
placed by the counsel for the First Respondent to be taken on record.
These facts would indicate that a competitive process of bidding has not
suffered as a result of the exclusion of the Petitioner. Whether, as a matter
of fact, the bids that have been received by the First Respondent meet the
technical criteria and if so, whether they are commercially viable is a
matter which is to be evaluated in the public interest by the First
Respondent. The relief that is sought in these proceedings is fairly
exceptional because a bidder who is admittedly not entitled to bid until 31
December 2010 seeks a direction from the Court compelling the bid inviting
authority to extend the deadline for the submission of bids. Ordinarily
the Court would not exercise the jurisdiction under Article 226 to grant
relief of this nature. On the basis of material on the record, we are of the
view that no case has been made out for an order of the Court for the
extension of time to submit bids. Several bidders, including among them,
those with a global presence are involved in the bidding process. There is
no justification for the Court to direct the extension of the time prescribed
for submitting bids, if only to enable a party which is not qualified to bid at
this time to bid at a future date. Besides any such direction will only delay
the implementation of a public project. The Petitioner has not questioned,
in the submissions at the hearing, the ground for its debarment under what
is described as a settlement on voluntary restraint.
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9 For these reasons, we decline to entertain the petition. The Petition
is dismissed. There shall be no order as to costs.
(ANOOP V. MOHTA, J.) ( DR.D.Y. CHANDRACHUD,J.)
