Indian Aluminium Cables Limited ... vs Power Grid Corporation Of Indian ...
1994 Latest Caselaw 66 Del

JUDGMENT

K.S. Bhat, J.

(1) In this writ petition, petitioners allege that they have come to know about the decision of the first respondent to award the contract for the "Line Material Package" for Northern Regional Transmission System, Phase Ii of respondent No.2. The contract is under the World Bank Loan. At the time of filing of the writ petition decision had not been taken but now there is no dispute that the contract has been awarded to the second respondent. The Project is financed by the loan sanctioned/to be sanctioned by the World Bank. The Line Material Package consists of 2825 Kms."ACSRMoose Conductors" and 735Kms.of"G.S.Earthwire" Undisputedly the procedure for awarding the contract is based on international competitive bidding, and the competitors for the contract may be from various countries. The petitioners contend that the offer of the petitioners was below the amount for which the second respondent sent his tender and on this ground alone the decision of the first respondent to award the contract to the second respondent should be set aside. The petitioners pointed out that they have performed similar contracts to the satisfaction of the first respondent and that petitioners have a blemish less record in this regard. Mr. Chidambaram, the learned Counsel for the petitioners pointed out that the terms of the bidding documents (Annexure R-III) have been ignored by the first respondent while awarding the contract to the second respondent and in this regard various terms were referred before us, from which the learned Counsel wanted us to infer that the ex-works price which will be the basis for the contract amount is a variable amount and if this basic fact is borne in mind, the action of the first respondent in awarding the contract in favor of the second respondent will be found to be arbitrary. The petitioner has brought out the net result of the quotations of the three competitors as follows:- No. (ii) above is the petitioner while No. (iii) is the second respondent. It is unnecessary to refer to the case of the first above. The learned Counsel also pointed out that the exchange rate adopted by the second respondent was Rs. 31.18 and this was in turn accepted by the first respondent while considering its tender. According to the petitioners the exchange rate ought to have been Rs. 31.61. For this purpose the learned Counsel referred to the prescribed form wherein summary of price proposal is given. Annexure R-lll filed by the first respondent was referred in this regard and this was the summary of the price proposal made by the second respondent. The lumpsum contract price was quoted as follows: (i) In Us $ 9,345,440, the balance in Indian Rupees - Rs.l5,90,000.00 . Thus the total of the bid price was US$93,45,440 + Rs.l5,90,000.00 . Thereafter under the head 'Details of expected expenditure in currencies other than bid currency the second respondent had given the name of the currency as Indian Rupees and stated that 26% of the bid price will be in Indian Rupees. By applying the exchange rate of Rs. 31.18 this 26% came to Rs. 7,56,61,612.00 . Thereafter the sales tax amount was also given. In the column relating to exchange rate the prescribed form has put an asterisk mark and this is explained at the end of the prescribed form as "the exchange rates used shall be 7 days prior to bid opening". Admittedly the bid opening date was 23.9.1993. Therefore, the exchange rate as on 15.9.1993 shall have to be taken into consideration. This was Rs.31.61. The learned Counsel compared this with the petitioner's tender where under the bid price was divided into 2 as follows:- In US$ 92,73,655.00 + Indian Rs. 35,60,000.00 . From this it was pointed out that by applying the proper exchange rate the tender submitted by the petitioner was more economical and ought to have been accepted. Alternatively the learned Counsel also pointed out that even by applying the exchange rate of Rs.31.18, the offer of the petitioner should be accepted because the sum of Rs. 7,56,61,612.00 which was 26% of the bid price in Indian Rupees in the tender of the second respondent was not a frozen amount but was liable to fluctuation being dependent upon the ex-works price.

(2) Even if we accept the petitioner's figures, we find that the difference between the tender amount of the petitioner and of the second respondent is about Rs.2 lacs. Having regard to the magnitude of the work involved and that of bid price offered this difference is very marginal. We have already noted that the bid price converted into Indian Rupees by the petitioners in the writ petition is more than Rs. 29 Crores, while the petitioner's figure comes to Rs. 29.67 Crores, the equivalent figure given by the petitioner for the tender of the second respondent comes to Rs. 29.6999 Crores. Mr. Chidambaram contends that this is an international competitive bidding and even a marginal difference should be taken note of by this Court. We are of the view that in the circumstances of this case it is not possible for us to magnify this marginal difference. The funding is done by the World Bank. The contract requires the approval of the World Bank. It is very clear that the final acceptance of the contract has to be by the World Bank. In fact, as could be seen from Annexure 'TY the petitioner had approached the World Bank earlier on 24.12.1993 seeking the intervention of the World Bank. This apart a substantial portion i.e. 26% of the bid amount in the tender of the second respondent is payable in Indian Rupees is a fact which should be taken note of even by the Court as a helpful measure in the present context of the Indian economy. The amount is payable in India and it will be certainly advantageous if a substantial amount is payable in Indian Currency rather than in foreign currency, especially when the alleged difference between the different tenders is only marginal. It was also contended by second respondent that several documents produced by the petitioner must have been obtained by the petitioners by adopting unhealthy device and the writ petition was filed even before a decision was taken by the first respondent. We do not think it necessary to go into this aspect of the case pleaded by the second respondent.

(3) Mr. Chidambaram laid great emphasis on the principle that the first respondent should abide by the standards laid by it and all the terms should be strictly complied with and respected. There could be no doubt about this proposition but the dispute here centers around the manner in which the terms are to be applied and had been applied.

(4) Mr. Venugopal the learned Counsel for respondent No.1 also took us to a few documents and justified the award of the contract by pointing out that the basis adopted by the petitioner to compute the bid prices for comparison is not correct. The learned Counsel also referred to the several assertions made in the counter affidavit. We are not expressing any opinion on this aspect and we make it clear that we are dismissing this writ petition by assuming for the sake of argument that the basis pointed out by Mr. Chidambaram is the proper basis. But that does not mean that we have accepted the said basis.

(5) We do not think that this is a fit case where this Court in exercise of its writ jurisdiction should intervene and set at naught the contract awarded in favor of the first respondent. State Trading Corporation. The writ petition is accordingly dismissed.