Delhi High Court
M/S Selex Sistemi Integrati, Spa vs Uoi & Ors. on 30 September, 2011
Author: Dipak Misra,Chief Justice
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 8th July, 2011
% Judgment pronounced on: 30th September, 2011
+ WP(C) No.13478/2009
M/S SELEX SISTEMI INTEGRATI, SPA ..... PETITIONER
Through: Mr. Rajive Sawhney, Sr. Advocate with
Mr. Vineet Jhanji, Mr. Gaurav Duggal,
Advs.
versus
UNION OF INDIA & ORS. ..... RESPONDENTS
Through: Mr. A.S. Chandhiok, ASG with Ms.Manisha
Dhir, Mr. Ritesh Kumar, Mr.Preeti Dalal,
Mr. Nitin Jain, Mr. Simranjeet Singh,
Mr.Piyush Sanghi, Mr.Nipun Bhavi,
Mr.Sumit Goyal, Advs. for R-1 & R-2
Dr. A.M. Singhvi, Sr. Adv. with Mr.R.N.
Karanjawala, Mr. Gopal Jain, Mr. Sanjeev
Sen, Ms.Nandini Gore, Ms.Abhiruchi
Mengi, Mr. Akhil Sachar, Mr.Abhishek
Roy, Mr.Amit Bhandari, Ms.Mehak Bhalla,
Mr.Jai, Advocates for Respondent No.3
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE MANMOHAN
1. Whether reporters of the local papers be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
DIPAK MISRA, CJ
A Division Bench of this Court referred the following issue to be dwelled
upon by the Full Bench:
"The question which thus arises for consideration is whether in
the matter of scrutiny and award of tender, the fairness of
procedure under Article 14 of the of the Constitution of India
can be examined de hors the rights under Article 19(1)(g) of the
Constitution of India to carry on the business and trade at the
behest of a foreign company invoking the jurisdiction under
Article 226 of the Constitution of India, especially keeping in
view of the fact that the issue of fairness in treatment and
absence of arbitrariness when involved on the basis of Article
14 in tender matters is relatable to the doctrine that the State has
to be fair in distribution of State largesse to its citizens."
2. When the matter was placed before us on certain dates, there was debate as
regards the said issue. Thereafter on 4th February, 2011, learned counsel for the
parties fairly stated that they have no objection if the Full Bench addresses the
controversy in entirety. Regard being had to the said concession, Mr. A.S.
Chandhiok, learned Additional Solicitor General was requested to produce the
relevant file. Thereafter, the matter was heard on merits of the lis but not with
regard to the reference that was initially made.
3. In view of the aforesaid, we proceed to dwell upon the lis on merits. The
petitioner company is a company incorporated under the laws of Italy having its
registered office at VIA TIBURTINA, 1231, Rome, Italy. The petitioner company
was previously known as Seleina, Aleina and Alenia Marconi Systems and was
one of the subsidiaries of Finmeccanica Company. As pleaded, it has 50 years‟ of
experience in the business of designing, developing, manufacturing, installing and
integrating Navigation Aids and Air Traffic Management System, etc. The system
offered by the petitioner company can be broadly divided into Air Traffic
Management and Global Airport Systems, large systems for homeland protection,
systems and censors for air and ground defence and integrated logistic support and
customer support.
4. The Ministry of Defence in Government of India, the first respondent herein,
floated a Request For Proposal (RFP) dated 4th January, 2008 inviting bids inter-
country and intra-country for modernization of 30 air fields of the Indian Air
Force, the second respondent herein. Pursuant to the RFP, the petitioner submitted
its bid and was declared as technically qualified along with others.
5. In response to the offer, the petitioner received the request for expression of
interest for the Modernization of Air Field Infrastructure (MAFI) of IAF air fields
from the Respondent No.2. In response to the aforesaid invitation, the petitioner
submitted its expression of interest vide letter dated 15 th October, 2007. After the
expression of interest submitted by various parties, though 8 bidders were
shortlisted and were issued the RFP, yet only 6 submitted their proposal including
the petitioner. The RFPs were issued to the shortlisted bidders pursuant to the
provisions of the DPP-2006 (Defence Procurement Procedure). In the RFP, it was
specifically mentioned that the project would be executed on a turnkey basis as per
para 45 of the DPP-2006, which includes Supply, Installation, Testing Integration
and Commissioning (SITIC) of all equipments/sub-systems, etc. to ensure that the
complete working system is made available at each airbase by the contractor at the
end of the specified period. The RFP consisted of four parts. Each bidder
interested in participating in the bid was required to comply with the act in terms of
the provisions of each of the four parts. Under paragraph 2 of the RFP, it has been
stipulated that the Government of India invites responses to the said request from
Original Equipment Manufacturer (OEM) or Authorised Vendors or Government
sponsored Export Agencies or System Integrators or duly registered Joint Venture
Company or Consortium of firms and companies subject to the condition that
where the same equipment is offered by more than one of the above mentioned
parties, preference would be given to OEM. Under Part-I of the RFP titled
"General Requirements", certain guidelines were postulated pertaining to the
quality of supplies, the time frame for completion of the work, creation of training
facilities, warranty of goods, conditions in the contract, maintenance of the goods,
technical knowhow, trials, who can apply, comparison of offers, payment
conditions, etc. As is vivid from para 37 of the RFP, a declaration has been made
by the Government of India that all actions regarding procurement of equipment
would be transparent and carried out as per established procedure. The supplier is
required to accept the stipulated standard clauses regarding agents/agency
commission, penalty for use of undue influence and integrity pact.
6. As set forth, in terms of the RFP, the petitioner signed the "Pre-Contract
Integrity Pact" submitting its technical and commercial bid. The objective of the
said Pact was to avoid all forms of corruption. After accepting the invitation, the
petitioner participated in the bidding process expecting that the procedure to be
adopted by the Respondents No.1 and 2 would be fair, transparent and totally free
from any prejudice. Be it noted, Respondent No.3 had also been declared to be
technically qualified in the bid. It is not disputed that the Respondent No.3
executed the Pact in terms of the RFP and agreed to maintain total transparency in
the consideration and evaluation of the bid.
7. As the factual narration would further exposit, the technical and commercial
bids were submitted by six parties. The technical bids were opened in the presence
of the representatives of all concerned on 3rd June, 2008 at the Indian Air Force
Headquarters, New Delhi. No bid document was rejected and all bids were
accepted for technical evaluation. The sealed commercial bids were separately
filed by each party and kept in a sealed box. The commercial bids of only those
parties who are qualified in the technical bid were to be opened. It has been
asseverated that the bidders whose technical bids were found to be in compliance
with the rules, bid terms were acceptable after tests and trials. Paragraph 34 of the
DPP-2006 provides for the constitution of the Technical Evaluation Committee
(TEC) for evaluation of the technical bids received in response to the RFP. While
preparing the compliance statement, the TEC is required to ensure that the same
equipment is not offered by two or more vendors. In such an eventuality, only the
equipments offered by the OEM can be accepted. In para 35 of the DPP-2006, it is
stipulated that once a technical offer is submitted, the same shall not be materially
changed at a subsequent date. However, minor variations which do not change the
basic character/profile of the offer would be acceptable. Para 37 of DPP-2006
mandates that field evaluations/trials would be conducted on the basis of standard
operating procedure. Para 38 of DPP-2006 provides that where field evaluations
are not feasible, there may be a possibility of conducting evaluation through
computer simulation. Para 41 of DPP-2006 provides that after the acceptance of
TEC report, all selected vendors shall be asked to provide their equipment for trials
simultaneously in India and if the equipment is not evaluated in the initial trials,
then the said equipment would not be considered at a later stage. There is a
stipulation in para 45 of the DPP-2006 that in the case of turnkey projects, trials
are not initially envisaged till establishment of the test bed and, hence, it is
essential to select the vendors with requisite capabilities prior to issuing a RFP.
Various other assertions have been made referring to the RFP which need not be
stated in detail as they relate to the earlier contracts executed by the petitioner and
the relevance of technical trials and such ancillary facets.
8. As per the petitioner, the Respondent Nos. 1 and 2 addressed and enquired
from it and other vendors certain information to be filled up in a questionnaire vide
communication dated 19th June, 2008. There was exchange of number of
communications for satisfaction of Respondent Nos. 1 and 2.
9. As is evincible from the material brought on record, on 12th August, 2009,
the concerned Committee opened the commercial bids of the six participating
parties including the petitioner and the Respondent No.3 in presence of their
representatives. On the opening of the commercial bids, it was observed by some
of the members of the Committee that the commercial bid submitted by
Respondent No.3 was not complete and costs with respect to various items/services
had not been stated and left blank. It has been specifically averred that no figure
had been mentioned in relation to the Maintenance of Transfer of Technology
(MTOT). Despite the aforesaid fact situation, the Chairman of the Committee
declined to discuss the matter stating that there was no time to undertake detailed
evaluation of the commercial bids and that the committee would undertake the said
exercise later on. The meeting did not continue and it failed to disclose the unit
price and rates that would be applicable in relation to deviations found on actual
measurements of the sites from the site model quoted by each of the bidder.
10. Keeping in view the procedure followed by the Committee, the petitioner
lodged his protest on 16th September, 2009 with the Respondent No.1 with copies
to other concerned departments. It was urged in the said letter of protest that
though as per the announcement of the bid quotations of the parties made at the
meeting on 12th August, 2009, it had been indicated that Respondent No.3 was the
lowest price bidder despite the fact that the commercial bid was incomplete as the
prices had not been indicated for various items such as MTOT which was one of
the major requirements of RFP. It was clearly indicated to the first Respondent to
ensure that the third Respondent should not be afforded any opportunity to modify
its proposal as in that event the principles of transparency in bidding process,
approach of fairness and a level playing field would be defeated. As pleaded, the
petitioner received no response to his letter. Thereafter, the commercial bids were
opened but the petitioner was not invited for any meetings or discussions nor had
he been informed of any decision taken with respect of declaration of any bidder as
L-1.
11. As has been set forth, eventually the commercial bid of the third Respondent
was accepted treated him as L-1 which compelled the petitioner to prefer the writ
petition assailing the action of the authorities.
12. A counter affidavit has been filed by the Respondent Nos.1 and 2
contending, inter alia, that the technical bids of the third Respondent and all other
five bidders including the petitioner were duly assessed by the TEC as per the
established norms of the DPP-2006. It is also urged that the evaluation of the
technical bid was accepted by all concerned and, therefore, the challenge in the
writ petition fundamentally rests on acceptance of commercial bid. In that regard,
it is put forth that the Respondent No.3 had categorically stated that Depot Level
Maintenance will be carried out by the seller and, therefore, the stand that the
commercial bid was incomplete inasmuch as costs with respect to various
items/services had not been stated and left blank really has no bearing on the bid.
As regards, the failure of the Contract Negotiation Committee (CNC) to disclose
the unit price and rates that would be applicable in relation to deviations found on
actual measurement of the sites from the representative airfield, it has been averred
that the prices quoted by each of the participating vendors were announced by the
committee as it had a bearing on deciding the L-1. Other items including the unit
price and rates that would be applicable in relation to deviations found on actual
measurement of the sites from the representative airfield was not quoted as it was
not a factor for determining the L-1. In this backdrop, it is set forth that the
contention of the petitioner that not quoting the unit price and rates amounted to
substantial breach of the terms of clarification issued by the Respondent Nos. 1 and
2 pursuant to the pre-bid meeting is totally incorrect and does not deserve
acceptation. Meeting the allegation that the commercial bid of the third
Respondent was incomplete with blanks and, hence, unresponsive, it has been
asseverated that the commercial bid was opened on 12th August, 2009 in the
presence of the representatives of all the vendors and the complete package costs
of the various proposals including that of the third Respondent was read out. It
was stated in categorical terms that the proposals would be studied in detail
thereafter. So far as the maintenance of transfer of technology is concerned, it had
been stated by the third Respondent in its proposal that Depot Level Maintenance
shall be carried out by the seller. This stipulation, therefore, fulfils the requirement
of RFP. Controverting the allegation of the petitioner that the Respondent No.3
had been given an opportunity to substitute equipment and systems offered by the
petitioner, it was asserted that RFP and DPP-2006 did not confer any preferential
right to OEM over others. In paragraph 2 of RFP, it has been clearly stated that
only if the same equipment was being offered by more than one vendor, preference
would be given to OEM and, therefore, the said allegation is totally baseless.
Defending the act of choosing the third Respondent as L-1, it has been asserted that
he was conferred the status of L-1 on the basis of comparative statement of quotes
by all vendors as it had been found that the third Respondent had quoted the lowest
price in the bid.
13. A return has been filed by the third Respondent controverting all the
allegations made in the writ petition by the petitioner. Certain aspects have been
highlighted to portray how the TEC evaluated the bids in accordance with the
objective/criteria laid down in RFP which is common to all bidders, but we do not
think it apposite to dwell upon the same as we have clearly indicated earlier that
the same was accepted by the petitioner. As regards the acceptance of the
commercial bid, it is contended when the commercial bids were opened the third
Respondent was found to be the lowest bidder as there was a difference of 47
crores between the petitioner and it. Meeting the allegation that certain columns
were not filled up and left blank, it has been stated that it relates to MTOT and the
third Respondent had clearly clarified that "depot level maintenance would be
carried out by the seller". As far as the L-1 determination process is concerned, the
unit rates have no relevance as they are not part of the procedure for determination
of L-1. It is to be determined on the basis of the cost quoted for the requirement
given. The L-1 vendor is required to go for the site survey of all 30 air fields and
actual cost of each location would be determined before finalization of the contract
and, therefore, there was no need to read out the unit rates at the time of bid
opening as they have no impact on L-1 calculation. Other items including the unit
price and rates that would be applicable in relation to deviation found on actual
measurements of the site from the representative air field was also not announced
during the opening of the commercial bid. The price quoted by the third
Respondent was Rs.1094.79 crores, which was the lowest amongst all bidders and
was complete in all aspects and resultantly as per the RFP and DPP-2006, he was
declared as L-1. As per para 45 of DPP-2006, an equipment is required to be
proved on a test bed for a turnkey project post contractual conclusion. In MAFI,
Program Model Airbase has been designated as the test bed; according to the
clarification III dated 14th March, 2008 stating that all equipment would be tested
at the Model Airbase, there was no requirement for trial or testing of equipment
under TEC evaluation before opening of the commercial bid. The same needs to
be done only after signing of the contract. The answering Respondent has put forth
that the procedure followed by Respondent Nos.1 and 2 in evaluation of the bids
was strictly in accordance with DPP-2006 and RFP and had been done in open, fair
and transparent manner. In this regard, it was also noted that this project was a
turnkey project and was not a normal procurement equipment supply contract.
14. Mr.Rajive Sawhney, learned senior counsel appearing for the petitioner has
submitted that Respondent Nos.1 and 2 have violated the sacrosanct principles
relating to acceptance of tender by suppressing facts relating to material defects in
the commercial bid of the third Respondent inasmuch as no reasons or any
justification has been given for accepting such non-responsive bid. It is urged by
him that the commercial bid of the third Respondent is not firm and fixed since it
has blanks at certain spaces and, therefore, should have been treated as incomplete.
It is canvassed by him that the bid was conditional with riders and the acceptance
of such a bid manifestly smacks of arbitrariness, unfairness and unreasonableness.
It is his further submission that as per the conditions laid down in para 4.2 of the
„Integrity Pact‟ observations of the stipulation therein are mandatory and no
relaxation is possible. When the bid is non-responsive and incomplete, it should
have been treated as non-responsive.
15. It is worth noting that in the writ petition as well as in the submission certain
stands have been taken with regard to acceptance of the technical bid. In the
course of hearing, we categorically asked Mr. Sawhney, learned senior counsel as
to how the issue of technical bid can be gone into at that stage. Learned senior
counsel really failed to satisfy us on that count inasmuch as the technical bid was
accepted long back and there was no protest by the petitioner. Everyone was
satisfied that the technical bid of the third Respondent was in order. It needs no
special emphasis to state that it is the considered position that after technical bid is
accepted the commercial bid is opened. Therefore, we do not intent to advert to
the submissions that have been raised, of course, to put the clock back. Hence, we
have referred to the submissions of the learned counsel for the petitioner pertaining
to the acceptance of the commercial bid by the Respondent Nos. 1 and 2. The
learned counsel in favour of his submission pertaining to the issue that the
commercial bid was non-responsive has commended us to the decisions in The
Tata Power Company Ltd. & Anr. v. Union of India, 2009 (8) AD (DEL) 583,
S.J.S. Business Enterprises (P) Ltd. v. State of Bihar & Ors., (2004) 7 SCC 166,
Dilip Singh v. State of U.P. & Ors., JT 2009 (15) SC 201, W.B. State Electricity
Board v. Patel Engineering Co. Ltd. & Ors., (2001) 2 SCC 451, P.K. Delicacies
Pvt. Ltd. v. Union of India & Ors., 122 (2005) DLT 685 (DB), Siemens Public
Communication Network Pvt. Ltd. & Anr. v. Union of India & Ors., (2008) 16
SCC 215, Sumitomo Chemical India Pvt. Ltd. v. Union of India & Ors., W.P.(C)
No.4196/2010 (26th July 2010) (DB : Delhi High Court), Rakesh Kapoor v.
Oriental Insurance Co. Ltd. & Anr, 91 (2001) DLT 677.
16. Mr. A.S. Chandhiok, learned Additional Solicitor General on behalf of the
Respondent Nos. 1 and 2 submitted that the Respondent No.3 had qualified in the
technical bid and for the said purpose he had placed reliance on clause 39(b) of the
RFP. Mr.Chandhiok, learned Additional Solicitor General by abundant caution
also argued that the acceptance of technical bid is absolutely correct. Be it noted,
the learned Additional Solicitor General has canvassed many a aspect to show how
the same is unimaginable but as noted earlier we have not taken note of the
submissions of Mr. Sawhney in this regard. Similarly there is no necessity to deal
with the counter submission as this is the agreed position that acceptance of
technical bid was not an issue in the whole scheme of things at any point,
otherwise the petitioner would have protested at that stage. He chose not to do so.
After the short listing of the bidders, whoever qualified in the technical bid, the
commercial bid was opened in the presence of others.
17. Mr. Chandhiok countering the submissions of Mr. Sawhney with regard to the
non-responsive and incomplete commercial bid of the Respondent No.3 urged that
the commercial proposals were opened on 12th August, 2009 in the presence of the
representatives of all vendors and the complete package costs of the various
proposals including that of Respondent No.3 were read out which were
subsequently examined in detail by the CNC and as a result of a comprehensive
valuation of the commercial proposal that the Respondent No.3 was found to be
the L-1. It is urged by him that the proposal for the third Respondent carrying out
the „D‟ level facilities by itself was in consonance with the requirements of RFP.
Learned ASG would submit that the „D‟ level maintenance facility has to be
provided to M/s BEL by the bidder. As the commercial bid would reflect that the
third Respondent had the requisite „D‟ level maintenance capability and it is ready
to provide the maintenance support, the same was duly evaluated by a team of
experts and found them to be compliant with the requirements of the RFP. It is
urged by him that the bidder had „D‟ level maintenance facility available in India,
no cost component was incorporated in MTOT and it is an inclusive cost and,
therefore, the bid was firm and fixed and not a conditional one with riders.
Commenting on the fairness and transparency of procedure, it is proponed by
Mr.Chandhiok that it was clearly mentioned by the Chairman to all the
representatives of the bidders that the CNC would examine all the commercial
clauses in detail and the L-1 bidder would be informed that the CNC, constituted as
per DPP 2006, evaluated commercial bid and on the basis of the recommendations
of the CNC, the Secretary (Defence Finance) and the Ministry of Finance accepted
the said commercial bid. The learned Additional Solicitor General has urged that
the commercial bid of the third Respondent by no stretch of imagination can be
regarded as unresponsive just because certain columns were not filled up and as no
cost impact was there. Once the total cost addition is less than that of the
petitioner, there is no irregularity or illegality in accepting the commercial bid.
Had it been stated otherwise with conditions or riders, the matter possibly would
have been different. It is urged by him that in exercise of power of judicial review
especially, pertaining to tender relating issues involve highly technical issues, a
free play in the joints has to be allowed to the owners and the writ court should not
ordinarily interfere. In support of the said decisions, he has drawn inspiration from
Tata Cellular v. Union of India, AIR 1996 SC 11, G.B. Mahajan v. Jalgaon
Municipal Council, AIR 1991 SC 1153, Poddar Steel Coporation v. Ganesh
Engineering Works, [1991] 2 SCR 696, AIR India Ltd. v. Cochin International
Airport, (2000) 2 SCC 617, Siemens Public Communication Network Pvt. Ltd.
(supra)and Larsen & Turbo Ltd. v. Union of India, 172 (2010) DLT 454 (DB).
18. Dr. A.M. Singhvi, learned senior counsel appearing for the Respondent No.3
submitted that the challenge to the acceptance of the technical bid of the third
Respondent by the petitioner is of ulterior motive and, in fact, is an effort to bring
an issue to the Court which had been put to rest long back and when such an
attempt is made, the writ petition deserves to be thrown overboard on the said
score. It is worth noting the learned senior counsel had argued that the technical
bid has been appropriately accepted as there had been detailed scrutiny at every
stage. We repeat at the cost of repetition that we will not enter into the said arena
as at no point of time there was any protest by the petitioner and the matter
travelled to this court after the commercial bid of the third Respondent was
accepted.
19. It is contended by Dr. Singhvi that the bid submitted by the third Respondent
is compliant of the essential conditions of RFP and on proper scrutiny it was
treated lower than that of the petitioner. The evaluation has been correctly made
by the CNC which is empowered under clause 32 of the RFP. It is urged by him
that the price offered by the third Respondent was complete, firm and fixed and not
in the realm of speculation. The criticism that there were blanks in the commercial
bid of the third Respondent which would enable it to increase its bid at a later point
of time was completely incorrect inasmuch as on a specific query made by the
Respondent Nos.1 and 2 on a specific query put forth by one of the bidders qua the
„D‟ level maintenance facility, it had been clarified at the pre-bid meeting held on
14.2.2008 that the need was to have „D‟ level maintenance facility in India and if a
particular vendor had the said facility, the same shall be validated by the
nominated team. It was further clarified that only in a scenario wherein the bidder
does not have „D‟ level maintenance facility in India then the same shall be
provided to Bharat Electronics Limited by the Respondent Nos.1 and 2. The „D‟
level maintenance capability of Tata Power SED was validated by TEC and a bare
perusal and reading of the clarification would make it abundantly clear that the
requirement of MTOT was to have „D‟ level maintenance capability and,
accordingly, nothing was left blank in the pricing payable against MTOT by the
third Respondent. On the contrary, it clearly stated that the Depot Level
Maintenance would be carried out by the seller; the pricing table, MTOT is the cost
of transferring the technology for maintenance to BEL and not the cost of
providing the maintenance support. The Respondent No.3 and its vendors had the
existing infrastructure and capability at the time of submission of the bid and the
same has been evaluated in an appropriate manner regard being had to the terms of
the RFP and the clarification provided by the third Respondent.
20. Meeting the stand with regard to seeking clarification from a bidder, it has
been urged by Dr. Singhvi that the clauses in DPP-2006 and RFP enable the
Respondent Nos. 1 and 2 to seek clarifications / ascertain as regards the
reasonability of price bids and more so when the bid was in conformity with the
DPP-2006 and all essential conditions of the RFP were fulfilled. It is urged by him
that as per the process enumerated under DPP-2006, it allowed the CNC to record
any kind of dissonance as per paragraph 49 of the DPP and if merited, clarification
can always be sought from the bidder as it has been so stipulated in paragraphs 42,
49 and 51 of the DPP-2006 and the said procedure had been followed by the
Committee. It is canvassed by him that a combined reading of the relevant clauses
of DPP and RFP clearlys show that the CNC can go into the reasonability of an
offer and have negotiations in such circumstances. It is further contended by him
that when the essential conditions were fulfilled, there was no speculative bid, the
space that was not filled up as it was mentioned that the MTOT shall be maintained
by the vendor and it had no impact on the final cost and if total cost is taken into
consideration it was less than 47 crores than the petitioner, the concept of judicial
review moreso pertaining to defence contract, does not arise. It is propounded by
him that the court should always keep the larger public interest in view and a
judicial intervention would only be called for when there is a definite conclusion
that overwhelming public interest requires interference or the action taken by the
Respondent Nos.1 and 2 is, per se, arbitrary, unreasonable and totally perverse.
The learned senior counsel would contend that the State, its corporations and
agencies are required to adhere to norms, standard and procedures laid down by
them and cannot depart from them arbitrarily and though their decision is not
amenable to judicial review, yet the court has to examine the decision making
process, if the decision is not vitiated by malafides, unreasonableness and does not
smack of arbitrariness and to that extent the scope of judicial review is limited.
The learned senior counsel propounded that in the case at hand there has been total
transparency and tested on the touchstone and anvil of every limb of Article 14 of
the Constitution, it withstands keen scrutiny. To bolster his submission, he has
placed reliance on Cochin International Airport Ltd. (supra) and Reliance Airport
Developers (P) Ltd. v. Airports Authority of India, (2006) 10 SCC 1 and Siemens
Public Communication Network Pvt. Ltd. (supra).
21. The controversy which has been portrayed on a larger canvass by the learned
counsel for the petitioner and sought to be narrowed down fundamentally to the
concept of public interest, really adverted to three core issues, namely, (i) whether
the bid of the third Respondent was non-responsive to be ignored for consideration
at the stage of commercial bid; (ii) whether the clarification sought from the third
Respondent smacks of arbitrariness and vitiates the decision determining the said
respondent as L-1; and (iii) whether the whole decision judged on the touchstone
of the principles, namely, "allowing some play in the joints" and "involvement of
public interest" is justified or deserves to be lanceted.
22. Before we proceed to scan the factual contours and move through the terrain
of the real crux which has been astutely and assiduously pyramided and edificed by
the learned counsel for the parties, we think it apposite to refer to certain
authorities in the field. We think it seemly as Mr. Sawhney, learned senior counsel
for the petitioner would urge that the whole decision making is absolutely vitiated
and is bound to founder and collapse like a pack of cards and in oppugnation Mr.
Chandhiok and Dr. Singhvi would submit that the decision arrived at by the
competent authority falls within the essential power of flexibility bestowed on the
owner regard being had to the field of contract which necessitates adaptability and
thereby, in the ultimate eventuate, the decision stands on the terra firma presently
to the authorities.
23. In Poddar Steel Corporation (supra), a two-judge Bench of the Apex Court
has held as follows:
"......As a matter of general proposition it cannot be held that
an authority inviting tenders is bound to give effect to every
term mentioned in the notice in meticulous detail, and is not
entitled to waive even a technical irregularity of little or no
significance. The requirements in a tender notice can be
classified into two categories-those which lay down the
essential conditions of eligibility and the others which are
merely ancillary or subsidiary with the main object to be
achieved by the condition. In the first case the authority issuing
the tender may be required to enforce them rigidly. In the other
cases it must be open to the authority to deviate from and not to
insist upon the strict literal compliance of the condition in
appropriate cases."
24. In Sterling Computers Ltd. V. M.N.Publications Ltd., (1993) 1 SCC 445 =
AIR 1996 SC 51, the Apex Court, while dealing with the concept of judicial
review in respect of contracts entered into on behalf of the State, had expressed the
view as follows: -
"18. While exercising the power of judicial review, in respect of
contracts entered into on behalf of the State, the Court is
concerned primarily as to whether there has been any infirmity
in the "decision making process." By way of judicial review the
Court cannot examine the details of the terms of the contract
which have been entered into by the public bodies or the State.
Courts have inherent limitations on the scope of any such
enquiry. But at the same time as was said by the House of
Lords in the aforesaid case, Chief Constable of the North Wales
Police v. Evans (supra), the Courts can certainly examine
whether "decision making process" was reasonable, rational,
not arbitrary and violative of Art. 14 of the Constitution.
19. If the contract has been entered into without ignoring the
procedure which can be said to be basic in nature and after an
objective consideration of different options available into
account the interest of the State and the public, then Court
cannot act as an appellate authority by substituting its opinion
in respect of selection made for entering into such contract."
25. In New Horizons Ltd. & Anr. v. Union of India & Ors., (1995) 1 SCC 478,
the Apex Court in para 17 opined thus:
"17. ..... The decision of this Court, therefore, insist that while
dealing with the public, whether by way of giving jobs or
entering into contracts or issuing quotas or licenses or granting
other forms of largesse, the Government cannot act arbitrarily at
its sweet will and like a private individual, deal with any person
it pleases, but its action must be in conformity with the
standards or norms which are not arbitrary, irrational or
irrelevant. It is, however, recognized that certain measure of
"free play in the joints" is necessary for an administrative body
functioning in an administrative sphere [See : Ramanna
Dayaram Shetty v. The International Airport Authority of India,
(1979) 3 SCC 489; Kasturi Lal Lakshmi Reddy v. State of J&K
: (1980) 4 SCC 1; Fasih Chaudhary v. Director General,
Dooradarshan (1989) 1 SCC 89; Sterling Computers Ltd. v.
M&N Publications Ltd. and Anr. (supra); Union of India v.
Hindustan Development Corporation, (1993) 3 SCC 499."
It is worth noting that in the said case, their Lordships ruled that the terms
and conditions of a tender should be construed from the standpoint of a prudent
businessman and the terms of the offer of the tenderer should be first considered
and if found suitable, then only its credentials and ability to perform the work
should be considered from a practical point of view.
26. In Tata Cellular (supra), the Apex Court has laid down as follows: -
"94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in
administrative action.
(2) The Court does not sit as a court of appeal but merely
reviews the manner in which the decision was made.
(3) The Court does not have the expertise to correct the
administrative decision. If a review of the administrative
decision is permitted it will be substituting its own decision,
without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to
judicial scrutiny because the invitation to tender is in the realm
of contract. Normally speaking, the decision to accept the
tender or award the contract is reached by process of
negotiations through several tiers. More often than not, such
decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other
words, a fair play in the joints is a necessary concomitant for an
administrative body functioning in an administrative sphere or
quasi administrative sphere. However, the decision must not
only be tested by the application of Wednesbury principle of
reasonableness (including its other facets pointed out above)
but must be free from arbitrariness not affected by bias or
actuated by mala fides.
(6) Quashing decisions may impose heavy administrative
burden on the administration and lead to increased and
unbudgeted expenditure.
27. In Asia Foundation and Construction Ltd. V. Trafalgar House
Construction (I) Ltd. And Others, (1997) 1 SCC 738, it has been held that the
principles of judicial review cannot be denied to be applicable to contractual
powers of government bodies but it is intended to prevent arbitrariness or
favouritism and it is to be exercised in the larger public interest.
28. In Raunaq International Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC
492, the Apex Court, while laying emphasis on public interest and commercial
consideration in the award of contract, expressed thus:
"11. When a writ petition is filed in the High Court
challenging the award of a contract by a public authority or the
State, the court must be satisfied that there is some element of
public interest involved in entertaining such a petition. If, for
example, the dispute is purely between two tenderers, the court
must be very careful to see if there is any element of public
interest involved in the litigation....."
Their Lordships further observed thus:
".....Therefore, unless the court is satisfied that there is a
substantial amount of public interest, or the transaction is
entered into mala fide, the court should not intervene under
Article 226 in disputes between two rival tenderers."
In the said case, their Lordships also emphasised upon the fact that an expert
committee has special knowledge which plays a decisive role in deciding as to
which is the best offer. The past record of the tenderers, the quality of the goods or
services which are offered and the assessment of such quality on the basis of the
past performance of the tenderer have an important role in deciding to whom the
contract should be awarded.
29. In Cochin International Airport Ltd. (supra), their Lordships expressed the
view that the award of a contract, whether by a private party or by the State, is
essentially a commercial transaction. It was held therein that when even some
defect is found in the decision making process, the Court must exercise its
discretionary powers under Article 226 of the Constitution with great caution and
should exercise it only in furtherance of public interest. Emphasis was laid, apart
from legal point, on public interest. The Apex Court has observed that in the
matters of award of contract, the larger public interest has to be kept in view and
when it is vivid that public interest commands that there has to be interference,
then the Court should interfere.
30. In M/s Moarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar
Municipal Corporation and others, AIR 2000 SC 2272, the Apex Court held that
if a term of the tender is deleted after the players entered into the arena, it is like
changing the rules of the game after it had begun and, therefore, if the Government
or the Municipal Corporation was free to alter the conditions, fresh process of
tender was the only alternative permissible. By reason of deletion of a particular
condition, the wider net will be permissible and a larger participation or more
attractive bids could be offered.
31. In Centre for Public Interest Litigation & Another v. Union of India &
Others, (2000) 8 SCC 606, after referring to a passage from Kasturi Lal Lakshmi
Reddy v. State of J&K, (1980) 4 SCC 1, it has been held thus:
"20. It is clear from the above observations of this Court that
it will be very difficult for the courts to visualise the various
factors like commercial/technical aspects of the contract,
prevailing market conditions, both national and international
and immediate needs of the country etc. which will have to be
taken note of while accepting the bid offer. In such a case,
unless the court is satisfied that the allegations leveled are
unassailable and there could be no doubt as to the
unreasonableness, mala fide, collateral considerations alleged, it
will not be possible for the courts to come to the conclusion that
such a contract can be prima facie or otherwise held to be
vitiated so as to call for an independent investigation, as prayed
for by the appellants. Therefore, the above contention of the
appellants also fails."
32. In Patel Engineering Co. Ltd. (supra), the Apex Court emphasised on
maintaining the sanctity and integrity of the process of tender / bid and also the
award of a contract. Adherence to the instructions cannot be given a go-by as the
very purpose of issuing rules / instructions is to ensure their enforcement, lest the
rule of law should be a casualty.
33. In State of NCT of Delhi & Anr. v. Sanjeev (alias Bitto), (2005) 5 SCC
181, while dealing with the scope of judicial interference in matters of
administrative decisions, the Apex Court has held that the authority must act in
good faith, must have regard to all relevant considerations and must not be
influenced by irrelevant considerations, must not seek to promote purposes alien to
the letter or to the spirit of the legislation that gives it power to act, and must not
act arbitrarily or capriciously.
34. In Laxmi Sales Corporation v. Bolongir Trading Co. & Ors., AIR 2005 SC
1962, the Apex Court disallowed the order passed by the High Court which had
held that the rejection of the offer made by the second Respondent therein was
arbitrary and unfair. The Apex Court took note of the fact that the necessary
documents were not filed along with the tender form solely on the ground that the
same were not mandatory. Thereafter, their Lordships proceeded to state that on a
reading of the various conditions in the tender form and the annexures annexed
thereto, it was quite clear that proof of turnover of the firm over the last two
relevant years with supporting documents were to be filed.
35. In M/s. B.S.N.Joshi and Sons Ltd. V. Nair Coal Services Ltd., AIR 2007
SC 437, their Lordships reiterated the principles of judicial review which have
been developed for interference in contractual matters. The Apex Court
summarized the principles as follows:
"(i) If there are essential conditions the same must be adhered
to:
(ii) If there is no power of general relaxation, ordinarily the
same shall not be exercised and the principle of strict
compliance would be applied where it is possible for all the
parties to comply with all such conditions fully:
(iii) If, however, a deviation is made in relation to all the parties
in regard to any of such conditions, ordinarily again a power of
relaxation may be held to be existing:
(iv) The parties who have taken the benefit of such relaxation
should not ordinarily be allowed to take a different stand in
relation to compliance of another part of tender contract,
particularly when he was also not in a position to comply with
all the conditions of tender fully, unless the court otherwise
finds relaxation of a condition which being essential in nature
could not be relaxed and thus the same was wholly illegal and
without jurisdiction.
(v) When a decision is taken by the appropriate authority upon
due consideration of the tender document submitted by all the
tenderers on their own merits and if it is ultimately found that
successful bidders had in fact substantially complied with the
purport and object for which essential conditions were laid
down, the same may not ordinarily be interfered with.
(vi) The contractors cannot form a cartel. If despite the same
their bids are considered and they are given an offer to match
with the rates quoted by the lowest tenderer, public interest
would be given priority.
(vii) Where a decision has been taken purely on public interest,
the Court ordinarily should exercise judicial restraint."
36. In Jagdish Mandal v. State of Orissa and Others, 2007 (8) SCJ 359, the
Apex Court opined that the power of judicial review in administrative action is
intended to prevent arbitrariness, irrationality, unreasonableness, bias and
malafides. It was further opined that when exercising the power of judicial review
in the matters relating to tender or award of contract, certain special features
should be kept in mind regard being had to the fact that a contract is a commercial
transaction. Emphasis was laid on the fact that it is essential to consider whether
the process adopted or the decision taken is so arbitrary or irrational that it could be
said with certitude that no responsible authority acting reasonably and in
accordance with the relevant law would have reached such a conclusion. In the
said decision, the concept of public interest was reiterated.
37. In Reliance Energy Ltd. and another v. Maharashtra State Road
Development Corpn. & Ors., (2007) 8 SCC 1, their Lordships laid emphasis on
level playing field to all bidders and the reasonableness of the State action.
38. In Siemens Public Communication Networks Pvt. Ltd. (supra), it has been
held as under:
"..... A contract is a commercial transaction and evaluating
tenders and awarding contracts are essentially commercial
functions. In such cases principles of equity and natural justice
stay at a distance. If the decisions relating to award of contracts
is bonafide and is in public interest, Courts will not exercise the
power of judicial review and interfere even it if is accepted for
the sake of argument that there is a procedural lacuna."
39. In Sorath Builders v. Shreejikrupa Buildcon Limited & Anr., (2009) 11
SCC 9, it was laid down that it was obligatory on the part of the bidder to submit
his pre-qualification documents within the time schedule.
40. In Meerut Development Authority vs. Association of Management Studies,
(2009) 6 SCC 171, it has been held as follows:
"27. The bidders participating in the tender process have no
other right except the right to equality and fair treatment in the
matter of evaluation of competitive bids offered by interested
persons in response to notice inviting tenders in a transparent
manner and free from hidden agenda. One cannot challenge the
terms and conditions of the tender except on the above stated
ground, the reason being the terms of the invitation to tender
are in the realm of the contract. No bidder is entitled as a matter
of right to insist the Authority inviting tenders to enter into
further negotiations unless the terms and conditions of notice so
provided for such negotiations."
41. In Triveni Engineering & Industries Ltd. v. D.J.B. & Anr., 2009 (5) AD
Delhi 265, the necessity to satisfy the essential pre-condition of the minimum
eligibility requirement to participate in the tender and the nature of the necessity
was dealt with and the Bench expressed the view that the nature of the project
needed work experience and the petitioner had not satisfied the mandatory
minimum eligibility criteria in respect of the work experience and was, therefore,
not entitled to be considered.
42. Regard being had to the aforesaid decisions, we shall proceed to produce at
what places there were blank spaces and whether leaving the space blank makes
the bid non-responsive. To have a holistic approach, we produce the excerpts from
the pricing table:
EXCERPTS FROM THE PRICING TABLE
S. Items Qty. TATA Power Strategic Electronics Division NELCO
No. (LEAD CONSORTIUM MEMBER) (CONSORTIUM MEMBER)
Price in INR Price in Price in Price in
USD EURO UKP
1 Unit Costs
applicable to:
a) Supply of Systems
& Equipment at one ------ ----- ------ ------- ------ ------- ------
representative
airfield, consisting of
following
systems/equipment:
i) Civil works,
Integration, Project ------ ------- ------ ------- ------
Management and
associated work
inclusive of supply
of Trucks, Tata
Sumos and Bush 30 218,13,39,344 2,54,780
Cutters
ii) Cat II Air field 30 116,22,25,000 0 1,02,48,383 0
lighting system ------ ------- ------
Commissioning ------ ------- ------
iii) Automated Air
Traffic Management ------ ------- ------
System 30 60,00,00,000 77,57,961 18,750 10,15,470
Commissioning ------ ------- ------
iv) NavAids 0 0 0 0 90,00,00,000 2,19,26,000 2,06,25,000
Deliverables (Total
Price)
Nav Aids 30 0 0 0 0 62,40,30,740 26,20,600 8,13,000
Installation,
Comissioning
7 Cost of
recommended
period of training in
India excluding the
cost of travel,
lodging. Details at
Enclosure 3
ATM, Mobile ATC Included in
NavAIds 0 0 0 4,00,25,217 2,92,774 43,512
8 Cost of Training
Aggregates/Aids.
ATM, Mobile ATC Included in
NavAIds 0 0 0 5,25,50,630 9,45,814 283,881
9 Cost of Technical
Literature. Details at ----
ATM, Mobile ATC, Included in
NavAIds 9,83,640 1,01,791 95,452
Total Cost. 472,73,77,700 1,26,40,265 1,11,57,376 10,22,570 165,98,87,140 2,99,91,393 2,37,49,686
10 Cost of MTOT for D Depot level maintenance will be carried out by the SELLER
level repair ----
11 Cost of Optional
Equipment --- ----- ------ ------- ------ ------- ------ ------
12 Amount for :
Excise Duty* Rs 46,71,95,989
Sales Tax/VAT** Rs 46,33,08,089
Service Tax*** Rs 12,61,43,972
Service Tax****
(for Civil
construction) Rs 8,76,83,144
Freight and Transit
insurance cost Included in the main equipment price
Octroi/Entry Tax Extra, as applicable
43. On a perusal of the above table, it is luculent that costs in the price table
which have not been specifically mentioned by the third Respondent are either
attached separately as enclosures or are included in the main equipment they are :
(i) Cost of Recommended period of training in India excluding the cost
of travel, boarding and lodging.
(ii) Cost of Training Aggregates/Aids.
(iii) Cost of Technical Literature.
(iv) Freight and Transit insurance cost.
44. We have produced the aforesaid tabular charge from the original file to
appreciate what has been left blank and what has been mentioned by the third
Respondent. The question that emanates for consideration whether leaving the
space blank really makes the bid non-responsive. On a proper scrutiny, it is
discernable that the cost of MTOT for „D‟ level maintenance was not specifically
mentioned as it had been undertaken that said maintenance will be carried out by
the seller. In this regard, it is imperative to appreciate what is the duty of the court,
conditions of the contract or entering into contract. In this regard, we may
profitably refer to the decision rendered in Union of India v. The Central India
Machinery Manufacturing Co. Ltd. and others, AIR 1977 SC 1537, their
Lordships, while dealing with the construction of a contract, expressed thus-
"29...... A correct construction, in turn, depends on a
reading of the Standard and Special conditions as a whole.
It would not be proper to cull out a sentence here or a sub-
clause there and read the same in isolation. What is required
is not a fragmentary examination in parts but an overall
view and understanding of the whole. Again, it is the
substance of the documents constituting the contract, and
not merely the Form which has to be looked into.
30. The real intention of the contracting parties is primarily
to be sought within the four corners of the documents
containing Standard and Special Conditions of the
Contract......"
[emphasis supplied]
45. In M/s Hindustan Shipyard Ltd. V. State of Andhra Pradesh, AIR 2000
SC 2411, the Apex Court has also emphasized the need of looking into the
substance and not merely the factum of the contract. Their lordships also stated
that the terms and conditions of the contract should be read as a whole.
46. In Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel & Ors.,
AIR 2006 SC 3304 their Lordships expressed thus-
"31. In Delta International Ltd. v. Shyam Sundar Ganeriwalla
[(1999) 4 SCC 545], this Court noticed:
"17. For construction of contracts between the parties and for
the interpretation of such document, learned Senior Counsel,
Mr. Desai has rightly relied upon some paragraphs from The
Interpretation of Contracts by Kim Lewison, Q.C. as under:-
"1.03 for the purpose of the construction of
contracts, the intention of the parties is the meaning of
the words they have used. There is no intention
independent of that meaning.
6.09 Where the words of a contract are capable of
two meanings, one of which is lawful and the other
unlawful, the former construction should be preferred.
Sir Edward Coke [Co. Litt. 42a] expressed the
proposition thus:
„It is a general rule, that whensoever the words of a
deed, or of one of the parties without deed, may have a
double intendment and the one standeth with law and
right, and the other is wrongful and against law, the
intendment that standeth with law shall be taken.‟ "
32. It is further stated:
"For that purpose, he referred to the following
observations of Buckley, J. from the paragraphs which are
sought to be relied upon from The Interpretation of Contracts
by Kim Lewison, Q.C.: "My first duly is to construe the
contract, and for the purpose of arriving at the true construction
of the contract, I must disregard what would be the legal
consequences of construing it one way or the other way"."
33. Moreover, the document is to be read as a whole. It is equally
well settled that the deed has to be construed keeping in view the
existing law.
34. It is now a well-settled principle of law that a document must be
construed having regard to the terms and conditions as well as the
nature thereof. [Union of India v. M/s Millenium Mumbai Broadcast
Pvt. Ltd. 2006 (5) SCALE 44]"
47. Tested on the touchstone of the enunciation of law laid down in the aforesaid
decisions, the bid really does not become non-responsive. The blanks do not really
affect. It is not a mercurial bid. It is not specious. It has no riders. It is not
postulated by conditions. It is clear, scrutinisable, discernible and all
comprehensive. If the tender document is read as a whole, it will be clear as day
that the Respondent No.3 had really not left out anything which could remotely be
called substantial to make the bid non-responsive. It has been categorically
stipulated that MTOT would be borne by the seller which clearly conveys that no
additional expenditure is involved. By appreciating the tender document in
entirety, it cannot be said that there has been non-adherence to the norms or the
Rules. In fact, there has been no deviation. Needless to say, while exercising
jurisdiction under Article 226 of the Constitution of India in a matter relating to
award of tender, the Court would not ordinarily interfere unless it finds that the
authorities have acted in a totally arbitrary or a perverse manner or, for that matter,
the ultimate determination in awarding the contract is wholly unreasonable and
cannot be conceived by a prudent man. There cannot be any dispute that certain
amount of play in the joints has to be given to the State authorities as they are in
the best position to judge the nature of the contract, the capabilities and various
other concomitant factors. Being of this view, we hold that the bid of the
Respondent No.3 cannot be treated as a non-responsive bid deserving non-
consideration.
48. Learned counsel for the petitioner, as we have indicated hereinbefore, has
submitted that the authorities could not have discussed with the Respondent No.3.
The said submission, though on a first blush looks quite attractive, yet on a keener
scrutiny, has to pale into insignificance. The respondent authorities had not
negotiated with the Respondent No.3. The clarification sought was with regard to
the rate by way of abundant caution. It was in the realm of fiscal interest. In our
considered opinion, this would come in the allowance of a play in the joints. Thus,
no exception can be taken to the same.
49. Keeping in view the aforesaid facts, it is also to be seen whether the decision
is so unreasonable or perverse that the same deserves to be axed in exercise of
power of judicial review. In this context, we may profitably reproduce a passage
from Reliance Airport Developers (P) Ltd. v. Airports Authority of India & Ors.,
(2006) 10 SCC 1:
"67. Wednesbury principles of reasonableness to which
reference has been made in almost all the decisions referred to
hereinabove is contained in Wednesbury's case, (1948) 1 KB
223: (1947) 2 All ER 680(CA). In that case Lord Green, M.R.
has held that a decision of a public authority will be liable to be
quashed in judicial review proceeding where the court
concludes that the decision is such that no authority properly
directing itself on the relevant law and acting reasonably could
have arrived at it.
xxx xxx xxx
77. Expression of different views and discussions in different
meetings really lead to a transparent process and transparency
in the decision-making process. In the realms of contract,
various choices were available. Comparison of the respective
merits, offers of choice and whether that choice has been
properly exercised are the deciding factors in the judicial
review."
Be it noted, in the said case, in the concurring judgment, S.H. Kapadia, J. (as
his Lordship then was), had stated thus:
"110. In the scoring system objectivity has an important role to
play (clause 5.4). In the scoring system the identification of
factors (including sub-factors), allocation of marks to each of
these factors (including sub-factors) and giving of marks are
three distinct and different stages. Clause 5.4 dealt with
assessment of technical pre-qualifications. Under that clause a
scoring system was to be applied based on the assessment of the
terms of the offer against the technical pre-qualification criteria.
It further stipulated that assessment shall be on absolute basis
and not relative as between the offers. Under the said system,
each factor had to be allocated certain marks. Objectivity had to
be provided in the allocation of marks (and not in giving of
marks) to each factor (including sub-factors). This was not
done. For example, RFP required certain marks to be allocated
for absorption of existing staff. Greater the absorption, higher
the marks to be given. In the present case, EC changed the
factor, namely, "absorption of employees" to the overall
approach. This led to change in priority. Similarly, in RFP, the
factor earmarked was "property development" which EC
compared to "infrastructure development". Experience in
property development is different from experience in
infrastructure development. Similarly, RFP had given
weightage to aeronautical revenue whereas in allocation of
marks, EC obliterated the difference between aeronautical and
non-aeronautical revenues. The above examples are given only
to show that objectivity which was the underlying principle
underlying Clause 5.4 is completely lost either by expanding
the enumerated factors like aeronautical revenue, overall
capability vis-a-vis capacity to absorb existing work force and
comparison of property development with infrastructure
development or by allocating uneven marks to sub-factors. In
my view, EC had no business to expand or narrow down the
scope of any of the above factors as it was beyond its authority
and contrary to the scoring system."
50. Presently, we shall advert to the comparative costs of the commercial offers
of the bidders as produced in the original file are as follows:
Sl. No. Vendor Cost of Commercial
Proposal (Rs.)
1. M/s Tata Power 1094, 79, 64, 039.00
2. M/s Selex SI 1141, 86, 01, 780.00
3. M/s BEL 1315, 28, 82, 034.00
4. M/s Jupiter Strategic Technologies 1959, 41, 43, 065.00
5. M/s Terma 1959, 41, 43, 065.00
6. M/s PET Aviation 2235, 17, 43, 053.00
51. From the aforesaid chart, it is clearly demonstrable that the proposal of
Respondent No.3 is the lowest at Rs.1094.79 Crores as against the commercial
proposal of the Petitioner being 4% higher at Rs.1141.86 Crores. After taking into
account the dimensions of each airfield and the per-meter cost-rates given in the
commercial proposal, the final total project cost of Respondent No.3 works out to
Rs.1219.99 Crores. Thus, the final negotiated cost of the Petitioner‟s proposal is
Rs.66.21 Crores higher than that of Respondent No.3. Ergo, the public interest lies
in ensuring that procurement is effected at the lowest possible cost to the State
exchequer.
52. Ex consequenti, we are of the opinion that taking into account the parameters
stipulated in the RFP and pre bid for determination of lowest tenderer, the decision
of Union of India cannot be flawed. Resultantly, the writ petition, being sans
merit, stands dismissed without any order as to costs.
CHIEF JUSTICE
SANJAY KISHAN KAUL, J.
MANMOHAN, J.
SEPTEMBER 30, 2011
Pk/dk
