1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 26 TH DAY OF FEBRUARY, 2013 BEFORE THE HON’BLE MR. JUSTICE A S BOPANNA WRIT PETITION NO.2535/2013 (GM-TEN) C/W WRIT PETITION NO.505/2013 (GM-TEN) W.P.NO. 2535/2013 BETWEEN : TATA PROJECTS LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANAIES ACT, 1956 AND HAVING ITS OFFICE AT “MITHONA TOWERS-1” 1-7-80 TO 87, PRENDERGHAST ROAD, SECUNDERABAD -500 003 REP. BY ITS COMPANY SECRETARY AND HEAD LEGAL DR.A.RAJA MOGILI. ... PETITIONER (BY M/S. CREST LAW PARTNERS & SRI DHYAN CHINNAPPA, ADVS. ) AND : 1. KARNATAKA POWER CORPORATION LIMITED HAVING ITS OFFICE AT SHAKTI BHAVAN, RACE COURSE ROAD, BANGALORE-560 009, REP. BY ITS MANAGING DIRECTOR. 2. LARSEN & TOUBRO LIMITED A COMPANY INCORPORATEE UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT L& T HOUSE,
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 26TH DAY OF FEBRUARY, 2013
BEFORE
THE HON’BLE MR. JUSTICE A S BOPANNA
WRIT PETITION NO.2535/2013 (GM-TEN) C/W
WRIT PETITION NO.505/2013 (GM-TEN)
W.P.NO. 2535/2013
BETWEEN :
TATA PROJECTS LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANAIES ACT, 1956 AND HAVING ITS OFFICE AT “MITHONA TOWERS-1” 1-7-80 TO 87, PRENDERGHAST ROAD, SECUNDERABAD -500 003 REP. BY ITS COMPANY SECRETARY AND HEAD LEGAL DR.A.RAJA MOGILI. ... PETITIONER (BY M/S. CREST LAW PARTNERS & SRI DHYAN CHINNAPPA, ADVS. ) AND :
1. KARNATAKA POWER CORPORATION LIMITED HAVING ITS OFFICE AT SHAKTI BHAVAN, RACE COURSE ROAD, BANGALORE-560 009, REP. BY ITS MANAGING DIRECTOR.
2. LARSEN & TOUBRO LIMITED
A COMPANY INCORPORATEE UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT L& T HOUSE,
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BALLARD ESTATE, P.O.BOX NO.8278, MUMBAI- 400 071 REP. BY ITS MANAGING DIRECTOR
3. ALSTOM (SWITZERLAND) LIMITED A COMPANY INCORPORATED UNDER THE LAWS OF SWITZERLAND AND HAVING OFFICE AT BROWN BOVERI STRASSE, CH 5401 BADEN, SWITZERLAND, REP. BY ITS MANAGING DIRECTOR.
4. BHARAT HEAVY ELECTRICALS LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT BHEL HOUSE, SIRI FORT, NEW DELHI-110049 REP. BY ITS MANAGING DIRECTOR ... RESPONDENTS
(BY SRI AJAY J N, ADV. FOR M/S. PRAGATHI LAW CHAMBERS FOR C/R1 SRI VENKATESH DHOND, Sr.COUNSEL FOR SRI R.V.S. NAIK, ADV. FOR R2 SRI UDAYA HOLLA, Sr. COUNSEL FOR SRI SHASHIKIRAN SHETTY, ADV. FOR R3 SRI N.S. NARASIMHA SWAMY, ADV. FOR M/S. SWAMY & SINGH, ADVOCATES FOR R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR RECORDS FROM THE R-1 OF THE IMPUGNED TENDER EVALUATION AND ALL RECORDS AND BIDS SUBMITTED IN RELATION TO THE TENDER NOTIFICATION VIDE ANNEXURE-A DT. JULY 2012 AND ETC.
W.P.No. 505/2013
BETWEEN : LARSEN & TOUBRO LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT. 1956, HAVING ITS REGISTERED OFFICE AT L & T HOUSE, BALLARD ESTATE, P.O.BOX NO.8278,
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MUMBAI-400 001, REP. HEREIN BY ITS AUTHORISED REPRESENTATIVE MR.KAMLESH KUMAR GUPTA. ... PETITIONER
(BY SRI VENKATESH DHOND, Sr. COUNSEL FOR SRI R V S NAIK (M/S. KING & PARTRIDGE)) AND :
1. KARNATAKA POWER CORPORATION LIMITED HAVING OFFICE AT SHAKTI BHAVAN, RACE COURSE ROAD, BANGALORE-560 009, REP. HEREIN BY ITS MANAGING DIRECTOR.
2. ALSTOM (SWITZERLAND) LIMITED
A COMPANY INCORPORATED UNDER THE LAWS OF SWITZERLAND AND HAVING OFFICE AT BROWN BOVERI STRASSE, CH-5401, BADEN, SWITZERLAND. ... RESPONDENTS
(BY SRI AJAY J N, ADV. FOR M/S. PRAGATHI LAW CHAMBERS FOR C/R1 SRI K G RAGHAVAN, Sr.COUNSEL FOR SRI SHASHIKIRAN SHETTY, ADV. FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR THE RECORDS FROM RESPONDENT NO.1 PERTAINING TO THE IMPUGNED TENDER EVALUATION AND ALL RECORDS RELATING TO TENDER NOTIFICATION & SET ASIDE THE IMPUGNED TENDER EVALUATION AND AWARD OF TENDER BY RESPONDENT NO.1 IN FAVOUR OF RESPONDENT NO.2 IN RESPECT OF TENDER NOTIFICATION [COPY NOT PRODUCED] AND ETC.
THESE WRIT PETITIONS HAVING BEEN RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
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O R D E R
The petitioners in both these petitions i.e., ‘‘L & T’’,
the petitioner in W.P.No.505/2013 and ‘Tata Projects’
the petitioner in W.P.No.2535/2013 had responded to
the tender notification No.CEGSW/Bidadi/EPC/001
invited by the first respondent (‘‘KPCL’’ for short) for
award of work for construction of 700 MW +/- 20%
combined Cycle Power Project at Bidadi, Ramanagara
District. In addition to the petitioners, ‘‘Alstom’’ the
respondents No.2 and 3 respectively in both the above
said petitions and Bharat Heavy Electricals Ltd., (‘BHEL’
for short) another respondent had responded to the
said tender.
2. The parties would be referred to by their
abbreviated names indicated above during the course of
this order for the purpose of convenience and clarity.
3. Though ‘‘L & T’’ in W.P.No.505/2013 have
sought for setting aside the tender evaluation and the
award of tender by ‘KPCL’ in favour of ‘Alstom’, the
factual position is that the tender has not yet been
5
awarded and as such, the grievance essentially is
against the evaluation process and negotiation with
‘Alstom’ to the exclusion of ‘L & T’. The grievance put
forth by ‘Tata Projects’ in W.P.No.2535/2013 is also to
the same effect, but they have set out grievance against
consideration of both ‘Alstom’ and ‘‘L & T’’. Hence, both
the petitions were heard together.
4. The fact that the bids were opened on
10.10.2012 is not in dispute. ‘L & T’ is stated to have
quoted the lumpsum price of Rs.2021.51 crores, while
‘Alstom’ is stated to have quoted Rs.2215.40 crores.
Thus ‘L & T’ had quoted Rs.193.9 lower than ‘Alstom’.
The prices quoted by the other tenderers are in the
higher order thereafter. Subsequent to the same, ‘KPCL’
was required to evaluate all the bids as per the
procedure contemplated in Annexure-8 of Section A2
and clause 23.4 of Section A2 to arrive at L-1 and
process the same further. While carrying out such
evaluation, the ‘discounting’ and ‘loading’ in respect of
the different items quoted was to be made keeping in
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view the requirements of the tender procedure and the
quote being made within the limits of permissible
deviation. The grievance of ‘‘L & T’’ is that in the
process of evaluation, an inappropriate method has
been followed with the intention of making ‘Alstom’ as
L-1 so as to negotiate with them though ‘L & T’ had
quoted less. This is done instead of the evaluation
being carried out in respect of all the bidders applying
the same yardstick and identifying the L1 after
comparative evaluation of all the tenderers and
negotiating with them. The present procedure has
caused prejudice to the petitioners as they have been
excluded even before carrying out evaluation. The
specific grievance of ‘L & T’ with regard to the
negotiations with ‘Alstom’ being contrary to the
requirement is set out in para 15 of the petition which
reads as hereunder:
“(i) Multi-party contracting: At Sl.No.49 of its
replies to pre-bid queries dated 18.09.2012,
Respondent No.1 had inter alia stated that it shall
only enter into contract with single party (legal
entity) for all the works, though divided into
separate contracts, for making the contracts most
7
tax efficient for Respondent No.1. However, the
Petitioner has reliably learnt that although
Respondent No.2 has submitted a single bid, has
requested that a separate contract be entered into
with its Indian subsidiary in respect of onshore
works, apparently with a view to making the bid
more tax efficient for Respondent No.2 thus causing
substantial loss to the exchequer to the tune of
about Rs.50 crore. It is submitted that the said
Indian subsidiary is a separate legal entity and is
neither a qualified bidder nor a consortium partner
of Respondent No.2 for this tender. Therefore, the
request of Respondent No.2 to Respondent No.1 of
such nature is a material deviation to the above
requirement of Respondent No.1, rendering the bid
liable for rejection. A true copy of the extract of the
Replies to Pre-Bid Queries issued by Respondent
No.1, is produced herewith as ANNEXURE-H; and,
(ii) As per clause 4.0 of Section A2 of tender
documents and pre-bid clarification dated
18.09.2012 issued by Respondent No.1, the
completion schedule for the works shall be 30
months from the date of letter of acceptance by the
successful bidder. It is submitted that
Commencement date as defined and release of
payment by Respondent No.1 to the successful
bidder are independent of each other. However,
Respondent No.2 has submitted the draw down
schedule linking Commencement Date with the
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release of first payment by Respondent No.1,
resulting in either pushing back or postponing the
implementation of the project beyond the stipulated
period of 30 months or Respondent No.1 having to
release payment on the date of letter of acceptance,
both of which are clearly opposed to the intent of
the Tender. As per clause 11.8 of section A2 of
tender documents, deviation in implementation
period is a bid rejection criterion. Therefore under
clause 11.8 of Section A2, Respondent No.1 has no
option but to declare the bid of Respondent No.2 as
non-responsive and reject the same. However,
Respondent No.1 has not done so for reasons best
known to it. True copies of the relevant Clauses i.e.
Clause 4.0, 11.8 and 13.4 are collectively produced
herewith as ANNEXURE-J.”
5. In addition, an affidavit has also been filed on
behalf of ‘‘L & T’’ setting out details to claim the
entitlement of ‘L & T’ to be considered as L1 and
negotiate with them.
6. In the petition filed by ‘Tata Projects’, they have
also referred to in detail with regard to the deviations
made both by ‘L & T’ and ‘Alstom’ and have therefore
classified the offers made by both of them as non-
responsive which according to them is liable to be
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rejected outright. In that regard, they have referred to
clause-24.3 of ITB and have contended that the
deviation affecting prices directly should be considered
as non-responsive and such bids should not be
processed.
7. The ‘KPCL’ as also ‘Alstom’ which are common
respondents in both the petitions have filed their
objection statement raising issues with regard to the
maintainability of these petitions at this stage. ‘KPCL’
more particularly has made detailed reference to the
Karnataka Transparency in Public Procurements Act,
1999 (‘KTPP Act’ for short) and has contended that no
cause has arisen for filing the instant petition. The said
objections are filed insofar as maintainability and have
sought leave to respond to the other contentions if the
same becomes necessary. The process of evaluation
and consideration presently adopted is however sought
to be justified by contending that the bids of all the
tenderers were evaluated and a report was prepared
which was examined by the Tenders Scrutiny
10
Committee. Thereafter the Technical Committee in
order to obtain confirmation has got it verified by the
independent firm of Chartered Accountants. All of
which were placed before the Tender Accepting
Authority for further consideration. According to them,
‘Alstom’ was found to be the lowest bidder and as such
negotiations are being carried on with them but not
finalized either by accepting their bid or by rejecting the
others. The Board of Directors which is the Tender
Accepting authority has examined the same in the
Board meeting and on accepting the evaluation reports,
decided to secure clarification in respect of
observations. Hence, it is contended that all procedures
have been followed and the Board is seized of the matter
and is yet to take a decision; the instant petitions are
premature. Hence they seek dismissal of the petitions.
8. Further ‘Alstom’ has also filed their statement of
objections and sought to contend that the bid made by
them is in order and that insofar as the instant
petitions, the ‘L & T’ and ‘Tata Projects’ can only avail
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the appellate remedy if ultimately the contract is
awarded to ‘Alstom’. Even otherwise, since the
petitioners are making out a case as if it has been
awarded, even in such event the writ petition would not
be maintainable as there is alternate remedy of appeal.
9. Since a threshold contention with regard to the
petitions being premature and not maintainable is very
strongly urged by ‘KPCL’, the said question is to be
considered at the outset as it would result in a situation
of there being nothing more to examine on merits at this
stage, if the contention is accepted. On the other hand,
if any further consideration of the matter is required,
‘KPCL’ would have to be provided opportunity to bring
further material on record.
10. On the said aspect, elaborate arguments were
heard from Sri Venkatesh Dhond, Sri S.S.Naganand, Sri
Udaya Holla, Sri K.G.Raghavan, learned senior counsel,
Sri Srinivas Raghavan and Sri Dhyan Chinnappa,
learned counsel appearing for the respective parties.
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11. Firstly though the contentions urged on behalf
of ‘Alstom’ would suggest that the instant petitions are
not maintainable in view of the alternate remedy being
available under Section 16 of the KTPP Act and the
decisions in the case of Tin Plate Company of India
Ltd., vs. State of Bihar and ors (AIR 1999 SC 74); in
the case of Kanaiyalal Lalchand Sachdev & Others –
vs- State of Maharashtra and Others (2011(2) SCC
782); in the case of Rajkumar Shivhare –vs- Asst.
Director, Directorate of Enforcement and Another
(2010 (4) SCC 772) and in the case of Kirloskar
Brothers Ltd., -vs- Karnataka Niravari Nigam
Limited and Others (2009(5) K.L.J. 608) were relied
upon, I am of the opinion that the said question would
not arise for consideration at this stage in view of the
categorical stand adopted by the ‘‘KPCL’’ that the tender
has not been awarded to ‘‘Alstom’’ and the process of
negotiation is still under progress. If that be the
position, the appellate remedy would not come into play.
Therefore, even the contentions put forth by the learned
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senior counsel on behalf of ‘L & T’ by placing reliance on
the decisions in the case of Whirlpool Corporation –vs-
Registrar of Trade Marks, Mumbai (1998(8) SCC 1)
and the case of Popcorn Entertainment and Another
–vs- City Industrial Development Corporation and
Another (2007(9) SCC 593) that the alternate remedy
in the instant case cannot be considered as an
efficacious one in view of the Appellate Authority itself
having a say in the matter of award of tender also would
not arise for consideration at this stage. Hence, the
contentions in that regard are left open to be urged at
an appropriate stage, if the need and the occasion
arises.
12. Therefore, though a statutory bar or an
alternate remedy as contemplated in law does not arise
at this stage, the question still would be as to whether
the petitions are premature and/or as to whether this
Court while considering the petition under Article 226 of
the Constitution of India is expected to interfere at this
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stage when the contract has not been awarded nor any
of the tenderers are expressly rejected.
13. Since large number of decisions have been
relied upon by the learned senior counsel and the other
counsel appearing on behalf of all the parties, the legal
position in that regard is to be analysed at the outset
and in that background, the fact situation arising
herein needs to be noticed. To contend that the instant
petitions are premature, the decision in the case of Mrs.
Kunda S.Kadam vs. Dr.K.K.Soman and ors (AIR
1980 SC 881); in the case of Chanan Singh vs.
Registrar of Co-operative Societies, Punjab and
others (AIR 1976 SC 1821) and in the case of
G.Sarana vs. University of Lucknow and others (AIR
1976 SC 2428) are relied on. It is contended that when
a decision is yet to be taken by the Tender Accepting
Authority, there would be no cause of action and as
such the petition is premature. In the cited cases, they
were matters relating to selection and disciplinary
proceedings wherein the competent authority was yet to
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take a decision wherein it was held that until a decision
is taken by the competent authority one way or the
other, there would be no cause to challenge the action.
14. Further, the learned counsel appearing for
‘KPCL’ relied on the decision in the case of Siba Prasad
Padhi vs. State of Orissa and others (2004(I) OLR
200); in the case of Harish Industries Pvt. Ltd vs. The
Bihar State Road Transport Corporation and others
(2003(3) PLJR 585) and in the case of M.Vasudevan
vs. Chennai Metropolitan Development Authority
(W.P. No.2475/2011) and contended that a final
decision in any event has not been taken by the ‘‘KPCL’’
and until such time, the same cannot be challenged.
Particular reference is made to the Madras High Court
decision that the Court while considering a similar
provision as contained in the KTTP Act was of the view
that only when the tender bulletin is issued, the
aggrieved person would be entitled to challenge the
same in accordance with law. Hence, in the said case it
was held that the petition was premature.
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15. The learned senior counsel for ‘L & T’ on the
other hand relied on the decision in the case of Siemens
Public Communication Networks Pvt. Ltd. –vs- Union
of India & Ors (2008 (16) SCC 215) to contend that in
similar set of circumstance as in the instant case, the
Hon’ble Supreme Court had entertained the petition and
had examined the issue, though in the said facts, the
Hon’ble Supreme Court did not choose to ultimately
accept the contention of the appellant. The decision in
the case of Ganapati RV-Talleres Alegria Track Pvt.
Ltd.–vs- Union of India & Another (2009 (1) SCC 589)
was also relied on by the learned senior counsel to
contend that even though the Delhi High Court
dismissed the petition, the Hon’ble Supreme Court had
not only entertained the petition but also directed the
evaluation committee to consider the bid of the
petitioner therein along with that of other bidders.
16. A cumulative perusal of the decisions relied
upon by both the sides would indicate that the
overwhelming opinion is that the Court will not interfere
17
unless the cause to do so has arisen i.e., until the
decision one way or the other is taken by the competent
authority who is required to take the decision and such
decision is in favour of one and has effected the other.
In the case of Siemens, though the Hon’ble Supreme
Court examined the matter, it did not interfere though
on opening the bid, the petitioner therein who had
quoted the lowest but was not treated as the L-1 after
evaluation. The Hon’ble Supreme Court has no doubt
held that judicial review is possible when the decision
making process is so arbitrary or irrational. In the said
case, the discussion with the petitioner was excluded.
However, in the instant case, evaluation was made by
the Committee itself taking note of the requirement and
the bids made and thereafter the discussion has
commenced with L-1 but the other tenderers have not
been rejected. Therefore, on opening the bids, the
evaluation procedure has been same for all, though
there is serious dispute with regard to the method
adopted in arriving at L-1 by applying different
standards of ‘discounting’ and ‘loading’ for
different tenderers. That aspect of the matter no doubt
18
would arise for consideration only after all evaluations
and negotiations are complete and a decision relating to
acceptance of any tender is made. Any examination at
this stage based on apprehension is only fishing for
discrepancies since the petitioners are also contending
based on reliable information and not on concrete
material. Further, unless this Court comes to a
conclusion regarding the imminent necessity of probing
the matter further, it would not be necessary for the
‘KPCL’ to divulge any further details at this stage since
the process is still under way. In the decision in the
case of Ganapathi RV-Talleres, it was a case where the
petitioner therein had been communicated that he had
not met the eligibility criteria of the tender and therefore
the commercial bid will not be considered. Hence, a
cause had arisen to approach the Court due to rejection
and the Court directed consideration along with the
other tenderers but, in the instant case, there is neither
rejection nor acceptance at this stage.
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17. The learned senior counsel for ‘Alstom’ apart
from contending that the petition is premature also
sought to impress upon this Court the restraint to be
exercised by Courts with regard to contractual matters
due to lack of expertise and there being technical issues
especially at a stage when it is not yet finalised. The
decisions in the case of TATA Cellular –vs- Union of
India (AIR 1996 SC 11); in the case of TATA Iron and
Steel Co.Ltd –vs- Union of India & Ors (AIR 1996 SC
2462); in the case of Federation of Railway Officers
Association & Ors –vs- Union of India & Ors (AIR
2003 SC 1344) and in the case of Siemens Public
Communication Networks Pvt. Ltd. –vs- Union of
India & Ors (AIR 2009 SC 1204) are relied on in
support of that proposition. In the instant case, at this
stage, the question of meddling with the decision of the
experts would not arise since this Court is examining
the issue at a preliminary stage and not with regard to
the details of the tender requirements and the scope of
work but only to examine whether the petitioners have
been unjustly excluded. At this stage, what is to be
20
examined even if the petition was not premature, was
only on the aspect as to whether ‘KPCL’ could have
excluded other tenderers and negotiated only with
‘Alstom’ and in that regard, the allegation of deviation
being permitted could be accepted at this stage.
18. In justification of the procedure adopted, the
learned counsel for the ‘KPCL’ would contend that
‘KPCL’ through its tender scrutiny committee has
evaluated the tenders of all the tenderers and the
further process is being undertaken. In such
circumstance, it would not be appropriate for the Court
to sit in judgment over the Technical issues which has
been examined by the Technical Committee, more
particularly when the process is not complete. There
are several technical issues in the implementation of
project and the situation for judicial review even to the
limited extent has not arisen. To buttress the said
contention, the learned senior counsel for ‘Alstom’ has
placed reliance on the decision of the Hon'ble Supreme
Court in the case of Bihar Public Service Commission
21
and ors vs. Kamini and others [(2007)5 SCC 519]; in
the case of M/s G.J.Fernandez vs. State of
Karnataka and ors (AIR 1990 SC 958) and in the
case of BSN Joshi and Sons Ltd., vs. Nair Coal
Services Ltd., and ors (AIR 2007 SC 437).
19. The above cited decisions would indicate that
in technical matters, the decision of the experts in the
field would have to be taken into consideration when
such experts have noticed all aspects and have taken a
decision. In the instant facts, ‘‘KPCL’’ has contended
that all such decisions have been taken at the
appropriate level and even the assistance of the
Chartered Accountants who are experts in evaluation
has been availed for proper evaluation. The learned
senior counsel for ‘‘Tata Projects’’ would however rely on
the decision of the Division Bench of this Court in the
case of ‘KPCL’ vs. SICAL Logistics Ltd., and ors (ILR
2007 Kar 226) to contend that in the said case it is
held that the tender inviting authority, tender scrutiny
committee and finally the tender accepting authority
22
alone have a role to play and there was no place for a
tender process committee to take part in the evaluation
process as has been done in that case. Hence, it is
contended that the evaluation itself is defective in the
instant case.
20. On the said aspect, it is necessary to notice
that in the case of M/s. G.J.Fernandes, the Hon'ble
Supreme Court had approved the satisfaction reached
by the person-in-charge of contract in consultation with
an independent agency like Tata. Further, in the case
of Spanco Telesystems and Solutions Ltd., vs. State
of Karnataka and ors (2008(5) Kar.L.J. 521), it has
been held that if the assistance of a sub-committee to
help the tender scrutiny committee to make technical
evaluation is taken, the same would not be contrary to
the required procedure. What is to be prima facie
noticed herein at this stage is not the correctness or
otherwise of the evaluation made, since the stage has
not arisen for the same. But, it would have to be seen
as to whether the requisite procedure has been followed
23
and as to whether any one of the tenderers has been
excluded from the zone of evaluation in an irrational
manner without basis and whether the process is being
undertaken in an arbitrary manner having disregard to
all established principles.
21. That apart the learned senior counsel for
‘Alstom’ has further relied on the decision in the case of
Raunaq International Ltd., vs. IVR Constructions
Ltd and ors (AIR 1999 SC 393) and in the case of
Jagdish Mandal vs. State of Orissa and ors
[(2007)14 SCC 517] to contend that even in a situation
where the contract has been awarded and even in such
circumstance while undertaking the exercise of judicial
review in a writ petition against a contract awarded by
public authority, the Court should be satisfied that
there is genuine public interest involved in entertaining
such petition. The possibility of delay in the project by
such interference should also be kept in view.
22. The combined reading of all the decisions on
different points referred above would boil down to the
24
position that as a rule, the Courts would not entertain
the petitions when no decision has been taken by the
competent authority effecting the right. The exception
however would be when it is shown that the decision
making process itself is so arbitrary and irrational, that
no authority acting reasonably will take such decision
to the extent it is taken. Even in such case, the Courts
would only peruse the decisions taken by experts in the
field to exclude arbitrariness or unreasonableness, if
evident on the face of it, but would not substitute its
opinion over the experts’ opinion and step beyond
institutional capacity. Mere deviation or relaxation or
price difference should not be the basis for interference
as the same are also permissible depending on its
nature and interference should be only if there is
substantial public interest. When that is the yardstick
to be applied to examine the decisions even at a stage
when the awarding of the contract is complete, the
interference when the process is still going on should be
with greater restraint and minimal.
25
23. In the above backdrop, what requires to be noticed
is as to whether even if the contentions which have been put
forth by the petitioners are looked into at this stage, would
the process call for interference at this juncture or should
the petitioners avail of their remedies after the process is
complete, if any action is taken to the detriment of the
petitioners. In that regard, a perusal of the papers in the
background of the contention put forth by the learned senior
counsel for ‘L & T’ would indicate that the reference in that
regard is made to Section 8(2) i.e., the instructions to the
bidders (ITB) vide revised Annexure-8. The price evaluation
for fixing the price has been indicated and the loading for the
deficiencies is also provided therein. The manner of
evaluation is indicated in clause 4. In that regard, it is also
contended that vide clause 11.8, it has been clearly indicated
that the issues mentioned therein will not be allowed for the
purpose of commercial deviation. It is therefore contended
that from the bid of ‘Alstom’, it is seen that there are several
deviations and yet the ‘KPCL’ is proposing to consider the
same by evaluating them as L-1. To contend regarding this
aspect, reference is made to Annexure-G wherein the
comparitive evaluation of the bids at the bid opening meeting
is stated to have been made. It is in that context contended
26
that ‘L & T’ had quoted a sum of Rs.2021.51 crores while
‘Alstom’ had quoted Rs.2215.40 crores and as such the bid
of ‘‘L & T’’ was about 193.9 crores lower than that of
‘Alstom’.
24. It is in that context contended that it is only due to
defective loading made on ‘L & T’ and wrong discounts
granted to ‘Alstom’, they have now been placed as L1 as per
the contention of ‘KPCL’ which is not acceptable. It is more
specifically contended that insofar as the commencement
date, ‘Alstom’ has indicated 30 days subsequent to the date
and insofar as the water treatment, the chlorination system
has been provided by the ‘Alstom’ which is a deviation and
also with regard to consortium, the ‘Alstom’ has indicated
that the contract has to be given in a different name which is
contrary to the requirement of the tender. It is in that
context contended if these aspects were taken into
consideration and a similar benefit had been provided to ‘L &
T’, the bid would be much lower, while on the other hand by
allowing these deviations to ‘Alstom’, the same has not only
caused loss of revenue to the Government, but the bid itself
is defective. On these aspects, specific reference has been
made by ‘L & T’ with regard to the actual loss that may be
27
caused. To drive home the point the learned senior
counsel has made reference to the pre-bid queries made
by the tenderers and the reply given by the ‘KPCL’. In
that regard, specific reference is made to the query
relating to award of contract wherein it was clarified
that ‘KPCL’ will enter into contract with single party for
all works. But, ‘Alstom’ is presently seeking award of
contract in favour of a different entity in India. Similar
other queries and the answer given are referred to. It is
therefore contended that despite the position being
clarified on certain aspects in the pre-bid meeting,
substantial deviations have been permitted to ‘Alstom’
which probably is the reason for considering them as L-
1 subsequent to the evaluation.
25. Insofar as these aspects of the matter, there is
no specific material available to come to a conclusion as
to the extent and manner of deviation and whether such
deviations have been accepted by ‘KPCL’ without demur
and as to whether the loading for deviation and
discounts on other aspects has been done in a manner
28
as alleged by ‘L & T’. The learned senior counsel would
however contend that the ‘KPCL’ is deliberately
withholding the information by only filing the
preliminary objections instead of justifying their action
on merits. The learned counsel for ‘KPCL’ would
however seek to rely on Rule 23 of the KTPP Rules,
2000, to point out that the Tender Inviting Authority
should ensure confidentiality of the process of tender
evaluation. Though the said provision cannot act as a
bar to provide information to this Court, certainly in the
evaluation process, such confidentiality requires to be
maintained to prevent the tenderers from interfering
with the process and manipulating the same. In the
present circumstance, ‘KPCL’ has indicated the nature
of evaluation that has been made and procedure
followed. Though as noticed it would be open for this
Court to seek for information at any stage, the
contention of ‘L & T’ with regard to ‘Alstom’ being
favoured is based on certain assumptions relating to the
inappropriate manner of loading and discounts being
provided which stems from the basis that when the bids
29
were opened, the price quoted by ‘L & T’ was much
lower, but presently ‘Alstom’ has been treated as L1.
Since the proceedings before this Court in these
petitions is at a stage prior to award of contract, I am of
the opinion that it is not a stage where this Court is
expected to make a roving inquiry by seeking for
information relating to the evaluation made by experts
by throwing open the entire gambit at this stage and
provide an opportunity to the rival tenderers to fish for
evidence and pick holes, more particularly at a stage
when ‘KPCL’ is contending that the matter has not been
finalized and such casual interference if entertained
would become the order of the day since in every
evaluation process, one or the other would have some
grievance and no process could be finalised. Even
assuming the contentions put forth by ‘L & T’ is
substantially true, the judicial review at the appropriate
stage and forum would be available and it could be
made in the matter subsequently instead of stalling the
process by examining at every stage. This is so for the
reason that even if all materials are placed before this
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Court, considering the technical nature and volume of
the project, there would be several aspects which would
go into the evaluation of the bids for the proper
completion of the work and the instant case is not a
simple case of comparing the difference of price for
supply of certain goods, the quality of which are held to
be similar. Therefore, the exercise of sitting in judgment
over the wisdom of the experts should be avoided at this
stage.
26. It is no doubt true that in view of the
contention put forth by ‘L & T’ that at the time of
opening of the bids, there was a substantial difference of
Rs.193.9 crores, at first blush, it would appear that
though there was huge difference and yet ‘Alstom’ being
presently considered as L1 could be contrary to public
interest and this Court may have to step in, however,
the contentions put forth on behalf of ‘Tata Projects’ in
the connected petition by relying on the decision in the
case of Larsen and Toubro Ltd and another vs.
Union of India and ors [(2011)5 SCC 430] that in the
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said decision the Hon'ble Supreme Court has held as to
what could be considered as responsive bid and in that
circumstance, when they have contended that even the
bid submitted by ‘‘L & T’’ cannot be considered as
responsive bid due to deviations, this aspect of the
matter also cannot be ignored.
27. In that regard, ‘Tata Projects’ have also made
reference to Annexure-8 and clause 11.8 of ITB to
contend that where there are commercial deviations, the
bids are liable for rejection. Stating so, they have
alleged that ‘L & T’ have deviated on several
specifications such as break down price of taxes and
with regard to long term parts management as payment
has been demanded even prior to initial firing. The
different equivalent operating hours taken for quoting
long term parts management has also been referred.
Several other similar flaws in the bid submitted by ‘L &
T’ as well as ‘Alstom’ has been referred to and they have
contended that only the bid submitted by them is as per
the requirement. These aspects of the matter would
32
indicate that each of the tenderers have been alleging
against the other about submission of non-responsive
bid by the other and in that circumstance though ‘L & T’
sought to contend that there was a huge difference of
price between their bid and that quoted by ‘Alstom’, the
contention raised by ‘Tata Projects’ if taken into
consideration would mean that the contention of ‘L & T’
also cannot be accepted on its face value at this
juncture. In such circumstance, it is for the expert
body to evaluate all the bids and take a decision at the
first instance. Clause 20 of ITB is referred relating to
the procedure that would be followed by ‘KPCL’ towards
examination of bids with regard to the same being
complete and the consideration of errors, if any. The
method of short-listing is also provided. Vide clause 23
the evaluation and comparison of the bid is
contemplated and the right of rejection is also with
‘KPCL’. As of now, none of the bidders have been
rejected.
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28. In the above background, the statement filed
by ‘KPCL’ would disclose that on opening the price bids
of all the four bidders, all of them have been evaluated
and an evaluation report was prepared which was
examined by Tender Scrutiny Committee and along with
the report, it was put up to Technical Committee.
Further, the evaluation made was also got verified by an
independent firm of Chartered Accountant. All the
evaluations and the reports have been placed before the
Tender Accepting Authority which is the Board of
Directors and the further procedure is under way. The
learned senior counsel for the petitioners while referring
to the averment in the objection statement and the
recording in the Board meeting dated 04.12.2012
sought to contend that the discussions with regard to
the technical and commercial deviations after evaluation
of the tenders would not be sustainable. Despite the
same, keeping in view the deviations being alleged
against one another, and also taking note of the fact
that all the tenders have been evaluated, if at all there
are any errors in the manner of evaluation and if
34
judicial review is necessary, the same could only be
made in an appropriate proceedings at an appropriate
stage and not when the process is not yet completed.
29. In the light of the above discussions, though at
this stage this Court cannot come to a conclusion as to
whether the bids submitted by any of the tenderers is
contrary to the requirement under the instructions to
the bidders and also with regard to the correctness or
otherwise of the evaluation made, considering that a
detailed procedure has been adopted by ‘KPCL’, any
further examination of the matter would not arise at
this stage. This conclusion shall not mean that the
validity of the procedure or the evaluation of the bid is
upheld. This Court has exercised restraint in
undertaking a detailed examination at this stage since
the grievance made in the petition is premature. The
contentions are left open to be urged at the appropriate