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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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

stage in appropriate proceedings.

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30. In the result, the petitions being premature

are disposed of accordingly. No costs.

Sd/- JUDGE

Akc/bms