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Friday, October 19, 2012

(1) Whether Writ Petition No.534 of 2011 filed by RDS challenging the rejection of its tender and annulment of the entire tender process was maintainable in the light of the withdrawal of writ petition No.8252 of 2010 previously filed by it? (2) Whether the rejection of the tender submitted by RDS and the decision to annul the entire tender process was vitiated by mala fides? (3) Whether the condition of eligibility stipulated in the second tender notice issued by the appellant-RGPPL unfairly excluded the appellant from bidding for the allotment of the work in question?



                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO.  7593  OF 2012
                 (Arising out of S.L.P. (C) No.3571 of 2012)

Ratnagiri Gas & Power Pvt. Ltd.                 …Appellant
      Versus
RDS Projects Ltd. & Ors.                                …Respondents
                                    With
                       CIVIL APPEAL NO. 7594  OF 2012
                 (Arising out of S.L.P. (C) No.5554 of 2012)

                                     And
                       CIVIL APPEAL NO.  7595 OF 2012
                 (Arising out of S.L.P. (C) No.6180 of 2012)

                               J U D G M E N T
T.S. THAKUR, J.
1.      Leave granted.
2.      These appeals arise out of a common judgment and  order  dated  17th
October, 2011 passed by the High Court of Delhi whereby  Writ  Petition  (C)
No.534 of 2011 filed by the respondent has been allowed  and  the  rejection
of the tender submitted by it quashed with  a  mandamus  to  the  appellant-
company to take a fresh  decision  on  the  subject  in  the  light  of  the
observations made by the High Court.

3.      The factual matrix leading to the filing of  the  writ  petition  by
RDS Project Ltd. (hereinafter referred to as ‘RDS’ for short) has  been  set
out at considerable length in the order passed by  the  High  Court.  We  do
not, therefore, consider it necessary to re-count the same  all  over  again
except to the extent the same is absolutely necessary for  the  disposal  of
these appeals.  Suffice it to say that Government  of  India  has  entrusted
the task of  reviving  and  restructuring  of  the  Dabhol  Project  to  Gas
Authority of India  Ltd.  (GAIL)  and  National  Thermal  Power  Corporation
(‘NTPC’ for short) both Government of India undertakings who  have  in  turn
formed a joint venture company in the name and  style  of  Ratnagiri  Gas  &
Power Pvt. Ltd., the appellant in this appeal,  for  short  referred  to  as
‘RGPPL’. The appellant-RGPPL is charged with  the  duty  of  completing  the
balance  work  at  LNG  Terminal  of  the  Dabhol  Power  project   and   of
commissioning and operating the same. The appellant has, for  that  purpose,
engaged GAIL as its Engineer who  has  in  turn  appointed  Engineers  India
Limited (EIL) as their Primary Project Management Consultant.  Scott  Wilson
a U.K. based entity was also kept in the loop as  a  backup  consultant  for
marine works.

4.      In terms of an international competitive bidding notice,  issued  by
it on 26th June,  2009,  EIL  invited  tenders  from  eligible  parties  for
completion of, what is called “Breakwater” at LNG Terminal  at  RGPPL  site,
Dabhol, Maharashtra. The construction of the breakwater was left  incomplete
by a previously employed contractor appointed for the purpose on account  of
the  stoppage  of  the  work  by  the  Dabhol  Power  Company.  The  earlier
contractor had, according to the appellant, constructed only 500  meters  of
breakwater length leaving the balance of nearly 1800 meters  incomplete  and
a certain length thereof untouched.

5.      Apart from stipulating other terms and  conditions,  Clause  8.1.1.1
of the tender required that Single  Bidders  responding  to  the  invitation
should have experience of successfully completing as a single bidder or  “as
a lead of a Consortium/Joint Venture”, at least one project of a  breakwater
in an offshore location  with  a  minimum  length  of  400  meters.   Clause
8.1.1.1 of the Tender document was in the following words:

         “The bidder shall have experience of having successfully completed,
         as a single bidder or as a lead of a Consortium/Joint  Venture,  at
         least one project of a  breakwater  in  an  offshore  location  (as
         defined at Clause No.8.1.2.5  below)  of  minimum  length  of  400m
         during the last 20 (twenty) years to be reckoned from the last date
         of submission of bids. The scope of work of the proposed qualifying
         project work should comprise of the  design,  engineering,  project
         management and construction of the breakwater.”


6.      In response to  the  notice  inviting  tenders,  EIL  received  five
tenders from five  different  entities  viz.  RDS  the  respondent  in  this
appeal, M/s ESSAR Construction Ltd., M/s Afcons Infrastructure  Ltd.,  joint
venture of M/s Higgard Punj Lloyd  Ltd.  and  joint  venture  of  M/s  Hung-
Hua/Ranjit Buildcon Ltd.

7.       With  the  tender  submitted  by  it  RDS  enclosed  the  requisite
documents such as Form-B in which details of specific  work  experience,  on
the basis  whereof  it  claimed  to  be  satisfying  the  Bid  Qualification
Criteria (‘BQC’ for short), were also given. It  also  enclosed  along  with
its tender, completion certificate dated 5th April, 2008  issued  by  Deputy
Chief Engineer-IV, Andaman Harbour Works under  the  Ministry  of  Shipping,
Road Transport and Highway, Government of  India  certifying  that  RDS  had
completed breakwater of 500 meters against a tender dated  26th  May,  1999.
Completion certificate dated 30th June, 2003 issued by the Senior  Executive
Manager of Ellen Hinengo Ltd. a Tribal Society (EHL) and letter  dated  10th
November, 2000 addressed by the said Ellen Hinengo Ltd. to RDS asking it  to
commence work for construction of breakwater at Mus in  Car  Nicobar  Island
pursuant to tender dated 3rd November, 2000 were also produced by RDS  apart
from a certificate  issued  by  EHL  about  the  offshore  location  of  the
breakwater.

8.      Tenders received from different  parties  were  techno  commercially
evaluated by EIL all of whom were found to be technically  qualified  except
Hung-Hua & Ranjit Buildcon Ltd. who went out of the reckoning at that  stage
itself.  Names of only four bidders found techno commercially eligible  were
recommended by EIL for the approval of GAIL the owner’s engineer. The  price
bids of the four bidders were pursuant to the said recommendation opened  on
11th February, 2010 in which RDS was found to be the  lowest  bidder  having
quoted a price of Rs.390 crores only, which  was  less  than  the  estimated
cost of the project by Rs.160 crores. GAIL accordingly  recommended  RDS  to
the appellant-company for award of the  contract.   Recommendation  received
from GAIL notwithstanding the appellant-company appears  to  have  expressed
apprehensions about the capability of RDS to complete the  project  in  time
having regard to the fact that RDS had  taken  three  years  to  complete  a
breakwater with a length of mere 500 meters whereas the  appellant-company’s
breakwater project stretched over a length of 1800  meters  and  had  to  be
completed within  a  period  of  33  months  only.  Reservations  about  the
viability of the rates quoted by RDS which were found to be  abnormally  low
were also expressed.

9.      While a final decision regarding award of the contract  had  yet  to
be taken,        Hung-Hua/Ranjit Buildcon Ltd. who was one  of  the  bidders
and whose bid was not found to be  techno-commercially  qualified,  filed  a
writ petition in the Delhi High Court, inter alia, alleging that while  they
had been wrongly disqualified,  RDS  who  did  not  satisfy  the  qualifying
criteria  had  been  wrongly  held  to  be  qualified.  Questions  regarding
validity of certificates submitted by RDS  were  also  raised  in  the  writ
petition.

10.     In response to the  above  writ  petition  filed  by  Hung-Hua,  the
appellant  company  filed  a  short  affidavit  in  which  it  disputed  the
averments made in the writ petition and took the stand  that  the  documents
filed by RDS along with its  bid  showed  that  breakwater  at  Mus  in  Car
Nicobar Island was built at an offshore location and that RDS had  completed
the entire work as a single entity on behalf of M/s Ellen Hinengo Ltd.
11.     While the writ petition filed by Hung-Hua  was  pending  before  the
High Court, the appellant sought from GAIL the work order issued to  RDS  in
respect of the qualifying project at Car Nicobar to verify  the  credentials
of the RDS.  RDS was accordingly asked by EIL to produce  the  documents  in
support of its qualification such as the work order for the Andaman  Harbour
works. The appellant-company also sought the details about the contracts  to
verify the correctness of the certificates submitted by RDS along  with  its
bid in response to the tender notice.
12.     A further development in the meantime took place in the form of  the
CAG forwarding a report in which certain adverse observations regarding  the
completion of the breakwater at chainage  22M  to  chainage  200  M  in  the
Andaman and Nicobar Project were made. The report revealed that in  January,
1998 the contractor had completed only 15 to 47  percent  of  the  work  and
that in April, 1998 the Executive Engineer had  taken  out  a  part  of  the
unexecuted work for awarding it to another contractor. The  CAG  found  that
due to delay in the construction of a  portion  of  the  breakwater  coupled
with non-compliance of contractual terms,  the  department  had  suffered  a
loss of Rs.2.61 crores, apart from increase in cost of the work  by  Rs.3.55
crores.
13.     The report of the CAG was forwarded by the appellant  to  GAIL  with
the request to arrange copies of work order, and  satisfactory  evidence  of
the credentials of RDS. GAIL was  also  informed  that  in  the  absence  of
satisfactory evidence furnished by RDS, the appellant was not in a  position
to place the matter for award of contract before the Board of Directors.
14.      While  correspondence  between  RGPPL,  GAIL  and  EIL  was   being
exchanged on the subject the appellant received certain documents under  RTI
Act including the work order placed by Andaman  Harbour  Works  on  EHL  and
those placed on M/s Recon International for a part of  the  Andaman  Project
for chainage 22-200 meters. These documents were quickly  sent  to  EIL  for
review who examined the matter  again  and  submitted  its  observations  in
terms of letter dated 18th September, 2010 stating that  RDS  did  not  meet
the basic qualifying conditions of offshore breakwater of a  minimum  length
of 400 meters. GAIL then forwarded that opinion to  the  appellant  to  take
appropriate action on the subject.
15.     On receipt of the letters aforementioned,  the  appellant  requested
GAIL to forward its own  recommendations.  GAIL,  however,  reiterated  that
since all the relevant information on the subject  was  available  with  the
appellant, it could take an  appropriate  decision  in  the  matter  in  its
capacity as the owner of the project.
16.     A resolution was accordingly passed by the  Board  of  Directors  of
the appellant company on 4th October, 2010, whereby it decided to annul  the
Breakwater tender in exercise of its power under Clause 28.1 of the  Bidding
Document on the ground that RDS did not qualify the BQC criteria which  fact
had, according to the appellant, come to light only  after  the  opening  of
the price bids.  From the minutes of the meeting of the Board  of  Directors
it is further evident that the Board had taken note of  the  CVC  guidelines
and declined to award the contract to the next lowest tenderer  in  view  of
the huge price difference between  L1  &  L2  and  opted  to  go  for  fresh
tenders. By a separate communication dated 6th October, 2010 the  appellant-
company conveyed to RDS the reasons for rejection of its tender.
17.     With the annulment  of  the  entire  tender  process  Writ  Petition
No.2142  of  2010  filed  by  Hung-Hua/Ranjit  Buildcon  Ltd.   inter   alia
challenging the acceptance  of  the  technical  bid  submitted  by  RDS  was
dismissed as withdrawn by the High  Court  in  terms  of  order  dated  30th
November, 2010.  That order came to be passed on  an  application  filed  by
the appellant-RGPPL stating that  the  entire  tender  process  having  been
scrapped with a decision to invite fresh tenders Writ  Petition  No.2142  of
2010 did not survive for consideration.  The High Court  took  note  of  the
subsequent events and dismissed the writ petition as not pressed in view  of
the fact that the tender process had been scrapped and a decision to  invite
fresh tenders had been taken.
18.     In Writ Petition (C) No.8252 of 2010  which  was  filed  by  RDS  to
challenge the annulment of the tender  process  and  the  rejection  of  its
techno commercial bid as non-responsive a similar order was  made  by  which
the writ petition was  dismissed  as  withdrawn  reserving  liberty  to  the
respondent-RDS to take recourse to seek redress in accordance  with  law  if
it was excluded from consideration in  the  fresh  tender  which  RGPPL  had
decided to issue. We shall presently refer to  the  writ  petition  and  the
effect of its withdrawal in greater detail.  Suffice  it  to  say  that  the
maintainability of Writ Petition No.534 of 2011 filed by RDS  out  of  which
the appeal arises was assailed by the appellant herein on  the  ground  that
the earlier petition filed by it having been withdrawn the  second  petition
filed by RDS was not according to the appellant maintainable insofar as  the
same sought to question the validity of the decision taken by the  Board  of
Directors on 4th  October,  2010  cancelling  the  tender  process  and  the
communication of the said decision with reasons for  rejection  of  the  bid
submitted by RDS on 6th October, 2010.  The High Court has in  the  judgment
under appeal rejected that contention  and  not  only  held  that  the  writ
petition filed by RDS was maintainable but also that the decision to  reject
the tender submitted by it was not legally valid nor was  the  annulment  of
the entire tender process.  The High Court found that the  action  taken  by
the appellant on both counts was vitiated by mala fides especially when  the
fresh tender notice issued by the appellant made an attempt to  exclude  RDS
from competing for the works in question.
19.     We have heard  learned  counsel  for  the  parties  at  considerable
length.  The  following  questions,   in   our   opinion,   fall   for   our
determination:
    (1) Whether Writ Petition No.534 of 2011 filed by RDS  challenging  the
    rejection of its tender and annulment of the entire tender process  was
    maintainable in the light of the withdrawal of writ petition No.8252 of
    2010 previously filed by it?
    (2) Whether the rejection of  the  tender  submitted  by  RDS  and  the
    decision to annul the entire tender process was vitiated by mala fides?
    (3) Whether the condition  of  eligibility  stipulated  in  the  second
    tender notice issued  by  the  appellant-RGPPL  unfairly  excluded  the
    appellant from bidding for the allotment of the work in question? and;
    4) Whether respondent-RDS was eligible in terms  of  the  first  tender
       notice to compete for  the  works  in  question  having  executed  a
       minimum breakwater length of 400 meters in a single project required
       vide Clause 8.1.1.1.


        We propose to deal with the questions ad-seriatim.
In Re: Question No.1
20.     Writ Petition (C) No.8252 of 2010 questioned  the  validity  of  the
appellant-Board’s decision dated 4th October, 2010  regarding  rejection  of
the bid submitted by RDS in terms of the former’s letter dated 6th  October,
2010 as also the annulment of the entire tender process for  the  completion
of the “Breakwater” at LNG Terminal at RGPPL site, Dabhol, Maharashtra.   It
also prayed for a mandamus directing the appellant to  formalise  the  award
of contract for the Dabhol project to RDS.  For the sake of  clarity  it  is
useful to extract the prayer made by RDS in the said writ petition:
         “In the premises mentioned above it  is  most  respectfully  prayed
         that this Hon’ble Court be pleased to:-
         (A)    Issue an appropriate writ, order or direction, quashing  the
             action of the Respondents,  and  in  particular  the  decision
             dated 4.10.2010 of the Respondent No.1, as communicated to the
             Petitioner vide letter dated  6.10.2010  whereby  bid  of  the
             Petitioner has been rejected and the  entire  bidding  process
             for the completion of the breakwater of LNG Terminal of Dabhol
             Power Project, Maharashtra, has been annulled; and
         (B)    Issue a Writ of Mandamus  or  any  other  appropriate  writ,
             order or direction, directing the Respondent No.1 to formalise
             the awarding of the contract for the  DABHOL  PROJECT  to  the
             Petitioner; and
         (C)    Issue any other appropriate writ,  order  or  direction,  as
             this Hon’ble Court may deem fit and proper in  the  facts  and
             circumstances of the case.”


21.     When the above petition came up before the High Court  on  the  14th
December, 2010 learned counsel for RDS withdrew the writ  petition  and  the
accompanying application reserving liberty  to  seek  redress  in  case  the
tender which is floated sought to exclude RDS in any manner  from  competing
for the allotment of the work in question.  Since  the  answer  to  question
No.1 above depends on the interpretation of the said order  we  may  extract
the same in extenso:
           “Learned senior counsel for the petitioner submits  that  though
         the tender process has been scrapped on  4.10.2010,  the  same  was
         followed up by a letter dated 6.10.2010 of the respondents  setting
         out the reasons why the petitioner was held not  to  meet  the  BQC
         requirements of having completed at least one project of breakwater
         in an offshore location of a minimum length of 400 mtrs; which  was
         a stipulation in the contract.   Learned  senior  counsel  for  the
         petitioner has serious objection to the contents of this letter and
         thus submits that the objection was only to somehow ensure that the
         petitioner does not get the contract  because  the  petitioner  had
         made the technical qualifications and thereafter the price bid  was
         opened in which the petitioner was L-1.
                The learned counsel for respondents No.1, on the other hand,
         disputes the aforesaid and submits that on analysis of  the  matter
         it was deemed proper to scrap the tender process itself  exercising
         the rights of an owner under article 28.1 of the terms & conditions
         of the tender.
                In view of the aforesaid, taking into consideration the fact
         that the tender process now stands scrapped,  learned  counsel  for
         the petitioner fairly states that he would  like  to  withdraw  the
         writ petition and the application at this stage but  that  in  case
         the tender which is floated seeks to exclude the petitioner, in any
         manner, so as to prevent  the  participation  in  the  tender,  the
         petitioner should have leave and liberty to take recourse to  legal
         remedy in accordance with law. Liberty granted.
           Dismissed as withdrawn.”

22.      Two  distinct  features  of  the  above  order   may   be   noticed
immediately. These are  (a)  The  writ  petition  specially  questioned  the
validity of the Board resolution dated 4th October, 2010 and  the  rejection
of the bid offered by  RDS,  by  letter  dated  6th  October,  2010  meaning
thereby that the same squarely related to the issues that were sought to  be
agitated in the subsequently filed writ petition No.534  of  2011  in  which
too RDS had prayed for quashing of the resolution dated  4th  October,  2010
and communication dated 6th October, 2010 rejecting the bid offered by  RDS.
There is thus almost complete identity of the subject matter and the  issues
raised in the two writ petitions and the grounds urged  in  support  of  the
same, and (b) The challenge to the Board resolution dated 4th October,  2010
and communication dated 6th  October,  2010  was  withdrawn  in  toto,  with
liberty reserved to RDS to file a fresh petition for redress  only  in  case
the fresh tender to be floated by the appellant for allotment of  the  works
in any manner sought to exclude RDS from participation  in  the  same.  This
necessarily implies that if RDS was allowed  to  participate  in  the  fresh
tender process it would have had  no  quarrel  with  the  annulment  of  the
entire tender process based on the first tender notice.  Conversely  if  the
fresh tender notice sought to disqualify RDS from bidding for the  works  it
could seek redress against such  exclusion.  Liberty  granted  by  the  High
Court to file a fresh petition was in our considered opinion limited to  any
such fresh challenge being laid by RDS to its  exclusion  in  terms  of  any
fresh tender notice.  The order passed by the High Court did not permit  RDS
to re-open and re-agitate issues regarding rejection of its bid pursuant  to
the earlier tender notice and the annulment of the  entire  tender  process,
even if the second tender notice sought to disqualify  it  from  competition
by altering the conditions of eligibility to  its  disadvantage.   In  fresh
Writ Petition No.534 of  2011  filed  by  RDS  not  only  were  the  amended
conditions of the tender notice assailed but the validity of the  resolution
dated 4th October,  2010  and  letter  dated  6th  October,  2010  was  also
sought to be re-opened no matter the same was  already  concluded  with  the
withdrawal of Writ Petition No.8252 of 2010. RDS sought to use  the  liberty
to challenge the amended terms of eligibility to re-open what it  could  and
indeed ought to have taken to a logical conclusion in Writ Petition  No.8252
of 2010. If the intention behind withdrawal of the Writ Petition No.8252  of
2010 was to come back on the issues raised therein there  was  no  need  for
any such withdrawal, which could if taken to their logical  conclusion  have
given to RDS the relief prayed for in the latter writ petition without  even
going into the question whether  exclusion  of  RDS  in  the  second  tender
notice was legally valid.  Besides,  the  withdrawal  of  the  earlier  writ
petition was a clear acknowledgment of the fact that the grievance  made  by
RDS regarding the rejection of its bid had been rendered infructuous as  the
works in question  remained  available  for  allotment  in  a  fresh  tender
process with everyone otherwise eligible to compete for the  same  being  at
liberty to do so. Inasmuch as and to the  extent  writ  petition  No.534  of
2011 filed by RDS challenged the rejection of the tender and  the  annulment
process in a second round despite withdrawal of the  earlier  writ  petition
filed for the same relief, it was  not  maintainable.   The  scope  of  writ
petition no.534 of 2011 was and had to be limited to  the  validity  of  the
amendment in the conditions  of  eligibility  introduced  by  RGPPL  in  the
second tender notice issued by it.  Question no.1 is answered accordingly.
In Re: Question No.2
23.     This question no longer survives for consideration in view  of  what
has been observed by us  while  answering  question  no.1  above.   If  writ
petition no. 534 of 2011 could not  have  re-agitated  issues  touching  the
validity of annulment of the tender process, there was no occasion  for  the
High Court to go into the question whether or not the decision to  refer  to
the bid and annul the process was vitiated by malice in law  or  fact.   The
findings recorded by the High Court on  the  question  of  mala  fides  are,
therefore, liable to be set aside on that ground alone.
24.     Even otherwise the findings  recorded  by  the  High  Court  on  the
question of mala fides do not appear  to  us  to  be  factually  or  legally
sustainable. While we do not consider it necessary to delve deep  into  this
aspect of the controversy, we may point out that allegations of  mala  fides
are more easily made than proved. The  law  casts  a  heavy  burden  on  the
person alleging mala fides to prove the same on the basis of facts that  are
either admitted or  satisfactorily  established  and/or  logical  inferences
deducible from the same.   This  is  particularly  so  when  the  petitioner
alleges malice in fact in which  event  it  is  obligatory  for  the  person
making any such allegation to furnish  particulars  that  would  prove  mala
fides on the part of the decision  maker.   Vague  and  general  allegations
unsupported by the requisite particulars do not provide a  sound  basis  for
the court to conduct an inquiry into their veracity.  The legal position  in
this regard is fairly well-settled by a  long  line  of  decisions  of  this
Court.   We may briefly refer to only some of them.  In State  of  Bihar  v.
P.P. Sharma 1992 Supp. (1) SCC 222, this Court summed  up  the  law  on  the
subject in the following words:
         “50. Mala fides means want of good faith,  personal  bias,  grudge,
         oblique or improper motive or ulterior purpose. The  administrative
         action must be said to be done in good faith, if it is in fact done
         honestly, whether it is  done  negligently  or  not.  An  act  done
         honestly  is  deemed  to  have  been  done  in   good   faith.   An
         administrative authority must, therefore, act in a bona fide manner
         and should never act for an improper motive or ulterior purposes or
         contrary to the requirements of the statute, or the  basis  of  the
         circumstances  contemplated  by  law,   or   improperly   exercised
         discretion to achieve some ulterior purpose. The determination of a
         plea of mala fide involves two questions, namely (i) whether  there
         is a personal bias or an  oblique  motive,  and  (ii)  whether  the
         administrative action is contrary to the objects, requirements  and
         conditions of a valid exercise of administrative power.
         51. The action taken must, therefore, be proved to have  been  made
         mala fide for such considerations. Mere assertion  or  a  vague  or
         bald statement is not sufficient. It must be demonstrated either by
         admitted or proved facts and circumstances obtainable  in  a  given
         case. If it is established that the action has been taken mala fide
         for any such considerations or by  fraud  on  power  or  colourable
         exercise of power, it cannot be allowed to stand.”
                                                        (emphasis supplied)




25.     We may also refer to the decision of this Court in  Ajit  Kumar  Nag
v. General Manager (PJ), Indian Oil Corpn. Ltd., Haldia and  Ors.  (2005)  7
SCC 764 where the Court declared that allegations of mala fides  need  proof
of high degree and that an administrative action  is  presumed  to  be  bona
fide unless the contrary is satisfactorily established. The Court  observed:

       56. … … … It is well settled that the burden of proving mala fide  is
       on the person making the allegations and the burden is “very  heavy”.
       (vide E.P. Royappa v. State of T.N. (1974) 4 SCC 3)  There  is  every
       presumption in favour of the administration that the power  has  been
       exercised bona fide and in good faith. It is to  be  remembered  that
       the allegations of mala fide are often more easily made than made out
       and the very seriousness of such allegations demands proof of a  high
       degree of credibility. As Krishna Iyer, J. stated in Gulam Mustafa v.
       State of Maharashtra (1976) 1 SCC 800 (SCC p. 802, para 2): “It (mala
       fide) is the last refuge of a losing litigant.”




26.     There is yet another aspect which cannot be  ignored.  As  and  when
allegations of mala fides are made, the persons against whom  the  same  are
levelled need to be impleaded as parties to the proceedings to  enable  them
to answer the charge. In the absence of the person concerned as a  party  in
his/her individual capacity it will neither be fair nor proper to  record  a
finding that malice in fact had vitiated the action taken by  the  authority
concerned.   It is important  to  remember  that  a  judicial  pronouncement
declaring an action to be mala fide is a serious indictment  of  the  person
concerned that can lead to adverse civil consequences against  him.   Courts
have, therefore, to be slow in drawing conclusions when it comes to  holding
allegations of mala fides to be proved and only in cases where based on  the
material placed before the Court or  facts  that  are  admitted  leading  to
inevitable inferences supporting the charge of mala  fides  that  the  Court
should record a finding in the process ensuring that while it  does  so,  it
also hears the person who was likely to  be  affected  by  such  a  finding.
Decisions of this Court have repeatedly emphasised this aspect, which is  of
considerable importance. In State of M.P. and Ors. v.  Nandlal  Jaiswal  and
Ors.   (1986) 4 SCC 566, speaking for the Court, P.N. Bhagwati, J.,  as  His
Lordship then was,  disapproved the observations  made  by  the  High  Court
attributing mala fides  and  corruption  to  the  State  Government  without
there being any foundation in  the  pleadings  for  such  observations.  The
Court declared that wherever allegations of  mala  fides  are  made,  it  is
necessary to give full particulars  of  such  allegations  and  to  set  out
material  facts  specifying  the  particular  person   against   whom   such
allegations are made so that he may have an opportunity to  controvert  such
allegations. The following observations of the Court are apposite:


            “39. Before we part with this case we must  express  our  strong
         disapproval of the observations made by B.M. Lal, J. in para 1,  9,
         17, 18, 19 and 34 of his concurring opinion. The learned Judge made
         sweeping  observations  attributing  mala  fides,  corruption   and
         underhand dealing to the State Government. These  observations  are
         in our opinion not at all justified by the  record.  In  the  first
         place it is difficult to appreciate how any such observation  could
         be made by the learned Judge without any foundation  for  the  same
         being laid in the pleadings. It is true that in the writ  petitions
         the petitioners used words such as “mala  fide”,  “corruption”  and
         “corrupt practice” but the use of such words is not enough. What is
         necessary is to give full particulars of such  allegations  and  to
         set out the material facts specifying the particular person against
         whom such allegations are made so that he may have  an  opportunity
         of controverting such allegations. The requirement of  law  is  not
         satisfied  insofar  as  the  pleadings  in  the  present  case  are
         concerned and in the absence of necessary particulars and  material
         facts, we fail to see how the learned Judge could come to a finding
         that the  State  Government  was  guilty  of  factual  mala  fides,
         corruption and underhand dealing.”


27.     To the same effect is the decision of  this  Court  in  Smt.  Swaran
Lata v. Union of India & Ors. (1979) 3 SCC 165, where the  Court  emphasized
the need for particulars supporting the allegations of mala fides, in  order
that the Court  may  hold  an  inquiry  with  the  same.   Absence  of  such
particulars was held to be sufficient for the Court to  refuse  to  go  into
the allegations. The Court said:
         “57. ……….. The Court would be justified in  refusing  to  carry  on
         investigation  into  allegations  of  mala  fides,   if   necessary
         particulars of the charge making out a prima  facie  case  are  not
         given in the writ petition. The burden of establishing  mala  fides
         lies very heavily on the person who alleges.”




28.     The above was reiterated in a  recent  decision  of  this  Court  in
Nirmal Jeet Singh Hoon v. Irtiza Hussain & Ors. (2010) 14 SCC  564  and  All
India State Bank Officers’ Federation v. Union of India (1997)  9  SCC  151.
In the latter case this Court observed:
         “22. There is  yet  another  reason  why  this  contention  of  the
         petitioners must fail. It  is  now  settled  law  that  the  person
         against whom mala fides are alleged must be made  a  party  to  the
         proceeding. The allegation that the policy was amended with a  view
         to benefit Respondents 4 and 5  would  amount  to  the  petitioners
         contending that the Board of Directors of the Bank sought to favour
         Respondents 4 and 5 and, therefore,  agreed  to  the  proposal  put
         before it. Neither the Chairman nor the Directors, who were present
         in the said meeting, have been impleaded as respondents. This being
         so the petitioners cannot be allowed to raise  the  allegations  of
         mala fides, which allegations, in fact, are without merit.”
                                               (emphasis supplied)


29.     In the case at hand there was no  allegation  of  “malice  in  fact”
against any individual nor was any individual  accused  of  bias,  spite  or
ulterior motive impleaded as a party to the writ petition.  Even Mr.  Sudhir
Chandra and Jagdeep Dhankar,  learned  Senior  Counsels  appearing  for  RDS
fairly conceded that  RDS  had  not  alleged  malice  in  fact  against  any
individual who had played any role in  the  decision  making  process.  What
according to them was alleged and proved by RDS was  malice  in  law,  which
did not require  impleading  of  individual  officers  associated  with  the
decision making process. We will presently examine whether a case of  malice
in law had been made out by the respondent-RDS.  But  before  we  do  so  we
wish to point out that the High Court had in the absence  of  any  assertion
in the writ petition and in the absence of the officers  concerned  recorded
a finding suggesting that the officers had acted mala fide.  The High  Court
named the officers concerned and concluded that the integrity of the  entire
process was suspect. We shall subsequently  extract  the  passage  from  the
impugned judgment where the High Court has even without an assertion of  any
malice against the officers named in the judgment, recorded a finding  which
was wholly unjustified in the circumstances of the case especially when  the
High Court was making out a case for RDS which it had not pleaded  when  nor
were the officers concerned arrayed as parties  to  the  writ  petition,  in
their individual capacities.
30.     Coming then  to  the  question  whether  the  action  taken  by  the
appellant-RGPPL was vitiated by malice in law, we need hardly  mention  that
in cases involving malice in law the administrative action is  unsupportable
on the touchstone of an acknowledged or  acceptable  principle  and  can  be
avoided even when the decision maker may have had no real or  actual  malice
at work in his mind.  The conceptual difference between  the  two  has  been
succinctly stated in the following paragragh by Lord Haldane in  Shearer  v.
Shields (1914) A.C. 808  quoted  with  approval  by  this  Court  Additional
District Magistrate, Jabalpur v. Shivkant Shukla (1976) 2 SCC 521 :
         “410.


         Between 'malice in fact' and 'malice  in  law'  there  is  a  broad
         distinction which is not peculiar to any system  of  jurisprudence.
         The person who inflicts a wrong or an injury  upon  any  person  in
         contravention of the law is not allowed to say that he did so  with
         an innocent mind. He is taken to know the flaw  and  can  only  act
         within the law. He may, therefore, be guilty of  'malice  in  law',
         although., so far as the state of ins mind was concerned  he  acted
         ignorantly, and in that sense innocently. 'Malice  in  fact'  is  a
         different thing. It means an actual malicious intention on the part
         of the person who has done the wrongful act.”


31.     Reference may also be made to the decision of this  Court  in  State
of AP & Ors. v. Goverdhanlal Pitti (2003) 4 SCC  739  where  the  difference
between malice in fact and malice in law was  summed  up  in  the  following
words:
          “11. The legal meaning of malice is “ill-will or spite  towards  a
         party and any indirect or improper motive  in  taking  an  action”.
         This is sometimes described as “malice in fact”. “Legal malice”  or
         “malice in law” means 'something done without  lawful  excuse'.  In
         other words, 'it is an act done  wrongfully  and  wilfully  without
         reasonable or probable cause, and not necessarily an act done  from
         ill feeling and spite'. It is a deliberate act in disregard of  the
         rights of others'. [See Words and Phrases legally defined in  Third
         Edition, London Butterworths 1989].
            . Where malice is attributed to the State, it can  never  be  a
              case of personal ill-will or spite on the part of the  State.
              If at all, it is malice in legal sense, it can  be  described
              as  an  act  which  is  taken  with  a  oblique  or  indirect
              object...”

                                       (emphasis supplied)
32.     To the same effect is the recent decision  of  this  Court  in  Ravi
Yashwant Bhoir v. District Collector, Raigad and Ors (2012) 2 SCC 407  where
this Court observed:
         “MALICE IN LAW:

         37. This Court has consistently held that the  State  is  under  an
         obligation to act fairly without ill will or malice- in fact or  in
         law. Where malice is attributed to the State, it  can  never  be  a
         case of personal ill-will or spite on the part of the State. “Legal
         malice” or “malice in law”  means  something  done  without  lawful
         excuse. It is a deliberate  act  in  disregard  to  the  rights  of
         others. It is an act which is taken with  an  oblique  or  indirect
         object.  It  is  an  act  done  wrongfully  and  willfully  without
         reasonable or probable cause, and not necessarily an act done  from
         ill feeling and spite. Mala fide exercise of power does  not  imply
         any moral turpitude. It  means  exercise  of  statutory  power  for
         “purposes foreign to those for which it is  in  law  intended.”  It
         means conscious violation of the law to the prejudice of another, a
         depraved inclination on the part of the authority to disregard  the
         rights of others, where intent is manifested by its injurious acts.
         Passing an order for unauthorized  purpose  constitutes  malice  in
         law. (See: Addl. Distt. Magistrate, Jabalpur  v.  Shivkant  Shukla,
         AIR 1976 SC 1207; Union of India thr. Govt. of Pondicherry and Anr.
         v. V. Ramakrishnan  and  Ors.,2005)  8  SCC  394;  and  Kalabharati
         Advertising v. Hemant Vimalnath Narichania and Ors.,  AIR  2010  SC
         3745).”

33.     In the case  at  hand  the  final  decision  to  reject  the  tender
submitted by RDS was taken by the appellant-RGPPL in  its  capacity  as  the
owner of the project.  GAIL and EIL performed only an  advisory  role  whose
opinions were recommendatory and meant to assist the owner to take  a  final
call.  The  appellant-RGPPL  had  from  the   date   of   receipt   of   the
recommendations made to it by  EIL  and  GAIL  till  the  end  maintained  a
consistent stand and expressed reservations about the  capacity  of  RDS  to
undertake the work. Correspondence exchanged between RGPPL and GAIL and  EIL
bears testimony to that fact.  In the  challenge  mounted  before  the  High
Court by Hung Hua/Ranjit Buildcon Ltd. to the decision  holding  RDS  techno
commercially  responsive,  RGPPL  had  no  doubt  filed  a  short  affidavit
supporting its decision holding RDS eligible but discovery  of  material  in
proceedings under the RTI Act and an adverse CAG report instead of  clearing
the mist had created further confusion in the process, supporting  what  may
have been a mere hunch or apprehension in the beginning about  the  capacity
of RDS to handle a major project having regard  to  the  fact  that  it  had
overshot the time schedule for completion of a much lesser  project  in  Car
Nicobar. In that backdrop and as owner of a  project  being  executed  at  a
colossal  cost  running  into  hundreds  of  crores  of  rupees,  RGPPL  was
perfectly justified in adopting a careful  approach  to  ensure  that  those
found eligible by its technical  experts  and  consultants  were  indeed  so
qualified and possessed the necessary wherewithal, experience and  expertise
to execute the project at Dabhol. It was  also  well  within  its  right  to
demand documentary proof from RDS to support its claim that  it  had  indeed
executed the project at Mus in Car Nicobar area so as to  make  it  eligible
for claiming award of the works in question.  In the course of  the  hearing
we had on several  occasions  asked  learned  counsel  for  RDS  to  furnish
documentary evidence to probabilize if not conclusively establish  that  RDS
had indeed undertaken the execution of the work  involving  construction  of
400 meters of breakwater which it claimed to have executed. Besides, we  had
directed the Central Government Counsel to produce before  us  the  relevant
record relating to the project at Car  Nicobar  in  response  to  which  Mr.
Gulati had produced a few files.  These files, according to Mr. Gulati,  did
not show that RDS had indeed executed the breakwater Project of  400  meters
length in Car Nicobar.  More importantly Mr. Gulati was unable  to  disclose
the basis on which the certificates, which RDS had  produced  to  prove  its
eligibility, were issued by the engineers concerned.  The  files  that  were
produced did not bear any testimony to the issue of  any  such  certificates
or the basis on which the same were  issued.   Our  effort  to  resolve  the
issue regarding the eligibility of  RDS  in  these  proceedings,  therefore,
remained fruitless, no matter  we  were  keen  to  give  a  quietus  to  the
controversy  which  is  delaying  indefinitely   a   project   of   national
importance. The task of finding an answer to  the  question  of  eligibility
was rendered all the more difficult by the fact that the High Court has  not
adverted to and resolved that issue  on  merits  and  by  reference  to  the
available material.  We will advert to this aspect in some detail  a  little
later.  Suffice it to say for the present that RGPPL as the owner acting  as
a  prudent  and  responsible  public  authority  discharging  public   trust
obligations was well within its rights to raise questions and  seek  answers
on an important matter like  the  eligibility  of  RDS  to  participate,  no
matter EIL and GAIL had on the basis of  the  certificates  produced  before
them recommended RDS as an eligible bidder.   There  was  in  that  view  no
justification for either RDS or the High Court to raise an  accusing  finger
against RGPPL simply because it had demanded proof regarding  the  claim  of
eligibility from RDS or collected relevant information  under  RTI  Act  and
referred the material so collected  to  GAIL  and  EIL  for  evaluation  and
opinion. The final decision to scrap the project  being  within  its  powers
under the terms of the tender notice RGPPL’s invocation of  that  power  was
not in the facts and circumstances vulnerable to challenge on the ground  of
malice in fact or law, on the  grounds  set  out  by  the  High  Court  even
assuming that writ petition  No.534/2012  was  maintainable  notwithstanding
the withdrawal of the earlier petition filed by RDS.


34.     Independent of what has been said above we may point  out  that  the
High Court has rested its finding on  malafides  entirely  on  the  conflict
between recommendations made by EIL in its  letter  dated  8th  March,  2010
holding RDS to be  techno  commercially  responsive  and  letter  dated  1st
December, 2010 by which the said recommendation has been reversed. The  High
Court has while dealing with the change  in  the  view  taken  by  the  EIL,
inspired as it was by the legal opinion  tendered  to  it  on  the  subject,
observed:


         “It was submitted before us that this opinion  became  the  edifice
         for the change of view that the EIL took on 1.9.2010. We  may  note
         at the outset that the opinion is completely converse to the  stand
         taken by the EIL up to 11.8.2010.  It is pertinent to note (a  fact
         we were told in the hearing) that the said legal opinion bears  the
         endorsement of Mr. Grover, Director  (Projects)  calling  upon  Mr.
         R.K. Bhandari, General Manager (Project), EIL to simply comply with
         the view taken by the legal department. As noticed here in above by
         us, Mr. R.K. Bhandari was the same gentleman, who on 10.6.2010  had
         opined that no revision in the award recommendation  in  favour  of
         RDS was called for.  The crucial question which  arises,  is  that,
         was Mr. R.K. Bhandari given a chance to express  his  view  on  the
         opinion rendered by the legal  department.   This  is  a  pertinent
         aspect of matter to our minds since Mr. R.K. Bhandari, followed  by
         Mr. Ravi Saxena, in EIL and Mr. M.B. Gohil in GAIL were people  who
         would have dealt with such like contact on a number  of  occasions.
         Being experts in their respective fields, they would know what  was
         intended when terms like “single project” and “single bidder”  were
         put in Clause 8.1.1.1 Therefore, for the legal department of EIL to
         take contrary, though “absurd” and “harsh” view, required at  least
         a modicum of response from the expert, which was  none  other  than
         Mr. R.K. Bhandari dealing with the issue till 10.6.2010. Mr. Grover
         Director (Projects) did not  deem  it  fit  to  even  ask  for  his
         comments.  Therefore, the integrity of entire process is suspect to
         say the least. In any event, in our view, the opinion is completely
         contrary to the plain language of clause 8.1.1.1.”




35.     The above clearly  shows  that  the  High  Court  has  recorded  its
finding on mala fides on the sole basis that EIL had  reviewed  its  earlier
opinion regarding eligibility of RDS.  The High Court, in our  opinion,  was
wrong in doing  so.   While  the  High  Court  could  find  fault  with  the
interpretation which EIL placed on the provisions of clause 8.1.1.1  on  the
basis of the legal opinion tendered to it, it went too far  in  dubbing  the
entire process as mala fide. The High Court appears to have taken  the  view
as though Mr. R.K. Bhandari,  Mr.  Ravi  Saxena  and  Mr.  M.B.  Gohil  were
experts, even in the matter of interpretation of the  terms  and  conditions
of the tender document, who could sit in judgment  over  the  legal  opinion
tendered to them. If on an interpretation of a clause in the  tender  notice
by the legal department concerned the  officers  review  their  decision  or
reverse the recommendations made earlier, the same does  not  tantamount  to
malice in law so as to affect the purity of the entire process or render  it
suspect even assuming that the opinion is on a more  thorough  and  seasoned
consideration found to be wrong.  In the absence of any other  circumstances
suggesting that the process was indeed  vitiated  by  consideration  of  any
inadmissible material or non-consideration of material that  was  admissible
or misdirection on issues of vital importance,  fresh  recommendations  made
in tune with the legal opinion could not be held to have  been  vitiated  by
malice in law.  The High Court, it appears, felt  that  since  the  officers
referred to above were senior officers they ought to  have  known  what  was
meant by terms like  ‘single  project’  and  ‘single  bidder’  appearing  in
clause 8.1.1.1.  We need hardly point out that in cases where  the  decision
making process is multi-layered, officers associated with  the  process  are
free and indeed expected to take views on various issues according to  their
individual perceptions.  They may in doing  so  at  time  strike  discordant
notes, but that is but  natural  and  indeed  welcome  for  it  is  only  by
independent deliberation, that all possible facets of an issue are  unfolded
and  addressed  and  a  decision  that  is  most   appropriate   under   the
circumstances shaped. If every  step  in  the  decision  making  process  is
viewed  with  suspicion  the  integrity  of  the  entire  process  shall  be
jeopardized. Officers taking views in the decision making process will  feel
handicapped in expressing their opinions freely  and  frankly  for  fear  of
being seen to be doing so for mala  fides  reasons    which  would  in  turn
affect public interest.  Nothing in the instant  case  was  done  without  a
reasonable or probable cause which is the very essence of  the  doctrine  of
malice in law vitiating  administrative  actions.  We  have,  therefore,  no
hesitation in holding that the findings recorded by the High  Court  to  the
effect that the process of annulment of the tender process or the  rejection
of the tender submitted by RDS was vitiated by mala fides  is  unsustainable
and is hereby set aside. Question no.  2  is  accordingly  answered  in  the
negative.


In Re: Question No.3
36.     The withdrawal of Writ Petition No.8252 of 2010 with  permission  to
petitioner-RDS to file a fresh Writ Petition No.534 of 2011 was followed  by
the issue of a fresh tender notice in which  Clause  8.1.1.1  of  the  first
tender document was modified.  Clause 8.1.1.1 as it appeared in  the  second
tender notice was as under:


         “The bidder must have completed in a single contract, as  a  single
         bidder or as a leader of a  consortium,  at  least  one  breakwater
         (using marine spread-refer Note 1)  of  minimum  length  of  400  m
         located in sea during the last 20 (twenty)  years  to  be  reckoned
         from the last date of submission of bids. The scope of work of  the
         above  referred  qualifying  job   should   comprise   of   design,
         engineering, construction and project management of the breakwater.
         Land connected breakwater having a minimum length of  400m  located
         in sea is also acceptable provided construction  has  been  carried
         out using marine spread as mentioned above.”


37.     Even when RDS claimed to have completed the project  of  400  meters
length in Mus-Car Nicobar, it was ineligible to compete  for  the  works  at
Dabhol under the above clause as the work in Car Nicobar was executed  under
two contracts and not a ‘single contract’ which was added to the  conditions
of eligibility under the above clause. The  said  modification  in  the  BQC
was, according to the RDS, meant to unfairly  exclude  RDS  from  competing.
The modified clause was, therefore, assailed  on  the  ground  that  it  was
tailor made to suit the requirement of other tenderers who had lost  out  on
the “financial bid” front in relation to the first tender.  The  High  Court
accepted that contention and declared that the modification in  the  BQC  by
which RDS was rendered ineligible was not justified and unfairly  eliminated
it from competing for the allotment of the works.
38.     Assailing the above finding of the High Court Mr.  Nariman,  learned
Solicitor General, argued that  if  the  annulment  of  the  tender  process
pursuant to the first  tender  notice  was  held  to  be  valid  and  beyond
challenge at the instance of RDS, the conditions on which fresh tenders  are
invited including the conditions of eligibility  stipulated  in  the  tender
notice was not open to challenge by a  prospective  tenderer.  Relying  upon
the decision of this  Court  in  Air  India  Ltd.  v.  Cochin  International
Airport Ltd. and Ors. (2000) 2 SCC 617, Mr. Nariman  argued  that  the  High
Court went wrong in declaring  the  provisions  of  Clause  8.1.1.1  of  the
second tender notice to be legally  bad.  The  following  passage  from  the
above decision is apposite:
         “7. ….. The award of a contract, whether it is by a  private  party
         or by a public body or  the  State,  is  essentially  a  commercial
         transaction. In arriving at a  commercial  decision  considerations
         which are paramount are commercial considerations.  The  State  can
         choose its own method to arrive at a decision. It can fix  its  own
         terms of invitation to tender and that  is  not  open  to  judicial
         scrutiny….”




39.     Having said that we must say to the credit of Mr.  Nariman  that  he
made a statement on instructions that in order to show its  bona  fides  and
to prove that it had no intention to deliberately  target  or  exclude  RDS,
RGPPL would not apply the modified  Clause  8.1.1.1  of  the  second  tender
notice  to  fresh  tenders  while  evaluating  them  for  techno  commercial
purposes. RGPPL would, according to Mr. Nariman, treat  Clause  8.1.1.1.  in
the first tender notice as the  applicable  clause  and  the  second  tender
process shall be carried forward on the Clause 8.1.1.1 as it  stood  in  the
first tender document.  The statement of Mr. Nariman  makes  it  unnecessary
for us to examine whether or not RGPPL was justified  in  amending  the  BQC
and whether such amendment was meant to exclude RDS or any  other  similarly
situated tenderers from competing for  the  works.   In  the  light  of  the
statement made by Mr. Nariman we do not consider it  necessary  to  go  into
the juristic aspect relevant to the validity of the clause extracted  above.
 All that we need say is that Clause 8.1.1.1 of  the  second  tender  notice
shall not be enforced by RGPPL and  that  the  corresponding  clause  as  it
appeared  in  the  first  tender  notice  shall  govern  matters  stipulated
therein.  Question No.3 is answered accordingly.
In Re: Question No.4
40.     We have while answering Question  No.1  held  that  W.P.  No.534  of
2011, out of which this appeal arises, was maintainable only in  so  far  as
the same questioned the exclusion of RDS from  competing  for  the  work  in
question.  That exclusion could be on account of a change in the  conditions
of eligibility as was sought to be  introduced  by  Clause  8.1.1.1  of  the
second tender notice or by reason of RDS being found ineligible  even  under
the unamended/original Clause 8.1.1.1 of the first  tender  notice.   In  so
far as the amended Clause 8.1.1.1 of the second tender notice  is  concerned
Mr. Nariman’s statement which we have noticed while answering question  no.3
above, has put  an  end  to  the  controversy.  RDS  cannot,  therefore,  be
excluded from competition based on  Clause  8.1.1.1  in  the  second  tender
notice. But that does not automatically make RDS eligible for  allotment  of
the works even under the first tender notice. The appellant’s case  is  that
RDS  was  techno  commercially  ineligible  for  allotment,   and   in   its
communication dated 6th October, 2010 it had  given  the  reasons  for  that
view. We shall presently examine the said reasons but before  we  do  so  we
need to point out that the High Court  had  quashed  the  communication  and
held RDS to be eligible. That finding has not yet attained finality, as  the
appellant has questioned the judgment of  the  High  Court  in  the  present
appeal. Whether or not RDS is eligible, therefore, remains relevant not  for
the purpose of taking the tender process initiated with  the  issue  of  the
first tender notice forward but for purposes of finally determining  whether
RDS will be eligible to participate in any fresh  tender  notice  issued  in
future, in which Clause 8.1.1.1 remains, the  touch  stone  for  determining
the eligibility of the tenderers.  It is in the  above  background  that  we
need to examine whether RDS was eligible to compete for the works  based  on
the first tender notice.
41.     In its communication dated  6th  October,  2010  the  appellant  had
summed up the reasons for declaring  RDS  to  be  techno  commercially  non-
responsive in the following words:
         “From perusal of the various documents, it can  be  concluded  that
         the qualifying project claimed by  you  to  have  been  awarded  in
         November 2000 had the maximum  length  of  290  m  and  not  400  m
         required under BQC. The breakwater(s) at Mus (chainage 22 m to  200
         m and chainage 200m to  330m/490m)  was  awarded  as  two  separate
         projects by the project authority and also executed accordingly  by
         the respective agencies.
                Further, award for different phases of the project was  made
         on  EHL  or  M/s  Reacon  International  and  you  were  also   not
         responsible for the execution of total scope of work in any of  the
         two projects.
                In the light of the above, it is concluded that RDS does not
         meet the BQC requirement of having completed at least  one  project
         of a breakwater in an offshore location of minimum length  of  400,
         during the last 20 (twenty) years to be reckoned from the last date
         of submission of bids.”

42.     A careful reading of the above would show that the rejection of  the
bid offered by RDS was based on three distinct grounds. These are:
(i)     RDS had claimed the qualifying project to have been awarded  in  its
      favour in November, 2000.  The length of the project so  allotted  was
      290 meters only as against 400 meters required under the BQC.
(ii)    The breakwater at Mus (chainage  22m  to  200m  and  200  meters  to
      330/490 meters) were awarded and executed as  two  separate  Projects,
      whereas Clause 8.1.1.1 required that the  single  bidder  should  have
      executed the required length of Breakwater in a Single Project.
(iii)   The award of the above  project  was  made  on  EHL  or  M/s  Reacon
      International, for different phases and RDS was  not  responsible  for
      the execution of the total scope of the work in any  one  of  the  two
      projects.
43.     RDS has before the High Court and even before us, claimed  that  the
Breakwater at Mus in Car Nichobar was a single project and not two  projects
as contended by the appellant-RGPPL. It has further claimed that the  entire
project has been executed by it on behalf of EHL, no matter a  part  of  the
work like quarrying of  stones/boulders  and  shipping  the  same  from  the
quarry site to the place of construction was handled  by  EHL.  These  works
were performed by the above  two  agencies  for  monetary  consideration  on
behalf of RDS who was entitled to associate them with the execution  of  the
project work in terms of the conditions of contract;  under  which  EHL  had
engaged RDS.
44.     The case of the appellant  on  the  other  hand  is  that  the  only
purpose  behind  stipulating  that  the  tenderer  should  have  executed  a
breakwater project as a single tenderer with a minimum length of 400  meters
was to ensure that only such tenderers are held eligible as have executed  a
“single project” of that length ‘single handedly’  without  associating  any
other agency with the execution of the  work.   It  was  important  for  the
appellant to do so because the breakwater length  in  the  present  case  is
more than four times the length stipulated as a  condition  of  eligibility.
It is the further case of the appellant that apart from Recon  International
one Surya Rao was also associated with the execution of the  project,  which
fact is according  to  the  appellant  evident  from  the  government  files
produced by Mr. Gulati appearing for the Central Government.
45.     On the question whether the Breakwater constructed  at  Mus  in  Car
Nicobar comprised one or two projects, also there was some debate which  was
rendered academic, by Mr. Nariman, making a fair and unqualified  concession
that for purposes of determining the eligibility of RDS  the  breakwater  at
Mus Car Nicobar could be treated as a single project. With that  concession,
what remains to be determined is  whether  RDS  had  limited  its  claim  to
eligibility only on the award made in its favour in November, 2000.  If  so,
whether it is debarred or stopped from claiming that  it  had  executed  the
project from chainage 22  meters  to  200  meters  also.  More  importantly,
whether RDS had actually executed the Breakwater Project at Mus Car  Nicobar
with a length of 400 meters.
46.     We looked in vain for a  finding  on  the  above  questions  in  the
impugned judgment  leave  alone  one  that  satisfactorily  dealt  with  the
material placed by the parties on record  in  support  of  their  respective
cases. What we found was a concession attributed to  Ms.  Indra  Jai  Singh,
learned Additional Solicitor General to which the  High  Court  referred  in
Para 30.2 of its order, and which by far is the only  reason  given  by  the
High Court for holding that RDS had executed the Breakwater Project  at  Mus
in Car Nicobar. The High Court observed:
         “30.2
         We may note at this stage that we had had pointedly put to the  ASG
         Ms. Indra Jai Singh during the course of  hearing,  as  to  whether
         there was any doubt or  dispute  that  RDS  had  not  executed  the
         qualifying work  at  Mus  Car  Nicobar  Island  equivalent  to  the
         contracted  length  of  500  meters.  Ms.  Indra  Jai   Singh,   on
         instructions, categorically informed us that  this  aspect  of  the
         matter was not in issue. She, however, submitted that what  was  in
         issue, was the fact, that since it had not  emerged  that  RDS  had
         completed the project in two (2) phases; according to EIL,  it  was
         not eligible. With EIL having  taken  this  stand,  which  was  not
         contradicted by GAIL at the hearing; it quite surprised us when Mr.
         Chandiok appearing on behalf of RGPPL took the stand that  RDS  had
         not even constructed the required  minimum  400  meters  length  of
         qualifying work.”


47.     Ms. Indra Jai Singh appearing  for  the  Central  Government  argued
that the High Court had  misconstrued  her  statement,  in  as  much  as  no
concession as attributed to her was made or could be made when the  relevant
record did not bear any evidence of RDS  having  been  associated  with  the
project in question. Mr. Nariman contended that the concession even if  made
did not bind the appellant  RGPPL,  who  as  a  separate  legal  entity  was
entitled to argue, as it indeed argued, before the High Court that  RDS  had
not been associated  with  or  executed  the  entire  project,  at  Mus  Car
Nicobar, hence was not eligible to compete.
48.     There is considerable merit in the submission made  by  the  learned
counsel for the appellants and Ms. Jai Singh. A concession even if  made  by
one of the parties could not prevent the other parties from arguing that  it
did not bind them or that the same was contrary  to  the  facts.   The  High
Court ought to have examined the issue  on  merits,  rather  than  taking  a
short  cut.  The  High  Court  has  incidentally  taken  support  from   the
certificate dated 5th April, 2008 and  clarification  issued  on  5th  June,
2010 to hold that the RDS had indeed executed the qualifying project at  Car
Nicobar. We had in the course of  the  hearing  asked  Mr.  Gulati,  learned
counsel for the Central Government, to disclose to us  the  basis  on  which
the certificate and the  clarification  had  been  issued  by  the  officers
concerned.  We got no satisfactory answer to the query.  We even  asked  the
parties to produce the relevant record including the  government  files,  so
that we could ourselves answer the question  regarding  eligibility  of  RDS
but in the absence of any conclusive evidence,  and  in  the  absence  of  a
specific  finding  from  the  High  Court,  on  the  question,  we  remained
handicapped. A remand to the High Court, therefore, became inevitable  which
part we must say  in  fairness  to  learned  counsel  for  both  sides,  was
conceded even by them.
49.     In the result we allow these appeals, set  aside  the  judgment  and
order passed by the High Court and remand the matter back to the High  Court
with the following directions:
(1)     The High Court shall examine and decide  afresh  the  limited  issue
whether RDS was eligible to compete for the works in question  in  terms  of
the first tender notice based on the works which it claims to have  executed
at Mus in Car Nicobar.
(2)     If the High Court comes to the conclusion that RDS is  not  eligible
in terms of Clause 8.1.1.1  of  the  first  tender  notice  as  it  had  not
executed a breakwater of the requisite length,  Writ  Petition  No.  534  of
2011  filed  by  the  respondent-RDS  shall   stand   dismissed   in   toto.
Resultantly,  the  appellant-RGPPL  shall  be  free  to  carry  forward  and
finalize the process of allotment of works started by it  in  terms  of  the
second tender notice.
(3)     In case, however, the High Court comes to the  conclusion  that  RDS
was eligible to compete for the works in question on the basis of the  first
tender notice, subject to that finding attaining  finality  in  any  further
appeal filed by the aggrieved party, the appellant-RGPPL shall  be  free  to
issue a fresh tender notice without altering the conditions  of  eligibility
as stipulated in Clause 8.1.1.1 and finalise the said process on such  other
terms and conditions as it may deem fit and proper  to  incorporate  in  the
tender notice.
(4) Keeping in view  that  the  tender  process  relates  to  a  project  of
national importance, the High Court is requested to dispose  of  the  matter
at an early date and as far as possible within a period of four months  from
the date a copy of this order is received by it.
50.        Parties    are    left    to    bear     their     own     costs.


                                                    ………        ……………….…..…J.
                                                           (T.S. Thakur)




                                                            ……………………………..…J.
                                                (Gyan Sudha Misra)

New Delhi
October 18, 2012

ITEM NO.1B               COURT NO.10             SECTION XIV
[FOR JUDGMENT]

            S U P R E M E   C O U R T   O F   I N D I A
                         RECORD OF PROCEEDINGS

C.A. No.........../2012 @
Petition(s) for Special Leave to Appeal (Civil) No(s).3571/2012
(From the judgement and order  dated 17/10/2011 in WPC No.534/2011 of The
HIGH COURT OF DELHI AT N. DELHI)

RATNAGIRI GAS & POWER PVT.LTD.                    Petitioner(s)
                 VERSUS
RDS PROJECTS LTD.& ORS.                           Respondent(s)
(With prayer for interim relief)
WITH
C.A. No.........../2012 @
SLP(C) NO. 5554 of 2012

C.A. No.........../2012 @
SLP(C) NO. 6180 of 2012

Date: 18/10/2012  These Petitions were called on for JUDGMENT today.

CORAM :
        HON'BLE MR. JUSTICE T.S. THAKUR
        HON'BLE MRS. JUSTICE GYAN SUDHA MISRA

For Petitioner(s)    Mr. Shailendra Swarup,Adv.
                     Mr. Ashok Mathur, Adv.
                        Mr. Ajit Pudussery,Adv.
                        Mr. K. Vijayan,Adv.

For Respondent(s)    Ms. Asha Jain Madan,Adv.
                     Mr. D.S. Mahra ,Adv
                     Ms. Asha Jain Madan, Adv.

                    The Court made the following
                               O R D E R


         Hon'ble Mr. Justice T.S. Thakur  pronounced  the  judgment  of  the
    Bench comprising His Lordship and Hon'ble Mrs. Justice Gyan Sudha Misra.

        Leave granted.

        The appeals are allowed in terms of the signed judgment.



|(N.K. Goel)                             | |(Veena Khera)                     |
|Court Master                            | |Court Master                      |


             (Signed Reportable Judgment is placed on the file)