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Wednesday, October 19, 2016

An aggrieved party can approach the Court at the appropriate stage, not when the bids are being considered. We do not intend to specify. It is appreciable the owner in certain kind of tenders call the bidders for negotiations to show fairness transparently. But the present case is not a one of such nature. Once the price bid was opened, a bidder could not have submitted representations on his own and seek a mandamus from the Court to take certain aspects into consideration. We have stressed this aspect only to highlight the role of the Court keeping in mind the established principle of restraint.

                                 Reportable


                           SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                    CIVIL APPEAL NOS. 10182-10183 OF 2016
                     (@ SLP(C) Nos. 28959-28960 of 2015)
Tamil Nadu Generation and Distribution       …Appellant(s)
Corporation Ltd. (TANGEDCO) Rep. By
Its Chairman & Managing Director
and Anr. Etc.

                       Versus

CSEPDI – Trishe Consortium, Rep. By its            …Respondent(s)
Managing Director & Anr.
                                    WITH
                    CIVIL APPEAL NOS. 10184-10185 OF 2016
                      (@ SLP Nos. 30098-30099 of 2015)

                               J U D G M E N T
Dipak Misra, J.

      Leave granted.

2.    The appellant, Tamil Nadu Generation and Distribution Corporation  Ltd
(for short ‘the Corporation’) vide notification dated 06.05.2013  floated  a
tender for setting up of two units  of  660  MW  Ennore  SEZ  Supercricitcal
Thermal Power Project at Ash Dyke of NCTPS,  Chennai  wherein  four  bidders
including the respondents herein participated. However, two bidders  out  of
four were  disqualified  as  they  failed  to  meet  the  Bid  Qualification
Requirements (BQR) as a result of which bids of Consortium of Trishe  Energy
Infrastructure  Services  Private  Limited   (CSEPDI)   and   Bharat   Heavy
Electrical Ltd (BHEL) were taken up for consideration. Prior to the  opening
of the price bid, CSEPDI and BHEL  submitted  supplementary  price  bids  on
05.02.2014. Price bids were opened on 05.02.2014 by  the  appellant  in  the
presence of the representatives of the respondents, the qualified bidders.

3.    The uncurtaining of facts would depict  that  the  1strespondent  sent
series of  representations  dated  16.06.2014,  17.06.2014,  01.07.2014  and
08.07.2014 to the appellant highlighting various aspects of the bid and  the
relevance of para (viii) of Clause 29.0 of  the  “Instructions  to  Bidders”
(ITB) which also deals with the rejection of  bids  of  the  tenderer  whose
past performance/vendor rating is not satisfactory.    Since  the  appellant
paid no heed to the request made by the respondent No.1, it filed  W.P.  No.
19247 of 2014 seeking issue of a writ of mandamus to  direct  the  appellant
to consider the representations and comply with Tamil Nadu  Transparency  In
Tenders Act, 1998 (for short, “the TTIT Act”).   An  undertaking  was  given
before the learned Single Judge by the learned  Advocate General that  post-
bid  representations  submitted  by  the  respondent  No.1  will   be   duly
considered while finalizing the  tenders  and  appropriate  orders  will  be
passed in accordance with the tender specifications and  the  TTIT  Act  and
rules framed thereunder and  in  terms  of  the  said  undertaking,  learned
Single Judge vide order dated 31.07.2014 directed the appellant to  consider
and pass orders  on  the  representations  of  the  appellant  herein  after
affording them an opportunity of personal hearing  and  directed  that  till
such orders are passed, the tender should not be finalised.

4.    Being aggrieved by the said order, the  appellant  filed  writ  appeal
W.A. No. 1065 of 2014 before the Division  Bench  which,   by  judgment  and
order dated 19.08.2014, disposed of the writ appeal by modifying  the  order
of  the  learned  Single  Judge  only  to  the  extent  that  affording   of
opportunity of personal hearing to the person was impermissible  having  not
contemplated under the Rules (for short, “the rules”) and further  permitted
the   respondent  No.1  to  submit  additional  documents  raising  all  its
objections and the appellant was directed to pass an order  and  communicate
the same to the respondents, CSEPDI and BHEL.  However, the  Division  Bench
did not modify the direction of the learned Single Judge which  was  to  the
effect that till  a  decision  was  taken  on  representations  of  the  1st
respondent, the bid shall not be finalised.

5.    After the disposal of the writ appeal, the respondent  No.1  sent  its
representation on  25.08.2014  along  with  necessary  documents  which  was
rejected by the appellant vide  its  communication  dated  27.09.2014.   The
legal propriety of the said rejection was called in question by way of  writ
petition W.P. No. 26762 of 2014 seeking quashment of the  same  and  further
restraining the owner from taking steps to finalise the tender.  During  the
hearing of the writ petition, a copy of  letter  dated  27.09.2014  awarding
the contract to BHEL, respondent No. 2 herein, was brought  on  record.   It
was mentioned therein with regard to price  negotiation  meetings  with  the
respondent No. 2.   The respondent No. 1 sent a letter  dated  1.10.2014  to
the   appellant,   highlighting    the    arbitrariness,    anomalies    and
inconsistencies in its reasoning and the mala-fide intent in the  matter  of
evaluation of the bid submitted by it.  However,  the  appellant  by  letter
dated 10.10.2014, informed the 1st respondent that the  subject  tender  had
been finalised and awarded to BHEL.

6.    The letter dated 27.9.2014 awarding the contract to respondent  No.  2
and letter dated 10.10.2014 were assailed by the respondent No.1  by  filing
W.P. No. 27529 of 2014 for annulments of the letters and further  for  issue
of directions to the Corporation  to  determine  the  award  of  the  tender
strictly in terms of the Tender/Bid document and  taking  into  account  the
bid of respondent No.1 and that of BHEL, the respondent No.2 herein.

7.    The learned Single Judge dismissed the writ petition  primarily  based
on the perusal of notes in the files containing the Consultant Report  dated
30.05.2014 and  on  that  basis  opined  that  the  conduct  of  process  of
evaluation of the tenders did not appear  to  be  arbitrary,  capricious  or
unfair; and that price bids of the bidders had been  evaluated  as  per  the
parameters  indicated  in  the  tender  notification   by   an   independent
consultant who was selected as per the Board Resolution that was within  the
knowledge of both the bidders.  The reasoning of the  learned  Single  Judge
basically hinged on the Consultant’s Report that  had  determined  that  the
respondent  No.2  herein  was  L1  and,  therefore,  the  decision  of   the
Corporation in treating BHEL as L1 and awarding  the  contract  was  neither
arbitrary nor malafide.

8.    Aggrieved by the order of the learned  Single  Judge,  the  respondent
No.1 preferred writ appeals before the Division Bench.  The  Division  Bench
took note of the various pleas  raised  by  the  respondent  No.1  including
violation of the statutory provisions,  arbitrariness,  adoption  of  unfair
and non-transparent procedure, erroneous  delineation  of  the  consultant’s
report  by  the  learned  Single  Judge  and  non-consideration  of   public
interest.

9.    The Corporation, in its turn,  contended  before  the  Division  Bench
that there was no violation of procedure and the award of the  contract  was
not amenable to judicial review in the  obtaining  factual  matrix  and  any
interference would only delay the execution of the work.  It was also  urged
that Tender Accepting Authority (TAA) had accepted  the  lowest  tender  and
negotiations were held only with lowest bidder;  that  Clause  25.4  of  the
Instruction to Bidders did not permit the bidder to change the substance  of
the bids after the bids were opened; that though  the  respondent  No.1  had
offered lower rate on interest, the original interest rate offered  was  not
in accordance with tender terms, for as per clause 14.0(d)(5)  the  rate  of
interest quoted should be fixed, whereas the CSEPDI had  not  specified  the
fixed rate of interest; that there was no  perversity  or  arbitrariness  in
the decision taken as  per  the  terms  of  the  tender,  prevalent  banking
practice and the Term Sheet given by the lender;  that  the  Consultant  was
appointed  pursuant  to  the   Board   Resolution   dated   28.01.2012   who
participated in all pre-bid and post-bid meetings and the minutes  had  been
signed by all the parties and the  consultant  and,  therefore,  CSEPDI  was
very much aware of appointment of the consultant  and  the  role  played  by
consultant could neither be criticised nor ignored.

10.   The 2nd  Respondent  herein  contended  that  respondent  No.1  lacked
credibility to make any allegation against it;  that  design  was  the  core
area of leader of the consortium  and  they  have  no  experience  in  India
insofar as supercritical Thermal Power Projects are concerned; and that  the
work was under progress and they had expended substantial amount.

11.   After  hearing  the  rival  contentions,  the  Division  Bench  placed
reliance on Jagdish Mandal v. State  of  Orissa[1]  and  observed  that  the
approach of the owner was unfair  in  the  tendering  process.   It  further
analysed the scheme of Section 10 of the TTIT Act and held that  the  Tender
Accepting Authority (TAA) has a role to cause objective  evaluation  of  the
tenders.  Referring to Section 10(6) of the  TTIT  Act,  it  held  that  the
Corporation had not complied with the said provision and it was  a  case  of
procedural impropriety, unfair approach and  arbitrariness.   The  appellate
Bench referred to the authority in Star Enterprises v. City  and  Industrial
Development Corporation of Maharashtra Ltd.[2]  and declined to  accept  the
stand of the Corporation by  opining  that  reasons  for  rejection  of  1st
respondent’s representations could not be treated as reasons  for  rejection
of its bid and hence, the decision making process was flawed and  in  breach
of Section  10(7)  of  the  Act.   It  further  held  that  in  the  “Tender
Bulletin”, absence of reasons for acceptance  of  tender,  no  statement  of
evaluation of tenders and no comparative statement of tenders received  and,
decision thereon was in clear violation of the requirements of Section  6(1)
read with Section 10 of the TTIT Act and Rule 30(3) of the TTIT  Rules.   On
the interest component and commitment fee, the Division Bench held that  the
approach was wholly arbitrary and the intention was to oust  the  respondent
No.1, for the evaluation process adopted was meant to suit  one  and  reject
the other. It further held that the process adopted and the  decision  taken
by the owner was arbitrary, unfair, irrational, biased  and  mala  fide  and
did not serve the larger public interest.  In view  of  the  said  analysis,
the Division Bench allowed the  appeals  and  directed  the  Corporation  to
evaluate the price bid of the respondents in the light of its  findings  and
taking  into   consideration   all   relevant   parameters   including   the
representations/documents submitted  by  respondent  No.  1  and  to  record
detailed  reasons  for  the  decision  and  communicate  the  same  to   the
respondent No.1 so as to comply with the requirement of  the  provisions  of
the TTIT Act and TTIT Rules and various decisions of this Court.

12.   Being aggrieved by the aforesaid judgment,  the  corporation  and  the
successful  bidder,  by  way  of  special  leave,  have  preferred  separate
appeals.

13.   We have heard Mr. Mukul Rohatgi,  learned  Attorney  General  and  Mr.
Parag P. Tripathi, learned senior counsel for  the  appellant-BHEL  and  Mr.
Subramonium Prasad, learned senior counsel  for  the  appellant-Corporation,
and Mr. Kapil Sibal, learned senior counsel  for  respondent  No.1  and  Mr.
Sriram Panchu, learned senior counsel for the respondent   No. 2.

14.   It is apposite to note that in course of hearing it  has  been  opined
that the singular issue that is required to be  addressed  is  “whether  the
Evaluation Report dated 30th May, 2014 by the  Consultant,  is  prima  facie
erroneous,  requiring  interference  within  the  parameters   of   judicial
review”. Such a singular point was required  to  be  focused  as  Mr.  Mukul
Rohatgi, learned Attorney General appearing for  BHEL  and  Mr.  Subramonium
Prasad learned senior counsel appearing for the  Corporation  had  submitted
as the subsequent offers either by BHEL or by the 1st  respondent  need  not
be considered.  At that juncture, Mr. Kapil  Sibal  learned  senior  counsel
appearing for the 1st respondent, the contesting party, had  submitted  that
the Consultant’s Report would graphically exposit that the  respondent  No.1
was entitled to be declared as L-1 even if  it  is  scrutinized  within  the
limited parameters of the  judicial  review.  The  Court  had  directed  for
handing over the Consultant’s Report to the learned  counsel  appearing  for
the 1st respondent.  In  view  of  the  aforesaid  submission,  the  opinion
expressed on other issues by the learned Single Judge  or  by  the  Division
Bench need not be adverted to.

15.   On a perusal of the facts brought on record, it is manifest  that  the
Corporation in its meeting held on 30.1.2014 had decided to open  the  price
bids on both the bidders and thereafter the supplementary  price  bids  were
obtained from both the parties for  the  additional  implications  items  in
respect of technical deviation quoted by both  parties  and  thereafter  the
price bids were opened on 05.2.2014.  As the factual  matrix  would  reveal,
the price bids were evaluated by the Consultant. The  learned  Single  Judge
has adverted  to  price  evaluation  report  submitted  by  the  Consultant.
Certain paragraphs from the report of the Consultant  that  were  reproduced
by him are as follows:-

“4.0 Evaluation

4.1 BHEL

BHEL has arranged finance from M/s. Power Finance Corporation of India.

They are arranged to finance 75% of the total cost as debt  at  an  interest
rate of 12.25% p.a.

Attached Annexures 1 to 5 indicate the methodology  adopted  in  calculating
the various components required for evaluation  like  IDC-Debt,  IDC-Equity,
IDC-UF Fess, Debt Repayment Schedule etc.

4.2 CSEPDI – TRISHE

CSEPDI-TRISHE has arranged finance from M/s. ICBC, China.

They have arranged a finance 85% of the total cost as debt  at  an  interest
rate of 7.2% p.a.

Attached Annexures 6 to 12 indicate the methodology adopted  in  calculating
the various components required for evaluation  like  IDC-Debt,  IDC-Equity,
IDC-UF Fess, Debt Repayment Schedule etc.

5.0 Evaluated Lower Cost

|    |               |         |BHEL        |CSEPDI-TRISH|
|    |               |         |            |E           |
|    |               |         |All figures |All figures |
|    |               |         |in Rs.      |in Rs.      |
|    |               |         |(Crores)    |(Crores)    |
|    |Capacity       |         |1320 MW     |1320 MW     |
|A   |Total EPC cost |         |7762.977    |9207.264    |
|    |excluding VAT  |         |            |            |
|B   |EPC Debt       |75%      |5822.233    |7826.174    |
|C   |EPC Equity     |25%      |1940.744    |1381.090    |
|D   |IDC Debt       |12.25%   |1295.079    |1228.378    |
|E   |EPC Debt       |         |7117.311    |9054.552    |
|    |Including IDC  |         |            |            |
|    |(B + D)        |         |            |            |
|F   |Upfront Fees   |         |8.925       |801.180     |
|    |Including      |         |            |            |
|    |Interest       |         |            |            |
|G   |Total Debt (E +|         |7126.237    |9855.732    |
|    |F)             |         |            |            |
|H   |Interest on    |14%      |509.597     |456.606     |
|    |Equity         |         |            |            |
|I   |Total Equity (C|         |2450.341    |1837.695    |
|    |+ H)           |         |            |            |
|J   |Total Project  |         |9576.578    |11693.427   |
|    |Cost (G + I)   |         |            |            |
|K   |Total Cost per |         |7.255       |8.859       |
|    |MW             |         |            |            |
|L   |PV – Debt      |         |7553.364    |8464.318    |
|M   |PV – Equity    |         |2809.403    |2106.984    |
|N   |Total PV       |         |10362.767   |10271.302   |
|O   |PV Cost per MW |`        |7.851       |7.781       |
|P   |Loading for    |         |10.287      |173.229     |
|    |Deficiency     |         |            |            |
|Q   |Total (N+P)    |         |10373.054   |10444.531   |
|R   |Evaluated Bid  |         |7.858       |7.913       |
|    |Price per MW   |         |            |            |


Paragraphs 4.0 and 5.0 of the “Price Evaluation  Report”  submitted  by  the
Consultant, which I have extracted above,  show  that  the  Consultant  took
into account only the interest  rate  of  12.25%  per  annum  for  the  debt
component arranged by BHEL from the  Power  Finance  Corporation  of  India.
The Consultant  did  not  take  note  of  the  reduced  rate  namely  12.15,
subsequently offered by BHEL,  for  arriving  at  the  conclusion  that  the
“Evaluated Bid Price” of BHEL was the lowest.”

16.   There is no dispute that as per the Price  Evaluation  Report  by  the
Consultant, the EPC price of the respondent No.  1  was  Rs.9207.264  crores
and respondent No.2  to  whom  the  contract  was  awarded  was  Rs.7762.977
crores.  Thus, the difference between  the  two  EPC  price  is  Rs.1444.287
crores.  The 1st respondent disputed the  Price  Evaluation  Report  by  the
Consultant on the ground that it wrongly loaded  the  sum  towards  (a)  the
commitment fee, (b) interest on management fee during IDC  period;  and  (c)
interest of guarantee fee during IDC period in its bid amount which had  led
to the evaluation of quoted financial charges  with  interest  to  Rs.801.18
crores.

17.   As regards the commitment  fee,  learned  counsel  for  the  appellant
submits that the contention of the respondent  No.1  that  since  commitment
fee was the fee to be charged on the unutilised amount of the  loan  meaning
thereby if the appellant failed to draw the loan amount as undertaken,  then
only the commitment fee would be charged and, therefore,  the  determination
after addition of the same was without any rationale as the respondent  No.1
had  quoted  in  the  ‘Calculation  Sheet  for  Financial   Cost’   in   the
supplementary bid commitment fee to the tune of Rs.164.72 crores  which  was
to be charged @ 1% p.a. on accrued drawals and  if  no  commitment  fee  was
required to be paid, the respondent No.1 should have mentioned the  same  to
be nil or zero.  To show that the commitment fee is a part of the  financial
charges, learned senior counsel has drawn our attention to  clause  14(d)  6
of the Instruction to Bidders under the tender, which reads as follows:-

“6.    Financing  Charges  :  All  financing  charges  of  any  nomenclature
relating to financing of the project including but not  limited  to  Finders
Fees, Commitment Fees, Arrangement Fees, Management  Fees,  Up  Front  Fees,
Syndication Fees, Service Charges, Guarantee Charges, Other Fees and  Taxes,
if any  should  be  clearly  outlined  in  the  Financing  Term  Sheet.   No
variation in Financing Charges is permitted during the tenor of loan.

3.37  “Financing Cost” means  all  financing  charges  of  any  nomenclature
relating to financing of the project including but not  limited  to  Finders
Fees, Arranger’s Fees, Commitment Fees,  Management  Fees,  Up  Front  Fees,
Syndication Fees, Service Charges, Guarantee Charges, Other Fees and  Taxes,
if any.”

18.   At this juncture we may also refer to clause 3.37 of  Section  2  that
deals with the General Terms and Conditions of  the  Contract.   It  defines
the “Financing Cost” as follows:-
“Financing Cost” means all financing charges of  any  nomenclature  relating
to financing of the project including  but  not  limited  to  Finders  Fees,
Arranger’s  Fees,  Commitment  Fees,  Management  Fees,   Up   Front   Fees,
Syndication Fees, Service Charges, Guarantee Charges, Other Fees and  Taxes,
if any”.

19.   Clause 14 that deals with the conditions for a Binding Debt  Financing
Term Sheet, which needs to be reproduced in entirety.  It reads as follows:-

“14.0 Conditions for a Binding Debt Financing Term Sheet
Bidder shall enter into a Memorandum of Understanding (MoU) with the  Lender
for the Debt Financing agreeing to provide Financing  for  the  Project  and
making payments directly to the Bidder based on bills certified by  TANGEDCO
as per the terms of payment clause.

The MoU shall be submitted by the Bidder along with their offer for  signing
of the loan agreement.

The Bidder shall be responsible for arranging  the  required  financing  and
achieving Financial Closure of the project within 4 (Four months)  from  the
date of Letter of Intent (LoI).

a. The Bidder and Lender shall furnish a joint undertaking  to  fulfill  the
commitment made in the offer for Debt Financing arrangement from the  Lender
subject to due diligence.

TANGEDCO will furnish the following documents to the lender  for  processing
of Debt Financing to the successful bidder.
1. Profile of TANGEDCO
2. Audited Balance Sheet of TANGEDCO for the last three financial years
3. MOU entered between TANGEDCO & MMTC for long term supply of coal of  this
project.
4. Tariff order for sale of power.
5. Copy of DPR

b. It shall be understood that the Financing Term Sheet shall  be  based  on
preliminary appraisal of the project jointly by the Bidder  and  the  Lender
satisfying themselves on the project financial viability.

c. It shall be understood that the  Award  of  Contract  to  the  Bidder  is
contingent  upon  successful  Financial  Closure  based  on  the  Terms  and
Conditions provided in the Financing Term Sheet and  in  the  event  of  the
Financial Closure does not materialize due to reasons  attributable  to  the
Bidder or the Lender or in the event of withdrawal by the  Lender  from  the
Project, the Bidder will forfeit the security deposit.

d. The Term Sheet should be full and complete with  all  material  terms  of
financing including but not limited to:
1. Loan Amount : At least 75% of the Total  EPC  Cost  +  100%  of  Interest
during construction and Financing Cost.
2. Currency of Loan: INR/USD/Euro or a combination thereof.

3. Tenor of the Loan : From the date of first drawal  of  the  Loan  upto  6
months from COD of the 1st or 2nd unit  whichever  is  later  and  15  years
thereafter.
4. Rate of Interest.
5. Fixed Rate of Interest till the entire tenor of  the  loan  after  taking
into account the hedged cost.
6. Financing Charges : All financing charges of  any  nomenclature  relating
to financing of the project including  but  not  limited  to  Finders  Fees,
Commitment  Fees,  Arrangement  Fees,  Management  Fees,  Up   Front   Fees,
Syndication Fees, Service Charges, Guarantee Charges, Other Fees and  Taxes,
if any should be clearly outlined in the Financing Term Sheet. No  variation
in Financing Charges is permitted during the tenor of loan.
7. Terms and conditions for draw down schedule.
8. Moratorium for Repayment of Installment, Interest and Financing  Charges:
 All cash outflow obligation of TANGEDCO towards repayment  of  Installment,
Interest and Financing Charges should be  in  INR  (fully  hedged)  for  the
entire tenure of the  loan  and  the  repayment  will  commence  only  after
6months from the date of COD of later unit.
9. Repayment Period:  15  years  post  IDC  and  moratorium  in  60  equated
quarterly installments
10. Project Cash  Flows  and  Installment  Repayments  statement  should  be
submitted and will form part of the Financing proposal.   The  Bidder  shall
indicate Draw Down Schedule of finance to  match  the  supply  and  erection
schedule of project activities.
11. Equity requirements and related covenants.
12. Security: Against Security  the  following  can  be  made  available  by
TANGEDCO
a. Hypothecation of all 100% Project Assets
b. Government Guarantee for the repayment of loan
13. Validity period of the Term Sheet will be co-terminus with the  validity
of the bid.”

20.   The stand of the respondent as regards the  interpretation  of  Clause
14(d) 6 is that it only outlines all fees, but it does not mean  that  every
such fee is to be loaded for evaluating the  bid  to  determine  L1  and  no
commitment fee can be loaded for such evaluation.   It  is  also  put  forth
that there can be no question of loading interest on commitment fee.
21.   As has been stated earlier, the issue  pertaining  to  correctness  of
Consultant’s report has to be adjudged and scrutinized within the  scope  of
limited power of judicial  review  in  the  obtaining  factual  score.   The
Division Bench in the impugned judgment has taken exception to  the  process
adopted in the identification of L1.  It has referred  to  its  order  dated
19.8.2014 wherein  the  1st  respondent  was  granted  the  time  to  submit
additional documents.  The impugned order takes note of  the  fact  that  at
that point of time, the Corporation had never averred that tender  had  been
finalized.  It has referred to the earlier order of the Division Bench  that
representations were to be considered and till then the bid  should  not  be
finalized.  It has referred  to  the  letter  of  the  Chairman-cum-Managing
Director of the Corporation dated 20.7.2014 and opined that  it  appears  to
be a misstatement of fact.

22.   Be it stated that the Division Bench has posed two questions:-
“(i) Whether interest offered by appellant is vague; and

(ii) Whether  the  reduction  of  interest  from  7.2%  to  6.2%  should  be
accepted.”

23.   While dealing with the said issue, the Division Bench has referred  to
the publication in  the  tender  bulletin  stating  about  the  decision  on
tender:-

“1.  Name  of  the  Tender:  Chief  Engineer/Civil/Projects  &  Environment,
Inviting Officer, 3rd Floor, NPKRR Maaligai, 144, Anna Salai, Chennai –  600
002.

2. a) Name of the Project/Detail of Purchase & Works:
Establishment of coal based 2 x 660  MW  Ennore  SEZ  Supercritical  Thermal
Power Project in the ash dyke of existing NCTPS under Single  EPC  cum  Debt
Finance basis. Vayalurvillage, Thiruvallur District, Tamil Nadu.





|Sl.  |Details      |Tender Value  |Decision on Tender      |
|No   |             |              |                        |
|1    |M/s. Bharat  |7840.087      |Out of four bids        |
|     |Heavy        |Crores &      |received for this work  |
|     |Electricals  |Lender: Power |and among the qualified |
|     |Limited, BHEL|Finance       |two bidders, negotiation|
|     |House,       |Corporation   |was called for & held   |
|     |Sirifort, New|Limited       |with the lowest bidder  |
|     |Delhi – 110  |Rate of       |viz M/s.BHEL. After     |
|     |049          |Interest:     |negotiation, tender     |
|     |             |12.25%        |value of Rs. 7788       |
|     |             |              |Crores, Rate of Interest|
|     |             |9716.5974     |at 12.15% was accepted  |
|     |Consortium of|Crores &      |by the Chief            |
|2    |Central      |Lender:       |Engineer/Projects and   |
|     |Southern     |Industrial &  |order for acceptance of |
|     |China        |Commerce Bank |the tender issued vide  |
|     |Electric     |of China      |this office issue       |
|     |Power Design |Rate of       |Lr.No.CE/P/SE/M/EE-10/E/|
|     |– Ms. Trishe,|Interest: 7.2%|File. 2x660MW Ennore SEZ|
|     |668, Minz    |(USD @ Rs.    |STPP/D.No.60/dt.27.09.20|
|     |Road, Ughan, |59.26 at SBI  |14                      |
|     |China – 430  |Bill selling  |                        |
|     |071          |rate)         |                        |

Finally, M/s. BHEL/New Delhi offered bid for Rs. 7788  Crores  was  accepted
by the Chief Engineer/Projects/Chennai  and  order  for  acceptance  of  the
tender was issued vide this  officer  Lr.No.CE/P/SE/M/EE-10/  E/File.2x660MW
Ennore SEZ STPP/D.No.60/dt. 27.09.2014.”

24.   Thereafter, the Division Bench has recorded as follows:-
“31.3 While it is the plea of the appellant that fixed rate of 7.2-7.5%  per
annum or LIBOR floating rate has been quoted by them, it is the case of  the
learned Advocate General that Clause 12.1 of  the  Instructions  to  Bidders
stated that interest is to be quoted at fixed rate and it is not subject  to
change, and since the interest quoted is variable, it  is  not  possible  to
evaluate the bid.

31.4 It is seen from the records, that subsequently, based on a  query  from
the first respondent, the appellant had confirmed that  it  would  be  fixed
rate of interest at 7.2%.  the same was  also  confirmed  in  the  Repayment
Schedule and the same rate of interest was taken into consideration  by  the
Consultant in his report dated 30.5.2014.  He did not find  fault  with  the
rate of interest.  It is to be noted  that  the  Term  Sheet  was  submitted
during  July,  2013  and  tender  was  evaluated  in  the  year  2014.   The
contention of vagueness in rate of interest does not  appeal  to  us.   When
the Consultant’s report dated 30.5.2014 is  accepted  by  TANGEDCO  for  the
purpose of evaluation, it has to be accepted for  all  purposes,  though  we
have reservation on the  Consultant’s  report  dated  30.5.2014.  There  is,
therefore, no vagueness in the rate of interest quoted at 7.2%.

31.5 The second issue relates to the reduction of rate of interest.   It  is
not in dispute that various meetings were held  between  the  appellant  and
the TANGEDCO.  The learned Advocate General states that the  Consultant  was
appointed based on the 21st Board Meeting on 28.1.2012  and  the  Consultant
participated in all pre-bid and post-bid meetings and  minutes  were  signed
by all parties, including BHEL  and  the  appellant.   He  stated  that  the
appellant was aware of the Consultant’s  appointment  and  his  role.   This
only fortifies the fact that there have been series of consultation  between
both the bidders.   The  finding  of  the  learned  Single  Judge  that  the
appellant acted on inside information is demolished  by  the  stand  of  the
learned Advocate General as above.  The insinuation has no basis.

31.6 Coming to the issue of reduction  of  rate  of  interest,  taking  into
consideration the prevailing market rate, the appellant  offered  to  reduce
the rate of interest from 7.2% to 6.2% on 5.6.2014, even prior to  any  form
of litigation.  When such an offer was given by  the  appellant  the  tender
was not accepted in terms of Section 10(6) of  the  Act.   To  recapitulate,
what has happened earlier is that the writ petition in  W.P.  No.  19247  of
2014 was filed on 17.7.2014, subsequent to the offer made on 5.6.2014.   The
first interim order was passed on 18.7.2014.  The second interim  order  was
passed on 31.7.2014.  The Division Bench passed an order on  19.8.2014.   At
that point of time, there was never a statement by the TANGEDCO that L1  was
identified and discussion was going on.  We have also  clearly  stated  that
the statement of the Chairman-cum-Managing Director  of  TANGEDCO  that  the
representations of the appellant will be duly considered  by  the  Board  of
Directors while finalizing the tender and appropriate orders will be  passed
strictly in accordance with the tender specifications and by  following  the
provisions of TTIT Act and TTIT Rules.

31.7 Therefore, the issue relating to reduction of rate of  interest  should
have been considered.  This reasoning of ours is  also  based  on  the  fact
that  we  have  clearly  held  that  the  third  respondent  could  not   be
ascertained as L1 on 2.6.2014  as  per  the  statement  of  TANGEDCO  or  on
30.5.2014 as per the finding of the learned Single Judge.  Once there is  no
identification of L1, TANGEDCO is bound to consider the  reduction  in  rate
of interest of both the appellant in their offer dated 5.6.2014 and that  of
the third respondent dated 27.6.2014, reducing the  rate  of  interest  from
12.25% to 12.15%.

31.8 Even otherwise, by virtue  of  the  power  under  Clause  25.3  of  the
Instructions to bidders, which  states  that  “The  Purchaser  reserves  the
right to relax or waive any of the conditions of this Specification  in  the
best interests of the TANGEDCO”, the TANGEDCO  could  have  considered  such
reduced  rate  of  interest  offered  by  the  appellant   and   the   third
respondent.”

25.   With regard to commitment fee, the analysis of the Division  Bench  is
worth referring to:-
“It clearly states that Commitment Fee is only on the cancelled  portion  of
the loan.  That apart, even as per the Drawdown Schedule, the fee is  to  be
paid only if the loan amount is not drawn by the 18th, 30th and 42nd  month.
 Moreover, the  appellant  in  the  letters  dated  13.6.2014,16.6.2014  and
17.6.2014, clarified that Commitment Fee is only on the unused  credit  line
and that there shall be no Commitment  Fee  if  the  loan  amount  is  fully
utilized as per the Drawdown Schedule.  All these  representations  sent  by
the appellant were  not  considered  by  TANGEDCO,  despite  there  being  a
specific direction by the Division Bench  of  this  Court  to  consider  the
same.  It is a clear case of arbitrariness in approach and intended to  oust
the appellant.  This act of the TANGEDCO is nothing but a case  of  malafide
in evaluation process to suit one and reject the other.”

26.   While dealing with the consultant’s report,  the  Division  Bench  has
proceeded to state thus:-
“33.3 Even as per the Consultant’s Report the difference between the bid  of
the appellant and the third respondent is around Rs.71 Crores.   That  being
the case, if either the Commitment Fee of Rs.156.184 Crores or the  interest
on Management Fee and Guarantee Fee for the 36 month construction period  is
not loaded on the appellant, it will have a bearing on  deciding  which  one
of the two is the lowest bid.  Assuming the Consultant’s report  is  of  any
value, such report without considering the relevant material is of  no  use.
The  approach  to  add  these   figures   without   taking   note   of   the
representations  and   additional   particulars/documents   is,   therefore,
arbitrary and tainted in bias.  This is in violation of the  Division  Bench
judgment as well as the orders of the learned  Single  Judge  in  the  first
round of litigation.”

27.   And again:-
“The financial implication in respect of two tenderers  has  been  specified
by the Consultant.  The issue is what factors mean and how  it  impacts  the
bid.  We find that the Repayment Schedule submitted by  the  appellant  with
regard to interest on management fee and guarantee fee during IDC period  is
an accepted document by the Consultant.  If  nothing  more  is  to  be  paid
beyond that and that is clarified in the course of representation  in  clear
terms, we fail to understand as to how this amount could be included in  the
cost when there is no implication.  The Consultant, as  we  have  held,  did
not have the benefit of considering the representation and  other  documents
on the financial implications in this issue.  His opinion is  therefore  not
based on relevant document/representation.  This we  have  held  is  not  in
conformity with the order of the learned Single Judge in the first round  of
litigation, which was confirmed by the Division Bench.  Withholding  such  a
factor and to obtain an evaluation from the Consultant loading  the  bid  of
the appellant is clearly a case of bias.  It  is  an  unreasonable  approach
and an unfair gesture which crumbles the spirit of transparent tender.”

“33.6 We, therefore, have no hesitation to hold that  the  first  respondent
had erroneously added interest on Management  Fee  and  Guarantee  Fee  when
there is none and there is no ambiguity or  vagueness.  Once  the  appellant
has indicated in the representation, in clear terms, as to how it should  be
treated, in the light of the order of the  Division  Bench,  which  TANGEDCO
accepted to consider the bid of the appellant, the  first  respondent  ought
not to have loaded this amount on the basis of the Consultant’s Report.   In
all fairness, the Tender Accepting Authority of the first respondent  should
have excluded this amount, if both the bidders are  to  be  treated  on  the
touchstone of fairness and on the doctrine  of  level-playing  field.   This
becomes necessary because the entire tender is tested on the  larger  public
interest, that is to say, the implementation of the project in a time  bound
manner where cost is another  important  factor  to  be  considered  in  the
decision making.   In  a  Welfare  State,  public  authority  cannot  decide
arbitrarily to throw away such an offer which they  agreed  to  consider  in
the course of judicial proceedings, which we have referred to above.   These
factors, namely, adding interest on Management Fee and Guarantee  Fee,  have
to be eschewed for the purpose of considering  the  bid  of  the  appellant,
otherwise,  it  will  suffer  from  the   vice   of   unreasonableness   and
irrationality.”

28.   Eventually, it was directed as follows:-
“The TANGEDCO is directed to evaluate the appellant’s price bid  along  with
the bid of the third respondent, in the light of our findings as  above  and
also  taking  into  consideration  in  all  required  parameters   and   the
clarifications submitted by the appellant in  its  various  representations,
as directed by the Single Judge in the order dated  31.7.2014  and  that  of
the Division Bench in its order dated 19.8.2014, afresh, at the earliest.”


29.    Before this Court, the consultant’s report is criticized by  the  1st
respondent stating thus:-
“2.3  The Consultant has made the following errors  in  the  calculation  of
the said ‘Upfront Fees Including Interest’ in respect of CSEPDI’s bid:

Error 1 : Included Commitment Fees

Error 2 : Calculated  and  loaded  interest  on  (a.)  Guarantee  Fee,  (b.)
Management Fee and (c.) Commitment Fee during the construction period of  36
months, i.e., IDC (Interest During Construction)

2.4   In 5.0 Item F – ‘Upfront Fees Including Interest’, the Consultant  has
loaded BHEL with Rs.8.925 Crores and CSEPDI with Rs.  801.180  Crores.   The
break-up of this Rs.  801.180  Crores  in  the  Consultant’s  Report  is  as
follows:

a. Guarantee Fee :     Rs. 371.743 Crores

b. Management Fee      :     Rs. 117.393 Crores

c. Commitment Fee      :     Rs. 156.184 Crores

d. Interest for 36 months

            on a,b,c (Rs. 127.613 Crores)

e. Interest from 37th to 42nd month:    Rs.155.860 Crores on a,b, &  c  (Rs.
28.247 Crores)

                 Total :          Rs. 801.180 Crores

2.4.1  There is no issue on entries a. and b. above

2.4.2 The issue is with regard to entries c. and d. above.

2.4.3. As regards c., no Commitment Fee  can  be  loaded,  for  the  reasons
explained below.

2.4.4 As regards d., no interest can be loaded for the  construction  period
of 36 months on Guarantee Fee and Management Fee, for the reasons  explained
below.  The question of interest on Commitment Fee does  not  arise  at  all
because no Commitment Fee can be loaded in the first  place  for  evaluation
of CSEPDI’s bid.

2.4.5 e. above will stand reduced as it depends on c. and d.

2.5   If the Consultant had correctly evaluated CSEPDI’s price  bid  by  not
including Commitment Fee and Interest on Guarantee Fee, Management  Fee  and
Commitment Fee for the construction period of 36 months, then  CSEPDI  would
be L1 by Rs. 171.600 Crores. Neither TANGEDCO nor BHEL  have  disputed  this
fact.

                       x     x     x    x     x     x

2.7 The  Consultant  has  confused  Commitment  Fee  with  an  Upfront  Fee.
Commitment Fee, as stated  above,  is  a  contingency  fee  payable  if  the
scheduled drawal does not take place.  An  Upfront  Fee  is  levied  by  the
lender as a definite fee without any contingency.  This  is  made  clear  by
PFC (BHEL’s lender) letter  dated  30-04-2015  showing  Commitment  Fee  and
Upfront Fee as distinct alternatives.  The Consultant has loaded  BHEL  with
Upfront Fee.  The Consultant has erroneously treated Commitment  Fee  as  an
Upfront Fee for CSEPDI and has in fact applied  the  label  Upfront  Fee  in
Item F”.

30.   With regard to the commitment  fee,  various  financial  nuances  have
been stated.  We think it apt to reproduce some of them:-
“2.8.3      When the earmarked funds  are  drawn,  the  interest  agreed  is
payable.  When the earmarked funds  are  not  drawn,  the  interest  is  not
payable but instead the Commitment Fee has to be  paid  on  the  amount  not
drawn.

2.8.4       CSEPDI’s Term Sheet clearly mentions that the Commitment Fee  is
payable on the cancelled portion of the loan.

2.8.5       The term ‘Accrued Drawal’  refers  to  the  amount  accured  and
available for drawal, but not drawn.

2.8.6       Commitment Fee is therefore only a contingent  fee  leviable  if
the funds are not drawn as per the Drawdown Schedule.  It  is  more  in  the
nature of a penalty in the event of a default by the borrower  TANGEDCO  and
is payable by TANGEDCO.  This cannot  be  added  to  the  project  cost  for
evaluation of the price bid.

                 x     x     x    x     x    x

2.8.8       The Repayment Schedule sets out the entire amount to be paid  by
TANGEDCO in the form of 48 Equated  Quarterly  Installments  (EQI)  starting
from the 43rd months of the date of financial  closure  for  12  years.   If
there is one document to be termed as most important to evaluate  the  Price
Bid, it is this Repayment Schedule.  The Repayment Schedule is part  of  the
Price Bid and is absolutely crucial as it caps the amount  TANGEDCO  has  to
pay.  Not a single rupee needs  to  be  paid  over  and  above  the  amounts
mentioned in the Repayment Schedule.

2.8.9       The EQI in the Repayment Schedule is based on the figure of  Rs.
15,038.2914 Crores, which comprises of interest  Rs.  5,025.3628  Crores  on
the Net Loan amount of Rs. 10,012.9286 Crores.  The components of  this  Net
Loan amount are:

a.  Loan amount
(85% of Total EPC
Cost of 9709.3822 Crores)         :     Rs. 8252.9748/-
b. Interest at 7.2% p.a. on the
above loan amount during
the Construction Period of 36     :     Rs. 896.2032/-
months
c. Guarantee Fee             :    Rs. 392.0163/-
d. Management Fee                 :     Rs. 123.7946/-
Moratorium Period interest
for 37th to 42nd month
(interest at 7.2% p.a. for
6 months on the total of
a,b,c and d. above)               :     Rs. 347.9396/-

Total                                :  Rs.10,012.9286/-*

*The Price Bid submitted by CSEPDI was Rs. 9709.3822 Crores  and  the  above
calculations were on that basis.  However the admitted position is  that  of
this sum, Rs. 509.339 Crores was disallowed by TANGEDCO and  the  Price  Bid
was arrived at  Rs.9207.264  Crores.   The  Consultant  has  also  evaluated
CSEPDI’s bid at Rs. 9207.264 Crores”.

31.   With regard to no interest on guarantee fee and management fee  during
the construction period of 36 months and no interest on Commitment fee,  the
stand of the 1st respondent has been put forth in various compartments.   We
think it apt to reproduce the relevant grounds:-
“2.9.1 The Consultant ought not to have loaded  interest  on  Guarantee  Fee
and Management Fee during the construction period  of  36  months,  for  the
evaluation of CSEPDI’s Price Bid.

2.9.2 The very same Repayment Schedule calculation set out above shows  that
no interest is being charged on Guarantee Fee and Management Fee during  the
construction period of 36 months and does not form part of the amount  which
TANGEDCO has to repay.  Not a single rupee needs to be paid over  and  above
the amounts mentioned in the Repayment Schedule.

2.9.3 The only interest payable during the construction period of 36  months
is interest calculated at 7.2% p.a. on the basic loan  amount  (85%  of  the
EPC cost) and not on any other amount  like  Guarantee  Fee  and  Management
Fee.  This is made clear in the  specific  calculation  sheet  for  Interest
During Construction submitted by CSEPDI in its Price Bid.

2.9.4 The Term Sheet submitted by CSEPDI outlines the fees  required  to  be
paid by TANGEDCO and the circumstances in which they are  payable.   In  the
very nature of this contract, the items chargeable  have  to  be  mentioned,
not the items not chargeable.  The contract requires to be  evaluated  based
on what the bidder is charging TANGEDCO.

2.9.5 In CSEPDI’s  Term  Sheet,  mention  is  made  of  Management  Fee  and
SINOSURE Re-insurance (Guarantee Fee). No mention is  made  of  interest  on
Management Fee and Guarantee Fee for the construction period of 36 months.

2.9.6 As far as interest on Commitment Fee is concerned, the same  does  not
arise as Commitment Fee itself cannot  be  loaded  for  evaluating  CSEPDI’s
bid.”

32.   The 1st respondent has also put forth  that  the  Consultant  was  not
right in loading on CSEPDI bid the values for  Commitment Fee  and  interest
thereon and  Interest  on  Guarantee  Fee  and  Management  Fee  during  the
construction period of 36 months, because that  Clause  14.d.6  only  states
that details of the Financing Charges should  be  clearly  outlined  in  the
Financing Term Sheet and does not state that it should be  included  in  the
price evaluation; that the reference to Commitment Fee  in  the  Term  Sheet
clearly indicates that it is only on the  cancelled  portion  of  the  loan;
that the fee is to be paid only if the loan  amount  is  not  drawn  by  the
18th, 30th and 42nd months in accordance with the  Drawdown  Schedule;  that
Clause 12.1 and Clause 32.1.1 makes no  mention  of  interest  on  Financing
Charges (i.e., on Management Fee and Guarantee Fee) during the  IDC  period;
that the words ‘Interest and Financing  Charges’  cannot  mean  interest  on
financing charges; that there is absolutely no  variance  between  the  Term
Sheet and Repayment Schedule submitted by CSEPDI; that the  Term  Sheet  and
the entire Financial Proposal/Price Bid, including the  Repayment  Schedule,
are to be read together; that the CSEPDI’s Term Sheet only mentions  that  a
Management Fee  is  to  be  paid  but  does  not  mention  any  interest  on
Management Fee for the 36 month construction period (IDC  period)  and  that
the Consultant ought not to have loaded the disputed amounts for  evaluating
the price bid of CSEPDI. It is also the stand  that  on  a  perusal  of  the
Comparison Sheet filed would  indicate  that  CSEPDI  is  L1  by  Rs.171.600
crores if the evaluation is done correctly. That apart, the  1st  respondent
has raised other grounds which we need not refer to in detail.
33.   The Corporation in support of the Consultant’s Report has stated  that
the stand of the 1st respondent  that  Net  Loan  Amount  in  the  repayment
schedule provided by respondent No.1 gives no  break  up  of  how  the  said
figure has been reached; that one cannot find out from  a  bare  perusal  of
the said Repayment Schedule as to whether the respondent No.1  has  factored
the component of Commitment Fee in the Net Loan Amount; that the  respondent
having not been declared as L1 bidder as a post facto  contention,  now  say
that Commitment Fee shall not be taken for evaluation in spite of  the  fact
that they themselves have quoted Commitment Fees for Rs.164.702 crores  with
split up details in the price bid and the above  post  facto  contention  is
against all tenets of fairness and justice; that  had  the  respondent  No.1
become L1, they would have insisted that Commitment Fee  being  a  financial
charge forms part of the loan and  therefore  is  payable  by  the  borrower
i.e., the Corporation as per their price bids submitted by respondent  No.1;
that since the respondent No.1 had not been evaluated as  L1,  a  contention
is advanced that Commitment Fee should not be taken  for  evaluation  citing
universal definition.
34.   On interest  on  management  and  guarantee  fee,  the  stand  of  the
Corporation is that the CSEPDI-TRISHE CONSROTIUM have  quoted  Rs.  123.9746
crores as Management fees and Rs. 392.0163 crores as Guarantee fee in  their
Price bid.  There is no dispute on  the  quantum  of  fees.  The  Consultant
during the evaluation have worked out interest @ 7.2 per annum on the  above
fees as per the term sheet of the Industrial and Commercial  Bank  of  China
Limited from the date on which they fall due since the above fees form  part
of the debt to be repaid by the appellant; that it is clear from the  Tender
Conditions as well as the Term Sheet provided by Industrial  and  Commercial
Bank of China Limited and the  clarification  dated  21.10.2013  (issued  by
Industrial and Commercial Bank  of  China  Limited)  that  appellant  herein
would be bound to pay the interest on  the  whole  loan  amount  which  will
include the financial charges.
35. The Corporation has quoted the  relevant  tender  conditions   from  the
Term Sheet submitted by Industrial and  Commercial  Bank  of  China  Limited
which are reproduced below:-
“Clause 14(d)1 of the Instruction to Bidders under the  Tender  defines  the
“Loan Amount” to include at least 75% of  the  total  EPC  cost  +  100%  of
interest during construction and Financing  Cost. As per clause 14(d)  6  of
the Instruction to Bidders under the Tender  management  fee  and  guarantee
fee is part of the financial charges/financial cost.



Under the term relating to  “Interest  rate”  in  term  sheet  submitted  by
Industrial and Commercial Bank of China it  is  clearly  provided  that  the
Borrower will pay interest on the full loan  amount  at  a  fixed  rate  per
annum.



Under the terms defined as “management fee” in the term sheet  submitted  by
Industrial and Commercial  Bank  of  China  Limited  it  is  specified  that
Management fee of 1.5% flat on the  Loan  Amount  will  be  payable  to  the
lender within a period of 60 days from the date of financial  closure.   Six
months is the time given for financial closure and so 8 months  in  case  of
management fee in view of outer limit of 60 days.



Similarly,  under  the  terms  relating  to  “Conditions   Precedent”,   the
condition (d) the term sheet specifies  that  petitioners  will  be  charged
guarantee fee (termed as Insurance Policy in the term sheet) at the rate  of
5% on 95% of the loan amount and the same will be payable from  the  end  of
the 6th month.



According to the term sheet the  amounts  get  debited  to  the  Petitioners
account at the end of the 8th month and 6th month respectively.



All financial costs form part of the debt  taken  from  the  Industrial  and
Commercial  Bank  of  China  Limited.   As  per  the   clarification   dated
21.10.2013 issued by Industrial and Commercial Bank of China  Limited  which
is the Lender institution for Respondent no.1 all costs and fee  charged  by
ICBC will form part of the debt financing”.

36.   From the aforesaid, it is vivid that the Consultant has  analysed  the
offers regard being had to the tender conditions.  Be  it  ingeminated  that
the analysis and determination made by the  financial  consultant  has  been
carried out before receipt  of any additional  document  from  either  side.
The documents were called for by the owner from both the qualifying  bidders
in a transparent manner and the same have been considered  at  the  time  of
evaluation  by  the  Consultant.   Submission  of  Mr.  Sibal  is  that  the
evaluation is ex facie defective  inasmuch  as  the  Consultant  has  loaded
certain charges as a consequence of  which  the  price  has  gone  up.   Mr.
Rohatgi, learned  Attorney  General  appearing  for  BHEL  and  Mr.  Prasad,
learned senior counsel appearing for the Corporation would submit  that  the
evaluation  is  founded  on  definities  leaving  nothing  to  any  kind  of
contingency.  They have referred to the Term Sheet and what  is  put  up  by
Industrial and Commercial Bank of China Limited. At  this  juncture  we  are
obliged to say that in a complex fiscal evaluation the Court  has  to  apply
the doctrine of restraint.  Several aspects,  clauses,  contingencies,  etc.
have to be factored.  These calculations are best left to experts and  those
who have knowledge and  skills  in  the  field.  The  financial  computation
involved, the capacity and efficiency of the bidder and  the  perception  of
feasibility of completion of the project have to be left to  the  wisdom  of
the financial experts and consultants.  The courts cannot really enter  into
the said realm in exercise of power of judicial review.  We  cannot  sit  in
appeal over the financial consultant’s assessment.  Suffice it  to  say,  it
is neither ex facie erroneous nor  can  we  perceive  as  flawed  for  being
perverse or absurd.
37. Before parting with the case we are constrained to add something. We  do
so with immense pain.  The respondent, before finalization of the  financial
bid submitted series of representations and seeing the silence of the  owner
it knocked at the doors of the writ court which directed  for  consideration
of the representations.  We are disposed to think that  the  High  Court  at
that stage should have exercised  caution.  If  the  courts  would  exercise
power of judicial review in such  a  manner  it  is  most  likely  to  cause
confusion and also bring jeopardy in public  interest.  An  aggrieved  party
can approach the Court at the appropriate  stage,  not  when  the  bids  are
being considered. We do not intend to specify. It is appreciable  the  owner
in certain kind of  tenders  call  the  bidders  for  negotiations  to  show
fairness transparently. But the present case is not a one  of  such  nature.
Once  the  price  bid  was  opened,  a  bidder  could  not  have   submitted
representations on his own and seek  a  mandamus  from  the  Court  to  take
certain aspects into consideration.  We have stressed this  aspect  only  to
highlight the role of the Court keeping in mind  the  established  principle
of restraint.
38.   In view of our preceding analysis we are  of  the  considered  opinion
that the Division Bench through the delineation has adopted the approach  of
an appellate forum or authority  and  extended  the  principle  of  judicial
review to certain areas to which it  could  not  have  and,  therefore,  the
judgment and order of the Division Bench  followed  the  path  of  error  in
continuum. Consequently, the inevitable conclusion is  unsettlement  of  the
impugned order and we so direct. In the ultimate eventual the appeals  stand
allowed. There shall be no order as to costs.

                                            ..............................J.
                                                               (Dipak Misra)



                                            ..............................J.
                                                         (Shiva Kirti Singh)
New Delhi;
October 18, 2016.


-----------------------
[1]

      [2]  (2007) 14 SCC 517
[3]

      [4]  (1990) 3 SCC 280


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