Manufacturing Co.Ltd. Vs. M/S Power Grid Corp. of India Ld.& ANR.  INSC
254 (9 February 2009)
REPORTABLE IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 801 OF
2009 [Arising out of Special Leave Petition (Civil) No.14858 of 2008] M/s.
Electrical Manufacturing Company Ltd. .. Appellant -versus- M/s. Power Grid
Corporation of India Ltd. & Anr. .. Respondents
MARKANDEY KATJU, J.
appeal has been filed against the impugned judgment dated 26.5.2008 of the
Delhi High Court in Writ Petition (Civil) No.3668 of 2008.
Shri Sudhir Chandra, learned senior counsel for the appellant, and Shri K.K.
Venugopal, learned senior counsel for the respondent and perused the record.
appellant Electrical Manufacturing Company Ltd., (hereinafter as `EMC') has
alleged that it is a leading modern power system company in India and is the
first ISO 9001 certified company in India in Transmission Line Projects. It was
established in 1951 and carries out such projects in India as well as overseas.
It filed a writ petition in the Delhi High Court with the following prayer :-
"To quash the decision taken by the Board of Directors in its meeting held
on 06.5.2008 with respect to not awarding of contract to the petitioner with
respect to Package A1, A2 & A7 in spite of the fact that it is L1, technically
qualified as per the requirement and more so its bid is Rs.16.34 crores less
than L2 bidders."
respondent no.1, the Power Grid Corporation of India Ltd. ((hereinafter as
`PGCIL') is a Public Sector Undertaking of the Government of India working
under the Ministry of Power. The petitioner has been carrying out the contract
of respondent no.1 for a long time.
5.11.2007, a Notice inviting tender with respect to Package A1 and A2 was made
by respondent no.1 PGCIL. On 8.11.2007, Notice inviting tender with respect to
Package A7 was made by respondent no.1.
These tenders were
for setting up electrical transmission lines.
8.1.2008 and 9.1.2008, bids were opened for the above mentioned packages,
respectively. In both the petitioner was declared the Lowest Quoted Bidder
16.4.2008 the petitioner made representations to the respondent no.1 with
respect to Package A1, A2 and A7, explaining as to how the petitioner was fully
qualified and met the requirements of technical experience stipulated in Clause
1.1 of Annexure `A' of Special Condition of Contract.
6.5.2008, the respondent no.1, decided not to award the contract for the above
mentioned packages to the petitioner as it was of the opinion that the
appellant did not have the requisite technical experience as set out in Clause
1.1 of Annexure `A' of the Special Condition of Contract.
appellant has alleged that the above refusal by respondent no.1 to award the
contract for the above mentioned packages was arbitrary and illegal since the
appellant's bid was the lowest among all the bidders.
Sudhir Chandra, learned senior counsel for the appellant has submitted that the
appellant has been denied the contract in question on an erroneous
interpretation of Clause 1.1 of Annexure `A' of the Special Conditions of
Contract. The aforesaid Clause 1.1 states :
Experience The bidder shall have satisfactorily completed as a prime contractor
or as a sub-contractor or as a member in a Joint Venture, 345/400 KV Double
Circuit or higher voltage class transmission line(s) within the last seven (7)
years as on date of bid opening. The bidder's experience should include the
(i) The bidder should
have surveyed, optimized tower locations, erected and strung with tension
stringing equipment, not less than following cumulative route length of
transmission lines of 345/400 KV Double Circuit or higher voltage class
involving bundle conductor.
Package - A7 : 100
Kms Package - A8 : 100 Kms"
counsel for the appellant submitted that the appellant fully satisfied the
requirements mentioned in Clause 1.1 namely that the petitioner has surveyed,
optimized tower locations, erected and strung with tension stringing equipment,
not less than following cumulative route length of transmission lines of
345/400 KV Double Circuit or higher voltage class involving bundle conductor,
which in so far as the petitioner is concerned is 100 Kms. for package A1 and
A7 and 200 Kms. for package A8. Hence learned counsel submits that the
appellant should have been given the contract in question.
the other hand Shri K.K. Venugopal, learned senior counsel for respondent
submitted that sub-clause (i) of Clause 1.1 has to be read along with the main
clause 1.1 which stipulates that the bidder should have satisfactorily
completed the requisite length of 100 Kms. He submitted that the petitioner has
only satisfactorily completed 83 Kms. of transmission line as on 9.1.2008 and
therefore, did not fulfill the technical experience required by Clause 1.1.
dispute thus in this case is whether the appellant has the requisite technical
experience mentioned in Clause 1.1 of the Special Conditions of Contract.
K.K. Venugopal, learned senior counsel for respondent submitted that the
appellant has satisfactorily completed only 83 Kms. of transmission lines as on
the date of the opening i.e. 8/9.1.2008 instead of the requisite 100 Kms. He
submitted that the appellant had in addition laid various incomplete
transmissions lines, but these cannot be added to the lines satisfactorily
completed because they are incomplete. The chart showing the work done by the
appellant is as follows:
completed Total extent of Lines Line by petitioner as on the line in
Satisfactorily 8/9.1.2008 question Completed by petitioner Meerut- 60 km (on
29.9.03) 60 km 60 km Mandola Bhadrawati- 23 km (on 13.4.06) 23 km 23 km
Chandrapur Trivenveli- 134 km (on 136 km Udmalpet 8/9.1.08; 2 km incomplete)
TAPP- 87 km (on 8/9.1.08; 97.3 km Kankaroli 10.3 km incomplete) Total 304 km 83
perusal of the above chart shows that the appellant has only satisfactorily
completed 83 Kms. of transmissions lines. The line Trivenveli-Udmalet in Tamil
Nadu was incomplete because only 134 Kms. out of the total extent of the line
of 136 Kms. had been completed by the appellant. Hence this transmission line
could not be treated to be satisfactorily completed. Similarly the line
Tapp-Kankaroli was also incomplete as it was only laid for 87 Kms. but the
entire line had to be 97.3 Kms.
Sudhir Chandra, learned senior counsel for the appellant has submitted that the
view taken by the High Court that satisfactorily completing the line means
commissioning the line is not correct. We are of the opinion that even if
satisfactory completion may not necessary mean commissioning of the line but it
certainly means completion of the entire length of the line and thereafter
testing the line to find out whether it is functioning satisfactorily. Without
testing it how can one be sure that it has been completed satisfactorily.
instance, if an electrical line is laid inside a person's house, the only way
to find out whether the electrical line has been laid satisfactorily is to find
out by pressing the switch and seeing whether the bulb in the house 8 is
lighted or the fan starts running. Merely putting wires dangling inside the
house but which do not light the bulb or turn the fan cannot be said to be
satisfactory completion of the electrical line.
the present case, as can be seen from the chart set out above the appellant has
not completed the lines from Trivenveli to Udmalet nor from Tapp to Kankaroli.
Unless the entire line is laid and is found to be functioning satisfactorily,
it cannot be said that there was satisfactory completion of the line.
regards the interpretation of Clause 1.1 we cannot agree with Shri Sudhir
Chandra that the words `Satisfactorily Completed' would not govern sub clause
(i) of Clause 1.1. A fair reading of the entire Clause 1.1 along with sub
clause (i) clearly indicates that the requisite technical experience requires
satisfactorily completion of the requisite length of the line. Sub clause (i)
is a part of Clause 1.1 and hence mere surveyance, optimizing tower locations,
erecting and stringing with tension stringing equipment, etc. is not sufficient
to give the requisite technical experience to the bidder unless such work was
satisfactorily completed, which means that it was tested and found to be
the bidder has surveyed, optimized tower locations, erected and strung with
tension stringing equipment, the requisite length of transmission lines, but
these transmission lines do not function, surely it cannot be said there was
satisfactory completion of these transmission lines. In our opinion the
expression `Satisfactory Completion' govern sub clause (i) of Clause 1.1 also.
Hence mere surveying, optimizing tower locations, erecting and stringing with
tension stringing equipment the requisite length of transmission lines will not
be enough to give the necessary technical experience because it is possible
that even after doing the above work the transmission lines may not function.
Unless after doing the above works the line is tested and found to be
successfully functioning it surely cannot be said that there was satisfactory
completion of the transmission lines.
from the above, completion of a part of the line will be of no avail and the
entire line from one location to another has to be completed before there can
be said to be satisfactory completion of the line.
Completion of part of
the line has to be totally ignored as a line is one integral whole and cannot
be divided into sections.
there is no force in this appeal and it is dismissed. No costs.