Hydro Devt. Corp. Vs. Alstom Hydro France & ANR.  INSC 229 (26 March
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2761 OF
2010 (ARISING OUT OF SLP (C) NO. 15779 OF 2009) Tehri Hydro Development
Corporation ... Appellant Versus Alstom Hydro France & Anr. ... Respondents
WITH CIVIL APPEAL NO.__2762_OF 2010 (ARISING OUT OF SLP (C) NO.19890 OF 2009)
Alstom Hydro France ... Appellant Versus Tehri Hydro Development Corporation
Limited & Anr. ... Respondents WITH Voith Hydro GMBH Co. KG .... Petitioner
Versus Alstom Hydro France & Anr. .... Respondents ORDER V.S. SIRPURKAR, J.
Leave granted in SLP (C) Nos.15779 and 19890 of 2009.
These appeals emanate out of the order passed by the learned
Single Judge of Uttaranchal High Court. On 31st August, 2007, the appellant
herein invited bids for turn- key execution of the Tehri Pump Storage Plant,
Phase-II. After the pre-bid conference and amendments four pre-qualification
bids were submitted on 29th December, 2007 by respondent no.1 - Alstom Hydro
France, Patel Engineering, Sumitomo Corporation, Japan and Voith Seimens as
leaders of their respective consortia. Initially respondents 1 and 2 along with
Sumitomo Corporation, Japan were qualified, however, subsequently the bid of
Sumitomo Corporation was declined as non-responsive. Thus there were two parties
in the fray, they being respondents 1 and 2 herein. These two gave two price
options. However, respondent no.1 filed a Writ Petition being W.P. No.167 of
2009 in the Uttarakhand High Court on two grounds, namely, (a) that respondent
no.2 was not technically qualified; (b) that respondent no.2 had submitted two
price bids which was in contravention of the terms and conditions of the ITB.
The High Court by its final judgment came to the conclusion that the respondent
no.2 was qualified. It was further held that there was no violation of terms
and conditions of ITB.
the learned Single Judge passed the following order by way of final directions:
this Court holds as follows:
qualifications of respondent no.2 for having done the work of `erection' at
Ghangzhou II seems to be in order as this court holds `supervision of erection'
as equivalent to that of `erection' and rejects the arguments of petitioner on
the eligibility of respondent no.2.
under the facts of this case, if two price bids had been invited by the
employer - one as an assignee and the other as a partner, then again there is
nothing wrong in such an approach and if consequent to it two price bids have
been given by respondent no.2- one as an 3 assignee and the other as a partner,
it is in order and will not be called as a non-responsive bid. However, since
the process of calling two bids is flawed for lack of clarity, the benefit has
to be given to the petitioner, for the reasons already stated above. Hence, it
is directed that respondent no.1 must ask for fresh bids from the petitioner as
well as respondent no.2."
aggrieved the appellant herein filed the present appeals.
As it appears from the appeal filed by Tehri Hydro Development
Corporation, the appellant assails the direction of the learned Single Judge to
issue fresh bids as it was bound to further delay the project which was already
delayed for six months only because of the pending proceedings. A contention
was also raised that the fresh bidding was directed without offering any
protection to the appellant herein against cartelization. It was, therefore,
apprehended that the two multinational corporations, they being respondents 1
and 2 in the appeal filed by Tehri Hydro, as leaders of the Consortia could
possibly get together and submit revised reduced bids which would not be in the
public interest. The criticism by the learned Single Judge in the impugned
judgment to the effect that there was no clarity on the issue whether two price
bids could be submitted was also assailed on various grounds. It was pointed
out that the price options of the respondent no.1 were at Rs.2520.60 crores
while after discount it was at Rs.2483.80 crores. The price options of the
respondent no.2 was at Rs.2327.50 crores as assignee and under Clause
9.4.4(v)(e) as a partner it was Rs.2261.60 crores and thus the respondent no.2
was the lowest bidder. According to the appellant this fact was completely lost
sight of by the High Court.
Notice was ordered to be issued on 11.9.2009. At that stage itself
all the interested parties were being represented through counsel. It was,
however, expressed by the learned Attorney General for India that in the
national interest of completing the project early, the appellant was not averse
to inviting the fresh bids in light of the judgment of the High Court.
Accepting that plea, the following order came to be passed:
affidavits shall be exchanged within three weeks from today. Tehri Hydro
Development Corporation shall invite fresh bids in the light of the judgment of
the High Court. Both Alstom Hydro France and Voith Siemens Hydro Germany shall
be entitled to put in their bids. These bids shall be examined by the Tehri
Hydro Development Corporation and report shall be submitted to this Court in a
sealed cover. Needless to mention, all this shall be done without prejudice to
their rights and contentions. All contentions shall be open. We are passing
this order deliberately as we are told that a very important project is held
after six weeks."
fresh bids were invited and the respondents 1 and 2 submitted the same.
ordered in the earlier order two bids were submitted to the Registry of this
Court in the sealed covers. Learned Attorney General also offered that the
sealed covers could 5 be opened in the office of the Registrar. Accordingly,
the bids were directed to be opened on 26.10.2009 at 4.30 p.m. in the office of
Registrar (Judicial-I) and copies thereof were directed to be given to the
representatives of the respective parties. A Report was submitted thereafter in
the sealed covers and vide order dated 4.12.2009, the appellant was directed to
process the matter further on the basis of the fresh bids.
appellant, at this stage, also offered to give hearing, if any, to the parties
in respect of their objections to the fresh bids.
Before that since it was found that respondent no.2 had impugned
the order of the learned Single Judge dated 29.12.2009 by way of an appeal
before the Division Bench of the Uttaranchal High Court being Special Appeal
No.131 of 2009. That appeal got transferred to this Court.
On 3.12.2009 the respondent no.1 submitted a representation
against the exercise of scrutiny by the appellant. It was suggested that the
respondent no.1 had no opportunity to review the contents of the Report. Some
other objections were also raised insisting that ultimately the Tender should
be awarded in favour of the respondent no.1 alone. It seems that all these
objections raised by the respondent no.1 were referred to a Panel of Experts on
29.1.2010. A letter to that effect was written to both the respondents by the
appellant. It was stated in this letter that the examination report on fresh
bids was opened in the Court on 4.12.2009 and since the court had directed the
appellant herein to give hearing to the objections raised by the parties, if
any, before the final decision and since the copies of the examination report
were already supplied and the appellant had received a representation raising
objections, in 6 order to maintain the transparency the appellant had
constituted a Panel of three experts of national repute and impeccable
integrity to examine the objections raised by the Consortium of respondents.
This panel of experts comprises of following experts:
Ramesh Chandra (Ex-Chairman, CWC) ii) Shri D.V. Khera (Ex-Chairman, CEA) iii)
Shri A.K. Shangle (Ex-Member, CWC) The objections raised by the first
respondent were inquired into by the Panel of Experts.
of Experts framed the following question:
the examination report of THDC declaring the bid of the Consortium of
M/s.Alstom as non-responsive is OK or the objections raised by the Consortium
of M/s.Alstom are justified with reference to the Terms & Conditions of the
Tender, Techno-commercial bid submitted in October 2008 and fresh price bid
submitted in October, 2009 and their bid can be considered as responsive."
of experts have drawn a conclusion in their report to the following effect:
upon the views outlined above, POE is of the opinion that fresh price bid of
consortium of M/s.Alstom is non-responsive. Their quoted price on partnership
basis even though non-responsive is however lower by Rs.84.5 crores (M/s.Voith
Rs.21,551,245,304.00 - M/s.Alstom Rs.20,705,840,090.00). Similarly, the quoted
price on assignee basis though non-responsive is lower by Rs.108.7 cores
(M/s.Voith Rs.22,343,174,985.00 - M/s.Alstom Rs.21,256,007,413.00). The
unconditional offer of consortium of M/s.Alstom to take care of THDC
observation without any extra cost so that bid becomes responsive and in
accordance with employers' requirement is not acceptable as this is not
permissible under Bidding Document of this Tender."
Ultimately when the matter was heard on 15.2.2010, a copy of the
report of the Panel of Experts was handed over to the parties.
When the matter came up on 19.3.2010 Shri Harish Salve, Senior
Advocate and Dr.A.M. Singhvi, Senior Advocate appearing for the respondent no.1
urged that the Panel of Experts had not given a fair opportunity to it and that
it had merely reiterated what was already done by the appellant. The respondent
no.1, however, in order to give quietus to the matter urged as under:- "it
is agreeable if the Government of India sends for the files and considers all
the objections raised by it and Voith and issues appropriate directions to the
appellant. Such a power is available with the Government in relation to PSUs in
any event. If such an `administrative review', is conducted, the petitioner
(respondent no.1 in the appeal filed by Tehri Hydro) states that it shall not
challenge any decision that may be taken in the matter by the Government of
India and the matter shall, as far as the petitioner (respondent no.1 in the
appeal filed by Tehri Hydro) is concerned, be given a quietus".
the respondent no.1 whose bid has been found to be non- responsive by the
appellant as well as Panel of Experts was prepared to have a final decision
from the Government of India.
Learned Attorney General as well as Shri F.S. Nariman, Senior
Advocate appearing on behalf of the respondent no.2, however, opposed this
plea. It was pointed out by the learned Attorney General that at no point of
time the integrity, competence or capability of the members of the Panel of
Experts was ever challenged by anybody including the respondent no.1. The
nature of objections raised to the report is of technical character. Even in
its objections the respondent no.1 has not challenged 8 the bonafides of the
Panel of Expert though during the arguments the possibility of bias was
expressed though haltingly. Learned Attorney General pointed out that in case
the respondent no.1 has any grievance of not being heard by the Panel of
Experts, the respondent no.1 could still address the Panel of Experts which
could be requested to give a hearing to the respondent no.1. The Attorney
General Pointed out that all the grievances, technical or otherwise could well
be raised before the Panel of Experts and for that purpose a hearing could be
given to all the concerned parties on the basis of the objections raised by
them which would atleast put an end to the controversy.
The offer given by the Attorney General is undoubtedly a fair
offer. The respondent no.1 has no problem about the matter being referred to
the Government of India. We do not think that in absence of any allegations/
charges made and substantiated against the Panel of Experts, it would be proper
to change the Panel of Experts and to appoint a new Panel of Experts through
the Government of India or some other panel. There has to a finality somewhere.
We are pained to note that a very important project like the present one is
being held up in a legal battle between the two multinational companies. Till
today, even the contract has not been finalized. All this would invariably
cause loss to the nation. After all, contractual rights of these companies are
not more important than the national interest.
Under the circumstances we order that the Panel of Experts shall
give one more final opportunity to the parties to be heard and more
particularly the respondent no.1 on the objections that it has raised on the
earlier report of Panel of Experts and give a fresh report in the nature of recommendations.
This exercise should be completed by 9 the end of April, 2010. The appellant
herein would then, without loss of time, take the decision, considering the
report of the Panel of Experts regarding the award of contract.
This course would leave nothing to be decided in the pending
appeals. Firstly, when the Attorney General for India agreed to invite fresh
bids as per the directions of the High Court, there remained nothing in that
appeal as the invitation for new bids would straightaway put the clock back and
the parties would be back to square one.
when all the parties agreed to give their fresh bids in pursuance of the offer
made by Attorney General for India, there remained nothing in the original
controversies. The challenge to the judgment by respondent no.1 in the appeal
arising out of SLP 19890 of 2009 would also not survive once both the
contesting respondents accepted the proposal to put bids again. Therefore, at
this juncture, it is futile to go into the earlier controversies. Even the
challenge by respondent no.2 would be of no consequence once the respondent
no.2 was given a fresh opportunity for bidding. The exercise of bidding before
this Court was ordered with the sole objective of saving time and to give the
transparency to the whole exercise. Once the fresh bids were allowed to be
given the old controversies before the High Court would naturally become
opinion it would be in the interest of the project which has already been
dragged by more than a year that the Panel of Experts should be allowed to
consider the objections and express their opinion. That opinion shall then be
considered by the appellant which would take the final decision on that basis.
We must reiterate here that it is not for this Court to award the contracts by
accepting or rejecting the tender bids. It 1 is exclusively for the appellant
herein to do that. Once all this exercise is over, nothing would remain for us
to decide in these appeals.
In view of the directions passed above both the appeals as well as
the Transfer Case No.33/2009 are disposed of.
..............................................J. (V.S. SIRPURKAR)