M/S. SIEMENS AKTIENGESELISCHAFT & S.LTD. Vs DMRC LTD. .
Bench: T.S. THAKUR,C. NAGAPPAN
Case number: C.A. No.-002068-002068 / 2014
Diary number: 16120 / 2013
Advocates: BIJOY KUMAR JAIN Vs
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2068 OF 2014 (Arising out of S.L.P. (C) No.19233 of 2013)
M/s Siemens Aktiengeselischaft & S. Ltd. …Appellant
Versus
DMRC Ltd. & Ors. …Respondents
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. A Division Bench of the High Court of Delhi has by a
common order passed in Writ Petition (C) No.1853 of 2013
filed by the appellant and Writ Petition No.2615 of 2013 filed
by Alstom Transport India Ltd. declined to interfere with the
award of a contract for the supply of 486 Standard Gauge
Cars Electrical Multiple Units meant for use in Phase-III of
the Mass Rapid Transit System (‘MRTS’ for short) for Delhi
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and its extension corridors. The High Court has taken the
view that the process of evaluation of the bids received from
eligible bidders culminating in the award of a contract in
favour of respondent No.2-Hyundai Rotem Company (‘HR’
for short) was transparent and did not suffer from any
illegality, irregularity or perversity of any kind to warrant
interference by it. The High Court held that the bidders were
well aware of and had accepted the tender conditions which
were free from any vagueness or uncertainty. The
parameters of evaluation conditions were also held to have
been applied uniformly to all the bidders under a procedure
that was open, transparent and fair as required by law. The
present appeal assails the correctness of that judgment and
order. Alstom Transport India Ltd. & Ors.-Writ-Petitioners in
connected Writ Petition No.2615 of 2013 have, however,
remained content with the view taken by the High Court and
have not chosen to appeal.
3. Respondent-Delhi Metro Rail Corporation (‘DMRC’ for
short) has planned to implement Phase-III of the MRTS for
Delhi to keep pace with the ever increasing traffic demands
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in Delhi. Phase-III of the MRTS, Delhi comprises metro
corridors of Mukundpur-Rajori Garden-Dhaula Kuan -
Maujpur - Gokulpuri and Janakpuri (West)–Munirka - Kalkaji -
Kalindi Kunj - Botanical Garden - (Noida). The project, it is
common ground, is financed with the help of a loan secured
by the DMRC from Japan International Cooperation Agency
(‘JICA’ for short). The loan agreement, inter alia, stipulates
the bid procedure to be followed by DMRC. What is
noteworthy is that the procedure, inter alia, provides for
submission of tenders to JICA for review, concurrence and
analysis of bids by the DMRC and reserves with the JICA the
discretion to convey its views regarding the analysis of the
bids and the proposal for award of the works.
4. In keeping with the requirements of the agreement
between DMRC and JICA, the former invited sealed tenders
in two parts (Technical & Price Bid) on International
Competitive Bid (‘ICB’ for short) basis for the design,
manufacture, supply, testing, commissioning and training of
486 number of Standard Gauge Cars Electrical Multiple units
referred to earlier at an estimated budget cost of Rs.3500
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crores funded by JICA. Pre-bid meetings were held to answer
the queries, if any, raised by the bidders. The DMRC in the
meantime issued as many as 9 Addenda which necessitated
the change in the dates fixed for submission of bids to enable
the bidders to formulate their offers and make their bids in
accordance with the terms and conditions finally stipulated
for the purpose. DMRC eventually received eight bids
including one submitted by the appellant before us. The
technical bids were opened on 18th September, 2012
whereupon only six of the bidders including the appellant
were declared to be eligible. With the opening of the
technical bids GEC values which the bidders were required to
submit as a part of their technical bid and which were
relevant and to a great extent critical for evaluation of the
price bid under the applicable terms and conditions also
became known to the bidders. The financial bids offered by
these six bidders were then opened on 9th February, 2013
and the bid amount along with GEC values offered by each
bidder announced by the DMRC. The price quotations of the
six bidders found eligible were as under:
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Bidder Grand Total in INR
INR per Car (without loading)
Position before Loading due to
difference in GEC values
Siemens Consortium 3625,27,92,409 7,45,94,223 L-1 Bombardier Consortium
4242,27,83,378 8,72,89,678 L-2
Hyundai ROTEM 4290,57,94,689 8,82,83,528 L-3 Alstom Consortium 4373,87,65,001 8,99,97,459 L-4 CAF Consortium 4614,18,66,794 9,49,42,113 L-5 Hitachi + BHEL 4891,32,60,656 10,06,44,569 L-6
5. Significantly, however, the above did not represent the
true inter se position of the bidders. That was so because
apart from the price quotation, the terms and conditions of
the tender notice required loading of GEC values duly
converted into Indian rupee to the price quotation of each
eligible bidder. The GEC values in turn comprised two distinct
components, namely, ‘X’ factor representing the electricity
consumption for the operation of the train without HVAC and
‘Y’ factor for operation of HVAC. The GEC values offered by
the six bidders found technically compliant were as under:
S.No. Bidder Other than HVAC (‘X)
HVAC (‘Y’) Total
1 ALSTOM 1434 595 2029 2 BTC 1621 564 2185 3 CAFC 1159 790 1949
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4 HBC 1767 514 2281 5 HRC 1259 567 1826 6 SIEMENS 1560 786 2346
6. In terms of Annexure ITT-8 the GEC value of
respondent No.2 which was the lowest was taken as the
baseline for the purpose of loading the rupee equivalent of
the higher values offered by other bidders on to their price
bids. The Indian rupee conversion of the said value above the
baseline, proportionate to the higher GEC values was worked
out as under:
S.No .
Bidder GEC (‘X’ + ‘Y’)
KWH
GEC for loading
INR
1 ALSTOM 2029 203 6,911,264,587.08 2 BTC 2185 359 12,222,384,171.24 3 CAFC 1949 123 4,187,613,518.28 4 HBC 2281 455 15,490,765453.80 5 HRC 1826 O (baseline) 0 6 SIEMENS 2346 520 17,703,731,947.20
7. The position that emerged after the GEC values
component was loaded to the price bid of the bidder was as
under:
Bidder Grand Total in INR
INR per Car (without loading)
Positio n before Loadin g
Grand Total (with energy loading) in INR
INR per Car (with loading)
Position after loading
Total Energy (kWH)
SEC value (kWH/ 1000G TKM)
Siemens Consortium
3625,27,92,409 7,45,94,22 3
L-1 5395,65,24,355 11,10,21,655 L-4 2346 55.71
Bombardier Consortium
4242,27,83,378 8,72,89,67 8
L-2 5464,51,67,548 11,24,38,616 L-5 2185 51.89
Hyundai ROTEM
4290,57,94,689 8,82,83,52 8
L-3 4290,57,94,690 8,82,83,528 L-1 1826 43.36
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Alstom Consortium
4373,87,65,001 8,99,97,45 9
L-4 5065,00,29,588 10,42,18,168 L-3 2029 48.18
CAF Consortium
4614,18,66,794 9,49,42,11 3
L-5 5032,94,80,313 10,35,58,601 L-2 1949 46.28
Hitachi + BHEL
4891,32,60,656 10,06,44,569 L-6 6440,40,26,108 13,25,18,572 L-6 2281 54.17
8. It is evident from a comparative study of the charts
extracted above, that while the appellant was L-1 in the price
bid, it went down to L-4 after GEC value was loaded to its
price bid. On the contrary respondent No.2-HR who was L-3
in the price bid rose to L-1 position on account of its low GEC
value in comparison to a higher GEC value offered by the
appellant.
9. Allotment of the award in favour of HR as the lowest
bidder, thus, appeared as a writing on the wall to the
appellant who sent a communication dated 12th February,
2013 to DMRC alleging that the GEC values offered by HR
were untenable and unsustainable and pointing out that
since the appellant’s price bid was lesser than that of the HR
by 665 crores (approx.) it should be taken as L-1 instead of
determining the inter se position of the bidders on the basis
of a supposedly anticipated saving in the consumption of
energy on a lifecycle of 30 years. Yet another letter dated
25th February, 2013 the appellant called for evaluation of
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energy values by an independent third party agency so as to
ascertain whether the GEC values offered by HR were
achievable. Yet another letter dated 1st March, 2013 to the
same effect having failed to cut any ice with the DMRC, the
appellant preferred Writ Petition No.1853 of 2013 before the
High Court of Delhi. That writ petition was notified for
hearing on 1st May, 2013. In the meantime DMRC issued a
Letter of Acceptance in favour of HR under intimation to the
appellant. The appellant, therefore, sought a restraint order
against the award of the contract before the High Court who
in turn accepted an undertaking given by the counsel for the
DMRC and HR that they will not act in pursuance of the letter
of award pending disposal of the writ petition.
10. Alstom Transport India Ltd. was the only other bidder
aggrieved by the award of the contract who filed Writ Petition
No.2615 of 2013 challenging the tender process. Both the
writ petitions were eventually heard by the High Court on 1st
May, 2013 and dismissed by the order under appeal before
us.
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11. Appearing for the appellant, Mr. U.U. Lalit, learned
senior counsel, fairly conceded that the appellant had not
alleged any mala fides, bias or bad faith in the matter of
evaluation of the bids by the DMRC or any process connected
therewith nor even in the award of the contract in favour of
HR, the successful bidder. He contended that the tender
notice no doubt required GEC values to be offered by the
bidders to be made use of in the process of the evaluation of
the bids but such values were not sacrosanct or immune
from scrutiny and evaluation to determine whether the same
were at all achievable. He submitted that since all the six
bidders competing for the contract are significant players in
the international market, they could with a reasonable
amount of certainty say whether or not the GEC values
offered by the bidders were sustainable. It was contended
by Mr. Lalit that while the GEC value offered by the appellant
was the highest, the one offered by the respondent
successful bidder for ‘X’ factor was wholly untenable. He
urged that the terms of the tender notice required the GEC
values offered by the bidders to be validated before they
could be used for processing the bids. He drew considerable
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support from a report submitted by the Director, Ministry of
Urban Development, Government of India, to suggest that
the stimulation test conducted by DMRC as a part of the
process of verification and validation of the GEC value offered
by HR was not accurate and urged that the Government of
India had appointed a two-member Committee to check the
evaluation process of the bids. The report of the Committee
filed by the Government in this Court in a sealed cover could,
according to the learned Counsel, throw considerable light on
the subject and help this Court in deciding whether an
independent verification of the GEC values was necessary.
12. Mr. Andhyarujina, learned counsel for the
respondent-DMRC, on the other hand, argued that the bids
offered by the eligible tenderers were evaluated by three
different Committees i.e. the Evaluation Committee, the
Appraisal Committee and finally by the Tender Committee in
a fair and transparent manner. On receipt of the
representations from the appellant-Siemens, Bombardier,
Alstom and Hitachi regarding the GEC values offered by HR,
the Board of Directors of DMRC constituted a sub-Committee
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to consider the said representations. The Board
sub-Committee consisted of six directors out of whom three
were Functional Directors besides MD of the DMRC, a
nominee Director of MoUD of Indian Railways and one
independent Director. The Sub-Committee met on 4th and 5th
March, 2013 and thoroughly examined the issues raised in
the representation and found the detailed explanations
provided in the Tender Committee Minutes to be satisfactory.
The Sub-Committee, therefore, agreed with the
recommendations of the Tender Committee culminating in
the issue of a Letter of Acceptance to respondent-HR. Our
attention was drawn to the counter- affidavit filed by the
DMRC in which the process of evaluation of the bids and the
GEC values has been set out. The counter-affidavit further
states that the DMRC was fully satisfied about the
achievability of the GEC values offered by HR. There was,
therefore, no room for validation of the GEC values by any
outside agency.
13. It was further contended by Mr. Andhyarujina that the
tender conditions specifically provide for levy of a penalty in
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case of failure of the committed GEC values. He referred to
ERTC 3.24.1 according to which the defaulting Contractor
shall be liable to pay penalty at the rate of Rs.4.03 crores per
unit of electricity committed in excess of the GEC values
declared by it. The penalty stipulated thus works out to be
approximately 18.47% which is significantly higher than the
rupee component loaded for each unit, argued the learned
counsel. This implies that the lowest tenderer is under an
onerous obligation to make good the GEC values or else end
up paying a penalty at a rate which is higher than the
amount by which the financial bid has been loaded on a per
unit of energy basis. The Letter of Acceptance issued to HR
also makes a specific provision for levy of penalty and, thus,
fully secures the interest of the DMRC.
14. Reliance upon the additional documents and the report
of the Committee appointed by the MoUD was, according to
Mr. Andhyarujina, wholly misplaced. He submitted that there
was no occasion for the Government to appoint a Committee
for evaluation of the bids received by DMRC which was an
autonomous entity. The appointment of the Committee at
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the instance of the Minister in disregard of the observations
made by the Secretary MoUD was not proper, argued the
learned counsel, especially when the matter was pending
adjudication before the High Court. The appointment of the
Committee was in any case not disclosed to the High Court
by the Union of India on 1st May, 2013 when the matter was
taken up for hearing. It was contended that the DMRC had at
all times maintained that there was no question of any
enquiry by an outside body regarding the evaluation of the
bids received by it not even by the Government of India. He
drew support for that submission from the following
statement made in the affidavit filed by the Union of India in
this Court:
“All tenders are floated and finalized by respective Metro Rail Corporations including DMRC. MoUD has no role in award/cancellation of any contract/tender.”
15. It was argued that the DMRC had also in its reply dated
14th August, 2013 sent to the Government clearly stated that
it would not respond to the preliminary observations of the
Committee as the matter had in the meantime travelled to
this Court and was sub judice. Legal opinion obtained by the
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DMRC from a Senior Advocate of this Court, also advised that
in a matter that is sub judice, any report by any outside
Enquiry Committee appointed by the Government would be
impermissible and improper nor would it be advisable for
DMRC to participate in any such exercise. In the premises it
was contended that the Report by the Enquiry Committee
submitted to this Court in a sealed cover need not be looked
into as the same was wholly extraneous to a judicial review
of the process of evaluation and eventual award of the
contract by DMRC, the authority competent to do so. Relying
upon the decisions of this Court in Amrik Singh Lyallpuri
v. Union of India & Ors. (2011) 6 SCC 535 and Union
of India v. K.M. Shankarappa (2001) 1 SCC 582, it was
argued that administrative review of a judicial decision was
not legally permissible. It was also contended by Mr.
Andhyarujina that pursuant to the allotment made in his
favour, HR had taken substantial steps towards
implementation of the project and that interference with the
award of the contract at this belated stage was neither in
public interest nor otherwise justified in the facts and
circumstances of the case.
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16. Appearing for the respondent No.2-HR, Mr. Venugopal,
learned senior counsel adopted the submissions of Mr.
Andhyarujina and took strong exception to the constitution of
a Committee by the Minister of Urban Development,
Government of India on a subject which was subjudice before
the High Court. It was contended by Mr. Venugopal that the
constitution of the Committee was not only against the sound
advice tendered by the Secretary to the Government,
Minister of Urban Development Department but was
tantamount to interference with the course of justice.
Relying upon the decision of the Full Bench of the High Court
of Patna in The King v. Parmanand and Ors. AIR 1949
Patna 222 and D. Jones Shield v. N. Ramesam & Ors.
AIR 1955 AP 156; In Re: P.C. Sen AIR 1970 SC 1821
and Jang Bahadur Singh v. Baij Nath Tiwari AIR 1969
SC 30, Mr. Venugopal argued that when a matter is pending
adjudication before a Court of law, nothing can be done
which might disturb the course of justice by either interfering
with the judicial process or prejudging the merits of the case
or by usurping the functions of the Court having seisin over
the proceedings. Any such practice, argued the learned
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counsel, was fraught with danger and would amount to
opening the door for contempt for those responsible for such
interference. It was further contended by Mr. Venugopal that
judicial review in tender cases was limited to examining the
decision-making process and not the decision itself. Reliance
in support of that submission was placed by the learned
counsel upon the decisions of this Court in Tata Cellular v.
Union of India (1994) 6 SCC 651; Asia Foundation &
Construction Ltd. v. Trafalgar House Construction
(1997) 1 SCC 738; Monarch Infrastructure (P) Ltd. v.
Ulhasnagar Municipal Corpn., (2000) 5 SCC 287;
Jagdish Mandal v. State of Orissa (2007) 14 SCC 517
and Heinz India (P) Ltd. v. State of U.P. (2012) 5 SCC
443. It was submitted that the decision making process in
the instant case was transparent, fair and reasonable and
that the High Court had after a careful examination of all
aspects correctly held that there was no illegality or
irregularity in the said process to warrant interference.
17. Principles governing judicial review of administrative
decisions are now fairly well-settled by a long line of
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decisions rendered by this Court, since the decision of this
Court in Ramana Dayaram Shetty v. International
Airport Authority of India and Ors. (1979) 3 SCC 489
which is one of the earliest cases in which this Court judicially
reviewed the process of allotment of contracts by an
instrumentality of the State and declared that such process
was amenable to judicial review. Several subsequent
decisions followed and applied the law to varied situations
but among the latter decisions one that reviewed the law on
the subject comprehensively was delivered by this Court in
Tata Cellular’s case (supra) where this Court once again
reiterated that judicial review would apply even to exercise of
contractual powers by the Government and Government
instrumentalities in order to prevent arbitrariness or
favouritism. Having said that this Court noted the inherent
limitations in the exercise of that power and declared that
the State was free to protect its interest as the guardian of
its finances. This Court held that there could be no
infringement of Article 14 if the Government tried to get the
best person or the best quotation for the right to choose
cannot be considered to be an arbitrary power unless the
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power is exercised for any collateral purpose. The scope of
judicial review, observed this Court, was confined to the
following three distinct aspects:
(i) Whether there was any illegality in the decision which would imply whether the decision making authority has understood correctly the law that regulates his decision making power and whether it has given effect to it;
(ii) Whether there was any irrationality in the decision taken by the authority implying thereby whether the decision is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at the same; and
(iii) whether there was any procedural impropriety committed by the decision making authority while arriving at the decision.
18. The principles governing judicial review were then
formulated in the following words:
(i) The modern trend points to judicial restraint in administrative action.
(ii) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(iii) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(iv) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through
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several tiers. More often than not, such decisions are made qualitatively by experts.
(v) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(vi) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
19. In M.P. Oil Extraction v. State of M.P. & Ors.
(1997) 7 SCC 592, this Court held that if an objective and
rational foundation for the fixation of royalty is disclosed, the
Court will not interfere with the exercise of governmental
decision by undertaking an exercise to determine whether or
not a better fixation was possible in the circumstances. This
Court struck a note of caution that in economic and policy
matters the scope of judicial review was limited.
20. It is unnecessary and platitudinous for us to burden this
judgment with reference to the decisions of this Court on the
subject for the governing principles are so well-known and
well-settled that any review of the law on the subject is
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bound to be simply repetitive without any meaningful
contribution to the existing legal literature on the subject.
We remain content by referring to two only of a plentitude of
judicial pronouncements on the subject in which the legal
position has been succinctly restated. One of these decisions
was delivered in Jagdish Mandal v. State of Orissa & Ors.
(2007) 14 SCC 517, where too this Court was dealing with
the exercise of power of judicial review in matters relating to
tenders and award of contracts. This Court identified the
special features should be borne in mind while judicially
reviewing award of contracts. We can do no better than
extract the following observations of this Court in this regard:
“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to
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be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.”
(emphasis supplied)
21. More recently in Heinz India (P) Ltd. & Anr. v. State
of U.P. & Ors. (2012) 5 SCC 443, this Court speaking
through one of us (Thakur, J.) examined the legal dimensions
of judicial review and quoted with approval the following
passage from Reid v. Secy. of State for Scotland (1999)
1 All ER 481 which succinctly sums up the law.
“Judicial review involves a challenge to the legal validity of the decision. It does not allow the court of review to examine the evidence with a view to forming its own view about the substantial merits of the case. It may be that the tribunal whose decision is being challenged has done something which it had no lawful authority to do. It may have abused or misused the authority which it had. It may have departed from the procedures which either by statute or at common law as a matter of fairness it ought to have observed. As regards the decisions itself it may be found to be perverse, or irrational or grossly disproportionate to what was required. Or the decision may be found to be erroneous in respect of a legal deficiency, as for example, through the absence of evidence, or of sufficient evidence, to support it, or through account being taken of irrelevant matter, or through a failure for any reason to take account of a relevant matter, or through some misconstruction of the terms of the statutory provision which the decision-maker is required to apply. But while the evidence may have to be explored in order to see if the decision is vitiated by such legal deficiencies it is perfectly clear that in case of review, as distinct from an ordinary
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appeal, the court may not set about forming its own preferred view of evidence.”
22. There is no gainsaying that in any challenge to the
award of contact before the High Court and so also before
this Court what is to be examined is the legality and
regularity of the process leading to award of contract. What
the Court has to constantly keep in mind is that it does not
sit in appeal over the soundness of the decision. The Court
can only examine whether the decision making process was
fair, reasonable and transparent. In cases involving award of
contracts, the Court ought to exercise judicial restraint where
the decision is bonafide with no perceptible injury to public
interest.
23. The High Court has, in the case at hand, undertaken
that exercise and concluded that there was neither any
illegality nor any irregularity in the process of evaluation of
the bids or the final allotment of the contract. That view has
come to be assailed by the appellant on what is essentially a
short point raised by Mr. Lalit in support of the appeal. The
contention, as noticed earlier, is that while no malafide or
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extraneous considerations have prevailed to vitiate the
decision of the DMRC allotting the contract in favour of HR,
the process of evaluation of the bids offered by the eligible
bidders should have in the facts and circumstances of the
case included validation of the GEC values offered by HR to
determine whether they were achievable having regard to
the ground realities and the laws of physics relevant to the
consumption of energy. That contention does not suggest
any illegality in the process of allotment of the contract in
favour of HR, for no violation of any law, rule or regulation
governing the process of invitation of tenders by the DMRC
or its evaluation and acceptance has been alleged or argued
before us. No such statutory or other provision has been
brought to our notice which could possibly provide to the
appellant a reason to contend that the allotment of the
contract was itself illegal or in breach of any such provision or
procedure prescribed thereunder. It is no body’s case that
the decision-making authority had not understood the law
that regulates its decision making power or failed to give
effect to it. We have, therefore, no hesitation in holding that
the allotment of contract did not suffer from any illegality as
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it is understood in the matter of judicial review of
administrative action and as that expression has been used
by this Court in Tata Cellular’s case (supra). It is also not
the case of the petitioner that the decision taken by the
DMRC is so outrageous in its defiance of logic or accepted
moral standards that no sensible person who had applied his
mind could have arrived at the same. Perversity or
irrationality in the decision or the decision making process is
also not a ground that can be invoked in the case at hand.
24. The contention urged by Mr. Lalit may at best constitute
an irregularity in the process of evaluation of the bids. That
an irregularity can itself, in certain situations result in
invalidating a process, cannot be disputed. The question,
however, is whether there was any irregularity in the
evaluation of the bids in the present case and if so whether
the same was sufficient to invalidate the evaluation process
or the ultimate award of the contract. Whether or not there
was any irregularity in the process of evaluation of the bids
shall in turn have to be examined by a reference to the
conditions of the tender notice under which the tenders were
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invited, received, processed, evaluated and eventually
accepted. It is common ground that the price bid offered by
the tenderers was not itself determinative. What was equally
important was the GEC values comprising X and Y factors
which the tenderers had to disclose in their technical bids.
That the values offered had to be converted into Indian
Rupees and loaded to the price bid of the tenderers is also
beyond question. That each one of the bidders had offered
their GEC values comprising X and Y factors separately was
also beyond doubt. There is no error even in the conversion
of such values in terms of Indian Rupees nor is there any
dispute about the effect of such loading of values to the price
bid of all the tenderers because of which loading the bid
offered by HR eventually emerged as L-1 with
appellant-Siemens sliding to L-4 position. That being so, the
process of evaluation of bids could not be faulted as the
same was strictly in accordance with the norms stipulated for
such evaluation. Even Mr. Lalit fairly conceded that there was
nothing that could be criticized in that process. What DMRC,
according to him, should have done was to check whether
the GEC values offered by the bidders were achievable.
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Inasmuch as no such verification was undertaken the
evaluation process was flawed. There is, in our opinion, no
merit in that contention. The reasons are not far to seek. In
the first place, the contention urged by Mr. Lalit does not find
support from any provision in the tender notice. There is
nothing in the tender document to suggest that the GEC
values had to be tested for their achievability. As rightly
contended by Mr. Lalit all the six bidders declared eligible are
world leaders in the field and have sufficient expertise and
know-how not only about the design and technology which
they use but also about their capacity to validate their
respective GEC values. If that be so, DMRC could be
supremely confident that the GEC values offered by HR were
achievable especially when such values offered by some of
the bidders for X and Y factors were lower than those offered
by HR. At any rate the DMRC had sufficiently protected itself
because under the terms and conditions stipulated in the
tender notice failure of the successful tender to make good
the GEC values offered by them would result in a penalty
which was higher than the GEC value factor that was loaded
to the price bid. We, therefore, do not see any real basis for
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the contention that the DMRC was supposed to go any
further than it did in protecting its interest. In the absence of
any specific stipulation or requirement for validation of the
GEC values by the DMRC and its experts or by any outside
agency such a requirement could not be implied into the
tender process. Inasmuch as the DMRC found the bid
offered by HR to be acceptable, keeping in view the GEC
values offered by it, the former had committed no illegality in
the evaluation of the bids or in making its choice of the
contractor.
25. Secondly, because even assuming that the process of
validation of the GEC values and their achievability was an
implied condition in the evaluation process, DMRC had on the
basis of an internal simulation satisfied itself that the GEC
values were not unachievable. The High Court has referred to
the simulation results and so has our attention been drawn
to the said result from the original record produced by DMRC.
We do not see any illegality or irregularity in the process of
verification conducted by the DMRC to test the achievability
of the GEC values. It is true that DMRC had conducted the
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simulation in regard to the GEC values offered by HR only but
then in the absence of any condition in the tender notice
requiring DMRC to conduct such verification even in regard to
other GEC values, there was no need for it to undertake any
such exercise. DMRC was, in our opinion, entitled to adopt
such methods as were reasonable to satisfy itself above
about the GEC values and their achievability offered by
lowest tenderer in whose favour it was considering the award
of the contract. The upshot of the above discussion,
therefore, is that the process by which the bids were
evaluated and eventually accepted was transparent, fair and
reasonable and does not, therefore, call for any interference
from this Court.
26. That brings us to the question whether the Government
of India was justified in appointing a Committee to test the
evaluation of bids and, if so, whether this Court ought to look
into the Report of the Committee. There is more than one
aspect that needs to be kept in view in this regard. The first
and foremost is the fact that the Committee was appointed
at a stage when the matter was already pending before the
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High Court. Considerable time was spent by learned counsel
for the parties in debating whether the constitution of the
Committee by the Government itself tantamounted to
interference with the course of justice, hence contempt. We
do not, however, consider it necessary to pronounce upon
that aspect in these proceedings especially because we have
not been called upon to initiate such contempt proceedings.
All that we need say is that once the Government had known
that the entire issue regarding the validity of the process
adopted by DMRC including the transparency and fairness of
the process of evaluation of the bids was subjudice before
the High Court of Delhi and later before this Court, it ought
to have kept its hands off and let the law take its course. It
could have doubtless placed all such material as was relevant
to that question before the High Court and invited a judicial
pronouncement on the subject instead of starting a parallel
exercise. The Government could even approach the High
Court and seek its permission to review the process of
evaluation either by itself or through an expert Committee if
it felt that any such process would help the Court in
determining the issues falling for consideration before the
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Court more effectively. Nothing of that sort was, however,
done. On the contrary even when the Secretary to the MoUD
pointed out that the matter is subjudice and any further
action in the matter could await the pronouncement of the
Court, the Hon’ble Minister heading MoUD directed the
constitution of the Committee with the following terms:
“2(1) To examine if a fair, equitable and transparent tender process was followed by DMRC, as per the prescribed guidelines”.
27. We have no manner of doubt that the terms of
reference give a clear indication that the process initiated by
the Government was a parallel process of the adjudication of
the very same issue as fell for consideration before the High
Court and at a later stage before this Court. We fail to
appreciate how the Government could have possibly done
this. Confronted with this situation Mr. Mohan Parasaran,
learned Solicitor General, argued that a reference to the
Committee was not meant to subvert judicial process but to
only find ways and means to formulate policies and
procedures for future allotment of contracts. We have no
hesitation in rejecting that submission. The Reference Order
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extracted above speaks for itself. It no where states that the
Committee has to look at anything beyond the process of
evaluation of tenders received by DMRC. It does not even
remotely suggest that the Government is concerned about
the procedures that may be followed in the future or anxious
to devise transparent methods by which such contract should
be allotted. What is notable is that the Committee’s hands
were not stayed by the Government even when the High
Court had pronounced upon the validity of the procedures
adopted by the DMRC and the matter reached this Court.
Continuance of the process of review even after the High
Court had delivered its judgment amounted to subjecting the
judicial pronouncement to an administrative review. There
was no question of any such judicial determination or
adjudication being subjected to any administrative review
albeit in the name of a Committee constituted for the
purpose.
28. Mr. Parasaran argued that the Committee’s proceedings
did not amount to sitting in appeal over the judgment of the
High Court. The Committee may have not said anything
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adverse to view taken by the High Court but if the
Committee were to find fault with the evaluation process
which the High Court has held to be valid it indirectly
amounted to putting a question mark on the judgment of the
High Court itself. Suffice it to say what the Government
ought to have stayed its hands once the matter landed in the
Court. Inasmuch as the Government did nothing of this kind,
it did not act properly. Beyond that we do not consider it
necessary or proper to say anything at this stage.
29. It was contended by Mr. Lalit that the report submitted
by the Committee appointed by the Government ought to be
taken as expert opinion on the subject and given due weight.
That position was disputed by Mr. Andhyarujina appearing for
DMRC and Mr. Venugopal appearing for HR. That the
Committee comprised a former Finance Secretary to the
Government of India and a Civil Engineer, none of whom
could claim to be expert in the field relevant to the
achievability of the GEC values, was not disputed by Mr.
Parasaran who urged that the Committee may have taken
the opinion of some experts on the subject. Even assuming
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that the Committee has taken expert advice regarding the
tenability of the GEC values offered by HR, it would simply
mean that there is a conflict between the views taken by the
experts of DMRC and those consulted by the Committee.
Any such conflict cannot be resolved by this Court in exercise
of its powers of judicial review. So long as the view taken by
the experts of the authority competent to take a final
decision is a possible view the very fact that some other
experts have expressed doubts about the sustainability of
the GEC values will not be enough for us to declare that the
values offered by HR are indeed unachievable. This Court
has in Federation of Railway Officers Association v.
Union of India (2003) 2 SCR 1085, stated the wholesome
principle applicable in such situations in the following words:
“Further, when technical questions arise and experts in the field have expressed various views and all those aspects have been taken into consideration by the Government in deciding the matter, could it still be said that this Court should re-examine to interfere with the same. The wholesome rule in regard to judicial interference in administrative decisions is that if the Government takes into consideration all relevant factors, eschews from considering irrelevant factors and acts reasonably within the parameters of the law, courts would keep off the same.”
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30. Reference may also be made to the decision of this
Court in N.D. Jayal v. Union of India (2004) 9 SCC 362
where this Court observed:
“This Court cannot sit in judgment over the cutting edge of scientific analysis relating to the safety of any project. Experts in science may themselves differ in their opinions while taking decisions on matters related to safety and allied aspects. The opposing viewpoints of the experts will also have to be given due consideration after full application of mind. When the Government or the authorities concerned after due consideration of all viewpoints and full application of mind took a decision, then it is not appropriate for the court to interfere.”
31. Reliance by the appellant upon the report of the
Committee is misplaced also for the reason that the same
was ex parte. It is common ground that HR was never
associated with the process of evaluation or verification if any
conducted by the Committee. In the absence of any such
opportunity to the party whose GEC values were being test
checked for their achievability, the report can hardly provide
a sound basis for a writ court to upset a decision which the
competent authority has taken after due deliberations by not
one but four different Committees including experts in the
field. That apart, Mr. Parasaran fairly submitted that even the
Government have not accepted the report submitted by the
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Committee so far. He urged that since the matter was
pending in this Court, the Government has simply placed the
report of the Committee in a sealed cover for the Court to
decide as to what value has to be attached to it. That being
the position, the preparation and submission of a report that
does not even take the view point of the party affected by it
into consideration can hardly provide to this Court a good
reason to scuttle the entire process at this stage when HR,
the successful bidder, has already taken substantial steps in
the direction of executing the works allotted to it.
32. Last but not the least, if the note submitted by the
Director in the MoUD is an indication of what the Committee
may have said, the difference in the GEC values pointed out
in the report of the Director, may have led to CAF which was
also an eligible bidder emerging as L-1 and not the appellant.
In terms of cost of the project it would hardly make a sizable
difference so as to justify a reversal of the steps that have
already been taken for execution of a project that is of
utmost importance for the people living in the national capital
execution whereof can brook no delay especially when the
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same is being financed by an agency from outside the
country.
33. In the result this appeal fails and is, hereby, dismissed
with costs of Rs.5,00,000/- to be deposited within six weeks
from today with the Supreme Court Advocates-on-Record
Welfare Fund.
………………………….……….…..…J. (T.S. THAKUR)
……………….…………………..…..…J. New Delhi (C. NAGAPPAN) February 14, 2014
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