“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO   2572    OF 2011 [Arising out of SLP (C) No. 4644 OF 2011)

THDC India Ltd. … Appellant

Versus

Voith Hydro GMBH Co. & Anr. … Respondents

J U D G M E N T

V.S. SIRPURKAR, J.

1. Leave granted.

2. This  case  is  a  classic  example  of  the  whole  nation  suffering  on  

account of the fight between two multi-national companies in respect of  

each other’s rights.  There is no dispute that the Tehri Pump Storage Plant  

project is of utmost importance to the State of Uttarakhand particularly, and  

to the nation generally.  Substantial electricity generation is the object of  

that project.  It is only with that objective that a dam was constructed on  

river Bhagirathi involving crores of rupees for the construction as also for  

the rehabilitation of  the persons who were displaced on account of  the  

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construction of  dam.  Tehri  Pump Storage Plant  is  a project  within  the  

larger picture of Tehri Dam and would prove to be a boon for the additional  

electricity  generation.   It  is  a  project  involving  technical  issues.   The  

appellant which is a corporation under the Government of India has been  

at  this  project  right  from  August,  2007.  Considering  the  tremendous  

importance of the project,  it  has yet  not  been able even to finalize the  

tender.  Three and a half years have rolled by and yet no progress has  

been made, thanks to the legal battles in between the two giants called  

Voith GMBH (respondent No.1) and Alstom (respondent No.2).   

3. It is not for the first time that this Court has to deal with the matter.  

Even about a year back, this Court was required to deal with the matter  

extensively and while dealing with the matter, the Court, in its order dated  

26.3.2010 observed:

“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.”

4. In spite of these observations, we are extremely sorry to note that  

the  matter  has  not  reached  its  finality  as  yet  and,  therefore,  we  are  

constrained to interfere against an interim order passed by the High Court.  

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The  issue  of  national  interest  is  our  prime concern,  the  importance  of  

which cannot be undermined.

5. Before  we  take  up  the  issue  for  consideration,  a  short  resume  

regarding  the  progress (?)  would  be  worth  seeing.   The notice  inviting  

tender on the prime turn-key execution was issued on 31.8.2007.  Bids  

were received on 29.12.2007 in all from four companies, the respondents  

being a part of them.  After opening the pre-qualification bids, two of the  

tendering  parties  were  found  to  be  dis-qualified  leaving  only  the  two  

respondents  in  the  fray.   On  15.1.2009,  financial  bids  were  opened  in  

respect  of  the offers made by the two respondents.   Obviously,  on the  

basis  of  the  fact  that  offers  of  the  two respondents  were  found  to  be  

responsive,  respondent  No.2  approached  the  Court  by  way  of  a  writ  

petition challenging the validity of the two bids submitted by respondent  

No.1. The High Court of Uttarakhand issued a stay order and ultimately on  

29.6.2009  though  it  held  that  the  objection  raised  by  respondent  No.2  

against respondent No.1 regarding its lack of experience was not valid, the  

bidding documents themselves were not clear as to the manner in which  

the bids were to be made.  It,  therefore, directed the appellant to invite  

fresh bids.   Special  Leave Petition  No.15779 of  2009 came to  be filed  

before this Court and the respondent No.1 also filed an intra-court appeal  

being Appeal No.131 of 2009 before the High Court of Uttarakhand. With  

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the sole objective of giving quietus to the issues and to provide the motion  

for the project, this Court transferred the said appeal filed by respondent  

No.1  and  tagged  it  along  with  the  Special  Leave  Petition.   Since  the  

Attorney General had offered to abide by the operative order of the High  

Court, this Court directed the appellant herein to invite fresh price bids by  

its order dated 11.09.2009.  Thus, bids were examined by the appellant  

and  it  was  found  that  the  bid  filed  by  Alstom,  respondent  No.2  was  

substantially  lower.  However,  there were  certain deviations in  the fresh  

bids offered by the respondent.  Respondent No.2, therefore, objected to  

the  report  dated  8.11.2009  and  took  exceptions  to  some  of  the  

observations  and  insisted  that  there  were  no  deviations  in  the  techno-

commercial  part  of  the  bid.   By  their  another  letter  dated  16.1.2010,  

respondent  No.2 again reiterated their  objections and insisted upon the  

grant of contract  in their  favour.  In order to maintain transparency and  

objectivity,  the  appellant  offered  to  send  the  fresh  bidding  process  for  

consideration  by  a  panel  of  experts  of  national  repute.   They  were  to  

examine objections raised by the consortium of respondent No.2.  They  

submitted their report on 8.2.2010 and observed that the fresh bid of M/s  

Alstom was non-responsive.  In this backdrop, the Court heard both the  

parties as also the appellants all over again and ultimately passed an order  

on 26.03.2010.

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6. The Court considered the question framed by the panel of experts  

which was to the following effect:

“whether the examination of report of THDC declaring  the bid of the consortium of M/s Alstom is OK or the  objections raised by the consortium of M/s Asltom are  justified with  reference to the terms and 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.”   

The Court also noted the conclusion drawn by the panel of experts  

which was to the following effect:

“based upon the views outlined, POE is of the opinion  that fresh price bid of consortium of M/s Alstom is not  non-responsive.  Their quoted price of partnership basis  even though non-responsive is, however, lower by 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 108.7  crores  (M/s  Voith  Rs.22,343,174,985.00  M/s  Alstom  Rs.21,256,007,413.00).  The unconditional offer of the  consortium  of  Alstom  to  take  care  of  the  THDC  observations without any extra costs was that the bid  becomes  responsive  and  in  accordance  with  the  employers’ requirements is not acceptable as this is not  permissible under bidding document of this tender.”   

7. During the hearing, respondent No.2 had urged that panel of experts  

had not  given any fair  deal  to  respondent  No.2  and it  prayed  that  the  

matter should be sent to the Government of India.  This was obviously  

opposed by the Attorney General as well as M/s Voith and, therefore, this  

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Court  took  note  of  the  contentions  that  the  nature of  objections  to  the  

report was of technical character and the bona fides of panel of experts  

was not questioned.  The Court further took note of the stand taken by the  

Attorney General that the respondent No.1 could still address the panel of  

experts and further hearing could be given to M/s Alstom.  The Court found  

the offer given by the Attorney General to be a fair offer and, therefore, one  

more opportunity  was  directed to be given to the parties for  appearing  

before the panel of experts and, therefore, a report was directed from the  

panel of experts.  The Court fixed the end of April 2010 for this purpose.  It  

was observed in paragraph 11:

“the appellant herein would then, without loss of time, take  decision,  considering  the  report  of  the  panel  of  experts  regarding  the  award  of  contract.”  (emphasis supplied)

In  view  of  this,  the  Court  disposed  of  all  the  pending  matters  

including the appeal filed by M/s Voith, respondent No.1 herein.  The Court  

observed:

“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  extinct.   In  our  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  

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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  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.”

8. What followed thereafter is more interesting.  On 17.4.2010, detailed  

written  submissions  file  by  both  the  respondents  before  the  panel  of  

experts  wherein  respondent  No.2  pointed  out  that  there  were  several  

technical deviations in the bid of M/s Voith which were not considered so  

far  by  the  appellant.   Several  technical  issues  were  raised  and it  was  

pointed  out  that  the  bid  of  M/s  Voith  was  not  in  accordance  with  the  

technical requirements.  It was stated that the bid of M/s Voith, respondent  

No.1 had more than 40 commercial deviations and more than 90 technical  

deviations.  It was, therefore, requested that panel of experts should look  

into the above referred matters and to look into all these aspects including  

the deviations of the bidding on the part of the respondent No.1.  This was  

reiterated by subsequent letter dated 27.4.2010.  On 29.4.2010 after going  

into the details of the contentions raised by both respondent Nos. 1 and 2  

the panel of experts went into the details regarding the deviations and non-

conformities in M/s Alstom, respondent No.2’s fresh bids but did not give  

any  finding  regarding  the  deviations  pointed  out  by  it  in  respect  of  

respondent No.1, M/s Voith.  It, however, expressed in the following terms:

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“M/s Alstom during hearing have pointed some specific  issues relating to bid of  M/s Voith Siemens regarding  sourcing and supply of  Turbine Shaft  and Rotor  from  Germany/  Italy/  Czech/  Spain/  Korea.   In  respect  of  Rotor  they  have  also  included  Poland  (Reference  written submissions dated 17.4.2010, Volume-II A). they  also  pointed  out  regarding  supply  of  Spherical  

Valve from Voith, USA.  M/s Alstom Consortium in their  rejoinder (15.4.2010) under “overall conclusions” (page  46) they also requested to enquire that both bids have  been evaluated at par and cross checked in details that  Voith’s bid is not containing hidden deviations as was  the case for MIV.   THDC will  have to look into these  issues along with all other issues particularly with regard  to clause 9.4.4 of employer’s requirements (amendment  No.9 at  Annexure 17) before taking a decision if  M/s  Voith’s  bid  is  responsive  or  non-responsive.  (emphasis supplied)

9. Again respondent No.2, M/s Alstom filed letters dated 12.7.2010 and  

23.7.2010 to the appellant and to the Ministry of Power.  The matter was  

then taken up on the basis of the report of the panel of experts by tender  

committee.  Tender committed again went into the exercise and submitted  

its report on 2.8.2010 wherein it was observed that the fresh price bids of  

consortium of M/s Asltom both as the partner and as the assignee were  

not responsive.  It recommended further that negotiations would have to be  

undertaken  with  the  respondent  No.1,  M/s  Voith  for  considering  the  

downward  trend  in  prices  and  to  much  with  the  quoted  prices  of  

respondent  No.2.   It  was  also  observed  that  the  deviations  of  bids  of  

respondent No.1 should be discussed with it.  The matter then went the  

higher  level  of  Executive Director,  Contracts.   He observed in  his  note  

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dated 8.9.2010  “if a minute scrutiny is carried out in respect of the bids of   

both the bidders, both the bids cannot be said to be fully responsive to the  

tender conditions”.  It was observed that even the bid of respondent No.1,  

M/s Voith could not be said to be fully complying and it was observed:

If  an  impartial  and  independent  scrutiny  of  tender  is  carried  out,  it  may  appear  that  THDC  has  been  too  stringent on M/s Alstom and quite lenient in case of M/s  Voith Siemens.  In a true stricter sense, it appears that  there have been some non-conformities in the bid of M/s  Voith Siemens also.”  

It was then suggested in the note that the tender committee should  

identify  the non-conformities in respect of  both the bidders and bidders   

should be asked to submit their fresh price bids after fully complying with  

the tender conditions without deviations. (emphasis supplied)

10. The competent authority, therefore, took a decision on 1.10.2010 to  

call for the fresh bids after due identification of the non-conformities.  Both  

the  bids  were,  therefore,  scrutinized  in  great  details.   Even  the  

deliberations were held between 2.11.2010 and 14.12.2010 and ultimately  

a report was submitted by the tender committee on 14.12.2010 in relation  

to  the  non-conformities  of  both  the  bidders.   The report  contained two  

annexures being annexures 1A and 1B detailing the non-conformities in  

respect of respondent No.2 and respondent No.1, respectively.  Therefore,  

a communication dated 21.12.2010 was sent to both the respondents that  

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it  is  only  after  the  unqualified  and  unconditional  compliance  to  the  

employer’s requirements in respect to the non-conformities pointed out in  

annexures 1A and 1B and on the respondents agreeing to comply with the  

objections  raised  as  regards  the  non-confirmities  that  the  respondents  

would submit fresh price bids.

11. In  this  letter  all  the  earlier  correspondence  and  the  techno-

commercial bids including all earlier letters sent by both the respondents  

were referred to.  The report of the panel of experts was also referred to.  It  

was  stated that  the  techno-commercial  offers  of  both  the  bidders  were  

reviewed at length and it was decided to invite fresh price bids from both  

the bidders.  The letter went on to clarify that these bids were invited in two  

stages. In the first stage both the bidders were required to convey their  

unqualified  and  unconditional  compliance  with  the  employer’s  

requirements with respect to the shortcomings observed in their respective  

bids,  so  as  to  resolve  all  the  inconsistencies  and  thereby  ensuring  

compliance with the tender conditions (In terms of the annexure 1A for  

consortium  of  M/s  Alstom and  annexure  1B  for  the  consortium  of  M/s  

Voith).   It  was  clarified  that  subsequent  to  such  unqualified  and  

unconditional confirmation by the respective bidders, the bidders were to  

put their fresh price bids in the second stage.  Seven pre-conditions were  

then put and it was clarified that the stage of price bidding i.e. regarding  

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the un-conditional compliance the bidders were to submit the documents  

latest by 7.1.2011, 4 p.m. IST.  The validity of the bid was limited to 180  

days from the date of submission of the fresh price bid.

12. This letter dated 21.12.2010 was challenged by the respondent No.1  

by way of a writ petition No.212 of 2011.  But before that respondent No.1  

had addressed a letter to the compliance dated 24.12.2010 that inviting  

fresh price bids was not in accordance with the bidding documents and  

was  contrary  to  the  legal  position.   In  that  letter  it  was  stated  that  it  

reserved the right to challenge the decision to invite fresh price bids and  

therein  also  sought  time  on  any  day  after  18.01.2011  to  seek  certain  

clarifications  in  respect  to the THDC’s letter  dated 21.12.2010.   It  also  

sought for extension of the compliance of first stage of price bidding.  This  

request of extension was acceded to by the appellant THDC and it fixed a  

meeting on 19.1.2011.  In the letter sent by THDC dated 4.1.2011 THDC  

refuted the contention raised by respondent No.1 regarding the invitation of  

fresh price bids.  Yet another objection was raised by a letter on 15.1.2011  

on behalf of respondent No.1.  for inviting the fresh price bids.  In addition  

to this notice,  fresh report  of  the panel  of  experts dated 29.4.2010 and  

further recommendations/reports of the tender committee were also sought  

for.  The meeting took place on 19.1.2011 when in addition to the appellant  

THDC officials, representatives of respondent Nos.1 and 2 were present  

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wherein the same stand was allegedly reiterated by respondent No.1.  A  

further  letter  dated  20.1.2011 was  sent  by  the  respondent  No.1  calling  

upon THDC:

“1) to respond to the points raised in the letter dated  15.1.2011;

2) requesting  for  a  copy  of  the  fresh  report  of  the  panel of experts dated 21.4.10;

3) requesting  for  the  copy  of  the  subsequent  report/recommendations of the tender committee.”

13. This letter was responded to by THDC wherein it reiterated its stand  

dated 21.12.2010 and further conveyed that it was not obliged to provide  

fresh reports of the panel of experts or reports of the tender committee.

14. On this basis, respondent No.1 proceeded to file a Writ Petition in  

the  High  Court  of  Uttarakhand  challenging  the  letter  dated 21.12.2010.  

This Writ Petition seems to have been filed on 27.1.2011 and was placed  

before the Learned Vacation Judge of the High Court of Uttarakhand.  The  

High Court then passed the following order:

“After  hearing rival  contentions of  learned counsel  for  the  parties,  this  Court  is  of  the  view  that  the  opinion/recommendation  made  by  panel  of  experts  should be placed on record along with  the objections  raised  by  the  parties  and  the  report  of  the  tender  committee  and  recommendations  of  the  Executive  Director.

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Mr. Rawal learned Additional Solicitor General of India  stated at Bar that the petitioner must also comply with  the letter of respondent No.1 though annexure P-1. to  which  learned  counsel  for  the  petitioner  stated  that  without prejudice to the rights of the petitioner, he shall  comply  with  the  same  within  a  week  if  the  date  of  compliance is so extended as the date has expired on  31.1.2011.

Mr. Rawal  learned counsel for respondent No.1 prays  for  and  is  granted  time to  file  counter  affidavit.   The  counter  affidavit  may  be  filed  by  8th February,  2011.  Respondent No.2 may also file counter affidavit, if any,  within the same period.  Copy of the counter affidavit be  supplied to the petitioner well before the fixed, who shall  also  file  his  reply  to  this  Court  on  or  before  11th  February, 2011.

Adjourned to 17.2.2011.   

In  the  meanwhile,  no  further  proceedings  shall  be  undertaken by respondent No.1.”

15. It seems that by their letter dated 12.2.2011, respondent No.1 have  

sent their compliance to annexure 1B of the letter dated 21.12.2010.  It has  

been stated in that letter  at the outset, and as recorded in the aforesaid  

order dated 1.2.2011, we have to state and emphasize that compliance by   

the Voith Hydro Consortium with the order dated 1.2.2011 passed by the  

High Court is strictly without prejudice to the rights and contentions of the  

Voith Hydro Consortium as well  as without prejudice to the contentions  

and  grounds raised  in  Writ  Petition  No.212  of  2011.  Added  to  this  is  

annexure signifying compliance with the question raised by the THDC as  

regards to the non-conformities.

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16. In  the  Writ  Petition,  amongst  the  other  prayers,  a  direction  was  

sought  against  the  appellant  to  award  the  contract  in  respect  of  Tehri  

Pump Storage Plant.  The main attack in the Writ Petition was on the letter  

dated 21.12.2010 on the  ground that  the decision  therein  was  ex-facie  

illegal,  unreasonable,  arbitrary,  unfair  and  biased  and  that  the  said  

decision was taken with a sole and ulterior  motive of  benefiting Alstom  

(respondent  No.2)  and  giving  Alstom  (respondent  No.2)  yet  another  

opportunity  to  rectify  or  supplement  its  admittedly  non-responsive  fresh  

price bids.  It was further urged in the Writ Petition that such action on the  

part  of  the  appellant  was  contradictory  to  the  tender  conditions,  more  

particularly,  Clause  25.3  of  the  Instructions  to  Bidders  (ITB),  which  

prohibited  a  non-responsive  bid  from  being  made  responsive  at  the  

instance of the bidder by introducing corrections or withdrawing the non-

conforming deviation or reservation.  It was also urged that in inviting the  

fresh pricing bids, the provisions of the bidding documents were selectively  

changed and had resulted in reopening techno commercial bids after the  

price bids of both the respondents had been opened and evaluated.  It was  

further urged that after passing of the judgment dated 26.3.2010 by this  

Court, the scope of the Panel of Experts was restricted, in the sense that it  

could only examine the price bid by Alstom (respondent No.2) and could  

not go into the merits of the bid given by Voith GMBH (respondent No. 1).  

On  that  basis,  it  was  urged  in  the  Writ  Petition  that  once  the  techno  

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commercial bid of Voith GMBH (respondent No. 1) was finally accepted,  

there was no question of introducing the subject of deviations and then  

insisting upon the compliance with those deviations and thereafter, inviting  

fresh price bids.  Strong words like ‘bias’, ‘discrimination’, ‘nepotism’ and  

‘fairness’ have also been used in the Writ Petition.  In short, the actions on  

the part of the appellant have been interpreted to be with the sole objective  

to  confer  benefit  to  Alstom (respondent  No.2)  to the detriment  of  Voith  

GMBH (respondent No. 1).  It was further urged in the Writ Petition that  

once Envelope Nos. 3 and 4 were opened and evaluated, there was no  

provision in any of the bidding documents permitting the appellant to revisit  

or  reopen or  reconsider  the technical  bid contained in Envelope No.  3.  

Referring  to  the  earlier  correspondence  and  various  letters  by  the  

appellant,  as also the contents of various documents, it  was contended  

that the appellant was stopped from contending to the contrary.   It  was  

suggested that after the judgment dated 26.3.2010 passed by this Court,  

the  only  course  left  open  to  THDC  (appellant  herein)  was  to  proceed  

further and award contract to Voith GMBH (respondent No. 1 herein) in  

view of Clause 28.1 of ITB.  It was urged that THDC (appellant) ought to  

have abided by the observations made by the Panel of Experts in their first  

report  dated 8.2.2010.   Contentions were also raised about the bidding  

process as also ITB.

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17. It is obvious that the High Court, on the basis of this plea, as also the  

plea of non-supply of the necessary documents, chose to stay the whole  

process after hearing both the sides.

18. We have  intentionally  chartered  the  whole  course  of  this  tender,  

which began in August, 2007.  When the matter came for the first time  

after  the  final  judgment  of  the  High  Court  was  passed,  requiring  the  

appellant THDC to invite fresh price bids, it was felt by this Court that the  

legal battle between these two multi-national companies was resulting in  

delaying of the whole process.  The importance of the project as also the  

tremendous financial implications, were realized.  The project undoubtedly  

was  going  to  cause  very  heavy  expenditure  on  the  part  of  THDC  

(appellant).   It  was  in  that  spirit  that  this  Court  proceeded to  pass the  

judgment and order dated 26.3.2010, and it was, therefore, that the price  

bids  were  directed  to  be  given  before  the  officer  of  this  Court.   The  

monetary implications were tremendous and, therefore, this Court felt the  

need  for  transparency  on  the  part  of  THDC  (appellant)  as  also  the  

objectivity.   It  was,  therefore,  directed that the price bids should be got  

examined by the Panel of Experts.  This was done not only once but twice  

to ensure that both the sides should get equal opportunities and treatment  

of fairness.

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19. What strikes us initially is that all the arguments and the insistence  

for award of contract in favour of Voith GMBH (respondent No. 1) could  

have been argued before us in that very first round.  That was not done  

and  even  if  that  was  haltingly  done,  it  was  not  found  feasible  to  

straightaway award a contract in favour of Voith GMBH (respondent No.  

1).  Considering the national interest, the matter was referred to the Panel  

of Experts.  Again, it was made very clear that the report of the Panel of  

Experts was not going to be be all and end all of the matter.  In the last  

paragraph  of  the  judgment,  it  was  made  very  clear  that  the  ultimate  

decision regarding awarding of  the contract  would  have to be given by  

THDC (appellant)  and not by this Court.   Therefore,  there was enough  

discretion and play left  in  THDC (appellant)  to act  on the report  of  the  

Panel  of  Experts  and  as  such  THDC  could  have  adhered  to  its  own  

procedure and decide upon the award of contract.

20. It  was  argued before  us by the  Shri  Vahanvati,  learned Attorney  

General that there are hierarchies in the working of THDC.  The report of  

the Panel of Experts had to be first analyzed by the Tender Committee and  

even the decision of the Tender Committee was not final and the same  

was subject to the decisions of the Executive Director and ultimately the  

competent authority.  It was pointed out by the learned Attorney General  

that  after  the  final  report  of  the Panel  of  Experts  came,  it  was  heavily  

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deliberated by the Tender Committee.  The Tender Committee made a few  

comments in terms of the report.  The Panel of Experts had already, in  

para 8 of its report, expressed what we have reproduced in para 8 of this  

judgment.   Therefore,  even if  the bid of  Alstom (respondent  No.2) was  

found to be non-responsive by the Panel of Experts, it was clear that the  

ultimate decision was to be taken by THDC after looking into number of  

issues.   When  the  matter  was  considered  further  by  the  Tender  

Committee, the Tender Committee came to the conclusion which is to be  

found  in  para  12  of  the  recommendations.   This  report  of  the  Tender  

Committee is dated 2.8.2010.  The Tender Committee, under the working  

pattern of THDC (appellant), could not have finalized the grant of award.  It  

could only make the recommendations.  It held that the fresh price bids of  

Alstom (respondent No.2) were non-responsive.  However, it is clear from  

the record that the report of the Tender Committee was to be considered at  

various higher levels in the hierarchical structure of the decision making of  

the  appellant.   In  this  report,  as  pointed  out  by  the  learned  Attorney  

General,  the Tender Committee had pointed out  certain deviations/non-

conformities in respect of the bid of Voith GMBH (respondent No. 1) also  

and, therefore, it had suggested discussion for resolving certain deviations  

and price negotiations and had also recommended the award of contract to  

Alstom (respondent No.2).  All these aspects were bound to be considered  

and were actually considered at the higher levels and thereafter the report  

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of the Executive Director came.  We have already made a reference to the  

decision of the Executive Director, who found, by his note dated 8.9.2010,  

that the bid of Voith GMBH (respondent No. 1) was also not fully complied  

with.   It  was  found  that  on  an  impartial  and  independent  scrutiny,  the  

attitude  of  THDC  (appellant)  was  found  to  be  too  stringent  to  Alstom  

(respondent No.2) and quite lenient to Voith GMBH (respondent No. 1).  

The Executive Director had also noted the non-conformities of the bids.  

The actual observations have been pointed out and mentioned in para 9 of  

this  judgment.   It  was  in  view  of  this  that  the  decision  was  taken  on  

1.10.2010 by the competent authority to call for fresh bids.  The matter was  

again  examined  by  the  Tender  Committee  and  by  its  report  dated  

14.12.2010,  the  Tender  Committee  fixed  the  deviations  which  were  

reported in Annexure 1 A and Annexure 1 B to its report.  It is these non-

conformities which were mentioned in the letter dated 21.12.2010.  Now, it  

was clear that these deviations or non-conformities, as the case may be,  

were located and both the respondents were asked to comply with these  

deviations/non-conformities with the sole objective of bringing them on the  

same level playing field, so that thereafter there would be only one task to  

decide as to whose price bid was lower and as such acceptable by THDC  

(appellant).

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21. We do not find anything amiss in this whole exercise.  Shri Desai,  

learned senior counsel appearing on behalf of Voith GMBH (respondent  

No. 1), invited our attention to the allegations of bias, discrimination etc.  It  

cannot be forgotten that at a point of time, the Executive Director felt that in  

fact,  THDC  (appellant)  was  showing  a  tilt  in  favour  of  Voith  GMBH  

(respondent No. 1).  When the documents and the correspondences are  

examined,  we  do  not  find  any  tilt  in  favour  of  either  party  and  in  our  

opinion, there is no scope to accept the allegation that THDC wanted to  

favour Alstom (respondent No.2) and had, therefore, changed the rules of  

the game.  That contention is clearly without any merits.  The allegations of  

mala fides and bias are directed towards THDC as a whole without naming  

any individual  person.   Such allegations are easy to be made but  very  

difficult to justify.  Precisely that has happened here also.  The extremely  

general  nature of  allegations would  desist  us from accepting the same.  

Particularly, when there is hardly any material justifying the same.   

22. It has already been pointed out that it is only when all the exercise  

was taken in pursuance of this Court’s judgment dated 26.3.2010 that the  

respondent No. 1 chose to raise the issue about the non-responsive bid of  

Alstom (respondent No.2).  It went on with the whole exercise including the  

arguments before the Panel of Experts not once but twice and thereafter,  

also took part in the negotiations.  But its stance changed only after the  

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final  decision  was  taken  by  the  competent  authority  on  1.10.2010  and  

more particularly, after the Tender Committee had finalized the report on  

14.12.2010.

23. In our opinion, since the whole process was absolutely transparent  

and since these issues,  which were raised by way of  the Writ  Petition,  

were not even argued before the Court in the first round, there is no scope  

to stall the whole process by finding fault with the tendering process and  

insisting that THDC could not invite the fresh pricing bids.  In our opinion,  

in  inviting  the  fresh  pricing  bids,  particularly  after  conveying  the  

deficiencies  or  non-conformities  to  both  the  respondents  and making  it  

clear to them that they would have to comply with the same as first stage,  

we do not think that any change is being made in the bidding conditions.  

We must note, at this juncture, that this Court had left discretion in THDC  

to take the decision in the light of Panel of Experts’ report.  The Panel of  

Experts had gone into the exercise not once but twice.  However, the close  

examination of the second report of the Panel of Experts would suggest  

that  everything  was  not  alright  even  with  the  bid  of  Voith  GMBH  

(respondent No. 1) and there were in fact some non-conformities, which  

were  required  to  be  considered  by  THDC  before  a  final  decision  was  

taken.  We do not find anything wrong in that.  It was earnestly urged by  

Shri Desai, learned senior counsel that the unfairness was clear enough  

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from the fact that even the documents were not supplied by THDC to Voith  

GMBH (respondent No. 1) though they were insisted upon from time to  

time.  While the debate was going on before us, all the documents were  

supplied.  But, even otherwise, we do not think that any serious prejudice  

would  have  been  caused  to  Voith  GMBH  (respondent  No.  1)  on  that  

account.

24. We may reiterate at the cost of repetition that by judgment and order  

dated 26.3.2010 passed by this Court, this Court had clearly expressed  

that  the  contractual  rights  of  the  competing  parties  like  Voith  GMBH  

(respondent No. 1) and Alstom (respondent No.2) were not more important  

than the  national  interest.   If  we find that  in  pursuance of  the national  

interest, which was so explicitly mentioned in this Court’s judgment dated  

26.3.2010,  the  THDC  by  adopting  a  fair  and  transparent  procedure,  

provided a level playing field to both the parties to get a proper idea of  

costs  that  it  would  have  to  pay  to  the  party  winning  the  contract,  no  

complaint could be made of the breach of the contractual rights.  In our  

opinion, firstly, there is no breach of the contractual rights or the terms of  

ITB.   After  all,  it  could  not  be  said  that  the  rights  of  the  parties  were  

crystallized.  According to Shri Desai, learned senior counsel arguing on  

behalf of Voith GMBH (respondent No. 1), the crystallization of the rights  

was even prior to passing of the judgment of this Court dated 26.3.2010,  

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as the bid of Alstom (respondent No.2) was found to be non-responsive  

and  the  only  bid  which  was  found  to  be  responsive  was  that  of  Voith  

GMBH (respondent No. 1).  Even accepting this, Voith GMBH (respondent  

No.  1)  could  not  insist  upon the grant  of  contract  in  its  favour  on that  

ground alone.  In the light of peculiar facts of this case, it must be stated  

that even if the bid of Voith GMBH (respondent No. 1) was found to be  

responsive, that did not end the matter.  After all, THDC, which was going  

to come out with the huge expenditure running into thousands of crores of  

rupees, was bound to safeguard the national interest.  That was the tone of  

this Court’s judgment dated 26.3.2010 also.  Otherwise, this Court could  

have  straightaway  awarded  the  contract  in  favour  of  Voith  GMBH  

(respondent No. 1).  But that was not found feasible in national interest.  

Instead, it was found proper to give fair opportunities to both the parties  

and it was only with that objective that the matters were referred to the  

Panel of Experts.  If the facts are viewed from this angle, then it will  be  

clear that there was nothing wrong in THDC treading its course with utmost  

care and it must be said that the facts show that THDC appears to have  

acted in favour of the national interest by trying to prevent the exorbitant  

prices for the project and further trying to go to the realistic and minimum  

price.  That was the spirit of this Court’s judgment dated 26.3.2010 too.

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25. In that view, we do not think that the High Court was right in passing  

the stay order as it did.  This was a clear effort on the part of Voith GMBH  

(respondent No. 1) to put the spoke and to bring to halt the motion of the  

process which was ordered by this Court in its judgment dated 26.3.2010.

26. Even at the beginning of this judgment, we had pointed out as to  

why this Court is interfering against the interim order passed by the High  

Court.  It is only to save the precious time that we have entertained this  

appeal and cleared the obstacles in the whole tendering process.

27. The appeal  succeeds.   The order  of  the Uttarakhand High Court  

granting stay is set aside.  The parties will  now proceed to submit their  

price bids in the light of the observations made by us.  The said price bids  

shall  be  submitted  within  three  weeks  from the  date  of  this  judgment.  

THDC (appellant)  shall  take the decision in  respect  of  the grant  of  the  

contract  within  three  weeks  thereafter.   With  these  observations,  the  

appeal is disposed of.  No costs.

………………………………..J. (V.S. Sirpurkar)

………………………………..J. (T.S. Thakur)

New Delhi; March 17, 2011.

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