TEHRI HYDRO DEVELOPMENT CORPORATIONversusALSTOM HYDRO FRANCE & ANR.

                     [2010) 3 S.C.R. 863


      TEHRI HYDRO DEVELOPMENT CORPORATION                        A
                               v.
             ALSTOM HYDRO FRANCE & ANR.
               (Civil Appeal No. 2761 of 2010)

                       MARCH 26, 2010
                                                                 B
        [V.S. SIRPURKAR AND DR. MUKUNDAKAM
                     SHARMA, JJ.]

      Tenders:
                                                                 c
        Tehri Hydro Development Corporation - Inviting tenders
   - Acceptance of bid challenged in writ petition before High
   Court - Direction by High Court for inviting fresh bids -
, Challenged before Supreme Court - Corporation directed to
   invite fresh bids and process the matter accordingly - D
   Objections filed - Panel of Experts appointed to examine
   objections - Objections raised to report submitted by Panel
   of Experts - HELD: A very important project like the instant
   one is being held up in a legal battle between two multinational
   companies - Contractual rights of these companies are not E
   more important than national interest - In the interest of the
  project, the Panel of Experts shall give a .JrftBh report after
  giving one more final opportunity of hearing to the parties -
   The Corporation would then, without loss cj/ime take the
   decision regarding the award of contract, cYinsidering the
  report of the Panel of Experts - Once the fresh bids were F
  allowed to be given, the old controversies before the High
  Court would naturally become extinct and nothing survives in
  the appeals arising out of its decision - The exercise of
  bidding before the Supreme Court was ordered with the sole
  objective of saving time and to give the transparency to the G
  whole exercise - It is not for this Court to award the contracts
  by accepting or rejecting the tender bids - It is exclusively for
  the Corporation to do that - Hydro-Electric Projects.

                              863                                H
    864      SUPREME COURT REPORTS                  [2010] 3 S.C.R.

A       CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    2761 of 2010.

        From the Judgment & Order dated 29.6.2009 of the High
    Court of Uttarakhand at Nainital in W.P. No. 167 of 2009.
B                               WITH

    SLP(C) No.19890 of 2009

    T.C. (C) No. 33 of 2009.
c      G.E. Vahanvati, AG, F.S. Nariman, A. Sharan, Harish
  Salve, Dr. A.M. Singhvi, Pratap, Venugopal, Surekha Raman,
  Dileep Poolakkot, Purushottam Kumar Jha (for K.J. John &
  Co.) Jai Munim, Gursharan, Anuradha Bindra, J.N. Patel, Amit
  Anand Tiwari, Abhinav Mukerji, Shiv Prakash Pandey for the
D appearing parties.

          The Order of the Court was delivered by

                               ORDER
E       V.S. SIRPURKAR, J. 1. Leave granted in SLP (C)
    Nos.15779 and 19890 of 2009.

        2. These appeals emanate out of the order passed by the
  learned Single Judge of Uttaranchal High Court. On 31st
F 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
G 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
H options. However, respondent no.1 filed a Writ Petition being
 TEHRI HYDRO DEVELOPMENT CORPORATION v.                       865
 ALSTOM HYDRO FRANCE [V.S. SIRPURKAR, J.]
W.P. No.167 of 2009 in the Uttarakhand High Court on two              A
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      B
there was no violation of terms and conditions of ITB. However,
the learned Single Judge passed the following order by way of
final directions:

     "Consequently this Court holds as follows:
                                                                      c
    The qualifications of respondent no.2 for having done the
    work of 'erection' at Ghangzhou II seems to be in order as
    this court holds 'st:1pervision of erection' as equivalent to
    that of 'erection' and rejects the arguments of petitioner on
    the eligibility of respondent no.2. Further, under the facts      D
    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 assignee and the other as a            E
    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           F
    fresh bids from the petitioner as well as respondent no.2."

    Being aggrieved the appellant herein filed the present
appeals.

     3. As it appears from lhe appeal filed by Tehri Hydro            G
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           H
    866       SUPREME COURT REPORTS                  [2010] 3 S.C.R.


A 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
B 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
c 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
0 appellant this fact was completely lost sight of by the High Court.
        4. 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
E 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:

          "Issue Notice.
F         The 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
G         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
H         deliberately as we are told that a very important project is
   TEHRI HYDRO DEVELOPMENT CORPORATION v.                      867
    ALSTOM HYDRO FRANCE [V.S. SIRPURKAR, J.]
      held up.                                                        A

      Put up after six weeks."

       Accordingly fresh bids were invited and the respondents
  1 and 2 submitted the same. As ordered in the earlier order
  two bids were submitted to the Registry of this Court in the B
  sealed covers. Learned Attorney General also offered that the
  sealed covers could 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 C
  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. The appellant, at this
  stage, also offered to give hearing, if any, to the parties in D
  respect of their objections to the fresh bids.

     5. 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          E
 the Uttaranchal High Court being Special Appeal No.131 of
 2009. That appeal got transferred to this Court.

        6. 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        F
  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      G
 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 H
    868           SUPREME COURT REPORTS            [2010] 3 S.C.R.


A   the copies of the examination report were already supplied and
    the appellant had received a representation raising objections,
    in 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
B   Consortium of respondents. This panel of experts comprises
    of following experts:

           (i)      Shri Ramesh Chandra (Ex-Chairman, CWC)

           (ii)     Shri D.V. Khera (Ex-Chairman, CEA)
c
           (iii)    Shri A.K. Shangle (Ex-Member, CWC)

         The objections raised by the first respondent were inquired
    into by the Panel of Experts. The Panel of Experts framed the
    following question:
D
          "Whether the examination report of THDC declaring the bid
          of the Consortium of Mis.Alstom as non-responsive is OK
          or the objections raised by the Consortium of Mis.Alstom
          are justified with reference to the Terms & Conditions of
E         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 Panel of experts have drawn a conclusion in their
    report to the following effect:
F
          "Based upon the views outlined above, POE is of the
          opinion that fresh price bid of consortium of Mis.Alstom is
          non-responsive. Their quoted price on partnership basis
          even though non-responsive is however lower by Rs.84.5
          crores (Mls.Voith Rs.21,551,245,304.00 - Mis.Alstom
G
          Rs.20,705,840,090.00). Similarly, the quoted price on·
          assignee basis though non-responsive is lower by
          Rs.108.7 cores (Mls.Voith Rs.22,343, 174,985.00 - Ml
          s.Alstom Rs.21,256,007,413.00). The unconditional offer
          of consortium of Mis.Alstom to take care of THDC
H
  TEHRI HYDRO DEVELOPMENT CORPORATION v.                    869
   ALSTOM HYDRO FRANCE [V.S. SIRPURKAR, J.)
     observation without any extra cost so that bid becomes         A
     responsive and in accordance with employers' requirement
     is not acceptable as this is not permissible under Bidding
     Document of this Tender."

     7. Ultimately when the matter was heard on 15.2.2010, a
                                                                    8
copy of the report of the Panel of Experts was handed over to
the parties.

    8. When the matter came up on 19.3.2010 Shri Harish
Salve, Senior Advocate and Dr.AM. Singhvi, Senior Advocate'
appearing for the respondent no.1 urged that the Panel of C
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:-
                                                                    0
    "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        E
    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".                                 F

     In short 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.                                                              G
    9. 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             H
    870      SUPREME COURT REPORTS                 [2010] 3 S.C.R.


A 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 the bonafides of the Panel of Expert.
  though during the arguments the possibility of bias was
B 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
c 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.

D       10. 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
E 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
F 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.

       11. Under the circumstances we order that the Panel of
G 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 the
H end of April, 2010. The appellant herein would then, without loss
       /




  TEHRI HYDRO DEVELOPMENT CORPORATION v.                        871
   ALSTOM HYDRO FRANCE [V.S. SIRPURKAR, J.]

of time, take the decision, considering the report of the Panel        A
of Experts regarding the award of contract.

      12. 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
                                                                       8
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. Secondly, 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           C
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          D
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       E
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        F
which would take the final decision on that basis. We must
reiterate here that it is not for this Court to award the contiacts
by accepting or rejecting the tender bids. It is exclusively for the
appellant herein to do that. One?. ail this exercise is over,
nothing would remain for :.:s t.J decide in these appeals.             G

    13. In view of the directions passed above both the
appeals as well as the Transfer Case No.33/2009 are
disposed of.

R.P.                                        Matters disposed of.       H