THDC INDIA LTD.versusVOITH HYDRO GMBH CO. AND ANR.

                          [2011) 5 S.C.R. 618


A                         THDC INDIA LTD.
                                   v.
               VOITH HYDRO GMBH CO. AND ANR.
                 (Civil Appeal No. 2572 of 2011)
                           MARCH 17, 2011
B
            [V.S. SIRPURKAR AND T.S. THAKUR, JJ.]

         Contract - Tender - Tehri Pump Storage Plant, a project
    for additional electricity generation - Appellant (THDC), a
C   corporation under the Government of India, handling the
    project right from August, 2007 - However, tender not finalized
    due to legal battle between the two bidders, respondent No. 1
    and respondent No.2 - Respondent no.1 filed writ petition -
    High Court passed interim order staying the whole tender
D   process - Justifiability - Held: Not justified - Since the whole
    process was absolutely transparent, there is no scope to stall
    the whole process by finding fault with the tendering process
    and insisting that THDC could not invite fresh pricing bids -
    In inviting the fresh pricing bids, particularly after conveying
E   the deficiencies or non-conformities to both the respondents
    and making it clear to them, it cannot be said that any change
    was made in the bidding conditions - There was nothing wrong
    in THDC treading its course with utmost care - THDC acted
    in favour of the national interest by trying to prevent the
F   exorbitant prices for the project and further trying to go to the
    realistic and minimum price - Contractual rights of competing
    parties like respondent no. 1 and respondent no. 2 not more
    important than the national interest - Stay order of High Court
    set aside - Parties to submit fresh price bids - THDC to
G   accordingly take decision in respect of the grant of contract.

      The Tehri Pump Storage Plant, a project for additional
  electricity generation, involved technical issues. The
  appellant (THDC), a corporation under the Government of
  India, has been handling the project right from August,
H                           618
THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 619
                     ANR.
2007. However the tender was not finalized due to legal        A
battle between the two bidders, respondent No.1 and
respondent No.2. Respondent no.1 filed writ petition. The
High Court; by the impugned order, passed an interim
order staying the whole tender process.                            •
                                                               B
    Allowing the appeal, the Court

     HELD:1. In an earlier round of litigation, 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. C
1) and Alstom (respondent No.2) were not more important
than the national interest. If 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 D
to both the parties to get a proper idea of costs that it
would have to pay to the party winning the contract, rio
complaint could be made of the breach of the contractual
rights. [Para 24] [637-A-C]
     2. Since the wh.ole process was absolutely                E
transparent and since the issues 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 inviting      F
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 hav~ to
comply with the same as first stage, it cannot be said that
any change is being made in the bidding conditions. This       G
Court had left discretion in THDC to take the decisioQ 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
                                                               H
   620      SUPREME COURT REPORTS              [2011) 5 S.C.R.


A 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. There is nothing wrong in that. [Para 23] [636-
B C-FJ
       3. There is no breach of the contractual rights or the
  terms of Instructions to Bidders (ITB). After all, it could
  not be said that the rights of the parties were crystallized.
  According to Voith GMBH (respondent No. 1), the
C crystallization of the rights was even prior to passing of
  the judgment of this Court dated 26.3.2010, 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).
D 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
E not end the matter. After all, THDC, which was going to
  come out with the huge expenditure running into
  thousands of cror,es 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
F 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 1
  it was only with that objective that the matters were
G 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
H to prevent the exorbitant prices for the project and further
THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 621
                     ANR.
trying to go to the realistic and minimum price. That was A
the spirit of this Court's judgment dated 26.3.2010 too.
[Para 24] [637-C-H; 638-A-B]

     3. In that view, it cannot be said that the High Court
was right in passing the stay order as it did. This was a 8
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. [Para 25) [638-C] .

    4. It is only to save the precious time that this Court C
has entertained the instant appeal and cleared the
obstacles in the· whole tendering process. The order of
the High Court granting stay is set aside. The parties will
now proceed to submit their price bids. THDC (appellant)
shall take the decision in respect of the grant of the D .
contract thereafter. [Paras 26, 27] [638-D-E]
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2572 of 2011.
    From the Judgment & Order dated 01.02.2011 of the High     E
Court of Uttaranchal at Nainital in WP No. 212 of 2011.

    G.E. Vahanvati, AG, H. Rawal, ASG, Pratap Venugopal,
Purushottam Kumar Jha, Namrata Sood and Anuj Sarma (K.J.
John & Co.) for the Appellant.                                 F
    Ashok Desai, Shyam Divan and A.M. Singhvi, Jai Munim,
Anu Bindra, Amit Anand Tiwari, Ashutosh Jha, Prashant Mehta
and Abhinav Mukharji for the Respondents.

    The Judgment of the Court was delivered by                 G

    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   H
    622       SUPREME COURT REPORTS                     [2011) 5 S.C.R.

A   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
B   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 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
c   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
0
    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
E   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
F         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."

G        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. The issue of national interest
    is our prime concern, the importance of which cannot be
H   undermined.
THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 623
           ANR. [V.S. SIRPURKAR, J.]
                         I
      5. Before we take up the issue for consideration, a short      A
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       B
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             c
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        D
was not valid, the bidding document$ 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       E
being Appeal No.131 of 2009 before the High Court of
 Uttarakhand. With 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        F
 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    G
 by the respondent. Respondent No.2, therefore, objected to the
 report dated 8.11.2009 and took exceptions to some of the
 observatiohs 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        H
    624       SUPREME COURT REPORTS                  [2011) 5 S.C.R.


A 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
B 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.

C        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
D         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."

E        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 Mis Alstom is not non-
          responsive. Their quoted price of partnership basis even
F         though non-responsive is, however, lower by 84.5 crores
          (Mis 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 Mis Alstom
G         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
H         permissible under bidding document of this tender."
THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND _625
          ANR. [V.S. SIRPURKAR, J.]
     7. During the hearing, respondent .No.2 had urged that A
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 Mis Voith and, therefore, this Court took note of the
contentions that the nature of objections to the report was of B
technical character and the bona tides 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 c
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:
                                                                  D
     "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        E
matters including the appealI filed
                                  .
                                    by M/s Voith, respondent
No.1 herein. The Court observ~d:                 ·

    ''The exercise of bidding b~fore this Court was ordered
    with the sole objective of saving time and to give the
    transparency to the whole exercise. Once the fresh bids F
    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 G
    express their opinion. That opinion shall then be
    considered by the appellant which would take the final
    decision on that basis. We must reiterate here that it is not
    for this Court to award the contracts by accepting or
    rejecting the tender bids. It is exclusively for the appellant H
    626       SUPREME COURT REPORTS                 [2011] 5 S.C.R.

A         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
8   respondents before the panel of experts wherein respondent
    No.2 pointed out that there were several technical deviations
    in the bid of Mis 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
C   the technical requirements. It was stated that the bid of Mis
    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
D   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
E   bids but did not give any finding regarding the deviations
    pointed 'Out by it in respect of respondent No.1, Mis Voith. It,
    however, expressed in the following terms:

          "M/s Alstom during hearing have pointed some specific
F         issues relating to bid of Mis 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).
G         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
H         containing hidden deviations as was the case for MIV.
 THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 627
            ANR. [V.S. SIRPURKAR, J.]
     THDC will have to look into these issues along with all A
     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 Mis . Voith 's bid is
     responsive or non-responsive. (emphasis supplied)
                                                                      8
       9. Again respondent No.2, Mis 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 C
  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 D
  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
  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 E
  to be fully responsive to the tender conditions". It was observed
  that even the bid of respondent No.1, Mis Voith could not be
  said to be fully complying and it was observed:

      If an impartial and independent scrutiny of tender is carried   F
 out, it may appear that THDC has been too stringent on Mis
 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      G
     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)
                                                                      H
    628       SUPREME COURT REPORTS                   [2011] 5 S.C.R.


A         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
B   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 18 detailing
    the non-conformities in respect of respondent No.2 and
    respondent No.1, respectively. Therefore, a communication
c   dated 21.12.2010 was sent to both the respondents that 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
0   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
E    experts was also referred to. It was stated that the techno-
     commerciat 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
F    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
G    of Mis Alstom and annexure 18 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
H    stage of price bidding i.e. regarding the un-conditional
THDC INDIA LTD. v. VOITH RYDRO GMBH CO. AND 629
          ANR. [V.S. SIRPURKAR, J.]
compliance the bidders were to submit the documents latest. A
by 7.1.201 ( 4 p.m. IST. The validity of the bid was limited to
180 days from the date of.submission of th~ fresh price bid.

       12: This letter dated 21.12.201 O was challenged by the
respondent No.1 by way of a writ petition No.212 of 2011. But 8
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 C
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 D
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 E
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 wherein the same stand
was allegedly reiterated by respondent No.1. A further letter F
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;     .                       . .
                                                                        G
      (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."                  H
    630       SUPREME COURT REPORTS                    [2011] 5 S.C.R.


A         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
8
  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
C 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
D         parties and the report of the tender committee and
          recommendations of the Executive Director.

          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
E
          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.

F         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
G         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
H         undertaken by respondent No.1."
THDC INDIA LTD. v: VOITH HYDRO GMBH CO. AND 631
           ANR. [V.S. SIRPURKAR, J.]
    . 15. It seems that by their .letter d:ated. 12.2.2011,          A
respondent No.1 h~ve 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 iri 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             B
passed by the Hi,gh Court is strictly without prejudice to the
rights and contentions of the Vojth 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        C
regard,s to the non~conformities.

       16. In the Writ Petition, amongst the other prayers, a
direction was sought against the appellant to award the contract
ih respect of Tehri Pump Storage Plant. The main attack in the
Writ Petition was on the letter dated 21.12.2010 on the ground       D
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 rriotive of benefiting. Alstom
(respondent No.2) and giving Alstom (respondent No.2) yet
another opportunity to rectify or supplement its admittedly non-     E
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 nqn-
 responsive bid from being made responsive at the instance of        F
 the bidder by introducing corrections or with.drawing the non-
conforming deviation or reseNation. 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 arid 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       H
    632      SUPREME COURT REPORTS                   (2011] 5 S.C.R.


A   given by Voith GMBH (respondent No. 1). On that basis, it was
    urged in the Writ Petition that once the techno 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
B   thereafter, inviting fresh price bids. Strong words iike '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
c   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
0
    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
E   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.
F
         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.
G
          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
H
 THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 633
            ANR. [VS. SIRPURKAR, J.]
multi-national companies was resulting in delaying of the whole A
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,     s
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 · c
of Experts. This was done not only once but twice to ensure that
both the sides should get equal opportunities and treatment of
fairness.

     19. What strikes us initially is that all th.e arguments and
the insistence for award of contract in favbur of Voith GMBH D
(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. E
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, itwas 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. F
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.
                                                                   G
     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
                                                                   H
    634      SUPREME COURT REPORTS                   [2011] 5 S.C.R.

A    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 deliberated by the Tender Committee. The Tender
     Committee made a few comments in terms of the report. The
B    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
C    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 ~ave finalized the grant
0
     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
E    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
F    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 of the Executive Director came.
     We have already made a reference to the decision of the
G    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
H    lenient to Voith GMBH (respondent No. 1). The Executive
THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 635
          ANR. [V.S. SIRPURKAR, J.]
Director had also noted the non-conformities of the bids. The A
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
                                                                  8
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 tleviations or non-
conformities, as the case may be, were located and both the
respondents were asked to comply with these deviations/non- C
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).
                                                                   D
     21. We (jo 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 E
(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 F
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 G
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
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    636       SUPREME COURT REPORTS                  [2011) 5 S.C.R.


A   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
B   thereafter, also took part in the negotiations. But its stance
    changed only after the 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
C 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 faultwith the tendering process and insisting that THDC
  could not invite the fresh pricing bids. In our opinion, in inviting
D 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,
E 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 eveh with the bid
F 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
G 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 Lis, all the documents were supplied. But, even
  otherwise, we do not think that any serious prejudice would have
H
 THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 637
            ANR. [V.S. SIRPURKAR, J.]
 been. caused
          .
              to
              .
              -
                 Voith GMBH (respondent No. 1) on that
                     '
                                                                            A
 account.         '>, .


        24. We may· reiterate at the cost of repetitioh that by
 judgment and order dated 26.3.2010 passed by this Court, this
  Court had clearly expressed that the contractual rights of the            B
  competing parties like Voith GMBH (respondent No. 1) and
 Alstom. (respondent No.2) were not more important than the
  nationafinterest. If we find that in pursuance 9f the national
  interest, which was so explicitly mentioned in this Court's
 judgmentdated 26.3.2010, _the .THDC by adopting a faii" and                C
  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. ln our Opinion, firstly; there
  is no breach of the contractual rights or the terms of ITB. After
  all, if could not be said that the rights of the parties were             D
  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, as the bid of Alstom
  (respondent No.2) was found to be non-responsive and the only             E
  bid which was found to be responsive was that ofVoith 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        F
  (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            G
  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.         H
    638      SUPREME COURT REPORTS                   [2011] 5 S.C.R.


A   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 THOC
    appears to have acted in favour of the national interest by trying
    to prevent the exorbitant prices for the project and further trying
B   to go to the realistic and minimum price. That was the spirit of
    this Court's judgment dated 26.3.2010 too.

       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
C 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
0   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
E   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.
    THOC (appellant) shall take the decision in respect of the grant
    of the contract within three weeks thereafter. With these
F   observations, the appeal is disposed of. No costs.

    B.B.B.                                          Appeal allowed.