TaxTMI 
TaxTMI 
2014 (2) TMI 1427
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....se in Phase-III of the Mass Rapid Transit System ('MRTS' for short) for Delhi and its extension corridors. The High Court has taken the view that the process of evaluation of the bids received from eligible bidders culminating in the award of a contract in favour of Respondent No. 2-Hyundai Rotem Company ('HR' for short) was transparent and did not suffer from any illegality, irregularity or perversity of any kind to warrant interference by it. The High Court held that the bidders were well aware of and had accepted the tender conditions which were free from any vagueness or uncertainty. The parameters of evaluation conditions were also held to have been applied uniformly to all the bidders under a procedure that was open, transparent and fair as required by law. The present appeal assails the correctness of that judgment and order. Alstom Transport India Ltd. and Ors.-Writ-Petitioners in connected Writ Petition No. 2615 of 2013 have, however, remained content with the view taken by the High Court and have not chosen to appeal. 3. Respondent-Delhi Metro Rail Corporation ('DMRC' for short) has planned to implement Phase-III of the MRTS for Delhi to keep pa....
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.... Position before Loading due to difference in GEC values Siemens Consortium 3625,27,92,409 7,45,94,223 L-1 Bombardier Consortium 4242,27,83,378 8,72,89,678 L-2 Hyundai ROTEM 4290,57,94,689 8,82,83,528 L-3 Alstom Consortium 4373,87,65,001 8,99,97,459 L-4 CAF Consortium 4614,18,66,794 9,49,42,113 L-5 Hitachi + BHEL 4891,32,60,656 10,06,44,569 L-6 5. Significantly, however, the above did not represent the true inter se position of the bidders. That was so because apart from the price quotation, the terms and conditions of the tender notice required loading of GEC values duly converted into Indian rupee to the price quotation of each eligible bidder. The GEC values in turn comprised two distinct components, namely, 'X' factor representing the electricity consumption for the operation of the train without HVAC and 'Y' factor for operation of HVAC. The GEC values offered by the six bidders found technically compliant were as under: S.No. Bidder Other than HVAC ('X) HVAC ('Y') Total 1 ALSTOM 1434 595 2029 2 BTC 1621 564 2185 3 CAFC 1159 ....
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....der, thus, appeared as a writing on the wall to the Appellant who sent a communication dated 12th February, 2013 to DMRC alleging that the GEC values offered by HR were untenable and unsustainable and pointing out that since the Appellant's price bid was lesser than that of the HR by 665 crores (approx.) it should be taken as L-1 instead of determining the inter se position of the bidders on the basis of a supposedly anticipated saving in the consumption of energy on a lifecycle of 30 years. Yet another letter dated 25th February, 2013 the Appellant called for evaluation of energy values by an independent third party agency so as to ascertain whether the GEC values offered by HR were achievable. Yet another letter dated 1st March, 2013 to the same effect having failed to cut any ice with the DMRC, the Appellant preferred Writ Petition No. 1853 of 2013 before the High Court of Delhi. That writ petition was notified for hearing on 1st May, 2013. In the meantime DMRC issued a Letter of Acceptance in favour of HR under intimation to the Appellant. The Appellant, therefore, sought a restraint order against the award of the contract before the High Court who in turn accepted an under....
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.... the other hand, argued that the bids offered by the eligible tenderers were evaluated by three different Committees i.e. the Evaluation Committee, the Appraisal Committee and finally by the Tender Committee in a fair and transparent manner. On receipt of the representations from the Appellant-Siemens, Bombardier, Alstom and Hitachi regarding the GEC values offered by HR, the Board of Directors of DMRC constituted a sub-Committee to consider the said representations. The Board sub-Committee consisted of six directors out of whom three were Functional Directors besides MD of the DMRC, a nominee Director of MOUD of Indian Railways and one independent Director. The Sub-Committee met on 4th and 5th March, 2013 and thoroughly examined the issues raised in the representation and found the detailed explanations provided in the Tender Committee Minutes to be satisfactory. The Sub-Committee, therefore, agreed with the recommendations of the Tender Committee culminating in the issue of a Letter of Acceptance to Respondent-HR. Our attention was drawn to the counter-affidavit filed by the DMRC in which the process of evaluation of the bids and the GEC values has been set out. The counter-affid....
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....in its reply dated 14th August, 2013 sent to the Government clearly stated that it would not respond to the preliminary observations of the Committee as the matter had in the meantime travelled to this Court and was sub judice. Legal opinion obtained by the DMRC from a Senior Advocate of this Court, also advised that in a matter that is sub judice, any report by any outside Enquiry Committee appointed by the Government would be impermissible and improper nor would it be advisable for DMRC to participate in any such exercise. In the premises it was contended that the Report by the Enquiry Committee submitted to this Court in a sealed cover need not be looked into as the same was wholly extraneous to a judicial review of the process of evaluation and eventual award of the contract by DMRC, the authority competent to do so. Relying upon the decisions of this Court in Amrik Singh Lyallpuri v. Union of India and Ors. (2011) 6 SCC 535 and Union of India v. K.M. Shankarappa (2001) 1 SCC 582, it was argued that administrative review of a judicial decision was not legally permissible. It was also contended by Mr. Andhyarujina that pursuant to the allotment made in his favour, HR had taken s....
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.... process to warrant interference. 17. Principles governing judicial review of administrative decisions are now fairly well-settled by a long line of decisions rendered by this Court, since the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India and Ors. (1979) 3 SCC 489 which is one of the earliest cases in which this Court judicially reviewed the process of allotment of contracts by an instrumentality of the State and declared that such process was amenable to judicial review. Several subsequent decisions followed and applied the law to varied situations but among the latter decisions one that reviewed the law on the subject comprehensively was delivered by this Court in Tata Cellular's case (supra) where this Court once again reiterated that judicial review would apply even to exercise of contractual powers by the Government and Government instrumentalities in order to prevent arbitrariness or favouritism. Having said that this Court noted the inherent limitations in the exercise of that power and declared that the State was free to protect its interest as the guardian of its finances. This Court held that there could be no infringem....
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....ive burden on the administration and lead to increased and unbudgeted expenditure. 19. In M.P. Oil Extraction v. State of M.P. and Ors. (1997) 7 SCC 592, this Court held that if an objective and rational foundation for the fixation of royalty is disclosed, the Court will not interfere with the exercise of governmental decision by undertaking an exercise to determine whether or not a better fixation was possible in the circumstances. This Court struck a note of caution that in economic and policy matters the scope of judicial review was limited. 20. It is unnecessary and platitudinous for us to burden this judgment with reference to the decisions of this Court on the subject for the governing principles are so well-known and well-settled that any review of the law on the subject is bound to be simply repetitive without any meaningful contribution to the existing legal literature on the subject. We remain content by referring to two only of a plentitude of judicial pronouncements on the subject in which the legal position has been succinctly restated. One of these decisions was delivered in Jagdish Mandal v. State of Orissa and Ors. (2007) 14 SCC 517, where too this Court was d....
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....ous in respect of a legal deficiency, as for example, through the absence of evidence, or of sufficient evidence, to support it, or through account being taken of irrelevant matter, or through a failure for any reason to take account of a relevant matter, or through some misconstruction of the terms of the statutory provision which the decision-maker is required to apply. But while the evidence may have to be explored in order to see if the decision is vitiated by such legal deficiencies it is perfectly clear that in case of review, as distinct from an ordinary appeal, the court may not set about forming its own preferred view of evidence. 22. There is no gainsaying that in any challenge to the award of contact before the High Court and so also before this Court what is to be examined is the legality and regularity of the process leading to award of contract. What the Court has to constantly keep in mind is that it does not sit in appeal over the soundness of the decision. The Court can only examine whether the decision making process was fair, reasonable and transparent. In cases involving award of contracts, the Court ought to exercise judicial restraint where the decision is ....
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....regularity can itself, in certain situations result in invalidating a process, cannot be disputed. The question, however, is whether there was any irregularity in the evaluation of the bids in the present case and if so whether the same was sufficient to invalidate the evaluation process or the ultimate award of the contract. Whether or not there was any irregularity in the process of evaluation of the bids shall in turn have to be examined by a reference to the conditions of the tender notice under which the tenders were invited, received, processed, evaluated and eventually accepted. It is common ground that the price bid offered by the tenderers was not itself determinative. What was equally important was the GEC values comprising X and Y factors which the tenderers had to disclose in their technical bids. That the values offered had to be converted into Indian Rupees and loaded to the price bid of the tenderers is also beyond question. That each one of the bidders had offered their GEC values comprising X and Y factors separately was also beyond doubt. There is no error even in the conversion of such values in terms of Indian Rupees nor is there any dispute about the effect of ....
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....of the GEC values and their achievability was an implied condition in the evaluation process, DMRC had on the basis of an internal simulation satisfied itself that the GEC values were not unachievable. The High Court has referred to the simulation results and so has our attention been drawn to the said result from the original record produced by DMRC. We do not see any illegality or irregularity in the process of verification conducted by the DMRC to test the achievability of the GEC values. It is true that DMRC had conducted the simulation in regard to the GEC values offered by HR only but then in the absence of any condition in the tender notice requiring DMRC to conduct such verification even in regard to other GEC values, there was no need for it to undertake any such exercise. DMRC was, in our opinion, entitled to adopt such methods as were reasonable to satisfy itself above about the GEC values and their achievability offered by lowest tenderer in whose favour it was considering the award of the contract. The upshot of the above discussion, therefore, is that the process by which the bids were evaluated and eventually accepted was transparent, fair and reasonable and does not....
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....l for consideration before the High Court and at a later stage before this Court. We fail to appreciate how the Government could have possibly done this. Confronted with this situation Mr. Mohan Parasaran, learned Solicitor General, argued that a reference to the Committee was not meant to subvert judicial process but to only find ways and means to formulate policies and procedures for future allotment of contracts. We have no hesitation in rejecting that submission. The Reference Order extracted above speaks for itself. It no where states that the Committee has to look at anything beyond the process of evaluation of tenders received by DMRC. It does not even remotely suggest that the Government is concerned about the procedures that may be followed in the future or anxious to devise transparent methods by which such contract should be allotted. What is notable is that the Committee's hands were not stayed by the Government even when the High Court had pronounced upon the validity of the procedures adopted by the DMRC and the matter reached this Court. Continuance of the process of review even after the High Court had delivered its judgment amounted to subjecting the judicial p....
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....rise and experts in the field have expressed various views and all those aspects have been taken into consideration by the Government in deciding the matter, could it still be said that this Court should re-examine to interfere with the same. The wholesome rule in regard to judicial interference in administrative decisions is that if the Government takes into consideration all relevant factors, eschews from considering irrelevant factors and acts reasonably within the parameters of the law, courts would keep off the same. 30. Reference may also be made to the decision of this Court in N.D. Jayal v. Union of India (2004) 9 SCC 362 where this Court observed: This Court cannot sit in judgment over the cutting edge of scientific analysis relating to the safety of any project. Experts in science may themselves differ in their opinions while taking decisions on matters related to safety and allied aspects. The opposing viewpoints of the experts will also have to be given due consideration after full application of mind. When the Government or the authorities concerned after due consideration of all viewpoints and full application of mind took a decision, then it is not approp....