Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Tender-Global tender |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Tender - Global tender - Consortium of two companies applied for the tender - Excluded from second stage of bidding - On the ground that one of the companies did not have net cash profit of Rs.200 crores, as per Pre Qualification terms, which would have negative impact on future cash flows on account of provisioning for doubtful debts of Financial Year 2001 - Propriety of the exclusion - Held: The exclusion of the consortium was arbitrary whimsical and unreasonable - An important method of 'Cash flow reporting' i.e. 'reconciliation method' was kept out of consideration - The decision-making process stood vitiated.Constitution of India, 1950 - Articles 14, 19(1)(g) and 21- Applicability of - To Government tenders - Held: Vagueness and subjectivity in terms and conditions of tenders regarding norms and bench marks would result in discriminatory treatment - Decisions resulting in unequal treatment would violate doctrine of 'level playing field' embodied in Article 19(1)(g) - Principle of equality embodied in Article 14 has to be read in conjunction with Article 21 and not in isolation - Any Government policy, even in contractual matters, if fails to satisfy the test of 'reasonableness', would be unconstitutional.Judicial Review - Applicability - In contractual matters - Held: Judicial review is applicable even in contractual matters - Object of the same is to prevent arbitrariness - It must be exercised in larger public interest - Standards applied by courts in judicial review must be justified by constitutional principles.Doctrine - Doctrine of 'level playing field' - Applicability of Words and Phrases - 'globalization', 'provisioning' and 'write off' - Meaning of.State of Maharashtra through respondent No.1-Compnay (MSRDC) floated a global tender, for completion of Mumbai Trans Harbour Link (MTHL). Appellant-Companies (REL and HDEC) formed a Consortium and applied for the tender. Under Pre Qualification (PQ) document, the bidders were required to submit financial statements of three financial years subject to the condition that the latest should not be earlier than the financial year ending 31.12.2002. As per clause 7.2.2 of PQ required a consortium to have net cash profit of Rs.200 crores. The bidders were also required to submit their Request for Qualification (RFQ) for the project on or before 10.1.2005. The consortium submitted three audited accounts for the Financial Years ending 31.12.2001, 31.12.2002 and 31.12.2003. One of the companies of the consortium namely HDEC was not having Net Cash Profit of Rs.200 crores for the financial years. However, the company according to its chartered accountant had net income of Rs.200 crores after adjusting 'non-cash expenses' incurred during the Financial Years.MSRDC kept the offer of the consortium open by extending validity of the offer from time to time till 6.10.2005. Consortium by a letter dated 18.8.2005 submitted audited accounts of HDEC for Financial Year ending 31.12.2004, thus complying with the condition of supplying account of the Financial Years latter than the Financial Year 20()1. Consultants of MSRDC excluded the consortium from the second stage of the bidding process. A committee constituted by MSRDC to review the draft evaluation report submitted by the consultants, opined that the exclusion of the consortium was bad. The consultants did not agree with the report of the Committee and the consortium stood disqualified haying failed to meet the qualification criteria. Writ Petition challenging the disqualification was dismissed by High Court upholding the disqualification. High Court also held that it had no jurisdiction under Article 226 of the Constitution to interfere with the decision of MSRDC, particularly when there were two different opinions regarding adjustment of net income. Hence the present appeal. |
Judge | Honble Mr. Justice S.H. Kapadia |
Neutral Citation | 2007 INSC 906 |
Petitioner | Reliance Energy Limited & Anr. |
Respondent | Maharashtra State Road Development Corporation Ltd. & Ors. |
SCR | [2007] 9 S.C.R. 853 |
Judgement Date | 2007-09-11 |
Case Number | 3526 |
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