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CASE NO.: Appeal (civil)  653 of 2006

PETITIONER: State of Orissa & Anr

RESPONDENT: M/s. Tata Iron & Steel Co. Ltd. & Ors

DATE OF JUDGMENT: 04/02/2008

BENCH: DR. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT: JUDGMENT

CIVIL APPEAL NO. 653 OF 2006 WITH Civil Appeal No. 654 of 2006, Civil Appeal No.655/2006,  Civil Appeal No.671 of 2006, Civil Appeal No.672 of 2006 and  Civil Appeal No.673 of 2006

Dr. ARIJIT PASAYAT, J.

1.      Challenge in these appeals is to the judgment of a  Division Bench of the Orissa High Court allowing the Writ  Petitions filed by Visa Industries Limited (in short the ’VISA’)  and Another (Writ Petition (C) No. 5128 of 2004) and M/s.  Tata Iron and Steel Co. Ltd.(in short the ’TISCO’) (Writ Petition  (C) No. 6798 of 2004).  By the impugned Judgment the High  Court held that the technical bids of VISA and TISCO could  not have been rejected at the threshold without proper  evaluation in terms of the eligibility condition as set out in the  concerned advertisement.  It was also held that Jindal Strip  Limited (in short ’Jindal’s’) bids were never evaluated and  assessed in a dispassionate and impartial manner.  There was  no attempt to find out as to which of the bids offered by the  three parties would give maximum advantage to the State in  terms of public interest and state exchequer. Certain other  observations were made questioning bonafides of the officials  of the State and Industrial Development Corporation of Orissa  Limited (in short the ’IDCOL’). It was held that power of  judicial review was to be exercised as the selection of Jindal as  a Joint Venture Partner for the project in question was not  properly done.  Therefore the IDCOL’s decision to select Jindal  cannot be maintained and was set aside.  

2.      It was noted that the matter could have been remitted to  IDCOL for fresh evaluation and formation of merits on the bids  of the respective parties, but it was not thought proper.  It was  also noted that Jindal proposed to set up stainless Steel  Industry which could not have been considered as a relevant  factor while deciding the question of Joint Venture Partner.   However, IDCOL was given the opportunity to issue a fresh  advertisement for the purpose of setting out in clear terms  whether it wants stainless industries to be set up in the State  or other industry where chrome could be used as an  ingredient.   

3.      The technical bids offered by the various parties are on  record.  By the last date for receipt of offers, four parties had

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submitted their offers but later on Jindal Steel Power Ltd. did  not want to continue.  

4.      The present appeals arise out of Special Leave Petitions  filed by the State of Orissa, IDCOL and Jindal.   

5.      Primary stand of Mr. G.E. Vahanvati, Learned Solicitor  General is that the High Court’s approach is clearly erroneous.   It has taken into account various irrelevant and extraneous  materials without even any pleading in that regard.  It has  assumed collusion, loss of revenue if Jindal’s bid was to be  accepted. It is not fathomable as to on what basis the  conclusions were arrived at, that too without any material  foundation.  The similar effect is the submission of Jindal.  It  is to be noted that Jindal Steels Limited is presently known as  Jindal Stainless Steel Limited.  However for the sake of  convenience it shall be described as ’Jindal’ in this judgment.

6.      To similar effect is the submission of learned counsel for  IDCOL.     7.      Learned counsel for TISCO and VISA submitted that the  conclusions of the High Court are in order.  Considering the  parameters of judicial review it is clear that the Government  granted approval in the most mechanical manner without  application of mind to the facts of the case.   It was submitted  that as has been rightly held by the High Court Jindal did not  satisfy the required parameters and, therefore, its bid could  not have been accepted.   

8.      One of the factors highlighted by learned counsel for  TISCO is that the information brochure and the NIT referred to  certain vague expressions like "Value addition".  In view of  such an indefinite condition the bids submitted by TISCO and  VISA could not have been rejected at the threshold and  therefore the High Court has rightly interfered in the matter.

9.      At this juncture, it would be relevant to quote the  Recommendations of the Technical Committee constituted for  evaluation of the offers received for development of  Tangarpada Chromite Deposit in Joint Venture, which reads  as follows:

"RECOMMENDATIONS OF THE TECHNICAL  COMMITTEE CONSTITUTED FOR EVALUATING THE  OFFERS RECEIVED FOR DEVELOPMENT OF  TANGARPADA CHROMITE DEPOSIT IN JOINT  VENTURE

       Offers for development of Tangarpada Chromite  Deposit in Joint Venture were received from four  parties namely:

1.      Tata Iron and Steel Co. Ltd.; 2.      Jindal Strips Limited; 3.      Jindal Steel and Power Ltd.; and 4.      VISA Industries Limited  

Before opening of the sealed offers, Jindal Steel and  Power (one of the offer) withdrew its offer.  The  technical bid of the other three parties were opened by  the committee in presence of the respective parties on  9th December, 2002.  Each party presented their case

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before the Technical Committee on the same day."

10.     It may be stated here that certain conclusions of the High  Court are clearly indefensible. The observations relating to  favoritism, so far as Jindal is concerned, are clearly without  any foundation.   

11.     On the sole ground that the High Court had relied upon  extraneous materials and has arrived at unfounded  conclusions, in normal course we would have set aside the  order and asked the High Court to re-consider the matter.  But  considering the passage of time and more particularly the fact  that the advertisement was issued in 2002 and on the basis of  materials on record, we dispose of the appeals on the following  terms:  1.      It shall be treated that the technical bids of all  the three parties are valid.   2.      The financial bids were submitted about five  years back it would be appropriate to permit the  parties to submit revised financial bids within  three weeks. 3.      The appropriate and authorized Committee of  IDCOL shall consider the technical bids and the  financial bids, keeping in view the parameters of  the advertisement, the NIT and the best interest  of the State.

12.     It is needless to say the Committee examining the bids shall  take note of all relevant factors.  In case it is considered  appropriate and in the interest of the State, it shall be open to  the State Government to negotiate with the parties so that the  best interest of the State including generation of the revenue of  the State and overall development of the State in the relevant  fields could be achieved.   

13.     Since the matter is pending since long it would be  desirable for the State Government to ensure that the  technical bids and the revised financial bids to be submitted  within three weeks as directed earlier, be evaluated and  informed decision taken by end of June, 2008. The  observations and conclusions about malafides of the officials  and their alleged favoritism stand quashed.   

14.     The appeals are allowed to the aforesaid extent without  any order as to costs.