“REPORTABLE”

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  2761    OF 2010 (ARISING OUT OF SLP (C) NO. 15779 OF 2009)

Tehri Hydro Development Corporation … Appellant

Versus

Alstom Hydro France & Anr. … Respondents

WITH

CIVIL APPEAL NO.__2762_OF 2010 (ARISING OUT OF SLP (C) NO.19890 OF 2009)

Alstom Hydro France … Appellant

Versus

Tehri Hydro Development Corporation  Limited & Anr. … Respondents

WITH

TRANSFERRED CASE NO.33 OF 2009

Voith Hydro GMBH Co. KG …. Petitioner

Versus

Alstom Hydro France & Anr. …. Respondents

O R D E R

V.S. SIRPURKAR, J.

1. Leave granted in SLP (C) Nos.15779 and 19890 of 2009.

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2. These appeals emanate out of the order passed by the learned Single Judge of  

Uttaranchal High Court.  On 31st 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 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 options.   However,  respondent no.1 filed a Writ Petition being W.P.  

No.167  of  2009  in  the  Uttarakhand  High  Court  on  two  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 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:

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  ‘supervision 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 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  

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assignee and the other as a 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 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 the appeal filed by Tehri Hydro 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  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 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 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 appellant this  

fact was completely lost sight of by the High Court.

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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 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.

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 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  

deliberately as we are told that a very important project is held up.

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 sealed covers.  Learned Attorney General also offered that the sealed covers could  

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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 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 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  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 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 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 the copies of  the examination  report  were  

already supplied and the appellant had received a representation raising objections, in  

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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 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)

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:

“Whether  the  examination  report  of  THDC  declaring  the  bid  of  the  Consortium of M/s.Alstom as non-responsive is OK or the objections raised  by the Consortium of M/s.Alstom are justified with reference to the Terms &  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.”

The Panel of experts have drawn a conclusion in their report to the following  

effect:

“Based upon the views outlined above, POE is of the opinion that fresh price  bid of consortium of M/s.Alstom is non-responsive.  Their quoted price on  partnership basis even though non-responsive is however lower by Rs.84.5  crores  (M/s.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  Rs.108.7  cores  (M/s.Voith  Rs.22,343,174,985.00  –  M/s.Alstom  Rs.21,256,007,413.00).   The  unconditional  offer  of  consortium  of  M/s.Alstom  to  take  care  of  THDC  observation without any extra cost so that bid becomes responsive and in  accordance with  employers’  requirement  is  not  acceptable  as this  is  not  permissible under Bidding Document of this Tender.”

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7. Ultimately when the matter was heard on 15.2.2010, a 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.A.M. Singhvi,  Senior  Advocate appearing for  the respondent  no.1 urged that  the  

Panel of 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:-

“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 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”.   

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.

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 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  

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the bonafides of the Panel of Expert though during the arguments the possibility of bias  

was 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 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.

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 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 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 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  

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the end of April, 2010.  The appellant herein would then, without loss of time, take the  

decision, considering the report of the Panel 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 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 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  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 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 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  

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is exclusively for the appellant herein to do that.  Once all this exercise is over, nothing  

would remain for us to decide in these appeals.

13. In view of the directions passed above both the appeals as well as the Transfer  

Case No.33/2009 are disposed of.  

……………………………………….J. (V.S. SIRPURKAR)

………………………………………J. (DR.MUKUNDAKAM SHARMA)

NEW DELHI; MARCH 26, 2010

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