2016 (10) TMI 1132 - SC - Indian Laws

Eligible bidding process - Held that - Consultant has analysed the offers regard being had to the tender conditions. Be it ingeminated that the analysis and determination made by the financial consultant has been carried out before receipt of any additional document from either side. The documents were called for by the owner from both the qualifying bidders in a transparent manner and the same have been considered at the time of evaluation by the Consultant. Submission of Mr. Sibal is that the evaluation is ex facie defective inasmuch as the Consultant has loaded certain charges as a consequence of which the price has gone up. Mr. Rohatgi, learned Attorney General appearing for BHEL and Mr. Prasad, learned senior Counsel appearing for the Corporation would submit that the evaluation is founded on definities leaving nothing to any kind of contingency. They have referred to the Term Sheet and what is put up by Industrial and Commercial Bank of China Limited. At this juncture we are obliged to say that in a complex fiscal evaluation the Court has to apply the doctrine of restraint. Several aspects, clauses, contingencies, etc. have to be factored. These calculations are best left to experts and those who have knowledge and skills in the field. The financial computation involved, the capacity and efficiency of the bidder and the perception of feasibility of completion of the project have to be left to the wisdom of the financial experts and consultants. The courts cannot really enter into the said realm in exercise of power of judicial review. We cannot sit in appeal over the financial consultant s assessment. Suffice it to say, it is neither ex facie erroneous nor can we perceive as flawed for being perverse or absurd. It is appreciable the owner in certain kind of tenders call the bidders for negotiations to show fairness transparently. But the present case is not a one of such nature. Once the price bid was opened, a bidder could not have submitted representations on his own and seek a mandamus from the Court to take certain aspects into consideration. We have stressed this aspect only to highlight the role of the Court keeping in mind the established principle of restraint. In view of our preceding analysis we are of the considered opinion that the Division Bench through the delineation has adopted the approach of an appellate forum or authority and extended the principle of judicial review to certain areas to which it could not have and, therefore, the judgment and order of the Division Bench followed the path of error in continuum. Consequently, the inevitable conclusion is unsettlement of the impugned order and we so direct

Summary

Issues Involved:
1. Bid Qualification Requirements (BQR) compliance.
2. Consideration of post-bid representations.
3. Evaluation of price bids and Consultant's Report.
4. Procedural propriety and adherence to Tamil Nadu Transparency In Tenders Act, 1998 (TTIT Act).
5. Judicial review of the tendering process.

Detailed Analysis:

1. Bid Qualification Requirements (BQR) Compliance:
The Corporation floated a tender for a thermal power project where four bidders participated. Two bidders were disqualified for failing to meet the BQR, leaving CSEPDI and BHEL as the qualified bidders. The price bids were opened and evaluated.

2. Consideration of Post-Bid Representations:
The 1st Respondent sent multiple representations highlighting the bid process and the relevance of Clause 29.0(viii) of the ITB, which deals with rejecting bids based on past performance. The Appellant did not respond, leading the 1st Respondent to file a writ petition. The Single Judge directed the Appellant to consider the representations with a personal hearing, which was modified by the Division Bench to exclude the personal hearing but allowed submission of additional documents.

3. Evaluation of Price Bids and Consultant's Report:
The Consultant's Report evaluated the bids and determined BHEL as L1. The 1st Respondent contested this, arguing that the Consultant wrongly loaded fees and interest components, which inflated their bid price. The Division Bench found procedural impropriety and arbitrariness in the evaluation process, holding that the Consultant's Report did not consider relevant documents and representations, making the process biased and unfair.

4. Procedural Propriety and Adherence to TTIT Act:
The Division Bench observed that the Corporation did not comply with Section 10(6) of the TTIT Act, which requires objective evaluation of tenders. The absence of reasons for acceptance of the tender in the Tender Bulletin violated Section 6(1) and Rule 30(3) of the TTIT Rules. The Division Bench directed the Corporation to re-evaluate the bids considering all relevant parameters and representations.

5. Judicial Review of the Tendering Process:
The Supreme Court emphasized the limited scope of judicial review in tender matters, highlighting the need for courts to exercise restraint. The Court noted that the evaluation by financial consultants involves complex fiscal assessments best left to experts. The Court criticized the High Court for intervening at the stage of bid consideration, which could cause confusion and jeopardize public interest.

Conclusion:
The Supreme Court found that the Division Bench overstepped its judicial review authority by acting as an appellate forum. The judgment of the Division Bench was set aside, and the appeals were allowed, emphasizing the principle of judicial restraint in tender evaluations.