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2012 (10) TMI 594 - SC - Indian LawsInternational competitive bidding - Tender process for the completion of the Breakwater at LNG Terminal at RGPPL site, Dabhol, Maharashtra- appellant-RGPPL - RDS challenging the rejection of its tender and annulment of the entire tender process - High Court recorded its finding on mala fides - Held that - The order passed by the High Court did not permit RDS to re-open and re-agitate issues regarding rejection of its bid pursuant to the earlier tender notice and the annulment of the entire tender process, even if the second tender notice sought to disqualify it from competition by altering the conditions of eligibility to its disadvantage. The withdrawal of the earlier writ petition was a clear acknowledgment of the fact that the grievance made by RDS regarding the rejection of its bid had been rendered infructuous as the works in question remained available for allotment in a fresh tender process with everyone otherwise eligible to compete for the same being at liberty to do so. Inasmuch as and to the extent writ petition No.534 of 2011 filed by RDS challenged the rejection of the tender and the annulment process in a second round despite withdrawal of the earlier writ petition filed for the same relief, it was not maintainable. The scope of writ petition no.534 of 2011 was and had to be limited to the validity of the amendment in the conditions of eligibility introduced by RGPPL in the second tender notice issued by it. The RGPPL as the owner acting as a prudent and responsible public authority discharging public trust obligations was well within its rights to raise questions and seek answers on an important matter like the eligibility of RDS to participate, no matter EIL and GAIL had on the basis of the certificates produced before them recommended RDS as an eligible bidder. There was in that view no justification for either RDS or the High Court to raise an accusing finger against RGPPL simply because it had demanded proof regarding the claim of eligibility from RDS or collected relevant information under RTI Act and referred the material so collected to GAIL and EIL for evaluation and opinion. The final decision to scrap the project being within its powers under the terms of the tender notice RGPPL s invocation of that power was not in the facts and circumstances vulnerable to challenge on the ground of malice in fact or law, on the grounds set out by the High Court even assuming that writ petition No.534/2012 was maintainable notwithstanding the withdrawal of the earlier petition filed by RDS. High Court has recorded its finding on mala fides on the sole basis that EIL had reviewed its earlier opinion regarding eligibility of RDS. The High Court was wrong in doing so. While the High Court could find fault with the interpretation which EIL placed on the provisions of clause 8.1.1.1 on the basis of the legal opinion tendered to it, it went too far in dubbing the entire process as mala fide. Thus the findings recorded by the High Court to the effect that the process of annulment of the tender process or the rejection of the tender submitted by RDS was vitiated by mala fides is unsustainable. The High Court ought to have examined the issue on merits, rather than taking a short cut. The High Court has incidentally taken support from the certificate dated 5th April, 2008 and clarification issued on 5th June, 2010 to hold that the RDS had indeed executed the qualifying project at Car Nicobar. As in the course of the hearing to disclose the basis on which the certificate and the clarification had been issued by the officers concerned no satisfactory answer to the query. Also to produce the relevant record including the government files regarding eligibility of RDS but in the absence of any conclusive evidence, and in the absence of a specific finding from the High Court, on the question, we remained handicapped - set aside the judgment and order passed by the High Court and remand the matter back to the High Court to examine and decide afresh whether RDS was eligible to compete for the works in question in terms of the first tender notice based on the works which it claims to have executed at Mus in Car Nicobar.
Issues Involved:
1. Maintainability of Writ Petition No.534 of 2011. 2. Alleged mala fides in the rejection of the tender and annulment of the tender process. 3. Validity of the eligibility conditions in the second tender notice. 4. Eligibility of the respondent under the first tender notice. Issue-wise Detailed Analysis: 1. Maintainability of Writ Petition No.534 of 2011: The court examined whether Writ Petition No.534 of 2011 was maintainable given the withdrawal of Writ Petition No.8252 of 2010. The earlier petition challenged the rejection of the bid and annulment of the tender process, which was withdrawn with liberty to challenge exclusion from the fresh tender. The court concluded that the second petition was not maintainable insofar as it sought to re-agitate issues from the first petition. The scope of the new petition was limited to challenging the amended eligibility conditions in the second tender notice. 2. Alleged Mala Fides: The court held that the issue of mala fides did not survive due to the conclusion on the maintainability of the second writ petition. Nevertheless, the court noted that allegations of mala fides require specific particulars and proof, which were not satisfactorily established in this case. It emphasized that administrative actions are presumed bona fide unless proven otherwise. The court found no evidence of malice in fact or law in the appellant's decision-making process and set aside the High Court's findings on mala fides. 3. Validity of the Eligibility Conditions in the Second Tender Notice: The court addressed the modification in Clause 8.1.1.1 of the second tender notice, which RDS claimed unfairly excluded it. The High Court had found the modification unjustified. However, the appellant's counsel, Mr. Nariman, stated that RGPPL would not apply the modified clause and would revert to the original clause from the first tender notice. The court accepted this statement, making it unnecessary to examine the validity of the modified clause. The second tender process would proceed under the original eligibility conditions. 4. Eligibility of the Respondent Under the First Tender Notice: The court examined whether RDS was eligible under the original Clause 8.1.1.1 of the first tender notice. The appellant had rejected RDS's bid on three grounds: the project length was insufficient, the project was executed as two separate projects, and RDS was not responsible for the entire scope of work. The High Court had relied on a concession attributed to the Additional Solicitor General, which was disputed. The court found that the High Court did not adequately address the eligibility issue on merits and remanded the matter for a fresh determination by the High Court. Conclusion: The appeals were allowed, and the High Court's judgment was set aside. The High Court was directed to re-examine the eligibility of RDS under the first tender notice. If found ineligible, the writ petition would be dismissed, and RGPPL could proceed with the second tender process. If found eligible, RGPPL could issue a fresh tender notice under the original eligibility conditions. The High Court was requested to expedite the matter within four months. Parties were left to bear their own costs.
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