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2001(1) Supreme 154
SUPREME COURT OF INDIA
(From Calcutta High Court)
Syed Shah Mohammed Quadri and S.N. Phukan, JJ.
West Bengal State Electricity Board -Appellant
versus
Patel Engineering Co. Ltd. & Ors. -Respondents
Civil Appeal No. 4921 of 2000
Decided on 15-1-2001
Counsel for the Parties :
For the Appearing Parties : Altaf Ahmed, ASG, P. Chidambaram, Sudipto Sarkar, Anil B. Diwan, Ashok H. Desai, R.F. Nariman, Bhaskar P. Gupta, Sr. Advocates, H.K. Puri, S.K. Puri, Udayan Sen, Rajesh Srivastava, Ms. Anindita Gupta, Padam Khaitan, Ms. Gauri Rasgotra, Suman J. Khaitan, Rajiv Chopra, B.V. Desai, Ms. Kumud Singh, Keshar Thakur, Girish Mishra, Gourab K. Banerjee, C.R. Addy, P. Addy, S. Saxena, G. Joshi, T.C. Sharma, S.B. Upadhyay, Pawan Upadhyay, Ravi Kant, M.C. Dhingra, Ujjal Banerjee, Advocates.
On these facts, the errors cannot be termed as mere clerical or mechanical. Permitting correction of such errors, if they can be so called, would result in not only re-writing unit rates in 37 entries in which such errors are said to have been committed but also appending an explanation thereto regarding splitting of unit rates in terms of representation dated 23.12.1999 of respondent Nos.1 to 4. Neither Clauses 27 and 29 nor any other clause in the ITB permits such corrections. The mistakes/errors in question, it is stated, are unintentional and occurred due to the fault of computer termed as "a repetitive systematic computer typographical transmission failure". It is difficult to accept this contention. A mistake may be unilateral or mutual but it is always unintentional. If it is intentional it ceases to be a mistake. Here the mistakes may be unintentional but it was not beyond the control of respondent Nos.1 to 4 to correct the same before submission of the bid. Had they been vigil in checking the bid documents before their submission, the mistakes would have been avoided. Further, correction of such mistakes after one and a half month of opening of the bids will also be violative of Clauses 24.1, 24.3 and 29.1 of ITB. The controversy in this case has arisen at the threshold. It cannot be disputed that this is an international competitive bidding which postulates keen competition and high efficiency. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, respondent Nos. 1 to 4 and respondent Nos. 10 & 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfil pre-qualification alone are invited to bid, adherence to the instructions cannot be given a go-bye by branding it as a pedantic approach otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the Rule of law and our Constitutional values. The very purpose of issuing Rules/instructions is to ensure their enforcement lest the Rule of law should be a casuality. Relaxation or waiver of a rule or condition, unless so provided under ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such of approach should always be avoided. Where power to relax or waive a rule or a condition exists under the Rules, it has to be done strictly in compliance with the Rules. We have, therefore, no hesitation in concluding that adherence to ITB or Rules is the best principle to be followed, which is also in the best public interest. For all these reason, in such a highly competitive bid of global tender, the appellant was justified in not permitting respondent Nos. 1 to 4 to correct the errors of the nature and the magnitude which, if permitted, will give a different complexion to the bid. The High Court erred in directing the appellant to permit respondent Nos. 1 to 4 to correct the errors in the bid documents. (Paras 21 to 24)
The mistakes in the bid documents of respondent Nos. 1 to 4 even though caused on account of faulty functioning of computer, could have been discovered and notified by the said respondents with exercise of ordinary care and diligence. Here, the mistakes remained in the documents due to gross negligence in not checking the same before the submission of bid. Further Clauses 24 and 27 of ITB permit modification or withdrawal of bids after bid submission but before the dead line for submissions of the bids and not thereafter. And "equity follows the law". Having submitted the bid they did not promptly act in discovering the errors and informing the same to the appellant. Though letters were written on October 25, 1999, and December 17, 1999, yet the real nature of errors/mistakes and corrections sought were not pointed out till December 23,1999 when representation was made after interim direction of the High Court was given on December 21, 1999. Indeed it appears to us that they improved their claim in the representation. In our view the said respondents are not entitled to rectification of mistakes/error for being considered along with the other bidders. The errors pointed out above are not simply arithmetic and clerical mistake but a deliberate mode of splitting the bid which would amount to re-writing the entries in the bid document and cannot be treated as non-material. (Paras 27 and 29)
The mode of execution of the work of the project should also ensure that the public interest is best served. Tenders are invited on the basis of competitive bidding for execution of the work of the project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in competing for the contract relating to execution of the work and on the other hand it affords the appellant a choice to select the best of the competitors on competitive price without prejudice to the quality of the work. Above all it eliminates favouritism and discrimination in awarding public works to contractors. The contract is, therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance of rules and conditions cannot be ignored. It is obvious that the bid of respondent Nos. 1 to 4 is the lowest of bids offered. As the bid documents of respondent Nos.1 to 4 stands without correction there will be inherent inconsistency between the particulars given in the annexure and the total bid amount, it cannot be directed to be considered along with other bid on the sole ground of being the lowest. The appellant is not obliged to award contract to any of the bidders at their quoted price bid. It is always open to the appellant to negotiate with the next lowest bidder for awarding the contract on economically viable price bid. (Paras 30 and 32)
JUDGMENT
Syed Shah Mohammed Quadri, J.-This appeal by the West Bengal Slate Electricity Board is from the common judgment of a Division Bench of the High Court at Calcutta in M.A.T. No. 398 of 2000, C.A.N. No. 1089 of 2000 and M.A.T. No. 523 of 2000 with cross objections (C.O.T. No. 522 of 2000) dated April 4, 2000 dismissing the appeals and cross objections and confirming the order of the learned Single Judge in W.P. No. 22458(W) of 1999 dated February 3, 2000.
2. To appreciate the controversy in this case narration of the following relevant facts will be necessary.
As a pragmatic solution to meet the peak demand of the energy/power by the West Bengal and also to cater to the requirements of the entire Eastern Region, the West Bengal State Electricity Board (for short, the appellant ) formulated "Purulia Pumped Storage Project" (for short, the Project ), at an estimated cost of about Rs. 3,188.9 crores with an installed capacity of 900 M.W. For funding that project the Central Government entered into a loan agreement with the Overseas Economic Cooperative Fund now Japan Bank of International Cooperation (for short, the J.B.I.C. ). The Project is proposed to be completed in six Lots of which Lot No.4 relates to main civil works. For carrying out the work of Lot No. 4, the appellant, after complying with the formalities and after satisfying itself of the pre-qualification of the bidders, invited revised tenders (hereinafter referred to as, the tenders ). The bids were to be submitted on or before April 27, 1998. Three bidders are now in fray. The first is a consortium of four companies (respondent Nos.1 to 4), the second is M/s. Taisei Corporation (respondent No. 10) and the third is M/s. Skanska International (respondent No. 11). They submitted their bids along with the summary sheets thereof. On September 8, 1999 the bids were opened in the presence of the representatives of the bidders and they were read out; the bid of respondent Nos.1 to 4 was Rs. 647.90 crores, of respondent No.11 was Rs. 691.22 crores and of respondent No. 10 was 726.50 crores. While the details of the bid were under scrutiny, by letter dated October 25, 1999, respondent Nos.1 to 4 informed the appellant that there was "a repetitive systematic computer typographical transmission failure" and requested that it be corrected. On December 17, 1999 they sent another letter stating that they had reason to believe that the appellant was evaluating their price bid by an illogical and incorrect application of the Instructions To Bidders (for short, the ITB ) and pointed out that the mistake indicated in their letter of October 25, 1999 was that Indian Rupee unit rate stated in the first line Item 0.2 was repeated in the next two succeeding lines, which is clerical in nature and not an arithmetic error. They emphasised that their bid was the lowest at Rs. 647.90 crores and assured that they would maintain the said bid price. Under the ITB, the appellant evaluated their bid and on December 18, 1999 informed them that during checking of their bid documents a good number of arithmetic errors was discovered. Copies of duly corrected documents were communicated to the said respondents for their response to be sent in writing to the appellant before December 27, 1999 (1700 IST). A caveat was also entered that the said letter did not provide any confirmation towards acceptance of their bid and subsequent award of contract by the appellant.
3. Challenging the validity of the said letter of the appellant dated December 18, 1999, respondent Nos.1 to 4 filed the aforementioned writ petition in the High Court at Calcutta. On December 21, 1999 a learned Single Judge of the High Court granted an interim direction to the appellant to consider the representation which would be made to it by the writ petitioners (respondent Nos.1 to 4). A representation was accordingly made to the appellant on December 23, 1999, which was decided by the Evaluation Committee of the appellant on
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