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2007 Supreme(Bom) 1337

IN THE HIGH COURT OF BOMBAY
Swatanter Kumar C. J. and Dr. D. Y. Chandrachud, J.
KEC INTERNATIONAL LTD., MUMBAI - Petitioner.
vs.
STATE OF MAHARASHTRA and others - Respondents.
W. P. (Lodg.) No. 1938 of 2007
Decided On: 17-9-2007.

Advocates Appeared:
For petitioner: Janak Dwarkadas, Senior Counsel with M.P.S. Rao instructed by M/s Legasis Partners
For respondent No.1:Pradeep Jadhav, AGP For respondent Nos. 2 and 3: P. P. Chavan instructed by M/s Little and Co.

Headnote:Constitution of India, 1950 - Articles 299 and 226-Rejection of technical bid-No reason given-No judgment of Court that be reasoned-Authority rejected after perusal of record-Documents on record clearly shows application of mind by authority no interference.

       Contract Act, 1872 - Sections 8, 9 and 10-Non-compliance of conditions.-Tender sent by the appellant was rejected by respondent on ground of non-compliance of necessary requirements. Rejection of tender was challenged on ground of arbitrariness and without giving reasons. It was held that by considering reasons given in affidavit it cannot be said that rejection was without justification. Action cannot be said to be arbitrary.

JUDGMENT

SWATANTER KUMAR, C. J.:-

Rule.

2. Learned Counsel appearing for the respective respondents waive service. By consent, Rule made returnable forthwith and taken up for final hearing.

3. The petitioner is a Company registered under the provisions of the Companies Act, 1956. According to the petitioner, it is one of the largest Power Transmission EPC companies in the world. The respondent No.3 on 2nd July, 2007 issued notice inviting tenders being Tender No. CE/DSPCIGFSS-Il-T-l/0708 in respect of Gaothan Feeder Separation Scheme - II to be implemented in seven zones and consequently they invited the bids. The petitioner responded and submitted its tender to the said respondent together with demand drafts towards bid security as contemplated under the terms and conditions of the tender. On 28th August, 2007, respondent No.3 wrote a letter to the petitioner seeking certain clarification from the petitioner in relation to certain lacuna in compliance to the conditions of the tender. On 30th August, 2003, respondent No. 3 addressed a letter to the petitioner asking for tender fees of Rs. 25,000/- per lot, in cash, and informed the petitioner that the demand drafts submitted by the petitioner by way of tender fees when presented for payment to the concerned Bank were returned unpaid by the bankers. Taking a note of this, on 3rd September, 2007 the petitioner deposited the said amount and also submitted further clarification. The representative of the petitioner along with the Banker's representative met respondent No. 2 and provided all requisite clarifications along with supporting documents on 5th 16th September, 2007 and even made payment of tender fees in cash which was accepted by the said respondent. However, on 8th July, 2007 the petitioner received the following letter:

"To,

M/s KEC International Ltd., Mumbai.

Email-iainsk@kecrpg.com

Kind Attn: Mr. S. K. Jain, General Manager (Distribution)

Sub: Goathan Feeder Separation Scheme - II (GFSS-II) - Our Tender No. CE/DSPCIGFSS -II/T-1I07-08 advertised on July 2, 2007.

Dear Sirs,

We regret to inform you that the offers submitted by you for all the 7 lots against our subject tender were not found technically responsive by MSEDCL.

Thanking you,"

4. Aggrieved from the said order dated 8th September, 2007, the petitioner has challenged the correctness and legality thereof in the present petition under Article 226 of the Constitution of India primarily on three grounds. Firstly, that the order is cryptic one and does not specify any reason for rejecting the technical bid of the petitioner and reliance is placed upon the judgment of the Supreme Court in the case of Ramchandra Murarilal Bhattad and ors. vs. State of Maharashtra and ors., AIR 2007 SC 401. Secondly, the defects pointed out are so immaterial and hardly of any significance so as to disentitle the petitioner from consideration of the technical bid and permitting petitioner to participate. Lastly, the certificates in original were submitted and as such there was no material irregularity in submission of the tender which could justify passing of the order dated 8th September, 2007. Reliance in this behalf was placed on the judgment of the Supreme Court in M/s Poddar Steel Corporation vs. M/s Ganesh Engineering Works and ors., AIR 1991 SC 1579. Learned Counsel appearing for the respondents, while relying upon the judgment of the Supreme Court in Ram Gajadhar Nishad vs. State of U. P. and ors., (1990) 2 SCC 486, contended that there was non-compliance of mandatory conditions spelled out in the notice inviting tenders and the action of the respondents in rejecting the technical bid having been found non-responsive, can hardly be questioned under Article 226 of the Constitution of India.

5. Before we proceed to deal with the merits of these contentions, we may precisely notice the stand taken by the respondents, in reply affidavit filed by them before this Court, which reads thus:

"1. However, in order to give a fair chance to the pet














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