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2013 Supreme(Bom) 1526
HIGH COURT OF JUDICATURE AT BOMBAY
S.J. VAZIFDAR & M.S. SONAK, JJ.
Knowledge Infrastructure Systems Pvt. Ltd. & Another
Versus
Maharashtra Power Generation Company Ltd. & Another
Writ Petition (Lodg) No. 1800 of 2013
Decided On : 08-08-2013
For the Petitioners:Mukul Rohatgi, Janak Dwarkadas, Shyam Mehta, Senior Counsels with C.D. Mehta, Ninad laud, Bhavik C. Mehta, Lalan Gupta, Harshmit Trivedi, Ms. Karishma Pandya i/b Dhruve Liladhar & Co., Advocates. For the Respondents:R1, Birendra Saraf with Ameya Gokhale, Ms. Anisha Chand i/b Khaitan & Co., R2, Ravi M. Kadam, senior counsel with Naresh Thacker, Amit Vyas, Abhileen Chaturvedi, Ms. Aanchal Vawani i/b Naresh Thacker, Advocates.
Headnote:
Exchange Rate - Interpretation of Tender Documents - Clause 20(c) - [Exchange rate as per RBI reference rate indicative on date of opening of bid] - Summary: The court considered the interpretation of clause 20(c) of the tender documents, which pertained to the evaluation of offers based on the exchange rate. The court held that the relevant date for evaluation should be the date of opening of the techno-commercial bids, as it provided certainty and fairness to the bidding process. The court emphasized that the interpretation should avoid arbitrariness and speculation, and should align with the bid documents and correspondence between the parties. The judgment clarified that it did not direct the award of the contract to the petitioner, leaving it to the parties to proceed accordingly.
Fact of the Case:
The case involved a dispute over the interpretation of clause 20(c) of the tender documents, which determined the relevant date for evaluating bids based on the exchange rate. The petitioner and respondent No.2 were competitive bidders for the supply of coal to a thermal power station in Maharashtra. The dispute arose from the differing interpretations of the relevant date for evaluation, with the petitioner contending that it should be the date of opening the techno-commercial bid, while respondent No.1 considered it to be the date of opening the price bid.
Finding of the Court:
The court found in favor of the petitioner, holding that the relevant date for evaluation under clause 20(c) should be the date of opening the techno-commercial bids. The court emphasized the need for certainty, fairness, and avoidance of arbitrariness in the bidding process. The judgment clarified that it did not direct the award of the contract to the petitioner, leaving it to the parties to proceed accordingly.
Issues: The main issue was the interpretation of clause 20(c) of the tender documents, specifically determining the relevant date for evaluating bids based on the exchange rate. The court also addressed the correspondence between the parties and the implications of the interpretation on the bidding process.
Ratio Decidendi: The court's decision was based on the need for certainty, fairness, and avoidance of arbitrariness in the bidding process. The court emphasized that the interpretation should align with the bid documents and correspondence between the parties, providing a logical and rational approach to bid evaluation.
Final Decision: The court held that the relevant date for evaluation under clause 20(c) should be the date of opening the techno-commercial bids. The judgment clarified that it did not direct the award of the contract to the petitioner, leaving it to the parties to proceed accordingly.
S.J. Vazifdar, J.
1. Rule. Rule is made returnable forthwith and heard finally.
2. Respondent No.1 is a public sector undertaking engaged in power generation and supply of electricity in the State of Maharashtra. Respondent No.2 is Adani Enterprises Limited. The petitioner and respondent No.2 are competitive bidders.
3. The interpretation of clause 20(c) of the tender documents falls for consideration. It provides that the offers would be evaluated considering, inter-alia, the “Exchange rate as per RBI reference rate indicative on date of opening of bid” (emphasis supplied).
Respondent No.1 by the decision impugned in this petition considered the date of opening of the price bid as the date of opening of the bid for the purpose of clause 20(c) of the General Terms and Conditions. The petitioner, however, contended that the relevant date for the purpose of clause 20(c) ought to be the date of opening the techno-commercial bid i.e. 16th May, 2013. If 16th May, 2013, is considered to be the correct date, the petitioner's bid would be the lowest, whereas if 23rd May, 2013, is taken to be the correct date, the second respondent's bid would be the lowest.
We have accepted the petitioner's contention that the relevant date ought to be the date of opening the techno-commercial bids. This interpretation is supported by the tender documents and is consistent with the stand taken by the petitioner and respondent No.1 in the correspondence between them. The interpretation suggested by the respondents is not only contrary to the tender documents and the correspondence, but is not even discernible from the same. Moreover, the petitioner's interpretation provides certainty and clarity. The respondents interpretation introduces speculation without even a suggested reason or justification for compelling bidders to speculate. The tender documents fixed the date of the opening of the techno-commercial bid but left the date of the opening of the price bid open. There was certainty, therefore, regarding the exchange rate on the date of opening the techno-commercial bid which was on the same day that the bids were to be submitted. There was uncertainty regarding the exchange rate on the date of opening of the price bid as that date was not fixed. This exchange rate is only for evaluating the tenders and has no financial implication on respondent No.1. There is no reason, therefore, and no reason was even suggested by the respondents for compelling the bidders to speculate regarding the exchange rate.
4. Respondent No.1, by a notice dated 18th April, 2013, invited bids for the supply of 2.992 million metric tonnes non-coking (steam) coal of foreign origin for its power stations at Bhusawal, Khaparkheda and Chandrapur Thermal Power Stations. This petition is concerned only with the bid in respect of the supply of coal to the Thermal Power Station at Chandrapur. The bids were to be submitted in the two-bid system i.e. technical / commercial bid (hereinafter referred to as the techno-commercial bid) and the price bid. By a Corrigendum dated 8th May, 2013, the “Due date for on-line and physical opening of techno-commercial bids” was 16th May, 2013.
5. The bid specification was divided into parts A to D viz. (A) Notification of Invitation of Bids, (B) Section-I Instructions of Bidders, (C) Section-II General Terms and Conditions of Contract and (D) Annexures.
6. The relevant clauses under Part-B i.e. Section-I INSTRUCTIONS TO BIDDERS are as under:-
“3.2 Documents comprising the Bid:
Documents set out in Clause 13 shall constitute the documents comprising the Bid
7.0 BID SECURITY (EMD):
7.1 The bidder shall submit the Bid security i.e. unconditional EMD of amounts equal to Rs.10 Cr./MMT, separate for each items specified quantity, offered along with its bid.
7.2 Bid security can be submitted in one of the following forms:
a. Crossed Demand Draft in the name of Maharashtra State Power Generation Co. Ltd. payable at Mumbai drawn on any s
