IN THE HIGH COURT OF DELHI
MUKUL MUDGAL,MANMOHAN
GMR INFRASTRUCTURE LTD. - Appellant
Versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA - Respondent
W.P.(C) NO. 6792/2008
W.P.(C) NO. 6419/2008
Decided On : 16-12-2008
The court held that the Ministry of Shipping, Road Transport and Highways (Ministry) did not have the authority to direct the National Highways Authority of India (NHAI) to reevaluate bids for a highway project. The court found that the Ministry's direction was not a policy direction within the meaning of Section 33 of the National Highways Authority of India Act, 1988, which authorizes the Ministry to issue directions to NHAI on matters of policy. The court also found that the Ministry's direction amounted to interference in NHAI's day-to-day commercial functioning.
Fact of the Case:
The Ministry of Shipping, Road Transport and Highways (Ministry) directed the National Highways Authority of India (NHAI) to reevaluate bids for a highway project. The Ministry's direction was based on representations from unsuccessful bidders who alleged that they had been wrongfully disqualified. NHAI complied with the Ministry's direction and reevaluated the bids, resulting in a change in the list of shortlisted bidders. The petitioners, who were among the original shortlisted bidders, challenged the Ministry's direction and the subsequent revaluation of bids.
Finding of the Court:
The court found that the Ministry's direction to NHAI to reevaluate the bids was not a policy direction within the meaning of Section 33 of the National Highways Authority of India Act, 1988. The court also found that the Ministry's direction amounted to interference in NHAI's day-to-day commercial functioning.
Issues: Whether the Ministry had the authority to direct NHAI to reevaluate the bids.
Ratio Decidendi: The court held that the Ministry did not have the authority to direct NHAI to reevaluate the bids because the Ministry's direction was not a policy direction within the meaning of Section 33 of the National Highways Authority of India Act, 1988, and because the Ministry's direction amounted to interference in NHAI's day-to-day commercial functioning.
Final Decision: The court quashed the Ministry's direction to NHAI to reevaluate the bids and upheld the validity of the original list of shortlisted bidders.
MUKUL MUDGAL, J.
1. The present petition challenges the letter No. NHAI/BOT/11012/66/2005/3940 dated 26th August, 2008 issued by the respondent no.1 National Highways Authority of India (hereinafter referred to as NHAI ) to the petitioner consortium intimating the petitioner that it is not eligible to participate in the second stage of the bidding process (the bid stage) in supercession of its earlier letter dated June 27, 2008 pursuant to which the consortium had been declared pre-qualified for the project in question i.e. Design, engineering, construction, development, finance, operation and maintenance of Hyderabad- Vijayawada section of the National Highway 9 (hereinafter referred to as NH9) from KM 40.000 to KM 221.500 of NH 9 in the state of Andhra Pradesh under National Highways Development Programme Phase IIIA on Build Operate and Transfer-toll Basis. The petitioner No.1 GMR Infrastructure Ltd. had applied pursuant to the Request For Qualification (RFQ), issued by the respondent No. 1 NHAI in December, 2007. It is not in dispute that pursuant to the process of evaluation and after compliance of the terms of the tender, and in particular Clause 3.5.2, the petitioner was short listed as one of the six successful tenderers, entitled to be further considered.
2. A number of writ petitions have been filed challenging the tender issued by the National Highways Authority of India, which can be broadly classified into three parts. The first challenge through writ petitions relates to the petitioners, i.e., those bidders, who were initially shortlisted but subsequently declared to be not eligible to participate in the second stage of the bidding process after the revaluation. The second challenge relates to those bidders, who were initially not shortlisted but subsequently allowed to participate in the second stage of the bidding process. The third challenge through the writ petitions relates to the petitioners Reliance Infrastructure Ltd. and DLF-Gayatri-Lor Joint Venture, i.e., those bidders, who did not qualify either through the initial evaluation at the qualification stage and who also did not qualify after the revaluation was done. The present writ petitions correspond to those bidders, i.e., WP(C) 6792/08 titled as GMR Infrastructure Pvt. Ltd. and Anr. Vs. NHAI and Anr. and WP(C) 6419/08 titled as Madhucon Project Pvt. Ltd. and Anr. Vs. UOI and Anr., who were declared qualified at the initial stage i.e. the qualification stage but subsequently declared to be not eligible to participate in the second stage of the bidding process after the revaluation. In the present petition, the bidders who were initially not shortlisted but subsequently allowed to participate in the second stage of the bidding process namely M/s Cintra Concessions De In Infraestruras De Tranporte S.A. and M/s Isolux-Soma-Omaxe Consortium were impleaded as respondents and Mr. Rajiv Nayar, who appeared for M/s Isolux-Soma-Omaxe Consortium was also heard.
3. Since common issues of law arise in the present writ petition and the Writ Petition(C) 6419/2008 titled as M/s Madhucon Projects Pvt. Ltd. and Anr. Vs. Union of India and Anr. we are taking into account only the facts of the present petition, which are as follows:- (a) The Petitioner No.1 GMR Infrastructure Ltd. and its group companies together are one of the fastest growing infrastructure organizations in the country with interests in airports, energy, highways and urban infrastructure (including special economic zones). (b) The Petitioner no. 2 Punj Lloyd Ltd. is in the business of Engineering, Procurement, Construction /Developer. The various areas of operation of the Petitioner No. 2 include Road/Highway and Bridge Construction, Industrial Construction, Laying of Cross Country Pipelines, Tankage and Composite Construction, EPC Contracts and Telecom Contracts. (c) The Respondent No. 1 National Highways Authority of India is engaged in the development of highways and as a part of this
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