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IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJAY KISHAN KAUL, VIPIN SANGHI, JJ.
M/S SUPREME INFRASTRUCTURE INDIA LIMITED – Petitioner
Versus
RAIL VIKAS NIGAM LIMITED AND ANOTHER – Respondents
W.P. (C.) No. 3817/2012
Decided on : 01.11.2012
The court held that the typographical error in the petitioner's bid document was obvious and did not constitute an arithmetical error. The court further held that the respondent's reliance on clause 33 of the bid conditions was misplaced as it dealt with the correction of arithmetical errors, which was not the case in the present instance. The court also held that the respondent's action in forfeiting the petitioner's bid security was not justified. The court directed the respondent to award the contract to the petitioner at the petitioner's tendered rates, by reading the rate for the BOQ item in question at Rs. 54,000/- per M.T. The court also quashed the impugned communication dated 04.05.2012 issued by the respondent purporting to make corrections in the petitioner's price bid and the communication dated 25.06.2012 issued by the respondent to the bank invoking the bid security of the petitioner.
Fact of the Case:
The petitioner, a listed public limited company, submitted its bid as a joint venture with M/s Bharat Rail Automation Private Limited for the execution of doubling of Hospet-Tinai Ghat line in Hubli division of South Western Railway in the State of Karnataka. The petitioner along with the JV partner were found to be lowest and most competitive bidder in respect of package 1, its total price bid aggregating to Rs.158,76,29,854/-. However, the respondent No. 1 claimed that by calculation (i.e., by multiplication of the estimated quantity with the rate), the total amount for this item comes to Rs.79,52,400/-. The respondent stated that since in the rate quoted there is no decimal involved, the price quoted by the petitioner for supply of TM.T. Fe-500 steel has to be taken as Rs. 2820/- per M.T. The respondent also referred to clause 33.2 of the ITB to state that if the bidder who submits the lowest evaluated bid does not accept the correction of errors, its bid shall be disqualified and its bid security may be forfeited. The petitioner sent its reply to the aforesaid communication on 09.05.2012 clarifying that the rate quoted for item 2061 schedule 20(c) of the BOQ was, in fact, Rs. 54,000/- per M.T. , which was the uniformally quoted rate for packages 1, 2, 3 and 1 & 3 (combination).
Finding of the Court:
The court held that the typographical error in the petitioner's bid document was obvious and did not constitute an arithmetical error. The court further held that the respondent's reliance on clause 33 of the bid conditions was misplaced as it dealt with the correction of arithmetical errors, which was not the case in the present instance. The court also held that the respondent's action in forfeiting the petitioner's bid security was not justified.
Issues: Whether the typographical error in the petitioner's bid document was an obvious error or an arithmetical error.
Ratio Decidendi: The court held that the typographical error in the petitioner's bid document was obvious and did not constitute an arithmetical error. The court further held that the respondent's reliance on clause 33 of the bid conditions was misplaced as it dealt with the correction of arithmetical errors, which was not the case in the present instance. The court also held that the respondent's action in forfeiting the petitioner's bid security was not justified.
Final Decision: The court directed the respondent to award the contract to the petitioner at the petitioner's tendered rates, by reading the rate for the BOQ item in question at Rs. 54,000/- per M.T. The court also quashed the impugned communication dated 04.05.2012 issued by the respondent purporting to make corrections in the petitioner's price bid and the communication dated 25.06.2012 issued by the respondent to the bank invoking the bid security of the petitioner.
VIPIN SANGHI, J.
1. The petitioner has preferred the present writ petition under Article 226 of the Constitution of India to seek a writ of mandamus directing respondent No. 1 – Rail Vikas Nigam Limited (RVNL) to award the contract to the petitioner arising out of the tender floated by respondent No. 1 bearing No. IFB No. RVNL/BANGALORE/HOSPET-TINAI GHAT/2011/02 dated 03.06.2011 for execution of doubling of Hospet/Tinai Ghat in Hubli division of South Western Railway in the State of Karnataka, on the rates of TM.T. Fe-500 reinforced steel at Rs.54,000/-per metric ton (M.T.). The petitioner also seeks the quashing of the communications dated 04.05.2012 and 25.06.2012 issued by respondent No.1. The petitioner also seeks restraint against respondent No.1 from invoking the bank guarantee dated 11.08.2011, as extended on 20.4.2012 for Rs. 2 crores issued by respondent No. 2 bank, i.e., the State Bank of Patiala, First Floor, Atlanta Building, Nariman Point, Mumbai – 400 021.
2. The petitioner is a listed public limited company. The petitioner claims to have pan India presence and undertakes construction of infrastructure projects like highways, flyovers, projects, multi-storeyed building etc. both on engineering, procurement and construction, i.e., EPC basis, and build, operate and transfer, i.e., BOT basis. Respondent No. 1 RVNL is a wholly owned government company under Section 617 of the Companies Act, 1956, under the Ministry of Railways. On 03.06.2011, RVNL invited the bids under the aforesaid tender calling upon interested parties for bid for execution of doubling of Hospet-Tinai Ghat line in Hubli division of South Western Railway in the State of Karnataka (India). The bids could be submitted in three packages, or combinations thereof. The nature of the work to be executed under the three packages was identical only the sections/stretches were different. In package No. 1, work was to be executed between Hospet and Harlapur; in package No. 2 work was to be executed between Harlapur to Hebsur and Hubli to Dharwad; and, in package No. 3 work was to be executed between Kambarganvi and Londa.
3. The petitioner along with M/s Bharat Rail Automation Private Limited, jointly submitted their bid as a joint venture -M/s Supreme Bharat (JV) for all the three packages separately, and also in combination for packages 1 and 3. Item No. 2061 of the Bill of Quantities (BOQ), schedule 2(c) in all the packages pertained to the supply of steel items. The bidders were required to specify the rate for T.M.T. Fe-500 reinforcement steel. Since the estimated quantities of the various items were mentioned in the BOQ, the bidders were also required to fill the total amount after multiplying the estimated quantity provided in the BOQ with the specified rate.
4. The case of the petitioners is that since the work involved in all the three packages was identical, the petitioner offered the rate of Rs.54,000/-per M.T. under the said item 2061, schedule 2(c) of the BOQ in all the packages uniformly, and also stated the respective total amounts corresponding to the said rate. The same rate of Rs.54,000/-per M.T. was quoted in the combination package Nos. 1 and 3 for the aforesaid BOQ item as well.
5. It appears that the petitioner was found to be technically qualified in the bidding process vide respondents communication dated 07.04.2012 and the price bids of the eligible bidders were opened on 23.04.2012. According to the petitioner, at the time of the opening of the price bids, the total amount quoted by the petitioner and the JV partner was read out. The petitioner along with the JV partner were found to be lowest and most competitive bidder in respect of package 1, its total price bid aggregating to Rs.158,76,29,854/.
6. The petitioner submits that on 04.05.2012, it received the first of the impugned communication from the respondent No. 1 stating that for item No. 2061 in Schedule 20(c), i.e., for supply of steel item, the petitioner had quote
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