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2023 Supreme(Del) 3620

IN THE HIGH COURT OF DELHI AT NEW DELHI
Satish Chandra Sharma, Saurabh Banerjee, JJ.
Gmr Hyderabad Vijayawada Expressways Pvt. Ltd. – Appellant
Versus
National Highways Authority of India – Respondent
W.P.(C) 8335 of 2023 and C.M. Nos. 31900-31901 of 2023 & 32166 of 2023
Decided On : 28-08-2023

Advocates appeared:
Mr. Sandeep Sethi, Senior Advocate with Mr. Atul Sharma, Mr. Abhishek Sharma and Ms. Ragini Sharma, Advocates, for the Petitioner.
Mr. Santosh Kumar and Ms. Akshita Singh, Advocates, for the Respondent.

The main legal point established in the judgment is that a party must participate in the bidding process as per the terms and conditions of the tender document to qualify as a bidder and exercise its Right of First Refusal (ROFR) under the Concessions Agreement and RFP.

Headnote:

ROFR - Interpretation of Concessions Agreement and RFP - Article 16.5.1, Clause 1.2.6 - The court dismissed the writ petition as the petitioner did not participate in the bidding process as per the terms and conditions of the RFP, and therefore lost its right to exercise the ROFR.

Fact of the Case:

The petitioner, a Special Purpose Vehicle, participated in a bidding process for a road construction project and subsequently filed a writ petition seeking permission to match the first ranked bid without submitting the Bid Security as per the terms of the Concessions Agreement and RFP. The petitioner contended that it had a legal and contractual 'Right of First Refusal' (ROFR) under the Concessions Agreement and RFP.

Finding of the Court:

The court found that the petitioner did not submit a bid and therefore did not qualify as a bidder. As a result, the court dismissed the writ petition, stating that the petitioner lost its right to exercise the ROFR by not participating in the bidding process as per the terms and conditions of the RFP.

Issues: The main issue was whether the petitioner, who did not submit a bid in the bidding process, could still exercise its ROFR under the Concessions Agreement and RFP.

Ratio Decidendi: The court held that a person who does not submit a bid in accordance with the specific terms and conditions mentioned in the tender document cannot be construed as a bidder. Therefore, the petitioner, having not participated in the bidding process as per the terms and conditions of the RFP, lost its right to exercise the ROFR.

Final Decision: The court dismissed the writ petition, stating that the petitioner, having not participated in the bidding process as per the terms and conditions of the RFP, lost its right to exercise the ROFR and cannot be permitted to do so.

JUDGMENT

Satish Chandra Sharma, C.J.

1. The Petitioner before this Court i.e., GMR Hyderabad Vijayawada Expressways Private Limited is a Special Purpose Vehicle (the "SPV") born out of a consortium between GMR Infrastructure Limited (the"GMR") and Punj Lloyd Limited (the"PLL") (hereinafter GMR and PLL shall collectively be referred to as the "Consortium"). The Petitioner participated in an open competitive bidding process for constructing and widening of existing road from KM.40.000 to KM.221.500 (a length of approximately 181 KMs) of Hyderabad-Vijayawada Section of National Highway ("NH") No.09 (the "Existing Road") in the State of Andhra Pradesh by four-laning the Existing Road and subsequently six-laning the Existing Road on a design, build, finance, operate and transfer basis (the "Project"). The Consortium promoted and incorporated the Petitioner. The Petitioner was awarded the Project, and in furtherance of the Project, the Petitioner executed a Concession Agreement dated 09.10.2009 with the Respondent (the "Concessions Agreement").

2. The facts further reveal that the Petitioner has been granted an exclusive right, license and authority to design, engineer, construct, develop, finance, operate and maintain the Hyderabad-Vijayawada section of NH No.9 forming a part of the Project for a period of 25 (twenty-five) years. Moreover, Article 16.1.1 read with Article 16.5.1 of the Concessions Agreement mandated that in the event the Respondent/ NHAI required provisions of outside works and services which were not included in the Scope of the Project as contemplated by this Concessions Agreement, the Respondent shall award such works through a open-competitive bidding process only after giving notice to the Petitioner / Concessionaire (as defined under the Concessions Agreement) and upon considering the Petitioner's reply thereto. Pertinently, the Respondent has followed the aforesaid procedure as per the Concession Agreement.

3. Subsequently, the Respondent/NHAI following due process of law, issued a Request for Proposal dated 21.12.2022 (amended thereafter vide a corrigendum dated 16.03.2023) (the "RFP") vis-a-vis the Long Term Rectification of 17 (seventeen) blackspots identified by the Ministry of Roads, Transport and Highways (the "Ministry") and other ancillary works on an identified Section of NH- 65 in the State of Telangana (the "Additional Project").

4. It is an undisputed fact that the Petitioner did not submit any Bid under the RFP. The Petitioner has come before this Court with a case that the Petitioner being a Concessionaire has a legal and contractual `Right of First Refusal' (the"ROFR") under Article 16.5.1 of the Concessions Agreement which thereafter has been incorporated into the RFP under Clause 1.2.6.

5. The Petitioner before this Court has argued that as per the terms and conditions of the RFP, the Petitioner, without submitting the Bid Security, is entitled to offer a bid by way of exercising its ROFR under the Concessions Agreement and the RFP. More particularly, the Ld. Counsel for the Petitioner argued that it is not required to furnish the Bid Security under Clause 1.2.4 of the RFP as the Petitioner is pre-qualified.

6. In those circumstances, the Petitioner has filed the present petition praying for inter alia the following reliefs:

"(a) Issue a writ of Mandamus or any other appropriate writ, order or direction to the National Highways Authority of India i.e. the Respondent directing it to permit the Petitioner to match the first ranked bid (if such bidder is someone other than the petitioner) in terms of the selection criteria set out in the Request for Proposal dated 21.12.2022 amended vide Corrigendum dated 16.02.2023 issued by the Respondent for Long Term Rectification of MORT&H identified blackspots (17 no's) and allied works on existing 4-lane Hyderabad- Vijayawada section of NH-65 from km.40.000 to km.221.500 in the state of Telangana in terms of the Petitioner's contractual rights to ma


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