IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No. 6820 of 2008 Date of Decision: June 13, 2008 Areva T&D India Limited …Petitioner Versus Power Grid Corporation of India Ltd. …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MRS. JUSTICE SABINA Present: Mr. Vijay Hansaria, Sr. Advocate, with Mr. Sanjeev Sharma, Advocate, for the petitioner. Mr. A.T.M. Rangaramanujam, Sr. Advocate, with Mr. Gaurav Mohunta, Advocate, for the respondent. M.M. KUMAR, J. This case is an apt illustration of Shakespearean adage ‘Much ado about nothing’. The non-matching patent printing errors in a part of tender documents have been blown out of proportion, which has resulted in filing of this petition under Article 226 of the Constitution for commanding the respondent-Power Grid Corporation to accept the price of the 125MVAR, 420Kv 3Ph Bus Reactor (excluding insulating oil) as has been given in Schedule-1 and to accordingly amend the letter of award dated 25.3.2008 (P-10) to make it consonance with the offer made by the petitioner Company in its price proposal (Schedule 1) of C.W.P. No. 6820 of 2008 the Bid Form. Still further it has been prayed to direct the respondent not to invoke the bank guarantee amounting to Rs. 96,97,000/- (P-3). 2. Brief facts of the case are that the petitioner is a Limited Company incorporated under the provisions of the Companies Act, 1956 (for brevity, ‘the 1956 Act’), having roots which are wide spread in the Country. The head office of the petitioner is located at Kolkata whereas its administrative office is situated at Noida (Uttar Pradesh). It is claimed that the workforce of the petitioner is spread across 8 industrial sites in Bangalore, Chennai and Pondicherry as well as in Calcutta, Naini and Delhi besides 22 regional sales offices. There are four business units of the petitioner in the country. The Baroda Division of the petitioner is stated to have invested 34 million Euros in the construction of a facility to manufacture ultra-high voltage power transformers, which would enable our country to meet domestic demand of energy and achieve world-class standards through state-of-the-art technology. It has further been claimed that the petitioner enjoys 70% market share in the Energy Management System segment for transmission networks. It has supplied and commissioned India’s first 765KV substation in 2007 for the NTPC Sipat plant. 80% of New Delhi’s electricity flows through this sub-station. It has 20% market share in HVDC technology for inter-regional power exchanges and has the largest number of GIS references in India. It also provides Network Consultancy contract for Reliance Energy’s Delhi and Mumbai networks, the first of its kind in India. The petitioner has also carried out modernization of Bhutan’s electricity network. 2 C.W.P. No. 6820 of 2008 3. The respondent-Power Grid Corporation is a Limited Company and an enterprise of the Government of India. On 18.6.2007, the respondent issued an advertisement floating Global Tenders inviting bids for Shunt Reactors Package (Supply & Erection) for 400KV Purena & Siliguri Substations associated with eastern region strengthening Scheme-II and 400KV Sonepat Substation accociated with NRSS-XII projects (Annexure P-1). On 2.7.2007, bid documents were issued by the respondents which includes (i) Instruction to Bidders (ITB); (ii) General Conditions of Contract (GCC); (iii) Special Conditions of Contract (SCC); (iv) Schedule of Requirements (SOR); (v) Technical Specifications (TS); (vi) Forms for bid security, contract agreement, performance security and others (FORMS); (vii) Bid form, price and other schedules (Bid Proposal Sheets); and (viii) data requirement sheets [Annexure P-2 (Colly)]. 4. Being qualified, the petitioner also participated in the tender and submitted its documentation on 24.8.2007. The petitioner also deposited a bank guarantee of Rs. 96,97,000/- with the respondent before submitting its documents, which was a pre-condition for participation in the tender process as per sub-clause 14.7 of Section II ITB conditions of Contract Vol. 1 (P-3). The petitioner made a bid for supply and erection of Reactors-400KV Purena & 400KV Siliguri Substations associated with Eastern region strengthening Scheme-II and 400KV Sonepat Substation. In all there is a requirement of 5 Reactors which are identical. Out of total 5 identical Reactors, 2 are to be installed at Purnea, 2 at Siliguri and 1 at Sonepat substation. The petitioner submitted the total price for a single reactor in Schedule-1, 3 C.W.P. No. 6820 of 2008 which was its bid for the reactor and five such reactors were to be supplied. The detailed price breakdown of the reactors was given in Schedule-3(III). These schedules formed a part of the bid documents. The price quoted was uniform at Rs. 4,63,14,400/- for one reactor. At the end of Schedule-3(III) the petitioner had given the total work price for all the five Reactors for three sub-stations at the cost of Rs. 26,06,32,000/-. It was also clearly stated that the total excise duty would be Rs. 4,29,52,153-60 and sale tax would be 91,07,524-61. The total price, submitted by the petitioner, for all the five reactors inclusive of tax and octroi was Rs. 32,91,53,838/-. The detailed breakup of price required was to be given in Schedule 3(III), which contained columns for Units, Quantity, Unit Ex-Works price, Total Ex-Works price which was a sub-total of the Quantity and Unit Ex-Works price, Excise Duty, Sales Tax, Octroi, Entry Tax, others etc. The schedule was in the nature of a spread sheet with all the figures mentioned in each column. 5. It has been pleaded that while printing Schedule 3(III) the price in column 7 has been correctly mentioned. The price of two Reactors to be installed at Purnea is also correctly quoted to be Rs. 92,628.800.00. However, on page two starting from Serial No. 1.7 to 2.5, there was a patent printing error in column 7, which apparently got squeezed in such a manner that the unit Ex-works price was reduced in width. As a result of this printing error, the figures shown were erroneous which resulted in omission of first two digits. In other words, two starting digits for prescribing price were not printed and instead of 10 digits (46314400.00) only 8 were actually printed. The price printed for each Reactor is Rs. 314400.00. In this manner, correct figures were 4 C.W.P. No. 6820 of 2008 not printed in column 7, which is the unit price and that too only on the second page. For remaining three pages of Schedule 3(III) the figures were correctly printed. It has further been emphasized that column 8 has reflected the correct figures, which gave the sub-total of both quantity and unit price. For example, for two Reactors the total amount shown is Rs. 92,628,800.00 although the price of single unit mentioned by misprint in column 7 was Rs. ‘,314,400.00’. All the figures from column 1 to 23 were correct except for column 7 on page 2 (P-4 at page 235). Alongwith the documents, the petitioner also submitted a ‘Summary Price Proposal’ with regard to the supply and erection of equipment at all the above mentioned places, which indicated that the price for the goods and remaining services would be Rs. 27,69,17,000/- (Rupees Twenty Seven Crores Sixty Nine Lacs Seventeen thousand only). The petitioner also mentioned the Excise duty @ 16.48% and Sales Tax @ 3% against Form-C as Rs. 4,31,29,314/- and Rs. 91,07,525/- respectively in Schedule 1 clause 2.0. In clause 3.0 the total lumpsum price inclusive of taxes and duties was mentioned as Rs. 32,91,53,838/- (P-5). 6. On 24.8.2007 itself, the bid was opened in the presence of all the representatives of various Companies including the petitioner and the petitioner’s bid was found to be lowest at Rs. 27,69,17,000/- as compared to the next to lowest bids of Rs. 40,46,05,600/- given by BHEL and Rs. 41,65,70,000/- given by Crompton Grieaves Ltd. (P-6). At the time of evaluation of the bids given by various bidders, by the respondent, the petitioner realized the patent error in printing of Schedule 3(III). 5 C.W.P. No. 6820 of 2008 7. On 20.3.2008, the petitioner addressed a letter to the respondent bringing to its notice the above mentioned printing mistake in respect of unit prices in column 7 at page 2 (P-4) and it was requested to evaluate their bid at the total evaluated price mentioned in the bid price (P-7). The problem started when respondent in reply, vide their letter dated 24.3.2008, took the stand that the offer given by the petitioner was evaluated in line with the provisions of the bidding documents. It has further been pointed out that the petitioner had submitted their bid with ‘NIL’ deviation to the specifications and confirmed that the work under the subject package would be executed by it strictly in accordance with the provisions made in the bidding documents. After consideration, the respondent asked the petitioner to come forward for post bid discussions vide letter dated 12.3.2008 for finalization of Technical, Commercial, Quality and Inspection and Monitoring aspects, if any. Since the bid validity was to expire on 31.3.2008, the respondent asked the petitioner to extend the bid validity upto 30.4.2008 (P-8). It is claimed that prior to receipt of letter dated 24.3.2008, the petitioner received a letter dated 25.3.2008 from the respondent awarding it the contract for Ex-works supply of equipment and material for all the three projects, which was followed by another Letter of Award dated 25.3.2008 (P-9 & P-10 respectively). In the Letter of Award the respondent had awarded the contract to the petitioner for Rs. 15 crores approximately, whereas the figure given by the petitioner in Schedule-1 was Rs. 32 crores approximately. 8. The petitioner took up the matter with the respondent, vide letter dated 8.4.2008, inter alia, pointing out that the value of the supply 6 C.W.P. No. 6820 of 2008 order is not as per the price quoted by it. The respondent was requested to correct the price in terms of the bid price and as mentioned in the letter dated 20.3.2008, sent to the respondent (P-11). On 11.4.2008, the respondent asked the petitioner to execute the contract by 23.4.2008, in terms of letter of award dated 25.3.2008 (P-10). With regard to correction in the price it was intimated that the request was against the bidding documents (P-12). Thus, the petitioner has been required to supply five reactors at the cost of Rs. 15,94,27,000/- whereas the offer made by the petitioner was for Rs. 32,91,53,838/-. The petitioner was also required to furnish an unconditional and irrevocable bank guarantee amounting to Rs. 1,59,42,700/- within 30 days i.e. by 24.4.2008. In the event of failure in signing and executing the contract, the petitioner was to lose an amount of Rs. 96,97,000/- under the bank guarantee, dated 7.8.2007. In these circumstances, the petitioner has approached this Court by filing the instant petition. 9. When the matter came up for first hearing on 25.4.2008, this Court issued the rule for 29.4.2008 and directed dasti service. The respondent put in appearance and raised few preliminary objections regarding territorial jurisdiction of this Court as well as alternative remedy of going for arbitration. This Court recorded the following order on 29.4.2008:- “ Mr. Rangaramanujam, learned senior counsel for the respondent, has raised a preliminary objection and has urged that the instant petition is not maintainable. In that regard, he has placed reliance on tender document Clause 12.2(c) (Annexure P-2) and also Clause 18(1 and 2) 7 C.W.P. No. 6820 of 2008 of the Letter of Award (Annexure P-10). It has been argued that there is arbitration clause. Additionally he submitted that exclusive jurisdiction has been given to Delhi Courts. Mr. Hansaria, learned senior counsel, appearing for the petitioner, has submitted that no concluded contract has so far come into existence and in any case, by the agreement of the parties, jurisdiction cannot be conferred if the Courts do not have jurisdiction otherwise. Looking at the controversy involved, we leave the aforementioned question open for decision. Let the reply be filed by the respondent within two weeks from today with a copy in advance to learned counsel for the petitioner. Rejoinder, if any, be also filed before the adjourned date with a copy in advance to learned counsel for the respondent. List again on 21.5.2008. In the meanwhile, encashment of the bank guarantee shall remain stayed. The period for execution of contract between the parties as well as the bank guarantee shall also stand extended till the next date of hearing. A copy of the order be given dasti on payment of usual charges.” 10. In the counter affidavit filed on behalf of the respondent, the preliminary objection regarding territorial jurisdiction of this Court 8 C.W.P. No. 6820 of 2008 to entertain the instant petition has been raised. It has also been asserted that since the company office of the petitioner is situated in the State of Uttar Pradesh and registered office of the respondent is situated in Delhi and, therefore, this Court has no jurisdiction to hear this case. The second objection raised by the respondent is that the present controversy relates to a contract, which is not a statutory contract rather it is a commercial contract. Clause 12 of the General Conditions of Contract (GCC) has been relied upon, which prescribes resolution of disputes through arbitration in accordance with Indian laws. Few Preliminary Objections 11. Mr. A.T.M. Rangaramanujam, learned senior counsel for the respondent has raised the preliminary objection that this Court lacks territorial jurisdiction to entertain such a petition under Article 226 of the Constitution as the head office of the respondent Corporation is at Delhi and as per clause 12.1(c) of the SCC (at page 110 of the paper book), the Courts at Delhi alone have been given exclusive jurisdiction in respect of all matters arising out of the contract including execution of arbitration award. According to the learned counsel once there is exclusion of jurisdiction of this Court by agreement of the parties then the Courts at Delhi alone would have jurisdiction to entertain such a petition. In support of his submission, learned counsel has placed reliance on a judgment of Hon’ble the Supreme Court in the case of A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem, AIR 1989 SC 1239. He has emphasised that once expression ‘alone’ or ‘only’ has been used in the exclusion clause then there is no difficulty in restricting the jurisdiction for entertaining a litigation at that place alone. He has 9 C.W.P. No. 6820 of 2008 also pointed out that by virtue of Section 146 of the 1956 Act, the Courts at Delhi enjoys the jurisdiction because the respondent has their Head Office at Delhi and that the parties by their agreement have rightly conferred jurisdiction on the Courts at Delhi. He has further submitted that there is arbitration provided by clause 32 of the GCC (at page 84 of the paper book), which in terms attract the application of Indian Arbitration and Conciliation Act, 1996. 12. Mr. Rangaramanujam has then argued that disputed question of facts are likely to arise and in writ jurisdiction under Article 226 of the Constitution such a petition may not be entertained. 13. Mr. Vijay Hansaria, learned senior counsel for the petitioner has controverted the aforementioned preliminary objections raised by the learned counsel for the respondent. He has firstly submitted that the whole cause of action has arisen within the territorial jurisdiction of this Court and in any case no part of the cause of action has arisen within the jurisdiction of the Delhi Courts. Learned counsel has maintained that the parties by their agreement may exclude the jurisdiction of one of those Courts if more than one Courts enjoy jurisdiction over a matter but the parties by their consent cannot confer jurisdiction on a Court which has got none. According to the learned counsel no cause of action or any part thereof has arisen within the territorial jurisdiction of the Courts at Delhi and, therefore, the preliminary objection raised is liable to be rejected. Learned counsel has taken us through the tender invitation dated 18.6.2007 (Annexure P- 1) and Tender Invitation Document (Annexure P-2). The tender invitation dated 18.6.2007 (at page 25) postulate that all 10 C.W.P. No. 6820 of 2008 correspondence/ communication including sale of Bidding documents and submission of bids was to be made to ‘Manager (CS-ER), POWERGRID, “Saudamini”, Plot No. 2, Sector-29, Gurgaon-12001, Haryana’. Learned counsel referred to clauses 3.1, 3.4 and 5.1 of the Global Invitation for Bids (GIFB)[at pages 29 to 32]; clauses 5.1, 14.3 (b), 17.2, 23.1, 23.2, 23.3, 23.5, 31, 31.1, 31.2,32 and 32.2 of the Instruction to Bidders (ITB)[at pages 33 to 57]; clause 13 of the Special Conditions of Contract (SCC)[at page 111]; sample forms [at pages 141, 143, 144], bid forms [at page 165], Schedules 1 to 16 [at pages 173 to 227], bid security in the form of bank guarantee (Annexure P-3) [at page 229 to 233] and argued that all the aforementioned documents show the address of Gurgaon. 14. On the basis of the aforementioned overwhelming facts on record, learned counsel for the petitioner has submitted that every part of cause of action has arisen at Gurgaon and no part of cause of action has arisen at Delhi. Therefore, despite the clause conferring exclusive jurisdiction on the courts at Delhi, no jurisdiction could be deemed to have been conferred. Learned counsel has submitted that in any case the clause excluding the jurisdiction i.e. clause 12.1 would come into operation only when a contract is formed and in the present case only letter of award has been issued and contract is yet to come into being. In support of his submission learned counsel has placed reliance on the judgments of Hon’ble the Supreme Court in the cases of Hakam Singh v. M/s Gammon (India) Ltd., (1971) 1 SCC 286; Globe Transport Corporation v. Triveni Engineering Works, (1983) 4 SCC 707; and Patel Roadways Ltd. v. Prasad Trading Company, (1991) 4 SCC 11 C.W.P. No. 6820 of 2008 270 and argued that the courts in Haryana within the territorial jurisdiction of this court alone would have jurisdiction since no cause of action or part of cause of action has arisen within the jurisdiction of the courts at Delhi. 15. Mr. Hansaria has then submitted that clause 32 dealing with Arbitration would also not come into operation because it only postulate dispute or difference arising in connection with or arising out of the contract. He has submitted that the contract is yet to come into existence as the parties have not proceeded after the issuance of letter of award. 16. Mr. Hansaria has also controverted the submission of the learned counsel for the respondent to the effect that disputed question of facts are likely to arise in the present petition. According to the learned counsel once it is ascertained and determined that the matter revolves around patent printing error then no disputed question of fact would arise for determination of this Court. Therefore, he has requested for rejection of all the preliminary objections. 17. Before deciding the controversy on merit it would be necessary to first decide the preliminary objections. Having examined the rival contentions and having perused the record we are of the firm view that none of the preliminary objections are sustainable. This Court has exclusive jurisdiction to entertain the instant petition for various reasons. First and foremost is that the cause of action or every part of it has arisen at Gurgaon, which is evident from various documents. The advertisement, dated 18.6.2007 (P-1) floating global tender specifically mentioned that all correspondence/communication including sale of 12 C.W.P. No. 6820 of 2008 bidding documents and submission of bids were to be made to the Manager (CS-ER), POWERGRID, “Saudamini”, Plot No. 2, Sector-29, Gurgaon-122001, Haryana. On 2.7.2007, bidding documents were supplied by the respondent to the petitioner by accepting payment of demand draft payable at Gurgaon, as per the provisions made in clause 3.1 of the GIFB. As per clause 3.4, pre-bid conference was held at Gurgaon on 13.7.2007. It has been specifically provided by clause 5 of the GIFB that all correspondence be made to the respondent’s Corporate Office at Gurgaon and even clarification, if any, was to be obtained from its office at Gurgaon. According to clause 17.2 of the Instructions to Bidders, inner and outer envelopes were to have the Corporation’s address as ‘Manager (CS-ER), Power Grid Corporation of India Ltd., “Saudamini”, Plot No. 2, Sector 29, Gurgaon, Haryana-122001’. It is also matter of record that the petitioner had submitted its bid on 24.8.2007 (P-4) at the Corporation Office of the respondent at Gurgaon for a total consideration of Rs. 27,69,17,000/- (excluding taxes). The bid submitted by the petitioner alongwith two other bidders were opened at the respondent’s Corporation Office at Gurgaon. Even a letter dated 20.3.2008 (P-7), for correction was addressed to the respondent’s Corporation Office at Gurgaon. Thereafter, reply to the aforementioned letter was sent by the respondent on 24.3.2008 (P-8) from its Corporation Office situated at Gurgaon. On 25.3.2008, letter of award for total ex-works price of Rs. 15,83,52,000/-, which has resulted into dispute, was issued from Gurgaon. Thereafter on 11.4.2008, the respondent wrote a letter to the petitioner from its Corporate Office at Gurgaon inviting them to execute the contract as per the letter of award, 13 C.W.P. No. 6820 of 2008 sign a duplicate copy of the letter of award and contract performance guarantee (P-12). 18. The aforementioned factual position overwhelmingly shows that no part of cause of action has arisen at a place other than Gurgaon, which is situated in the State of Haryana and is within the territorial jurisdiction of this Court. No cause of action or a part thereof has arisen in Delhi. It is now well settled, as has been rightly contended by Mr. Hansaria, that parties by their consent cannot confer territorial jurisdiction on a Court where no cause of action has arisen. In that regard reliance has been rightly placed on the judgment of Hon’ble the Supreme Court in the case of Patel Roadways Ltd. (supra). In that case, a private transport company had raised a similar objection, which was rejected by the Supreme Court with the observation that the Company may have head office and branch offices. For the purposes of cause of action, a suiter cannot be compelled to file a suit at the head office if no cause of action or part of cause of action has arisen within the territorial jurisdiction of the courts at head office. Rejecting a similar argument their Lordships’ proceeded to interpret Explanation-I to Section 20 of the Code of Civil Procedure, 1908 (for brevity, ‘the Code’), which reads thus:- “9. …… What has been urged with the aid of the Explanation to Section 20 of the Code is that since the appellant has its principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the courts at Bombay will also have jurisdiction. On a plain reading of the Explanation to Section 20 of the Code we 14 C.W.P. No. 6820 of 2008 find an apparent fallacy in the aforesaid argument. The Explanation is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of" and the other thereafter. The Explanation applies to a defendant which is a corporation which term, as seen above, would include even a company such as the appellant in the instant case. The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation. The latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a principal office at one place and