Case: NTPC Limited Vs. Ansaldo Caldaie Boilers India P. Ltd. &amp; Another

the Bidder. Learned counsel urged that the use of the expression "provided" in dealing with the capability of the Bidder to deal with variable pressures merely indicated that the Steam Generator Manufacturer would have to provide technical tie-up for variable pressure design and in the absence of the same, the bid submitted would still qualify for being considered. It was urged that the use of the expression "provided" would have to be read along with the phrase "designed, engineered, manufactured/got manufactured" etc. The further usage of the words "in addition" indicated that the stipulation regarding the provision of an evaporator suitable for variable pressure operation was an additional, ancillary and peripheral requirement and not integral to the type of Steam Generator contemplated. Mr. Rohatgi urged that the submission made on behalf of the Appellant to the contrary was incorrect since it had been in no uncertain terms submitted that in the bid document and in the pleadings before the High Court and this Court noted that the evaporator provided with the Steam Generator at the reference plant at TNP was suitable for variable pressure operation.21. It was submitted that the entire basis of the case made out by the Appellant was, therefore, non-est and the High Court did not commit any error in allowing the Writ Petition filed by the Respondents. 22. There is no dispute that the Respondent No.1 chose Route 4 while submitting its Tender Bid, in its capacity as an Indian Joint Venture Company for manufacturing Super-Critical Steam Generator in India between an Indian Company and a Qualified Steam Generator Manufacturer. The crucial condition for a Bidder of the said category to be considered is contained in Clause 7.1.1 of the Tender Documents, which has been extracted hereinbefore and provides that the Bidder should have designed, engineered, manufactured/got manufactured, erected/ supervised direction, commissioned/supervised commissioning of at least one Steam Generator having rated capacity of 1500 Tonnes of Steam per hour or above and that it should be provided with an Evaporator suitable for variable pressure operations for special category and supercritical pressure ranges. 23. The controversy which led to the rejection of the Technical Bid of the Respondent No.1 was with regard to the question as to whether in the case of a Joint Venture Undertaking it was essential that the Qualified Steam Generator Manufacturer also had to be the manufacturer of the evaporator or whether it could function as a facilitator. Furthermore, what appears to have weighed with the Appellant in rejecting the Technical Bid of the Respondent No.1 was that the Steam Generator had been designed for constant pressure and not variable pressure, as required by the Appellant. 24. Admittedly, the evaporator is an integral part of the Steam Generator. The question is whether the same could not be manufactured by a third party and supplied to the Qualified Steam Generator Manufacturer for use in the boiler. Although, the said proposition has been hotly contested on behalf of the Respondent, an attempt was also made to show that the evaporator was in fact designed for variable pressure, but such a submission was contrary to the confirmation given by the Respondent No.1 which indicated that the evaporator had been designed for Constant Pressure (Universal Pressure) operation only. The MOU, while permitting manufacturing, erection or commissioning of the Steam Generator, provided that the same could be outsourced, but the "designing" and "engineering" of the Steam Generator had to be done by the Bidder himself and if the party proposed as Qualified Steam Generator Manufacturer and the Bidder had not designed and engineered the Steam Generator itself, it could not be said that the qualifying requirements for such manufacturer had been satisfied. 25. From the terms and conditions contained in the MOU, it appears to us that it was the intention of the Appellant that the Qualified Steam Generator Manufacturer would have to be the manufacturer of the evaporator itself and could not have outsourced the manufacture thereof to a third party, since the evaporator controlling the pressure of the Steam generated is a vital and crucial component of the Steam Generator itself. The Appellant, which will be the ultimate user of the Generator, must be presumed to be conscious of the competence of the tenderer to "provide" the evaporator in keeping with the required specifications. 26. In the aforesaid context, we are unable to uphold the decision of the Division Bench of the Delhi High Court quashing the letter dated 5th January, 2011, issued by the Appellant herein, informing the Respondent No.1 that its Techno-commercial Bid had been rejected on the ground that it did not meet the minimum requirement set forth in item No.4 of Section III of the Tender Documents. The High Court while interpreting the provisions of Clause 7.1.1 of the Tender Documents was influenced by the use of the phrase "manufactured/got manufactured" while considering the fact that although, Ansaldo Caldaie, Italy, was being projected as the Qualified Steam Generator Manufacturer, Siemens A.G. was shown as the technology owner/licensor of the evaporator which was offered by the Respondent No.1. In other words, the evaporator being offered by the Respondent No.1 was one which had been manufactured not by the Qualified Steam Generator Manufacturer, but by a third party, which was not contemplated in the aforesaid condition of the Tender Documents.27. The importance of the above condition is manifested in the functioning of the Steam Generator which handles High Pressure Steam for the purpose of turning the turbines for generating electricity. The design and engineering of the evaporator and the boiler itself has to be such as to withstand the very high temperatures and pressures generated. The importance of the variable pressure operations is of great importance as far as generation and wastage of energy is concerned. The importance of the evaporator in controlling pressure during operations is to automatically regulate the flow of water, generation of pressure and temperature of the steam to the desired level. 28. In that view of the matter, we

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]25. From the terms and conditions contained in the MOU, it appears to us that it was the intention of the Appellant that the Qualified Steam Generator Manufacturer would have to be the manufacturer of the evaporator itself and could not have outsourced the manufacture thereof to a third party, since the evaporator controlling the pressure of the Steam generated is a vital and crucial component of the Steam Generator itself. The Appellant, which will be the ultimate user of the Generator, must be presumed to be conscious of the competence of the tenderer to "provide" the evaporator in keeping with the requiredare unable to uphold the decision of the Division Bench of the Delhi High Court quashing the letter dated 5th January, 2011, issued by the Appellant herein, informing the Respondent No.1 that its Techno-commercial Bid had been rejected on the ground that it did not meet the minimum requirement set forth in item No.4 of Section III of the Tender Documents. The High Court while interpreting the provisions of Clause 7.1.1 of the Tender Documents was influenced by the use of the phrase "manufactured/got manufactured" while considering the fact that although, Ansaldo Caldaie, Italy, was being projected as the Qualified Steam Generator Manufacturer, Siemens A.G. was shown as the technology owner/licensor of the evaporator which was offered by the Respondent No.1. In other words, the evaporator being offered by the Respondent No.1 was one which had been manufactured not by the Qualified Steam Generator Manufacturer, but by a third party, which was not contemplated in the aforesaid condition of the Tender Documents.27. The importance of the above condition is manifested in the functioning of the Steam Generator which handles High Pressure Steam for the purpose of turning the turbines for generating electricity. The design and engineering of the evaporator and the boiler itself has to be such as to withstand the very high temperatures and pressures generated. The importance of the variable pressure operations is of great importance as far as generation and wastage of energy is concerned. The importance of the evaporator in controlling pressure during operations is to automatically regulate the flow of water, generation of pressure and temperature of the steam to the desired