Case: Ratnagiri Gas &amp; Power Pvt.Ltd Vs. Rds Projects Ltd

responsible for the execution of the total scope of the work in any one of the two projects. 43. RDS has before the High Court and even before us, claimed that the Breakwater at Mus in Car Nichobar was a single project and not two projects as contended by the appellant-RGPPL. It has further claimed that the entire project has been executed by it on behalf of EHL, no matter a part of the work like quarrying of stones/boulders and shipping the same from the quarry site to the place of construction was handled by EHL. These works were performed by the above two agencies for monetary consideration on behalf of RDS who was entitled to associate them with the execution of the project work in terms of the conditions of contract; under which EHL had engaged RDS. 44. The case of the appellant on the other hand is that the only purpose behind stipulating that the tenderer should have executed a breakwater project as a single tenderer with a minimum length of 400 meters was to ensure that only such tenderers are held eligible as have executed a single project of that length single handedly without associating any other agency with the execution of the work. It was important for the appellant to do so because the breakwater length in the present case is more than four times the length stipulated as a condition of eligibility. It is the further case of the appellant that apart from Recon International one Surya Rao was also associated with the execution of the project, which fact is according to the appellant evident from the government files produced by Mr. Gulati appearing for the Central Government. 45. On the question whether the Breakwater constructed at Mus in Car Nicobar comprised one or two projects, also there was some debate which was rendered academic, by Mr. Nariman, making a fair and unqualified concession that for purposes of determining the eligibility of RDS the breakwater at Mus Car Nicobar could be treated as a single project. With that concession, what remains to be determined is whether RDS had limited its claim to eligibility only on the award made in its favour in November, 2000. If so, whether it is debarred or stopped from claiming that it had executed the project from chainage 22 meters to 200 meters also. More importantly, whether RDS had actually executed the Breakwater Project at Mus Car Nicobar with a length of 400 meters. 46. We looked in vain for a finding on the above questions in the impugned judgment leave alone one that satisfactorily dealt with the material placed by the parties on record in support of their respective cases. What we found was a concession attributed to Ms. Indra Jai Singh, learned Additional Solicitor General to which the High Court referred in Para 30.2 of its order, and which by far is the only reason given by the High Court for holding that RDS had executed the Breakwater Project at Mus in Car Nicobar. The High Court observed: 30.2 We may note at this stage that we had had pointedly put to the ASG Ms. Indra Jai Singh during the course of hearing, as to whether there was any doubt or dispute that RDS had not executed the qualifying work at Mus Car Nicobar Island equivalent to the contracted length of 500 meters. Ms. Indra Jai Singh, on instructions, categorically informed us that this aspect of the matter was not in issue. She, however, submitted that what was in issue, was the fact, that since it had not emerged that RDS had completed the project in two (2) phases; according to EIL, it was not eligible. With EIL having taken this stand, which was not contradicted by GAIL at the hearing; it quite surprised us when Mr. Chandiok appearing on behalf of RGPPL took the stand that RDS had not even constructed the required minimum 400 meters length of qualifying work. 47. Ms. Indra Jai Singh appearing for the Central Government argued that the High Court had misconstrued her statement, in as much as no concession as attributed to her was made or could be made when the relevant record did not bear any evidence of RDS having been associated with the project in question. Mr. Nariman contended that the concession even if made did not bind the appellant RGPPL, who as a separate legal entity was entitled to argue, as it indeed argued, before the High Court that RDS had not been associated with or executed the entire project, at Mus Car Nicobar, hence was not eligible to compete. 48. There is considerable merit in the submission made by the learned counsel for the appellants and Ms. Jai Singh. A concession even if made by one of the parties could not prevent the other parties from arguing that it did not bind them or that the same was contrary to the facts. The High Court ought to have examined the issue on merits, rather than taking a short cut. The High Court has incidentally taken support from the certificate dated 5th April, 2008 and clarification issued on 5th June, 2010 to hold that the RDS had indeed executed the qualifying project at Car Nicobar. We had in the course of the hearing asked Mr. Gulati, learned counsel for the Central Government, to disclose to us the basis on which the certificate and the clarification had been issued by the officers concerned. We got no satisfactory answer to the query. We even asked the parties to produce the relevant record including the government files, so that we could ourselves answer the question regarding eligibility of RDS but in the absence of any conclusive evidence, and in the absence of a specific finding from the High Court, on the question, we remained handicapped. A remand to the High Court, therefore, became inevitable which part we must say in fairness to learned counsel for both sides, was conceded even by them.

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

Explanation:
1[ds]If writ petition no. 534 of 2011 could not have re-agitated issues touching the validity of annulment of the tender process, there was no occasion for the High Court to go into the question whether or not the decision to refer to the bid and annul the process was vitiated by malice in law or fact. The findings recorded by the High Court on the question of mala fides are, therefore, liable to be set aside on that ground alonerecorded its finding on mala fides on the sole basis that EIL had reviewed its earlier opinion regarding eligibility of RDS. The High Court, in our opinion, was wrong in doing so. While the High Court could find fault with the interpretation which EIL placed on the provisions of clause 8.1.1.1 on the basis of the legal opinion tendered to it, it went too far in dubbing the entire process as mala fide. The High Court appears to have taken the view as though Mr. R.K. Bhandari, Mr. Ravi Saxena and Mr. M.B. Gohil were experts, even in the matter of interpretation of the terms and conditions of the tender document, who could sit in judgment over the legal opinion tendered to them. If on an interpretation of a clause in the tender notice by the legal department concerned the officers review their decision or reverse the recommendations made earlier, the same does not tantamount to malice in law so as to affect the purity of the entire process or render it suspect even assuming that the opinion is on a more thorough and seasoned consideration found to be wrong. In the absence of any other circumstances suggesting that the process was indeed vitiated by consideration of any inadmissible material or non-consideration of material that was admissible or misdirection on issues of vital importance, fresh recommendations made in tune with the legal opinion could not be held to have been vitiated by malice in law. The High Court, it appears, felt that since the officers referred to above were senior officers they ought to have known what was meant by terms like single project and single bidder appearing in clause 8.1.1.1. We need hardly point out that in cases where the decision making process is multi-layered, officers associated with the process are free and indeed expected to take views on various issues according to their individual perceptions. They may in doing so at time strike discordant notes, but that is but natural and indeed welcome for it is only by independent deliberation, that all possible facets of an issue are unfolded and addressed and a decision that is most appropriate under the circumstances shaped. If every step in the decision making process is viewed with suspicion the integrity of the entire process shall be jeopardized. Officers taking views in the decision making process will feel handicapped in expressing their opinions freely and frankly for fear of being seen to be doing so for mala fides reasons which would in turn affect public interest. Nothing in the instant case was done without a reasonable or probable cause which is the very essence of the doctrine of malice in law vitiating administrative actions. We have, therefore, no hesitation in holding that the findings recorded by the High Court to the effect that the process of annulment of the tender process or the rejection of the tender submitted by RDS was vitiated by mala fides is unsustainable and is hereby set asideClause 8.1.1.1 of the second tender notice shall not be enforced by RGPPL and that the corresponding clause as it appeared in the first tender notice shall govern matters stipulated therein.