Rochem Separation Systems (I) Pvt. Ltd vs Mazagon Dock Ltd. And Ors

Respondent No.1 called for a tender for design, manufacture, testing, supply, preservation, alignment, installation, setting to work, commissioning and trials of the complete supply of 4 units of 30 tonnes per day, self- sustaining reverse osmosis plants per ship for 3 ships of P15A class destroyer of Indian Navy to be built by the 1st respondent vide tender dated 20.06.2002, 04.07.2002 and 12.09.2002. The appellant submitted its original techno- commercial and price bids as per the tender terms. The appellant also submitted the clarification sought for by the respondent No.1. Commercial discussions were also held between the parties. The appellant submitted its supplementary price bid dated 11.05. 2004 and the technical bid dated 12.05.2004 as directed in the meeting dated 03.05.2004. The first respondent again sought technical clarifications from the appellant subsequent to the submission of supplementary price bid. The first respondent, by letter dated 23.06.2004, set out certain comments of the 3rd respondent on the revised technical offer submitted by the appellant and sought further clarifications from the appellant. The appellant submitted the technical clarifications as required. The first respondent once again sought technical clarification on 20.09.2004 and the appellant submitted the clarification sought. The first respondent by a communication acknowledged receipt of the appellant's facsimile communication dated 23.06.2004 and sought review and advice. The first respondent once again wrote to the appellant stating that it was in a position to open the price bids but that additional time was required to complete the process of obtaining internal approvals and, therefore, sought further extension of the validity period of the price bids till 31.01.2005.

On 29.12.2004, the first respondent issued a letter to the appellant stating that an un-priced price format had not been submitted with the supplementary price bid of 12.05.2004, which was neither an essential condition nor complained of until then and hence it would not be considered and that a new supplementary price bid in the format annexed for only increase over the original technical specifications should be submitted on or before 05.01.2005 though the decision as per the meeting of 03.05.2004 was for submission of increase/decrease over the original TSP. The appellant, by letter dated 04.01.2005 addressed the first respondent to extend the advantages of advancements in technology leading to a reduction in price to respondent No.1. The appellant submitted the supplementary price bid as per the new format. The first respondent had opened the original offer and the supplementary price bid in the new format but did not inform the appellant about the opening of the price bids. The appellant wrote to the first respondent enquiring about the status of the opening of the tender price bids but did not receive any reply. Several reminders were sent. The first respondent stated that the Management approval was granted on 18.02.2005 and that the letter of intent was given to respondent No.4. The first respondent sent a belated reply to the reminder of the appellant dated 09.02.2005 stating that the supplementary price bid of 12.04.2004 was rejected as the unpriced price format was not submitted and that it was not confirmed in the bid that it was the increase/decrease over the original technical specifications and that on opening of the bids, it was found that the appellant was not L1 and hence it was mandatory to initiate price negotiations with the other bidder. The appellant questioned the action of the first respondent as discriminatory. Thereafter, appellant filed writ petition under Article 226 of the Constitution of India in the High Court and questioned the discriminatory and biased action of the first respondent in permitting respondent No.4 to alter its original offer nearly 2 years later in the new format given to the 4th respondent which was different from that furnished to the appellant. By judgment and final order dated 21.04.2005, a Division Bench of the High Court rejected the writ petition holding that it would not be proper to interfere at that stage.

(b) The High Court has failed to notice that even the letter dated 29.12.2004 discriminates between the appellant and respondent No.4 as it permits respondent No.4 to include additions/deletions in the new supplementary price bid including two additional items in the form whilst the appellant was directed to include only increase over the original offer made by them despite the TNC/CNC meeting dated 28.04.2004 and 03.05.2004 respectively permitting the appellant to increase/decrease to the original offer, which per se discriminates against the appellant and which has caused grave prejudice to the appellant. Several other submissions were also made in regard to the letter dated 29.12.2004. Many other factual and legal contentions have also been raised in the grounds of appeal.

On 05.01.2005, the appellant submitted its supplementary price bid in the prescribed format. Price bids were opened on 17.01.2005 and respondent No.4 found to be L1. PNC was conducted with respondent No.4 on 03.02.2005. On 18.02.2005, LOI issued to respondent No.4. On 22.02.2005 purchase order placed on respondent No.4. Thus, he submitted from the pleadings filed before this Court, the following facts stand admitted by the appellant:-

The project in question and the work sought to be undertaken by the tender process is one of national importance. Learned ASG submitted that the tender process is purely of commercial nature and no interference by this Court is called for. The High Court, in our opinion, ought to have heard respondent No.4 in whose favour the letter of intent is now given. The High Court has not disposed of the writ petition after affording opportunity to all the parties and in particular the fourth respondent. In our opinion, the matter requires deep and elaborate consideration in the nature of pleadings filed by the appellant, respondent No.1 and respondent No.4. We, therefore, set aside the order passed by the High Court and remit the matter to the High Court with a request to dispose of the writ petition on merits after affording opportunity to all the parties. Since the project is of national importance, the High Court is requested to dispose of the same on priority basis and at any rate not later than 28th February, 2007. Both the appellants and the other respondents are at liberty to raise the grounds/contentions that have been raised in this Court before the High Court by way of additional pleadings. They are also at liberty to file the civil appeal grounds, counter by all the parties and the rejoinder and other documents and records before the High Court for a fair and proper consideration of the same by the High Court.

In the result, the appeal filed by the appellant is allowed and the order of the High Court stands set aside and matter is remitted back for fresh disposal. No costs.