TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD. (TANGEDCO) REP. BY ITS CHAIRMAN MANAGING DIRECTOR AND ANR. ETC. versus CSEPDI - TRISHE CONSORTIUM, REP. BY ITS MANAGING  DIRECTOR & ANR.
[2016] 7 S.C.R. 495, Supreme Court of India, 2016
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
[2016] 7 S.C.R. 495 
TAMIL NADU GENERATION AND DISTRIBUTION 
A 
CORPORATION LTD. (TANGEDCO) REP. BY ITS CHAIRMAN 
& MANAGING DIRECTOR AND ANR. ETC. 
v. 
CSEPDI - TRISHE CONSORTIUM, REP. BY ITS MANAGING 
'-c 
DIRECTOR & ANR. 
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(Civil Appeal Nos. I 0182-10183 of2016) 
OCTOBER 18, 2016 
(DIPAK MISRA AND SIDVA KIRTI SINGH, JJ.] 
Tender - Finalization of the bid - Evaluation report by the 
Consultant - Judicial review - Held: Jn a complex fiscal evaluation, 
the court has to apply the doctrine of restraint - Financial 
computation involved, the capacity ana efficiency of the bidder and 
the perception of feasibility of completion of the project have to be 
left to the wisdom of the financial experts and consultants who have 
knowledge and skills in the field - Courts cannot really enter into 
the said realm in exercise of power of judicial review - If the courts 
would exercise power of judicial review in such a manner it is most 
likely to cause confusion and also bring jeopardy in public interest 
- Further, an aggrieved party can approach the Court at the 
appropriate stage, not when the bids are being considered~ Once 
the price bid was opened, a bidder could not have submitted 
representations on his own and sought mandamus from the Court to 
take certain aspects into consideration - On facts, Consultant 
analysed and determined the offers regard being had to the tender 
conditions - Documents were called for by the owner from both the 
qualifying bidders in a transparent
manner and the same were 
considered at the time of evaluation by the Consultant - It was 
carried out before receipt of any additional document from either 
side - Thus, the Division Bench erred in adopting the approach of 
an appellate forum or authority and extended the principle of 
iudicial review to certain areas - Order of Division Bench set aside 
- Tamil Nadu Transparency in Tenders Act, 1998. 
Allowing the appeals, the Court 
HELD: 1.1 It is manifest that the Corporation in its meeting 
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held on 30.1.2014 had decided to open the price bids on both the 
bidders and thereafter the supplementary price bids were 
obtained from both the parties for the additional implications items 
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[2016] 7 S.C.R. 
in respect of technical deviation quoted by both parties and 
thereafter the price bids were opened on 05.2.2014. As the factual 
matrix would reveal, the price bids were evaluated by the 
Consultant. The Single Judge has adverted to price evaluation 
report submitted by the Consultant. (Para 15) (503-D-F) 
1.2 As per the Price Evaluation Report by the Consultant, 
the EPC price of the respondent No.1 was Rs.9207.264 crores 
and respondent No.2 to whom the contract was awarded was 
Rs.7762.977 crores. Thus, the difference between the two EPC 
price is Rs.1444.287 crores. The 1st respondent disputed the 
Price Evaluation Report by the Consultant on the ground that it 
wrongly loaded the sum towards the commitment fee, interest 
on management fee during me period; and interest ofguarantee 
fee during JDC period in its bid amount which had led to the 
evaluation of quoted financial charges with interest to Rs.801.18 
crores. (Para 16) (505-C-F) 
· 
1.3 The issue pertaining to correctness of Consultant's 
report has to be adjudged and scrutinized within the scope of 
limited power of judicial review in the obtaining factual score. 
The Division Bench in the impugned judgment has taken 
exception to the process adopted in the identification of Ll. It 
has referred to its order dated 19.8.2014 wherein the 1st 
respondent was granted the time to submit additional documents. 
The impugned order takes note of the
fact that at that point of 
time, the Corporation had never averred that tender had been 
finalized. It has referred to the earlier order of the Division Bench 
that representations were to be considered and till then the bid 
should not be finalized. It has referred to the letter of the 
Chairman-cum-Managing Director of the Corporation dated 
20.7.2014 and opined that it appears to be a misstatement of fact. 
(Para 21) (509-B-D) 
1.4 On interest on management and guarantee fee, the stand 
of the Corporation is that the respondent no. 1 quoted Rs. 
123.9746 crores as Management fees and Rs. 392.0163 crores 
as Guarantee fee in their Price bid. There is no dispute on the 
quantum of fees. The Consultant during the evaluation have 
worked out interest@ 7.2 per annum on the above fees as per 
the term sheet of the Industrial and Commercial Bank of China 
Limited from the date on which they fall due since the above fees
TAMIL NADU GENERATION AND DISTRIBUTION 
CORPORATION LTD. v. CSEPDI - TRISHE CONSORTIUM 
form part of the debt to be repaid by the appellant; that it is clear 
from the Tender Conditions as well as the Term Sheet provided 
by Industrial and Commercial Bank of China Limited and the 
clarification dated 21.10.2013 (issued by Industrial and 
Commercial Bank of China Limited) that appellant would be bound 
to pay the interest on the whole loan amount which would include 
the financial charges. [Para 34) [520-C-E} 
1.5 It is vivid that the Consultant analysed the offers regard 
being had to the tender conditions. Be it ingeminated that the 
analysis and determination made by the financial consultant was 
carried out before receipt of any additional document from either 
side. The documents were called for by the owner from both the 
qualifying bidders in a transparent manner and the same were 
considered at the _time of evaluation by the Consultant. The 
respondent submitted that the evaluation is ex f acie defective 
inasmuch as the ConsuUant loaded certain charges as a 
consequence of which the price went gone up. The counsel for 
BHEL and counsel appearing for the Corporation submitted that 
the evaluation is founded on definities leaving nothing to any kind 
-of contingency. They referred to the Term Sheet and what was 
put up by Industrial and Commercial Bank of China Limited. In a 
complex fiscal evaluation the Court has to apply the doctrine of 
restraint. Several aspects,
clauses, contingencies, etc. have to 
be factored. These calculations are best left to experts and those 
who have knowledge and skills in the field.· The financial 
computation involved, the capacity and efficiency of the bidder 
and the perception of feasibility of completion of the project have 
to be left to the wisdom of the financial experts and consultants. 
The courts cannot really enter into the said realm in exercise of 
power of judicial review. Suffice it to say, it is neither ex /acie 
erroneous nor can be perceived as flawed for being perverse or 
absurd. (Para 36} (521-F-H; 522-A-C} 
1.6 The respondent, before finalization of the financial bid 
submitted series of representations and seeing. the silence of 
the owner it knocked at the doors of the writ court which directed 
for consideration of the representations. The High Court at that 
stage should have exercised caution. If the courts would exercise 
power of judicial review in such a manner it is most likely to 
cause confusion and also bring jeopardy in public interest. An 
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aggrieved party can approach the Court at the appropriate stage, 
not when the bids are being considered. It is appreciable the 
owner in certain kind of tenders call the bidders for negotiations 
to show fairness transparently. But the instant case is not a one 
· of such nature. Once the price bid was opened, a bidder could 
not have submitted representations on his own and seek a 
mandamus from the Court to take certain aspects into 
consideration. This aspect is only to highlight the role of the Court 
keeping in mind the established principle of restraint. [Para 37] 
[522-D-F] 
1. 7 The Division Bench through the delineation has adopted 
the approach of an appellate forum or authority and extended the 
principle of judicial review to certain areas to which it could not 
have and, therefore, the judgment and order of the Division Bench 
followed the path of error in continuum. [Para 38] [522-G] 
Jagdish Manda/ v. State of Orissa 2006 (10) Suppl. 
SCR 606: (2007) 14 SCC 517; Star Enterprises v. City 
and Industrial Development Corporation of 
Maharashtra Ltd. 1990 (2) SCR 826 : (1990) 3 SCC 
280 - referred to. 
Case Law Reference 
2006 (10) Suppl. SCR 606 
referred to 
Para 11 
1990 (2) SCR 826 
referred to 
Para 11 
CIVILAPPELLATE JURISDICTION: Civil Appeal Nos. 10182-
10183 of2016 
. From the Judgment and Order dated 07.09.2015 of the High Court 
of Madras in WA No. 712 and 713 of2015 
WITH 
Civil
Appeal No. 10184-10185 of2016. 
Mukul Rohatgi, A.G., Parag P. Tripathi, L. Nageshwar Rao, 
Subramonium Prasad, Sr. Advs., Atul Shankar Mathur, Ms. Nimita Kaul, 
Ms. Sweta Singh, (for Mis. Khaitan & Co.), Mayank Pandey, Ms. Meha 
Aggarwal, B. Balaji, Advs. for the Appellants. 
Kapil Sibal, Sriram Panchu, Sr. Advs. Gautam Narayan, N.L. 
Rajah,ArunAnbumani, Santanam Swaminathan, Gautam Narayan, N.L. 
Rajah, Arun Anbumani, Advs. for the Respondents. 
The Judgment of the Court was delivered by
TAMIL NADU GENERATION AND DISTRIBUTION 
499 
CORPORATION LTD. v. CSEPDJ - TRI SHE CONSORTIUM 
DIPAK MISRA, J. I. Leave granted. 
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2. The appellant, Tamil Nadu Generation and Distribution 
Corporation Ltd (for short 'the Corporation') vide notification dated 
06.05.2013 floated a tender for setting up of two units of 660 MW Ennore 
SEZ Supercricitcal Thermal Power Project at Ash Dyke of NCTPS, 
Chennai wherein four bidders including the respondents herein · lJ 
participated. However, two bidders out of four were disqualified as they 
failed to meet the Bid Qualification Requirements (BQR) as a result of 
which bids of Consortium ofTrishe Energy Infrastructure Services Private 
Limited (CSEPDJ) and Bharat Heavy Electrical Ltd (BHEL) were taken 
up for consideration. Prior to the opening of the price bid, CSEPDJ and 
BHEL submitted supplementary price bids on 05.02.2014. Price bids 
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were opened on 05.02.2014 by the appellant in the presence of the 
representatives of the respondents, the qualified bidders. 
3. The uncurtaining of facts would depict that the !."respondent 
sent series ofrepresentations dated 16.06.20 I 4, I 7.06.2014, 01.07.20 I 4 
and 08.07.2014 to the appellant highlighting various aspects of the bid 
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and the relevance of para (viii) of Clause 29.0 of the "Instructions to 
Bidders" (ITB) which also deals with the rejection of bids of the tenderer 
whose past performance/vendor rating is not satisfactory. 
Since the 
appellant paid no heed to the
request made by the respondent No. I, it 
filed W.P. No. 1924 7 of 2014 seeking issue of a writ of mandamus to. 
direct the appellant to consider the representations and comply with Tamil 
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Nadu Transparency In Tenders Act, 1998 (for short, "the TTIT Act"). 
An undertaking was given before the learned Single Judge by the learned 
Advocate General that post-bid representations submitted by the 
respondent No. I will be duly considered while finalizing the tenders and 
appropriate orders will be ·passed in accordance with the tender 
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specifications and the TTIT Act and rules framed thereunder and in 
terms of the said undertaking, learned Single Judge vide order dated 
31.07.2014 directed the appellant to consider and pass orders on the 
representations of the respondent no. I herein after affording them an 
opportunity of personal hearing and directed that till such orders are 
passed, the tender should not be finalised. 
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4. Being aggrieved by the said order, the appellant filed writ appeal 
W.A. No. 1065 of 2014 before the Division Bench which, by judgment 
and order dated 19.08.2014, disposed of the writ appeal by modifying 
the order of the learned Single Judge only to the extent that affording of 
opportunity of personal hearing to the person was impermissible having 
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not contemplated under the Rules (for short, "the rules") and further 
permitted the respondent No. I to submit additional documents raising 
all its objections and the appellant was directed to pass an order and 
communicate the same to the respondents, CSEPDf and BHEL. 
However, the Division Bench did not modify the direction of the learned 
Single Judge which was to the effect that till a decision was taken on 
representations of the I" respondent, the bid shall not be finalised. 
5. After the disposal of the writ appeal, the respondent No. l sent 
its representation on 25.08.2014 along with necessary documents which 
was rejected by the appellant v.ide its communication dated 27.09.2014. 
The legal propriety of the said rejection was cal led in question by way of 
writ petition W.P. No. 26762 of 2014 seeking quashment of the same 
and further restraining the owner from taking steps to finalise the tender. 
During the hearing of the writ petition, a copy ofletter dated 27.09.2014 
awarding the contract to BHEL, respondent No. 2 herein, was brought 
on record. It was mentioned therein with regard to price negotiation 
meetings with the respondent No. 2. The respondent No. I sent a letter 
dated I. I 0.2014 to the appellant, highlighting the arbitrariness, anomalies 
and inconsistencies in its reasoning and the mala-fide intent in the matter 
of evaluation of the bid submitted by it. However, the
appellant by letter 
dated 10.10.2014, informed the I" respondent that the subject tender 
had been finalised and awarded to BHEL. 
6. The letter dated 27. 9.2014 awarding the contract to respondent 
No. 2 and letter dated I 0.10.20 I 4 were assailed by the respondent No. I 
by filing W.P. No. 27529of2014 for annulments of the letters and further 
for issue of directions to the Corporation to determine the award of the 
tender strictly in terms of the Tender/Bid document and taking into 
account the bid of respondent No. I and that of BHEL, the respondent 
No. 2 herein. 
7. The learned Single Judge dismissed the writ petition primarily 
based on the perusal of notes in the files containing the Consultant Report 
dated 30.05.2014 and on that basis opined that the conduct of process of 
evaluation of the tenders did not appear to be arbitrary, capricious or 
unfair; and that price bids of the bidders had been evaluated as per the 
parameters indicated in the tender notification by an independent 
consultant who was selected as per the Board Resolution that was within 
the knowledge of both the bidders. The reasoning of the learned Single 
Judge basically hinged on the Consultant's Report that had determined 
that the respondent No.2 herein was LI and, therefore, the decision of
T AMILNADU GENERATION AND DISTRJBlITION CORPORATION 
50 l 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
the Corporation in treating BHEL as LI and awarding the contract was 
neither arbitrary nor malafide. 
8. Aggrieved by the order of the learned Single Judge, the 
respondent No. I preferred writ appeals before the Division Bench. The 
Division Bench took note of the various pleas raised by the respondent 
No. I including violation of the statutory provisions, arbitrariness, adoption 
of unfair and non-transparent procedure, erroneous delineation of the 
consultant's report by the learned Single Judge and non-consideration of 
public interest. 
9. The Corporation, in its turn, contended before the Division 
Bench that there was no violation of procedure and the award of the 
contract was not amenable to judicial review in the obtaining factual 
matrix and any interference would only delay the execution of the work. 
It was also urged that Tender Accepting Authority (TAA) had accepted 
the lowest tender and negotiations were held only with lowest bidder; 
that Clause 25 .4 of the Instruction to Bidders did not permit the bidder to 
change the substance of the bids after the bids were opened; that though 
the respondent No. I had offered lower rate on interest, the original interest 
rate offered was not in accordance with tender terms, for as per clause 
14.0(d)(5) the rate of interest quoted should be fixed, whereas the 
CSEPDI had not specified the fixed rate of
interest; that there was no 
perversity or arbitrariness in the decision taken as per the terms of the 
tender, prevalent banking practice and the Term Sheet given by the lender; 
that the Consultant was appointed pursuant to the Board Resolution dated 
28.01.2012 who participated in all pre-bid and post-bid meetings and the 
minutes had been signed by all the parties and the consultant and, 
therefore, CSEPDl was very much aware of appointment of the 
consultant and the role played by consultant could neither be criticised 
nor ignored. 
I 0. The 2"d Respondent herein contended that respondent No. I 
lacked credibility to make any allegation against it; that design was the 
core area of leader of the consortium and they have no experience in 
India insofar as supercritical Thermal Power Projects are concerned; 
and that the work was under progress and they had expended substantial 
amount. 
I I. After hearing the rival. contentions, the Division Bench placed 
reliance on Jagdisb Manda/ v. State of Orissa1 and observed that the 
approach of the owner was unfair in the tendering process. It further 
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analysed the scheme of Section I 0 of the TTIT Act and held that the 
Tender Accepting Authority (TAA) has a role to cause objective 
evaluation of the tenders. Referring to Section I 0( 6) of the TTIT Act, it 
held that the Corporation had not complied with the said provision and it 
was a case of procedural impropriety, unfair approach and arbitrariness. 
The appellate Bench referred to the authority in Star Enterprises v. 
City and Industrial Development Corporation of Maharashtra Ltd." 
and declined to accept the stand of the Corporation by opining that 
reasons for rejection of I" respondent'sJepresentations could not be 
treated as reasons for rejection of its bid and hence, the decision making 
process was flawed and in breach of Section l 0(7) of the Act. It further 
held that in the "Tender Bulletin", absence ofreasons for acceptance of 
tender, no statement of evaluation of tenders and no comparative 
statement of tenders.received and, decision thereon was in clear violation 
of the requirements of Section 6(1) read with Section IO of the TTIT 
Act and Rule 30(3) of the TTIT Rules. On the interest component and 
commitment fee, the Division Bench held that the approach was wholly 
arbitrary and the intention was to oust the respondent No. I, for the 
evaluation process adopted was meant to suit one and reject the other. It 
further held that the process adopted 1\11d the decision taken by the
owner 
was arbitrary, unfair, irrational, biased and mala fide and did not serve 
the larger public interest. In view of the said analysis, the Division Bench 
allowed the appeals and directed the Corporation to evaluate the price 
bid of the respondents in the light of its findings and taking into 
consideration all relevant parameters including the representations/ 
documents submitted by respondent No. I and to record detailed reasons 
for the decision and communicate the same to the respondent No. I so 
as to comply with the requirement of the provisions of the TTIT Act and 
TTIT Rules and various decisions of this Court. 
12. Being aggrieved by the aforesaid judgment, the corporation 
and the successful bidder, by way of special leave, have preferred separate 
appeals. 
13. We have heard Mr. Mukul Rohatgi, learned Attorney General 
and Mr. Parag P. Tripathi, learned senior counsel for the appellant-SHEL 
and Mr. Subramonium Prasad, learned senior counsel for the appellant-
Corporation, and Mr. Kapil Sibal, learned senior counsel for respondent 
No. I and Mr. Sriram Panchu, learned senior counsel for the respondent 
No.2. 
'(1990) 3 sec 2so
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
503 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
14. It is apposite to note that in course of hearing it has been 
opined that the singular issue that is required to be addressed is "whether 
the Evaluation Report dated 301h May, 2014 by the Consultant, is prima 
facie erroneous, requiring interference within the parameters of judicial 
. review". Such a singular point was required to be focused as Mr. Mukul 
Rohatgi, learned Attorney General appearing for BHEL and Mr. 
Subramonium Prasad learned senior counsel appearing for the Corporation 
had submitted as the subsequent offers either by BHEL or by the I" 
respondent need not be considered. At that juncture, Mr. Kapil Sibal 
learned senior counsel appearing for the I" respondent, the contesting 
party, had submitted that the Consultant's Report would graphically 
exposit that the respondent No. I was entitled to be declared as L-1 
even ifit is scrutinized within the limited parameters of the judicial review. 
The Court had directed for handing over the Consultant's Report to the 
learned counsel appearing forthe l" respondent. In view of the aforesaid 
submission, the opinion expressed on other issues by the learned Single 
Judge or by the Division Bench need not be adverted to. 
15. On a"perusal of the facts brought on record, it is manifest that 
the Corporation in its meeting held on 30.1.2014 had decided to open the 
price bids on both the bidders and
thereafter the supplementary price 
bids were obtained from both the parties for the additional implications 
items in respect of technical deviation quoted by both parties and 
thereafter the price bids were opened on 05.2.2014. As the factual 
matrix would reveal, the price bids were evaluated by the Consultant. 
The learned Single Judge has adverted to price evaluation report submitted 
by the Consultant. Certain paragraphs from the report of the Consultant 
that were reproduced by him are as follows:-
"4.0 Evaluation 
4.1 BHEL 
BHEL has arranged finance from Mis .. Power Finance 
Corporation oflndia. 
They are arranged to finance 75% of the total cost as debt 
at an interest rate of 12.25% p.a. 
AttachedAnnexures I to 5 indicate the methodology adopted 
in calculating the various components required for evaluation 
like !DC-Debt, !DC-Equity, IDC-UF Fess; Debt Repayment 
Schedule etc. 
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[2016] 7 S.C.R. 
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4.2 CSEPDI - TRISHE 
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CSEPDI-TRISHE has arranged finance from Mis. ICBC, 
China. 
They have arranged a finance 85% of the total cost as debt 
at an interest rate of7.2% p.a. 
Attached Annexures 6 to 12 indicate the methodology 
adopted in calculating the various components required for 
evaluation like JDC-Debt, JDC-Equity, IDC-UF Fess, Debt 
Repayment Schedule etc. 
5.0 Evaluated Lower Cost 
BHEL 
CSEPDI-
TRISHE 
All figures in 
All figures in 
Rs. (Crores) 
Rs. (Crores) 
Capacity 
1320MW 
1320 MW 
Total EPC cost 
7762.977 
9207.264 
excluding VAT 
EPC Debt 
75% 
5822.233 
7826.174 
EPC Equity 
25% 
1940.744 
1381.090 
!DC Debt 
12.25% 
1295.079 
1228.378 
EPC Debt Including 
7117.311 
9054.552 
!DC (B + D) 
Upfront Fees 
8.925 
801.180 
Including Interest 
Total Debt (E + F) 
7126.237 
9855.732 
Interest on Equity 
14% 
509.597 
. 456.606 
Total Equity (C+H) 
2450.341 
1837.695 
Total Project Cost 
9576.578 
11693.427 
(G +I) 
Total Cost per MW 
7.255 
8.859 
PV - Debt 
7553.364 
8464.318 
PV - Equity 
2809.403 
2106.984 
Total PV 
10362.767 
10271.302 
PV Cost per MW 
7.851 
7.781 
Loading for 
10.287 
173.229 
Deficiency 
Total (N+P) 
10373.054 
10444.531 
Evaluated Bid 
7.858 
7.913 
Price per MW
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
505 
LTD. v. CSEPDI - TRlSHE CONSORTIUM [DlPAK MISRA, J.] 
Paragraphs 4.0 and 5.0 of the "Price Evaluation Report" submitted by 
the Consultant, which I have extracted above, show that the Consultant 
took into account only the interest rate of 12.25% per annum for the 
debt component arranged by BHEL from the Power Finance Corporation 
of India. The Consultant did not take note of the reduced rate namely 
12.15, subsequently offered by BHEL, for arriving at the conclusion that 
the "Evaluated Bid Price" ofBHEL was the lowest." 
16. There is no dispute that as per the Price Evaluation Report by 
the Consultant, the EPC price of the respondent No. 1 was Rs.9207 .264 
crores and respondent No.2 to whom the contract was awarded was 
Rs.7762.977 crores. Thus, the difference between the two EPC price 
is Rs.1444.287 crores. The 1" respondent disputed the Price Evaluation 
Report by the Consultant on the ground that it wrongly loaded the sum 
towards (a) the commitment fee, (b) interest on management fee during 
JDC period; and ( c) interest of guarantee fee during IDC period in its 
bid amount which had led to the evaluation of quoted financial charges 
with interest to Rs.80 l .18 crores. 
17. As regards the commitment fee, learned counsel for the 
appellant submits that the contention of the respondent No. I that since 
commitment fee was the fee to be charged on the unutilised amount of 
the loan meaning thereby ifthe
appellant failed to draw the loan amount 
as undertaken, then only the commitment fee would be charged and, 
therefore, the detennination after addition of the same was without any 
rationale as the respondent No. I had quoted in the 'Calculation Sheet 
for Financial Cost' in the supplementary bid commitment fee to the tune 
of Rs.164.72 crores which was to be charged @ l o/o p.a. on accrued 
drawals and if no commitment fee was required to be paid, the respondent 
No.I should have mentioned the same to be nil or z.ero. To show that 
the commitment fee is a part of the financial charges, learned senior 
counsel has drawn our attention to clause 14(d) 6 of the Instruction to 
Bidders under the tender, which reads as follows:-
"6. Financing Charges : All financing charges of any 
nomenclature relating to financing of the project including 
but not limited to Finders Fees, Commitment Fees, 
Arrangement Fees, Management Fees, Up Front Fees, 
Syndication Fees, Service Charges, Guarantee Charges, 
Other Fees and Taxes, if any should be clearly outlined in 
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the Financing Term Sheet. No variation in Financing 
Charges is permitted during the tenor of loan. 
3.37 "Financing Cost" means all financing charges of any 
nomenclature relating to financing of the project including 
but not limited to Finders Fees, Arranger's Fees, 
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Commitment Fees, Management Fees, Up Front Fees, 
Syndication Fees, Service Charges, Guarantee Charges, 
Other Fees and Taxes, if any." 
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18: At this juncture we may also refer to clause 3.37 of Section 2 
that deals with the General Terms and Conditions of the Contract. It 
defines the "Financing Cost" as follows:-
"Financing Cost" means all financing charges of any 
nomenclature relating to financing of the project including 
but not limited to Finders Fees, Arranger's Fees, 
Commitment Fees, Management Fees, Up Front Fees, 
Syndication Fees, Service Charges, Guarantee Charges, 
Other Fees and Taxes, if any". 
19. Clause 14 that deals with the conditions for a Binding Debt 
Financing Term Sheet, which needs to be reproduced in entirety. It 
reads as follows:-
"14.0 Conditions for a Binding Debt Financing Term 
Sheet 
Bidder shall enter into a Memorandum of Understanding 
(MoU) with the Lender for the Debt Financing agreeing to 
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provide Financing for the Project and making payments 
directly to the Bidder based on bills certified by 
TANGEDCO as per the terms of payment Clause. 
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The MoU shall be submitted by the Bidder along with their
offer for signing of the loan agreement. 
The Bidder shall be responsible for arranging the required 
financing and achieving Financial Closure of the project 
within 4 (Four months) from the date of Letter of Intent· 
(Loi). 
a. The Bidder and Lender shall furnish a joint undertaking
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
507 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
to fulfill the commitment made in the offer for Debt 
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Financing arrangement from the Lender subject to due 
diligence. 
TANGEDCO will furnish the following documents to the 
lender for processing of Debt Financing to the successful 
bidder. 
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I. Profile ofTANGEDCO 
2. Audited Balance Sheet ofTANGEDCO for the last three 
financial years 
3. MOU entered between TANGEDCO & MMTC for long 
term supply of coal of this project. 
4. Tariff order for sale of power. 
5. Copy of DPR 
b. It shall be understood that the Financing Term Sheet shall 
be based on preliminary appraisal of the project jointly by 
the Bidder and the Lender satisfying themselves on the 
project financial viability. 
c. It shall be understood that the Award of Contract to the 
Bidder is contingent upon successful financial Closure based 
on the Terms and Conditions provided in the Financing Term 
Sheet and in the event onhe Financial Closure does not 
materialize due to reasons attributable to the Bidder or the 
Lender or in the event of withdrawal by the Lender from 
the Project, the Bidder will forfeitthe security deposit. 
d. The Term Sheet should be full and complete with all 
material terms of financing including but not limited to: 
I. Loan Amount : At least 75% of the Total EPC Cost + 
100% of Interest during construction and Financing Cost. 
2. Currency of Loan: INR/USD/Euro or a combination
thereof. 
3. Tenor of the Loan: From the date of first drawal of the 
Loan upto 6 months from COD of the I" or 2nd unit 
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A 
whichever is later and 15 years thereafter. 
B 
c 
4. Rate of Interest. 
5. Fixed Rate oflnterest till the entire tenor of the loan 
after taking into account the hedged cost. 
6. Financing Charges : All financing charges of any 
nomenclature relating to financing of the project including 
but not limited to Finders Fees, Commitment Fees, 
Arrangement Fees, Management Fees, Up Front Fees, 
Syndication Fees, Service Charges, Guarantee Charges, 
Other Fees and Taxes, if any should be clearly outlined in 
the Financing Term Sheet. No variation in Financing Charges 
is permitted during the tenor ofloan. 
7. Terms and conditions for draw down schedule. 
8. Moratorium for Repayment of Installment, Interest and 
D 
Financing Charges: All cash outflow obligation of 
TANGEDCO towards repayment of Installment, Interest 
and Financing Charges should be in INR (fully hedged) for 
the entire tenure of the loan and the repayment will 
commence only after 6months from the date of COD of 
E 
later unit. 
9. Repayment Period: 15 years post IDC and moratorium 
in 60 equated quarterly installments 
I 0. Project Cash Flows and Installment Repayments 
statement should be submitted and will form part of the 
F 
Financing proposal. The Bidder shall indicate Draw Down 
Schedule of finance to match the supply and erection 
schedule of project activities. 
11. Equity requirements and related covenants. 
12. Security: Against Security the following can
be made 
G 
available by TANGEDCO 
H 
a. Hypothecation of all I 00% Project Assets 
b. Government Guarantee for the repayment of loan 
13. Validity period of the Term Sheet will be co-terminus 
with the validity of the bid."
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
20. The stand of the respondent as regards the interpretation of 
Clause 14(d) 6 is that it only outlines all fees, but it does not mean that 
every such fee is to be loaded for evaluating the bid to determine L l and 
no commitment fee can be loaded for such evaluation. It is also put 
forth that there can be no question of loading interest on commitment 
~-
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21. As has been stated earlier, the issue pertaining to correctness 
of Consultant's report has to be adjudged and scrutinized within the scope 
of limited power of judicial review in the obtaining factual score. The 
Division Bench in the impugned judgment has taken exception to the 
process adopted in the identification of L l. It has referred to its order 
dated 19.8.2014 wherein the l" respondent was granted the time to 
submit additional documents. The impugned order takes note of the fact 
that at that point of time, the Corporation had never averred that tender 
had been finalized. It has referred to the earlier order of the Division 
Bench that representations were to be considered and till then the bid 
should not be finalized. It has referred to the letter of the Chairman-
cum-Managing Director of the Corporation dated 20. 7.2014 and opined 
that it appears to be a misstatement of fact. 
22, Be it stated that the Division Bench has posed two questions:-
"(i) Whether interest offered by appellant is vague;
and 
(ii) Whether the reduction of interest from 7.2% to 6.2% 
should be accepted." 
23. While dealing with the said issue, the Division Bench has 
referred to the publication in the tender bulletin stating about the decision 
on tender:-
" l. Name of the Tender: Chief Engineer/Civil/Projects & 
Environment, Inviting Officer, J•d Floor, NPKRR Maal igai, 
144, Anna Salai, Chennai - 600 002. 
2. a) Name of the Project/Detail of Purchase & Works: 
Establishment of coal based 2 x 660 MW Ennore SEZ 
Supercritical Thermal Power Project in the ash dyke of 
existing NCTPS under Single EPC cum Debt Finance basis. 
Vayalurvillage, Thiruvallur District, Tamil Nadu. 
'·· 
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SI. 
Details 
No 
Tender Value 
Decision on Tender 
2 
Mis. 
Bharat 7840.087 
Out of four bids received 
Heavy 
Electricals 
Limited, BHEL 
House, Sirifort, 
New Delhi -
110 049 
Crores 
& for this work and among 
Lender: Powe1 the -qualified two bidders, 
Finance 
negotiation was called for 
Corporation 
& held with the lowest 
Limited 
bidder viz M/s.BHEL. 
Rate of 
After negotiation, tender 
Interest: 
value of Rs. 7788 Crores, · 
12.25% 
Rate oflnterest at 12.15% 
Consortium 
o; 9716.5974 
Central Southern Crores & 
China 
Electric Lender: 
Power Design - Industrial & 
Ms. Trishe, 668, Commerce 
Minz 
Road, Bank of China 
Ughan, China - Rate of 
430 071 
Interest; 7.2% 
(USD@Rs. 
59.26 at SBI 
Bill selling 
rate) 
was 
accepted by the 
Chief Engineer/Projects 
and order for acceptance 
of the tender issued vide 
this 
office 
issue 
Lr.No.CE/P/SE/M/EE-
1 O/E/File. 
2x660MW 
Ennore 
SEZ 
STPP/D.No.60/dt.27.09.2 
014 
Finally, M/s. BHEL/New Delhi offered bid for Rs. 7788 Crores was 
accepted by thtl Chief Engineer/Projects/Chennai and order for 
acceptance of the tender was issued vide this officer Lr.No.CE/P/SE/ 
M/EE-10/ E/File.2x660MW Ennore SEZ STPP/D.No.60/dt. 27.09.2014." 
24. Thereafter, the Division Bench has recorded as follows:-
"31.3 While it is the plea of the appellant that fixed rate of 
7 .2-7 .5% per annum or LIBOR floating rate has been 
quoted by them, it is the case of the learned
Advocate 
General that Clause 12.1 of the Instructions to Bidders 
stated that interest is to be quoted at fixed rate and it is not 
subject to change, and since the interest quoted is variable, 
it is not possible to evaluate the bid.
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
511 
LTD. v, CSEPDI - TRISHE CONSORTIUM [DIPAK MISRA, J.] 
31.4 It is seen from the records, that subsequently, based 
on a query from the first respondent, the appellant had 
confirmed that it would be fixed rate of interest at 7.2%. 
the same was also confirmed in the Repayment Schedule 
and the same rate of interest was taken into consideration 
by the Consultant in his report dated 30.5.2014. He did not 
find fault with the rate of interest. It is to be noted that the 
Term Sheet was submitted during July, 2013 and tender 
was evalu11ted in" the year 2014. The contention of 
vagueness in rate of interest does not appeal to us. When 
the Consultant's report dated 30.5.2014 is accepted by 
TANGEDCO for the purpose of evaluation, it has to be 
accepted for all purposes, though we have reservation on 
the Consultant's report dated 30.5.2014. There is; therefore, 
no vagueness in the rate of interest quoted at 7.2%. 
31.5 The second issue relates to the reduction of rate of 
interest. It is not in dispute that various meetings were held 
between the appellant and the TANGEDCO. The learned 
Advocate General states that the Consultant was appointed 
based on the 21" Board Meeting on 28.1.2012 and the 
Consultant participated in all pre-bid and post-bid meetings 
and minutes were signed by all parties, including BHEL 
and the appellant. He stated that the appellant was aware 
of the Consultant's appointment and his role. This
only 
fortifies the fact that there have been series of consultation 
between both the bidders. The finding of the learned Single 
Judge that the appellant acted on inside information is 
demolished by the stand of the learned Advocate General 
as above. The insinuation has no basis. 
31.6 Coming to the issue of reduction of rate of interest, 
taking into consideration the prevailing market rate, the 
appellant offered to reduce the-rate of interest from 7 .2% 
to 6.2% on 5.6.2014, even prior to any form of litigation. 
When such an offer was given by the appellant the tender 
was not accepted in terms of Section 10(6) of the Act. To 
recapitulate, what has happened earlier is that the writ 
petition in W.P. No. 19247 of2014 was filed on 17. 7.2014, 
subsequent to the offer made on 5.6.2014. The first interim 
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order was passed on I 8. 7 .20 I 4. The second interim order 
was passed on 31.7.2014. The Division Bench passed an 
order on I 9.8.2014. At that point of time, there was never 
a statement by the TANGEDCO that LI was identified 
and discussion was going on. We have also clearly stated 
that the statement of the Chairman-cum-Managing Director 
of TANGEDCO that the representations of the appellant 
will be duly considered by the Board of Directors while 
finalizing the tender and appropriate orders will be passed 
strictly in accordance with the tender specifications and by 
following the provisions ofTTIT Act and TTIT Rules. 
31. 7 Therefore, the issue relating to reduction of rate of 
interest should have been considered. This reasoning of 
ours is also based on the fact that we have clearly held that 
the third respondent could not be ascertained as LI on 
2.6.2014 as per the statement of TANGEDCO or on 
30.5.2014 as per the finding of the learned Single Judge. 
Once there is no identification of Lt, TANGEDCO is bound 
to consider the reduction in rate of interest of both the 
appellant in their offer dated 5.6.2014 aiid that of the third 
respondent dated 27.6.2014, reducing the rate of interest 
from I 2.25% to 12. I 5%. 
3 I .8 Even otherwise, by virtue of the power under Clause 
25 .3 of the Instructions to bidders, which states that "The 
Purchaser reserves the right to relax or waive any of the
conditions of this Specification in the best interests ofthe 
TANGEDCO", the TANGEDCO could have considered 
such reduced rate of interest offered by the appellant and 
the third respondent." 
25. With regard to commitment fee, the analysis of the Division 
Bench is worth referring to:-
"It clearly states that Commitment Fee is only on the 
cancelled portion of the loan. That apart, even as per the 
Drawdown Schedule, the fee is to be paid only if the loan 
amount is not drawn by the I 81h, 30th and 42"d month. 
Moreover, the appellant in the letters dated 
13.6.2014, 16.6.20 I 4 and 17.6.2014, clarified that
T AMJL NADU GENERATION AND DISTRIBUTION CORPORATION 
513 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
Commitment Fee is only on the unused credit line and that 
there shall be no Commitment Fee if the loan amount is 
fully utilized as per the Drawdown Schedule. All these 
representations sent by the appellant were not considered 
by TANGEDCO, despite there being a specific direction 
by the Division Bench of this Court to consider the same. 
It is a clear case of arbitrariness in approach and intended 
to oust the appellant. This act of the TANGEDCO is nothing 
but a case of malafide in evaluation process to suit one and 
reject the other." 
26. While dealing with the consultant's report, the Division Bench 
has proceeded to state thus:-
"33.3 Even as per the Consultant's Report the difference 
between the bid of the appellant and the third respondent is 
around Rs. 71 Crores. That being the case, if either the 
Commitment Fee of Rs.156.184 Crores or the interest on 
Management Fee and Guarantee Fee for the 36 month 
construction period is not loaded on the appellant, it will 
have a bearing on deciding which one of the two is the 
lowest bid. Assuming the Consultant's report is of any value, 
such report without considering the relevant material is of 
no use. The approach to add these figures without taking 
note of the representations and additional particulars/ 
documents is, therefore, arbitrary and tainted in bias. This 
is in violation ofthe Division Bench
judgment as well as the 
orders of the learned Single Judge in the first round of 
litigation." 
27. And again:-
"The financial implication in respect of two tenderers has 
been specified by the Consultant. . The issue is what factors 
mean and how it impacts the bid. We find that the 
Repayment Schedule submitted by the appellant with regard 
to interest on management fee ang guarantee fee during 
JDC period is an accepted document by the Consultant. If 
nothing more is to be paid beyond that and that is clarified 
in the course of representation fo clear terms, we fail to 
understand as to how this amount could be included in the 
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cost when there is no implication. The Consultant, as we 
have held, did not have the benefit of considering the 
representation and other documents on the financial 
implications in this issue. His opinion is therefore not based 
on relevant document/representation. This we have held is 
not in conformity with the orderofthe learned Single Judge 
in the first round oflitigation, which was confirmed by the 
Division Bench. Withholding such a factor and to obtain an 
evaluation from the Consultant loading the bid of the 
appellant is clearly a case of bias. It is an unreasonable 
approach and an unfair gesture which crumbles the spirit 
of transparent tender." 
"33.6 We, therefore, have no hesitation to hold that the first 
respondent had erroneously added interest on Management 
Fee and Guarantee Fee when there is none and there is no 
ambiguity or vagueness. Once the appellant has indicated 
_,in the representation, in clear terms, as to how it should be 
treated, in the light of the order of the Division Bench, which 
TANGEDCO accepted to consider the bid of the appellant, 
the first respondent ought not to have loaded this amount 
on the basts of the Consultant's Report. In all fairness, the 
Tender Accepting Authority of the first respondent should 
have excluded this amount, if both the bidders are to be 
treated on the touchstone of fairness and on the doctrine of 
level-playing field. This becomes
necessary because the 
entire tender is tested on the larger public interest, that is to 
say, the implementation of the project in a time bound manner 
where cost is another important factor to be considered in 
the_ decision making. In a Welfare State, public authority 
cannot decide arbitrarily to throw away such an offer which 
they agreed to consider in the course of judicial proceedings, 
which we have referred to above. These factors, namely, 
adding interest on Management Fee and Guarantee Fee, 
have to be eschewed for the purpose of considering the bid 
of the appellant, otherwise, it will suffer from the vice of 
_ mu:~ason~bl~ness and irrationality." 
28. Eventually, it was directed as follows:-
"The TANGEDCO is directed to evaluate the appellant's
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
5 I 5 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
price bid along with the bid of the third respondent, in the 
light of our findings as .above and also taking into 
consideration in all required parameters and the clarifications 
submitted by the appellant in its various representations, as 
directed by the Single Judge in the order dated 31.7.2014 
and that of the Division Bench in its order dated 19.8.2014, 
afresh, at the earliest." 
29. Before this Court, the consultant's report is criticized by the 
I" respondent stating thus:-
"2.3 The Consultant has made the following errors in the 
A 
B 
calculation of the said 'Upfront Fees Including Interest' in 
c 
respect of CSEPDI's bid: 
Error 1 : Included Commitment Fees 
Error 2: Calculated and loaded interest on (a.) Guarantee 
Fee, (b.) Management Fee and ( c.) Commitment Fee during 
the constructiori period of 36 months, i.e., IDC (Interest 
D 
During Construction) 
---
2.4 In 5.0 Item F - 'Upfront Fees Including Interest', the 
Consultant has loaded BHEL with Rs.8.925 Crores and 
CSEPDI with Rs. 801.l80 Crores. The break-up of this 
Rs. 801.180 Crores in the Consultant's Report is as follows: 
E 
a. Guarantee Fee 
· · 
Rs. 371.743 Crores 
b. Management Fee· 
c. Commitment Fee 
d. Interest for 36 months 
on a,b,c (Rs. 127.613 Crores) 
Rs. 117.393 Crores 
Rs. 156.184 Crores 
e. Interest from J7•h to 42nd month: 
Rs. I 5 5 . 8 6 0 
Crores on a,b, & c (Rs. 28.247
Crores) 
Total 
Rs. 801.180 Crores 
-2.4.1 There is no issue on entries a. and b. above 
2.4.2 The issue is with regard to entries c. and d. above. 
2.4.3. As regards c., no Commitment Fee can be loaded, 
F 
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for the reasons explained below. 
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(2016] 7 S.C.R. 
2.4.4 As regards d., no interest can be loaded for the 
construction period of 36 months on Guarantee Fee and 
Management Fee, for the reasons explained below. The 
question of interest on Commitment Fee does not arise at 
all because no Commitment Fee can be loaded in the first 
place for evaluation of CSEPDI's bid. 
2.4.5 e. above will stand reduced as it depends on c. and d. 
2.5 If the Consultant had correctly evaluated CSEPDI's 
price bid by not including Commitment Fee and Interest on 
Guarantee Fee. Management Fee and Commitment Fee 
for the construction period of 36 months, then CSEPDI 
would be LI by Rs. 171.600 Crores. NeitherTANGEDCO 
nor BHEL have disputed this fact. 
x 
x 
x 
x 
x 
x 
2. 7 The Consultant has confused Commitment Fee with an 
Upfront Fee. Commitment Fee, as stated above, is a 
contingency fee payable ifthe scheduled drawal does not 
take place. An Upfront Fee is levied by the lender as a 
definite fee without any contingency. This is made clear 
by PFC (BHEL's lender) letter dated 30-04-2015 showing 
Commitment Fee and Upfront Fee as distinct alternatives. 
The Consultant has loaded BHEL with Upfront Fee. The 
Consultant has erroneously treated Commitment Fee as an 
Upfront Fee for CSEPDI and has in fact applied the label 
Upfront Fee in Item F". 
30. With regard to the commitment fee, various financial nuances 
have been stated. We think it apt to reproduce some ofthem:-
"2.8.3
When the earmarked funds are drawn, the interest 
agreed is payable. When the earmarked funds are not 
drawn, the interest is not payable but instead the 
Commitment Fee has to be paid on the amount not drawn. 
· 2.8.4 CSEPDI's Term Sheet clearly mentions that the 
Commitment Fee is payable on the cancelled portion of the 
loan, 
2.8.5 The term 'Accrued Drawal' refers to the amount 
'H 
accured and available for drawal, but not drawn.
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
517 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J.] 
2.8.6 Commitment Fee is therefore only a contingent fee 
· leviable ifthe funds are not drawn as per the Drawdown 
Schedule. It is more in the nature of a penalty in the event 
of a default by the borrower TANGEDCO and is payable 
by TANGEDCO. This cannot be added to the project cost 
for evaluation of the price bid. 
x 
x 
x 
x 
x 
x 
2.8.8 The Repayment Schedule sets out the entire amount 
to be paid by TANGEDCO in the form of 48 Equated 
Quarterly Installments (EQI) starting from the 43'd months 
of the date of financial closure for 12 years. If there is one 
document to be termed as most important to evaluate the 
Price Bid, it is this Repayment Schedule. The Repayment 
Schedule is part of the Price Bid and is absolutely crucial 
as it caps the amount TANGEDCO has to pay. Not a 
single rupee needs to be paid over and above the amounts 
mentioned in the Repayment Schedule. 
2.8.9 The EQI in the Repayment Schedule is based on the 
figure of Rs. 15,038.2914 Crores, which. comprises of 
interest Rs. 5,025.3628 Crores on the Net Loan amount of 
Rs. I 0,012.9286 Crores. The components of this Net Loan 
amount are: 
a. Loan amount 
(85% of Total EPC 
Cost of9709.3822 Crores) 
b. Interest at 7.2% p.a. on the 
above loan amount during 
the Construction Period of36 
months 
c. Guarantee Fee 
d. Management Fee 
Moratorium Period interest 
for 3 7'h to 42°d month 
(interest
at 7.2% p.a. for 
6 months on the total of 
a,b,c and d. above) 
Total 
Rs. 8252.9748/-
Rs. 896.2032/-
Rs. 392.0163/-
Rs. 123.7946/-
Rs. 347.9396/-
Rs.10,012.9286/-* 
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*The Price Bid submitted by CSEPDI was Rs. 9709.3822 
Crores and the above calculations were on that basis. 
However the admitted position is that of this sum, Rs. 
509.339 Crores was disallowed by TANGEDCO and the 
Price Bid was arrived at Rs.9207.264 Crores. The 
Consultant has also evaluated CSEPDl's bid at Rs. 9207.264 
Crores". 
31. With regard to no interest on guarantee fee and management 
fee during the construction period of 36 months and no interest on 
Commitment fee, the stand of the l" respondent has been put forth in 
various compartments. We think it apt to reproduce the relevant grounds:-
"2.9.1 The Consultant ought not to have loaded interest on· 
Guarantee Fee and Management Fee during the construction 
period of36 months, for the evaluation ofCSEPDI's Price 
Bid. 
2.9.2 The very same Repayment Schedule calculalion set 
out above shows that no interest is being charged on 
Guarantee Fee and Management Fee during the construction 
period of36 months and does not form part of the amount 
which TANGEDCO has to repay. Not a single rupee needs 
to be paid over and above the amounts mentioned in the 
Repayment Schedule. 
2.9 .3 The only interest payable during the construction period 
of36 months is interest calculated at 7 .2% p.a. on the basic 
loan amount (85% of the EPC cost) and not on any other 
amount like Guarantee Fee and Management Fee. This is 
made clear in the specific calculation
sheet for Interest 
During Construction submitted by CSEPDI in its Price Bid. 
2.9.4 The Term Sheet submitted by CSEPDI outlines the 
fees required to be paid by TANGEDCO and the 
circumstances in which they are payable. In the very nature 
of this contract, the items chargeable have to be mentioned, 
not the items not chargeable. The contract requires to be 
evaluated based on what the bidder is charging 
TANGEDCO. 
2.9.5 In CSEPDI's Term Sheet, mention is made of 
Management Fee and SINOSURE Re-insurance
TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION 
519 
LTD. v. CSEPDI-TRISHE CONSORTIUM [DIPAK MISRA, J .] 
(Guara11tee Fee). No mention is made of interest on 
A 
Management Fee and Guarantee Fee for the construction 
period of36months. 
· 
2.9.6 As far as interest on Commitment Fee is concerned, 
the same does not arise as Commitment Fee itself cannot 
be loaded for evaluating CSEPDl's bid." 
-
B 
J2. The 1" respondent has also put forth that the Consultant was 
not right in loading on CS.EPDI bid the values for Commitment Fee and. 
Interest thereon and Interest on Guarantee Fee and Management Fee 
during the construction period of36 month~, because that Clause 14.d.6 
only states that details of the Financing Charges should be clearly outlined 
C 
in the Financing Term Sheet and does.not state that it should be include.d 
in the pdce evaluation; that the reference to Commitment Fee in the 
Term Sheet clearly indicates that it is only on the cancelled portion of the 
loan; that the fee is to be paid only if the loan amount is not drawn by the 
I 8'h, 30'h and 42"d months in accordance with the Drawdown Schedule; 
that Clause I 2. i and Clause 32. I.I makes no mention of hiterest on · D 
Financing Charges (i.e., on Management Fee and Guarantee Fee) during 
the IDC period; that the words 'Interest and Financing Charges' cannot 
mean interest on financing charges; that there is absolutely no variance 
between the Term Sheet and Repayment Schedule submitted by· 
•. CSEPDl;
that the Term Sheet and the entire Financial Prop<?sill/Price 
Bid, incl.uding the Repayment Schedule, are to be read together;·thatthe'' 
CSEPDI's Term Sheet only mentions that a Management Fee Is to .be 
paid but'does not mention any interest .on Management Fee'for the 36 
month construction period (lDC period) and that the Consultan~ ought. 
notto have loaded the disputed amounts for evaluating the price bid of 
CSEPDI. It is also the stand that on a perusal ofthe Comparison Sheet 
filed would indicate that CSEPDI is LI by Rs.17L600 crores if the · 
evalul!-tion is done correctly. That apait, the I" respondent has raised 
other grounds which we need not refer to in detai I.· 
E 
F 
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33. The Corporati~n in supe.~rt ofthe Gons~ltant's Report has 
stated that the stand of the l" respondent thatNet.LoanAmQunt in the 
repayment schedule provided by respond~nt No. I gives no break up of 
how the said figure has been reached; that one cannot find out from a 
bare perusal of the said Repayment Schedule as to whether the 
respondent No. I has factored the component ofCommfrmentFee in the 
Net Loan A1~ount; that the resppndent having not been declar~d as Ll . H
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[2016] 7 S.C.R. · 
bidder as a post facto contention, now say that Commitment Fee shall 
not be taken for evaluation in spite of the fact that they themselves have 
. quoted Commitment Fees for Rs.164.702 crores with split up details in 
the price bid and the above post facto contention is against all tenets of 
fairness and justice; that had the respondent No.1 become L 1, they would 
have insisted that Commitment Fee being a financial charge forms part 
of the loan and therefore is payable by the borrower i.e., the Corporation 
as per their price bids submitted by respondent No. I; that since the 
respondent No. I had not been evaluated as LI, a contention is advanced 
that Commitment Fee should not be taken for evaluation citing universal 
definition. 
C 
34 .. On interest on management and guarantee fee, the stand of_ 
the Corporation is that the CSEPDI-TRISHE CONSROTIUM have 
quoted Rs_ J 23 .9746 crores asManagemenffees and Rs. 392.0163 crori:s 
as.Guarantee fee in their Price bid. There is no dispute on the quantum 
of fees. The Consultant during the evaluation have worked out interest 
D 
@ 7 .2 per annum on the above. fees as per the term sheet of the Industrial 
and Commercial Bank of China Limited from the date on which tliey fall 
due. since· the above fees form part of the debt to be repaid by the 
appellant; that it is clear from the Tender Conditions as well as the Term 
Sheet provided by Industrial and Commercial Bank of
China l,.imited 
and the clarification dated 21.10.2013 (issued by Industrial and 
E 
Commercial Bank of China Limited) that appellant herein would be bound 
to pay the interest on the whole loan amount which will include the 
finanqial charges. 
·· 
35. The Corporation has quoted the relevant tender conditions 
from the Term Sheet submitted by Industrial and Commercial Bank of 
F . China Limited which are reproduced below:-
• "Clause 14(d)I of the Instruction to Bidders under the 
Tender defines the "Loan Amount" to include at least 75% 
of the totalEPC cost+ 100% ofinterest during construction · 
and Financing Cost. As per clause 14( d) 6 _of the Instruction 
G 
to Bidders under the Tender management fee and guarantee 
· ftie is part oft~e financial charges/financial cost. 
' 
. ' 
' 
• 
Under thti term relating to "Interest rate" in term sheet 
submitted by Industrial and Commercia! BankofChina it is 
clearly provided that the Borrower will pay interest on the 
H 
full loan amount at a fixed rate per annum. 
, .
TAMILNADU GENERATION AND DISTRIBUTION CORPORATION 
52 l 
LTD. v. CSEPDI - TRlSHE CONSORTIUM [DIPAK MISRA, J.] 
• 
Under the terms defined as "management fee". in the 
term sheet submitted .by Industrial and Commercial Bank· 
of ChinaLimited .it is specified that Management fee of 
1.5% tlaton the Loan Amount will be payable to the lender 
within a period of60 days from the date of financial closure. 
Six months is the time given for financial closure and so 8 
months in case of management fee in view of outer limit of 
60 days. 
• · Similarly;· under the terms relating to "Conditions 
Ptecedent'', tlie-condition( d) the term sheet specifies that 
petitioners will •be charged .guarantee Jee (termed as 
Insura11ce··Policyofo4he·term,.sheet) ·at.the rate of·5% on 
95%oftheJoan amountand.the.samewill be payable from 
the ·end ofthe 6'h month. 
· 
. 
• . According to the term sheet the amounts get debited 
to the Petitioners account at the end of the s•1t month and 
61h month respectively. 
• Allfin.ancial .costsform part ofthe debt taken fro1n the 
lndustrial"and Commercial Bank of China Limited .. As per 
theclarification dated2l.10.2013 issued by Industrial and 
Commercial BankoofChina Limited which is the Lender 
institutionforRespondent no. I all costs and fee charged by 
ICBGwill fQrrn·partofthe debt financing". 
" 
36; From the aforesaid, it is vivid that the Consultant has analysed 
the offers regard being had to the tender conditions, Be it ingeminated . 
that the
analysis and determination made by the financial consultant has 
been carried out before receipt of any additional document from either 
side. The documents were called· for by the owner from both the 
qualifying bidders in a transparentmanner and the same, have been 
considered at the time of evaluation byth.e Consultant Submission of 
A 
B 
c 
D· 
E 
F 
G 
Mr, Sibatis thatthe evaluation is exjacie defective foasmuch as the 
Consultant has loaded ce1tain charges as a consequence of which the 
price has gone up, Mr; Rohatgi, learned Attorney(foneral appearing for 
BHELand Mr;·l>tasad;Jearned senior .counsel appearing for the 
Corporation would submit thatthe evaluation·is founded on definities 
leaving nothing to any kind of contingency. They have referred to the 
Term ~heeNmd what is put up by Industrial and Commercial Bank of 
H. 
_,
522 
SUPREME COURT REPORTS 
[2016) 7 S.C.R. 
A · China Limited. At this juncture we are obliged to say that in a complex 
fiscal evaluation the Court has to apply the doctrine of restraint. Several 
aspects, clauses, contingencies, etc. have to be factored. These 
· calculations are best leftto experts and those who have knowledge and 
skills in the field, The financial computation involved, the capacity and 
B 
efficiency ofthe bidder and the perception of feasibility of completion of 
· the project have to be left to the wisdom of the financial experts and 
consultants. The courts cannot really enter into the said realm in exercise 
of p,ower of judicial review. We cannot sit in appeal over the financial 
consultant's assessment. Suffice it to say, it is neither exfacie erroneous 
c 
D 
E 
nor can we perceive as flawed for being perverse or absurd. 
37. Before parting with the case we _are constrained to add 
something. We do so with immense pain. The respondent, before ' 
finalization of the financial bid submitted series ofrepresentation~ and 
seeing the silence of the owner it knocked at the doors of the writ court 
which directed for consideration of the representations. We are disposed 
to think that the High Court at that stage should have exercised caution. 
If the courts would exercise power of judicial review in.such a manner 
it is most likely to cause confusion and also bring jeoplirdy i11 public 
· interest. An aggrieved party can approach the Court at the
appropriate 
stage, not when the bids are beiiig considered. We do not intend to specify. 
It is appreciable the owner in certain kind of tenders call the bidders for 
negotiations to show fairness transparently. But the present case is not a 
one of such nature. Once the price bid was opened, a bidder could not 
have submitted representations on his own il:nd seek a mandamus from 
the Court to take certain aspects into consideration. We have stressed 
. this aspect only to highlightthe role of the Court keeping in mind the 
F · established principle of restraint. 
3 8. In view of our preced.ing analysis we are of the considered 
opinion that the Division Bench through the delineation hasndopted the 
approach of an appellate forum or authority and extende~ the principle 
of judicial review to certain areas to which it could not have and, therefore, 
G 
thej\ldgment and order of the Division Bench followed the path of error 
in continuum. Consequently, the inevitable conclusion is, unsettlement of 
H 
. the impugned order and we so direct. In the ultimate eventual the appeals· · 
'stand allowed. There shall be no order as to costs. 
NidhiJain 
Appeals allowed . 
.'~