Case: M/S. Siemens Aktiengeselischaft &amp; S.Ltd Vs. Dmrc Ltd.

2. A Division Bench of the High Court of Delhi has by a common order passed in Writ Petition (C) No.1853 of 2013 filed by the appellant and Writ Petition No.2615 of 2013 filed by Alstom Transport India Ltd. declined to interfere with the award of a contract for the supply of 486 Standard Gauge Cars Electrical Multiple Units meant for use in Phase-III of the Mass Rapid Transit Systemfor short) for Delhi and its extension corridors. The High Court has taken the view that the process of evaluation of the bids received from eligible bidders culminating in the award of a contract in favour of respondent No.2-Hyundai Rotem Companyfor short) was transparent and did not suffer from any illegality, irregularity or perversity of any kind to warrant interference by it. The High Court held that the bidders were well aware of and had accepted the tender conditions which were free from any vagueness or uncertainty. The parameters of evaluation conditions were also held to have been applied uniformly to all the bidders under a procedure that was open, transparent and fair as required by law. The present appeal assails the correctness of that judgment and order. Alstom Transport India Ltd. & Ors.-Writ-Petitioners in connected Writ Petition No.2615 of 2013 have, however, remained content with the view taken by the High Court and have not chosen to appeal.3. Respondent-Delhi Metro Rail Corporationfor short) has planned to implement Phase-III of the MRTS for Delhi to keep pace with the ever increasing traffic demands in Delhi. Phase-III of the MRTS, Delhi comprises metro corridors of Mukundpur-Rajori Garden-Dhaula Kuan – Maujpur - Gokulpuri and Janakpuri (West)–Munirka - Kalkaji - Kalindi Kunj -Botanical Garden - (Noida). The project, it is common ground, is financed with the help of a loan secured by the DMRC from Japan International Cooperation Agencyfor short). The loan agreement, inter alia, stipulates the bid procedure to be followed by DMRC. What is noteworthy is that the procedure, inter alia, provides for submission of tenders to JICA for review, concurrence and analysis of bids by the DMRC and reserves with the JICA the discretion to convey its views regarding the analysis of the bids and the proposal for award of the works.4. In keeping with the requirements of the agreement between DMRC and JICA, the former invited sealed tenders in two parts (Technical & Price Bid) on International Competitive Bidfor short) basis for the design, manufacture, supply, testing, commissioning and training of 486 number of Standard Gauge Cars Electrical Multiple units referred to earlier at an estimated budget cost of Rs.3500 crores funded by JICA. Pre-bid meetings were held to answer the queries, if any, raised by the bidders. The DMRC in the meantime issued as many as 9 Addenda which necessitated the change in the dates fixed for submission of bids to enable the bidders to formulate their offers and make their bids in accordance with the terms and conditions finally stipulated for the purpose. DMRC eventually received eight bids including one submitted by the appellant before us. The technical bids were opened on 18th September, 2012 whereupon only six of the bidders including the appellant were declared to be eligible. With the opening of the technical bids GEC values which the bidders were required to submit as a part of their technical bid and which were relevant and to a great extent critical for evaluation of the price bid under the applicable terms and conditions also became known to the bidders. The financial bids offered by these six bidders were then opened on 9th February, 2013 and the bid amount along with GEC values offered by each bidder announced by the DMRC. The price quotations of the six bidders found eligible were asn beforece in. Significantly, however, the above did not represent the true inter se position of the bidders. That was so because apart from the price quotation, the terms and conditions of the tender notice required loading of GEC values duly converted into Indian rupee to the price quotation of each eligible bidder. The GEC values in turn comprised two distinct components, namely,factor representing the electricity consumption for the operation of the train without HVAC andfactor for operation of HVAC. The GEC values offered by the six bidders found technically compliant were as. In terms of Annexure ITT-8 the GEC value of respondent No.2 which was the lowest was taken as the baseline for the purpose of loading the rupee equivalent of the higher values offered by other bidders on to their price bids. The Indian rupee conversion of the said value above the baseline, proportionate to the higher GEC values was worked out as. The position that emerged after the GEC values component was loaded to the price bid of the bidder was asIt is evident from a comparative study of the charts extracted above, that while the appellant was L-1 in the price bid, it went down to L-4 after GEC value was loaded to its price bid. On the contrary respondent No.2-HR who was L-3 in the price bid rose to L-1 position on account of its low GEC value in comparison to a higher GEC value offered by the appellant.9. Allotment of the award in favour of HR as the lowest bidder, thus, appeared as a writing on the wall to the appellant who sent a communication dated 12th February, 2013 to DMRC alleging that the GEC values offered by HR were untenable and unsustainable and pointing out that since theprice bid was lesser than that of the HR by 665 crores (approx.) it should be taken as L-1 instead of determining the inter se position of the bidders on the basis of a supposedly anticipated saving in the consumption of energy on a lifecycle of 30 years. Yet another letter dated 25th February, 2013 the appellant called for evaluation of energy values by an independent third party agency so as to ascertain whether the GEC values offered by HR were achievable. Yet another letter dated 1st March, 2013 to the same effect having failed to cut any ice with the DMRC, the appellant preferred Writ Petition No.1853 of 2013 before the High Court of Delhi. That writ petition was notified for hearing on 1st May, 2013. In the meantime DMRC issued a Letter ofin favour of HRunder intimation to the appellant. The appellant, therefore, sought a restraint order against the award of the contract before the High Court who in turn accepted an undertaking given by the counsel for the DMRC and HR that they will not act in pursuance of the letter of award pending disposal of the writ petition.10. Alstom Transport India Ltd. was the only other bidder aggrieved by the award of the contract who filed Writ Petition No.2615 of 2013 challenging the tender process. Both the writ petitions were eventually heard by the High Court on 1st May, 2013 and dismissed by the order under appeal before us.

Court's reasoning:
23. The High Court has, in the case at hand, undertaken that exercise and concluded that there was neither any illegality nor any irregularity in the process of evaluation of the bids or the final allotment of the contract. That view has come to be assailed by the appellant on what is essentially a short point raised by Mr. Lalit in support of the appeal. The contention, as noticed earlier, is that while no malafide or extraneous considerations have prevailed to vitiate the decision of the DMRC allotting the contractin favour ofthe process of evaluation of the bids offered by the eligible bidders should have in the facts and circumstances of the case included validation of the GEC values offered by HR to determine whether they were achievable having regard to the ground realities and the laws of physics relevant to the consumption of energy. That contention does not suggest any illegality in the process of allotment of the contractin favour offor no violation of any law, rule or regulation governing the process of invitation of tenders by the DMRC or its evaluation and acceptance has been alleged or argued before us. No such statutory or other provision has been brought to our notice which could possibly provide to the appellant a reason to contend that the allotment of the contract was itself illegal or in breach of any such provision or procedure prescribed thereunder. It is nocase that the decision-making authority had not understood the law that regulates its decision making power or failed to give effect to it. We have, therefore, no hesitation in holding that the allotment of contract did not suffer from any illegality as it is understood in the matter of judicial review of administrative action and as that expression has been used by this Court in Tatacase (supra). It is also not the case of the petitioner that the decision taken by the DMRC is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind could have arrived at the same. Perversity or irrationality in the decision or the decision making process is also not a ground that can be invoked in the case athave, therefore, no hesitation in holding that the allotment of contract did not suffer from any illegality as it is understood in the matter of judicial review of administrative action and as that expression has been used by this Court in Tatae (supra). It is also not the case of the petitioner that the decision taken by the DMRC is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind could have arrived at the same. Perversity or irrationality in the decision or the decision making process is also not a ground that can be invoked in the case attherefore, do not see any real basis for the contention that the DMRC was supposed to go any further than it did in protecting its interest. In the absence of any specific stipulation or requirement for validation of the GEC values by the DMRC and its experts or by any outside agency such a requirement could not be implied into the tender process. Inasmuch as the DMRC found the bid offered by HR to be acceptable, keeping in view the GEC values offered by it, the former had committed no illegality in the evaluation of the bids or in making its choice of thedo not see any illegality or irregularity in the process of verification conducted by the DMRC to test the achievability of the GEC values. It is true that DMRC had conducted the simulation in regard to the GEC values offered by HR only but then in the absence of any condition in the tender notice requiring DMRC to conduct such verification even in regard to other GEC values, there was no need for it to undertake any such exercise. DMRC was, in our opinion, entitled to adopt such methods as were reasonable to satisfy itself above about the GEC values and their achievability offered by lowest tenderer in whose favour it was considering the award of the contract. The upshot of the above discussion, therefore, is that the process by which the bids were evaluated and eventually accepted was transparent, fair and reasonable and does not, therefore, call for any interference from thishave no hesitation in rejecting that submission. The Reference Order extracted above speaks for itself. It no where states that the Committee has to look at anything beyond the process of evaluation of tenders received by DMRC. It does not even remotely suggest that the Government is concerned about the procedures that may be followed in the future or anxious to devise transparent methods by which such contract should be allotted. What is notable is that thehands were not stayed by the Government even when the High Court had pronounced upon the validity of the procedures adopted by the DMRC and the matter reached this Court. Continuance of the process of review even after the High Court had delivered its judgment amounted to subjecting the judicial pronouncement to an administrative review. There was no question of any such judicial determination or adjudication being subjected to any administrative review albeit in the name of a Committee constituted for the purpose.Reliance by the appellant upon the report of the Committee is misplaced also for the reason that the same was ex parte. It is common ground that HR was never associated with the process of evaluation or verification if any conducted by the Committee. In the absence of any such opportunity to the party whose GEC values were being test checked for their achievability, the report can hardly provide a sound basis for a writ court to upset a decision which the competent authority has taken after due deliberations by not one but four different Committees including experts in the field. That apart, Mr. Parasaran fairly submitted that even the Government have not accepted the report submitted by the Committee so far. He urged that since the matter was pending in this Court, the Government has simply placed the report of the Committee in a sealed cover for the Court to decide as to what value has to be attached to it. That being the position, the preparation and submission of a report that does not even take the view point of the party affected by it into consideration can hardly provide to this Court a good reason to scuttle the entire process at this stage when HR, the successful bidder, has already taken substantial steps in the direction of executing the works allotted to it.32. Last but not the least, if the note submitted by the Director in the MoUD is an indication of what the Committee may have said, thethe GEC values pointed out in the report of the Director, may have led to CAF which was also an eligible bidder emerging as L-1 and not the appellant. In terms of cost of the project it would hardly make a sizable difference so as to justify a reversal of the steps that have already been taken for execution of a project that is of utmost importance for the people living in the national capital execution whereof can brook no delay especially when the same is being financed by an agency from outside the country.