M/s.MSPL Gases Limited v. M/s.Steel Authority of India Limited & Ors.

20. The above said course of action for re-tendering withnecessary clarification, correction as suggested by the ExecutiveDirector of the second respondent was communicated to the thirdrespondent herein over phone and based on the same, a proposal forre-tender for ASP was initiated on 02.02.2008, it is contended bythe respondents 1 to 3.21. It is further stated by the respondents 1 to 3 that inthe mean while, the fifth respondent also sent another letter dated02.02.2008, suggesting the points which are required to be kept inmind while seeking proposal for fresh revised prices as suggestedby them in the earlier letter dated 01.02.2008. But, the saidevaluation method suggested by the fifth respondent was notacceptable. It is further stated by the respondents 1 to 3 that,because of the above confusion and lack of clarity in the tenderdocument, in the matter of evaluation criteria, the view of thefifth respondent’s suggested course of action for getting revisedprice bid in his letter dated 01.02.2008, which was elaborated inhis another letter dated 02.02.2008 and the tentative decision ofthe third respondent, were all placed before the tender committeeagain on 02.02.2008 along with the suggestion made by the ExecutiveDirector (Operation) of the first respondent to go for re-tender ofASP. 22. It is the further case of respondents 1 to 3 that theplant level tender committee found that seeking revised priceswould not be in accordance with the existing Purchase ContractProcedure (PCP-06) and as such, the fifth respondent’s proposal forseeking fresh revised price bid is not acceptable. Further, theplant level tender committee recommended on 02.02.2008, that thecase may as well be re-tendered on open tender basis afterincorporating all the necessary clarifications and corrections inthe tender document including the suggestions made by the fifthrespondent. The said decision of the tender committee, according tothe respondents 1 to 3, was placed before the Executive Director ofthe second respondent on 04.02.2008, who in turn approved thedecision of the tender Committee for re-tender. It is furtherstated that, the second respondent placed the said re-tenderproposal before the Executive Director (Operation) of the firstrespondent SAIL, New Delhi. The Executive Director of the CorporateOffice sought the opinion from the General Manager and thePrincipal Law Officer who have opined that revised tender seems tobe the "better alternative". After taking the opinion from thePrincipal Law Officer of the first respondent, the ExecutiveDirector (Operation) of the first respondent SAIL, New Delhiapproved the recommendation of the plant level committee for re-tendering on 22.02.2008, it is contended by R1 to R3. https://hcservices.ecourts.gov.in/hcservices/

23. Thereafter, for re-tendering of ASP as approved by thefirst respondent, after due clearance from the Principal LawOfficer of the first respondent, for which decision was taken on22.02.2008 to go for re-tender, the second respondent placed theproposal for issue of fresh tender of Air Separation Plant beforethe approving authority on 22.02.2008, itself with necessarymodification in respect of technical specification as suggested bythe fifth respondent and in respect of evaluation criteria in thetender document. The competent authority approved the said re-tender as ASP package on 22.02.2008 itself. As the ExecutiveDirector of the second respondent was camping at New Delhi on thatday (i.e.) on 22.02.2008, the recommendation was faxed to theExecutive Director, the second respondent, who approved therecommendation and as such, the approval was informed to the thirdrespondent through fax on 22.02.2008 itself; it is contended.24. Thereafter, the second respondent sent letter dated23.02.2008 to all the three tenderers including the petitionerherein informing the cancellation of the previous tender dated13.11.2007 and the return of the EMD was being arranged andrequested to participate in the proposed re-tender. On 23.02.2008itself, notice inviting fresh tender(hereinafter called as 3rdtender) for establishment of Air Separation Plant was issuedindicating the last date for submitting and opening of the tenderas 15.03.2008, which was subsequently extended to 22.03.2008 andfurther extended to 31.03.2008. 25. In the meanwhile, the petitioner sent a letter dated01.02.2008 to the Chairman, SAIL, stating as if the fifthrespondent had recommended him as the lowest bidder and requestedhim to issue letter of acceptance. Subsequently, a letter dated04.02.2008, was sent by the petitioner to the second respondentherein claiming that the fifth respondent had recommended in hisletter dated 30.01.2008, that the petitioner was L1. There wereseveral letters sent by the petitioner to the first respondentrequesting the respondents 1 to 3 to give letter of acceptance onthe basis of the alleged recommendation made by the fifthrespondent by his letter dated 30.01.2008. 26. The re-tender notification No.PU-E 882802 dated23.02.2008 was issued under Tender Notice No.E/19 dated 23.02.2008.After the said tender notification, the petitioner has approachedthis Court by filing W.P.No.6425 of 2008 seeking to quash the saidtender notice N.E/19 dated 23.02.2008. On the same day, thepetitioner filed another writ petition in W.P.No.6426 of 2008 for awrit of mandamus to direct the respondents to issue letter ofacceptance to the petitioner as the successful bidder in the 2ndtender and to award the contract to him. That is how these two writpetitions are now before this Court for disposal. Since common https://hcservices.ecourts.gov.in/hcservices/ issues are involved in these writ petitions, they are disposed offby means of a common order.27. In W.P.No.6425 of 2008, as many as 21 grounds have beenraised. In the other writ petition namely in W.P.No.6426 of 2008,as many as 26 grounds have been raised. Almost all the groundsraised in both the writ petitions are common. The respondents 1 to3 have filed a detailed counter affidavit. 28. The main ground raised in both the writ petitions isthat the decision to go for fresh tender (3rd tender) is arbitrary,discriminatory and malafide. The said decision has been taken onlywith a view to favour the fourth respondent M/s.INOX Air ProductsLtd., to see that ultimately contract is awarded to the saidcompany. 29. The said contention of the petitioner is stoutly deniedby the respondents 1 to 3. According to them, at the outset, thepetitioner has no locus standi to maintain the writ petitions.Secondly, according to the respondents 1 to 3, the issues involvedin these writ petitions cannot be subjected to judicial review asthese issues do not fall within the scope of judicial review underArticle 226 of the Constitution of India. It is further contendedthat there was neither unreasonableness, nor arbitrariness normalafides in the action of R1 to R3. 30. Now, let me first consider the preliminary objectionraised by the respondents on the ground of locus standi of thepetitioner to maintain these writ petitions. As I have extractedabove, the objection is, having either failed or avoided toparticipate in the 3rd tender floated by the respondents 1 to 3, itis not open for the petitioner to question the said tender notice.31. In general, a person who had participated in the tenderprocess and whose tender was rejected can very well complain thathis tender had been wrongly rejected and the tender of someone elsehad been wrongly accepted. Admittedly, in this case, the petitionerhas not participated in the 3rd tender. While so, is it permissiblefor him under law to question the said tender process? In answer tothis question, the learned counsel for the petitioner would placereliance on a judgment of the Honourable Supreme Court in RAMANADAYARAM SHETTY v. THE INTERNATIONAL AIRPORT AUTHORITY OF INDIA (AIR1979 SC 1628). In the said case, the question of locus standi wasraised on the ground that a person who did not participate in atender process cannot question the acceptance of the tender of aparticipant. The Honourable Supreme Court rejected the saidargument as misconceived. In the said judgment, the HonourableSupreme Court has held as follows; https://hcservices.ecourts.gov.in/hcservices/ "The grievance of the appellant, it may benoted, was not that his tender was rejected asa result of improper acceptance of the tenderof the 4th respondent, but that he wasdifferentially treated and denied equality ofopportunity with the 4th respondent insubmitting a tender. His complaint was that ifit were known that non-fulfillment of thecondition of eligibility would be no bar toconsideration of a tender, he also would havesubmitted a tender and competed for obtaining acontract. But he was precluded from submittinga tender and entering the field ofconsideration by reason of the condition ofeligibility, while so far as the 4th respondentswere concerned, their tender was entertainedand accepted even though they did not satisfythe condition of eligibility and this resultedin inequality of treatment which wasconstitutionally impermissible. This was thegrievance made by the appellant in the writpetition and there can be no doubt that if thisgrievance were well founded, the appellantwould be entitled to maintain the writpetition." 32. In the above case, the writ petition came to be filedafter the acceptance of the tender of a tenderer. The appellant inthat case could not submit his tender as he was not informed aboutthe non-fulfillment of certain conditions of the tender, in respectof eligibility, would not be a bar for consideration for tendering.But, in the instant case, of course, there was no hurdle for thepetitioner to have participated in the 3rd tender. There was nodenial of opportunity to him in any manner to participate in thetender process. The petitioner cannot complain that there wasdiscrimination against him. The petitioner has not beendifferentially treated in any manner as it was the case of theappellant in the judgment of the Honourable Supreme Court citedsupra. Therefore, in my considered opinion, the principleenunciated in the said judgment would not be applicable to thepetitioner as there is no question of denial of equality ofopportunity. 33. It could have very well participated in the tender andthen come to this Court by way of a writ petition. But, it wouldhave been only an empty formality for the Petitioner to submit it'stender first, though according to the petitioner, the veryadministrative decision to go for fresh tender notice itself is notin accordance with law and the same suffers from unreasonableness, https://hcservices.ecourts.gov.in/hcservices/ arbitrariness and malice to unduly favour a particular company. Ifthe petitioner had waited till the award of contract was made infavour of a tenderer and then approached this Court to challengethe said award of contract, then there could be some force in theargument that the petitioner will have no locus standi. But, thatis not the case here. The petitioner has, well in advance, as soonas the tender notification was issued and the moment he felt thatthe administrative action of the respondents 1 to 3 in cancelingthe earlier tender process and in calling for the fresh tender, wasunreasonable, illegal arbitrary and malafide, has approached thisCourt. The administrative action deciding to cancel the earliertender process and to call for the fresh tender notice form part ofthe same transaction which are inseparable. When the petitionerchallenges the entire administrative decision namely canceling the2nd tender process and calling for fresh tender, in my consideredopinion, the petitioner has got locus standi to maintain thesewrit petitions. 34. The next ground of attack on the side of the respondentis, in respect of scope of judicial review of contract underArticle 226 of the Constitution of India. In TATA CELLULAR v. UNIONOF INDIA ((1994) 6 SCC 651) the Honourable Supreme Court afteranalysing various other judgments of the Honourable Supreme Courtin respect of the power of judicial review of the High Court underArticle 226 of the Constitution of India has deduced the followingprinciples;"1. The modern trend points to judicialrestraint in administrative action.2. The court does not sit as a Court ofappeal but merely reviews the manner in whichthe decision was made.3. The court does not have the expertiseto correct the administrative decision. If areview of the administrative decision ispermitted it will be substituting its owndecision, without the necessary expertise whichitself may be fallible.4. The terms of the invitation to tendercannot be open to judicial scrutiny because theinvitation to tender is in the realm ofcontract. Normally speaking, the decision toaccept the tender or award the contract isreached by process of negotiations throughseveral tiers. More often than not, suchdecisions are made qualitatively by experts. https://hcservices.ecourts.gov.in/hcservices/

5. The Government must have freedom ofcontract. In other words, fair play in thejoints is a necessary concomitant for anadministrative body functioning in anadministrative sphere or quasi-administrativesphere. However, the decision must not only betested by the application of Wednesburyprinciple of reasonableness (including itsother facts pointed out above) but must be freefrom arbitrariness not affected by bias oractuated by malafides.6. Quashing decisions may impose heavyadministrative burden on the administration andlead to increased and unbudgeted expenditure. "35. In CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF INDIA((2008) 8 SCC 606), the Honourable Supreme Court has held asfollows;"Since the power of judicial review is notan appeal from the decision, the Court cannotsubstitute its own decision. Apart from thefact that the court is hardly equipped to doso, it would not be desirable either. Where theselection or rejection is arbitrary, certainlythe court would interfere. It is not thefunction of a Judge to act as a superboard, orwith the zeal of a pedantic schoolmastersubstituting its judgment for that of theadministrator.The duty of the court is thus to confineitself to the question of legality. Its concernshould be:1. Whether a decision-making authorityexceeded its powers?2. committed an error of law;3. committed a breach of the rules ofnatural justice,4. reached a decision which no reasonabletribunal would have reached or,5. abused its powers.36. Similarly in RELIANCE AIRPORT DEVELOPERS (P) LTD., v.AIRPORTS AUTHORITY OF INDIA ((2006) 10 SCC 1) wherein theHonourable Supreme Court has re-affirmed the above view in thefollowing terms; https://hcservices.ecourts.gov.in/hcservices/ "25. In the multi-tier system in thedecision-making process the authority empoweredto take a decision can accept the viewexpressed by one committee in preference toanother for plausible reasons. It is not boundto accept the view of any committee. Thesecommittees, it needs no emphasis, areconstituted to assist the decision makingauthority in arriving at the proper decision.It is a matter of discretion of the authorityto modify the norms. It is not a case ofabsolute discretion.62. Therefore, to arrive at decision on"reasonableness" the Court has to find out ifthe administrator has left out relevant factorsor taken into account irrelevant factors. Thedecision of the administrator must have beenwithin the four corners of the law, and not onewhich no sensible person could have reasonablyarrived at, having regard to the aboveprinciples, and must have been a bona fide one.The decision could be one of many choices opento the authority but it was for that authorityto decide upon the choice and not for the courtto substitute its view.62. In essence, the test is to see whetherthere is any infirmity in the decision-makingprocess and not in the decision itself."37. Keeping in view the principles deduced by the HonourableSupreme Court time and again in the above referred to judgments, inmind, let me now analyse the facts of the present case to seewhether this Court should review the decision of the respondents 1to 3 to cancel the second tender process and to notify the thirdtender.38. According to the petitioner, the impugned notice callingfor fresh tender (3rd tender) is wholly arbitrary, discriminatoryand actuated by malice. If the petitioner is able to make out acase to substantiate his claim that the fresh tender notice fallsunder any one or more of the above, this Court has to necessarilyinterfere with the said decision of the respondents 1 to 3. 39. The reasons stated by the respondents 1 to 3 for takingthe above decision are precisely as follows; https://hcservices.ecourts.gov.in/hcservices/ a. There is lack of clarity in theevaluation mechanism prescribed in the tenderdocument dated 12.11.2007 (2nd tendernotification).b. Because of the lack of clarity, thetenderers have interpreted the same in theirown way and each one claimed that he was thelowest bidder.c. There were several representations fromthe tenderers claiming that the evaluationmechanism adopted by the fifth respondentnamely the consulting company was not correctand each one of them evolved it's ownevaluation mechanism.d. The consulting company namely the fifthrespondent in its communications dated01.02.2008 and 02.02.2008 indicated that theparties have not clearly understood the tenderrequirements/stipulations and have interpretedthe tender document differently to the extentof all of them claiming to be the successfulbidder. e. The fifth respondent further suggestedthat evaluation criteria be redefined so as toimpart clarity and certainty.f. Based on the representations of thetenderers and on the basis of the suggestionsof the fifth respondent the issue was discussedat various levels (as extracted in the previousparagraphs) and at last in the interest of theorganisation it was decided to cancel thesecond tender process and go for a fresh tendernotice with clarity in respect of theevaluation mechanism. 40. But, the contentions of the petitioner arethus;(a) There was no lack of clarity inevaluation mechanism as stated by therespondents 1 to 3. https://hcservices.ecourts.gov.in/hcservices/ (b) The contention of the respondentsthat numerous representations were received(after the opening of the price bids on14.01.2008) which shall show the confusion inthe minds of the tenderers is baseless anduntenable. (c) The fifth respondent made a finalrecommendation on 30.01.2008 itself in favourof the petitioner recommending to therespondents 1 to 3 that the petitioner was thelowest bidder and so, on accepting the same,contract should have been awarded to thepetitioner.(d) The respondents 1 to 3 have not come beforethis Court with clean hands inasmuch as therespondents 1 to 3 have denied therecommendation made by the fifth respondentthrough its letter dated 30.01.2008.(e) The contention of the respondents 1 to 3that the letter dated 30.01.2008 of the fifthrespondent is only an alternativeevaluation/calculation cannot be accepted,since the said letter clearly indicates that itis a final recommendation.(f) Respondents 1 to 3 have acted arbitrarilyby ignoring the recommendation of the fifthrespondent dated 30.01.2008.(g) There is no lack of transparency in theentire tender process during the 2nd tendernecessitating cancellation of the same.(h) The decision to cancel the 2nd tender and togo for the 3rd tender is actuated by malice andthere are factual foundations to establish thesame. 41. The learned Senior Counsel for the petitioner placedreliance on the following decisions:(i) DIRECTOR OF EDUCATION v. EDUCOMP DATAMATICS ((2004) 4 SCC19) wherein the Honourable Supreme Court, while dealing with thescope of judicial review to interfere with the terms of a tendernotice, has held as follows; https://hcservices.ecourts.gov.in/hcservices/ "13. The courts would not interfere withthe terms of the tender notice unless it wasshown to be either arbitrary or discriminatoryor actuated by malice. While exercising thepower of judicial review of the terms of thetender notice the Court cannot say that theterms of the earlier tender notice would servethe purpose sought to be achieved better thanthe terms of tender notice under considerationand order change in them, unless it is of theopinion that the terms were either arbitrary ordiscriminatory or actuated by malice."ii. GLOBAL ENERGY LTD. v. ADANI EXPORTS ((2005) 4 SCC 435),the Honourable Supreme Court has held as follows;"10. The principle is, therefore, wellsettled that the terms of the invitation totender are not open to judicial scrutiny andthe Courts cannot whittle down the terms of thetender as they are in the realm of contractunless they are wholly arbitrary,discriminatory or actuated by malice."iii) NOBLE RESOURCES v. STATE OF ORISSA ((2006) 10 SCC 236)wherein the Honourable Supreme Court has held as follows;"15. it is trite that if an action on thepart of the State in violative the equalityclause contained in Article 14 of theConstitution of India, a writ petition would bemaintainable even in the contractual field. Adistinction indisputably must be made between amatter which is at the threshold of a contractand a breach of contract;whereas in the formerthe court's scrutiny would be more intrusive,in the latter the Court may not ordinarilyexercise its discretionary jurisdiction ofjudicial review, unless it is found to beviolative of Article 14 of the Constitution.While exercising contractual powers also, thegovernment bodies may be subjected to judicialreview in order to prevent arbitrariness orfavoritism on its part."42. At the out set, on going through the above judgments ofthe Honourable Supreme Court cited supra, I am of the view that theprinciples stated in the above judgments have got no relevance tothe facts of the present case at all. In those cases, certain termsand conditions incorporated in the tender documents came to bechallenged and, the Honourable Supreme Court considered whether https://hcservices.ecourts.gov.in/hcservices/ such terms and conditions are arbitrary, unreasonable or actuatedby malice. But in the case on hand, the terms and conditions of thetender notice (3rd tender) are not under challenge and thechallenge is only to the decision of the respondents 1 to 3 tocancel the earlier tender process (2nd tender) and call for a freshtender (3rd tender). If it is the grievance of the petitioner thatthe 3rd tender notification is liable to be quashed, as some of theterms and conditions incorporated in the said tender notice arearbitrary, unreasonable or actuated by malice, then the principlesenunciated in the above judgments would have relevancy. Here thepetitioner does not challenge the 3rd tender notification on anysuch ground. 43. Applying the principles deduced in TATA CELLULAR casefollowed in many other cases cited supra, let me now analyse therival contentions of the parties in the instant case.44. The Steel Authority of India Limited is governed byPurchase/Contract Procedure 2006 (in short PCP-2006) adopted on 3rdOctober 2006. The preface to PCB-2006 says that the most importantfunction of public procurement is to maintain transparency whichnot only ensures a level playing field to the suppliers/contractorsbut also results in qualitative improvement in material/servicesreceived due to increased competition.45. Clause 6.17 of PCP-06 provides for constitution of TenderCommittee. The functions of tender committee would be as follows;a) To constitute Technical EvaluationCommittees (TEC) & Commercial EvaluationCommittees (CEC) and also sub-committees, ifrequired, in consultation with the TEC & CEC.TEC & CEC shall function concurrently.b) To monitor the progress made by the TEC& CEC and Consultants.c) To examine the recommendations of TEC &CEC and Consultants.d) To take decision to open the price bidsafter freezing the Technical & Commercialconditions.e) To evaluate the price offers, conductnegotiation with L-1 tenderer, if required,without any further approval and put up therecommendations of order placement to theCompetent Authority after justifying thereasonability of the price. https://hcservices.ecourts.gov.in/hcservices/ The Committee should complete the scrutinyand give the recommendations to the CompetentAuthority within a period of three months fromthe date of opening of the tender or one monthfrom the date of receipt of recommendationsfrom the Technical & Commercial EvaluationCommittees.46. Clause 6.17.3 deals with the functions of the TechnicalEvaluation (TEC) as under;a) To scrutinise the Technical part of thetender and the recommendations of theconsultants/Technical Evaluation Sub Committee,if any.b) To conduct clarification meetings withthe tenderers.c) To evaluate the performance of on-goingwork/contract, if any in SAIL includingSubsidiaries.d) To give the recommendations to theTender Committee.e) To assist the Tender Committee, ifrequired.The TEC should complete the scrutiny andsubmit the recommendations to the TenderCommittee within a period of two months fromthe date of opening of the tender.47. Clause 6.17.4 deals with the functions of the CommercialEvaluation Committee (CEC) as under:a) To scrutinise the Commercial part of thetender and the recommendations of theconsultants or Commercial Evaluation SubCommittee, if any.b) To conduct clarification meetings withthe tenderers.c) To give the recommendations to theTender Committee.d) To assist the Tender Committee, ifrequired.The CEC should complete the scrutiny andsubmit the recommendations to the TenderCommittee within a period of two months from thedate of opening of the tender.48. Clause 7.17 deals with opening of tenders as under;"Where tenders are issued in 2/3 parts,only the techno-commercial bids (including thatof trial parties) shall be opened on the tender https://hcservices.ecourts.gov.in/hcservices/ opening date. The price bid shall not beopened, but, after signing on the envelopes,shall be kept under lock and key till thereceipt of final technical/commercialrecommendations from theIndentor/Consultants/Negotiating Committee. Incase, the quoted techno-commercial bids are inconformity to that of the tender, the pricebids received shall be considered for opening.In case the techno-commercial bids need to bediscussed and clarified by the tenderers,clarification meetings should be held withthem. However,clarifications/confirmations/details soughtfrom the tenderers should not amount to changein basic structure and specifications of theTender Documents. After clarification meetingsand freezing of the technical and commercialbids, the tenderers should be advised toconfirm the validity of their price bids. Inthe event, tenderers desire to update theirprice bids, and it is permitted, theopportunity to be provided to all techno-commercially accepted tenderers."49. Clause 9.2.1 deals with "quotations" as under:"The techno-commercial bids after itsopening as per Para 7.17, shall be evaluated bythe Indentor/Tender Committee and, whereverapplicable, comments recommendations of theConsultants would be obtained. In caseevaluation is done by the Indentor, acomparative statement of techno-commercialscrutiny of all the tenders shall be preparedand given along with its recommendations to theMM Deptt./Contract Cell within seven days ofthe receipt of the Techno-commercial bids.9.2.2 The Technical & CommercialEvaluation Committees may discuss the techno-commercial bids with the tenderers. Aftercompletion of discussions and freezing thetechno-commercial conditions, the Technical &Commercial Evaluation Committees shall submittheir recommendations to the Tender Committee.After due deliberations, the Tender Committeeshall open the valid price bids for finalevaluation of the tender including the priceand submit its recommendation for the approvalof the Competent Authority for placement of https://hcservices.ecourts.gov.in/hcservices/ order/award of contract to the suitabletenderer.50. Clause 9.4 deals with Comparative Statement of price bidsas under;9.4.1. After completion of the techno-commercial scrutiny, a explained in Paras 9.1and 9.2, the price bids shall be opened andevaluated. At this stage if price bids are lessthan X+2, prior approval of Competent Authoritybe obtained for opening the price bids.9.4.4 The evaluated prices as per Paras9.4.1 to 9.4.3 worked out in the comparativestatement for difference tenderers will beranked as L-1, L-2, L-3 . . . . . . .L-1 beingthe lowest. The estimated price, as per theindent and its percentage variation from thetotal quoted price worked out as percomparative statement for each tenderer, willalso be recorded in the comparative statement.51. The above are the relevant Clauses in PCP-06 which wouldmake one understand as to how, a tender is floated, processed andfinalised and who are the functionaries involved in the process andtheir powers and duties. In the light of the above provisions, letme further analyse the case.52. It is the case of the petitioner that there was no lack ofclarity prescribed in the tender documents and in an arbitrary andunreasonable manner and on a false ground, the 2nd tender processhad been cancelled. 53. The evaluation criteria according to the second tendernotice is as follows;1. The total cost of all the three gasesincluding fixed charges for fifteen (15) yearsshall be brought down to Net Present Value ofthe gases.2. An escalation @ 5% p.a. shall beapplicable for power rates only for thecontract period.3. A discounting factor of 10% shall bethe basis for computing the Net present value. https://hcservices.ecourts.gov.in/hcservices/

4. For the purpose of evaluation, oneuniform Power Cost on base date shall beconsidered for all the three gases.54. A glance through the above evaluation criteria in thesecond tender notification would go to show that there is nodefinite evaluation mechanism mentioned therein, in the sense,whether the evaluation has to be made on the basis of Average FlowRate per hour or on the basis of days requirement of all the threegases. From the records placed before me, I am not able to findthat this aspect was anytime discussed when the Techno Commercialbids were opened and when the tenderers participated in thediscussions held on 20.12.2007 to 21.12.2007. All that could begathered would be that certain deviations in the tender documentssubmitted by Inox Air Products and Prax Air were noticed duringnegotiations; same was brought to the notice of theirrepresentatives and when they were informed that such deviationswere not permissible, they withdrew their deviations. 55. It is admitted in paragraph 20 of the counter affidavit bythe respondents 1 to 3 that after the withdrawal of the deviationsby the tenderers, the Technical Evaluation Committee (TEC) andCommercial Evaluation Committee (CEC) recommended on 10.01.2008that all the three parties are Techno Commercially eligible.Thereafter, Inox Air Products and Prax Air submitted revised pricebids also. The price bids of all the tenderers were admittedlyhanded over to the fifth respondent for the purpose of evaluationto arrive at Net Present Value (NPV) and consequently to calculatethe total cost for the contract period of 15 years as contemplatedin the tender documents.56. The price bids were thereafter opened on 14.01.2008. It isstated by the petitioner that on such opening, the petitionercompany was found to be the L-1. But the fifth respondent appearsto have not prepared the comparative statement of price bids atonce. Between 14.01.2008 and 30.01.2008, there were representationssent in writing by the tenderers, including the petitioner. 57. On 14.01.2008, the Prax Air sent a representation to therespondents 1 to 3 wherein in respect of the evaluation criteriaadopted by the fifth respondent on the day of opening of the pricebids, Prax Air stated as follows;"We understand that there is some lack ofclarity on the flow rates to be considered forevaluation. We strongly feel that Price Bidevaluation should be done on the basis of dailyaverage flow required by SSP indicated in thetender (Gaseous Oxygen:51,600 NM3/day, GaseousNitrogen:22,500 NM3/day, and Argon:11,500 https://hcservices.ecourts.gov.in/hcservices/ NM3/day), and not on the basis of productioncapacity of the Oxygen Plant. This is becauseSSP will make payments on the basis of theiraverage daily requirement, and not on the basisof production of the Oxygen Plant.As per current statutory tax and dutystructure prevalent in India, excise duty andlocal ST are CENVATable and VATablerespectively. Accordingly, we request you to dothe price bid evaluation on Net of CENVAT andNet of VAT basis. This is a true reflection ofthe Total Gas Price indicated in the tender,because this will be the net outgo for SSP."58. On 15.01.2008 Prax Air India Private Limited sent anothercommunication wherein, it stated as follows;"We understand that your consultant, M/s.MNDastur has chosen to do the Price Bid Evaluationbased on Plant Production Rate for GaseousOxygen & Nitrogen, and Day Requirement forGaseous Argon. We would like to bring to yourkind attention that this is an erroneous methodof evaluation. The correct mode of evaluationshould be based on your Day requirement for allgases (gaseous oxygen, nitrogen and argon). Werequest you to refer to Preamble Art.1.1 (3rdparagraph) of Specification No.SSEP-04-UTL-001(Rev.01), and to Annexure-II of the DraftAgreement.The lowest bidder as per MN Dastur's chosenmethod will charge SSP an additional Rs.12 lakhsper month at your Day Requirement level. Pleasefind enclosed detailed calculation of themonthly invoice to SSP for all the bidders atthe Day Requirement level.Hence, we request you to do the Price BidEvaluation based on your Day Requirement for allgases and not on Average Flow Rate for somegases, as this will increase the overall monthlygas cost for SSP as demonstrated above."59. From the above said two representations, it is clear thataccording to Prax Air, evaluation should be made on day requirementbasis in respect of all the three gases and the price bidsevaluation on Net of CENVAT and Net of VAT basis should also bedone.60. On 16.01.2008, the petitioner sent a representation tothe respondents wherein he had stated as follows; https://hcservices.ecourts.gov.in/hcservices/ "We are happy to note that M/s. MSPL Gaseslimited was the lowest bidder as calculatedbased on the evaluation criteria specified inyour price format attached to the tenderdocuments (i.e. escalation of 5% applicable forPower rates for the contract period and adiscounting factor of 10% shall be the basisfor computing the net present value)."61. On 16.01.2008, the respondent Inox sent a representationto the following effect;"We understand that the NPV calculations,as done by MN Dastur & Company, are on thebasis of Average Flow Rate for Gaseous Oxygenand Nitrogen, but for Argon they have used theday's consumption as mentioned in Annexure-IIof the Draft Agreement. You will appreciatethat this cannot be the basis of evaluation andhence it should only be evaluated either on thebasis of Day's Requirement for all three gasesor Average Flow Rate per hour of all threegases, as per Annexure-II of the DraftAgreement, as mentioned above."A comparative table of all the three gases onNm3 per Day as per annexure 2 of the draftagreement is also attached to the saidcommunication.62. On 16.01.2008, the respondent Inox sent anothercommunication wherein it has been stated as follows;"We understand that the NPV calculationsare being done by M N Dastur & Company on thebasis of Average Flow Rate for Gaseous Oxygenand Nitrogen in conjunction with day'sconsumption of Argon. You will appreciate thatthis cannot be the basis for evaluation fromthe "Principles of Equity" and hence it shouldbe evaluated either on the basis of DayRequirement of Average Flow Rate as perAnnexure-II as mentioned above."63. While so, the petitioner sent a letter dated 18.01.2008wherein inter alia it has stated as follows;"From this, it is evidently clear that thequantity of argon gas to be outsourced was notabove 20 tpd taking into account the expectedproduction of 2 tpd from the Air SeparationUnit to be installed by the Successful bidder." https://hcservices.ecourts.gov.in/hcservices/ "Therefore the quantities of Argon Gasindicated in the Annexure II under average flowrate per hour or per day requirements has norelevance to the quantities to be taken forevaluation beyond the Argon gas quantityproduced from the plant in total disregard tothe stipulations made at various places in thebid documents in express terms. To bring moreclarity on the subject the tender documents hasclearly brought out and frozen the quantity to20 tons per day of argon gas to be outsourcedand supplied which finds specific mention atvarious places in the tender document. Thesestipulations are specified in express terms andtherefore, can not be ignored and disregarded.This is therefore, relevant for eligibility andevaluating the price impact.After evaluation and qualifying thetechnical bids and having given finalopportunity to the tenderers to seek anyclarifications before submitting the price bidsvide your letter no:PU-E 88280 1R dated11.01.2008, entertaining and considering anyother interpretation and proposal from any ofthe unsuccessful bidders will amount to adeviation from the evaluation guidelinesprescribed in the bid document after submissionof price bids and should not be permitted bySSP."64. On 19.01.2008 another letter was sent by the petitionerwhich contains almost the similar contentions. Again on 19.01.2008,the Prax Air has sent a letter wherein the Prax Air has contendedas follows;"Your daily requirement is given inAnnexure-II of the draft agreement. We alsobring to your notice the steel production andthe corresponding gas requirement indicated inthe preamble to the ITT. Additional productionabove 179.400 t/year of liquid steel in EAF,189, 350 t/year of liquid steel in AOD, andhigher consumption gases thereof appears to bebeyond the scope of the subject tender.Accordingly, we maintain that the "ContractedRequirement", and the "Contracted Quantity" areboth equal to the daily requirement indicatedin the Annexure-II of the draft agreement andthe Preamble of the ITT, which is 51,600 Nm3/hr https://hcservices.ecourts.gov.in/hcservices/ for gaseous oxygen, 22,500Nm3/hr for gaseousnitrogen, and 11,500Nm3/hr for gaseous argon.We trust that you will look into this usingyour esteemed judgment and agree with us onthis matter."65. On 21.08.2008, the petitioner has sent anotherrepresentation wherein the petitioner has stated as follows;"There is inconsistency in the figuresshown against Gaseous Argon requirement inAnnexure-II. Therefore, in order to know thecorrect figure of outsourcing requirement oneneeds to go deeper and find out whether at anyplace in the tender document requirement ofGaseous Argon specified or quantified and takingall the stipulations in account harmoniouslywhich one is the correct requirement havingregard to the object i.e. the processrequirement of the Argon Gas which is clearlyspecified in the Preamble as explained above.In other words, if there is a doubt aboutwhich of the two interpretations or meaning isthe correct one, then they have to be givenharmonious interpretation having regard of theobject which the process requires.It is well recognized and established ruleof interpretation of tender conditions thatexpressions used therein should ordinarily beunderstood in a sense in which they bestharmonise with the object of the tender. Anyother interpretation that frustrates the presentpurpose of the tender will not be fair."66. On 21.01.2008, the Prax Air sent another letter whereinit is stated as follows;"We would like to highlight that we arethe lowest bidder at the "Day Requirement"level, and our competitors monthly bill at thislevel is higher than ours by Rs.12-17 lacs.Please find below detailed calculation of themonthly invoice to SSP for all the Bidders atthe "Day Requirement" levelPraxairINOX-APMSPLFixed FacilityFee(Rs lacs/month) 59.5125.0100.00 https://hcservices.ecourts.gov.in/hcservices/ PraxairINOX-APMSPLGaseous OxygenBill (Rslacs/month)(51,600 x 358 x5.68)/12/100,000=87.44(51.600 x 358 x4.61)/12/100,000=70.97(51.600 x 358 x4.00)/12/100,000=61.58Gaseous nitrogenbill (Rslacs/month)(22,500 x 358 x2.22)/12/100,000=14.90(22,500 x 358 x1.00)/12/100,000=6.71(22,500 x 358 x0.80)/12/100,000= 5.37Gaseous argonbill(Rs lacs/month)(11,500 x 358 x22.00)/12/100,00=75.48(11,500 x 358 x15.00)/12/100,00=51.46(11,500 x 358 x24.00)/12/100,000=82.34Total outgo forSSP (Rslacs/month)237.32254.14249.29Higher than Praxair monthly billby (Rslacs/month) -16.8211.97 In fact, our monthly billing will be lowerthan all our competitors' over the entire rangeof expected operation. The graph showing thecomparison between the monthly billing figuresfor all bidders is enclosed as annexure-I.Hence, we request you to do the Price BidEvaluation based on your "Day Requirement" forall gases on "net of CENVAT/VAT" basis.We trust that you will look into thisusing your esteemed judgment, and agree with uson this matter."67. On 22.01.2008, the petitioner sent another letter whereinit is stated as follows;"From the above it is clear that there wasno bout or any ambiguity among SSP and allbidders about the contracted requirement ofArgon Gas which was admittedly 20 TDP only. In view of the above stipulations made inthe bid document as conveyed Vide our abovereference letter including the letter dated21.01.2008 there is no scope for taking anyother interruption about contracted requirementof Argon." https://hcservices.ecourts.gov.in/hcservices/

68. On 23.01.2008, the respondent Inox Air has sent anotherletter wherein it claimed as follows;"In view of the above, it is abundantlyclear and contract specific that the evaluationof the offer shall be made on the followingbasis:GasUOMAverage FlowGOXNm3/Hr3500HP GAN Nm3/Hr1200GARNm3/Hr825.0On the basis of the above INOXAP's offer becomes the Lowest."69. From the above correspondences from the tenderers, it isvery obvious that there was no clear understanding of theevaluation criteria. It is evident that each company claimed thatthe evaluation criteria adopted by it alone is correct.70. As per Annexure-II (Draft Agreement), Requirement of Gasesis as follows;Sl.No.ProductParameters Unit Oty1 GaseousOxygen Purity% O2(BalanceArgon)99.6 to 99.8PressureKg/Cm^224Day RequirementNm^3/day51600Average FlowrateNm^3/hr35002 HighPressure GaseousNitrogen Purity2 ppm O2MaximumsamePressureKg/Cm^222Day RequirementNm^3/day22500Average FlowrateNm^3/hr1200 https://hcservices.ecourts.gov.in/hcservices/ 3 LowPressure GaseousNitrogen Purity2 ppm O2maximumsamePressureKg/Cm^27-9Day RequirementNm^3/day250(ForOccasionalPurging oftheaccumulator)Average FlowrateNm^3/hr- ---4 GaseousArgon Purity< 2ppm O2<2ppm N2and maximumtotalimpurities5 ppmsamePressureKg/Cm^222Day RequirementNm^311500Average FlowrateNm^3/hr82571. At this juncture, once again it is necessary to reproducethe evaluation criteria as per the tender documents. 1. The total cost of all the three gasesincluding fixed charges for fifteen (15) yearsshall be brought down to Net Present Value ofthe gases.2. An escalation @ 5% p.a. shall beapplicable for power rates only for thecontract period.3. A discounting factor of 10% shall bethe basis for computing the Net present value.4. For the purpose of evaluation, oneuniform Power Cost on base date shall beconsidered for all the three gases.72. From the requirements of Gases as found in annexure-II ofthe draft agreement it could be seen that requirement of GaseousOxygen per day is 51600 Nm^3 and the Average Flow rate is 3500Nm^3/hr. The requirement of Gaseous Nitrogen per day is 22500 Nm^3and Average Flow rate is 1200 Nm^3/hr. The requirement of GaseousArgon per day is 11500 Nm^3 and Average Flow rate is 825 Nm^3/hr. 73. This would go to show that in respect of all the threegases, the value of the quantity of gases to be supplied per day https://hcservices.ecourts.gov.in/hcservices/ should be calculated for evaluation purposes. To put it otherwisein respect of all the three gases, evaluation is to be made on thebasis of the days requirement. Average Flow rate means supply ofthe required gas in a particular pressure/hr on a day. There shouldbe a minimum average flow rate of all the three gases as mentionedin the annexure 2 of the draft agreement. If it is theinterpretation of the petitioner that the average requirement perday should be the basis for evaluation, that should be done inrespect of all the three gases. To put it in a more understandablemanner, either evaluation should be made for all the three gases onthe basis of days requirement or on the basis of average flow rateper hour. This is the plain interpretation one could reasonablygive on going through the draft agreement.74. There is yet another reason to state that the evaluationcriteria stated in tender documents and the requirement of gasesstated in annexure 2 of the draft agreement are inconsistent. Ifthe average hourly flow rate (Nm3/hr) is converted into day'srequirement (Nm3/day) (hourly flow rate in Nm3/hr of gas multipliedby 24 hrs,) the resultant figure should tally with the day'srequirement mentioned in the annexure II. But it differs from theday's requirement as given in Annexure -II as detailed below;GasHourly flow rate converted into day requirement NM3/hrX24 =Day requirement asprovided in Annexure -IIOxygen3500X24=84,000 i.e.,(120 TPD)51,600 (73.71 TPD)Nitrogen1,200X24=28,800 i.e., (36 TPD)22,500 (28.125 TPD)Argon825X24=19,800 i.e., (35.35TPD)11,500 (20.5 TPD) 75. From the above it could be easily found that the dailyrequirement per hour calculated on the basis of the hourly flowrate do not tally with the annexure. The tender documents do notalso say whether gases are to be supplied for 365 days continuouslyin a year for a period of 15 years. It is also not clear whethersupply is to be made for all the 24 hours in a day. Thus, theannexure II to the draft agreement instead of clarifying theevaluation method in the tender document, goes to confuse the same.76. While so, a letter dated 30.01.2008 allegedly came to besent by the fifth respondent to the respondents 1 to 3. Though inthe counter it is stated that the respondents 1 to 3 did notreceive any such letter from the fifth respondent dated 30.01.2008,in the absence of any counter filed by the fifth respondentexplaining this, there is every possibility for this Court toassume that such a letter would have been sent to the respondent 1to 3 by fifth respondent. On such assumption, let me now analysethe said letter. In that letter dated 30.01.2008, the fifth https://hcservices.ecourts.gov.in/hcservices/ respondent made evaluation in respect of Oxygen and Nitrogen ondays requirement basis but in respect of Argon alone it made onAverage Flow rate per hour basis. In my considered opinion thisevaluation cannot be correct.77. Now, the next question is; what is the force or effect ofthis letter dated 30.01.2008 on the respondents 1 to 3? It may betrue that such a letter was sent on 30.01.2008 by the fifthrespondent to respondents 1 to 3. But, the ultimate authority tomake the evaluation is only the Tender Committee. The fifthrespondent is only the consultant who could only suggest. Ofcourse, as per the letter dated 30.01.2008, the petitioner was L-1.But it does not mean that the said evaluation so made by the fifthrespondent would bind either the tender committee or the otherauthorities of the respondents 1 to 3. Even in the absence of anyother communication from the fifth respondent and assuming that theletter dated 30.01.2008 was the final recommendation made by thefifth respondent, even then, it is quite within the competence ofthe tender committee and the other authorities of the respondents 1to 3 to examine whether the evaluation made by the fifth respondentis correct and the same would be in the interest of SAIL.Therefore, there can be no doubt that the respondents 1 to 3 arenot bound by the letter dated 30.01.2008 of the fifth respondent asthe evaluation is to be made finally only by the Committee. 78. On the next day, that was on 01.02.2008, the fifthrespondent sent another letter to the Steel Authority of Indiawherein it has stated as follows;"In view of the above and to give one moreequal opportunity to the bidders, we areproposing that SSP may consider requesting allthe eligible bidders to submit fresh pricesonce again defining once again the evaluationcriteria and other applicable contract terms."79. This letter, according to the learned Senior Counselappearing for the petitioner, would have been got only to favour"Inox" so as to reject the evaluation made in favour of thepetitioner. It is contended by the learned Senior Counsel that theletter dated 30.01.2008 indicates that it was the finalrecommendation. Admittedly, there was no representation madebetween 30.01.2008 and 01.02.2008, but the letter dated 01.02.2008states as if the said letter came to be written on considering therepresentations received from all the parties. The learned SeniorCounsel would, therefore, question as to how this letter could cometo be written when, in fact, there was no representation from anytenderer between 30.01.2008 and 01.02.2008. https://hcservices.ecourts.gov.in/hcservices/

80. Per contra, the learned Senior Counsel for the respondents1 to 3 would submit that the representations referred to in theletter dated 01.02.2008 would refer to the representations receivedprior to 30.01.2008. The learned Counsel for the fifth respondentwould also say so. In my considered opinion, for the fifthrespondent, being the consultant of the respondents 1 to 3, thereis no bar to change its opinion and to send any number ofcommunications. Had it been true that the letter dated 01.02.2008came to be issued at the instance of respondents 1 to 3, one canexpect the fifth respondent to have suggested for cancellation ofthe entire tender process and to go for fresh tender process. Butin the letter dated 01.02.2008, the fifth respondent has onlyrequested R1 to R3 to define once again the evaluation criteria andto call for fresh bids from the parties. In my considered opinion,being the consultant, the fifth respondent is free to make suchsuggestions. Thus, the argument of the learned Senior Counsel forthe petitioner that the letter dated 01.02.2008 would have been gotup at the instance of the respondents 1 to 3 is liable to berejected. 81. From the records, it is seen that the letter dated01.02.2008 and all the representations made by the parties wereplaced before several authorities of the respondents 1 to 3.82. It is stated in the counter that the possibility ofdefining the evaluation criteria afresh and to call for fresh pricebids was also discussed at various levels. But, the said Course wasnot possible since the same would be against the tender conditions.The said contention deserves to be accepted. Here it should be keptin mind that it is not as if, immediately on receiving the letterdated 01.02.2008 from the fifth respondent, the decision to cancelthe 2nd tender process and to call for re-tender was taken. 83. The above matter was considered by the plant level tendercommittee and it decided not to seek for revised price bids assuggested by the fifth respondent. As extracted in the previousparagraphs, the matter was discussed at various levels ofrespondents 1 to 3 and finally it was decided to cancel the 2ndtender and to go in for re-tender by incorporating necessarychanges in the evaluation criteria which lacks clarity (asconcluded in the previous paragraphs) which lead to differentinterpretations by the bidders. 84. Now, let me see whether, really in the 3rd tenderdocuments such changes have been introduced in order to obviatethe different interpretations by the bidders. In the 3rd tenderdated 23.02.2008, which is now under challenge, the evaluationcriteria have been stated as follows; https://hcservices.ecourts.gov.in/hcservices/

1. Price bid evaluation will be done onNet of CENVAT and Net of TNVAT basis.2. For the purpose of evaluation of Pricebids and for calculating the total variablecost of gases, the contracted quantity ofOxygen shall be taken as 75600 NM3/day, HPNitrogen as 28800 NM3/day and Argon as 11200NM3/day. The number of days in a year shall betaken as 358 (i.e. 365 days less 7 days ofannual schedule maintenance).3. The total variable cost, net of CENVAT& TNVAT, of all the three gases (Oxygen, HP-Nitrogen & Argon) and fixed facility chargesexcluding taxes and duties shall be calculatedfor fifteen (15) years and brought down to NetPresent Value (NPV) of the gases. The taxes andduties, if any, applicable on fixed facilitycharges as indicated under fixed facilitycharges will not be taken for the purpose ofevaluation. 4. As escalation @ 5% p.a. shall beapplicable for power rates for all three Gases(Oxygen, HP-Nitrogen & Argon) during Contractperiod of 15 years only for the purpose ofevaluation.5. A discounting factor of 10% shall bethe basis for computing the Net Present Value(NPV).6. For evaluation purpose, the notionalPower Cost on base date i.e.; Rs.4.86/=(Rupeesfour and paise eighty six only) per unit shallbe considered for Oxygen and HP Nitrogen gases.7. For evaluation purpose, the notionalPower cost on base date i.e. Rs.4.86/=(Rupeesfour and paise eighty six only) per unit shallbe considered also for Argon gas irrespectiveof the source/state of supply.8. Extent of leased land required or leaserent paid by SELLER, will have no impact onevaluation criteria." https://hcservices.ecourts.gov.in/hcservices/

85. A perusal of the above evaluation criteria stipulated inthe impugned tender documents would go to show that it has beenclarified that evaluation of price bids and for calculating thetotal variable cost of gases, the contracted quantity of all thegases (Oxygen, Nitrogen and Argon) shall be on NM3/day requirementand the number of days shall be 358 that means less 7 days ofannual schedule maintenance. In the annexure-II of the draftagreement, the contract quantity of gases is stated as follows;Sl.No.ProductParametersUnitValue 1. GaseousOxygenPurity% O2(BalanceArgon)99.6 to 99.8PressureKg/Cm2(g)24Avg.ConsumptionNm3/day75600 2. HighPressure GaseousN2 Purityppm2ppm O2MaximumPressureKg/Cm2(g)22Avg.ConsumptionNm3/day28800 3. GaseousArgonPurityppm<2ppm O2<2ppm N2 andmaximumtotalimpurities 5ppmPressureKg/Cm2(g)22Avg.ConsumptionNm3/day1120086. A glance through the said annexure would go to show thatthe Hourly Flow Rate of all the three gases as found in the 2ndtender has been given up and only Average Consumption per day ofall the three gases is mentioned. There is no contradiction betweenthe evaluation criteria for contracted quantity of gases mentionedin the tender notification and the contracted quantity of gasesstated in annexure-II of the Draft Agreement. The evaluationcriteria further clarifies that the total variable cost, net ofCENVAT and TANVAT of all the three gases and fixed facility charges https://hcservices.ecourts.gov.in/hcservices/ excluding taxes and duties shall be calculated for 15 years andbrought down to Net Present Value (NPV) of the gases. But, in theprevious 2nd tender, there is no such reference about the CENVAT andTNVAT. Two more Clauses have also been incorporated in the 3rdtender documents. Now, in my considered opinion, a reading of theevaluation criteria and the contracted quantity of the gases asfound in the 3rd tender documents would not lead to more than oneinterpretation. The terms and conditions are simple, precise andclear. This shows that the cancellation of the second tender and togo in for the 3rd tender is only with good intention in the interestof SAIL and not with a view to favour "Inox" as contented by thelearned Senior Counsel for the petitioner.87.The learned Senior Counsel appearing for the petitionerwould submit that various circumstances are available in this caseto infer malafide intention. He would submit that though in thefirst tender floated, recommendation was made by the fifthrespondent in favour of "BOC India Ltd.," without assigning anyreason, the same was cancelled which itself was only to favourInox. Admittedly, in the 1st tender, the company, which was the L1(BOC India Limited), did not challenge the decision of theauthorities. Though the petitioner MSPL Gases Limited was also abidder, the petitioner did not choose to challenge the same.Therefore, it is too late on the part of the petitioner to contendthat the 1st tender itself was cancelled only to favour Inox. Unlessthe cancellation of the 1st tender is challenged before this Court,one cannot expect the respondents 1 to 3 to give details as to whythe 1st tender came to be cancelled. Therefore, the contention ofthe learned Senior Counsel that the cancellation of the firsttender itself would be sufficient to infer mala fide on the part ofthe respondents 1 to 3 is only to be rejected. In respect of thecancellation of the 2nd tender, as I have already concluded, therewas no consistency between the evaluation criteria as found in thetender documents and the required quantity of gases as found in theannexure-II of the draft agreement. The annexure stated both, aboutthe days requirement as well as the Hourly Flow Rate. If HourlyFlow Rate is multiplied by 24 hours, it does not tally with thedays requirement. If days requirement is multiplied by 365 days,then it does not tally with the yearly requirement. The tenderdocument does not specifically say whether the evaluation would bemade on the basis of daily requirement or on the basis of HourlyFlow Rate. As stated above, each one of the bidders wantedevaluation to be done in its own way. The fifth respondent in itsletter dated 30.01.2008, evaluated on the basis days requirement inrespect of Oxygen and Nitrogen, whereas in respect of Argon itevaluated on the basis Hourly Flow Rate. Admittedly, if the cost iscalculated on the basis of Hourly Flow Rate by arriving at the NetPresent Value, it would be totally different from the value of thegases calculated on the basis of the daily requirement by arriving https://hcservices.ecourts.gov.in/hcservices/ at NPV on that basis. In arithmetical calculation, if Hourly FlowRate is multiplied by 24, it should tally with days requirement.But in this case, demonstrably, it does not do so. Thus, it is veryclear that there are lot of confusions in the 2nd tender documents.There is also every chance to believe that some other companies,by going through the second tender documents, would have beenmisled by these anomalies and so they would not have participatedin the tender process. For all these reasons, I am of the clearopinion that the respondents 1 to 3 have taken the right decisionto cancel the 2nd tender process and to go in for the 3rd tenderwithout any confusion. I do not find anything arbitrary,unreasonable or mala fide in the said decision of the respondents 1to 3.88. Yet another contention of the learned Senior Counsel forthe petitioner is that the respondents 1 to 3 have not come forwardwith the clean hands inasmuch as they have denied the receipt ofletter dated 30.01.2008 from the fifth respondent. As of now, thereis no material to show that such letter was received by therespondents 1 to 3. The fifth respondent has not filed any counterto clarify the same. But, from the records, it is seen that beforetaking the decision to cancel the 2nd tender, on learning from thecorrespondence of the petitioner that a letter was sent on30.01.2008 by the fifth respondent, immediately the fifthrespondent was called to state as to whether any such letter wassent and to explain. In response, the fifth respondent has sent aletter dated 20.03.2008 wherein it is stated as follows;"During the meeting SAIL has informed thatthey have received a representation from M/sMSPL enclosing letter Ref.MD-25046-288A dated30th January 2008 and enquired about the statusof this letter. Dasturco clarified that thiswas one of the alternative evaluationcalculations worked out by them. Daturcofurther stated that they had worked out otheralternative calculations considering daily flowrate of all gases etc. These alternatives wereworked out to check the various representationsreceived. Dasturco also clarified that the saidletter had not been officially dispatched toSAIL-SSP since it was felt that any evaluationmethod followed will not be able to address thevarious representations received and the matterneeded further review."89. This letter would go to show that the fifth respondentcompany did not dispatch this letter officially to the respondents1 to 3. Thus, the representation of the petitioner that the fifthrespondent had recommended for grant of order of acceptance to the https://hcservices.ecourts.gov.in/hcservices/ petitioner treating him as the L1 was also duly considered by theauthorities and it is not as if the representation was not dulyconsidered. Thus, I do not find any material to hold that therespondents 1 to 3 have not come forward with clean hands. 90. As extracted in the earlier paragraphs, the law laid downby the Honourable Supreme Court is that if the action of theauthorities is actuated by malice or the same is arbitrary orunreasonable, certainly this Court should exercise its power ofjudicial review to interfere with the same. But in this case, as Ihave concluded, there is neither malice nor unreasonableness norarbitrariness. Instead, as I have discussed above, there areenormous circumstances to safely conclude that the said decisionwas taken with good intention in the interest of SAIL. The decisionof the respondents 1 to 3 to go in for fresh tender after cancelingthe 2nd tender does not suffer from any illegality. Thus, it doesnot require any interference at the hands of this Court at all.91. In the result, the writ petitions fail and they areaccordingly dismissed. No costs. Consequently, the connectedmiscellaneous petitions are closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.vsi/jbm/jikrTo1. Executive Director (Operations)M/s.Steel Authority of India Limited ISPAT Bhavan, Lodi Road, New Delhi-110 003.2.Deputy General Manager,Salem Steel Plant I/C (Materials Management) A Unit of Steel Authority of India Limited, Salem-636 013, Tamil Nadu. https://hcservices.ecourts.gov.in/hcservices/

3.Deputy General Manage I/C (Materials Management) Salem Steel Plant, Salem- 636 013, Tamil Nadu.1 cc to Mrs. Uma Vijaya Kumar, Advocate, SR. 419921 cc to Mr. Srinath Sridevan, Advocate, SR. 419382 ccs to Mr.A. Ilango, Advocate, sR. 415111 cc to Mr.Mani Shankar, Advocate, SR. 41499W.P.Nos.6425 & 6426 of 2008GV (CO)kk 6/8