Delhi High Court
M/S Ansaldo Caldaie Boilers India ... vs Union Of India And Another on 1 March, 2011
Author: Rajiv Shakdher
Bench: Sanjay Kishan Kaul, Rajiv Shakdher
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 18.02.2011
% Judgment delivered on: 01.03.2011
WP(C) No. 296/2011
M/S ANSALDO CALDAIE BOILERS INDIA PVT. LTD. ..... PETITIONER
Vs
UNION OF INDIA & ANOTHER ..... RESPONDENTS
Advocates who appeared in this case:
For the Petitioner : Mr.Harish Salve and Mr.Maninder Singh, Sr.Advocates
with Mr.Rajiv Bansal, Mr.Prashant Kumar and Mr.Anurag
Sharma, Advocates.
For the respondents : Mr.B.V.Niren, Advocate for R-1/UOI
Mr.A.S.Chandhiok, ASG with Ms.Bindu Saxena and
Mr.Shailendra Swarup, Ms.Aparajita Swarup and Ms.Neha
Khattar, Advocates for R-2/NTPC
CORAM :-
HON'BLE MR JUSTICE SANJAY KISHAN KAUL
HON'BLE MR JUSTICE RAJIV SHAKDHER
1. Whether the Reporters of local papers may
be allowed to see the judgment ?
2. To be referred to Reporters or not ?
3. Whether the judgment should be reported
in the Digest ?
RAJIV SHAKDHER, J
1. The writ petitioner has approached this court under Article 226 of
the Constitution of India to remedy its grievance qua respondent No.2 i.e.,
NTPC Ltd. (hereinafter referred to as NTPC). The grievance of the
petitioner in short is its exclusion from the tendering process initiated by
NTPC. The writ petitioner amongst others had tendered its bid in
response to a tender floated by NTPC. By virtue of the said tender, NTPC
sought bids with respect to Steam Generators package (in short 'steam
generators'). NTPC by virtue of the said tender sought offers in respect of
11 units of steam generators of 660 MW in respect of its projects at
WP(C ) No. 296/2011 Page 1 of 40
Mouda, STTP, Stage-II, Solapur STP, Nabinagar STPP, Meja TPP and
Raghunathpur TPP Phase-II. Insofar as Nabinagar STTP and Meja TPP
were concerned, these were projects which NTPC had routed through a
joint venture, while Raghunathpur TPP Phase-II is a project of Damodar
Valley Corporation Ltd.
2. The tender was issued on 23.06.2010. The bid documents in terms
of tender were put on sale between 28.06.2010 to 30.07.2010. As is
normally the case in such like tenders, sealed bids were invited by NTPC in
two stages. At Stage-I, techno-commercial bids are received while at
Stage-II price bids are to be received. In terms of the said tender, techno-
commercial bids were to be received on 25.08.2010 uptil 1030 hours (IST),
which in turn, were to be opened on the same day at 1100 hours (IST). As
regards dates in respect of the next stage in the tendering process (i.e.,
submission of the price bid and its opening), these were to be intimated in
due course.
3. The writ petitioner here has been eliminated from the tendering
process at Stage-I (i.e., at the stage of opening of techno-commercial bid)
on the ground that its bid did not meet the Qualification Requirements (in
short, 'QRs') stipulated in the tender.
4. At this stage, we may only notice that even though pleadings and
documents filed run into several hundred pages, the issue involved falls in
a narrow compass. The writ petitioner's techno-commercial bid has been
WP(C ) No. 296/2011 Page 2 of 40
rejected by NTPC on account of its ostensible failure to comply with the
provisions of Clause 7.1.1 of section I of the tender. Evidently, this
decision was conveyed by the NTPC to the writ petitioner vide its letter
dated 05.01.2011. The writ petitioner has alleged mala fides in the
issuance of the said letter. The allegations, in sum and substance being:
that the said letter has been ante-dated. This allegation rests on the date
of dispatch of the said letter which, according to the writ petitioner was
10.01.2011; a date which in point of fact falls after the date of issuance of
notice by the writ petitioner to NTPC i.e., 07.01.2011. The writ
petitioner has sought to further strengthen its aforesaid claim, by taking
the stand that the said letter, in actuality, was received by it on
13.01.2011. We would come back to this aspect of the matter a little
later.
5. The fact of the matter remains that by virtue of the
aforementioned letter i.e., letter dated 05.01.2011, the writ petitioner's
techno-commercial bid was rejected on the ground that it did not meet
the minimum requirement set forth in Item 4 of Section III of the tender
documents. The necessary consequences of this was that the bank
guarantee submitted by the writ petitioner towards bid security, was also
returned.
WP(C ) No. 296/2011 Page 3 of 40
6. Therefore, in order to appreciate the issue at hand we would be
referring to only the relevant provisions of the tender documents (which
otherwise contains multiple sections and provisions). In particular our
emphasis would be on those provisions of the tender documents that
pertain to QRs for the bidders.
6.1 It is important to note at this stage that it is a common case of the
contestants before us, that the provision which calls for interpretation is
clause 7.1.1. mentioned in Section I which is identical to clause 1.1.1 of
item no.4 contained in section III of the tender documents. The common
ground between parties, who appeared before us, is that the relevant
clause i.e., Clause 7.1.1 of Section I is identical to Item 4 and Clause 1.1.1
of Section III.
7. With this preface the following broad facts may be noted.
7.1 As indicated above, Stage-I i.e. techno-commercial bids, in respect
of steam generators (qua the projects referred to above), were invited by
NTPC pursuant to issuance of tender on 23.06.2010. The entities which
filed their bids in response to the invitation were four (4) in number.
These being Bharat Heavy Electrical Ltd., New Delhi (BHEL); L&T Power
and MHI Boilers Private Limited, Faridabad (L&T-MHI Boilers), BGR Energy
System Limited, New Delhi (BGR) and Ansaldo Caldaie Boilers India Pvt.
WP(C ) No. 296/2011 Page 4 of 40
Ltd., Chennai i.e., the writ petitioner. The bids of the aforesaid entities
were opened on 28.08.2010. The QRs stipulated, envisaged a bidder's
entry into the fray through five (5) routes. The five (5) routes being : -
(i) as a Qualified Steam Generator Manufacturer; or
(ii) as an Indian Steam Generator manufacturer; or
(iii) as an Indian subsidiary company of a Qualified Steam
Manufacturer; or
(iv) as an Indian joint venture company for manufacturing Super Critical
Steam Generator in India between an Indian company qualified
Steam Generator Manufacturer; or
(v) as an Indian joint venture promoter holding at least 51% stake in a
joint venture company for manufacturing Super Critical Steam
Generator in India between an Indian company and qualified steel
manufacturer.
8. It is not in dispute that none of the aforementioned parties came
through Route 1 or Route 3. BHEL adopted Route 2. Route 4 found
favour with L&T, MHI and the writ petitioner while, BGR took recourse to
Route 5. What is also not in dispute is that Clause 1.1.1 of Item No.4
contained in section III of the tender documents was applicable
irrespective of the route which bidder took recourse to, in order to be
considered a Qualified Steam Generator Manufacturer (in short, 'QSGM').
8.1 As noticed by us hereinabove Clause 7.1.1 of section I is identical to
Clause 1.1.1 of Item No.4 of section III of the tender documents.
Therefore, it is critical to quote Clause 1.1.1 of the tender documents. For
the sake of convenience, it is extracted below :-
WP(C ) No. 296/2011 Page 5 of 40
"4.0 Qualification Requirements for Bidders:
1.0.0 The Bidder should meet the qualifying
requirements of any one of the qualifying routes stipulated
under clause 1.1.0 or 1.2.0 or 1.3.0 or 1.4.0 or 1.5.0. In
addition, the Bidder should also meet the requirements
stipulated under clause 2.0.0 & 3.0.0 together with the
requirements stipulated under Section ITB.
1.1.0 Route 1 : Qualified Steam Generator Manufacturer
1.1.1 The Bidder should have designed, engineered,
manufactured/got manufactured, erected/supervised
erection, commissioned/supervised commissioning of at
least one (1) number of coal fired supercritical Steam
Generator having rated capacity of 1500 tonnes of steam
per hour or above. Further, such Steam generator should
be of the type specified i.e., single pass (tower type) or two
pass type using either would (inclined) or vertical plain or
vertical rifled type water wall tubing, and should be in
successful operation for a period of not less than one (1)
year as on the date of Techno-commercial bid opening. In
addition the above Steam Generator should have been
provided with evaporator suitable for variable pressure
operation (sub-critical and super-critical pressure ranges).
The bidder should offer only the type of Steam Generator
and type of water wall tubing for which he is qualified."
9. Based on the said clause, arguments have been addressed on
behalf of the writ petitioner as well as the contesting respondent i.e.,
NTPC. On behalf of the writ petitioner submissions were advanced by
Mr.Harish Salve and Mr.Maninder Singh, Sr.Advocates assisted by
Mr.Rajiv Bansal, Mr.Prashant Kumar and Mr.Anurag Sharma, Advocates
while, on behalf of NTPC arguments were addressed by
Mr.A.S.Chandhiok, learned Additional Solicitor General instructed by
WP(C ) No. 296/2011 Page 6 of 40
Ms.Bindu Saxena and Mr.Shailendra Swarup, Ms.Aparajita Swarup and
Ms.Neha Khattar, Advocates.
10. Mr.Salve submitted that the only ground on which the writ
petitioner has been eliminated from the tendering process, is that, having
come through Route 4, its collaborator and shareholder one Ansaldo
Caldaie SpA, Italy ( in short, 'ACS') ought to have, according to NTPC, not
only designed and manufactured the Steam Generator but also the
evaporator which forms part of the Steam Generator in so far as its
referential plant was concerned, so as it evaluate its experience in the
field.
10.1 It was contended that the writ petitioner fulfills the requirements
of entering the bidding process, in as much as, it is an Indian joint venture
company, in which, 73.4% of the shares are held by M/s Gammon India
Ltd., while 26% shares are held by ACS. The remaining 0.6% shares are
held by G.B.Engineering. It was stated, in addition, 50% of the shares of
ACS are held and owned by Gammon India Ltd., a stake which was
accompanied with a casting right and managerial control.
10.2. Mr.Salve went on to submit that after the bids were opened by
NTPC on 25.08.2010, correspondence ensued between NTPC and the writ
petitioner between September, 2010 and November, 2010 primarily, to
ascertain the referential credentials of ACS. In this regard our attention
WP(C ) No. 296/2011 Page 7 of 40
was drawn to letters dated 03.09.2010 and 25.09.2010 written by NTPC to
the writ petitioner; letters dated 03.11.2010 and 09.11.2010 written by
NTPC to one entity by the name of Enel Ingegneria & Innovazione SPA (in
short, 'Enel'); and letters dated 05.11.2010 and 15.11.2010 written by
Enel to NTPC. It is important to note at this stage that Enel is the owner
of the referential plant i.e., Torrevaldaliga Nord Power Plant (in short, the
TNP Plant).
10.3 According to Mr.Salve even though the exercise was contrary to the
terms of the tender, information sought for was supplied to the
satisfaction of the NTPC.
10.4 Elaborating on the relevant contents of the aforementioned letters,
he submitted that by virtue of the letter dated 03.09.2010 information
was sought in terms of the Clause 1.4.1 Item 4 of section III of the tender
with regard to the writ petitioner's claim that ACS had manufactured,
designed and commissioned the TNP Plant. Amongst other aspects, he
submitted a pointed reference was made in the said letter to the fact that
the client's certificate enclosed as Annexure to attachment 3 A-4 did not
bear the signatures or stamp of its referencee i.e., Enel. The writ
petitioner was thus, by this letter, called upon to submit an attachment
duly stamped by Enel. Furthermore, it was pointed out by Mr. Salve that
since the work at the TNP Plant was executed and commissioned by a
WP(C ) No. 296/2011 Page 8 of 40
consortium, which inter alia consisted of ACS and another entity by the
name of Babcock Hitachi Kure (in short, 'BHK'); the writ petitioner was
called upon to submit the consortium agreement or other documentary
evidence to establish "split of scope of work" between ACS and BHK.
10.5. The aforesaid request was reiterated by NTPC vide its letter of
25.09.2010. The reason for the same apparently was that the writ
petitioner's response dated 20.09.2010 did not provide, in entirety, the
information sought for, in particular the consortium agreement.
10.6 On receipt of the consortium agreement, NTPC vide its letter dated
03.11.2010 entered into direct correspondence with Enel. It was pointed
to us that in view of the certificate dated 25.06.2010 issued by Enel
(which was attached to the bidding document) whereby petitioner had
represented that ACS had designed, engineered, manufactured, erected
and commissioned at least one (1) number of coal fired supercritical
Steam Generator having rated capacity of 1500 tonnes of steam per hour;
NTPC sought clarification and confirmation as regards the scope of work,
responsibilities and obligations undertaken as between ACS and BHK, in
respect of execution of works at the TNP Plant.
10.7 Mr. Salve pointed out to us that immediately thereupon, Enel vide
its letter dated 03.11.2010 provided the break-up of works as between
ACS and BHK.
WP(C ) No. 296/2011 Page 9 of 40
10.8 Mr.Salve submitted that instead of putting the enquiry to rest,
NTPC at the behest of its competitor Hitachi Power Europe, GmbH (in
short, HPE) sought to seek further information vide its letter dated
09.11.2010. By this communication, NTPC sought to ascertain the role
assigned to each of the consortium members, who were involved in the
execution of works at the TNP Plant.
10.9 In view of the query raised, Enel vide its letter dated 15.11.2010
supplied detailed information vis-a-vis break-up of works as executed by
BHK and ACS in relation to the TNP plant. Particular emphasis was placed
on break-up of works with respect to "pressure parts" by providing the
further information under the sub-headings: Boiler Walls, Economizer,
Superheaters and reheaters and Connecting Piping.
11. It was submitted that the writ petitioner sensing trouble, made a
representation to the Chairman and Managing Director of NTPC vide
letter dated 07.01.2011 wherein, it took pains to reiterate that NTPC
should confine itself to the QRs provided in clause 7.1.1 of section I of the
tender documents. In the light of the said clause 7.1.1, it was emphasized
that in order to qualify as a Qualified Steam Generator Manufacture ( in
short, 'QSGM') - while, the bidder was required to have relevant
experience in designing and manufacturing a Steam Generator of the kind
specified, it did not necessarily require experience in manufacturing the
WP(C ) No. 296/2011 Page 10 of 40
evaporator. The representation stressed the fact that the words used in
Clause 7.1.1 of section I of the tender required bidder to "provide" an
evaporator. The writ petitioner laid emphasis on the fact that it fulfilled
the specified QRs for a QSGM in as much as in the reference plant (i.e.,
TNP plant) it had not only provided an evaporator but also executed the
assigned works as the team leader of the consortium.
11.1 It is at this juncture, Mr. Salve contended (which is after the writ
petitioner's representation on 07.01.2011 had been put in post) that,
NTPC dispatched the impugned letter dated 05.01.2011 - communicating
its decision to eliminate the writ petitioner from the tendering process.
11.2 As noticed above, Mr. Salve pointed out the relevant documents to
show that the impugned letter dated 05.01.2011 was dispatched on
10.01.2011 which was received by the writ petitioner only on 13.01.2011.
11.3. Based on the terms of the tender documents as also the
correspondence exchanged with relevant parties, it was submitted that
NTPC could not have come to the conclusion that the writ petitioner's bid
did not meet the stipulated QRs, as it had not manufactured the
evaporator of the reference plant.
11.4 To drive home the point, reference was made to the fact that under
Route 5, a bidder could make a valid offer in terms of clause 7.1.1 of
section 1 of the tender even if, the evaporator of the reference Steam
WP(C ) No. 296/2011 Page 11 of 40
Generator was not designed for variable pressure operations. It would
suffice if the reference Steam Generator was designed for constant
pressure provided that the bidder had an on-going licence agreement, as
on date of techno-commercial bid: for design, manufacture, sale, use etc.
of a variable pressure super-critical Steam Generator available in sub-
critical and supercritical ranges. In such an eventuality, the bidder under
the terms of the tender was required to furnish a deed of joint
undertaking executed between bidder/the supercritical Steam Generator
manufacturer and its technology owner/the licensor, so that they could
be held jointly and severally liable to NTPC, for the successful
performance of the tendered Steam Generator.
11.4 It was contended that the fact that, the writ petitioner had applied
via Route 4 was known to NTPC. In so far as the fact that the writ
petitioner proposed to provide an evaporator through a third party along
with the Steam Generator - was also a fact in the knowledge of NTPC. In
this regard reference was made by Mr. Salve to its attachment 3A-4 to the
bid documents and letter dated 12.04.2010 issued by Siemens AG in its
capacity as technology owner/licensor of the evaporator.
11.5 It is pertinent to note that, in the course of arguments, Mr. Salve
attributed, the attempts made at eliminating the writ petitioner from the
tendering process, to the former Chairman of NTPC, Mr.T.Sankaralingam
WP(C ) No. 296/2011 Page 12 of 40
who, according to the writ petitioner, was working with BGR, a
competitor of the writ petitioner. According to Mr. Salve, the queries
raised (to which reference is already made by us) by NTPC in respect of
the writ petitioner's bid were inspired by its competitor BGR and HPE. For
this purpose, Mr. Salve referred to the averments made in paragraph 17
of the rejoinder :-
"That it is further submitted that, the former Chairman
of NTPC is working for BGR who is a competitive bidder, and it
seems he has been using his influence in the NTPC, to get the
petitioner ( who is an authentic and qualified bidder) out of the
fray. It is surprising that the competition HPE has full
knowledge of all the correspondence made by NTPC. In fact is
surprising that a letter is received by NTPC on 5.11.2010, on the
same day, the competitor gets to know about it, and sends
another baseless letter with false allegations to contradict the
letter send by ENEL. Again ENEL writes a letter on 15.11.2010
and it is made known to the competitor. On the same day the
competitor sends another letter to NTPC attempting to
substantitate the false averments made by it. NTPC never
disclosed this letter to the petitioner."
12. On the other hand, Mr.Chandhiok, learned Additional Solicitor
General sought to contend that the writ petitioner's bid had been
correctly rejected by NTPC. In support of his contentions, Mr.Chandhiok
placed reliance upon the documents filed by the writ petitioner, in
particular the attachment to the bid, being attachment 3A-4. The said
attachment details out the experience of the bidder in manufacturing
Steam Generators. Relying upon the said attachment, Mr.Chandhiok
sought to demonstrate that under paragraph 1.2.0 of the said
WP(C ) No. 296/2011 Page 13 of 40
attachment, the bidder had claimed that its joint venture partner, ACS
had not only manufactured and erected the TNP plant i.e., a Steam
Generator but also made a representation that the evaporator provided
in the said TNP plant which was designed for variable pressure, had been
manufactured by ACS. In this regard, a specific reference was made to
Clause 2.06.00. Mr.Chandhiok laid stress on the fact that in the
attachment, wherever specific information was sought as to the type of
Steam Generator the bidder had manufactured in the past - the bidder
had answered in the affirmative, in respect of each one of the parameters
indicated therein, and in particular, in respect of information sought vis-a-
vis the evaporator. Mr.Chandhiok emphasized the fact that the format of
the attachment required the bidder to furnish "additional data" in case its
answer was in the negative. Insofar as the specifications qua the
evaporator were concerned, our attention was drawn to the following
portion of the attachment; which is extracted verbatim (with the portions
scored as found in the annexure filed) for the sake of convenience:-
"M/s ANSALDO CALDAIE SpA (qualified Steam Generator Manufacturer)
have designed, engineered, manufactured/get manufactured,
erected/supervised erection, commissioned/supervised commissioning of (i)
at least one (1) number of coal fired supercritical Steam Generator having
rated capacity of 1500 tonnes of steam per hour or above. Further this Steam
generator is of the type specified, i.e. single pass (tower type) or two pass
type using either spiral wound (inclined) or vertical plain or vertical rifled
type water wall tubing, and are in successful operation for a period of not
less than one (1) year as on the date of Techno commercial bid opening.
WP(C ) No. 296/2011 Page 14 of 40
Further, it is confirmed that reference Steam Generator is provided with
evaporator suitable for variable pressure operation (sub-critical and super-
critical pressure ranges). Also, we confirm that offered steam generator is of
the same type & same type of water wall tubing for which reference of
Steam Generator has been furnished below. The details are as follows:
S.No. Item Description Station-1
1.00.00 Name of the reference Torrevaldaliga
station and its location North P.S.
Torrevaldaliga,
Italy
1.01.00 Name, address, Fax No. and Enel Ingegneria
Tel. No. of Owner of station e Innovazione
SpA Via
Carducci 1/3
20123 Milano
(Italy)
Tel. No. +39 02
2301 51
Fax No. +39 02
2301 5433
Web site address ww.enel.it
1.01.01 ............... .........
1.02.00 Name and Designation of Mr. Roberto
the responsible person in Tomasi
Owner's organization Executive Vice
President
Thermal Plants
Development
and
Construction
Business Area
1.02.01 .............. ................
1.01.02 No. of units & capacity 1x660 MW
(Gross) of each unit in MW
1.01.03 No. of steam generator sets 3 x 660 MW
supplied by us for reference
the station
1.01.04 Contract No. & Date # I.AA.3.1.179.1
dt. Dec. 28,
2004
1.01.05 Starting date of Project December 28,
2004
1.01.06 Scheduled date of March 5, 2009
Commissioning
1.01.07 Actual date of March 5, 2009
Commissioning
WP(C ) No. 296/2011 Page 15 of 40
1.01.08 A) Date of Commencement March 5, 2009
of successful operation
B) Date of commencement June 22, 2009
of successful commercial
operation
1.01.09 Whether the Plant is coal Yes/No *
fired (bituminous
coal)
1.01.10 Scope of work executed by
us for the aforesaid Steam
Generator includes the
following
a) Designed Yes/No *
b) Engineered Yes/No *
c) *Manufactured/got Yes/No *
manufactured
d) *Erection/*Supervised Yes/No *
erection/*Acted as
Advisor for erection
e) Yes/No *
Commissioned/Supervised
commissioning/* Acted as
Advisor for commissioning
f) Whether the plant is in Yes/No *
successful operation for a
period of one (1) year
(minimum) as on date of
techno-commercial bid
opening
(* in case the bidder has acted as advisor for erection/commissioning of
reference Steam Generator, bidder shall furnish necessary
documents/certificate from client in support of such activity and enclose the
same at Annexure.... to this Attachment)
2.06.00 Type of Steam
Generator
(i) Single pass (tower Yes/No *
type)
(ii) One through type Yes/No *
(iii) Evaporator Yes/No *
WP(C ) No. 296/2011 Page 16 of 40
designed for
variable pressure
operation (sub-
critical and super
critical pressure
range)
12.1 Mr.Chandhiok also laid stress on that portion of the attachment
which evidently indicated that ACS had, as a matter of fact, manufactured
a Steam Generator in the past (the reference is clearly to TNP plant)
which was designed for an evaporator having constant pressure. In this
regard once again for the sake of convenience relevant portion is
extracted verbatim with the scored out portion :-
"TO BE FILLED IN BY THE BIDDER WHO IS SEEKING QUALIFICATION AS PER
CLAUSE 1.1.1, ITEM 4 OF BDS READ IN CONJUNCTION WITH NOTE 6 TO
CLAUSE 1.0.0, ITEM 4 OF BDS (I.E. IF THE ANSWER TO SUB CLAUSE 2.06.00
(III) TO CLAUSE 1.1.0. ABAOVE IS "NO".
1.5.0 We, confirm that M/s. ANSALDO CALAIE S.D.A. (Qualified Steam
Generator Manufacturer) meets all the requirement as per 1.1.1 of BDS
except that the evaporator indicated in the reference steam generator is not
designed for variable pressure operation and is designed for constant
pressure (Universal Pressure) operation only and seeking qualification along
with the original technology owner (Licensor) from which he has an ongoing
license agreement (which covers technology transfer), as on the date of
Techno-commercial bid opening, for design, manufacture, sell, use, service of
once through variable pressure supercritical steam generator technology
(with evaporator suitable for variable pressure operation in sub-critical and
supercritical pressure ranges).
Further we confirm that original technology owner (Licensor) had experience
of providing variable pressure design steam generator technology for at least
one (1) no. of coal fired supercritical steam generator technology for at least
one (1) no. of coal fired supercritical steam generator for a 1500 T/hr or
higher capacity using either spiral wound (inclined) or vertical plain or
vertical riffed type water wall tubing with the evaporator suitable for variable
pressure operation in sub-critical and super-critical pressure ranges and
which should be in successful operation for a period of not less than one (1)
year as on the date of techno commercial bid opening. The detail of Licensor
and his experience detail are as follows :-
WP(C ) No. 296/2011 Page 17 of 40
S.No. Item Description Station-I
1. Detail of Technology Owner
(Licensor)
1.01.00 Name of the original SIEMENS AG
technology owner (Licensor)
1.02.00 Address, Email ID & Tel. No. EF ES EN,
Freyeslebenstr.1,
91058, Eriangen
Ph.+49 9131 18-
6234
1.03.00 Name and Designation of the Dr. Joachim
Responsible person in the Franke
Organization
1.04.00 Licensing agreement for max. 660 MW
Capacity rating of Steam
Generator (in MW)
1.05.00 Date of Start of Licensing Year 1995
agreement
1.06.00 Date of end of Licensing Year 2019
agreement
1.07.00 Whether scope of licensing
agreement covers for design,
manufacture, sell, use,
service of once through
variable pressure
supercritical steam generator
technology (with evaporator
suitable for variable pressure
operation in sub-critical and
supercritical pressure
ranges).
1.08.00 Copy of relevant portion of
Licensing agreement
attached at Annexure ___
II. Details of experience of
Technology owner (Licensor)
1.01.00 Name of the reference Torrevaldaliga
station and its location North P.S.
Torrevaldaliga,
Italy
1.02.00 Client Name and its address,
Fax. NO. & Tel. No., email ID
1.03.00 Actual date of
completion/date of
commencement of successful
operation
1.04.00 Whether the plant is coal
fired
1.05.00 Scope of work executed by us
WP(C ) No. 296/2011 Page 18 of 40
for the aforesaid Steam
Generator includes the
following :
(i) Designed Yes*/No*
(ii) Engineered Yes*/No*
(iii) Whether the plant is in Yes*/No*
successful operation for a
period of one(1) year
(Minimum) as on date of
techno commercial bid
opening
1.06.00 i) Supercritical Steam Generator Yes*/No*
ii). Steam Generator steam flow
capacity at Superheater Outlet
(T/Hr.)
1.07.00 Type of Steam Generator
i). Single pass (tower type) or Yes*/No*
two pass type
ii). Once through type Yes*/No*
iii). Evaporator designed for Yes*/No*
variable pressure operation
(sub-critical and super critical
pressure range)
1.08.00 Type of Water, wall tubes
(spiral wound/inclined or
vertical plain or vertical Yes*/No*
riffed)
i). Type of firing (Coal)
1.09.00 Certificate from the owner of
the reference plant that the
aforesaid Steam Generator is
in successful operation for a
period of not less than one
(1) year as on date of techno-
commercial bid opening and
caused no serious problem in
past, is furnished alongwith
bid at Annexure ____.
1.10.00 Joint Deed of Undertakings
with coal fired steam
generator set manufacturer
as per performae enclosed in
Section-VII (Forms &
Procedures) is furnished
alongwith the bid at
Anneuxre ___.
Notes:
WP(C ) No. 296/2011 Page 19 of 40
1. Wherever the term Coal Fired is appearing above, "coal" shall be deemed to
also include bituminous Coal/Sub Bituminous Coal/Brown Coal/Lignite.
1.6.0. Deed of Joint Undertaking (DJU) executed by us, Qualified Steam Generator
Manufacture, alongwith subsidiaries of Holding Company (Qualified Steam
Generator Manufacturer)/*JC promoter in JV Company and Technology
Owner (Licenser) of Qualified Steam Generator Manufacturer as per clause
1.2.2 and/or Note No.4 and/or note no.5 for clause no.1.0.0. of BDS is
enclosed at Annexure ___ to this attachment.
* Bidder to strike out whichever is not applicable."
12.2 Mr.Chandhiok based on the aforesaid extract submitted that it was
quite clear that the writ petitioner had represented on its own that the
TNP plant was designed with an evaporator suitable for constant pressure
and not what was required i.e., Variable Pressure. Therefore, it was
contended that in terms of Note 5(iii) the writ petitioner was mandatorily
required to furnish a deed of joint undertaking executed by the bidder
and the technology owner/licensor having the requisite experience in
designing, manufacturing, sale, use and servicing of variable pressure
supercritical steam generator (with evaporator suitable for variable
pressure operation in sub-critical and supercritical pressure ranges). Since
the writ petitioner had not done so it could be that the writ petitioner had
fulfilled the conditions of the tender. For the sake of convenience, the
relevant portion of Note 5(iii) is extracted hereinbelow :-
"(5) Steam Generator Manufacturer with Technology Tie-up
for Variable Pressure Design
In case a supercritical Steam Generator manufacturer meets all
the requirements as specified in clause no.7.1.1. above except
that the evaporator in the reference steam generator is not
designed for variable pressure operation and is designed for
WP(C ) No. 296/2011 Page 20 of 40
constant pressure (Universal Pressure) operation only, in such
case, the supercritical Steam Generator manufacturer shall be
considered to be qualified, provided that such supercritical
steam generator manufacturer has an ongoing license
agreement (which covers technology transfer), as on the date
of Techno-commercial bid opening, with the original
Technology Owner (Licensor) for design, manufacture, sell, use,
service of once through variable pressure supercritical steam
generator technology (with evaporator suitable for variable
pressure operation in sub-critical and supercritical pressure
ranges)
(iii) In such an event, the bidder shall furnish a
Deed of Joint Undertaking executed between the
Bidder and the supercritical steam generator
manufacturer (as the case may be) and its
Technology Owner (Licensor), as per the format
enclosed in the Bidding Documents towards the
Bidder and the licensor being jointly and severally
liable to the Employer for successful performance of
the Steam Generator along with an extended
warranty of at least one (1) year over and above
what is required as per tender documents."
12.3 As regards the allegations that queries were raised by NTPC at the
behest of the competitor, Mr.Chandhiok submitted that these assertions,
in particular those with respect to the involvement of
Mr.T.Sankaralingam, the Ex-Chairman of NTPC (presently employed with
BGR) were made, for the first time, in the rejoinder filed by the writ
petitioner. Therefore, in these circumstances, they could not be taken
note of, for the simple reason that NTPC had no occasion to rebut the
same. In any event, Mr.Chandhiok submitted that a careful reading of
WP(C ) No. 296/2011 Page 21 of 40
the information supplied by the writ petitioner along with its bid, which
was scrutinized by committee of experts, brought to fore issues which
required NTPC to seek clarification from the writ petitioner.
Mr.Chandhiok submitted that in so far as NTPC was concerned it had
carried out the evaluation of bid including that of the writ petitioner in a
fair and transparent manner. To support his assertion, learned ASG drew
our attention to the letter dated 09.11.2010 issued by NTPC to Enel,
wherein the relevant extract of the letter received from HPE (one of the
competitor's of the writ petitioner) dated 05.11.2010 was reproduced. As
a matter of fact, it was pointed out by Mr.Chandhiok that a copy of the
said letter dated 09.11.2010 was marked to the writ petitioner as well.
The allegation of the writ petitioner that the letter was received from HPE
on the same date on which NTPC had received a communication from
Enel i.e., 05.11.2010, may perhaps have been a sheer co-incidence,
according to Mr. Chandhiok. The fact remained according to Mr.
Chandhiok, that NTPC had disclosed to the writ petitioner, the receipt of
letter from HPE. In any event, since relevant contents of the letter of HPE
were forwarded to both Enel and the writ petitioner, it could not be
contended that NTPC was acting malafidely, at the behest of competitors
of the writ petitioners.
WP(C ) No. 296/2011 Page 22 of 40
12.4 On the main aspect of the matter Mr.Chandhiok submitted that, in
order to be categorised as a QSGM under clause 7.1.1 of section I of the
tender, the bidder had to have designed, manufactured, erected and
commissioned a Steam Generator of requisite specifications as indicated
in the said clause. This would necessarily mean that the Steam Generator
would include an evaporator designed and manufactured by the bidder,
for it to be declared as a QSGM in terms of clause 7.1.1. In other words,
the contention made on behalf of writ petitioner that merely because a
part of the steam generator (in this case the evaporator) was
manufactured by another entity, would not render it ineligible to be
classified as a QSGM, was untenable. According to Mr.Chandhiok, a plain
reading of the clause 7.1.1 (which was identical to clause 1.1.1 of Item 4
of section III of the tender), did not countenance such a submission. It
was contended by Mr. Chandhiok that the evaporator was vital to Steam
Generator and hence, the requirement that - only such person could be
declared a QSGM who, had not only the requisite experience in designing,
engineering, manufacturing, erecting and commissioning a steam
generator of the requisite specifications, but also every vital part of it,
which included the evaporator.
13. We have heard the learned counsel for the parties at length and
also perused the documents placed on record. We also had the occasion
WP(C ) No. 296/2011 Page 23 of 40
of briefly looking at the two (2) files submitted for our perusal by NTPC, in
relation to the tender in issue.
13.1 A perusal of the documents would show that the writ petitioner is
an Indian Company registered under the Companies Act, 1956. The writ
petitioner is a joint venture between Gammon India Ltd. and ACS. As
noticed hereinabove, M/s Gammon India Limited holds 73.4% shares in
the writ petitioner. The remaining equity is split between ACS and
G.B.Engineering. Former holds 26% shares in the writ petitioner, while
latter holds 0.6% of the equity. This aspect of writ petitioner's claim is not
disputed by NTPC. We may only point out that NTPC does dispute the
writ petitioner's claim (on account of the fact that this information does
not form part of its bid documents) that Gammon India Ltd. owns 50% of
the equity in ACS along with its claimed casting right and control over the
management of ACS.
13.2 Continuing with the narrative, on 23.06.2010 NTPC had invited
global bids for Steam Generators for its various projects, as noticed
hereinabove. The tender documents were available for sale between
28.06.2010 and 28.07.2010. Admittedly, the writ petitioner filed its bid
dated 18.08.2010 with NTPC on 25.08.2010. In so far as the bid
documents are concerned, they are divided into seven sections. These
being as follows :-
WP(C ) No. 296/2011 Page 24 of 40
(i). Section I - Invitation for Bids(IFB)
(ii). Section II - Instructions to Bidder (ITB)
(iii). Section III - Bid Data Sheet (BDS)
(iv). Section IV - General Conditions of Contract (GCC)
(v). Section V - Special Conditions of Contract (SCC)
(vi). Section VI - Technical Specification (TS)
(vii). Section VII - Forms and Procedures (FP)
13.3 For our purposes what is relevant are Sections I to III. As noticed
above, the tendering was to take place in two stages. Stage-I mandated
submission of techno-commercial bid, while Stage-II mandated
submission of price bid. Clause 2 of the IFB broadly describes the scope of
work. Similarly, Clause 22 of the ITB lays down the parameters for
evaluation of the techno-commercial bid. Under Clause 23 of the ITB,
after due scrutiny, NTPC is required to ascertain as to whether the bidders
had submitted a responsive Stage-I (techno-commercial) bid. The
purpose being to ascertain and satisfy itself as to whether bidder is
qualified to perform the contract at hand. It is only after the employer
i.e., NTPC has made such an evaluation that the bidder can proceed to
Stage-II. As per Clause 25.1(b)(ii), the employer/NTPC is required to
convey to the bidder, if found suitable, to submit Stage-II (price) bid or
conversely in the event the bid is found unsuitable, to convey the grounds
on which the bid is rejected. The grounds of rejection appear to be
broadly two. First, where the bid is found to be substantially non-
WP(C ) No. 296/2011 Page 25 of 40
responsive. Second, where the bidder fails to meet the minimum QRs, set
forth in the bidding documents. In case of such an eventuality, the
employer/NTPC is obliged to return the bid security.
13.4. Under clause 26 of the ITB procedure is prescribed for evaluating
Stage-II (price) bid. Since those aspects are not in issue, we do not
propose to dilate on the provisions relatable to Stage-II (price) bid.
Importantly, for our purposes what is crucial is Clause 7 of the IFB which
lays down the QRs for a bidder. A bare perusal of the opening part of
Clause 7 of the IFB would show that it provides for routes which are
available to a bidder to participate in the tender process.
"7. Qualifying Requirements for Bidder
7.1.0 The Bidder should meet the qualifying requirements of any one of
the qualifying routes stipulated under clause 7.1.0 or 7.2.0 or 7.3.0 or 7.4.0
or 7.5.0. In addition, the Bidder should also meet the requirements
stipulated under clause 7.6.0 & 7.7.0 together with the requirements
stipulated under section ITB." (emphasis is ours)
13.5. The bidder could thus follow any of the routes stipulated in Clause
7.1.0 (Route 1), 7.2.0(Route 2), 7.3.0(Route 3), 7.4.0(Route 4), 7.5.0(Route
5).
13.6 In the present case, it is not disputed that the attributes of a QSGM,
as provided in Clause 7.1.1 in relation to Route 1, are common to all other
routes. It is also not disputed that Section III of the bidding documents,
which is the Bid Data Sheet (BDS) contains a similar provision under Item
WP(C ) No. 296/2011 Page 26 of 40
4 in Clause 1.1.0 (Route 1) which is identical to clause 7.1.1 of the IFB. It is
also not in dispute that the writ petitioner had applied under Route 4 and
hence, the eligibility criteria for being declared a QSGM as provided in
clause 1.1.1 under Item 4 of the BDS or that contained under Clause 7.1.1
of the IFB would be applicable to the writ petitioner. This also clear on a
plain reading of "Notes for Clause 1.0.0" which provides as follows:-
"Notes for clause 1.0.0
(1) Definitions
(ii) "Qualified Steam Generator Manufacturer" means a manufacturer
meeting requirements stipulated at 1.1.1"
13.7. In these circumstances, it would suffice if we quote one or the
other clause. Since clause 1.1.1 is quoted in the earlier part of our
judgment, for the sake of convenience Clause 7.1.1 is extracted
hereinbelow:-
"7.1.1 The Bidder should have designed, engineered, manufactured got
manufactured, erected/supervised erection, commissioned/supervised
commissioning of at least one (1) number of coal fired supercritical Steam
Generator having rated capacity of 1500 tonnes of steam per hour or above.
Further, such Steam generator should be of the type specified, i.e. single pass
(tower type) or two pass type using either spiral wound (inclined) or vertical
plain or vertical rifled type water wall tubing, and should be in successful
operation for a period of not less than above Steam Generator should have
been provided with evaporator suitable for variable pressure operation (sub-
WP(C ) No. 296/2011 Page 27 of 40
critical and supercritical pressure ranges). The bidder shall offer only the
type of Steam Generator and type of water wall tubing for which he is
qualified."
13.8 As noted above, it is not disputed that the writ petitioner was
eligible to bid via Route 4 on the strength of credentials of ACS which
holds 26% stake in it, as is the requirement of the bid documents (see
Clause 1.4.1 of Item 4 of the BDS). Writ petitioner's claim that it met the
requirements of a QSGM under Clause 1.1.1 of BDS which, as indicated
above, is identical to Clause 7.1.1 of IFB is decidedly based on ACS
experience qua the TNP plant. An examination of documentation
furnished by writ petitioner and/or the owner of the TNP Plant, Enel, is
indicative of the fact that the work at the TNP Plant was executed by a
consortium which included BHK with ACS as the leader of the consortium.
It appears that the writ petitioner had submitted three (3) documents:
(i). an undated client certificate from Enel which is the owner of TNP
plant; (ii). a certificate from Enel dated 25.06.2010 which, encloses an
attachment 3A-4; and (iii). a letter from Siemens AG dated 12.04.2010. It
appears that since the writ petitioner had scored out the portion
contained immediately above clause 1.5.0 of the attachment 3A-4 (see
paragraph 12.1 above), and given the fact that the Deed of Joint
Undertaking of the technology owner (i.e., Siemens AG) was not
WP(C ) No. 296/2011 Page 28 of 40
furnished, NTPC proceeded to examine whether the petitioner complied
with the QRs stipulated in Clause 7.1.1 of the IFB/clause 1.1.1. of the BDS.
13.9 This examination resulted in issuance of letter dated 03.09.2010.
With the issuance of the said letter correspondence ensued, to which
reference has been made hereinabove, by us. Clarifications were sought
by NTPC as regards the scope of work entrusted to ACS and BHK in
respect of the reference plant i.e., TNP plant. NTPC in its own wisdom
appears to have written directly to the owner of the plant Enel vide its
letter dated 03.11.2010. Enel furnished a break up of work executed by
each member of the consortium vis-à-vis the TNP plant vide its letter
dated 05.11.2010. Not being satisfied with the information supplied, in
particular, with respect to certain critical parts of the Steam Generator,
such as, the 'pressure parts'; it once again wrote to Enel vide its letter
dated 09.11.2010. What is crucial at this juncture, is that on 05.11.2010
NTPC had received a letter from HPE. By this letter HPE had sought to
convey its credential with respect to the TNP plant. In this letter, HPE
claimed that BHK was the technical leader for the TNP plant, and that
critical aspects of engineering, concerning pressure parts, were worked
upon by HPE in conjunction with BHK. It is apparent from the letter of
NTPC dated 09.11.2010 that, HPE's letter of 05.11.2010 had triggered the
queries raised therein. Enel responded to aforementioned letter of NTPC
WP(C ) No. 296/2011 Page 29 of 40
vide its letter dated 15.11.2010. In the said letter Enel quite clearly
indicated as follows:-
"Subject: Torrevaldaliga Nord Power Plant
Contract No.I.AA.3.1.179.1 dated Dec. 28, 2004 - ATI Ansaldo Caldaie
- 3 x 660 MW Coal fired boilers, ultra-supercritical Benson Once-
Through type
With a reference to your fax/email dated November 9th, 2010, Ref. No.:01/CS-
9575/9571/0370/0360/3568-102(R)-2-PRA, with particular regard to paragraph
4.0, we inform you as follows :-
"(i)It has been done by each party for its own Scope of work; It has to be
understood that the parties were contractually jointly liable.
(ii)Under Italian law, the Temporary Association of Companies does not
assign to any party the role of technical leader of the consortium.
(iii)Ansaldo Caldaie developed design and engineering for each supply in
its own scope. Considering your request of clarifications, we hereto attach
a detailed break-up of works executed by Ansaldo Caldaie, the Consortium
Leader, and Babcock Hitachi Kure (BHK)."
13.10 Insofar as the "pressure parts" were concerned, the break-up of
works between BHK and ACS was provided; which reads as follows:-
"TORREVALDALIGA NORD POWER PLANT
ANSALDO CALDAIE - BHK TEMPORARY ASSOCIATION OF COMPANIES
BREAK-UP OF WORKS
BHK ANSALDO
CALDAIE
Project Management Leadership X
Design and engineering (*) X X
Pressure parts
- Boiler Walls - Furnance X
- Convection pass X
Economizer X
Superheaters and reheaters: SH2, SH3,RH2 X
SH1, RH1 X
Connecting piping X X
WP(C ) No. 296/2011 Page 30 of 40
13.11 Curiously, BGR shot off a letter dated 15.11.2010 in continuation
of HPE's earlier letter dated 05.11.2010. With this letter, a technical
paper presented at Power Gen. Europe 2011 titled "Design and
Operation Experience of the First 600° C Boiler in Europe, Torrevaldaliga
Nord 660 MW - a Step towards a 700° C Advanced USC Boiler" was
enclosed. The thrust of the communication being that BHK and HPE were
the ones primarily involved in the execution of works at the TNP plant.
13.12 The internal files of NTPC seem to indicate that NTPC referred the
matter for legal opinion to the Law Officer of the Union of India. After
receiving the legal opinion on the issue as to whether the ACS met the
QRs under Clause 1.4.0 of Item 4 of the BDS, it concluded that the ACS did
not meet the experience criteria.
13.13 The record of NTPC is indicative of the fact that it was the
representation of the writ petitioner dated 12.12.2010, which propelled
NTPC to re-examine the matter. The representation of 12.12.2010 was
followed by a second representation dated 16.12.2010. Consequently,
NTPC once again approached the law officers of Union Of India for legal
opinion. Suffice it to say, the Law Officers opined that ACS could not be
categorized as QSGM under clause 1.1.1 of the BDS.
13.14 Consequently, the writ petitioner was excluded from the tendering
process. From amongst the bidders, following three were cleared for
WP(C ) No. 296/2011 Page 31 of 40
Stage-II (price) bid i.e., BHEL, L&T-MHI and BGR. Resultantly, the
clarification meetings were held only with the aforementioned three
bidders.
13.15 Thereafter, amendments to the bidding documents were finalized.
The matter was put up before the competent authority in the NTPC for
approval.
13.16 As noticed it is in the aforesaid circumstances that NTPC sent
intimations to the three successful bidders of Stage-I to proceed to Stage-
II (price) bid, even while the writ petitioner was informed about the
rejection of its bid. These decisions were taken simultaneously by NTPC,
on 05.01.2011. The record supplied to us does not seem to suggest that
the decision to reject the writ petitioner's bid was ante-dated. Therefore,
notwithstanding the allegation of the writ petitioner that letter dated
05.01.2011 conveying the rejection of its techno-commercial bid (i.e.,
stage-I) was dispatched on 10.01.2011 - the decision by itself was not
ante dated. The record shows that the decision with regard to successful
bidders of Stage-I as well as the rejection of the writ petitioner's bid was
taken on 05.01.2011. Therefore, it is not as if writ petitioner's
representation of 07.01.2011 triggered rejection letter dated 05.01.2011.
14. The other allegation of the writ petitioner that,
Mr.T.Sankaralingam's association with BGR had hand in the queries being
WP(C ) No. 296/2011 Page 32 of 40
triggered, is also not borne out from the record. The record shows that
NTPC had formed a committee to evaluate the bids. Information supplied
with bid documents, in particular attachment 3A-4 could quite possibly
have triggered these queries. The fact that letters were received from
HPE/BGR on 05.11.2010 and 15.11.2010 respectively, which was the very
day, responses were received from Enel may seem a little curious, but
that by itself does not vitiate the process in as much no fault can be found
with NTPC as recipient of information. In our view no definitive material
is available with us to come to the conclusion that these letters were
inspired by Officers of NTPC to exclude the writ petitioner from tendering
process or that Mr. T. Sankaralingam had a hand in it. We are in the age of
commercial espionage, it cannot be ruled out that information flowed to
the competitor from an insider. Where the insider is located or what is his
identity is anybody's guess at this stage. However, suspicion cannot be
made a basis for arriving at such a conclusion. As observed above by us,
the timings may seem curious, but no definitive conclusion can be
reached in this regard based on the material available. This view is
fortified by the actions taken by NTPC at its end on receipt of information
from writ petitioner's competitor. In the letter dated 09.11.2010 NTPC
categorically conveyed to Enel the extract of letter dated 05.11.2010
issued by HPE. A copy of this letter was also sent to the writ petitioner.
WP(C ) No. 296/2011 Page 33 of 40
Therefore, as observed by us above, we cannot find fault with NTPC for
using the information received by it (even if it was from a competitor of
the writ petitioner) to seek clarification from the owner of the TNP plant,
i.e. Enel. In our view no mala fides can be attributed to NTPC in that
regard. Allegations in this regard, as rightly submitted by learned ASG
are made by the writ petitioner in the rejoinder, and hence, afforded no
opportunity to NTPC to rebut this aspect of the matter. What cannot be
lost sight of is the fact that Mr. T. Sankaralingam is not a party to the
present proceedings. Allegations are personal in nature. Mr. T.
Sankarlingam ought to have had an opportunity to rebut the allegations.
He cannot be condemned unheard. We, therefore, do not consider it fit
to take cognizance of these allegations made by the writ petitioner. The
argument at best can be termed as an argument of prejudice.
15. This brings us to the heart of the matter, which is, whether ACS
could be construed as a QSGM in terms of Clause 7.1.1 of the IFB or
Clause 1.1.1 of Item 4 of BDS. A close reading of the relevant part of the
aforementioned Clause would show that bidder should have designed,
engineered, manufactured (could also get manufactured),
erected/supervised erection, commissioned/supervised commissioning of
at least one (1) number of coal fired supercritical Steam Generator having
rated capacity of 1500 tonnes of steam per hour or above.
WP(C ) No. 296/2011 Page 34 of 40
15.1. Furthermore, such Steam Generator should be of the type
specified: (1) single pass (tower type) or two pass type using either spiral
wound (inclined) or vertical plain or vertical rifled type water wall tubing,
and should be in successful operation for a period of not less than one(1)
year as on the date of techno-commercial bid opening.
15.2 In addition to the above, the Steam Generator should have been
provided with an evaporator suitable for variable pressure operation
(sub-critical and super-critical pressure ranges). Interpretation put on
this part of the clause by the writ petitioner is that, in so far as the
evaporator is concerned, ACS would not stand disqualified from being
declared a QSGM, if it otherwise had the experience of designing,
engineering and manufacturing a Steam Generator of the requisite
specification as provided in Clause 7.1.1 or its equivalent Clause in BDS
only because the evaporator in the TNP plant was provided by a separate
entity. It is important to note that in so far as the evaporator installed in
the TNP Plant is concerned, the writ petitioner concedes only to the fact
that certain parts of it and not the entire evaporator as is suggested, was
manufactured by its other consortium partner i.e., BHK.
15.3 Furthermore, the fact that the writ petitioner had wrongly scored
out a portion of the attachment 3A-4 ought not to have, according to the
writ petitioner, put NTPC in doubt on this aspect in respect of the current
WP(C ) No. 296/2011 Page 35 of 40
tender since it had provided the particulars of the technology partners
i.e., Siemens AG.
15.4 Therefore, the argument was that while as a whole the reference
Steam Generator i.e., TNP plant had been designed, engineered and
manufactured by a consortium of which ACS was the leader, the fact that
certain parts of the evaporator had been manufactured by BHK/HPE
would not make ACS ineligible as a QSGM.
15.5 As against this, Mr.Chandhiok argued to the contrary. He stressed
upon the fact that the evaporator being a crucial part of the Steam
Generator, it was quite apparent on a plain reading of the relevant clause
of the bid documents that ACS would be eligible as a QSGM only if it had
also designed, engineered and manufactured the evaporator.
15.6 We may only note at this stage that the writ petitioner's filling up of
the bid documents in particular the attachment 3A-4 was less than happy,
but what cannot be lost sight of is that there was no attempt on the part
of writ petitioner to mislead NTPC as regards the fact that it was offering
an evaporator manufactured by a third party in so far the current tender
was concerned. From the extracts which are culled out by us
hereinabove, it is quite clear that NTPC was quite aware of the fact that
the Siemens AG was the technology owner/licensor of the evaporator
which was offered by the writ petitioner in its bid.
WP(C ) No. 296/2011 Page 36 of 40
15.7 Therefore, this brings us to the question as to whether
interpretation placed by the writ petitioner ought to be accepted or not?
In our view it is trite law that interpretation is required to be made;
whether of contract, document or a statute, only if, there is an ambiguity
as to the intent of the parties. Intent has to be construed from the words
used in the contract. It is only when the language of a document is
ambiguous, should the tools of interpretation be brought into play to
gather the intent of the parties. In doing so one should read the
document as a whole and not in fragmented parts.
15.8 The word "provide" used in clause 7.1.1 of the IFB/clause I.I.I. of
the BDS leaves us no wiser as to the intent of parties. In plain English, the
word "provide" would mean supply or furnish (see Concise Oxford
Dictionary 9th Edition page 1102). Would it then mean that ACS will stand
disqualified as a QSGM if in the reference plant (i.e., the TNP plant), the
evaporator was supplied by say BHK. In our view, this interpretation
cannot be laid on the said clause, given the manner in which it is
structured, especially when it is read in conjunction with other similar
clauses (read routes) of the tender. To cite an example, under Route 5, a
bidder can qualify as a QSGM if he had in the past had experience of
manufacturing a Steam Generator of requisite specification with an
evaporator of constant pressure provided it undertook to supply one with
WP(C ) No. 296/2011 Page 37 of 40
a variable pressure, and in addition furnished a joint deed of undertaking
of the owner and/or licensor of such technology. Therefore, on a
comparison of QRs for a QSGM (which are common to all five Routes) it
appears that in so far as the NTPC was concerned, it was quite prepared
to accept a bidder as a QSGM if the evaporator supplied had the backing
of the technology owner and/or the licensor of the evaporator.
15.9 In the present case, a consortium appears to have designed and
manufactured the TNP Plant of which ACS was the leader. The fact that
certain parts of the evaporator (we will assume that they are crucial) were
designed and manufactured by BHK would not, on this account alone,
disentitle ACS from being categorized as a QSGM, because in our opinion,
a reading of the document does not reflect that such was the intent of
parties. If NTPC is prepared to accept a joint deed of undertaking of a
technology licensor for a Steam Generator with a Variable Pressure
evaporator when the referential plant was designed with an evaporator
suitable for constant pressure - we see no reason why the word
"provide" used in clause 7.1.1 of IFB/clause 1.1.1 of BDS cannot be
interpreted to mean that parties did not intend to exclude a person from
being categorized as a QSGM only because the evaporator provided in the
referential plant was supplied by a third party.
WP(C ) No. 296/2011 Page 38 of 40
15.10 We are thus unable to persuade ourselves to concur with the
interpretation placed on clause 7.1.1 of IFB /clause 1.1.1 of the BDS by the
NTPC, which is, that ACS was not a QSGM as it did not have the relevant
experience of designing, engineering or manufacturing an evaporator. As
a matter of fact the said clause also seems to indicate that it would suffice
if the QSGM had only designed and engineered a Steam Generator and
sub contracted the work of manufacturing the Steam Generator to
another entity. This is quite evident on a plain reading of the expression
"got manufactured" appearing in the main clause. To us it seems quite
odd that NTPC would accept in respect of the current tender a Steam
Generator manufactured by a third party but would seek elimination of
the bidder on the ground that it cannot be categorized as a QSGM, since
in the referential plant the evaporator was supplied by a third party. If
this was the requirement in the contemplation of NTPC at the time when
the tender was first floated it certainly does not seem to have
transcended in the provisions incorporated in the tender. We should not
be understood as having said that NTPC is bound to go ahead with tender
if it otherwise does not suit its purpose; given the value of the
investment.
WP(C ) No. 296/2011 Page 39 of 40
16. The NTPC, however, cannot based on the present tender, exclude
the writ petitioner from the tendering process for the reasons articulated
before us.
17. Having come to the aforesaid conclusion, we are of the view the
letter dated 05.01.2011 whereby, the writ petitioner's bid has been
rejected deserves to be quashed. It is ordered accordingly.
Consequently, NTPC will allow the writ petitioner, in accordance with the
terms of the bid documents, not only to proceed to the next stage i.e.,
Stage-II (price bid) but also permit it to participate in the technical
discussions qua the tendering process.
18. For the foregoing reasons, the writ petition is allowed. Parties
shall, however, bear their own costs.
RAJIV SHAKDHER, J.
SANJAY KISHAN KAUL, J.
March 01, 2011 da WP(C ) No. 296/2011 Page 40 of 40