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Dipak Misra, J.

Leave granted.

2. The appellant, Tamil Nadu Generation and Distribution Corporation Ltd (for short ‘the Corporation’) vide notification dated 06.05.2013 floated a tender for setting up of two units of 660 MW Ennore SEZ Supercricitcal Thermal Power Project at Ash Dyke of NCTPS, Chennai wherein four bidders including the respondents herein participated. However, two bidders out of four were disqualified as they failed to meet the Bid Qualification Requirements (BQR) as a result of which bids of Consortium of Trishe Energy Infrastructure Services Private Limited (CSEPDI) and Bharat Heavy Electrical Ltd (BHEL) were taken up for consideration. Prior to the opening of the price bid, CSEPDI and BHEL submitted supplementary price bids on 05.02.2014. Price bids were opened on 05.02.2014 by the appellant in the presence of the representatives of the respondents, the qualified bidders.

5. After the disposal of the writ appeal, the respondent No.1 sent its representation on 25.08.2014 along with necessary documents which was rejected by the appellant vide its communication dated 27.09.2014. The legal propriety of the said rejection was called in question by way of writ petition W.P. No. 26762 of 2014 seeking quashment of the same and further restraining the owner from taking steps to finalise the tender. During the hearing of the writ petition, a copy of letter dated 27.09.2014 awarding the contract to BHEL, respondent No. 2 herein, was brought on record. It was mentioned therein with regard to price negotiation meetings with the respondent No. 2. The respondent No. 1 sent a letter dated 1.10.2014 to the appellant, highlighting the arbitrariness, anomalies and inconsistencies in its reasoning and the mala-fide intent in the matter of evaluation of the bid submitted by it. However, the appellant by letter dated 10.10.2014, informed the 1st respondent that the subject tender had been finalised and awarded to BHEL.

6. The letter dated 27.9.2014 awarding the contract to respondent No. 2 and letter dated 10.10.2014 were assailed by the respondent No.1 by filing W.P. No. 27529 of 2014 for annulments of the letters and further for issue of directions to the Corporation to determine the award of the tender strictly in terms of the Tender/Bid document and taking into account the bid of respondent No.1 and that of BHEL, the respondent No.2 herein.

7. The learned Single Judge dismissed the writ petition primarily based on the perusal of notes in the files containing the Consultant Report dated 30.05.2014 and on that basis opined that the conduct of process of evaluation of the tenders did not appear to be arbitrary, capricious or unfair; and that price bids of the bidders had been evaluated as per the parameters indicated in the tender notification by an independent consultant who was selected as per the Board Resolution that was within the knowledge of both the bidders. The reasoning of the learned Single Judge basically hinged on the Consultant’s Report that had determined that the respondent No.2 herein was L1 and, therefore, the decision of the Corporation in treating BHEL as L1 and awarding the contract was neither arbitrary nor malafide.

“4.0 Evaluation 4.1 BHEL BHEL has arranged finance from M/s. Power Finance Corporation of India.

They are arranged to finance 75% of the total cost as debt at an interest rate of 12.25% p.a. Attached Annexures 1 to 5 indicate the methodology adopted in calculating the various components required for evaluation like IDC-Debt, IDC-Equity, IDC-UF Fess, Debt Repayment Schedule etc. 4.2 CSEPDI – TRISHE CSEPDI-TRISHE has arranged finance from M/s. ICBC, China.

They have arranged a finance 85% of the total cost as debt at an interest rate of 7.2% p.a. Attached Annexures 6 to 12 indicate the methodology adopted in calculating the various components required for evaluation like IDC-Debt, IDC-Equity, IDC-UF Fess, Debt Repayment Schedule etc. 5.0 Evaluated Lower Cost | | | |BHEL |CSEPDI-TRISH| | | | | |E | | | | |All figures |All figures | | | | |in Rs. |in Rs. | | | | |(Crores) |(Crores) | | |Capacity | |1320 MW |1320 MW | |A |Total EPC cost | |7762.977 |9207.264 | | |excluding VAT | | | | |B |EPC Debt |75% |5822.233 |7826.174 | |C |EPC Equity |25% |1940.744 |1381.090 | |D |IDC Debt |12.25% |1295.079 |1228.378 | |E |EPC Debt | |7117.311 |9054.552 | | |Including IDC | | | | | |(B + D) | | | | |F |Upfront Fees | |8.925 |801.180 | | |Including | | | | | |Interest | | | | |G |Total Debt (E +| |7126.237 |9855.732 | | |F) | | | | |H |Interest on |14% |509.597 |456.606 | | |Equity | | | | |I |Total Equity (C| |2450.341 |1837.695 | | |+ H) | | | | |J |Total Project | |9576.578 |11693.427 | | |Cost (G + I) | | | | |K |Total Cost per | |7.255 |8.859 | | |MW | | | | |L |PV – Debt | |7553.364 |8464.318 | |M |PV – Equity | |2809.403 |2106.984 | |N |Total PV | |10362.767 |10271.302 | |O |PV Cost per MW |` |7.851 |7.781 | |P |Loading for | |10.287 |173.229 | | |Deficiency | | | | |Q |Total (N+P) | |10373.054 |10444.531 | |R |Evaluated Bid | |7.858 |7.913 | | |Price per MW | | | | Paragraphs 4.0 and 5.0 of the “Price Evaluation Report” submitted by the Consultant, which I have extracted above, show that the Consultant took into account only the interest rate of 12.25% per annum for the debt component arranged by BHEL from the Power Finance Corporation of India. The Consultant did not take note of the reduced rate namely 12.15, subsequently offered by BHEL, for arriving at the conclusion that the “Evaluated Bid Price” of BHEL was the lowest.”