Global Energy Ltd. & Anr vs M/S Adani Exports Ltd. & Ors on 3 May, 2005
In this regard, the latest judgment of the Hon'ble Supreme Court in the case of Global Energy Ltd. v. Adani Exports Ltd. 2005 AIR SCW 2875 throws some light. This decision is of course in the context of granting exemption from payment of earnest money deposit to the Government Companies. However, these observations are equally applicable to giving some priority or preferential treatment to such Government companies when there is some marginal difference between the two bidders. The Hon'ble Supreme Court has observed that a deposit of some amount of earnest money is a normal condition of tender. The object is that only such parties who arc financially sound and arc serious in getting the work or contract, should make a bid. Otherwise any number of persons who have no capacity, financial or otherwise, would like to take a chance by making a bid. Normally, State/Central Government Organizations or Central or State Public Sector Undertakings would not make a bid unless they arc serious in getting the work. The shareholding of the Government (State or Central) in any Public Sector Undertakings is always more than 50 per cent. They cannot be equated with a Company whose net worth may be very small or may have a small shareholding. Therefore, the exemption granted in favour of State Government Organizations and Public Sector Undertakings from making deposit of earnest money of Rs. 30 lakhs was based upon a rational criteria and could not be faulted on any ground whatsoever.