Civil Appeal Nos. 8545-8546 of 2010 (Arising out of S.L.P. (C) Nos. 14538-14539 of 2010) and Civil Appeal No. 8549 of 2010 (Arising out of S.L.P. (C) No. 17471 of 2010). Case: 1. Indian Railway Catering and Tourism Corporation Limited and Anr., 2. Doshion Veolia Water Solutions (P) Limited Vs 1. Doshion Veolia Water Solutions (P) Limited and Ors., [Alongwith Civil Appeal Nos. 8547-8548 of 2010 (Arising out of S.L.P. (C) Nos. 14996-14997 of 2010)], 2. Indian Railway Catering and Tourism Corporation Limited and Ors.. Supreme Court (India)
| Case Number | Civil Appeal Nos. 8545-8546 of 2010 (Arising out of S.L.P. (C) Nos. 14538-14539 of 2010) and Civil Appeal No. 8549 of 2010 (Arising out of S.L.P. (C) No. 17471 of 2010) |
| Judges | Altamas Kabir and A. K. Patnaik, JJ. |
| Issue | Constitution of India - Article 14 |
| Judgement Date | October 04, 2010 |
| Court | Supreme Court (India) |
Judgment:
A.K. Patnaik, J.
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Leave granted.
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These Appeals are against the judgment and order dated 29.04.2010 passed by the Division Bench of the Madras High Court in Writ Appeal Nos. 726 and 727 of 2010.
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The relevant facts very briefly are that M/s Indian Railway Catering and Tourism Corporation Limited (for short 'IRCTC') planned to set up a packaged drinking water bottling plant at Palure, near Chennai, to produce drinking water under the brand name "Rail Neer" for railway passengers. In November 2008, the civil work for construction of the plant building was started. In February 2009, IRCTC published a tender notice for turnkey project for design, engineering, supply, installation, commissioning, operation and maintenance of the packaged drinking water bottling plant. Pursuant to the tender notice, three tenderers, namely, M/s Thermax, M/s Ion Exchange (I) Ltd. and M/s. Doshion Veolia Water Solutions (P) Limited submitted their offers, but as the offers were conditional, it was not possible to evaluate them and to decide the inter-se position of the three tenderers in an objective manner and therefore the Tender Committee of the IRCTC recommended for discharge of the tender and to invite fresh tenders after incorporating all the relevant revisions in the tender document to avoid anomalies. On 04.08.2009, a fresh tender notice was advertised by IRCTC and in response to this fresh tender notice M/s Ion Exchange (I) Limited (for short 'Ion Exchange') and M/s. Doshion Veolia Water Solutions (P) Limited (for short 'Doshion') submitted their technical and financial bids in separate sealed covers. The technical bids were opened on 24.08.2009 and both Ion Exchange and Doshion were informed on 26.08.2009 that their financial bids would be opened on 27.08.2009. When on 27.08.2009 the financial bids of Ion Exchange and Doshion were opened, it was found that Doshion had quoted a total price of Rs. 18.65 Crores, whereas Ion Exchange had quoted a total price of Rs. 18.66 Crores and had also quoted a discount of 1% on the quoted price. The result was that the net price quoted by Ion Exchange after deducting the discount of 1; worked out to Rs. 18,47,34,000/- as against the price of Rs. 18,66,00,000/- quoted by Doshion.
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On 28.08.2009, Doshion submitted a letter to IRCTC saying that the offer of discount on the quoted price made by Ion Exchange was in violation of Clause 1.10 of the Instructions to Bidders. Again on 03.09.2009, Doshion submitted a letter reiterating its objection to the offer of discount made by Ion Exchange and also saying that the excise duty amount had not been indicated in rupees by Ion Exchange in its financial bid contrary to the terms and conditions of the tender. On 18.10.2009, the Tender Committee of IRCTC met and made its first recommendation to the Accepting Authority of IRCTC. In the recommendation, the two members of the Tender Committee gave their opinion that the discount of 1% offered by Ion Exchange was not valid and that the non-mentioning of the excise duty amount in Rupees by Ion Exchange was a major deviation. The third member gave his dissent in the recommendation saying that the excise duty could be easily ascertainable by applying the normal methodology of calculation and so calculated the excise duty amount in the bid of Doshion was Rs. 69,26,080/- and that of Ion Exchange was Rs. 55,12,050/-. The third member also gave his opinion that the bid amount of Ion Exchange was Rs. 17 Lacs lesser and if the set off received in service tax for operation and maintenance part of the contract is taken into account, then the additional benefit of MODVAT would get neutralized and therefore even if excise duty amount was not quoted by Ion Exchange in its financial bid, this was not a material deviation. On 13.10.2009, the Accepting Authority of IRCTC directed the Tender Committee to look into the financial implications of excise duty on plant and equipment/ MODVAT credit. Regarding the discount of 1%, the Accepting Authority directed the Tender Committee to look into the prevalent practice being followed by Government Departments and Public Sector Undertakings regarding discount and thereafter make their recommendations. On 02.11.2009, the Tender Committee made its second recommendation. In this recommendation, all the three members of the Tender Committee were of the unanimous view that excise duty should not be taken into account for tender evaluation because if the offer of Ion Exchange in totality was considered, there was no adverse financial implication to IRCTC. Regarding discount, the Tender Committee could not find any instruction relating to the prevalent practice followed by Government Departments and Public Sector Undertakings. On 13.11.2009, the Accepting Authority considered the second recommendation of the Tender Committee and asked the Tender Committee for further clarification on excise duty and to make a review of the cases of Central Vigilance Commission, Chief Technical Examiner's Organization and Stores Directorate Compendium, Railway Board on the discount aspect. On 20.11.2009, the Tender Committee made its third recommendation. In the third recommendation, the members of the Tender Committee were of the unanimous view that taxes and duties (excise duty in particular) had no adverse financial implication to IRCTC. Two of the three members of the Tender Committee after taking into consideration the guidelines/observations in the Railway Stores Directorate Compendium, Central Vigilance Commission, Chief Technical Examiner's Organization, the bid documents of other Public Sector Undertakings in respect of discounts and after verification from Railways and Railway Public Sector Undertakings, took the view that unconditional discount available alongwith the offer should be considered. The third member of the Tender Committee, however, did not agree with this view and maintained his earlier view that unconditional discount offers should not be considered when price bid does not speak of discount as part of the bid conditions. The Accepting Authority of the IRCTC accepted the unanimous recommendation of the Tender Committee that taxes and duties (including the excise duty) had no financial implication on IRCTC. The Accepting Authority also accepted the majority recommendation of the Tender Committee that the 1% discount offered in the bid of Ion Exchange can be considered. Accordingly, the Accepting Authority decided to accept the offer of Ion Exchange and on 17.12.2009 letter of acceptance was issued to Ion Exchange.
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On 21.12.2009, Doshion filed Writ Petition No. 27074 of 2009 in the Madras High Court praying for a writ of mandamus restraining IRCTC from taking any step in furtherance of the tender. On 23.12.2009...
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