P. K. Balasubramanyan, J. - (1.) These appeals arise from Writ Petition No.886 of 1997 filed by M/s. Larson and Toubro (L and T for short), in the High Court of Calcutta. Respondent No.11 in the Writ Petition M/s. Subhash Projects and Marketing Limited (Subhash Projects for short) was the contesting respondent. By judgment dated 3.10.1997, a learned single Judge of the High Court dismissed the Writ Petition. The Writ Petitioner thereupon filed Appeal No. 559 of 1997 before the Division Bench. By judgment dated 14.7.1998, the Division Bench came to the conclusion that the appeal was liable to be allowed and the Writ Petitioner granted relief. Still, it did not grant the full relief to the Writ Petitioner, the appellant before it, but directed the contesting respondent, Subhash Projects, to pay a compensation of Rs.1 crore to the Writ Petitioner. This was on the finding that the contract based on the tender floated by respondent No.1, the West Bengal Power Development Corporation Limited (hereinafter referred to as the Power Corporation) ought to have been awarded to the writ petitioner-L and T and the award of the same to respondent No.11 Subhash Projects was illegal, but it was inexpedient at that stage to set aside the award of the contract and the least that should be done was to direct Subhash Projects to disgorge at least some portion of the profit it would have earned out of the illegally awarded contract and make over the same as compensation to the writ petitioner-L and T, who ought to have been awarded the contract. Feeling aggrieved, respondent No.11 in the Writ Petition, Subhash Projects, has filed Civil Appeal No. 5030 of 1999. M/s. Larson and Toubro, the writ petitioner and the appellant before the High Court has filed C.A. No. 5031 of 1999 submitting that the High Court having found that the award of the contract to Subhash Projects was illegal, and it should have been awarded to L and T, ought to have gone ahead and struck down the award of the contract to Subhash Projects and ought to have directed it to be awarded to L and T. The Union of India, the Director (Thermal), Ministry of Power and the Central Electricity Authority, who were respondents 8, 9 and 10 in the Writ Petition have filed Civil Appeal No. 5032 of 1999 challenging the judgment of the Division Bench, but essentially complaining, as was disclosed at the hearing, about the remarks made by the Division Bench of the High Court about the interference of the Ministry of Power and that of the Minister of State for Power and about its impropriety. Since all the appeals arise from the same judgment, they have been heard together.
(2.) With the aid of the Overseas Economic Corporation Fund, Japan (hereinafter referred to as OECF), the Power Corporation, decided to take up the construction of Bakereshwar Thermal Power Project. Pursuant to that decision, the Power Corporation issued a notice dated 19.7.1995 inviting tenders for the work of water intake and plant water system package for 3 x 20 m.w. units of Bakereshwar Thermal Power Project. The bid was required to be submitted in three separate covers, the first containing the earnest money deposit, the second, the techno-commercial evaluation and the third, the price bid. Pursuant to the tender notice, five bidders including Subhash Projects and L and T submitted tenders. As per the instructions issued to the bidders, bidders were not to be allowed to deviate from the principal requirements of the tender specifications. It was provided that the price quoted should remain firm throughout the period of the contract. In other words, no price variation was permissible. The procedure for opening of the tenders was also set out. Pursuant thereto, Cover-I containing the earnest money deposit and Cover-II containing the techno-commercial evaluation, were opened and the tenderers were found technically qualified. It was found that some vagueness had crept into the notice inviting tenders and that the scope of certain works remained vague or unclear. The technically qualified tenderers were called for discussion. Conferences were held. Ultimately, at a Technical Evaluation Committee meeting on 21.5.1996 for techno-commercial evaluation, it was decided to suggest seven modifications. The proposed modifications were forwarded to OECF. OECF suggested that the bidders may be allowed to submit price implications strictly limited to the seven aspects suggested at the techno-commercial evaluation and that bidders who agreed to withdraw the price variation clause must submit a positive price implication for the same. It may be noticed here that while L and T claims to have made a firm bid as per its original tender, Subhash Projects had resorted to price variation clause and had not indicated the positive price implication in its tender.
(3.) Pursuant to the communication in that behalf issued by the Power Corporation regarding the seven deviations and the clarifications relating to the work made at the conferences, Subhash Projects made a firm bid but increased its tender amount. L and T indicated an increase of Rs. 35 lakhs in view of the seven deviations mentioned in the communication, but indicated that it was willing to reduce the original tender amount by Rs. 64 crores in view of the clarifications issued about the work and in view of the proper understanding of the real scope of the work. Thereafter, the price bids were opened. As per the original price offered, L and T was placed as the fifth lowest and Subhash Projects though it had resorted to price variation in the original tender, was found the lowest bidder on the basis of the firm valuation offered by it subsequent to the clarificatory letter issued by the Power Corporation. But on taking note of the reduction proposed by L and T, while responding to the subsequent communication, its bid was found to be the lowest.;