LARSEN AND TOUBRO LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This Special Leave Petition has been filed by M/s. Larsen and Toubro Ltd. and one Lt. Col. Ajay Bhatia (Retired), challenging the judgment and order passed by the Division Bench of the Delhi High Court on 8th September, 2010, dismissing Writ Petition (Civil) No. 3231 of 2010, filed by the Petitioners herein. In the Writ Petition, a prayer had, inter alia, been made for an appropriate writ, order or direction upon the Respondent Nos. 1 to 3 to consider the bid of the Petitioner No. 1 in response to Request For Proposal (RFP) No. TM (M)/0025/CG/FPV dated 17th June, 2009 and to invite the said Petitioner for negotiation, since the said bid was the lowest bid, and, thereafter, to accept the same in terms of the said RFP.

(2.) On 17th June, 2009, the Respondent No. 1 sent a RFP to the Petitioner No. 1 for supply of 20 Fast Patrol Vessels (FPV) for the Indian Coast Guard. Similar requests were also sent to other persons as well. According to the normal procedure, the RFP was to be submitted by the intending bidders in two parts. The first part was to consist of the technical proposal and the second part was to be the commercial proposal or financial bid. In response to the said RFP, the Petitioner No. 1 submitted its bid on 19th October, 2009, containing a technical proposal and a commercial proposal in two parts. In its commercial offer, the Petitioner had indicated that it intended to avail of the Exchange Rate Variation benefit. The Petitioner and four others, including the Respondent No. 4, proved to be successful in the technical bid and, thereafter, the commercial bids were opened on 11th January, 2010, in the presence of the Bidders and/or their representatives. Although, the offer of the Petitioner No. 1 was found to be the lowest (L-1), its bid was held to be non-responsive, because, despite the tender condition that the price was to be firm and fixed for the entire duration of the contract and would not be subject to escalation, the Petitioner No. 1 had claimed the benefit of Foreign Exchange Rate Variation. On the other hand, Respondent No. 4, M/s. Cochin Shipyard Ltd., a Public Sector Undertaking, was found to be the second lowest bidder (L-2).

(3.) Apart from the fact that the Technical Evaluation Committee, which had been constituted on 21st October, 2009, found that the price quoted by the Petitioner had a variable foreign content, it was also found that in order to determine the foreign exchange content, the Petitioner had attached a copy of the rate card of the State Bank of India along with the commercial bid, which contained various exchange rates of different foreign currencies. The Petitioner, however, did not specify as to which foreign currency was the basis of the foreign exchange component in its commercial bid. Since the Commercial offers had to be firm and fixed and since the Petitioner had claimed the benefit of the foreign exchange variation component, the Contract Negotiation Committee, which was constituted in accordance with the Defence Procurement Procedure-08 (DPP), concluded that the commercial offer of the Petitioner was non-responsive. The Petitioner thereupon withdrew its offer and offered the quoted price without the Foreign Exchange Rate Variation content. The Contract Negotiation Committee, however, declared the bid of the Petitioner as non-responsive and awarded the contract to Respondent No. 4, which was declared as L-1. Challenging the said decision of the Respondents, the Petitioners filed Writ Petition No. 3231 of 2010 before the Delhi High Court.