LARSEN AND TOUBRO LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) In this writ petition, there is a challenge to the rejection letter dated 18.08.2010, whereby the petitioner No.1's bid has been rejected by the respondent No.2 (NTPC) on the ground of it being non-responsive in terms of clause 21 of the Instructions to Bidders (ITB) read alongwith Item No.4 of the Bid Data Sheet (BDS), Section-III. Consequently, the respondent No.2 also returned the bank guarantee submitted by the petitioner No.1 towards bid security.

(2.) It may be pointed out straightaway that the rejection was on the ground that the Deed of Joint Undertaking (DJU), which was to be submitted by the bidders, including the petitioner No.1, was found to be not in accordance with the prescribed format and was, therefore, regarded as being non-compliant. It is for this reason that the respondent No.2 (NTPC) rejected the bid submitted by the petitioner No.1. However, according to the learned counsel for the petitioners, the rejection is bad inasmuch as the requirement of furnishing a Deed of Joint Undertaking in the prescribed format was not a critical requirement. It was sufficient that a Deed of Joint Undertaking was furnished. If there was any deficiency in the Deed of Joint Undertaking furnished by a bidder, the same could be rectified as it had been done by the petitioner No.1 at a subsequent stage on 28.06.2010 when it submitted a revised Deed of Joint Undertaking dated 17.06.2010. Thus, according to the learned counsel for the petitioners, there was substantial compliance of the condition of furnishing a Deed of Joint Undertaking, in the first instance, and whatever deficiencies there were in the said Deed of Joint Undertaking were, in any case, rectified by furnishing a revised Deed of Joint Undertaking dated 17.06.2010 by the petitioner on 28.06.2010.

(3.) Thus, the entire controversy in this writ petition centres around the Deed of Joint Undertaking. According to the petitioners, the Deed of Joint Undertaking, which was initially submitted, was substantially compliant with the requirements of the tender. It was also contended that after the submission of the initial bid, there was correspondence between the petitioner No.1 on the one hand and, the respondent No.2 on the other, with regard to various aspects of the bid documents, but no query was ever raised by the respondent No.2 with regard to the Deed of Joint Undertaking alleging that the same was not compliant. In fact, it was also contended on behalf of the petitioners that the respondent No.2 (NTPC) sent a letter on 21.07.2010 indicating that as the bids are still under processing and are likely to take some more time and that the present validity of the petitioner No.1's proposal is upto 11.08.2010, the petitioner No.1 was requested to extend the validity of its offer for a further period of at least 60 days upto and, including 11.10.2010 and that the bank guarantee against the bid security may also be extended accordingly. Pursuant to this, the petitioner No.1 extended the validity of the offer for a further period of 60 days and also extended the validity. According to the learned counsel for the petitioners, there was no mention in the respondent No.2's letter dated 21.07.2010 with regard to the petitioner No.1's bid being non-compliant on account of the Deed of Joint Undertaking not being in terms of the tender conditions. It was contended that till the impugned rejection letter dated 18.08.2010, the petitioners were never informed by the respondent No.2 that their bid was non-compliant with respect to the Deed of Joint Undertaking. Thus, according to the learned counsel for the petitioners, the respondent No.2 took a complete volt-face in issuing the rejection letter dated 18.08.2010. Consequently, it was submitted that the said rejection was liable to be set aside.