PSA ENNORE PTE LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) ENNORE Port Limited (hereinafter referred to as "the ENNORE Port") is one of the 12 major ports under the Ministry of Shipping, Road Transport and Highways, Government of India. It issued advertisements on 7.3.2008 in "The Economic Times, Mumbai Edition" and in "The Hindu, Chennai Edition" calling for bids for the proposed development of a container terminal at ENNORE Port in Tamil Nadu on the Build, Operate, Transfer (BOT) basis. The bid was for selection of a developer to "design, engineer, finance, construct, operate, maintain, market, provide project facilities and services" of a container terminal with a quay length of 1000 metres and an estimated capacity of 1.50 million TEU on BOT basis for a concession period of 30 years at an indicative capital project cost of Rs.1300 crores. As per clause 1.2.1, the ENNORE Port adopts a two-stage process (collectively referred to as the "Bidding Process") for selection of the bidder for award of the project. The first stage (Qualification Stage) of the process involves qualification of interested parties / consortia who make an application in accordance with the Request for Qualification document (RFQ). At the end of the said stage, the ENNORE Port will announce a shortlist of five suitable pre-qualified applicants who shall be eligible for participation in the second stage of the bidding process comprising the Request for Proposals (RFP). A set of procedure is prescribed by way of instructions to the applicants. Clause 2(A) relates to general eligibility norms. Clause 2.2.1 relates to the eligibility of applicants. Clause 2.2.2 relates to the eligibility for pre-qualification shortlisting in technical capacity and financial capacity. The nature of documents to be submitted is prescribed under instruction 2(B). Clause 3 relates to the criteria for evaluation including the technical capacity and financial capacity. Only those applicants who are pre-qualified and shortlisted by the ENNORE Port shall be invited to submit their bids for the project.

(2.) ACCORDINGLY, the intending bidders submitted their applications for consideration by the Ennore Port for the purpose of Request for Qualification and for shortlisting. The RFQ documents were opened on 20.5.2008 and the scores obtained by 22 applicants on the basis of self assessment were announced. The writ petitioners were not shortlisted and, therefore, they were not made entitled for consideration at the bid stage regarding the technical capacity / financial capacity in respect of the project in accordance with the RFP document, and a decision to this effect was communicated to the petitioners by the communication dated 30.6.2008, which was questioned by each of the petitioners in separate writ petitions. The learned single Judge, by orders dated 21.1.2009 & 21.4.2009, rendered a finding that even in Government contracts there should not be arbitrariness and the reasons for refusal to shortlist the petitioners should have been communicated to each of the petitioners and failure of the same would amount to non-application of mind. Though the learned Judge found that the Ennore Port is obliged to assign reasons for refusal of the tenders of the applicants in not shortlisting them for the next stage of bid, he did not hold against the Ennore Port on the above issue for the reasons stated in the counter affidavits. However, the learned Judge found that the Ennore Port was not justified in refusing to exercise its discretion in seeking clarification from the applicants as required under clause 2.20.1 of the RFQ document. In the absence of such clarification, the applications ought not to have been rejected in terms of clause 2.20.2 of the RFQ document. With the above observations, the learned Judge remitted the matter to the Ennore Port to make fresh evaluation after seeking clarification from the petitioners. After the above orders, with various reasons, the Ennore Port once again refused to shortlist the petitioners and communicated the decision with reasons. Hence they have approached this Court by way of the present writ petitions.

(3.) IN Sterling Computers Limited v. M/s M & N Publications Limited and Others, (1993) 1 SCC 445, the Apex Court has held that "though the public authorities have some discretion in the contracts having commercial element, the discretion is not absolute and must be governed by some norms and procedures in public interest and for public good. The Court can intervene in the decision-making process of public authorities, if such decision is influenced by extraneous/irrelevant consideration which would ultimately vitiate the decision even if it is without bias."