Indure Limited vs State of Haryana

G.S. Singhvi, J.—In this petition filed under Article 226 of the Constitution of India, the petitioner has prayed for quashing of the decision taken by the Haryana Power Generation Corporation Ltd. (respondent No. 2) to award contract for design, manufacture, supply, delivery at site, unloading and storage at site, intra site transportation, installation, complete erection, testing and commissioning of complete bottom and Fly Ash Handling System for 1x210 MW. Unit6, Panipat Thermal Power Project (hereinafter described as PTPP) to M/s MELCO India Pvt. Limited (respondent No. 3).

For proper appreciation of the issues raised in the petition, it is necessary to notice the relevant facts.

For the purpose of suggesting the technical and other specifications for the Ash Handling System to be installed at PTPP Stage IV 1x210 Unit No. 6, the Haryana State Electricity Board (hereinafter described as HSEB) (predecessor of respondent No. 2) engaged the services of TATA Consulting Engineers (for short, described as TCE) and on the basis of the report submitted by TCE, the Chief Engineer (Thermal Design), HSEB, Panchkula issued notice dated 18.8.1994 for inviting sealed tenders in three parts (Earnest money first part, technical specification and general terms and condition second part and price bid third part). The following prequalification requirements were stipulated in the said notice.

"Prequalification requirements :

The bidder should be a manufacturer of critical equipment of ash handling system. The bidder should have designed, manufactured, supplied, erected and commissioned at least two hydrovacuum type fly ash handling systems, each having a capacity of 5 x 130 tonnes/hour (150 TPH) or higher which should be operating satisfactorily for a minimum period of two (2) years by the time bid is to be submitted. Similarly, the bidder should have designed, manufactured, supplied, erected and commissioned 2 jet pump type bottom ash handling systems, each having a capacity of 60 TPH or higher which should be operating for a minimum period of two years by the date of bid submission.

In case the bidder is manufacturer but does not meet the above stipulated experience, he should have collaboration with a reputed manufacturer who meet the above manipulated experience requirement. In such a case, the collaboration should have been approved by Govt. of India and should have clearance of Reserve Bank of India (RBI) and the collaboration should be valid minimum till expiry of the warranty period of the subject contract.

The documentary evidence to the above facts should accompany the request for issue of tender documents."

Clauses 7 and 8 of the general instructions incorporated in the notice, which have bearing on the decision of this case, are also reproduced below :

"7.00 Chief Engineer/Thermal Design, reserved the right to reject any of the tenders or accept any tender without assigning any reasons, whatsoever.

8.00 Chief Engineer/Thermal Design, may relax prequalification requirement in exceptional cases."

The last date of submission of the tenders which was fixed as 31.5.1994 in the Notice Inviting Tender (N.I.T.) was extended to 30.6.1994 vide corrigendum issued on 26.5.1994 and then to 18.7.1994 on the request of M/s HV Equipments (P) Ltd.

In response to the advertisement, the following parties applied for tender documents :

The Indure Limited petitioner.

M/s MELCO India Pvt. Ltd. respondent No. 3.

M/s D.C. Industrial Plant Services Ltd. Calcutta.

M/s Larsen And Toubro Ltd.

HV Equipments (P) Ltd. New Delhi.

Vide communication Annexure R.2/8 dated 5.5.1994, respondent No. 3 requested the Chief Engineer (Thermal Design) to supply the tender documents by stating that it had entered into a collaboration with M/s Projects and Developments India Ltd. (a Government of India Undertaking), Sindri for design, engineering, inspecting and follow up supervision during construction and commissioning of Ash Handling System. After two days, respondent No. 3 wrote letter Annexure R.2/9 to the Chief Engineer (Thermal Design) and requested him to give relaxation in the prequalification requirements by making the following submissions :

"Ref. subject above, we have been asked to fulfil following pre qualification requirements to get higher tender documents.

(1) Technical Tie up arrangement with PDIL

(2) Performance report of PDIL''s executed projects. In this connection, we will hereby request you to kindly consider the following :

(1) Our formal agreement and arrangement with PDIL will be finalised soon. In the meanwhile, they have given one letter which we enclosed without requisition papers wherein they have confirmed their participation with us in HSEB tender. Detailed tieup will be sent shortly.

(2) Regarding performance of 60 TPH Plant, we have written to PDIL and they will be sending the certificate soon.

(3) Kindly note that we are a new upcoming entrant in the field of complete Turnkey jobs. Furthermore, we are the only party located in same State of Haryana engaged in this activity. For your kind information, our unit is owned by graduate engineers who have experience of nearly 20 years in the field of manufacturing and supply of Ash Plant equipments. We are not only supplying these equipments all over the country but also at Panipat and Faridabad Thermal Power Plants.

Thus we request your goodself to give certain relaxation for pre qualification since our case is exceptional.

After having described above, we now request you to issue the tender documents. However, we confirm that we will submit all papers in regards to Sr. No. (1) and (2) along with our offer."

The request of respondent No. 3 for relaxation of prequalfication requirements was examined by the officers of H.S.E.B. and the recommendation made by the Executive Engineer for grant of relaxation subject to the condition that the petitioner shall meet and supply the qualifying requirement documents before the opening of the bid on 31.5.1994 was approved by the Chief Engineer (Thermal Design) on 9.5.1994. This is clearly borne out from the office notings, which have been reproduced in paragraph 4 of the affidavit dated 9.9.1999 filed by Shri J.D. Gulati, S.E., Thermal Design (Mech), HPGCL.

In pursuance of the decision taken by the Chief Engineer, tender documents were issued to respondent No. 3 vide memo dated 9.5.1994 subject to the condition that it will supply the qualifying requirement documents by 31.5.1994, else its tender will not be accepted. A similar condition was imposed in the case of M/s HV Equipments (P) Ltd. The documents submitted by the petitioner and M/s HV Equipments (P) Ltd. were examined by the department in the first week of August, 1994 and on 5.8.1994, the Chief Engineer (Thermal Design) approved the recommendation made by the Executive Engineer to relax the prequalification requirements in favour of respondent No. 3 by exercising his power under Clause 8 of the NIT. This is clearly revealed from the following extracts of the notings recorded on the file, which have been quoted in the affidavit of Shri J.D. Gulati :

"Noting of AEE from NP57 to above may kindly be perused, which is regarding prequalification requirement in respect of M/s Melco and M/s H.V. Equipment.

(A) M/s Melco (Ch165).

The company after having entered into agreement of collaboration with M/s I&A meets the requirement of Bottom Ash Hoppers (of 2 x 60 TPH capacity). However, in case of fly ash capacity, they have supplied two streams of 30 TPH capacity against specification requirement of 5 x 30 TPH capacity. However, technically speaking this requirement is also met with as per stream capacity 30 TPH is the major criteria, and a company making 30 TPH capacity fly ash handling system can give any number of streams as per our requirement. Thus, it is only a very insignificant deviation and Chief Engineer/Thermal Design is competent under Clause 8.00 of NIT to "relax the prequalification requirement in exceptional cases."

Agreed Sd/ C.E./T.D. 5/8.

This may be agreed by Chief Engineer/Th. Design, please.

(B) H.V. Equipment (Ch166)

Ask for the consent of M/s L & T from M/s H.V. Equipment as a proof of their collaboration. Sd/ CE/TD 5/8

This company has informed that they have entered into collaboration with M/s L&T (who are a qualified bidder in their own capacity.)

But no proof of collaboration has been submitted so far. This can be asked before the opening of the bids, the date of which has been now proposed to 19.8.1994 from 4.8.1994 as per C.E.T.D. message at Ch167A.

Submitted for approval of CE/TD please.

Sd/ Xen/MII

4.8.1994

S.E. (Mech.) (on tour)

C.E./T.D.

As per remarks in the margin.

Sd/ CE/TD

5.8.1994"

In view of the decision taken by the competent authority, the technical bid submitted by respondent No. 3 was opened on 19.8.1994 along with those of other tenderers in the presence of representatives of the bidders. The petitioner was represented by Shri Yogesh Sharma and respondent No. 3 was represented by T. Chatterjee. However, no final decision was taken for award of contract to any of the bidders and the matter was virtually put in cold storage in June, 1995 due to lack of resources. Vide memo dated 19.6.1995, the Chief Engineer (Thermal Design) informed tenderers that the earnest money deposited by them will be refunded shortly. In the meanwhile, some correspondence was made between the authorities of HSEB and TCE about the prequalification requirements and at one stage, TCE opined that respondent No. 3 and M/s Larsen & Toubro Ltd. did not fulfil the prequalification requirements.

In 1997, HSEB was converted into two Corporations one of which is respondent No. 2 and the other is Haryana Vidyut Parsaran Nigam Ltd. After its formation, Board of Directors of respondent No. 2 decided to ask the bidders to submit their price along with EMD. Accordingly, memo dated 24.8.1998 was sent to all the tenderers. Thereafter, the matter progressed in the following manner :

(a) Vide letter dated 7.12.1998 addressed to the Chief Engineer, Thermal Design, TCE submitted technical evaluation report on the bids submitted by the petitioner, respondent No. 3 and others. In the said report, TCE opined that respondent No. 3 does not meet the prequalification requirements and the contracts executed by it were small in magnitude as compared to the subject contract.

(b) The report of TCE was forwarded to the petitioner, respondent No. 3 and M/s D.C. Industrial Plant and Services Ltd. and after receiving the clarification from respondent No. 3, the Chief Engineer (Thermal Design) vide memo dated 29.12.1998 asked the TCE to submit purchase recommendations.

(c) In response to the letter of the Chief Engineer, TCE submitted purchase recommendations vide letter dated 19.1.1999. Paragraphs 2 to 4 of that letter, which have bearing on this case, read as under :

"SUMMARY

2.1 The summary of quoted, evaluated and differential evaluated prices for design, manufacture, supply, erection, testing and commissioning along with quoted completion periods is furnished below for your ready reference :

Sr. No.

Item/Bidder

DCIPS

Indure

Melco

2.1.1

Lumpsum Quoted Price (Rs.)

19,42,00,000

15,75,00,000

14,32,60,000

2.1.2

Lumpsum Evaluated Price (Rs.)

19,59,00,000

16,35,63,000

14,61,10,000

2.1.3

Differential Evaluated Price (Rs.)

(1) 4,97,90,000

(1) 1,74,53,000

Base

2.1.4

Completion period

Not indicated

Not indicated

Before end March, 2000 as specified.

2.2 All the Bidders have quoted firm prices.

2.3 It may be noted that the quoted prices for the technically recommended alternative for fly ash handling system (i.e. Fly Ash Handling System with Mechanical Exhausters) are lower compared to those for the other alternative of fly ash handling system with hydraulic exhausters. Hence this alternative (alternativeII) only has been considered for evaluation.

2.4 Melco and Indure have included the Excise Duty (E.D.) and Sales Tax (S.T.) in their lumpsum quoted price whereas DCIPS have not included E.D. and S.T. in their quoted lumpsum price. However, DCIPS have indicated lumpsum E.D. and S.T. separately.

2.5 Evaluated prices indicated in the above table include E.D. and S.T.

2.6 All the three offers have been evaluated on equitable basis in regard to scope and technical specifications.

2.7 We have considered the evaluation the alternative of locating the mechanical exhausters in the ESP area since Melco and Indure have quoted only for that alternative while the quoted price of DCIPS for the above alternative is higher than that of locating the mechanical exhausters in ash water pump house. However, technically DCIPS have also recommended location of exhausters close to ESP.

3.0 RECOMMENDATION.

3.1 Melco''s offer generally conforms to the specification except for the items discussed in clause 4.0 below. The quoted and evaluated prices of Melco are the lowest. Their quoted completion period meets the project schedule. In view of the above, we recommend that the offer of Melco be considered for acceptance subject to the following :

3.1.1 We note that they do not have adequate inhouse capability for civil design. In view of this, they should confirm that they will engage a reputed civil Consultant for design engineering of civil and structural aspects of the subject contract.

3.1.2 As they do not have collaboration with any reputed fly ash handling system manufacture, they should confirm that they will furnish the pneumatic system design calculations (such as pipe sizing, pressure drop, vacuum pump sizing, etc.) obtained from a reputed agency like IIT, New Delhi in addition to submitting their own design calculations to IIPGC/TCE for their review and approval.

3.1.3 We understand from the feedback received from one of the Clients of Melco (Birla Cellulose at Kosamba) that they were not very happy with electrical and instrumentation work of Ash Handling System supplied by Melco. Hence, you may please obtain confirmation from Melco indicating that they will augment the electrical and instrumentation engineering capability or engage a reputed Consultant for carrying out electrical and instrumentation engineering.

3.1.4 HPGC shall obtain suitable letter from the bankers of Melco indicating that they will furnish bank guarantees and working capital as required by Melco for executing the subject contract satisfactory, since the turnover of their group companies is around Rs. 900 lakhs only.

3.1.5 Melco shall furnish satisfactory confirmation/clarifications to the points discussed in Clause 4.0 below.

3.2 We request HPGC to take care of the following before finalising the order irrespective of the Bidder selected for placement of order :

For AlternativeII, High Pressure (HP) water will be required basically for operation of jet pumps and at other times after deashing of bottom ash, these pumps will not operate. As per the specification Low Pressure (LP) water pumps are required to supply water for flushing of ash slurry disposal pipes also which lasts for about 30 minutes. The head requirement for flushing water is around 105 m and for services other than flushing for which water will have to be supplied by LP water pumps, the head requirement is around 65 m and operates for about 4 hours. Therefore, combining of flushing water service with other services of LP water pumps will result in avoidable extra energy consumption for about 4 hours. Hence, we recommend that flush water be taken from HP water pumps. In view of the above, we recommend that the following specifications be adopted for water pumps :

Details

HP Water Pumps

LP Water Pumps

Quantity

Two(2) (1 operating + 1 standby)

Two (2) (1 operating 1 standby)

Capacity cu.m./hour

750

750

Total discharge head(m)

105

65

4.0 DISCUSSION OF OFFERS

4.1 OFFER OF MELCO

4.1.1 Melco have included 4 Nos. of HP water pumps of 375 cu.m./hr capacity and 90 m head instead of 2 Nos. 750 Cu.m./hr capacity with 105 m head required as recommended above. Melco may be asked to confirm that they will include two (2) Nos. of 750 cu.m./hr capacity and 105 M head HP water pumps. They have included 2 Nos. LP water pumps of 750 cu.m./hr capacity with 90 m head. Please advise them to include 2 Nos. LP water pumps of 750 cu.m/hr capacity and 65 m head as recommended above. Melco may be requested to confirm the above indicating the rebate for the same. This being minor, the same has not been evaluated.

4.1.2 They have not included start up spares and maintenance tools. They may be asked to confirm that they will include the same in their scope and furnish the list of the start up spares and maintenance tools. However, this has been evaluated suitably.

4.1.3 They have quoted Rs. 27,00,000 extra for including alloy cast iron pipes for conveying slurry from jet pumps to slurry sump as specified instead of cast iron pipes included by them in their base price. We have considered the additional amount of Rs. 27,00,000 quoted by them for evaluation. This may please be considered while placing the order on them.

4.1.4 The sum of breakup prices (items 1.2.1 to 1.2.5) furnished in the price schedule works out to Rs. 14,32,50,000 while the lumpsum price quoted against them (item ?) 1.1 is Rs. 14,32,60,000. Please advise them to confirm the total price as Rs. 14,32,50,000.

4.1.5 They have confirmed the specified completion period with some conditions. Melco may be requested to withdraw all these conditions since these are required to be discussed amongst Melco, HPGC and TCE and arrived at mutually acceptable conditions.

4.1.6 In clause No. 9(4) of general terms and conditions of Melco''s offer, they have indicated that the foundations, buildings, pipe racks, etc. have to be arranged by ''customer'' (i.e. HPGC) as per mutually agreed dates as civil works are not included in their scope. However, Melco have included and indicated the cost for structural and civil works in their quoted prices. We presume that they have put this condition in clause No. 9(4) by oversight and hence you may advise them to withdraw this clause. Further, they have not clearly indicated price for foundations of fine ash silo. They may be advised to confirm that all the civil and structural works including pipe racks as specified and required for ash handling system are included in their scope.

4.1.7 They may be asked to confirm that the cost of vacuum pump house is included in the cost quoted by them for miscellaneous civil works.

4.1.8 They have offered a rebate of 0.002% if their bills are cleared within 30 working days. HPGC may review this along with all other commercial points and GCC.

4.1.9 They have indicated in their price schedule that the amount of excise duty on bought out items included by them in the lumpsum price is Rs. 54 lakhs. They may be asked to confirm that there will not be any variation in this and it is firm.

4.1.10 Melco have not furnished total value of foreign currency component included by them for vacuum pumps in the total quoted price. They have also not furnished details regarding exchange rate considered and customs duty for each vacuum pump included by them in their lumpsum price.

4.1.11 Vide AnnexureIII of their price schedule they have quoted for fly ash handling by Mechanical Exhauster and conveying of dry fly ash from 3 cell collectors to silo by dense phase system. This has not been considered since they do not have experience in dense phase system. This has been indicated in our TER also.

4.1.12 Melco have included six (6) slurry pumps each of 32 meters head while as per our calculations the same need to have 35 meters head. You may please obtain confirmation from Melco indicating that they will supply slurry pumps with a minimum head of 35 meters. However, they will have to submit calculations for the slurry pump head during detail engineering based on the finalised layout. This has not been evaluated since in our opinion there will not be any cost implications due to this.

4.2 Discussion of the offer of Indure is furnished in AnnexureIII.

4.3 Discussion of the offer of DCIPS has not been furnished since the difference between the evaluated cost of the lower offer and that of DCIPS is very high (Rs. 4.98 crores)."

As soon as the petitioner came to know about the recommendations of TCE, it submitted representation dated 1.2.1999 addressed to the Minister, Non Conventional and Energy Resources, Haryana with the request that the bid of respondent No. 3 may not be accepted in view of the fact that it did not fulfil the prequalification conditions. The said representation appears to have been forwarded to respondent No. 2 and in its meeting held on 16.2.1999, the Directors Standing Committee, after considering the representation of the petitioner and the recommendations of TCE, decided to constitute a committee comprising of the Managing Director, Director (Finance), Director (O&M), Chief Engineer (Thermal Design) and S.E. Mechanical, Thermal Design, HPGCL to discuss the matter with the consultantsM/s TCE in the light of the representation of the petitioner. After due deliberation, the Committee made the following recommendations :

"Item Agenda No.

Resolution

NIT No. 61/CE/TD/M11/43Ash Handling System for Unit6.1 x 210 MWPurchase proposal.

The Committee considered in detail the points made in the representation of M/s Indure and the discussion thereafter with the Technical Consultant. Without commenting on the propriety of action of the C.E./TD in relaxing bid qualification requirement, the Committee recommends that M/s Melco, being the lowest bidder with a difference of Rs. 1,74,53,000/ in evaluated prices from next higher bidder, should be awarded the contract. The fact that M/s TCE, the consultant, have expressed faith in technical capability of M/s Melco to execute the job and the financial capability of the firm has also been verified and found satisfactory and also the fact that the Project has to be commissioned by March, 2000 are important considerations which persuade the committee to make this recommendation. The Committee however feels it prudent to seek the expert legal advice before the contract is finally awarded to M/s Melco, especially in view of the representation of M/s Indure."

After considering the report of the committee headed by the Managing Director, advice tendered by Legal Remembrancer and after deliberating over the matter, the Directors Standing Committee recommended on 15.3.1999 that the contract be awarded to respondent No. 3 being the lowest bidder. These recommendations are reproduced below :

"2. NIT No. 61/CE/TD/MII43Ash Handling System for Panipat Unit6 1 x 210 MW.

The construction of Unit6 is a time bound project. In order to ensure its timely completion, the bids have been invited only from the tenderers who had participated earlier, before the project was put on hold because of paucity of funds. Further to ensure proper completion, present technical and financial capability of the bidders is considered relevant. The Committee also considered the legal advice of L.R./HPGCL dated 9.3.1999 and after deliberating on all the aspects recommends the award of the contract on M/s Melco, the lowest tenderer."

The Board of Directors of respondent No. 2 considered the matter in its 5th meeting held on 17.3.1999 and approved the recommendations made by the Directors Standing Committee and in pursuance of that decision, Chief Engineer (Thermal Design) issued Letter of Intent (LOI) dated 20.3.1999 (Annexure P.7) to respondent No. 3 for design, manufacture, supply, delivery to site, unloading and storage at site, intra State transport, installation, complete erection, testing and commissioning of complete bottom of fly Ash Handling System at a total lump sum of Rs. 14,59,50,000/ and vide letter dated 31.3.1999, respondent No. 3 confirmed its unconditional acceptance of LOI.

The petitioner vide representation dated 2.4.1999 addressed to the Chairman of respondent No. 2 protested against the issuance of LOI to respondent No. 3. The matter was then reviewed by a committee of five Ministers with Shri Mani Ram Godara (Home Minister, Haryana) as its Chairman. The Committee, which included Shri Attar Singh Saini, Minister for Non Conventional Resources, was assisted by Shri S.Y. Quraishi, Commissioner and Secretary, Power, Shri S.C. Munjal, Managing Director, Shri P.P. Pamneja, Director (O&M), Shri R.K. Sud, Chief Engineer (Thermal Design) and Dr. I.M.N. Soi. S.E. Mechanical (Thermal Design) (all belonging to respondent No. 2). After detailed deliberations, the Committee left it to the Department of Power to take action in the matter. Paragraphs 6, 7 and 8 of the report of the Ministers Committee read as under :

"6. The Committee was further informed that although the representations of M/s Indure were on the matters relating to their fulfilling the NIT conditions, existence of collaborators and their capability to carry out the work of Unit6, these were made only after the evaluation of price bids and receipt of purchase recommendations from the consultants although the process of issue of tender documents and technical evaluation of the tenders had commenced in the year 1994 and participation of M/s Melco was well known to them. It was also informed to the committee that the retendering of the contract will mean approx. six months delay besides legal problems which may come up due to cancellation of award of contract to Melco."

The Committee also heard the representative of M/s Indure in person. The Committee members observed that relaxing of bid qualifying requirement in case of M/s Melco by the then CE/TD in 1994 was not in order. The Committee was informed that GOH had already ordered HPGC to initiate action for fixing of responsibility for this action. The Chairman of the Committee was of the opinion that since all the aspects were considered by the Directors Standing Committee and Board of Directors in various meetings, interference with the award of contract at this stage will delay the project and will not be advisable.

After detailed deliberations the Committee decided that the Department of Power may take a view on the representation on the basis of its own assessment and expedite action against officials found guilty of relaxation of pre qualification conditions."

Thereafter, the State Government constituted a Committee of seven officers with Financial Commissioner and Secretary to Government, Health Department as its Chairman. This Committee held its meetings on 15th, 17th June and 12th and 13th July, 1999 and after detailed deliberations, the entire Committee with the exception of its Chairman unanimously decided to uphold the decision of the Board of Directors of respondent No. 2 to award contract to respondent No. 3. The observations made by the Committee of seven officers, the findings recorded by it and its recommendations, which form part of Annexure R. 2/6, read as under :

"5.3 The Committee held its 2nd meeting on 17.6.1999. Director/O&M presented the report on technical capability of M/s Melco (Copy of report placed at AnnXI). Director/O&M informed that to assess technical suitability of Melco a three members expert technical team comprising of Chief Engineer/Faridabad TPS, Superintending Engineer/Faridabad and Xen/TG Mte., Faridabad TPS, visited the works of M/s Melco Faridabad on 16.6.99 to verify the credentials of the said Company. The report of the expert team about the various design, manufacturing, quality assurance facilities and the technical manpower available with M/s Melco Faridabad has been annexed with report at AnnXI. Based on the salient information contained in the report of the expert technical team the Director/O&M observed as under :

(i) The company has got a fully equipped design office. The design office is well equipped with computers for computer aided design having AUTOCAD facilities and skilled engineers well conversant with autocad to do the design work for various projects under execution by the company.

(ii) The list of plan and machinery furnished by the company was verified by the expert team and found to be in order. The company has well equipped foundry having different type of furnaces to handle all kinds of foundry jobs required for its various projects. The company has 4 Nos. electric furnaces for various heat treatment applications. The machine shop division of the company is equipped with heavy duty lathes and boring, machining and milling machines to handle various applications required for manufacturing of critical ash handling equipment. The range of assemblies produced by M/s Melco Faridabad includes Vacuum breakers, Clinker grinders, Hydrojet pumps, Vacuum producers, Slurry pumps, Air washers and all types of valves required in the ash handling system.

(iii) The company has established its quality assurance plans in adherence to the codes and standards governing plant design and construction. Various established quality levels and statutory requirements are being applied during manufacturing activities.

(iv) The team also verified the rolls of the company and found that M/s Melco have 17 engineers (degree holders) including one postgraduate in engineering. In addition to the above, they have 11 diploma holders and 5 personnel skilled in Autocad working in their design department.

(v) Out of the total fabrication equipments of around 50 tonnes required for Panipat Unit6 Project, they have already completed the fabrication of 15 tonnes of material and out of total, 130 drawings, which are required to be submitted to HPGCL/M/s TCE, M/s Melco have already submitted 93 drawings to M/s TCE out of which 27 Nos. Drawings stands approved.

5.4 The Director/O&M has, further, noted about the experience of M/s Melco as under :

M/s Melco had executed job of Ash Handling System comprising of design, engineering, supply, erection, testing and commissioning for two numbers boilers of Grasim Industries, Nagda. The system supplied has a removal capacity of 2x40 TPH fly ash and 2x30 TPH bottom ash removal capacity. The complete system is working satisfactorily for the past 2 years. M/s Melco has been given a repeat order by the Grasim Industries on the basis of earlier performance.

The other major job executed by M/s Melco is for Hindalco Industries Ltd. Renukoot for design, engineering, supply, erection, testing and commissioning of Ash Handling System comprising of 1 stream of bottom ash having a removal capacity of 60 TPH through Jet pump and 2 stream of 40 TPH removal capacity for fly ash with vacuum created by mechanical exhausters. The plant at Hindalco is also functioning satisfactorily for the past 2 years and on the basis of their performance, they have been given a repeat order by them for another 2 boilers having the same capacity as executed by them earlier. A total 140 TPH Fly Ash removal capacity is thus operational at Hindalco Industries Ltd., Renukoot.

In addition to the above, M/s Melco had also executed a running contract for operation and maintenance of complete ash handling system of 500 MW Thermal Power Station of Tata Electric Power Company, Trombay Station, ''B''.

M/s Melco has also been supplying the critical ash handling spares to all the major thermal power stations in India which includes power stations of NTPC also. NTPC has already sent a satisfactory report for the various ash handling spares/equipments supplied to them by M/s Melco.

5.5 Director/Finance presented the report on financial capability of M/s Melco. (copy of report placed at AnnxXII). Director/Finance explained that financial statements for last three accounting periods have been examined. Based on the salient information culled out therefrom, following observations are made :

(i) M/s Melco show a debtequity ratio of 0.85 : 1 for the year ending 31.3.1997 to 0.82 : 1 for the year ending 31.3.1998. This shows that the owners have adequate stake in the company and rely more on their own funds than on loans for running the business.

(ii) M/s Melco had a sales turnover of Rs. 805.22 lacs in 199697 and of Rs. 678.15 lacs in 199798. The contract in respect of ash handling system involves a financial implication of Rs. 1459.60 lacs, which would be spread over the current and the next financial year. This contract implies a quantum jump in the operations of the company.

(iii) M/s Melco are a profit making company and registered profit before tax of Rs. 32.48 lacs in 199697 and Rs. 29.02 lacs in 199899. The financial statements show that the company made profit after tax of Rs. 21.98 lacs and Rs. 22.12 lacs in 199697 and 199899 respectively. However, the net profit margin of 2.73% in 199697 and 3.26% in 199798 is quite low.

(iv) The Company''s networth, which stood at Rs. 139.51 lacs on 31.3.1997 went up to Rs. 181.40 lacs on 31.3.1998. The company had a return on average networth of Rs. 20.2% in 199798 and of 13.8% in 199899.

(v) The ability of the firm to meet its current liabilities is comfortable as seen from its current ratio of 2.31 times for the year 199798. Even the quick ratio for the year was 1.5 times, which shows that the company''s short term solvency is assured.

(vi) As seen from the inventory turnover ratio of 8.4 times for the year 199697 and 7.38 times for the year 199798. M/s Melco are fairly efficient in the deployment of their stocks.

(vii) On the basis of the contract price of Rs. 14,59,60,000 and execution period of 9 months, it is noted that the Company would have, at any point of time, a sum of Rs. 3.24 crores blocked in the contract. From the details of credit limit secured by the company as furnished to the HPGC earlier, it is seen that against the aforesaid requirement of Rs. 3.24 crore, it would have access to an amount of Rs. 4.76 crore. Thus, M/s Melco are unlikely to face cash crunch for the execution of the subject contract.

(viii) The HPGC would have under clauses 4 and 6 of general terms and conditions of the contract, a cover by way of security money of Rs. 36.5 lacs and security deposit of Rs. 1.46 crores in the shape of BG required to be lodged by the contractor. In light of the foregoing position, M/s MELCO has the financial capability to successfully execute the contract.

5.6 The committee observed that while giving the recommendations for award in favour of Melco M/s TCE, Bangalore (The Project Consultants) have pointed out the following :

M/s Melco do not have adequate inhouse capability for civil design. In view of this, they should confirm that they will engage a reputed civil Consultant for design engineering of civil and structural aspects of the subject contract.

M/s Melco do not have collaboration with any reputed fly ash handling system manufacturer, they should confirm that they will furnish the pneumatic system design calculations (such as pipe sizing, pressure drop, vacuum pump sizing etc.) obtained from a reputed agency like, IIT, New Delhi in addition to submitting their own design calculations to HPGC/TCE for their review and approval.

From the feedback received from one of the clients of Melco (Birla Cellulose at Kosamba) that they were not very happy with electrical and instrumentation work of Ash Handling System supplied by Melco. Hence, HPGC should obtain confirmation from Melco indicating that they will augment the electrical and instrumentation engineering capability or engage a reputed consultant for carrying out electrical and instrumentation engineering.

HPGC shall obtain suitable letter from the bankers of Melco indicating that they will furnish bank guarantees and working capital as required by Melco for executing the subject contract satisfactorily, since the turnover of their group companies is around Rs. 900 lakhs only.

The committee also noted that Melco has already intimated about their decision to appoint the following reputed consultants for vetting of civil, electrical and mechanical drawings calculations and has requested for approval/acceptance of these appointments by HPGC (AnnexureXIII).

Civil : M/s Bhagwati Associates, Mumbai,

Electrical : M/s Power System Consultants, Mumbai

Mechanical design calculations : Indian Institute of Technology, New Delhi.

Regarding the letter from their Bankers, the same was obtained from M/s Melco and the credit limits available to M/s Melco is found in order by the Whole Time Directors.

The Committee also noted that in response to the reference made by M/s HINDALCO on 15.6.1999 regarding the performance of the system, commissioned by M/s Melco, the reply from HINDALCO has confirmed satisfactory performance and execution ahead of schedule. (AnnxXIV).

6.0 FINDINGS

At the end of four sittings of the committee, the following findings emerged out :

(i) M/s Melco did not meet the prequalification requirement at the time of bid submission which stipulates that the bidder should have executed fly ash handling system of 5x30 TPH capacity and bottom ash handling system of 2x60 TPH capacity. M/s Melco had an experience of 2x30 TPH for fly ash and 1x60 TPH for bottom ash. M/s Melco did not have the requisite experience at the time of bid submission as already observed by Board of Directors/Govt. of Haryana. M/s Melco was allowed to participate by relaxing the conditions, which was not correct, for which Board of Directors/Govt. of Haryana have already ordered enquiry against the defaulting officials. Accordingly, HPGCL has initiated necessary disciplinary action against the then CE/TD and Xen concerned and Show Cause Notices have been issued.

(ii) M/s Melco even today do not meet the prequalification requirement of the NIT as already observed by the Board of Directors of HPGC/Govt. of Haryana.

(iii) As on today Melco has executed ash handling systems for captive power projects and industrial application boilers having capacity of Fly Ash Handling of 2x40 TPH and Bottom Ash Handling of 1x60 TPH. The present capacity of ash handling system for Unit6 finalised after technical discussions is 4x40 TPH fly ash handling system and 2x60 TPH bottom ash handling system.

(iv) Though the ash handling systems supplied by M/s Melco are not for big thermal projects but ash handling plants of captive power projects and industrial application boilers and these are similar in nature irrespective of application.

(v) One of the major jobs executed by M/s Melco is for Hindalco Industries wherein Melco have designed, manufactured, supplied, erected and commissioned ash handling system with capacity of fly ash as 2x40 TPH and 1x60 TPH for bottom ash against Panipat Unit6 requirement of 4x40 TPH for fly ash and 2x60 TPH for bottom ash. In response to the committee''s reference M/s Hindalco has informed about the satisfactory performance of ash handling system supplied and erected by M/s Melco for the past more than 2 years.

(vi) M/s Melco had a sales turnover of Rs. 805.22 lacs in 199697 and of Rs. 678.15 lacs in 199798. The contract in respect of ash handling system involves a financial implication of Rs. 1459.60 lacs, which would be spread over the current and the next financial year. This contract implies a quantum jump in the operations of the company. The company has not executed the project of such magnitude in the past.

(vii) The analysis of the financial statements for the last three accounting periods of the company as per report of Director. Finance show a sound financial health of the company and M/s Melco are unlikely to face cash crunch for the execution of the contract for Unit6.

(viii) M/s TCE (the consultants for the Project) while recommending the award of contract to M/s Melco have put preconditions to be fulfilled by Melco to take care of shortcomings of inadequate inhouse capability for civil design, pneumatic system design calculations and for electrical and instrumentation design. M/s Melco has already intimated for appointment of reputed consultants to take care of these shortcomings and has requested for approval/acceptance of these appointments by HPGCL.

(ix) The three member expert technical team headed by CE/O&M Faridabad TPS after visiting the works/factory of Melco have found adequate infrastructure facilities available with M/s Melco to carry out design, manufacture and execution of Fly ash (both wet and dry) and bottom ash handling system.

(x) The LOI (Letter of Intent) was issued on M/s Melco on 20.3.1999 and unconditional acceptance of the same was received from M/s Melco on 31.3.1999. The contract has been deemed to be effective from the date of issue of LOI, as per general terms and conditions of NIT. Further activities e.g. release of advance payment, issue of detailed purchase order are held up.

RECOMMENDATIONS :

In view of infrastructure facilities available with M/s Melco as brought out in the report of Director (O&M); Sound financial health of the Company as brought out in the report of Director (Finance); Feedback of satisfactory performance from the Organizations like NTPC and HINDALCO for which MELCO has executed jobs; Appointment of reputed consultants to overcome in house design capability shortcomings, the Committee is of the opinion that M/s MELCO has the technical and financial capability to successfully execute the contract for design, manufacture, supply, installation, erection, testing and commissioning of the complete Ash Handling System for Panipat Unit6.

The Committee, however, recommends that HPGCL should closely monitor and review the progress of the contract through an Expert Committee constituted for this purpose. This should be in addition to regular monitoring mechanism for the project."

The Chairman of the Committee recorded her dissent by observing that respondent No. 3 does not have sufficient experience for execution of the work relating to Ash Handling System of the required capacity and, therefore, it would be better to retender the entire work.

The report of the Officers'' Committee was placed before the Government of Haryana on 30.7.1999 and after examining the case which was placed before it in the form of memo dated 5.8.1999 prepared by the Financial Commissioner and Secretary to Government of Haryana, Power Department, the Cabinet of Haryana approved the award of contract to respondent No. 3 which was duly communicated to the Managing Director of respondent No. 2 vide letter Annexure R.2/7 dated 6.8.1999 and on that very day, detailed purchase order (Annexure P. 13) was issued to respondent No. 3.

The petitioner has challenged the decision of respondents No. 1 and 2 to issue LOI and place purchase order in favour of respondent No. 3 on the following grounds :

(i) the consideration of the tender submitted by respondent No. 3 is violative of Article 14 of the Constitution of India because the said respondent did not fulfil the prequalification requirements and was not eligible to submit tender;

(ii) the Chief Engineer (Thermal Design) did not have the jurisdiction to grant relaxation in the conditions of eligibility stipulated in the NIT;

(iii) the relaxation granted under Clause 8 of the general instructions is wholly arbitrary, unreasonable and unjustified and the decision of the Ministers Committee as well as the Committee headed by the Financial Commissioner and Secretary to Government of Haryana, Department of Health to overlook the illegality committed by the Chief Engineer (Thermal Design). Simply on the ground of possible delay in the execution of the project is not justified; and

(iv) if H.S.E.B. or respondent No. 2 intended to relax pre qualification requirements, then the same should have been duly notified so that others, who did not possess the experience mentioned in the pre qualification clause, could also apply.

Respondents No. 1, 2 and 3 have not only questioned the bona fides of the petitioner but have also challenged the maintainability of the writ petition on the ground of unexplained delay of 5 years in the filing of writ petition. They have pleaded that the decision taken by the official respondents to award contract to respondent No. 3 is in larger public interest and in the absence of any allegation of mala fides, the relaxation granted by the Chief Engineer (Thermal Design), who is a technical person, cannot be decried as arbitrary or unjustified. They have averred that the petitioner has tried to monopolise the installation of Ash Handling Systems in the country and the writ petition has been filed with the sole object of throttling any possibility of competition by others in the field. Respondent No. 3 has also alleged that the petitioner had fabricated an order in the name of Delhi High Court with a view to damage the business interest of the former.

In the replications filed by it, the petitioner has reiterated its prayer for invalidation of the contract awarded to respondent No. 3. It has also made detailed averments to explain the charge levelled by respondent No. 3 about the fabrication of the record. Along with the replication filed to the written statement of that respondent, documents marked as Annexures P. 16 to P.18 have been placed on record to show that Shri B.R. Gupta, Advocate, who had forged the Court''s order was convicted by the Court and his licence was cancelled by the Bar Council of Delhi.

Shri M.L. Sarin argued that the decision taken by the official respondents to award contract to respondent No. 3 is patently illegal, arbitrary and unconstitutional and the same is liable to be quashed being violative of Article 14 of the Constitution of India because respondent No. 3 did not fulfil the prequalification requirements and was, therefore, not eligible to submit the tender. He made reference to Annexure R. 2/1 dated 27.7.1994 written by respondent No. 3 to the Chief Engineer (Thermal Design), H.S.E.B. and letter Annexure R. 2/2 dated 8.8.1994 written by the latter to the former and submitted that the socalled relaxation granted by the Chief Engineer (Thermal Design) can, at the best, be treated as valid for issuance of tender submitted by respondent No. 3. Shri Sarin submitted that respondent No. 3 had not made any prayer for relaxation of the prequalification requirements and, therefore, the decision taken by the Directors Standing Committee, Board of Directors of respondent No. 2, the Ministers'' Committee and the Officers'' Committee on the assumption that the Chief Engineer (Thermal Design) had relaxed the prequalification requirements should be treated as vitiated by nonapplication of mind and patent arbitrariness. He further argued that the socalled relaxation granted by the Chief Engineer (Thermal Design) is arbitrary, discriminatory and violative of the fundamental rights of others who could have submitted tenders if the requirement of experience contained in the clause relating to prequalification was relaxed and duly notified for information to the general public. Learned counsel heavily relied on the observations made by the Chairman of the Officers'' Committee and submitted that while adjudicating upon the legality of the decision taken by the official respondents to award contract to respondent No. 3, the Court must not be influenced by the ghost of delay in the execution of project and the possible loss to the public exchequer and it will be in larger public interest that fresh tenders are invited giving an opportunity to a larger segment of the operators in the field to compete for award of contract. He relied on Ramana Dayaram Shetty v. The International Airport Authority of India and others, A.I.R. 1979 SC 1628, M/s Driplex Water Engineering Limited v. Punjab State Electricity Board and another, 1991(1) L.L.R. 558 and Tata Cellular v. Union of India, 1994(6) SCC 651. Shri Sarin also assailed the decision of the official respondents to extend the period of execution of contract up to September, 2000 and reduction in the penalty clause from 10% to 5% of the total price of the project.

The learned Advocate General and Shri H.L. Sibal, Senior counsel appearing for respondent No. 3, strongly urged for dismissal of the writ petition on the ground of unexplained delay of 5 years. The learned Advocate General argued that the delay of 5 years in the institution of the petition should be treated as fatal to the prayer made by the petitioner. He submitted that as early as in August, 1994, the petitioner''s representative knew about the decision of the Chief Engineer (Thermal Design) to relax the pre qualification requirements in favour of respondent No. 3, but it did not challenge the same within a reasonable time and took a chance to get the contract by influencing the decision making process. He produced the original register to show that the petitioner''s representative, Shri Yogesh Sharma, was present on 19.8.1994 when the technical bids given by the parties including respondent No. 3 were opened. The learned Advocate General argued that by having refrained from challenging the relaxation granted in favour of respondent No. 3, the petitioner should be deemed to have waived his right to do so or, in any case, it should be deemed to have acquiesced with the so called illegality committed by the Chief Engineer (Thermal Design). Shri Jain pointed out that the price bid given in third part of the tender was opened after clearance of the first two stages and the petitioner deliberately kept silent till the opening of price bids and started raising objection to the eligibility of respondent No. 3 after having found that the price bid given by the said respondent was lower by Rs. 1,74,00,000/ as compared to its own bid. He submitted that this conduct of the petitioner should be treated as sufficient for dismissal of the writ petition. The learned Advocate General laid considerable emphasis on the fact that the delay caused in the execution of the project has already resulted in the increase of the price and any further delay would cause loss of about Rs. 15 croes per month. He read out the averments made in paragraphs 10 to 12 of the affidavit dated 9.9.1999 of Shri J.D. Gulati to show that the estimated cost of the project was Rs. 239.27 crores in 1989 and it has risen to Rs. 854.36 crores as in 1998.

Shri H.L. Sibal joined the learned Advocate General in the latter''s effort to justify the relaxation granted by the Chief Engineer (Thermal Design) and submitted that by conferring power upon the Chief Engineer to relax prequalification requirements in exceptional cases, H.S.E.B. had enlarged the scope of prospective bidders who may not be fulfilling the pre qualification requirements in strict sense. Shri Sibal further submitted that the only defect in the eligibility of respondent No. 3 was that as against the requirement of having designed, manufactured, supplied, erected and commissioned at least two hydro vacuum fly Ash Handling System each having a capacity of 5x30 tonnes/hour (150 TPH), respondent No. 3 and its collaborator had the experience of having designed, manufactured, supplied, erected and commissioned two hydro vacuum fly Ash Handling System having capacity of 2x30 times per hour and after considering its request, the Chief Engineer had legitimately exercised his power to relax the condition of prequalification requirements. Learned counsel submitted that no allegation of mala fide has been levelled against the Chief Engineer (Thermal Design) and, therefore, the Court should not invalidate the impugned decisions which the official respondents have taken after a comprehensive evaluation and examination of the entire matter by the Tata Consulting Engineers, the Directors Standing Committee, the Board of Directors of respondent No. 2, majority of which comprised of persons having vast knowledge of the subject, the Ministers'' Committee, which was duly assisted by experts and engineers and the Officers'' Committee, majority of whom were technical hands. Shri Sibal drew our attention to the letter dated 13.5.1994 written by the Member and ExOfficio Additional Secretary to Government of India, Central Electricity Authority, New Delhi to the then Chairman, H.S.E.B. Panchkula to show that there was considerable delay in the installation of the nine Ash Handling Plants for which contracts had been awarded by Electricity Board etc. to the petitioner. This was controverted by Shri Sarin, who relied on the affidavit dated 13.9.1999 filed by Shri Varghese George, Director of the petitionerCompany. He strongly relied on the contens of Annexure P.1 and submitted that the petitioner has vast experience of installing the Ash Handling Plants at various power stations situated throughout the length and breadth of the country.

Before dealing with the respective contentions, we consider it appropriate to take notice of the guidelines down by the Supreme Court for exercise of power of judicial review in such contractual matters. In Tata Cellular v. Union of India (supra), a three Judges Bench of the Supreme Court, reviewed various decisions of the Apex Court and the foreign Courts and culled out the following proposition :

"The principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down.

The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court''s ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action.

Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision making process itself. It is thus different from an appeal. When hearing an appeal, the Court is concerned with the merits of the decision under appeal. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Apart from the fact that the Court is hardly equipped to do so, it would not be desirable either. Where the selection or rejection is arbitrary, certainly the Court would interfere. It is not the function of a judge to act as a superboard, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator.

The duty of the Court is thus to confine itself to the question of legality. Its concern should be :

Whether a decision making authority exceeded its powers ?

committed an error of law,

committed a breach of the rules of natural justice,

reached a decision which no reasonable tribunal would have reached or,

abused its powers.

Therefore, it is not for the Court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under :

(i) Illegality : This means the decisionmaker understand correctly the law that regulates his decisionmaking power and must give effect to it.

(ii) Irrationality, : namely, Wednesbury unreasonableness. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at. The decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it.

(iii) Procedural impropriety.

The above are only the broad grounds but it does not rule out addition of further grounds in course of time. Another development is that referred to by Lord Diplock in R. v. Secretary of State for the Home Deptt., ex. Brind. viz. the possible recognition of the principle of proportionality. Two other facets of irrationality may be mentioned : (1) It is open to the court to review the decisionmaker''s evaluation of the facts. The Court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decisionmaker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. (2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes."

Their Lordships then held as under :

"(1) The modern trend points to judicial restraint in administrative action.

(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made.

(3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.

(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.

(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasiadministrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."

If the petitioner''s plea for invalidation of the decision taken by respondents No. 1 and 2 to award contract to respondent No. 3 is examined in the light of the principle laid down by the Supreme Court, we do not find any difficulty in holding that there is no valid ground to interfere with the decision of respondent No. 2 to issue LOI to respondent No. 3 or to place purchase order for Ash Handling System. The facts brought on record clearly show that while issuing NIT containing prequalification requirements, the H.S.E.B. had reserved power with the Chief Engineer (Thermal Design) to relax pre qualification requirements in exceptional cases. In other words, compliance of the prequalification requirements was not treated mandatory in each and every case and scope was left for consideration of a bid in spite of the fact that the tenderer may not fulfil the prequalification requirements in its strict sense. It is also clearly revealed from the applications Annexures R. 2/8 and R. 2/9 submitted by respondent No. 3 and the notes recorded on the file, which have been incorporated in the affidavit of Shri J.D. Gulati that respondent No. 3 had made a request for relaxation of the prequalification requirement relating to experience by pleading that its case was exceptional and the Chief Engineer (Thermal Design) after considering the recommendations made by the Executive Engineer and in exercise of his power under Clause 8 of the general instructions relaxed prequalification requirements relating to experience of supplying Ash Handling Plants with 150 tonnes per hour capacity. The petitioner acquired knowledge of this relaxation as early as in August, 1994 when the technical bids were opened in the presence of the tenderers but it did not challenge the decision of the Chief Engineer for over next 4 years. Even when respondent No. 2 revived the NIT, the petitioner did not object to the consideration of the tender submitted by respondent No. 3. Instead, it waited till the price bids were opened and after having come to know that the bid price quoted by respondent No. 3 was lower by Rs. 1,74,00,000/ as compared to its price, the petitioner started the campaign for exclusion of the tender of respondent No. 3 because it felt that if the said respondent is considered, then there is every likelihood of the award of contract to it. In our view, by not raising an objection to the consideration of the tender of respondent No. 3 for a period of over 4 years, the petitioner will be deemed to have waived its right to challenge the same. It will also be deemed to have acquiesced in the illegality allegedly committed by the Chief Engineer (Thermal Design) while granting relaxation in the prequalification requirements in favour of respondent No. 3.

We also agree with the learned Advocate General that the writ petition is highly belated and the petitioner should be nonsuited on the ground of unexplained delay of 4 years and 4 months in the filing of writ petition for nullification of the decision taken by the Chief Engineer (Thermal Design) on 9.5.1994 to grant relaxation in the prequalification requirements in favour of respondent No. 3.

The argument of Shri Sarin that before granting relaxation in the pre qualification requirements to respondent No. 3, the official respondents should have issued a corrigendum indicating their justification to dilute the requirement of experience, which appears to be based on the decision of the Supreme Court in Ramana Dayaram Shetty v. The International Airport Authority of India and others (supra) sounds attractive but lacks merit and cannot be accepted in the facts and circumstances of this case because by virtue of Clause 8 of the general instructions embodied in the NIT, power to grant relaxation was specifically conferred upon the Chief Engineer (Thermal Design). Moreover, the petitioner cannot be heard to make a grievance that due to the lack of publicity about the proposed relaxation in the pre qualification requirements, others were denied opportunity of submitting their bids. Such grievance would have been raised only by a party who could not submit bid because of the stipulation of the particular experience in the prequalification requirements. As far as the petitioner is concerned, it had submitted bid in pursuance of the NIT.

We also do not find any patent illegality in the decision of the Chief Engineer (Thermal Design) to grant relaxation in the prequalification requirements in the case of respondent No. 3 because the only thing which it lacked was the experience of installation of two similar systems having capacity of 150 tonnes per hour. This deficiency has been taken note of TCE which was engaged by the Board to lay down the specifications for award of contract and after due consideration of the various factors, TCE accepted the relaxation granted by the Chief Engineer (Thermal Design).

The submission of the learned Advocate General and Shri H.L. Sibal that the Court will, keeping in view the public interest, not interfere with the impugned decision is quite appealing and deserves to be accepted because,

(a) the petitioner has neither made any allegation of bias or mala fides against the Chief Engineer (Thermal Design) who granted relaxation in the prequalification requirements nor he has been impleaded as party respondent;

(b) the decision of the Chief Engineer (Thermal Design) was critically examined by the Tata Consulting Engineers who had recommended the pre qualification requirements before the NIT was issued, the Directors Standing Committee and the Board of Directos of respondent No. 2, the Ministers'' Committee and the Officers'' Committee. All these bodies consisted of technical persons and experts in the field. They have, after a comprehensive evaluation of the financial status of respondent No. 3, its technical capacity and knowledge to instal the Ash Handling Plants, taken a virtually unanimous decision to award contract to the said respondent keeping in view the lowest offer made by it. In our opinion, the decision taken by the expert bodies in a matter, like the present one, does not call for interference by the Court because the petitioner has failed to show that the impugned decision amounts to an abuse of power vested in respondents No. 1 and 2 to award contract to the lowest tenderer;

(c) admittedly, the bid given by respondent No. 3 is lower than the one given by the petitioner by a huge amount of Rs. 1,74,00,000/. Thus, the acceptance of the bid of respondent No. 3 is in larger public interest.

There is one more reason for our disinclination to interfere with the impugned decision, namely, delay likely to be caused in the execution of the project and the consequential increase in the price. In his affidavit, Shri J.D. Gulati has pointed out that the delay of each month will put additional burden of Rs. 15 crores on respondent No. 2. Therefore, in the facts of this case, we do not find any valid ground or justification to interfere with the award of contract to respondent No. 3.

In view of the above conclusion, we do not consider it necessary to deal with the objections raised by the respondents to the maintainability of the writ petition nor do we consider it necessary to burden the judgment by making elaborate reference to the decisions relied upon by the learned counsel for the parties.

For the reasons mentioned above, the writ petition is dismissed.