Supreme Court of India
ISOLUX- SOMA -OMAXE CONSORTIUMversusM/S. MADHUCON PROJECTS PVT. LTD. & ORS.
- Citation
- 2009 INSC 402
- Decided
- 24 March 2009
- Disposal
- Disposed off
- Bench
- ARIJIT PASAYAT
Holding
By mere inclusion in the short‑list, bidders only obtain the right to be considered, and increasing the short‑list to eight bidders does not prejudice any party.
Summary
The dispute concerned a tender by the National Highways Authority of India (NHAI) for the design, construction and operation of a highway section under a Build‑Operate‑Transfer model. Out of 19 bidders, six were initially short‑listed as per clause 3.5.2 of the tender documents, which allowed up to six pre‑qualified applicants. The Central Government invoked Section 33 of the National Highways Authority of India Act, 1986 to re‑evaluate the short‑list, again selecting six bidders, thereby excluding the writ petitioners from the second stage. The petitioners challenged the applicability of Section 33 to an individual tender and the restriction on the number of short‑listed bidders. The Supreme Court held that inclusion in the short‑list merely confers a right to be considered, and that expanding the short‑list to eight bidders would not prejudice any party. Consequently, the Court allowed the NHAI to increase the short‑list and dismissed the appeals.
Issues considered
- Whether Section 33 of the National Highways Authority of India Act, 1986 can be applied to an individual tender process.
- Whether the number of short‑listed bidders can be increased beyond the six permitted by clause 3.5.2 of the tender document.
- Whether the exclusion of certain bidders from the second stage of the bid process caused prejudice violating principles of transparency.
Subjects
tender evaluationshort‑listingSection 33NHAItransparencyprocurementpublic worksprejudicebid process
Judgment
[2009) 5 S.C.R. 315
~{
ISOLUX- SOMA- OMAXE CONSORTIUM A
v.
M/S. MADHUCON PROJECTS PVT. LTD. & ORS.
(Civil Appeal Nos. 1826 of 2009)
j MARCH 24, 2009
B
[DR. ARIJIT PASAYAT AND ASOK KUMAR
GANGULY, JJ.]
Tender bid - Invitation for tender - Two stages of
evaluation - Short-listing of six bidders including writ c
petitioners in terms with the clause - For transparency in the
process of evaluation, Central Government applying s. 33 of
the Act to tender process - Re-evaluation of list and short-
listing of six bidders - However, writ petitioners not eligible to
->- participate in the second stage of bid process - Challenge D
to - Disposal of writ petition - On appeal, held: By mere
inclusion in the list of short-listed bidders, bidders only get the
right to be considered in respect of its financial and technical
bids - No prejudiced would be caused to any parties by
increasing the number - NHAI would select the best bidder E
<
• for undertaking the project- Clause 3. 5.2 is not insisted upon
in subsequent tenders - Since project is of some urgency it
would be appropriate to make the number of short-listed
bidder increased to eight - National Highways Authorities of
India Act, 1986 - s. 33. F
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1826 of 2009.
From the Judgment & Order dated 16.12.2008 of the High
Court of Delhi at New Delhi in Writ Petition (C) No. 6792/2008. G
-! WITH
Civil Appeal Nos. 1827 & 1828 of 2009.
315 H
316 SUPREME COURT REPORTS [2009] 5 S.C.R.
.-
~
A P.P. Tripathi, ASG, R.F. Nariman, Arunabh Chaudhary,
Anupam Lal Oas, Amey Nargolkar and Abhiseth for the
Appellants.
T.S. Doabia, K.K. Venugopal, Rekha Pandey, D.S. Mahra,
Vikas Goel, Ankur Talwar, Tarun Dua, Abhishek Kumar, Ravi
B
Singhania, K.C. Dua, Amitabh Chaturvedi, Neevesh Nagrath, ~
Dr. Vipin Gupta, Atul Sharma, Milanka Chaudhary, S. Jha,
Surbhi Sharma, Jyoti Mendiratta and M.V. Kini & Associates
for the Respondents.
c The Judgment of the Court was delivered by
DR. ARIJIT PASA'(AT, J. 1. Leave granted.
2. These three appeals are directed against the judgment
of the Delhi High Court disposing of two writ petitions being
D W.P.(C) No. 6792/2008 and 6419/2008. The first writ petition 4
was filed by GMR Infrastructure Ltd. and another, and the latter
writ petition was filed by Madhucon Projects Pvt. Ltd. and
another. The National Highway's Authority of India (in short
'NHAI') had indicated to the writ petitioners in each writ petition
E that the writ petitioner was not eligible to participate in the
second stage of the bid process. The tender in question related
to design, engineering, construction, development, finance
operation and maintenance of Hyderabad Vijaywada Section
of the National Highway (NH-9) from KM 40.00 KM 221.500 in
F the State of AP. under NHDP Phase llA on Build, Operate and
Transfer basis.
Factual situation is almost undisputed. There were 19
bidders and two of them were non-responsive leaving 17
G bidders in the field. There are two stages in the evaluation
according to points scored method. The initial stress is on
financial stability and technical competence and experience.
The modalities for short listing of bidders is covered by clauses
2.21 and 3.5.2. The latter clause reads as follows:
H "The Applicants shall then be ranked on the basis of
ISOLUX- SOMA- OMAXE CONSORTIUM v. MADHUCON 317
~{ PROJECTS PVT. LTD. & ORS. [DR. ARIJIT PASAYAT, J.]
their respective Aggregate Experience Scores and short- A
listed for submission of Bids. The Authority expects to
short-list upto 5 (five) pre-qualified Applicants for
participation in the Bid Stage. The Authority, however,
reserves the right to extend the number f short-listed pre-
), qualified Applicants ("Bidders") upto 6 (six)." B
Placing reliance on clause 3.5.2 originally six persons were
short listed. They were as follows:
S.No. Name of the Bidder Re-evaluated Score
c
1. Maytas Infra Limited 22779.70
Nagarjuna Construction
Company Limited China
Railway 18 Bureau
;A Corporation Limited. D
2. Hindustan Construction 21657.26
., company Limited-John
Laing Investments Limited.
3. GVK Power and 15722.52 E
infrastructure Limited
Thiess Leighton India-
Oriental Structural
Engineers India Private
Limited. F
4. Larsen Toubro Limited 15052.47
B.Seenaiah & Company
Limited.
5. GMR Infrastructure Limited- 8362.73 G
Punj Lloyd Limited
6. Madhuchon Projects Limited- 2839.00
Galfar Engineering and
contracting S.A.O.G. H
318 SUPREME COURT REPORTS [2009] 5 S.C.R.
r
A sultanate of oman-Wade
Adams (Middle East)
Limited Dubai, UAE-SREI
Infrastructure Finance Limited.
It appears that Central Government had in purported
B (
'
exercise of power under Section 33 of the National Highways
Authorities of India Act, 1986, (in short the 'Act') imperated
transparency in the process of evaluation and in fact re-
evaluation was done in which the following six bidders were
short-listed:
c
S.No. Name of the Bidder Re-evaluated Score
1. Maytas Infra Limited 24376.03
Nagarjuna Construction
D Company Limited China
Railway 18 Bureau "
Corporation Limited.
2. Hindustan Construction 21657.26
company Limited-John
E Laing Investments Limited.
3. Cintra Concessions De 21247.98
. lnfraestructuas De Transporte,
S.A. Shapoorji Pallonji and
F Company Ltd.
4. t,arsen Toubro Limited 16232.58
B.Seenaiah & Company
Limited.
G 5. GVK Power and infrastructure 15722.52
Limited Thiess Leighton
India-Oriental Structural
Engineers India Private
Limited.
H
~
'
ISOLUX- SOMA- OMAXE CONSORTIUM v. MADHUCON 319
PROJECTS PVT. LTD. & ORS. [DR ARIJIT PASAYAT, J.]
'l'
6. lsolux Corsan Concession- 9896.79 A
Soma Enterprise Ltd.-
Omaxe Infrastructures and
Constructions Private Ltd.
Undisputedly a Committee was appointed to work out the
.
1 B
modalities of the evaluation process. Challenge in the writ
petitions was to the permissibility to apply Section 33 of the Act
to individual tender process, as according to the writ petitioners
it was exercisable only in respect of'the policy matters and to
that limited extent direction can be given by the Central
Government. The High Court apparently has accepted this c
stand of the writ petitioners.
Learned counsel for the appellants in each case submitted
that the materials, which would have shown that the appellant
in each of the appeals is eligible to be short-listed, have been D
.>.
allegedly kept out of consideration thereby making them
ineligible. It is also submitted that two of the bidders (Maytas
Infra Limited Nagarjuna Construction Company Limited-China
Railway 18 Bureau Corporation Limited and Madhucon
Projects Limited-Galfar Engineering and contracting S.A.O.G. E
sutanate of oman-Wade Adams (Middle east) Limited Dubai,
UAE-SREI Infrastructure Finance Limited) do not have clean
records and therefore their bids ought not to have been
accepted when the stress is on transparency. It is pointed out
that if these two are to be kept out of consideration, the F
appellants will have to be included amongst the six short-listed
" bidders.
The learned counsel for the NHAI submitted that in terms
of clause 3.5.2 the choice has to be restricted to maximum six
and cannot go beyond it. It is, however, stated that action has G
been taken against one of the short-listed bidders, i.e.
Madhucon Projects Pvt.Ltd. Learned counsel appearing for the
said party stated that the action initiated is the su.bject matter
of challenge before the Delhi High court.
H
320 SUPREME COURT REPORTS [2009) 5 S.C.R.
A We find that at the stage of short-listing the evaluation is
on the basis of points score basis on financial stability and
technical capabilities.
In the peculiar facts of the case let all the eight bidders be
B short-listed, i.e. ...
1.Maytas Infra Limited Nagarjuna Construction
Company Limited China Railway 18 Bureau Corporation
Limited.
c 2.Hindustan Construction company Limited-John Laing
Investments Limited.
3.Cintra Concessions De ... lnfraestructuas De
Transporte, S.A. Shapoorji Pallonji and Company Ltd.
"'-
D 4.Larsen Toubro Limited B.Seenaiah &Company Limited.
5.GVK Power and infrastructure Limited Thiess
Leighton India-Oriental Structural Engineers India Private
Limited.
E 6.lsolux Corsan Concession-Soma Enterprise Ltd.-
Omaxe Infrastructures and Constructions Private Ltd.
7.GMR Infrastructure Limited-Punj Lloyd Limited
F 8.Madhuchon Projects Limited-Galfar Engineering and ..
contracting S.A.O.G. sultanate of oman-Wade Adams
(Middle East) Limited Dubai, UAE-SREI Infrastructure
Finance Limited.
By increasing the number to eight practically no prejudice
G will be caused to any parties. It is for the NHAI to select the
best bidder for undertaking the project which is of great
importance. It is on record that expansion of the number was
one of the recommendations of the Committee formed by the
Government.
H
ISOLUX- SOMA- OMAXE CONSORTIUM v. MADHUCON 321
~ PROJECTS PVT. LTD. & ORS. [DR. ARIJIT PASAYAT, J.)
.;,.
We are told that clause 3.5.2 is not insisted upon in A
subsequent tenders, thereby making it an open field. By mere
inclusion in the list of short-listed bidders.the bidders only get
the right to be considered in respect of its financial and
technical bids. Since the project is of some urgency it would
J be appropriate to make the number of the short-listed bidders B
eight.
Needless to say that if any circumstance regarding the
credibility of any of the bidders has come to the notice of the
NHAI it is for it to take such action. Further if the aggrieved
bidder has any grievance it can be agitated before an c
appropriate Forum. In that regard we express no opinion.
The appeals are accordingly disposed of.
~ In view of the aforesaid directions it is not necessary to D
go into the question as to the scope and ambit of Section 33
of the Act.
-- N.J. Appeal disposed of.
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