TMI Blog2009 (2) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... ti to deposit the amount by means of a cheque drawn in favour of the Registrar General of this court within four weeks from today. - 7865 of 2008 - - - Dated:- 2-2-2009 - MADAN B. LOKUR AND SIDDHARTH MRIDUL , JJ. The judgment of the court was delivered by MADAN B. LOKUR J. The two questions posed for an answer relate to the interpretation of the price bid made by the petitioner (Arraycom) and the extent of judicial review in the event of a misinterpretation of its bid. We agree with Arraycom that its bid placed a ceiling on the price quoted and that a contrary interpretation by Prasar Bharati could invite judicial review. Respondent No. 2 (Prasar Bharati) issued a notice inviting tender (NIT) on October 20, 2006 for the supply of two transmitters of 1000 KW (or 1 MW) each. The bidding was a two-stage process involving a technical bid and a financial bid. There is no dispute that the petitioner (Arraycom) and respondent No. 3 (BECIL) were both technically qualified. In respect of the financial bid which was opened on 30th July, 2007, the quotation given by Arraycom was for a sum of Rs. 51.57 crores and it was stated that: 1. Prices in INR including custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was, in fact, awarded to BECIL. According to Arraycom, the problem with the calculation worked out by Prasar Bharati lies in the third row in the above chart. According to Arraycom (and we agree) there was no necessity of calculating its quoted price with 12.5 per cent tax. Two questions immediately arise in this context. Firstly, how exactly is the sales tax liability to be determined in the two bids? The bid of Arraycom clearly mentioned: CST (Central sales tax) is inclusive in the above prices. AIR will have to give concessional forms C/D. In other words, the quoted price of Arraycom was Rs. 51.57 crores inclusive of sales tax. According to learned counsel for Prasar Bharati the second sentence in the above text meant that the bid was inclusive of sales tax provided Arraycom was given the concessional C/D forms. This raises the second question: What if Arraycom was not given the concessional C/D forms? Learned counsel for Arraycom submitted that if it were not given the C/D forms, even then Arraycom would have to supply the goods at Rs. 51.57 crores. In support of this submission, reliance was placed upon two clauses of the bid documents, which we will shortly deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. Of course, it was submitted before us that Prasar Bharati had no doubt about the interpretation of the bid given by Arraycom and so there was no need to obtain any clarification. If that be so, then our simple answer is this: Prasar Bharati did not correctly appreciate the bid of Arraycom in its proper perspective and also failed to correctly appreciate the import of clause 4.2 of the NIT. To put it another way, Prasar Bharati completely misunderstood the bid of Arraycom and this erroneous interpretation resulted in Prasar Bharati having awarded the contract to BECIL for an amount of more than Rs. 2 crores over and above the bid of Arraycom. This is totally unacceptable and demonstrates a gross error in the decision making process. Learned counsel for Arraycom placed reliance on clause 9.II of Form DGS D 230 being instructions to tenderers quoting against tender enquiries issued by DGS D and its regional offices. In paragraph 8 of the writ petition, it is stated by Arraycom that DGS D-229 (Booklet) is expressly applied in the present NIT . In this context, our attention was drawn to clause 13 of the NIT containing important instructions to the effect that, The contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prasar Bharati. Every which way the issue is looked at, it is crystal clear that the bid of Arraycom cannot be read to mean anything above the figure of Rs. 51.57 crores, whatever be the rate of sales tax 12.5 per cent. or even more. Contrast this with the bid of BECIL. It is explicit in its choice of words. If Form C/D are provided then four per cent. sales tax would have to be loaded to the basic price quoted by it. If forms C/D are not available, then 12.5 per cent. sales tax would have to be loaded to its basic quoted price. Admittedly, forms C and D are not applicable to the facts of the case. Hence, the basic price quoted by BECIL would have to be loaded by 12.5 per cent. sales tax. If this is done, then the bid of BECIL is more than Rs. 2 crores higher than the bid of Arraycom. Can the incorrect interpretation of Arraycom's bid by Prasar Bharati invite judicial review? Could it not be said that the court has virtually sat in appeal over the interpretation given to the bid by Prasar Bharati? In our opinion, we would not be exceeding the power of judicial review if we were to correct the wrong interpretation given by Prasar Bharati to the bid of Arraycom. In com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... courts can interfere. See Anisminic Ltd. v. Foreign Compensation Commission [1969] 1 All ER 208. And, of course, if the body acts in bad faith or for an ulterior object, which is not authorised by law, its decision will be set aside. See Sydney Municipal Council v. Campbell [1924] All ER Rep 930. In exercising these powers, the courts will take into account any reasons which the body may give for its decisions. If it gives no reasons in a case when it may reasonably be expected to do so, the courts may infer that it has no good reason for reaching its conclusion, and act accordingly. See Padfield case [1968] AC 997 (as AC pp. 1007, 1061). (emphasis Here italicised. supplied by us). In our opinion, Prasar Bharati acted completely arbitrarily in loading the bid of Arraycom with an amount that was not at all justified. The result of the loading is that the bid of Arraycom got unnaturally inflated and became higher than the bid of BECIL. This was clearly wrong on the part of Prasar Bharati and we can correct that error which has a serious and material consequence. The award of the contract to BECIL, on this basis, was clearly erroneous and it deserves to be set aside. On Novemb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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