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Global Energy Ltd. & Anr. Versus M/s Adani Exports Ltd. & Ors.

2005 AIR 2653 - Appeal (civil) 2988 of 2005 (Arising out of SLP (C) No.7032 of 2005) - Dated:- 3-5-2005 - CJI R.C. LAHOTI & G. P. MATHUR JJ. G. P. MATHUR, J. Leave granted. 2. These appeals have been preferred against the judgment and order dated 21.3.2005 of a Division Bench of Calcutta High Court by which the appeals preferred against the interim order passed by a learned Single Judge on 15.3.2005 were allowed and the interim directions contained in the said order were set aside. 3. The We .....

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tate Electricity Board, Vidyut Bhawan, 8th Floor, Block-A, Bidhannagar, Kolkata - 700 091 from experienced and interested Traders and Business Enterprises having Power Trading License or Clearance from the Central Electricity Regulatory Commission for export of following approximate quantum of power. 5. Mode of deposit of Earnest Money : 5.1 Every quotation must accompany 'Earnest Money' in the form of Demand Draft or Pay Order drawn on any Scheduled Bank of India in favour of West Benga .....

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of Tender. 5.3 No interest shall be paid by WBSEB on Earnest Money." 4. Global Energy Ltd. and H. Dhaul, the appellants herein, filed a writ petition in the Calcutta High Court on 14.3.2005, where the principal relief claimed was that the Electricity Board be restrained from enforcing the condition requiring deposit of ₹ 30 lakhs as earnest money in respect of the aforesaid tender and an injunction may be issued directing the Electricity Board to accept and evaluate their bid without .....

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The writ petition was taken up for admission hearing by a learned Single Judge on 15.3.2005 and the following order was passed on the same day: "The petitioners herein have challenged the action of the respondent authorities regarding publication of the notice inviting tender and also the condition regarding deposit of earnest money by the intending tenderers on various grounds mentioned in the writ petition. According to the petitioners, the respondent authorities hereto have shown undue f .....

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hearing four weeks hence. Let there also be an interim order by granting liberty to the petitioners to participate in the tender process in response to the notice inviting tender being Annexure 'P-1' to the writ petition subject to the condition that the said petitioners will deposit the earnest money by furnishing a Bank Guarantee or Bankers' Cheque in favour of the respondent No.2 within 18th March, 2005. The petitioners will, however, comply with the other tender conditions as me .....

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ounsel for the appellants has submitted that the condition requiring deposit of ₹ 30 lakhs as earnest money by Power Utilities other than Central/State Government Organizations and Public Sector Undertakings is discriminatory and illegal. He has further submitted that the notice inviting tenders (NIT) was published on 8.3.2005 which required that every quotation must accompany earnest money in the form of a demand draft or pay order in favour of the Electricity Board amounting to ₹ 3 .....

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counsel for M/s Adani Exports Ltd. and M/s PTC India Ltd., who are respondents in the appeals, have submitted that an important clause regarding deposit of earnest money in a NIT cannot be altered or changed by Court as the said clause has to be strictly complied with, being in the realm of contract. The learned single Judge, therefore, committed manifest error of law in issuing the interim direction on 15.3.2005 right on the first day of admission hearing of the writ petition, which was rightly .....

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r process without depositing any earnest money as the tenders/offers were to be opened at 15.00 hrs. on 15.3.2005 and thus the appellants' tender was directed to be considered even though the same was not accompanied with the earnest money. Secondly, once the tenders are opened, the relative position of each bidder is known and the appellants would have avoided depositing any earnest money, had they felt that their bid was not competitive and there was no chance of getting the contract. It i .....

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quotation must accompany earnest money amounting to Rupees thirty lakhs in the form of demand draft or pay order drawn on any Scheduled Bank of India in favour of West Bengal State Electricity Board payable at Kolkata. However, the learned Single Judge in his order dated 15.3.2004 also gave an option to the appellants to furnish a bank guarantee of the said amount. Deposit of some amount of earnest money is a normal condition of tender. The object is that only such parties who are financially s .....

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d with a company whose net worth may be very small or may have a small shareholding. Therefore, the exemption granted in favour of State Government Organizations and Public Sector Undertakings from making deposit of earnest money of ₹ 30 lakhs was based upon a rational criteria and could not be faulted on any ground whatsoever. Order XXVII Rule 8A CPC provides that no such security as is mentioned in rules 5 and 6 of Order XLI shall be required from the Government or, where the Government .....

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re the condition in the NIT requiring deposit of earnest money itself being set aside. 9. In Tata Cellular v. Union of India AIR 1996 SC 11, a Three Judge Bench has explained what is a tender and what are the requisites of a valid tender. It has been held that the tender must be unconditional and must conform to the terms of the obligation and further the person by whom the tender is made must be able and willing to perform his obligations. It has been further held that the terms of the invitati .....

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ion v. Educomp Datamatics Ltd. 2004(4) SCC 19. The Directorate of Education, Government of National Capital Territory of Delhi had taken a decision to establish computer laboratories in all Government schools in NCT area and tenders were invited to provide hardware for this purpose. For the final phase of 2002-03, tenders were called for 748 schools and the cost of project was approx. ₹ 100 crores. In view of the difficulty faced in the earlier years where the lowest tenderers were not abl .....

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20 crores or more for the last three financial years would be eligible. It was contended before the High Court that the aforesaid condition had been incorporated solely with an intent to deprive a large number of companies imparting computer education from bidding and monopolize the same for big companies. The writ petition was allowed and the clause was struck down as being arbitrary and irrational. In appeal, this Court reversed the judgment of the High Court basically on the ground that the .....

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is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition .....

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77; 396 crores and as the tender of the appellants was ₹ 40 crores more than that of respondent No.1 the Electricity Board would gain the said amount if the contract is awarded to the appellant. Learned counsel for the contesting respondents have submitted that appellant no.1 is not technically qualified to be awarded the contract for the sale of electricity as it does not possess the requisite license for the said purpose. The appellant no.1 applied for grant of license for interstate tra .....

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nally on 3.2.2005, the High Court directed that the interim license granted to appellant no.1 shall be extended till further orders. It is, therefore, clear that appellant no.1 is having an interim license of category 'A' in its favour on the basis of the order passed by the High Court. It is averred in the counter affidavit filed by the Electricity Board that the total units of power intended to be traded are 1471 million units. For trading over 1000 million units of power in any year t .....

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