CIVIL APPEAL NO. 653 OF 2006 WITH
Civil Appeal No. 654 of 2006, Civil Appeal No.655/2006,
Civil Appeal No.671 of 2006, Civil Appeal No.672 of 2006 and
Civil Appeal No.673 of 2006
Arijit Pasayat, J.-
Challenge in these appeals is to the judgment of a Division Bench
of the Orissa High Court allowing the Writ Petitions filed by Visa
Industries Limited (in short the 'VISA') and Another (Writ Petition (C)
No. 5128 of 2004) and M/s. Tata Iron and Steel Co. Ltd.(in short the 'TISCO')
(Writ Petition (C) No. 6798 of 2004). By the impugned Judgment the High
Court held that the technical bids of VISA and TISCO could not have been
rejected at the threshold without proper evaluation in terms of the
eligibility condition as set out in the concerned advertisement. It was
also held that Jindal Strip Limited (in short 'Jindal's') bids were
never evaluated and assessed in a dispassionate and impartial manner.
There was no attempt to find out as to which of the bids offered by the
three parties would give maximum advantage to the State in terms of
public interest and state exchequer. Certain other observations were
made questioning bonafides of the officials of the State and Industrial
Development Corporation of Orissa Limited (in short the 'IDCOL'). It was
held that power of judicial review was to be exercised as the selection
of Jindal as a Joint Venture Partner for the project in question was not
properly done. Therefore the IDCOL's decision to select Jindal cannot be
maintained and was set aside.
2. It was noted that the matter
could have been remitted to IDCOL for fresh evaluation and formation of
merits on the bids of the respective parties, but it was not thought
proper. It was also noted that Jindal proposed to set up stainless Steel
Industry which could not have been considered as a relevant factor while
deciding the question of Joint Venture Partner. However, IDCOL was given
the opportunity to issue a fresh advertisement for the purpose of
setting out in clear terms whether it wants stainless industries to be
set up in the State or other industry where chrome could be used as an
3. The technical bids offered by the
various parties are on record. By the last date for receipt of offers,
four parties had submitted their offers but later on Jindal Steel Power
Ltd. did not want to continue.
4. The present appeals arise out of
Special Leave Petitions filed by the State of Orissa, IDCOL and Jindal.
5. Primary stand of Mr. G.E.
Vahanvati, Learned Solicitor General is that the High Court's approach
is clearly erroneous.It has taken into account various irrelevant and
extraneous materials without even any pleading in that regard. It has
assumed collusion, loss of revenue if Jindal's bid was to be accepted.
It is not fathomable as to on what basis the conclusions were arrived
at, that too without any material foundation. The similar effect is the
submission of Jindal. It is to be noted that Jindal Steels Limited is
presently known as Jindal Stainless Steel Limited. However for the sake
of convenience it shall be described as 'Jindal' in this judgment.
6. To similar effect is the
submission of learned counsel for IDCOL
7. Learned counsel for TISCO and
VISA submitted that the conclusions of the High Court are in order.
Considering the parameters of judicial review it is clear that the
Government granted approval in the most mechanical manner without
application of mind to the facts of the case. It was submitted that as
has been rightly held by the High Court Jindal did not satisfy the
required parameters and, therefore, its bid could not have been
8. One of the factors highlighted by
learned counsel for TISCO is that the information brochure and the NIT
referred to certain vague expressions like "Value addition". In view of
such an indefinite condition the bids submitted by TISCO and VISA could
not have been rejected at the threshold and therefore the High Court has
rightly interfered in the matter.
9. At this juncture, it would be
relevant to quote the Recommendations of the Technical Committee
constituted for evaluation of the offers received for development of
Tangarpada Chromite Deposit in Joint Venture, which reads as follows:
"RECOMMENDATIONS OF THE TECHNICAL COMMITTEE CONSTITUTED FOR EVALUATING
THE OFFERS RECEIVED FOR DEVELOPMENT OF TANGARPADA CHROMITE DEPOSIT IN
Offers for development of Tangarpada
Chromite Deposit in Joint Venture were received from four parties
1. Tata Iron and Steel Co. Ltd.;
2. Jindal Strips Limited;
3. Jindal Steel and Power Ltd.; and
4. VISA Industries Limited
Before opening of the sealed offers,
Jindal Steel and Power (one of the offer) withdrew its offer. The
technical bid of the other three parties were opened by the committee in
presence of the respective parties on 9th December, 2002. Each party
presented their case before the Technical Committee on the same day."
10. It may be stated here that
certain conclusions of the High Court are clearly indefensible. The
observations relating to favoritism, so far as Jindal is concerned, are
clearly without any foundation.
11. On the sole ground that the High
Court had relied upon extraneous materials and has arrived at unfounded
conclusions, in normal course we would have set aside the order and
asked the High Court to re-consider the matter. But considering the
passage of time and more particularly the fact that the advertisement
was issued in 2002 and on the basis of materials on record, we dispose
of the appeals on the following
1. It shall be treated that the technical bids of all the three parties
2. The financial bids were submitted
about five years back it would be appropriate to permit the parties to
submit revised financial bids within three weeks.
3. The appropriate and authorized
Committee of IDCOL shall consider the technical bids and the financial
bids, keeping in view the parameters of the advertisement, the NIT and
the best interest of the State.
12. It is needless to say the
Committee examining the bids shall take note of all relevant factors. In
case it is considered appropriate and in the interest of the State, it
shall be open to the State Government to negotiate with the parties so
that the best interest of the State including generation of the revenue
of the State and overall development of the State in the relevant fields
could be achieved.
13. Since the matter is pending
since long it would be desirable for the State Government to ensure that
the technical bids and the revised financial bids to be submitted within
three weeks as directed earlier, be evaluated and informed decision
taken by end of June, 2008. The observations and conclusions about
malafides of the officials and their alleged favoritism stand quashed.
14. The appeals are allowed to the
aforesaid extent without any order as to costs.
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