M/S. INDIAN RAILWAYS CATERING & TOURISM CORPORATION LIMITED AND ANR. versus M/S. DOSHION VEOLIA WATER SOLUTIONS (P) LIMITED AND ORS.

Citation: [2010] 13 S.C.R. 76 · Decided: 04-10-2010 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Disposed off
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Judgment (excerpt)

[201 O] 13 (ADDL.) S.C.R. 76 
A 
M/S. INDIAN RAILWAYS CATERING & TOURISM 
CORPORATION LIMITED AND ANR. 
v. 
M/S. DOSHION VEOLIA WATER SOLUTIONS (P) LIMITED 
AND ORS. 
B 
(Civil Appeal Nos. 8545-8546 of 2010) 
OCTOBER 04, 2010 
[ALTAMAS KABIR AND A.K. PATNAIK, JJ.] 
C 
Contract - Government Contract -
Turnkey project -
Tender notice published by appellant-IRCTC - Two bidders, 
'/' and 'D' - 'D' objected to the bid of '/' on the ground that '/' 
violated the Instructions to Bidders by offering 1% discount 
on the quoted price and further violated the terms and 
D conditions of the tender by not indicating the excise duty 
amount in its bid - Objection negated by the appellant and 
bid of 'I' accepted - Writ petition filed by 'D' dismissed by 
Single Judge of High Court - Order set aside by the Division 
Bench - Justification of - Held: Not justified - The offer of 
E discount on the quoted price and non-mentioning of excise 
duty amount in the bid of '/' were not in breach of the essential 
terms of the tender documents, therefore, it was for the 
appellant to evaluate the valid offers of the two bidders on the 
merits of the two offers - On the basis of recommendations 
F of Tender Committee, the Accepting Authority of the 
appellant-I RC TC found the offer of'/' to be better than the offer 
of 'D' and also that tax and duties including excise duty had 
no adverse financial implications on the appellant-IRCTC and 
accordingly accepted the offer of '/' - By reversing this 
G decision of the Accepting Authority of the appe/lant-IRCTC, 
the Division Bench of the High Court acted as an appellate 
court and exceeded its power of judicial review in a matter 
relating to award of contract - Judicial Review. 
H 
76 
INDIAN RAILWAYS CAT. & TOURISM COR. LTD. v. DOSHION 77 
VEOLIA WATER SOLUTIONS (P) LTD. 
Appellant no.1- IRCTC published a tender notice for A 
a turnkey project in regard to a packaged drinking water 
bottling plant. In response, two tenderers, Ion Exchange 
and Doshion, submitted their technical and financial bids, 
with Doshion quoting a total price of Rs.18.65 Crores, 
and Ion Exchange quoting a price of Rs.18.66 Crores B 
alongwith a discount of 1% thereon (thereby the net price 
worked out to Rs.18.47 Crores). 
Doshion objected to the bid of Ion Exchange on the 
ground that Ion Exchange violated the Instructions to C 
Bidders by offering 1 % discount on the quoted price and 
further violated the terms and conditions of the tender by 
not indicating the excise duty amount in its bid. In this 
regard, Doshion relied upon Clauses 1.10, 1.11 and 1.12 
of the Instructions to Bidders and Clauses 2.1 and 9.0 of 
the Special Terms and Conditions of the tender D 
documents. The Tender Committee of IRCTC made 
recommendation that taxes and duties (including the 
excise duty) had no financial implication on IRCTC and 
that the 1% discount offered in the bid of Ion Exchange 
can be considered. The Accepting Authority of IRCTC 
E 
accepted the said recommendation and issued a letter of 
acceptance to Ion Exchange. 
Doshion filed two writ petitions, one praying for a 
writ of mandamus restraining IRCTC from taking any step 
F 
in furtherance of the tender; and another praying for 
quashing the letter of acceptance issued in favour of Ion 
Exchange. The Single Judge of the High Court dismissed 
both the writ petitions. 
In writ appeal, the Division Bench quashed the G 
acceptance of the offer of Ion Exchange. However, it 
declined to award the contract to Doshion (as prayed ,by 
it) leaving it for IRCTC to take a decision in the matter. 
In the instant cross-appeals, the questions which H 
78 
SUPREME COURT REPORTS [2010) 13 (ADDL.) S.C.R 
A 
arose for consideration were: 1) whether the offer of 1 % 
discount on the quoted price made by Ion Exchange was 
in breach of any essential term of the tender notification 
or the tender format as held by the High Court and 2) 
whether the High Court was right in coming to the 
B 
conclusion that by not indicating the excise duty amount 
in rupees in its offer, Ion Exchange committed breach of 
an essential term or condition of the tender notification 
or the tender format. 
Allowing the appeals of IRCTC and Ion Exchange 
C 
and dismissing the appeal of Doshion, the Court 
HELD: 1.1. Clause 1.10 of the Instructions to Bidders 
states that rates are to be quoted in the Prescribed Price 
Schedule format only and it shall be inclusive of all taxes, 
D levies and duties. This clause does
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