LexNTPC LIMITED versus ANSALDO CALDAIE BOILERS INDIA P. LTD. & ANR.
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A B [2012] 1 S.C.R. 966 NTPC LIMITED v. ANSALDO CALDAIE BOILERS INDIA P. LTD. & ANR. (Civil Appeal No. 2134 of 2012) FEBRUARY 16, 2012 [ALTAMAS KABIR AND J. CHELAMESWAR, JJ.] Contract: Tender - Bid for installation of Steam Generator Package C - Rejected - Held: Evaporator being an integral part of Steam Generator, Qualified steam Generator Manufacturer would have to be the manufacturer of evaporator itself and could not have outsourced the manufacture thereof - Evaporator being offered was one which had been manufactured not by D Qualified Steam Manufacturer but by a third party, which was not contemplated in the condition of the tender document - Rejection of Bid upheld. The appellant invited bids for supply and installation E of Steam Generator Package for captive coal based Thermal Power Projects in different areas. The appellant, by letter dated 5.1.2011 informed respondent no.1 that its bid had been rejected as the same did not meet the minimum qualifying requirement set out in the Bid F documents and the Qualified Steam Generator Manufacturer proposed by the respondent did not have the necessary minimum qualification as was required in terms of the Bid documents. Respondent no.1 filed a writ petition. The Division Bench of the High Court quashed the letter dated 5.1.2011. G In the instant appeal filed by the employer NTPC Ltd, the questions for consideration before the court were: (i) whether in the case of a joint venture undertaking it was essential that the Qualified Steam Generator Manufacturer H 966 NTPC LIMITED v. ANSALDO CALDAIE BOILERS 967 INDIA P. LTD. & ANR. also had to be the manufacturer of the evaporator or A whether it could function as a facilitator; and (ii) Whether the Steam Generator Manufacturer proposed by respondent no.1 could be said to be a Qualified Steam Generator Manufacturer within the definition set out in the Detailed Invitation Bids. B Allowing the appeal, the Court HELD: 1.1 Respondent No.1 chose Route 4 of the qualifying routes while submitting its Tender Bid, in its capacity as an Indian Joint Venture Company for C manufacturing Super-Critical Steam Generator in India between an Indian Company and a Qualified Steam Generator Manufacturer. The crucial condition for a Bidder of the said category to be considered, as contained in Clause 7 .1.1 of the Tender Documents, D provides that the Bidder should have designed, engineered, manufactured/got manufactured, erected/ supervised direction, commissioned/supervised commissioning of at least one Steam Generator having rated capacity of 1500 Tonnes of Steam per hour or E above and that it should be provided with an Evaporator suitable for variable pressure operations for special category and supercritical pressure ranges. [para 22] [982-B-D] 1.2 Admittedly, the evaporator is an integral part of F the Steam Generator. The MOU, while permitting manufacturing, erection or commissioning of the Steam Generator, provided that the same could be outsourced, but the "designing" and "engineering" of the Steam Generator had to be done by the Bidder himself and if the G party proposed as Qualified Steam Generator Manufacturer and the Bidder had not designed and engineered the Steam Generator itself, it could not be said that the qualifying requirements for such manufacturer had been satisfied. [Para 24] [982-G; 983-B-C] H 968 SUPREME COURT REPORTS [2012] 1 S.C.R. A 1.3 From thP terms and conditions contained in the MOU, it appears that it was the intention of the appellant that the Qualified Steam Generator Manufacturer would have to be the manufacturer of the evaporator itself and could not have outsourced the manufacture thereof to a B third party, since the evaporator controlling the pressure of the Steam generated is a vital and crucial component of the Steam Generator itself. The appellant, which will be the ultimate user of the Generator, must be presumed to be conscious of the competence of the tenderer to c "provide" the evaporator in keeping with the required specifications. [Para 25] [983-D-E] 1.4 The importance of the condition is manifested in the functioning of the Steam Generator which handles High Pressure Steam for the purpose of turning the D turbines for generating electricity. The design and engineering of the evaporator and the boiler itself has to be such as to withstand the very high temperatures and pressures generated. Th
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