STATE OF ORISSA AND ANR versus M/S. TATA IRON AND STEEL CO. LTD. AND ORS.

Citation: [2008] 2 S.C.R. 363 · Decided: 04-02-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

[2008] 2 S.C.R 363 
STATE OF ORISSA AND ANR 
v. 
MIS. TATA IRON AND STEEL CO. LTD. AND ORS. 
(Civil Appeal No. 653 of 2006) 
FEBRUARY 4, 2008 
[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.] 
Constitution of India, 1950 - Art. 226: 
Government contracts - Tenders - Judicial review -
Scope - Industrial Development Corporation of Orissa Ltd. 
(IDCOL) issued advertisement inviting technical bids - Bids 
A 
B 
c . 
of two out of three parties rejected at the threshold - Third party 
selected- Writ petitions by unsuccessful parties -Allowed by 
High Court which held that the bid of selected party was not 
evaluated in an impartial manner - On appeal, held: High D 
Court relied upon extraneous materials and arrived at 
unfounded conclusions - Hence, matter ought to have been 
remitted back to High Court - But considering that the 
advertisement was issued 5 years back and on basis of 
materials on record, appeals disposed of with suitable E 
directions - Directions issued that technical bids of all the three 
parties be treated as valid - Parties permitted to submit 
revised financial bids - Authorized Committee of IDCOL to 
consider the technical bids and the financial bids, keeping in 
view parameters of the advertisement, the NIT and best F 
interests of the State - Observations and conclusions made 
by High Court about malafides of the officials and their alleged 
favoritism quashed. 
The Industrial Development Corporation of Orissa 
Limited (IDCOL) issued advertisement inviting technical G 
bids for development of a chromite deposit project in Joint 
Venture. The bids of two out of the three parties viz VISA 
and TISCO were rejected at the threshold. The third party, 
viz. Jindal was selected. VISA and TISCO filed writ petitions 
363 
H 
364 
SUPREME COURT REPORTS 
[2008] 2 S.C.R. 
A before the High Court which allowed the same holding 
that the bid. of Jindal was not evaluated in an impartial 
manner and that there was no attempt to find out as to 
which of the bids offered by the three parties gave 
· maximum advantage to the State in terms of public 
s interest and State exchequer. After making certain 
observations questioning the bonafides of the officials 
of the State and IDCOL, the Court in exercise of its power 
of judicial review set aside the decision of IDCOL to select 
Jindal. 
c 
D 
The contention of Appellants is that the High Court 
took into account various irrelevant and extraneous 
materials without even any pleading in that regard and 
wrongly assumed collusion and loss of revenue if Jindal's 
bid was to be accepted. 
Disposing of the appeals, the Court 
HELD: 1. Certain conclusions of the High Court are 
clearly indefensible. The observations relating to 
favoritism, so far as Jindal is concerned, are clearly 
E without any foundation. [Para 1 O] [368-C] 
. 2. On the sole ground that the High Court had relied 
upon extraneous materials and has arrived at unfounded 
conclusions, in normal course this Court would have set 
aside the order and asked the High Court to re-consider 
F 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, the appeals 
are being disposed on the following terms: 
G 
H 
a. 
It shall be treated that the technical bids of all 
b. 
the three parties are v~lid; 
The financial bids were submitted about five 
years back it wou.ld be appropriate to permit 
the parties to submit revised financial bids within 
three weeks and; 
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O=
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STATE OF ORISSA AND ANR. v. MIS. TATA IRON 
365 
AND STEEL CO. LTD. AND ORS. [PASAYAT, J.] 
c. 
The appropriate. and authorized Committee of A 
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. [Para 11] [368-D; E, F, GJ 
3. The observations and conclusions about 8 
malafides of the officials and their alleged favoritism stand 
-.,. 
quashed. [Para 13] [369-8, C] 
... 
CIVIL APPELLATE JURISDICITON : Civil Appeal No. 653 
of 2006. 
c 
From the final Judgment and Order dated 18.11.2004 of 
the High Court of Orissa at Cuttack in W.P. (C) No. 6798/2004. 
WITH 
Civil Appeal Nos. 654, 655, 671, 672 and 673 of 2006. 
D 
G.E. Vahanvati, Solicitor General, B.K. Mohanti,Advocate 
General (Orissa), Arun Jaitley, K.K. Venugopal, Dr. A.M. Singhvi, 
Shyam Divan, Shanti Bhushan, Ashok Parija, T.R. Andhiarujina, 
R.F. Nariman, Rajat Rat
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