THDC INDIA LTD. versus VOITH HYDRO GMBH CO. AND ANR.

Citation: [2011] 5 S.C.R. 618 · Decided: 17-03-2011 · Supreme Court of India · Bench: V.S. SIRPURKAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
B 
[2011) 5 S.C.R. 618 
THDC INDIA LTD. 
v. 
VOITH HYDRO GMBH CO. AND ANR. 
(Civil Appeal No. 2572 of 2011) 
MARCH 17, 2011 
[V.S. SIRPURKAR AND T.S. THAKUR, JJ.] 
Contract - Tender - Tehri Pump Storage Plant, a project 
for additional electricity generation - Appellant (THDC), a 
C corporation under the Government of India, handling the 
project right from August, 2007 - However, tender not finalized 
due to legal battle between the two bidders, respondent No. 1 
and respondent No.2 - Respondent no.1 filed writ petition -
High Court passed interim order staying the whole tender 
D process - Justifiability - Held: Not justified - Since the whole 
process was absolutely transparent, there is no scope to stall 
the whole process by finding fault with the tendering process 
and insisting that THDC could not invite fresh pricing bids -
In inviting the fresh pricing bids, particularly after conveying 
E the deficiencies or non-conformities to both the respondents 
and making it clear to them, it cannot be said that any change 
was made in the bidding conditions - There was nothing wrong 
in THDC treading its course with utmost care - THDC acted 
in favour of the national interest by trying to prevent the 
F exorbitant prices for the project and further trying to go to the 
realistic and minimum price - Contractual rights of competing 
parties like respondent no. 1 and respondent no. 2 not more 
important than the national interest - Stay order of High Court 
set aside - Parties to submit fresh price bids -
THDC to 
G accordingly take decision in respect of the grant of contract. 
The Tehri Pump Storage Plant, a project for additional 
electricity generation, involved technical issues. The 
appellant (THDC), a corporation under the Government of 
India, has been handling the project right from August, 
H 
618 
THDC INDIA LTD. v. VOITH HYDRO GMBH CO. AND 619 
ANR. 
2007. However the tender was not finalized due to legal 
A 
battle between the two bidders, respondent No.1 and 
respondent No.2. Respondent no.1 filed writ petition. The 
High Court; by the impugned order, passed an interim 
order staying the whole tender process. 
• 
Allowing the appeal, the Court 
HELD:1. In an earlier round of litigation, by judgment 
and order dated 26.3.2010 passed by this Court, this 
Court had clearly expressed that the contractual rights of 
B 
the competing parties like Voith GMBH (respondent No. 
C 
1) and Alstom (respondent No.2) were not more important 
than the national interest. If in pursuance of the national 
interest, which was so explicitly mentioned in this Court's · 
judgment dated 26.3.2010, the THDC by adopting a fair 
and transparent procedure, provided a level playing field 
D 
to both the parties to get a proper idea of costs that it 
would have to pay to the party winning the contract, rio 
complaint could be made of the breach of the contractual 
rights. [Para 24] [637-A-C] 
2. Since the wh.ole process was absolutely 
E 
transparent and since the issues raised by way of the Writ 
Petition, were not even argued before the Court in the first 
round, there is no scope to stall the whole process by 
finding fault with the tendering process and insisting that 
THDC could not invite the fresh pricing bids. In inviting 
F 
the fresh pricing bids, particularly after conveying :the 
deficiencies or non-conformities to both the respondents 
and making it clear to them that they would hav~ to 
comply with the same as first stage, it cannot be said that 
any change is being made in the bidding conditions. This 
G 
Court had left discretion in THDC to take the decisioQ in 
the light of Panel of Experts' report. The Panel of Experts 
had gone into the exercise not once but twice. However, 
the close examination of the second report of the Panel 
H 
620 
SUPREME COURT REPORTS 
[2011) 5 S.C.R. 
A of Experts would suggest that everything was not alright 
even with the bid of Voith GMBH (respondent No.1) and 
there were in fact some non-conformities, which were 
required to be considered by THDC before a final decision 
was taken. There is nothing wrong in that. [Para 23] [636-
B C-FJ 
3. There is no breach of the contractual rights or the 
terms of Instructions to Bidders (ITB). After all, it could 
not be said that the rights of the parties were crystallized. 
According to Voith GMBH (respondent No. 1), the 
C crystallization of the rights was even prior to passing of 
the judgment of this Court dated 26.3.2010, as the bid of 
Alst
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