The Supreme Court has ruled that private companies cannot complain about violation of their contractual rights by government when national interest is involved in awarding contracts for public projects involving taxpayers' massive money.
The Supreme Court has ruled that private companies cannot complain about violation of their contractual rights by government when national interest is involved in awarding contracts for public projects involving taxpayers' massive money.
A bench of Justice VS Sirpurkar and Justice TS Thakur in a judgement expressed anguish at the manner in which the Tehri Pump Storage Plant could not be taken up for the past three and half years due to the legal battle involving two MNCs - Voith GMBH (respondent No 1) and Alstom (respondent No 2).
"This case is a classic example of the whole nation suffering on account of the fight between two multi-national companies in respect of each other's rights. There is no dispute that the Tehri Pump Storage Plant project is of utmost importance to the state of Uttarakhand particularly and to the nation generally," the apex court said.
The apex court passed the judgement while staying a Uttarkhand high court order which had halted the tendering process adopted by Tehri Hydro Development Corporation India Ltd after Voith Hydro GMBH Co challenged the process as being in favour of rival bidder Alstom.
In this case, the notice inviting tenders on the prime turn-key execution was issued on August 31, 2007.
But the two companies, which were finally shortlisted for the contract, fought legal battles in the high court and the apex court accusing THDC of being biased in favour of the other.
The apex court had then passed the order in March 2010 asking the Corporation to adopt certain parameters for determinging the contractors on the basis of the evaluations done by the high-powered committeee. It had also made certain remarks expressing anguish over the delay in the project's execution due to the legal fight between the two MNCs.
However, when on the basis of the committee's recommendations, the THDC had posed certain queries to Voith Hydro GMBH Co, the latter challenged the move again in the High Court alleging bias. The High Court had stayed the tendering process, following which the Corporation appealed in the apex court.
The apex court said, "If we find that in pursuance of the national interest, which was so explicitly mentioned in this court's judgment dated 26.3.2010, THDC, by adopting a fair and transparent procedure, provided a level-playing field to both the parties to get a proper idea of costs that it would have to pay to the party winning the contract, no complaint could be made of the breach of the contractual rights.
"In our opinion, firstly, there is no breach of the contractual rights or the terms of ITB. After all, it could not be said that the rights of the parties were crystallised.
The bench said the THDC, which was going to come out with the huge expenditure running into thousands of crores of rupees, was bound to safeguard the national interest.
"That was the tone of this court's judgment dated 26.3.2010 also. Otherwise, this court could have straightaway awarded the contract in favour of Voith GMBH (respondent No 1).
"But that was not found feasible in national interest. Instead, it was found proper to give fair opportunities to both the parties and it was only with that objective that the matters were referred to the panel of experts. If the facts are viewed from this angle, then it will be clear that there was nothing wrong in the THDC treading its course with utmost care and it must be said that the facts show that THDC appears to have acted in favour of the national interest by trying to prevent the exorbitant prices for the project and further trying to go to the realistic and minimum price, " the apex court said.
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