In a setback to Larsen and Toubro, the Supreme Court on Thursday turned down the construction major?s petition challenging the government?s decision to reject its bid for supply of 20 fast patrolling vessels (FPVs), meant to strengthen the maritime security of the country in the wake of the Mumbai terror attack.
A bench headed by Justice Altamas Kabir upheld the Delhi High Court?s September 2010 order rejecting the company?s plea and letting the government to accept the Cochin Shipyard Ltd?s (CSL) bid for the R1,333-crore tender.
The ministry of defence in January last year rejected L&T?s commercial bid terming it non-responsive on the grounds that the company had claimed foreign exchange rate variation (FERV) benefits which was impermissible as per the terms of the tender issued in June 2009.
Even the HC while taking strong exception to the L&T?s challenge to the acceptance of Cochin Shipyard?s bid by the government had accused the company of malafides intending to create ?nuisance value.?
The HC had also imposed a cost of over R6.70 lakh on the construction major.
Alleging gross discrimination, L&T had told the apex court that it had dropped its claim for ERV benefits after it was asked to do so at the time of reopening of the bid and such claim was not critical condition which could have made the bid non-responsive.
While L&T had indicated cost of 20 vessels as R1,333.70 crore including the cost of imported components, CSL had quoted R69.89 crore as the cost per vessel. According to the company, if its bid was liable to be rejected on this ground, then CSL?s bid should have been equally held non-responsive.
L&T?s had stated that its bid was not only the lowest amongst all the bids but also about R60 crore lower than CSL?s bid of R1,300 crore, he said, adding that if both the bids were on equal footing, then L&T, whose bid being lower, should have been declared as lowest bidder.