Punjab-Haryana High Court
M/S Naresh Kumar & Company Private ... vs Haryana Power Generation Corporation & ... on 10 October, 2012
Bench: Ajay Kumar Mittal, G.S.Sandhawalia
CWP No.14411 of 2012 1
IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH
CWP No.14411 of 2012(O & M)
Date of decision:10.10.2012
M/s Naresh Kumar & Company Private Limited .....Petitioner
Versus
Haryana Power Generation Corporation & others .....Respondents
CWP No.14412 of 2012(O & M)
Date of decision:10.10.2012
M/s Nair Coal Services Limited .....Petitioner
Versus
Haryana Power Generation Corporation & others .....Respondents
CORAM : HON'BLE MR.JUSTICE AJAY KUMAR MITTAL
HON'BLE MR.JUSTICE G.S.SANDHAWALIA
Present: Mr.Chetan Mittal, Sr.Advocate, with
Mr.Amit Jhanji, Advocate, for the petitioner,
Mr.Anand Chhibbar, Sr.Advocate, with
Ms.Harpriya Khaneka, Advocate,
Mr.Arun Palli, Sr.Advocate, with
Mr.Tushar Sharma, Advocate, for respondents No.1 to 3,
Mr.Rajiv Atma Ram, Sr.Advocate, with
Mr.Arjun Partap Atma Ram, Advocate, for respondent No.4.
******
G.S.Sandhawalia J.
1. This order shall dispose of CWP No.14411 and 14412 of 2012 as common questions of facts are involved. The facts, necessary for decision of the cases, have been taken from CWP No.14411 of 2012 since pleadings are complete in this case.
2. The present writ petition under Articles 226/227 of the Constitution of India has been filed for issuance of writ in the nature of CWP No.14411 of 2012 2 certiorari for quashing order of the respondent-Corporation of declaring respondent No.4 as the successful L-1 bidder and awarding the tender in its favour despite the fact that it did not meet the qualifying requirements as given under Clause 9 of the tender and, therefore, was not eligible for consideration. Further writ in the nature of mandamus has been prayed for directing the respondent-Corporation to undertake thorough scrutiny and verification of the contents of the documents and certificates in support produced by respondent No.4 on the consideration of which the Techno- Commercial bid of respondent No.4 was accepted whereas the documents and certificates produced by respondent No.4 were false, fictitious and fabricated. A prayer has also been made in the nature of writ of mandamus for direction to the respondent-Corporation not to issue the letter of intent and work orders in favour of respondent No.4 being illegal, arbitrary and mala fide since the Techno-Commercial bid of respondent No.4 had been accepted on the basis of false and fabricated documents/certificates produced by respondent No.4 and the price bid had also been accepted declaring him as L-1 bidder on the basis of drastic under quoting of rates to the extent of 171% from its next closest rival bidder, the petitioner- Company which has been declared L-2 bidder.
3. The case put up by the petitioner is that it is in the business of coal since 1925 and the petitioner is one of the topmost coal supplying and coordinating agency in the country. The petitioner-Company has the capacity of supplying 40 million tonnes annually and has a staff of over 1000 experienced personnel at 70 locations at all major coalfields and industrial hubs and having mostly all the blue chip companies like BALCO, Tata Steel, IFFCO Ltd. etc. as its clients.
CWP No.14411 of 2012 3
4. The respondent-Corporation had issued a notice inviting tender (for short, the 'NIT') No.2/HPGCL/Fuel-58/Vol-II dated 19.03.2012 for appointment of coal agent for supervision of loading, weighment of coal at loading points consigned to PTPS Panipat, DCRTPP Yamunanagar and RGTPP, Khedar, Hisar to minimise the loss of coal during transit and also in connection with despatch of coal and other activities as per scope of work. The respondent-Corporation had invited sealed tenders under a 'Two Bid System', i.e., (i)Techno-Commercial and (ii) Price Bid. The petitioner- Company, being fully eligible had applied for the tender, the pre-bid conference of which was to take place on 12.04.2012 and the last date for sale of tenders was 24.04.2012 which was also the date for receipt of bids, checking of credentials by Committee was to be done on 02.05.2012 which was also the date for opening of bids at 15.30 Hrs. The pre-bid conference, held on 12.04.2012, made certain necessary amendments in the tender forms and the tenders were accordingly changed and the last date for receipt of bids was advanced to 01.05.2012 and the Committee was to check the credentials on 08.05.2012 which was also the date for opening of the bids at 15.30 Hrs. The petitioner-company attached all the requisite documents along with its tender form and the Techno-Commercial Bids were opened wherein the bid of respondent No.4 was accepted by the respondent- Corporation but the same was done without undertaking proper scrutiny and verification of documents and certificates produced by respondent No.4. The petitioner-Company had made a representation vide letter dated 26.05.2012 outlining the fact that respondent No.4, in fact, did not possess the necessary experience in shortage minimisation (transit loss) as required by the present tender and that respondent No.4 had been successful in CWP No.14411 of 2012 4 obtaining false, fictitious and fabricated certificates issued by Damodar Valley Corporation (for short, 'DVC'). Certificate dated 23.03.2010 (Annexure P-16) wherein DVC had certified that respondent No.4 did not possess the requisite qualification/experience in shortage minimisation was attached. But subsequently, DVC issued another certificate dated 09.08.2011 (Annexure P-17) wherein it had certified that respondent No.4 had executed shortage minimisation work for DVC. Another certificate dated 12.04.2012 was issued by DVC wherein, once again, shortage minimisation was not included in the scope of work undertaken by respondent No.4. Accordingly, it was pleaded that the above-mentioned certificates had been obtained by respondent No.4 in collusion and misrepresentation wherein it was certified that it had experience in shortage minimisation (Annexure P-17). However, the latest certificate dated 12.04.2012 did not include shortage minimisation in its ambit which showed that in fact, respondent No.4 did not possess the required qualification and experience in shortage minimisation (transit loss). The petitioner was aware of the fact that respondent No.4 was producing false and fabricated documents at an earlier stage also and at one point of time, submitted a certificate purported to have been issued by the Chief Engineer (Construction) & Project Head of DVC in regard to shortage minimisation but it was not found to be in consonance with the work order of DVC and the officials of West Bengal Power Development Corporation Limited (WBPDCL) had rejected the bid of respondent No.4. Similarly, Madhya Pradesh Power Generation Corporation Limited (MPPGCL) had disqualified respondent No.4 from the tender process on the same lines.
5. Subsequently, letter dated 16.07.2012 was issued by respondent- CWP No.14411 of 2012 5 Corporation informing the successful tenderers whose technical bids had been opened that the price bid was scheduled to be opened on 23.07.2012 at 11 A.M. in the office of respondent No.2 and in accordance with the said letter, the price bids were opened and respondent No.4 was declared successful L-1 bidder since it had quoted the lowest price bid and the tender had been awarded to it for appointment as coal agent. Respondent No.4 had resorted to extreme under-quoting of rates to the extent that the difference of rates between respondent No.4 and petitioner-Company was to the tune of 171% and such drastic under-quoting in itself showed clear signs of mala fide on the part of respondent No.4 and was against the principle of equity and fairplay. Thus , the case set up by the petitioner was that respondent No.4 did not possess the minimum experience in shortage minimisation which was the mandatory requirement under Clause 9.01 of Section A of the NIT for minimisation of transit losses, handling of coal, liaison with coal companies and railways for supply and despatch including supervision of minimum 30 lac metric tonnes of coal in any one year during preceding three financial years, i.e., 2008-09, 2009-10 and 2010-11. The petitioner also filed additional affidavit dated 09.08.2012 vide CM No.10835 of 2012 to plead that Part-E of the work order was allotted to M/s T.K.Security Agency vide work order dated 19.07.2010. The experience possessed by respondent No.4 was that of liaisoning with DVC and not of shortage minimisation and the minimum turn-over requirement of respondent No.4 also did not meet the qualifying criteria even if it included works related to coal liaisoning and loading supervision and, therefore, it did not qualify as a bidder and, accordingly, the action of the official respondents was challenged.
CWP No.14411 of 2012 6
6. In the written statement filed on behalf of the official respondents, it was pleaded that the petition was bad for non-joinder of the necessary parties as the allegations made were that the certificates issued by the DVC were forged and fabricated and, therefore, DVC was a necessary party. The petition was not maintainable as it involved disputed questions of facts which could not be adjudicated in writ jurisdiction. The answering respondent is a public sector corporation engaged in business of generating electricity through various means including coal which is procured from various subsidiaries of Coal India Ltd. located all over the country transported by railway through the coal agent who has the job of transporting, weighing and other related works. The NIT dated 19.03.2012 clearly mentioned that only those firms would be authorized to participate which have the requisite qualification as set out by the Corporation. In pursuance of the NIT, 6 parties had applied including the petitioner- Company and various committees were formed to deal with the entire tender process vide office order dated 10.04.2012. The committee, on scrutiny of the documents of all the parties, found that M/s Elegant Surveyors and M/s Aggarwal & Associates did not qualify the pre-qualification test as set up by the official respondents as they failed to supply additional documents and both the firms were disqualified from the bidding process leaving only 4 contenders, viz., M/s Naresh Kumar & Company, M/s Karam Chand Thapar & Brothers, M/s Nair Coal Services Ltd. and M/s Aka Logistics Pvt. Ltd. On 07.05.2012, a letter dated 04.05.2012, sent by Nair Coal Services Ltd.(petitioner in CWP No.14412 of 2012) was received that respondent No.4 should not be considered for appointment of coal agent as it did not fulfill the qualifications as mentioned in the NIT. It was specifically alleged CWP No.14411 of 2012 7 in the letter that respondent No.4 did not possess the experience for transit loss minimisation as given in the head of instructions to bidders and that the WBPDCL, DVC and MPPGCL had disqualified respondent No.4 for this reason. According to the letter, the experience of respondent No.4 with DVC consisted only of liaisoning and not of transit loss minimisation and it did not have the minimum turnover aggregating to `15 crores from only coal liaisoning, supervising etc. Accordingly, a meeting was called on 07.05.2012 and the documents furnished by respondent No.4 including the certificate dated 09.08.2011 and the work order issued by DVC on 25.06.2009 were perused and it was found that respondent No.4 fulfilled the criteria as laid down in the NIT and the annual turn-over was much over `15 crores.
7. Accordingly, it was decided that respondent No.4 was qualified to participate in the bidding process and was allowed to do so. Due to the serious nature of allegations which had been levelled in the letter of M/s Nair Coal Services Limited, another meeting of the Committee was called on 08.05.2012 to discuss the same and as a precautionary measure, a clarification was sought from the DVC and the Techno-Commercial bid of all the contenders were opened and all of them were found eligible for opening the price bid. On 16.05.2012, the respondent-Corporation sent a letter to DVC seeking clarification whether respondent No.4 possessed the experience of transit loss minimization as was depicted in the certificate dated 09.08.2011 issued by DVC which was duly replied to on the same day wherein it was clarified that the certificate was self explanatory. On 18.05.2012, the official respondents received another letter dated 14.05.2012 from M/s Nair Coal Services in continuation of letter dated CWP No.14411 of 2012 8 04.05.2012 containing the same allegations that the transit loss minimization was mentioned in the NIT under the heading 'Part-E' but the same had been omitted in the work order and that respondent No.4 had no experience in transit loss minimization. It was, accordingly, averred that the perusal of the work order dated 25.06.2009 of the DVC would show that Part-E, as mentioned in the NIT, had been omitted in the work order but the nature of work of transit loss given in Part-E was included under the heading, 'scope of work and services' in the work order. Thereafter, vide letter dated 03.07.2012 work experience of respondent No.4 was asked for and reply dated 05.07.2012 was received wherein it was mentioned that there was a general instruction in the scope of work order awarded to M/s AKA Logistics Pvt. Ltd. Kolkata (formerly CISC-ESSAR Eng. Consortium Pvt. Ltd.) that the firm will have to follow the coal shortage minimization en route to MTPS which is self explanatory. A number of other complaints regarding the petitioner were also received and probe was made to each and every claim and clarification was sought for and none of them carried any weight and accordingly, the price bids were opened on 23.07.2012. On the opening of the price bids, it was found that the bid of respondent No.4 was the lowest and it was declared L-1 bidder and was called for negotiations and thereafter, the present writ petition has been filed. It was mentioned in the written statement that respondent No.4 had also attached a work order dated 18.11.2011 by Vedanta Aluminium Ltd. for the year 2011-12 for 68,15,026 metric tonnes of coal which proved that respondent No.4 was not a raw hand and was not completely inexperienced. However, the said certificate was not taken into consideration as the work order pertained to the year 2011-12 and it did not fulfill the relevant criteria as given in the CWP No.14411 of 2012 9 tender documents. The disqualification of respondent No.4 by WBPDCL and MPPGCL pertained to different NIT's which had no bearing on the present tender and the decision taken by both the above-mentioned organizations were not binding on the official respondents who had selected respondent No.4 in accordance with their own NIT. The official respondents, while awarding a contract to a party as a coal agent, were duty bound to protect the interest of the Corporation and the rates of the petitioner was 171% higher and the table depicting the rates in para No.15 of the writ petition was a matter of record and the acceptance of the rate of respondent No.4 was not against any established principles of equity and fair play. It was clarified that the minimum turn-over of `15 crores during the 3 financial years, i.e., 2009-10, 2010-11 and 2011-12 was amended for 2008-09, 2009-10 and 2010-11 and the bidders were to produce audited balance-sheets thereof and their turn-over for the said years were to be considered.
8. In the written statement filed on behalf of respondent No.4, in the preliminary objections, it was pleaded that both the petitioners have been found to be indulging in cartel formation by the Hon'ble Apex Court and as per Clause 3.07, the offer of such parties was to be rejected. The tactics of the two petitioners and a third firm, M/s Karam Chand Thapar was to oust the new companies entering in the field and to submit similar bids with the object that one out of the three would be awarded the tender. The members of the cartel would give higher rates of 4 to 4.5 times the rates quoted by other bidders and it was not in public interest to award the tender to the petitioners. The difference in the amount payable was depicted in the chart prepared to show that there was uniformity between the rates quoted by the CWP No.14411 of 2012 10 petitioners and in the public interest, it was required that the tender was not given to the petitioners. The official respondents had asked the correctness of the certificates issued by the DVC and similar tender had also been floated in Maharashtra by MAHAGENCO and DVC had certified the experience of the answering respondent to MAHAGENCO and similar was the position with Karnataka Power Corporation Ltd. M/s Naresh Kumar & Company Pvt. Ltd. was a black-listed company and the Madhya Pradesh State Electricity Board, vide order dated 12.09.2003, had debarred the company from all future business with the Board for a period of 5 years due to the non-completion of the contractual formalities. A similar tender had been floated in the State of Andhra Pradesh and the petitioner had failed to execute the tender and the letter of intent was cancelled and a fresh tender was floated and respondent No.4 had put in its tender 14.80 per metric tonnes, M/s Nair Coal Services had quoted 39.33 per metric tonnes and M/s Karam Chand Thaper & Brothers had quoted 21.24 per metric tonnes whereas South India Corporation had quoted 22.47 per metric tonnes. M/s Nair Coal Service, despite being L-4 bidder, had challenged the bid of respondent No.4 in order to enable M/s Karam Chand Thaper & Brothers, its cartel member, to get the tender and no interim order was passed by the Andhra Pradesh High Court.
9. In the reply to the additional affidavit, respondent No.4 stated that Part-E of the work order (shortage minimization and transit loss minimization) which was allotted to M/s T.K. Security Agency vide work order dated 19.07.2010 pertained to engagement of security personnel for escorting coal rakes from Raniganj Railway Station to the thermal plant in District Bankura which is a private captive railway line CWP No.14411 of 2012 11 and the property of Mejia Thermal Power Plant (MTPS). The distance between Raniganj Railway Station and the MTPS in District Bankura is only 15 KMs. and the loading of the coal rakes was done at the coal fields of Eastern Coal Fields Ltd., Bharat Coking & Coal Ltd., Mahanadi Coalfields Ltd., situated at Orissa, Jharkhand and West Bengal at a distance varying from 250 to 500 KMs. from the MTPS. The security agency had no role to play at the loading point as they were totally unaware of the quantity of coal loaded into the wagons and were only deployed to ensure that no miscreants damage/sabotage the coal rakes and to avoid theft of machinery etc. between Raniganj Railway Station and the Mejia Thermal Power Plant. The said work order had no connection with the shortage minimization en- route and was for the private captive railway line from Raniganj Railway Station for which, various security guards were deployed per shift for patrolling. The certificates issued by the DVC were justified on the ground that the scope of work and services was to ensure the availability of coal to MTPS and to meet the requirement of coal through railway channel and minimization of shortage en route. The experience of shortage minimization was to be included within the scope of work itself after the pre-bid conference and it was nothing but to ensure that the maximum amount of coal from the loading point to the unloading point be delivered. The transit loss was to be minimized during the movement of coal rakes from loading to unloading point and the DVC had incorporated the penal clauses to ensure shortage minimization and no payment was to be made to the company until 60% or more materialization of standard linkage coal was loaded at loading point and received at the unloading point. The bank guarantee had also been furnished by the respondents that indemnified CWP No.14411 of 2012 12 DVC against the period of the tender of the DVC which was in the terms of the work order issued by the DVC. The power corporations- MAHAGENCO and WBPGCL had sought clarification from the DVC and reply had been given that they had satisfactorily executed the work including the minimization of shortage of coal en route.
10. Respondent No.4 filed CM No.12974 of 2012 to place additional affidavit and material to show that the petitioners were engaged in cartel formation along with M/s Karam Chand Thaper & Brothers and that M/s Nair Coal Services Ltd. were accused of embezzling coal from Sanjay Gandhi Thermal Power Plant (Madhya Pradesh). The respondent No.4 also filed CM No.12002 of 2012 to place on record additional affidavit of Rishi Singh that the petitioner in CWP No.14412 of 2012, M/s Nair Coal Services Ltd. had filed a writ petition in the High Court at Kolkata for quashing the certificate dated 09.08.2011 on the ground that it had been wrongly and illegally issued by the DVC, copy of the writ petition was placed on record.
11. The petitioners filed reply to the said additional affidavits of Vijay Singh dated 13.09.2012 alleging that M/s B.S.N. Joshi & Sons, who further continued the work, were issued show cause notice by MAHAGENCO, after a period of 3 months, due to the failure of compliance of various objects and caused huge loss due to the shortage of coal minimization. The contracts had been terminated on 30.08.2009 and the Hon'ble Apex Court had relegated the parties to the remedies which were available to them. Thus, loss to the tune of `12.25 crores was caused due to the inefficient handling of the work by M/s B.S.N.Joshi & Sons. Accordingly, it was pleaded that the said respondent No.4 had also no experience and was also not competent. MAHAGENCO had issued letter dated 18.09.2009 to M/s CWP No.14411 of 2012 13 B.S.N.Joshi & Sons for coal liaisoning which had undertaken to reduce the transit loss to less than 8%. Accordingly, it was contended that allotment of work to respondent No.4, who had no experience, would not be in public interest as it would cause huge loss.
12. From the above pleading, the question that arises for consideration is whether the action of the official respondents No.1 to 3 in considering the certificates dated 23.03.2010 and 09.08.2011 issued by the DVC made respondent No.4 eligible as per the terms of the NIT and whether the action of the official respondents was justified. Learned Senior Counsel for the petitioner has taken pains to take us to the NIT to show that the appointment was of a coal agent for supervision of coal liaisoning and for the purpose of minimizing the transit losses, handing of coal liaisoning with coal companies and railways for supply and despatch in connection with coal and other activities as per the scope of works. Clause 9 was referred to which reads as under:
"9.0 Qualifying Requirements of Bidders: HPGCL intends to appoint some firm/consortium to work as coal agent for the coal linkages for its Thermal Power Stations (PTPS, DCRTP & RGTPP) from CCL, BCCL, WCL & NCL. The firms who intend to participate in bid must have at least established offices since last one year at any three out of the following seven hub centers of coal companies i.e. Nagpur, Ranchi, Dhanbad, Delhi, Kolkata, Bina & Singrauli etc. The detail, such as addresses, names of personnel, telephone and fax nos. etc., shall be furnished. Bidder/s shall produce documentary proof such as telephone bill or electricity bill in the name of bidding firms. Against this tender, single firm(s) as well as consortium(s) may participate as per qualifying criteria given below-
9.01 Sole Bidder Route: In case the single firm (bidder meets the following requirements, it may participate as a sole bidder (A) Only those firms shall be allowed to participate in the CWP No.14411 of 2012 14 tender who have experience of similar work as coal agent for minimization of transit losses, handing of coal liaisoning with coal companies and railways for supply and dispatch including supervision of minimum 30 Lac MT of coal in any one year during preceding 3 financial years i.e. 2009-10, 2010-11 and 2011-12 of Power Utilities/Electricity Boards/Steel Plants/Fertilizer Plants/Cement Plants Experience of providing such services for dispatch of ROM coal by Rail shall only be considered. The experience of washery operators shall not be counted.
(B) The bidder (firm) must have minimum turnover aggregating Rs. 15 crore during preceding 3 financial years i.e. 2009-10, 2010-11 and 2011-12. The bidder shall produce documentary proof i.e. audited balance sheet. The turnover and experience of bidding company would be considered only and not that of any other sister concern or joint venture. The firm should be a profit making company in any two years during 2009-10, 2010-11 and 2011-12.
xxxx xxxx xxxx"
13. The tender document dated 26.12.2008 by DVC pertained only to MTPS was referred to show that Part-E pertained to shortage minimization of BOBR indigenous coal rakes for MTPS and improve turn-around time.
Accordingly, reference was made to work order dated 25.06.2009 to show that Part-E did not figure in the work order and that the certificate issued by the DVC on 23.03.2010, in favour of respondent No.4 did not pertain to Part-E. Similarly, the certificate dated 09.08.2011, on which respondent No.4 was placing reliance, did not show that respondent No.4 had done the work and had the experience of minimization of coal shortage. The letter dated 12.04.2012 depicted Part-A to Part-D of the work done by respondent No.4 and reference was made to the disqualification done by the WBPGCL, vide letter 29.05.2011 and 21.10.2011 in which certificate dated 09.08.2011 was also mentioned. Similar reference was made to certificate issued to MPPGCL to show that respondent No.4 had no experience in shortage CWP No.14411 of 2012 15 minimization and did not qualify for licensing work in respect of shortage minimization at Sanjay Gandhi Thermal Power Station, Birsinghpur. It was, accordingly, contended that Part-E which pertained to shortage minimization of BOBR had been sub-let. Stress was laid on the scope of work under Clause 1 of the NIT by MTPS and, therefore, as per Clause 9.101 and 9.105, the scope of work was different in Part-A and Part-E. The official-respondents had made an enquiry from the DVC on 16.05.2012 which was replied on that day itself by the DVC that the certificate dated 09.08.2011 was self-explanatory and information was again asked on 03.07.2012 which was replied on 05.07.2012 by the DVC to show that there was general instructions in the scope of works. Reference was made to the decision of the committee dated 11.07.2012 (Annexure R-1/10) to contend that the letter dated 05.07.2012, issued by the DVC had been ignored and the work done by M/s Vedanta Aluminium Ltd. had been taken into consideration which had not yet finished. It was pointed out that there was contradiction on the part of the official respondents as in the written statement, they had pleaded that the work order dated 18.11.2011 by M/s Vedanta Aluminium Ltd. had also been allotted for the year 2011-12 for 68,15,026 metric tonnes of coal. Thus, it was submitted that the respondent No.4 did not have the requisite experience for similar work and no payment had been made under Clause-E which would be clear from the certificates dated 12.04.2012 and 25.06.2009. Reference was also made to Clause 6.100 and 6.102 to show that proper security had to be made en route from the loading point to MTPS for which, armed guards were to be deployed in each linkage.
14. Accordingly, reliance was placed upon a Division Bench CWP No.14411 of 2012 16 judgment of this Court in CWP No.2321 of 2006 decided on 04.05.2006 titled M/s Selvel Coir Private Ltd. Vs. Union of India and Mukesh Kumar Vs. Haryana State, 2006 (1) PLR 464 and the judgment of the Hon'ble Apex court in West Bengal Electricity Board Limited Vs. Patel Engineering Company Limited & others (2001) 2 SCC 451. Counsel for the petitioner also placed reliance upon the judgment of the Hon'ble Apex Court in Raunaq International Limited Vs. I.V.R.Construction Limited 1991 (1) SCC 492 to urge that the ability to deliver all the works had to be taken into consideration and if the decision of the official respondents in acknowledging the certificate was wrong, then the whole processing of the tender was liable to be quashed.
15. On the other hand, Learned Senior Counsel for the official respondents stressed that the decision making process of the Corporation was to be taken into consideration as to whether it was arbitrary, without any bias and that there was bona fide exercise of power and once it was found so, then it was beyond the domain of judicial scrutiny. It was submitted that the DVC was a statutory body and had issued the certificates. A complaint was received from M/s Nair Coal Services Limited dated 04/07.05.2012, on the basis of which, the letter was written on 16.05.2012 to the Chief Engineer of the DVC. The Chief Engineer had responded on the same date and had stated that the certificate was in order. Thereafter, another complaint was made by the petitioner on 26.05.2012 on similar lines and again, information was asked on 03.07.2012 and a positive response was received on 05.07.2012. The Committee had taken into consideration the six bidders out of which, two had not qualified and decided on 08.05.2012 that the scope of work be checked. On 11.07.2012, CWP No.14411 of 2012 17 the bids pertaining to 4 bidders were examined at various levels and it was found that respondent No.4 had the requisite eligibility. Accordingly, the tender price bid had been opened and the petitioner had quoted `8,54,95,000/- whereas L-2 had quoted `22,52,00,000/- and the other co- petitioner, i.e., M/s Nair Coal Services Limited had quoted `29,48,00,000/-. Accordingly, reliance was placed upon the judgment of the Hon'ble Apex Court in Jagdish Mandal Vs. State of Orissa 2007(14) SCC 517 and Raunaq International Limited (supra). It was further contended that the case of the petitioner itself was that the certificate was obtained by respondent No.4 by collusion and misrepresentation and the petition was bad for non-joinder (though in the connected case, DVC has been impleaded). It was, thus, stated that the minimum rate had been quoted which suited the official respondents and there was no basis to hold that the certificate was bad.
16. Learned Senior Counsel for the private respondent submitted that as per Clause (iii) of Section-B of the NIT which gave the technical specification of the scope of work, i.e., the weight of coal at power station was generally found lessor than the billed weight. Such a difference was caused due to short-loading at the loading point or en route pilferage or both and it was for the firm to take necessary measures to minimise the difference. The said difference was generally described as transit loss or shortage en route or loss of coal during transit. The penalties/reductions were directly linked to the verification as per Annexure B (Section B) for PTPS, Panipat, DCRTPP, Yamunanagar and RTGPP, Khedar, Hisar which was to be worked out coal company vis-a-vis on monthly basis. It was pointed out that the scope of work as per Annexure A for the above-said CWP No.14411 of 2012 18 thermal plants in case of shortage of more than 2% on monthly basis in coal received of the build quantity for washed coal, coal company-wise, plant- wise-penalty was to be imposed and recovered as per Annexure B. Reliance was placed upon Raunak International Limited (supra) to contend that complaints made by the petitioners had been considered by the official- respondents and the eligibility of respondent No.4 had been verified and that there was due diligence. Accordingly, it was submitted that there was no replication filed to the reply of respondent No.4 to the additional affidavit in which it had been pleaded that once disputed questions of fact arose, the same could not be pressed into action until the issue was thrashed out in a Court of original jurisdiction. It was also pleaded that the matter was pending with the Kolkata High Court and one of the petitioners had himself challenged the veracity of the letter dated 09.08.2011 issued by the DVC. The case put forward by the petitioners could not be accepted till the matter was decided finally by the Kolkata High Court. The petitioner was a blacklisted company and order dated 12.09.2003 issued by the MPPGCL was relied upon to press-forth the submission that it had no locus standi to challenge the allotment of work in favour of respondent No.3. Reference was also made to Annexure B placed on record to show that the APPGCL had terminated the contract w.e.f. 28.05.2005 in the case of the petitioner as the transit loss of coal, as per terms of letter of intent, was going beyond the tolerable range. Reference was also made to the observations of the Hon'ble Apex Court in the case of B.S.N. Joshi and sons Ltd. Vs. Nair Coal Services Ltd. and others (2006) 11 SCC 548 to allege that there was a cartel formation between the petitioners, M/s Naresh Kumar and Company Ltd. & M/s Nair Coal Services Ltd. Accordingly, it was pointed out that in CWP No.14411 of 2012 19 the said case, there was a difference of `52 crores in the rates quoted by the appellant therein and the petitioner-firms. In the present case also, there was a difference of `14 to `22 crores and therefore, public interest required that the petitioners be not allotted the tender. Reliance was, accordingly, placed upon the later judgment in M/s B.S.N.Joshi & Sons Ltd. Vs. Ajay Mehta (2009) 3 SCC 458. It was also submitted that the two petitioners, along with one M/s Karam Chand Thaper had been successful in bidding for supplies to various thermal power plants from 03.06.2008 to 31.08.2008 and similarly, from 01.09.2008 to 06.03.2009. The rates offered by the 3 companies for the successful bids showed that there was a lot of commonality between the rates and the petitioners, admittedly, were challenging the letter of intent issued by the official respondents on the ground that it would not be in a position to execute the work which showed the cartel formation and, therefore, the bid of the petitioners was liable to be rejected.
17. After having heard counsel for the parties and having perused the record and the documents placed on the file, in our opinion the contention of the petitioners is devoid of merit. Undisputedly, while scrutinizing the action of the official respondents, this Court is to examine whether the exercise of power by the official respondents is actuated with any mala fide or is without jurisdiction, arbitrary or against the terms of the NIT. The Court is not to sit as a Court of appeal and review the decision making process but is only to prevent arbitrariness, irrationality, unreasonableness, bias or any mala fide since action of the official-respondents to award the tender is a commercial decision. Ordinarily, the official respondents would have the freedom of contract and the Court would not exercise jurisdiction CWP No.14411 of 2012 20 to correct the administrative action. To adjudicate the eligibilities of the parties, it would be left to the official respondents to determine the same on the basis of the documents furnished by the tenderer. The Court has to be very circumspect and has to thwart any attempt on the part of the unsuccessful tenderers to stall the process of awarding contracts/tenders by raising mere technical pleas. Keeping in view these principles in mind, the Courts shall adjudicate on the decision making process of the official respondents.
18. Examining the factual matrix in the present case, there is no dispute that the DVC, which is a statutory body, had issued a certificate dated 09.08.2011 (Annexure P-11) though the same has been challenged before the Kolkata High Court by one of the petitioners. In the said certificate, which was certified by the Chief Engineer (Construction & Project Head), DVC that respondent No.4 had satisfactorily executed the scope of work and services for liasioning with colliery and railways to ensure allotment, placement of rake and coordinate movement and to minimise the shortage en route. The supervision of coal at the loading points (mines end/railway siding) and unloading of the coal rakes at the MTPS track hopper was taken into account and the overall performance of the contract had been found satisfactory. The quantity of coal handled against the work orders was also considered for the period from April, 2007 to March, 2011. The details of the amount of coal handled against the work order found mention in the certificate which is reproduced below:
"From April, 2007 to March, 2011 Period Qty.(MT) Work Order No. April 2007 to 3855871440 MT/CE(O&M)/T-5/FM(155) /DDCOMMON March 2008 /07.08.2500 DT. 11.04.2007 CWP No.14411 of 2012 21 April 2008 to 3751286006 MT/CE(O&M)/T-5/FM(155)/DD/COMMON March 2009 /07.08/2529 DT.11.04.2007 April 2009 to 3883404366 MT/CE(O&M)/T-5/FM (155)DD/COMMON March 2010 /07.08/2500 DT.11.04.2007 & MT/CE/T-
5/FM(282)/DD Unit 1 to 6/09-10/4885
dt.25.06.2009
19. The said certificate was got verified by the official respondents from the Chief Engineer (Construction & Project Head), DVC vide letter dated 16.05.2012. On the complaint received from M/s Nair Coal Services Private Limited, the Chief Engineer (Fuel) of the official respondents had specifically mentioned that the work orders mentioned in the certificate were to be confirmed after verification whether the private respondent had carried out the work of shortage minimisation with coal companies against the work order dated 25.06.2009. The information was sought to be returned urgently and was confirmed on the same date by the office of the Chief Engineer (Construction & Project Head), DVC, who certified that the work order was in order and was self-explanatory. It would be advantageous to reproduce the letter dated 16.05.2012 which reads thus:
"Subject: Regarding appointment of Coal Agent/Liaison Agent.
Ref. No. Your Memo No.72/Ch-47/HPGCL/CE/Fuel-58 (Vol.IV), dated 16.05.2012.
Dear Sir, Pursuant to your above Memo it is reiterated that certificate for performance of M/s AKA Logistics Pvt. Ltd. Kolkata (formerly M/s CISC/ESSAR Eng.Consortium Pvt. Ltd.) issued from this end vide No.MTP/Ph-II/Mech-14/9811, dated 09.08.2011 is in order and self explanatory.
Yours faithfully, Sd/- 16.05.2012 (D.Mitra) Chief Engineer & Project Head"
20. In order to again verify the veracity of the certificate, another CWP No.14411 of 2012 22 letter was written on 03.07.2012 to the Chief Engineer (Construction & Project Head), DVC, specifically enquiring whether the work of coal shortage minimisation en route had been done by respondent No.4 from the loading end (mine end) to the unloading point (power station end) and regarding the quantity indicated in the performance/experience certificate and whether it related to some other works. This query was answered on 05.07.2012 and the DVC specified that there was general instruction in the scope of work awarded to respondent No.4 and that the firm was to follow the coal shortage minimisation en route MTPS which was self-explanatory. Reference can also be made to the work order of contract of coal given to respondent No.4 on 25.06.2009 (Annexure P-11) wherein the scope of work and services was classified under Clause 1.000, the said clause reads as under:
"1.000. SCOPE OF WORK AND SERVICES The objective of this contract is to keep the CHP system healthy so that desired quantity of coal can be fed to the Bunkers for sustained Generation of the Units (No.1 to
6) and to ensure availability of required number of coal rakes for MTPS and evacuation of the same at MTPS track Hoppers (2 nos) to meet the requirement of Coal at MTPS without Railway demurrage charges and minimize the shortage en-route. The contractor has to keep a close liaison with the concerned authorities of coal companies, Railways and DVC, MTPS."
21. A plain reading of the said clause shows that the contract was for the purpose of getting coal which was to be fed to the bunkers for generation of the units and to ensure the free and ready availability of coal for the thermal plants and minimise any shortage en route to avoid any extra charges. The committee of the official respondents consisting of the Executive Engineers and Superintending Engineer, which had been CWP No.14411 of 2012 23 constituted vide office order dated 10.04.2012, after going through the documents, had rejected two tenderers and came to the opinion that four parties had fulfilled the pre-qualifying requirement of the NIT. Accordingly, the bids of M/s Aggarwal Associates and M/s Elegant Services, Allahabad were returned. On 08.05.2012, the committee took into consideration the complaint dated 04.05.2012 of M/s Nair Coal Services, on which a note had been put up by the Executive Engineers for putting it up before the committee. Accordingly, a decision was taken that the concerned dealing officer of fuel section would take up the matter with the Chief Engineer, DVC, Bankura to get clarification regarding the scope of work to check the basis on which the committee held that the private respondent had qualified the eligibility clause. Accordingly, letter dated 16.05.2012 was written, answer to which was received on the same day in favour of respondent No.4. Thereafter, on 11.07.2012, the committee of the Executive Engineers noticed that another complaint of the same nature had also been sent by M/s Naresh Kumar and Company regarding the lack of experience in shortage minimisation. The private respondent's work experience was noted that it had handled as many as 3,88,304 metric tonnes during the year 2009-10, 45,70,628 metric tonnes for the period 2010-11 and 60,77,718 metric tonnes for the year 2011-12 and therefore, the private respondent had handled more than 30 lacs metric tonnes as required in the NIT during the last 3 financial years. It was also noticed that as per the NIT clause, the firm was to have a minimum turn-over aggregating `15 crores during the 3 financial years in question and the said amount was not restricted to any specific scope of work. The subsequent letter of the Chief Engineer (Construction Project Head), DVC dated 05.07.2012 was also CWP No.14411 of 2012 24 taken into consideration and placed before the Superintending Engineer. The Superintending Engineer placed the same before the higher authorities and accordingly, it was taken up by the Chief Engineer (Fuel) who came to the conclusion that the private respondent had carried out the work of shortage minimisation starting from the loading end to the power station and therefore, the complaints of the petitioners herein did not carry any weight. Similarly, the complaints against the petitioners were also rejected. The said decision of the Chief Engineer dated 11.07.2012 reads as under:
"From the above details, it is clear that M/s AKA Logistic has carried out the work of shortage minimisation enroute from Loading end to Power Station end and thus complaints against M/s AKA Logistic carry no weight. Similarly other complaints against M/s Nair Coal Services Ltd. & M/s Naresh Kumar & Co. also carry no weight. It is therefore, proposed that all complaints as mentioned above should be filed and 4 nos. firms as already qualified by credential checking committee consisting of SE/Fuel, Xen/Fuel-I & Xen/Fuel-II should be considered as eligible bidders for the opening of price bid (Part-II).
Four nos. firm are as under:-
1.M/s Naresh Kumar Co. New Delhi.
2.M/s Karam Chand Thapar & Brothers (CS) Limited, New Delhi.
3.M/s Nair Coal Services Limited, Nagpur.
4.M/s AKA Logistics Private Limited, Kolkata.
Submitted for approval of MD/HPGCL as per 'Y' please.
Sd/11.7.12 CE/Fuel"
This was placed before the Managing Director on 16.07.2012 who granted the approval for the opening of the price bids. The sequence of the events shows that the official respondents took into consideration all the complaints of the petitioners and enquired into the veracity of the certificate issued by the Chief Engineer, DVC.CWP No.14411 of 2012 25
22. Thus, the decision making process of the official respondents, which is the subject matter of challenge, was validly exercised. The complaints against the tenderers were being filed as the business rivals were busy trying to put down each other in a bid to be successful in the contract.
23. Another factor which would require notice is that Section D of the NIT, which is the format for performance bank guarantee depicts that the bidder had to give the details of his performance for one year during the preceding 3 years. The bidder had to submit month-wise details of percentage shortages received at unloading end during one year of the last three preceding years in respect of the coal from coalfields in a prescribed format. The official respondents placed on record the past performance of the private respondent No.4 as submitted by it in Section D of the NIT showing the percentage of shortage for the work carried out at MTPS, DVC. The said chart which was enclosed with the tender in a separate statement reads as under:
"Technical and Commercial Details
1.Past Performance This contract is basically for supervision of loading and weighment of coal rakes at loading end in order to minimize short receipt of coal at destination and for providing liaison services with coal companies, railways & other agencies in connection with dispatch of coal for PTPS, DCRTPP & RGTPP, it is essential requirement for bidder to give their performance company wise at least for one year during preceding 3 years i.e. 2009-10, 2010-11 and 2011-12 in following format.
Name of Coal fields:- CCL/BCCL/WCL/NCL
Sl Name Year No. of Total Total Shorta Perce
No of TPS/ Rake Billed Actual ge ntage
Organis Handl Quantity Weight at (MT) short
ation ed (MT) Power age
Station
end (MT)
CWP No.14411 of 2012 26
1 DVC, 2009- 803 27,76,280 27,32,463 43817 1.58
MTPS 2010
2010- 1363 45,94,440 45,58,159 36281 0.79
2011
2011- 1797 55,45,026 55,24,272 20753 0.37
2012
1.(ii) Technical and Commercial Details
The bidder shall submit the month wise details of % shortage received at unloading end during any year of the three preceding years in respect of the coal from CCL/BCCL/WCL/NCL (company wise) coalfields in following format:-
Months Name of Billed Weight Actual Weight % age
TPS/Orga (MT) at Power Station shortage
nisation end (MT)
APR'11 4,95,952 4,95,952 0.0
MAY'11 5,48,172 5,48,172 0.0
JUNE'11 4,61,026 4,61,420 -0.1
JULY'11 Mejia 5,50,314 5,41,160 1.7
AUG'11 Thermal 4,83,066 4,83,066 0.0
SEP'11 Power 4,52,102 4,48,865 0.7
OCT'11 Station 4,66,552 4,66,552 0.0
NOV'11 DVC 4,78,571 4,78,571 0.0
DEC'11 5,31,975 5,31,975 0.0
JAN'12 5,28,686 5,24,480 0.8
FEB'12 5,48,215 5,44,058 0.8
MAR'12 5,53,447 5,53,447 0.0
Total 60,98,078 60,77,718 0.3
24. A perusal of the said chart shows that the month-wise shortage for the year 2011-12 was placed before the official respondents as per the requirement of the NIT along with the certificates dated 28.04.2012 and 09.08.2011 issued by the DVC. The said certificates read as under:
"DAMODAR VALLEY CORPORATION MEJIA THERMAL POWER STATION DURLAVPUR : BANKURA No.MT/O&M/FM/Credential/688 Dated: 28/04/2012 To Whom It May Concern CWP No.14411 of 2012 27 This is to Certify that M/s AKA Logistic Pvt. Ltd. (Formerly M/s CISC-ESSAR-ENG-Consortium Pvt. Ltd.), Circular Court, 9th floor, Block No.92, 8, A.J.C.Bose Road, Kolkata-17 are the working contractor of Mejia Thermal Power Station, DVC and they satisfactorily executed the scope of work and services against W.O.No.Even 127 dt. 29.12.2011. The overall performance of the above contractor has been found satisfactory.
Receipt of coal rakes with Quantity of indigenous coal during the period from April' 2011 to March' 2012 are noted below:
From April'2011 to March'2012
Months Billing Passed Qnty. Rake
Qnty.(MT) (MT)
April'11 495952 495952 147
May'11 548172 548172 160
June'11 461026 461420 132
July'11 550314 541160 162
August'11 483066 483066 142
September'11 452102 448865 134
October'11 466552 466552 139
November'11 478571 478571 142
December'11 531975 531975 156
January'12 528686 524480 156
February'12 548215 544058 161
March'12 553447 553447 166
Total = 6077718
Sd/-
Superintending Engineer(M)
Fuel Management,
MTPS, DVC
Damodar Valley Corporation
Mejia Thermal Power Station
(Phase - B)
P.O.:-MTPS, Distt:-Bankura-722183, West Bengal Fax : 03241 262238 No.MTP/Ph-II/Mech-14/-9811 Dated:09.08.2011 TO WHOM IT MAY CONCERN CWP No.14411 of 2012 28 This is to certify that M/s CISC-ESSAR ENG-CONSORTIUM PRIVATE LIMITED, "Circular Court" 9th Floor, Block-92, 8, AWJC Bose Road, Kolkata-17 are the working contractor of Mejia Thermal Power Station, DVC and they satisfactorily executed the scope of work and services for (i) Liaison with Colliery & Railways to ensure allotment, placement of rake & coordinate movement & to minimise shortage en-route, (ii) Supervision of loading of Coal (BOBR wagons) at Loading Point (Mines end/railway siding) (iii) Unloading of BOBR coal rakes at MTPS track hopper and (iv) AW.M.C. Job of CHP. The overall performance of the above contractor has all along been found satisfactory. Receipt of coal rakes with Quantity for indigenous coal during the period from April'2007 to March-2011 are noted below:
From April' 2007 to March'2011
Period Qty.(MT) Work Order No.
April 2007 to March' 3855871.440 MT/CE(O&M)T-
2008 5/FM(155)/DD/COMM
ON/07-08/2529
DT.11.04.2007
April'2008 to March' 3751286.006 MT/CE(O&M))T-
2009 5/FM(155)/DD/COMM
ON/07-08/2529
DT.11.04.2007
April' 2009 to March' 3883404.366 MT/CE/T-
2010 5/FM(155)/DD/COMM
ON/07-08/2529
DT.11.04.2007 &
MT/CE/T-
5/FM(282)/DD/Unit 1 to
6/09-10 /4885
DT.25.06.2009
April' 2010 to March' 4570626.880 MT/CE/T-
2011 5/FM(282)/DD/Unit 1 to
6/09-10 /4885
DT.25.06.2009
Sd/-
Chief Engineer(Constn) & Project Head"
25. A cumulative reading of the documents shows that the official respondents took into consideration the capability of the private respondent to deliver the goods and whether it had the ability to render the services as per the required specifications. The past experience of the private CWP No.14411 of 2012 29 respondent was duly considered following the principles laid down by the Hon'ble Apex Court in Raunaq International Limited (supra) which reads as under:
"9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be : (1) the price at which the other side is willing to do the work;
(2) whether the goods or services offered are of the requisite specifications;
(3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services.
Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction."
26. Adverting to the submission of the Learned Senior Counsel for the petitioner that the scope of work as per Clause E was assigned to M/s Tee Kay Security Agency vide work order dated 19.07.2010 has also been CWP No.14411 of 2012 30 explained in detail by Learned Senior Counsel for the private respondent. It has been elaborated that M/s Tee Kay Security Agency was involved only for the purpose of ensuring security from the Raniganj Railway Station to the MTPS since the said railway line was a private railway line on which the coal wagons moved for supply to the MTPS. The services of the said security agency was availed to accompany the rakes on the private railway lines and also for providing patrolling of vehicles parallel to the railway lines and for ensuring that the coal rakes were not stopped or slowed down en route to the MTPS. Stress was, accordingly, laid on the scope of work as per Clause 1.000 of the tender documents of the MTPS which has been reproduced above in paragraph No.20. The certificate dated 09.08.2011 mentioned the quantity of work done in metric tonnes against the various work orders which have been reproduced in paragraph No.24 above. The private respondent had also given the details as per Section D of the NIT and the same were taken into consideration by the committee in its meeting dated 11.07.2012 and a perusal of the bank guarantee furnished by the private respondent to the DVC would go on to show that the private respondent had furnished bank guarantee of `24,12,500/- for the following works:
"Supervision at Loading Point, liasioning with Railways & Coal Companies indigenous coal, Annual Contract for evacuation of BOBR & BOXN coal rakes at Track Hopper 1 & 2 of MTPS for Indigenous Coal and imported Coal and Annual Repairs & Maintenance of Coal Handling Plant (CHP) of Unit # 1, 2, 3 & 4 and Coal Handling Plant of Unit # 5 & 6 of MTPS, Shortage Minimization of BOBR indigenous coal rakes for Mejia TPS."
27. A combined reading of the said documents depicts that the petitioners are only unsuccessful business rivals and are attempting to get an CWP No.14411 of 2012 31 administrative decision judicially reviewed and making a mountain out of molehill and alleging technical/procedural violations. The public interest does not require any such interference in such an action and the principles laid down by the Hon'ble Apex Court in Jagdish Mandal (supra), would be wholly applicable since there has been no unreasonableness or arbitrariness on behalf of the committee while processing the cases of the parties. The relevant portion of the judgment reads as under:
"19. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions.
Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out.
The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial CWP No.14411 of 2012 32 review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.'
ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer /contractor or distribution of state largesse (allotment of sites/ shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
28. The private respondent has also been able to demonstrate successfully with reference to the observations made by the Hon'ble Apex court in B.S.N.Joshi case (supra) regarding the conduct of the petitioners who have been engaging in liasioning all over the country for similar contracts leading to cartel formation. The relevant observations of the Hon'ble Apex Court in the said judgment reads as under:
"33.The Managing Director of MAHAGENCO approving the note of the Director, Finance, stated :
"On perusal of rates M/s Nair Coal Services Ltd., Nagpur, M/s Nareshkumar & Co. Ltd. Nagpur and M/s Karamchand Thapar & Brs. Ltd., Mumbai, it is apparent that they have formed a cartel. The rates quoted by these firms are nearly 51 crs. to 52 crs. More than quoted by LI. As a goodwill gesture the above parties were called for negotiations.CWP No.14411 of 2012 33
However, they have refused to match the LI rates. In view of the above, it is in public interest and in the interest of MAHAGENCO a Govt. owned, public utility that the work is allocated to the lowest qualified bidder namely M/s B.S.N. Joshi & Co."
53.The rates quoted by the parties have been considered at great details. The difference of the amount in view of the rates quoted by Appellant vis-a- vis the other three firms was of the order of about Rs. 52 crores. Thus, a decision was taken in the interest of the organization. Such a decision taken in public interest should ordinarily be not interfered with.
72.The question which arises for consideration is as to what relief can be granted in the instant case. The private respondents who had formed a cartel have successfully obtained the contract after the judgment of the High Court. Award of such contract although was subject to the decision of this appeal, this Court cannot ignore the fact that if Appellant is permitted to take over forthwith, supply of coal to the Thermal Power Station may be affected. We, therefore, intend to give another opportunity to MAHAGENCO. It shall consider the offer of Appellant upon consideration of the matter afresh, as to whether it even now fulfils the essential tender conditions. If it satisfies the terms of the tender conditions, the contract may be awarded in its favour for a period of one year; but such contract shall take effect after one month from the date of the said agreement so as to enable the private Respondents herein to wind up their business. This order is being passed in the interest of MAHAGENCO as also the private Respondents herein.
73. Private Respondents, however, shall be paid their dues in terms of the offer made by them and accepted by MAHAGENCO.
74. The appeal is allowed with the aforementioned observations and directions. All the Private Respondents shall pay and bear their cost of Appellant which is quantified at Rs.50,000/- each."
29. The submission of the petitioners that subsequently the work in favour of M/s B.S.N.Joshi & Sons could not be successfully executed by them due to their incapacity cannot wash away the finding which has been CWP No.14411 of 2012 34 recorded against the petitioners in the above-noted judgment. The submission of the counsel for the petitioners that the rates which have been quoted by the private respondent are not viable and they will not be able to function on the said rates and it would lead to fresh tendering by the respondents cannot be accepted. That public interest was involved regarding the difference in quotation is also a major factor and the difference in the bids is palpable and in the face of such difference, the decision of the official respondents awarding the tender to the L-1 bidder cannot be interfered with. A perusal of the bids received shows that the private respondent had quoted only `8,54,95,000/- against the quotation of `22,52,00,000/- of L-2 and there is a 171% difference between the two bidders, i.e., L-1 and L-2. The said rates read as under:
"AKA Logistics Private Limited 8,54,95,000.00/-
Naresh Kumar & Co.Pvt.Ltd. 22,52,00,000.00/-
Karan Chand Thapar & Bros.
Coal Sales Ltd. 25,17,10,000.00/-
Nair Coal Services Ltd. 29,48,00,000.00/-"
30. Once the said rates are suiting the official respondents themselves, it does not lie in the mouth of the petitioners to say that the private respondent will not be able to work at the said rates. It is for the official respondents to ensure that the work is carried out and to protect the Corporation from any loss by imposing adequate conditions.
31. Another factor which has to be taken into consideration is that one of the petitioners', viz., M/s Nair Coal Services Ltd. has himself challenged the letter dated 09.08.2011 issued in favour of the private respondent before the Kolkata High Court. Once the letter itself has been challenged and it is yet to be determined as to whether there was any falsity or fraud on behalf of the private respondent in obtaining the said certificate or whether there CWP No.14411 of 2012 35 was any collusion or misrepresentation, the petitioners, in such circumstances, cannot plead that the certificate cannot be relied upon since the official respondents have, on their part, made all efforts to verify the veracity of the scope of work and have come to a valid conclusion that the private respondent had the necessary experience of shortage of coal minimisation. The Hon'ble Apex Court in Tata Cellular Vs. Union of India (1994) 6 SCC 651 laid down the following principles:
"94. The principles deducible from the above are : (1) The modem trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
32. Recently, the Hon'ble Apex Court, in Siemons Public Communication Pvt. Ltd. & another Vs. Union of India & others AIR CWP No.14411 of 2012 36 2009 SC 1204 has held that the principles of judicial review are only to prevent arbitrariness and to correct an error of law or decision which no reasonable person would have urged and accordingly, where there is an abuse of power and mala fide alleged, the Courts would interfere. In the present case, the supply of coal which is the essential condition for the effective functioning of the thermal plants is under challenge and such a contract is for the supply of electricity in the State of Haryana and in the absence of any patent violation by the official respondents, interference by this Court would not be justified. The relevant observations made are reproduced below:
"34. On examining the facts and circumstances of the present case, we are of the view that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellants. When the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features have to be considered. A contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bonafide and is in public interest, Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake of argument that there is a procedural lacuna.
35. In the instant case, as has been rightly contended by the learned Addl. Solicitor General appearing for Union of India, the contract is in respect of sensitive Army equipments which are urgently needed. It cannot be held that the process adopted or decision made is so arbitrary or irrational that no responsible authority acting reasonably or in accordance with the relevant law could not have taken such a decision. The inevitable conclusion is that the appeal is devoid of any merit and deserves dismissal, which we order. However, there shall be no order as to costs."CWP No.14411 of 2012 37
33. Accordingly, keeping in view the above circumstances, no case is made out for interference in the award of tender to respondent No.4 for the reasons noted hereinabove. Accordingly, the writ petitions are dismissed.
(G.S.Sandhawalia)
JUDGE
10.10.2012 (Ajay Kumar Mittal)
sailesh JUDGE
Refer to the Reporter.