Karnataka High Court
O And M Solutions Private Ltd vs Kpc Gas Power Corporation Limited on 3 August, 2022
Author: Krishna S.Dixit
Bench: Krishna S.Dixit
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF AUGUST, 2022
BEFORE
THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT
WRIT PETITION NO.19159 OF 2021 (GM-TEN)
BETWEEN:
O AND M SOLUTIONS PRIVATE LTD,
PLOT NO.24/1A, CHANDAKA INDUSTRIAL AREA,
KIIT CAMPUS, PATIA,
BHUBANESWAR-751 021,
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR.ARUN KUMAR CHAURASIA.
...PETITIONER
(BY SRI.R.V.S.NAIK, SENIOR COUNSEL A/W
SRI.NITIN PRASAD, ADVOCATE)
AND:
1. KPC GAS POWER CORPORATION LIMITED,
SHAKTI BHAVAN, RACE COURSE ROAD,
BANGALORE-560 001,
REPRESENTED BY ITS MANAGING DIRECTOR.
2. POWER MECH PROJECTS LIMITED,
FLAT NO.201, YESHWANTH RESIDENCY,
WIDIA COLONY MIYAPUR,
HYDERABAD-500 049,
REPRESENTED BY ITS AUTHORISED SIGNATORY
MR B LAVAN KUMAR.
3. ADDITIONAL CHIEF SECRETARY,
ENERGY DEPARTMENT (APPELLATE AUTHORITY),
SHAKTI BHAVAN, RACE COURSE ROAD,
BANGALORE-560 001.
...RESPONDENTS
(BY SRI.AJAY J NANDALIKE, ADVOCATE FOR R1;
SRI.ASHOK HARANAHALLI, SENIOR COUNSEL A/W
2
SRI. BHARATH KUMAR V, ADVOCATE FOR R2;
SRI. VINOD KUMAR M, AGA FOR R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED ORDER DTD 30.09.2021 PASSED BY R-3 IN APPEAL
NO.EN 11 NCE 2021 VIDE ANNX-A AS BEING ERRONEOUS AND
NOT SUSTAINABLE IN LAW AND ETC.,
THIS PETITION COMING ON FOR ORDERS, THIS DAY, THE
COURT MADE THE FOLLOWING:-
ORDER
Petitioner, a company incorporated under the Companies Act is knocking at the doors of Writ Court for assailing the order dated 30.09.2021 passed by the 3rd respondent-Appellate authority at Annexure-A in 2nd respondent's Appeal No.EN 11 NCE 2021 whereby the tender process in question having been set aside, a direction has been issued to go for a fresh one on a short term basis.
2. The 1st respondent-tendering body is represented by its Panel Counsel; the 3rd respondent-Appellate authority is represented by the learned AGA, and the 2nd respondent who was the appellant is represented by his private advocate. The Statement of Objections has been filed 3 opposing the writ petition. All the advocates appearing for the respondents resist the writ petition making submission in justification of the impugned order and the grounds on which it has been constructed.
3. FOUNDATIONAL FACTS OF THE CASE:
(a) The 1st respondent issued a Tender Notification on 02.01.2021 for "Operation & Maintenance Contract for 1X370 MW Gas Combined Cycle Power Plant at Yelahanka, Bengaluru." The last date for submission of bid was 15.02.2021, within which petitioner admittedly was in the tender fray, along with 2nd respondent herein.
(b) The 1st respondent having procured certain information & records from the earlier contractor of the petitioner in Andhra Pradesh, had raised some issue as to certain lapses attributable to the petitioner; however, the explanation offered by the petitioner presumably found being plausible, the tender process was moved further and the Financial Bid was opened; eventually petitioner happened to be L1.
4
(c) The act of 1st respondent in allowing the petitioner to continue in the Tender Fray was put in challenge in appeal by the 2nd respondent essentially on the ground that the earlier contractor of the petitioner was unhappy, there being several lapses attributable to him and as a consequence petitioner's contract was discontinued. This information was withheld by the petitioner which the 2nd respondent caused procurement of; that being the position, the 1st respondent ought to have disqualified the petitioner.
(d) Petitioner and the 1st respondent opposed the appeal by filing the objections. The 3rd respondent- Appellate authority vide order dated 30.09.2021 said as under:
"The 2nd Respondent is directed to cancel the present tender and immediately call for fresh tenders on short term basis. The findings made in relation to the termination of the 3rd Respondent by APGPCL will not influence the 2nd Respondent and the 2nd Respondent will take into consideration all documents furnished by the 3rd Respondent and examine the legal consequences of termination if any and to obtain clarifications from APGPCL if it is possible. The 5 fresh tender shall be called within a week from the date of receipt of the order."
4. Having heard the learned counsel appearing for the parties and having perused the petition papers, this Court is inclined to grant indulgence in the matter as under
and for the following reasons:
(a) Clause 10 of Tender Notification which happens to be the jugular vein of the impugned order reads as under:
"10.0(i) The tender will be rejected, if the tenderer has not uploaded in the e-portal an undertaking in the form of a notarized affidavit (as per format AnnexureL2) declaring that during the past five financial years i.e., 2015-16, 2016-17, 2017-18, 2018-19 & 2019-20 and the period up to the date of submission of bid, • Their EMD has not been forfeited. • None of their contracts have been terminated/foreclosed on account of their default in KPCL/KPCGPCL or elsewhere • They have not been anytime blacklisted/subject to procedure initiate for blacklisting for participating in the tenders issued by KPCL/KPCGPCL or Government or Central, State PSUs or any other utility of India."
(b) The copies of documents i.e., the letters dated 01.02.2021, 04.03.2021, 16.03.2021, etc. procured from 6 the hands of earlier contractor namely Andhra Pradesh Gas Power Corporation Limited (hereafter APGPCL) mentioned about 'unhappy performance' of the petitioner and termination of his contract as well. The letter dated 16.03.2021 addressed by the APGPCL team to the 2nd respondent at paragraph 2 reads: "APGPCL is not happy since they have not meeting (sic) the terms and conditions of O&M contract. Hence terminated by 31st March 2021". However the version as to termination of contract is demonstrably not true inasmuch it was a simple case of determination of contract by efflux of time coupled with discharge of obligation undertaken. A contract not being renewed is one thing and a contract being terminated is another; they are poles asunder; ordinarily, former is not stigmatic whereas the later is. They have different legal consequences, hardly needs to be stated. This legal difference obtaining between these two, is missed by authors of the letters in question. The terminology employed in these letters apparently is of a layman and not a lawman. This aspect of the matter having been examined 7 by the 1st respondent with the participation of the petitioner herein, the tender was processed further. It remains a mystery wrapped in enigma, as to how the Appellate authority could fish out the elements of culpability attributable to the petitioner for voiding of the tender itself.
(c) Mr. Naik, learned Sr. Advocate appearing for the petitioner is more than justified in notifying to the court that after the information & copies of records were obtained from APGPCL, the 1st respondent had graciously confronted the same to the petitioner and accepted the plausible explanation offered by his client, though in so many words no specific order to that effect was passed. Had an order been passed, it would have been ideal, is true. However, the fact that no specific order was passed, pales into insignificance, regard being had to the conduct of the 1st respondent in processing the tender further by opening the Financial Bid; that itself vouches contention of the petitioner, who emerged as L1 bidder. Had the 1st respondent not being convinced of the explanation offered by the petitioner, the tender would have been concluded in 8 favour of the 2nd respondent herein, there being none other.
(d) What is significant to note is that: as a matter of policy for awarding tender, the satisfaction of tender calling body does factor and not of the tenderers nor of the Appellate authority. The Apex Court in M/S. N.G. PROJECTS LIMITED vs. M/S. VINOD KUMAR JAIN CIVIL APPEAL NO. 1846 OF 2022 disposed off on 22.03.2022 at paragraph 22 observed:
"The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance...".
Added, the Apex Court in UFLEX LTD. Vs. THE GOVERNMENT OF TAMIL NADU (2022) 1 SCC 165 at paragraph 40 observed:
"...economics must be permitted to play its role for which the tendering authority knows best as to what is suited in terms of technology and price for them..."9
This approach expected of the Appellate Authority has not animated the impugned order and thus there is a gross error apparent on the face of the record, warranting indulgence of this Court.
(e) The assumptive finding of the tender calling authority as to satisfactory compliance with the tender conditions by the petitioner herein could not have been casually interfered with by the Appellate authority without justifiably faltering the opinion of the 1st Respondent in this regard. The Appellate authority appears to have been swayed away by the APGPCL letters which said about the so called 'termination of contract' when it was not and its being 'unhappy' with the performance of the petitioner. 'Unhappy' is a word of variable import; its meaning has to be understood in the light of contents of the letter in which it occurs and the status of their author. What one has to bear in mind is that we are construing the letter correspondence between two private parties and not interpreting the provisions of the Statute employing such words. The letter in question mention about some arguable 10 lapse on the part of the petitioner who had offered his explanation inter alia mentioning COVID - 19 Pandemic difficulties. As already mentioned above, the same was found favoured with the 1st Respondent who is the true decision maker in matters of this kind. Even otherwise, despite vociferous arguments, no justification is shown for upsetting this view.
(f) The vehement contention of Mr. Haranahalli learned Senior Advocate appearing for the 2nd Respondent that this is only a Writ Court which exercises a limited supervisory jurisdiction constitutionally vested under Article 227 and therefore, should not grant indulgence in the matter when the 3rd Respondent - Statutory Appellate Authority has made the impugned order, is bit difficult to countenance. Limited jurisdiction this Court exercises, is true. Once error apparent on the face of the record are demonstrated, this Court cannot shirk its responsibility of setting the same at naught and undoing the injustice caused to the petitioner. The Appellate Authority failed to see that in matters of the kind, almost invariably some 11 pitfalls do occur. What is to be seen is whether they are substantial as to void the decision of the tendering authority, which has wherewithal. A perusal of the records does not justify interference of the Appellate Authority in any way.
In the above circumstances, this Writ Petition succeeds; a Writ of Certiorari issues quashing the impugned order. The 1st Respondent is directed to process the tender in question further in accordance with law.
Costs are reluctantly made easy.
On the request of counsel for 2nd Respondent, this judgment is kept in abeyance for a period of two weeks from the date it is web hosted.
Sd/-
JUDGE Snb/