Madras High Court
M/S.Pt.Bara Daya Energi India Private ... vs The Government Of Tamil Nadu on 20 December, 2024
2024:MHC:4200
W.P.Nos.35456 and 35462 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 10.12.2024
PRONOUNCED ON : 20.12.2024
CORAM
THE HONOURABLE MR.JUSTICE S.SOUNTHAR
W.P.Nos.35456 and 35462 of 2024
and
W.M.P.Nos.38349, 38352 and 38361 of 2024
M/s.PT.Bara Daya Energi India Private Limited,
No. 106-A/9, Coal Grand Complex,
Ettayapuram Road, Tuticorin,
Tamil Nadu – 628 002
Rep. by its Authorized Signatory,
Mr.Vairavan Narayanan ... Petitioner (in both WPs)
vs.
1.The Government of Tamil Nadu,
Rep. by the Principal Secretary to Government,
Energy Department, Fort. St. George,
Chennai – 600 009
2.The Chairman,
Tamil Nadu Power Generation
Corporation Limited (TNPGCL),
II Floor, NPKRR Maaligai,
No. 144, Anna Salai,
Chennai – 600 002
1/26
https://www.mhc.tn.gov.in/judis
W.P.Nos.35456 and 35462 of 2024
3.The Chief Engineer/Mech/COAL,
Tamil Nadu Power Generation
Corporation Ltd. (TNPGCL),
II Floor, NPKRR Maaligai,
No. 144, Anna Salai,
Chennai – 600 002 ... Respondents (in both WPs)
PRAYER in W.P.No.35456 of 2024: Writ Petition is filed under Article
226 of the Constitution of India, to issue a Writ of Certiorarified
Mandamus, to call for the records of the impugned email communication
dated 15.11.2024 of the 3rd Respondent rejecting the Petitioner's technical
Bid in Tender Inviting Notification in Specification No: 165 COAL Dated
22.07.2024 for Supply of 4600 GAR Imported Steam Coal of any Origin for
delivery at Kamarajar Port, Ennore for a period of Three Years 2024-25,
2025-26 and 2026-27 through Global E-Tender followed by E-Reverse
Auction under variable Price Mechanism as and when required basis for
NCTPS – III and consequently, direct the 3rd Respondent to declare the
Petitioner as technically qualified bidder allowing for further evaluation in
the tender.
PRAYER in W.P.No.35462 of 2024: Writ Petition is filed under Article
226 of the Constitution of India, to issue a Writ of Mandamus, restraining
the 2nd and 3rd Respondents from awarding any contract or taking any furher
action pursuant to the Tender Inviting Notification in Specification No: 165
COAL Dated 22.07.2024 for Supply of 4600 GAR Imported Steam Coal of
any Origin for delivery at Kamarajar Port, Ennore for a period of Three
Years 2024-25, 2025-26 and 2026-27 through Global E-Tender followed by
E-Reverse Auction under variable Price Mechanism as and when required
2/26
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W.P.Nos.35456 and 35462 of 2024
basis for NCTPS – III till such time as the Appeal filed by the Petitioner
before the 1st Respondent is disposed of in accordance with the Tamil Nadu
Transparency in Tenders Act, 1998.
For Petitioner : Mr.Vijay Narayan
Senior Advocate
for M/s.C.Santhosh Kumar (in both WPs)
For R2 and R3 : Mr.P.S.Raman
Advocate General
Assisted by Mr.D.R.Arunkumar
Standing Counsel (TNEB) (in both WPs)
For R1 : Mr.G.Ameedius
Government Advocate (in both WPs)
COMMON ORDER
The Writ Petition in W.P.No.35456 of 2024 is filed challenging the email communication dated 15.11.2024 of the 3rd respondent rejecting the petitioner's technical bid in Tender Inviting Notification in Specification No: 165 COAL, dated 22.07.2024 for supply of 4600 GAR Imported Steam Coal of any Origin for delivery at Kamarajar Port, Ennore for a period of three years commencing from 2024-25 to 2026-27 and also to direct the 3 rd respondent to declare the petitioner as technically qualified bidder allowing for further evaluation in the tender process.
2. The Writ Petition in W.P.No.35462 of 2024 is filed seeking issue 3/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 of Writ of Mandamus, forbearing the respondents 2 and 3 from awarding any contract or taking any further action pursuant to the Tender Inviting Notification in Specification No: 165 COAL, dated 22.07.2024 for supply of 4600 GAR Imported Steam Coal of any Origin for delivery at Kamarajar Port, Ennore for the above mentioned period, till such time as the appeal filed by the petitioner before the 1st respondent is disposed of in accordance with the Tamil Nadu Transparency in Tenders Act, 1998.
3. The petitioner is a Company carries on business of wholesale and retail trading of Coal and Energy and export and import of Coal and Energy. The petitioner-company is a 100% subsidiary company of M/s. PT Bara Daya Energi, Indonesia (hereinafter referred to as 'the Parent Company'). The 2nd Respondent-Corporation issued a notice inviting global tender for supply of specified quantities of Steam Coal for a period of three years as mentioned above. The petitioner submitted its bid on the last date 24.10.2024. As Earnest Money Deposit, a sum of Rs.11,00,00,000/- was deposited by the petitioner as per the tender conditions. The technical bid submitted by the bidders were opened on 25.10.2024. The petitioner received an email communication on 15.11.2024 from the 3rd respondent 4/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 informing the petitioner-company that its bid was rejected during the technical evaluation by the duly constituted committee for the reasons Bid Qualification Requirements (hereinafter referred to as 'BQR') was not satisfied.
4. The Clause 7.0 of tender condition speaks about BQR and as per the same, the tenderers should possess the following qualifications:-
(i) Tenderer should have imported and supplied 1.25 Lakh Tonnes of imported steam coal in each of the preceding FIVE financial years (2019-20, 2020-21, 2021-22, 2022-23 and 2023-24) to any of the Public Power Utilities and/or Public industrial units in India and 5 Lakh Tonnes of imported steam coal of any origin in any one of the said Five financial years to any of the Public Power Utilities and/or Public industrial units in India.
(ii) Tenderers should have a turnover of Rs.280 Crores in any one of the last THREE financial years i.e. 2021-22, 2022-23 and 2023-24.
(iii) The tenderers should have a valid tie-up with mine owners till the completion of the contract period which should be evidenced by a support letter in Original 10 from the mine owner for each country of 5/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 origin, the tenderer proposes to source the supply, as per the format attached (Schedule-G-FORMAT FOR THE LETTER FROM THE MINE OWNER).
(iv) The offers not satisfying the Bid Qualification Requirements will be summarily rejected.
5. It is stated by the petitioner that it submitted necessary documents showing the experience of importing steam coal of its parent company namely M/s. PT Bara Daya Energi, Indonesia. The parent company of petitioner successfully completed the project of import and supply of steam coal of Indonesian Origin to TANGEDCO for the financial years 2019-20, 2020-21, 2022-23 and 2023-24. The End User Certificate dated 03.08.2024 issued by the 3rd respondent was also enclosed along with the bid. Thus, the petitioner participated in the bid on the strength of the experience of its parent company as petitioner is the 100% subsidiary of its parent company.
6. When the petitioner sought for the clarification from the respondents 2 and 3 regarding the rejection of its bid, it was informed that experience conditions as stipulated in BQR has not been satisfied by the 6/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 petitioner. It is stated that the experience gained by the parent company of the petitioner can be taken into consideration as per the law settled by the Apex Court in catena of decisions and therefore, the rejection by the respondents 2 and 3 is not in accordance with law. The petitioner filed an appeal before the 1st respondent under Section 11 of Tamil Nadu Transparency in Tenders Act, 1998 on 18.11.2024 and the same was not taken up for consideration. However, the 3rd respondent proceeded further and also conducted reverse auction on 18.11.2024. In these circumstances, left with no other alternative remedy, the petitioner has knocked the doors of this Court with the above mentioned prayers.
7. In W.P.No.35462 of 2024, the petitioner sought for prohibitory orders, as mentioned above, since petitioner's appeal before the 1st respondent was not taken up for consideration and the respondents 2 and 3 are proceeding with the further tender process including the reverse auction.
8. The 3rd respondent filed a counter affidavit denying various averments found in the writ affidavit. It is the specific case of the 3 rd respondent that as per Clause 7 (h) of the Section II of Tender Conditions, 7/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 the bid submitted by the tenderer is liable to be rejected, if any of the contracts awarded to the Bidder for the supply of imported coal had been terminated. A contract awarded to the petitioner's parent company M/s. PT Bara Daya Energi, Indonesia, was terminated by M/s.Gujarat State Electricity Corporation Ltd., in a contract for the supply of imported coal and therefore, by invoking Clause 7(h) of Tender Conditions, the bid submitted by the petitioner was rejected, as it failed to satisfy BQR conditions. It is also stated by the 3rd respondent that during evaluation of Techno-Commercial bids submitted by the bidders, it was found that the petitioner failed to satisfy the Bid Qualification Requirements specified in the tender conditions and the same was uploaded in the e-procurement portal. As a consequence, the petitioner had received a computer generated message informing it about the rejection of its tender for failure to satisfy the BQR. The email communication sent to the petitioner cannot be treated as an order of rejection of the tender. Only after evaluation of financial bid and awarding of the tender to the successful bidder, the Tender Accepting Authority is permitted to issue the order of rejection along with its reasons to the unsuccessful bidders as per Section 10(7) of the Tamil Nadu Transparency in Tenders Act, 1998. Therefore, the writ petitions filed by the 8/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 petitioner are pre-matured and consequently, liable to be dismissed. It is also stated by the 3rd respondent that during pre-bid query, the petitioner requested the 3rd respondent to relax Clause 7(h) of the tender conditions and the same was rejected by the 3rd respondent.
9. Mr.Vijay Narayan, learned Senior Counsel appearing for the petitioner submitted that the petitioner is entitled to take advantage of the credentials of its parent company namely M/s. PT Bara Daya Energi, Indonesia, as it possess sufficient experience in importing steam coal for last 5 preceding years. In support of the said contention, the learned Senior Counsel relied on judgment of Apex Court in New Horizons Ltd vs. Union of India reported in (1995) 1 SCC 478 and Consortium of Titagrah Firema Adler S.P.A. vs. Nagpur Metro Rail Corporation Limited reported in (2017) 7 SCC 486.
10. The learned Senior Counsel further submitted that while subsidiary company is entitled to take advantage of the experience of the parent company, being a separate legal entity, any disqualifications or stigma attached to the parent company will not affect the subsidiary 9/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 company. The learned Senior Counsel by taking this Court to Clause 7(h) of Tender Conditions submitted that only in cases where the contracts awarded to the bidder had been terminated earlier, the respondents can invoke Clause 7(h) and reject the tender.
11. He further submitted that in the case on hand, no contract awarded to the petitioner-bidder had been terminated earlier and termination of contract awarded to petitioner's parent company will not affect the petitioner's qualification in the absence of anything to suggest in the tender conditions, the word 'bidder' mentioned therein will include the bidder's associate companies. The learned Senior Counsel further submitted that when petitioner's bid for supply of coal to Karnataka Power Corporation Limited was rejected citing the termination of contract awarded to the petitioner's parent company, the same was challenged by the petitioner before the Karnataka High Court in M/s. PT. Bara Daya Energi India Private Limited vs. State of Karnataka and another reported in 2024:KHC:3759 and the Karnataka High Court held that termination or blacklisting of parent company would not affect its subsidiary. Therefore, it is the submission of the learned Senior Counsel that termination of contract 10/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 as against the parent company of the petitioner will not affect its subsidiary namely the petitioner. He further submitted that penal clause in the tender conditions should be strictly construed in the absence of any express provision in the tender conditions so as to include the parent companies of the bidder in Clause 7(h), the same cannot be interpreted liberally so as to include the parent company.
12. The learned Senior Counsel further submitted that there was default on the part of the petitioner's parent company during covid period in meeting the supply commitments due to intervention of force majeure and termination of contract by M/s. Gujarat State Electricity Corporation Ltd., is a subject matter of arbitration. It is also submitted that petitioner invoked arbitration clause and filed Section 11 petition before the Gujarat High Court and the same is still pending.
13. Per contra, Mr.P.S.Raman, the learned Advocate General appearing for the respondents 2 and 3 submitted that when the petitioner counts the experience of the parent company in order to satisfy the qualification criteria, any disqualification suffered by the petitioner's parent 11/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 company will also affect the petitioner. The learned Advocate General further submitted that the petitioner being a subsidiary company is entirely dependent on the parent company for its very qualification and hence, it cannot claim that disqualification of the parent company will not affect its bid as it is a distinct juridical entity.
14. It is submitted that in order to satisfy BQR, the petitioner relies on the credentials of its parent company. On the other hand, in order to escape the disqualifications suffered by the parent company, the petitioner contends that it is a separate legal entity and therefore, disqualification of the parent company will not affect its bid and the same is illogical and untenable in law. The learned Advocate General further submitted that Maharashtra State Power Generation Co., Ltd., rejected the similar bid of the petitioner citing the termination order passed by M/s. Gujarat State Electricity Corporation Ltd., against its parent company. The said rejection order was tested by the petitioner before the Bombay High Court in Writ Petition (L) No.12123 of 2023. The Division Bench of Bombay High Court upheld the rejection order against the petitioner. The said order passed by Division Bench of Bombay High Court was affirmed by the Apex Court in S.L.P.(C).No.10610 of 2023. 12/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 Therefore, it is the submission of the learned Advocate General that disqualification of the parent company will certainly affect the qualification of the petitioner which is a subsidiary. The learned Advocate General also submitted that as per Section 10(7) of the Tamil Nadu Transparency in Tenders Act, 1998, the reason for rejection of bid will be communicated to the unsuccessful bidders only after completion of tender evaluation process and awarding of the contract. The aggrieved unsuccessful bidders are entitled to file an appeal under Section 11 of the said Act. During the tender evaluating process before passing of final order, the bidders are not entitled to challenge the tender process at each and every stage and stall the same. In support of the said contention, he also relied on the judgment of Apex Court in National High Speed Rail Corporation Limited vs. Montecarlo Limited and another reported in (2022) 6 SCC 401.
15. The learned Advocate General also relied on the judgment of the Apex Court in Silppi Constructions Contractors vs. Union of India and another reported in (2020) 16 SCC 489 for the proposition, the Tender Authority need not give reasons at every stage and the reasons for rejection can be given finally or even at the time of filing counter affidavit. 13/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024
16. In the light of the submission made by the learned Senior Counsel appearing for the petitioner and the learned Advocate General appearing for the respondents, the main core issue to be decided in this writ petition is whether the disqualification suffered by the petitioner's parent company will affect petitioner's bid or not?
17. It is not in dispute that for the purpose of satisfying Bid Qualification Requirements (BQR), the petitioner is relying on the credentials of its parent company. The petitioner's parent company imported coal and supplied it to TANGEDCO during 5 previous years and in order to satisfy the Clause 7 (i) and (ii) of the Tender Conditions, which deals with BQR, the petitioner relied on the credentials of the parent company. No doubt, the petitioner being a 100% owned subsidiary of its parent company is entitled to use the credentials of its parent company for the purpose of satisfying BQR as per the law settled by Apex Court in New Horizons Ltd vs. Union of India reported in (1995) 1 SCC 478 cited supra. The respondents have no quarrel about the said position.
18. As seen from the counter affidavit filed by the 3rd respondent, the 14/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 bid submitted by the petitioner was rejected during technical evaluation only on the ground that contract awarded to petitioner's parent company was terminated by the M/s. Gujarat State Electricity Corporation Ltd. The Clause-7 (iii) of the Tender Conditions, which deals about BQR, reads as follows:-
“The tenderers should have a valid tie-up with mine owners till the completion of the contract period which should be evidenced by a support letter in Original 10 from the mine owner for each country of origin, the tenderer proposes to source the supply, as per the format attached (Schedule-G- FORMAT FOR THE LETTER FROM THE MINE OWNER).”
19. Therefore, the tender should have a valid tie-up with the mine owners for sourcing their supply. In order to satisfy the above said clause of tender conditions, petitioner submitted a letter from parent company which owns coal mines in Indonesia as per the format in Form Schedule-G to the tender conditions. The letter from Mine owner reads as follows:-
“We,_(Name of Manufacturer / Mine Owner) established and reputed manufacturers producers of Steam Coal having factories / mines at_ (Name of the place) hereby authorize ________ (Name of the Bidder) to bid, negotiate and 15/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 conclude the contract with TNPGCL for the quantity and quality against your Tender No.for the Steam Coalmined/explored by us.”
20. When a specific question was addressed to the learned Senior Counsel appearing for the petitioner during arguments, as to the source of supply for the petitioner, he submitted that the petitioner's parent company owns Coal Mines in Indonesia, which produces high quality coals. The supply to the respondents will be made by the petitioner from coal mines of petitioner's parent company and letter from parent company is submitted as per Schedule-G to the Tender Conditions. The said submission made by the learned Senior Counsel appearing for the petitioner was also accepted by the learned Advocate General appearing for the respondents 2 and 3. Therefore, it is agreed by both the counsel that petitioner submitted a letter from its parent company M/s. PT Bara Daya Energi, Indonesia under Form Schedule-G wherein parent company authorised the petitioner to conclude contract with respondents for supply of Steam Coal Mined/Explored by it. Therefore, it is clear that petitioner's source for supply of coal as per the bid submitted by it, is the coal extracted from mines of petitioner's parent 16/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 company. It is not the case of the petitioner that it is sourcing its supply from a third party other than the parent company. Therefore, the credentials of the parent company in adhering to the contract for supply of coal is very much relevant in the facts of the present case. Any default committed by the petitioner's parent company to supply of coal can very well be taken into consideration while considering the bid submitted by its 100% owned subsidiary namely the petitioner. The main reason would be the petitioner has no other source of supply except supply from the parent company mines. Though there is considerable force in the submission made by the learned Senior Counsel appearing for the petitioner that the subsidiary company is a separate legal entity and hence, in the absence of anything contrary in the tender conditions to suggest the expression 'bidder' would include it's affiliate companies, the termination of contract against parent/affiliate company would not affect the bid of the subsidiary company, in the peculiar facts narrated above, when the petitioner solely depends on its parent company for supply of coal, the respondents are entitled to take into consideration the default committed by parent company and the termination of contract awarded to the petitioner's parent company while evaluating the petitioner's technical bid, as the petitioner is a 100% owned 17/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 subsidiary of its parent company.
21. As per the letter submitted by the petitioner in Form Schedule-G, it depends solely on the coal supply by its parent company to discharge the supply obligations. Therefore, any default committed by the parent company in earlier occasion can be certainly taken into consideration. The petitioner on its own does not satisfy the qualification criteria and admittedly, it relies on credentials of its parent company for the purpose of satisfying BQR and in such circumstances, when it comes to the disqualification or default on the part of the parent company, the fully owned subsidiary cannot turn around and say the disqualifications of parent company will not affect its bid. When the petitioner solely relies on the credentials of the parent company to satisfy all the Bid Qualification Requirements, it should also take the burden of disqualification attached to the parent company. In the peculiar facts of this case, wherein, the petitioner solely depends on parent company for supply of coal, the corporate veil can be lifted and the disqualifications suffered by the parent company can be taken into consideration.
22. The Karnataka High Court in M/s. PT. Bara Daya Energi India 18/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 Private Limited vs. State of Karnataka and another reported in 2024:KHC:3759, while considering the similar case filed by the petitioner observed as follows:-
“11. It is too well settled principle of law that experience gained by the company to which any company is subsidiary can be taken into consideration for the purpose of experience or eligibility of a tenderer, be it the company or its subsidiary. Insofar as the penal provisions are concerned, the subsidiary has nothing to do with the termination or blacklisting of any company as the penal provisions are invoked qua the said company and not every of its subsidiary. ... ... ... ...”
23. Though as held by the Karnataka High Court the experience gained by the parent company can be taken into consideration while considering the bids submitted by its subsidiary company is very well settled as per the decisions of the Apex Court in New Horizons Ltd vs. Union of India reported in (1995) 1 SCC 478 and Consortium of Titagrah Firema Adler S.P.A. vs. Nagpur Metro Rail Corporation Limited reported in (2017) 7 SCC 486, insofar as effect of disqualifications suffered by the parent company on the subsidiary company's bid is concerned, no 19/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 case laws have been cited before me, even in the judgment of the Karnataka High Court cited supra, no earlier decisions regarding the effect of parent company's disqualification on the subsidiary company had been discussed.
24. In State of U.P. and others vs. Renusagar Power Co. and others, reported in (1988) 4 SCC 59, the Apex Court while dealing with doctrine of lifting of corporate veil observed as follows:-
“66. It is high time to reiterate that in the expanding horizon of modern jurisprudence, lifting of corporate veil is permissible. Its frontiers are unlimited. It must, however, depend primarily on the realities of the situation. The aim of the legislation is to do justice to all the parties. The horizon of the doctrine of lifting of corporate veil is expanding. Here, indubitably, we are of the opinion that it is correct that Renusagar was brought into existence by Hindalco in order to fulfil the condition of industrial licence of Hindalco through production of aluminium. It is also manifest from the facts that the model of the setting up of power station through the agency of Renusagar was adopted by Hindalco to avoid complications in case of take over of the power station by the State or the Electricity Board. As the facts make it abundantly clear that all 20/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 the steps for establishing and expanding the power station were taken by Hindalco, Renusagar is wholly-owned subsidiary of Hindalco and is completely controlled by Hindalco. Even the day-to-day affairs of Renusagar are controlled by Hindalco. Renusagar has at no point of time indicated any independent volition. Whenever felt necessary, the State or the Board have themselves lifted the corporate veil and have treated Renusagar and Hindalco as one concern and the generation in Renusagar as the own source of generation of Hindalco. In the impugned order the profits of Renusagar have been treated as the profits of Hindalco.
67. In the aforesaid view of the matter we are of the opinion that the corporate veil should be lifted and Hindalco and Renusagar be treated as one concern and Renusagar's power plant must be treated as the own source of generation of Hindalco and should be liable to duty on that basis. In the premises the consumption of such energy by Hindalco will fall under Section 3(1)(c) of the Act. The learned Additional Advocate-General for the State relied on several decisions, some of which have been noted.
68. The veil on corporate personality even though not lifted sometimes, is becoming more and more transparent in modern company jurisprudence. The ghost of Salomon's case 21/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 still visits frequently the hounds of Company Law but the veil has been pierced in many cases. Some of these have been noted by Justice P.B. Mukharji in the New Jurisprudence.
69. It appears to us, however, that as mentioned the concept of lifting the corporate veil is a changing concept and is of expanding horizons. We think that the appellant was in error in not treating Renusagar's power plant as the power plant of Hindalco and not treating it as the own source of energy. The respondent is liable to duty on the same and on that footing alone; this is evident in view of the principles enunciated and the doctrine now established by way of decision of this Court in Life Insurance Corporation of India, (supra) that in the facts of this case Sections 3(1)(c) and 4(1)(c) of the Act are to be interpreted accordingly. The persons generating and consuming energy were the same and the corporate veil should be lifted. In the facts of this case Hindalco and Renusagar were inextricably linked up together.
Renusagar had in reality no separate and independent existence apart from and independent of Hindalco.”
25. In the facts of the present case, the petitioner is 100% subsidiary of its parent company. For the purpose of satisfying the Bid Qualification Requirements, the petitioner is solely relying on the credentials of its parent 22/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 company. For the purpose of supplying coal as per the tender condition, the petitioner is solely relying on the supply of coal from the parent company's coal mines as evidenced by the letter submitted by the petitioner in Schedule-G. In the light of these facts, this Court finds that there is force in the submission made by the respondents 2 and 3 that petitioner company was floated by its parent holding company as 100% owned subsidiary just to over come the illeffect of termination order.
26. In these circumstances, both the petitioner and its parent company are closely connected with each other and disqualification suffered by the parent company will certainly affect the petitioner's bid. The respondents are entitled to lift the corporate veil and take into consideration the termination of contract as against the parent company while evaluating the petitioner's bid.
27. In view of the peculiar facts of this case, which established the close connection between the parent company and the petitioner, I prefer to differ with the view expressed by the Karnataka High Court in M/s. PT. Bara Daya Energi India Private Limited vs. State of Karnataka and 23/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 another reported in 2024:KHC:3759. Therefore, I hold the respondents 2 and 3 are justified in invoking Clause-7 (h) of the tender conditions to reject the technical bid of the petitioner.
28. The learned Senior Counsel appearing for the petitioner orally submitted that the contract awarded to the petitioner's parent company was terminated during covid period and the default committed by the petitioner's parent company was due to the intervention of force majeure and therefore, disqualification suffered by the petitioner's parent company at the time of covid should not be put against the subsidiary company namely the petitioner. As observed by the Division Bench of Bombay High Court in Pt.Bara Daya Energi vs. Maharashtra State Power Generation Co. Ltd., in Writ Petition (L) No.12123 of 2023, the termination of contract against the petitioner's parent company was subject matter of arbitration. Therefore, at this stage, this Court is not inclined to venture into the question as to the reasons for the default committed by the petitioner's parent company, especially when there is no averments regarding said fact in the writ affidavit.
29. In view of the above discussion, the petitioner has not made out 24/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 any case for issuance of writ as prayed for and accordingly, these Writ Petitions are dismissed. No costs. Consequently, the connected writ miscellaneous petitions are closed.
20.12.2024
Index :Yes
Speaking order :Yes
Neutral Citation :Yes
dm
To
1.The Principal Secretary to Government,
Government of Tamil Nadu,
Energy Department, Fort. St. George, Chennai – 600 009
2.The Chairman, Tamil Nadu Power Generation Corporation Limited (TNPGCL), II Floor, NPKRR Maaligai, No. 144, Anna Salai, Chennai – 600 002
3.The Chief Engineer/Mech/COAL, Tamil Nadu Power Generation Corporation Ltd. (TNPGCL), II Floor, NPKRR Maaligai, No. 144, Anna Salai, Chennai – 600 002.
25/26 https://www.mhc.tn.gov.in/judis W.P.Nos.35456 and 35462 of 2024 S.SOUNTHAR, J.
dm Pre-delivery common order made in W.P.Nos.35456 and 35462 of 2024 20.12.2024 26/26 https://www.mhc.tn.gov.in/judis