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Monnet Ispat and Energy Ltd Through Its Assistant General Manager Cum Authorized Signatory Vs. Central Coalfields Limited Through Its Chairman Cum Managing Director and Ors - Court Judgment

LegalCrystal Citation
CourtJharkhand High Court
Decided On
AppellantMonnet Ispat and Energy Ltd Through Its Assistant General Manager Cum Authorized Signatory
RespondentCentral Coalfields Limited Through Its Chairman Cum Managing Director and Ors
Excerpt:
1 in the high court of jharkhand at ranchi w.p. (c) no.5190 of 2014 ----- monnet ispat & energy limited, a company incorporated under the companies act, having its registered office at monnet marg, mandir hasuad, p.o. shankar nagar, p.s. telibhanda, district raipur-492101, chhattisgarh, through its assistant general manager-cum-authorized signatory, sri naresh saini, son of sri t.r. saini, resident of house no.61, t.a. mcf, sector-35, p.o. amar nagar, p.s. sarai khawaza, faridabad-121001, haryana. ………. petitioner. -versus- 1. central coalfields limited, through its chairman-cum- managing director, having its registered office at darbhanga house, p.o. n.c.d.c., p.s. lalpur, district ranchi-834029.2. the general manager (ws/wc), central coalfields limited, darbhanga house, p.o......
Judgment:

1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No.5190 of 2014 ----- Monnet Ispat & Energy Limited, a Company incorporated under the Companies Act, having its registered office at Monnet Marg, Mandir Hasuad, P.O. Shankar Nagar, P.S. Telibhanda, District Raipur-492101, Chhattisgarh, through its Assistant General Manager-cum-Authorized Signatory, Sri Naresh Saini, son of Sri T.R. Saini, resident of House No.61, T.A. MCF, Sector-35, P.O. Amar Nagar, P.S. Sarai Khawaza, Faridabad-121001, Haryana. ………. Petitioner. -Versus- 1. Central Coalfields Limited, through its Chairman-cum- Managing Director, having its registered Office at Darbhanga House, P.O. N.C.D.C., P.S. Lalpur, District Ranchi-834029.

2. The General Manager (WS/WC), Central Coalfields Limited, Darbhanga House, P.O. N.C.D.C., P.S. Lalpur, District Ranchi-834029.

3. Director, (Tech./Oprn.), Central Coalfields Limited, Darbhanga House, P.O. N.C.D.C., P.S. Lalpur, District Ranchi-834029. .……... Respondents. ------ CORAM : HON’BLE MR. JUSTICE D. N. UPADHYAY ------ For the Petitioner : M/s. Chetan Sharma, Sr. Advocate & Indrajit Sinha, Advocate For the Respondents: M/s. J.

Dhankar, Sr. Advocate & A. K. Das, Advocate ------ CAV On 13th Aug., 2015 Pronounced on 26th Nov., 2015 ------ D. N. Upadhyay, J.:

1. This writ petition has been filed on behalf of Monet Ispat & Energy Limited (for short 'MIEL') and the petitioner is a Company incorporated under the provisions of Companies Act and all its Directors are Citizens of India and as such are entitled to get protection and enforcement of the rights and liberties granted under the Constitution of India.

2. Following reliefs have been sought for by the petitioner:- (i) An appropriate writ, order or direction, for quashing the letter dated 8.9.2014 issued by the Respondent No.2, whereby the respondents have been arbitrarily seeking to compel the petitioner to enter into a contract for setting up and operation of a coal washery, which was stipulated to be executed 2 in the year 2010, failing which the respondents have threatened coercive action against the petitioner under the Notice Inviting Tender, which includes encashment of a bank guarantee to the tune of Rs.50.00 lacs submitted by the petitioner against the bid security/earnest money deposit; (ii) A writ of mandamus be issued, directing the respondents to provide clause for price compensation for the delay caused by the respondents in executing the contract pursuant to Bid Notice No.203 dated 6th January, 2009 and, accordingly, the respondents be directed to incorporate an appropriate price compensation clause and adhere to it in a non- discriminatory manner at parity as was done by the BCCL, a sister concern of the respondent; (iii) In alternative and without prejudice to prayer (ii) above, a further writ of certiorari or any other writ be issued or direction be made for quashing/setting aside the Bid Notice No.203 dated 6th January, 2009 and the letter of award dated 20th July, 2012 issued by the respondents and further direction be made to the respondents to return the bid security of Rs.50.00 lacs deposited by the petitioner in the form of bank guarantee; and (iv) Any other appropriate writ, order or direction be made which the Court may deem fit and proper.

3. The relevant facts and dates, giving rise to filing of the present writ petition, are as follows:- (a) The respondents issued Bid Notice No.203 dated 6th January, 2009 and invited tender for installation and functioning of a coal washery for 10 MT per annum coal on Built Operation Maintain (BOM) at its Ashok Open Cast Project of Ashok Block of Piparwar Area in North Karanpura Coalfields of Central Coalfields Limited. It was international competitive bidding. (b) The petitioner submitted its bid for a total sum of Rs.128.31 crores approximately. The bid against a 3 Request for Qualification (RFQ) was opened by the respondents on 15th May, 2009 and as per Notice Inviting Tender, validity of bid/offer shall be 18 (eighteen) months from the date of opening of the bid against RFQ Document. (c) According to the petitioner, the validity of bid shall be reckoned from 15th May, 2009 and if it is done so the period of 18 months shall be completed on 14th November, 2010. (d) At the request of the respondents on 19th September, 2011 (Page-60 of the writ petition) the petitioner vide its letter dated 26th September, 2011 (Page-61 of the writ petition) extended the validity period up to 30th September, 2012. (e) A letter of award/acceptance was issued by the respondents in favour of the petitioner on 20th/21st July, 2012 and it was duly accepted by the petitioner on 25th July, 2012. (f) On 21st September, 2012, draft contract document for construction of 10 MT per annum for Ashok Washery on “Built-Operation Maintain” concept was sent to the petitioner for their comment. In response to that the petitioner sent a letter dated 20th October, 2012 and requested the respondents to please incorporate a clause in the contract document for price compensation due to delay caused on the part of the respondents and reference of events which had taken place in course of installation of other coal washery have been referred. Further correspondences from both sides have been made for insertion of clause for price compensation. In this regard, the respondents issued letter dated 20th March, 2013 (Page-80 of the writ petition) by which it was asked to the petitioner to satisfy as to under which provision of bid document, you are claiming for price compensation. (g) The bid security/earnest money of Rs.50.00 las furnished by way of bank guarantee stood extended 4 by the petitioner till 30th November, 2014 vide letter dated 9th August, 2014 (Page-111 of the writ petition). (h) Lastly by Letter No.1704 dated 8th September, 2014 (letter under challenge) it was requested by the respondents to the petitioner to come for signing of the agreement as already finalized after issuance of Letter of Assurance by 23rd September, 2014 failing which CCL Management shall be constraint to take a final decision in accordance with the provision of the NIT. The other relevant dates and documents, if necessary, shall be referred and discussed in course of dealing with the submission and argument extended by the parties.

4. The petitioner has filed the present writ application for the reliefs as indicated above and further filed I.A. No.5213 of 2014. During the pendency of the writ application, on 4.10.2014 the respondents invoked the bank guarantee furnished by the petitioner as bid security. Due to that event, the petitioner filed I.A. No.361 of 2015 with a prayer to allow amendment in the writ petition after Paragraph 50 of the writ petition and the amendment sought for find mentioned in Paragraph 5 of the said interlocutory application.

5. The respondents filed rejoinder to that interlocutory application and after granting hearing to the parties by order dated 27th March, 2015, I.A. No.361 of 2015 and rejoinder thereto were directed to be form part of the writ petition and the counter affidavit, respectively.

6. It was submitted by learned counsel for the petitioner that present writ petition is quite maintainable because the dispute arose at the stage of entering into a contract. The RFQ document was opened by the respondents on 15th May, 2009 and according to the terms of Notice Inviting Tender period of 18 months shall be calculated from 15th May, 2009 and, therefore, all the formalities and required statutory clearances ought to have been obtained by the respondents before 14th November, 2010 and letter of acceptance ought to have been 5 issued by that time, meaning thereby validity of the bid was only up to 14th November, 2010. Since the respondents have failed to perform its part of obligation within time framed, indicated in the NIT Document, the respondents cannot direct the petitioner to enter into a contract against an expired bid. The contract between the parties was to be executed on or before 13th December, 2010, but the same could not be executed due to failure on the part of the respondents. The respondent-CCL is an instrumentality of the State and, therefore, they are not permitted to take arbitrary decision. The action of the respondents should have been done in all fairness with tenable reasonings.

7. It was submitted that since the respondents failed to obtain statutory permission and required clearances from the concerned authority, as indicated under Clause 3.2.1.6 and 3.2.2.3 of the NIT, within the stipulated time, they cannot force the petitioner to move and proceed according to their choice and will. The consent to establish the project was obtained by the respondents from Jharkhand State Pollution Control Board only on 8th August, 2013 and, therefore, no Letter of Award/Acceptance (for short 'LOA') was supposed to be issued prior to that. As per Clause 6.8 “time schedule for bid evaluation”, obtaining of environmental clearances and other clearances are pre-requisite condition for issuance of letter of award. It was further argued that considering the price index prevailing in the year 2009, tender was submitted by the petitioner. The respondents consumed time for more than four years in securing required permission and clearances for installation and execution of said coal washery and, therefore, in the year 2014, after lapse of five years, the respondents cannot compel the petitioner to sign the contract on the same value, which was submitted in the year 2009. The demand for inserting a clause in the contract for price compensation is quite genuine and that has also been given to other contractors for construction and functioning of coal washery by other sisters concern like BCCL and MCL. Therefore, in these circumstances the action of the respondents in compelling the petitioner to execute the contract by 23rd 6 September, 2014 without providing for adequate price compensation for the delay in executing the contract, which is solely attributable to the respondents, is patently arbitrary, whimsical and against all principles of fairness in action on behalf of the State Instrumentality such as the Respondent- CCL. The decision making process of the respondents is amenable to the writ jurisdiction exercised by this Court under Article 226 of the Constitution of India.

8. By giving reference to the judgments pronounced by the Hon'ble Supreme Court, it was submitted that even in pure contractual matters, the State cannot act like a private person in an arbitrary and discriminatory manner. All the decisions of the respondents are required to be tested on the touch stone of Article 14 of the Constitution of India. The rejection of the petitioner's request for price compensation on the basis of RBI Price Index is patently arbitrary, discriminatory, irrational and inequitable and, therefore, such decision of the respondents is amenable to judicial review.

9. The petitioner, in support of its claim for its entitlement to price compensation, placed following points:- (a) The obligation to obtain all the clearance was that of respondents. The grant of clearances was the precondition for the parties to enter into a contract and the respondents failed to comply their obligation, which is apparent from the dates and events indicated i.e. permission from Jharkhand State Pollution Control Board was obtained only on 8th August, 2013, but prior to that LOA was issued. (b) Due to failure of the respondents in complying with its obligation under the NIT, delay of more than four years has occurred. As per time line provided in the NIT, the contract ought to have been signed by 13th December, 2010, which could not be done due to laches on the part of the respondents and, therefore, they cannot compel the petitioner to enter into a contract on the basis of rates quoted by the petitioner in the year 2009 considering the price index prevalent then. (c) The respondents have failed to assign valid reasons for rejecting inclusion of a clause in the contract for price 7 compensation. 10.In support of the amendment sought for, I.A. No.361 of 2015 was filed and it was submitted that unfairness and arbitrariness become apparent from the conduct when the respondents invoked the bank guarantee furnished as bid security and that too during pendency of the writ application. Needless to mention that the petitioner never extended the bid after 30th September, 2012 and, therefore, bid security/earnest money should not have been encashed after expiry of bid. 11.On 20th July, 2012 the respondents issued Letter of Award in favour of the petitioner. The LOA provided that the respondents shall have to enter into a contract with the petitioner within 30 days from the date of issuance of LOA and the petitioner was directed to accept LOA within a period of seven days failing which LOA shall stand cancelled and the petitioner's bid security will be forfeited. It was pointed out that said LOA was issued against the provision of the NIT, more particularly, Clause 3.2.2.3, which specifically provides that LOA would be issued only after obtaining of statutory clearance, so the LOA was issued in contravention of the provisions, contained in the NIT, and by issuing the said LOA on 20th July, 2012 the respondents cannot compel the petitioner to sign the contract on the rates quoted in the year 2009 and they are not entitled to forfeit the bid security.

12. The petitioner has relied on the following judgments of the Hon'ble Supreme Court:- (i) (1990)3 SCC752[Mahabir Auto Stores & Ors. Vs. Indian Oil Corporation & Ors.] (ii) (1991)1 SCC212[Kumari Shrilekha Vidyarthi & Ors. Vs. State of U.P. & Ors.] (iii) (1995)1 SCC478[New Horizons Limited & Anr. Vs. Union of India & Ors.] (iv) (1995)5 SCC482[LIC of India & Anr. Vs. Consumer Education & Research Centre & Ors.] (v) (2004)3 SCC553[ABL International Ltd. & Anr. Vs. Export Credit Guarantee Corporation of India Ltd. & Ors.] (vi) AIR2006Del 98 [D.S. Constructions Ltd. Vs. Rites Ltd.] (vii) (2006)10 SCC236[Noble Resources Ltd. Vs. State of Orissa & Anr.] (viii) (1990)3 SCC280[M/s. Star Enterprises & Ors. Vs. City and Industrial Development Corporation of Maharashtra Ltd. & Ors.] 8 (ix) (2010)9 SCC496[Kranti Associates Private Limited & Anr. Vs. Masood Ahmed Khan & Ors.] 13.Learned counsel for the respondents has submitted that the bid was opened on 15th May, 2009 and, thus, bid validity was up to 14th November, 2010. Significantly, during that period final evaluation of the technical bid was not done and considering aforesaid situation, the Respondent-CCL sought bidder's consent for extension of the validity of bid in writing, as per Clause 6.7 of RFQ. Clause 6.7 stipulates “however the bidders, accepting request of the CCL for valid extension, shall not be permitted to modify the bid”. Needless to mention, the petitioner conceding the request extended its bid up to 30th September, 2012. The extension was voluntary and unqualified. MIEL was under no compulsion to extend the bid validity and they had option not to extend the bid validity and sought refund of the bid security. It is necessary to mention here that at the time of extending bid validity, the question of price compensation was not raised. 14.During extended period of bid, MIEL was identified as L-1 by the Respondent-CCL and, accordingly, LOA was issued in July, 2012, which was duly accepted with thanks on 25th July, 2012. The bid having been accepted on 25th July, 2012 i.e. during its validity period, it was not required to be further extended. The acceptance of the bid has merged in the LOA. In the circumstances (a) MIEL was required to send acceptance of LOA within seven days from the date of its receipt; (b) in accordance with Clause 6.5.2.1 of RFQ, part of the bid document, MIEL was advised to furnish a development guarantee in the form of bank guarantee in INR for Rs.12.83 crores before signing of the contract; (c) as per Clause 4.3.1 of RFQ of part bid document, CCL shall enter into contract with MIEL within 30 days from the date of issuance of LOA. It was specially provided in the LOA that failure to comply with the requirements, as stated above, the CCL shall constitute sufficient ground for cancellation of the LOA and forfeiture of the bid security. It was pointed out that MIEL after accepting the LOA failed to perform its obligation on all counts. 9 15.Learned counsel has submitted that MIEL instead of depositing development guarantee requested the CCL for inserting a clause for price compensation in the contract. On this point, correspondences from both sides had taken place and finally a request for inclusion of a clause for price compensation was rejected by the CCL because they will have to adhere to the stipulation made in the NIT document and they will have to maintain full transparency in all its action because it was an International Competitive Bidding. When the petitioner kept on lingering the matter of signing the contract, final opportunity to respond the signing of contract was given to the petitioner by letter dated 8th September, 2014, which is under challenge. When MIEL failed to sign the contract, the bid security was forfeited and bank guarantee was invoked well within its validity. 16.It was submitted that relief sought for by the petitioner is barred by principle of waiver and acquiescence. It is apparent that the petitioner had been extending the validity period of his offer by extending the bank guarantee after acceptance of LOA. Learned counsel has submitted that a party cannot be permitted to blow “hot and cold, fast and loose or approbate and reprobate”. MIEL, knowing the benefits of the contract, accepted the LOA and, therefore, the petitioner was stopped from raising objection against signing of contract. It was further submitted that the doctrine of election is based on the rule of estoppel and the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the steps of estoppel in pias (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded by way of his action or conduct when it is his duty to speak from ascertaining a right, which he would have otherwise had. It is settled legal proposition that matters/disputes regarding contract cannot be agitated, nor terms of the contract can be enforced through writ jurisdiction under Article 226 of the Constitution of India. Thus, the writ Court cannot be a forum to seek any relief based on terms and conditions incorporated in the agreement by the parties. (vide Barely Development Authority Vs. Ajay Pal Singh 10 and State of Uttar Pradesh Vs. Bridge and Roof Company India Limited). The contract between the parties is in the realm of private law. It is not a statutory contract. The dispute relating to interpretation of the terms and conditions of such a contract should not have been agitated in a petition under Article 226 of the Constitution of India, rather it is a matter for adjudication by the Civil Court or in an arbitration proceeding, if provided for in the contract. 17.Learned counsel has reiterated, it was an 'International Competitive Bid' and, therefore, the Respondent-CCL will have to adhere strictly the stipulation to the NIT Document. The petitioner has failed to bring on record that action taken by the respondents was either malicious, unreasonable, irrational or arbitrary in nature or of favouritism. The entire process of evaluation up to the issuance of LOA in favour of the petitioner was completely transparent and adhering to the NIT. The action taken by the respondents was in public interest. The respondents shall not suppose to go beyond the conditions laid down in the NIT and, therefore, refusal to include clause for price compensation was well within the ambit. There is no merit in this writ petition and the petitioner is not entitled for any relief sought for and the writ petition is liable to be dismissed with exemplary cost. 18.The respondents have relied on the following judgments:- (i) (2013)5 SCC470[Rajasthan State Industrial Development and Investment Corporation & Anr. Vs. Diamond & Gem Development Corporation Limited & Anr.] (ii) (2010)10 SCC174[Bharti Cellular Limited Vs. Union of India & Anr.] (iii) (2011)10 SCC420[Cauvery Coffee Traders, Mangalore Vs. Hornor Resources (International) Company Limited] (iv) (2008)16 SCC215[Siemens Public Communication Networks Private Limited & Anr. Vs. Union of India & Ors.] (v) (2003)7 SCC410[National Highways Authority of India Vs. Ganga Enterprises & Anr.] (vi) (2006)13 SCC599[Reliance Salt Ltd. Vs. Cosmos Enterprises & Anr.] (vii) (2008)1 SCC544[Vinitec Electronics Private Ltd. Vs. HCL Infosystems Ltd.] (viii) (1996)5 SCC450[Ansal Engineering Projects Ltd. Vs. Tehri Hydro Development Corporation Ltd. & Anr.] 11 (ix) (2001)2 SCC451[W.B. State Electricity Board Vs. Patel Engineering Co. Ltd. & Ors.] (x) (2012)8 SCC216[Michigan Rubber (India) Limited Vs. State of Karnataka & Ors.] (xi) (2006)11 SCC548[B.S.N. Joshi & Sons Ltd. Vs. Nair Coal Services Ltd. & Ors.] (xii) (1999)1 SCC492[Raunaq International Ltd. Vs. I.V.R. Construction Ltd. & Ors.] (xiii) (2000)2 SCC617[AIR India Ltd. Vs. Cochin International Airport Ltd. & Ors.] 19.Having heard both sides and after going through the judgments, referred to above by the learned counsel appearing on behalf of the parties, it appears that the judicial review even in contractual matters can be done, but with great care and caution and also considering the facts and circumstances prevailing in each individual case. It was held by the Apex Court in the case of Asia Foundation and Construction Limited Vs. Trafalgar House Construction (I) Limited, reported in (1997)1 SCC738 inter alia, as under:-

“10. Therefore, though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose. ....” 20.The Apex Court further in the case of Tata Cellular Vs. Union of India & Ors., reported in (1994)6 SCC651 has given illustration, in which the Court may exercise power conferred in Article 226 of the Constitution of India, which reads as under:-

“77. The duty of the court is to confine itself to the question of legality. Its concern should be: (1) Whether a decision-making authority exceeded its powers? (2) committed an error of law, (3) committed a breach of the rules of natural justice, (4) reached a decision which no reasonable tribunal would have reached, or (5) abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by 12 judicial review can be classified as under: (I) Illegality: This means the decision- maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. ....” The Apex Court further in the case of Air India Ltd. Vs. Cochin International Airport Ltd., reported in (2000)2 SCC617 has given illustration in Para-20 of the judgment, which reads as under:-

“15. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. Vs. Cochin International Airport Ltd. and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.” 21.Now coming to the facts and events, which are available in the case at hand, it is apparent that the bid was opened on 15 th May, 2009 and according to Clause 6.8 time schedule for bidding evaluation the LOA was to be issued within 18 months i.e. before 14th November, 2010. Since the required statutory permission and environmental clearance had not been obtained within stipulated period, the respondents made a request for extension of the bid validity and it was duly extended by the petitioner up to 30th September, 2012. The petitioner was identified as L-1 by the respondents on 23rd April, 2011 and LOA was issued on 20th/21st July, 2012 with a request to respond the same within seven days. The LOA was accepted by the petitioner on 25th July, 2012 with thanks. Thereafter, draft contract was sent to the petitioner by the 13 respondents for comment. After three months from the date of issuance of LOA, the petitioner responded to the draft contract and raised a point for inclusion of a clause in the contract for price compensation. The ground behind raising the issue for inclusion of a clause for price compensation was that the bid was submitted in the year 2009 according to prevailing price index, but the respondents failed to obtain statutory permission, environmental clearance, including other clearances, within stipulated time line and delayed the matter. According to the petitioner, obtaining statutory permission and environmental clearance were the preconditions for issuance of LOA, but the respondents issued LOA without obtaining permission from Jharkhand State Pollution Control Board and said permission from Jharkhand State Pollution Control Board was obtained in the month of August, 2013. Therefore, the petitioner was not obliged to deposit development guarantee and sign the contract. 22.In the circumstances, stated above, this Court has to decide; (I) whether a writ of mandamus can be issued directing the respondents to include a clause for price compensation in the contract; and (ii) whether the action and decision taken by the respondents is against the principles enshrined under Article 14 of the Constitution of India? An international bidding of such a nature being highly competitive is also expected to be extremely precise. The technical nature of the subject matter of the contract itself postulated assistance of technical experts and thus, a very high degree of care and meticulous adherence to the requirements of the bid was inherent in such a bidding. On its part, the respondent was under an obligation to not only maintain a great degree of transparency and fair dealing of its part, but was also expected to maintain the sanctity and integrity of the entire process. Accepting the proposal as sought for by the petitioner would amount to rewrite the terms in the bid document. It was incumbent upon the respondents to ensure that no different yardsticks were detected for any of the bidders and at the same time, to ensure that there was not the remotest 14 possibility of discrimination, arbitrariness or favouritism. There is no scope for the respondents to read into the documents, terms and conditions, which did not exist in the bid document. This view finds support from the judgment of the Hon'ble Supreme Court rendered in the case of Siemens Public Communication Networks Pvt. Ltd. (supra). 23.The Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the Court would interfere. The Court cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. 24.Coming to the facts, appearing in the case at hand, the validity of bid was voluntarily and unconditionally extended by the petitioner up to 30.9.2012 and it was well indicated that such extension of the bid validity shall not permit the bidders to make any change of the bid document. Therefore, the petitioner is debarred from raising objection against issuance of LOA, which, according to the original time line, it was to be completed by 14th November, 2010. It is further necessary to mention that the petitioner, at the time of extending the validity of bid, did not raise the question of insertion of a clause for price compensation. Even at the time of accepting LOA, the petitioner did not raise the question and this issue was raised three months after issuance of LOA. Not only that the petitioner instead of withdrawing the bid had been expressing its willingness to establish and execute the coal washery. The respondents were not supposed to go beyond the terms and conditions of the bid document and, therefore, the request to include specific clause for price compensation in the contract was turned down. 25.Placing reliance on the judgments, cited by the respondents, I am also of the opinion that a writ of mandamus cannot be issued directing the respondents to make a change in the terms and conditions of the NIT by including specific clause for price compensation. Therefore, the respondents have rightly rejected the request. 15 26.Now answering to the second question, whether action and decision taken by the respondents are against the principles enshrined under Article 14 of the Constitution of India. I would like to give reference to the judgment of the Hon'ble Supreme Court reported in (2007)14 SCC517[Jagdish Mandal Vs. State of Orissa, Para-22]. Para-22 of the said judgment reads as under:-

“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. 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 mine. 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 bond 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/procedure violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial 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 below 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 blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largess (allotment of sites/shops, grant of licences, 16 dealerships and franchises) stand on a different footing as they may require a higher decree of fairness in action.” 27.Admittedly, the petitioner has not raised a question of bias and mala fide, but interference has been sought for on the ground that the decision of the respondents is arbitrary, irrational and unreasonable. To examine this aspect, I have considered the rival submissions, documents available on record, terms and conditions appearing in the NIT and the dates and events indicated above. There is no question of arbitrariness because the bid validity was extended voluntarily and unconditional. Opportunities were given to the petitioner to sign the contract and deposit the Development Guarantee, but he kept on pending the matter on the ground of inclusion of specific clause for price compensation for more than a year. The inclusion of a clause for price compensation was beyond the terms of NIT. Needless to mention, it was an international competitive bidding and, therefore, the respondents had left no option but to proceed further. In the circumstances, the decision taken by the respondents cannot be considered as arbitrary in nature. 28.The petitioner has further tried to frame the prayer within the ambit of irrationality and unreasonableness, alleged to have been committed by the respondents. I do not find that the action taken by the respondents was in any manner irrational or unreasonable. The petitioner has cited example that sister concerns of CCL, like BCCL and MCL, had considered and dealt with such situation, but the same has not been made very specific in the facts and circumstances prevailing in the situation available. The action of the respondents was all along confined within the terms of the NIT. In order to accommodate and to get the project executed, more than one year's time was allowed to the petitioner to sign the contract. It is further admitted situation that consent from Jharkhand State Pollution Control Board was also obtained prior to the filing of the present writ petition i.e. in the month of August, 2013, but the petitioner had been insisting for inclusion of a clause for price compensation, which was beyond the purview of NIT and the same was, accordingly, rejected by the respondents. In that 17 view of the matter, I do not find that the decision of the respondents was irrational or unreasonable to the extent of refusing to include specific clause for price compensation in the contract. 29.During the pendency of the writ petition, the respondents have invoked the bank guarantee of Rs.50.00 lacs deposited by the petitioner as bid security. The present writ petition was filed on 24th September, 2014 and the copy of which was already handed over to the counsel for the Respondent-CCL. The filing of the present writ petition was well within the knowledge of the Respondent-CCL. According to the terms of NIT, the contract has to be signed within 30 days from the date of issuance of LOA dated 20th/21st July, 2012. The respondents did not forfeit the bid security, when the contract was not signed within 30 days from the date of issuance of LOA and both the parties had indulged in making correspondences with each other on the point of inclusion of a clause for price compensation and they consumed almost two years for the said discussion. The bid security was not forfeited within the said period of two years, but was forfeited within a fortnight after presentation of the present writ petition. This action of the respondent-CCL now appears to be arbitrary. 30.Since the petitioner has been found L-1 and LOA was issued in its favour and correspondences made by him on earlier occasion suggest that the petitioner had been intending to proceed with the project, liberty is given to the petitioner to sign the contract, if it so wishes, within three weeks from today, in terms of NIT and Bid Document. If it is done so, it would also eliminate further delay in installation and execution of said coal washery and the respondents shall also be saved from discharging further exercise of re-tender. If the petitioner enters into the contract, as indicated above, question of refund of bid security of Rs.50.00 lacs, as forfeited by the respondents, shall come to an end, but in the invent, the petitioner does not wish to sign the contract within three weeks, as indicated above, said sum of Rs.50.00 lacs shall be returned to the petitioner within a fortnight either 18 from the date of refusal to sign the contract expressed by the petitioner in writing or after expiry of the period of three weeks for which liberty to sign the contract is given to the petitioner for proceeding with the project, whichever is earlier. In the result, I do not feel it desirable to issue writ of mandamus, directing the respondents to include a clause for price compensation and, accordingly, the prayer stands rejected. If the petitioner will refuse to proceed with the project and sign the contract as per the terms of NIT, the Respondent- CCL shall be at liberty to proceed with the process of tendering afresh after expiry of the period of three weeks. 31.Accordingly, the writ petition stands disposed of. (D. N. Upadhyay, J.) Sanjay/NAFR


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