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2016 (7) TMI 976 - HC - Companies LawValidity of Bid - credibility and capability of the bidding parties - Held that:- In the instant case, SECL is the proposed Employer. The tender was floated by RITES on behalf of SECL. The object of a tender process in respect of work projects is not only to ascertain the lowest price at which the work can be got executed but also to assess the credibility and capability of the bidding parties who are interested to perform the job. The lowest tenderer need not always be awarded the work if it is found that he has a dubious or unsatisfactory track record or if on an overall assessment the authority concerned is of the opinion that his capability is doubtful. It is settled law that the Government and public authorities must have freedom of contract. In the present case, SECL found the financial bid of Jhajharia to be the lowest. It was about 7 crores less than the second lowest bid that was of the appellant. It is not in dispute that Jhajharia carried out work satisfactorily for KSK Mahanadi and this has been verified from KSK Mahanadi by RITES. Being satisfied by the capability of Jhajharia, SECL directed RITES to consider Jhajharia’s financial bid along with the financial bids of others including that of the appellants. We see absolutely nothing illegal or irregular with such action of SECL. In any event, in ascertaining whether a condition in a NIT has been complied with, one has to take a commercial point of view. It is not in dispute that KSK Mahanadi which issued the credential certificate to Jhajharia is a subsidiary of KSK Energy Ventures. In fact, KSK Energy Ventures holds approximately 84 per cent of the shares in KSK Mahanadi. KSK Energy Ventures in its annual report referred to itself and its subsidiaries as a ‘Group’ i.e. a single economic entity. KSK Energy Ventures appears to be in complete control of the management and administration of the affairs of KSK Mahanadi and this is a commercial reality which cannot be lost sight of. Although KSK Ventures and KSK Mahanadi may be separate legal entities in the eye of law, from a practical and pragmatic point of view KSK Energy Ventures operates through KSK Mahanadi being 84 per cent shareholder thereof. The Directors of the two companies are also common. Hence, in our opinion, there is substantial compliance of Note 5 under Clause 2(a) of the NIT since KSK Energy Ventures is undisputedly a listed company. SECL’s decision to consider Jhajharia’s financial bid is an administrative decision made qualitatively by experts in the field. If the writ court interferes with such decision lightly without having the necessary expertise such action is likely to be fallible. It is trite law that the writ court is not concerned with the decision but with the decision making process. We decline to interfere is that the decision of SECL to consider the financial bid of Jhajharia and T & T has not been challenged by the writ petitioners. The Learned Judge reserved liberty to the writ petitioners to challenge such decision of SECL before the appropriate forum. Instead of doing so, the writ petitioners preferred the instant appeal. Prayers in the instant appeal are beyond the scope of the writ petition. Learned Counsel for the appellants argument that SECL and RITES are acting in tandem and collusion with Jhajharia has no substance in such contention and the materials on record also do not support such allegation. Out of the bidders who were initially technically disqualified by RITES, it was not only Jhajharia’s financial bid that SECL directed RITES to consider but also the financial bid of T & T. It was for SECL to finally decide whether those two bidders were technically eligible and no inference of collusion or of SECL or RITES acting hand in glove with Jhajharia can be drawn merely from the decision of SECL to consider the financial bids of Jhajharia and T & T. On the contrary, we are inclined to agree with the submission of Learned Counsel for SECL and Jhajharia that the present litigation is an attempt on the part of the appellant company to scuttle and/or eliminate competition.
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