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2016 (5) TMI 1561 - DELHI HIGH COURTSeeking quashing/waiving off the arbitrary and discriminatory conditions encapsulated in clauses B.2.6(v) and B.2.7(v) and B.2.6(v) of the tender Nos.1, 2 & 3 respectively - holding 100% share of its subsidiary Company as per Russian Law - 100% subsidiary is permissible as per Indian Law or not - whether the impugned condition is an essential condition of eligibility or is merely ancillary or subsidiary to the main object to be achieved by the condition? - HELD THAT:- In the case of a newly formed company, there is no requirement that the promoter company should have a 100% shareholding in the bidder. All that is required is that the promoter company should give a corporate guarantee/undertaking that it would financially support the newly formed company for executing the project/job in case the same is awarded to them. The pleas in the counter affidavit seeking to justify the requirement of a 100% shareholding by a parent company, on the ground that several anomalies or difficulties can be caused by even a single shareholder who can affect/hamper the tender process of the Respondent No.1 to a great extent, are without any basis. No such fear or apprehension is expressed in respect of a newly formed company. One cannot comprehend as to how a subsidiary would be different from a newly formed company when in both cases a corporate guarantee/undertaking is submitted from the parent/ultimate parent/holding company or the promoter company/joint venture partner that it would financially support the subsidiary company or the newly formed company (as the case may be) for executing the project/job in case the same is awarded to them. One fails to understand as to how holding 100% share in the subsidiary company would make the corporate guarantee/undertaking any better than in a case where the parent/ultimate parent/holding company does not hold 100% shares of the subsidiary company. In case of default of the bidder, the corporate guarantee/undertaking of the parent/ultimate parent/holding company would be enforced, in which case, it would be immaterial whether it holds 100% share in the subsidiary company or not. Respondent No. 1 has itself not considered the said condition as an essential condition of eligibility and has admittedly not applied the principal of holding 100% shareholding of the bidder subsidiary company in the case of the consortium Russian Company M/s Bumi Armada Offshore Contractor Limited (BAOCL), Marshall Island and M/s Afcons Infrastructure Limited, Mumbai on the ground that as per legal advice received, under Russian Law a 100% subsidiary company cannot hold 100% shares of its subsidiary company. When the Respondent No. 1 has itself not treated the impugned condition as an essential condition of eligibility in the case of the Russian Company, then how can it be permitted to contend that in the case of the Petitioner, it is an essential condition of eligibility and not ancillary or subsidiary to the main condition. In the present case, clearly the decision of the Respondent No. 1 to selectively apply the impugned condition in the case of the Petitioner and not the Russian company, smacks of arbitrariness. Further, as discussed hereinabove, the applicability of the impugned condition in the case of a subsidiary company bidder and not in the case of a newly formed company bidder or any other bidder company is clearly arbitrary and irrational. The impugned condition is not an essential condition of eligibility but merely ancillary and subsidiary with the main object to be achieved by the said condition and thus the Respondent No. 1 cannot insist upon the strict literal compliance of the said condition - Petition allowed.
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