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2016 (7) TMI 976 - CALCUTTA HIGH COURT

2016 (7) TMI 976 - CALCUTTA HIGH COURT - tmi - Validity 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 tender .....

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ia 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 n .....

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ch 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 .....

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earned 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 bidd .....

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bmission 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. - APOT 71 of 2016, GA 753 of 2016,GA 1881 of 2016, WP 146 of 2016 - Dated:- 15-7-2016 - The Chief Justice Dr. Manjula Chellur & Justice Arijit Banerjee For the appellant : Mr. Abhrajit Mitra, Sr. Adv. Mr. Kishore Dutta, Sr. Adv. Mr. Chayan Gupta, Adv. Mr. S.S. Banerjee, Adv. For the Respondent : Mr. Jishnu Chowdhury, Adv., .....

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derstanding (MOU) dated 28 June, 2010 was entered into by and between Coal India Limited (in short CIL ) and RITES Limited (in short RITES ) where under RITES was appointed as the project management consultant of CIL. Subsequently the said MOU was modified and a communication was issued by CIL to all its subsidiaries including South Eastern Coal Field Limited ( in short SECL ) with the instruction that in respect of engineering and project management consultancy and approval of tenders, the subs .....

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the tender process including the appellant no. 1. The technical bids submitted by the parties were opened on 17 August, 2015 and six bidders including the appellant no. 1 were found to be technically qualified. Jhajharia Nirman being the respondent No. 4 above named and three other bidders were found not to be technically qualified. (5) The appellants received a letter dated 9 December, 2015 from RITES to the effect that the financial bids would be opened on 14 December, 2015 in the presence of .....

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e appellants demanded justice from RITES and requested RITES that the financial bids be opened. The appellants contend that thereafter they came to learn that RITES was acting in collusion with the technically disqualified bidders and that was one of the reasons for not opening the financial bids. (7) In those circumstances, the appellants approached this Court by filing W.P. No. 146 of 2016 praying for inter alia the following reliefs: (a) A writ of or in the nature of Mandamus do issue directi .....

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hereof from participating in tender process being No. 34/OT/SECLKUSMUNDA/ civil & P. Way/PKG-II/2015, Dated 17TH July, 2015; (8) SECL and the respondent Nos. 4 and 5 above named whose bids were initially found to be technically disqualified, were not parties to the writ petition. However, as per the direction of the learned Judge, they were added as parties. By the impugned judgment and order the said writ petition was disposed of. (9) The learned Judge recorded that upon consideration of t .....

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that the learned Judge should direct RITES to proceed with the tender process without opening the financial bids of Jhajharia and T&T. The learned Judge held that it would not be proper to give any such direction in view of the limited scope of relief claimed in the writ petition. The operative portion of the impugned judgment and order is as follows:- The decision of South Eastern Coal Fields Limited declaring Track & Tower Infratech (P) Ltd. and Jhajharia Nirman Limited as qualified i .....

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liberty to challenge such decision in accordance with law before the appropriate forum, if so advised. CONTENTION OF APPELLANTS :- (10) Appearing on behalf of the appellants Mr. Mitra, learned Senior Counsel submitted that only one point arises for consideration in the present appeal i.e., whether or not Jhajharia met the requirements of Clause 2(a) of NIT under the heading Qualifying Criteria Works Contracts . Clause 2(a) of the NIT pertaining to work experience and in so far as relevant for th .....

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on of the Bid Works completed prior to the cutoff date shall not be considered. (11) Note No. 5 under the aforesaid Clause stipulates that Credential Certificates issued by Government Organizations/Semi Government Organizations of Central or State Government; or by Public Sector Undertakings/Autonomous Bodies of Central or State Government; or by Public Limited Companies listed in Stock Exchange in India or Abroad shall only be accepted for assessing the eligibility of a Tenderer. (Emphasis adde .....

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on 23 September, 2013 and 24 September, 2015. This is also the finding of the Tender Evaluation Committee constituted by SECL as would appear from its recommendation dated 29 January, 2016. Mr. Mitra submitted that it is not the case of either RITES or SECL that the Credential Certificate Clause, even though a part of the qualifying criteria is of a general nature, distinct from a pre-qualification criterion. Had it been of a general nature, provision of the same could have been deviated from. M .....

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ere the holding Company itself is a bidder. (13) Learned Counsel then submitted that Clauses 6.4, 7.1, 7.2 read with Clause 5.1 of the NIT required any modification of the tender terms to be uploaded on website by publishing addendum/ corrigendum. This procedure has not been followed in the instance case. Relaxation of the qualifying criterion i.e., Clause 2(a), if known to all concerned, would have ensured maximum participation and best price. Mr. Mitra then submitted that there is a mala fide .....

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the waiver of qualification criterion regarding Credential Certificate of a listed Company. He submitted that the subject tender is a very large one where all the bids are over ₹ 100 crores. There were only six qualified tenderers with the required eligibility criteria as prescribed that include the mandatory eligibility criterion regarding Credential Certificate. The appellant Company in a commercial venture structured its financial bid accordingly. Had the tender terms not included the .....

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idders, may be by eliminating the profit element or even by taking a small loss. Jhajharia knew fully well that it was not eligible and only those bidders who met the qualification criteria stipulated in NIT would participate in the tender. However, Jhajharia is obviously the favoured tenderer having access to all internal records of SECL. It was the only ineligible tenderer which had an unfair advantage and it knew that it would get the qualification by waiver of the mandatory qualification cri .....

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es of law relaxing the eligibility criteria after the intending parties submitted their bids. The Courts would not countenance such action. In this connection Mr. Mitra relied on a decision of the Hon ble Supreme Court in the case of Sorath Builders Vs. Shreejikrupa Buildcon Limited & Another reported in (2009)11 SCC 9. Learned Counsel relied on paragraphs 25 and 26 of the said judgment which are set out hereunder:- 25. The prime consideration on which the High Court set aside the award of c .....

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ng the issue with regard to the process of tender held: (SCC p. 467, para 24) 24…… where bidders who fulfill pre-qualification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination , arbitrariness and favouritism which are totally opposed to the rule of law and our constitutional values. It was also held: (SCC p. 467, para 24) 24….. The very purpo .....

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Orient Blackswan Private Limited Vs. Sandip Nayak (MAT 111 OF 2015). Learned Counsel relied on paragraph 26 of the said Judgment which is set out hereunder:- 26. It is trite law that rules of the game cannot be changed in the midst of the tendering process and in the instant case such change of terms of tender as reflected in the points of consideration and the consequential decision taken thereon is liable to be quashed on this ground alone. In the event terms of tender were altered by the auth .....

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ke changing the rules of the game after it had begun and, therefore, if the Government or the Municipal Corporation was free to alter the conditions, fresh process of tender was the only alternative permissible. Therefore, we find that the course adopted by the High Court in the circumstances is justified because by reason of deletion of a particular condition wider net will be permissible and a larger participation or more attractive bids could be offered. The aforesaid principle applied with f .....

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also been argued that other contemporaneous documents do not reflect the points of consideration. CONTENTION OF RITES:- (14) Learned Counsel for RITES submitted that under the MOU executed by and between CIL and RITES, the latter was to provide Project Management Consultancy Services for all Rail Infrastructures and allied civil works to CIL and its subsidiaries. Such services including preparation of tender documents, notification of NIT, issuance of tenders on behalf of the CIL and its subsid .....

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as held to be technically disqualified since it submitted documents showing that it had performed certain contracts with KSK Mahanadi Power Company Limited. However, it did not submit any documents to show that KSK Mahanadi Power Company Limited was listed in a Stock Exchange in India or Abroad. Thus, the Credential Certificate did not conform to the qualifying criteria and as such RITES held Jhajharia to be technically disqualified. The evaluation report was placed before the Director (Projects .....

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sent to SECL along with the files. However, under cover of a letter dated 3 December, 2015 SECL sent back all the files to RITES after perusing the evaluation report which included the rejection of Jhajharia s bid. It was stated by SECL that the matter may be decided by RITES for evaluation as per MOU dated 28 June, 2010 and the final Tender Committee recommendations may be sent for acceptance and approval of SECL. It was further stated that the recommendations of RITES should be in accordance .....

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ECL to witness the price bid opening program, the date was rescheduled to 18 December, 2015 and later on was postponed till further advise. (17) By a letter dated 1 January, 2016 SECL called upon RITES to take a final logical decision in the matter and send all the files to SECL. Under cover of letter dated 1 January, 2016, RITES sent all the files to SECL. (18) Thereafter, by a letter dated 30 January, 2016, SECL directed RITES to consider the bids of 8 bidders including Jhajharia. RITES is bou .....

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o to be entered into with SECL. The role of RITES is that of an agent. The MOU that was entered into by and between CIL and RITES clearly states that acceptance/approval of tender evaluation statement and placement of letter of intent on the contractor has to be done by CIL s subsidiary, in this case SECL. (20) After opening of the technical bids on 9 September, 2015 by RITES in presence of Jhajharia, the latter sent two representations to SECL dated 24 September and 26 September, 2015. Thereaft .....

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RITES and the matter was sent back to RITES for further consideration under cover of a letter dated 3 December, 2015. RITES rejected the representations of Jhajharia by a communication dated 8 December, 2015. Such decision was challenged by Jhajharia in the Bilashpur High Court. The said writ petition was disposed of by the Bilashpur High Court by an order dated 22 December, 2015. On 1 January, 2016 RITES was requested by SECL to return the entire file relating to tender for consideration by SE .....

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eafter i.e. on 1 February, 2016 that the appellants advocate sent a representation to RITES seeking opening of the financial bids of the technically eligible bidders only. (21) Learned Counsel submitted that the instant appeal is not maintainable. Having regard to the scope of the prayers in the representation and the communication dated 30 January, 2016, learned single Judge passed the impugned order and granted liberty to the writ petitioners to challenge such decision before the appropriate f .....

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di to challenge the qualification of Jhajharia. (B) It is not the case of the writ petitioners/appellants that they were disqualified on the same ground at the technical stage. No prejudice has been caused to the writ petitioners at the technical stage. (C) It does not lie in the mouth of the writ petitioners to allege that the course adopted by SECL may have caused prejudice to the other parties. Such other parties have not applied before this Court. This is only an attempt on the part of the w .....

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t hereunder:- Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them. Thus, if a party does not strictly comply with the requirements of paras III, V or VI of the N.I.T., it is open to the K.P.C. to decline to consider the party for the contract and if a party comes to Court saying that the K.P.C. should be stopped from doing so, the Court will dec .....

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case, the K.P.C. made some changes in the time frame originally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension .....

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s excluded at the preliminary stage. But it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance. The question, then, is whether the course adopted by the K.P.C. has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all? It is true that the relaxations of the time schedule in the case of one party does affect even such a person in the sense that .....

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the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration. If, save for the delay in filing one of the relevant documents, M.C.C. is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the M.C.C. and in the K.P.C. going in for a choice of the better on the me .....

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have been fulfilled or not. The facts and circumstances of the instant case would show that SECL had considered the inclusion of two other bidders namely Jhajharia and T&T after due deliberation. The stand of SECL cannot be termed arbitrary or unfair. The object of tender, in most of the matters is to satisfy the authority that the person who intends to execute the work or the person who offers tender would be really worthy and that he would perform to the best of his ability. The writ Cour .....

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um is the Bilashpur High Court. Learned counsel submitted that all decisions relating to the tender must be challenged before the Bilashpur High Court. The site of the project and the work is Chattisgarh. The Head Office of SECL is in Chattisgarh. RITES is only the agent. RITES has offices in various parts of India and the Head Quarter of the Eastern Region is in Calcutta. The approval of every decision in the tender is that of SECL and RITES merely communicates such decision. Initially the earn .....

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n of any dispute which may arise in respect of processing of the tender. (24) It was finally submitted by learned Counsel for SECL that the stand of the writ petitioners/appellants is also not bona fide. At the technical stage, it was not possible for the writ petitioners to know the details of bids submitted by other bidders. The writ petition was filed before opening of the financial bids. From the financial bids, it would appear that Jhajharia is L-1 bidder and the writ petitioner Company is .....

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ade by the writ petitioner Company before this Court shows lack of bona fide on the part of the writ petitioner Company. The only attempt is to oust competition which is neither desirable in public interest nor beneficial to the interest of SECL. CONTENTION OF JHAJHARIA (RESPONDENT NO. 4):- (25) Learned Counsel for Jhajharia has taken three preliminary objections to the maintainability of the appeal. The first preliminary objection is that the appeal is beyond the scope of the writ petition. The .....

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the bidders who had been technically disqualified. On this basis, the writ petition was filed seeking finalization of the tender process by evaluation of financial bids of the qualified bidders named by the writ petitioners. In the writ petition, there is no challenge to the decision of the respondent authorities finding Jhajharia to be technically qualified. However, in the appeal, the only point urged is that the decision of the respondent authorities to technically qualify Jhajharia was bad i .....

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46.17 of schedule F referred to in the NIT. It was further submitted that no part of the cause of action has arisen within the jurisdiction of this Court since:- (i) The works are to be carried out in Chattisgarh. (ii) SECL, who is the Employer is to take all decisions in the matter of grant or rejection of the bids. SECL s office is in Bilashpur, Chattishgarh. (iii) The letters dated 9 December, 2015, 10 December, 2015 and 16 December, 2015 which were referred to in the writ petition were also .....

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icer of RITES parties to the writ petition, so that the jurisdiction of this Court could be attracted not on the basis of cause of action but on the basis that RITES has its office in Kolkata. This the appellants did in spite of being aware that the entire tender had been issued by RITES on behalf of SECL. The appellants have thus sought to mala fide invoke the jurisdiction of this Court knowing that RITES was an agent of SECL and it was only the actions of SECL that could be challenged. (27) Th .....

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nancial bid will also be considered. The right of the writ petitioner Company to participate in the tender process has not been taken away in any manner by the impugned order. Upon opening of the financial bids, Jhajharia has been found to be the lowest bidder. Awarding the contract to Jhajharia will benefit the State Authorities and result in saving of a sum in excess of ₹ 7 crores. The appellants are merely seeking to have Jhajharia ousted from the zone of consideration though it is full .....

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or the terms of the tender. He submitted that Jhajharia had submitted the Credential Certificate as issued by KSK Mahanadi Power Company Limited, which is a subsidiary of KSK Energy Ventures Limited. Along with the Certificate Jhajharia submitted a Certificate issued by KSK Energy Ventures Limited Stating that KSK Mahanadi Power Company Limited is a part of KSK Energy Ventures Limited. The contents of this Certificate have not been disputed by anybody concerned. KSK Energy Ventures Limited is a .....

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Ventures Limited as a part of its own assets, liabilities and business. iii) The holding Company carries on business through its subsidiaries. Therefore, the annual report of KSK Energy Ventures Limited refers to itself and its subsidiaries as a Group i.e. single economic entity. iv) KSK Mahanadi Power Company Limited is the highest profit making subsidiary of KSK Energy Ventures Limited and therefore it contributes substantially to the assets and income of KSK Energy Ventures Limited. The turn .....

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ed. (29) Learned Counsel submitted that the relationship between a holding Company and subsidiary Company has to be seen from the stand point of business realities. A subsidiary company is not always treated as a separate legal entity vis-a-vis the holding company. In the instant case, KSK Energy Ventures Limited and its subsidiaries have been legitimately treated as one economic entity. In this connection, learned Counsel relied on a decision of the Hon ble Supreme Court in the case of New Hori .....

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Counsel was that the affairs of a Company include the affairs of its subsidiary. As such, the certificate issued by KSK Mahanadi Power Company Limited is equivalent to a certificate issued by its holding company KSK Energy Ventures Limited which is undisputedly a listed Company. In this connection, learned counsel relied on a decision of this Court in the case of Bajrang Prasad Jalan Vs. Mahavir Prasad Jalan reported in AIR 1999 CAL 156 wherein at paragraph 27 the Court observed that It is also .....

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ential Certificate issued by KSK Mahanadi Power Company Limited cannot be treated as a Certificate issued by KSK Energy Ventures Limited. Submission of the Credential Certificate as issued by KSK Mahanadi Power Company Limited can therefore be treated as compliance of the relevant qualifying criteria as contained in the NIT. (32) Learned Counsel then submitted that the scope of judicial review of a decision taken in a tender process is extremely limited. Unless it can be demonstrated that the de .....

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trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because t .....

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ion must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles. 137. In Poddar Steel Corpn. v. .....

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rely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases." (33) Learned Counsel submitted that it cannot be said that the Credential Certificate from a listed Company is an essential term of the tender and there is no .....

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hich no authority reasonably instructed would have acted or that the interpretation given to the tender conditions by the respondent authorities is absolutely illegal. Such interpretation in fact finds support from the Supreme Court decision in the case of New Horizons Limited (supra). (34) Learned Counsel for Jhajharia finally submitted that there has been suppression of material facts on the part of the appellants. The technical bid of Jhajharia was also disqualified with regard to an issue as .....

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e qualification of Jhajharia to participate in the tender process pursuant to the aforesaid letter has not been challenged in the writ petition but the writ petitioners have sought to proceed on the basis that Jhajharia was disqualified on 17th August, 2015. The writ petition and the appeal are liable to be dismissed on the ground of suppression alone. THE APPELLANTS IN REPLY :- (35) In reply, learned Counsel for the appellants submitted that in the case of G.J. Fernandez (supra) it has been hel .....

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Counsel then submitted that in its judgment in the case of New Horizons Limited (supra), the Hon ble Supreme Court has not held that in tender matters, the corporate veil should be lifted on every aspect. In this connection, learned Counsel relied on a decision of the Hon ble Supreme Court in the case of Gammon India Limited Vs. Commissioner of Customs reported in (2011)12 SCC 499, wherein at paragraphs 16 to 18 of the Judgment the Hon ble Supreme Court discussed its earlier decision in the case .....

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ation if the bidder is a wholly owned subsidiary of a Company. (37) Learned Counsel then submitted that reliance on the case of Bajrang Prasad Jalan(supra) by the respondents is wholly misplaced and in subsequent decisions the said case has been held to be confined to its peculiar facts. In this connection, learned Counsel relied on a decision of the Madras High Court in the case of Amalgamations Limited Vs. Shankar Sundaram reported in (2012) 1 Company Law Journal 568. Learned Counsel submitted .....

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of India Limited Vs. Secretary Revenue Department, Government of Andhra Pradesh reported in (1999) 4 SCC 458. Reliance was also placed on a decision of the Supreme Court in the case of Vodafone International Holdings Vs. union of India reported in (2012) 6 SCC 613. Learned Counsel relied on paragraphs 258 to 260 of the said Judgment which are set out hereunder:- 258. Holding company, of course, if the subsidiary is a WOS, may appoint or remove any director if it so desires by a resolution in the .....

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ver, considered as separate legal entities, and subsidiary are allowed decentralized management. Each subsidiary can reform its own management personnel and holding company may also provide expert, efficient and competent services for the benefit of the subsidiaries. 259. The U.S. Supreme Court in United States v. Bestfoods 524 US 51 (1998) explained that it is a general principle of corporate law and legal systems that a parent corporation is not liable for the acts of its subsidiary, but the C .....

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29, the Court of Appeal emphasized that it is appropriate to pierce the corporate veil where special circumstances exist indicating that it is mere fagade concealing true facts. 260. Courts, however, will not allow the separate corporate entities to be used as a means to carry out fraud or to evade tax. Parent company of a WOS, is not responsible, legally for the unlawful activities of the subsidiary save in exceptional circumstances, such as a company is a sham or the agent of the shareholder, .....

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the cause of action have arisen within the jurisdiction of this Court:- (i) The tender documents were issued from the office of RITES at Kolkata (clauses 5.1 and 5.2 of NIT). (ii) For clarification of any term of the tender documents queries were addressed to RITES at Kolkata (clause 5.5 of NIT). (iii) The pre-bid meeting was held at the office of RITES at Kolkata (clause 6.0 of NIT). (iv) The receipt and opening of tender applications were to be made at the office of RITES at Kolkata (Clause 12 .....

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Court in the case of Ashok Kr. Saboo(HUF) Vs. Hindustan Paper corporation Limited reported in (2007) 3 CHN 533. Reliance was placed on paragraphs 12 and 21 of the Judgment which are set out hereunder:- 12. It is plain from the above clause that the resolution of legal dispute if arises will have to be brought by any of the parties on the strength of the aforesaid agreement before the Appropriate Civil Court at the place in the State of Assam. In the writ petition upon scrutiny we find enforceme .....

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be vague and such an agreement cannot operate as bar. Moreover, it is impossible to think that the provision under Article 226 can be contracted out by selecting one of the two competent forums. There cannot be estoppel as against provision of Constitutional law. The legality and validity of forum selection agreement is indirectly recognized under the provision of Section 28 of the Contract Act. This provision does not envisage, in our view recognition and acceptance of contracting out of the pr .....

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id observation of the Division Bench which is binding upon him as it was directly on this issue. Rather he has relied on a decision of the learned Single Judge. The decision cited by Mr. Chatterjee rendered by the learned Single Judge in the case of Calpro Food (Pvt.) Ltd. reported in MANU/WB/0508/1995:100 CWN 322 had nothing to do with the question of office of the respondent, rather the said was founded on the cause of action while attracting territorial jurisdiction of this Court. Moreover, t .....

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provision is one part of basic structure of the Constitution and it is inviolable even by the Parliament, not to speak of private individual. (40) Learned Counsel finally submitted that in any event the jurisdiction clause contained in NIT is a term which was to be incorporated in the contract that would be entered into with the successful bidder. The jurisdiction clause would apply to future disputes that may arise in course of performance of the contract between the employer and the contracto .....

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een found to be qualified either at the instance of RITES or at the instance of SECL. The appellants are aggrieved by such direction. The question is whether or not the appellants can make a legitimate grievance in respect of the aforesaid direction of the learned Judge. (42) Briefly put, the complaint of the appellants is that Jhajharia did not satisfy the condition stipulated in Note No. 5 under Clause 2(a) of the NIT. The said note provided that a credential certificate had to be submitted by .....

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K Energy Ventures Ltd. Learned Counsel for the appellants contended that this is not in compliance with the requirement of Note No. 5 under Clause 2(a) of the NIT, thus disqualifying Jhajharia for the purpose of the subject tender. According to him, KSK Mahanadi may be a fully owned subsidiary or a substantially held subsidiary of KSK Energy Ventures but in law, they are two separate legal entities and the work experience or commercial worth of the holding company cannot be reflective of the wor .....

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d and it was clarified that in respect of engineering and project management consultancy and approval of tenders the subsidiary of CIL (in this case SECL) would be the final authority. (44) RITES floated the subject tender on behalf of the SECL inviting bids from interested parties and in doing so, RITES was acting as an agent of SECL. Initially, out of the ten bidders, six were found to be technically qualified. Jhajharia was one of the bidders who was found not to be technically qualified for .....

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ucted by SECL to open the bids and award the contract. In our opinion, RITES, which was acting as an agent of SECL was bound by the instruction of SECL. It is trite law that an agent is bound by the principal s mandates and cannot act beyond or contrary to such mandates. (46) The question then arises as to whether SECL was justified in instructing RITES to consider the financial bid of Jhajharia. Did SECL commit any illegality or irregularity by bringing Jhajharia into the zone of consideration .....

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e a listed company was only to lend more credence to the certificate, as listed companies are generally placed on a higher commercial pedestal than unlisted companies. If the Employer (SECL) could otherwise ascertain the credibility and past record of a bidder and if the bid of that party is the lowest, nothing would prevent the Employer from considering that party s financial bid even if the credential certificate was not issued by a listed public limited company. (46) As observed by the Hon bl .....

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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 aut .....

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at of the appellants. We see absolutely nothing illegal or irregular with such action of SECL. (48) Learned Counsel for the appellants, relying on two decisions referred to above, urged that the decision of SECL to open the financial bid of Jhajharia even when the credential certificate was not issued by a listed public limited company, amounted to changing the rules of the game once the game has started, which is impermissible in law. We would have agreed with such contention of Learned Counsel .....

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ty aggrieved and, hence, even its locus standi to maintain the present writ petition is highly doubtful. (49) 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 repor .....

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ectors 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. (50) 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 .....

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es of a game cannot be altered once the game is on its way. In our opinion, this is not an absolute proposition of law. Firstly, the appellant company cannot claim to have a vested right in being awarded the contract. It is settled law that none of the bidders in a tender process has any legal right in the contract being awarded in his favour. This is so, even if he is the lowest bidder. The Government or a public authority always has a right to reject even the lowest bid for cogent reasons prov .....

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no injustice can be said to have been done to the appellant company by the decision of SECL to consider the tender of Jhajharia side by side with that of the appellant company. The comparative merits of the appellant company viz-a-viz Jhajharia is a matter for SECL to decide and not for the courts. This view of our finds support from the decision of the Hon ble Apex Court in the case of G. J. Fernandez (supra). (52) Another reason as to why we decline to interfere is that the decision of SECL to .....

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