TMI Blog2005 (5) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... tment, West Bengal State Electricity Board, Vidyut Bhawan, 8th Floor, Block-A, Bidhannagar, Kolkata - 700 091 from experienced and interested Traders and Business Enterprises having Power Trading License or Clearance from the Central Electricity Regulatory Commission for export of following approximate quantum of power. 5. Mode of deposit of Earnest Money : 5.1 Every quotation must accompany 'Earnest Money' in the form of Demand Draft or Pay Order drawn on any Scheduled Bank of India in favour of West Bengal State Electricity Board payable at Kolkata amounting to ₹ 30,00,000.00 (Rupees thirty lakh) only. The Central/State Government Organization(s) and CPSU(s)/PSU(s) are exempted from submission of Earnest Money. 5.2 Earnest Money shall be refunded to the successful bidder only after opening of irrevocable and revolving LC by the successful bidder and commencement of supply as per Payment Security Mechanism Clause. Earnest Money shall be refunded to the unsuccessful bidder after finalization of Tender. 5.3 No interest shall be paid by WBSEB on Earnest Money. 4. Global Energy Ltd. and H. Dhaul, the appellants herein, filed a writ peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice inviting tender. 5. Feeling aggrieved by the aforesaid order, M/s Adani Exports Ltd. and M/s PTC India Ltd. filed two separate Letters Patent Appeals which were allowed by the Division Bench on 21.3.2005 and the direction contained in the order under challenge, permitting the writ petitioners (appellants herein) to deposit the earnest money by furnishing a bank guarantee or bankers' cheque in favour of the Electricity Board by 18.3.2005 was set aside. 6. Learned counsel for the appellants has submitted that the condition requiring deposit of ₹ 30 lakhs as earnest money by Power Utilities other than Central/State Government Organizations and Public Sector Undertakings is discriminatory and illegal. He has further submitted that the notice inviting tenders (NIT) was published on 8.3.2005 which required that every quotation must accompany earnest money in the form of a demand draft or pay order in favour of the Electricity Board amounting to ₹ 30 lakhs and the last date fixed for submission of the tender was 14.30 hrs. on 15.3.2005. A very short notice had been given by the Electricity Board in which it was difficult for the appellants to make arrange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r pay order drawn on any Scheduled Bank of India in favour of West Bengal State Electricity Board payable at Kolkata. However, the learned Single Judge in his order dated 15.3.2004 also gave an option to the appellants to furnish a bank guarantee of the said amount. Deposit of some amount of earnest money is a normal condition of tender. The object is that only such parties who are financially sound and are serious in getting the work or contract, should make a bid. Otherwise any number of persons who have no capacity, financial or otherwise, would like to take a chance by making a bid. Normally, State/Central Government Organizations or Central or State Public Sector Undertakings would not make a bid unless they are serious in getting the work. The shareholding of the Government (State or Central) in any Public Sector Undertakings is always more than 50 per cent. They cannot be equated with a company whose net worth may be very small or may have a small shareholding. Therefore, the exemption granted in favour of State Government Organizations and Public Sector Undertakings from making deposit of earnest money of ₹ 30 lakhs was based upon a rational criteria and could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it was felt that it would be easier for the department to deal with one company which is well managed and not with several companies. Some of the firms filed writ petitions in Delhi High Court challenging the clause of the NIT whereby a condition was put that only such firms which had a turnover of ₹ 20 crores or more for the last three financial years would be eligible. It was contended before the High Court that the aforesaid condition had been incorporated solely with an intent to deprive a large number of companies imparting computer education from bidding and monopolize the same for big companies. The writ petition was allowed and the clause was struck down as being arbitrary and irrational. In appeal, this Court reversed the judgment of the High Court basically on the ground that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract and the Government must have a free hand in settling the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. It was further held that while exercising the power o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court. It is averred in the counter affidavit filed by the Electricity Board that the total units of power intended to be traded are 1471 million units. For trading over 1000 million units of power in any year the license required is that of category 'F'. The computer website of Central Electricity Regulatory Commission, as on 14.3.2005, contains the names of 12 licensed electricity traders, but the name of the appellant no.1, M/s Global Energy Ltd. does not find mention therein. It is also averred in the counter affidavit that the Electricity Board had been selling surplus power to electricity traders since 1st April, 2003. In the course of such negotiations, the Electricity Board came to be associated with appellant no.1 for entering into power purchase agreement for the period March to June 2004. However, the appellant no.1, after accepting the terms and conditions offered by the Electricity Board and after issuance of letters of awards, failed at the last moment to open the letter of credit for requisite amount and submitted unacceptable letter of credit making the Electricity Board as a second beneficiary. Due to this reason, the power purchase agreement faile ..... X X X X Extracts X X X X X X X X Extracts X X X X
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