Shapoorji Pallonji And Company vs The West Bengal Power Development ...
2023 Latest Caselaw 3721 Cal

                        In the High Court at Calcutta

                      Constitutional Writ Jurisdiction

                                  Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                              W.P.A. No.10028 of 2023

                     Shapoorji Pallonji and Company
                                    Vs.
     The West Bengal Power Development Corporation Ltd. and others

       For the petitioner               :   Mr. Sakya Sen,
                                            Mr. Asif Hussain,
                                            Ms. Labani Pan

       For the WBPDCL                   :   Mr. Abhrajit Mitra,
                                            Mr. Jishnu Chowdhury,
                                            Mr. Debanjan Mandal,
                                            Mr. Chayan Gupta,
                                            Mr. Sandip Dasgupta,
                                            Mr. Aviroop Mitra,
                                            Ms. Mahima Choura


       Hearing concluded on             :   10.05.2023

       Judgment on                      :   08.06.2023



       Sabyasachi Bhattacharyya, J:-



1.     The petitioner has challenged a Tender cum Reverse Auction floated

       by the respondents in respect of Flue Gas De-sulphurisation (FGD)

Package in respect of four units of the Sagardighi Thermal Power

Project (2x300 MW + 2x500 MW). The specific premise of the

challenge is Clause 26.0 of the Notice Inviting Tender (NIT). The

petitioner has also challenged the rejection of the petitioner's bid at

the technical stage.

2. Learned counsel for the petitioner argues that there is inherent

discrepancy between the different sub-clauses of Clause 26.0, which

comprise the 'Must Conditions'. Whereas for Phase-I units, Limestone

Consumption of FGD System shall not exceed 3.68 T/hr. at 100 per

cent unit MCR with SO2 removal efficiency of 80 per cent, such

consumption for Phase-II units, as per the NIT, are not to exceed 7.61

T/hr. at 100 per cent unit MCR with SO2 removal efficiency of 96 per

cent.

3. However, in spite of such provisions in paragraphs 3 and 4 of sub-

clause 26.1, in paragraph 5 of the same sub-clause, the maximum

Total Auxiliary Power Consumption for Phase-I units is 5900 KW with

both units operating at 100 per cent TMCR whereas for Phase-II, such

consumption shall not exceed 4800 KW operating also at 100 per cent

TMCR condition.

4. It is submitted that such inherent discrepancy governing Phase-I and

Phase-II units vitiates the clause. Whereas Limestone Consumption

would be less with worst coal firing and SO2 removal efficiency at 80

per cent for Phase-I units, while the maximum Total Auxiliary Power

Consumption for FGD System for such units is 5900 KW, for Phase-II

units, the Limestone Consumption shall not exceed 7.61 T/hr. with

worst coal firing and SO2 removal efficiency of as high as 96 per cent,

while the Total Auxiliary Power consumption for such units cannot

exceed 4800 KW.

5. It is further argued that such clause is not only arbitrary, such

conditions are technically impossible for any operator to meet.

6. Moreover, it is contended that the criteria stipulated in such clause do

not have any correlation with the purpose of the Tender and the

product sought.

7. Learned counsel for the petitioner next argues that the said clause is

contrary to the Notification dated March 7, 2019 issued by the Central

Electricity Regulatory Commission (CERC), in particular Regulation

No.49 thereof (amended on August 25, 2020 and further amended on

February 2, 2021).

8. It is also pointed out that whereas Phase-I units contemplate 300 MW,

Phase-II units are intended for 500 MW, which does not tally with the

converse ratio of power consumption as per the impugned Clause

26.1.

9. Moreover, learned counsel for the petitioner submits that the rejection

of the petitioner's bid was bad even in terms of the NIT provisions.

Clause 24.2 of the same provides that a substantially responsive bid is

one that meets the requirement of the Bidding Document without

material deviation, reservation or omission. Such terms, if accepted,

are defined to be ones which:

i) affect in any substantial way the scope, quality or performance

of the plant and installation services specified in the contract; or

ii) limit in any substantial way, inconsistent with the Bidding

Document, the Employer's right or the Public's obligations

under the proposed contract.

10. Thus, the petitioner also challenges the rejection of the petitioner's bid

at the technical stage.

11. Learned counsel for the respondents, at the outset, argues that the

impugned tender has already reached its culmination, upon the price

bids being opened and the L-I and L-II bidders being declared.

12. Hence, the clock ought not to be set back to the stage of inception of

the writ petition.

13. Next, it is argued, the petitioner fully participated in the tender

process and thereafter, subsequent to the rejection of its technical bid,

has come up with the present challenge, by taking a chance in respect

of the outcome of the auction. Moreover, the delay in preferring the

present challenge is inordinate. Hence, the writ petition ought to be

dismissed, if not for any other reason, on the grounds of delay and

mala fides.

14. With regard to the amendment of Regulation 49 of the relevant

Notification, learned counsel argues that there was no material

alteration therein of the impugned clause. For such purpose, learned

counsel for the respondents places the exact amendment and the

Gazette Notification thereof. Hence, the petitioner's argument that the

impugned clause was contrary to such Regulation/Notification is not

tenable in the eye of law.

15. That apart, it is argued that the application of cap at the rate of 1 per

cent both for Phase-I and Phase-II units is absolutely reasonable and

not, in any manner, arbitrary.

16. The respondents cite an unreported judgment dated February 11,

2022 passed by the Supreme Court in Balaji Ventures Private Limited

Vs. Maharashtra State Power Generation Company Ltd. and another for

the proposition that unless a clause was tailor-made to suit a

particular bidder, the owner should always have the freedom to

provide the eligibility criteria in a tender and a challenge on the

ground that the bid condition/clause might not suit a particular

bidder cannot be any ground for challenge.

17. Next citing a Division Bench judgment of this Court reported at 2020

SCC OnLine Cal 2213 [Subir Ghosh Vs. State of West Bengal and

others], it is argued that the challenge to a tender has to be before the

time to put in the bids is closed. If a bid is made and is thrown out on

an illegal or unfair condition in the tender document, even then, a

challenge can be fashioned.

18. Learned counsel for the respondents also places reliance on Greentech

Environ Management Pvt. Ltd. and others Vs. the Union of India and

others, reported at MANU/WB/0054/2021, where it was held by this

Court that it did not lie in the mouth of the petitioners therein to

challenge the tender process after having participated in the same and

having turned out to be unsuccessful.

19. Learned counsel for the respondents next cites National High Speed

Rail Corporation Limited Vs. Monte Carlo Limited and another, reported

at (2022) 6 SCC 401, to indicate the limited grounds on which there

can be interference under Article 226. Such criteria having not been

satisfied in the present case, it is submitted, the writ petition ought to

be dismissed.

20. From the cited judgments, certain principles can be elicited.

21. The limited scope of challenge to a tender process, according to the

Supreme Court [in Balaji Ventures (supra)], is that a particular clause

or condition of a tender is tailor-made to suit a particular bidder or is

arbitrary. Otherwise, the owner/employer should always have the

freedom to provide the eligibility criteria and the terms and conditions

of the bid, unless those are mala fide.

22. The bidder cannot be permitted to challenge a clause merely because

it does not suit him and/or is inconvenient to him.

23. It has further been observed by courts that a challenge to tender

documents on the ground of being unfair or illegal has to be thrown

before the time to put in the bids is closed.

24. In the event the bidder participates and awaits the outcome of the

bids, a challenge at the behest of such bidder ought not to be allowed.

25. In National High Speed Rail Corporation (supra), the Supreme Court

stipulated specific grounds of interference under Article 226. The

grounds were, whether the process or decision made by the authority

is mala fide or intended to favour someone, or is so arbitrary and

irrational that no responsible authority acting reasonably and in

accordance with relevant law could have reached it; also, whether the

public interest is affected.

26. In the present case, the challenge to the impugned Clause of the NIT

is three-fold. As to the first limb of the challenge, the petitioner

argues that the conditions stipulated therein are technically

impossible to meet. However, the petitioner has failed to establish

such ground in any cogent manner. Moreover, in the meantime, the

financial bids have been opened and two bidders have already come

out successful, being declared as L-I and L-II, which itself demolishes

the myth that the tender conditions could not be fulfilled.

27. The next challenge is that Clause 26.1 is arbitrary.

28. However, a bare perusal of the same clearly shows that the same

specifies certain technical requirements. Not only is the court or any

other authority than the authority floating the tender technically

incompetent to decide the legitimacy of such requirement, it is well-

settled that the tender-issuing authority reserves absolute right in

specifying its requirements.

29. The purpose for which tender was floated in the present case was

technically very specific. The thermal power project was to get four

units of a Flue Gas De-sulphurisation Package, two of 300 MW and

other two of 500 MW.

30. There is parity between Paragraphs 3 and 4 of Clause 26.1, insofar as

both have been capped at One per cent in terms of the relevant

Notification.

31. The requirements of Phase-I and Phase-II units are entirely different,

for which the Limestone Consumption of FGD System vary in respect

of both, as well as the worst coal firing and SO2 removal efficiency.

32. The Total Auxiliary Power consumption for the FGD System,

accordingly, varies as per the need of the respondent-Authorities for

the particular project.

33. Nothing has been shown by the petitioner to indicate that the said

conditions are patently arbitrary or mala fide and/or tailor-made to

suit the particular purpose of any particular bidder or a small section

of bidders.

34. The question of arbitrariness does not arise, insofar as the authorities

have ample jurisdiction to determine their own criteria for a particular

project for which the tender is floated.

35. It is not for the court or any other authority to decide whether the

criteria are not co-related with the purpose of the tender.

36. Moreover, nothing has been established by the petitioner to rebut the

presumption that the tender issuing authorities had cut their coat

according to their own cloth.

37. Even otherwise, the petitioner waited for the outcome of the technical

bid, after having fully participated in the tender process, and only

after having lost in the technical bid, has preferred the present

challenge.

38. Certain time-lines are important in this context. The tender was

floated on September 30, 2021 and a pre-bid meeting was scheduled

in the month of November, 2021. Thus, there was ample scope for the

petitioner, along with other bidders, to clarify their queries and doubts

and, if dissatisfied, to challenge the clauses of the tender. However,

instead of choosing to do so, the petitioner awaited the result of the

tender process, having participated therein till its technical bid was

rejected as late as in the month of July, 2022.

39. Such conduct of the petitioner itself is mala fide and reeks of

opportunism.

40. Insofar as Regulation 49 of the relevant Notification is concerned, it is

clear from the February, 2021 amendment thereto that the relevant

provisions of Regulation 49 remained unaltered even after such

amendment was effected.

41. Regulation 49, as it stood originally, provided certain norms of

operation for thermal generating stations.

42. By the amendment, sub-sub-clause (iv) of sub-clause (d) of Clause (E)

of Regulation 49 was omitted and a new sub-clause (f) was inserted

after sub-clause (e) of Clause (E) of the said Regulation. The norms of

Auxiliary Energy Consumption for Emission Control System with

regard to reduction of emission of sulphur dioxide for Wet Limestone

based FGD systems was capped at 1.0 per cent, which has not been

shown to be arbitrary or unreasonable in any manner, to require

interference under Article 226 of the Constitution of India.

43. Thus by applying the tests as provided by the Supreme Court in the

cited judgments, there is no reason why the impugned clause ought to

be set aside.

44. Regarding the question as to whether the petitioner's technical bid

comprised of a material deviation, reservation or omission as defined

in Paragraph 24.2 of Clause 24.0 of the NIT, the same is entirely

subjective. Unless that much discretion is left with the authority

issuing the tender, no technical tender could be floated by any

authority. Such technical considerations, which have not been shown

to be mala fide or arbitrary in any manner, are best left to the

judgment of the respondent-Authorities issuing the tender. The

process by which the decision to reject the petitioner's technical bid

was reached has not been shown to be flawed or irregular in any

manner.

45. That apart, it is too late in the day to permit the petitioner to have the

tender process recalled, after having participated in the same and

having been unsuccessful.

46. Hence, there is no scope of interference either with the rejection of the

petitioner's technical bid or the impugned Clause and sub-clauses of

the NIT.

47. Accordingly, WPA No.10028 of 2023 is dismissed on contest, without

any order as to costs.

48. Urgent certified server copies, if applied for, be issued to the parties

upon compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )