Delhi High Court
Montecarlo Limited vs Ntpc Limited on 30 September, 2016
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 19.09.2016
Judgment delivered on: 30.09.2016
+ W.P.(C) 7726/2016 & CM 31901/2016
MONTECARLO LIMITED ..... Petitioner
versus
NTPC LIMITED ..... Respondent
Advocates who appeared in this case:
For the Petitioner : Mr Rajiv Nayar, Senior Advocate with Mr Sandeep Sethi,
Mr Rishi Aggarwala, Mr Shamik Bhatt, Mr Karan Luthra
and Mr Parminder Singh.
For the Respondent : Mr Vikas Singh, Senior Advocate with Ms Iti Agarwal and
Ms Deepika.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE ASHUTOSH KUMAR
JUDGMENT
ASHUTOSH KUMAR, J
1. The petitioner, a company engaged in the business of mining of
coal and lignite has questioned the communication dated 29.08.2016
issued by the Respondent, NTPC Limited, intimating that the techno-
commercial proposal of the petitioner for operation and development of
Dulanga Coal mine in the state of Odisha was not acceptable in terms of
clause 6.3.2 of the Invitation to Bid (hereinafter referred to as „ITB‟);
which in effect disqualifies the petitioner from participating in the price
bids opening and the reverse auction qua the bid for development and
operation of the aforementioned Coal Block, as unreasonable, arbitrary,
contrary to the terms of the tender papers and therefore unsustainable.
2. The respondent, NTPC Ltd, had issued separate invitation for bids
for development and operation of three coal mines viz. Dulanga Coal
Block, Chatti Bariatu and Talaipalli in the state of Odisha. Online bids
were invited on Single Stage Two Envelope Bidding basis (Envelope-1:-
Techno-Commercial Bid and Envelope-II: - Price Bid) with Reverse
Auction.
3. The issue in controversy between the parties is as to whether the
proposal/bid of the petitioner was responsive to the qualifying
requirements (hereinafter called "QR") set out in the tender documents.
The dispute, in the present case, hinges on the interpretation of the
requirement of a bidder of having experience in "Drilling" for removal of
overburden and coal, which the petitioner claims to be possessing but the
respondent, NTPC Limited, insists on the experience of "drilling for the
purposes of blasting" and not drilling in a generic sense as the essential
condition for meeting the QR for acceptance of the first stage of techno
commercial bid.
4. It is submitted that after certain clarificatory communication
between the petitioner and the respondent, the project proposal of the
petitioner for Dulanga Coal Block was submitted on 26.04.2016 and
27.04.2016 on the respondent's website. The techno commercial bid of
the petitioner was rejected by the respondent by the impugned
communication dated 29.08.2016.
5. It would be necessary to cull out the relevant provisions of the
tender documents (ITB) for appreciating the contention of the parties:-
"6.3 TECHNO-COMMERCIAL PROPOSAL PHASE
This phase shall be conducted in the following steps:
6.3.1 PRELIMINARY EXAMINATION OF TECHNO-
COMMERCIAL PROPOSALS
(a) OWNER will examine the Project Proposals to determine whether
they are complete, whether required securities have been furnished,
whether the documents have been properly signed and whether the
bids are generally in order.
(b) Prior to the detailed evaluation, OWNER will initially determine
whether each Techno Commercial Proposal is of acceptable quality, is
generally complete and is substantially responsive to the bidding
documents. For purposes of this determination, a substantially
responsive Proposal is one that conforms to all the terms, conditions
and specifications of the bidding documents without material
deviations, objections, conditionalities or reservations. A material
deviation, objection, conditionality or reservation is one (i) that affects
in any substantial way the scope, quality or performance of the
contract; (ii) that limits ill any substantial way, inconsistent with the
bidding documents, the Owner's rights or the successful Bidder's
obligations under the contract; or (iii) whose rectification would
unfairly affect the competitive position of other Bidders who are
presenting substantially responsive Proposals.
(c) OWNER's determination of a Techno Commercial Proposal's
responsiveness is to be based on the contents of the Techno
Commercial Proposal itself without recourse to extrinsic evidence. If a
Techno Commercial Proposal is not substantially responsive, it will be
rejected by OWNER, and may not subsequently be made responsive
by the Bidder by correction of the nonconformity.
6.3.2 EVALUATION OF RESPONSIVE TECHNO-
COMMERCIAL PROPOSAL
The responsive Techno-Commercial Proposal shall be evaluated as
under:
6.3.2.1 EVALUATION OF QUALIFICATION PROPOSALS
The Qualification Proposals shall be evaluated in detail as specified in
Chapter 9 to determine fulfilment of Qualification Requirements
specified in Chapter 7 of this RFP Document.
6.3.2.2 EVALUATION OF TECHNICAL PROPOSALS
The Technical! Proposals shall be evaluated further in. detail as
specified in Chapter 9 to determine compliance with the Technical
Proposals requirements.
6.3.4 CLARIFICATION MEETING: The Owner, if required shall
hold discussions or clarification meeting with only those bidders who
have been considered qualified and whose Techno Commercial
Proposal have been found to be responsive . However, it will not be
construed from inviting/holding of these post bid discussions that the
bidder has been considered eligible for opening of their Price Proposal
6.3.5 The responsive Techno-Commercial Proposal which meets the
Qualifying Requirements specified in Chapter 7 and Technical
Requirements specified in Chapter 8 of RFP Documents shall be
considered for Price Proposal Phase of the Bidding Process. The
Bidders who meets Qualifying Requirements Specified in Chapter 7
and Technical requirements specified in Chapter 8 of RFP Documents
shall be termed as Shortlisted Bidders.
7.0 In addition to the satisfactory fulfilment of the requirements
stipulated under section ITS, the following shall also apply:
7.1 TECHNICAL CRITERIA
7 .1.1 The Bidder should have, in the preceding 7 (seven) years
reckoned from the date of opening of the Techno-commercial Bids
developed & operated single coal I lignite mine having coal/lignite
reserves of atleast 150 million tonnes & annual capacity of at least 6
MTPA and produced at least 2 million tonnes of coal/lignite from such
mine.
OR
7 .1.2 The Bidder should have, in the preceding 7 (seven) years
reckoned from the date of opening of the Techno-commercial Bids,
operated and produced:
a) At least 23 Million SCM of aggregated volume of overburden and/
or coal/ lignite from a maximum of seven open cast mines of Coal I
Lignite, in any year.
b) At least 11.5 Million SCM of composite volume of overburden and
coal/lignite from single open cast mine in any year, out of which at
least 3 million tonnes shall be coal I lignite.
The qualifying works at clause 7.1.2(a) can be from same mine or
different mines including the mine considered to meet qualifying
requirement at clause 7.1.2(b).
NOTES:
i. The word "operated" means that the Bidder should have performed
the necessary activities of drilling, excavation, hauling etc. on its own
or through sub-contracting.
ii. The word "developed" means that the Bidder should have performed
the necessary activities of Land Acquisition I assisted in Land
Acquisition, Statutory clearances/assisted in Statutory clearances and
carried out 'Infrastructure development' on its own or through sub-
contracting.
9. EVALUATION METHODOLOGY FOR TECHNO
COMMERCIAL PROPOSAL (QUALIFICATION PROPOSAL
AND TECHNICAL PROPOSAL)
9.1 Evaluation of Qualification Proposal: The Techno-Commercial
Proposal shall be scrutinized to establish "responsiveness" as per
Clause 6.3.1.
The Responsive Techno-Commercial Proposal shall be evaluated in
detail to determine their fulfilment of Qualifying requirements
specified in Chapter 7 of this RFP document.
During the bid evaluation, NTPC may, at its discretion, ask the Bidder
for a clarification of its Qualification; Proposal including documentary
evidence pertaining to only the reference mines declared in the
Qualification Proposal for the purpose of meeting Qualifying
Requirement specified in Chapter 7 of this RFP document. The request
for clarification and the response shall be in writing and no change in
the substance of the TECHNO-COMMERCIAL Proposal including
substitution of reference mines in the Qualification Proposal by
new/additional mines for conforming to Qualifying Requirement shall
be sought, offered or permitted.
The Qualification Proposals which meets the qualification criteria shall
be considered for Technical Proposal Evaluation Phase of the Bidding
Process. The Bidders who meet the qualification criteria shall be
termed as Qualified Bidders.
9.2 Evaluation of Technical Proposal: The Technical Proposals shall
be evaluated to determine their compliance with the Technical
Proposal Requirements. For this purpose, NTPC shall use the
supporting documents and/or information available with or obtained by
NTPC.
9.2.1 During evaluation NTPC may seek clarification from the
Bidders, may conduct discussions with the Bidders, and may ask the
bidder to make Technical presentation.
Technical proposal shall include details as has been sought vide
Chapter 8.
9.2.2 The Technical Proposals without sufficient information as per the
terms of Chapter 8 of this document shall be deemed "Non Responsive
Technical Proposal".
9.2.3 The Responsive Technical Proposals meeting the requirements to
the satisfaction of Owner shall be considered for further detailed
Technical Evaluation.
9.3 Detailed Evaluation of Technical Proposals submitted by the
Bidder.
9.3.1 The purpose of technical evaluation is to check responsive and
assess the compliance with the requirements of NTPC.
9.3.2 To ensure effective evaluation of Technical Proposals the
Bidders shall provide the necessary details as specified in Clause 8.4.
The Technical evaluation will be for evaluating whether the Technical
Proposal of the Bidder meets the following criteria.
(a) Time Schedule to Achieve First Year Coal Production Target -
NTPC shall
evaluate the PERT chart submitted by the Bidder, to determine its
completeness; reasonableness; and achievability.
(b) Adequacy of the Equipment Plan- The Bidder shall submit an
equipment plan giving details of the equipment that shall be used by
the Mine Operator to provide Mining Services which shall be not less
than the Minimum Equipment to be deployed as specified by NTPC at
Schedule 6 of Project Agreement. NTPC shall evaluate the adequacy
of equipment to meet the criteria imposed by NTPC in terms of
quantity of production, quality of coal produced etc.
(c) Development and Operational Philosophy - NTPC shall evaluate
the feasibility of the development and operational philosophy being
proposed by the Bidder for the Site.
(d) Staffing - NTPC shall evaluate the staffing plan being proposed by
the Bidder to determine its ability to meet the requirements for NTPC's
project.
(e) Mine Infrastructure Facilities - NTPC shall evaluate the proposed
site facilities being proposed by the Bidder to determine their ability to
support the proposed fleet of mining equipment and accommodate the,
projected staffing levels. This assessment shall include Bidder's plan
for workshop, warehouse and office complex.
(f) Maintenance of Major Mining Equipment- NTPC shall evaluate
the proposed program of the Bidder for maintenance of the mining
equipments to determine its ability to meet the production
requirements for the Dulanga Block.
(g) Control of Coal Quality - NTPC shall evaluate the proposed
program of the Bidder in respect of quality control of delivered coal to
ensure that the quality of dispatched coal meets the specification~ set
by NTPC.
(h) Coal handling, crushing - NTPC shall evaluate the proposed
equipment and program for the crushing and handling of coal to meet
NTPC's production and delivery requirements.
(i) Environmental Compliance - NTPC shall evaluate the proposed
environmental program to determine its compliance with key
requirements of the approved Mining Plan.
(j) Safety - NTPC shall evaluate the proposed Safety Program to
determine its ability to achieve satisfactory levels of safety for the
Project.
(k) Training - NTPC shall evaluate Bidder's training plan and overall
philosophy to determine its ability to meet the requirements of NTPC.
(I) Site Security and Control of Coal Theft- NTPC shall evaluate the
proposed program for security of the Site and the control of coal theft
to determine whether it meets the requirements of NTPC.
(m) Land Acquisition and Construction of R&R Colony - NTPC
shall evaluate
Bidder's proposed program for Land acquisition and Construction of
R&R Colony to determine its ability and commitment to meet the
requirements of NTPC. (emphasis provided)
6. The petitioner, in its project proposal uploaded on 26.04.2016 gave
reference of three mines in support of its claim in terms of clause 7.1.2
(b) of the ITB, towards meeting the QR. The three mines referred to in
the proposal were (i) Mata No Madh, Lignite Mine, Kutch, GMDC (Mine
1); (ii) Juna Kundada OCP of Western Coalfield Limited (Mine 2); (iii)
Khadia OCP, Northern Coalfield Limited (Mine 3). Out of the said mines,
the data with respect to Mine Nos.2 and 3 did not meet the QR as it did
not relate to operation and production of 11.5 million BCM of composite
volume of overburden and coal/lignite from single open cast mine in any
year, out of which at least 3 million tonnes was to be coal/lignite. Thus,
only Mine No.1 (Mata No Madh) was considered as the reference mine
for evaluation of the proposal for Dulanga Coal Block of the petitioner.
7. With respect to Mine No.1, the petitioner, while declaring the
scope of work done in the aforesaid mine had furnished the following
details:-
Sl. Particulars Mine 1 (Lignite Project, Mata
No. No Madh, Kutch)
10. Brief description of scope of Turnkey mining Contract
work involving overburden/ inter
burden removal, excavation
and/or loading of lignite from
mines face and ancillary
activities.
11. Drilling Yes/No
Carried out Drilling on our Our own/subcontracting
own or through
subcontracting
Excavation Yes/No
Carried out Excavation on Our own/subcontracting
our own or through
subcontracting
Hauling Yes/No
Carried out Excavation on Our own/subcontracting
our own or through
subcontracting
8. Thus, the petitioner had initially given the information that it had
not carried out drilling in the aforesaid mine (Mata No Madh). However,
despite this, the respondent vide letter dated 17.05.2016 sought certain
clarification regarding QR and other aspects. The communication dated
17.05.2016 is as hereunder:-
"Ref: 01/ CS-7014-602(R1)-9-PAA Dated: 17.05.2016
To,
M/s. Montecarlo Limited,
706, Ship Building, Near Municipal Market,
C.G. Road, Navrangpura, Ahmedabad-380 009, Gujarat, India
Kind Attn. Sh. Shekhar Shanna, Sr. General Manager
Sub: Development and Operation of Dulanga Coal Block as per IFB No.
40051319; Bid Doc. No.CS-7014-802(R1)-9
Dear Sir,
1.0 This has reference to your Project Proposal (Techno-Commercial
Bid) against IFB No.40051319 for the subject package. You are
requested to furnish the following information with respect to the
details/documents furnished in the bid for qualification requirement
data:
(i) Against QR requirement of Clause 7.1.2 of ITB:
It is observed in the Contract Agreement dtd. 11.02.2014 submitted by
the bidder in support of meeting qualifying requirement for Lignite
project Mata No Madh, Kutch, Gujrat that the necessary activity of
drilling as per stipulations of QR (sr.no. i of Notes) is not mentioned.
The same may please be clarified with supporting documents.
(ii) Against QR requirement of Clause 7.2 of ITB:
Details of Other non cash expenses in Million for calculating Annual
Cash Accrual for three year viz. 2013-14, 2014-15 & 2015-16
2.0 It is requested that the requisite information along with necessary
documents be furnished to us at the earliest, preferably by 24.05.2016.
3.0 It may please be noted that seeking the above clarifications should
not be construed that the bid submitted by you is considered techno
commercially responsive and/or meeting the Qualification requirements
(QR).
Thanking you,
Yours faithfully,
For & on behalf of NTPC Ltd.,
(S.N. Mallick)
AGM (CS - IV)"
9. As against the aforesaid clarification, the petitioner responded by
attaching various certificates including the certificate from Gujarat
Mineral Development Corporation, mentioning the scope of the turnkey
project which included activities of mine planning, quality control,
drilling etc. Copy of the reply dated 21.05.2016 along with the certificate
granted by GMDC is being reproduced below:-
No.: ML(C)/CO/9000/CLT/2016-2017/208 Date: 21.05.2016
To,
AGM (CS - IV)
M/s NTPC Ltd.
Engineering Office Complex,
Plot No.A-8A, Sector - 24,
NOIDA (UP) - 201301.
Sub: Development and Operation of Dulanga Coal Block as per IFB
No.40051319; Bid Doc. No.CS-7015-602(R1)-9.
Ref: Your Letter No.CS-7015-602(R1)-9-PRA dated 17.05.2016.
Dear Sir,
This has reference to your above referred letter dated 17.05.2016
regarding QR Requirement.
A) Para 1.0 (i) of your above letter against QR of Clause 7.1.2 of ITB:
We are attaching the followings:
a) A certificate from GMDC (client of our Lignite Project at Mata
No Math) Vide No.GMDC/MMLG/298/2016-17 dated 18.05.2016
mentioning our scope on this Turnkey Project which includes
activities of Mine Planning, Quality Control, Drilling, Ripping,
Dust suppression, Nala Diversion, preparation of Garland drain,
dewatering of Monsoon and seepage water, preparation and
monitoring of haul road for better hauling as required to complete
the mining process.
b) Certificates from Northern Coalfields Ltd. (NCL) and Western
Coalfields Ltd. (WCL) are also attached herewith mentioning
drilling as part of the Mining Process of these projects as ready
reference:
i) NCL Certificate No.GM/KSL/2016/460 dated 31.03.2016
ii) NCL Certificate No.GM/KSL/25 dated 24.04.2016
iii)NCL Certificate No.GM/KHD/OS/2016/43 dated 23.04.2015
iv) WCL Certificate No.WCL/MA/MGR/JKOC/2015/400 dated
04.12.2015
v) WCL Certificate No.WCL/MA/MGR/JKOC/2015/27 dated
14.04.2016
Further, as you are kindly aware that Indian Lignite deposits occur in
the Tertiary sediments in southern and western parts of peninsular
shield particularly in Tamilnadu, Rajasthan and Gujarat. The
Overburden and interburden comprises of Clay, Claystone, mudstone
and as well as lignite [Geologically younger sediments (Formations)
then occurrences of Coal] which can be excavated by hydraulic Shovel
dumper combination. As such, in lignite deposits of Tamilnadu,
Gujarat and Rajasthan, Blast hole drilling is normally not required.
B) Para 1.0 (ii) of your above letter against QR of Clause 7.2 of
ITB:
We are attaching the following:
a) Financial certificate of last 3 years
We hope that the above submission clarifies your points on QR
requirement;
If your require further clarification/information in this regard, kindly
inform us. We shall be pleased to provide the same at your
convenience.
Thanking you and assuring you of our best services always.
Yours faithfully,
For and on behalf of
M/s. Montecarlo Ltd.
Encl: As above."
"GMDC/MMLG/298/2016-17 Dated: 18.05.2016
TO WHOM IT MAY CONCERN
This is to certify that the Turnkey Mining Contract Involving
Overburden/ Inter burden removal, Excavation and/or Loading of
Lignite from mining face and ancillary activities at Lignite Project, Mata
No Madh Vide Tender Notice No.(RI)/LP/01/13-14 dated 30.08.2013,
has been awarded to M/s. Montecarlo Limited, having registered office
at 7th Floor, Shilp Building, Nr. Municipal Market, C.G. Road,
Navrangpura, Ahmedabad-380009, Gujarat, INDIA.
Name of Work: Turnkey Mining contract Involving Overburden/Inter
burden removal, Excavation and/or Loading of Lignite from mines face
and ancillary activities at Lignite project, Mata No Madh.
Name of Contractor : M/s Montecarlo Limited
LOI No : GMDC/LP/13306/13-14 Dated:
15.01.2014
Estimated Cost/Contract Value : 663.04 Cr.
Awarded Quantity : Over Burden (1109.00) Lac
CUM
Lignite (148.00) Lac MJ
Contract Period : 28.01.2014 to 27.01.2019
The scope of Project is to carry out mining operation on Turnkey basis
comprising of removal of over burden, inter burden and lignite and/or
loading from mines faces using hydraulic showel and dumper
combination and other activities like Mine planning, Quality control,
Drilling, Ripping, Dust suppression, Nala Diversion, preparation of
Garland drain, dewatering of Monsoon and seepage water, preparation
and monitoring of haul road for better hauling etc as required to
complete the mining process.
Quantities Executed (year-wise) by M/s Montecarlo Limited are shown
below:
Sl. Period Over Burden Lignite Total Work
N Removal Dispatched (MT) Done Amount
o (Cum.) (Rs.)
1 28.01.2014 TO 1824,674.03 7,64,791.18 33,59,23,240.00
31.03.2014
2 01.04.2014 TO 1,37,54,520.76 32,10,961.46 135,57,06,364.00
31.03.2015
3 01.04.2015 TO 1,45,66,445.22 13,68,861.67 55,38,07,353.00
31.03.2016
M/s Montecarlo Limited successfully carried out Dewatering of Mine.
Yearwise details are shown for dewatering by deploying high
capacities of Diesel and Electrical operated pump:
Sr. No. Period Dewatering in Lac m3
1 01.04.2015 TO 31.03.2016 65.0
This certificate is issued as per their request vide letter
no.ML(P)/mn/4190/cit/2016-17/020 date 18.05.2016 for applying
tender.
Thanking you,
For GMDC Ltd.
General Manager (P)
Lignite Project, Mata No Madh"
10. The certificate of GMDC, as is noticed, clearly spells out that no
blasting was done in the turnkey project in Mata No Madh mines. The
respondent, thus, found that the proposal of the petitioner did not meet the
QR as it did not have the necessary experience of drilling for blasting
purposes and, therefore, rejected the proposal.
11. Mr Rajiv Nayar, learned senior advocate appearing for the
petitioner submitted that no reason was assigned for rejecting the
proposal and it was only after the filing of the present writ petition that
the response of the respondent was forthcoming.
12. It was further argued that in the tender document, the QR was of
the experience of a bidder in only drilling, excavation and hauling etc and
not blasting or drilling for blasting purposes.
13. The scope of work for Dulanga Mines project, which was taken
into account by the respondent in evaluating the technical proposal of the
petitioner as being non-responsive, in it having necessary experience for
development and operation of Dulanga Coal mine, was not part of the
tender document and hence it was absolutely incorrect for the respondent
to have shut out the petitioner at the threshold stage on the ground of not
meeting the qualifying requirement for eligibility. It was clarified by the
petitioner, it is argued, in the communication dated 21.05.2016 referred to
above, that Indian Lignite deposits occur in tertiary sediments in southern
and western parts of peninsular shield, particularly, in Tamil Nadu,
Rajasthan and Gujarat where the overburden and interburden comprises
Clay, Claystone, mudstone as well as lignite which is a sediment of lesser
antiquity and the same can be excavated by hydraulic Shovel dumper
combination. It was emphasized that in lignite deposits of Tamilnadu,
Gujarat and Rajasthan, blast hole drilling is normally not required. Since
the petitioner was informed for the first time that drilling was part of the
scope of work in Dulanga Coal mine, any information/experience
regarding the same, or the lack of it could not have been treated as a
necessary experience of the petitioner towards meeting the QR.
14. It was submitted that on 21.06.2016, a team of the respondent had
visited the office of GMDC, where and when the team was made to
understand that it was only rarely that overburden was encountered in a
lignite mine and the process of removing the same was to drill bore holes,
which were then filled with water overnight to soften the hard strata and
then ripped by Ripper Dozer. Many a times, the team was made to
understand, overburden and lignite in the reference mine would be so soft
that blasting may not be required. It was in this context that the certificate
issued by GMDC reported that no blasting was done in the Mata No
Madh, (reference mine).
15. On the contrary, Mr Vikas Singh, learned senior advocate
appearing for the respondent countered the claim of the petitioner and
submitted that the writ petition is liable to be dismissed, in the first
instance, as the petitioner has purposely withheld the information that
while giving the details of the reference mine of Mata No Madh, it had
denied the factum of having experience in drilling. It was only a fair stand
of the respondent in seeking clarification from the petitioner about its
drilling and perhaps blasting experience.
16. It was further submitted by the respondent that as a necessary
qualifying requirement, experience in drilling was a must. The drilling in
this context cannot be understood to be for the purposes of drilling bore
holes only for putting water into it overnight for softening harder strata of
overburden or lignite but drilling for the purposes of blasting as blast hole
drills are necessarily to be deployed by the mine operator for blast hole
drilling. Clause 5 of Schedule II of the scope of work for the Dulanga
Coal Block gives the description of mining services to be followed in any
project agreement for the development and operation of Dulanga Coal
Block.
"5. MINE OPERATIONS
5.1. The Mine Operator shall construct and operate the Site in
accordance with the following scope:
(a) Plan the mine (Site), its development and construction.
(b) Strip OB and store such OB on dumps.
(c) Mine and extract coal in accordance with the requirements of
Owner.
(d) Make provisions for HEMM, other mining machinery and its
effective Maintenance.
(e) Implement, and comply with EMP and environmental clearances;
(f) Construction, maintenance and operation of mine dewatering plant,
sump, and garland drains with de-silting provisions
(g) Construct and maintain all access ways and haul roads
(h) Arrangement and use of explosives, as per Indian Explosives Act.
(i) Drilling and blasting
(j) Construction and maintenance of workshops, stores etc as per the
requirement.
(k) Construction, Operation and maintenance of complete power
supply system.
(l) Mine illumination as per prevalent laws
(m) Arrangement of petrol/diesel, oil and lubricants.
(n) (if applicable) control any spontaneous combustion on Site
(o) Conduct advance infill drilling.
(p) OB dump management including rehandling of internal dump as
per Environmental Clearance
(q) Progressive mine closure with effective land reclamation plan in
accordance with approved mine closure plan. The Mine Operator
shall submit to the Owner the annual financial statement of cost
incurred towards Progressive mine closure activities duly certified
by National Environmental Engineering Research Institute
(NEERI) or Central Mine Planning & Design Institute Limited
(CMPDIL) or any other institute as may be notified by the
Government for these purpose to an acceptable level by the Coal
Controller.
(r) POL Store shed
(s) Development of Power Supply Distribution System beyond 33KV
switchgear breaker terminals of Darlipalli STPP for various
equipments/facilities included in Mine Operator's scope."
5.9 Blasting
Blasting shall be required for coal and selectively for overburden with
the objective of achieving good fragmentation so that the excavators
can operate at high levels of efficiency.
5.10 Overburden and Inter burden Removal
The terms overburden and interburden are each included in the term
overburden below unless noted otherwise. The Mine Operator shall
ensure the following in respect of Overburden removal:
(emphasis provided)
Schedule 3 - Proposed size of equipment deployment by the Mine
Operator
The equipment size (column (iii)) is to be filled by the Mine Operator.
Task Major Equipment Equipment
(i) (ii) (iii)
Overburden removal Front shovel and/or
backhoe
Interburden and Front shovel, Surface
coal/waste "band" Miner and/or backhoe
removal
Overburden and Haul trucks
interburden hauling
Coal haulage Haul trucks
Operations support Track dozers
Dust control Water Sprinklers
Road maintenance Motor graders
Blast hole drilling Blasthole drills
5.7.2 Drilling & Blasting
Crawler-mounted pneumatically operated down the hole drilling rigs
with hole diameter of about 250 mm and those rigs are capable to meet
the future requirement of 8 m/hr will be deployed for OB. R.B.H. drills
will be used for drilling about 160 mm diameter holes in coal.
After shot holes are drilled into the horizontal bench cut by the shovel,
the faces are blasted using explosives and detonators. Coal is also
extracted after blasting off the coal faces.
Drilling and Blasting would be required both in OB and Coal benches
before excavation by shovel. Except for coal benched which will be
mined by CSMs. Heavy ANFO type/Slurry Emulsion is proposed to be
used based on the daily requirement. However, flexibility may have to
be provided for usage of suitable alternative/available explosives as per
the requirement."
17. The "mining plan" also emphasizes the deployment of drills of
requisite size and numbers for operations directed towards excavation of
overburden and coal.
18. The technical committee, on the basis of the data furnished by the
petitioner in its proposal regarding the experience in Mata No Madh (as
this mine only met the qualifying requirements under the tender
document) came to the conclusion that the petitioner did not have the
necessary qualification/wherewithal for operating Dulanga Coal Mine.
19. In the counter affidavit, an effort has been made to compare the
drilling experience of the petitioner at Mata No Madh (reference mine)
and the drills which would be required at Dulanga Coal Block.
Sl Parameter As seen/observed at Expected at Dulanga
No. Mata No Madh
1 Size 50 mm (approx) 160mm-250mm
2 Numbers One Ten
3 Depth of holes 0.5-2.0 meters Upto 10 meters
4 Mounting Tyre Mounted, Diesel Crawler mounted,
operated diesel/electrically
operated
5 Drilling Pattern No specific pattern Specific pattern is
seen required to be formulated
based on type of strata
and desired
fragmentation. This
dictates the type and
quantity of explosive to
be used.
20. On a careful analysis of the experience of the petitioner in the
reference mine (Mata No Madh) and what would be expected of the
bidder in operating and developing Dulanga Coal Block, it becomes
evident that the experience of the petitioner is substantially inadequate.
21. It is true that in the Notes to the QR, there is no specific use of the
words "drilling for the purposes of blasting" but the experience of drilling
has to be seen in the correct perspective and context and not in a generic
way. Deep/heavy drilling would be required in development of a coal
project and unless a prospective awardee of the contract has the necessary
wherewithal namely purpose specific vehicles for mounting the drilling
machine and other equipments along with experience in blasting, the
technical requirement would not and cannot in this case be said to have
been fulfilled.
22. In the scheme of the detailed evaluation of the techno commercial
proposal as set forth in clause no.9.3.2(b), a bidder is required to give an
equipment plan giving details of the equipment that shall be used by the
bidder to provide mining services which shall not be less than a minimum
equipment to be deployed as specified by the respondent at Schedule 6 of
the Project Agreement. The aforesaid condition further delineates that
the respondent shall evaluate the adequacy of equipment to meet the
criteria imposed by the employer in terms of the quantity of production,
quality of coal produced, etc.
23. Similarly, in the project agreement and scope of work for the
Dulanga Coal Block, details of the equipments including blast hole drills,
to be deployed by the mine operator, has been specifically given.
24. We had called for the concerned file for satisfying ourselves as to
whether the decision making process when the proposal of the petitioner
was rejected, was fair and impartial qua the petitioner. We could find no
anomaly or unfairness in the evaluation and on the score of eligibility of
experience in drilling and blasting, another bidder also was rejected. We
have also noticed that a legal opinion was sought before rejecting the
proposal of the petitioner and another on this aspect (drilling and
blasting) of eligibility and that even after the rejection of the petitioner
and another, there are still many bidders in the fray.
25. It is beyond doubt that Courts would not, by way of judicial
review, sit in appeal over the administrative decision and hold that such
decision should have been otherwise in the given facts and circumstances
for it would have the effect of usurping the discretion of a public
authority which is vested with the powers to take a decision; more so
when this Court does not find anything to tag such decision as capricious,
uninformed or impractical. A coal block/mine, if not developed and
operated properly, would result in loss of public revenue and would not
be in the interest of anyone. The decision of rejecting the proposal of the
petitioner, therefore, passes the litmus test of legal reasonableness and
cannot be subjected to any interference on the slender ground of non use
of the word blasting along with drilling in the QR of the tender document.
The project agreement regarding Dulanga Coal Block was known to the
petitioner and the argument about the petitioner being taken unawares
regarding QR of drilling for blasting", is not tenable.
26. The Supreme Court in Tata Cellular vs. Union of India: (1994) 6
SCC 651 has listed the principles to be followed while deciding the issue
of acceptance of a tender. What has been emphasized upon by the
Supreme Court in the aforesaid judgment is that judicial restraint should
be exercised while dealing with administrative decisions because a Court
does not sit in appeal over such decisions but merely reviews the manner
in which the decision has been taken. We have noticed that even though,
in the first instance, the petitioner while explaining the scope of work in
the reference mine (Mata No Madh) did not speak about its
expertise/experience in drilling, clarification was sought from the
respondent regarding such drilling experience. Had the respondent not
been fair, the petitioner would have lost at that stage itself. The
clarification sent by the petitioner was further reviewed by the technical
committee and even the expert legal opinion was obtained. This clearly
establishes that the decision arrived at by the respondent was well-
informed and was in consonance with the purpose of evaluation of the
proposal given by the petitioner.
27. We deem it appropriate to add that the decision to accept a tender
and award the contract is actually gone through a process of consideration
at various levels/tiers and it would only be reasonable and fair that such
decision be of the experts in the field. In the present case, the feasibility
and viability of full operation and development of a coal block has been
gone into by the technical evaluation committee of the respondent, for
rejecting the proposal/bid of the petitioner.
28. In Poddar Steel Corporation vs. Ganesh Engineering Works:
(1991) 3 SCC 273, the Supreme Court has clarified that as a matter of
general proposition, it cannot be held that an authority inviting tenders is
bound to give effect to every term mentioned in the notice in meticulous
detail or in a literal sense. In the facts of the present case, even though the
word blasting has not been specifically used while defining the term
"operated" in the Notes to the QR, nonetheless it would fall within the
category of an essential condition of eligibility and not merely as
ancillary or subsidiary to the main object which is sought to be achieved,
by the condition of having experience in drilling for blasting in the tender
paper; the object being full operation and development of the coal block.
In appropriate cases, for defining the object of the tender, an authority can
interpret a condition and it would be unnecessary to insist upon the
strict/literal compliance/adherence to the conditions stipulated in the
tender papers as long as the evaluation is fair and not arbitrary or
capricious.
29. It would be apposite to refer to two paragraphs from the judgment
rendered by the Supreme Court in Michigan Rubber (India) Ltd vs. State
of Karnataka and Ors: (2012) 8 SCC 216 wherein, after analyzing
several judgments of the Supreme Court on the issue of acceptance of
tender and grant of contract, has been summarized.
"23. From the above decisions, the following principles emerge:
(a) the basic requirement of Article 14 is fairness in action by the State,
and non-arbitrariness in essence and substance is the heartbeat of fair
play. These actions are amenable to the judicial review only to the
extent that the State must act validly for a discernible reason and not
whimsically for any ulterior purpose. If the State acts within the bounds
of reasonableness, it would be legitimate to take into consideration the
national priorities;
(b) fixation of a value of the tender is entirely within the purview of the
executive and courts hardly have any role to play in this process except
for striking down such action of the executive as is proved to be
arbitrary or unreasonable. If the Government acts in conformity with
certain healthy standards and norms such as awarding of contracts by
inviting tenders, in those circumstances, the interference by Courts is
very limited;
(c) In the matter of formulating conditions of a tender document and
awarding a contract, greater latitude is required to be conceded to the
State authorities unless the action of tendering authority is found to be
malicious and a misuse of its statutory powers, interference by Courts is
not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid
down to ensure that the contractor has the capacity and the resources to
successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in
public interest in awarding contract, here again, interference by Court is
very restrictive since no person can claim fundamental right to carry on
business with the Government.
24. Therefore, a Court before interfering in tender or contractual
matters, in exercise of power of judicial review, should pose to itself the
following questions:
(i) Whether the process adopted or decision made by the authority is
mala fide or intended to favour someone; or whether the process
adopted or decision made is so arbitrary and irrational that the court can
say: "the decision is such that no responsible authority acting
reasonably and in accordance with relevant law could have reached";
and
(ii) Whether the public interest is affected. If the answers to the above
questions are in negative, then there should be no interference under
Article 226."
(emphasis provided)
30. Tested on the aforesaid propositions, we are firmly of the view that
the decision arrived at by the respondent is neither malafide nor intended
to favour anybody and the decision making process is not at all arbitrary
or irrational. That apart, the aforesaid decision of the respondent in
rejecting the proposal of the petitioner as being technically unresponsive
does not adversely affect public interest; rather it is in accord with the
public interest that a coal mine is fully operated and developed by the
most suitable awardee of a contract, to be chosen from a number of
proposers, who are still in the contest, thereby obviating the chances of
lack of competition.
31. We are, therefore, satisfied that no unfair treatment was given to
the petitioner and that the decision was also in conformity with the larger
public interest of selecting the most suitable proposer/mine operator on
the basis of competitive bidding as six others are still left from amongst
whom the respondent may chose the most suitable mine operator.
32. For the reasons aforestated, we do not find it appropriate to
interfere with the decision of the respondent in rejecting the proposal of
the petitioner.
33. The writ petition is, thus, dismissed but, without costs.
ASHUTOSH KUMAR, J
BADAR DURREZ AHMED, J
SEPTEMBER 30, 2016
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