O And M Solutions Private Ltd vs Kpc Gas Power Corporation Limited
2022 Latest Caselaw 11264 Kant

                            1

       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

          DATED THIS THE 3RD DAY OF AUGUST, 2022

                          BEFORE

          THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT

       WRIT PETITION NO.19159 OF 2021 (GM-TEN)

BETWEEN:

O AND M SOLUTIONS PRIVATE LTD,
PLOT NO.24/1A, CHANDAKA INDUSTRIAL AREA,
KIIT CAMPUS, PATIA,
BHUBANESWAR-751 021,
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR.ARUN KUMAR CHAURASIA.
                                             ...PETITIONER
(BY SRI.R.V.S.NAIK, SENIOR COUNSEL A/W
    SRI.NITIN PRASAD, ADVOCATE)

AND:

1. KPC GAS POWER CORPORATION LIMITED,
   SHAKTI BHAVAN, RACE COURSE ROAD,
   BANGALORE-560 001,
   REPRESENTED BY ITS MANAGING DIRECTOR.

2. POWER MECH PROJECTS LIMITED,
   FLAT NO.201, YESHWANTH RESIDENCY,
   WIDIA COLONY MIYAPUR,
   HYDERABAD-500 049,
   REPRESENTED BY ITS AUTHORISED SIGNATORY
   MR B LAVAN KUMAR.

3. ADDITIONAL CHIEF SECRETARY,
   ENERGY DEPARTMENT (APPELLATE AUTHORITY),
   SHAKTI BHAVAN, RACE COURSE ROAD,
   BANGALORE-560 001.
                                          ...RESPONDENTS
(BY SRI.AJAY J NANDALIKE, ADVOCATE FOR R1;
    SRI.ASHOK HARANAHALLI, SENIOR COUNSEL A/W
                               2

   SRI. BHARATH KUMAR V, ADVOCATE FOR R2;
   SRI. VINOD KUMAR M, AGA FOR R3)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED ORDER DTD 30.09.2021 PASSED BY R-3 IN APPEAL
NO.EN 11 NCE 2021 VIDE ANNX-A AS BEING ERRONEOUS AND
NOT SUSTAINABLE IN LAW AND ETC.,

    THIS PETITION COMING ON FOR ORDERS, THIS DAY, THE
COURT MADE THE FOLLOWING:-


                           ORDER

Petitioner, a company incorporated under the

Companies Act is knocking at the doors of Writ Court for

assailing the order dated 30.09.2021 passed by the 3rd

respondent-Appellate authority at Annexure-A in 2nd

respondent's Appeal No.EN 11 NCE 2021 whereby the

tender process in question having been set aside, a

direction has been issued to go for a fresh one on a short

term basis.

2. The 1st respondent-tendering body is represented

by its Panel Counsel; the 3rd respondent-Appellate authority

is represented by the learned AGA, and the 2nd respondent

who was the appellant is represented by his private

advocate. The Statement of Objections has been filed

opposing the writ petition. All the advocates appearing for

the respondents resist the writ petition making submission

in justification of the impugned order and the grounds on

which it has been constructed.

3. FOUNDATIONAL FACTS OF THE CASE:

(a) The 1st respondent issued a Tender Notification

on 02.01.2021 for "Operation & Maintenance Contract for

1X370 MW Gas Combined Cycle Power Plant at Yelahanka,

Bengaluru." The last date for submission of bid was

15.02.2021, within which petitioner admittedly was in the

tender fray, along with 2nd respondent herein.

(b) The 1st respondent having procured certain

information & records from the earlier contractor of the

petitioner in Andhra Pradesh, had raised some issue as to

certain lapses attributable to the petitioner; however, the

explanation offered by the petitioner presumably found

being plausible, the tender process was moved further and

the Financial Bid was opened; eventually petitioner

happened to be L1.

(c) The act of 1st respondent in allowing the

petitioner to continue in the Tender Fray was put in

challenge in appeal by the 2nd respondent essentially on the

ground that the earlier contractor of the petitioner was

unhappy, there being several lapses attributable to him and

as a consequence petitioner's contract was discontinued.

This information was withheld by the petitioner which the

2nd respondent caused procurement of; that being the

position, the 1st respondent ought to have disqualified the

petitioner.

(d) Petitioner and the 1st respondent opposed the

appeal by filing the objections. The 3rd respondent-

Appellate authority vide order dated 30.09.2021 said as

under:

"The 2nd Respondent is directed to cancel the present tender and immediately call for fresh tenders on short term basis. The findings made in relation to the termination of the 3rd Respondent by APGPCL will not influence the 2nd Respondent and the 2nd Respondent will take into consideration all documents furnished by the 3rd Respondent and examine the legal consequences of termination if any and to obtain clarifications from APGPCL if it is possible. The

fresh tender shall be called within a week from the date of receipt of the order."

4. Having heard the learned counsel appearing for

the parties and having perused the petition papers, this

Court is inclined to grant indulgence in the matter as under

and for the following reasons:

(a) Clause 10 of Tender Notification which happens

to be the jugular vein of the impugned order reads as

under:

"10.0(i) The tender will be rejected, if the tenderer has not uploaded in the e-portal an undertaking in the form of a notarized affidavit (as per format AnnexureL2) declaring that during the past five financial years i.e., 2015-16, 2016-17, 2017-18, 2018-19 & 2019-20 and the period up to the date of submission of bid, • Their EMD has not been forfeited. • None of their contracts have been terminated/foreclosed on account of their default in KPCL/KPCGPCL or elsewhere • They have not been anytime blacklisted/subject to procedure initiate for blacklisting for participating in the tenders issued by KPCL/KPCGPCL or Government or Central, State PSUs or any other utility of India."

(b) The copies of documents i.e., the letters dated

01.02.2021, 04.03.2021, 16.03.2021, etc. procured from

the hands of earlier contractor namely Andhra Pradesh Gas

Power Corporation Limited (hereafter APGPCL) mentioned

about 'unhappy performance' of the petitioner and

termination of his contract as well. The letter dated

16.03.2021 addressed by the APGPCL team to the 2nd

respondent at paragraph 2 reads: "APGPCL is not happy

since they have not meeting (sic) the terms and conditions

of O&M contract. Hence terminated by 31st March 2021".

However the version as to termination of contract is

demonstrably not true inasmuch it was a simple case of

determination of contract by efflux of time coupled with

discharge of obligation undertaken. A contract not being

renewed is one thing and a contract being terminated is

another; they are poles asunder; ordinarily, former is not

stigmatic whereas the later is. They have different legal

consequences, hardly needs to be stated. This legal

difference obtaining between these two, is missed by

authors of the letters in question. The terminology

employed in these letters apparently is of a layman and not

a lawman. This aspect of the matter having been examined

by the 1st respondent with the participation of the petitioner

herein, the tender was processed further. It remains a

mystery wrapped in enigma, as to how the Appellate

authority could fish out the elements of culpability

attributable to the petitioner for voiding of the tender itself.

(c) Mr. Naik, learned Sr. Advocate appearing for the

petitioner is more than justified in notifying to the court

that after the information & copies of records were obtained

from APGPCL, the 1st respondent had graciously confronted

the same to the petitioner and accepted the plausible

explanation offered by his client, though in so many words

no specific order to that effect was passed. Had an order

been passed, it would have been ideal, is true. However,

the fact that no specific order was passed, pales into

insignificance, regard being had to the conduct of the 1st

respondent in processing the tender further by opening the

Financial Bid; that itself vouches contention of the

petitioner, who emerged as L1 bidder. Had the 1st

respondent not being convinced of the explanation offered

by the petitioner, the tender would have been concluded in

favour of the 2nd respondent herein, there being none

other.

(d) What is significant to note is that: as a matter of

policy for awarding tender, the satisfaction of tender calling

body does factor and not of the tenderers nor of the

Appellate authority. The Apex Court in M/S. N.G. PROJECTS

LIMITED vs. M/S. VINOD KUMAR JAIN CIVIL APPEAL NO.

1846 OF 2022 disposed off on 22.03.2022 at paragraph 22

observed:

"The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance...".

Added, the Apex Court in UFLEX LTD. Vs. THE

GOVERNMENT OF TAMIL NADU (2022) 1 SCC 165 at

paragraph 40 observed:

"...economics must be permitted to play its role for which the tendering authority knows best as to what is suited in terms of technology and price for them..."

This approach expected of the Appellate Authority has not

animated the impugned order and thus there is a gross

error apparent on the face of the record, warranting

indulgence of this Court.

(e) The assumptive finding of the tender calling

authority as to satisfactory compliance with the tender

conditions by the petitioner herein could not have been

casually interfered with by the Appellate authority without

justifiably faltering the opinion of the 1st Respondent in this

regard. The Appellate authority appears to have been

swayed away by the APGPCL letters which said about the so

called 'termination of contract' when it was not and its

being 'unhappy' with the performance of the petitioner.

'Unhappy' is a word of variable import; its meaning has to

be understood in the light of contents of the letter in which

it occurs and the status of their author. What one has to

bear in mind is that we are construing the letter

correspondence between two private parties and not

interpreting the provisions of the Statute employing such

words. The letter in question mention about some arguable

lapse on the part of the petitioner who had offered his

explanation inter alia mentioning COVID - 19 Pandemic

difficulties. As already mentioned above, the same was

found favoured with the 1st Respondent who is the true

decision maker in matters of this kind. Even otherwise,

despite vociferous arguments, no justification is shown for

upsetting this view.

(f) The vehement contention of Mr. Haranahalli

learned Senior Advocate appearing for the 2nd Respondent

that this is only a Writ Court which exercises a limited

supervisory jurisdiction constitutionally vested under Article

227 and therefore, should not grant indulgence in the

matter when the 3rd Respondent - Statutory Appellate

Authority has made the impugned order, is bit difficult to

countenance. Limited jurisdiction this Court exercises, is

true. Once error apparent on the face of the record are

demonstrated, this Court cannot shirk its responsibility of

setting the same at naught and undoing the injustice

caused to the petitioner. The Appellate Authority failed to

see that in matters of the kind, almost invariably some

pitfalls do occur. What is to be seen is whether they are

substantial as to void the decision of the tendering

authority, which has wherewithal. A perusal of the records

does not justify interference of the Appellate Authority in

any way.

In the above circumstances, this Writ Petition

succeeds; a Writ of Certiorari issues quashing the impugned

order. The 1st Respondent is directed to process the tender

in question further in accordance with law.

Costs are reluctantly made easy.

On the request of counsel for 2nd Respondent, this judgment is kept in abeyance for a period of two weeks from the date it is web hosted.

Sd/-

JUDGE

Snb/