Telangana High Court
M/S. Idl Explosives Limited vs Singareni Collieries Company Limited on 28 October, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P.No.27029 OF 2024 AND W.P.No.28706 OF 2024
W.P.No.27029 OF 2024:
Between:
M/s. IDL Explosives Limited
... Petitioner
And
Singareni Collieries Company Limited
... Respondent
W.P.No.28706 OF 2024:
Between:
M/s. IDL Explosives Limited
... Petitioner
And
Singareni Collieries Company Limited & 2 others
... Respondents
JUDGMENT PRONOUNCED ON: 28.10.2024
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
1. Whether Reporters of Local newspapers : Yes
may be allowed to see the Judgment?
2. Whether the copies of judgment may be : Yes
marked to Law Reporters/Journals?
3. Whether Their Lordships wish to : Yes
see the fair copy of the Judgment?
___________________________
MRS JUSTICE SUREPALLI NANDA
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THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P.No.27029 OF 2024 AND W.P.No.28706 OF 2024
% 28.10.2024
W.P.No.27029 OF 2024:
Between:
# M/s. IDL Explosives Limited
... Petitioner
And
$ Singareni Collieries Company Limited
... Respondent
W.P.No.28706 OF 2024:
Between:
# M/s. IDL Explosives Limited
And
$ Singareni Collieries Company Limited & 2 others
... Respondents
< Gist:
> Head Note:
! Counsel for the Petitioner : Sri S.Ravi, Senior Designate
Counsel appearing on behalf of
R.S. Associates in both the
above writs
^ Counsel for Respondents : Learned Addl. Advocate
General Sri T.Rajinikant Reddy, representing the learned Standing
Counsel on record Sri P.Harsha Reddy, on behalf of sole
respondent in W.P.No.27029 of 2024 and on behalf of 1st
respondent in W.P.No.28706 of 2024 and the learned Senior
Designate Counsel Sri J. Prabhakar, representing Smt.D.Venkata
Padmaja, learned counsel appearing on behalf of the 3rd
respondent on record in W.P.No.28706 of 2024.
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? Cases Referred:
i) (2022) 6 SCC 401
ii) 2023 LiveLaw (SC) 467.
iii) 2022 Vol.6 SCC page 127.
iv) 2016 vol.15 SCC page 272.
v) 2021 Vol.16 SCC page 808.
vi) 2020 Vol.16 SCC page 489.
vii) The judgment of this Court, dated 01.08.2024 passed in W.P.No.
18339 of 2024.
viii) 2022 vol.5 SCC page 362.
ix) (2024) 3 S.C.R. 363.
x) (2000) 2 SCC 617.
xi) (2007) 14 SCC 517
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THE HON'BLE MRS. JUSTICE SUREPALLI NANDA
W.P.No.27029 OF 2024
AND
W.P.No.28706 OF 2024
COMMON ORDER:
Heard learned Senior Designate Counsel Sri S. Ravi,
appearing on behalf of the petitioner in both the writ
petitions i.e., M/s. IDL Explosives Limited, IDL Access Road,
Kukatpally, Hyderabad, Telangana and the learned Additional
Advocate General Sri T.Rajinikant Reddy, representing the
learned Standing Counsel on record Sri P.Harsha Reddy, on
behalf of sole respondent in W.P.No.27029 of 2024 and on
behalf of 1st respondent in W.P.No.28706 of 2024 i.e.,
Singareni Collieries Company Limited represented by its
General Manager, Corporate Material Procurement
Department, Bhadradri-Kothagudem District and the learned
Senior Designate Counsel Sri J. Prabhakar, representing Smt.
D.Venkata Padmaja, learned counsel appearing on behalf of
the 3rd respondent on record in W.P.No.28706 of 2024.
2. The case of the petitioner in W.P.No.27029 of 2024 and
W.P.No.28706 of 2024, as per the averments made by the
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petitioner in the affidavits filed by the petitioner in support of
the present writ petitions in brief, is as under:
a) The petitioner is a Company established under the
provisions of the Companies Act, 1956 and is engaged in the
business of manufacturing and supplying Slurry and
Emulsion Explosives, Cartridges and Bulk Explosives for
Mining and Infrastructure Projects. Petitioner is Class-I
Local Supplier and accordingly, the tender was offered to the
petitioner for supply of bulk explosives to subsidiaries of CIL
for the period 2021-2023. The CIL engaged charted
accountants as external experts for independently verifying
the 'local content' certificates. As a result, CIL imposed a
ban on the petitioner herein for award of any contract/order
by CIL or its subsidiaries for a period of two years from the
date of issue of the order. As against the banning of
business letter issued by CIL dated 02.07.2024, the
petitioner submitted a letter dated 18.07.2024 before CIL for
review of its decision.
b) It is further the case of the petitioner that the 1st
respondent in W.P.No.28706 of 2024 is a Government Coal
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Mining Company jointly owned by the Government of
Telangana and Government of India on a 51:49 equity
business and the first respondent floated an open Enquiry
No.E1324O0167 dated 20.08.2024 for supply of permitted
explosives and accessories for blasting of underground coal
and the petitioner had participated and submitted its bid in
Enquiry No.E1324O0167 dated 20.08.2024 to the 1st
respondent Company i.e., SCCL and the same is pending
technical evaluation before the said authority. The 1st
respondent Company issued a fresh "Notice inviting tenders"
(NIT) for Procurement of SME Explosives, LDC Explosives and
Accessories for use in OB Blasting at all open cast projects of
SCCL for a period of two years vide Enquiry No.E1324O0215
dated 24.09.2024 and the 1st Respondent Company had
published the tender through TSE-Procurement Portal i.e.,
https://tender.telangana.gov.in. The time for submission of
the bids under the Enquiry No.E1324O0215 had commenced
on 24.09.2024 and closed on 01.10.2024.
c) It is further the case of the petitioner that in view of the
terms of the tender notice, the petitioner is entitled to
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participate in the tender by giving a declaration as to status
of being a banned or delisted bidder. Mere banning of the
petitioner by CIL does not however prevent the petitioner
from participating in any other tenders called for by other
Government, Quasi Government Agencies or PSUs except
where the tender document contains a requirement with
respect to import/supply to local content. In apprehension
that the petitioner will be disqualified by the respondent
company in the pre-qualification bid stage in view of letter of
ban dated 02.07.2024 issued by CIL without a fair
opportunity, petitioner approached the Court by filing
W.P.No.27029 of 2024, with prayer as under:
"...declaring that banning of the petitioner by Coal India Ltd.,
for violating the condition with respect to the import condition
of inputs will have no application whatsoever to the tender
now floated by Respondent No.1 in as much as the said
requirement is not a condition in the notice inviting tenders
vide Enquiry No.E1324O0215 dated 24.09.2024 and pass..."
d) This Court vide its orders dated 30.09.2024 passed
interim orders in favour of the petitioner in I.A.No.1 of 2024
in W.P.No.27029 of 2024 observing as under:
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Heard learned Senior designated counsel Sri S.Ravi,
appearing on behalf of the petitioner and the learned
Additional Advocate General Sri T.Rajnikanth Reddy,
representing Sri P.Sri Harsha Reddy, learned Standing
Counsel for Singareni Collieries Company Limited
appearing on behalf of the respondents.
The prayer sought for by the petitioner in I.A No.1 of 2024 is
extracted hereinunder:
"Pending disposal of writ petition, it is humbly prayed
that this Hon'ble Court may be pleased to direct the
respondent to consider the bid which is to be submitted
by the petitioner herein in Enquiry No. E1324O0215
dated 24.09.2024 floated by the respondent de hors the
letter CIL/C2D/Bulk Explosives/2024-25/Banning of
Business/274 dated 02.07.2024 issued by Coal India
Limited and pass such further or other order(s) as this
Hon'ble Court deems fit and proper tin the circumstances
of the case."
Learned Additional Advocate General appearing on behalf of
the respondents draws attention of this Court to Clause 17.0 of
the tender commercial terms and conditions and the same is
extracted hereinunder:
"17.0 Banned and delisted Suppliers:
a) The bidders would give a declaration that they
have not been banned or de-listed by any Government or
quasi-Government agencies or PSUs. If the bidder has
been banned by any Government or quasi-Government
agencies or PSU, this fact must be clearly stated and it
may not necessarily be a cause for disqualifying him. If
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declaration is not given, the bid will be rejected as non-
responsive."
Learned Additional Advocate General submits that the writ
itself is premature since no decision is taken by the Respondent
Authority as on date as per Clause 17.0 (a) of the commercial
terms and conditions of the subject tender (referred to and
extracted above) and petitioner approached the Court under
mere apprehension.
Bringing the said submission of the learned Additional
Advocate General on record, and duly considering Clause
17.0(a) of Commercial Terms and Conditions of the subject
Tender referred to and extracted above, the respondents are
directed to consider the bid which is to be submitted by the
petitioner herein in enquiry No.E1324O0215 dated 24.09.2024
floated by the respondent in accordance to Law, in terms of
Clause 17.0 of Commercial Terms and Conditions of the subject
Tender referred to and extracted above and take a decision in
the matter.
e) It is further the case of the petitioner that contrary to
the interim orders of this Court dated 30.09.2024 passed in
W.P.No.27029 of 2024, the 1st respondent company rejected
the technical bid of the petitioner in clear violation of Clause
17.O of the Commercial Terms and Conditions of Enquiry
No.E1324O0215 dated 24.09.2024 and aggrieved by the
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same, petitioner filed W.P.No.28706 of 2024, with prayers as
under:
"A. Setting aside the Notice Inviting Tender dated 24.09.2024
bearing Enquiry No.E1324O0215 has been arbitrary, irregular,
illegal, perverse and anti-competitive; or;
B. Declaring the action of the Respondents in rejecting the
technical bid of the petitioners as illegal, arbitrary, violative of
Clause 17 of the Commercial Terms and Conditions of Enquiry
no.E1324O0215 dated 24.09.2024 and consequently set aside
the same;
C. Pass a Writ/Direction/Order in the nature of Mandamus
directing the Respondent No.1 to consider the bid submitted
by Petitioner and provide opportunity to the Petitioner to
match with the L1 price and allot quantities on an equitable
basis.
D. Declare Clause 3.1 and Clause 17 of the Revised Tender
violative of Article 19(1)(g) of the Constitution of India, 1950;
and;
E. Direct the Respondent No.1 to reinstate a fair tender
process that allows equal participation for all bidders, including
new entrants, without arbitrary restrictions,
F. Direct an independent investigation into the biased, cartel-
like behaviour and favouritism demonstrated in the tender
process, particularly the auctioning of quantities beyond
licensed capacities and award costs;
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G. Award costs and grant such further reliefs as this Hon'ble
Court may deem fit in the interest of justice and equity."
3. PERUSED THE RECORD.
4. Petitioner's bid details indicating the petitioner as
disqualified, on 07.10.2024 is extracted hereunder:
Schedule Name Overall Responsiveness Department Remarks
KOC II DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
JK OCP DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
PK OC IV DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
MNG OCP DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
RGOC I DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
RGOC II DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
RGOCP III DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
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firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
GDKS OC DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
KTK OCP II DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
KTK OCP III DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
KK OCP DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
SRP OCP DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
IK OCP DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
Khariaguda OC DisQualified As per NIT commercial terms and
conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
Goleti OCP DisQualified As per NIT commercial terms and
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conditions of annexure-3 clause No17, the
firm has declared and uploaded banning
certificate issued by CIL. Hence, the offer
submitted by IDL Exp Ltd is not considered.
5. The order dated 17.10.2024 passed in W.P.No.28706 of
2024 and W.P. No.27029 of 2024 is extracted hereunder:
"Heard Sri S.Ravi, learned Senior designate counsel
appearing on behalf of the petitioner.
Sri T.Rajinikanth Reddy, learned Additional
Advocate General, appearing on behalf of the
respondents submits that the finalization of the subject
tender would not be undertaken by the Respondents till
the next date of hearing.
The said submission of the learned Additional Advocate
General is brought on record.
Notice Before Admission.
List on 21.10.2024 along with W.P.No.27029 of 2024.
6. The interim order granted by this Court on 17.10.2024
stood extended till the pronouncement of the Judgment vide
order of this Court dated 22.10.2024.
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7. The relevant paragraph Nos. 14 and 23 pertaining to the
counter affidavit filed on behalf of respondent No.1 in
W.P.No.28706 of 2024 are extracted hereunder:
14. In reply to Para No.16 (c) it is submitted that, the
allegations made by the petitioner are false and denied by the
respondent No.1, the petitioner may be put to strict proof of
the same. That the petitioner was well aware of the terms
and conditions of the tender before participating the same. It
is pertinent to mention that Clause 3.0 does not preclude, the
writ petitioner from participating in the tender. That vide
order dated 30.09.2024 in W.P.No.27029 of 2024 this Hon'ble
Court directed the respondents to consider the bid of the
petitioner in terms of Clause 17.0 of Commercial Terms and
Conditions of the subject tender. That the petitioner has
already uploaded the banned certificate from CIL in
compliance of terms and conditions. Hence, further technical
evaluation of the firm is not done as no shortfall documents
are sought considering the firms present banned status and
the offer submitted by the petitioner was not considered and
was disqualified.
23. It is submitted that, the existing orders for
explosives are valid up to 04.11.2024. That if orders
are not placed, the Coal Production of SCCL will come a
stand still and this will have adverse impact on
generation of power in the State of Telangana, Andhra
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Pradesh, Karnataka and Tamil Nadu. That the Hon'ble
Supreme Court in (2022) 6 SCC 401, "National High
Speed Rail Corporation Limited Vs. Montecarlo Limited
and another" has observed that the grant of interim
order will impede the execution of the projects of public
importance and disables the State and/or its
agencies/instrumentalities from discharging the
constitutional and legal obligation towards the citizens.
That the above principle set forth by the Hon'ble Supreme
Court squarely applies in the present case, as grant of any
interim order will impede the production of Coal by the
Respondent and the same will have adverse impact on
generation of power in States as mentioned above. That in
view of the same, the interim application I.A.No.1 of 2024 in
W.P.No.28706 of 2024 is liable to be dismissed."
DISCUSSION AND CONCLUSION:
DISCUSSION:
8. The learned Senior Designate Counsel Sri S.Ravi,
appearing on behalf of the petitioner in both the writ
petitions mainly put forth the following submissions:
(i) The petitioner is not given a fair consideration and
the 1st respondent company - SCCL acted in clear
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violation of the interim order dated 30.09.2024
passed in W.P.No.27029 of 2024.
(ii) The Disqualification order disqualifying the
petitioner is bereft of reasons and the respondent
No.1 being an instrumentality of state ought to
have specified reasons while passing the
disqualification order disqualifying the petitioner
in accordance with law.
(iii) The action of the 1st respondent is in violation of
Articles 14 and 19(1)(g) of Constitution.
(iv) The 1st respondent i.e., the Tender inviting
authority acted arbitrarily, whimsically and
malafide.
(v) The respondent No.1 failed to appreciate that in
terms of tender, the petitioner was legally entitled
to participate by declaring its ban/delisting status
and the same did not operate as an automatic
disqualification.
(vi) Clause 17(b) of Enquiry No.E1324O0215 VIZ the
tender is vague, arbitrary, unconstitutional,
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violative of Articles 14 and 19 of Constitution of
India and is not based on any reasonable
classification.
(vii) The 1st respondent Company failed to pass a
reasoned order which ought to have spelled out
the factors which weighed in not considering the
bid of the petitioner in teeth of the order dated
30.09.2024 passed by the High Court and the
same is in clear violation of principles of natural
justice.
(viii) Respondent No.1 acted arbitrarily when it has
disqualified the petitioner only on the basis of
CIL's letter dated 02.07.2024 despite the tender
permitting participation inspite of such
disqualification.
(ix) The respondent No.1 failed to appreciate that the
CIL Ban is pending review and failed to appreciate
that banning a party from participating in tender
of one PSU does not form a ground for an
automatic disqualification of other tenders of
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other PSUs, in an arbitrary, malafide and
whimsical manner without providing any cogent
reasons.
(x) The respondent No.1 failed to consider that a Ban
on participating in tenders pertaining to "Local
Content" cannot operate against unrelated tenders
that do not pertain to "Local Content", since the
same was absent in the tender of respondent No.1
under challenge.
(xi) The respondent No.1 failed to consider that even
CIL's order to Ban the petitioner did not operate
against all tenders and in fact, the ongoing tenders
between the petitioner and CIL for supply of Bulk
Explosive to ECL, CCL, MCI and NCL and running
contracts for supply of Cartridge, Explosives and
Accessories for all Subsidiaries were kept alive.
(xii) The 1st respondent deprived the petitioner from
fairly participating the Revised Tender Process and
the Reverse E-Auction without application of mind
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and the same evinces manifest arbitrariness,
absence of fair play, equity and justice.
(xiii) Respondent No.1 failed to conduct the pre-bid
meeting and failed to seek clarifications from the
bidders.
(xiv) The respondent No.1 introduced arbitrary,
vexatious conditions under the Revised Tender
which did not find mention in the initial tender due
to bias.
(xv) Clause 3.1 of the Revised Tender laid down that if
the quantities offered by the Tenderer turn out to
be more than the quantity specified in Clause 3.1
of the Revised Tender, the respondent No.1 will
disqualify such a tenderer at its discretion.
Therefore, altered tender condition is prima facie
violative of Articles 14 and 19(1)(g) of
Constitution of India.
9. The learned Senior Designate Counsel mainly relied upon
the following Judgments of the Apex Court in support of his
submissions:
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(1) Reliance Energy Limited Vs. Maharashtra State Road
Development Corporation Limited, reported in 2007
Vol.8 SCC, page 1.
(2) Ramanna Dayaram Shetty Vs. International Airport
Authority of India reported in 1979 Vol.3 SCC, page
489.
(3) Tata Cellular Vs. Union of India, reported in 1994
Vol.6 SCC, page 651.
(4) Competition Commission of India Vs. Coordination
Committee of Artists and Technicians, reported in
2017 Vol.5 SCC, page 17.
(5) Sterling Computers Limited Vs. M & N Publications
Limited, reported in 1993 Vol.1 SCC, page 445.
Based on the aforesaid submissions and placing reliance
on the aforesaid Judgments of the Apex Court, the learned
Senior Designate Counsel appearing on behalf of the writ
petitioner in both the writ petitions contended that the writ
petitions need to be allowed as prayed for.
10. The learned Additional Advocate General appearing on
behalf of the respondent No.1 in W.P.No.28706 of 2024 and
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on behalf of the sole respondent No.1 in W.P.No.27029 of
2024 mainly put forth the following submissions:
(i) The respondent No.1 being the tendering
authority, with great respect complied with the
orders of the Court dated 30.09.2024 passed in
W.P.No.27029 of 2024 and considered the case of
the petitioner in terms of Clause No.17.O of
Commercial Terms and Conditions of the subject
tender, but however the petitioner was
disqualified as per the NIT Commercial Conditions.
(ii) The respondent No.1 took the decision to
disqualify the bid of the petitioner as the Clause
No.17.0, gives the power to the tendering
authority to do so and the petitioner was aware of
the said condition even before participating in the
tender process and the petitioner having
participated in the subject tender and on being
disqualified cannot turn back and challenge the
same because he was disqualified on the basis of
the said clause and seek a prayer declaring Clause
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3.1 and Clause 17 of the revised tender as
violative of Article 19(1)(g) of the Constitution of
India, 1950.
(iii) Petitioner had uploaded the Bank Certificate from
CIL in compliance of the Terms and Conditions,
and the case of the petitioner was considered as
per the orders of this Court dated 30.09.2024
passed in W.P.No.27029 of 2024 and a decision
was taken to disqualify the petitioner duly
considering the contents of the Banning of
business letter, dated 02.07.2024 issued to the
petitioner.
11. The learned Additional Advocate General mainly relied
upon the following judgments of the Apex Court in support of
his submissions.
i) Judgment dated 31.01.2022 passed in National High-
speed Rail Corporation Ltd. Vs. Montecarlo Ltd.and another
reported in (2022) 6 SCC 401 (para Nos.44 & 48)
On the points: The petitioner having participated
having knowledge of all the Clauses of the Tender
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ought not have participated in the tender process or
ought to have challenged the relevant Clause 17 of
the Tender before participating in the tender process.
That it is to the wisdom of the Court concerned
which ultimately may look to the larger public
interest and the national interest involved and
examine carefully even while entertaining the Writ
Petition or granting the stay which ultimately may
delay the execution of the Mega Projects, it must be
remembered that it may seriously impede the
execution of the projects of public importance and
disable the state and/or its
agencies/instrumentalities from discharging the
constitutional or legal obligation towards the
citizens.
Para No.44: Under the circumstances, the High Court has
committed a grave error in holding that Clauses 28.1 and
42.5 are patently illegal, more particularly, in absence of
any challenge to the same and also on the ground that
once the original writ petitioner participated having
knowledge of the aforesaid clauses in the ITB, thereafter it
was not open for the original writ petitioner to challenge
the same. The original writ petitioner was knowing right
from the very beginning with respect to the confidentiality
clause contained in Clause 28 and that grounds on which
the Bids of unsuccessful Bidders are not selected shall be
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communicated only after a final decision to award the
contract is communicated under Clause 42. If the original
writ petitioner was aggrieved either it would not
have participated and/or ought to have challenged
such clauses before participating in the tender
process. Under the circumstances, the impugned
judgment and order passed by the High Court holding
Clauses 28.1 and 42.5 as patently illegal cannot sustain
and the same also deserves to be quashed and set aside.
Para No.48: Even while entertaining the writ petition
and/or granting the stay which ultimately may delay the
execution of the Mega projects, it must be remembered
that it may seriously impede the execution of the projects
of public importance and disables the State and/or its
agencies/instrumentalities from discharging the
constitutional and legal obligation towards the citizens.
Therefore, the High Courts should be extremely careful and
circumspect in exercise of its discretion while entertaining
such petitions and/or while granting stay in such matters.
Even in a case where the High Court is of the prima facie
opinion that the decision is as such perverse and/or
arbitrary and/or suffers from mala fides and/or favouritism,
while entertaining such writ petition and/or pass any
appropriate interim order, High Court may put to the
writ petitioner's notice that in case the petitioner
loses and there is a delay in execution of the project
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due to such proceedings initiated by him/it, he/they
may be saddled with the damages caused for delay in
execution of such projects, which may be due to such
frivolous litigations initiated by him/it. With these
words of caution and advise, we rest the matter
there and leave it to the wisdom of the concerned
Court(s), which ultimately may look to the larger
public interest and the national interest involved.
ii) Judgment dated 19.05.2023 in Tata Motors Limited Vs.
The Brihan Mumbai Electric supply & Transport undertaking
(BEST) And Others. reported in 2023 LiveLaw (SC) 467 (Para
No.54).
On the points: Courts not to needlessly interfere in
contracts involving technical issues. The judges do
not possess the necessary expertise to adjudicate
technical issues beyond their domain and that the
Courts must realize their limitations and the havoc
which needless interference in commercial matters
can cause.
Para No.54: As observed by this Court in Jagdish Mandal
v. State of Orissa and Others, reported in (2007) 14 SCC
517, that while invoking power of judicial review in matters
as to tenders or award of contracts, certain special features
should be borne in mind that evaluations of tenders and
awarding of contracts are essentially commercial functions
26 SN,J
wps_27029 & 28706_2024
and principles of equity and natural justice stay at a
distance in such matters. If the decision relating to award
of contract is bona fide and is in public interest, courts will
not interfere by exercising powers of judicial review even if
a procedural aberration or error in assessment or prejudice
to a tenderer, is made out. Power of judicial review will
not be invoked to protect private interest at the cost
of public interest, or to decide contractual disputes.
iii) The judgment dated 21.03.2022 in N.G.Projects Limited
Vs. Vinod Kumar Jain and Others. reported in 2022 Vol.6 SCC
page 127 (Para Nos. 23 & 26)
On the point: If the Court finds that there is total
arbitrariness or that the tender has been granted in
malafide manner, still the Court should refrain from
interfering in the grant of tender but instead relegate
the parties to seek damages for the wrongful
exclusion rather than to inject the execution of the
contract.
Para No.23: In view of the above judgments of this Court,
the Writ Court should refrain itself from imposing its
decision over the decision of the employer as to whether or
not to accept the bid of a tenderer. The Court does not
have the expertise to examine the terms and conditions of
the present- day economic activities of the State and this
27 SN,J
wps_27029 & 28706_2024
limitation should be kept in view. Courts should be even
more reluctant in interfering with contracts involving
technical issues as there is a requirement of the necessary
ex- pertise to adjudicate upon such issues. The approach of
the Court should be not to find fault with magnifying glass
in its hands, rather the Court should examine as to whether
the decision-making process is after com- plying with the
procedure contemplated by the tender conditions. If the
Court finds that there is total arbitrariness or that the
tender has been granted in a malafide manner, still
the Court should refrain from interfering in the grant
of tender but instead relegate the parties to seek
damages for the wrongful exclusion rather than to
injunct the execution of the contract. The injunction or
interference in the tender leads to additional costs on the
State and is also against public interest. Therefore, the
State and its citizens suffer twice, firstly by paying
escalation costs and secondly, by being deprived of the
infrastructure for which the present-day Governments are
expected to work.
Para No.26: A word of caution ought to be mentioned
herein that any contract of public service should not be
interfered with lightly and in any case, there should not
be any interim order derailing the entire process of
the services meant for larger public good. The grant of
interim injunction by the learned Single Bench of the High
Court has helped no-one except a contractor who lost a
28 SN,J
wps_27029 & 28706_2024
contract bid and has only caused loss to the State with no
corresponding gain to anyone.
iv) The judgment, dated 18.10.2016 in Montecarlo Limited
Vs. National Thermal Power Corporation Limited reported in
2016 vol.15 SCC page 272 (Para Nos. 25 & 26)
On the points:- Judicial review of decision making
process is permissible if it suffers from arbitrariness or
malafide's or procedure adopted is to favour one, if
decision is taken according to language of tender
document or decision subserves purpose of tender, then
Courts must exercise principle of restraint.
Para No.25: Recently in Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corporation Ltd. a two-Judge Bench eloquently
exposited the test which is to the following effect:-
"We may add that the owner or the employer of a project,
having authored the tender documents, is the best person to
understand and appreciate its requirements and interpret its
documents. The constitutional Courts must defer to this
understanding and appreciation of the tender
documents, unless there is mala fide or perversity in the
understanding or appreciation or in the application of
the terms of the tender conditions. It is possible that
the owner or employer of a project may give an
29 SN,J
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interpretation to the tender documents that is not
acceptable to the constitutional Courts but that by itself
is not a reason for interfering with the interpretation
given."
Para No.26: We respectfully concur with the aforesaid
statement of law. We have reasons to do so. In the present
scenario, tenders are floated and offers are invited for highly
complex technical subjects. It requires understanding and
appreciation of the nature of work and the purpose it is going
to serve. It is common knowledge in the competitive
commercial field that technical bids pursuant to the notice
inviting tenders are scrutinized by the technical experts and
sometimes third party assistance from those unconnected with
the owner's organization is taken. This ensures objectivity.
Bidder's expertise and technical capability and capacity must
be assessed by the experts. In the matters of financial
assessment, consultants are appointed. It is because to check
and ascertain that technical ability and the financial feasibility
have sanguinity and are workable and realistic. There is a
multi-prong complex approach; highly technical in nature. The
tenders where public largesse is put to auction stand on a
different compartment. Tender with which we are concerned,
is not comparable to any scheme for allotment. This arena
which we have referred requires technical expertise.
Parameters applied are different. Its aim is to achieve high
degree of perfection in execution and adherence to the time
30 SN,J
wps_27029 & 28706_2024
schedule. But, that does not mean, these tenders will escape
scrutiny of judicial review. Exercise of power of judicial
review would be called for if the approach is arbitrary
or malafide or procedure adopted is meant to favour
one. The decision making process should clearly show
that the said maladies are kept at bay. But where a
decision is taken that is manifestly in consonance with
the language of the tender document or subserves the
purpose for which the tender is floated, the court
should follow the principle of restraint. Technical
evaluation or comparison by the court would be
impermissible. The principle that is applied to scan and
understand an ordinary instrument relatable to contract in
other spheres has to be treated differently than interpreting
and appreciating tender documents relating to technical works
and projects requiring special skills. The owner should be
allowed to carry out the purpose and there has to be
allowance of free play in the joints.
v) The judgment of the Apex Court dated 18.12.2020 in
Galaxy Transport Agencies, contractors, Traders, Transports
and Suppliers. Vs. New J.K.Roadways, Fleet Owners and
Transport contractors and Others. reported in 2021 Vol.16
SCC page 808 ( Para Nos.14 & 18)
31 SN,J
wps_27029 & 28706_2024
On the point:- The Authority that authors the tender
document is the best person to understand and
appreciate its requirements and thus, its
interpretation should not be second-guessed by a
Court in judicial review proceedings.
Para No.14: In a series of judgments, this Court has
held that the Authority that authors the tender
document is the best person to understand and
appreciate its requirements and thus, its
interpretation should not be second-guessed by a
Court in judicial review proceedings.
Para No.18: Insofar as Condition No. 27 of the NIT
prescribing work experience of at least 5 years of not
less than the value of Rs 2 crores is concerned, suffice
it to say that the expert body, being the Tender
Opening Committee, consisting of four members,
clearly found that this eligibility condition had been
satisfied by the appellant before us. Without therefore
going into the assessment of the documents that have
been supplied to this Court, it is well settled that
unless arbitrariness or mala fide on the part of the
tendering authority is alleged, the expert evaluation of
a particular tender, particularly when it comes to
technical evaluation, is not to be second-guessed by a
writ court.
32 SN,J
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vi) The judgment dated 21.06.2019 in Silppi constructions
Contractors Vs. Union of India and Another reported in 2020
Vol.16 SCC page 489 (Para No.19)
On the points: The Court must realize that the
Authority floating the tender is the best judge of its
requirement and therefore, the Courts interference
should be minimal, the Courts should give way to the
opinion of the experts unless the decision is totally
arbitrary or unreasonable, the Court does not sit like
a Court of Appeal over the appropriate Authority.
Para No.19: This Court being the guardian of
fundamental rights is duty bound to interfere when
there is arbitrariness, irrationality, mala fides and
bias. However, this Court in all the aforesaid
decisions has cautioned time and again that courts
should exercise a lot of 12 2019 (6) SCALE
70 restraint while exercising their powers of judicial
review in contractual or commercial matters. This
Court is normally loathe to interfere in contractual
matters unless a clearcut case of arbitrariness or
mala fides or bias or irrationality is made out. One
must remember that today many public sector
undertakings compete with the private industry. The
contracts entered into between private parties are
not subject to scrutiny under writ jurisdiction. No
33 SN,J
wps_27029 & 28706_2024
doubt, the bodies which are State within the meaning
of Article 12 of the Constitution are bound to act
fairly and are amenable to the writ jurisdiction of
superior courts but this discretionary power must be
exercised with a great deal of restraint and caution.
The Courts must realise their limitations and the
havoc which needless interference in commercial
matters can cause. In contracts involving technical
issues the courts should be even more reluctant
because most of us in judges' robes do not have the
necessary expertise to adjudicate upon technical
issues beyond our domain. As laid down in the
judgments cited above the courts should not use a
magnifying glass while scanning the tenders and
make every small mistake appear like a big blunder.
In fact, the courts must give "fair play in the joints"
to the government and public sector undertakings in
matters of contract. Courts must also not interfere
where such interference will cause unnecessary loss
to the public exchequer.
vii) The judgment of this Court, dated 01.08.2024 passed in
W.P.No. 18339 of 2024 (para No.15)
On the point:- In cases where a party invoking Writ
Jurisdiction has been a participant in the tender
process, Courts should be slow and cautious in
exercising the power of Judicial Review.
34 SN,J
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12. The learned Additional Advocate General on the basis of
the averments made in the counter affidavit filed on behalf of
the respondent No.1 and placing reliance on the aforesaid
judgments of the Apex Court and the judgment dated
01.08.2024 passed in W.P.No.18339 of 2024 contended that
there is no illegality in disqualifying the petitioner and the
respondent No.1 company considered the case of the
petitioner as per Clause 17.0 in obedience to the directions of
this Court, dated 30.09.2024 passed in W.P.No. 27029 of
2024 and took a decision in the matter in accordance to law
and the same warrants no interference by this Court and the
Writ Petition needs to be dismissed in limini.
13. Sri J.Prabhakar, learned Senior Designated Counsel
appearing on behalf of the 3rd respondent submits that the
contracts entered into between private parties are not
subject to scrutiny under Writ Jurisdiction and attempts by
unsuccessful tenderers on the pretext of procedural violation
or some prejudice to self cannot be the ground for the
Courts to interfere by exercising power of judicial Review
35 SN,J
wps_27029 & 28706_2024
and the present case does not warrant any interference by
this Court.
CONCLUSION:-
14. Clause 17.0 of the tender document is extracted
hereunder:-
17.0 Banned and delisted Suppliers:
a) The bidders would give a declaration that they
have not been banned or de-listed by any Government
or quasi-Government agencies or PSUs. If the bidder
has been banned by any Government or quasi-
Government agencies or PSU, this fact must be clearly
stated and it may not necessarily be a cause for
disqualifying him. If declaration is not given, the bid
will be rejected as non-responsive.
b) After submitting the bid and while tender is in
progress, if any bidder who submitted his bid is
banned/de-listed by any Government or quasi-
Government agencies or PSUs, appropriate legal opinion
will be obtained and tender will be processed
accordingly.
However the SCCL management reserves the right to
take appropriate decision in above cases.
36 SN,J
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15. This Court on perusal of the record opines that in
pursuance to the directions of this Court, dated 30.09.2024
passed in W.P.No. 27029 of 2024, the tender submitted by
the petitioner was considered by the 1st respondent-company
(SCCL) in terms of Clause 17.0 of commercial terms and
conditions of the subject tender (referred to and extracted
above) and the petitioner was disqualified in view of the
banning of business certificate, dated 02.07.2024 issued by
CIL against the petitioner which clearly indicated that on
receipt of a complaint written to the Minister of Coal Mines
and Parliamentary Affairs questioning the authenticity of the
"Local Content Certificates" submitted by the petitioner
against the open e-tender No.CIL/C2D/Bulk
Explosives/2021-23/376 dated 23.07.2021 as well as Tender
No.CIL/C2D/Cart Expl and Accs/2023-25/390 dated
04.03.2023 for supply of Cartridge, Explosives and
Accessories for the period 2023-2025, the subject issue was
inquired into and external expert report was obtained
pertaining to the subject issue and further after duly
considering and examining the reply of the petitioner dated
37 SN,J
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03.05.2024 to CIL's show-cause notice, dated 12.03.2024
issued to the petitioner it had been found that charges of
willful suppression of fact, furnishing of wrong information
and submission of false declaration stood against the
petitioner. Hence, a decision was taken to disqualify the
petitioner after duly considering the case of the petitioner as
per Clause 17.0, since the SCCL Management reserves the
right to take appropriate decision in matters pertaining to
banned and delisted suppliers, and to that effect giving the
reasons for said disqualification of the petitioner's bid, it was
displayed on 07.10.2024 on e-procurement website of 1st
respondent-company(SCCL) that the petitioner stood
disqualified as per NIT Commercial terms and conditions of
Annexure-3, Clause No.17 since the petitioner firm had
declared and uploaded banning certificate issued by CIL,
hence offers submitted by the petitioner herein i.e., IDL
Explosives Limited cannot be considered.
16. The learned Senior designated counsel appearing on
behalf of the petitioner contends that the petitioner cannot
be disqualified at the threshold itself and the disqualification
38 SN,J
wps_27029 & 28706_2024
if any even as per Clause 17.0 (b), can be only after
petitioner submitted the bid and while the tender is in
progress. This Court opines that the said plea of the learned
Senior Designated counsel appearing on behalf of the
petitioner is untenable since the Clause 17.0 pertaining to
Banned and Delisted suppliers should be read in total and not
in isolation and on perusal of Clause 17.0 of the tender
document, in its entirety (referred to and extracted above), it
is evident that the SCCL Management reserved the right to
take appropriate decision in cases of Banned and Delisted
suppliers.
This Court opines that the judgments relied upon by the
learned Senior Designated Counsel appearing on behalf of
the petitioner do not apply to the facts of the present case.
17. In the judgment of the Apex Court dated 31.01.2022 in
AGMATEL India Private Limited Vs. RESOURSYS TELECOM and
others, reported in 2022 vol.5 SCC page 362, it is observed at
para 26 as under:-
26. The abovementioned statements of law make it amply
clear that the author of the tender document is taken to be
39 SN,J
wps_27029 & 28706_2024
the best person to understand and appreciate its
requirements; and if its interpretation is manifestly in
consonance with the language of the tender document or
subserving the purchase of the tender, the Court would prefer
to keep restraint. Further to that, the technical evaluation
or comparison by the Court is impermissible; and even
if the interpretation given to the tender document by
the person inviting offers is not as such acceptable to
the Constitutional Court, that, by itself, would not be a
reason for interfering with the interpretation given.
18. The recent Division Bench judgment of the Apex Court,
dated 06.03.2024 in The Travancore Devaswom board Vs.
Ayyappa Spices & Ors. reported in (2024) 3 S.C.R. 363 and in
particular para No.19, which reads as under:-
19. The principle that in matters of public tenders for
procurement, judicial review is restrained is well
established. In cases where a party invoking writ
jurisdiction has been a participant in the tender
process, courts should be slow and cautious in
exercising the power of judicial review. In a recent
decision, UFLEX Ltd. v. Government of Tamil Nadu, Civil
Appeal Nos. 4862-63 of 2021, this Court has held that
constitutional courts should exercise caution while
interfering in contractual and tender matters, disguised
40 SN,J
wps_27029 & 28706_2024
as public interest litigations. The following observations
are important for the purpose of this case:
"1. The enlarged role of the Government in economic
activity and its corresponding ability to give economic
"largesse" was the bedrock of creating what is
commonly called the "tender jurisdiction". The objective
was to have greater transparency and the consequent
right of an aggrieved party to invoke the jurisdiction of
the High Court under Article 226 of the Constitution of
India, beyond the issue of strict enforcement of
contractual rights under the civil jurisdiction. However,
the ground reality today is that almost no tender
remains unchallenged. Unsuccessful parties or parties
not even participating in the tender seek to invoke the
jurisdiction of the High Court under Article 226 of the
Constitution.
2. The judicial review of such contractual matters has
its own limitations. It is in this context of judicial
review of administrative actions that this Court has
opined that it is intended to prevent arbitrariness,
irrationality, unreasonableness, bias, and mala fides.
The purpose is to check whether the choice of decision
is made lawfully and not to check whether the choice of
decision is sound. In evaluating tenders and awarding
contracts, the parties are to be governed by principles
41 SN,J
wps_27029 & 28706_2024
of commercial prudence. To that extent, principles of
equity and natural justice have to stay at a distance.
3. We cannot lose sight of the fact that a tenderer or
contractor with a grievance can always seek damages in
a civil court and thus, "attempts by unsuccessful
tenderers with imaginary grievances, wounded pride
and business rivalry, to make mountains out of
molehills of some technical/procedural violation or
some prejudice to self, and persuade courts to interfere
by exercising power of judicial review, should be
resisted."
19. The Apex Court in the judgment in Air India Limited Vs.
Cochin International Airport Ltd. reported in (2000) 2 SCC
617 held that the Award of contract, whether by a private
party or by a State is essentially a commercial transaction. It
can choose its own method to arrive at decision and it is free
to grant any relaxation for bonafide reasons, if the tender
conditions permit such a relaxation. It was further held that
the State, Corporations, instrumentalities and agencies have
the public duty to be fair to all concerned. Even when some
defect is found in the decision making process, the Court
must exercise its discretionary powers under Article 226 with
42 SN,J
wps_27029 & 28706_2024
great caution and should exercise it only in furtherance of
public interest and not merely on the making out of a legal
point. The Court should always keep the larger public interest
in mind in order to decide whether its intervention is called
for or not. Only when it comes to a conclusion that
overwhelming public interest requires interference, the Court
should interfere.
20. The Apex Court in its judgment dated 11.12.2006 passed
in Jagdish Mandal vs. State of Orissa reported in (2007) 14
SCC 517 observed as under:
14. "Judicial review of administrative action is intended
to prevent arbitrariness, irrationality,
unreasonableness, bias and mala fides. Its purpose is to
check whether choice or decision is made "lawfully" and
not to check whether choice or decision is "sound".
When the power of judicial review is invoked in matters
relating to tenders or award of contracts, certain special
features should be borne in mind. A contract is a
commercial transaction. Evaluating tenders and
awarding contracts are essentially commercial
functions. Principles of equity and natural justice stay
at a distance. If the decision relating to award of
contract is bona fide and is in public interest, courts will
43 SN,J
wps_27029 & 28706_2024
not, in exercise of power of judicial review, interfere
even if a procedural aberration or error in assessment
or prejudice to a tenderer, is made out. The power of
judicial review will not be permitted to be invoked to
protect private interest at the cost of public interest, or
to decide contractual disputes. The tenderer or
contractor with a grievance can always seek damages in
a civil court. Attempts by unsuccessful tenderers with
imaginary grievances, wounded pride and business
rivalry, to make mountains out of molehills of some
technical/procedural violation or some prejudice to self,
and persuade courts to interfere by exercising power of
judicial review, should be resisted. Such interferences,
either interim or final, may hold up public works for
years, or delay relief and succour to thousand and
millions and may increase the project cost manifold.
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
44 SN,J
wps_27029 & 28706_2024
reasonably and in accordance with relevant law could
have reached";
ii) Whether public interest is affected.
This Court posing the above questions to itself in the
present case opines that the answers are in the
negative.
In the counter affidavit filed by the respondent No.1 at
para No.23, it is specifically stated that the existing orders
for explosives are valid up to 04.11.2024 and if the orders
are not placed soon, the Coal production of SCCL will come to
standstill and this will have adverse impact on generation of
power in the State of Telangana and Andhra Pradesh,
Karnataka and Tamilnadu.
This Court in the light of the discussion and conclusion as
arrived at as above opines that the present case does not
warrant invocation of the power of judicial Review of this
Court to protect private interest at the cost of public interest.
21. Taking into consideration:-
a) The aforesaid facts and circumstances of the case
45 SN,J
wps_27029 & 28706_2024
b) The submissions made by all the learned counsel on
record.
c) The averments made in the counter affidavit filed by the
respondent No.1 at para Nos. 14, 15 and 23 ( referred to and
extracted above)
d) The judgments relied upon by the learned Additional
Advocate General appearing on behalf of the respondent No.1
in both the Writ Petitions. ( referred to and extracted above)
and enlisted below:
i) National High-speed Rail Corporation Ltd. Vs.
Montecarlo Ltd.and another.
ii) Tata Motors Limited Vs. The Brihan Mumbai Electric
supply & Transport undertaking (BEST) And Others.
reported in 2023 LiveLaw (SC) 467.
iii) N.G.Projects Limited Vs. Vinod Kumar Jain and
Others. reported in 2022 Vol.6 SCC page 127.
iv) Montecarlo Limited Vs. National Thermal Power
Corporation Limited reported in 2016 vol.15 SCC page
272.
v) Galaxy Transport Agencies, contractors, Traders,
Transports and Suppliers. Vs. New J.K.Roadways, Fleet
Owners and Transport contractors and Others. reported
in 2021 Vol.16 SCC page 808.
46 SN,J
wps_27029 & 28706_2024
vi) Silppi constructions Contractors Vs. Union of India
and Another reported in 2020 Vol.16 SCC page 489.
vii) The judgment of this Court, dated 01.08.2024
passed in W.P.No. 18339 of 2024.
e) The view of the Apex Court in the judgments (referred to
and extracted above)
i) AGMATEL India Private Limited Vs. RESOURSYS
TELECOM and others, reported in 2022 vol.5 SCC page
362.
ii) The Travancore Devaswom board Vs. Ayyappa Spices
& Ors. reported in (2024) 3 S.C.R. 363.
iii) Air India Limited Vs. Cochin International Airport
Ltd. reported in (2000) 2 SCC 617.
iv) Jagdish Mandal vs. State of Orissa reported in
(2007) 14 SCC 517
f) The orders of this Court, dated 30.09.2024 passed in
W.P.No.27029 of 2024 and Clause No.17.0 of the tender
document pertaining to Banned and Delisted suppliers.
g) The contents of the Banning of business letter, dated
02.07.2024 issued to the petitioner herein by CIL.
Both the Writ Petition Nos. 27029 of 2024 and 28706
of 2024 stand dismissed. Interim orders, dated
47 SN,J
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17.10.2024 passed in Writ Petition Nos. 27029 of 2024
and 28706 of 2024 stand vacated. However, there shall be
no order as to costs.
Miscellaneous petitions, if any, pending in this Writ Petition,
shall stand closed.
___________________________
MRS. JUSTICE SUREPALLI NANDA
Date: 28.10.2024
Note : CC by today
L.R. Copy to be marked.
B/o.Yvkr/ktm
