M/S. Idl Explosives Limited vs Singareni Collieries Company Limited
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Telangana High Court

M/S. Idl Explosives Limited vs Singareni Collieries Company Limited on 13 February, 2025

 THE HONOURABLE THE ACTING CHIEF JUSTICE SUJOY PAUL
                                  AND
         THE HONOURABLE SMT. JUSTICE RENUKA YARA



             WRIT APPEAL Nos.116 and 117 of 2025

COMMON JUDGMENT:

(Per the Hon'ble the Acting Chief Justice Sujoy Paul)

Sri S.Niranjan Reddy, learned Senior Counsel

representing Sri Tarun G.Reddy, learned counsel for the

appellant.

Sri T.Rajnikanth Reddy, learned Additional Advocate

General for respondent No.1 in W.A.No.116 of 2025 which

is also the sole respondent in W.A.No.117 of 2025.

Sri J.Prabhakar, learned Senior Counsel representing

Ms.D.Venkata Padmaja, learned counsel for respondent

No.3 in W.A.No.116 of 2025.

2. With the consent, finally heard.

3. In these intra court appeals, the common order of the

learned Single Judge passed in W.P.Nos.27029 and 28706

of 2024 is called in question.

4. Shorn of unnecessary details, the relevant facts which

have given rise to the litigation are that on 23.07.2021 the

Coal India Limited (CIL) issued a tender for supply of bulk

explosives to the subsidiaries of CIL. Accordingly, the bid

of the appellant for the said tender was accepted. On

12.03.2024, the CIL issued a show cause notice to the

appellant stating that pursuant to a complaint being

received from the Ministry of Coal, Mines and

Parliamentary Affairs, it was found that the appellant did

not meet the necessary criteria to be classified as Class-I

Local Supplier and the response of the appellant was

sought for in this regard.

5. In turn, on 03.05.2024, the appellant filed a reply to

the show cause notice. On 02.07.2024, the CIL issued an

order, whereby the appellant was banned for awarding of

any contract from CIL or its subsidiaries for a period of two

years, as the appellant was found to have suppressed the

information and wilfully withheld the information at the

time of submission of bid. The appellant filed a review

application on 18.07.2024 before the Chairman of the CIL

seeking review of the decision dated 02.07.2024. The

review application of the appellant is pending consideration

before the Chairman of the CIL. The respondent (Singareni

Collieries Company Limited) issued tenders on 27.03.2024

for procurement of SME Explosives and other accessories.

6. Learned Senior Counsel for the appellant submits

that the appellant submitted its bid and also

communicated the aforesaid ban order passed by CIL to the

Singareni Collieries Company Limited. On 25.07.2024, the

appellant's bid was selected as qualified for the

e-reverse auction to be held on 31.07.2024. The Singareni

Collieries Company Limited issued a Corrigendum dated

28.08.2024, whereby the entire tender process pursuant to

the previous tender dated 27.03.2024 was dropped due to

administrative reasons. A fresh/revised tender dated

24.09.2024 was issued with a specific condition i.e., Clause

17.0(b). The appellant, with an apprehension that in the

teeth of Clause 17.0(b) of revised tender its bid will not be

considered, filed W.P.No.27029 of 2024. On 30.09.2024,

the learned Single Judge passed an interim order in the

said writ petition directing the Singareni Collieries

Company Limited to consider the bid to be submitted by

the appellant in terms of Clause 17.0 of the Commercial

Terms and Conditions of the subject tender and take a

decision in the matter. On 07.10.2024, the appellant was

disqualified from participating in the e-reverse auction on

the ground that the CIL had issued a banning order in

relation to the appellant. Dissatisfied with the said

disqualification order, the petitioner filed W.P.No.28706 of

2024. Both the writ petitions were clubbed together. The

learned Single Judge passed the interim orders on

17.10.2024 and 22.10.2024 restraining the Singareni

Collieries Company Limited from finalizing the bids. Both

the writ petitions were finally heard and decided by the

common order dated 28.10.2024. This common order is

the subject matter of challenge in these writ appeals.

7. The learned Senior Counsel for the appellant briefly

raised two contentions. Firstly, he submits that Clause

17.0 makes it obligatory for the Singareni Collieries

Company Limited to consider the impact of any banning by

any other company/subsidiary. Thus, there should have

been application of mind on the factum of banning the

appellant which was duly disclosed by the appellant in its

bid. By taking this Court to certain paragraphs of the

counter, learned Senior Counsel submits that the Singareni

Collieries Company Limited has not considered the impact

of banning by the CIL. There should have been an

independent application of mind on the said aspect and

after exercising discretion in a judicious manner, decision

should have been taken. In absence thereof, the decision

making process is polluted.

8. Secondly, it is submitted that after the impugned

decision by the learned Single Judge, the Singareni

Collieries Company Limited has issued the contract in

favour of certain contractors. Since the tender process was

polluted, the same be directed to be reconvened within a

period of 2-3 months and till such time, the present

successful bidders may continue and thereafter, if the

appellant succeeds, it may also be given the contract.

9. Learned Additional Advocate General appearing for

the Singareni Collieries Company Limited submits that the

appellant's claim was considered, which is evident from

paragraph 14 of the counter filed before the learned Single

Judge in W.P.No.28706 of 2024, which reads thus:

"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."

10. It is submitted that there is no flaw in the decision

making process. Considering the nature of the activity

carried out by the Singareni Collieries Company Limited

and the importance of supplying bulk explosives, a public

interest is involved and after completion of the tender

process and issuance of contracts, it will not be proper to

put the clock back or initiate a fresh proceeding. A

document bearing Ref No:CRP/MP/Sec.13/Law/2025/444,

dated 30.01.2025, was also supplied by the learned

Additional Advocate General to contend that nine contracts

have been given pursuant to the impugned tender process.

Thus, no interference may be made.

11. The learned Senior Counsel for respondent No.3 in

W.A.No.116 of 2025 submits that the writ appeal is filed

belatedly. Although the delay has been condoned, it cannot

be forgotten that interference in contract matters can be

made with circumspection. Once the contracts have

already been granted, it will not be proper to interfere in

the writ appeals.

12. The parties have confined their arguments to the

extent indicated above and no other point is pressed.

13. We have heard the parties at length and perused the

record.

14. Clause 17.0 of the tender document on which the

whole case is founded upon reads thus:

"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."

(Emphasis Supplied)

15. Learned Senior Counsel for the appellant submits

that the right was reserved with the management of the

Singareni Collieries Company Limited to take appropriate

decision in the cases of delisting/banning. Since the

banning was admittedly disclosed, the said right to take

appropriate decision should have been exercised. In

paragraph 14 of the counter filed before the learned Single

Judge in W.P.No.28706 of 2024 as extracted above, it is

shown that a decision has been taken to disqualify the

appellant.

16. A careful reading of Clause 17.0 reproduced

hereinabove shows that if bidder has been banned by any

other body and has disclosed this fact clearly in his bid, as

a rule of thumb, SCCL management will not disqualify him.

The SCCL management reserves right to take appropriate

decision in such eventuality. The language employed in

the aforesaid clause shows that it enables the SCCL

management to take an appropriate decision in such cases

where disclosure of banning is there. The decision taken

by SCCL management in the present case is to disqualify

the petitioner. At this stage, we are not inclined to put the

clock back and direct the Singareni Collieries Company

Limited to undertake the entire exercise afresh. The

Singareni Collieries Company Limited is serving public

interest. For the smooth production and running of

Singareni Collieries Company Limited, supply of bulk

explosive is essential. Any interference by us at this

juncture, will hamper the activity of the industry and

consequently will have an adverse impact on public

interest. Thus, in the peculiar facts of these cases, we are

not inclined to interfere in the matter. More-so, after

passing of impugned order, third party rights are created

and contracts have been granted to nine (9) contractors

and they are not parties before us.

17. This is trite that in exercise of discretionary

jurisdiction, this Court may not set aside an illegal order

even though it would be lawful to do so.

18. In Shiv Shankar Dal Mills v. State of Haryana 1, the

Apex Court held as under:

"6. Article 226 grants an extraordinary remedy which is essentially discretionary, although founded on legal injury. It is perfectly open for the court, exercising this flexible power, to pass such order as public interest dictates and equity projects."

(Emphasis Supplied)

(1980) 2 SCC 437

19. In Chandra Singh v. State of Rajasthan 2, the Apex

Court held as under:

"43. Issuance of a writ of certiorari is a discretionary remedy. (See : Champalal Binani v. CIT, (1971) 3 SCC 20: AIR 1970 SC 645).) The High Court and consequently this Court while exercising their extraordinary jurisdiction under Article 226 or 32 of the Constitution of India may not strike down an illegal order although it would be lawful to do so. In a given case, the High Court or this Court may refuse to extend the benefit of a discretionary relief to the applicant.

44. ...This Court in Brji Mohan Gupta case [(2003) 2 SCC 390 : 2003 SCC (L&S) 1741 has also refused to exercise its discretionary jurisdiction in favour of the appellants although the order of the High Court was found liable to be set aside being not in accordance with law."

(Emphasis Supplied)

20. In Master Marine Services (P) Ltd. v. Metclfe &

Hodgkinson (P) Ltd. 3, the Apex Court opined as under:

"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

(2003) 6 SCC 545

(2005) 6 SCC 138

that overwhelming public interest requires interference, the court should interfere."

21. In view of this legal position and peculiar factual

backdrop of this matter, we are not inclined to entertain

these writ appeals.

22. The writ appeals are accordingly dismissed.

However, the point raised by the appellant will remain open

to be decided in an appropriate case. There shall be no

order as to costs.

Interlocutory applications, if any pending, shall stand

closed.

______________________________________ SUJOY PAUL, ACJ

______________________________________ RENUKA YARA, J

13.02.2025 nvl/vs