Orissa High Court
Ncc Ltd vs Mahanadi Coalfields Ltd on 16 January, 2025
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) Nos.17188 of 2023 & 17120 of 2023
W.P.(C) No.17188 of 2023
NCC Ltd., NCC House, Madhapur, Hyderabad, 500081, through its
authorized representative Sri N.S. Prakasa Rao, aged about 53 years,
S/o. Late N. Venkateswara Rao, at present working as Deputy General
Manager (Technical).
...Petitioner
-Versus-
1. Mahanadi Coalfields Ltd., for short MCL, through its
Chairman and Managing Director, Jagruti Vihar, Burla, Dist-
Sambalpur- 768020.
2. General Manager (CMC), Mahanadi Coalfields Ltd., Jagruti
Vihar, Burla, Dist-Sambalpur- 768020.
3. Tender Committee, Mahanadi Coalfields Ltd., Burla, through
its Chairman, Director (Technical), Jagruti Vihar, Burala, Dist-
Sambalpur-768020.
4. VPR Mining Infrastructure Pvt. Ltd., Plot No.1259, Lakshmi
Towers, Road No.36, Jubilee Hills, Hyderabad-500033.
...Opposite Parties.
AND
WPC Nos. 17188 and 17120 of 2023 Page 1 of 107
W.P.(C) No.17120 of 2023
BGR Mining & Infra Limited, having at HIG-11, Lumbini Vihar,
Chandrasekharpur, Bhubaneswar-751021 and represented by its
authorized representative Sri Muralidhar Mishra.
...Petitioner
-Versus-
1. Mahanadi Coalfields Limited, represented through its General
Manager (CMC), having its address at P.O. Jagruti Vihar, Burla, MCL,
Dist-Sambalpur, PIN- 768020, Odisha.
2. VPR Mining Infrastructure Pvt. Ltd., having its address at D.
No.8-2-293/82/A/1259, 3rd Floor, Plot No.1259, Lakshmi Towers, Rd
Number 36, Jubilee Hills, Hyderabad, Telengana-500033
...Opposite Parties.
Advocates appeared in these cases:
In W.P.(C) No.17188 of 2023
For the Petitioner : Mr. Vikas Singh,
Senior Advocate
Mr. S. Sudhakar Rao,
Senior Advocate
For Opp. Parties No.1 and 3 : Mr. K.M. Natraj
Addl. Solicitor General of India
Mr. Rakesh Sharma, Advocate
For Opp. Party No.4 : Mr. Ramakanta Mohanty
Senior Advocate along with
Ms. Sumitra Mohanty, Advocate
AND
WPC Nos. 17188 and 17120 of 2023 Page 2 of 107
In W.P.(C) No.17120 of 2023
For the Petitioner : Mr. Dama Seshadri Naidu,
Senior Advocate along with
Mr. Nikhil Pratap, Advocate
For Opp. Party No.1 : Mr. K.M. Natraj
Addl. Solicitor General of India
Mr. Rakesh Sharma, Advocate
For Opp. Party No.2 : Mr. Ranjit Kumar,
Senior Advocate
Mr. Ramakanta Mohanty
Senior Advocate along with
Ms. Sumitra Mohanty, Advocate
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MISS JUSTICE SAVITRI RATHO
JUDGMENT
16.01.2025
Chakradhari Sharan Singh, CJ.
1. The Opposite Party No. 1- Mahanadi Coal Fields Ltd. floated
a global tender on 17.11.2022 for “Development and Operation of
Balabhadra OCP as per Part II (scope of project) of Contract
Agreement and other requirements specified in the Contract Agreement
through Mine Operator” with estimated project cost amounting to Rs.
1274.90 Crores for a period of 27 years through the Electronic Tender
bearing NIT/MCL/SBP/GM(CMC)NIT- 179/2022/595& Request for
Bid (hereinafter referred to as „RFB‟).
2. The NCC, Hyderabad Ltd. (Petitioner in WP (C) No. 17180 of
2023), BGR Mining and Infrastructure Ltd. (Petitioner in WP (C) No.
WPC Nos. 17188 and 17120 of 2023 Page 3 of 107
17120 of 2023) and VPR Mining Infra Ltd. (OP No.4 inWP (C) No.
17180 of 2023&OP No. 2 in WP (C) No. 17120 of 2023) had
participated in bidding process in response to the aforesaid tender
floated by MCL Ltd..
3. Clauses 2.2.1(b), 4.1 read with 4.3 of the RFB are at the core
of the dispute between the contesting parties, which, while laying down
the criteria for eligible bidders, stipulated that a bidder shall not have a
conflict of interest that affects the bidding process and that any bidder
found to have conflict of interest shall be disqualified. The said clauses
are being reproduced herein below:-
2.2 Eligibility and Qualification Criteria.
2.2.1 Eligible Bidders
(a) xxxxxxxxx
(b) A Bidder shall not have a conflict of interest
(the “Conflict of Interest'”) that affects the Bidding
Process. Any Bidder found to have a Conflict of
Interest shall be disqualified. In the event of
disqualification, the Authority shall be entitled to
forfeit and appropriate the Bid Security or
Performance Security, as the case may be. as
mutually agreed genuine pre-estimated loss and
damage likely to be suffered and incurred by the
Authority and not by way of penalty for, inter alia,
the time, cost and effort of the Authority (the
“Damages”), without prejudice to any other right or
remedy that may be available to the Authority
under the Bidding Documents and/ or the Contract
Agreement or otherwise. A Bidder shall be deemed
to have a Conflict of Interest affecting the Bidding
Process, if:
WPC Nos. 17188 and 17120 of 2023 Page 4 of 107
(i) the Bidder, its Member or Associate (or any
constituent thereof) and any other Bidder. its
Member or any Associate thereof (or any
constituent thereof) have common controlling
shareholders or other ownership interest; provided
that this disqualification shall not apply in cases
where the director indirect shareholding of a
Bidder. its Member or an Associate_ thereof (or
any shareholder thereof having a shareholding of
more than 5% (five per cent) of the paid up and
subscribed share capital of such Bidder, Member or
Associate, as the case may be) in the other Bidder,
its Member or Associate is less than 5% (five per
cent) of the subscribed and paid up equity share
capital thereof. provided further that this
disqualification shall not apply for any ownership
by a bank. insurance company, pension fund or a
public financial institution referred to in section
2(72) of the Companies Act, 2013 For the purposes
of this Clause 2.2. 1(b), indirect shareholding held
through one or more intermediate persons shall be
computed as follows: (aa) where any intermediary
is controlled by a person through management
control or otherwise, the entire shareholding held
by such controlled intermediary in any other person
(the “Subject Person”) shall be taken into account
for computing the shareholding of such controlling
person in the Subject Person: and (bb) subject
always to sub-clause (aa) above, where a person
does not exercise control over an intermediary,
which has shareholding in the Subject Person, the
computation of indirect shareholding of such
person in the Subject Person shall be undertaken on
a proportionate basis: provided, however, that noWPC Nos. 17188 and 17120 of 2023 Page 5 of 107
such shareholding shall be reckoned under this
subclause (bb) if the shareholding of such person in
the intermediary is less than 26% (twenty-six)
percent of the subscribed and paid up equity
shareholding of such intermediary; or
(ii) a constituent of such Bidder is also a
constituent of another Bidder; or
(iii)such Bidder, its Member or any Associate
thereof receives or has received any direct or
indirect subsidy, grant, concessional loan or
subordinated debt from any other Bidder, its
Member or any Associate thereof or has provided
any such subsidy, grant, concessional loan or
subordinated debt to any other Bidder, its Member
or any Associate hereof; or
(iv) such Bidder has the same legal representative
for purposes of this RFB as any other Bidder; or
(v) such Bidder, its Member or any Associate
thereof has a relationship (arising due to ownership
/ holding / cross holding) with another Bidder, its
Member or any Associate thereof, directly or
through common third party/ parties, that puts
either or both of then n a position to have access to
each other’s information about, or to influence the
Bid of either or each other; or
(vi) such Bidder, its Member or any Associate
thereof has participated as a consultant to the
Authority in the preparation of any documents,
design or technical specifications of the Project.
WPC Nos. 17188 and 17120 of 2023 Page 6 of 107
SECTION IV : FRAUD AND CORRUPT
PRACTICES
4.1 The Bidders and their respective officers,
employees, agents and advisers shall observe the
highest standard of ethics during the Bidding
Process. Notwithstanding anything to the contrary
contained herein, the Authority may reject a Bid
without being liable in any manner whatsoever to
the Bidder if it determines that the Bidder has,
directly or indirectly or through an agent, engaged
in corrupt practice, fraudulent practice, coercive
practice, undesirable practice or restrictive practice
in the Bidding Process.
4.3 For the purposes of this Clause, the following
term shall have the meaning hereinafter
respectively assigned to them:
(a) xxxxxxxxx
(b) xxxxxxxxx
(c) xxxxxxxxx
(d) “undesirable practice” means (i) establishing
contact with any person connected with or
employed or engaged by the Authority with the
objective of canvassing, lobbying or in any manner
influencing or attempting to influence the Bidding
Process; or (ii) having a Conflict of interest; and
(e) “restrictive practice” means forming a cartel or
arriving at any understanding or arrangement
among Bidders with the objective or restricting or
manipulating a full and fair competition in the
Bidding Process.”
Other relevant provisions for considering the issue at hand are as
follows:-
“2.2.4 Associates
WPC Nos. 17188 and 17120 of 2023 Page 7 of 107
(i) xxxxxxxxx
(ii) For purposes of this RFB, the expression
“Associate means, in relation to the Bidder/
Member. a person who is controlled by such
Bidder/ Member. As used in this definition, the
expression “control’ means. with respect to a
person which is a company or corporation, (a) the
right to appoint, or cause the appointment of, more
than 50% (fifty per cent) of the members of the
board of directors(or similar governing body) of
such person; or (b) ownership, directly or
indirectly. of more than 50% (fifty per cent) of the
voting shares of such person, and with respect to a
person which is not a company or corporation, the
power to direct the management and policies of
such person by operation of law.
(iii) xxxxxxxxx
(iv) xxxxxxxxx
3.7 Clarifications by Authority
3.7.1 To facilitate evaluation of Bids, the Authority
may, at its sole discretion, seek clarifications from
any Bidder regarding its Bid. Such clarification(s)
shall be provided within the time specified by the
Authority for this purpose. Any request for
clarification(s) and all clarification(s) in response
thereto shall be in writing.
3.7.2 If a Bidder does not provide clarifications
sought under Clause 3.7.1 within the prescribed
time, its Bid shall be liable to be rejected. In case
the Bid is not rejected, the Authority may proceed
to evaluate the Bid by construing the particulars
requiring clarification to the best of its
understanding, and the Bidder shall be barred from
subsequently questioning such interpretation of the
Authority.
WPC Nos. 17188 and 17120 of 2023 Page 8 of 107
4.1 The Bidders and their respective officers,
employees, agents and advisers shall observe the
highest standard of ethics during the Bidding
Process. Notwithstanding anything to the contrary
contained herein, the Authority may reject a Bid
without being liable in any manner whatsoever to
the Bidder if it determines that the Bidder has,
directly or indirectly or through an agent, engaged
in corrupt practice, fraudulent practice, coercive
practice, undesirable practice or restrictive practice
in the Bidding Process.”
4. Citing clause 2.2.1 (b) of the RFB, the writ petitioners have been
disqualified by an order dated 15.05.2023 issued by the MCL mainly
on the ground that they are associated with each other in a Special
Purpose Vehicle (SPV) Company, incorporated under the Companies
Act, viz. Pacchwara Coal Mining and Talaipalli Coal Mining Pvt. Ltd.
Consequently VPR Mining Infra has been declared as L-1 bidder. The
decision of the Mahanadi Coalfields Ltd. disqualifying the Petitioners
invoking the Conflict of Interest clause as noted above, is under
challenge in both the cases.
5. It is pertinent to mention here that these writ petitions were
earlier dismissed by a co-ordinate bench of this court by a common
judgment dated 19.12.2023 which was put to challenge by the
Petitioners before the Supreme Court giving rise to Civil Appeal No.
5390 of 2024 arising out of SLP(C) No. 8813 of 2024(BGR Mining
and Infra Ltd. v. Mahanadi Coalfields Ltd.) and SLP (C) Diary No(s).
12835/2024 (NCC Ltd., Hyderabad v. Mahanadi Coal Fields Ltd.
&Ors), which have been allowed and the cases have been remitted
back to this court for a fresh decision.
WPC Nos. 17188 and 17120 of 2023 Page 9 of 107
6. Operative portion of the order dated 26.04.2024 passed in BGR
Mining and Infra Ltd. v. Mahanadi Coalfields Ltd., Civil Appeal No.
5390 of 2024 (arising out of SLP(C) No. 8813 of 2024) is:-
“8. The judgment of the High Court is bereft of any
reason bearing on the grounds which resulted in the
disqualification of the appellant and the rejection of
their bid. The High Court has recorded the
submissions of the rival parties and cited from the
precedents of this Court. The citing of a litany of
precedent does not make for reasons unless the High
Court specifically applies its mind, in a case like the
present, to the grounds of disqualification and to the
submissions which have been urged by the parties to
assail them.
9. Finding an absence of any reasons in the judgment
of the High Court on the merits of the issue of
disqualification, we remit the proceedings back to the
High Court for a fresh decision. We clarify that we
have not expressed any opinion on the rival
submissions which are left open to be decided by the
High Court, in a reasoned judgment.”
7. By an order dated 06.05.2024, NCC Ltd., Hyderabad v.
Mahanadi Coal Fields Ltd. &Ors, SLP (C) Diary No(s). 12835/2024
came to be disposed of by the Supreme Court :-
“2. Civil Appeal No 5390 of 2024 (arising out of
SLP(C) No 8813 of 2024) [BGR Mining and Infra
Limited represented by its Director v Mahanadi
Coalfields Limited &Anr] arose out of the same order
of the High Court dated 19 December 2023, which
has been impugned in these proceedings. The
connected proceedings were disposed of by an order
dated 26 April 2024.
xx xx xx
WPC Nos. 17188 and 17120 of 2023 Page 10 of 107
4. The Special Leave Petition shall stand disposed of
in terms of the order dated 26 April 2024.”
8. It is noteworthy at this juncture that during the pendency of these
writ petitions, before they were remanded back under the orders of the
Supreme Court as noted above, an interim order to the following effect
was passed on 20.05.2023 :-
“12. As an interim measure, it is directed that MCL
may proceed with the evaluation process of the
BIDs of NIT-179, but work order shall not be
issued till the next date.”
9. After the dismissal of the writ petitions by the judgement and
order of this court dated 19.12.2023 the MCL issued Letter of
Acceptance (LoA) in favour of the VPR Mining on 28.12.2023.
Subsequently on 29.02.2024 the contract was executed whereafter VPR
Mining started executing the work.
10. After these matters were remanded back to this court, an
application being IA No. 6467 of 2024 was filed for continuation of the
earlier interim order dated 20.02.2023. The Application stood disposed
of by an order dated 26.09.2024, relevant part of which reads thus :-
“19. We are not inclined to pass any interim order
of stay or status quo also for the reason that we
intend to expedite the final hearing of the writ
petitions. It goes without saying that the rights of the
respective parties shall be subject to final
adjudication of these two writ applications.
20. All the interlocutory applications stand disposed
of.”
WPC Nos. 17188 and 17120 of 2023 Page 11 of 107
11. The Petitioner-NCC Ltd., Hyderabad claims to be a Public
Limited Company registered under the provisions of Indian Companies
Act, 1956 that has experience in carrying all variety of contract works,
which includes execution of several construction and infrastructure
projects floated by Govt. and Non-Govt. institutions. It has its
registered office in Hyderabad and one of its offices in Odisha. The
Petitioner company has prayed for relief vide WP (C) 17188 of 2023 as
follows :-
“The Petitioner in the circumstances most humbly
prays that this Hon‟ble Court may be graciously
pleased to admit this writ application, call for records
and direct the Opposite Parties to show cause or show
insufficient cause, allow this writ application and
issue a writ in the nature of certiorari /mandamus/and
/ or direction;
(a) Quashing the letters under annexure 4,
disqualifying the petitioner‟s bid on the ground of
having conflict of interest
(b) Quash the letter dt 15.05.2023 calling upon the
petitioner to show cause vide Annexure 12
(c) Declare that the petitioner is qualified to
participate in the tender and has no disqualification
on the available materials.
(d) And quash the LOA dt. 28.12.2023 issued by
the opposite party no. 1 in favour of opposite party
no.4
(e) Open the financial bid of the petitioner
And issue such other writ or direction as this Hon‟ble
Court in the facts and circumstances deemed fit and
proper.
WPC Nos. 17188 and 17120 of 2023 Page 12 of 107
Alternatively direct opposite Party No. 1 to consider
the grounds taken in Annexure 10 and pass a
reasoned order”
The aforesaid is the amended prayer after remand of the case by
the Supreme Court vide the Supreme court‟s order in BGR Mining and
Infra Ltd. v. Mahanadi Coalfields Ltd., Civil Appeal No. 5390 of 2024
(arising out of SLP(C) No. 8813 of 2024); NCC Ltd., Hyderabad v.
Mahanadi Coal Fields Ltd. & Ors, SLP (C) Diary No(s). 12835/2024.
The Petitioner Company has prayed as follows prior to remand of the
instant matter to this Court :-
“The Petitioner in the circumstances most humbly
prays that this Hon’ble Court may be graciously
pleased to admit this writ application, call for
records and direct the Opposite Parties to show
cause and if the opposite parties fail to show
cause or show insufficient cause, allow this writ
application and issue a writ in the nature of
certiorari /mandamus/and / or such other writ or
direction;
(a) Quashing the letters under annexures 4,
disqualifying the petitioner’s bid on the ground of
having conflict of interest.
(b) Declare that the petitioner is qualified to
participate in the tender and has no
disqualification on the available materials.
(c) Open the financial bid of the petitioner
And issue such other writ or direction as this
Hon’ble Court in the facts and circumstances
deemed fit and proper.
Alternatively direct opposite party no. 1 to
consider the grounds taken in annexure 10 and
WPC Nos. 17188 and 17120 of 2023 Page 13 of 107
pass a reasoned order. And for this act of
kindness, the petitioner shall as in duty bound
ever pray.”
12. The Petitioner-BGR Mining and Infra Ltd. claims to be a mining
and excavation company which offers contract mining services,
overburden removal, coal extraction, transportation, coal quality
Management and local liaison works etc. has sought relief (amended)
vide WP (C) 17120 of 2023 as follows :-
“In the circumstances, it is therefore prayed that
your Lordships would graciously be pleased to:
i. Issue a writ of certiorari or any other writ,
order or direction in the nature of Certiorari to
call for the records of the case and quash and set
aside the disqualification of the Petitioner and the
forfeiture of its security deposit in NIT No.
MCL/SBP/ GM (CMC)/ NIT- 179/2022/595 vide
Annexure -3 of the Writ Petition
ii. Issue a writ of certiorari or any other writ,
order or direction in the nature of Certiorari to
quash and set aside the determination of the
Opposite Party No. 2 as the L-1 Bidder vide
Annexure – 4 of the Writ Petition
iii. Issue a writ of Certiorari or any other writ,
order or direction to quash and set aside the
Letter of Acceptance dated 28.12.2023 issued in
favour of Opposite Party No. 2, and the Project
Agreement for execution of the works in the
subject Tender and/or any further action pursuant
to the subject Tender,
iv. Issue a writ of mandamus or writ in the
nature of mandamus or any appropriate writ,
order or direction directing Opposite Party No. 1
to reconsider the bid submitted by the PetitionerWPC Nos. 17188 and 17120 of 2023 Page 14 of 107
for the purposes of the tender for the
determination of L-1 Bidder
v. And issue such other writ/writs,
order/orders, direction/directions as this Hon‟ble
Court may deem fit and properAnd for this act of kindness, the Petitioner shall as
in duty bound ever pray.”
13. Previously before remitting this instant matter to this court vide
the Supreme court‟s order in [BGR Mining and Infra Ltd. v. Mahanadi
Coalfields Ltd., Civil Appeal No. 5390 of 2024 (arising out of SLP(C)
No. 8813 of 2024); NCC Ltd., Hyderabad v. Mahanadi Coal Fields
Ltd. & Ors, SLP (C) Diary No(s). 12835/2024], the Petitioner
Company has prayed as follows :-
“In the circumstances, it is therefore prayed that
your Lordship would graciously be pleased to:
(i) issue Rule NISI calling the Opposite Party
No. 1 to show cause so as to why the impugned
disqualification of the Petitioner, the forfeiture of
its security deposit vide Annexure-3 and the
determination of Opposite Party No.2 as the L-I
Bidder shall not be set aside and the Petitioner’s
Price Bid shall not be allowed to be considered
for the determination of L-1 Bidder; if the
Opposite Party No. 1 fails to show cause or show
insufficient cause, make the said Rule absolute;
(ii) further be pleased to declare that the
Petitioner is qualified to participate in the tender
and restrain the Opposite Party No.1 from
disqualifying the Petitioner and or forfeiting their
security:
WPC Nos. 17188 and 17120 of 2023 Page 15 of 107
(iii) and issue such other writ/writs,
order/orders, direction/ directions as this Hon‟ble
Court may deem it fit and proper.
And for this act of kindness the Petitioners shall
as in duty bound ever pray”
Factual Background
NCC Ltd., Hyderabad
14. According to the Notice Inviting Tender (NIT), the bidding
process for the said project was on “single stage two-part basis”, i.e.,
the bidders, while making their bids, would submit their information in
two-parts, such as:-
“Part I/Cover I:
1. Bidder’s Covering Letter:
2. Details of the Bid Security:
3. Information on qualifying criteria as detailed at Paragraph 9
and Paragraph 10 of NIT including necessary scanned
documents as elaborated there. Part II/Cover II: Price Bid in
Excel format.”
As per clause 3.8 of the RFB, the evaluation of the bids for the
said project shall take place in two stages;
(i) the Techno-Commercial Evaluation of Tender; and
(ii) Determination of L-1 Bidder.”
15. As per the process, at the first stage of the bid evaluation
(Techno-Evaluation Stage), the opposite party-MCL shall have to
evaluate the documents supplied in Part I/Cover I of their application
and confirm whether they comply with the terms and conditions of the
bidding documents. At the second stage of the bid evaluation
WPC Nos. 17188 and 17120 of 2023 Page 16 of 107
(determination of L-1 bidder), the opposite party-MCL shall open the
price bid in Part II/Cover II of all techno-commercially acceptable
bidders, i.e., the bidders who qualified in the first stage. Thereafter, the
lowest price bidder, i.e., the L-1 price bidder shall be determined.
16. The Petitioner submitted its bid on 15.02.2023 enclosing all
documents in support of the bid and declaring that they do not have
any Conflict of Interest as per Clause 2.2.1(b) or indulged in any
corrupt practice. The Petitioner fulfilled all the requirements as per
Clause 5.1 & 9.1 of the RFB and submitted the required security
deposit of Rs. 2Cr along with application of bid, as security bid.
17. In adherence to the NIT and RFB, the opposite party-MCL
opened technical bids on 08.02.2023, in accordance with clause 3.5 of
the RFB, and found that three bidders including the Petitioner had
participated in the bid for the said project and all the three bidders were
determined to be responsive, in accordance with clause 3.6 of the RFB,
and were admitted for techno commercial evaluation under clause 3.8.1
of the RFB.
18. No decision was taken by the Opposite Part-MCL for three
months. On 15.5.2023 the technical bid was opened and result was
uploaded in the website of the OP No. 1- MCL Ltd. wherein only VPR
Mining and Infrastructure was found to be the sole eligible bidder for
the price bid. A default mail was received by the petitioner wherein the
bids of Petitioner and BGR Mining and Infra was rejected and both the
Petitioners were disqualified.
WPC Nos. 17188 and 17120 of 2023 Page 17 of 107
19. The disqualification of the Petitioners was done on the ground of
“conflict of interest” clause [Clause 2.2.1. (b) of Section II of the
RFB], which provides that if a bidder is found to be in conflict of
interest it shall be disqualified and the opposite party-MCL shall be
entitled to forfeit and appropriate the bidder’s bid security or
performance security and also impose damages. Under clause 4.3 of
the RFB, “conflict of interest” is classified as an “undesirable practice”
that invites both rejection of a bidder‟s bid (Clause 4.1 of the RFB) and
ineligibility from participating in any tender process of opposite party-
MCL for 5 years (Clause 4.2 of the RFB).
20. The impugned rejection order dtd.15.05.2023 contained no
reason rather the ground of rejection was indicated as conflict of
Interest under Clause 2.2.1(b) and the bid security of Rs. 2 Cr was
forfeited.
The relevant portion of the impugned decision is quoted below:-
“The bids of the following 02 bidders have been
disqualified having “conflict of interest” as per Cl. No.
2.2.1 (b) of RFB, declaration under Point No. 5 of
Bidder’s Covering letter and acceptance of bid
conditions and under CL. No. 2.6 of RFB & rejected
under CI. No. 4.1 of RFB due to directly or indirectly
engaged in undesirable practice” as defined under Cl.
No. 4.3(d). Bid Security (EMD) deposited by the 02
bidders i.e. (i) NCC Limited and (ii) BGR MINING
AND INFRA LIMITED during bid submission
forfeited as the “Damages” as per Cl. No. 2.2.1 (b),
2.16.5 & 2.16.6 of RFB of NIT-179.” (Emphasis
supplied).”
21. Within half an hour the bid was opened and the tender was
allotted in favour of VPR Mining and Infrastructure-OP No. 4. It was
WPC Nos. 17188 and 17120 of 2023 Page 18 of 107
alleged that the NCC Ltd. and BGR Mining Ltd. have conflict of
Interest as both have access to each other via a common third party i.e.
Pachhwara Ltd. and Talaipalli Coal Mining Pvt. Ltd. One of the
Directors of BGR Mining and Infra and one of the employees of the
Petitioner in charge of the project created a consortium, Pachhwara
Coal Mining Pvt. Ltd. wherein it had participated and was awarded a
tender floated by the West Bengal power Development Corporation
Ltd. in Pachhwara Mines. The said project is an ongoing project.
22. The Petitioner‟s stance is that none of the directors of the
Petitioner Company are part and parcel of the Pachhwara Mines. The
position was also similar in the case of Talaipalli Coal Mining Pvt. Ltd.
23. The Price bid submitted by the VPR Mining and Infra – OP No.
4 was @ ₹568 [Quoted Rate in (Rs./Te.)] equivalent to Quoted amount
(in Rs.) incl. GST @18% of Rs. 15410,82,83,200.00 which in
comparison to the Petitioner‟s bid is much higher causing a huge loss
to the OP No. 1 which is a Public Sector undertaking.
24. That on 15.05.2023 itself the Petitioner made a representation to
OP No.1 indicating that the process adopted was wrong and the price
bid of the petitioner should be opened which was not responded by OP
No.1-MCL ltd..
25. Meanwhile, the Petitioner was served show cause notice as to
why action shall not be taken against the petitioner as per Clauses
2.16.6 and 4.2 of the RFB.
“(i) Cl. 2.16.6 of the RFB, whereunder “the
defaulting Bidder shall be debarred and black-listedWPC Nos. 17188 and 17120 of 2023 Page 19 of 107
from participating in any bids/tenders floated by
Coal India Limited and/or its subsidiaries for a
minimum period of 1 (one) year from the date of
getting declared as debarred/black-listed.”
(ii) Cl. 4.2 of the RFB whereunder a Bidder
indulging in ‘undesirable practices’ shall not be
eligible to participate in any tender process issued
by the Authority during a period of 5 (five) years”
26. The Petitioner asserts that MCL-OP No. 1 has taken different
standards in different mining tenders pertaining to Lakhanpur and
Belpahar. The OP No. 1 had accepted the bids of the Petitioner under
the similar circumstances. Furthermore, the OP No. 1 (MCL) has
recently accepted a bid of Rs 497 per MT in a tender adjacent to the
current mine in favour of one Essel Mining and Industries Ltd.
(Annexure 9)
27. The Petitioner has challenged the impugned disqualification
order dated 15.05.2023 on the ground of having conflict of Interest / or
undesirable practice as arbitrary, illegal and discriminatory as it does
not contain any reason and has been passed without any opportunity to
respond.
BGR Mining and Infra
28. The factual matrix of the second writ petition is almost identical.
It is the case of the BGR Mining and Infra Ltd. that it had submitted its
bid pursuant to the aforesaid tender floated by the Opposite Party,
MCL ltd., in consonance with the terms of the NIT and RFB and
submitted Rs. 2 Crores as the bid security.
WPC Nos. 17188 and 17120 of 2023 Page 20 of 107
29. The BGR Mining and Infra was also disqualified in the similar
fashion as that of the NCC Ltd. by the same impugned disqualification
order dated 15.05.2023 and the security bid of Rs. 2 Crore was also
forfeited.
30. On 15.05.2023, the Opposite Party- MCL declared the VPR
Mining Infrastructure Pvt. Ltd. as the sole eligible bidder for the price
bid. As already stated, the price bid of the Techno commercial Bid was
opened and the Bid of VPR Mining was declared as L1 bidder whose
price bid was an amount of Rs. 15410,82,83,200.00.
31. On the very same day the petitioner – BGR Mining wrote a letter
to the Opposite party- MCL Ltd. praying to allow the Petitioner to
participate in the tender process, subsequent to which the opposite
party-MCL issued a show cause notice to the petitioner-BGR Mining
directing it to submit reply to the show cause within 10 days as to why
action shall not be taken against it as per Clause 2.16.6, 4.2 of the RFB.
32. It is deemed apt to state briefly the pith of the Petitioners‟ cases
as pleaded in the present proceedings:-
(i) The RFB allows the individual bidder or consortium having
financial and technical experience to participate in the tender process.
The Petitioners had participated in the bid on their own capacity.
Further, there is no material available on record to show the Conflict of
Interest. The rejection of the bid was liable to be quashed as the NIT or
the RFB did not contain any restricting clause regarding carrying on
any other trade as consortium members of the Joint Venture (JV).
WPC Nos. 17188 and 17120 of 2023 Page 21 of 107
Clause 2.2.1 (b)(i) of the RFB has been misinterpreted by the opposite
Parties as it relates to the tender in the same contract and it cannot be
applied beyond the scope of current contract. Clause 2.2.2 of the RFB
permits and gives weightage to those who participate in a consortium
in other contracts and Clause 2.2.1 of the RFB contemplates regarding
the contracts within the tendered area. The petitioner was disqualified
even when the Pachhwara Coal Mining was not participating in the
tender process.
(ii) Further, the time schedule as mentioned in the tender notice was
not adhered to. The bid was supposed to be applied online in two
stages, first was the technical bid and the other was for price bid which
was to be opened only if a bidder qualifies in the technical bid. As per
the bidding scheme, there is no scope for the Petitioner to know who
are the other bidders until the same is published in the public domain.
There can be no possibility for the petitioner to know that shareholders
of other bidder had any control by which it could determine the
Conflict of Interest.
(iii) The issue of Conflict of Interest is confined to the stage of
bidding. As per Clause 2.2.1(b)(v), even if there is common Interest
and control on each other, there is no chance of utilizing that
information when one bidder will be selected and the other will have
no role in influencing.
(iv) It has been pleaded that for three months after the submission of
bid, no action was taken and the sudden opening of bid where a single
bid was considered raises suspicion. There was scope of negotiation for
WPC Nos. 17188 and 17120 of 2023 Page 22 of 107
price but it wasn‟t done. There was a provision for seeking clarification
(under Clause 3.7 of RFB) but no clarification was sought from the
Petitioner.
(v) Such disqualification, without any reason, will cause huge loss
to the Petitioner, for the reason that the disclosure of such
disqualification becomes mandatory in future contracts which will lead
to disqualification at the bidding stage itself.
(vi) The forfeiture of EMD by OP No.1 is also arbitrary in absence
of any loss to the OP No.1 due to disqualification of the petitioner.
(vii) The Petitioners rely on State of Rajasthan Vs. Rohitas & Ors’
reported in (2008) 15 SCC 49, Alexander Machinery (Dudley)
Limited Vs. Crabtree reported in 1974 ICR 120 (NIRC), Ran Singh
Vs. State of Haryana & Anr. reported in (2008) SCC 70 wherein the
court has reiterated that reason is must while passing an order.
(viii) The OP No.1 could have floated a new tender or could have
called the successful bidder for negotiation as per clause 2.7 of the
RFB to mitigate the huge loss but such was not done.
(ix) In the rejoinder filed by the Petitioner to the Counter filed on
behalf of the OP No. 1, MCL Ltd. it has been contended that the
Conflict of Interest clause would arise only if the M/s Pachhawara or
M/s Talaipalli would have participated in the present bid, by virtue of
the Petitioner holding more than 50% of the voting shares. But such is
not the instant case and Petitioner has no controlling right or interest in
WPC Nos. 17188 and 17120 of 2023 Page 23 of 107
the BGR. Further, the terms of the bid should have explicitly provided
the necessary information regarding the reason for conflict in the
instant situation. Furthermore, it is not the case of the Opposite Party
No. 1 that the Petitioner has control over the BGR rather that it has
control over the SPV‟s which have not participated in the present bid.
The documents submitted were given for experience as per the clauses
of RFB and nothing was suppressed. The clauses of the RFB have been
misinterpreted by the Opposite Parties. And there has been confusion,
which could have been resolved by the Opposite Parties by seeking
clarification.
33. In the rejoinder filed to the Counter filed by the OP No. 4 (MCL
Ltd.) on 26.06.23, the Petitioner has contended that the justification
provided for the price quoted by the OP No. 4 is not sustainable, and if
the Price bid of the OP No. 4 is accepted then there will be loss of
more than Rs. 3,000/- Cr.. Reliance was placed on the data of prices at
which work was allotted by MCL on 22.03.2022. The price quoting
will be based on the Stripping Ratio(SR) and other parameters of the
Mine. The present tender SR is very less. Thus, the OP No. 4 is trying
to mislead the issue by suppressing the fact. Further, the OP No.4 has a
Joint venture with the BGR and another at Magadh OCP, Jharkhand
State of Central Coal Fields Ltd., a subsidiary of Coal India Ltd. which
has been intentionally suppressed by the OP No.4.
34. If the bid of opposite party no. 2-VPR Mining has been
qualified, then the BGR Miming should have also been qualified for
the price bid, as opposite party no.2-VPR Mining is on the same
footing as the petitioner and has entered into Consortium Agreement
WPC Nos. 17188 and 17120 of 2023 Page 24 of 107
dated 22.12.2016 with the petitioner for the Khadia Project of the
opposite party-MCL wherein the parties have joint (50-50) ownership
interests. The price bid quoted by opposite party no.2-VPR Mining,
being much higher than the price bid quoted by the petitioner, if the
tender is finalised in favour of opposite party no.2-VPR Mining,
without considering the price bid quoted by the petitioner-BGR
Mining, it would be a grave misuse and substantial loss to the public
exchequer.
Counter Pleadings Mahanadi Coalfields Limited, OPs No.1 to 3
35. It has been stated in the counter affidavit that the petitioner had
uploaded work experience of 3 nos. of coal mines as a contractor. The
work experience at Sl no. 3 i.e. M/s Pachhwara Coal Mining Private
Limited a Special Purpose Vehicle Company incorporated under
Companies Act, 2013 was that of its „Associate‟. The perusal of the
Letter of Award dt. 12.05.2016 and the Work Done Certificate dt.
15.06.2022 as issued to PCMPL, shows that it is a consortium of NCC
Ltd. and BGR Mining and the address is of NCC Limited, NCC House,
Madhapur, Hyderabad- 500081, Telangana, India and NCC Limited is
the Lead Member of the Consortium. Further, the NCC- BGR
consortium was required to form SPV Company within 30 days of
issue of LoA for entering into Contract Agreement with the employer
West Bengal Power Development Corporation Limited and
accordingly M/s Pachhwara Coal Mining Pvt. Ltd (SPV) company was
incorporated. NCC Ltd. held 51% share whereas BGR held 49% of
shares of PCMPL.
WPC Nos. 17188 and 17120 of 2023 Page 25 of 107
36. BGR Mining and Infra Ltd is another bidder in this NIT. The
tender committee got an impression of suspicion that the two bidders
i.e. NCC Ltd and BGR Mining seem to be connected through a
common third party i.e. M/s Pachhwara Coal Mining Private Limited
(Associate of Petitioner NCC Ltd.). Therefore, the tender committee
gathered more information about the said two bidders as available in
public domain though uploaded documents.
37. The authorized signatory of the petitioner Company in tender is
R Subba Raju. He is the authorized true & lawful attorney of NCC vide
notarized Power of Attorney dt. 27.01.2023 issued by ASN Raju,
whole time director, NCC Ltd. It is mentioned that R Subba Raju was
employed with NCC and holding the position of Director (Projects),
NCC Ltd. Rudraraju Subba Raju has digitally signed all the documents
uploaded with TPS & BOQ of the Petitioner Company. The
Authorized Signatory for NCC Ltd. in all the uploaded documents is of
the seal of RS Raju, Director (Projects). There is a difference in the
name of Authorized Signatory. R Subba Raju, Rudraraju Subba Raju &
R S Raju are different names of single person. As per the Company
Master Data available in public domain of M/s Pachhwara Coal Mining
Pvt. Ltd. the company status (for e filing) is Active and the registered
address of Pachhwara Coal Mining Pvt. Ltd. is same as that of the
Petitioner and the directors includes Rudraraju Subba Raju and Rohit
Reddy Bathina.
38. On scrutiny of the Company Master Data of the Petitioner
Company, NCC & BGR available in the public domain it was pointed
out that the names of the both Directors of the SPV are not appearing
WPC Nos. 17188 and 17120 of 2023 Page 26 of 107
as Directors/ Signatory. Upon searching the DIN No. 00037918 of
Rudraraju Subba Raju, it was found that he is the Director of the three
registered limited companies – NCC Vizag Urban Infrastructure Ltd.,
Pachhwara Coal Mining Pvt. Ltd. and Talaipalli Coal Mining Pvt. Ltd.
39. Thereafter, after going through the Company Master Data of M/s
Talaipalli, it was found that the company status (for e filing) was active
and the registered address is that of NCC, Hyderabad office. Its
Directors/Signatories details included Rudraraju Subba Raju and
Umapathyreddy Bathina. The name of B. Umapathy Reddy S/o B
Venkata Krishna Reddy appears to be subscribers/ shareholders of
BGR Mining & Infra Ltd. (Annexure E/1), having subscribed to equity
share of 1,08,00,000 no.s out of 4,50,00,000 shares i.e., 24% and
Umapathy Reddy Bathina is a director in BGR Mining & Infra Ltd.
Umapathy Reddy Bathina and B. Umapathy Reddy are 2 different
names of the same person. The names of both the directors of M/s
Talaipalli Coal Mining Pvt. Ltd are associated with NCC and BGR.
40. NCC and BGR are associated to each other in a SPV company,
Pacchwara coal mining as well as in Talaipalli coal Mining Pvt. Ltd.
The subscriber of BGR Mining & Infra Ltd. Rohit Reddy Bathina is
associated with Rudraraju Subba Raju, Director (Projects) of NCC ltd.
through M/s Pachhwara Coal Mining since dt. 01.06.2016 which is
operating from the registered address of NCC Ltd. The Directors of
both M/s Pachhwara and M/s Talaiapalli are appointed by its
shareholders i.e. NCC& BGR and they have virtual control over the
SPVs.
WPC Nos. 17188 and 17120 of 2023 Page 27 of 107
41. Therefore, the Associate of Petitioner i.e. PCMPL has a
relationship (arising due to ownership/ holding/ cross holding) with
another bidder i.e. BGR Mining directly. And the Petitioner has a
relationship (arising due to ownership/ holding/ cross holding) with
another Bidder i.e. BGR Mining through common third parties i.e. M/s
Pachhwara Coal Mining Pvt. Ltd and M/s Talaipalli Coal Mining Pvt.
Ltd.
42. The petitioner has joined hands with another bidder i.e. BGR
Mining since 2016 through common third parties which are active as
on last date of bid submission with ownership/ shareholding and are
controlled from the registered office of NCC Ltd. In the given
circumstances, it puts either or both of them to have access to each
other‟s information about, or to influence the Bid of either or each
other, which attracts Conflict of Interest in line with the Cl. No.
2.2.1(b) and 2.2.1(b)(v) r/w Cl no. 4.1of RFB and calls for
disqualification. Moreover, the bid security was forfeited as damages
as per Clauses 2.2.1(b), 2.16.5 and 2.16.6 of the RFB.
43. Therefore, the present writ petition is not maintainable in view
of above circumstances. It was reasonable to hold that Petitioner has a
Conflict of Interest with another Bidder i.e. BGR Mining who had also
participated in the e- tender. Hence, the writ petition merits no
consideration and is liable to be dismissed. Furthermore, the relief
sought in the writ petition is not per se maintainable as disputes arising
out of terms of contract or alleged breaches have to be settled by the
ordinary principles of law of contract. The fact that the opposite party
to the agreement is a statutory of public body will not by itself affect
WPC Nos. 17188 and 17120 of 2023 Page 28 of 107
the principles to be applied and writ jurisdiction under Article 226 of
Constitution of India cannot be invoked as has been laid down in M/s
RadhakrishnaAgarwal&Ors. V. State of Bihar, (2000) 6 SCC 293;
Kerela State Electricity Board &Anr. v. Kurien E. Kalathil&Ors,
(2020) 16 SCC 489 and Silppi Construction Contractors v. Union of
India &Anr, (2020) 16 SCC 489. Hence, the present writ petition is
liable to be dismissed.
44. The writ petition is liable to be dismissed as terms of tender
cannot be open for judicial scrutiny as per the case of Tata Cellular Vs.
Union of India reported in (1994) 6 SCC 651.
45. It was pleaded that Conflict of Interest Clauses are included in
tender terms and conditions to ensure fairness, transparency and
integrity in the procurement process and aims to prevent any bidder or
contractor from gaining an unfair advantage due to relationship,
financial interests or influence that could compromise the objectivity
and impartiality of the tendering process. The overall conflict of
interest clause protects the reputation of the organization and ensures
that decisions are made purely on merit and the best value for the
project or service.
46. The tender NIT-861 dated 08.11.2022 was a tender awarded to a
joint venture named M/s. I.V.T.V.L.T. (TV) consisting of M/s. IB
Valley Transport (a partnership firm) and M/s. Vijaylaxmi Private
Limited (Company Limited by shares), whereas in NIT-866 dated
20.12.2022 both participated in the tender as an individual entity. Apart
WPC Nos. 17188 and 17120 of 2023 Page 29 of 107
from the fact that the terms and conditions of the tenders NIT- 861 and
NTT-866 are different from the terms and conditions of the present
tender in question i.e., NIT-179. NIT 866 has been cancelled before
being awarded to any bidder. On the other hand petitioner took
experience from PCMPL as an Associate of the petitioner which is an
SPV. In SPV there is arises conflict of interest which doesn‟t in a Joint
Venture or a Consortium.
47. The Letter of Acceptance dt. 28.12.2023 which was issued in
favour of OP No. 4 (VPR Mining) followed by the execution of the
Contract Agreement on 29.02.2024 is entirely legal and valid.
48. After the judgement dt. 19.12.2023 by this Hon‟ble Court, OP
No. 1 had extended hearing to the petitioner to the Show Cause Notice
dt. 15.05. 2023, which was held on 24.01.2024. OP No. 1
sympathetically acceded the prayer made by the petitioner and has not
debarred/ blacklisted the petitioner from participating in future tenders
in MCL/ CIL and its subsidiaries as a purely onetime concession
without any precedent vide letter 12.04.2024.
VPR MINING INFRASTRUCTURE PVT. LTD OP. NO 4
49. In the counter affidavit filed in WP (C) 17188 of 2023 OP No.4
pleaded that the grounds taken by the writ petitioner is unsustainable in
law and therefore, the writ petition is liable to be dismissed. The
petitioner has involved disputed questions of facts and has substantially
impugned the terms of RFB for which, writ jurisdiction under Article
226 of the Constitution of India cannot be invoked.
WPC Nos. 17188 and 17120 of 2023 Page 30 of 107
50. As a matter of fact, and as admitted by the petitioner, the
financial bid has already been opened and the OP No. 4 has been found
L-1.
51. The petitioner‟s main contention was that the Conflict of Interest
clause doesn‟t apply to their case. But in the instant case the petitioner
is having joint venture with BGR Mining having constituted a
consortium with PCMPL. This joint venture participated in a tender
floated by West Bengal Power Development Corporation Ltd. and the
tender was awarded in favour of such consortium. After the work was
awarded, this consortium formed a Special Purpose Vehicle (SPV) for
execution of the work. The documents clearly show that Directors of
both the companies have formed this SPV and the contention of the
petitioner that none of the directors of the petitioner company is a part
and parcel of the SPV is not at all correct.
52. The petitioner‟s contention regarding violation of natural justice
is wholly unjustified and inapplicable in the present case under Cl.
2.2.1 (b) of the RFB, MCL was entitled to disqualify a bidder at the
time of discovery or uncovering of any material misrepresentation or
violation of any condition therein. In the present case it has been
documentarily found out subsequently that the petitioner has conflict of
Interest within the meaning of this clause. In the present case, the
petitioner deliberately suppressed the disclosure of the fact of the
petitioner being a part of the SPV. The question of natural justice
would have arisen if there would have been a disclosure and thereafter,
for the sake of justification the question of giving an opportunity of
WPC Nos. 17188 and 17120 of 2023 Page 31 of 107
hearing would have been given to explain the petitioner‟s position in
the SPV. It is a clear non- disclosure which entails automatic
disqualification as per the RFB.
53. It has further been contended that amended writ petition filed by
the petitioner by adding new prayers is not maintainable in law and
liable to be dismissed. The petitioner has added subsequent events that
are related to subsequent causes of action and cannot form the subject
matter of the present writ petition and thereby expand the scope of
adjudication and the change the character and nature of original writ
petition.
54. The Supreme Court has not set aside the earlier judgement of
this court on merits, it is only for the reason of absence of any reasons
in the judgement, the remit order had been passed for a fresh decision.
Therefore, in the present re- hearing the petitioner isn‟t entitled to
expand the scope of the writ petition and seek adjudication of issues
forming a fresh cause of action.
55. The conflict of interest is a term in contract to ensure fairness
and integrity in the tender process. Therefore, the conflict of interest
clause is not justiciable being in the realm of contract. As a matter of
fact, the price bid having been opened and the tender process having
progresses upon issuance of LoA and work order issues and contract
agreement executes, it is highly unfair on the part of the petitioner to
challenge the tender process that too without any justifiable ground.
WPC Nos. 17188 and 17120 of 2023 Page 32 of 107
56. In reply to the rejoinder filed by petitioner, OP No. 4 pleaded
that the allegation of loss of public money to the extent of Rs. 3000
crores is wholly baseless and not backed by any material.
Mahanadi Coalfields Ltd. (OP No.1)
57. OP No.1 filed a clarificatory affidavit to the rejoinder filed by
the petitioner. It was submitted that in regard to the disqualification of
the petitioner, OP No. 1 had issued a show cause notice on 15.05. 2023
wherein an opportunity was granted to the Petitioner to reply as to why
action as per Cl. 2.26.6 and Cl. 4.2 of RFB shall not be taken against
them. But the said show cause is pending decision with OP No. 1 and it
agitating it in the proceeding is premature. It was also pleaded that the
other rejected bidder NCC Ltd. Claimed experience obtained by M/s.
Pachhwara Coal Mining Pvt. Ltd. which is a SPV duly registered under
the Companies Act, 203. Thus PCMPL is not a consortium. In case of a
consortium the Conflict of Interest clause doesn‟t attract. Whereas, in
case of a SPV which is registered company, there is a Board of
Directors representing the shareholders for decision making process.
Therefore, there is no conflict of interest under Cl 2.2.1 (b) (v) under
the consortium agreement between M/s/ BGR Mining and Infra Ltd.
And M/s. VPR Mining Infrastructure Pvt. Ltd as alleged.
58. It was pleaded that allegations of loss to the public exchequer is
wholly misconceived and misleading. The price accepted by OP No. 1
MCL from OP No. 2 VPR cannot be compared with any other price is
as much as the other two bidder i.e. the petitioners have failed to
WPC Nos. 17188 and 17120 of 2023 Page 33 of 107
qualify in the tender. So, the question of any comparison with their
price doesn‟t arise at all.
VPR MINING INFRASTRUCTURE PVT. LTD OP No. 2
59. It was contended by the petitioner that since OP No.1 has
disqualified the petitioner on the Conflict of Interest clause, the OP No.
2 is also supposedly guilty of the same defect having entered into
consortium with petitioner. This contention doesn‟t sustain as the
consortium was entered in 2016 and has been awarded the work
alleged in 2016. The work has been completed since 31.08.2022 and
the consortium has been issued with the completion certificate. The
COI has been stipulated to be at the time of submission of the bid and
not completed contract as in the instant case. Otherwise also petitioner
and OP No.2 had not executed any SPV requiring joint participation of
the directors of both the companies. Whereas in the case of the
petitioners, the JV is ongoing and also has been followed by an SPV
which requires joint participation of directors of both the companies.
60. The allegation of loss to public exchequer is wholly
misconceived and misleading as price accepted by MCL from OP No.
2 cannot be compared with any other price as the other two bidders
(including the petitioner) have failed to qualify the tender. So, question
of comparison with their price doesn‟t arise at all. The final price
accepted from OP No. 2 is reasonable and competitive with the current
market rate.
WPC Nos. 17188 and 17120 of 2023 Page 34 of 107
61. OP No.2 have now altered their position to a great extent in
pursuance to grant of Letter of Acceptance and work order and has
spent huge lots of finance on the project approximately Rs. 25 crores.
62. OP No 2 subsequently filed additional reply affidavit to the
rejoinder filed by the petitioner. It was clarified regarding the joint
consortium issue of Khadia Project and Magadh OCP. In both cases no
SPV was created, therefore in both the cases the concept of Conflict of
Interest doesn‟t arise. Further, OP No.2 has already made huge
investments and changed their position greatly after the grant.
63. OP No. 2 again filed further reply to the rejoinder filed by the
petitioner. It was pleaded that allegation of bias and malafideness was
introduced as an afterthought and for the first time in the affidavit dt.
08.10.2024. The entire litigation proceeded on the applicability of COI
clause and there was no allegation of bias or malafideness against
either OP 1 or OP 2.
Development after pronouncement of the judgement dt. 19.12.23
64. The petitioner- NCC Ltd. has replied to show cause notice issued
on 15.05.2023, while the matter was sub-judice no further action was
taken.
65. Meanwhile the petitioner-BGR Mining and Infra sent an email
on 03.01.2024 addressing MCL to allow the Petitioner to participate in
the future tenders. It further requested to revoke the forfeiture of the
EMD and withdraw the showcause notice issued dated 15.05.2023.
(Annexure 6B of the WP (C) No. 17120 of 2023)
WPC Nos. 17188 and 17120 of 2023 Page 35 of 107
66. The Opposite Party-MCL Ltd. intimated regarding the personal
hearing vide letter dated 20.01.2024 and extended personal hearing to
the petitioners on 24.01.2024.
67. On 08.02.2024, the Petitioner -BGR Mining and Infra after the
personal hearing was extended, wrote an email wherein BGR has
reiterated it prayer further mentioning that in case the prayer is allowed
then the petitioner would not resort to any further litigation.
68. Subsequent to the above, the Opposite Party- MCL
sympathetically agreed to the prayer of the petitioners and decided not
to blacklist/ debar the petitioners from participating in the future
tenders of the MCL/CIL. This was done as a onetime concession
without any precedent vide letter dated 12.04.2024.
Submissions
69. Mr. Sandeep Sethi, the learned Senior Counsel appearing on
behalf of the Petitioner- NCC Ltd., submitted that the Petitioner‟s
rejection of the bid is under challenge, the reason for such rejection
which is evident from the Opposite Party‟s counter and impugned
disqualification order is that Petitioner and BGR Ltd. had some joint
ventures which resulted in consortium/SPV‟s and are executing other
3rd party contracts, and by the reasons of such SPV‟s they are having
conflict of Interest. The essence of proviso 2.2.2(b)(v) of RFB is that if
there is some commonality of shareholding of ownership in the
Petitioner Bidder and some other bidder. It is his submission that in the
instant case there is no commonality of shareholding, directors etc. In
the instant case, neither any instance of holding/ cross holding arises.
WPC Nos. 17188 and 17120 of 2023 Page 36 of 107
70. He has argued that this court has to consider as to what has been
prohibited by the conflict of interest clause. Merely because the
Petitioners have done business by forming an SPV in another contract
does not hit the proviso 2.2.2(b)(v) of the RFB. Furthermore, the RFB
permits claiming of work experience of a prior work done as a
consortium member or simple member as per the proviso 2.2.2 of RFB.
71. Mr. Sethi, further submitted that the respondent has done no
analysis, neither sought any clarification regarding SPV‟s which
should have been sought as per proviso clause 3.7.1 of the RFB, they
have not exercised such discretion available.
72. The Petitioner, NCC Ltd. has been awarded many contracts in
similar circumstances, these SVPs were of year 2016. In those awarded
contracts, it was not considered as a conflict of interest, he contends.
73. Moreover, the VPR Mining Infrastructure-OP No. 4 is also in a
prior project with the BGR in a contract namely Magadh OCP,
submitted that if the Petitioner is disqualified then the OP No.4 has
also to be disqualified which is not the case.
74. He further argues that while interpreting the term „associate‟ in
sub para (v) of proviso clause 2.2.2(b) of RFB, it has to be interpreted
as associate for the instant contract and not in the prior contracts.
75. He submitted that the nature of price bids also has to be
considered, the price bid of successful bidder, VPR Ltd.-OP No. 4
(Annexure ) is Rs. 568 per unit, while price bid of the Petitioner is at
WPC Nos. 17188 and 17120 of 2023 Page 37 of 107
the rate of Rs 434.50 per unit, and the price bid of the an adjoining
mine at the rate of Rs. 497 per unit. The bid of the VPR-OP No. 4 is
much more in comparison to the other two bids.
76. He relied on M/S Aquafil Polymers Co. Pvt. Ltd Versus Gujarat
Urban Development Company Limited, R/Special Civil Application
No. 11731 of 2018, Gujarat HC DB, judgment Date – 10/06/2022; M/s
Harsha Constructions Private Limited, Hyderabad v. Western
CoalFields Limited, Nagpur, WRIT PETITION NO. 2677/2024 along
with others, Bombay High Court, Nagpur Bench, Judgment Date-
23.09.2024;Banshidhar Construction (P) Ltd. v. Bharat Coking Coal
Ltd., 2024 SCC OnLine SC 2700.
77. Mr. Sethi further submitted that conflict of interest does not arise
in the instant case, which is clear from the manifestation of new NIT
and that the conduct of concerned authorities in not holding the OP No.
4 to be in conflict of interest will be an estoppel against Opposite
Parties. Further, there is a public interest in saving Rs. 3000 Cr by
accepting the petitioners bid.
78. Mr. Vikas Singh, Senior Counsel appearing on behalf of the
Petitioner -NCC Ltd. submitted that the concept of conflict of interest
in this case contemplates forming of cartel and the purpose of forming
a cartel is to hike price by controlling the market. It can never be to
lower the price.
79. Referring to the case of Union of India v. Hindustan
Development Corpn., (1993) 3 SCC 499 he has submitted that that
was a case in respect of supply of wagons to the railways, wherein the
WPC Nos. 17188 and 17120 of 2023 Page 38 of 107
three large manufacturers decided to oust the small manufacturers. In
bidding process the said large manufacturers submitted same price and
they further reduced the price that no small manufacturer was able to
compete. The Supreme Court in such circumstances observed that there
may be a cartel but just because the price of bid is same, it wasn‟t
sufficient evidence. He contends that the substantive evidence of
cartelization has to be produced. In the instant case the price bids of
both the Petitioners is different. As two different rates were given it
prima facie doesn‟t establish any collusion and it can be never be the
intention to lower the price of the Bid favouring the Respondent.
80. He further submits that the financial impact between the
Petitioner‟s bid and the bidder in favour of whom the contract is
granted, VPR Ltd.-OP No.4 is huge. The contract value quoted by the
Petitioner is 11,788 Cr and the contract value quoted by OP No. 4 is
15,459 Cr in which the difference is 3670 Cr. The reduced value stands
at 14434 Cr, the new difference is 2654 Cr, considering the escalation
for 27 yrs of the contract, it will amount to a difference of 5554 Cr.
Further there is an interest which shall be awarded over and above
1000Cr which makes the differential value of 655Cr. The differential
of 665 Cr while awarding the contract to the benefit of authority shall
be considered as a „cartel‟ or „conflict of interest‟ is to be deliberated
upon.
81. He submitted that when the case is that if the authority is non-
suiting a party which has a lower price and is more qualified in all
WPC Nos. 17188 and 17120 of 2023 Page 39 of 107
technical aspects then the threshold of judicial review is much higher
to justify the impugned rejection and disqualification.
82. He also argues that the CVC guidelines have been adopted by
the Coal India and has formulated exactly the same guidelines.
Relevant proviso in the instant matter is Clause 6-Bid opening and
tender evaluation.
83. He has submitted that as per Clause 2.2.1 (b)(v) of the RFB, only
if there is a clause between the entities prescribing that if either of them
applies in a bid, and those bid details have to be submitted by the other
then only the conflict of interest clause will come into play. Only a
SPV was formed which of very limited nature. A company is an
individual entity as per Company law, and the piercing of veil has not
occurred in the instant case. It is misconceived to submit that for the
mere reason of formation of SPVs, the bidders are disqualified for
these entire 27 years. The action of the authority raises questions for
disqualifying the petitioners for 27 years when the bidders are eligible
for independent bidding. Further, the petitioner itself has disclosed
regarding the Pacchwara as prior experiences.
84. He further submits that the Coal India has subsidiaries like
Northern coal Ltd., CCL etc.; the CCL has issued a clarification which
permits bidders such as Petitioners to participate in tender process,
right just after the rejection of the Petitioner‟s bid. The clarification has
been issued in a very similar manner. Similarly in the RFB of
Sanghamitra OPC by CCL, the participation of Members, partners of
WPC Nos. 17188 and 17120 of 2023 Page 40 of 107
any consortium of other project would not amount to conflict of
Interest.
85. Mr. Singh has submitted that there is an element of subjectivity
present as far as determining the conflict of Interest is concerned. The
Opposite Party has made it very restrictive on their interpretation
exercising their subjective satisfaction and when the price difference is
more 6500CR even after reduction, such cannot be labelled as
reasonable price. On these grounds the justification given by the
Opposite parties relying the Coal India guidelines falls foul.
86. He Relied on Uflex Ltd. v. State of T.N., (2022) 1 SCC 165;
Calcutta Chromotype Ltd. v. CCE, (1998) 3 SCC 681 ; Union of
India v. Hindustan Development Corpn., (1993) 3 SCC 499;
AmitabhaMitra v. State of West Bengal, 2011 SCC OnLine Cal
2579; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.,
(2016) 16 SCC 818;Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC
272 : 2016 SCC OnLine SC 1149.
87. He further submitted that, generally, when a contract is for 2 or 3
years Coal India accepts Joint Ventures. But when a contract is for 29
years or so, Coal India insists that it shouldn‟t be a Joint Venture rather
a registered company with its own juristic entity with fixed
shareholding, so that each party has set roles.
88. It is submitted that a bidder can be a consortium. But when such
bidder is qualified, the consortium may further be converted into a JV
or a company based on the terms of the contract.
WPC Nos. 17188 and 17120 of 2023 Page 41 of 107
89. The allegations in the counter affidavit of having used three
names or various variations of same name cannot be said to have
concealed anything rather the Petitioner itself has revealed regarding
the M/s Thalaipalli, he contends.
90. He has argued that it may not be a malice in fact that it is but a
case of malice in law is made out. Relied on Ravi Yashwant Bhoir v.
Collector, (2012) 4 SCC 407 : 2012 SCC OnLine SC 237; Rajneesh
Khajuria v. Wockhardt Ltd., (2020) 3 SCC 86 : 2020 SCC OnLine
SC 36 to bolster his contention.
91. He further submits that there existed a conflict in the precedents
as well, in which one set of the precedents have held that even though a
wrong has been committed by State, if the work has started it cannot be
interfered by the court; whereas another set of precedents state that if a
wrong has been committed by State, it has to be stuck down
irrespective of the fact that work has started or not, and court has to
interfere.
92. Mr. Singh, the learned Senior Counsel further submits that there
is no direct shareholding or common share holding in each other‟s
companies of the petitioners. Further there is a requirement of the
finding that one bidder has access to information of another bidder in
that particular bidding which is absent in the instant case.The conflict
of interest as per the impugned disqualification order has arisen only
due to M/s Thaliapalli & M/s Pacchwara, but there is no material to
show that NCC Ltd. has access/ controlling right/ interest to the BGR
Ltd. That these companies have participated in the bidding process of
WPC Nos. 17188 and 17120 of 2023 Page 42 of 107
different tenders where they were awarded the tender and those
biddings had similar clauses as that of the instant one.
93. It is also submitted that there is inconsistency in the decision
making of Mahanadi coal limited as they should not have let the
Petitioners bid in initial stage or should have disqualified the
Petitioners in the beginning as it was within the knowledge of them
that such bidders had relationship with each other either directly or
through the third party. The Opposite Party-MCL had malicious
intentions for which it did not act upon and tackling of monopoly it is
an excuse to conceal their true intentions.
94. The Petitioner has no conflict of interest with BGR Mining
under Clause 2.2.1 (b)(v) of the RFB since:
a. Petitioner and BGR are separate legal entities with no
common shareholders, directors or key managerial persons.
b. Petitioner and BGR do not own any shares in each other.
c. Petitioner and BGR regularly compete against each other in
various tenders.
d. Petitioner has applied in an individual capacity. Neither
PCMPL nor TCMPL have any connection with the present
Tender.
e. There is no factual proof of any actual bias or unfair
competitive practice.
95. The Learned Counsel relied upon the case of Hon‟ble Bombay
High Court in Harsha Constructions Pvt Ltd. v. Western Coalfields
Ltd, & Ors, W.P. 2677 of 2024 dated 23.09.2024 and submitted that
WPC Nos. 17188 and 17120 of 2023 Page 43 of 107
just for the fact of having a business relationship would not create a
conclusive presumption of having conflict of interest in a tender
process.
96. Mr. Dama Seshadri Naidu, Senior Counsel appearing on behalf
of the Petitioner-BGR Mining and Infrastructure Ltd., submitted that
forming of JVs or SVPs is a well-established practice, and without any
cogent evidence of collusion it cannot be said that there arises a
conflict of Interest. Moreover, NCC Ltd., BGR Ltd. and VPR Ltd. have
on various occasions entered into JVs or SPVs for executing specific
projects. These entities have competed against each other in various
tenders under similar circumstances and the issue of conflict of Interest
had not arisen.
97. He submitted that the tenders have been floated in which bids
were given in online mode and the bidder would be having no
knowledge of the other bidders participating in the same bidding
process. In such situation the collusion is difficult.
98. He contends that the proviso clause 2.2.1(b)(i) of RFB has to be
construed as the bidder or its member or its associate. The proviso
2.2.1(b) of RFB needs to be read all together. It differentiates between
“a bidder” and “such bidder”. According to him, these terms have been
used for different purposes. The purpose of having a „conflict of
interest‟ clause is to prevent cartelization and monopoly i.e having
access to each other.
99. It is his contention that the fulcrum of the Respondent‟s case is
that the BGR and NCC had some joint projects, and those joint projects
WPC Nos. 17188 and 17120 of 2023 Page 44 of 107
have become the Petitioner‟s associate as per clause 2.2.4 of the RFB.
Further, that once the Petitioners have become the Associate it is
alleged that the Petitioners had access to each other for the reason that
both the directors from either entity were getting represented over
there. The alleged relationship between both the Petitioners is also
existent with the Respondent No. 2 but it is said by the Opposite Party-
MCL Ltd. that an enquiry was made into it upon which it was found
that the project is completed. The said response of the MCL was
responded by the Petitioner showing that the Petitioner and VPR Ltd.-
OP No. 2 have an on-going project to which the OP No.1 had given no
response which raises a doubt. Moreover, VPR Ltd.-OP No. 2 has
responded that they had a consortium/ JV on the other hand the
Petitioner-BGR has SPV with the other Petitioner-NCC Ltd.
100. He further submitted that there is an enabling proviso, Clause 3.7
of the RFB for seeking clarification, but the OP No. 1 didn‟t seek any
clarification. Such non-exercise of discretion has to be based on
reasonable grounds and not be done arbitrarily. There was a justifiable
ground for exercising the proviso for seeking clarification, that the bid
was made in online mode and the Petitioner had no way of knowing
the other bidders.
101. He further submitted that the Petitioner has been also alleged
undesirable practice under Clause 4.3 of the RFB, which again
mentions of „conflict of Interest‟, the terms of which have not been
defined in the RFB. The consortium is expansive in nature, can operate
in multiple projects, but SPV has limited scope, it is a device to secure
WPC Nos. 17188 and 17120 of 2023 Page 45 of 107
itself with a limited liability for a particular independent project. The
Petitioner had an SPV, whereas the OP No. 2 had consortium which is
worse. Moreover, as per Clause 2.2.6 of the RFB the Successful bidder
has to form a SPV.
102. He submitted, that the OP No. 1- MCL Ltd. has invoked Clause
2.2.1 (b) and Clause 4.3(d) of the RFB for disqualification of the
Petitioneron the allegation that the Petitioner and NCC Ltd. are
associated with SPV company namely Pachhwara Coal Mining Pvt Ltd
(PCMPL), formed by NCC-BGR consortium in which the NCC Ltd.
has a shareholding of 51% and BGR has 49%. Both NCC and BGR has
directors on the Board of Pachhwara and the Pachhwara becomes a
common third party to both the Petitioners, but such shall not apply to
the Respondent No. 2 as it is not a SPV and it‟s a Consortium fall foul
of logic, if the alleged access if facilitated then it is the same for
Consortium also.
103. It is submitted that the BGR-VPR Consortium agreement
(Annexure 9 of the Writ Petition) is signed by both the directors of the
Petitioner and Respondent No. 2. A mere change in nomenclature will
not change the contractual relationship and the underlying object of
prevention of cartelisation is not achieved by doing so. The element of
sharing of profits is present in both the Consortium and SPV. The
purpose behind Conflict of Interest and Undesirable practices is to
eliminate cartelization and to ensure genuine and healthy business
rivalry. That as far as cartelisation is concerned the JV/SPV/
Consortium stand on the same footing. If signatories to the
WPC Nos. 17188 and 17120 of 2023 Page 46 of 107
consortium/JV/SPV agreements raise suspicion then it has to be
applied equally to all cases.
104. The OP No.1 has failed to appreciate that SPVs were formed to
perform a specific project. The Petitioner‟s shareholding in both the
SPVs is 49% which is below 50%, that is the Petitioner has no control
as per Clause 2.2.4(2) of the PFB; thus neither SPV qualifies to be an
associate. Furthermore, the OP No. 1 has failed to appreciate that the
Bidder or its Associate should have a relationship with another bidder
or associate by way of ownership/ holding/ cross holding which is
crucial; in the instant case such it is absent andno conflict of Interest
arises thereof.
105. It is quintessential to complete the chain by connecting the link
of ownership/holding/ cross-holding through a common third party
from where access could be gained or which in turn would be investing
in the Petitioner, which is absent in the instant case as the Petitioner
has participated independently and the SPV‟s mentioned cannot be an
associate as per clause 2.2.4 and were neither bidders or associates, he
argues.
106. Moreover, M/sThallaipalli was incorporated for specific project
with NTPC but it was terminated on 04/07/2019 before the Petitioner
could bid much before the present tender was floated.
107. Responding to the averment made by OP No.1-MCL Ltd. that as
per clause 3.9.1 of the RFB the L-1 price (price bid of VPR) is
reasonable and viable, he submits that on 12.06.2023 the Tender
WPC Nos. 17188 and 17120 of 2023 Page 47 of 107
Evaluation Committee had written to the Central Mine Planning and
Design institute Ltd. to submit a report on viability of the L1 price bid
of the project and simultaneously without waiting for the expert
opinion the Tender Evaluation Committee wrote a letter to OP No.2.
The wordings “gesture of the goodwill…. Revised price will be Rs. 532
per Ton of Coal” in the OP No. 1‟s counter [Referred to Pg 247, 248
of the OP No. 1‟s Counter,] is a strange expression in public projects.
On 13.06.2023, the very same day another communication was made
by the OP No.1 to the expert body regarding the Revised price which
raises suspicion as the OP No. 1 on finding that the L1 price was not
viable, a communication was made to the OP No.2 and then the revised
price in turn was communicated to the expert committee.Such actions
of the OP No.1 shows favouritism and collusion and were much
beyond the contemplated mechanism. That the L1 price shall have
been asked to justify but not to reduce it. He submitted that despite the
reduction in price, it was being unreasonable, too high compared to the
estimated price still the OP No. 1 choose to continue with the VPR
mines.
108. Furthermore, the OP No.1 was made aware that the Petitioner
and OP No. 2 had joint projects, which includes one namely Kadia
project, regarding which the OP No. 1 via email dt. 18.05.2023
inquired to Northern Coalfields, and received clarification that the
project was not ongoing but was completed. The OP No. 1 disqualified
the Petitioner and forfeited the EMD on 15.05.2023 without
considering it as a completed project. It shows biasness.
WPC Nos. 17188 and 17120 of 2023 Page 48 of 107
109. Furthermore, OP No. 1 was also brought to notice regarding the
on-going project namely Magadh OCP awarded by Central Coalfields
Ltd. executed by the Petitioner, OP No. 2 and another third party
(PLR) wherein the VPR-BGR-PLR Consortium contained 40%
shareholding by VPR-BGR each which was also ignored by OP No.1.
to which the VPR Ltd- OP No. 2 gave an explanation that the SPV was
not created for Kadhia Project, it was only a JV through Consortium.
Submitted that such plea is impermissible. The plea that no directors
were appointed is also untenable as the directors of the Petitioner and
OP No.2 themselves are the signatories to the Consortium Agreements
for Khadia and Magadh Project.
110. As per the provisions of the RFB no distinction has been made
between JV and SPV while applying the Conflict of Interest clause.
111. He further submitted that the Letter dt. 18.05.2023 which was
addressed by OP No.1 to GM, CMC, Northern Coalfields Ltd., made
no distinction between the JV/Consortium/ SPV, neither was
communicated regarding the ground of JV/ Consortium/ SPV rather it
was communicated that the project was not on-going.
112. He relied on Banshidhar Construction (P) Ltd. v. Bharat
Coking Coal Ltd., 2024 SCC OnLine SC 2700; Subodh Kumar Singh
Rathour v. Chief Executive Officer and Others, 2024 SCC OnLine
SC 1682; M/s Rosmerta Technologies Ltd. v. State of Odisha and
Others, WP (C) No. 7776 of 2024;PopatraoVyankatraoPatil v State of
Maharashtra and others, (2020) 19 SCC 241; ABL International Ltd.
WPC Nos. 17188 and 17120 of 2023 Page 49 of 107
and another v Export Credit Guarantee Corporation of India Ltd.
and others, (2004) 3 SCC 553: 2003 SCC in support of his arguments.
113. It was submitted that the when it comes to tender condition it is
neither judicial or quasi-judicial but the courts have held time over
time that such writs are maintainable in the courts and relied on Noble
resources ltd. Vs State of Orissa (2006) 10 SCC 236 wherein it was
held that “It is trite that if an action on the part of the State is violative
the equality clause contained in Article 14 of the Constitution of India,
a writ petition would be maintainable even in the contractual field. A
distinction indisputably must be made between a matter which is at the
threshold of a contract and a breach of contract; whereas in the former
the court’s scrutiny would be more intrusive, in the latter the court may
not ordinarily exercise its discretionary jurisdiction of judicial review,
unless it is found to be violative of Article 14 of the Constitution. While
exercising contractual powers also, the government bodies may be
subjected to judicial review in order to prevent arbitrariness or
favouritism on its part. Indisputably, inherent limitations exist, but it
would not be correct to opine that under no circumstances a writ will
lie only because it involves a contractual matter.”
114. He submitted that mere association is not sufficient, but it has to
be arrived at as to how it affected the bid process, which has not been
done in the case at hand. Thereby, the reason, as assigned in the show
cause notice, i.e., conflict of interest, cannot be sustained in the eye of
law.
WPC Nos. 17188 and 17120 of 2023 Page 50 of 107
115. It is further contended that VPR Mining Ltd. has been show
favouritism while accepting its bid at a much higher price than the bids
quoted by BGR Mining and NCC Limited and no plausible reasons
have been given while rejecting the Petitioner‟s bid for which the
opposite party-MCL has acted arbitrarily and unreasonably. As a
consequence, thereof, rejection letter shall be quashed.
116. Further, a distinction has to be made between the threshold
adjudication and post contractual adjudication. He submits that it has
been observed that when it comes to threshold adjudication the court‟s
scrutiny would be more intrusive. Relied on MP Power Management
Company Ltd. v. M/s Sky Power Southeast Solar India, pvt. Ltd.,
[2022] 5 SCR 1.
117. He replies to the pleading of the Opposite Parties that when it
comes to ambiguity in any clause which has to be interpreted, what‟s
required to be looked at is the interpretation given by the author of the
document. He submitted that it can‟t be the position because it cannot
be subjective, it ought to objective. Further, the author of the document
may have any intention, but once such is reduced to writing only that
should speak, not the author. The author cannot plead any sort of parol
evidence or justification post contractual conduct; even correspondence
cannot come to rescue. Additionally, as per contra proferentem if there
is any dispute as to the meaning of the word, it should always be made
against the one who made it.
WPC Nos. 17188 and 17120 of 2023 Page 51 of 107
118. He argues that there are no common nominee Directors on these
SPV‟s, being the minority shareholder the Petitioner had nominated its
Director and the other party has nominated its Director. The Director
appointed in consortium and SPV is different, in SPV it has limited
permit because that Director cannot travel beyond the SPV. Once the
project is completed it loses its existence. In consortium and JV they
form a partnership like relationship whose ambit is larger.
119. He has also submitted that in the clause 2.2.1 (b) (i), the
expressions „common controlling shareholding‟ assume importance
which means that somebody is having investment in Petitioner and the
other Petitioner, has common controlling shareholding, where the
ultimate benefit is to the third party. It has to be established that such
third party has come in picture and acted upon in such manner. That
those expressions have to be interpreted by following „ejusdem
generis‟, as they are not disjunctive expressions, they mean one and the
same. Further, as per Clause 2.2.1 (b)(v) there has to be a relationship
between the entities, by means of ownership/holding/cross holding
which may happen directly or indirectly. In the instant case the direct
manner is overruled. It is being said that the indirect investment is
happening through the SPV (common party).
120. Further, the phrase „in a position to access to each other‟ is of
pivotal importance. He has relied to the meaning of „position‟ as given
in Ramanath Iyer‟s lexicon 5th vol. pg 5205, latest edn.; and Black‟s
law Dictionary pg 1406 and submitted that there must to be a
legitimate position to have access to the other‟s information. It requires
the Petitioner‟s investment in a company which has access to the other
WPC Nos. 17188 and 17120 of 2023 Page 52 of 107
company(associate). In SPV such is not possible as the SVP has no
access to the other party. It is created for a particular purpose which
cannot demand access. It requires a proxy through which the Petitioner
can access the other entity.
121. The learned Addl. Solicitor General, Mr. M Nataraj appearing on
behalf of the opposite Party -Mahanadi Coalfields Ltd. contended that
while exercising the power of judicial review these tender matters, it
has to be seen if the decision is palpably wrong, and the scope of
judicial review, and approach is that just because it is wrong, the
judicial review is not permissible on the fundamental premise that
these all are commercial transactions, where the scope of judicial
review is very limited, and a second/alternative/ better view is not
permissible.
122. It is further contended that as Clause 2.2.1 (a), it permits the
consortium but it does not permit SPV or independent legal entity for
the purpose of application of conflict of Interest. The sanctity of tender
document is one of crucial aspects which will have to borne in mind,
and the language employed in the tender document has to be strictly
adhered to while interpreting.
123. He argues that if it is Consortium then the conditions set out in
Clause 2.2.7 has to be fulfilled, as the tender document itself makes it
clear that it only permits Consortium subject to fulfilment of conditions
in Clause 2.2.7.
WPC Nos. 17188 and 17120 of 2023 Page 53 of 107
124. It is contended by him that the tender document was notified and
the petitioners participated with open eye accepting the tender
conditions. They were aware of the tender conditions and clauses and
still chose to participate in it. Referring to clause 2.2.1 (b), it is
submitted that the conflict of Interest is not to be understood as strictly
in terms of what has been mentioned in its sub clauses. It has wider
connotation. If the Tender Inviting Authority is able to come to a
conclusion that there is a conflict of Interest then the bidder can be
disqualified, and in such instance the scope of judicial review is
limited.
125. Alternatively it is contended that, the OP No.1‟s case is that it
falls under the clause 2.2.1(b). There are six clauses (i)-(vi). It can be
seen that if one of the sub-sub-clauses is hit then the conflict of Interest
will arise. And the term „such bidder‟ in clause (v) indicates the bidder
as under 2.2.1 (b). The argument of Petitioners that „sub bidder‟ has to
read in terms of previous clauses is not permissible.
126. It is further contended that in these are commercial transactions
and the sanctity of the bidding process has to be maintained and
cartelization should not be allowed. Further the tender document will
have to be strictly construed to for the purpose of maintaining the
purity of the selection process of the successful bidder.
127. He has referred to Clause 2.2.4 of the RFB and submits that it
defines an associate. And it specifies the documents for recognition of
the „consortium‟. With this definition also the Petitioners are liable to
be disqualified from the process and then referred to clause 2.6,
WPC Nos. 17188 and 17120 of 2023 Page 54 of 107
clauses 4.1&4.3 to contend that again the „conflict of interest‟ that has
been emphasized as indicated in the clause 4.3 (d) is independent of
what is provided under clause 4.1, as a ground which may vitiate the
tender on account of clause 4.1 applied with fraud and corrupt
practices, also that conflict of Interest as provided under clause 4.1
need not be referred to in respect of clause 2.2.1, it is independent of
all other clauses.
128. The Learned Addl. Solicitor General referred to the
disqualification order and submitted that the Tender Inviting Authority
has reached the decision after proper analysis and referred to the
documents which have been relied upon while reaching the decision.
There are, thus three juristic entities i.e. NCC, BGR and Pachhwara
(SPV) due to which the conflict-of-Interest clause applies. Further
submits that once such a decision is taken upon interpretation of tender
documents, the scope of the judicial review is very limited and it is the
author of the document alone who would be in a proper position to say
what he intended or how the document has to be interpreted while
deciding the clauses placing reliance on Afcons Infrastructure Ltd. v.
Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818.
129. He has also contended that merely on the ground that the view
taken by tender authority is not sound, a judicial review cannot be
sought. There has to be some element of mala fide in the decision to
establish favoritism to a bidder, to seek a judicial review, else the
decision by the author of the tender document shall be final and
judicial review on such matter is very limited. He has placed reliance
WPC Nos. 17188 and 17120 of 2023 Page 55 of 107
on Central Coalfields Ltd. v. SLL-SML (Joint Venture
Consortium) [Central Coalfields Ltd. v. SLL-SML (Joint Venture
Consortium), (2016) 8 SCC 622 : (2016) 4 SCC (Civ) 106 : (2016) 8
Scale 99] where it has been held by the Supreme Court, relying on a
host of decisions that the decision-making process of the employer or
owner of the project in accepting or rejecting the bid of a tenderer
should not be interfered with. Interference is permissible only if the
decision-making process is mala fide or is intended to favor someone.
Further relied upon Tata Cellular v. Union of India [Tata
Cellular v. Union of India, (1994) 6 SCC 651] which went a step
further and held that a decision if challenged (the decision having been
arrived at through a valid process), the constitutional courts can
interfere if the decision is perverse. However, the constitutional courts
are expected to exercise restraint in interfering with the administrative
decision and ought not to substitute its view for that of the
administrative authority.
130. It is further contended that State can choose its own method to
arrive at a decision and it is free to grant any relaxation for bona fide
reasons, if the tender conditions permit such a relaxation. It has been
further held that the State, its 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 great caution
and should exercise it only in furtherance of public interest and not
merely on the making out of a legal point. Relied upon Master Marine
Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. [Master Marine
WPC Nos. 17188 and 17120 of 2023 Page 56 of 107
Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC
138].
131. He has argued that the authorities have the liberty to assess the
overall situation for purpose of taking a decision as to whom the
contract shall be awarded and at what terms, and by way of judicial
review the Court cannot examine the details of the terms of the contract
which have been entered into by the public bodies or the State. Courts
have inherent limitations on the scope of any such enquiry. He has
placed his reliance on Sterling Computers Ltd. v. M&N Publications
Ltd. [Sterling Computers Ltd. v. M&N Publications Ltd., (1993) 1
SCC 445] in support of his argument.
132. He has referred to the case laws which further strengthens his
argument that court shall not interfere in the matter of commercial
transaction unless there is mala fide or favoritism in the tender
decision. Placeing reliance upon Raunaq International Ltd. v. I.V.R.
Construction Ltd. [Raunaq International Ltd. v. I.V.R. Construction
Ltd., (1999) 1 SCC 492] he has submitted that Supreme Court has held
that the superior courts should not interfere in matters of tenders unless
substantial public interest was involved or the transaction was mala
fide. In the case Air India Ltd. v. Cochin International Airport
Ltd. [Air India Ltd. v. Cochin International Airport Ltd., (2000) 2
SCC 617] , this Court once again stressed the need for overwhelming
public interest to justify judicial intervention in contracts involving the
State and its instrumentalities. It was held that the courts must proceed
with great caution while exercising their discretionary powers and
WPC Nos. 17188 and 17120 of 2023 Page 57 of 107
should exercise these powers only in furtherance of public interest and
not merely on making out a legal point.
133. He has also placed his reliance on Jagdish Mandal v. State of
Orissa, (2007) 14 SCC 517] wherein it has been held that 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 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
thousands and millions and may increase the project cost manifold.
WPC Nos. 17188 and 17120 of 2023 Page 58 of 107
134. He further placed his reliance upon Montecarlo
Ltd. v. NTPC reported in (2016) 15 SCC 272: AIR 2016 SC 4946] it
was held that 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. Relying on the Supreme Court‟s
decision in the case of Municipal Corpn., Ujjain v. BVG (India)
Ltd. [Municipal Corpn., Ujjain v. BVG (India) Ltd., (2018) 5 SCC 462:
(2018) 3 SCC (Civ) 291] he argues that the authority concerned is in
the best position to find out the best person or the best quotation
depending on the work to be entrusted under the contract. The court
cannot compel the authority to choose such undeserving
person/company to carry out the work. Poor quality of work or goods
can lead to tremendous public hardship and substantial financial outlay
either in correcting mistakes or in rectifying defects or even at times in
redoing the entire work.
135. He has also referred to the three-Judge Bench decision of this
Court in Galaxy Transport Agencies v. New J.K. Roadways, Fleet
WPC Nos. 17188 and 17120 of 2023 Page 59 of 107
Owners & Transport Contractors, (2021) 16 SCC 808: 2020 SCC
Online SC 1035] to support his contentions.
136. He has further contended that 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. In Afcons Infrastructure Ltd. v. Nagpur Metro
Rail Corpn. Ltd. (2016) 16 SCC 818], the Supreme Court has held
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 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.‟
137. It is further contended that in the recent judgment in Silppi
Constructions Contractors v. Union of India (2020) 16 SCC 489], this
Court held that there should be exercise of restraint and caution; and
there must be overwhelming public interest to justify judicial
intervention in matters of contract involving the state instrumentalities.
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; the court must realise
WPC Nos. 17188 and 17120 of 2023 Page 60 of 107
that the authority floating the tender is the best judge of its
requirements and, therefore, the court’s interference should be
minimal. The authority which floats the contract or tender, and has
authored the tender documents is the best judge as to how the
documents have to be interpreted. If two interpretations are possible
then the interpretation of the author must be accepted. The courts will
only interfere to prevent arbitrariness, irrationality, bias, mala fides or
perversity.
138. He further contends that the law relating to award of a contract
by the State, its corporations and bodies acting as instrumentalities
and agencies of the Government has been settled by the decision of this
Court in Ramana Dayaram Shetty v. International Airport Authority of
India [(1979) 3 SCC 489], Fertilizer Corpn. Kamgar Union
(Regd.) v. Union of India [(1981) 1 SCC 568], CCE v. Dunlop India
Ltd. [(1985) 1 SCC 260: 1985 SCC (Tax) 75], Tata Cellular v. Union
of India [(1994) 6 SCC 651], Ramniklal N. Bhutta v. State of
Maharashtra [(1997) 1 SCC 134] and Raunaq International
Ltd. v. I.V.R. Construction Ltd. [(1999) 1 SCC 492].
139. The Learned Addl. Solicitor General contended that there is no
whisper of allegation of “mala fides” in the pleadings of the petitioner-
NCC Ltd.. However, in BGR case there is some reference to “Mala
fides” which is vague totally. It is well settled that not only the
pleading but proof is also required. Plea of mala fide is not at all
sustainable, he argues.
WPC Nos. 17188 and 17120 of 2023 Page 61 of 107
140. In the present case, the authorities after evaluating the records
found common shareholding, common signatories, common address,
and common Directors. Applying the strict adherence to terms and
conditions of the tender document they come to the conclusion that
conflict of interest exists. Therefore, the rejection as justified in law.
The contract has been given to a third party and work is going on.
141. He has argued that out of ten no. of tenders which have been
floated by NCL (Northern Coalfields Limited) and MCL, the tenders
mentioned at serial nos. 1 to 7, 9, and 10 do not have the Conflict-of-
Interest clause. Therefore, the terms and conditions in the above said
tenders, referred to by the petitioner, are not the same as that of the
terms and conditions of the tender in question in the present writ
application”.
142. Mr. Ranjit Kumar appearing on behalf of OP No. 2 in WP(C)
17120 of 2023 and OP No. 4 in WP (C) 17188 of 2023 has argued that
MCL, the tendering authority has rightly disqualified the petitioners i.e.
NCC Ltd. and BGR Mining under the terms of Cl. 2.2.1 (b) on the
ground of „Conflict of Interest‟ and under Clauses 4.1 read with 4.3(d)
for engaging in “undesirable practices”. The disqualified bidders have
made false declarations in their bidding document, contrary to Clause
2.6.1. of the RFB. BGR and NCC are connected through two common
third parties, namely, M/s Pachhwara Coal Mining Private Limited
(PCMPL) and Talaipalli Coal Mining Private Limited (TCMPL). The
relationship between BGR and NCC arises due to their holding in these
two SPVs. PCMPL is an SPV formed by the said bidders, wherein
NCC has a 51% shareholding, while BGR has a 49% shareholding.
WPC Nos. 17188 and 17120 of 2023 Page 62 of 107
Similarly, TCMPL is another SPV formed by NCC & BGR. NCC has a
51% shareholding in TCMPL, while BGR has a 49% shareholding in
the SPV. Moreover, both BGR and NCC could exercise „control‟ over
the SPVs and thus, over each other through these SPVs. Thus, the BGR
& NCC did have the ability to influence the bid of the other or to have
access to each other‟s bid information. The two directors of TCMPL,
namely, Mr. R. S. Raju and Mr. U. Reddy are in turn the authorized
representative and director of NCC & BGR respectively. The Directors
of both, PCMPL and TCMPL are appointed by NCC & BGR. NCC &
BGR exercise direct control over the functioning of these common
third parties. Futhermore, PCMPL, TCMPL AND NCC share a
common address. The aforementioned circumstances clearly reflect
that both, NCC & BGR are in position to have access to each other‟s
information and to influence each other‟s bid. Under the RFB, there is
no requirement to prove actual exchange between bidders and/or
influence over each other. The very existence of a relationship, as
explained, is enough to render BGR & NCC to be disqualified. For this
reliance was placed on Sterlite Grid20 Ltd. v. PFC Consulting Ltd.,
2021 SCC OnLine Del 4357. Furthermore, the Conflict-of-interest
clause itself rests on a deeming fiction. Thus, evidently, the
relationship between NCC & BGR falls under Clause 2.2.1(b)(v).
143. It was submitted by Mr. Ranjit Kumar that Clause 2.2.1 of the
RFB is a deeming provision and not exhaustive as to what constitutes
„Conflict of Interest‟. This is not just clear from a perusal of Clause
2.2.1 itself but also from Clause 4.3(d) of the RFB, he argues. While
WPC Nos. 17188 and 17120 of 2023 Page 63 of 107
defining „undesirable practices‟ in Clause 4.3(d), the tendering
authority has consciously not made a reference to Clause 2.2.1(b). This
only goes to show that „Conflict of Interest‟ has to be understood in a
wider sense and the instances contained in Clause 2.2.1, as to what
constitutes „Conflict of Interest‟, were not exhaustive.
144. It was submitted that as per the RFB Cl. 2.1.6 and 3.1.1, the
MCL has the sole discretion to disqualify any defaulting bidder for not
conforming to the terms and conditions of the bidding documents or on
account of any other reason that MCL deems fit. Further as per Cl.
2.7.1, 3.9.2 and 6.2 of the RFB provides that MCL also retains the right
to reject any bids or bidders without assigning any reason.
145. It was submitted that it is completely MCL‟s prerogative to
accept or reject any bids or to disqualify any bidder. The rightful
exercise of such a prerogative cannot be interfered with on the ground
that principles of natural justice are not followed. This is because the
instant proceeding stems from a commercial transaction, which are
beyond the realm of administrative law. The principles of equity and
natural justice do not operate in the field of commercial transactions as
held in Municipal Corpn., Ujjain v. BVG India Ltd., (2018) 5SCC
462, at paragraph 27. The power of judicial review cannot be
exercised on account of procedural defects in closing such commercial
transactions.
146. It was submitted that the tendering authority‟s decision to accept
or reject a bid cannot be interfered with under Article 226, particularly
when the decision is made responsibly and in accordance with the
WPC Nos. 17188 and 17120 of 2023 Page 64 of 107
tender conditions. The decision to disqualify BGR and NCC was a
reasonable decision, which a person with ordinary prudence would
have arrived at. In light of the same, this Hon‟ble Court ought not to
interfere in the present matter. The award of a contract through tenders
by a public authority is a commercial act as held in Jagdish Mandal v.
State of Orissa, (2007) 14 SCC 517 at paragraph 22. In the case of
Tata Cellular v. Union of India, (1994) 6 SCC 657, the Supreme
Court has held that there are inherent limitations to judicial review of
contractual actions. The Court cannot act as an appellate authority for
scrutinizing as to whom the tender should be awarded as held in
Meerut Development Authority v. Association of Management
Studies, (2009) 6 SCC 171 at paragraph 41-42; Municipal
Corpn.,Ujjain v. BVG India Ltd., (2018) 5 SCC 462, at paragraph
64.3, 10, 22,23. Reliance was placed on Uflex Ltd. v. State of T.N.,
(2022) 1 SCC 165 : 2021 SCC OnLine SC 738 at page 173 para 1-6
where catena other judgements were referred which lay down that
judicial review of contractual/ tender matters under Article 226 is not
permissible unless the tendering authority has acted with arbitrariness,
irrationality, unreasonableness, bias and mala fides, which hasn‟t been
a case in the present matter. Thus, this Hon‟ble Court ought not to
interfere with commercial transactions, as such transactions are not
amenable to judicial review.
147. It was submitted that the author of the document, viz., MCL is
the best person to assess and appreciate its requirements as laid down
in Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation
WPC Nos. 17188 and 17120 of 2023 Page 65 of 107
Limited &Anr., (2016) 16 SCC 818 at paragraph 15; N.G. Projects
Ltd. v. Vinod Kumar Jain, (2022) 6 SCC 127;CaretelInfotech Ltd. v.
Hindustan Petroleum Corpn. Limited, (2079) 14 SCC 81at paragraph
37, 39, 43. MCL‟s decision which is based on an interpretation of the
RFB, being its own document, and based on allied facts, cannot be
called in question.
148. It was submitted that the disqualified bidders erroneously claim
that MCL has provided preferential treatment to VPR. They have
claimed that VPR also has a consortium with BGR to execute another
project, namely, Magadh OCP. Despite this, VPR was allowed to
participate in the bid. This contention is factually & legally
unsustainable. It was submitted that BGR and NCC cannot claim parity
with VPR. The Consortium between VPR and BGR is completely
distinct and cannot be equated with the issue of conflict of interest as
involved in the present case because the petitioners are a SPV and VPR
and BGR formed a consortium which are inherently different and don‟t
involve any conflict of interest.
149. Countering the argument that the MCL acted in inconsistent
manner and provided preferential treatment to VPR as MCL has not
invoked any „conflict of interest‟ in the past and thus should not invoke
the same in the present tender and that VPR has been permitted to
participate alongside DBL in 10 tenders floated by the subsidiaries of
Coal India Ltd., despite the fact that VPR & DBL have formed an SPV
for execution of another tender, he has argued that DBL has not
participated in the present tender so conflict of interest with VPR
doesn‟t arise; nine out of the ten tenders do not have conflict of interest
WPC Nos. 17188 and 17120 of 2023 Page 66 of 107
clause and in nine of the ten tenders followed a system of „reverse
bidding‟. The remaining 1 tender i.e. Dudhichana the tendering
authority is Northern Coalfields Ltd. and not MCL and the terms of
RFB are totally different.
150. Assuming while denying that a wrong was committed by an
authority in the past, the same would not bestow a right upon NCC &
BGR to claim such an undue benefit as a matter of right by reference to
Article 14 of the Constitution. There cannot be, in law and under
Article 14, reverse parity or discrimination. NCC cannot seek a
direction requiring MCL to perpetuate any illegality or irregularity
assuming the same was earlier committed, if at all. Reliance was
placed on decision of Hon‟ble Supreme Court in the case of Tinku v.
State of Haryana, 2024 INSC 867.
151. It was submitted that the disqualified bidders have erroneously
claimed that the variation of price bid by VPR from Rs.15,410 Cr to
Rs.14,434 Cr has been undertaken in violation of RFB. This
submission by the Petitioners is completely incorrect and in ignorance
of the disclaimer contained in the RFB, which allows MCL to negotiate
the offer as per Cl. 2.7, 2.7.2 of RFB.
152. It was submitted that Ld. Counsel for BGR have wrongly relied
on several Judgments rendered by foreign courts relating to judicial
review in the interpretation of contracts. Because all the aforesaid
Judgments are not applicable to the present case, as the law relating to
interpretation of an RFB is different from the interpretation of a
WPC Nos. 17188 and 17120 of 2023 Page 67 of 107
contract. The foreign judgments cited by the Ld. Counsel for BGR do
not deal with the aspect of judicial review in awarding tenders,
particularly in the Indian context. Moreover, the reliance on the
principle of contra proferentem was mis-guided. This is because the
rules of contra proferentem only apply to interpretation of contracts
and not the construction of tender terms or an RFB.
153. Mr. Naidu representing petitioner BGR placed reliance on MP
Power Management Company Ltd. v. M/s Sky Power Southeast Solar
India, pvt. Ltd., [2022] 5 SCR 1, but it was submitted by Mr. Ranjit
Kumar that it doesn‟t apply in this case because the facts are entirely
different in this case.
154. It was submitted that VPR has acted in good faith throughout the
bidding process. VPR has duly met all the deadlines and milestones as
per the bidding documents and Contract Agreement. At this stage, VPR
has also spent considerable amounts of money to fulfill the conditions
precedent laid down in Article 4 of the Contract Agreement. Thus,
pursuant to these proceedings, if the vested right accrued to VPR in
respect of the execution of the project is taken away, then grave
prejudice and irreparable harm will be caused to VPR for no fault of
theirs. Thus, at this stage, any action against VPR will be against
public interest. This is because any interference will lead to
considerable delay. This will inevitably lead to losses for the
Government run- Coal India Ltd & affect power generation in the
Country. This is contrary to doctrine of public interest as laid down in
N.G. Projects Ltd. v. Vinod Kumar Jain, (2022) 6 SCC127, at
paragraph 23,24. The power of judicial review should not be permitted
WPC Nos. 17188 and 17120 of 2023 Page 68 of 107
to be invoked to protect private interest at the cost of public interest, or
to decide contractual disputes as held in Jagdish Mandal (supra) at
paragraph 22.
155. As can be noticed from what has been mentioned
hereinabove and is also discernible from the pleadings on behalf of the
parties that the present case has been contested to the hilt on behalf of
all the parties and rival issues have been addressed threadbare.
156. We, however, at the outset intend to record following
opinions before addressing other issues for the purpose of clarity :-
i. No case of mala fide has been specifically pleaded by
either of the petitioners against any individual in the bidding
process in question;
ii. It has been argued though that the impugned action of
the opposite parties may not be hit by malice in fact, but
certainly the action suffers from the vice of malice in law,
which aspect we shall address at appropriate stage;
iii. It has rightly been argued by the parties across the board
that Clause 2.2.1 pertaining to Conflict of Interest, and Clause
4(d) under Section IV of RFB, which postulates conflict of
interest as one of the undesirable practices, is to prevent
cartelization. However, in our considered view, for invoking
Clause 2.2.1 or applying Clause 4.3(d),cartelization was not
required to be established by the MCL rather existence ofWPC Nos. 17188 and 17120 of 2023 Page 69 of 107
befitting circumstance under the clause is enough to conclude
conflict of interest.
iv. Further, to invoke Conflict of Interest Clause, the
concerned authority was not required to establish that the
parties alleged of having conflict of interest had in fact
attempted to control the bid price and/or otherwise prejudice or
affect the bidding process. The competent authority of the
MCL dealing with the tender process was required to reach a
conclusion, whether conflict of interest could be possibly and
reasonably inferred or not based on the materials before it.
v. The correctness of the decision of the MCL disqualifying
the petitioner invoking conflict of interest has to be considered
by this Court within the ambit of settled legal principles and
limitation of the power of judicial review, in tender matters.
157. Keeping the aforesaid aspects in mind, before we formulate
the issues in controversy required to be addressed, we must notice
certain significant facts, which are crucial for the present adjudication
which are as follows:-
I. After the writ petitioners were disqualified by invoking
Conflict of Interest Clause, the MCL had issued a notice to the
petitioners on the same day i.e., 15.05.2023 stating as under:-
“a. The bid has been disqualified having
conflict of interest as per Cl. No.2.2.1 (b) of RFB
and rejected under Cl. No.4.1 of RFB. EMDWPC Nos. 17188 and 17120 of 2023 Page 70 of 107
deposited during bid submission forfeited as
Damages as per Cl. No.2.2.1 (b), 2.16.5 and 2.16.6
of RFB of NIT 179.”
b. NCC Limited has claimed the Experience of
Pachhwara Coal Mining Private Limited (PCMPL
i.e., an SPV formed by NCC-BGR Consortium with
51% share of NCC Limited and 49% share of BGR
MINING AND INFRA LIMITED), wherein it has
been observed that PCMPL is an Associate of NCC
Limited due to its share of more than 50% as defined
under Cl. No.2.2.4 of RFB. PCMPL is currently
active and executing a project as Mine Developer
cum Operator (MDO) for Pachhwara North Coal
Mine with a stipulated period of completion of 29
years. In the Associate of NCC Limited i.e., PCMPL
you have 49% of share.
It is also observed that, NCC Limited and BGR
Mining & Infra Limited are also associated through
another common third party i.e., M/s. TALAIPALLI
COAL MINING PRIVATE LIMITED.
The registered address of Pachhwara Coal Mining
Private Limited and Talaipalli Coal Mining Private
Limited are the same as that of NCC Limited. The
Director of BGR Mining & Infra Limited and the
Authorized representative of NCC Limited for this
NIT-179 are the Directors of Talaipalli Coal Mining
Private Limited. It is apparent that Talaipalli Coal
Mining Private Limited and Pachhwara Coal
Mining Private Limited are virtually controlled by
NCC Limited and BGR Mining & Infra Limited.
Therefore BGR Mining & Infra Limited has a
relationship (arising due to ownership/ holding/
cross holding) with another Bidder i.e., NCC
Limited, directly or through common third party/WPC Nos. 17188 and 17120 of 2023 Page 71 of 107
parties i.e., M/s. Pachhwara Coal Mining Private
Limited and M/s. Talaipalli Coal Mining Private
Limited.
In the above circumstances, it puts either or both of
them in a position to have access to each other‟s
information about, or to influence the Bid of either
or each other, which attracts Conflict of Interest in
line with the Cl. No.2.2.1 (b).
Therefore, upon scrutiny of the uploaded documents
of M/s. NCC Limited and M/s. BGR Mining & Infra
Limited, it has been observed that, the uploaded bid
documents are not in compliance to Cl.2.2.1 (b),
declaration under Point No.5 of Bidder‟s Covering
Letter and acceptance of bid conditions and under
Cl. No.2.6 of RFB. Therefore, your bid is not eligible
for further evaluation as per provisions of NIT-179.
Hence, the following actions have been taken as per
provisions of NIT-179:
(i) As per Cl. No.2.2.1 (b) of RFB, Bid of BGR
Mining & Infra Limited has been disqualified having
“conflict of interest”.
(ii) As per Cl. No.4.1 of RFB, Bid of BGR Mining
& Infra Limited rejected due to directly or indirectly
engaged in “undesirable practice” as defined under
Cl. No.4.3 (d).
(iii) Bid Security (EMD) deposited by the bidder
i.e., BGR Mining & Infra Limited during bid
submission forfeited as the “Damages” as per Cl.
No.2.2.1(b), 2.16.5 & 2.16.6 of RFB of NIT-179.
Accordingly, by virtue of the provisions of NIT,
your bid has been rejected online in the e-
WPC Nos. 17188 and 17120 of 2023 Page 72 of 107
procurement portal on 15.05.2023 & the EMD has
been forfeited.
In addition, you are liable for action under the
provisions of Cl. No.2.16.6 and 4.2 of RFB of NIT-
179.
Accordingly, you are hereby required to show
cause within 10 days from the date of issue of this
letter as to why the actions as per provisions under
the Cl. No.2.16.6 and Cl. No.4.2 of RFB of NIT-179
shall not be taken against you. Failing which it
would be construed that you have no valid
justification.
“c. It was also observed that NCC Limited and
BGR Mining & Infra Limited are also associated
through another common third party i.e., M/s.
TALAIPALLI COAL MINING PRIVATE LIMITED”.
II. There was an interim order passed by this Court in this case
earlier, as has been noted above, which was dismissed by an order
dated 19.12.2023. Soon after the dismissal of the writ petition, the
Director, BGR Mining filed his reply to the said show-cause notice
dated 15.05.2023. In the said reply, following was stated:-
“a. With regard to the above, we humbly
submit that Pachwara Coal Mining Private Limited
is a Special Purpose Vehicle formed by NCC-BGR
Consortium with 51% share of NCC Limited and
49% share of BGR Mining & Infra Limited. In view
of the above, even as per the Clause 2.2.4 of RFB,
we are neither an associate of NCC Limited, nor do
we have any direct control over the operations of
our Consortium Partner. As such, we do not have
any access to NCC; nor does NCC require BGR‟s
WPC Nos. 17188 and 17120 of 2023 Page 73 of 107
permission to participate in the tenders. It is also
very relevant here to submit that we had no
knowledge that NCC Limited was participating as
one of the bidders for the said Tender. Hence,
Conflict of interest cannot be attributed to BGR.
b. We would like to mention here firstly that M/s.
Talaipalli Coal Mining Private Limited is a Special
Purpose Vehicle incorporated for executing the
project therein and, secondly, the said Talaipalli
Project never took off/ commenced. In fact the said
project was terminated. As such the said SPV i.e.,
M/s. Talaipalli Coal Mining Private Limited, is not
operative.
Moreover, vide our letter dt. 15.05.2023, we
requested your kind authorities for an opportunity of
personal hearing to present our case. Unfortunately,
no such opportunity of personal hearing was ever
accorded to us to explain the exact facts of the case.
Further, we submit that had we been given the
opportunity of personal hearing, we would have
explained the entire facts of the present case to your
esteemed office.
We state that subsequent to filing of the said Writ
Petitions W.P.(C) No.17188 of 2023 & W.P.(C)
No.17120 of 2023, it had come to our knowledge
that based on the guidelines issued by the Coal India
Limited, the Central Coalfields Limited (CCL) has
given clarification in the NIT No.CCL/GM
(CMC)/MDO/ Sanghamitra/GeM/2023/28 dated
27.10.2023; participation by the members of Joint
Ventures/Consortiums/SPVs, executing other
ongoing contracts in the subsequent tenders floated
by CCL is permitted in their individual capacity and
that the same would not amount to disqualification
on the ground of conflict of interest.
WPC Nos. 17188 and 17120 of 2023 Page 74 of 107
We state that in view of the above mentioned
clarification given by CCL, in the RFB dated
27.10.2023, the same would apply to our case also,
as both NCC Limited and BGR Mining & Infra
Limited have participated in the subject NIT in their
individual capacity and that the SPVs have not
participated in the said NIT.
It is further submitted that the Hon‟ble Orissa
High Court in its order dated 19.12.2023 in W.P.(C)
No.17188 of 2023 & W.P.(C) No.17120 of 2023 said
that “determination or interpretation of the
conditions stipulated in the tender documents, being
within the complete domain of the tendering
authority, in exercise of power of judicial review,
this Court has got limited jurisdiction. Even if a
defect is found in the decision-making process, the
court must use its discretionary power under Article
226 with caution and circumspection. It should be
exercised only in furtherance of public interest and
not merely on the basis of a legal point.
In view of the order passed by the Hon‟ble High
Court and also by taking into consideration the
latest developments explained supra in regard to the
Tender work, We being the aggrieved party and to
facilitate us to participate in future MDO Tenders
and without prejudice to our rights and remedies, we
humbly request the MCL authorities to revoke the
forfeiture of EMD and withdraw the Show cause
notice dated 15.05.2023 issued by GM (CMC), MCL
without any punitive action.”
III. In the light of request made by the Director, BGR Mining, a
personal hearing was given to the BGR Mining on 24.01.2024. After
personal hearing was given, what offer was made by the BGR in
personal hearing can be seen from the Communication dated
WPC Nos. 17188 and 17120 of 2023 Page 75 of 107
08.02.2024 addressed to the CMD, MCL, relevant portion of which is
as follows:
“xxx xxx xxx
As such in the said personal hearing, we requested
MCL to refund the Bid security i.e., EMD amount
without any negative effect and not to debar BGR
Mining and Infra Limited from participating in the
future tenders of MCL.
In the said personal hearing we had also requested
you to dispose of the matter within a period of two
weeks from the date of the said personal hearing.
We humbly remind your good office that it was only
at your request we assured you that we would not
resort to any further legal action/ litigation in the
event our request to refund our EMD amount and
not to debar BGR from participating in the future
tenders is considered.
However, till now there has been no action taken
from your good office to resolve the issue on hand.
Any further delay in resolving the present issue will
put immense pressure on our company as we would
not be able to participate in any other tenders (in
view of the forfeiture of EMD) which will result in
huge financial loss to our company.
As such we again remind/request your good office to
resolve the issue as prayed by us in the personal
hearing held on 24.01.2024 by refunding our EMD
amount and not taking any further coercive steps
against us at the earliest.”
Emphasis added
WPC Nos. 17188 and 17120 of 2023 Page 76 of 107
IV. An SLP was preferred by the BGR against the common
judgment of this Court dated 19.12.2023 on 15.03.2024. These
developments as noted above had taken place in the meanwhile.
During the pendency of the SLP preferred by the BGR Mining,
i.e., Civil Appeal No.5390 of 2024 arising out of SLP No.8813 of
2024, a communication was made by the MCL to the BGR on
12.04.2024, which reads thus:
“To,
BGR MINING & INFRA LIMITED
8-2-596/R, Road No. 10,
Banjara Hills, Hyderabad,
State-Telangana, PIN-500034.
Sub- “Development and Operation of Balabhadra
OCP as per Part-II (scope of the Project) of
Contract Agreement and other requirements
specified in the Contract Agreement” invited under
NIT-179 by MCL.
Ref. No.: 1. NIT No: MCL/SBP/GM(CMC)/NIT –
179/2022/595, Date: 17.11.2022.
2. Show Cause Notice: MCL/SBP/GM(CMC)/NIT –
179/2023/097, Dtd. 15.05.2023.
Dear Sir,
Mahanadi Coalfields Limited (MCL) through
General Manger, Contract Management Cell
(CMC), had invited on-line Global Notice Inviting
Tender (NIT) vide No.: MCL/SBP/GM (CMC)/NIT-
179/2022/595 dated 17.11.2022 for the work of
“Development and Operation of BalabhadraOCP as
per Part-II (scope of the Project) of Contract
WPC Nos. 17188 and 17120 of 2023 Page 77 of 107
Agreement and other requirements specified in the
Contract Agreement” for a period of 27 years.
This is in reference to above, where you were one of
the bidders along with two more bidders. During
technical evaluation of the tender you were found to
be in conflict of interest with another bidder (NCC
Limited) under Clause No.2.2.1 (b) of RFB of NIT-
179, due to which your bid was not eligible for
further evaluation and rejected.
Due to the above, following actions have been taken
as per provisions of the NIT- 179:
Bid Security (EMD) deposited by you has been
forfeited as the “Damages” as per Clause
No.2.2.1(b), 2.16.5 & 2.16.6 of RFB of NIT-179.
Show Cause Notice was served to you vide ref. No.
MCL/SBP/GM(CMC)/NIT-179/2023/097 dated
15.05.2023 for banning of business under Clause
No.2.16.6 and 4.2 of RFB of NIT-179.
In response to above Show Cause Notice and on your
request, an opportunity was given to you for
personal hearing on 24.01.2024, where you have
deliberated your stand.
The committee after due consideration of your reply
and personal hearing held with you, comes to
conclusion that you are in Conflict of interest with
another bidder NCC Limited under Clause
No.2.2.1(b) of RFB of NIT-179.
Further, apprising your past conduct, commercial
tenability and satisfactory work with the
undersigned and other subsidiaries of CIL., the
Competent Authority sympathetically acceded the
prayer made by you and has decided not to
debar/blacklist you from participating in future
tenders in MCL/CIL and its subsidiaries as a purely
onetime concession without any precedent.
WPC Nos. 17188 and 17120 of 2023 Page 78 of 107
However, you have been sternly warned against
engaging in any form of undesirable practices in
future tender participation.
Yours‟ faithfully,
General Manager (CMC),
MCL HQ”
(Emphasis supplied)
Similarly, a communication was also made by the MCL to the
NCC on 12.04.2024, which reads as under:
“To,
NCC Limited,
NCC House, Mining Division,
7th Floor, Madhapur, Hyderabad,
State-Telangana, PIN-500081.
Sub- “Development and Operation of Balabhadra
OCP as per Part-II (scope of the Project) of
Contract Agreement and other requirements
specified in the Contract Agreement” invited under
NIT-179 by MCL.
Ref. No.: 1. NIT No: MCL/SBP/GM(CMC)/NIT –
179/2022/595, Date: 17.11.2022.
2. Show Cause Notice: MCL/SBP/GM(CMC)/NIT –
179/2023/098, Dtd. 15.05.2023.
Dear Sir,
Mahanadi Coalfields Limited (MCL) through
General Manger, Contract Management Cell
(CMC), had invited on-line Global Notice Inviting
Tender (NIT) vide No.: MCL/SBP/GM (CMC)/NIT-
179/2022/595 dated 17.11.2022 for the work of
“Development and Operation of Balabhadra OCP
as per Part-II (scope of the Project) of Contract
WPC Nos. 17188 and 17120 of 2023 Page 79 of 107
Agreement and other requirements specified in the
Contract Agreement” for a period of 27 years.
This is in reference to above, where you were one of
the bidders along with two more bidders. During
technical evaluation of the tender you were found to
be in conflict of interest with another bidder (BGR
Mining & Infra Limited) under Clause No.2.2.1 (b)
of RFB of NIT-179, due to which your bid was not
eligible for further evaluation and rejected.
Due to the above, following actions have been taken
as per provisions of the NIT- 179:
Bid Security (EMD) deposited by you has been
forfeited as the “Damages” as per Clause
No.2.2.1(b), 2.16.5 & 2.16.6 of RFB of NIT-179.
Show Cause Notice was served to you vide ref. No.
MCL/SBP/GM(CMC)/NIT -179/2023/098 dated
15.05.2023 for banning of business under Clause
No.2.16.6 and 4.2 of RFB of NIT-179.
In response to above Show Cause Notice and on your
request, an opportunity was given to you for
personal hearing on 24.01.2024, where you have
deliberated your stand.
The committee after due consideration of your reply
and personal hearing held with you, comes to
conclusion that you are in Conflict of interest with
another bidder NCC Limited under Clause
No.2.2.1(b) of RFB of NIT-179.
Further, apprising your past conduct, commercial
tenability and satisfactory work with the
undersigned and other subsidiaries of CIL., the
Competent Authority sympathetically acceded the
prayer made by you and has decided not to
debar/blacklist you from participating in future
tenders in MCL/CIL and its subsidiaries as a purely
onetime concession without any precedent.
WPC Nos. 17188 and 17120 of 2023 Page 80 of 107
However, you have been sternly warned against
engaging in any form of undesirable practices in
future tender participation.
Yours‟ faithfully,
General Manager (CMC),
MCL HQ”
(Emphasis supplied)
In reply to the aforesaid letter dated 12.04.2024 made by the
MCL, the NCC, vide its letter dated 15.04.2024, communicated the
following:
“To
The General Manager (CMC)
Mahanadi Coalfields Limited HQ
JagrutiVihar, Burla, MCL
Dist: Sambalpur-768020 (Odisha)
Email: [email protected]xxx xxx xxx
We sincerely hope that considering the undertaking
given by us vide Letter dated 27.03.2024, not to
further proceed against the Order of High Court in
the SLP filed by us in the Hon‟ble Supreme Court,
which is yet to be numbered, the Management of
MCL will consider our request as communicated
vide our Letter dated 23-12-2023 positively at the
earliest.
We further draw your kind attention to the Circular
dated 07.04.2017, issued by Coal India Limited to
all its subsidiaries, including MCL, mandating
amendment to terms of the NIT by inclusion of
Arbitration Clause. However, the terms of subject
NIT do not contain the said amended clause as
mandated under the Circular of CIL.
WPC Nos. 17188 and 17120 of 2023 Page 81 of 107
However, to avoid further legal proceedings post the
Order of the Hon‟ble High Court of Orissa, we
propose for referring the issue pertaining to
disqualification and forfeiture of EMD to
Arbitration for resolution independently,
notwithstanding the observations of the High Court
in WP No.17188/2023.”
(Emphasis supplied)
158. The communications dated 12.04.2024 have not been challenged
in the present proceeding, though the same has been brought on record.
As is evident from the said communication dated 12.04.2024,
considering the petitioners‟ past conduct and satisfactory work with the
MCL, and other subsidiaries of the CIL, the competent authority is said
to have taken a sympathetic view acceding to the prayer made by the
BGR Mining and decided not to debar/blacklist from participating in
future tenders in MCL/CIL and its subsidiaries as purely one time
concession without any precedent. The petitioners were sternly warned
against engaging in any form of undesirable practices in future tender
participation. The Civil Appeal No.5390 of 2024 was disposed of on
26.04.2024 setting aside this Court‟s order dated 19.12.2023 remitting
the matter back to this Court for hearing afresh and for deciding the
matter afresh mainly, on the ground that the said order did not contain
adequate reasons for dismissal of the writ petitions.
159. In our considered view, the developments subsequent to the
dismissal of the writ petition by order dated 19.12.2023 till
communication of the order dated 12.04.2024 are of significance for
adjudication of the present matter inasmuch as the request of the
petitioner not to debar/blacklist was acceded by the said
WPC Nos. 17188 and 17120 of 2023 Page 82 of 107
communication dated 12.04.2024, notice for which was issued
invoking the conflict of interest clause. In our considered view, once
upon the representation made by the BGR and NCC before the MCL,
the MCL too a decision acceding to the request not to debar or blacklist
the BGR and NCC from participating in future tenders, while
reiterating its conclusion that it was in conflict of interest with each
other, it is impermissible for the BGR and NCC in the present
proceeding to question the disqualification for the tender process in
question. In our considered opinion, the petitioners BGR and NCC,
apparently, in order to ensure that they are not disallowed from
participation in future tenders of MCL made an assurance that they
would not resort to any further legal action/litigation, in the
communication dated 08.02.2024, which was subsequently acceded to
by the MCL through its communication dated 12.04.2024, despite
dismissal of the writ petition by this Court on 19.12.2023, considering
its past conduct, commercial tenability and satisfactory work, as a one-
time concession, without any precedent. It seems that the petitioners
have consciously not questioned the said communication dated
12.04.2024 as that might have had the adverse consequences on the
petitioner‟s participation in future tenders. The petitioner took a
calculated move before the MCL in the personal hearing requesting the
MCL to take a sympathetic view on the point of consequences of the
MCL‟s decision to disqualify the petitioners invoking the conflict of
interest clause.
WPC Nos. 17188 and 17120 of 2023 Page 83 of 107
160. Arguments advanced by Mr. Vikas Singh and Mr. Dama
Seshadri Naidu, learned Senior Counsel appearing on behalf of the
petitioners that in terms of the conditions under RFB
debarment/blacklisting is an essential consequence if a bidder is found
to be in conflict of interest with another tenderer and, therefore, since
the MCL subsequently decided not to debar/blacklist the petitioner,
therefore, the Court should presume that the MCL, after having
realized its mistake on the point of interpretation of the conflict of
interest clause, decided not to debar/blacklist the petitioners, an
inference should be drawn that the MCL also is of the opinion that
there was no conflict of interest.
161. We are of the view that the petitioners had consciously made a
representation before the MCL that they should not be blacklisted and
their EMD should be refunded since blacklisting/forfeitures of EMD
shall have adverse consequence on their future participation in the
tender processes. The MCL rather, in its wisdom and in view of past
commercial association with the petitioner decided not to blacklist
them acting on certain assurances given by the petitioners. In our
opinion, the petitioners, while making such representation responding
to the show-cause notice issued by the MCL, attempted to preempt the
MCL from taking a decision on the point of blacklisting/debarment.
The MCL acceding to their request decided not to blacklist/debar.
Making this ground to question the correctness of the decision of the
tendering authority to disqualify the petitioners invoking the conflict of
interest clause is not at all tenable. The conduct of the petitioners
amounts to “blow hot and cold”, “play fast and loose” or “approbate
WPC Nos. 17188 and 17120 of 2023 Page 84 of 107
and reprobate”, by firstly making a representation before the MCL to
grant concession and later by questioning the decision of the MCL to
disqualify them under the conflict of interest clause taking ground of
the concession having been given.
162. It is deemed beneficial to refer to the Supreme Court‟s decision
in case of R.N. Gosain v. Yashpal Dhir, reported in (1992) 4 SCC
683, reiterating the legal principle that a law does not permit a person
to both approbate and reprobate and has observed in paragraph 10 as
under:
“10. Law does not permit a person to both approbate and
reprobate. This principle is based on the doctrine of
election which postulates that no party can accept and
reject the same instrument and that “a person cannot say
at one time that a transaction is valid and thereby obtain
some advantage, to which he could only be entitled on
the footing that it is valid, and then turn round and say it
is void for the purpose of securing some other
advantage”. [See :Verschures Creameries Ltd. v. Hull
and Netherlands Steamship Co. Ltd. [(1921) 2 KB 608,
612 (CA)] , Scrutton, L.J.] According to Halsbury’s Laws
of England, 4th Edn., Vol. 16, “after taking an advantage
under an order (for example for the payment of costs) a
party may be precluded from saying that it is invalid and
asking to set it aside”. (para 1508)
163. Further the Supreme Court has reiterated the principle of
“approbate and reprobate” in the following cases; in the case Shyam
Telelink Ltd. v. Union of India, (2010) 10 SCC 165 it was held that –
“23. The maxim qui approbat non reprobat (one who
approbates cannot reprobate) is firmly embodied in
English common law and often applied by courts in thisWPC Nos. 17188 and 17120 of 2023 Page 85 of 107
country. It is akin to the doctrine of benefits and burdens
which at its most basic level provides that a person taking
advantage under an instrument which both grants a benefit
and imposes a burden cannot take the former without
complying with the latter. A person cannot approbate and
reprobate or accept and reject the same instrument.”
In the case of Bharti Cellular Ltd. v. Union of India, (2010) 10
SCC 174, it was observed that –
“9. Relying upon the decision of this Court in City
Montessori School v. State of U.P. [(2009) 14 SCC 253]
, New Bihar Biri Leaves Co. v. State of Bihar [(1981) 1
SCC 537] and R.N. Gosain v. Yashpal Dhir [(1992) 4
SCC 683 : AIR 1993 SC 352] , this Court has in Shyam
Telelink Ltd. v. Union of India [(2010) 10 SCC 165] held
that no one can approbate and reprobate and anyone who
has accepted with full knowledge or notice of facts,
benefits under a transaction which he might have rejected
or contested, cannot question the transaction or take up an
inconsistent position qua the same. We have said: (Shyam
Telelink case [(2010) 10 SCC 165] , SCC p. 172, para 23)“23. The maxim qui approbat non
reprobat (one who approbates cannot
reprobate) is firmly embodied in English
common law and often applied by courts in this
country. It is akin to the doctrine of benefits and
burdens which at its most basic level provides
that a person taking advantage under an
instrument which both grants a benefit and
imposes a burden cannot take the former
without complying with the latter. A person
cannot approbate and reprobate or accept and
reject the same instrument.”
In the light of the above, the view taken by the Tribunal is
legally unexceptionable.”
WPC Nos. 17188 and 17120 of 2023 Page 86 of 107
In the case of Union of India v. N. Murugesan, (2022) 2 SCC
25, it was reiterated that
“Approbate and reprobate
26. These phrases are borrowed from the Scots law. They
would only mean that no party can be allowed to accept
and reject the same thing, and thus one cannot blow hot
and cold. The principle behind the doctrine of election is
inbuilt in the concept of approbate and reprobate. Once
again, it is a principle of equity coming under the contours
of common law. Therefore, he who knows that if he
objects to an instrument, he will not get the benefit he
wants cannot be allowed to do so while enjoying the
fruits. One cannot take advantage of one part while
rejecting the rest. A person cannot be allowed to have the
benefit of an instrument while questioning the same. Such
a party either has to affirm or disaffirm the transaction.
This principle has to be applied with more vigour as a
common law principle, if such a party actually enjoys the
one part fully and on near completion of the said
enjoyment, thereafter questions the other part. An element
of fair play is inbuilt in this principle. It is also a species
of estoppel dealing with the conduct of a party. We have
already dealt with the provisions of the Contract Act
concerning the conduct of a party, and his presumption of
knowledge while confirming an offer through his
acceptance unconditionally.”
164. Following the aforediscussed judgments of the Supreme Court,
we hold that after having taken the advantage of the communication
dated 12.04.2024 granting one-time concession by the MCL, the
petitioner is precluded from saying that the basis of its decision
(conflict of interest) was invalid and should be set aside. We reiterate
that a person cannot say at one time that a transaction is valid and
WPC Nos. 17188 and 17120 of 2023 Page 87 of 107
thereby obtain some advantage, to which he could only be entitled on
the footing that it is valid, then turn around to say that it is void for the
purpose for securing the same advantage.
165. If the petitioners have not questioned and could not have
questioned rather they have accepted the grant of one-time concession
by the MCL through communication dated 12.04.2024; in our
considered view, it is impermissible for them to question the decision
of the MCL to disqualify them invoking the conflict of interest clause.
166. As has been noted hereinabove, submissions have also been
made with reference to past tender processes wherein, the MCL had
not invoked the Conflict of Interest Clause, though circumstances
similar to the present tender process did exist. Extensive submissions
have been made with reference to the facts which have been brought on
record by additional affidavits. In our opinion, those facts are neither
germane nor are required to be referred and discussed on the sole
ground that a decision taken in a different tender process cannot be
basis for determining the justification or otherwise of the impugned
decision of the MCL in the present tender process holding that there
was conflict of interest of BGR with NCC and vice versa.
167. After having recorded our conclusions above, we are now left
with the following questions for adjudication:
(i) Whether the decision of the MCL, in the facts and
circumstances which have been noted, the decision of the MCL
to disqualify the petitioners invoking conflict clause is soWPC Nos. 17188 and 17120 of 2023 Page 88 of 107
patently illegal and erroneous as no prudent person/authority
could have reached such conclusion ?
(ii) Whether depending upon the answer to the first question,
the second question pertains to the limited scope of judicial
review in tender matters as has been laid down by the Supreme
Court in a series of decisions ?
168. It is noteworthy that following facts asserted in the counter
affidavit filed on behalf of the MCL have not been disputed:-
(i) The petitioner (BGR) had uploaded work
experience of 3 nos. of coal mines as a contractor.
The work experience at Sl no. 3 i.e. M/s
Pachhwara Coal Mining Private Limited a Special
Purpose Vehicle Company incorporated under
Companies Act, 2013 was that of its „Associate‟.
The perusal of the Letter of Award dt. 12.05.2016
and the Work Done Certificate dt. 15.06.2022 as
issued to PCMPL, shows that it is a consortium of
NCC Ltd. and BGR Mining and the address is of
NCC Limited, NCC House, Madhapur,
Hyderabad- 500081, Telangana, India and NCC
Limited is the Lead Member of the Consortium.
Further, the NCC- BGR consortium was required
to form SPV Company within 30 days of issue of
LoA for entering into Contract Agreement with
WPC Nos. 17188 and 17120 of 2023 Page 89 of 107
the employer West Bengal Power Development
Corporation Limited and accordingly M/s
Pachhwara Coal Mining Pvt. Ltd (SPV) company
was incorporated. NCC Ltd. held 51% share
whereas BGR held 49% of shares of PCMPL.
(ii) BGR Mining and Infra Ltd is another
bidder in this NIT. The tender committee got an
impression of suspicion that the two bidders i.e.
NCC Ltd and BGR Mining seem to be connected
through a common third party i.e. M/s Pachhwara
Coal Mining Private Limited (Associate of
Petitioner NCC Ltd.). Therefore, the tender
committee gathered more information about the
said two bidders as available in public domain
though uploaded documents.
(iii) The authorized signatory of the petitioner
Company in tender is R SubbaRaju. He is the
authorized true & lawful attorney of NCC vide
notarized Power of Attorney dt. 27.01.2023 issued
by ASN Raju, whole time director, NCC Ltd. It is
mentioned that R SubbaRaju was employed with
NCC and holding the position of Director
(Projects), NCC Ltd. Rudraraju SubbaRaju has
digitally signed all the documents uploaded with
TPS & BOQ of the Petitioner Company. The
Authorized Signatory for NCC Ltd. in all the
WPC Nos. 17188 and 17120 of 2023 Page 90 of 107
uploaded documents is of the seal of RS Raju,
Director (Projects). There is a difference in the
name of Authorized Signatory. R SubbaRaju,
Rudraraju Subba Raju& R S Raju are different
names of single person. As per the Company
Master Data available in public domain of M/s
Pachhwara Coal Mining Pvt. Ltd. the company
status (for e filing) is Active and the registered
address of Pachhwara Coal Mining Pvt. Ltd. is
same as that of the Petitioner and the directors
includes RudrarajuSubbaRaju and Rohit Reddy
Bathina.
(iv) On scrutiny of the Company Master Data
of the Petitioner Company, NCC & BGR
available in the public domain it was pointed out
that the names of the both Directors of the SPV
are not appearing as Directors/ Signatory. Upon
searching the DIN No. 00037918 of
RudrarajuSubbaRaju, it was found that he is the
Director of the three registered limited companies
– NCC Vizag Urban Infrastructure Ltd.,
Pachhwara Coal Mining Pvt. Ltd. and Talaipalli
Coal Mining Pvt. Ltd.
(v) Thereafter going through the Company
Master Data of M/s Talaipalli, it was found that
WPC Nos. 17188 and 17120 of 2023 Page 91 of 107
the company status (for e filing) was active and
the registered address is that of NCC, Hyderabad
office. Its Directors/Signatories details included
RudrarajuSubbaRaju and UmapathyreddyBathina.
The name of B. Umapathy Reddy S/o B Venkata
Krishna Reddy appears to be subscribers/
shareholders of BGR Mining & Infra Ltd.
(Annexure E/1), having subscribed to equity share
of 1,08,00,000no.s out of 4,50,00,000 shares i.e.,
24% and Umapathy Reddy Bathina is a director in
BGR Mining & Infra Ltd. Umapathy Reddy
Bathina and B. Umapathy Reddy are 2 different
names of the same person. The names of both the
directors of M/s Talaipalli Coal Mining Pvt. Ltd
are associated with NCC and BGR.
(vi) NCC and BGR are associated to each
other in a SPV company, Pacchwara coal mining
as well as in Talaipalli coal Mining Pvt. Ltd. The
subscriber of BGR Mining & Infra Ltd. Rohit
Reddy Bathina is associated with Rudraraju
SubbaRaju, director (projects) of NCC ltd.
through M/s Pachhwara Coal Mining since
dt.01.06.2016 which is operating from the
registered address of NCC Ltd. The Directors of
both M/s Pachhwara and M/s Talaiapalli are
WPC Nos. 17188 and 17120 of 2023 Page 92 of 107
appointed by its shareholders i.e. NCC& BGR
and they have virtual control over the SPVs.
169. We have reproduced clause 2.2.1 of the RFB in the present
judgment which envisages that a bidder should not have a conflict of
interest that affects the bidding process and any bidder found to have a
conflict of interest shall be disqualified. A bidder, according to the said
clause, shall be deemed to have a conflict of interest affecting the
bidding process if;
(a) the bidder and any other bidder have common controlling
shareholders or other ownership interest. Further, if such bidder has a
relationship (arising due to ownership/holding/cross holding) with
another bidder, directly or through common third party/parties that puts
either or both of them in „a position to‟ have access to each other‟s
information or to influence the bid of either or each other. As has been
noted hereinabove, it is the petitioners‟ case that the bid was supposed
to be applied online and as per the bidding scheme, there was no scope
for the petitioner to know who were the other bidders until the same
was published in the public domain. Further, there could be no
possibility for the petitioners to know that the share holders of the other
bidders had any control by which it could determine the conflict of
interest.
170. We reiterate our observation that the tendering authority during
the techno commercial evaluation was required to consider whether
clause 2.2.1 of the RFB was applicable or not in the given facts and
WPC Nos. 17188 and 17120 of 2023 Page 93 of 107
circumstances. Apparently, BGR and NCC are connected through two
common 3rd parties namely PCMPL and TCMPL. There is admitted
relationship between the BGR and NCC arising due to their holding in
these two SPVs. In PCMPL, the NCC has 51% shareholding whereas
BGR has 49% shareholding. Similarly, in TCMPL, another SPV found
by NCC and BGR, NCC has 51% shareholding in TCMPL and the
BGR 49% share holding in the said SPV which is an existing company.
In the opinion of the tendering authority, since the petitioners‟ had
formed two SPVs and had common holdings, they were in „a position
to‟ influence the bid of another and had access to each other‟s bid
information. It is remarkable to note here that influencing the bid of the
other in fact by the BGR and NCC is not a fact which only could be the
basis for disqualification by applying clause 2.2.1 (B of the RFB).
Whether they were in a position to do so was required to be assessed
by the tendering authority.
171. Whether they were in a position to influence each other because
of common shareholding was the fact to be taken into account by the
tendering authority. In the opinion of the tendering authority, because
of such association of the petitioners through the SPV, they were in a
position to influence each other and therefore, they deserved to be
disqualified.
172. In our considered view, the said opinion formed by the tendering
authority that the petitioners were disqualified because of conflict of
interest cannot be said to be completely unfounded. It further appears
that during the techno-commercial evaluation, the tendering authority
also found that two Directors of TCMPL namely Mr. R.S. Raju and
WPC Nos. 17188 and 17120 of 2023 Page 94 of 107
Mr. U. Reedy were authorized representatives and Directors of NCC
and BGR respectively. The BGR and NCC had, thus, commercial
exposure with each other which put them in a position to access to each
other‟s information about, or to influence the bid of either or each
other. There was no requirement to prove actual exchange between the
bidders.
173. It is trite that the decision making process of the employer or
owner of the project in accepting or rejecting the bid of a tenderer can
be interfered with in a judicial review proceeding only if the decision
making process is mala fide or is intended to favour someone. Said
differently, the decision should be perverse not merely faulty or
incorrect or erroneous as held in case of Afcons Infrastructure Ltd.
Vs. Nagpur Metro Rail Corporation (supra). The Division Bench of
Calcutta High Court in case of Sharma Transport Vs. Coal India
Limited in FMA No.2119 of 2018 (judgment dated 14.12.2018) has
aptly observed in paragraph-41 as under:-
“41. Tender matters are not decided by running a
fine tooth-comb over the process to discover which
‘i’ has not been dotted or which ‘t’ not crossed. The
writ court always maintains a dispassionate distance
from the process and, in course of the adjudication,
does not imagine itself being in the position of the
tender committee or as evaluators of the bids. It is
only if the writ court finds the decision or the
decision-making process to be utterly illegal or
patently irrational or totally unreasonable that it
would seek to intervene. If an executive authority
has acted within its jurisdiction, has adopted a
reasonable procedure and has rendered a cogentWPC Nos. 17188 and 17120 of 2023 Page 95 of 107
decision at the end of the process : the writ court
will ask for nothing more……”
174. The said decision of Calcutta High Court has been relied upon
by the Delhi High Court in the case of Sterlite Grid 20 Limited v. PFC
Consulting Limited and another, reported in 2021 SCC OnLine Del
4357. In the case of Sterlite Grid 20 Limited (supra), a Division Bench
of Delhi High Court had the occasion to deal with a similar conflict of
interest clause. While interpreting the conflict of interest clause the
Delhi High Court took note of the key words used in the conflict of
interest viz. “relationship with each other” and that puts them in a
position to have access to information about.
175. In our considered opinion, after having noticed, the admitted fact
regarding the relationship between BGR and NCC, the decision of
MCL to declare the petitioners‟ disqualified cannot be said to be
unfounded/baseless. It is also noteworthy that under Clause 6.2 of
RFB, the tendering authority had the discretion, without incurring any
obligation or liability to qualify or disqualify any bidder. It is stipulated
that Clause 3.9.2 of the RFB prescribed that the authority reserved the
right to reject all the bids without assigning any reason whatsoever.
176. In case of Municipal Corporation Ujjain v. BVG India Limited,
reported in (2018) 5 SCC 462, the Supreme Court has held that the
principles of equity and natural justice do not operate in the field of
commercial transaction.
177. It would be pertinent to notice the Supreme Court‟s decision in
case of AIR India Limited v. Cochin International Airport Limited,
WPC Nos. 17188 and 17120 of 2023 Page 96 of 107
reported in (2000) 2 SCC 617, summarizing the scope of interference
while exercising power of judicial review in contract matters,
paragraph 7 of which reads thus:
“7. …. The award of a contract, whether it is by a
private party or by a public body or the State, is
essentially a commercial transaction. In arriving at a
commercial decision considerations which are
paramount are commercial considerations. The State
can choose its own method to arrive at a decision. It can
fix its own terms of invitation to tender and that is not
open to judicial scrutiny. It can enter into negotiations
before finally deciding to accept one of the offers made
to it. Price need not always be the sole criterion for
awarding a contract. It is free to grant any relaxation,
for bona fide reasons, if the tender conditions permit
such a relaxation. It may not accept the offer even
though it happens to be the highest or the lowest. But
the State, its corporations, instrumentalities and
agencies are bound to adhere to the norms, standards
and procedures laid down by them and cannot depart
from them arbitrarily. Though that decision is not
amenable to judicial review, the court can examine the
decision-making process and interfere if it is found
vitiated by mala fides, unreasonableness and
arbitrariness. The State, its 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 power under Article 226 with
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 intervene.”
WPC Nos. 17188 and 17120 of 2023 Page 97 of 107
178. In case of Jagdish Mondal (supra), the Supreme Court has held
as under:
“21.4. In Air India Ltd. v. Cochin International
Airport Ltd. [(2000) 2 SCC 617] this Court
summarised the scope of interference as
enunciated in several earlier decisions thus: (SCC
pp. 623-24, para 7)
“7. … The award of a contract, whether it is by a
private party or by a public body or the State, is
essentially a commercial transaction. In arriving at
a commercial decision considerations which are
paramount are commercial considerations. The
State can choose its own method to arrive at a
decision. It can fix its own terms of invitation to
tender and that is not open to judicial scrutiny. It
can enter into negotiations before finally deciding
to accept one of the offers made to it. Price need
not always be the sole criterion for awarding a
contract. It is free to grant any relaxation, for bona
fide reasons, if the tender conditions permit such a
relaxation. It may not accept the offer even though
it happens to be the highest or the lowest. But the
State, its corporations, instrumentalities and
agencies are bound to adhere to the norms,
standards and procedures laid down by them and
cannot depart from them arbitrarily. Though that
decision is not amenable to judicial review, the
court can examine the decision-making process
and interfere if it is found vitiated by mala fides,
unreasonableness and arbitrariness. The State, its
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
power under Article 226 with 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 theWPC Nos. 17188 and 17120 of 2023 Page 98 of 107
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 intervene.”
(emphasis supplied)
179. In the case of Jagdish Mondal (supra), the Supreme Court has
held that the power of judicial review will not be permitted to be
invoked to protect private interest or to decide the contractual disputes.
The tenderer or the contractor with a grievance can always seek
damages in a Civil Court. Paragraph 22 of the said decision is relevant
and is being reproduced hereinbelow:
“22. 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 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
WPC Nos. 17188 and 17120 of 2023 Page 99 of 107
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 thousands 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
reasonably and in accordance with relevant law could
have reached”;
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no
interference under Article 226. Cases involving
blacklisting or imposition of penal consequences on a
tenderer/contractor or distribution of State largesse
(allotment of sites/shops, grant of licences,
dealerships and franchises) stand on a different
footing as they may require a higher degree of
fairness in action.”
180. In Maa Binda Express Carrier vs. North East Frontier Railway
reported in 2014 (3) SCC 760, it has been held that all that the
participating bidders are entitled to is a fair, equal and non-
discriminatory treatment in the matter of evaluation of their tenders.
Award of a contract is essentially a commercial transaction, which
WPC Nos. 17188 and 17120 of 2023 Page 100 of 107
must be determined on the basis of considerations that are relevant to
such commercial decision.
181. In Afcons Infrastructure Limited (supra), the Supreme Court
has held that a mere disagreement with the decision making process or
the decision of the administrative authority is no reason for a
constitutional Court to interfere. The threshold of mala fides, intention
to favour someone or arbitrariness, irrationally or perversity must be
met before the Constitutional Court interferes with the decision making
process. The decision of the tendering authority, in the background of
the facts noted hereinabove, cannot be said to be mala fide. We have
no hesitation in recording our opinion that keeping in mind, the factual
circumstances which have emerged based on enquiry subsequent to
submission of the bids as regards formation of SPVs by the petitioners,
which are companies incorporated under the Companies Act, the
tendering authority acted bona fide in taking a decision by application
of the conflict of interest clause. The High Court exercising power of
judicial review cannot act as an appellate authority dealing with the
merits or correctness of the decision but can examine only the manner
in which the decision is taken or the order is made.
182. We are afraid, exercising power of judicial review in view of the
admitted facts which have been noted above, we cannot substitute our
opinion or the opinion of the tendering authority and hold that there
was no conflict of interest. The Courts exercising power of judicial
review have inherent limitations. It is also noteworthy that no case has
been made out by the writ petitioners to the effect that the action of the
WPC Nos. 17188 and 17120 of 2023 Page 101 of 107
Technical Evaluation Committee was actuated by extraneous
consideration or mala fide. It would be apt to notice the Supreme
Court‟s decision in case of N.G. Projects Limited v. Vinod Kumar
Jain, reported in (2022) 6 SCC 127, paragraphs 23 to 27 read as under:
“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 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 expertise 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 complying 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 mala fide 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.
24. The State has paid over a sum of Rs 3,98,52,396 to
the appellant till date, though the stand of the appellant
is that it had submitted bills of work of Rs 8.5 crores.
The termination of contract would cause additional
financial burden on the State and also deprive theWPC Nos. 17188 and 17120 of 2023 Page 102 of 107
amenity of road for a longer period. The learned
counsel for the appellant has stated that it shall not
claim escalation of costs for the period when the writ
petition before the High Court was pending and there
was a stay granted.
25. In view thereof, we find that the action of the
respondent in setting aside the letter of acceptance
granted to the appellant suffers from manifest illegality
and cannot be sustained. Consequently, the appeal is
disposed of with a direction to the respondent State to
allow the appellant to resume and complete the work
by excluding the period spent in the stay of execution
of the contract.
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 contract bid and has only caused loss to the State
with no corresponding gain to anyone.
27. We also find that multiple layers of exercise of
jurisdiction also delay the final adjudication
challenging the grant of tender. Therefore, it would be
open to the High Courts or the Hon’ble Chief Justice to
entrust these petitions to a Division Bench of the High
Court, which would avoid at least hearing by one of the
forums.”
183. We accordingly conclude thus:
(i) No case of mala fide has been specifically pleaded by
either of the petitioners against any individual in the bidding
process in question;
WPC Nos. 17188 and 17120 of 2023 Page 103 of 107
(ii) It has rightly been argued by the parties across the board
that Clause 2.2.1 pertaining to Conflict of Interest, and Clause
4(d) under Section IV of RFB, which postulates conflict of
interest as one of the undesirable practices, is to prevent
cartelization. However, in our considered view, for invoking
Clause 2.2.1 or applying Clause 4.3(d), cartelization is not
required to be established by the MCL, rather existence of
conditions for attracting the said clauses is enough to conclude
conflict of interest.
(iii) Further, to invoke Conflict of Interest Clause, the
concerned authority was not required to establish that the
parties alleged of having conflict of interest had in fact
attempted to control the bid price and/or otherwise prejudice or
affect the bidding process. The competent authority of the
MCL dealing with the tender process was required to reach a
conclusion, whether conflict of interest could be possibly and
reasonably inferred or not based on the materials before it in
terms of the conditions stipulated thereunder.
(iv) The correctness of the decision of the MCL disqualifying
the petitioners invoking conflict of interest clause has to be
considered by this Court within the ambit of settled legal
principles and limitation of the power of judicial review, in
tender matters.
(v) Following the afore discussed decisions of the Supreme
Court, we hold that after having taken the advantage of theWPC Nos. 17188 and 17120 of 2023 Page 104 of 107
communication dated 12.04.2024 granting one-time concession
by the MCL, the petitioner is precluded from saying that the
basis of its decision (i.e. the conflict of interest) was invalid
and should be set aside. We reiterate that a person cannot say at
one time that a transaction is valid and thereby obtain some
advantage, to which he could only be entitled on the footing
that it is valid, then turn around to say that it is void for the
purpose for securing the same advantage.
(vi) Since the petitioners have not questioned, and could not
have questioned, rather they have accepted the grant of one-
time concession by the MCL through communication dated
12.04.2024; in our considered view, it is impermissible for
them to question the decision of the MCL to disqualify them
invoking the conflict of interest clause for the tender process in
question.
(vii) As has been noted hereinabove, submissions have also
been made with reference to past tender processes wherein, the
MCL had not invoked the Conflict of Interest Clause, though
circumstances similar to the present tender process did exist.
Extensive submissions have been made with reference to the
facts which have been brought on record by additional
affidavits. In our opinion, those facts are neither germane nor
are required to be referred to and discussed on the sole ground
that a decision taken in a different tender process cannot be the
WPC Nos. 17188 and 17120 of 2023 Page 105 of 107
basis for determining the justification or otherwise of the
impugned decision of the MCL in the present tender process
holding that there was conflict of interest of BGR with NCC
and vice versa.
(viii) Exercising power of judicial review, in view of the
admitted facts which have been noted above, we cannot
substitute our opinion in place of the opinion of the tendering
authority and hold that there was no conflict of interest. The
Courts exercising power of judicial review have inherent
limitations too.
184. We have already noted hereinabove, the conduct of the
petitioners. To avoid the consequence of their disqualification in the
nature of blacklisting, they made a representation not to blacklist them
and after their requests were acceded to, they continued to question the
correctness of the decision of the tendering authority of disqualification
invoking the conflict of interest clause. We do not approve of such
conduct of the petitioners in the present set of facts and circumstances.
We have rejected the contention made on behalf of the petitioners that
since the MCL has decided not to blacklist the petitioners, therefore,
their disqualification invoking the conflict of interest clause is also bad
and therefore requires interference.
185. In view of the discussions herein above, we do not find any
merit in the writ applications. No interference is required with the
impugned decision of the disqualification invoking conflict of interest
clause taken by the MCL.
WPC Nos. 17188 and 17120 of 2023 Page 106 of 107
186. However, in the peculiar facts and circumstances of the present
case and in view of the nature of commercial relationship between
MCL on one hand and NCC and BGR on the other hand, we observe
that though we have not interfered with the decision, to disqualify the
petitioners on the ground of conflict of interest and by way of
concession the MCL has decided not to blacklist them; now the MCL
shall not review its decision on the question of blacklisting the
petitioners on the ground of their subsequent conduct of challenging
the MCL‟s decision before this Court despite the undertakings.
187. We further observe that it will be open for the MCL to
reconsider the case of these petitioners for refund of EMD, if forfeiture
of the same may have the consequence of their disqualification/
impediment in participation in any future tender processes.
188. These writ applications are accordingly dismissed with the
aforesaid observations. There shall be no orders as to the costs.
(Chakradhari Sharan Singh)
Chief Justice
Savitri Ratho, J. I agree
(Savitri Ratho)
Judge
SK Jena/Secy. Signature Not Verified
Digitally Signed
Signed by: SANJAY KUMAR JENA
Designation: SECRETARY
Reason: Authentication
Location: High Court of Orissa, Cuttack.
Date: 20-Jan-2025 16:58:12
WPC Nos. 17188 and 17120 of 2023 Page 107 of 107
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