w w w . L a w y e r S e r v i c e s . i n



Bhatia Coal Washeries Ltd. v/s Maharashtra State Mining Corporation Ltd. & Others


Company & Directors' Information:- COAL INDIA LTD GOVT OF INDIA UNDERTAKING [Active] CIN = L23109WB1973GOI028844

Company & Directors' Information:- S & T MINING COMPANY PRIVATE LIMITED [Active] CIN = U13100WB2008PTC129436

Company & Directors' Information:- C T MINING PRIVATE LIMITED [Active] CIN = U10100JH2008PTC013329

Company & Directors' Information:- R. K. MINING PRIVATE LIMITED [Active] CIN = U13209TG2008PTC058844

Company & Directors' Information:- R G C MINING PRIVATE LIMITED [Strike Off] CIN = U25209TN1997PTC037514

Company & Directors' Information:- MAHARASHTRA STATE MINING CORPORATION LIMITED [Active] CIN = U10100MH1973SGC017008

Company & Directors' Information:- U C M COAL COMPANY LIMITED [Active] CIN = U10100UP2008PLC036169

Company & Directors' Information:- K M MINING PRIVATE LIMITED [Active] CIN = U12000UP2007PTC034052

Company & Directors' Information:- BHATIA COAL WASHERIES LIMITED [Active] CIN = U51102MH2008PLC281159

Company & Directors' Information:- T M MINING COMPANY LIMITED [Under Process of Striking Off] CIN = U13100WB2010PLC156401

Company & Directors' Information:- O & K MINING PRIVATE LIMITED [Strike Off] CIN = U74999DL1994PTC062570

Company & Directors' Information:- J K M MINING PRIVATE LIMITED [Strike Off] CIN = U14200MH2008PTC179244

Company & Directors' Information:- N S COAL PRIVATE LIMITED [Active] CIN = U10100MH2003PTC140221

Company & Directors' Information:- B T MINING PRIVATE LIMITED [Active] CIN = U14101MH2008PTC181458

Company & Directors' Information:- A J COAL PRIVATE LIMITED [Active] CIN = U23100MH1994PTC076762

Company & Directors' Information:- S N BHATIA AND CO PRIVATE LIMITED [Active] CIN = U99999DL1976PTC008293

Company & Directors' Information:- A J MINING INDIA PRIVATE LIMITED [Strike Off] CIN = U10100TG2014PTC094267

Company & Directors' Information:- S R F MINING LIMITED [Strike Off] CIN = U14200WB2011PLC170738

Company & Directors' Information:- B L A COAL PRIVATE LIMITED [Active] CIN = U10200MH2009PTC191479

Company & Directors' Information:- V S MINING PRIVATE LIMITED [Strike Off] CIN = U14200DL2011PTC214150

Company & Directors' Information:- G R COAL PRIVATE LIMITED [Strike Off] CIN = U10200GJ2007PTC050341

Company & Directors' Information:- M A MINING PRIVATE LIMITED [Active] CIN = U10300WB2020PTC238143

Company & Directors' Information:- MAHARASHTRA COAL COMPANY PRIVATE LIMITED [Active] CIN = U10100MH2008PTC186624

Company & Directors' Information:- A AND L MINING (INDIA) PRIVATE LIMITED [Active] CIN = U13209KL2008PTC023021

Company & Directors' Information:- BHATIA AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U70109DL1986PTC024822

Company & Directors' Information:- S B R MINING PRIVATE LIMITED [Active] CIN = U14108TZ2001PTC009679

Company & Directors' Information:- COAL CORPORATION OF INDIA LTD [Strike Off] CIN = U10100WB1946PLC013091

Company & Directors' Information:- O S N MINING COMPANY PRIVATE LIMITED [Strike Off] CIN = U14200MP2012PTC029037

Company & Directors' Information:- M & M MINING PRIVATE LIMITED [Active] CIN = U13209MH2003PTC143345

Company & Directors' Information:- P P MINING PRIVATE LIMITED [Strike Off] CIN = U14200MH2009PTC191612

Company & Directors' Information:- K K MINING COMPANY PRIVATE LIMITED [Under Process of Striking Off] CIN = U14200MH2010PTC204764

Company & Directors' Information:- R H MINING PRIVATE LIMITED [Strike Off] CIN = U13100TG2008PTC061529

Company & Directors' Information:- K. BHATIA AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U51420MH1960PTC011708

    Writ Petition No. 6204 of 2019

    Decided On, 09 October 2019

    At, In the High Court of Bombay at Nagpur

    By, THE HONOURABLE MR. JUSTICE R.K. DESHPANDE & THE HONOURABLE MR. JUSTICE VINAY JOSHI

    For the Petitioner: Subodh Dharmadhikari, Senior Advocate, assisted by D.V. Chauhan, A.S. Dabadghao, Advocates. For the Respondent: R1, Anand Jaiswal, Senior Advocate, assisted by R.A. Jain, R2, A.D. Mohgaonkar, R3, A.A. Naik, R4, C.S. Kaptan, Senior Advocate, assisted by H.S. Chawhan, R5 & R6, G.B. Sawal, P.P. Deshmukh, Advocates.



Judgment Text

R.K. Deshpande, J.

1. Notice for final disposal of the matter was issued by this Court on 5-9-2019 and the parties were heard finally by consent. Rule. The petition is being disposed of finally.

2. This petition seeks declaration that the pre-qualification criteria of Tender No.MSMC/MINING/2019/07 dated 16-8-2019 issued by the respondent No.1 is arbitrary and smacks of favourtism, thereby effectively eliminating fair competition and level playing. On 5-9-2019, we heard Shri Subodh Dharmadhikari, the learned Senior Advocate, assisted by Advocates Shri D.V. Chauhan and Shri A.S. Dabadghao, appearing for the petitioner; and Shri Anand Jaiswal, the learned Senior Advocate, assisted by Advocate Shri R.A. Jain, appearing for the respondent No.1-caveator, and noted that the petition challenges the imposition of Conditions 1.5.2(A) Note (2), 1.5.3(A) and 1.6.6(4) on Pages 84B, 84C and 84D of the petition, prescribing the technical criteria requiring to be fulfilled by the bidders in response to the tender notice for the work of “Beneficiation of RoM Coal and Supply of Beneficiated Coal to Chandrapur, Koradi, Khaperkheda, Nasik, Bhusawal, Parli & Paras TPS of MAHAGENCO” by the respondent No.1- the Maharashtra State Mining Corporation Limited. We noted the argument that the technical criteria is best suited to favour the respondent Nos.3 and 4 and directed to eliminate the other competitors at least in Vidarbha region of the State. The criteria is arbitrary, unreasonable and totally disproportionate to the value of the demand of coal.

3. We initially put a question to Shri Subodh Dharmadhikari, the learned Senior Advocate, to address us on the question of scope of interference of this Court in the terms and conditions of the tender notice, the imposition of which is a prerogative of the employer. Our attention was invited to the decision of the Apex Court in the case of Michigan Rubber (India) Limited v. State of Karnataka and ors., reported in (2012) 8 SCC 216. Keeping in view the parameters laid down therein, we expressed that the matter requires consideration and permitted the respondents to go ahead with the process of opening the technical bids, but directed that the financial bids shall not be opened until further orders are passed by this Court. The notice was issued for final disposal and accordingly all the respondents have appeared before us and have clearly expressed that the replies are filed on merits and they do not want to file any additional reply.

4. The petitioner is a Company claiming itself to be one of the leading suppliers of indigenous as well as imported coal not only to almost all the major industries manufacturing cement, oil, iron and steel, sponge iron, soda ash, chemical, paper, etc. It claims to have set up total five washeries in different locations and different parts and is an established leading washery operator. It further claims to have supplied washed coal in the past to the respondent No.2, i.e. the Maharashtra State Power Generation Company Limited, based on their allocations of raw coal from various collieries of Western Coalfields Limited.

5. The respondent No.1 the Maharashtra State Mining Corporation Limited is a Government of Maharashtra Undertaking, whereas the respondent No.2- the Maharashtra State Power Generation Company Limited is also an instrumentality of the State Government. The respondent No.1 is appointed as a Nodal Agency for commercial and profitable exploitation and marketing of coal and other minerals in the State of Maharashtra. The respondent No.2- MSPGCL has entered into an agreement dated 21-6-2019 with the respondent No.1- Corporation for supply of washed coal to various Thermal Power Stations of the respondent No.2, located at different places, from various coal mines of Western Coalfields Limited, Mahanadi Coalfields Limited, South Eastern Coalfields Limited, which are the subsidiaries of Coal India Limited, a Government of India Undertaking.

6. The respondent No.1- Corporation issued a tender notice dated 16-8-2019 containing the terms and conditions for beneficiation of RoM coal and supply of beneficiated coal to Chandrapur, Koradi, Khaparkheda, Nashik, Bhusawal, Parali and Paras Thermal Power Stations of MAHAGENCO. On 29-8-2019, it was claimed by the respondent Nos.1 and 2 that some of the tender conditions were relaxed and the last date for submission of online bids was prescribed as 6-9-2019. The bids were to be opened on 7-9-2019. This petition was filed on 4-9-2019 and the interim order was passed on 5-9-2019. Though the financial bids were not to be opened, the permission was granted to go ahead with the process of opening of technical bids. We are informed that even the technical bids are also not opened.

7. The scope of work in the tender notice is contained in Clause 2.1, which is reproduced below :

“2.1 SCOPE:

The contract covers lifting of 22 Million Metric Tonnes per annum or any additional quantity allocated by WCL/MCL/SECL of RoM G-11/G-13/G-11 bands coal respectively by Road mode from the Collieries of M/s Western Coalfields Limited; M/s Mahanadi Coalfields Limited. And M/s. South Eastern Coalfields Limited, and beneficiation/ washing the coal at the Washery Plant and onward supply of Washed Coal to MAHAGENCO Power Stations through Rail-mode as per the following monthly delivery schedule for Chandrapur, Koradi, Khaperkheda, Nasik, Bhusawal, Parli & Paras TPS of MAHAGENCO.”

It is told to us that the estimated cost of the above work is of Rs.250 crores and it is of one year.

8. Clause 1.6.6 in the tender notice deals with the quantity distribution to bidders. It is in two parts – Category-A and Category-B bidders, based upon the quantity and capacity of coal that can be lifted, beneficiated and supplied.

9. As per Clause 1.6.6(1), the quantity distribution to Category-B bidder is restricted up to maximum 80% of the quantity at the respective Thermal Power Stations and the bidder for this category can be a single bidder or a joint-venture / consortium, comprising not more than three members, all having presence in the coal washing business. To qualify technically, the bidders are required to jointly or severally satisfy all the minimum threshold criteria specified in Clause 1.5.2(B)(1) to (8), including clauses (1) and (2) in the Note below it. The estimated cost of this 80% work is Rs.200 crores.

10. Clause 1.6.6(4) deals with the quantity distribution to Category-A bidders. If they are more than one, the aggregate quantity distribution to them will be restricted to maximum 20% of the quantity at respective Thermal Power Stations and the bidder for this category can be a single bidder, technically qualifying the conditions in clause 1.5.2(A)(1) to (6) and clauses (1) and (2) in the Note below it, provided that the price quoted by Category-A bidder is lower than the price quoted by the L-1 bidder of Category-B. The estimated cost of this 20% work is Rs.50 crores.

11. Clause 1.5 deals with the minimum qualification requirements. It is in two parts – (1) the technical criteria for Category A and Category B bidders, contained in Clause 1.5.2, and (2) the financial criteria for both these categories, contained in Clause 1.5.3. For Category-B bidder, the relevant technical criteria is prescribed under Clauses 1.5.2(B)(4) and (5), which are reproduced below :

“1.5.2 Technical Criteria

B) Category B

Under Category B, the Bidder can be a single bidder or a joint-venture/consortium comprising not more than two members. To qualify technically, Bidders shall (in case of JV/Consortium either jointly or severally) satisfy all the following minimum threshold criteria

(4) The bidder must have executed (in case of JV/Consortium on collectively / aggregate basis executed) the work of lifting and beneficiation of an average quantity of 3.00 million metric tons per annum (3.00 MMTPA) of RoM coal and supply of beneficiation coal (Washed Coal) in the last three financial year (2016-17, 2017-18 and 2018-19).

(5) The bidder must have supplied beneficiated coal to any state electricity Board or Central Government owned Company or any state owned company or supply to Independent Power Producer (IPP) (not Captive).”

Note 2 in the aforesaid criteria is also relevant and it is reproduced below :

“The Bidder should offer minimum quantity of 2 Million MTPA from each of the three subsidiaries i.e. South Eastern Coalfields Limited, Western Coalfields Limited and Mahanadi Coalfields Limited. However, the Bidder may offer maximum quantity up to the approved capacity, as approved by the state pollution control boards of their Washery or their available spare capacity whichever is lower.”

The relevant financial criteria for Category-B bidder is contained in Clause 1.5.3(B), which is reproduced below :

“1.5.3 Financial Criteria

B) Category B

The Bidder must demonstrate sound financial status as defined under this clause to the satisfaction of MSMC. However in case of Bidder participating in form of Consortium, the Lead Member shall fulfill the following:

1. As on 31st March 2019, the Bidder should have a Networth of atleast Indian Rupees 240 Crores and a Turnover of atleast Indian Rupees 450 Crores.

2. Credit Limits as on the date not prior to 15 days before the last date of submission of Bid along with bank references of the Lead Member of the joint venture / consortium.”

12. The technical criteria for Category-A bidder, contained in Clauses 1.5.2 (A)(4) and (5), are reproduced below :

“1.5.2. Technical Criteria

A) Category A

Under Category A, the Bidder can only be a single bidder. Further, the said Bidder shall be prohibited for submitting multiple bids either directly or through any of the related party/affiliate/associate. An affidavit cum undertaking to this effect shall be submitted the Bidders along with Bid.

To qualify technically, Bidders shall satisfy all the following minimum threshold criteria.

4) The Bidder must have executed the work of lifting and beneficiation of an average quantity of 1.50 million metric tons per annum (1.50 MMTPA) of RoM coal and supply of beneficiation coal (Washed Coal) in the last three financial year (2016-17, 2017-18 and 2018-19). The Bidder shall have to indicate the beneficiation work carried out in the last three years in (i.e. 2016-17, 2017-18 and 2018-19) in Annexure-III showing the details of Customers, Year-wise Quantity of Raw Coal lifted Washed and dispatches by Rail along with the washing technology deployed for the same.

5) The Bidder must have supplied beneficiated coal to any state electricity Board or Central Government owned Company or any state owned company or supply to independent Power Producer (IPP)(not Captive). The Bidder should have executed the contracts successfully to the satisfaction of the order placing party without any default.”

Note 2 under the said Clause is also relevant and it is, therefore, reproduced below :

“The bidder should have a minimum installed capacity of 2.00 MMTPA washery in any of the three subsidiaries. Further the Bidder should offer minimum quantity of 1 MMTPA from any of the three subsidiaries i.e. South Eastern Coalfields Limited, Western Coalfields Limited and Mahanadi Coalfields Limited. However, the Bidder may offer maximum quantity upto the approved capacity, as approved by the state pollution control boards of their Washery or their available spare capacity whichever is lower.”

13. The relevant financial criteria for Category-A bidder is contained in Clause 1.5.3(A), which is reproduced below :

Clause 1.5.3(A) :

“The Bidder must demonstrate sound financial status as defined under this clause to the satisfaction of MSMC:

1. As on 31st March 2019, the Bidder should have a net worth of atleast Indian Rupees 85 Crores and a Turnover of atleast Indian Rupees 140 Crores.

2. Credit Limits as on the date not prior to 15 days before the last date of submission of Bid along with Bank references of the bidder.”

14. The petitioner does not satisfy the technical criteria specified under Clause 1.5.2(B)(4) and (5) for Category B bidder. The petitioner has not executed the work of lifting and beneficiation of an average quantity of 3.00 million metric ton per annum of RoM Coal and supply of beneficiation coal (washed coal) in the last three financial years - 2016-17, 2017-18, and 2018-19 to any State Electricity Board, Central Government-owned Company, State-owned Company or Independent Power Producer. The petitioner does not satisfy the financial criteria for Category B bidder under Clause 1.5.3(B), i.e. as on 31-3-2019, the bidder should have a net worth of at least Indian Rs.240 crores and a turnover of at least Indian Rs.450 crores.

15. So far as Category A bidder is concerned, the petitioner does not satisfy the technical criteria under Clause 1.5.2(A)(4) and (5). The petitioner has not executed the work of lifting and beneficiation of an average quantity of 1.50 million metric ton per annum of RoM Coal and supply of beneficiation coal (washed coal) in the last three financial years – 2016-17, 2017-18 and 2018-19 to any State Electricity Board, Central Government-owned Company, Stateowned Company or Independent Power Producer. The petitioner also does not satisfy the technical criteria under Note 2 of Clause 1.5.2(A) to satisfy that it has a minimum installed capacity of 2.00 million metric ton per annum washery in any of the three subsidiaries. The petitioner does not satisfy the financial criteria for Category A bidder, as specified in Clause 1.5.3(A), i.e. as on 31-3-2019, the bidder should have a net worth of at least Indian Rs.85 crores and a turnover of at least Indian Rs.140 crores.

16. Obviously, the petitioner is aggrieved by the aforesaid conditions, which it does not satisfy and the same are challenged on the ground that these conditions have been incorporated to eliminate the fair competition and do not provide a level playing field to the bidders, like the petitioner. The challenge is that the minimum qualification requirements are tailor-made to select the respondent Nos.2 and 4, which propagate favouritism and smack arbitrariness. It is urged that the conditions in sub-clauses (4) and (5) of Clauses 1.5.2(A) and 1.5.2(B) can be satisfied only by the respondent Nos.3 and 4, who are having multiple washeries in the South Eastern Coalfields Limited and Mahanadi Coalfields Limited regions, and this is how the washery operators in the Western Coalfields Limited area have been eliminated from the competition despite they having the capacity and capability to execute the work.

17. It is urged that the financial criteria of having a net worth of at least Rs.85 crores and a turnover of at least Rs.140/- crores, introduced by way of corrigendum for Category A bidder as on 31-3-2019, does not have any nexus with the scope of work to be executed by the bidder under Category A. It is much more higher than the scope of work which is awarded to a bidder under Category A. It is pointed out that the maximum quantity of coal that can be prospectively given for beneficiation to the bidder under Category A is 4.4 million metric ton per annum and the cost of it, would be around Rs.50 crores, whereas the requirement of net worth and turnover is of more than fourteen times of the minimum quantity to be offered by Category A bidder.

18. In respect of Clause 1.5.3(B), it is urged that the financial criteria is to have a net worth of at least Rs.240 crores and a turnover of at least Rs.400 crores, introduced through corrigendum, whereas Category B bidder is required to offer a minimum of 2.00 million metric ton per annum from each of the three subsidiaries, i.e. South Eastern Coalfields Limited, Western Coalfields Limited and Mahanadi Coalfields Limited, as per Clause 1.5.2(B), Note 2, the cost of it, would come around Rs.66 crores for 6.00 million metric ton per annum. It is urged that the entire tender is valued at Rs.252 crores per annum and asking the bidder for a turnover of Rs.400 crores is absolutely whimsical, having no nexus to the scope of work being tendered.

19. In respect of sub-clauses (4) and (5) of Clause 1.5.2(A) for Category B bidder, it is urged that the minimum qualifying technical requirement of execution of work of lifting and beneficiation of an average quantity of 1.50 million metric ton per annum (Category A) and 3.00 million metric ton per annum (Category B) of RoM Coal and supply of beneficiation coal in the last three financial years – 2016-17, 2017-18 and 2018-19 cannot be fulfilled by any of the bidders from Vidarbha region, for the reason that the coal washeries, which are located in the Western Coalfields Limited belt, have been virtually inoperative since 2011 due to MAHAGENCO obtaining raw coal directly from Western Coalfields Limited for its Thermal Power Stations, resulting in no work of coal beneficiation being awarded to the washeries situated herein. It is the further averment that none of other Industries, which require beneficiated coal, require such a huge quantity as compared to the Thermal Power Stations. As a result, none of the washery operators in the Western Coalfields Limited belt are in a position to comply with the aforesaid tender conditions.

20. It is further urged that as per Clause 1.6.6, the L-1 bidder in Category A is required to quote the rate which is lesser than the rate quoted by the L-1 bidder in Category B in order to obtain the work order. It is further urged that at the same time, the L-1 bidder in Category B is not required to match the rate quoted by the L-1 bidder in Category A. Thus, the arbitrariness is writ large, since the bidders under Category B are awarded 80% of the tender work, their cost of executing such work is bound to be significantly lower in view of the bulk quantity than that of a bidder in Category A, who is to execute 20% of the tender work.

21. Several other contentions are raised by Shri Subodh Dharmadhikari, the learned Senior Advocate appearing for the petitioner, including non-compliance of the guidelines framed by the Central Vigilance Commission, Government of India, on 17-12-2002 and 7-5-2004, which are binding on the parties. We do not propose to refer to all such arguments and the documents placed on record in support of such arguments. Shri Anand Jaiswal, the learned Senior Advocate appearing for the respondent No.1; Shri A.D. Mohgaonkar, the learned counsel appearing for the respondent No.2; Shri A.A. Naik, the learned counsel appearing for the respondent No.3; Shri C.S. Kaptan, the learned Senior Advocate appearing for the respondent No.4; and Shri G.B. Sawal, the learned counsel appearing for the respondent Nos.5 and 6, have also taken us through various documents placed on record to oppose the claim made by the petitioner in the present case. We also do not wish to refer to those documents in detail, as we are of the view that the petition can be decided on merits on a very short ground.

22. It is an undisputed position that the petitioner does not satisfy the minimum qualifying technical criteria mentioned in sub-clauses (4) and (5) of Clause 1.5.2(A) for Category A bidder, and Clause 1.5.2(B) for Category B bidder. The conditions are of having executed the work of lifting and beneficiation of an average quantity of 1.50 or 3.00 million metric tone per annum of RoM Coal and supply of beneficiation coal (washed coal) in the last three financial years - 2016-17, 2017-18 and 2018-19 to any State Electricity Board, Central Government-owned Company, State-owned Company or Independent Power Producer.

23. In our view, merely because the petitioner does not fulfill or satisfy the essential minimum qualifying technical criteria of requisite experience specified in sub-clauses (4) and (5) of Clauses 1.5.2(A) and 1.5.2(B) of the tender document, and stands eliminated from the competition, neither the said condition becomes unreasonable, unjust or arbitrary, nor the petitioner gets any right to challenge it. What we find is that these conditions are incorporated to ensure that the washeries available with the bidders are in good running condition and able to effectively and continuously achieve the target required. The condition of having past experience of three years proximate to the period of contract in question, is to judge the capacity and efficiency of the bidders. The conditions have, therefore, reasonable nexus with the award of contract to have smooth, efficient, regular, continuous, uninterrupted and timely supply of quality coal to various Thermal Power Stations. All those who do not satisfy would obviously and naturally stand eliminated. In such a case, there would be no question of artificial distinction and the conditions cannot per se be considered as arbitrary and unreasonable.

24. Our attention is invited by Shri Subodh Dharmadhikari, the learned Senior Advocate for the respondent No.1, to the averments made in Para 7 of the affidavit in support of the aforesaid challenge, and the relevant portion of it, is reproduced below :

“7. … It is submitted that, the Coal Washeries which are located in the WCL belt have been virtually inoperative since 2011, due to MAHAGENCO obtaining raw coal directly from WCL for its Thermal Power Stations resulting into no work of coal beneficiation being awarded to the washeries situated herein. None of the other industries which require beneficiated coal requires such a huge quantity as compared to Thermal Power Stations. Therefore, in absence of any work from MAHAGENCO in the past several years, none of the washery operators in the WCL belt are in a position to comply with the aforesaid tender condition. Yet again, it is the third & fourth respondents having multiple washeries in the SECL & MCL regions, who can satisfy the aforesaid requirement of experience. By putting in such a condition, all the washery operators in the WCL areas have been eliminated from the competition despite they having the capacity and capability to execute the work. The petitioner has four coal washeries in the WCL area & another in MCL belt and has successfully executed the work of coal beneficiation and supply in the past. The petitioner has also executed similar work in past even for the second respondent. Therefore, it cannot be said that the petitioner does not have the experience to execute the tendered work in question, but for the aforesaid peculiar, stringent, whimsical, arbitrary and tailor-made conditions drafted to favour some particular firms like third and fourth respondent, that the otherwise competent bidders such as the petitioner are being eliminated from the competition. By putting in such conditions for pre-qualification of the bidders, otherwise competent firms are being ousted and there is an absence of any level playing field in the tender in question.”

25. Shri Anand Jaiswal, the learned Senior Advocate for the respondent No.1- Corporation, has invited our attention to Para 5 of the additional submissions, which is also reproduced below :

“5) That the petitioner has stated in the petition that since 2011, MAHAGENCO is obtaining raw coal directly from WCL resulting into no work for washeries situated in the WCL area and hence tender condition cannot be complied with. That it is humbly submitted apart from respondent no.2 there are other power producers in or near the WCL area who requires washed coal, some of them are as under:

a) Adani Power Maharashtra Ltd., Tiroda Thermal Power Plant, Gondia.

b) RKM Powergen Pvt. Ltd. Raigarh (C.G.).

c) GMR Warora Energy Ltd., Chandrapur.

d) Madhya Pradesh Genco Ltd., Sarni Thermal Power Plant.

e) Madhya Pradesh Genco Ltd., Khandwa Thermal Power Plant.

f) Dhariwal Infrastructure, Chandrapur.

g) M.B. Power, Anuppur (M.P.)

That it would not be out of place to mention here that one of the bidder namely, N.N. Global Mercantile Pvt. Ltd., Chandrapur have supplied 17 lakh tonnes of washed coal to some of the Power Producers mentioned above till January 2019. That apart from respondent no.2, there are other power producers who requires washeries for power generation and therefore it cannot be said that washeries are not operative as MAHAGENCO is taking raw coals directly from collieries. That the said contention is baseless and petitioner is just trying to create an obstacle in the tender process. That further it is submitted that apart from power plants, cement industry, iron and steel plants also require large quantities of washed coals for production of cement and steel respectively. Hence the use of beneficiated coal is not limited to thermal power plants but the same is used in other industries as mentioned above and hence contention that no work of coal beneficiation is available to washeries is not acceptable. That from above it is also clear that washeries situated in Maharashtra is also supplying beneficiated coal to power plants situated in other States such as Punjab and Madhya Pradesh. That inspite of requirement of huge amount of washed coal in different power plants and other industries, if washeries are not operative then adverse inference should be taken.”

26. It is the claim that the coal washeries located in the Western Coalfields Limited belt have been virtually inoperative since 2011, due to MAHAGENCO obtaining raw coal directly from the Western Coalfields Limited for its Thermal Power Stations, resulting into no work of coal beneficiation being awarded to the washeries situated in the area. It is also the claim that none of the other industries require the beneficiated coal in such a huge quantity as compared to the Thermal Power Stations. Therefore, in the absence of any work from MAHAGENCO in the past several years, none of the washery operators in the Western Coalfields Limited belt are in a position to comply with the aforesaid tender condition.

27. All the aforesaid averments are denied by the respondent No.1, and it is the stand taken that there are other power producers in or near the Western Coalfields Limited area which require washed coal and the names of such power producers are specified. It is the stand taken that one of the bidders, namely N.N. Global Mercantile Private Limited, Chandrapur, has supplied 17 lakh tone washed coal to some of the power producers mentioned in the said belt till January 2019. It is also the stand taken that the other power producers also require washed coal, and merely because the MAHAGENCO is taking raw coal directly from the collieries, cannot be the ground. It is further the stand taken that apart from the power plants, some industries and iron and steel plants also require large quantities of washed coal for production of cement and steel, which are used in power project.

28. In our view, there are disputed questions of fact. The grounds of challenges to the technical requirement of requisite experience, cannot be substantiated on the basis of the disputed questions of fact in a writ jurisdiction. We, therefore, do not find substance in the justification putforth by the petitioner.

29. We would like to note the decision of the Apex Court in the case of Directorate of Education and others v. Educomp Datamatics Ltd. and others, reported in (2004) 4 SCC 19, in which the cost of project of establishing computer labs in the National Capital Territory area in all government schools was approximately Rs.100 crores. On several occasions, the tenders were invited from the firms having a turnover of Rs.2 crores, Rs.5 crores, and Rs.30 crores, but the difficulties were faced and the tenders were cancelled and ultimately the contract was required to be distributed amongst eight parties. In view of the fact that the lowest tenderer was not able to take up the entire project, the Government took a policy decision to deal with one company having a financial capacity to take up such a project instead of dealing with number of small companies which were able to take up the entire project individually. The decision was taken to invite tenders from the firms having a turnover of Rs.20 crores or more for the last three financial years, ending with 31-3-2002.

30. In a challenge to the aforesaid condition, the High Court struck down the offending clause as being arbitrary and irrational. It was held that the condition was incorporated solely with an intent to deprive a large number of companies imparting computer education from bidding and to monopolize the same for big companies. The Apex Court allowed the appeal and set aside the decision of the High Court.

31. In the aforesaid decision, the Apex Court has held in Para 12 as under :

“12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.”

In Para 13, it is held as under :

“13. ...As a matter of policy the Government took a conscious decision to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies which is a relevant consideration while awarding such a big project. Moreover, it was for the authority to set the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitr

Please Login To View The Full Judgment!

ary or discriminatory or actuated by malice. While exercising the power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier tender notice would serve the purpose sought to be achieved better than the terms of tender notice under consideration and order change in them, unless it is of the opinion that the terms were either arbitrary or discriminatory or actuated by malice. The provision of the terms inviting tenders from firms having a turnover of more than Rs.20 crores has not been shown to be either arbitrary or discriminatory or actuated by malice.” 32. Keeping in view the aforesaid law laid down by the Apex Court, it has to be held that if a conscious policy decision is taken to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies, there is no malice involved in it and the conditions incorporated cannot be said to be arbitrary or discriminatory. It has to be kept in mind that the party calling for tenders is entitled to pragmatic adjustments which may be called by the particular circumstances. We have seen such circumstances existing in the present case indicating that the respondent No.2- MAHAGENCO has always been unsuccessful in getting the regular, continuous and uninterrupted supply of quality coal, as a result of which there were problems of pollution in the environment and shutting down the power units for want of smooth, regular and uninterrupted supply of coal. 33. Once we hold that there is no substance in the challenge to the essential conditions of minimum qualifying technical requirements contained in sub-clauses (4) and (5) of Clauses 1.5.2(A) and 1.5.2(B) of the tender document, there is no occasion for us to proceed further in the matter to consider the other challenges on merits. The petitioner is out of competition in response to the tender in question and, therefore, we cannot judge the validity of the other conditions in the tender document, as are urged by Shri Subodh Dharmadhikari, the learned Senior Advocate for the petitioner, as it would merely be an academic discussion and our final decision would not alter, even if we hold those conditions to be arbitrary or unreasonable. We do not find any allegation of factual malice or favouritism even if ultimately the contract is awarded to the respondent Nos.4 and 5 or some other competitors. 34. In view of above, we do not find any substance in the challenge raised. The petition is dismissed. Rule stands discharged. No order as to costs. Lanjewar, PS 35. At this stage, Shri Chauhan, the learned counsel appearing for the petitioner, seeks continuation of the interim order for a further period of four weeks. The prayer is opposed by the learned counsels appearing for the respondents. 36. Keeping in view the fact that the public interest is involved, we do not find that it is a case for staying the operation of the order. The prayer is, therefore, rejected. 37. It seems that the respondent No.4 filed submissions in bullet points on 1-10-2019. There was no noting that the case is closed for judgment and, therefore, the office did not place these submissions before this Court. However, since the judgment is already pronounced and the petition is dismissed, there is no need to take these submissions on record.
O R