IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.987 of 2009 1. THE STATE OF BIHAR THROUGH THE SECRETARY, MINES AND GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 2. THE SECRETARY, MINES AND GEOLOGY DEPARTMENT, GOVT. OF BIHAR, PATNA, 3. THE BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, BAILEY ROAD, PATNA, 4. THE CHAIRMAN, BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, BAILEY ROAD, PATNA, AND 5. THE MANAGING DIRECTOR, BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, BAILEY ROAD, PATNA ….. RESPONDENTS - …………………………………………..…. APPELLANTS Versus 1. M/S BHAGWATI COAL DISTRIBUTORS, A PROPRIETARY CONCERN HAVING ITS PLACE OF BUSINESS AT SHAHPUR, TIKARI ROAD, AURANGABAD, THROUGH ITS PROPRIETOR, SHYAM KISHORE PRASAD, SON OF LATE DEO NANDAN PRASAD, RESIDENT OF URMILA VILLA, M.O. SURYA MANDIR ROAD, P.O., P.S. TOWN AND DISTRICT – AURANGABAD ……… PETITIONER – ………………RESPONDENT (RESPONDENT 1ST SET) AND 2. M/S MAHALAXMI CONTINENTAL PVT. LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGIONAL OFFICE SITUATED AT GALI NO. 8, BELTALA, GAUHATI, ASSAM ... RESPONDENT-RESPONDENT (RESPONDENT 2ND SET) …………………………………….... RESPONDENTS. with LPA No.989 of 2009 1. THE STATE OF BIHAR THROUGH THE SECRETARY, MINES AND GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 2 2. THE SECRETARY, MINES AND GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 3. THE BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA THROUGH ITS MANAGING DIRECTOR, 4. THE CHAIRMAN, BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, BAILEY ROAD, NEW SECRETARIAT, PATNA, AND 5. THE MANAGING DIRECTOR, BIHAR STATE MINERAL DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA ………… RESPONDENTS- …………………………………………………. APPELLANTS Versus 1. M/S S.G. PROJECTS LTD., A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT 613 JASMINE TOWER, 31- SHAKESPEARE SARANI, KOLKATA-17, THROUGH ONE OF ITS DIRECTOR SHRI SURESH SINGH, SON OF SRI TEJAN SINGH, RESIDENT OF RAMAYAN NIWAS, BARWA ROAD, DHAIYA, DHANBAD, DISTRICT – DHANBAD (JHARKHAND) ….. PETITONER – RESPONDENT (RESPONDENT 1ST SET) AND 2. M/S MAHALAXMI CONTINENTAL PVT. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT GALI NO. 8, BELTALA, GAUHATI, ASSAM ... RESPONDENT- RESPONDENT (RESPONDENT 2ND SET) …………………………………….……….... RESPONDENTS. with LPA No.1034 of 2009 M/S MAHALAXMI CONTINENTAL PVT. LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE GALI NO. 8, BELTALA, GAUHATI, ASSAM THROUGH ONE OF ITS DIRECTORS, NAVIN KUMAR GUPTA, SON OF SHRI LAXMI CHANDRA GUPTA, RESIDENT OF GALI NO. 8B, N.H.-37, BELTALLA, GAWAHATI ………………... RESPONDENT- APPELLANT Versus 1. THE STATE OF BIHAR THROUGH THE SECRETARY, MINES & GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 3 2. THE SECRETARY, MINES AND GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 3. THE BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA, THROUGH ITS MANAGING DIRECTOR, 4. THE CHAIRMAN, BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA, 5. THE MANAGING DIRECTOR, BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA ….. ……………………..RESPONDENTS – RESPONDENTS AND 6. M/S S.G. PROJECTS LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE 613, JASMINE TOWER, 31, SHAKESPEARE SARANI, KOLKATA-17, THROUGH ONE OF ITS DIRECTORS, SHRI SURESH SINGH, S/O SRI TEJAN SINGH, RESIDENT OF RAMAYAN NIWAS, BARWA ROAD, DHAIYA, DHANBAD, (JHARKHAND) ……………... PETITONER – RESPONDENT with LPA No.1049 of 2009 M/S MAHALAXMI CONTINENTAL PVT. LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT GALI NO. 8, BELTALA, GAUHATI, ASSAM THROUGH ONE OF ITS DIRECTORS, NAVIN KUMAR GUPTA, SON OF SHRI LAXMI CHANDRA GUPTA, RESIDENT OF GALI NO. 8B, N.H.-37, BELTALLA, GAWAHATI ……………... RESPONDENT- APPELLANT Versus 1. THE STATE OF BIHAR THROUGH THE SECRETARY, MINES & GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 2. THE SECRETARY, MINES AND GEOLOGICAL DEPARTMENT, GOVT. OF BIHAR, PATNA, 3. THE BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA THROUGH ITS MANAGING DIRECTOR, 4 4. THE CHAIRMAN, BIHAR STATE MINERALS DEVELOPMENTS CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA, 5. THE MANAGING DIRECTOR, BIHAR STATE MINERALS DEVELOPMENT CORPORATION LTD., VIKASH BHAWAN, NEW SECRETARIAT, PATNA ….. ……………….. RESPONDENTS – RESPONDENTS, AND 6. M/S BHAGWATI COAL DISTRIBUTORS, A PROPRIETARSHIP CONCERN HAVING ITS OFFICE AT SHAHPUR, TIKARI ROAD, THROUGH ITS PROPRIETOR, SHYAM KISHORE PRASAD, SON OF LATE DEO NANDAN PRASAD, RESIDENT OF URMILA VILA, SURYAMANDIR ROAD, P.O., P.S. TOWN AND DISTRICT – AURANGABAD …………… PETITIONER – RESPONDENT ----------- (L.P.A. Nos. 987/09 & 989/09) For the appellants: Mr. V.M.K. Sinha, Spl. P. P. (Mines)– cum – S.C.-III. For the respondents: Mr. Y.V. Giri, Sr. Advocate, Mr. N.K. Agarwal, Sr. Advocate, Mr. Raj Kishore Prasad and Mr. Tej Bahadur Roy, Advocates. (L.P.A. Nos. 1034/09 & 1049/09) For the appellants: Mr. Gyan Prakash Ojha, Advocate. For the respondents: Mr. V.M.K. Sinha, Spl. P. P. (Mines)– cum – S.C.-III. ----------- PRESENT- THE HON’BLE THE CHIEF JUSTICE THE HON’BLE MR JUSTICE RAMESH KUMAR DATTA O R D E R (06.05.2010) As per Dipak Misra, C.J.- Regard being had to the similitude of assail, this batch of appeals was heard analogously and is disposed of by a common order. 2. In LPA No. 987/2009 and LPA No. 989/2009, the 5 State of Bihar and its functionaries, and in LPA No. 1034/2009 and LPA No. 1049/2009, the affected private respondents, whose selection has been held to be unsustainable, have called in question the legal substantiality of the common order dated 01.07.2009 passed by the learned single Judge in CWJC Nos. 17360/2008 and 16265/2008. 3. Though we have indicated hereinabove that there is commonality in the controversy and hence a singular order yet for the sake of clarity and convenience, we shall advert to the factual exposition in each case separately. 4. M/s S.G. Projects Ltd., the respondent no. 6 in LPA No. 1034/2009, preferred CWJC No. 16265/2008 contending, inter alia, that the Ministry of Coal, Government of India issued a New Coal Distribution Policy, 2007 (for short, `the 2007 Policy’) on 18.10.2007 under which the Government of India had decided to supply coal through Fuel Supply Agreement by the Coal India Limited at notified prices to be fixed and declared by the Coal India Limited. As per the 2007 Policy, the 6 existing linkage holders of erstwhile core and non-core sector and not having Fuel Supply Agreement would be required to enter into Fuel Supply Agreement with Coal Companies. The distribution of coal to the units whose requirement was up to 4200 tons per annum would be drawn through the agencies nominated by the State Governments while the units whose requirement was more than 4200 tons per annum will take coal directly from Coal India Limited / subsidiary companies through Fuel Supply Agreements. As far as the linked consumers of erstwhile non-core sector whose annual requirement was less than 4200 tons were concerned, they were given the option to either enter into the Fuel Supply Agreement with the coal company as per the standard terms and conditions or they may opt out of the Fuel Supply Agreement regime and access their coal requirement through agencies nominated by the State Government. 5. A reference has been made to Clause 3.1 of the 2007 Policy as regards the role ascribed to the State Governments under the policy. It has become the obligation of the State Governments to work out the 7 genuine requirement of such units in small and medium sectors like smokeless fuel, brick kiln, coke oven units, etc. and on transparent and scientific basis and distribute coal to them accordingly. The State Governments are also required to take proper steps to evaluate the genuine consumption and monitor the use of coal. It has been set forth in order to meet the enhanced cap fixed for such consumers, the quantity earmarked for distribution to these agencies would also be increased to eight million tons annually and the said quantity would be allocated for distribution to those units/consumers in small and medium sectors across the country whose requirement is less than 4200 tons per annum and are otherwise not having any access to purchase coal or conclude Fuel Supply Agreement with Coal Companies. The earmarked quantity would be distributed through agencies notified by the State Governments which could be State Government Agencies / Central Government Agencies like National Small Industries Corporation or other Industries Associations. It is put forth that the State Government is required to enter into Fuel Supply Agreement (for short 8 `FSA’) with the Coal company to be designated by the Coal India Limited (for short `CIL’) which would include the subsidiaries of the CIL but not private coal companies owned by any individual or private company and the said FSA will continue to remain in force till the State Government denotifies the agency / association or CIL shifts the obligation to some other Coal company due to production, transportation, logistics, etc. In the latter case, a fresh FSA would be signed with the new Coal company. The FSA would be based on firm commitment and compensation for default in performance by either side. 6. According to the writ petitioner, the Mines and Geological Department, Government of Bihar, in terms of the 2007 Policy appointed the Bihar State Minerals Development Corporation Limited (for short `the Corporation’) as its nominated agency. The Corporation, pursuant to the appointment as State nominated agency, floated a tender for appointment of Coal Coordinator for lifting and distribution of coal allotted under the New Coal Distribution Policy, 2007. Pursuant to the said notice inviting tender, the writ petitioner along with other 9 tenderers participated in the tender process and submitted their tenders along with requisite documents as prescribed in the Notice Inviting Tender (for short `NIT’). As per the NIT, the petitioner was required to submit a certificate from the coal company with respect to lifting of coal during the last three financial years. It was also provided that apart from the details of lifting of coal of the last three years, the tenderers were required to give the details of distribution / consumption of coal for the last three years. In terms of Clause 9 of the NIT, the tenderers were to furnish experience certificates of lifting of average 50,000 MT coal per year. Clause 9(1) of the NIT deals with the lifting of coal whereas Clauses 9(2) & 9(3) deal with distribution and own consumption of coal. There is no provision in the said technical bid format which deals with the sale of coal to the respective buyers. The petitioner submitted the technical bid giving details of lifting of coal for the years 2005-06, 2006-07 and 2007-08 and thereby had given the average lifting to the extent of 1,65,633.603 MT and a certificate in that regard issued by Bharat Coking Coal Limited (for short `BCCL’) had also been 10 enclosed. The petitioner had also submitted a certificate of financial capacity for Rs. 18 crores issued by Dena Bank. Other formalities were also complied with. The Corporation opened the technical bid of the petitioner on 24.10.2008 and rejected his technical bid without assigning any reason. The petitioner came to know that his technical bid had been rejected on the ground that Clauses 9(2) & 9(3) had not been filled up. It was contended before the writ Court that the said clauses were not required to be filled up by the petitioner as the petitioner is neither a distributor nor a consumer of coal. The petitioner used to lift coal from BCCL as a trader and sell it to different consumers and, therefore, the petitioner has not filled up Clauses 9(2) & 9(3) of the technical bid as there was no clause which deals with the sale of coal. That apart, the details of sale of coal had already been mentioned in the balance-sheet submitted by the petitioner along with the technical bid. 7. It was argued that the technical bid submitted by the respondent no. 6 had been accepted by the respondent-Corporation in spite of the fact that the 11 respondent no. 6 had got no requisite experience of lifting of average 50,000 MT coal since the last three years. The said respondent had given the details of lifting of coal from a private mine which is not at all a coal company within the meaning of the 2007 Policy. It is put forth that in terms of the 2007 Policy, the coal company means a subsidiary of CIL and not a coal company owned by any private individual and, therefore, the experience of lifting of coal from a private mine cannot be taken into consideration for the purpose of appointment of Coal Coordinator by the State nominated agency. It was contended that in the terms of the notice inviting tender, the certificate of experience of lifting of coal was to be submitted and the said certificate should have been issued from any subsidiary coal company of C.I.L. The 6th respondent submitted an experience certificate from a private coal mine of Assam which was also fabricated and even at the time of opening of the technical bid, he had not enclosed any experience certificate but only the details of purchase had been mentioned in the technical bid form. 8. The Corporation after coming to know that no 12 certificate of experience had been attached with the technical bid allowed the respondent no. 6 to submit the experience certificate before opening of the financial bid on 30th October, 2008. The respondent no. 6 obtained the experience certificate from private coal mines and submitted the same after opening of the technical bid. It was put forth that the action of the respondent authorities in rejecting the technical bid of the petitioner and accepting the technical bid of the respondent no. 6 is wholly illegal and arbitrary inasmuch as the said respondent did not possess the requisite experience of lifting of coal in terms of the notice inviting tender. 9. The petitioner after coming to know about such a situation submitted a detailed representation to the Managing Director stating, inter alia, that in the tender paper there are only three columns under Clauses 9(1), (2) (3) wherein the figures of purchase and distribution or consumption were to be filed and there was no column pertaining to sale and the terms `distribution and consumption’ do not connote the idea of sale. As the position was never made clear to the bonafide tenderers, 13 they did not fill up the said distribution column though the coal was sold amongst the consumers. The Corporation did not consider the representation and declared the 6th respondent successful in the technical bid without opening the financial bid of the petitioner though in terms of the notice inviting tender, the said respondent had got no requisite experience certificate for lifting and distribution of coal. 10. In this factual backdrop, a prayer was made for commanding the respondents to cancel the selection and appointment of respondent no. 6 as the coal coordinator of the Corporation and to issue directions to open the financial bid of the petitioner treating him as successful in the technical bid and to appoint the petitioner as the coal coordinator of the respondent-Corporation after considering the financial bid of the petitioner. 11. A counter affidavit was filed by the respondents no. 1 to 5 stating, inter alia, that the tender papers filed by the petitioner were incomplete as he had not disclosed the required information in columns 9(2) and 9(3) of the technical bid form. The representative of the petitioner 14 was present at the time of opening of the technical bid to express his inability to provide the information required in the aforesaid columns. The information regarding the quantity of coal and the number of consumers was to be disclosed in column 9(2). On 29.10.2008, two fax copies of the letter of the petitioner were received in which the number of consumers during 2005-2006 and 2006-2007 was mentioned as `500+’. The petitioner did not have the exact number of consumers available with him on 29.10.2008. The original copy of the said letter was made available on 30.10.2008. According to the original copy of the said letter, the number of consumers during 2005- 2006 and 2006-2007 were `520’ and `515’ respectively. The Purchase Committee on 30th October, 2008 gave an opportunity to the petitioner and after considering the submissions decided to reject its prayer. It is averred that for the purposes of counting the experience of various tenderers who had applied in pursuance of the advertisement, the experience with the private coal companies was also to be counted. There is no condition in the tender paper that the experience with the 15 Government Coal Companies shall only be counted. It is put forth that it is an erroneous assertion that there is no clause in the technical bid which deals with the sale of coal. The petitioner himself had harboured a sense of confusion whereas the other five tenderers had no confusion and they had submitted the figures of sale of coal in column 9(2) of the technical bid form. In the said heading, it has been mentioned `No. of consumers’ and this obviously refer to the sale of coal. If the petitioner had confusion on this point, he could have sought clarification from the authorities before submitting the tender. The submission of the petitioner was considered by the Purchase Committee and, considering his representation, his bid was not accepted. It is put further that the respondent no. 6 has the requisite experience and it is fallacious to say that the certificate of the private coal mines cannot be counted inasmuch as there is no such condition in the tender document prohibiting the consideration of such certificate. It is contended that the petitioner has referred to various documents of the Ministry of Coal in which the `Coal Company’ means the 16 subsidiary of CIL and the coal from the subsidiary of CIL can only be distributed under the new Coal Policy but for the purpose of counting the experience of various tenderers who had applied in pursuance of the advertisement, the experience with the private coal companies has also to be counted. There is no condition in the tender paper that the experience with the private coal companies shall not be taken into consideration. The respondent no. 6 had submitted the requisite certificate of the private coal mines and also claimed experience with respect to the State Government quota of Nagaland and in support of the same had enclosed the certificate issued by the State Nodal Agency nominated by the Nagaland Government. From the documents submitted by the said respondent, it was not clear as to whether the said State Nodal Agency had been appointed by the Nagaland Government or not and, therefore, the respondent no. 6 was asked to produce the order of the Nagaland Government by which the State Nodal Agency was appointed by it. The said documents were submitted by the respondent no. 6 from which it was found that the 17 State Nodal Agency was appointed by the Nagaland Government and, therefore, it was concluded that the respondent no. 6 fulfilled all the conditions of the tender. It is put forth that the petitioner was given due opportunity by the Purchase Committee but he was not found suitable. 12. A counter affidavit has been filed by the respondent no. 6 contending, inter alia, that for the purpose of considering the experience of the tenderers who had applied pursuant to the tender issued in the present matter, the experience with the private coal companies can be counted inasmuch as there is no condition in the tender paper that the experience with the private coal companies shall not be counted. It is put forth that for the purpose of coal mining in North Eastern State, it is not a pre-requisite for a private coal company to obtain a mining lease from the State Government and, thus, even a private coal company in Meghalaya can trade coal unlike the other States of India where mining leases are awarded only to those private parties which use mined coal for captive consumption. In support of the same, the annual report of 2004-2005 issued by the Ministry of Coal, 18 Government of India has been brought on record. It is contended that the policy does not formulate any guideline or impose any condition precedent for consideration / selection / appointment of the coordinator by the State’s nominated agencies and, therefore, the State’s nominated agency can formulate terms and conditions for selection and appointment of their coordinator. It is averred that the respondent had given certificates not only from the private coal companies but also the certificate issued by the State Nodal Agency nominated by the Nagaland State Government. It is also averred that the petitioner had sought withdrawal of the earnest money and the writ petition, at the first instance, is not maintainable. 13. A supplementary counter affidavit had been filed by the respondents no. 1 to 5 wherein it has been stated that when the writ petitioner was not found fit for the technical bid, he applied for return of the earnest money on 31.10.2008, but even though he was informed vide letter dated 12.11.2008 to collect the demand draft of the earnest money from the office of the Corporation, yet no representative on his behalf turned up to collect the 19 same. 14. The learned single Judge adverted to the policy and the conditions incorporated in the notice inviting tender and came to hold that the coal company would mean a subsidiary of Coal India Limited and BCCL is admittedly a subsidiary of Coal India Limited and, therefore, the stand of the respondents that supply or transaction with the private companies would also be accepted was impermissible under the policy as well as under the NIT. 15. As far as the writ petition preferred by M/s Bhagwati Coal Distributors (CWJC No. 17360/2008) the learned single Judge has held that the same was a proprietary concern of one Shyam Kishore Prasad, who had submitted the tender and in support of the experience had produced the certificate. The tender committee rejected his technical bid on the ground that the experience of said Shyam Kishore Prasad cannot be taken into consideration for the purpose of the firm M/s Bhagwati Coal Distributors. The learned Judge has held that the said approach is wholly illegal as it is well established 20 proposition of law that there is no distinction between the identity of the proprietary concern and the proprietor. Being of this view, the learned single Judge expressed that the rejection of the two writ petitioners were indefensible and they are entitled to be considered. The learned single Judge further held that the selection of the respondent no. 6 is vitiated in fact as well as in law and could not be sustained and his selection deserves to be lanceted and, accordingly, so ordered. Be it noted, the ground that one of the appellants had sought to refund of the earnest money did not impress the learned single Judge and he repelled the said submission. 16. We have heard Mr. V.M.K. Sinha, learned Special Public Prosecutor (Mines) – cum - Standing Counsel-III for the State and Mr. Y.V. Giri and Mr. N.K. Agarwal, learned Senior Advocates along with Raj Kishore Prasad, Tej Bahadur Roy and Mr. Gyan Prakash Ojha, for the respondents-company. 17. The crux of the matter is whether the approach of the owner in dealing with the conditions precedent for not considering the tenders of the writ petitioners is valid. 21 In this context we may refer with profit to the 2007 Policy which has its own sanctity. The 2007 Policy has its own sanctity. The learned single Judge has reproduced the relevant part of the Policy which we think apposite to be reproduced herein below for the sake of completeness: “The agency/association so notified by the State Governments, would be required to enter into FSA with coal company to be designated by the Coal India Limited. The FSA will continue to