Case: Bhatia Coal Washeries Limited Indore, Thr. Auth. Signatory Dilip S/O Ganpatrao Wasnik Vs. Maharashtra State Mining Corporation Limited Nagpur and Others

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 arbitrary 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.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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.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.140do not propose to refer to all such arguments and the documents placed on record in support of suchalso 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.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.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.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.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.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.