Case: S.S. &amp; Company &amp; Another Vs. Orissa Mining Corporation Limited &amp; Another

transport of iron ores from its mines on contract to an outside agency. It would be truism to say that the Corporation knows best the exact nature of its work and it is the best judge to say what is and what is not comparable to it. The expression “excluding minor minerals” used in the eligibility must, therefore, be viewed as commonly understood in the mining/industrial and commercial world. What the clause intends to convey is that the extraction of iron ore requires certain degree of technical expertise and competence and in order to have the required degree of competence the bidder must have some past experience of similar kind of work, clarifying further that working of minor minerals would not be accepted as qualifying experience/sufficient expertise for the purpose of the NIT. The distinction between minor and major minerals is well-known to the mining/industrial and commercial world and anyone engaged in the business would know what the eligibility clause in the NIT demands without referring to the statute and case law and any abstruse arguments based thereon.47. There is yet another reason, weightier than the previous ones, for rejecting the appellant’s challenge to the amendment made in the eligibility clause. A grievance against the amendment, either based on the plea of mala fide or on the substance of the amendment can only be raised by someone whose position gets adversely affected by the amendment. 48. The basic question therefore is how far the appellant can be said to be affected by the amendment in actual terms. Clause 8(i) is simply the well known and the well established experience clause. In its unamended form as contained in NITs 65 and 75 it required the bidder to have some past experience of the work under contract. In other words, the bidder was required to have successfully executed in the past some work similar in nature to the one being the subject matter of the contract. In NIT 85, which is for raising, calibration and transport of iron ore the clause in question stipulated that the tenderer must have past experience of similar work and made it further clear that working of minor mineral would not be accepted as similar in nature to the work under the NIT. It is thus manifest that the insertion of the words “exclude mine and mineral” does not bring about any alteration or change in the basic experience clause. It simply makes it clear and explicit that the working of any minor mineral is not the same as raising, calibration and transport of iron ore at Daitari Mines. It may be noted here that in the affidavit filed before the High Court on behalf of the Corporation it was stated as follows: “Some changes in the eligibility criteria of NIT No.85 in comparison to NIT No.75 have been approved. In clause 3(i) “excluding minor minerals” has been added in the 2nd line of the clause after the word minerals. Iron ore being too hard, drilling and blasting and strict quality control measures will be essential which cannot be compared with mining of “minor minerals”. To bring required expertise for undertaking efficient iron ore mining, the above change in eligibility criteria has been made.” 49. Let us now examine how far the petitioner SSC can feel aggrieved by what it describes as amendment in the clause in question. The Appellant’s own statement in regard to its experience is to be found at Annexure P-1 in which it gives description of five different kinds of work. The works at Sl.Nos.1 and 2 are described as follows: “Drilling, Blasting, Excavation, Loading and transportation of Sand and Lumps deploying HEMM from the leasehold area of Faridabad Yamuna Sand Mines of M/s. S.S. & Company (M/s. SSC)”. 50. The other three works related to handling of materials like Rock Phosphate, Gypsum, Copper Concentrate, flux, slag and material handling work at Zinc Smelter Plant. 51. On the basis of the appellant’s own statement submitted along with the tender documents, the Technical Committee in its report dated June 11, 2007, noted as follows: “M/s. S.S.& Co. has submitted experience certificate for working in Yamuna Sand Quarry in the district of Faridabad and other minor minerals including handling in the Plant. As per the eligibility riteria of NIT under clause 8(i) the experience of the agency is not at par with the eligibility of NIT.” 52. We are unable to see any error much less any unreasonableness in the view taken by the Technical Committee and in rejecting the appellant’s tender on that basis. It does not require much imagination to hold that the work of lifting of sand from a riverbed or a sand quarry is not similar in nature to the work of raising, calibration and transport of iron ore. 53. It is significant to note here that the appellant’s tender in response to NIT75 that did not contain the expressions “excluding minor mineral” was also rejected at the stage of technical bid since it did not satisfy the eligibility clause of having previously done some work similar in nature to the work under contract. 54. It is thus evident to us that the appellant-SSC did not satisfy the eligibility criteria with regard to past experience even in terms of the unamended clause 8(i). Had the appellant been qualified in terms of the unamended clause and faced exclusion only as a result of the amendment in the criterion it might have been open to it to assail the introduction of the amendment. But that is not the case here. As noted above, the appellant was liable to be excluded, and was in fact excluded, even under the unamended clause 8(i) and, therefore, all arguments either based on mala fide or on the substance of the amendment lose all their relevance. 55. Thus on a careful consideration of all the materials produced before the court and the submissions advanced by the two sides we find no merit in the case of SSC either.

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

Explanation:
0[ds]20. In our view, the submission is quiteThe materials on record plainly indicate that the appellant was trying to find ways to get out of the contract for the third year period because the rates under the tender schedule were no longer profitable to it. We were shown theletter, dated June 29, 2007 by which it was pointed out to the appellant that according to the terms of the tender the contract was for a period of three years and it would expire on February 24, 2008. It was further stated in the letter that the appellant had badly defaulted on the production target for the first quarter ofand in terms of clause 1.8 of the tender schedule it was asked to clarify its final stand and to indicate its production plan for the remaining tender period i.e. till February 24, 2008. To theletter, the appellant gave a highly evasive reply by its letter of July 4, 2007. Alluding to Writ Petition (C) No.7002/2007 it stated that the matter wasbefore the High Court and on that plea it declined to enter into any correspondence on the issue raised by the Corporation. It is to be noted here that the Writ Petition arose from a controversy relating to the eligibility clause in NIT 85/2007 and it had nothing to do with the production targets under NITis thus manifest that, according to the Corporation, thehad the right to work the mine till February 24, 2008 and on its own showing it was actually engaged in working the mine till June 30,fact of the matter is that the appellant on its own showing was working the mine upto June 30, 2007. Further, in view of the decision of the Corporation it had the right to be there upto February 24, 2008. Therefore, the High Court was not incorrect in observing that the appellant would have been barred from taking part in the tender process even if the six months margin was retained in the eligibilityis axiomatic that the Corporation is the best judge of its interests and needs and it is always open to it to suitably modify or change the eligibility criteria so as to best serve its purposes. Whenever a change is introduced in the eligibility criteria either by introducing some new conditions or restricting or altogether doing away with certain previous concessions it might hurt the interests of someone or the other but for that reason the change(s) made in the eligibility criteria cannot be labelled as mala fide. The first two arguments advanced on behalf of the appellant thus completely fail to show any mala fide and we now proceed to examine the third argument advanced on its behalf.We find that the explanation given by the Corporation is perfectly reasonable and if any illustration is needed it is to be found in the facts of the case in hand itself.There was no escalation clause in the contract and from the record it is manifest that the rates on which thetender was accepted were no longer profitable for it, at least in third year, and the appellant was not at all interested in carrying on the work for the third year on the rates given in the tender schedule. In paragraph 2 of thet it is stated that the appellant had completely failed to meet the production target and it was badly inthe aforesaid circumstances the consequences of the appellant getting the contract under NIT 85/2007 would have been: one, that it would operate the same mine at the same time under two different contracts with widely different rates and the other, that it would be charging much higher rates for extraction of ores that it was obliged to extract at much lower rates under the previous contract. The Corporation can hardly be faulted for protecting itself against entering into such a bargain with anyone.32. Thus, on a careful consideration, we are fully satisfied that doing away with the six months margin in clause 8(vii) was not arbitrary or unreasonable, nor it had any mala fide intent. For the reasons discussed above, we find no merit in the) case. The High Court has taken a perfectly correct view of the matter and it warrants no interference by this Court. M/s. S.S.& Company (SSC) Mr. R.F. Nariman, learned senior counsel appearing for the SSC also began his submissions by alleging, that the amendment in clause 8(i) of NIT 85 by insertion of the wordswas mala fide: its sole purpose was to exclude SSC and to unduly favour another bidder, namely, M/s. Arun Udyog Ltd. In support of the plea of mala fide Mr. Nariman advanced three arguments. Learned counsel stated that though being the lowest bidder in response to the earlier two NITs 65 and 75, SSC was not awarded the work because the concerned officials in the Corporation wanted to give it to Arun Udyog whose bids were much higher than the appellant. When the appellant took the matter arising from NITs 65 and 75 to the High Court, on each occasion the bid process was aborted in the middle and finally NIT 85 was issued with the offending amendment. He next submitted that the amendment made in the clause was a one time exclusionary measure: it was not there in the earlier NITs and it is unlikely to find place in the future NITs. He also submitted that the impugned amendment in clause 8(i) of NIT 85 was made at the instance of the Managing Director and without the prior approval of the36. We are in complete agreement with the view taken by the High Court. As a matter of fact, for rejecting the allegation that the impugned amendment was introduced in clause 8(i) of the NIT at the instance of the Managing Director, without obtaining prior approval of the Board of Directors we need not even go to the rebuttal affidavit filed by the Addl. General Manager. The Board of Directors is the apex policy making body. It may lay down broad guidelines but it is impossible to conceive that all the NITs (over a hundred in number) issued by the Corporation for different purposes every year should come before it for consideration and approval of their respective clauses or any amendment proposed in any clause in any of the NITs. [We fail to see any good reason why the matter should not be finalized by the Managing Director or, depending upon the nature of the contract, even at some lower level]. The normal work of any organization or government department would be seriously hampered if every tendering party would claim the right to raise objection that one or the other clause in a NIT or any amendment introduced in any of its clauses did not have the prior sanction of the highest policy making body of the organization. In this case particularly there is no occasion to go into that question as there is neither any material to suggest, even remotely, that the Managing Director harboured any malice against the appellant nor is the Managing director made a party to this case in his personal capacity.45. We find substance in Dr.submission and we are unable to accept the arguments advanced on behalf of the appellant that any distinction between minor and major minerals was illusory and the amendment in the clause in question, based on the distinction between the two, was arbitrary and did not serve any purpose.46. We have noted the submissions of the two sides and have also said that on the issue whether there are any differences between minor and major minerals we are inclined to accept the position taken by Dr. Dhawan. But we think that in the context of the case an elaborate analysis of the provisions of the MM (R&D) Act and Mineral Concession Rules to bring out the distinction between minor and major minerals is quite misconceived. We think it would be a mistake to see the NIT through the prism of the Act and the Rules. The NIT should not be viewed in the highly pedantic and legalistic manner as suggested by Mr. Nariman but it should be read and understood for what it is. It is a notice issued by the Corporation which is engaged in the business of mining. The Corporation owns a number of mines and wishes to give the work of raising, calibration and transport of iron ores from its mines on contract to an outside agency. It would be truism to say that the Corporation knows best the exact nature of its work and it is the best judge to say what is and what is not comparable to it. The expressionused in the eligibility must, therefore, be viewed as commonly understood in the mining/industrial and commercial world. What the clause intends to convey is that the extraction of iron ore requires certain degree of technical expertise and competence and in order to have the required degree of competence the bidder must have some past experience of similar kind of work, clarifying further that working of minor minerals would not be accepted as qualifying experience/sufficient expertise for the purpose of the NIT. The distinction between minor and major minerals isto the mining/industrial and commercial world and anyone engaged in the business would know what the eligibility clause in the NIT demands without referring to the statute and case law and any abstruse arguments based thereon.47. There is yet another reason, weightier than the previous ones, for rejecting thechallenge to the amendment made in the eligibility clause. A grievance against the amendment, either based on the plea of mala fide or on the substance of the amendment can only be raised by someone whose position gets adversely affected by the8(i) is simply the well known and the well established experience clause. In its unamended form as contained in NITs 65 and 75 it required the bidder to have some past experience of the work under contract. In other words, the bidder was required to have successfully executed in the past some work similar in nature to the one being the subject matter of the contract. In NIT 85, which is for raising, calibration and transport of iron ore the clause in question stipulated that the tenderer must have past experience of similar work and made it further clear that working of minor mineral would not be accepted as similar in nature to the work under the NIT. It is thus manifest that the insertion of the wordsdoes not bring about any alteration or change in the basic experience clause. It simply makes it clear and explicit that the working of any minor mineral is not the same as raising, calibration and transport of iron ore at Daitari