Prescription of pre-qualification criteria by the Andhra Pradesh Power Generation Corporation Limited (APGENCO) at variance with the guidelines issued by the Central Electricity Authority (CEA) is called in question.

2. The APGENCO invited pre-qualification bids for selection of qualified bidders for execution of Engineering, Procurement and Construction (EPC) contracts for Balance of Plant (BoP) works for its 1 x 600 MW Coal Fired Thermal Power Station at Kakatiya Thermal Power Plant (TPP) Stage-II in Chelpur Village, Ghanapuram Mandal, Warangal District and its 1 x 600 MW Rayalaseema TPP Stage-IV in Kadapa District, Andhra Pradesh. This invitation to offer was posted on the website of the APGENCO on 25.08.2009 and was published in Hindu English daily newspaper on 29.08.2009. Responding thereto, eight bidders, including the petitioner company, submitted their bids before the closing date, 10.09.2009. The notification specified the following eligibility criteria, amongst others:

“2.1. The bidder should have executed contracts on an Engineering, Procurement and Construction (EPC) basis for at least one (1) no. Coal Based/Lignite Based/Gas Based Combined Cycle Power Plant of installed capacity not less than 300 MW which has been commissioned during last seven (7) years and has been in successful operation for a period of not less than one (1) year as on the date of bid opening. ………

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3.4 The average annual turnover of the bidder/consortium leader should be at least Rs.500 crore during the preceding three consecutive years. ………”

3. Admittedly, the petitioner company did not satisfy the aforestated eligibility conditions but submitted its bid. By letter dated 25.02.2010 the petitioner company addressed the APGENCO complaining of the above pre-qualification requirements which were not in accordance with the CEA’s guidelines or the previous tenders of the APGENCO and requested it to modify the said requirements so as to permit the petitioner company to participate in the tender process.

4. Stating that it had learnt that the APGENCO had decided in May, 2010 to qualify only three out of the eight bidders to its exclusion, the petitioner company filed the present writ petition. Challenge was laid against the petitioner company’s disqualification on the basis of what it termed to be illegal and unauthorized tender conditions.

5. By order dated 26.05.2010, this Court directed status quo obtaining as on that date to be maintained. However, by subsequent order dated 04.06.2010, this Court permitted the APGENCO to undertake further process in pursuance of the tender notification but restrained it from finalizing the tenders until further orders.

6. Aggrieved thereby, the APGENCO filed the present vacate stay application in WVMP No.2068 of 2010. However, with the consent of the learned counsel, the main writ petition itself is taken up for consideration and disposal.

7. It is the case of the petitioner company that during the years 2005-08, the APGENCO had issued four tenders relating to execution of BoP works, in all of which the pre-qualification requirements were far lower than those prescribed in the subject notification. The petitioner company claimed to have emerged successful in bidding for the above works. The main thrust of the attack is however as to the disparity between the criteria prescribed in the subject notification and the CEA’s guidelines which are said to be statutory. It is alleged that prescribing such higher pre-qualification requirements is without rationale and would restrict healthy competition. The petitioner company further alleged that these pre-qualification criteria have been prescribed to ensure that the petitioner company is eliminated from the competition as it had emerged the successful bidder in the earlier projects.

8. In its counter, the APGENCO assailed the locus of the petitioner company to challenge the norms of eligibility/pre-qualification prescribed in the tender notification af