Point of Law: Section 14 of Act reads as general rejection of tenders.

ORDER :

First petitioner is Kanchan India Limited and the 2nd petitioner is Emta Coal Limited. Both these companies are incorporated under the Companies Act, 2013. The respondent is the Karnataka Power Corporation Limited (‘the Corporation’ for short). The petitioners are knocking at the doors of this Court in the subject writ petition calling in question notification communicated by electronic mail dated 04-11-2022, by which the Corporation recalls the tender notified on 02-12-2020 and have sought a writ in the nature of mandamus directing restoration of tender in favour of the petitioners.

2. Brief facts that lead the petitioners to this Court in the subject petition, as borne out from the pleadings, are as follows:-

The Corporation issued a notice inviting tender for Selection of a Mine Operator for development and operation of Mandakini-A coal block and supply of 7.5 million tonnes per annum of coal for a period of 15 years, which could be extended for a term of 10 years on mutually agreeable terms and conditions. After the notice inviting tender, both the petitioners enter into a consortium agreement forming the consortium by name EMTA-KIL (hereinafter referred to as ‘the consortium’ for short) to participate in the tender, on 02.12.2021. After about 14 months of notifying the said tender, bids were called. On 18-01-2022, the aforesaid consortium participated in the tender and submitted all the necessary documents including a Bank guarantee for Rs.3,74,00,000. After submission of the bid by the consortium, the Corporation holds its 285th Board Meeting for evaluating the tenders submitted. There were two tenderers. The tenders submitted to the Tender Inviting Authority and scrutiny made by the Tender Scrutiny Committee, were placed before the Board of Directors for a decision on both the evaluation report and the documents submitted by tenderers. The consortium emerged as the lowest bidder and was called for negotiation with regard to the price. The petitioners claim to have agreed for reduction of price in the negotiation.

3. When things stood thus, two of the Directors of the 2nd petitioner – one Mr. U.K. Upadhaya and another Mr. Bikash Mukherjee, resigned as Directors on 22-07-2022. The Board of the 2nd petitioner accepts the resignation and rights of those Directors were relinquished by the 2nd petitioner/Company. All statutory requirements for such resignation were also executed by the Board. It appears that on 31-08-2022, after a month of resignation of the aforesaid Directors, they in their individual capacity come to be convicted for offences punishable under Sections 120B and 420 of the IPC. This was published in the newspapers. On 03-10-2022, an electronic mail was sent to the consortium by the Corporation in relation to the aforesaid event of conviction. The petitioners replied immediately to the mail of the Corporation bringing to its notice that they are persons who have resigned from the Company long before conviction and have nothing to do with the Company. Before any orders could be passed on it, on 11-10-2022 and 14-10-2022, the High Court of Delhi suspended the sentence against those former Directors and the matter is pending consideration before the High Court of Delhi. On 21-10-2022, the Board of Directors of the Corporation in its 287th meeting resolves to cancel the tender invited on 02.12.2020, and re-tender the whole issue. This is communicated to the consortium again by email with a remark that the original tender is revoked.

4. The petitioners then claimed to have filed an application on 15.11.2022, under the Right to Information Act seeking minutes of 284th, 285th and 287th meetings of the Board of Directors relating to cancellation of original tender. The application was rejected on certain grounds. A second application for the same purpose also comes to be rejected on 07-01-2023. In the interregnum, on 28-12-2022, pursuant to a decision for re-tendering entire process, a pre-tender scrutiny committe