IMPORTANT POINT
A subsidiary company can rely on the experience of its parent company and cannot be rejected solely for lacking its own experience. Penal provisions cannot be invoked against a subsidiary based on the actions of the parent company.

ORDER :

The petitioner-M/s PT Bara Daya Energi India Private Limited is before this Court calling in question a communication dated 08-12-2023 issued by the 2nd respondent/Karnataka Power Corporation Limited (‘the Corporation’ for short) conveying the reasons for holding the bid of the petitioner to be non-responsive.

2. Heard Sri S.Basavaraja, learned senior counsel appearing for the petitioner, Sri Spoorthy Hegde, learned High Court Government Pleader appearing for respondent No.1 and Sri Ajay J.Nandalike, learned counsel appearing for respondent No.2.

3. Facts adumbrated, are as follows:-

The petitioner is a company engaged in the business of import, trade and supply of coal and is a subsidiary company of M/s PT Bara Daya Energi, Indonesia (hereinafter referred to as ‘the parent company’). The 2nd respondent/Corporation issues a notice inviting tender for import and supply of 2.50 lakh MT of coal for Yemarus Thermal Power Station of Raichur Thermal Power Corporation Limited and Bellary Thermal Power Station & Raichur Power Station of the Corporation in No.A1M1B3/Imported Coal/Sep 2023 dated 19-09-2023. The petitioner participates in the tender by submitting its bid. It is the claim of the petitioner that it met all the stipulated conditions and pre-qualification requirement as necessary in terms of the tender notification and also remitted necessary Earnest Money Deposit (‘EMD’) and fulfilled every other condition to partake consideration in the tender. The averment in the petition is that, the petitioner on verification of the status of the bid on the online Karnataka Public Procurement portal, it came to know that its bid has been rejected. No reason was furnished in the portal for rejection of the bid of the petitioner. The petitioner then submits an application on 25.11.2023 to the Finance Director of the Corporation under the Right to Information Act, seeking the grounds of rejection of the bid of the petitioner. The said application did not merit any consideration. Therefore, another representation was made on 04.12.2023 seeking the reasons for rejection. On 08-12-2023, in response to the query raised under the Right to Information Act, the reason for rejection of the bid of the petitioner was divulged. The reason so rendered for rejection of the bid of the petitioner is what has driven the petitioner to this Court in the subject petition calling in question the aforesaid communication dated 08.12.2023 through which reasons are communicated.

4. The learned senior counsel Sri S. Basavaraja would vehemently contend that the petitioner had fulfilled all the conditions that were necessary for a merited consideration at the hands of the 2nd respondent/Corporation qua the bid. The bid is rejected for the reason that the petitioner did not meet necessary criteria in the tender document. The reason for rejection is for non-furnishing of bidders name at the pre-qualification stage and the petitioner was found to be in contradiction of one particular clause – Clause 1.2 of the tender document. The learned senior counsel would submit that the reasons so rendered are contrary to law as every subsidiary company is entitled to take the experience of the parent company and merely because the parent company has suffered an order of termination, it cannot mean that the subsidiary company also should be ousted on such termination. He would seek quashment of the said communication and awarding of contract to the petitioner.

5. The learned counsel Sri Ajay J. Nandalike appearing for the 2nd respondent/Corporation would make an effort to refute the submissions of the learned senior counsel for the petitioner in defending the action of the Corporation and contend that it is open to the Corporation to choose its path in the tender. It can deny the experience that the company to which the petitioner is subsidiary to be taken off and also attach the company when it comes to the order of termination. This process cannot be termed to be arbitrary at