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2023 Supreme(Del) 4157
IN THE HIGH COURT OF DELHI AT NEW DELHI
Najmi Waziri, Sudhir Kumar Jain, JJ.
NTPC Ltd. – Appellant
Versus
Emami Power Ltd. & Anr. [lpa 96/2018]
Oriental Sales Agencies (India) & Anr. [lpa 100/2018] – Respondent
LPA 96 of 2018 and LPA 100 of 2018
Decided On : 12-05-2023
Mr. Puneet Taneja, Mr. Manmohan Singh Narula and Mr. Amit Yadav, Advocates, for Appellant.
Mr. Abhimanyu Bhandari and Mr. Harshit Khanduja, Advocates, for Respondent/Emami Power Ltd. in Item No. 4.
Mr. Avishkar Singhvi, Ms. Gauri Rishi, Ms. Srishti Juneja, Ms. Garima Sehgal and Mr. Vivek Kumar, Advocates, in Item No. 5.
The court emphasized that the alleged collusion and loss must be proven, and in the absence of evidence, the rejection of bids and forfeiture of EMD were unjustified.
Headnote:
Collusion - Bidding Process - RFS Article 2
Fact of the Case:
The appellant challenged an order alleging collusion between two bidders, Emami Power Ltd and Oriental Sales Agencies (India) Private Limited (OSAPL), as group companies and colluding in the bid. The respondents withdrew their applications for bids before the bid took place.
Finding of the Court:
The court found that there was no collusion between the bidders, Emami and OSAPL, and no loss was proven to have been caused to the appellant. The rejection of their application for bids was of no consequence, and there was no basis for the forfeiture of the EMD.
Issues: Alleged collusion between bidders, rejection of bids, and forfeiture of EMD.
Ratio Decidendi: The court held that the bidders were not group companies and had not colluded to cause any harm to the appellant. The rejection of the bids was of no consequence, and there was no proven loss to the appellant.
Final Decision: The appeals were dismissed, and the monies deposited were ordered to be released to Emami and OSAPL along with the interests accrued thereon.
JUDGMENT
Najmi Waziri, J. (Oral)
The hearing has been conducted through hybrid mode (physical and virtual hearing).
1. The appeals are received on transfer. At joint request, they are taken up for disposal.
2. This appeal impugns the order dated 03.01.2018 passed by the learned Single Judge in W.P.(C) No. 7493/2016 on the ground that it has erred in not holding that the two bidders: i) Emami Power Ltd and Oriental Sales Agencies (India) Private Limited (`OSAPL') as group companies and ii) that they had colluded in the bid. The learned counsel for the appellant submits that there was collusion between Emami and OSAPL. Referring to page 836 of the paper-book, he states that there is cross holding between Emami and OSAPL. However, the said chart only shows five sets of shareholdings in each Emami Power Ltd. and OSAPL with some common shareholding. This shareholding pattern by itself does not establish or mean that they are group companies or one and the same company.
3. The learned counsel for the respondent states that the appeals are without basis; pursuit of the same is causing much prejudice and harassment to the respondents, both of whom had withdrawn their applications for bids, before the bid took place.
4. The impugned order has rightly held, indeed it was conceded by the appellant, that Emami and OSAPL were not group companies; there was nothing on the record to establish that the two companies which are otherwise independent and separate entities, could be said to have colluded or otherwise conspired to cause any monetary loss or injury or impediment in the affairs of the appellant. The impugned order has reasoned as under:
"45. In the present case, the only allegation against the petitioners is that their bids were submitted under a common signatory. In the circumstances, it is reasonable to believe that both Emami and OSAPL had knowledge of each other's bids. The petitioners maintain that their bids were independent and it was an obvious mistake in naming a common signatory. Even if the said explanation is rejected, it does not necessarily follow that the petitioners have practiced any deception. NTPC in its reply has also not been able to establish as to how this had caused any wrongful gain to the petitioners or any wrongful loss to NTPC or any other competitor. In the written submission, which was filed after conclusion of the hearing, it is contended on behalf of NTPC, that submission of such bids had reduced the chances of the elimination. This argument is plainly an afterthought as it does not form a part of any contemporaneous documents. Further, this contention also assumes that the petitioners are one and the same entity. However, during the course of arguments it was conceded that the petitioners are not group companies. Although, some common shareholding had been established, there is no material to conclude that petitioners are the one and the same entity. More importantly, this is also not a conclusion which was drawn by NTPC or MNRE for taking actions, which are impugned herein.
46. Since, the petitioners are not "affiliates" or "group companies" as defined under Article 2 of the RFS, there was no prohibition for both the petitioners submitting their separate bids. The only allegation against them is that their bids were known to each other. This plainly cannot by itself lead to the conclusion that there was any wrongful gain resulting to the petitioners or any wrongful loss caused to any other person. There is also no material to indicate that the bids were submitted to mislead or deceive any person or persons leading them to do or prohibiting them from doing any bonafide act or taking any bonafide decision.
47. It is important to note that the communication dated 02.06.2016, which according to the respondents was a show cause notice, sought clarification on two points: (i) whether the petitioners had common ownership and were group companies; and (ii) whether submission of their bids through common aut
