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2019 Supreme(Ker) 1019
IN THE HIGH COURT OF KERALA AT ERNAKULAM
C.K. Abdul Rehim, Anu Sivaraman, JJ.
The Kerala State Electricity Board Ltd. - Appellant
Versus
Hanjong Energy And Technology Private Limited - Respondent
Wa.No.1975 of 2019
Decided On : 09-10-2019
For the Appellant : Sri. C. Joseph Antony, Shri. John Manjooran
For the Respondent: Sri. Babu Karukapadath, Smt. M.A. Vaheeda Babu, Smt. Arya Raghunath, Sri. P.U. Vinod Kumar, Sri. Avinash P Raveendran, Sri. Raju Joseph. Sr. For KSEB
IMPORTANT POINTS
Whether the EMD can be forfeited at that stage of the tender, on the allegation that writ petitioner was not qualified based on the conditions stipulated for pre-qualification. The condition regarding the net worth, is an eligibility criteria insisted upon while inviting the EoI. It is only on satisfying the eligibility criteria that the tenderers are short listed for inviting the price bid. In the case at hand the writ petitioner was selected or short listed on satisfying about all their eligibility, including its net worthiness. Therefore the EMD cannot be forfeited after submission of the price bid on the basis that the Financial Advisor of the Board had found that the net worth document submitted are not acceptable.
Headnote:
Constitution of India-Art.226-Whether the EMD can be forfeited at that stage of the tender, on the allegation that writ petitioner was not qualified based on the conditions stipulated for pre-qualification- The EMD cannot be forfeited after submission of the price bid on the basis that the Financial Advisor of the Board had found that the net worth document submitted are not acceptable- The Board has not suffered any injury, loss or damages, we find that the forfeiture of EMD was illegal and unsustainable, because it was not entitled, going by the terms of the tender and the conditions stipulated in various documents of tender, including the price bid document furnished to the respondent herein.
Statement of facts:
The writ petition was filed by the respondent herein challenging Ext.P3 order issued by the appellant, through which sanction was accorded for forfeiture of the Earnest Money Deposit (EMD) amounting to Rs.1 Crore, which was deposited by the respondent along with the 'price bid' submitted, responding to an invitation for 'Expression of Interest (EoI)' for setting up a power plant based on 'renewable energy' other than 'Hydro energy'. Inter alia, a direction was sought for against the appellant for refund of the EMD along with interest @ 12% per annum. The Single Judge had allowed the writ petition and directed the appellant to refund the amount of Rs.1 Crore to the respondent, along with interest @ 9% per annum from the date of Ext.P3 onwards, within a period of 2 months from the date of receipt of the judgment. It is aggrieved by the said direction the appellant has filed the above writ appeal.
Finding of the court:
Whether the appellant can be mulcted with the liability for payment of interest. We take note into consideration of the fact that there occurred delay on the part of the respondent herein in executing the PPA within the stipulated time of 180 days. The appellant had shown indulgence in extending the time limit on 3 occasions. Still it is evident that the documents furnished with respect to title and encumbrance of the land, was not full-The respondent had also contributed considerably in occurring the delay. Hence while setting aside the forfeiture of EMD, we are not inclined to sustain the direction issued by the Single Judge in ordering repayment along with interest.
Result: Writ appeal is disposed of
JUDGMENT :
Abdul Rehim, J.
The Kerala State Electricity Board Ltd. (hereinafter referred to as 'the Board' for short), who is the respondent in the writ petition is in appeal challenging judgment of the Single Judge, dated 27-03-2019. The writ petitioner is the respondent herein.
2. The writ petition was filed by the respondent herein challenging Ext.P3 order issued by the appellant, through which sanction was accorded for forfeiture of the Earnest Money Deposit (EMD) amounting to Rs.1 Crore, which was deposited by the respondent along with the 'price bid' submitted, responding to an invitation for 'Expression of Interest (EoI)' for setting up a power plant based on 'renewable energy' other than 'Hydro energy'. Inter alia, a direction was sought for against the appellant for refund of the EMD along with interest @ 12% per annum. The Single Judge had allowed the writ petition and directed the appellant to refund the amount of Rs.1 Crore to the respondent, along with interest @ 9% per annum from the date of Ext.P3 onwards, within a period of 2 months from the date of receipt of the judgment. It is aggrieved by the said direction the appellant has filed the above writ appeal.
3. Narration of brief facts, especially the sequence of events, will be beneficial for deciding the issue. By virtue of Ext.P1, the appellant invited EoI from potential developers in the field of renewable energy. The eligibility criteria insisted were as follows;
“Eligibility Criteria
1. Developers of renewable projects under this EoI shall be body corporates, private individuals or LSG Institutions.
2. Net worth in the case corporates and individuals shall be at least 0.5 crore/MW of offered capacity. In the case of LSG Institutions, the financial credibility shall be decided by the Government.
3. The developer or his technology partner should have at least 3 years experience in the field of implementation of renewable power projects.
4. The promoters shall make their own arrangements to procure land required for implementation of the project.”
It is stated that, short listing of the potential developers will be on the basis of their credentials, capability to set up and run the project and readiness for the same (availability of land, arrangements for forward and backward linkages REC / Carbon Credit trading capability, technology etc.). The method for allocation of points, out of the maximum score of 100, is also enumerated in Ext.P1. It is specifically stated that the shortlisted potential developers would be required to quote their 'annualised levellized tariff' for the next 10-20 years. It is also specified that, selection will be from among the potential providers on the basis of the EOI submitted, who is quoting less than the average 'pooled power purchase cost' for REC mechanism approved by KSERC. The appellant had received EOI from 15 persons and 7 persons were short listed for the second stage of consideration, who were provided with 'price bid' document to be submitted. The respondent is one among those companies short listed, who was required to submit the 'price bid' in the proforma enclosed as per Ext.R1 (a). As per Ext.R1 (a) 'price bid' document the respondent was required to furnish EMD @ Rs.2,00,000/-per M.W. of capacity offered. Accordingly the respondent submitted the 'price bid' and furnished EMD to the tune of Rs.1 Crore. As per Ext.R1 (a), the respondent had to submit further documents as required, while processing the 'price bid', at 3 distinct stages such as; (i) along with price bid (2) at the time of execution of the 'Power Purchase Agreement (PPA)' and (3) after the financial closure. The documents to be submitted at the time of submission of 'price bid' are enumerated in Clause C.9 of Ext.R1 (a), which includes; (1) EMD as per para C.5 (2) price bid in the form as per Annexure-II and (3) the agreement as per Annexure-IV. Admittedly, along with the 'price bid', the respondent had furnished EMD as required. He had also submitted the 'price
