IN THE HIGH COURT OF JUDICATURE AT MADRAS
M.M. SUNDRESH, J.
M/s South India Corporation Pvt. Ltd. - Petitioner
Vs.
M/s. Kamarajar Port Limited, Government of India Undertaking – Respondent
W.P.No.1757 of 2016 and W.M.P.Nos.1544 to 1547 of 2016
Decided on : 01-06-2016
Companies Act, 2013 - Constitution of India,1950 - Article 14 - Seeking modification of existing Iron Ore - Petitioner was one of bidders by forming a Consortium along with International Coal Terminal Private Limited and Limited petitioner made the bid based upon its own capacity qua minimum eligibility criteria for financial capability as lead Consortium member having net tangible asset Crores - Petitioners bid was rejected on the ground that it has failed to meet the minimum eligibility criteria as overdraft facility of Crores availed would come under short term borrowing as per Schedule III of Companies Act - This communication was preceded by numerous correspondence between the parties – Held, Therefore classification of respondent treating borrowing as short term borrowing cannot be found fault with submission of learned Senior Counsel for petitioner that there is no statutory prescription also cannot be countenanced as we are more concerned with the nature of borrowing - When once the borrowing would come under short term and current liability as indicated in balance sheet of petitioner itself then it cannot make out a case in its favor - As rightly observed by Division Bench of Bombay High Court in Lloyd Limited Vs. Oil and Natural Gas Corporation Limited and others, it is well within the jurisdiction of the 1st respondent to go into said issue based upon documents submitted by petitioner - Certification of the Chartered Accountant would not be binding on respondent - In other words it will not prevent the said respondent from considering the materials placed before it to satisfy itself financial capability of a bidder - Writ Petition Stands dismiss
In the month of July, 2015, the 1st respondent had issued a Request for Qualification (hereinafter, referred to as ''RFQ'') bearing No.KPL/DBFOT/01/2015 for the selection of a developer seeking modification of existing Iron Ore Terminal on ''as is where is'' basis and to handle Common-User Coal at Kamarajar Port Limited on DBFOT basis. The petitioner was one of the bidders by forming a Consortium along with Chettinad International Coal Terminal Private Limited and Marg Limited. The petitioner made the bid based upon its own capacity qua the minimum eligibility criteria for financial capability as the lead Consortium member having net tangible asset of Rs.580 Crores. The petitioner's bid was rejected on the ground that it has failed to meet the minimum eligibility criteria, as the overdraft facility of Rs.98.01 Crores availed would come under ''short term borrowing'' as per Schedule III of the Companies Act, 2013. This communication dated 8.1.2016 was preceded by numerous correspondence between the parties.
2. Challenging the RFQ itself and the consequential notice dated 22.12.2015, by which, the Consortium of JSW Jaigarh Port Limited (JSWJPL) and JSW Infrastructure Limited (JSWIL) was declared to be the eligible applicant as against the petitioner, followed by the communication dated 8.1.2016 sent by the 1st respondent indicating the basis for rejection, the present writ petition has been filed. The petitioner has also put into challenge Clause 7.4.1.2 of the RFQ condition prescribing Net Tangible Asset to not less than Rs.580 Crores with a consequential prayer to declare the rejection of the petitioner's RFQ as arbitrary and unreasonable and thus resultantly the 1st respondent will have to issue the Request For Proposal (in short, ''RFP'') for the purpose of participation in the tender process to be considered on merit.
3. After hearing the parties, this Court in W.M.P.Nos.1544 to 1547 of 2016 was pleased to pass the following order:
''...9. In such view of the matter, this Court is of the opinion that the petitioner has made out a prima facie case for grant of interim order. Hence, the respondent is directed to issue Request for Proposal (RFP) document to the petitioner by today. On receipt of the same, the petitioner is directed to submit his financial bid by tomorrow the 21st January 2016 before 5.00 p.m. The respondent is further directed to produce the price bid of the petitioner as well as the other bidders, before this Court in a sealed cover on 25.01.2016....''
However the petitioner did not comply with the said order on the ground that the fixation of the amount at Rs.580 Crores is illegal.
4. After filing this writ petition, the petitioner has filed another writ petition in W.P.No.2850 of 2016 calling for the records of the Kamarajar Port Limited, the 2nd respondent therein comprised in the tender for selection of a Developer for Modification of existing Iron Ore Terminal on “as is where is” and also to handle common user Coal at Kamarajar Port Limited, Chennai, including RFQ bearing No.KPL/DBFOT/01/2015, dated July 2015, and RFP bearing No.KPL/DEFOT/01/2015, dated December 2015, and all proceedings consequent thereto and quash the same as being wholly illegal, arbitrary and unreasonable.
5. Though M/s. Sical Iron Ore Terminal Limited (SIOTL) is not impleaded as a party respondent in this writ petition, this Court is inclined to suo motu implead it as respondent No.2, more so, when it has also been arrayed as party respondent in the other Writ Petition No.2850 of 2016. This is also for the reason that arguments have been heard at length from the counsel appearing for the said respondent without any objection and certainly the said respondent is a person interested and thus, a necessary and proper party.
6. All the counsels agreed that it would be appropriate to decide W.P.No.1757 of 2016 qua the petitioner's satisfaction of eligibility criteria for the RFQ with particular reference to the Financial Capability. The s
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