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IN THE HIGH COURT OF ORISSA AT CUTTACK
VINEET SARAN, B.R. SARANGI, JJ.
Jindal Steel & Power Limited and others - Petitioners
Versus
Odisha Coal and Power Limited - Opp. Party
W.P.(C) NO. 4687 OF 2017
Decided On : 14-09-2017
TENDER - CONDITIONS - JUDICIAL REVIEW - ARBITRARINESS - REASONABLENESS - NON-JOINDER OF PARTIES - CONTRACTUAL MATTERS - INTERFERENCE BY COURT.
Fact of the Case:
Petitioners, Jindal Steel & Power Limited and Jindal Power Limited, challenged the NIT issued by Odisha Coal and Power Limited (OCPL) for selection of Mine Operator for Manoharpur Coal Mines, alleging that the condition of annual capacity of at least 7 MTPA in Section 5.2.1 of the RFQ was arbitrary and unreasonable, and sought its quashing.
Finding of the Court:
1. The Court held that the condition of annual capacity of at least 7 MTPA in Section 5.2.1 of the RFQ was not arbitrary or unreasonable, as it had a rational nexus with the object sought to be achieved, i.e., to meet the fuel requirement of OPGC's power plant. 2. The Court further held that the petitioners were not entitled to participate in the tender process through the affiliate route, as they did not possess a single coal mine with the required annual capacity of 7 MTPA, as stipulated in Section 5.2.1 of the RFQ. 3. The Court also held that the writ application was not maintainable due to non-joinder of parties, as the petitioners had failed to implead the other bidders who had participated in the tender process.
Issues: 1. Whether the condition of annual capacity of at least 7 MTPA in Section 5.2.1 of the RFQ was arbitrary and unreasonable? 2. Whether the petitioners were entitled to participate in the tender process through the affiliate route? 3. Whether the writ application was maintainable in the absence of necessary parties?
Ratio Decidendi: 1. The Court held that the condition of annual capacity of at least 7 MTPA in Section 5.2.1 of the RFQ was not arbitrary or unreasonable, as it had a rational nexus with the object sought to be achieved, i.e., to meet the fuel requirement of OPGC's power plant. The Court relied on the fact that the power plant required 7.5 MTPA of coal, and that the mining plan for Manoharpur Coal Mine had been approved for 8 MTPA. 2. The Court further held that the petitioners were not entitled to participate in the tender process through the affiliate route, as they did not possess a single coal mine with the required annual capacity of 7 MTPA, as stipulated in Section 5.2.1 of the RFQ. The Court noted that the petitioners' affiliate had two mines with a combined annual capacity of 6.25 MTPA, but this did not meet the requirement of Section 5.2.1. 3. The Court also held that the writ application was not maintainable due to non-joinder of parties, as the petitioners had failed to implead the other bidders who had participated in the tender process. The Court relied on the judgment of the Supreme Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 4 SCC 4305, which held that all eligible bidders should be made parties to a writ petition filed by an unsuccessful or ineligible bidder.
Final Decision: The Court dismissed the writ petition, holding that the condition of annual capacity of at least 7 MTPA in Section 5.2.1 of the RFQ was not arbitrary or unreasonable, that the petitioners were not entitled to participate in the tender process through the affiliate route, and that the writ application was not maintainable due to non-joinder of parties.
JUDGMENT :
DR. B.R. SARANGI, J.
1. Jindal Steel & Power Limited, petitioner no.1, a company incorporated under the Companies Act, 1956, is engaged in business of manufacturing of sponge iron/steel, generation of electricity, development/operation of mines in India and abroad including coal mines. Jindal Power Limited, petitioner no.2, which is also a company incorporated under the Companies Act, 1956, is engaged in the business of generation of power, development and operation of mines etc. Petitioner no.3, who is working as Associate Vice-President of petitioner no.1 company and also one of its share holders, is duly authorized by the corporate management committee of Board of Directors of petitioner no.1 vide its resolution dated 02.03.2017 and petitioner no.2 vide resolution dated 17.02.2017 to institute legal proceedings against the opposite party with respect to the tender process for selection of Mines Developer and operator for Manoharpur Coal Mines vide NIT No.OCPL/33/2016 dated 12.12.2016.
2. Odisha Coal and Power Limited (in short ‘OCPL’) is a joint venture of Odisha Power Generation Corporation (in short ‘OPGC’) and Odisha Hydro Power Corporation (in short ‘OHPC’), both Government of Odisha undertakings. Therefore, the opposite party is a “Government Company” as defined under Section 2 (45) of the Companies Act, 2013. The opposite party was created to develop and operate coal mines to cater to the fuel requirements of the expansion of power plant of OPGC. OPGC is establishing the End Use Plant as part of its capacity addition.
3. The Ministry of Coal, Government of India has allotted two contiguous coal blocks, namely, Manoharpur Coal Mine and the dip side of Manoharpur Coal block, both located in Ib valley coalfields in Odisha, to the opposite party for supply of coal exclusively for use in the power plant (under construction) of OPGC. The NIT No.OCPL/33/2016 dated 12.12.2016 pertains to only Manoharpur Coal Mines. The opposite party intended to appoint a Mine Operator (MO) in respect of the Manoharpur coal mine. Accordingly, the opposite party issued Request For Qualification (RFQ) for the selection of MO for operation of Manoharpur coal mines project in the State of Odisha, India. Therefore, International Competitive Bidding (ICB) was issued on 12.12.2016. The said RFQ has been revised twice vide Corrigendum-1 dated 23.12.2016 and Corrigendum-2 dated 07.03.2017. The schedule date for submission and opening of qualification proposals was 31.01.2017. Consequence of issuance of Corrigendum, revised cut-off date and time for submission of proposals for qualification was fixed to 25.03.2017 at 14.00 hours. The qualification proposals were scheduled to be opened at 14.30 hours on 25.03.2017. Vide Corrigendum-1 dated 23.12.2016, the opposite party modified Section-5.2 of the RFQ and Appendix-5 relating to technical qualification requirement that in place of “financial year”, it should be “calendar year”. Subsequently, the opposite party modified Sections-5.2.2 (c) and 5.4.3 of the RFQ as well as Annexure-A to the RFQ vide Corrigendum-2 dated 17.03.2017. The said modifications incorporated certain clarification regarding technical qualification in case of bids submitted under the consortium route. The opposite party allotted with such coal mines for the End Use (power plant of OPGC) with 420 MW is being expanded by another 1320 MW and, as such, the opposite party has already invested around rupees 500 crores in the aforementioned coal blocks as the coal will be used to meet the captive requirement of OPGC for generation of electricity in the Thermal power plant established at Banaharpali in the district of Jharsuguda for the larger benefit of people of the State of Odisha.
4. The present requirement of coal in the said power plant of OPGC is around 7.5 MTPA (Million Tonnes Per Annum). Both petitioners no.1 and 2 are hav
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