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21

W.P. No. 169(W) of 2017

13.01.2017

(C.A.N. 224 of 2017)

KC

Renesco India Pvt. Ltd.

Vs.
Eastern Coalfields Limited & Ors.
Mr. Binod Poddar
Mr. Dipak Sinha
Mr. Somak Basu.

for the petitioner.

Mr. Arijit Chowdhury

Mr. Alok Banerjee
Mr. A. Sarkar
Mr. Pradyot Kumar Das.
for the Eastern Coalfields Limited.
Mrs. Sumita Mukherjee
Mr. S.K. Sarkar.
for the added respondent.

In Re. CAN 224 of 2017

This is an application by a participant in the

impugned tender who is not a party to present writ petition.
Learned advocate for the applicant submits that, any
decision rendered in the writ petition would affect the right, title and
interest of the applicant as the applicant had participated in the subject
tender and has now become the lowest tenderer after the reverse bidding.
Therefore, the applicant should be added as a party-respondent and be
heard in this writ petition.
The petitioner and the ECL Authorities are represented.

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In view of the applicant participating in the tender, which is
presently under challenge, and in view of the fact that any order that may
be passed in the writ petition is likely to affect the applicant, it would be
appropriate to add the applicant as a respondent in the present writ
petition.

Learned advocate-on-record for the petitioner will make

necessary amendment in the cause title of the writ petition in course of

today.
The petitioner will serve a copy of the amended writ petition
on the added respondent. The advocate-on-record for the petitioner will
also serve a copy of the amended cause title on the advocate-on-record for
ECL Authority by the same date.
CAN 224 of 2017 is disposed of.
There shall, however, be no order as to costs.
In Re.: W.P. No. 169(W) of 2017

The petitioner assails the rejection of a technical

bid of the tender submitted by the petitioner pursuant to a
notice inviting tender dated June 6, 2016 issued by Eastern
Coalfields Limited (ECL). ECL had floated the subject notice
inviting tender for supplying and laying of tarfelt, removal of
tarfelt and grading for water proofing treatment for three
years.

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Learned

senior

advocate

appearing

for

the

petitioner submits that, the technical bid of the petitioner

was rejected on two grounds.

The first being that the

petitioner does not qualify Clause 10 of the Technical Section

of the terms and conditions of the tender. The second ground
being that the petitioner does not have a Value Added Tax
(VAT) registration under the West Bengal Act for it to qualify
in the tender process.
Referring to the two grounds, learned senior
advocate for the petitioner submits that, the tender process
requires a provenness criteria to be fulfilled in terms of
Clause 10. He submits that, the various sub-clauses of Clause
10 are mutually exclusive to each other. He submits that, the
primary object of the subject tender is to procure tarfelt for
the purpose of laying the same at the designated area. The
incidental act of laying the tarfelt such as removal of the old
tarfelt and laying the new tarfelt are included in the subject
tender.

The primary object of the subject tender being

supply of tarfelt and the petitioner being a dealer of a

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branded product, he submits that, the petitioner comes within
the Clause 10(vii) of the terms and conditions of the contract
and, therefore, the rejection of the technical bid of the
petitioner on such ground is not proper.
So far as VAT registration is concerned, he
submits that, since the petitioner is not doing business in
State of West Bengal before the subject tender, the
petitioner had offered to obtain registration as and when the
tender was awarded in favour of the petitioner.

Non-

registration under the VAT should not prevent the authority

from considering the technical bid. He submits that, it was
open to the authorities to specify the time period within which
the application for VAT registration was required to be made
and the VAT registration obtained. He submits that, in the
event the petitioner had failed thereafter, the authorities
could have take steps in accordance with the terms and
conditions of the contract.
Learned

senior

advocate

for

the

petitioner

submits that the work order or the letter of intent under the

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subject tender is yet to be issued. In such circumstances, he
submits that, there should be a stay of the tender process till
disposal of the writ petition.
Learned senior advocate for the ECL Authority
submits that, all clauses of the tender terms and conditions of
the tender may not be relevant for consideration. He relies
upon

2010(4)

Supreme

Court

Cases

114

(Economic

Transport Organisation, Delhi Vs. Charan Spinning Mills

Pvt. Ltd. & Anr.) in support of such proposition. He submits
that the Clause 10(vii) of the terms and conditions of the
contract is redundant in the present context.

The subject

tender is not limited to supply of a branded item only. The

subject tender requires a tenderer to undertake other works.
The petitioner not having submitted relevant documents
establishing its capability to undertake the portions of the
other work under the subject tender, the petitioner cannot be
said to be duly qualified to participate in the tender.
Moreover, the petitioner does not have a VAT registration in
terms of Clause 15 of the tender provisions.

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Learned senior advocate for the ECL submits that,
neither the prima facie case nor is the balance of convenience
is in favour of the petitioner in granting any interim relief in
favour of the petitioner.
Learned advocate for the added respondent
submits that, after the petitioner has been found to be
disqualified.

On a reverse bidding taking place, the added

respondent had succeeded in becoming the lowest tenderer.

The ECL Authorities had called upon the added respondent to
justify its price.

The added respondent had provided such

justification. The ECL Authorities had called upon the added

respondent to extend the validity period of its offer.

The

added respondent had extended the validity period of its

offer till January 31, 2017. Moreover, according to her, the
petitioner not having fulfilled the essential terms and
conditions of the tender provisions, no relief should be
granted to the petitioner.
Having considered the rival contentions of the
parties and materials made available on record, by a notice

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inviting tender dated June 6, 2016, the ECL Authority had
invited tender for supplying and laying of tarfelt, removal of
old tarfelt and grading of water proof treatment for three
years.
It appears from the materials made available on
record that, the petitioner and the added respondent had
participated
tenderers.

in

such

tender

process

along

with

other

The technical bid of the respective tenderers

were opened.

Apparently few tenderers were disqualified.

The petitioner was also disqualified as having not qualified the

technical bid. Two grounds have been argued on behalf of ECL
Authorities

today as the grounds of non-fulfillment of the

technical qualification by the petitioner. Contemporaneously

also the grounds were highlighted by the ECL Authorities.
At the time of consideration of the technical bid,
ECL Authorities had called upon the petitioner to explain on
the two grounds. One of the ground is the non-submission of
relevant documents in terms with Clause 10 of the Technical
Section of the terms and conditions of the subject tender.

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Clause 10 of the Technical Section of the terms
and conditions of the subject tender is as follows:
10. Provenness criteria: The offered item shall be
considered proven provided it meets any of the
criteria noted below; otherwise it offer shall be
liable for rejection. The decision of ECL for
considering any firm as proven will be final and
binding upon the tenderers. Bidders should
upload scanned copies of documents is support
of proneness criteria, after getting the same
certified by the Notary Public. Item wise
provenness criteria is given below:
(a) ******************
(b) ******************
i.

If the tenderer can submit self attested and

notarized copies of formal orders received
from ECL Hqrs, placed within last 7 years, of
same
or
higher
capacity/size/version/specification etc.
OR

ii. If the tenderer can submit self attested and

notarized copies of formal orders received from
CIL/Hq of other subsidiaries of CIL/other
Public Sector/Govt. Organization, placed within
last 7 years, of same or higher capacity/ size/
version/ specification etc. with order qty for at
least 25% of tender qty alongwith satisfactory
performance report issued by the user dept.
OR
iii.
Firms currently holding Rate Contract for
supply of the tendered item(s)/ same or
higher capacity/ size/ version/ specification
etc. of tendered items with CIL/Hq of any
subsidiary of CIL/DGS&Dfirms have to
submit self-attested copies of relevant Rate
Contracts received by them (placed within last
7 years).
OR
iii.
If the tenderer can submit self attested and

iii.

iii.

iii.

notarized copies of trial orders received from

CIL/its subsidiaries placed within last 7 years
of same or higher capacity/ size/ version/
specification etc. with order by qty for at
least 10% of tender qty; alongwith
satisfactory performance certified by HOD of
concerned
technical
dept
of
that
CIL/subsidiary.
OR
Firms who are short-listed/ approved by CIL
for supply of the tendered item/ same or
higher capacity/ size/ version/ specification
etc. of tendered items to subsidiaries of CIL
and such list is currently validfirms have to
submit self-attested copies of relevant
documents.
OR
For supply of parts/components/assemblies of
equipment, the OEM/OPM/OES firms and
authorized agents of OEM/OPM shall be
exempted from provenness criteria.
OR
For propriety item/tendered items of specific
brand/model/source, provenness criteria shall
not be applicable.

All sub-clauses of Clause 10 are mutually exclusive

to each other as is apparent from user of the word or in
between the subject clauses.

Learned senior advocate for

ECL Authorities has also not attempted to suggest that, the

word or in the present context and should be read as and.
The ECL Authorities have also not proceeded on the basis that
the word or in between the clauses should be read as and.

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Learned senior advocate for the ECL Authorities
suggest that sub-clause (vii) of Clause 10 is redundant and is
to be ignored.
Authorities

Such stand has not been taken by ECL

contemporaneously

while

dealing

with

and

considering the technical qualifications of the petitioner. The

ECL Authorities had invited clarifications from the petitioner
on such count. The clarification given by the petitioner was
rejected solely on the ground that, the petitioner did not
qualify in terms of Clause 10(ii).

The qualification of the

petitioner under Clause 10(vii) was overlooked.

The ECL

Authorities contemporaneously did not state that, Clause

10(vii) is redundant. The petitioner claims to be a dealer of
branded

tarfelt

item.

Such

was

claim

was

made

contemporaneously before the ECL Authorities. On the basis

of such claim, ECL Authorities did not consider the request of
the petitioner in terms of Clause 10(vii). Clause 10(vii) states
that, the entirety of Clause 10 will not apply in the event of
the tendered item being of a specific brand.

As the

petitioner claims to be a dealer of specific brand, it will, at

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least, prima facie come within the Clause 10(vii) of the tender
provisions.
Economic Transport Organisation (supra) deals
with a claim being lodged in respect of an insurance contract.
In such context it is said in paragraph 41 that, a contract for
insurance are in standardised forms to cover all types of
situations and circumstances and that several of such clauses
in such forms may be wholly inapplicable to the transactions
intended to be covered by the documents. Prima facie, in the
facts of the present case I am not in a position to reject it
under Clause 10(vii) as to be inapplicable to the said tender.
The other ground for rejection of the technical
bid of the petitioner is that, the petitioner does not fulfil
Clause 15 of the terms of instruction to bidder.

Clause 15

requires a bidder to have a relevant registration under the

Sales Tax Act.

The petitioner has explained its non-

registration under the Bengal Act on the ground that it is not

carrying on business in Bengal for it obtain a registration
under the Bengal Act. Moreover, it has offered to obtain such

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registration in the event of award of the contract.
The terms of the tender allows ECL Authorities to
call upon a tenderer to explain its position and accept or
reject such clarification. In the present case, the rejection
of the clarification given by the petitioner for the VAT
registration is unacceptable, at least, on a prima facie finding.
By a writing dated December 24, 2016 ECL
Authorities had intimated the petitioner that, the petitioner
emerged as a L-1 tenderer after the tender was opened on
July 14, 2016. Subsequent thereto, on the technical bid of
the petitioner being rejected and a reverse auction being held
by ECL Authorities the added respondent has become the L-1.
The ECL Authorities have not issued the letter of intent or a
contract in favour of any of the parties. The validity period
of the offer of the added respondent has been extended till
January 31, 2017.
Learned senior advocate for the ECL Authority
submits that, the balance of convenience is not in favour of
the petitioner to obtain any interim relief in as much as the

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petitioner may be compensated by way of damages in the
event the Court comes to a finding against ECL Authority.
Prima facie, it appears that ECL Authorities have
acted arbitrarily in rejecting tender of the petitioner on the
two grounds as noted above. In such circumstances, a prima
facie case has been made out by the petitioner for grant of
interim relief. The tender process is under challenge. Such
tender process has been conducted in a manner which is found
to be arbitrary.

In such circumstances, it would be

appropriate to grant an interim stay of such tender process

till the disposal of the writ petition.
ECL Authorities are restrained from proceeding any further
with the subject tender until disposal of the present writ petition.
Let affidavit-in-opposition be filed within four weeks from
date as prayed for; reply thereto, if any, be filed two weeks thereafter.
The writ petition will be treated as ready for hearing immediately on
completion of the time period prescribed for filing affidavits. Liberty to
the parties to mention for early hearing.
Urgent certified website copies of this order, if applied for,
be made available to the parties upon compliance of the requisite
formalities.

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(Debangsu Basak, J.)