B KUMARSWAMY REDDY Vs. GUJARAT INDUSTRIES POWER COMPANY

JUDGEMENT

(1.) Rule. Mr. S.B. Vakil for respondent No. 3 Mr. Anjaria for respondent No. 4, Mr. Kamal Trivedi for respondent No. 1 and Mr. P.G. Desai for respondent No. 2 waive service of notice of Rule.

(2.) B. Kumaraswamy Reddy sole proprietor of M/s B. Kumaraswamy Reddy has filed the present petition to issue a writ a mandamus an/or directions to quash and set aside the entire process of the tender work assigned to respondents No. 3 and 4 by respondent No. 1 Gujarat Industries Power Company Ltd. (hereinafter referred to as "GIPCL") a public Limited Company incorporated under the provisions of Sec. 43-A of the Companies Act. Respondent No. 1 GIPCL is a company constituted to build and operate the power stations and to generate power. They have already set up -and commissioned two power projected. They started the third projected at village Nai-Naroli Taluka Mangrol, District Surat. It is a power station with 2 x 125 mw. The construction of the said work was started in the year 1996 and scheduled to be completed and commissioned in June, 1999. In the said power project lignite is to be used a fuel. Said lignite is to be supplied by and from the respondent company's captive mines commonly known as Vastan mines located at a distance of about only 3 kms. from the said power plant. Said power production plant is called as Surat Lignite Power Plant and the power produced by the said company will be used by Gujarat Electricity Board for which a power purchase agreement has already been executed by and between GIPCL as well as GEB. In connection with the said power plant in order to start the actual production it was necessary to develop the mines by undertaking the job of excavation and removal of over burden i.e., doing the earth work by removing the mud etc., so that lignite can be exposed, taken out and then transported to the power plant. They therefore, consulted M/s Nirkon-Madras. As per the said prepared plan, it was necessary to remove 32 lakhs cubic mtrs. of overburden and 1 lakh cubic mtrs. of lignite was to be produced during the first year and about 80 lakhs cubic mtrs. of over-burden and about 8 lakhs cubic mtrs. of lignite would be required to be produced during the second years. In order to achieve the same, deployment of heavy earth moving equipments were required. Said GIPCL was not owing and possessing the same and had no mining infrastructure and experience when it had decided to start the said work. They therefore, approached the Gujarat Industrial Development Corporation (GMDC) which is a nobal agency for mining in the State, Gujarat Power corporation Ltd. (GPCL) and also Neyveli Lignite Corporation (NLC) sometime in November/December 1995 in order to get the names of agencies engaged in and having experience of such type of activities of removing the overburden and production of lignite from the mines. Said corporations gave a list of about 16 persons. Thereafter all the 16 agencies were approached and from those 16 agencies they had short listed 8 parties and the work of removing the overburden of first phase was assigned to respondent No. 3 M/s Sadbhav Engineering after following the tendering process. Accordingly respondent No. 3 started the job in the year 1996 and when the said job for the first phase work coming was closer to the completion it was necessary for GIPCL to finalise the process of awarding a contract for the second phase before September, 1997. Therefore, in the month of April, 1997 they short listed 9 parties out of 16 parties mentioned in Annexure-I whose names were suggested by GMDC and GPCL and NCL. When the present petitioner came to know about the same, he also approached and then the process giving work of the 2nd phase was being worked out an negotiated with all the ten persons. Said 10 parties were asked to forward the original bid documents latest by 17.8.1997. But actually out of those 10 parties only 5 parties including the present petitioner, respondents No. 3 and 4 submitted their 2 bids in two parts. - part 1 being techno-commercial bid and part II being commercial bid containing the price/grade/quality. When part II bid documents were scrutinised by the respondent No. 1 it was found that some of those 5 tenderers had incorporated some deviation and hence it was decided to have a discussion with all the five tenderers for techno commercial discussion individually with each of them and accordingly there were discussion with the present petitioner. Thereafter in view of the said discussion it was found that the contract period instead of one year should be extended to 3 years. Accordingly all the 5 tenderers were informed to submit their revised quotations indicating the price implication based on the discussion held during the meeting latest by 7.6.1997. Accordingly all the five tenderers including the present petitioners had given their revised bids. In the mean time technical and mining consultants of respondent No. 1 M/s Rheinbraun Engineering who has been engaged for updating and finalising the mining plan suggested that it would he necessary to take out 13 lakhs tons of lignite per year and consequently it would be necessary to remove 150 lakhs cubic metres of overburden every year for meeting the said requirements. Thereafter, respondent No. 1 again approached the five tenderers and the same was discussed with them and they were told that as per the estimates of the mining consultants 150 lakhs cubic metres of over burden was required to be removed per year. At that time all the tenderers had expressed that increase in the quantum of job would require equipment of larger size and higher capacity which in turn would involve more financial capacity on the part of the contractor and the period should be atleast 3 years and preferably of five years. Therefore, they were asked by the respondent No. I to give their bids for three years and five years separately. Accordingly the revised bids were given by all the tenderers including the petitioner on 16.8.1997. Then revised bids were opened on 19.8.1997 and they held meetings individually with each of them, and they were informed that the rates quoted by them were not acceptable to the company and they were given opportunity to give their reconsidered and revised bid by 2.9.1997 accordingly. All of them had given the revised bids. When they were opened on 12.9.1997 still they were found to be high. They were again requested to reconsider their rates and on that request all the four bidders gave their revised rates and thereafter 2/3rd job of the said contract work was given to respondent No. 3 and l/3rd job work was given to respondent No. 4.

(3.) The petitioner has come before this Court to challenge said contract work given by the respondent No. 1 GIPCL. It is the claim of the petitioner that the petitioner himself is a civil engineering contractor and is engaged in the business of mining and he has worked as a consultant in the same capacity in other states like Rajasthan, Tamil Nadu and Karnataka. According to him there are other good companies to carry out the work in question but as no advertisement was issued by the respondent No. 1 inviting global tenders to the contracts, the procedure followed in giving the said contract and is arbitrary illegal and the procedure followed in giving the contract is given a complete go bye of all the settled norms with regard to accepting tenders. It is further the allegation of the petitioner that Vishnubhai V. Patel one of the partners of respondent No. 3 M/s Sadhbhav Engineering is a close friend of the then Chief Minister-respondent No. 6 herein and in order to favour said respondent No. 3 the whole procedure in giving a contract was followed and the contract is ultimately given to respondent No. 3 in order to favour him. It is further alleged that the offers of first two tenders were not at all considered and opened and though the respondent Nos. 3 and 4 had given conditional tenders the same were accepted with a view to favour them. The petitioner contends that said contract is given by following corrupt practice and in the circumstances said giving of contract should be interfered with by this Court by exercising the jurisdiction under Art. 226 of the Constitution of India by making the following prayers :