REUTECH MINING Vs. UNION OF INDIA

JUDGEMENT

(1.) Cancellation of the tender process initiated by the Western Coalfields Limited has been challenged by two successful bidders. That challenge is being considered together and the writ petitions preferred by them seeking issuance of purchase orders are being decided by this common judgment.

(2.) The facts giving rise to the present proceedings are that on 17/11/2021, Western Coalfields Limited (for short, 'WCL') published a notice of Global Tender Enquiry for the Supply, Installation and Commissioning of Mine Slope Stability Monitoring Radar System with one year warranty and seven years Comprehensive Annual Maintenance Contract (CAMC). The petitioner in Writ Petition No. 6566 of 2022 - M/s Reutech Mining and the petitioner in Writ Petition No.8247 of 2022 - Sujyoti India alongwith M/s Hexagon Geosystems responded to the aforesaid Global Tender Enquiry. In terms of the tender notice each bidder was entered into a Pre-Contract Integrity Pact with the WCL. The technical bids submitted by the aforesaid three bidders were opened on 18/1/2022. On evaluation of the said technical bids on 12/3/2022, the technical bids of M/s Reutech Mining and Sujyoti India were found qualified. The technical bid of M/s Hexagon Geosystems was rejected as the bid did not meet the requisite criteria. The two successful bidders were informed that the price bids would be opened on 15/3/2022. Accordingly, the price bids were opened on the said date. After conducting reverse auction wherein the bidders quoted their revised rates, the WCL declared that M/s Reutech Mining was the lowest bidder for Item No.2 in the tender enquiry while Sujyoti India was the lowest bidder for Item Nos.1 and 3 in the tender enquiry. On instructions of the WCL said bidders submitted the requisite price break-up alongwith a detailed calculation sheet on 25/3/2022. The WCL on 7/4/2022 referred the tender process to two Independent External Monitors (for short, 'IEMs') and sought their opinion as to whether the tender process should be taken further since the prices quoted by the bidders were more than the estimated tender value by 54.08% but when compared with the Last Purchase Price, the quoted prices were 5% higher. On 15/4/2022 the IEMs opined that the WCL could take necessary action so as to take the tender process to its logical conclusion. It is the case of the petitioners that thereafter they were not provided with any information with regard to the tender process by the WCL. Sujyoti India made representations to the IEMs as further tender process was being delayed. Similarly, M/s Hexagon Geosystems having been declared ineligible at the evaluation of its technical bid also made representations to the IEMs. The WCL referred the matter again to the IEMs in the light of said representations. The IEMs held meetings on 26/9/2022 and 27/9/2022 and thereafter on 29/9/2022 submitted their report to the WCL. They opined that the tender in question be cancelled in view of defects in scrutiny of the techno-commercial bids. The Tender Committee of the WCL considered the report of the IEMs on 7/11/2022 and thereafter resolved to accept the report of the IEMs and scrap the tender process. It was decided to go in for a fresh tender process. On 12/11/2022 the petitioners received the requisite communication informing them of the cancellation of the tender process. After making a representation to the WCL in that regard, these writ petitions have been filed challenging the decision of the WCL to cancel the tender process.

(3.) Shri Vineet Kothari, learned Senior Advocate for M/s Reutech Mining after referring to various clauses in the Global Tender Enquiry as well as Purchase Manual published by Coal India Limited in Year-2020 submitted that the WCL was not justified in cancelling the tender process for procurement of Mine Slope Stability Radar on grounds that were foreign to the Purchase Manual as well as the conditions mentioned in the Global Tender Enquiry. The technical bid of M/s Reutech Mining having been found to be eligible in the techno-commercial scrutiny after which it was permitted to participate in the financial bid coupled with the opinion expressed by the IEMs to complete the tender process, there was no justifiable reason for the WCL to turn around and undertake a fresh reference to the IEMs. Without referring to the earlier opinion expressed by the IEMs on 12/4/2022, the IEMs erroneously considered the relevant documents and expressed an opinion to scrap the tender process. Notwithstanding the presence of Clause 22 of the Global Tender Enquiry which permitted the WCL to either accept or reject any or all bids it was not permissible for the WCL to exercise the power of rejection of all the bids in absence of any justifiable reason. The WCL ought to act reasonably and fairly in the said matter and Clause 22 could not be read to mean that the tender process could be cancelled at the whims of the WCL. It was urged that giving an absolute right to the WCL to scrap the tender process without any justifiable reason and in an arbitrary manner would render such clause ultra vires. Referring to the observations in paragraph 82 of the judgment of the Gujarat High Court in Aakash Exploration Services Limited Through Director Heman Navinbhai Haria Versus Oil and Natural Gas Corporation Limited [Special Civil Application No. 7814 of 2019] it was urged that Clause 22 did not give an unfettered right to the WCL to cancel the tender process. M/s Reutech Mining being the lowest bidder for Item No. 2 of the tender enquiry, it had a legitimate expectation that the work order would be issued to it since the entire tender process till that stage had been conducted in a fair manner which was even endorsed by the IEMs in their report dtd. 15/4/2022. It was then submitted that the Tender Committee to whom the first report of the IEMs was submitted on 12/4/2022 underwent a change and of the four members constituting the Tender Committee three were changed. The Tender Committee which considered the subsequent report of the IEMs did not consider the earlier report of the IEMs dtd. 15/4/2022 and took a diagonally opposite view of the matter. Our attention was invited to the observations in paragraph 58 of the judgment of the Hon'ble Supreme Court in The Vice Chairman and Managing Director, City and Industrial Development Corporation of Maharashtra Ltd. and Another Versus Shishir Realty Private Limited and Others [2021 (14) SCALE 378] in the context of "regime revenge". M/s Reutech Mining was not heard prior to cancelling the tender process. It ought to have been heard in the light of the fact that its bid for Item No.2 of the tender notice had been found to be lowest and a decision of scrapping the tender process adversely affected it. In that regard the learned Senior Advocate placed reliance on the decision of the Orissa High Court in M/s Maa Kalijaee Transport, Sambalpur Versus Union of India and Ors. [W.P. (C) No. 2160 of 2022] as well as the judgment of the Himachal Pradesh High Court in Jalam Singh Versus State of Himachal Pradesh and Ors. [AIR 2022 HP 59]. It was also urged that M/s Reutech Mining filed the present writ petition on 17/10/2022 seeking a direction to be issued to the WCL for issuance of a work order. Notice was issued in the writ petition on 19/10/2022 and during pendency of the present proceedings the WCL issued a corrigendum cancelling the tender process on 12/11/2022. This was done without obtaining the leave of the Court and the same indicated the approach of the WCL. The said decision was taken ignoring public interest. It was thus submitted that a clear case for issuance of a writ of mandamus was made out and M/s Reutech Mining was entitled to be issued a work order as regards Item No.2 of the tender enquiry issued by the WCL.