ESSAR POWER LIMITED, A COMPANY REGISTERED UNDER COMPANIES ACT THROUGH ITS AUTHORIZED REPRESENTATIVE MR. SUBODH TYAGI Vs. THE STATE OF BIHAR THROUGH THE CHIEF SECRETARY & ORS.

JUDGEMENT

(1.) Challenge in this writ application is to the letter dated 20th September, 2012 (Annexure-15) enclosing a copy of the letter No. COM-Misc.-57/2011/2462 of the same date written by the respondent No. 5, the Chief Engineer (Commercial) of the respondent-Bihar State Electricity Board (hereinafter referred to as the Board) communicating the cancellation of the Letter of Intent (LOI) issued by the Board in favour of the petitioner for appointment of Distribution Franchise for supply of electrical energy within the Patna Electric Supply Undertaking (PESU) Area and forfeiting the earnest money for not executing the agreement within the stipulated time on receipt of the LOI. The short relevant facts are that in order to have continuous electric supply in the PESU area the respondent Board decided to give distribution franchise and accordingly for appointment/selection of distribution franchise issued an advertisement vide tender notice No. 22/PR/BSEB/11 (Annexure-1) and Request for Proposal (RFP) inviting bid from the interested bidders to participate in the bidding process for selection of distribution franchise vide bid specification No. DF-1-Patna-2010-11 (Annexure-2) containing the detailed terms and conditions for such appointment. The petitioner submitted its proposal for -such appointment on 20th June, 2011 as contained in Annexure-20 (series) to the supplementary affidavit. A pre-bid meeting was held between the petitioner and the concerned officials of the Board and thereafter LOI was issued in favour of petitioner vide letter dated 18th July, 2011 (Annexure-5) and revised LOI dated 27.7.2011 (Annexure-7) on the terms and conditions stipulated therein. As required, petitioner deposited the earnest money and as per the letter of intent the petitioner was to enter into distribution franchise agreement as detailed in the Draft Agreement forming part of RFP and start operation of distribution of power within sixty days from the date of signing of the agreement. As per the terms and conditions of RFP in case the successful bidder fails to enter into the agreement within a stipulated time Earnest Money deposited shall be forfeited. The LOI was cancelled since petitioner failed to enter into the distribution franchise agreement. Consequently the Earnest Money deposit of Rs. 50,00,000/- (five (sic--fifty?) lacs) was forfeited.

(2.) Mr. Y.V. Giri, learned Senior Counsel appearing for the petitioner submits that as per the RFP vide Annexure-2 besides various terms and conditions mentioned therein a fact would appear which is not in dispute that the appointment of distribution franchise was input based i.e. the franchise was required to meet the expected shortfall in the input of supply of electrical energy for distribution by the respondent-Board vide clause 5.4.2 of the RFP (Annexure-2) read with its corrigendum Annexure-3 of the writ application issued after pre-bid conference which is quoted below:--

(3.) Subsequently a corrigendum No. IV to RFP was issued after pre-bid conference of the bidders with the officials of the Board clarifying the bidders' queries/clarifications. The clause 5.4.2 of the R.F.P. was clarified as below:--