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| HC clears re-tendering of Rs 161-cr Kathua power project | | | Early Times Report
Jammu, July 21: The High Court of Jammu & Kashmir and Ladakh has cleared the way for fresh tendering of theRs 161.23-crore power infrastructure project in Kathua district after dismissing a petition challenging the cancellation of the earlier tender process.
Justice Sanjay Parihar held that merely emerging as the lowest or L-1 bidder does not confer an indefeasible or legally enforceable right upon a company to secure a government contract.
The court dismissed the writ petition filed by M/s SPBL Energy Pvt. Ltd. against the Jammu Power Development Corporation Limited and vacated the interim directions passed in the matter.
JPDCL has been granted liberty to proceed with the re-tendering process in accordance with law.
The dispute pertained to an e-tender floated in July 2022 for development of distribution infrastructure in Electric Division Kathua, covering the Kathua and Hiranagar subdivisions under the Revamped Distribution Sector Scheme.
TheRs 161.23-crore project included bifurcation of long feeders, reconductoring of electricity lines, augmentation and replacement of distribution transformers, replacement of worn-out wooden poles and stranded conductors and installation of capacitor banks at substations for voltage regulation.
SPBL Energy claimed that it had emerged as the L-1 bidder and legitimately expected the issuance of the Letter of Award. The tender process was, however, cancelled by JPDCL through a communication dated February 3, 2023.
Challenging the cancellation, the company alleged that the decision was arbitrary, unreasoned and passed in violation of the principles of natural justice. It sought quashing of the cancellation order and issuance of the contract in its favour.
The Corporation opposed the plea, alleging that the petitioner had concealed material facts relating to previous blacklisting orders and had furnished an affidavit declaring that it had not been blacklisted by any authority.
The respondents placed before the court allegations that the company had been blacklisted by Dakshinanchal Vidyut Vitran Nigam Limited, Agra, after an inquiry concerning the submission of allegedly forged bank guarantees worthRs 11.55 crore.
The company was also stated to have faced an earlier blacklisting order from Construction and Design Services, Uttar Pradesh Jal Nigam Limited.
Senior Advocate Sunil Sethi, assisted by Advocate Ankesh Chandel, appeared for the petitioner and argued that the complaints against the company were motivated and that the authorities had earlier considered the allegations before permitting the tender process to proceed.
It was contended that cancellation of the proposed award through a cryptic communication, without granting an effective hearing, violated Article 14 of the Constitution and the company’s legitimate expectation.
Senior Advocate Amit Gupta, assisted by Advocate Sumit Moza, represented JPDCL, while Advocate Khem Chand appeared vice Advocate Jatinder Choudhary.
The respondents argued that participation in the tender process, declaration as L-1 or issuance of a Letter of Intent did not create a vested right in favour of the bidder.
The High Court observed that tendering and award of government contracts are essentially commercial functions and the scope of judicial review in such matters is extremely limited.
Courts can interfere only when the decision-making process is shown to be mala fide, manifestly arbitrary, irrational or affected by serious procedural impropriety, it said.
“Merely because the petitioner emerged as the L-1 bidder did not confer upon it an indefeasible right to the award of the contract,” the court observed.
Justice Parihar said JPDCL was fully justified in verifying the company’s credentials before awarding a project involving substantial public funds and critical electricity infrastructure.
The court noted that the petitioner had been repeatedly provided opportunities to clarify its position regarding the blacklisting orders.
The company had also furnished an undertaking that the proposed contract would stand cancelled if any document submitted by it was subsequently found to be forged or if an adverse order affecting its eligibility surfaced.
Despite the opportunities, the court said, the petitioner failed to satisfactorily remove the doubts surrounding its eligibility and antecedents.
The High Court rejected the argument that the cancellation was liable to be set aside merely because the final communication did not contain elaborate reasons.
It observed that departmental records and correspondence demonstrated that the authorities had sought clarifications, examined the available material and followed a discernible process before taking the final decision.
The court further noted that after cancelling the tender, the authorities did not award the contract to the second-highest bidder but instead decided to initiate a fresh tendering process.
This conduct demonstrated that the decision was taken to secure a suitable and eligible contractor rather than to confer an undue benefit upon another bidder, it said.
Holding that no arbitrariness, favouritism, mala fides or violation of natural justice had been established, the court dismissed the petition.
It, however, clarified that if SPBL Energy is subsequently exonerated and otherwise satisfies the prescribed eligibility conditions, it will be free to participate in the fresh tender process. (JNF) |
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