1. The Opposite Party No. 1- Mahanadi Coal Fields Ltd. floated a global tender on 17.11.2022 for “Development and Operation of Balabhadra OCP as per Part II (scope of project) of Contract Agreement and other requirements specified in the Contract Agreement through Mine Operator” with estimated project cost amounting to Rs. 1274.90 Crores for a period of 27 years through the Electronic Tender bearing NIT/MCL/SBP/GM(CMC)NIT- 179/2022/595& Request for Bid (hereinafter referred to as „RFB‟).

2. The NCC, Hyderabad Ltd. (Petitioner in WP (C) No. 17180 of 2023), BGR Mining and Infrastructure Ltd. (Petitioner in WP (C) No. 17120 of 2023) and VPR Mining Infra Ltd. (OP No.4 inWP (C) No. 17180 of 2023&OP No. 2 in WP (C) No. 17120 of 2023) had participated in bidding process in response to the aforesaid tender floated by MCL Ltd..

3. Clauses 2.2.1(b), 4.1 read with 4.3 of the RFB are at the core of the dispute between the contesting parties, which, while laying down the criteria for eligible bidders, stipulated that a bidder shall not have a conflict of interest that affects the bidding process and that any bidder found to have conflict of interest shall be disqualified. The said clauses are being reproduced herein below:-

2.2 Eligibility and Qualification Criteria.

2.2.1 Eligible Bidders

"(a) xxxxxxxxx

(b) A Bidder shall not have a conflict of interest (the "Conflict of Interest'") that affects the Bidding Process. Any Bidder found to have a Conflict of Interest shall be disqualified. In the event of disqualification, the Authority shall be entitled to forfeit and appropriate the Bid Security or Performance Security, as the case may be. as mutually agreed genuine pre-estimated loss and damage likely to be suffered and incurred by the Authority and not by way of penalty for, inter alia, the time, cost and effort of the Authority (the “Damages”), without prejudice to any other right or remedy that may be available to the Authority under the Bidding Documents and/ or the Contract Agreement or otherwise. A Bidder shall be deemed to have a Conflict of Interest affecting the Bidding Process, if:

(i) the Bidder, its Member or Associate (or any constituent thereof) and any other Bidder. its Member or any Associate thereof (or any constituent thereof) have common controlling shareholders or other ownership interest; provided that this disqualification shall not apply in cases where the director indirect shareholding of a Bidder. its Member or an Associate_ thereof (or any shareholder thereof having a shareholding of more than 5% (five per cent) of the paid up and subscribed share capital of such Bidder, Member or Associate, as the case may be) in the other Bidder, its Member or Associate is less than 5% (five per cent) of the subscribed and paid up equity share capital thereof. provided further that this disqualification shall not apply for any ownership by a bank. insurance company, pension fund or a public financial institution referred to in section 2(72) of the Companies Act, 2013 For the purposes of this Clause 2.2. 1(b), indirect shareholding held through one or more intermediate persons shall be computed as follows: (aa) where any intermediary is controlled by a person through management control or otherwise, the entire shareholding held by such controlled intermediary in any other person (the “Subject Person”) shall be taken into account for computing the shareholding of such controlling person in the Subject Person: and (bb) subject always to sub-clause (aa) above, where a person does not exercise control over an intermediary, which has shareholding in the Subject Person, the computation of indirect shareholding of such person in the Subject Person shall be undertaken on a proportionate basis: provided, however, that no such shareholding shall be reckoned under this subclause (bb) if the shareholding of such person in the intermediary is less than 26% (twenty-six) percent of the subscribed and paid up equity shareholding of such intermediary; or

(ii) a constituent of such Bidder is also a constituent of another Bidder; or

(iii) such Bidder, its Member or any Associate thereof receives or has received any direct or indirect subsidy, grant, concessional loan or subordinated debt from any other Bidder, its Member or any Associate thereof or has provided any such subsidy, grant, concessional loan or subordinated debt to any other Bidder, its Member or any Associate hereof; or

(iv) such Bidder has the same legal representative for purposes of this RFB as any other Bidder; or

(v) such Bidder, its Member or any Associate thereof has a relationship (arising due to ownership / holding / cross holding) with another Bidder, its Member or any Associate thereof, directly or through common third party/ parties, that puts either or both of then n a position to have access to each other's information about, or to influence the Bid of either or each other; or

(vi) such Bidder, its Member or any Associate thereof has participated as a consultant to the Authority in the preparation of any documents, design or technical specifications of the Project."

SECTION IV : FRAUD AND CORRUPT PRACTICES

4.1 The Bidders and their respective officers, employees, agents and advisers shall observe the highest standard of ethics during the Bidding Process. Notwithstanding anything to the contrary contained herein, the Authority may reject a Bid without being liable in any manner whatsoever to the Bidder if it determines that the Bidder has, directly or indirectly or through an agent, engaged in corrupt practice, fraudulent practice, coercive practice, undesirable practice or restrictive practice in the Bidding Process.

4.3 For the purposes of this Clause, the following term shall have the meaning hereinafter respectively assigned to them:

(a) xxxxxxxxx

(b) xxxxxxxxx

(c) xxxxxxxxx

(d) “undesirable practice” means (i) establishing contact with any person connected with or employed or engaged by the Authority with the objective of canvassing, lobbying or in any manner influencing or attempting to influence the Bidding Process; or (ii) having a Conflict of interest; and

(e) “restrictive practice” means forming a cartel or arriving at any understanding or arrangement among Bidders with the objective or restricting or manipulating a full and fair competition in the Bidding Process.”

Other relevant provisions for considering the issue at hand are as follows:-

“2.2.4 Associates

(i) xxxxxxxxx

(ii) For purposes of this RFB, the expression “Associate means, in relation to the Bidder/ Member. a person who is controlled by such Bidder/ Member. As used in this definition, the expression "control' means. with respect to a person which is a company or corporation, (a) the right to appoint, or cause the appointment of, more than 50% (fifty per cent) of the members of the board of directors(or similar governing body) of such person; or (b) ownership, directly or indirectly. of more than 50% (fifty per cent) of the voting shares of such person, and with respect to a person which is not a company or corporation, the power to direct the management and policies of such person by operation of law.

(iii) xxxxxxxxx

(iv) xxxxxxxxx

3.7 Clarifications by Authority

3.7.1 To facilitate evaluation of Bids, the Authority may, at its sole discretion, seek clarifications from any Bidder regarding its Bid. Such clarification(s) shall be provided within the time specified by the Authority for this purpose. Any request for clarification(s) and all clarification(s) in response thereto shall be in writing.

3.7.2 If a Bidder does not provide clarifications sought under Clause 3.7.1 within the prescribed time, its Bid shall be liable to be rejected. In case the Bid is not rejected, the Authority may proceed to evaluate the Bid by construing the particulars requiring clarification to the best of its understanding, and the Bidder shall be barred from subsequently questioning such interpretation of the Authority.

4.1 The Bidders and their respective officers, employees, agents and advisers shall observe the highest standard of ethics during the Bidding Process. Notwithstanding anything to the contrary contained herein, the Authority may reject a Bid without being liable in any manner whatsoever to the Bidder if it determines that the Bidder has, directly or indirectly or through an agent, engaged in corrupt practice, fraudulent practice, coercive practice, undesirable practice or restrictive practice in the Bidding Process.”

4. Citing clause 2.2.1 (b) of the RFB, the writ petitioners have been disqualified by an order dated 15.05.2023 issued by the MCL mainly on the ground that they are associated with each other in a Special Purpose Vehicle (SPV) Company, incorporated under the Companies Act, viz. Pacchwara Coal Mining and Talaipalli Coal Mining Pvt. Ltd. Consequently VPR Mining Infra has been declared as L-1 bidder. The decision of the Mahanadi Coalfields Ltd. disqualifying the Petitioners invoking the Conflict of Interest clause as noted above, is under challenge in both the cases.

5. It is pertinent to mention here that these writ petitions were earlier dismissed by a co-ordinate bench of this court by a common judgment dated 19.12.2023 which was put to challenge by the Petitioners before the Supreme Court giving rise to Civil Appeal No. 5390 of 2024 arising out of SLP(C) No. 8813 of 2024(BGR Mining and Infra Ltd. v. Mahanadi Coalfields Ltd.) and SLP (C) Diary No(s). 12835/2024 (NCC Ltd., Hyderabad v. Mahanadi Coal Fields Ltd. &Ors), which have been allowed and the cases have been remitted back to this court for a fresh decision.

6. Operative portion of the order dated 26.04.2024 passed in BGR Mining and Infra Ltd. v. Mahanadi Coalfields Ltd., Civil Appeal No. 5390 of 2024 (arising out of SLP(C) No. 8813 of 2024) is:-

“8. The judgment of the High Court is bereft of any reason bearing on the grounds which resulted in the disqualification of the appellant and the rejection of their bid. The High Court has recorded the submissions of the rival parties and cited from the precedents of this Court. The citing of a litany of precedent does not make for reasons unless the High Court specifically applies its mind, in a case like the present, to the grounds of disqualification and to the submissions which have been urged by the parties to assail them.

9. Finding an absence of any reasons in the judgment of the High Court on the merits of the issue of disqualification, we remit the proceedings back to the High Court for a fresh decision. We clarify that we have not expressed any opinion on the rival submissions which are left open to be decided by the High Court, in a reasoned judgment.”

7. By an order dated 06.05.2024, NCC Ltd., Hyderabad v. Mahanadi Coal Fields Ltd. &Ors, SLP (C) Diary No(s). 12835/2024 came to be disposed of by the Supreme Court :-

“2. Civil Appeal No 5390 of 2024 (arising out of SLP(C) No 8813 of 2024) [BGR Mining and Infra Limited represented by its Director v Mahanadi Coalfields Limited &Anr] arose out of the same order of the High Court dated 19 December 2023, which has been impugned in these proceedings. The connected proceedings were disposed of by an order dated 26 April 2024.

xx xx xx

4. The Special Leave Petition shall stand disposed of in terms of the order dated 26 April 2024.”

8. It is noteworthy at this juncture that during the pendency of these writ petitions, before they were remanded back under the orders of the Supreme Court as noted above, an interim order to the following effect was passed on 20.05.2023 :-

“12. As an interim measure, it is directed that MCL may proceed with the evaluation process of the BIDs of NIT-179, but work order shall not be issued till the next date.”

9. After the dismissal of the writ petitions by the judgement and order of this court dated 19.12.2023 the MCL issued Letter of Acceptance (LoA) in favour of the VPR Mining on 28.12.2023. Subsequently on 29.02.2024 the contract was executed whereafter VPR Mining started executing the work.

10. After these matters were remanded back to this court, an application being IA No. 6467 of 2024 was filed for continuation of the earlier interim order dated 20.02.2023. The Application stood disposed of by an order dated 26.09.2024, relevant part of which reads thus :-

“19. We are not inclined to pass any interim order of stay or status quo also for the reason that we intend to expedite the final hearing of the writ petitions. It goes without saying that the rights of the respective parties shall be subject to final adjudication of these two writ applications.

20. All the interlocutory applications stand disposed of.”

11. The Petitioner-NCC Ltd., Hyderabad claims to be a Public Limited Company registered under the provisions of Indian Companies Act, 1956 that has experience in carrying all variety of contract works, which includes execution of several construction and infrastructure projects floated by Govt. and Non-Govt. institutions. It has its registered office in Hyderabad and one of its offices in Odisha. The Petitioner company has prayed for relief vide WP (C) 17188 of 2023 as follows :-

“The Petitioner in the circumstances most humbly prays that this Hon‟ble Court may be graciously pleased to admit this writ application, call for records and direct the Opposite Parties to show cause or show insufficient cause, allow this writ application and issue a writ in the nature of certiorari /mandamus/and / or direction;

(a) Quashing the letters under annexure 4, disqualifying the petitioner‟s bid on the ground of having conflict of interest

(b) Quash the letter dt 15.05.2023 calling upon the petitioner to show cause vide Annexure 12

(c) Declare that the petitioner is qualified to participate in the tender and has no disqualification on the available materials.

(d) And quash the LOA dt. 28.12.2023 issued by the opposite party no. 1 in favour of opposite party no.4

(e) Open the financial bid of the petitioner

And issue such other writ or direction as this Hon‟ble Court in the facts and circumstances deemed fit and proper.

Alternatively direct opposite Party No. 1 to consider the grounds taken in Annexure 10 and pass a reasoned order”

The aforesaid is the amended prayer after remand of the case by the Supreme Court vide the Supreme court‟s order in BGR Mining and Infra Ltd. v. Mahanadi Coalfields Ltd., Civil Appeal No. 5390 of 2024 (arising out of SLP(C) No. 8813 of 2024); NCC Ltd., Hyderabad v. Mahanadi Coal Fields Ltd. & Ors, SLP (C) Diary No(s). 12835/2024. The Petitioner Company has prayed as follows prior to remand of the instant matter to this Court :-

“The Petitioner in the circumstances most humbly prays that this Hon'ble Court may be graciously pleased to admit this writ application, call for records and direct the Opposite Parties to show cause and if the opposite parties fail to show cause or show insufficient cause, allow this writ application and issue a writ in the nature of certiorari /mandamus/and / or such other writ or direction;

(a) Quashing the letters under annexures 4, disqualifying the petitioner's bid on the ground of having conflict of interest.

(b) Declare that the petitioner is qualified to participate in the tender and has no disqualification on the available materials.

(c) Open the financial bid of the petitioner

And issue such other writ or direction as this Hon'ble Court in the facts and circumstances deemed fit and proper.

Alternatively direct opposite party no. 1 to consider the grounds taken in annexure 10 and pass a reasoned order. And for this act of kindness, the petitioner shall as in duty bound ever pray.”

12. The Petitioner-BGR Mining and Infra Ltd. claims to be a mining and excavation company which offers contract mining services, overburden removal, coal extraction, transportation, coal quality Management and local liaison works etc. has sought relief (amended) vide WP (C) 17120 of 2023 as follows :-

“In the circumstances, it is therefore prayed that your Lordships would graciously be pleased to:

i. Issue a writ of certiorari or any other writ, order or direction in the nature of Certiorari to call for the records of the case and quash and set aside the disqualification of the Petitioner and the forfeiture of its security deposit in NIT No. MCL/SBP/ GM (CMC)/ NIT- 179/2022/595 vide

Annexure -3 of the Writ Petition

ii. Issue a writ of certiorari or any other writ, order or direction in the nature of Certiorari to quash and set aside the determination of the Opposite Party No. 2 as the L-1 Bidder vide Annexure – 4 of the Writ Petition

iii. Issue a writ of Certiorari or any other writ, order or direction to quash and set aside the Letter of Acceptance dated 28.12.2023 issued in favour of Opposite Party No. 2, and the Project Agreement for execution of the works in the subject Tender and/or any further action pursuant to the subject Tender,

iv. Issue a writ of mandamus or writ in the nature of mandamus or any appropriate writ, order or direction directing Opposite Party No. 1 to reconsider the bid submitted by the Petitioner for the purposes of the tender for the determination of L-1 Bidder

v. And issue such other writ/writs, order/orders, direction/directions as this Hon‟ble Court may deem fit and proper

And for this act of kindness, the Petitioner shall as in duty bound ever pray.”

13. Previously before remitting this instant matter to this court vide the Supreme court‟s order in [BGR Mining and Infra Ltd. v. Mahanadi Coalfields Ltd., Civil Appeal No. 5390 of 2024 (arising out of SLP(C) No. 8813 of 2024); NCC Ltd., Hyderabad v. Mahanadi Coal Fields Ltd. & Ors, SLP (C) Diary No(s). 12835/2024], the Petitioner Company has prayed as follows :-

“In the circumstances, it is therefore prayed that your Lordship would graciously be pleased to:

(i) issue Rule NISI calling the Opposite Party No. 1 to show cause so as to why the impugned disqualification of the Petitioner, the forfeiture of its security deposit vide Annexure-3 and the determination of Opposite Party No.2 as the L-I Bidder shall not be set aside and the Petitioner's Price Bid shall not be allowed to be considered for the determination of L-1 Bidder; if the Opposite Party No. 1 fails to show cause or show insufficient cause, make the said Rule absolute;

(ii) further be pleased to declare that the Petitioner is qualified to participate in the tender and restrain the Opposite Party No.1 from disqualifying the Petitioner and or forfeiting their security:

(iii) and issue such other writ/writs, order/orders, direction/ directions as this Hon‟ble Court may deem it fit and proper.

And for this act of kindness the Petitioners shall as in duty bound ever pray”

Factual Background NCC Ltd., Hyderabad

14. According to the Notice Inviting Tender (NIT), the bidding process for the said project was on “single stage two-part basis”, i.e., the bidders, while making their bids, would submit their information in two-parts, such as:-

“Part I/Cover I:

1. Bidder's Covering Letter:

2. Details of the Bid Security:

3. Information on qualifying criteria as detailed at Paragraph 9 and Paragraph 10 of NIT including necessary scanned documents as elaborated there. Part II/Cover II: Price Bid in Excel format.”

As per clause 3.8 of the RFB, the evaluation of the bids for the said project shall take place in two stages;

(i) the Techno-Commercial Evaluation of Tender; and

(ii) Determination of L-1 Bidder.”

15. As per the process, at the first stage of the bid evaluation (Techno-Evaluation Stage), the opposite party-MCL shall have to evaluate the documents supplied in Part I/Cover I of their application and confirm whether they comply with the terms and conditions of the bidding documents. At the second stage of the bid evaluation (determination of L-1 bidder), the opposite party-MCL shall open the price bid in Part II/Cover II of all techno-commercially acceptable bidders, i.e., the bidders who qualified in the first stage. Thereafter, the lowest price bidder, i.e., the L-1 price bidder shall be determined.

16. The Petitioner submitted its bid on 15.02.2023 enclosing all documents in support of the bid and declaring that they do not have any Conflict of Interest as per Clause 2.2.1(b) or indulged in any corrupt practice. The Petitioner fulfilled all the requirements as per Clause 5.1 & 9.1 of the RFB and submitted the required security deposit of Rs. 2Cr along with application of bid, as security bid.

17. In adherence to the NIT and RFB, the opposite party-MCL opened technical bids on 08.02.2023, in accordance with clause 3.5 of the RFB, and found that three bidders including the Petitioner had participated in the bid for the said project and all the three bidders were determined to be responsive, in accordance with clause 3.6 of the RFB, and were admitted for techno commercial evaluation under clause 3.8.1 of the RFB.

18. No decision was taken by the Opposite Part-MCL for three months. On 15.5.2023 the technical bid was opened and result was uploaded in the website of the OP No. 1- MCL Ltd. wherein only VPR Mining and Infrastructure was found to be the sole eligible bidder for the price bid. A default mail was received by the petitioner wherein the bids of Petitioner and BGR Mining and Infra was rejected and both the Petitioners were disqualified.

19. The disqualification of the Petitioners was done on the ground of “conflict of interest” clause [Clause 2.2.1. (b) of Section II of the RFB], which provides that if a bidder is found to be in conflict of interest it shall be disqualified and the opposite party-MCL shall be entitled to forfeit and appropriate the bidder's bid security or performance security and also impose damages. Under clause 4.3 of the RFB, “conflict of interest” is classified as an “undesirable practice” that invites both rejection of a bidder‟s bid (Clause 4.1 of the RFB) and ineligibility from participating in any tender process of opposite party- MCL for 5 years (Clause 4.2 of the RFB).

20. The impugned rejection order dtd.15.05.2023 contained no reason rather the ground of rejection was indicated as conflict of Interest under Clause 2.2.1(b) and the bid security of Rs. 2 Cr was forfeited.

The relevant portion of the impugned decision is quoted below:-

“The bids of the following 02 bidders have been disqualified having “conflict of interest” as per Cl. No.

2.2.1 (b) of RFB, declaration under Point No. 5 of Bidder's Covering letter and acceptance of bid conditions and under CL. No. 2.6 of RFB & rejected under CI. No. 4.1 of RFB due to directly or indirectly engaged in undesirable practice" as defined under Cl. No. 4.3(d). Bid Security (EMD) deposited by the 02 bidders i.e. (i) NCC Limited and (ii) BGR MINING AND INFRA LIMITED during bid submission forfeited as the “Damages” as per Cl. No. 2.2.1 (b), 2.16.5 & 2.16.6 of RFB of NIT-179.” (Emphasis supplied).”

21. Within half an hour the bid was opened and the tender was allotted in favour of VPR Mining and Infrastructure-OP No. 4. It was alleged that the NCC Ltd. and BGR Mining Ltd. have conflict of Interest as both have access to each other via a common third party i.e. Pachhwara Ltd. and Talaipalli Coal Mining Pvt. Ltd. One of the Directors of BGR Mining and Infra and one of the employees of the Petitioner in charge of the project created a consortium, Pachhwara Coal Mining Pvt. Ltd. wherein it had participated and was awarded a tender floated by the West Bengal power Development Corporation Ltd. in Pachhwara Mines. The said project is an ongoing project.

22. The Petitioner‟s stance is that none of the directors of the Petitioner Company are part and parcel of the Pachhwara Mines. The position was also similar in the case of Talaipalli Coal Mining Pvt. Ltd.

23. The Price bid submitted by the VPR Mining and Infra - OP No. 4 was @ ₹568 [Quoted Rate in (Rs./Te.)] equivalent to Quoted amount (in Rs.) incl. GST @18% of Rs. 15410,82,83,200.00 which in comparison to the Petitioner‟s bid is much higher causing a huge loss to the OP No. 1 which is a Public Sector undertaking.

24. That on 15.05.2023 itself the Petitioner made a representation to OP No.1 indicating that the process adopted was wrong and the price bid of the petitioner should be opened which was not responded by OP No.1-MCL ltd..

25. Meanwhile, the Petitioner was served show cause notice as to why action shall not be taken against the petitioner as per Clauses 2.16.6 and 4.2 of the RFB.

“(i) Cl. 2.16.6 of the RFB, whereunder “the defaulting Bidder shall be debarred and black-listed from participating in any bids/tenders floated by Coal India Limited and/or its subsidiaries for a minimum period of 1 (one) year from the date of getting declared as debarred/black-listed.”

(ii) Cl. 4.2 of the RFB whereunder a Bidder indulging in 'undesirable practices' shall not be eligible to participate in any tender process issued by the Authority during a period of 5 (five) years”

26. The Petitioner asserts that MCL-OP No. 1 has taken different standards in different mining tenders pertaining to Lakhanpur and Belpahar. The OP No. 1 had accepted the bids of the Petitioner under the similar circumstances. Furthermore, the OP No. 1 (MCL) has recently accepted a bid of Rs 497 per MT in a tender adjacent to the current mine in favour of one Essel Mining and Industries Ltd. (Annexure 9)

27. The Petitioner has challenged the impugned disqualification order dated 15.05.2023 on the ground of having conflict of Interest / or undesirable practice as arbitrary, illegal and discriminatory as it does not contain any reason and has been passed without any opportunity to respond.

BGR Mining and Infra

28. The factual matrix of the second writ petition is almost identical. It is the case of the BGR Mining and Infra Ltd. that it had submitted its bid pursuant to the aforesaid tender floated by the Opposite Party, MCL ltd., in consonance with the terms of the NIT and RFB and submitted Rs. 2 Crores as the bid security.

29. The BGR Mining and Infra was also disqualified in the similar fashion as that of the NCC Ltd. by the same impugned disqualification order dated 15.05.2023 and the security bid of Rs. 2 Crore was also forfeited.

30. On 15.05.2023, the Opposite Party- MCL declared the VPR Mining Infrastructure Pvt. Ltd. as the sole eligible bidder for the price bid. As already stated, the price bid of the Techno commercial Bid was opened and the Bid of VPR Mining was declared as L1 bidder whose price bid was an amount of Rs. 15410,82,83,200.00.

31. On the very same day the petitioner – BGR Mining wrote a letter to the Opposite party- MCL Ltd. praying to allow the Petitioner to participate in the tender process, subsequent to which the opposite party-MCL issued a show cause notice to the petitioner-BGR Mining directing it to submit reply to the show cause within 10 days as to why action shall not be taken against it as per Clause 2.16.6, 4.2 of the RFB.

32. It is deemed apt to state briefly the pith of the Petitioners‟ cases as pleaded in the present proceedings:-

"(i) The RFB allows the individual bidder or consortium having financial and technical experience to participate in the tender process. The Petitioners had participated in the bid on their own capacity. Further, there is no material available on record to show the Conflict of Interest. The rejection of the bid was liable to be quashed as the NIT or the RFB did not contain any restricting clause regarding carrying on any other trade as consortium members of the Joint Venture (JV). Clause 2.2.1 (b)(i) of the RFB has been misinterpreted by the opposite Parties as it relates to the tender in the same contract and it cannot be applied beyond the scope of current contract. Clause 2.2.2 of the RFB permits and gives weightage to those who participate in a consortium in other contracts and Clause 2.2.1 of the RFB contemplates regarding the contracts within the tendered area. The petitioner was disqualified even when the Pachhwara Coal Mining was not participating in the tender process.

(ii) Further, the time schedule as mentioned in the tender notice was not adhered to. The bid was supposed to be applied online in two stages, first was the technical bid and the other was for price bid which was to be opened only if a bidder qualifies in the technical bid. As per the bidding scheme, there is no scope for the Petitioner to know who are the other bidders until the same is published in the public domain. There can be no possibility for the petitioner to know that shareholders of other bidder had any control by which it could determine the Conflict of Interest.

(iii) The issue of Conflict of Interest is confined to the stage of bidding. As per Clause 2.2.1(b)(v), even if there is common Interest and control on each other, there is no chance of utilizing that information when one bidder will be selected and the other will have no role in influencing.

(iv) It has been pleaded that for three months after the submission of bid, no action was taken and the sudden opening of bid where a single bid was considered raises suspicion. There was scope of negotiation for price but it wasn‟t done. There was a provision for seeking clarification (under Clause 3.7 of RFB) but no clarification was sought from the Petitioner.

(v) Such disqualification, without any reason, will cause huge loss to the Petitioner, for the reason that the disclosure of such disqualification becomes mandatory in future contracts which will lead to disqualification at the bidding stage itself.

(vi) The forfeiture of EMD by OP No.1 is also arbitrary in absence of any loss to the OP No.1 due to disqualification of the petitioner.

(vii) The Petitioners rely on State of Rajasthan Vs. Rohitas & Ors’ reported in (2008) 15 SCC 49, Alexander Machinery (Dudley) Limited Vs. Crabtree reported in 1974 ICR 120 (NIRC), Ran Singh Vs. State of Haryana & Anr. reported in (2008) SCC 70 wherein the court has reiterated that reason is must while passing an order.

(viii) The OP No.1 could have floated a new tender or could have called the successful bidder for negotiation as per clause 2.7 of the RFB to mitigate the huge loss but such was not done.

(ix) In the rejoinder filed by the Petitioner to the Counter filed on behalf of the OP No. 1, MCL Ltd. it has been contended that the Conflict of Interest clause would arise only if the M/s Pachhawara or M/s Talaipalli would have participated in the present bid, by virtue of the Petitioner holding more than 50% of the voting shares. But such is not the instant case and Petitioner has no controlling right or interest in the BGR. Further, the terms of the bid should have explicitly provided the necessary information regarding the reason for conflict in the instant situation. Furthermore, it is not the case of the Opposite Party No. 1 that the Petitioner has control over the BGR rather that it has control over the SPV‟s which have not participated in the present bid. The documents submitted were given for experience as per the clauses of RFB and nothing was suppressed. The clauses of the RFB have been misinterpreted by the Opposite Parties. And there has been confusion, which could have been resolved by the Opposite Parties by seeking clarification."

33. In the rejoinder filed to the Counter filed by the OP No. 4 (MCL Ltd.) on 26.06.23, the Petitioner has contended that the justification provided for the price quoted by the OP No. 4 is not sustainable, and if the Price bid of the OP No. 4 is accepted then there will be loss of more than Rs. 3,000/- Cr.. Reliance was placed on the data of prices at which work was allotted by MCL on 22.03.2022. The price quoting will be based on the Stripping Ratio(SR) and other parameters of the Mine. The present tender SR is very less. Thus, the OP No. 4 is trying to mislead the issue by suppressing the fact. Further, the OP No.4 has a Joint venture with the BGR and another at Magadh OCP, Jharkhand State of Central Coal Fields Ltd., a subsidiary of Coal India Ltd. which has been intentionally suppressed by the OP No.4.

34. If the bid of opposite party no. 2-VPR Mining has been qualified, then the BGR Miming should have also been qualified for the price bid, as opposite party no.2-VPR Mining is on the same footing as the petitioner and has entered into Consortium Agreement dated 22.12.2016 with the petitioner for the Khadia Project of the opposite party-MCL wherein the parties have joint (50-50) ownership interests. The price bid quoted by opposite party no.2-VPR Mining, being much higher than the price bid quoted by the petitioner, if the tender is finalised in favour of opposite party no.2-VPR Mining, without considering the price bid quoted by the petitioner-BGR Mining, it would be a grave misuse and substantial loss to the public exchequer. Counter Pleadings Mahanadi Coalfields Limited, OPs No.1 to 3.

35. It has been stated in the counter affidavit that the petitioner had uploaded work experience of 3 nos. of coal mines as a contractor. The work experience at Sl no. 3 i.e. M/s Pachhwara Coal Mining Private Limited a Special Purpose Vehicle Company incorporated under Companies Act, 2013 was that of its „Associate‟. The perusal of the Letter of Award dt. 12.05.2016 and the Work Done Certificate dt. 15.06.2022 as issued to PCMPL, shows that it is a consortium of NCC Ltd. and BGR Mining and the address is of NCC Limited, NCC House, Madhapur, Hyderabad- 500081, Telangana, India and NCC Limited is the Lead Member of the Consortium. Further, the NCC- BGR consortium was required to form SPV Company within 30 days of issue of LoA for entering into Contract Agreement with the employer West Bengal Power Development Corporation Limited and accordingly M/s Pachhwara Coal Mining Pvt. Ltd (SPV) company was incorporated. NCC Ltd. held 51% share whereas BGR held 49% of shares of PCMPL.

36. BGR Mining and Infra Ltd is another bidder in this NIT. The tender committee got an impression of suspicion that the two bidders i.e. NCC Ltd and BGR Mining seem to be connected through a common third party i.e. M/s Pachhwara Coal Mining Private Limited (Associate of Petitioner NCC Ltd.). Therefore, the tender committee gathered more information about the said two bidders as available in public domain though uploaded documents.

37. The authorized signatory of the petitioner Company in tender is R Subba Raju. He is the authorized true & lawful attorney of NCC vide notarized Power of Attorney dt. 27.01.2023 issued by ASN Raju, whole time director, NCC Ltd. It is mentioned that R Subba Raju was employed with NCC and holding the position of Director (Projects), NCC Ltd. Rudraraju Subba Raju has digitally signed all the documents uploaded with TPS & BOQ of the Petitioner Company. The Authorized Signatory for NCC Ltd. in all the uploaded documents is of the seal of RS Raju, Director (Projects). There is a difference in the name of Authorized Signatory. R Subba Raju, Rudraraju Subba Raju & R S Raju are different names of single person. As per the Company Master Data available in public domain of M/s Pachhwara Coal Mining Pvt. Ltd. the company status (for e filing) is Active and the registered address of Pachhwara Coal Mining Pvt. Ltd. is same as that of the Petitioner and the directors includes Rudraraju Subba Raju and Rohit Reddy Bathina.

38. On scrutiny of the Company Master Data of the Petitioner Company, NCC & BGR available in the public domain it was pointed out that the names of the both Directors of the SPV are not appearing as Directors/ Signatory. Upon searching the DIN No. 00037918 of Rudraraju Subba Raju, it was found that he is the Director of the three registered limited companies – NCC Vizag Urban Infrastructure Ltd., Pachhwara Coal Mining Pvt. Ltd. and Talaipalli Coal Mining Pvt. Ltd.

39. Thereafter, after going through the Company Master Data of M/s Talaipalli, it was found that the company status (for e filing) was active and the registered address is that of NCC, Hyderabad office. Its Directors/Signatories details included Rudraraju Subba Raju and Umapathyreddy Bathina. The name of B. Umapathy Reddy S/o B Venkata Krishna Reddy appears to be subscribers/ shareholders of BGR Mining & Infra Ltd. (Annexure E/1), having subscribed to equity share of 1,08,00,000 no.s out of 4,50,00,000 shares i.e., 24% and Umapathy Reddy Bathina is a director in BGR Mining & Infra Ltd. Umapathy Reddy Bathina and B. Umapathy Reddy are 2 different names of the same person. The names of both the directors of M/s Talaipalli Coal Mining Pvt. Ltd are associated with NCC and BGR.

40. NCC and BGR are associated to each other in a SPV company, Pacchwara coal mining as well as in Talaipalli coal Mining Pvt. Ltd. The subscriber of BGR Mining & Infra Ltd. Rohit Reddy Bathina is associated with Rudraraju Subba Raju, Director (Projects) of NCC ltd. through M/s Pachhwara Coal Mining since dt. 01.06.2016 which is operating from the registered address of NCC Ltd. The Directors of both M/s Pachhwara and M/s Talaiapalli are appointed by its shareholders i.e. NCC& BGR and they have virtual control over the SPVs.

41. Therefore, the Associate of Petitioner i.e. PCMPL has a relationship (arising due to ownership/ holding/ cross holding) with another bidder i.e. BGR Mining directly. And the Petitioner has a relationship (arising due to ownership/ holding/ cross holding) with another Bidder i.e. BGR Mining through common third parties i.e. M/s Pachhwara Coal Mining Pvt. Ltd and M/s Talaipalli Coal Mining Pvt. Ltd.

42. The petitioner has joined hands with another bidder i.e. BGR Mining since 2016 through common third parties which are active as on last date of bid submission with ownership/ shareholding and are controlled from the registered office of NCC Ltd. In the given circumstances, it puts either or both of them to have access to each other‟s information about, or to influence the Bid of either or each other, which attracts Conflict of Interest in line with the Cl. No. 2.2.1(b) and 2.2.1(b)(v) r/w Cl no. 4.1of RFB and calls for disqualification. Moreover, the bid security was forfeited as damages as per Clauses 2.2.1(b), 2.16.5 and 2.16.6 of the RFB.

43. Therefore, the present writ petition is not maintainable in view of above circumstances. It was reasonable to hold that Petitioner has a Conflict of Interest with another Bidder i.e. BGR Mining who had also participated in the e- tender. Hence, the writ petition merits no consideration and is liable to be dismissed. Furthermore, the relief sought in the writ petition is not per se maintainable as disputes arising out of terms of contract or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that the opposite party to the agreement is a statutory of public body will not by itself affect the principles to be applied and writ jurisdiction under Article 226 of Constitution of India cannot be invoked as has been laid down in M/s RadhakrishnaAgarwal&Ors. V. State of Bihar, (2000) 6 SCC 293; Kerela State Electricity Board &Anr. v. Kurien E. Kalathil&Ors, (2020) 16 SCC 489 and Silppi Construction Contractors v. Union of India &Anr, (2020) 16 SCC 489. Hence, the present writ petition is liable to be dismissed.

44. The writ petition is liable to be dismissed as terms of tender cannot be open for judicial scrutiny as per the case of Tata Cellular Vs. Union of India reported in (1994) 6 SCC 651.

45. It was pleaded that Conflict of Interest Clauses are included in tender terms and conditions to ensure fairness, transparency and integrity in the procurement process and aims to prevent any bidder or contractor from gaining an unfair advantage due to relationship, financial interests or influence that could compromise the objectivity and impartiality of the tendering process. The overall conflict of interest clause protects the reputation of the organization and ensures that decisions are made purely on merit and the best value for the project or service.

46. The tender NIT-861 dated 08.11.2022 was a tender awarded to a joint venture named M/s. I.V.T.V.L.T. (TV) consisting of M/s. IB Valley Transport (a partnership firm) and M/s. Vijaylaxmi Private Limited (Company Limited by shares), whereas in NIT-866 dated 20.12.2022 both participated in the tender as an individual entity. Apart from the fact that the terms and conditions of the tenders NIT- 861 and NTT-866 are different from the terms and conditions of the present tender in question i.e., NIT-179. NIT 866 has been cancelled before being awarded to any bidder. On the other hand petitioner took experience from PCMPL as an Associate of the petitioner which is an SPV. In SPV there is arises conflict of interest which doesn‟t in a Joint Venture or a Consortium.

47. The Letter of Acceptance dt. 28.12.2023 which was issued in favour of OP No. 4 (VPR Mining) followed by the execution of the Contract Agreement on 29.02.2024 is entirely legal and valid.

48. After the judgement dt. 19.12.2023 by this Hon‟ble Court, OP No. 1 had extended hearing to the petitioner to the Show Cause Notice dt. 15.05. 2023, which was held on 24.01.2024. OP No. 1 sympathetically acceded the prayer made by the petitioner and has not debarred/ blacklisted the petitioner from participating in future tenders in MCL/ CIL and its subsidiaries as a purely onetime concession without any precedent vide letter 12.04.2024. VPR MINING INFRASTRUCTURE PVT. LTD OP. NO 4

49. In the counter affidavit filed in WP (C) 17188 of 2023 OP No.4 pleaded that the grounds taken by the writ petitioner is unsustainable in law and therefore, the writ petition is liable to be dismissed. The petitioner has involved disputed questions of facts and has substantially impugned the terms of RFB for which, writ jurisdiction under Article 226 of the Constitution of India cannot be invoked.

50. As a matter of fact, and as admitted by the petitioner, the financial bid has already been opened and the OP No. 4 has been found L-1.

51. The petitioner‟s main contention was that the Conflict of Interest clause doesn‟t apply to their case. But in the instant case the petitioner is having joint venture with BGR Mining having constituted a consortium with PCMPL. This joint venture participated in a tender floated by West Bengal Power Development Corporation Ltd. and the tender was awarded in favour of such consortium. After the work was awarded, this consortium formed a Special Purpose Vehicle (SPV) for execution of the work. The documents clearly show that Directors of both the companies have formed this SPV and the contention of the petitioner that none of the directors of the petitioner company is a part and parcel of the SPV is not at all correct.

52. The petitioner‟s contention regarding violation of natural justice is wholly unjustified and inapplicable in the present case under Cl. 2.2.1 (b) of the RFB, MCL was entitled to disqualify a bidder at the time of discovery or uncovering of any material misrepresentation or violation of any condition therein. In the present case it has been documentarily found out subsequently that the petitioner has conflict of Interest within the meaning of this clause. In the present case, the petitioner deliberately suppressed the disclosure of the fact of the petitioner being a part of the SPV. The question of natural justice would have arisen if there would have been a disclosure and thereafter, for the sake of justification the question of giving an opportunity of hearing would have been given to explain the petitioner‟s position in the SPV. It is a clear non- disclosure which entails automatic disqualification as per the RFB.

53. It has further been contended that amended writ petition filed by the petitioner by adding new prayers is not maintainable in law and liable to be dismissed. The petitioner has added subsequent events that are related to subsequent causes of action and cannot form the subject matter of the present writ petition and thereby expand the scope of adjudication and the change the character and nature of original writ petition.

54. The Supreme Court has not set aside the earlier judgement of this court on merits, it is only for the reason of absence of any reasons in the judgement, the remit order had been passed for a fresh decision. Therefore, in the present re- hearing the petitioner isn‟t entitled to expand the scope of the writ petition and seek adjudication of issues forming a fresh cause of action.

55. The conflict of interest is a term in contract to ensure fairness and integrity in the tender process. Therefore, the conflict of interest clause is not justiciable being in the realm of contract. As a matter of fact, the price bid having been opened and the tender process having progresses upon issuance of LoA and work order issues and contract agreement executes, it is highly unfair on the part of the petitioner to challenge the tender process that too without any justifiable ground.

56. In reply to the rejoinder filed by petitioner, OP No. 4 pleaded that the allegation of loss of public money to the extent of Rs. 3000 crores is wholly baseless and not backed by any material. Mahanadi Coalfields Ltd. (OP No.1)

57. OP No.1 filed a clarificatory affidavit to the rejoinder filed by the petitioner. It was submitted that in regard to the disqualification of the petitioner, OP No. 1 had issued a show cause notice on 15.05. 2023 wherein an opportunity was granted to the Petitioner to reply as to why action as per Cl. 2.26.6 and Cl. 4.2 of RFB shall not be taken against them. But the said show cause is pending decision with OP No. 1 and it agitating it in the proceeding is premature. It was also pleaded that the other rejected bidder NCC Ltd. Claimed experience obtained by M/s. Pachhwara Coal Mining Pvt. Ltd. which is a SPV duly registered under the Companies Act, 203. Thus PCMPL is not a consortium. In case of a consortium the Conflict of Interest clause doesn‟t attract. Whereas, in case of a SPV which is registered company, there is a Board of Directors representing the shareholders for decision making process. Therefore, there is no conflict of interest under Cl 2.2.1 (b) (v) under the consortium agreement between M/s/ BGR Mining and Infra Ltd. And M/s. VPR Mining Infrastructure Pvt. Ltd as alleged.

58. It was pleaded that allegations of loss to the public exchequer is wholly misconceived and misleading. The price accepted by OP No. 1 MCL from OP No. 2 VPR cannot be compared with any other price is as much as the other two bidder i.e. the petitioners have failed to qualify in the tender. So, the question of any comparison with their price doesn‟t arise at all.

VPR MINING INFRASTRUCTURE PVT. LTD OP No. 2

59. It was contended by the petitioner that since OP No.1 has disqualified the petitioner on the Conflict of Interest clause, the OP No. 2 is also supposedly guilty of the same defect having entered into consortium with petitioner. This contention doesn‟t sustain as the consortium was entered in 2016 and has been awarded the work alleged in 2016. The work has been completed since 31.08.2022 and the consortium has been issued with the completion certificate. The COI has been stipulated to be at the time of submission of the bid and not completed contract as in the instant case. Otherwise also petitioner and OP No.2 had not executed any SPV requiring joint participation of the directors of both the companies. Whereas in the case of the petitioners, the JV is ongoing and also has been followed by an SPV which requires joint participation of directors of both the companies.

60. The allegation of loss to public exchequer is wholly misconceived and misleading as price accepted by MCL from OP No. 2 cannot be compared with any other price as the other two bidders (including the petitioner) have failed to qualify the tender. So, question of comparison with their price doesn‟t arise at all. The final price accepted from OP No. 2 is reasonable and competitive with the current market rate.

61. OP No.2 have now altered their position to a great extent in pursuance to grant of Letter of Acceptance and work order and has spent huge lots of finance on the project approximately Rs. 25 crores.

62. OP No 2 subsequently filed additional reply affidavit to the rejoinder filed by the petitioner. It was clarified regarding the joint consortium issue of Khadia Project and Magadh OCP. In both cases no SPV was created, therefore in both the cases the concept of Conflict of Interest doesn‟t arise. Further, OP No.2 has already made huge investments and changed their position greatly after the grant.

63. OP No. 2 again filed further reply to the rejoinder filed by the petitioner. It was pleaded that allegation of bias and malafideness was introduced as an afterthought and for the first time in the affidavit dt. 08.10.2024. The entire litigation proceeded on the applicability of COI clause and there was no allegation of bias or malafideness against either OP 1 or OP 2. Development after pronouncement of the judgement dt. 19.12.23

64. The petitioner- NCC Ltd. has replied to show cause notice issued on 15.05.2023, while the matter was sub-judice no further action was taken.

65. Meanwhile the petitioner-BGR Mining and Infra sent an email on 03.01.2024 addressing MCL to allow the Petitioner to participate in the future tenders. It further requested to revoke the forfeiture of the EMD and withdraw the showcause notice issued dated 15.05.2023. (Annexure 6B of the WP (C) No. 17120 of 2023)

66. The Opposite Party-MCL Ltd. intimated regarding the personal hearing vide letter dated 20.01.2024 and extended personal hearing to the petitioners on 24.01.2024.

67. On 08.02.2024, the Petitioner –BGR Mining and Infra after the personal hearing was extended, wrote an email wherein BGR has reiterated it prayer further mentioning that in case the prayer is allowed then the petitioner would not resort to any further litigation.

68. Subsequent to the above, the Opposite Party- MCL sympathetically agreed to the prayer of the petitioners and decided not to blacklist/ debar the petitioners from participating in the future tenders of the MCL/CIL. This was done as a onetime concession without any precedent vide letter dated 12.04.2024.

Submissions

69. Mr. Sandeep Sethi, the learned Senior Counsel appearing on behalf of the Petitioner- NCC Ltd., submitted that the Petitioner‟s rejection of the bid is under challenge, the reason for such rejection which is evident from the Opposite Party‟s counter and impugned disqualification order is that Petitioner and BGR Ltd. had some joint ventures which resulted in consortium/SPV‟s and are executing other 3rd party contracts, and by the reasons of such SPV‟s they are having conflict of Interest. The essence of proviso 2.2.2(b)(v) of RFB is that if there is some commonality of shareholding of ownership in the Petitioner Bidder and some other bidder. It is his submission that in the instant case there is no commonality of shareholding, directors etc. In the instant case, neither any instance of holding/ cross holding arises.

70. He has argued that this court has to consider as to what has been prohibited by the conflict of interest clause. Merely because the Petitioners have done business by forming an SPV in another contract does not hit the proviso 2.2.2(b)(v) of the RFB. Furthermore, the RFB permits claiming of work experience of a prior work done as a consortium member or simple member as per the proviso 2.2.2 of RFB.

71. Mr. Sethi, further submitted that the respondent has done no analysis, neither sought any clarification regarding SPV‟s which should have been sought as per proviso clause 3.7.1 of the RFB, they have not exercised such discretion available.

72. The Petitioner, NCC Ltd. has been awarded many contracts in similar circumstances, these SVPs were of year 2016. In those awarded contracts, it was not considered as a conflict of interest, he contends.

73. Moreover, the VPR Mining Infrastructure-OP No. 4 is also in a prior project with the BGR in a contract namely Magadh OCP, submitted that if the Petitioner is disqualified then the OP No.4 has also to be disqualified which is not the case.

74. He further argues that while interpreting the term „associate‟ in sub para (v) of proviso clause 2.2.2(b) of RFB, it has to be interpreted as associate for the instant contract and not in the prior contracts.

75. He submitted that the nature of price bids also has to be considered, the price bid of successful bidder, VPR Ltd.-OP No. 4 (Annexure ) is Rs. 568 per unit, while price bid of the Petitioner is at

the rate of Rs 434.50 per unit, and the price bid of the an adjoining mine at the rate of Rs. 497 per unit. The bid of the VPR-OP No. 4 is much more in comparison to the other two bids.

76. He relied on M/S Aquafil Polymers Co. Pvt. Ltd Versus Gujarat Urban Development Company Limited, R/Special Civil Application No. 11731 of 2018, Gujarat HC DB, judgment Date – 10/06/2022; M/s Harsha Constructions Private Limited, Hyderabad v. Western CoalFields Limited, Nagpur, WRIT PETITION NO. 2677/2024 along with others, Bombay High Court, Nagpur Bench, Judgment Date- 23.09.2024;Banshidhar Construction (P) Ltd. v. Bharat Coking Coal Ltd., 2024 SCC OnLine SC 2700.

77. Mr. Sethi further submitted that conflict of interest does not arise in the instant case, which is clear from the manifestation of new NIT and that the conduct of concerned authorities in not holding the OP No. 4 to be in conflict of interest will be an estoppel against Opposite Parties. Further, there is a public interest in saving Rs. 3000 Cr by accepting the petitioners bid.

78. Mr. Vikas Singh, Senior Counsel appearing on behalf of the Petitioner –NCC Ltd. submitted that the concept of conflict of interest in this case contemplates forming of cartel and the purpose of forming a cartel is to hike price by controlling the market. It can never be to lower the price.

79. Referring to the case of Union of India v. Hindustan Development Corpn., (1993) 3 SCC 499 he has submitted that that was a case in respect of supply of wagons to the railways, wherein the three large manufacturers decided to oust the small manufacturers. In bidding process the said large manufacturers submitted same price and they further reduced the price that no small manufacturer was able to compete. The Supreme Court in such circumstances observed that there may be a cartel but just because the price of bid is same, it wasn‟t sufficient evidence. He contends that the substantive evidence of cartelization has to be produced. In the instant case the price bids of both the Petitioners is different. As two different rates were given it prima facie doesn‟t establish any collusion and it can be never be the intention to lower the price of the Bid favouring the Respondent.

80. He further submits that the financial impact between the Petitioner‟s bid and the bidder in favour of whom the contract is granted, VPR Ltd.-OP No.4 is huge. The contract value quoted by the Petitioner is 11,788 Cr and the contract value quoted by OP No. 4 is 15,459 Cr in which the difference is 3670 Cr. The reduced value stands at 14434 Cr, the new difference is 2654 Cr, considering the escalation for 27 yrs of the contract, it will amount to a difference of 5554 Cr. Further there is an interest which shall be awarded over and above 1000Cr which makes the differential value of 655Cr. The differential of 665 Cr while awarding the contract to the benefit of authority shall be considered as a „cartel‟ or „conflict of interest‟ is to be deliberated upon.

81. He submitted that when the case is that if the authority is non- suiting a party which has a lower price and is more qualified in all technical aspects then the threshold of judicial review is much higher to justify the impugned rejection and disqualification.

82. He also argues that the CVC guidelines have been adopted by the Coal India and has formulated exactly the same guidelines. Relevant proviso in the instant matter is Clause 6-Bid opening and tender evaluation.

83. He has submitted that as per Clause 2.2.1 (b)(v) of the RFB, only if there is a clause between the entities prescribing that if either of them applies in a bid, and those bid details have to be submitted by the other then only the conflict of interest clause will come into play. Only a SPV was formed which of very limited nature. A company is an individual entity as per Company law, and the piercing of veil has not occurred in the instant case. It is misconceived to submit that for the mere reason of formation of SPVs, the bidders are disqualified for these entire 27 years. The action of the authority raises questions for disqualifying the petitioners for 27 years when the bidders are eligible for independent bidding. Further, the petitioner itself has disclosed regarding the Pacchwara as prior experiences.

84. He further submits that the Coal India has subsidiaries like Northern coal Ltd., CCL etc.; the CCL has issued a clarification which permits bidders such as Petitioners to participate in tender process, right just after the rejection of the Petitioner‟s bid. The clarification has been issued in a very similar manner. Similarly in the RFB of Sanghamitra OPC by CCL, the participation of Members, partners of any consortium of other project would not amount to conflict of Interest.

85. Mr. Singh has submitted that there is an element of subjectivity present as far as determining the conflict of Interest is concerned. The Opposite Party has made it very restrictive on their interpretation exercising their subjective satisfaction and when the price difference is more 6500CR even after reduction, such cannot be labelled as reasonable price. On these grounds the justification given by the Opposite parties relying the Coal India guidelines falls foul.

86. He Relied on Uflex Ltd. v. State of T.N., (2022) 1 SCC 165; Calcutta Chromotype Ltd. v. CCE, (1998) 3 SCC 681 ; Union of India v. Hindustan Development Corpn., (1993) 3 SCC 499; AmitabhaMitra v. State of West Bengal, 2011 SCC OnLine Cal 2579; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818;Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272 : 2016 SCC OnLine SC 1149.

87. He further submitted that, generally, when a contract is for 2 or 3 years Coal India accepts Joint Ventures. But when a contract is for 29 years or so, Coal India insists that it shouldn‟t be a Joint Venture rather a registered company with its own juristic entity with fixed shareholding, so that each party has set roles.

88. It is submitted that a bidder can be a consortium. But when such bidder is qualified, the consortium may further be converted into a JV or a company based on the terms of the contract.

89. The allegations in the counter affidavit of having used three names or various variations of same name cannot be said to have concealed anything rather the Petitioner itself has revealed regarding the M/s Thalaipalli, he contends.

90. He has argued that it may not be a malice in fact that it is but a case of malice in law is made out. Relied on Ravi Yashwant Bhoir v. Collector, (2012) 4 SCC 407 : 2012 SCC OnLine SC 237; Rajneesh Khajuria v. Wockhardt Ltd., (2020) 3 SCC 86 : 2020 SCC OnLine SC 36 to bolster his contention.

91. He further submits that there existed a conflict in the precedents as well, in which one set of the precedents have held that even though a wrong has been committed by State, if the work has started it cannot be interfered by the court; whereas another set of precedents state that if a wrong has been committed by State, it has to be stuck down irrespective of the fact that work has started or not, and court has to interfere.

92. Mr. Singh, the learned Senior Counsel further submits that there is no direct shareholding or common share holding in each other‟s companies of the petitioners. Further there is a requirement of the finding that one bidder has access to information of another bidder in that particular bidding which is absent in the instant case.The conflict of interest as per the impugned disqualification order has arisen only due to M/s Thaliapalli & M/s Pacchwara, but there is no material to show that NCC Ltd. has access/ controlling right/ interest to the BGR Ltd. That these companies have participated in the bidding process of different tenders where they were awarded the tender and those biddings had similar clauses as that of the instant one.

93. It is also submitted that there is inconsistency in the decision making of Mahanadi coal limited as they should not have let the Petitioners bid in initial stage or should have disqualified the Petitioners in the beginning as it was within the knowledge of them that such bidders had relationship with each other either directly or through the third party. The Opposite Party-MCL had malicious intentions for which it did not act upon and tackling of monopoly it is an excuse to conceal their true intentions.

94. The Petitioner has no conflict of interest with BGR Mining under Clause 2.2.1 (b)(v) of the RFB since:

"a. Petitioner and BGR are separate legal entities with no common shareholders, directors or key managerial persons.

b. Petitioner and BGR do not own any shares in each other.

c. Petitioner and BGR regularly compete against each other in various tenders.

d. Petitioner has applied in an individual capacity. Neither PCMPL nor TCMPL have any connection with the present Tender.

e. There is no factual proof of any actual bias or unfair competitive practice."

95. The Learned Counsel relied upon the case of Hon‟ble Bombay High Court in Harsha Constructions Pvt Ltd. v. Western Coalfields Ltd, & Ors, W.P. 2677 of 2024 dated 23.09.2024 and submitted that just for the fact of having a business relationship would not create a conclusive presumption of having conflict of interest in a tender process.

96. Mr. Dama Seshadri Naidu, Senior Counsel appearing on behalf of the Petitioner-BGR Mining and Infrastructure Ltd., submitted that forming of JVs or SVPs is a well-established practice, and without any cogent evidence of collusion it cannot be said that there arises a conflict of Interest. Moreover, NCC Ltd., BGR Ltd. and VPR Ltd. have on various occasions entered into JVs or SPVs for executing specific projects. These entities have competed against each other in various tenders under similar circumstances and the issue of conflict of Interest had not arisen.

97. He submitted that the tenders have been floated in which bids were given in online mode and the bidder would be having no knowledge of the other bidders participating in the same bidding process. In such situation the collusion is difficult.

98. He contends that the proviso clause 2.2.1(b)(i) of RFB has to be construed as the bidder or its member or its associate. The proviso 2.2.1(b) of RFB needs to be read all together. It differentiates between “a bidder” and “such bidder”. According to him, these terms have been used for different purposes. The purpose of having a „conflict of interest‟ clause is to prevent cartelization and monopoly i.e having access to each other.

99. It is his contention that the fulcrum of the Respondent‟s case is that the BGR and NCC had some joint projects, and those joint projects have become the Petitioner‟s associate as per clause 2.2.4 of the RFB. Further, that once the Petitioners have become the Associate it is alleged that the Petitioners had access to each other for the reason that both the directors from either entity were getting represented over there. The alleged relationship between both the Petitioners is also existent with the Respondent No. 2 but it is said by the Opposite Party- MCL Ltd. that an enquiry was made into it upon which it was found that the project is completed. The said response of the MCL was responded by the Petitioner showing that the Petitioner and VPR Ltd.- OP No. 2 have an on-going project to which the OP No.1 had given no response which raises a doubt. Moreover, VPR Ltd.-OP No. 2 has responded that they had a consortium/ JV on the other hand the Petitioner-BGR has SPV with the other Petitioner-NCC Ltd.

100. He further submitted that there is an enabling proviso, Clause 3.7 of the RFB for seeking clarification, but the OP No. 1 didn‟t seek any clarification. Such non-exercise of discretion has to be based on reasonable grounds and not be done arbitrarily. There was a justifiable ground for exercising the proviso for seeking clarification, that the bid was made in online mode and the Petitioner had no way of knowing the other bidders.

101. He further submitted that the Petitioner has been also alleged undesirable practice under Clause 4.3 of the RFB, which again mentions of „conflict of Interest‟, the terms of which have not been defined in the RFB. The consortium is expansive in nature, can operate in multiple projects, but SPV has limited scope, it is a device to secure itself with a limited liability for a particular independent project. The Petitioner had an SPV, whereas the OP No. 2 had consortium which is worse. Moreover, as per Clause 2.2.6 of the RFB the Successful bidder has to form a SPV.

102. He submitted, that the OP No. 1- MCL Ltd. has invoked Clause 2.2.1 (b) and Clause 4.3(d) of the RFB for disqualification of the Petitioneron the allegation that the Petitioner and NCC Ltd. are associated with SPV company namely Pachhwara Coal Mining Pvt Ltd (PCMPL), formed by NCC-BGR consortium in which the NCC Ltd. has a shareholding of 51% and BGR has 49%. Both NCC and BGR has directors on the Board of Pachhwara and the Pachhwara becomes a common third party to both the Petitioners, but such shall not apply to the Respondent No. 2 as it is not a SPV and it‟s a Consortium fall foul of logic, if the alleged access if facilitated then it is the same for Consortium also.

103. It is submitted that the BGR-VPR Consortium agreement (Annexure 9 of the Writ Petition) is signed by both the directors of the Petitioner and Respondent No. 2. A mere change in nomenclature will not change the contractual relationship and the underlying object of prevention of cartelisation is not achieved by doing so. The element of sharing of profits is present in both the Consortium and SPV. The purpose behind Conflict of Interest and Undesirable practices is to eliminate cartelization and to ensure genuine and healthy business rivalry. That as far as cartelisation is concerned the JV/SPV/ Consortium stand on the same footing. If signatories to the consortium/JV/SPV agreements raise suspicion then it has to be applied equally to all cases.

104. The OP No.1 has failed to appreciate that SPVs were formed to perform a specific project. The Petitioner‟s shareholding in both the SPVs is 49% which is below 50%, that is the Petitioner has no control as per Clause 2.2.4(2) of the PFB; thus neither SPV qualifies to be an associate. Furthermore, the OP No. 1 has failed to appreciate that the Bidder or its Associate should have a relationship with another bidder or associate by way of ownership/ holding/ cross holding which is crucial; in the instant case such it is absent andno conflict of Interest arises thereof.

105. It is quintessential to complete the chain by connecting the link of ownership/holding/ cross-holding through a common third party from where access could be gained or which in turn would be investing in the Petitioner, which is absent in the instant case as the Petitioner has participated independently and the SPV‟s mentioned cannot be an associate as per clause 2.2.4 and were neither bidders or associates, he argues.

106. Moreover, M/sThallaipalli was incorporated for specific project with NTPC but it was terminated on 04/07/2019 before the Petitioner could bid much before the present tender was floated.

107. Responding to the averment made by OP No.1-MCL Ltd. that as per clause 3.9.1 of the RFB the L-1 price (price bid of VPR) is reasonable and viable, he submits that on 12.06.2023 the Tender Evaluation Committee had written to the Central Mine Planning and Design institute Ltd. to submit a report on viability of the L1 price bid of the project and simultaneously without waiting for the expert opinion the Tender Evaluation Committee wrote a letter to OP No.2. The wordings “gesture of the goodwill…. Revised price will be Rs. 532 per Ton of Coal” in the OP No. 1‟s counter [Referred to Pg 247, 248 of the OP No. 1‟s Counter,] is a strange expression in public projects. On 13.06.2023, the very same day another communication was made by the OP No.1 to the expert body regarding the Revised price which raises suspicion as the OP No. 1 on finding that the L1 price was not viable, a communication was made to the OP No.2 and then the revised price in turn was communicated to the expert committee.Such actions of the OP No.1 shows favouritism and collusion and were much beyond the contemplated mechanism. That the L1 price shall have been asked to justify but not to reduce it. He submitted that despite the reduction in price, it was being unreasonable, too high compared to the estimated price still the OP No. 1 choose to continue with the VPR mines.

108. Furthermore, the OP No.1 was made aware that the Petitioner and OP No. 2 had joint projects, which includes one namely Kadia project, regarding which the OP No. 1 via email dt. 18.05.2023 inquired to Northern Coalfields, and received clarification that the project was not ongoing but was completed. The OP No. 1 disqualified the Petitioner and forfeited the EMD on 15.05.2023 without considering it as a completed project. It shows biasness.

109. Furthermore, OP No. 1 was also brought to notice regarding the on-going project namely Magadh OCP awarded by Central Coalfields Ltd. executed by the Petitioner, OP No. 2 and another third party (PLR) wherein the VPR-BGR-PLR Consortium contained 40% shareholding by VPR-BGR each which was also ignored by OP No.1. to which the VPR Ltd- OP No. 2 gave an explanation that the SPV was not created for Kadhia Project, it was only a JV through Consortium. Submitted that such plea is impermissible. The plea that no directors were appointed is also untenable as the directors of the Petitioner and OP No.2 themselves are the signatories to the Consortium Agreements for Khadia and Magadh Project.

110. As per the provisions of the RFB no distinction has been made between JV and SPV while applying the Conflict of Interest clause.

111. He further submitted that the Letter dt. 18.05.2023 which was addressed by OP No.1 to GM, CMC, Northern Coalfields Ltd., made no distinction between the JV/Consortium/ SPV, neither was communicated regarding the ground of JV/ Consortium/ SPV rather it was communicated that the project was not on-going.

112. He relied on Banshidhar Construction (P) Ltd. v. Bharat Coking Coal Ltd., 2024 SCC OnLine SC 2700; Subodh Kumar Singh Rathour v. Chief Executive Officer and Others, 2024 SCC OnLine SC 1682; M/s Rosmerta Technologies Ltd. v. State of Odisha and Others, WP (C) No. 7776 of 2024;PopatraoVyankatraoPatil v State of Maharashtra and others, (2020) 19 SCC 241; ABL International Ltd. and another v Export Credit Guarantee Corporation of India Ltd. and others, (2004) 3 SCC 553: 2003 SCC in support of his arguments.

113. It was submitted that the when it comes to tender condition it is neither judicial or quasi-judicial but the courts have held time over time that such writs are maintainable in the courts and relied on Noble resources ltd. Vs State of Orissa (2006) 10 SCC 236 wherein it was held that "It is trite that if an action on the part of the State is violative the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter.”

114. He submitted that mere association is not sufficient, but it has to be arrived at as to how it affected the bid process, which has not been done in the case at hand. Thereby, the reason, as assigned in the show cause notice, i.e., conflict of interest, cannot be sustained in the eye of law.

115. It is further contended that VPR Mining Ltd. has been show favouritism while accepting its bid at a much higher price than the bids quoted by BGR Mining and NCC Limited and no plausible reasons have been given while rejecting the Petitioner‟s bid for which the opposite party-MCL has acted arbitrarily and unreasonably. As a consequence, thereof, rejection letter shall be quashed.

116. Further, a distinction has to be made between the threshold adjudication and post contractual adjudication. He submits that it has been observed that when it comes to threshold adjudication the court‟s scrutiny would be more intrusive. Relied on MP Power Management Company Ltd. v. M/s Sky Power Southeast Solar India, pvt. Ltd., [2022] 5 SCR 1.

117. He replies to the pleading of the Opposite Parties that when it comes to ambiguity in any clause which has to be interpreted, what‟s required to be looked at is the interpretation given by the author of the document. He submitted that it can‟t be the position because it cannot be subjective, it ought to objective. Further, the author of the document may have any intention, but once such is reduced to writing only that should speak, not the author. The author cannot plead any sort of parol evidence or justification post contractual conduct; even correspondence cannot come to rescue. Additionally, as per contra proferentem if there is any dispute as to the meaning of the word, it should always be made against the one who made it.

118. He argues that there are no common nominee Directors on these SPV‟s, being the minority shareholder the Petitioner had nominated its Director and the other party has nominated its Director. The Director appointed in consortium and SPV is different, in SPV it has limited permit because that Director cannot travel beyond the SPV. Once the project is completed it loses its existence. In consortium and JV they form a partnership like relationship whose ambit is larger.

119. He has also submitted that in the clause 2.2.1 (b) (i), the expressions „common controlling shareholding‟ assume importance which means that somebody is having investment in Petitioner and the other Petitioner, has common controlling shareholding, where the ultimate benefit is to the third party. It has to be established that such third party has come in picture and acted upon in such manner. That those expressions have to be interpreted by following „ejusdem generis‟, as they are not disjunctive expressions, they mean one and the same. Further, as per Clause 2.2.1 (b)(v) there has to be a relationship between the entities, by means of ownership/holding/cross holding which may happen directly or indirectly. In the instant case the direct manner is overruled. It is being said that the indirect investment is happening through the SPV (common party).

120. Further, the phrase „in a position to access to each other‟ is of pivotal importance. He has relied to the meaning of „position‟ as given in Ramanath Iyer‟s lexicon 5th vol. pg 5205, latest edn.; and Black‟s law Dictionary pg 1406 and submitted that there must to be a legitimate position to have access to the other‟s information. It requires the Petitioner‟s investment in a company which has access to the other company(associate). In SPV such is not possible as the SVP has no access to the other party. It is created for a particular purpose which cannot demand access. It requires a proxy through which the Petitioner can access the other entity.

121. The learned Addl. Solicitor General, Mr. M Nataraj appearing on behalf of the opposite Party -Mahanadi Coalfields Ltd. contended that while exercising the power of judicial review these tender matters, it has to be seen if the decision is palpably wrong, and the scope of judicial review, and approach is that just because it is wrong, the judicial review is not permissible on the fundamental premise that these all are commercial transactions, where the scope of judicial review is very limited, and a second/alternative/ better view is not permissible.

122. It is further contended that as Clause 2.2.1 (a), it permits the consortium but it does not permit SPV or independent legal entity for the purpose of application of conflict of Interest. The sanctity of tender document is one of crucial aspects which will have to borne in mind, and the language employed in the tender document has to be strictly adhered to while interpreting.

123. He argues that if it is Consortium then the conditions set out in Clause 2.2.7 has to be fulfilled, as the tender document itself makes it clear that it only permits Consortium subject to fulfilment of conditions in Clause 2.2.7.

124. It is contended by him that the tender document was notified and the petitioners participated with open eye accepting the tender conditions. They were aware of the tender conditions and clauses and still chose to participate in it. Referring to clause 2.2.1 (b), it is submitted that the conflict of Interest is not to be understood as strictly in terms of what has been mentioned in its sub clauses. It has wider connotation. If the Tender Inviting Authority is able to come to a conclusion that there is a conflict of Interest then the bidder can be disqualified, and in such instance the scope of judicial review is limited.

125. Alternatively it is contended that, the OP No.1‟s case is that it falls under the clause 2.2.1(b). There are six clauses (i)-(vi). It can be seen that if one of the sub-sub-clauses is hit then the conflict of Interest will arise. And the term „such bidder‟ in clause (v) indicates the bidder as under 2.2.1 (b). The argument of Petitioners that „sub bidder‟ has to read in terms of previous clauses is not permissible.

126. It is further contended that in these are commercial transactions and the sanctity of the bidding process has to be maintained and cartelization should not be allowed. Further the tender document will have to be strictly construed to for the purpose of maintaining the purity of the selection process of the successful bidder.

127. He has referred to Clause 2.2.4 of the RFB and submits that it defines an associate. And it specifies the documents for recognition of the „consortium‟. With this definition also the Petitioners are liable to be disqualified from the process and then referred to clause 2.6, clauses 4.1&4.3 to contend that again the „conflict of interest‟ that has been emphasized as indicated in the clause 4.3 (d) is independent of what is provided under clause 4.1, as a ground which may vitiate the tender on account of clause 4.1 applied with fraud and corrupt practices, also that conflict of Interest as provided under clause 4.1 need not be referred to in respect of clause 2.2.1, it is independent of all other clauses.

128. The Learned Addl. Solicitor General referred to the disqualification order and submitted that the Tender Inviting Authority has reached the decision after proper analysis and referred to the documents which have been relied upon while reaching the decision. There are, thus three juristic entities i.e. NCC, BGR and Pachhwara (SPV) due to which the conflict-of-Interest clause applies. Further submits that once such a decision is taken upon interpretation of tender documents, the scope of the judicial review is very limited and it is the author of the document alone who would be in a proper position to say what he intended or how the document has to be interpreted while deciding the clauses placing reliance on Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818.

129. He has also contended that merely on the ground that the view taken by tender authority is not sound, a judicial review cannot be sought. There has to be some element of mala fide in the decision to establish favoritism to a bidder, to seek a judicial review, else the decision by the author of the tender document shall be final and judicial review on such matter is very limited. He has placed reliance on Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) [Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622 : (2016) 4 SCC (Civ) 106 : (2016) 8 Scale 99] where it has been held by the Supreme Court, relying on a host of decisions that the decision-making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision-making process is mala fide or is intended to favor someone. Further relied upon Tata Cellular v. Union of India [Tata Cellular v. Union of India, (1994) 6 SCC 651] which went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional courts can interfere if the decision is perverse. However, the constitutional courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority.

130. It is further contended that State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It has been further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the Court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. Relied upon Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. [Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138].

131. He has argued that the authorities have the liberty to assess the overall situation for purpose of taking a decision as to whom the contract shall be awarded and at what terms, and by way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. He has placed his reliance on Sterling Computers Ltd. v. M&N Publications Ltd. [Sterling Computers Ltd. v. M&N Publications Ltd., (1993) 1 SCC 445] in support of his argument.

132. He has referred to the case laws which further strengthens his argument that court shall not interfere in the matter of commercial transaction unless there is mala fide or favoritism in the tender decision. Placeing reliance upon Raunaq International Ltd. v. I.V.R. Construction Ltd. [Raunaq International Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492] he has submitted that Supreme Court has held that the superior courts should not interfere in matters of tenders unless substantial public interest was involved or the transaction was mala fide. In the case Air India Ltd. v. Cochin International Airport Ltd. [Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617] , this Court once again stressed the need for overwhelming public interest to justify judicial intervention in contracts involving the State and its instrumentalities. It was held that the courts must proceed with great caution while exercising their discretionary powers and should exercise these powers only in furtherance of public interest and not merely on making out a legal point.

133. He has also placed his reliance on Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] wherein it has been held that Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold.

134. He further placed his reliance upon Montecarlo Ltd. v. NTPC reported in (2016) 15 SCC 272: AIR 2016 SC 4946] it was held that where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints. Relying on the Supreme Court‟s decision in the case of Municipal Corpn., Ujjain v. BVG (India) Ltd. [Municipal Corpn., Ujjain v. BVG (India) Ltd., (2018) 5 SCC 462: (2018) 3 SCC (Civ) 291] he argues that the authority concerned is in the best position to find out the best person or the best quotation depending on the work to be entrusted under the contract. The court cannot compel the authority to choose such undeserving person/company to carry out the work. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work.

135. He has also referred to the three-Judge Bench decision of this Court in Galaxy Transport Agencies v. New J.K. Roadways, Fleet Owners & Transport Contractors, (2021) 16 SCC 808: 2020 SCC Online SC 1035] to support his contentions.

136. He has further contended that in a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd. (2016) 16 SCC 818], the Supreme Court has held that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.‟

137. It is further contended that in the recent judgment in Silppi Constructions Contractors v. Union of India (2020) 16 SCC 489], this Court held that there should be exercise of restraint and caution; and there must be overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities. The courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable. The court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity.

138. He further contends that the law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489], Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India [(1981) 1 SCC 568], CCE v. Dunlop India Ltd. [(1985) 1 SCC 260: 1985 SCC (Tax) 75], Tata Cellular v. Union of India [(1994) 6 SCC 651], Ramniklal N. Bhutta v. State of Maharashtra [(1997) 1 SCC 134] and Raunaq International Ltd. v. I.V.R. Construction Ltd. [(1999) 1 SCC 492].

139. The Learned Addl. Solicitor General contended that there is no whisper of allegation of “mala fides” in the pleadings of the petitioner- NCC Ltd.. However, in BGR case there is some reference to “Mala fides” which is vague totally. It is well settled that not only the pleading but proof is also required. Plea of mala fide is not at all sustainable, he argues.

140. In the present case, the authorities after evaluating the records found common shareholding, common signatories, common address, and common Directors. Applying the strict adherence to terms and conditions of the tender document they come to the conclusion that conflict of interest exists. Therefore, the rejection as justified in law. The contract has been given to a third party and work is going on.

141. He has argued that out of ten no. of tenders which have been floated by NCL (Northern Coalfields Limited) and MCL, the tenders mentioned at serial nos. 1 to 7, 9, and 10 do not have the Conflict-of- Interest clause. Therefore, the terms and conditions in the above said tenders, referred to by the petitioner, are not the same as that of the terms and conditions of the tender in question in the present writ application”.

142. Mr. Ranjit Kumar appearing on behalf of OP No. 2 in WP(C) 17120 of 2023 and OP No. 4 in WP (C) 17188 of 2023 has argued that MCL, the tendering authority has rightly disqualified the petitioners i.e. NCC Ltd. and BGR Mining under the terms of Cl. 2.2.1 (b) on the ground of „Conflict of Interest‟ and under Clauses 4.1 read with 4.3(d) for engaging in "undesirable practices". The disqualified bidders have made false declarations in their bidding document, contrary to Clause 2.6.1. of the RFB. BGR and NCC are connected through two common third parties, namely, M/s Pachhwara Coal Mining Private Limited (PCMPL) and Talaipalli Coal Mining Private Limited (TCMPL). The relationship between BGR and NCC arises due to their holding in these two SPVs. PCMPL is an SPV formed by the said bidders, wherein NCC has a 51% shareholding, while BGR has a 49% shareholding. Similarly, TCMPL is another SPV formed by NCC & BGR. NCC has a 51% shareholding in TCMPL, while BGR has a 49% shareholding in the SPV. Moreover, both BGR and NCC could exercise „control‟ over the SPVs and thus, over each other through these SPVs. Thus, the BGR & NCC did have the ability to influence the bid of the other or to have access to each other‟s bid information. The two directors of TCMPL, namely, Mr. R. S. Raju and Mr. U. Reddy are in turn the authorized representative and director of NCC & BGR respectively. The Directors of both, PCMPL and TCMPL are appointed by NCC & BGR. NCC & BGR exercise direct control over the functioning of these common third parties. Futhermore, PCMPL, TCMPL AND NCC share a common address. The aforementioned circumstances clearly reflect that both, NCC & BGR are in position to have access to each other‟s information and to influence each other‟s bid. Under the RFB, there is no requirement to prove actual exchange between bidders and/or influence over each other. The very existence of a relationship, as explained, is enough to render BGR & NCC to be disqualified. For this reliance was placed on Sterlite Grid20 Ltd. v. PFC Consulting Ltd., 2021 SCC OnLine Del 4357. Furthermore, the Conflict-of-interest clause itself rests on a deeming fiction. Thus, evidently, the relationship between NCC & BGR falls under Clause 2.2.1(b)(v).

143. It was submitted by Mr. Ranjit Kumar that Clause 2.2.1 of the RFB is a deeming provision and not exhaustive as to what constitutes „Conflict of Interest‟. This is not just clear from a perusal of Clause 2.2.1 itself but also from Clause 4.3(d) of the RFB, he argues. While defining „undesirable practices‟ in Clause 4.3(d), the tendering authority has consciously not made a reference to Clause 2.2.1(b). This only goes to show that „Conflict of Interest‟ has to be understood in a wider sense and the instances contained in Clause 2.2.1, as to what constitutes „Conflict of Interest‟, were not exhaustive.

144. It was submitted that as per the RFB Cl. 2.1.6 and 3.1.1, the MCL has the sole discretion to disqualify any defaulting bidder for not conforming to the terms and conditions of the bidding documents or on account of any other reason that MCL deems fit. Further as per Cl. 2.7.1, 3.9.2 and 6.2 of the RFB provides that MCL also retains the right to reject any bids or bidders without assigning any reason.

145. It was submitted that it is completely MCL‟s prerogative to accept or reject any bids or to disqualify any bidder. The rightful exercise of such a prerogative cannot be interfered with on the ground that principles of natural justice are not followed. This is because the instant proceeding stems from a commercial transaction, which are beyond the realm of administrative law. The principles of equity and natural justice do not operate in the field of commercial transactions as held in Municipal Corpn., Ujjain v. BVG India Ltd., (2018) 5SCC 462, at paragraph 27. The power of judicial review cannot be exercised on account of procedural defects in closing such commercial transactions.

146. It was submitted that the tendering authority‟s decision to accept or reject a bid cannot be interfered with under Article 226, particularly when the decision is made responsibly and in accordance with the tender conditions. The decision to disqualify BGR and NCC was a reasonable decision, which a person with ordinary prudence would have arrived at. In light of the same, this Hon‟ble Court ought not to interfere in the present matter. The award of a contract through tenders by a public authority is a commercial act as held in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 at paragraph 22. In the case of Tata Cellular v. Union of India, (1994) 6 SCC 657, the Supreme Court has held that there are inherent limitations to judicial review of contractual actions. The Court cannot act as an appellate authority for scrutinizing as to whom the tender should be awarded as held in Meerut Development Authority v. Association of Management Studies, (2009) 6 SCC 171 at paragraph 41-42; Municipal Corpn.,Ujjain v. BVG India Ltd., (2018) 5 SCC 462, at paragraph 64.3, 10, 22,23. Reliance was placed on Uflex Ltd. v. State of T.N., (2022) 1 SCC 165 : 2021 SCC OnLine SC 738 at page 173 para 1-6 where catena other judgements were referred which lay down that judicial review of contractual/ tender matters under Article 226 is not permissible unless the tendering authority has acted with arbitrariness, irrationality, unreasonableness, bias and mala fides, which hasn‟t been a case in the present matter. Thus, this Hon‟ble Court ought not to interfere with commercial transactions, as such transactions are not amenable to judicial review.

147. It was submitted that the author of the document, viz., MCL is the best person to assess and appreciate its requirements as laid down in Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited &Anr., (2016) 16 SCC 818 at paragraph 15; N.G. Projects Ltd. v. Vinod Kumar Jain, (2022) 6 SCC 127;CaretelInfotech Ltd. v. Hindustan Petroleum Corpn. Limited, (2079) 14 SCC 81at paragraph 37, 39, 43. MCL‟s decision which is based on an interpretation of the RFB, being its own document, and based on allied facts, cannot be called in question.

148. It was submitted that the disqualified bidders erroneously claim that MCL has provided preferential treatment to VPR. They have claimed that VPR also has a consortium with BGR to execute another project, namely, Magadh OCP. Despite this, VPR was allowed to participate in the bid. This contention is factually & legally unsustainable. It was submitted that BGR and NCC cannot claim parity with VPR. The Consortium between VPR and BGR is completely distinct and cannot be equated with the issue of conflict of interest as involved in the present case because the petitioners are a SPV and VPR and BGR formed a consortium which are inherently different and don‟t involve any conflict of interest.

149. Countering the argument that the MCL acted in inconsistent manner and provided preferential treatment to VPR as MCL has not invoked any „conflict of interest‟ in the past and thus should not invoke the same in the present tender and that VPR has been permitted to participate alongside DBL in 10 tenders floated by the subsidiaries of Coal India Ltd., despite the fact that VPR & DBL have formed an SPV for execution of another tender, he has argued that DBL has not participated in the present tender so conflict of interest with VPR doesn‟t arise; nine out of the ten tenders do not have conflict of interest clause and in nine of the ten tenders followed a system of „reverse bidding‟. The remaining 1 tender i.e. Dudhichana the tendering authority is Northern Coalfields Ltd. and not MCL and the terms of RFB are totally different.

150. Assuming while denying that a wrong was committed by an authority in the past, the same would not bestow a right upon NCC & BGR to claim such an undue benefit as a matter of right by reference to Article 14 of the Constitution. There cannot be, in law and under Article 14, reverse parity or discrimination. NCC cannot seek a direction requiring MCL to perpetuate any illegality or irregularity assuming the same was earlier committed, if at all. Reliance was placed on decision of Hon‟ble Supreme Court in the case of Tinku v. State of Haryana, 2024 INSC 867.

151. It was submitted that the disqualified bidders have erroneously claimed that the variation of price bid by VPR from Rs.15,410 Cr to Rs.14,434 Cr has been undertaken in violation of RFB. This submission by the Petitioners is completely incorrect and in ignorance of the disclaimer contained in the RFB, which allows MCL to negotiate the offer as per Cl. 2.7, 2.7.2 of RFB.

152. It was submitted that Ld. Counsel for BGR have wrongly relied on several Judgments rendered by foreign courts relating to judicial review in the interpretation of contracts. Because all the aforesaid Judgments are not applicable to the present case, as the law relating to interpretation of an RFB is different from the interpretation of a contract. The foreign judgments cited by the Ld. Counsel for BGR do not deal with the aspect of judicial review in awarding tenders, particularly in the Indian context. Moreover, the reliance on the principle of contra proferentem was mis-guided. This is because the rules of contra proferentem only apply to interpretation of contracts and not the construction of tender terms or an RFB.

153. Mr. Naidu representing petitioner BGR placed reliance on MP Power Management Company Ltd. v. M/s Sky Power Southeast Solar India, pvt. Ltd., [2022] 5 SCR 1, but it was submitted by Mr. Ranjit Kumar that it doesn‟t apply in this case because the facts are entirely different in this case.

154. It was submitted that VPR has acted in good faith throughout the bidding process. VPR has duly met all the deadlines and milestones as per the bidding documents and Contract Agreement. At this stage, VPR has also spent considerable amounts of money to fulfill the conditions precedent laid down in Article 4 of the Contract Agreement. Thus, pursuant to these proceedings, if the vested right accrued to VPR in respect of the execution of the project is taken away, then grave prejudice and irreparable harm will be caused to VPR for no fault of theirs. Thus, at this stage, any action against VPR will be against public interest. This is because any interference will lead to considerable delay. This will inevitably lead to losses for the Government run- Coal India Ltd & affect power generation in the Country. This is contrary to doctrine of public interest as laid down in N.G. Projects Ltd. v. Vinod Kumar Jain, (2022) 6 SCC127, at paragraph 23,24. The power of judicial review should not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes as held in Jagdish Mandal (supra) at paragraph 22.

155. As can be noticed from what has been mentioned hereinabove and is also discernible from the pleadings on behalf of the parties that the present case has been contested to the hilt on behalf of all the parties and rival issues have been addressed threadbare.

156. We, however, at the outset intend to record following opinions before addressing other issues for the purpose of clarity :-

"i. No case of mala fide has been specifically pleaded by either of the petitioners against any individual in the bidding process in question;

ii. It has been argued though that the impugned action of the opposite parties may not be hit by malice in fact, but certainly the action suffers from the vice of malice in law, which aspect we shall address at appropriate stage;

iii. It has rightly been argued by the parties across the board that Clause 2.2.1 pertaining to Conflict of Interest, and Clause 4(d) under Section IV of RFB, which postulates conflict of interest as one of the undesirable practices, is to prevent cartelization. However, in our considered view, for invoking Clause 2.2.1 or applying Clause 4.3(d),cartelization was not required to be established by the MCL rather existence of befitting circumstance under the clause is enough to conclude conflict of interest.

iv. Further, to invoke Conflict of Interest Clause, the concerned authority was not required to establish that the parties alleged of having conflict of interest had in fact attempted to control the bid price and/or otherwise prejudice or affect the bidding process. The competent authority of the MCL dealing with the tender process was required to reach a conclusion, whether conflict of interest could be possibly and reasonably inferred or not based on the materials before it.

v. The correctness of the decision of the MCL disqualifying the petitioner invoking conflict of interest has to be considered by this Court within the ambit of settled legal principles and limitation of the power of judicial review, in tender matters."

157. Keeping the aforesaid aspects in mind, before we formulate the issues in controversy required to be addressed, we must notice certain significant facts, which are crucial for the present adjudication which are as follows:-

I. After the writ petitioners were disqualified by invoking Conflict of Interest Clause, the MCL had issued a notice to the petitioners on the same day i.e., 15.05.2023 stating as under:-

“a. The bid has been disqualified having conflict of interest as per Cl. No.2.2.1 (b) of RFB and rejected under Cl. No.4.1 of RFB. EMD deposited during bid submission forfeited as Damages as per Cl. No.2.2.1 (b), 2.16.5 and 2.16.6 of RFB of NIT 179.”

b. NCC Limited has claimed the Experience of Pachhwara Coal Mining Private Limited (PCMPL i.e., an SPV formed by NCC-BGR Consortium with 51% share of NCC Limited and 49% share of BGR MINING AND INFRA LIMITED), wherein it has been observed that PCMPL is an Associate of NCC Limited due to its share of more than 50% as defined under Cl. No.2.2.4 of RFB. PCMPL is currently active and executing a project as Mine Developer cum Operator (MDO) for Pachhwara North Coal Mine with a stipulated period of completion of 29 years. In the Associate of NCC Limited i.e., PCMPL you have 49% of share.

It is also observed that, NCC Limited and BGR Mining & Infra Limited are also associated through another common third party i.e., M/s. TALAIPALLI COAL MINING PRIVATE LIMITED.

The registered address of Pachhwara Coal Mining Private Limited and Talaipalli Coal Mining Private Limited are the same as that of NCC Limited. The Director of BGR Mining & Infra Limited and the Authorized representative of NCC Limited for this NIT-179 are the Directors of Talaipalli Coal Mining Private Limited. It is apparent that Talaipalli Coal Mining Private Limited and Pachhwara Coal Mining Private Limited are virtually controlled by NCC Limited and BGR Mining & Infra Limited.

Therefore BGR Mining & Infra Limited has a relationship (arising due to ownership/ holding/ cross holding) with another Bidder i.e., NCC Limited, directly or through common third party/ parties i.e., M/s. Pachhwara Coal Mining Private Limited and M/s. Talaipalli Coal Mining Private Limited.

In the above circumstances, it puts either or both of them in a position to have access to each other‟s information about, or to influence the Bid of either or each other, which attracts Conflict of Interest in line with the Cl. No.2.2.1 (b).

Therefore, upon scrutiny of the uploaded documents of M/s. NCC Limited and M/s. BGR Mining & Infra Limited, it has been observed that, the uploaded bid documents are not in compliance to Cl.2.2.1 (b), declaration under Point No.5 of Bidder‟s Covering Letter and acceptance of bid conditions and under Cl. No.2.6 of RFB. Therefore, your bid is not eligible for further evaluation as per provisions of NIT-179.

Hence, the following actions have been taken as per provisions of NIT-179:

(i) As per Cl. No.2.2.1 (b) of RFB, Bid of BGR Mining & Infra Limited has been disqualified having “conflict of interest”.

(ii) As per Cl. No.4.1 of RFB, Bid of BGR Mining & Infra Limited rejected due to directly or indirectly engaged in “undesirable practice” as defined under Cl. No.4.3 (d).

(iii) Bid Security (EMD) deposited by the bidder i.e., BGR Mining & Infra Limited during bid submission forfeited as the “Damages” as per Cl. No.2.2.1(b), 2.16.5 & 2.16.6 of RFB of NIT-179. Accordingly, by virtue of the provisions of NIT, your bid has been rejected online in the e-

procurement portal on 15.05.2023 & the EMD has been forfeited.

In addition, you are liable for action under the provisions of Cl. No.2.16.6 and 4.2 of RFB of NIT- 179.

Accordingly, you are hereby required to show cause within 10 days from the date of issue of this letter as to why the actions as per provisions under the Cl. No.2.16.6 and Cl. No.4.2 of RFB of NIT-179 shall not be taken against you. Failing which it would be construed that you have no valid justification.

“c. It was also observed that NCC Limited and BGR Mining & Infra Limited are also associated through another common third party i.e., M/s. TALAIPALLI COAL MINING PRIVATE LIMITED”.

II. There was an interim order passed by this Court in this case earlier, as has been noted above, which was dismissed by an order dated 19.12.2023. Soon after the dismissal of the writ petition, the Director, BGR Mining filed his reply to the said show-cause notice dated 15.05.2023. In the said reply, following was stated:-

“a. With regard to the above, we humbly submit that Pachwara Coal Mining Private Limited is a Special Purpose Vehicle formed by NCC-BGR Consortium with 51% share of NCC Limited and 49% share of BGR Mining & Infra Limited. In view of the above, even as per the Clause 2.2.4 of RFB, we are neither an associate of NCC Limited, nor do we have any direct control over the operations of our Consortium Partner. As such, we do not have any access to NCC; nor does NCC require BGR‟s permission to participate in the tenders. It is also very relevant here to submit that we had no knowledge that NCC Limited was participating as one of the bidders for the said Tender. Hence, Conflict of interest cannot be attributed to BGR.

b. We would like to mention here firstly that M/s. Talaipalli Coal Mining Private Limited is a Special Purpose Vehicle incorporated for executing the project therein and, secondly, the said Talaipalli Project never took off/ commenced. In fact the said project was terminated. As such the said SPV i.e., M/s. Talaipalli Coal Mining Private Limited, is not operative.

Moreover, vide our letter dt. 15.05.2023, we requested your kind authorities for an opportunity of personal hearing to present our case. Unfortunately, no such opportunity of personal hearing was ever accorded to us to explain the exact facts of the case. Further, we submit that had we been given the opportunity of personal hearing, we would have explained the entire facts of the present case to your esteemed office.

We state that subsequent to filing of the said Writ Petitions W.P.(C) No.17188 of 2023 & W.P.(C) No.17120 of 2023, it had come to our knowledge that based on the guidelines issued by the Coal India Limited, the Central Coalfields Limited (CCL) has given clarification in the NIT No.CCL/GM (CMC)/MDO/ Sanghamitra/GeM/2023/28 dated 27.10.2023; participation by the members of Joint Ventures/Consortiums/SPVs, executing other ongoing contracts in the subsequent tenders floated by CCL is permitted in their individual capacity and that the same would not amount to disqualification on the ground of conflict of interest.

We state that in view of the above mentioned clarification given by CCL, in the RFB dated 27.10.2023, the same would apply to our case also, as both NCC Limited and BGR Mining & Infra Limited have participated in the subject NIT in their individual capacity and that the SPVs have not participated in the said NIT.

It is further submitted that the Hon‟ble Orissa High Court in its order dated 19.12.2023 in W.P.(C) No.17188 of 2023 & W.P.(C) No.17120 of 2023 said that “determination or interpretation of the conditions stipulated in the tender documents, being within the complete domain of the tendering authority, in exercise of power of judicial review, this Court has got limited jurisdiction. Even if a defect is found in the decision-making process, the court must use its discretionary power under Article 226 with caution and circumspection. It should be exercised only in furtherance of public interest and not merely on the basis of a legal point.

In view of the order passed by the Hon‟ble High Court and also by taking into consideration the latest developments explained supra in regard to the Tender work, We being the aggrieved party and to facilitate us to participate in future MDO Tenders and without prejudice to our rights and remedies, we humbly request the MCL authorities to revoke the forfeiture of EMD and withdraw the Show cause notice dated 15.05.2023 issued by GM (CMC), MCL without any punitive action.”

III. In the light of request made by the Director, BGR Mining, a personal hearing was given to the BGR Mining on 24.01.2024. After personal hearing was given, what offer was made by the BGR in personal hearing can be seen from the Communication dated 08.02.2024 addressed to the CMD, MCL, relevant portion of which is as follows:

“xxx xxx xxx

As such in the said personal hearing, we requested MCL to refund the Bid security i.e., EMD amount without any negative effect and not to debar BGR Mining and Infra Limited from participating in the future tenders of MCL.

In the said personal hearing we had also requested you to dispose of the matter within a period of two weeks from the date of the said personal hearing.

We humbly remind your good office that it was only at your request we assured you that we would not resort to any further legal action/ litigation in the event our request to refund our EMD amount and not to debar BGR from participating in the future tenders is considered.

However, till now there has been no action taken from your good office to resolve the issue on hand. Any further delay in resolving the present issue will put immense pressure on our company as we would not be able to participate in any other tenders (in view of the forfeiture of EMD) which will result in huge financial loss to our company.

As such we again remind/request your good office to resolve the issue as prayed by us in the personal hearing held on 24.01.2024 by refunding our EMD amount and not taking any further coercive steps against us at the earliest.”

Emphasis added

IV. An SLP was preferred by the BGR against the common judgment of this Court dated 19.12.2023 on 15.03.2024. These developments as noted above had taken place in the meanwhile.

During the pendency of the SLP preferred by the BGR Mining, i.e., Civil Appeal No.5390 of 2024 arising out of SLP No.8813 of 2024, a communication was made by the MCL to the BGR on 12.04.2024, which reads thus:

“To,

BGR MINING & INFRA LIMITED 8-2-596/R, Road No. 10,

Banjara Hills, Hyderabad, State-Telangana, PIN-500034.

Sub- “Development and Operation of Balabhadra OCP as per Part-II (scope of the Project) of Contract Agreement and other requirements specified in the Contract Agreement” invited under NIT-179 by MCL.

Ref. No.: 1. NIT No: MCL/SBP/GM(CMC)/NIT - 179/2022/595, Date: 17.11.2022.

2. Show Cause Notice: MCL/SBP/GM(CMC)/NIT - 179/2023/097, Dtd. 15.05.2023.

Dear Sir,

Mahanadi Coalfields Limited (MCL) through General Manger, Contract Management Cell (CMC), had invited on-line Global Notice Inviting Tender (NIT) vide No.: MCL/SBP/GM (CMC)/NIT- 179/2022/595 dated 17.11.2022 for the work of “Development and Operation of BalabhadraOCP as per Part-II (scope of the Project) of Contract

be in conflict of interest with another bidder (NCC Limited) under Clause No.2.2.1 (b) of RFB of NIT- 179, due to which your bid was not eligible for further evaluation and rejected.

Due to the above, following actions have been taken as per provisions of the NIT- 179:

Bid Security (EMD) deposited by you has been forfeited as the “Damages” as per Clause No.2.2.1(b), 2.16.5 & 2.16.6 of RFB of NIT-179.

Show Cause Notice was served to you vide ref. No. MCL/SBP/GM(CMC)/NIT-179/2023/097 dated

15.05.2023 for banning of business under Clause No.2.16.6 and 4.2 of RFB of NIT-179.

In response to above Show Cause Notice and on your request, an opportunity was given to you for personal hearing on 24.01.2024, where you have deliberated your stand.

The committee after due consideration of your reply and personal hearing held with you, comes to conclusion that you are in Conflict of interest with another bidder NCC Limited under Clause No.2.2.1(b) of RFB of NIT-179.

Further, apprising your past conduct, commercial tenability and satisfactory work with the undersigned and other subsidiaries of CIL., the Competent Authority sympathetically acceded the prayer made by you and has decided not to debar/blacklist you from participating in future tenders in MCL/CIL and its subsidiaries as a purely onetime concession without any precedent.

Yours‟ faithfully,

General Manager (CMC),

MCL HQ”

(Emphasis supplied)

Similarly, a communication was also made by the MCL to the NCC on 12.04.2024, which reads as under:

“To,

NCC Limited,

NCC House, Mining Division,

7th Floor, Madhapur, Hyderabad, State-Telangana, PIN-500081.

Sub- “Development and Operation of Balabhadra OCP as per Part-II (scope of the Project) of Contract Agreement and other requirements specified in the Contract Agreement” invited under NIT-179 by MCL.

Ref. No.: 1. NIT No: MCL/SBP/GM(CMC)/NIT - 179/2022/595, Date: 17.11.2022.

2. Show Cause Notice: MCL/SBP/GM(CMC)/NIT - 179/2023/098, Dtd. 15.05.2023.

Dear Sir,

Mahanadi Coalfields Limited (MCL) through General Manger, Contract Management Cell (CMC), had invited on-line Global Notice Inviting Tender (NIT) vide No.: MCL/SBP/GM (CMC)/NIT- 179/2022/595 dated 17.11.2022 for the work of “Development and Operation of Balabhadra OCP as per Part-II (scope of the Project) of Contract

be in conflict of interest with another bidder (BGR Mining & Infra Limited) under Clause No.2.2.1 (b) of RFB of NIT-179, due to which your bid was not eligible for further evaluation and rejected.

Due to the above, following actions have been taken as per provisions of the NIT- 179:

Bid Security (EMD) deposited by you has been forfeited as the “Damages” as per Clause No.2.2.1(b), 2.16.5 & 2.16.6 of RFB of NIT-179.

Show Cause Notice was served to you vide ref. No. MCL/SBP/GM(CMC)/NIT -179/2023/098 dated

15.05.2023 for banning of business under Clause No.2.16.6 and 4.2 of RFB of NIT-179.

In response to above Show Cause Notice and on your request, an opportunity was given to you for personal hearing on 24.01.2024, where you have deliberated your stand.

The committee after due consideration of your reply and personal hearing held with you, comes to conclusion that you are in Conflict of interest with another bidder NCC Limited under Clause No.2.2.1(b) of RFB of NIT-179.

Further, apprising your past conduct, commercial tenability and satisfactory work with the undersigned and other subsidiaries of CIL., the Competent Authority sympathetically acceded the prayer made by you and has decided not to debar/blacklist you from participating in future tenders in MCL/CIL and its subsidiaries as a purely onetime concession without any precedent.

Yours‟ faithfully,

General Manager (CMC),

MCL HQ”

(Emphasis supplied)

In reply to the aforesaid letter dated 12.04.2024 made by the MCL, the NCC, vide its letter dated 15.04.2024, communicated the following:

“To

The General Manager (CMC) Mahanadi Coalfields Limited HQ JagrutiVihar, Burla, MCL

Dist: Sambalpur-768020 (Odisha)

Email: gm-tc.mcl@coalindia.in

xxx xxx xxx

We sincerely hope that considering the undertaking given by us vide Letter dated 27.03.2024, not to further proceed against the Order of High Court in the SLP filed by us in the Hon‟ble Supreme Court, which is yet to be numbered, the Management of MCL will consider our request as communicated vide our Letter dated 23-12-2023 positively at the earliest.

We further draw your kind attention to the Circular dated 07.04.2017, issued by Coal India Limited to all its subsidiaries, including MCL, mandating amendment to terms of the NIT by inclusion of Arbitration Clause. However, the terms of subject NIT do not contain the said amended clause as mandated under the Circular of CIL.

However, to avoid further legal proceedings post the Order of the Hon‟ble High Court of Orissa, we propose for referring the issue pertaining to disqualification and forfeiture of EMD to Arbitration for resolution independently, notwithstanding the observations of the High Court in WP No.17188/2023.”

(Emphasis supplied)

158. The communications dated 12.04.2024 have not been challenged in the present proceeding, though the same has been brought on record. As is evident from the said communication dated 12.04.2024, considering the petitioners‟ past conduct and satisfactory work with the MCL, and other subsidiaries of the CIL, the competent authority is said to have taken a sympathetic view acceding to the prayer made by the BGR Mining and decided not to debar/blacklist from participating in future tenders in MCL/CIL and its subsidiaries as purely one time concession without any precedent. The petitioners were sternly warned against engaging in any form of undesirable practices in future tender participation. The Civil Appeal No.5390 of 2024 was disposed of on 26.04.2024 setting aside this Court‟s order dated 19.12.2023 remitting the matter back to this Court for hearing afresh and for deciding the matter afresh mainly, on the ground that the said order did not contain adequate reasons for dismissal of the writ petitions.

159. In our considered view, the developments subsequent to the dismissal of the writ petition by order dated 19.12.2023 till communication of the order dated 12.04.2024 are of significance for adjudication of the present matter inasmuch as the request of the petitioner not to debar/blacklist was acceded by the said communication dated 12.04.2024, notice for which was issued invoking the conflict of interest clause. In our considered view, once upon the representation made by the BGR and NCC before the MCL, the MCL too a decision acceding to the request not to debar or blacklist the BGR and NCC from participating in future tenders, while reiterating its conclusion that it was in conflict of interest with each other, it is impermissible for the BGR and NCC in the present proceeding to question the disqualification for the tender process in question. In our considered opinion, the petitioners BGR and NCC, apparently, in order to ensure that they are not disallowed from participation in future tenders of MCL made an assurance that they would not resort to any further legal action/litigation, in the communication dated 08.02.2024, which was subsequently acceded to by the MCL through its communication dated 12.04.2024, despite dismissal of the writ petition by this Court on 19.12.2023, considering its past conduct, commercial tenability and satisfactory work, as a one- time concession, without any precedent. It seems that the petitioners have consciously not questioned the said communication dated 12.04.2024 as that might have had the adverse consequences on the petitioner‟s participation in future tenders. The petitioner took a calculated move before the MCL in the personal hearing requesting the MCL to take a sympathetic view on the point of consequences of the MCL‟s decision to disqualify the petitioners invoking the conflict of interest clause.

160. Arguments advanced by Mr. Vikas Singh and Mr. Dama Seshadri Naidu, learned Senior Counsel appearing on behalf of the petitioners that in terms of the conditions under RFB debarment/blacklisting is an essential consequence if a bidder is found to be in conflict of interest with another tenderer and, therefore, since the MCL subsequently decided not to debar/blacklist the petitioner, therefore, the Court should presume that the MCL, after having realized its mistake on the point of interpretation of the conflict of interest clause, decided not to debar/blacklist the petitioners, an inference should be drawn that the MCL also is of the opinion that there was no conflict of interest.

161. We are of the view that the petitioners had consciously made a representation before the MCL that they should not be blacklisted and their EMD should be refunded since blacklisting/forfeitures of EMD shall have adverse consequence on their future participation in the tender processes. The MCL rather, in its wisdom and in view of past commercial association with the petitioner decided not to blacklist them acting on certain assurances given by the petitioners. In our opinion, the petitioners, while making such representation responding to the show-cause notice issued by the MCL, attempted to preempt the MCL from taking a decision on the point of blacklisting/debarment. The MCL acceding to their request decided not to blacklist/debar. Making this ground to question the correctness of the decision of the tendering authority to disqualify the petitioners invoking the conflict of interest clause is not at all tenable. The conduct of the petitioners amounts to “blow hot and cold”, “play fast and loose” or “approbate and reprobate”, by firstly making a representation before the MCL to grant concession and later by questioning the decision of the MCL to disqualify them under the conflict of interest clause taking ground of the concession having been given.

162. It is deemed beneficial to refer to the Supreme Court‟s decision in case of R.N. Gosain v. Yashpal Dhir, reported in (1992) 4 SCC 683, reiterating the legal principle that a law does not permit a person to both approbate and reprobate and has observed in paragraph 10 as under:

“10. Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that “a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage”. [See :Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. Ltd. [(1921) 2 KB 608, 612 (CA)] , Scrutton, L.J.] According to Halsbury's Laws of England, 4th Edn., Vol. 16, “after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside”. (para 1508)

163. Further the Supreme Court has reiterated the principle of “approbate and reprobate” in the following cases; in the case Shyam Telelink Ltd. v. Union of India, (2010) 10 SCC 165 it was held that -

“23. The maxim qui approbat non reprobat (one who approbates cannot reprobate) is firmly embodied in English common law and often applied by courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument.”

In the case of Bharti Cellular Ltd. v. Union of India, (2010) 10 SCC 174, it was observed that -

“9. Relying upon the decision of this Court in City Montessori School v. State of U.P. [(2009) 14 SCC 253] , New Bihar Biri Leaves Co. v. State of Bihar [(1981) 1 SCC 537] and R.N. Gosain v. Yashpal Dhir [(1992) 4 SCC 683 : AIR 1993 SC 352] , this Court has in Shyam Telelink Ltd. v. Union of India [(2010) 10 SCC 165] held that no one can approbate and reprobate and anyone who has accepted with full knowledge or notice of facts, benefits under a transaction which he might have rejected or contested, cannot question the transaction or take up an inconsistent position qua the same. We have said: (Shyam Telelink case [(2010) 10 SCC 165] , SCC p. 172, para 23)

“23. The maxim qui approbat non reprobat (one who approbates cannot reprobate) is firmly embodied in English common law and often applied by courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument.”

In the light of the above, the view taken by the Tribunal is legally unexceptionable.”

In the case of Union of India v. N. Murugesan, (2022) 2 SCC 25, it was reiterated that

“Approbate and reprobate

26. These phrases are borrowed from the Scots law. They would only mean that no party can be allowed to accept and reject the same thing, and thus one cannot blow hot and cold. The principle behind the doctrine of election is inbuilt in the concept of approbate and reprobate. Once again, it is a principle of equity coming under the contours of common law. Therefore, he who knows that if he objects to an instrument, he will not get the benefit he wants cannot be allowed to do so while enjoying the fruits. One cannot take advantage of one part while rejecting the rest. A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part. An element of fair play is inbuilt in this principle. It is also a species of estoppel dealing with the conduct of a party. We have already dealt with the provisions of the Contract Act concerning the conduct of a party, and his presumption of knowledge while confirming an offer through his acceptance unconditionally.”

164. Following the aforediscussed judgments of the Supreme Court, we hold that after having taken the advantage of the communication dated 12.04.2024 granting one-time concession by the MCL, the petitioner is precluded from saying that the basis of its decision (conflict of interest) was invalid and should be set aside. We reiterate that a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, then turn around to say that it is void for the purpose for securing the same advantage.

165. If the petitioners have not questioned and could not have questioned rather they have accepted the grant of one-time concession by the MCL through communication dated 12.04.2024; in our considered view, it is impermissible for them to question the decision of the MCL to disqualify them invoking the conflict of interest clause.

166. As has been noted hereinabove, submissions have also been made with reference to past tender processes wherein, the MCL had not invoked the Conflict of Interest Clause, though circumstances similar to the present tender process did exist. Extensive submissions have been made with reference to the facts which have been brought on record by additional affidavits. In our opinion, those facts are neither germane nor are required to be referred and discussed on the sole ground that a decision taken in a different tender process cannot be basis for determining the justification or otherwise of the impugned decision of the MCL in the present tender process holding that there was conflict of interest of BGR with NCC and vice versa.

167. After having recorded our conclusions above, we are now left with the following questions for adjudication:

(i) Whether the decision of the MCL, in the facts and circumstances which have been noted, the decision of the MCL to disqualify the petitioners invoking conflict clause is so patently illegal and erroneous as no prudent person/authority could have reached such conclusion

(ii) Whether depending upon the answer to the first question, the second question pertains to the limited scope of judicial review in tender matters as has been laid down by the Supreme Court in a series of decisions

168. It is noteworthy that following facts asserted in the counter affidavit filed on behalf of the MCL have not been disputed:-

(i) The petitioner (BGR) had uploaded work experience of 3 nos. of coal mines as a contractor. The work experience at Sl no. 3 i.e. M/s Pachhwara Coal Mining Private Limited a Special Purpose Vehicle Company incorporated under Companies Act, 2013 was that of its „Associate‟. The perusal of the Letter of Award dt. 12.05.2016 and the Work Done Certificate dt. 15.06.2022 as issued to PCMPL, shows that it is a consortium of NCC Ltd. and BGR Mining and the address is of NCC Limited, NCC House, Madhapur, Hyderabad- 500081, Telangana, India and NCC Limited is the Lead Member of the Consortium. Further, the NCC- BGR consortium was required to form SPV Company within 30 days of issue of LoA for entering into Contract Agreement with the employer West Bengal Power Development Corporation Limited and accordingly M/s Pachhwara Coal Mining Pvt. Ltd (SPV) company was incorporated. NCC Ltd. held 51% share whereas BGR held 49% of shares of PCMPL.

(ii) BGR Mining and Infra Ltd is another bidder in this NIT. The tender committee got an impression of suspicion that the two bidders i.e. NCC Ltd and BGR Mining seem to be connected through a common third party i.e. M/s Pachhwara Coal Mining Private Limited (Associate of Petitioner NCC Ltd.). Therefore, the tender committee gathered more information about the said two bidders as available in public domain though uploaded documents.

(iii) The authorized signatory of the petitioner Company in tender is R SubbaRaju. He is the authorized true & lawful attorney of NCC vide notarized Power of Attorney dt. 27.01.2023 issued by ASN Raju, whole time director, NCC Ltd. It is mentioned that R SubbaRaju was employed with NCC and holding the position of Director (Projects), NCC Ltd. Rudraraju SubbaRaju has digitally signed all the documents uploaded with TPS & BOQ of the Petitioner Company. The Authorized Signatory for NCC Ltd. in all the uploaded documents is of the seal of RS Raju, Director (Projects). There is a difference in the name of Authorized Signatory. R SubbaRaju, Rudraraju Subba Raju& R S Raju are different names of single person. As per the Company Master Data available in public domain of M/s Pachhwara Coal Mining Pvt. Ltd. the company status (for e filing) is Active and the registered address of Pachhwara Coal Mining Pvt. Ltd. is same as that of the Petitioner and the directors includes RudrarajuSubbaRaju and Rohit Reddy Bathina.

(iv) On scrutiny of the Company Master Data of the Petitioner Company, NCC & BGR available in the public domain it was pointed out that the names of the both Directors of the SPV are not appearing as Directors/ Signatory. Upon searching the DIN No. 00037918 of RudrarajuSubbaRaju, it was found that he is the Director of the three registered limited companies – NCC Vizag Urban Infrastructure Ltd., Pachhwara Coal Mining Pvt. Ltd. and Talaipalli Coal Mining Pvt. Ltd.

(v) Thereafter going through the Company Master Data of M/s Talaipalli, it was found that the company status (for e filing) was active and the registered address is that of NCC, Hyderabad office. Its Directors/Signatories details included RudrarajuSubbaRaju and UmapathyreddyBathina. The name of B. Umapathy Reddy S/o B Venkata Krishna Reddy appears to be subscribers/ shareholders of BGR Mining & Infra Ltd. (Annexure E/1), having subscribed to equity share of 1,08,00,000no.s out of 4,50,00,000 shares i.e., 24% and Umapathy Reddy Bathina is a director in BGR Mining & Infra Ltd. Umapathy Reddy Bathina and B. Umapathy Reddy are 2 different names of the same person. The names of both the directors of M/s Talaipalli Coal Mining Pvt. Ltd are associated with NCC and BGR.

(vi) NCC and BGR are associated to each other in a SPV company, Pacchwara coal mining as well as in Talaipalli coal Mining Pvt. Ltd. The subscriber of BGR Mining & Infra Ltd. Rohit Reddy Bathina is associated with Rudraraju SubbaRaju, director (projects) of NCC ltd. through M/s Pachhwara Coal Mining since dt.01.06.2016 which is operating from the registered address of NCC Ltd. The Directors of both M/s Pachhwara and M/s Talaiapalli are appointed by its shareholders i.e. NCC& BGR and they have virtual control over the SPVs.

169. We have reproduced clause 2.2.1 of the RFB in the present judgment which envisages that a bidder should not have a conflict of interest that affects the bidding process and any bidder found to have a conflict of interest shall be disqualified. A bidder, according to the said clause, shall be deemed to have a conflict of interest affecting the bidding process if;

(a) the bidder and any other bidder have common controlling shareholders or other ownership interest. Further, if such bidder has a relationship (arising due to ownership/holding/cross holding) with another bidder, directly or through common third party/parties that puts either or both of them in „a position to‟ have access to each other‟s information or to influence the bid of either or each other. As has been noted hereinabove, it is the petitioners‟ case that the bid was supposed to be applied online and as per the bidding scheme, there was no scope for the petitioner to know who were the other bidders until the same was published in the public domain. Further, there could be no possibility for the petitioners to know that the share holders of the other bidders had any control by which it could determine the conflict of interest.

170. We reiterate our observation that the tendering authority during the techno commercial evaluation was required to consider whether clause 2.2.1 of the RFB was applicable or not in the given facts and circumstances. Apparently, BGR and NCC are connected through two common 3rd parties namely PCMPL and TCMPL. There is admitted relationship between the BGR and NCC arising due to their holding in these two SPVs. In PCMPL, the NCC has 51% shareholding whereas BGR has 49% shareholding. Similarly, in TCMPL, another SPV found by NCC and BGR, NCC has 51% shareholding in TCMPL and the BGR 49% share holding in the said SPV which is an existing company. In the opinion of the tendering authority, since the petitioners‟ had formed two SPVs and had common holdings, they were in „a position to‟ influence the bid of another and had access to each other‟s bid information. It is remarkable to note here that influencing the bid of the other in fact by the BGR and NCC is not a fact which only could be the basis for disqualification by applying clause 2.2.1 (B of the RFB). Whether they were in a position to do so was required to be assessed by the tendering authority.

171. Whether they were in a position to influence each other because of common shareholding was the fact to be taken into account by the tendering authority. In the opinion of the tendering authority, because of such association of the petitioners through the SPV, they were in a position to influence each other and therefore, they deserved to be disqualified.

172. In our considered view, the said opinion formed by the tendering authority that the petitioners were disqualified because of conflict of interest cannot be said to be completely unfounded. It further appears that during the techno-commercial evaluation, the tendering authority also found that two Directors of TCMPL namely Mr. R.S. Raju and Mr. U. Reedy were authorized representatives and Directors of NCC and BGR respectively. The BGR and NCC had, thus, commercial exposure with each other which put them in a position to access to each other‟s information about, or to influence the bid of either or each other. There was no requirement to prove actual exchange between the bidders.

173. It is trite that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer can be interfered with in a judicial review proceeding only if the decision making process is mala fide or is intended to favour someone. Said differently, the decision should be perverse not merely faulty or incorrect or erroneous as held in case of Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation (supra). The Division Bench of Calcutta High Court in case of Sharma Transport Vs. Coal India Limited in FMA No.2119 of 2018 (judgment dated 14.12.2018) has aptly observed in paragraph-41 as under:-

“41. Tender matters are not decided by running a fine tooth-comb over the process to discover which 'i' has not been dotted or which 't' not crossed. The writ court always maintains a dispassionate distance from the process and, in course of the adjudication, does not imagine itself being in the position of the tender committee or as evaluators of the bids. It is only if the writ court finds the decision or the decision-making process to be utterly illegal or patently irrational or totally unreasonable that it would seek to intervene. If an executive authority has acted within its jurisdiction, has adopted a reasonable procedure and has rendered a cogent decision at the end of the process : the writ court will ask for nothing more……”

174. The said decision of Calcutta High Court has been relied upon by the Delhi High Court in the case of Sterlite Grid 20 Limited v. PFC Consulting Limited and another, reported in 2021 SCC OnLine Del 4357. In the case of Sterlite Grid 20 Limited (supra), a Division Bench of Delhi High Court had the occasion to deal with a similar conflict of interest clause. While interpreting the conflict of interest clause the Delhi High Court took note of the key words used in the conflict of interest viz. “relationship with each other” and that puts them in a position to have access to information about.

175. In our considered opinion, after having noticed, the admitted fact regarding the relationship between BGR and NCC, the decision of MCL to declare the petitioners‟ disqualified cannot be said to be unfounded/baseless. It is also noteworthy that under Clause 6.2 of RFB, the tendering authority had the discretion, without incurring any obligation or liability to qualify or disqualify any bidder. It is stipulated that Clause 3.9.2 of the RFB prescribed that the authority reserved the right to reject all the bids without assigning any reason whatsoever.

176. In case of Municipal Corporation Ujjain v. BVG India Limited, reported in (2018) 5 SCC 462, the Supreme Court has held that the principles of equity and natural justice do not operate in the field of commercial transaction.

177. It would be pertinent to notice the Supreme Court‟s decision incase of AIR India Limited v. Cochin International Airport Limited, reported in (2000) 2 SCC 617, summarizing the scope of interference while exercising power of judicial review in contract matters, paragraph 7 of which reads thus:

“7. …. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.”

178. In case of Jagdish Mondal (supra), the Supreme Court has held as under:

“21.4. In Air India Ltd. v. Cochin International Airport Ltd. [(2000) 2 SCC 617] this Court summarised the scope of interference as enunciated in several earlier decisions thus: (SCC pp. 623-24, para 7)

“7. … The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.”

(emphasis supplied)

179. In the case of Jagdish Mondal (supra), the Supreme Court has held that the power of judicial review will not be permitted to be invoked to protect private interest or to decide the contractual disputes. The tenderer or the contractor with a grievance can always seek damages in a Civil Court. Paragraph 22 of the said decision is relevant and is being reproduced hereinbelow:

“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

OR

Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”;

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.”

180. In Maa Binda Express Carrier vs. North East Frontier Railway reported in 2014 (3) SCC 760, it has been held that all that the participating bidders are entitled to is a fair, equal and non- discriminatory treatment in the matter of evaluation of their tenders. Award of a contract is essentially a commercial transaction, which must be determined on the basis of considerations that are relevant to such commercial decision.

181. In Afcons Infrastructure Limited (supra), the Supreme Court has held that a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationally or perversity must be met before the Constitutional Court interferes with the decision making process. The decision of the tendering authority, in the background of the facts noted hereinabove, cannot be said to be mala fide. We have no hesitation in recording our opinion that keeping in mind, the factual circumstances which have emerged based on enquiry subsequent to submission of the bids as regards formation of SPVs by the petitioners, which are companies incorporated under the Companies Act, the tendering authority acted bona fide in taking a decision by application of the conflict of interest clause. The High Court exercising power of judicial review cannot act as an appellate authority dealing with the merits or correctness of the decision but can examine only the manner in which the decision is taken or the order is made.

182. We are afraid, exercising power of judicial review in view of the admitted facts which have been noted above, we cannot substitute our opinion or the opinion of the tendering authority and hold that there was no conflict of interest. The Courts exercising power of judicial review have inherent limitations. It is also noteworthy that no case has been made out by the writ petitioners to the effect that the action of the Technical Evaluation Committee was actuated by extraneous consideration or mala fide. It would be apt to notice the Supreme Court‟s decision in case of N.G. Projects Limited v. Vinod Kumar Jain, reported in (2022) 6 SCC 127, paragraphs 23 to 27 read as under:

“23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.

24. The State has paid over a sum of Rs 3,98,52,396 to the appellant till date, though the stand of the appellant is that it had submitted bills of work of Rs 8.5 crores. The termination of contract would cause additional financial burden on the State and also deprive the amenity of road for a longer period. The learned counsel for the appellant has stated that it shall not claim escalation of costs for the period when the writ petition before the High Court was pending and there was a stay granted.

25. In view thereof, we find that the action of the respondent in setting aside the letter of acceptance granted to the appellant suffers from manifest illegality and cannot be sustained. Consequently, the appeal is disposed of with a direction to the respondent State to allow the appellant to resume and complete the work by excluding the period spent in the stay of execution of the contract.

26. A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.

27. We also find that multiple layers of exercise of jurisdiction also delay the final adjudication challenging the grant of tender. Therefore, it would be open to the High Courts or the Hon'ble Chief Justice to entrust these petitions to a Division Bench of the High Court, which would avoid at least hearing by one of the forums.”

183. We accordingly conclude thus:

"(i) No case of mala fide has been specifically pleaded by either of the petitioners against any individual in the bidding process in question;

(ii) It has rightly been argued by the parties across the board that Clause 2.2.1 pertaining to Conflict of Interest, and Clause 4(d) under Section IV of RFB, which postulates conflict of interest as one of the undesirable practices, is to prevent cartelization. However, in our considered view, for invoking Clause 2.2.1 or applying Clause 4.3(d), cartelization is not required to be established by the MCL, rather existence of conditions for attracting the said clauses is enough to conclude conflict of interest.

(iii) Further, to invoke Conflict of Interest Clause, the concerned authority was not required to establish that the parties alleged of having conflict of interest had in fact attempted to control the bid price and/or otherwise prejudice or affect the bidding process. The competent authority of the MCL dealing with the tender process was required to reach a conclusion, whether conflict of interest could be possibly and reasonably inferred or not based on the materials before it in terms of the conditions stipulated thereunder.

(iv) The correctness of the decision of the MCL disqualifying the petitioners invoking conflict of interest clause has to be considered by this Court within the ambit of settled legal principles and limitation of the power of judicial review, in tender matters.

(v) Following the afore discussed decisions of the Supreme Court, we hold that after having taken the advantage of the communication dated 12.04.2024 granting one-time concession by the MCL, the petitioner is precluded from saying that the basis of its decision (i.e. the conflict of interest) was invalid and should be set aside. We reiterate that a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, then turn around to say that it is void for the purpose for securing the same advantage.

(vi) Since the petitioners have not questioned, and could not have questioned, rather they have accepted the grant of one- time concession by the MCL through communication dated 12.04.2024; in our considered view, it is impermissible for them to question the decision of the MCL to disqualify them invoking the conflict of interest clause for the tender process in question.

(vii) As has been noted hereinabove, submissions have also been made with reference to past tender processes wherein, the MCL had not invoked the Conflict of Interest Clause, though circumstances similar to the present tender process did exist. Extensive submissions have been made with reference to the facts which have been brought on record by additional affidavits. In our opinion, those facts are neither germane nor are required to be referred to and discussed on the sole ground that a decision taken in a different tender process cannot be the basis for determining the justification or otherwise of the impugned decision of the MCL in the present tender process holding that there was conflict of interest of BGR with NCC and vice versa.

(viii) Exercising power of judicial review, in view of the admitted facts which have been noted above, we cannot substitute our opinion in place of the opinion of the tendering authority and hold that there was no conflict of interest. The Courts exercising power of judicial review have inherent limitations too."

184. We have already noted hereinabove, the conduct of the petitioners. To avoid the consequence of their disqualification in the nature of blacklisting, they made a representation not to blacklist them and after their requests were acceded to, they continued to question the correctness of the decision of the tendering authority of disqualification invoking the conflict of interest clause. We do not approve of such conduct of the petitioners in the present set of facts and circumstances. We have rejected the contention made on behalf of the petitioners that since the MCL has decided not to blacklist the petitioners, therefore, their disqualification invoking the conflict of interest clause is also bad and therefore requires interference.

185. In view of the discussions herein above, we do not find any merit in the writ applications. No interference is required with the impugned decision of the disqualification invoking conflict of interest clause taken by the MCL.

186. However, in the peculiar facts and circumstances of the present case and in view of the nature of commercial relationship between MCL on one hand and NCC and BGR on the other hand, we observe that though we have not interfered with the decision, to disqualify the petitioners on the ground of conflict of interest and by way of concession the MCL has decided not to blacklist them; now the MCL shall not review its decision on the question of blacklisting the petitioners on the ground of their subsequent conduct of challenging the MCL‟s decision before this Court despite the undertakings.

187. We further observe that it will be open for the MCL to reconsider the case of these petitioners for refund of EMD, if forfeiture of the same may have the consequence of their disqualification/ impediment in participation in any future tender processes.

188. These writ applications are accordingly dismissed with the aforesaid observations. There shall be no orders as to the costs.