HC grants relief to Govt, directs for fresh tendering of power projects

Excelsior Correspondent

Srinagar, Jan 28:  In a major relief to Government, the State High Court has dismissed the writ petition filed by Chenab Valley Power Projects Private Limited (CVPP) and directed the Government to go ahead with the fresh tendering process for the construction of three hydroelectric power projects on Chenab River Basin.
The CVPP had got tender for the construction of three power projects – Pakal Dul, Kiru and Kwar – with aggregate capacity of 2164 MW on at Chenab River Basin in District Kishtwar of Jammu Division. But Government cancelled its tender and issued fresh tender but the company challenged it in the High Court.
In 231 page judgment, Justice Tashi Rabstan dismissed the writ petition of the Chenab Valley Power Projects Private Limited (CVPP) as, it said, it is devoid of any merit and held that the decision of the agency is immune from judicial review.
“In view of the aforesaid analysis, especially in absence of malafide, prejudice, unreasonableness, arbitrariness, extraneous consideration or the decision being against Public Interest, the decision of respondent CVPP, cancelling “turnkey tender” as also petitioner’s bid and issuing fresh tender notices for “package mode”, need not be interfered with by this Court, is immune from judicial review in the given facts and circumstances”, read the judgment.
Court also vacated the interim relief which was granted to the Company in which decision of Government was kept in abeyance. However, expected from the executing agency (CVPP) that it will allow the company as other individual or company, to participate and compete in fresh bids on package mode, so that more competitors/bidders participate in the fresh bids, which will ultimately have a better results.
“Keeping in abeyance impugned communication dated 16th February 2016 with liberty to respondent No.1, if it so chooses, to reconsider the decision so taken, after hearing the petitioners and the fresh tender notices issued regarding the project and the bids, if any, received shall not be carried into effect till next date before the Bench”, read the interim order granted to the petitioner company, which has now been vacated.
Chenab Valley Power Projects Private Limited is a Joint Venture of National Hydro Power Corporation Limited (NHPC), J&K State Power Development Corporation Limited (JKSPDC) and Power Trading Corporation India Limited (PTC), responsible to plan, promote and organise an integrated and efficient development of Pakal Dul, Kiru and Kwar Hydroelectric Projects with an aggregate installed capacity of about 2120 MW in Chenab River Basin in all its aspects in the State of Jammu and Kashmir.
It intends to implement Pakal Dul (Drangdhuran) Hydroelectric Project 1000 MW (4 x 250 MW) in J&K and, as such, invited sealed tenders vide Invitation of Bid (International Competitive Bidding) bearing No.CVPP/ PD/MW/RB/TK/ 2013 dated 19th June 2013, for “Turnkey Execution” of Pakal Dul (Drangdhuran) Hydroelectric Project from Consortia/Companies through International Competitive Bidding (ICB).
The project was to be handed over to CVPP on one of the conditions contained in Invitation of bid, at condition No.13, was that the “Owner shall have the right to reject all or any bid and shall not be bound to accept the lowest or any other bid or to give any reason for such decision”.
Petitioner Company along with others as well responded to above Invitation of Bid. In all, five tenderers responded. Of five, four tenderers were found sound, including petitioner. However, the owner of the project CVPP vide letter No.CVPP/PD/MW/RB/TK-07/2016/2383 dated 16th February 2016, informed petitioner company that prices quoted by it were substantially higher than estimated cost of works, based on CEA cleared/Government of India sanctioned estimate of the project, the manner in which the price bid had been structured involving unbalanced distribution among various work components, large amount of front loading and hedging of risks against owner  did not infuse confidence on the consortium for successful completion of project works and accordingly conveyed cancellation of both “Turnkey Tender” as also “petitioner’s bid”.
Petitioner, aggrieved with decision of cancellation of tender as also its bid, conveyed vide letter No.CVPP/PD/ MW/RB/TK-07/2016/2383 dated 16th February 2016, has knocked at portals of this Court with writ petition on hand, seeking quashment thereof, with further direction to respondent to reconsider petitioner’s tender for allotment of Pakal Dul Project.
The CCVP which is an instrumentality/agency of the State and all its directors are appointed or nominated by Government of Jammu and Kashmir/Government of India. There are no private shareholders in the company. The decisions taken by said company are decisions of the Government as such its instructions, etc. are binding on respondent company.
Petitioner company was invited to be present on 3rd February 2014 at the time of unsealing of “Price Bid”. Petitioner’s representative was present when “price bids” were opened and it was found petitioner had submitted lowest tender as Rs 9278.53 Crore.
Petitioner company was seeking relief from the court that the cancellation of his bid be quashed and the fresh Notices Inviting Tenders (NITs) against the said Project be stayed and by writ of mandamus respondents be directed to reconsider the tender of petitioner company for allotment of Pakal Dul Project.
CCVP in its objections against the writ petition submitted that the impugned communication of respondent in cancelling the turnkey tender and floating new tenders is neither arbitrary, nor discriminatory nor with mala fide intention but said action has been taken purely in interest of public because it involved huge public money.
“Further there is no biasness or favouritism to any other party as the instant contract has not been allotted to any other tenderer who participated in tendering process. Thus, in view of settled position of law, the said decision of respondent which has been impugned instant writ petition, not opens for judicial review”, read the objections of executing agency CVPP.
It has also been submitted that without arraying the State of J&K as party respondent, writ petition under Section 103 of the Constitution of Jammu and Kashmir is not maintainable. Despite being lowest tenderer, no right is vested in petitioner to claim the allotment of contract.
“It is submitted that report of the Committee has been obtained by petitioner in an unauthorised manner, which showed intention of petitioner to resort to unfair means for purpose of award of contract and the report of the committee states that considering the prices quoted by bidder, the total project cost shall be 16.5% above the updated CCEA cost at Oct. 2013 Price level with inclusion of excise, custom duty and BOCWC.
Court has also been informed that the report of committee was deliberated by Board of Director, and the Board, after detailed deliberations, decided to constitute Directors level Committee to explore further scope of reduction of cost. Directors Level Committee constituted for BoD, held discussions with petitioner on 15th December 2015 and 22nd December 2014 and after considering earlier Committee report/recommendations concluded that M/s DHPC is not ready to reduce prices any further thus the unjustifiable/unjustified gap calculated by earlier Committee as Rs.545.84 Crore remains as it is and consortium has included some items as lump sum items which have been quoted on much higher side making the price bid front loaded.
Court also held that a public authority (like CVPP) is a body which has public or statutory duties to perform and which performs those duties and carries out its transactions for the benefit of the public and not for private profit. Such an authority is not precluded from making a profit for the public benefit. “In terms of the Memorandum of Association, CVPP is to acquire and require land for constructing Power Stations. It is in need of water of the State to generate power, obviously, for benefit of the public”, court said.
Court also held that Chenab Valley Power Projects Private Limited which is a Joint Venture of National Hydro Power Corporation Limited (NHPC), JKSPDC and PTC India Limited, has been given responsibility to plan, promote and organise an integrated and efficient development of Pakal Dul, Kiru and Kwar Hydroelectric Projects. “CVPP is to execute these Projects on Build, Own, Operate and Maintain (BOOM) basis. Respondent CVPP is to use and utilise all the resources of J&K State, for public purpose i.e. to generate and supply power and generation and supply of power cannot be permitted to be in the hands of an individual or private person”, reads the judgment
Court has said that it is not for it to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. There are inherent limitations in exercise of power of judicial review. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State.
The right to refuse the lowest or any other tender is always available to the Government. There can be no infringement of Article 14 if the Government tries to get the best person or the best quotation. “I am inclined to hold that the doctrine of legitimate expectation or for that matter promissory estoppel, as canvassed on behalf of petitioner, cannot be made applicable to this case. The decisions cited on behalf of learned counsel for petitioner, are not, therefore, relevant for a decision in this case”, Justice Tashi said.