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TMI Blog2009 (7) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... iting of global bids for receiving offers from the potential bidders.It is directed that the applicant would seek permission of this Court before making an offer to the employees and their Unions and making a declaration of the successful bidder. Petition partly allowed. - C.A. NO. 993 OF 2006 - - - Dated:- 3-7-2009 - MRS. B.V. NAGARATHNA, J. Udaya Holla, T. Rajaram for the Applicant. Puttige R. Ramesh, Arvind Kumar, K. Subbarao, Chandrashekar, M. Rajanna, Sheriff, Narayanaswamy, S.P. Shankar, Ashwin Prabhu, N.S. Satish Chandra, Sunil S. Rao, H. Sanna Maligai, Y. Hariprasad, P.H. Ramalingam and Manjunath M. Hegde for the Respondent. ORDER 1. This company petition has been registered pursuant to an order dated 12-6-2000 passed by the Board of Industrial Financial Reconstruction ("BIFR", for the sake of brevity) vide Reference No. 505/1992 dated 30-6-2000. Pursuant to the opinion of the BIFR that Bharath Gold Mines Limited ("BGML", for the sake of brevity) ought to be wound up, reference was made to this Court to consider the winding up of BGML in accordance with law. 2. In this application the applicant-BGML has sought permission to implement the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the order of BIFR. The said order of AAIFR was challenged in several writ petitions before this Court and a learned Single Judge by a common order dated 16-3-2001 allowed the writ petitions and quashed the order dated 12-6-2000, passed by BIFR, and order dated 15-11-2000 passed by AAIFR and order dated 29-1-2001, passed by Government of India under section 25(O) of the Industrial Disputes Act, permitting the closure of BGML, with a further direction to BIFR to reconsider the claim made by employees unions and to find ways and means to revive BGML. 6. Being aggrieved by the said order and direction the Union of India filed Writ Appeal Nos. 1747-1757/2001. A Division Bench of this Court held that the learned Single Judge could not have interfered with the decision of BIFR and AAIFR and thereby directing the BIFR to re-consider the same and further held that there was no infirmity in the order dated 21-1-2001 of the Central Government granting permission for closure of BGML under section 20(O) of the Industrial Disputes Act. However, in its conclusion the Division Bench recorded that the employees association could give proposals for settlement which could be considered with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government may at its discretion modify the recommendations. The Central Government may also consider any fresh proposals for revival if it so deems fit. Be that as it may." The Division Bench subject to the above observations allowed the appeals of the Union of India and dismissed the writ petitions. 7. Thereafter another Division Bench of this Court while considering the judgment of the learned Single Judge of this Court in a batch of writ petitions, calling in question the orders of termination issued by BGML, which orders of termination were quashed by the learned Single Judge in its order dated 19-7-2004, observed in its order dated 17-8-2001, that the recommendations with regard to certain measures to be taken by the Central Government keeping in mind the interest of the employees and officers of BGML in W.A. Nos. 1747-1757/2001 should be treated as directions to the concerned authorities by its order dated 26-9-2003. 8. Thereafter in the light of the observations of the Division Bench in its order dated 26-9-2003, a proposal was sent by the BGML Employees Supervisors and Officers United Forum (hereinafter referred to as the "Forum" for the sake of brevity). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup (IMG), under the Chairmanship of Secretary (Mines) will be set up to oversee the tendering process and obtain technical, financial and legal advise whenever necessary. The IMG will determine the highest bid and make the counter offer as mentioned above. In case, the Forum s society/company accepts the offer of the Government to purchase the assets as proposed above the assets will be sold to them after getting all the requisite approvals as mentioned below. If not, then the assets will be sold to the highest bidder after getting similar approvals. The IMG will make its recommendation to a Committee of Secretaries on the above lines. Thereafter the matter will be submitted to the cabinet with the recommendations of the committee of Secretaries for approval of the final disposal of the assets. ( d )The proceeds from the above sales will be disturbed among all creditors of the company equal proportion. To the extent that the proceeds from the sale of assets as per the above procedure falls short of the liabilities, the creditors will be moved to make their sacrifices proportionately. Since the Central Government is the major creditor, writing off the balance liabilities of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances, this Court is of the opinion that the Government of India has to be permitted to invite global tender by fixing reserve price of Rs. 250 crores. Para 13. In the circumstances, C.A. is disposed of granting permission for the Government of India to invite global tender to ascertain the actual market value of the assets of the BGML in order to consider the revival of the BGML either by the Forum or by any other authority and Government of India shall make its submissions in regard to the amount payable to each of the employees as an interim measure subject to final accounts." Subsequently, by order dated 12-1-2007 it was observed as follows : "Insofar as the doubt of Government of India is concerned, this Court has permitted the Government of India to invite global tender by fixing reserve price of Rs. 250 crores to assess the market value of the BGML and this Court has not ordered that the BGML has to be revived by handing over the same either to the Forum or any other authority for the reserve price only. This question has to be considered by the Government of India; only after opening the global tender and has to determine the market value. Therefore, this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor, during the course of winding up of the company has been initiated. However, learned senior counsel Sri Gopalan has submitted that the Company Court does not have the jurisdiction to consider revival of the company when once the BIFR has sent its opinion to the Company Court to complete the winding up process. According to him the Company Court is bound by the opinion of BIFR or AAIFR as the case may be and hence has no option but to wind up the company. It is submitted that in the event of the process of revival being commenced, then the only authority which can have jurisdiction is BIFR. He has also submitted that in the instant case, global bids have been called for sale of assets, which can only take place under the jurisdiction of BIFR. In support of his submission, he has relied upon a decision of the Apex Court in the case of NGEF Ltd. v. Chandra Developers (P.) Ltd. [2005] 64 SCL 1 (SC). He submits that the ratio of the said decision has been followed in three other decisions of the Apex Court in Ram Suresh Singh v. Prabhat Singh AIR 2008 SC 2805, Kerala State Financial Enterprises Ltd. v. Official Liquidator, High Court of Kerala [2007] 72 SCL 130 and Jay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. 14. The case of Pune Municipal Corpn. ( supra ) is relied upon to contend that no order of a Court or authority can be ignored altogether unless a finding is given that it is illegal, void or not in consonance with law. He also relied upon in the case of Shiv Chander Kapoor ( supra ) contend that a person assailing the validity of an order has to get such a declaration from a proper forum in a proper proceeding and unless the same is done, the order is enforceable. To the same effect is the decision in the case of M. Meenakshi ( supra ) wherein it has been held that even if an order is void, the same is required to be set aside by a competent Court of law and that an order cannot be declared to be void in a collateral proceeding. 15. While adverting to the role of the company judge after receiving the opinion under section 20 of SICA, reliance is placed on the decision of the Gujarat High Court in the case of BIFR v. Unity Steels Ltd. 2000 (1) Guj. LH 14 wherein it has been held that the High Court cannot be a rubber stamp upon the receipt of the board opinion, but the High Court in deciding the winding up of the company has to take into account the opinion fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Companies Act and for the purpose of winding up of the sick industrial company, a liquidator can be appointed who shall have the powers of the Official Liquidator under the Companies Act. Therefore, section 20(2) and (3) deal with the winding up of the sick industrial company in accordance with the provisions of the Companies Act by the High Court. However, section 20(4) begins with a non obstante clause and irrespective of the provisions of section 20(2) and (3), the Board is also empowered to sell the assets of the sick industrial company in such manner as it deems fit and forward the sale proceeds to the High Court for distribution in accordance with the provisions of section 529(A) and other provisions of the Companies Act. On a combined reading of all the sub-sections of section 20, it becomes appeared that if steps have to be taken for winding up of the sick industrial company in accordance with the provisions of the Companies Act, then it is the High Court which is empowered to do so, but under section 20(4), the High Court can also request the Board to sell the assets of the sick industrial company and forward the sale proceeds to the High Court for or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to initiate proceeding for winding up. The Apex Court further held that a company declared to be sick in terms of the provisions of SICA continues to be sick unless it is directed to be wound up as the Company Court deems fit. That BIFR alone has jurisdiction regarding sale of assets till the winding up order is passed by the Company Court. In such a manner as it may deem fit and it is also empowered to forward the sale proceeds to the High Court for orders for distribution in accordance with section 529(A) and other provisions of the Companies Act, which in no uncertain terms would be for the purpose of meeting the needs of the creditors in the manner laid down therein. The said conclusion was arrived by considering the fact that SICA is a special statute as compared to the Companies Act which prevails over the provisions of the Companies Act, particularly, having regard to the phraseology used in section 20(1) of the SICA. The Apex Court further held that BIFR is the authority proprio vigore which continues to remain as custodian of the assets of the company till a winding up order is passed by the High Court. On the facts of the said case, it held that since the Company Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted to BIFR to proceed in accordance with the provisions of SICA afresh. After referring to NGEF Ltd. s case ( supra ) the Apex Court held that the Company Court and the BIFR did not exercise concurrent jurisdiction and that it was not possible to harmonise the provisions of sections 391 to 394 of the Companies Act with the provisions of SICA, that is during the pendency of the matter before BIFR. 23. What becomes apparent from a reading of the aforesaid judgments is that the case of NGEF Ltd. ( supra ), was one of sale of assets after the BIFR had referred the matter to the company Court for winding up. In Jay Engg. Works Ltd s case ( supra ), the Apex Court held that once the amount awarded by the Industry Facilitation Council in terms of the provisions of the 1993 Act was enacted, to provide for and regulate payment of interest on delayed payments to small-scale industries, a scheme for revival of a sick company was not envisaged by the said Act, the High Court could not have intervened in the matter only because the debt had been incurred after the company was declared sick since the provisions of SICA had an overriding effect over the aforesaid 1993 enactment. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival of the company rather than winding up. In fact, a scheme for a revival of company which is wound up can also be sanctioned where the same is fair and reasonable vide Richa Jain v. Registrar of Companies [1990] 69 Comp. Cas. 248 . If a scheme is workable for the revival of the company with or without modification, then the Court has no power to pass a winding up order under sub-section (2) of section 392. The Court must attempt to find out what modifications if any are necessary to make a scheme workable and if necessary may proceed suo motu in this regard. In S.K. Gupta v. K.P. Jain AIR 1979 SC 734 it is stated that a condition precedent to make up a winding up order under section 392 is that the compromise or arrangement cannot be worked out satisfactorily with or without modifications. It is only where the Court has specified that the scheme cannot be worked out satisfactorily that the Court must close the chapter by ordering winding up vide D.S. Venkataraman v. Gujarat Industries (P.) Ltd. [1977] 47 Comp. Cas. 352 (Bom.). In the instant case the observations made by the Division Bench with regard to the revival of BGML has to be understood in the context o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial company once it receives an opinion from the Board in this regard without examining the correctness of such opinion on hearing the concerned parties. However, normally, such opinion being one tendered by the Board consisting of experts acting judicially will have a greater weight while deciding the question of winding up of the sick industrial company. Such opinion of the Board cannot lightly be brushed aside. Even otherwise, it is a jurisdiction conferred upon the High Courts under the Companies Act and any jurisdiction conferred on the High Courts under a statute has to be exercised as per the statute. The said decision was appealed before the Apex Court and the same was upheld in the decision in V.R. Ramaraju s case ( supra ), by holding that in deciding the question of winding up of the company, the High Court has to take into account the decision of the board following section 20 of SICA but it cannot abdicate its own function of determining the question of winding up. 28. Similarly, in the case of Loharu Steel Industries Ltd. ( supra ), a Division Bench of this Court has held that opinion of the Board, that it is just and equitable to wind up is not conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues. Unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of power, the Court will not interfere with such matters. In the first case, the matter pertained to renewal of mining lease in the interest of mineral development with regard to chromite mines in Orissa and in the second case the formation of a new railway zone to meet the demands of backward areas the Government had to take a decision to create six new railway zones. The Apex Court opined that to meet the demands of backward areas cannot by itself be inconsistent with efficiency and that the concept of "efficiency" should not be approached in a doctrinaire or pedantic manner. 31. In the case of Shri Sitaram Sugar Co. Ltd. v. Union of India [1990] 3 SCC 223, the Constitution Bench of the Apex Court while dealing with compensation payable to a seller in the context of Essential Commodities Act, 1955 held that judicial review is not concerned with matters of economic policy. The Court does not substitute its judgment for that of the Legislature or its agents as to matters within the province of either. The Court does not supplant the "feel of the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed for the purpose of mining only till a final closure of mines is achieved and duly approved/certified by Indian Bureau of Mines (IBM); (elaborated in Clause 4.2.2 of Section 4); ( b )A Highest Bidder (hereinafter defined in section 5) shall be identified through a competitive bidding process for purchase of assets of BGML; ( c )A Co-operative Society having largest number of Ex-Employees (those regular ex-employees who were on the rolls of the Company at the time of its closure, i.e., 1 March, 2001) of BGML as its members or a company of such society (hereinafter both the society and the company is referred to as Ex-Employees Co-operative Society ) shall have the first right of refusal for purchase of assets of BGML; ( d )Upon or before identification of Highest Bidder, BGML shall ascertain and satisfy itself of the qualification/eligibility and technical plans/competence of the Ex-Employees Co-operative Society before making an offer to exercise first right of refusal. The basis of ascertaining the qualification and technical plans shall be the same as set out for other Bidders and provided in this RFP document; ( e )The assets of BGML shall be offered to the Ex-Empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows : 2.15.4 Each of the envelopes (outer and inner) shall clearly bear the following identification : "Proposal for Sale of Assets of BGML" Clause 2.27 reads as follows : "2.27 Declaration of Successful Bidder 2.27.1 BGML shall, after identification of Highest Bidder approach the Ex-Employees Co-operative Society, and make an offer for purchase of the assets on certain conditions as decided by Government of India on 27 July, 2006. 2.27.2 If Ex-Employees Co-operative Society accepts the offer of BGML which would be higher of the Price Proposal of the Highest Bidder and Reserve Price, BGML shall declare the Employees Co-operative Society or its Company as Successful Bidder. Provided that the offer to the Society or its Company shall be made after ascertaining the technical competence, qualification criteria and business plan of such Society. The criteria for assessment of technical competence, qualification and business plan by the Society or its Company shall be same as that for Bidders, provided in this RFP document. Provided further that the Society or its Company shall also agree to the conditions as mentioned in Clause 2.27.1 2.27.3 If Ex-Employees Co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the report of M/s. Ernst and Young Pvt. Ltd. He also doubted as to whether the consultant had made a spot inspection before they prepared the said documents. He expressed strong reservation to the valuation made by M/s. Ernst Young Pvt. Ltd. 39. In the context of the global bid to ascertain the market value of the assets of the company, he said that the said exercise must be in the context of the Division Bench order regarding revival of the company and hence, the valuation is required only for that purpose and not for sale of assets. While referring to the title of the tender document as "sale of assets" he submitted that if it is a case of sale of assets, then a winding up order has to be made and the Official Liquidator would step in and he alone can sell the assets and not the company as such. Therefore, the order of this Court, dated 15-12-2006 sanctioning global bids has to be read in the context of the order of the Division Bench for revival of the company. He, therefore, stated that global tender for the "sale of assets" is contrary to the Division Bench directions. The purpose of the global tender is only to ascertain the market value and nothing else. He also obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brevity) respondent No. 30 herein, is in possession of a portion of the land by virtue of a lease executed by BGML. which being used as a defence entity. He submitted that the requirement of the leased portion of the land by BEML is a national requirement and that a defence activity is being carried out in the leased portion of the land, and that both mining activity as well as the defence activity can co-exist, in mutually exclusive portions of the land. He therefore, submitted that the portion of the land leased to BEML has to be excluded from the tender documents. 42. Sri Gopalan, also submitted that BEML is ready to pay the market value for the extent of land which had been let to it by way of lease. He drew my attention to the amendment sought to volume-I and volume-II of the tender documents. 43. In their counter affidavit, BEML has stated that an extent of 1109 acres of land is in their possession and that they have been using it and therefore, the said extent has to be excluded in the valuation of the assets, and in the said document and that their interest in the company petition is only with regard to seeking exclusion of the said extent of land from the valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lternatives have expressed their inability to revive the company. As there is also no other rehabilitation proposal with means of finance fully tied up for consideration of the Board despite ample opportunities having been given to all concerned, the Bench confirms its prima facie opinion that the sick industrial company M/s. Bharat Gold Mines Ltd., is not likely to make its net worth exceed is accumulated losses within a reasonable time while meeting all financial obligations, and that the company as a result thereof is not likely to become viable in future and that it is just, equitable and in public interest that it is wound up under section 20(1) of the Act. The opinion may be forwarded to the concerned High Court along with copies of all earlier orders/proceedings, for necessary action according to law." The said opinion was recorded by BIFR having regard to the following factors : ( a ) Though the Government of Karnataka expressed its keenness to revive the company, it refused to contribute any fund for revival; ( b ) The Ministry of Mines, Government of India which was the promoter of the company, categorically stated that it would not provide any additional funds at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (that is share capital of Rs. 51.06 crores and reserves and surplus of Rs. 2.23 crores) the accumulated losses were Rs. 409.03 crores as on 31-3-1999; ( d ) As BGML continued to make huge losses every year and was heavily indebted, there was no possibility of rehabilitating it; ( e ) The proposal by KGMNL to purchase the assets for a small consideration of Rs. 31.32 crores having been rejected by the Government of India, the said proposal cannot form basis of preparing any workable rehabilitation scheme; ( f ) The employees were neither willing to nor in a position to make any investment; ( g ) The employees unions had not come up with any workable rehabilitation proposal and their suggestions depended upon substantial financial investment by Government of India, which had already indicated that it was not willing to make any such financial investment; ( h ) It was not possible for BGML to raise sufficient funds by sale of available vacant land for revival and the suggestion of Employees Union that BGML can generate sufficient funds for rehabilitation by selling 12000 acres of land held by it was not tenable." 50. In the year 1993 a Parliamentary Committee identified BGML as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age to the employees to mitigate such hardship." It is in the said context that at para 47 the Division Bench observed that the Central Government could consider a fresh proposal for revival if it so deems fit. Possibly the Division Bench was persuaded by the following points urged by the employees while making the above observation. "BGML is the only gold mine in India and, therefore, it should not be closed down. Operations at the mines have become uneconomical because market price has not been paid to the company for producing gold. Finances have not been provided for revival/modernization of mines. The prospect of opening up shallow mines has not been fully explored. The high cost of power is mainly because only one shaft is operated in the entire stretch of 8 kilometers of the mines. There is 40 tonnes of gold available from tailing which has not been recovered. There are huge land assets of the company which have not been fully utilized/sold for realizing funds for rehabilitation of the company. 10,000 families will be affected and reduced to penury if the workers are rendered jobless as a result of closure." 52. It is in the above context that the procuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be contended that it is not necessary to ascertain the value of the assets of BGML by means of a global bid. In this context the decisions relied upon by the counsel for the applicant that an order cannot be assailed in a collateral proceeding, but can be challenged only before a competent higher authority are squarely applicable. 55. It is submitted by Sri Subba Rao and also by Sri Gopalan, learned Senior Counsel that in the instant case the initiative for inviting global bids etc., has been taken by BGML whereas the direction was given by the Division Bench to the Central Government to initiate steps for the revival of the Company and that BGML has no authority to invite the global bids. In this regard Sri Gopalan invited my attention to the orders passed by this Court dated 22-11-2006, 15-12-2006, 12-1-2007, 15-2-2007, 31-8-2007, 17-8- 2007, 17-12-2007, 10-1-2007 and 6-3-2007 to point out that initially it was the Central Government which was taking steps in the matter, but subsequently the company s advocate was making submissions and that the tender documents have also been prepared by BGML and not by the Central Government. On a close perusal of the aforesaid ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccessful Bidder, which could be the Highest Bidder or the Ex-Employees Co-operative Society, shall then be identified on decision of Ex-Employees Society to refuse the offer. [[[[[ Successful Bidder, which could be the Highest Bidder or the Fix-Employees Co-operative Society, shall then be identified on decision of[[[ Para No. Existing Text Replacement Text Ex-Employees Society to accept or refuse the offer. 2.2.1( a ) The number of members in a Consortium would be limited to three (3) members. The number of members in a Consortium would be limited to three (3) members provided that a fourth (4th) member may be allowed if he has experience extracting and processing gold from Tailings and in such a case the minimum shareholding of the 3rd and 4th member shall be not less than 5% each. 2.11.4( c ) If the Successful Bidder fails to deposit 50 per cent amount of the Price Proposal as required in Clause 2.30 and Clause 2.31, within the stipulated time or any extension thereof provided by BGML. If the Successful Bidder fails to deposit 50 per cent amount of the Price Proposal and in add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India on 27 July, 2006 would be duly complied with prior to transfer of assets in pursuance of the tender. 2.30.2 Within thirty (30) days of receiving intimation of acceptance of its Proposal from BGML, the Successful Bidder shall acknowledge the Letter of Award and deposit 50 per cent of the amount indicated in the Price Proposal into the said Escrow Account. Failure to deposit said amount on or before the due date into the Escrow Account will result in forfeiture of the Bid Security and rejection of the Proposal. Within thirty (30) days of receiving intimation of acceptance of its proposal from BGML the Successful Bidder shall acknowledge the Letter of Award deposit 50 per cent of the amount indicated in the Price Proposal an in addition the full differential amount between the STBP package and the VRS of about Rs. 52 crores into the said Escrow Account. Failure to deposit the said amounts on or before the due date into the Escrow Account will result in forfeiture of the Bid Security and rejection of the Proposal. 2.30.3 The Escrow arrangement will stipulate that if the finalization of the draft agreement as mentioned in Clause 2.31 is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per cent of value of Price Proposal directly to BGML. If for any reasons whatsoever the Successful Bidder fails to make the 100 per cent payment to BGML within thirty (30) days of the agreement being finalized, the Bid Security shall be forfeited and the Proposal shall stand rejected. If the finalization of the draft agreement is delayed beyond one hundred and twenty (120) days of deposit of first instalment of 50 per cent of the bid amount and the STB-VRS differential in the Escrow Account and the Bidder has withdrawn the amount deposited in the Escrow Account in terms of Clause 2.30.3, the Bidder shall forthwith pay 100 per cent of value of Price Proposal and the STBP-VRS diffferential directly to BGML. If for any reasons whatsoever the Successful Biddel fails to make the above payment to BGML within thirty (30) day of the agreement being finalized, the Bid Security shall be forfeited and the proposal shall stand rejected. [ Para No. Existing Text Replacement Text Section 3 ( a ) Surface Mining (wherever it occurs); ( b ) Metallic Ores (wherever it occurs) ( a )Open Pit Mining ( b )Shall be deleted 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f experience as a Developer. Extraction value of the entire project shall be considered, provided that the Bidder holds 50 per cent or more stake in such projects or has 50 per cent or more revenue accruing from such project and if the Bidder is demonstrating experience as a Contractor, Extraction value of only the ore extracted by the Bidder in its individual capacity shall be considered. Further, experience of Contractor of mere removal of overburden or movement of earth/ore from one point to other shall not be treated as experience of extraction. that the Bidder holds 50 per cent demonstrating experience as a Developer, Extraction value of the entire project shall be considered, provided that the Bidder holds 50 per cent or more stake in such projects or has 50 per cent or more revenue accruing from such project; and extraction value of 70 per cent of the project will be considered provided that the bidder holds 30 per cent or more but less than 50 per cent of the project or has 30 per cent or more but less than 50 per cent of the revenue : Provided further that if the Bidder is demonstrating experience as a Contractor, Extraction value of only the ore extracted by the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o : ( a )Achieve the experience score of at least 25 marks for Experience Score for Underground and/or Open Pit gold mining calculated in accordance with Clause 3.3; ( b )Commit to hold a minimum equity stake equal to 26 per cent of the aggregate shareholding in the SPV for a minimum period of 5 years or until listing whichever is earlier : And 3.9.3 Under Option 2, the Lead Member would be required to : ( a ) achieve the experience score of at least 25 marks for Experience Score for Underground Mining or Gold Mining calculated in accordance with Clause 3.3; and ( b ) meet at least 50 per cent of the financial capability criteria in terms of networth and average turnover mentioned in Clause 3.6: ( c ) commit to hold a minimum equity stake equal to 50 per cent of the aggregate shareholding in the SPV till implementation of the final closure of mines as approved by IBM Under Option 2, the Lead Member would be required to : ( a )achieve the experience score of at least 25 marks for Experience Score for Underground and/or Open Pit Gold Mining calculated in accordance with Clause 3.3; ( b )meet at least 50 per cent of the financial capability criteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineralized; and Para No. Existing Text Replacement Text ( iii )the two workshops are vital for Revival. The matter is in Court and the Court s decision will be binding on the successful bidder. Explanatory Remarks in Box below 3.3.2 *All freehold land should be society used for the purpose of mining and no other commercial use until final closure of mines are completed and after a mine closure plan is approved by Indian Bureau of Mines (IBM) *All freehold land should be solely used for the purpose of mining and allied activities and for no other commercial use. After mining is completed a Mine Closure Plan be got approved by IBM and implemented. Thereafter, the land shall lapse back to the Government unless separate permission is obtained for non-mine related use. Re : 1.1.7( d ) - The qualification/eligibility and technical plans/competence of the Ex-employees Co-operative Society need not be the same as set out for other bidders and provided in the bid document. If the object and purpose of the entire exercise is to ultimately achieve the revival plans envisaged for the company keeping in mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tallic ore or coal or underground/surface mining of gold. It is submitted on behalf of respondent No. 31 that gold mining being a specialized activity in mining, the competence and capability of a person or an entity in gold mining cannot be equal to the competence or capability of a person or entity having experience in mining of any other metallic ore or coal. Therefore, the eligibility conditions cannot be on par and hence, the scope for bidding by person or entity engaged in any other metallic ore or coal cannot be said to have the same competence for mining of gold and hence, they ought not to be permitted and that the eligibility and experience and competence of the bidders must be restricted to those persons who have the said competence in mining of gold only. 58. Per contra, it is submitted by the counsel for the company that since the technology is same for other metallic ores as well as for extraction of gold and that a better value or bid could be secured by expanding the scope of bidding to persons engaged in mining of other metallic ore, therefore, the eligibility criteria has been expanded. 59. In my view, the level of experience that a person has in the minin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrase "sale of assets" ought to be understood in the context of revival of BGML, in view of the reasoning given by me while dealing with the preliminary objection. Therefore, the bid documents must clearly state that "sale of assets" is in the context of revival of BGML and not in the Context of winding-up of the company. ( ii )Similarly in clause 1.1-7 the phrase "sale of assets of BGML" requires modification as stated above. ( iii )In clause 1.1-7( b ) the phrase "purchase of assets of BGML" requires substitution as when there is no "sale of assets", there cannot be purchase of assets of BGML rather the "purchase of assets" is also in the context of revival of the company. ( iv )1.1-7( c ) ought to be deleted and instead it shall be stated that after the bids are revived, BGML shall approach this Court for determining as to who shall be offered the first right of refusal considering the fact that there are several Unions of ex-employees of BGML. ( v )With regard to "reserve price" mentioned in 1.1-7( e ) and ( f ) from the letter dated 7/8-8-2006, it is seen that the Government proposes to invite global bids with regard to the assets of the company and make a counter off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived at by the highest bidder and the valuation arrived at by the in-house Committee, whichever is "lower" is offered to the Ex-employees and in case the Ex-employees refuse the said offer, then the highest bidder can be offered at the rate at which the highest bidder has quoted. Since the entire exercise is being carried out in the context of revival of BGML and not in the context of sale of assets of BGML, the purpose is not to realize the highest or the best market value for the assets of BGML, but rather to revive the company in a most economically viable manner. If the above method is followed then in that case the possibility or chances of the Ex-employees accepting the price would be greater, which would also be in line with the observations made by the Division Bench in the context of revival of company. Further, in case the Ex-employees refuse even the lower valuation, then the higtest bidder the can be offered at the price it has quoted, in which event, it would be in consonance with the offer of the highest bidder at the price that it quoted. On the other hand, if as between the valuation arrived at by the in-house Committee and the highest bidder, the higher of the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the In-house Committee and the Ex-employees Co-operative Society shall have the first right of refusal for the purchase of assets at such price. 1.1.7( f ) Successful bidder which could be the highest bidder or the Ex-employees shall then be identified based on the decision of Ex-employees Society to refuse the offer. ( vii )2.15.4 Proposal for sale of assets of BGML has to be amended. It could be "proposal for revival of BGML". ( viii )Similarly in 2.2.7 and its various clauses appropriate amendments would have to be made with regard to declaration of successful bidder in terms of the above observations. ( ix )In Vol. II the sub-title "sale of assets" would have to be understood in the context of revival of BGML. 64. DIRECTIONS : The applicant is directed to carry out the amendments to Vols. I and II of the bid documents in the following manner : ( i )The applicant to amend the respective clauses referred to in para 57 above. ( ii )The applicant to amend as per para Nos. 61(I) to (IX). ( iii )The price determined by the In-house Valuation Committee shall be placed in a sealed cover and deposited with the Registrar General of this Court before the bids are opene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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