9911796707
TMI Blog2005 (5) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... license granted to it was extended till the next date of hearing. This order was extended and finally on 3.2.2005, the High Court directed that the interim license granted to appellant no.1 shall be extended till further orders. It is, therefore, clear that appellant no.1 is having an interim license of category 'A' in its favour on the basis of the order passed by the High Court. It is averred in the counter affidavit filed by the Electricity Board that the total units of power intended to be traded are 1471 million units. For trading over 1000 million units of power in any year the license required is that of category 'F'. The computer website of Central Electricity Regulatory Commission, as on 14.3.2005, contains the names of 12 licensed electricity traders, but the name of the appellant no.1, M/s Global Energy Ltd. does not find mention therein. It is also averred in the counter affidavit that the Electricity Board had been selling surplus power to electricity traders since 1st April, 2003. In the course of such negotiations, the Electricity Board came to be associated with appellant no.1 for entering into power purchase agreement for the period March to June 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Electricity Boards or Power Utilities on short term basis through Power Trading Agencies. Paragraphs 1 and 5 of the notice, which are relevant for the decision of controversy in hand, are being reproduced below : 1. Sealed tenders are invited by the Chief Engineer, Central Commercial Department, West Bengal State Electricity Board, Vidyut Bhawan, 8th Floor, Block-A, Bidhannagar, Kolkata - 700 091 from experienced and interested Traders and Business Enterprises having Power Trading License or Clearance from the Central Electricity Regulatory Commission for export of following approximate quantum of power. 5. Mode of deposit of Earnest Money : 5.1 Every quotation must accompany 'Earnest Money' in the form of Demand Draft or Pay Order drawn on any Scheduled Bank of India in favour of West Bengal State Electricity Board payable at Kolkata amounting to ₹ 30,00,000.00 (Rupees thirty lakh) only. The Central/State Government Organization(s) and CPSU(s)/PSU(s) are exempted from submission of Earnest Money. 5.2 Earnest Money shall be refunded to the successful bidder only after opening of irrevocable and revolving LC by the successful bidder and commencement of supply as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earnest money by furnishing a Bank Guarantee or Bankers' Cheque in favour of the respondent No.2 within 18th March, 2005. The petitioners will, however, comply with the other tender conditions as mentioned in the notice inviting tender. 5. Feeling aggrieved by the aforesaid order, M/s Adani Exports Ltd. and M/s PTC India Ltd. filed two separate Letters Patent Appeals which were allowed by the Division Bench on 21.3.2005 and the direction contained in the order under challenge, permitting the writ petitioners (appellants herein) to deposit the earnest money by furnishing a bank guarantee or bankers' cheque in favour of the Electricity Board by 18.3.2005 was set aside. 6. Learned counsel for the appellants has submitted that the condition requiring deposit of ₹ 30 lakhs as earnest money by Power Utilities other than Central/State Government Organizations and Public Sector Undertakings is discriminatory and illegal. He has further submitted that the notice inviting tenders (NIT) was published on 8.3.2005 which required that every quotation must accompany earnest money in the form of a demand draft or pay order in favour of the Electricity Board amounting to ₹ 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est money, which was a mandatory condition of NIT. 8. Clause 5.1 of NIT clearly provided that every quotation must accompany earnest money amounting to Rupees thirty lakhs in the form of demand draft or pay order drawn on any Scheduled Bank of India in favour of West Bengal State Electricity Board payable at Kolkata. However, the learned Single Judge in his order dated 15.3.2004 also gave an option to the appellants to furnish a bank guarantee of the said amount. Deposit of some amount of earnest money is a normal condition of tender. The object is that only such parties who are financially sound and are serious in getting the work or contract, should make a bid. Otherwise any number of persons who have no capacity, financial or otherwise, would like to take a chance by making a bid. Normally, State/Central Government Organizations or Central or State Public Sector Undertakings would not make a bid unless they are serious in getting the work. The shareholding of the Government (State or Central) in any Public Sector Undertakings is always more than 50 per cent. They cannot be equated with a company whose net worth may be very small or may have a small shareholding. Therefore, the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to implement the entire project, a decision was taken to invite tenders from firms having a turnover of ₹ 20 crores or more for the last three financial years ending with 31.3.2002, as it was felt that it would be easier for the department to deal with one company which is well managed and not with several companies. Some of the firms filed writ petitions in Delhi High Court challenging the clause of the NIT whereby a condition was put that only such firms which had a turnover of ₹ 20 crores or more for the last three financial years would be eligible. It was contended before the High Court that the aforesaid condition had been incorporated solely with an intent to deprive a large number of companies imparting computer education from bidding and monopolize the same for big companies. The writ petition was allowed and the clause was struck down as being arbitrary and irrational. In appeal, this Court reversed the judgment of the High Court basically on the ground that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract and the Government must have a free hand in settling the terms of the tender. The courts wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extended till further orders. It is, therefore, clear that appellant no.1 is having an interim license of category 'A' in its favour on the basis of the order passed by the High Court. It is averred in the counter affidavit filed by the Electricity Board that the total units of power intended to be traded are 1471 million units. For trading over 1000 million units of power in any year the license required is that of category 'F'. The computer website of Central Electricity Regulatory Commission, as on 14.3.2005, contains the names of 12 licensed electricity traders, but the name of the appellant no.1, M/s Global Energy Ltd. does not find mention therein. It is also averred in the counter affidavit that the Electricity Board had been selling surplus power to electricity traders since 1st April, 2003. In the course of such negotiations, the Electricity Board came to be associated with appellant no.1 for entering into power purchase agreement for the period March to June 2004. However, the appellant no.1, after accepting the terms and conditions offered by the Electricity Board and after issuance of letters of awards, failed at the last moment to open the letter of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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