Isabella Mariam

The Division Bench of the High Court of Judicature at Bombay comprising Chief Justice Alok Aradhe and Justice M. S. Karnik held that the rejection of the bid and forfeiture of Earnest Money Deposit by the Maharashtra State Power Generation Co. Ltd. could not be faulted. The Court disposed of the petition, recording that although the expression “Government entity” may admit of a broader construction, the petitioner’s earlier stand in legal proceedings indicated that Bokaro Power Supply Company (P) Ltd. fell within the scope of that term.

The petitioners, Karam Chand Thapar & Bros. (Coal Sales) Ltd. and another, challenged the rejection of their bid and the forfeiture of their EMD in response to an e-tender issued by MAHAGENCO on November 10, 2023. The tender concerned the appointment of an agency for the supervision, monitoring, and coordination of coal rake movements and coal quality for MAHAGENCO’s thermal power stations.

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The petitioners had paid an EMD of Rs. 5,00,000 on November 22, 2023, and submitted their bid on December 22, 2023. However, their bid was rejected on January 23, 2024. MAHAGENCO subsequently issued letters of award to two other respondents on January 31, 2024. The petitioners were later notified on February 9, 2024, that their bid had been rejected because of a prior debarment imposed by BPSCPL on July 14, 2023.

According to the petitioners, BPSCPL is not a government entity or an independent power producer. They argued that Clause IV of the tender, which disqualifies bidders blacklisted by a government entity or independent power producer, did not apply to them. They pointed to Ministry of Corporate Affairs data showing BPSCPL as a private company not defined as a Government entity under Section 2(45) of the Companies Act, 2013.

They further stated that BPSCPL, being neither a government entity nor an independent power producer, could not be grounds for their disqualification. Additionally, they noted that the Calcutta High Court had stayed the blacklisting order through an interim order dated February 19, 2024, which was made absolute on March 27, 2024.

On behalf of the respondents, it was contended that BPSCPL is a Joint Venture between two Government entities—Steel Authority of India Ltd. (SAIL) and Damodar Valley Corporation (DVC). SAIL holds 65% of its shares, and both DVC and SAIL nominate the company’s directors. The respondents stated that BPSCPL qualifies as a Government entity and also as an independent power producer under Section 2(l) of the Maharashtra Electricity Duty Act, 2016.

Additionally, it was pointed out that in the petition filed by the same petitioner before the Calcutta High Court, the petitioner had described BPSCPL as a Government entity falling within the definition of "State" under Article 12 of the Constitution of India.

The court examined Clause IV of the tender, which states:

“On the due date of submission of bid, the bidder/consortium/JV members including any of their affiliate should not have been blacklisted/banned for participation by any IPP or Govt. entities including Thermal power Generators, CIL subsidiaries/SCCL.”

In reference to the petitioner’s affidavit submitted with their bid, the court noted the statement:

“That no order for blacklisting/Banning of the bidder has been passed against the bidder or any of the consortium partner/bidder for participation in tenders by Govt. entities in Thermal power generation, CIL subsidiaries by any of the Government entities, which is still in force as on due date of submission of bids.”

The court assessed whether BPSCPL could be considered a government entity or an independent power producer. It recorded that "BPSCPL was established on 18th September 2001 as a Joint Venture between the Steel Authority of India Ltd. and the Damodar Valley Corporation, with its shares held equally by these Government-linked entities." It added that the "Chairman and Board of Directors are nominated by SAIL and DVC, and its accounts are audited by the Comptroller and Auditor General of India.”

The bench further relied on the petitioner’s own prior litigation, quoting from Writ Petition No. 18476 of 2023 filed before the Calcutta High Court, wherein the petitioner had stated that "the respondent number one [BPSCPL] is a joint venture of two government entities... [and] fall under the scope and ambit of 'State' as understood under the Article 12 of the Constitution of India.”

The court recorded: "The petitioner is now estopped from contending that BPSCPL is not a government entity.” It also acknowledged that the blacklisting by BPSCPL fell within the scope of disqualifications under Clause IV, regardless of whether BPSCPL was deemed a government entity or an independent power producer.

The court concluded: "Clause IV of Section-1 of the e-tender is attracted to the facts and circumstances of the case. The petitioner was admittedly debarred/disqualified on 14th July 2023 by BPSCPL and therefore, on the date of submission of the bid i.e. 22nd December 2023, the petitioner was debarred/banned from participating in the tender.”

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It added: "The issue whether BPSCPL is a government entity or independent power producer is answered in the affirmative.”

Regarding the forfeiture of the EMD, the court stated that since misleading information was submitted in the affidavit regarding the petitioner’s blacklisting status, MAHAGENCO's action was justified under the terms of the tender.

However, the court also observed: "It will be open to the petitioner to disclose the grant of interim order granted by the Calcutta High Court, if it still subsists, in future tenders.”

Accordingly, the writ petition and any interim applications stood disposed of.

Advocates Representing the Parties
For the Petitioners: Zal Andhyarujina, Senior Advocate with Ishani Khanwilkar, Munaf Virjee and Tirtha Mukherjee, Advocates, instructed by AMR Law
For the Respondents: Dr. Birendra Saraf, Senior Advocate with Amita Chaware, Advocate; Jyoti Chavan, Additional Government Pleader with Nazia Sheikh, Assistant Government Pleader; Saloni Manjrekar, Advocate, instructed by HH Legal; Nikita Bhansali, Advocate, assisted by Tejas Gupta and Roshni Bhati, Advocates, instructed by Yasmin Bhansali & Co.

Case Title: Karam Chand Thapar & Bros. (Coal Sales) Ltd. & Anr. vs. Maharashtra State Power Generation Co. Ltd. & Ors.

Neutral Citation: 2025: BHC-OS:6225-DB

Case Number: Writ Petition No. 3590 of 2024

Bench: Chief Justice Alok Aradhe and Justice M. S. Karnik

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