Gurugram: The Punjab and Haryana High Court has issued an order restraining the Haryana Power Generation Corporation Ltd (HPGCL) from finalising the selection of a mine developer and operator (MDO) for the Kalyanpur-Badalpara coal block in Jharkhand’s Dumka district. The Union coal ministry had allocated this block to HPGCL in 2013.
The interim order, pronounced on 22 July, came on a civil writ petition by a firm, M/s Barjora Mining Pvt Ltd, which said it had submitted the lowest bid for the tender but was disqualified as not meeting the terms and conditions. The committee constituted for the bidding had declared it “non-responsive/non-compliant”, which the firm has contested through its petition in the high court.
According to the firm, the issue is over a clarification the authorities had sought about its direct holding company. The petitioner argues that this requirement doesn’t apply since it’s a joint venture company (JVC) with three promoters, and meets the criteria set for such companies in the notice inviting bid (NIB).
The high court order allows the authorities to proceed with the tender process but stipulates that the award is not to be finalised till the adjourned date. The case has now been adjourned to 8 August.
“However, it would be the discretion of the authorities to provisionally permit the petitioner, in terms of notice of bid (NIB), to participate in the negotiation process,” the order said.
The counsel for M/s Barjora Mining Pvt Ltd submitted that the petitioner’s bid was for Rs 1,386 per metric ton. The next lowest tenderer, which was declared technically compliant, had submitted a bid at Rs 1,558 per metric ton.
“Therefore, the difference between the rates offered by the petitioner and the next lowest bidder is nearly 11.4 percent , which would work out to Rs 1,740 crore (approximately). Hence, he asserts that the decision of the respondent authorities would have serious financial ramifications,” the counsel submitted before the court.
‘Arbitrary, irrational and unjust’
The petitioner firm, M/s Barjora Mining Pvt Ltd, is a Kolkata-based joint venture company (JVC) with three shareholders: M/s Ambey Mining Pvt Ltd (48 percent), M/s Godavari Commodities Ltd (26 percent) and M/s Maheshwari Mining Pvt Ltd (26 percent).
According to the firm, after it submitted its bid, the committee had sought information from it through emails on 1 and 2 July, when the process of technical evaluation was going on. The company responded on 5 July with a detailed email that supplied all the required information.
But then, on 16 July, the firm received an email from the committee declaring it “non-responsive/non-compliant”.
The counsel for the petitioner has submitted that the issue was regarding a clarification the authorities had sought. This was a question about which firm was the petitioner’s direct holding company, under the terms of the NIB.
Put simply, direct ownership is when a person or company owns shares in another company. Indirect ownership would take place if a person owns shares in a company that owns a subsidiary company. The person would then be an indirect owner of shares in the subsidiary.
The petitioner has asserted that since all three shareholders/promoters had 26 percent or more equity in the joint venture — as specified in Clause 4 of the NIB — the direct holding requirement had no bearing on the case.
Clause 4 of the NIB said: “If the bidder is a joint venture company and the qualifying requirement (QR) is met by one of the promoters or jointly by more than one promoter, then each promoter on the basis of whom the joint venture company gets qualified shall have a minimum of 26 percent equity in the JV company and such promoter(s) shall give an undertaking to hold the said equity for a period till the mine achieves 85 percent of the contracted capacity of the project (“contracted capacity” means 3.00 million tons of coal per annum). In such a case, the bidder shall submit the notarised copy of the joint venture agreement entered into between the promoters and a copy of the certificate of incorporation of the JV company.”
The petitioner says it had submitted valid supporting documents of all three promoters. Terming the authorities’ action arbitrary, irrational and unjust, the company has sought the annulment of the order that declared it “non-responsive/non-compliant”.
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