## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE V.G.ARUN**
**TUESDAY, THE 20[TH] DAY OF DECEMBER 2022 / 29TH AGRAHAYANA,**
## **1944**
## **WP(C) NO. 19076 OF 2021**
## **PETITIONER/S:**
LASER POWER AND INFRA PVT.LTD. 307, SWASTIKA CENTRE, 4A POLLOCK STREET, KOLKATA, WEST BENGAL-700 001, REPRESENTED BY MR. ABHISHAKE GHOSH, AUTHORIZED SIGNATORY BY ADVS. P.K.SURESH KUMAR (SR.) K.P.SUDHEER
## **RESPONDENT/S:**
- 1 THE KERALA STATE ELECTRICITY BOARD LIMITED, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695 004.
- 2 THE CHIEF ENGINEER (SCM), KERALA STATE ELECTRICITY BOARD LIMITED, VYDYUTHI BHAVANAM, PATTOM P.O.THIRUVANANTHAPURAM-695 004. BY ADV B.PREMOD
**THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04.08.2022, THE COURT ON 20.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
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## **JUDGMENT**
Dated this the 20[th] day of December, 2022
The petitioner, a Company engaged in the manufacture of cables used for high tension and low tension power supply, had submitted its bid in response to Ext.P1 Notice Inviting Tender published by the Kerala State Electricity Board. By Ext.P1, tenders were invited for the procurement of 11 KV 3x 300 sq.mm XLPE UG Cable (Cross linked polyethylene underground cable) of 452 Kms. While the petitioner was awaiting a favourable response, it was served with Ext.P2 letter stating that the KSEBL had come to know that the Madhyanchal Vidyut Vitaran Nigam Ltd and the Pashchimanchal Vidyut Vitaran Nigam Ltd had debarred the petitioner from participating in their tenders. The petitioner submitted Ext.P7 reply to Ext.P2 letter stating that the order of debarment passed by the Pashchimanchal Vidyut Vitaran Nigam Ltd, was quashed by the High Court
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of Allahabad and the debarment order of the Madhyanchal Vidyut Vitaran Nigam Ltd was stayed by the Allahabad High Court. The judgment and interim order were also appended to the reply. It was pointed out that in view of the judgment and order of the Allahabad High Court, the information referred to in Ext.P2 letter can no longer be relied upon. However, the KSEBL decided not to pre-qualify the petitioner, since the debarment case by the Madhyanchal Vidyut Vitaran Nigam Ltd had not been settled. Aggrieved by the rejection of its bid at the prequalification stage, this writ petition is filed seeking the following reliefs;
_“(i) quash the decision contained in Exhibit P8 proceeding by which the petitioner has been disqualified from participation in the bidding process pursuant to Exhibit P1 notice;_
_(ii) issue a writ of mandamus or other_
_appropriate writ, order or direction commanding the respondents to consider the financial bid of the petitioner and to_
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_evaluate the same along with the other participants who stand prequalified as per Exhibit P9 proceedings;_
_(iii) direct the respondents to accept the bid of the petitioner as it contains the lowest quote amongst all the bids;_
_(iv) issue such other writ, order or direction as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.”_
2. Heard Adv.P.K.Suresh Kumar, learned
Senior Counsel appearing for the petitioner, as instructed by Adv.K.P.Sudheer and Adv.Sudheer
Ganesh Kumar, learned Standing Counsel for the KSEBL.
3. Learned Senior Counsel contended that
the KSEBL committed a fundamental flaw by holding that the debarment order of the Madhyanchal Vidyut Vitaran Nigam Ltd had not been settled in the Allahabad High Court. Attention is drawn to Ext.P6, wherein the Allahabad High Court has observed that the order of blacklisting would be subject to the fresh report of the Government
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Laboratory. It is contended that such observation was made since both test reports, based on which the order of blacklisting was passed, were obtained behind the petitioner's back. It is asserted that, the test would reveal that the cables supplied by the petitioner conforms to the standards prescribed by the Madhyanchal Vidyut Vitaran Nigam Ltd. Being so, disqualification of the petitioner, based on a non-existent blacklisting order, is patently illegal. To drive home this contention, the Senior Counsel drew attention to Clause 47 of the instruction to bidders, as per which a bidder firm ineligible to participate in the tender only if it is blacklisted from any power utility in India or by the KSEBL. It is contended that in the instant case, no blacklisting order is in force and rejection of petitioner's bid on that ground cannot therefore be sustained. Relying on the decision in _**Jagdish Mandal v. State of Orissa and**_
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_**others [2007 (14) SCC 517],**_ it is contended that,
even though the scope for judicial review in contractual matters is limited, the writ courts should interfere to prevent arbitrariness,
irrationality, unreasonable, bias and _mala fides_ .
The case at hand is a classic example of irrationality and unreasonableness and hence, this Court is bound to interfere, is the contention.
4. Learned Standing Counsel for the KSEBL
commenced his argument by contending that the KSEBL, as the tender awarding authority, is having the absolute prerogative to refuse or
reject a tender if it is not satisfied with the overall performance of the tenderer. It is
submitted that Ext.P5 judgment and Ext.P6 interim
order of the Allahabad High Court were rendered on the technical ground that the blacklisting order was passed without issuing show cause notice and affording opportunity of hearing to
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the petitioner. The Allahabad High Court did not interfere with the finding of the Paschimanchal and Madhyanchal Vidyut Vitaran Nigam Ltd that, quality of the cable supplied by the petitioner did not conform to the prescribed standard. The decision of the KSEBL cannot also be faulted for the reason that, in Ext.P6 order, the Allahabad High Court had made the blacklisting order subject to the fresh report to be obtained from the Government Laboratory and only restrained the Madhyanchal Vidyut Vitaran Nigam Ltd from displaying the impugned order in the website of the Corporation for three weeks. It is submitted that in a high value contract where the probable amount of contract itself is 49.39 Crores, the Board cannot afford to take the risk of preqaulifying a tenderer whose supply was found to be below standard by two other power utilities.
5. In the case at hand, the general terms and conditions contain a Clause which confers the
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KSEBL with the right to select the bidders based on their financial soundness and capacity, availability of sufficient machinery/equipment and the overall performance relating to earlier contracts executed by them. It is also specified that the decision of KSEBL with respect to the evaluation of pre-qulaification bid will be final and binding on all parties concerned and the KSEBL is not bound to give any reason for the acceptance or rejection of any firm/bidder on any account whatsoever. The position is reiterated by stating that the selection made at the prequalification stage shall be final and no appeal shall lie against the decision. The KSEBL has also reserved the right to disqualify any bidder without assigning any reason whatsoever. No doubt, even with the above Clauses, being an instrumentally of the State, the KSEBL cannot act in an arbitrary or unreasonable manner. The question here is whether the decision of the
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Board at Ext.P8 can be held to be unreasonable, irrational or arbitrary, to the extent of warranting judicial interference. The answer to this question can only be in the negative since, as rightly contended by the Standing Counsel, Ext.P5 judgment and Ext.P6 order are rendered on the technical ground that the blacklisting orders were passed without issuing show cause notice and without affording an opportunity of hearing to the petitioner. A perusal of Exts.P3 and P4 orders of blacklisting shows that the prohibitory orders were passed on finding the cables supplied by the petitioner to be below the prescribed standard. Moreover, by Ext.P6 order, the Allahabad High Court only made the order of blacklisting subject to the fresh report to be obtained from the Government laboratory and restrained the Madhyanchal Vidyut Vitaran Nigam Ltd from displaying the impugned order in its website for a period of three weeks from the date
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of order. The operation of the blacklisting order was not stayed as such. It is also pertinent to note that the petitioner has produced the further orders, if any passed, after obtaining test report from the Government Laboratory. In such circumstances, this Court, in exercise of the power of judicial review, cannot find fault with Ext.P8 decision. As held
in _**Jagdish Mandal**_ , the purpose of judicial review is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound.
For the aforementioned reasons, the writ petition is dismissed.
Sd/-
## **V.G.ARUN JUDGE**
Scl/
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## **APPENDIX OF WP(C) 19076/2021**
## PETITIONER EXHIBITS
|Exhibit P1|TRUE COPY OF RELEVANT PORTIONS OF|
|---|---|
||NOTICE DATED 10.2.2021 ISSUED BY THE|
||1ST RESPONDENT|
|Exhibit P2|TRUE COPY OF LETTER NO XH-AE/SCM/EP|
||90/20-21/KLPE/UG CABLE/3134 DATED|
||9.8.2021 ISSUED BY THE 2ND RESPONDENT|
|Exhibit P3|TRUE COPY OF LETTER DATED 26.4.2019 OF|
||PASCHIMANCHAL VIDYUT VITARAN NIGAM|
||LIMITED (ANNEXED TO EXT P20 ALONG WITH|
||ITS ENGLISH TRANSLATION|
|Exhibit P4|TRUE COPY LETTER DATED 21.6.2021 OF|
||MADHYANCHAL VIDYUT VITARAN NIGAM|
||LIMITED (ANNEXED TO EXT P2) ALONG WITH|
||ITS ENGLISH TRANSLATION|
|Exhibit P5|TRUE COPY OF JUDGMENT DATED 17.12.2019|
||IN WRIT.C NO 40497 OF 2019 PASSED BY|
||HIGH COURT OF ALLAHABAD|
|Exhibit P6|TRUE COPY OF ORDER DATED 2.7.2021 IN|
||WRIT.C NO 14365/2021 OF HIGH COURT OF|
||ALLAHABAD|
|Exhibit P6(A)|TRUE COPY OF ORDER DATED 17.8.2021 IN|
||WRIT.C NO 14365/2021 OF HIGH COURT OF|
||ALLAHABAD|
|Exhibit P7|TRUE COPY OF REPLY DATED 11.8.2021|
||SUBMITTED BY THE PETITIONER BEFORE THE|
||KERALA STATE ELECTRICITY BOARD|
|Exhibit P8|TRUE COPY OF MINUTES OF THE PRE-|
||QUALIFICATION COMMITTEE IN ITS MEETING|
||HELD ON 25.8.2021|
|Exhibit P9|TRUE COPY OF TENDER SUMMARY REPORT|
||DATED 2.9.2021|
|Exhibit P10|TRUE COPY OF STATUS OF THE TENDER|
||UPLOADED FROM THE WEBSITE ON WHICH THE|
||TENDER NOTICE WAS PUBLISHED|
