1. Loss of public revenue if coal block not operated properly: Delhi High Court

Loss of public revenue if coal block not operated properly: Delhi High Court

Delhi High Court has upheld the decision of NTPC Ltd rejecting the techno-commercial bid of a company for operation and development of Dulanga coal mine in Odisha, observing that there would be loss of public revenue if a coal block is not operated properly.

By: | New Delhi | Updated: October 4, 2016 6:24 PM
The bench held that "no unfair treatment" was given to the petitioner and the decision was in conformity with "larger public interest of selecting the most suitable proposer/mine operator on the basis of competitive bidding". (Source: Reuters) The bench held that “no unfair treatment” was given to the petitioner and the decision was in conformity with “larger public interest of selecting the most suitable proposer/mine operator on the basis of competitive bidding”. (Source: Reuters)

Delhi High Court has upheld the decision of NTPC Ltd rejecting the techno-commercial bid of a company for operation and development of Dulanga coal mine in Odisha, observing that there would be loss of public revenue if a coal block is not operated properly.

A bench of Justices B D Ahmed and Ashutosh Kumar dismissed the petition of Montecarlo Ltd, a firm engaged in the business of mining of coal and lignite, which challenged NTPC’s August 29, 2016 communication rejecting its techno- commercial bid for operation and development of the coal mine.

The bench held that “no unfair treatment” was given to the petitioner and the decision was in conformity with “larger public interest of selecting the most suitable proposer/mine operator on the basis of competitive bidding”.

“A coal block/mine, if not developed and operated properly, would result in loss of public revenue and would not be in the interest of anyone,” the bench said.

“The decision of rejecting the proposal of the petitioner (Montecarlo Ltd), therefore, passes the litmus test of legal reasonableness and cannot be subjected to any interference on the slender ground of non use of the word blasting along with drilling in the QR (qualifying requirements) of the tender document,” it said.

Montecarlo Ltd had approached the high court challenging the NTPC communication, alleging it was unreasonable and contrary to the terms of tender papers. It said NTPC had issued separate invitation for bids for development and operation of three coal mines — Dulanga coal block, Chatti Bariatu and Talaipalli — in Odisha.

The company claimed it possessed the required experience in drilling but NTPC rejected its proposal on the ground that it did not meet the qualifying requirements in this regard.

It alleged that in the tender document, the qualifying requirement was about bidder’s experience only in drilling, excavation and hauling, and not blasting or drilling for blasting purposes as claimed by NTPC.

NTPC countered Montecarlo’s claim and told the court that experience in drilling for the purpose of blasting was a necessary qualifying requirement.

In its judgement, the bench said, “we are firmly of the view that the decision arrived at by the respondent (NTPC) is neither malafide nor intended to favour anybody and decision-making process is not at all arbitrary or irrational.”

“That apart, the aforesaid decision of the respondent in rejecting the proposal of the petitioner as being technically unresponsive does not adversely affect public interest; rather it is in accord with public interest that a coal mine is fully operated and developed by the most suitable awardee of a contract, to be chosen from a number of proposers, … thereby obviating the chances of lack of competition,” the court said.

It also observed that NTPC’s technical evaluation committee had gone into the feasibility and viability of full operation, while rejecting the firm’s proposal.

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