2025:MHC:564W.P.No.38829 of 2024

IN THE HIGH COURT OF JUDICATURE AT MADRAS

RESERVED ON :24.01.2025

PRONOUNCED ON :25.02.2025

CORAM:

THE HONOURABLE MR.JUSTICE S.SOUNTHAR

W.P.No.38829 of 2024

and WMP.No.42038 of 2024

Ram Taranga Solutions Private Limited,

Rep. By its Managing Director, Ravishankar,

Somashekar, No.20, Ground Floor, 3

rd

Main Road,

11 Block, 2

nd

Stage, BDA Layout,

Naagarabhavi, Bengaluru, Karnataka – 560 072.

... Petitioner

Vs.

NCL India Limited,

Represented by its Secretary, No.135,

EVR Periyar High Road,

Kilpauk, Chennai – 600 010.

... Respondent

Prayer: Writ Petition filed under Article 226 of Constitution of India, to

issue a Writ of Certiorarified Mandamus, calling for the records relating to

the impugned order dated 26.02.2024 in Lr.No.CO CONTS/0013P/50MW

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W.P.No.38829 of 2024

WIND PROJECT/e-conts/2023 passed by the respondent and quash the same

and consequently direct the respondent to forthwith allow the petitioner and

its associated companies to participate in the bidding process of the tenders of

the respondent and its associated companies.

For Petitioner : Mr.Sathish Parasaran

Senior Advocate

for M/s.Chandini Pradeep Kumar

For Respondent : Mr.Kishore Balasubramanian

O R D E R

The writ petition is filed challenging the order passed by the

respondent dated 26.02.2024 blacklisting the petitioner from participating in

the tender floated by the respondent and its subsidiaries for a period of two

years and for further direction to the respondent to allow the petitioner and its

associate companies to participate in the tenders floated by the respondent

and its associates.

2. The petitioner is a company engaged in the business of

renewal energy generation for the past 15 years and has experience in

providing services to multiple Government entities and public sector

undertakings. The respondent is a public sector enterprise engaged in the

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W.P.No.38829 of 2024

business of renewable energy Generation. The respondent issued a tender

dated 04.05.2023 for setting up Wind Power Projects on Pan India basis with

operation and maintenance for ten years. As per the tender notice issued by

the respondent, the bid documents submitted by bidders shall be accompanied

with a Bank Guarantee. As per the tender conditions, any bank guarantee

submitted in physical form, must also be verified through the respondent's

platform for Structured Financial Messaging System (herein after referred to

as SFMS), failing which the bid will be summarily rejected.

3. The petitioner submitted its technical and financial bid as per

the terms of tender along with Bank Guarantee for a sum of Rs.1,91,84,000/-

which was arranged by one Ashok Kumar and Varadarajan. It is claimed by

the petitioner that in the Bank Guarantee submitted by the petitioner, a

typographical error with regard to the date was pointed out by the respondent.

The Federal Bank, who issued a Bank Guarantee, sent an e-mail to the

petitioner dated 26.06.2023 acknowledging the typographical error with

regard to the date. Subsequently, on the basis of the information furnished

by the respondent, the petitioner came to understand that it had been

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W.P.No.38829 of 2024

defrauded by Ashok Kumar and Varadarajan, who furnished it with an

improper Bank Guarantee. Therefore, the petitioner was constrained to file a

police complaint against the said persons on 10.07.2023 with Karnataka

State Police and informed the same to the respondent. Inspite of the action

taken by the petitioner against the person who defrauded the petitioner, the

respondent issued a show cause notice on 25.11.2023 stating that the

petitioner submitted a bogus Bank Guarantee and hence why action should

not be taken against the petitioner by invoking Clause 3.9.1(vii) (e) of

Section 3 of (Volume -IA). The petitioner submitted a reply to the respondent

on 01.12.2023 explaining that bonafidely the petitioner availed the services

of Ashok Kumar and Varadarajan for securing Bank Guarantee to be

submitted along with bid and they defrauded the petitioner by furnishing fake

bid guarantee. The respondent was also informed that the criminal action had

been lodged against the said two persons. Further it was stated by the

petitioner that as per Clause 3.9.1 (vi) of tender, if any bid submitted without

bid guarantees or submitted with part amount etc., the bid shall be summarily

rejected. In the case on hand, the bid guarantee submitted by the petitioner

found to be invalid and therefore as per the Clause 3.9.1 (vi) of tender, the

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W.P.No.38829 of 2024

respondent can only reject the tender submitted by the petitioner and it is not

open to the respondent to invoke Clause 3.9.1 (vii) of tender and impose a

ban of two years. Subsequently, the second respondent without properly

considering the explanation submitted by the petitioner, by impugned order

blacklisted the petitioner for a period of two years from participating in any

of the tenders floated by the respondent or its subsidiaries. Aggrieved by the

same, the petitioner has come before this Court.

4. The learned Senior Counsel appearing for the petitioner

would submit that reading of show cause notice issued by the respondent

would indicate that the respondent came to the conclusion about invalidity of

Bank Guarantee submitted by the petitioner based on non confirmation

through SFMS. The non confirmation of bid Bank Guarantee submitted by

the petitioner will entitle the respondent to invoke Clause 3.9.1 (vi) of tender

and reject the bid summarily. However, non confirmation of Bank Guarantee

submitted by the petitioner will not entitle the respondent to impose two years

ban on the petitioner which will actually have the effect of Civil death. The

learned counsel further submitted that the petitioner bonafidely believed one

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W.P.No.38829 of 2024

Ashok Kumar and Varadarajan, who arranged Bank Guarantee to enable the

petitioner to submit the same along with its bid. When the fraud committed

by the said persons was brought to the notice of the petitioner, it promptly

had taken action against them by making a police complaint. Therefore, there

is no wilful negligence on the part of the petitioner in submitting bogus Bank

Guarantee along with bid and accordingly the imposition of two years ban on

the petitioner is highly disproportionate. The learned Senior Counsel further

submitted that Clause 3.9.1 (vii) (e) only enables the respondent to impose

two years ban if the bidder furnished the bogus certificate. The respondent in

the impugned order clandestinely included the word ''document'' to Clause

3.9.1 (vii) (e) of tender and came to the conclusion, the Bank Guarantee

submitted by the petitioner is a forged document and therefore, said Clause

can be invoked against the petitioner. In other words, it is the submission by

the learned senior counsel that the petitioner has not submitted any forged

certificate along with bid documents and Bank Guarantee is a document

which cannot be treated as a certificate and hence Clause 3.9.1 (vii) (e) of

tender could not be invoked. He further submitted that the impugned order is

a Non-Speaking one and therefore liable to be set aside.

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W.P.No.38829 of 2024

5. In support of his contention, the learned counsel appearing

for the petitioner relied on the following decisions:

(i) Blue Dreamz Advertising Private Limited and another Vs.Kolkata

Municipal Corporation and others reported in 2024 SCC OnLine SC 1896;

(ii) Mohinder Singh Gill and another Vs. The Chief Election

Commissioner, New Delhi and others reported in (1978) 1 SCC 405;

(iii) Kulja Industries Limited Vs. Chief General Manager, Western

Telecom Project Bharat Sanchar Nigam Limited and others reported in

(2014) 14 SCC 731;

(iv) Erusian Equipment Vs. State of West Bengal and another reported

in (1975) 1 SCC 70.

6. The learned counsel appearing for the respondent would

submit that in the Bank Guarantee submitted by the petitioner, e-stamp paper

was purchased on 08.06.2023 and whereas, the Bank Guarantee was executed

on 07.06.2023. Further the signatures appeared in the stamp paper is with the

date of 07.06.2023. After noting the serious discrepancy in the Bank

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W.P.No.38829 of 2024

Guarantee, the respondent by e-mail dated 13.06.2024 requested its

beneficiary bank(State Bank of India, Neyveli Branch) to confirm whether it

has received any Bank Guarantee confirmation through SFMS from Federal

Bank (Bank which said to have furnished Bank Guarantee to the petitioner).

In response, the respondent's beneficiary bank by e-mail dated 14.06.2023

informed that it had not received any such Bank Guarantee confirmation

through SFMS. Subsequently, the respondent sent an e-mail to Federal Bank,

Chandni Chowk Branch, New Delhi (which said to have furnished the Bank

Guarantee to the petitioner). The said e-mail was sent to the e-mail address

referred to in the bank guarantee. However, these emails bounced

back/returned without being delivered, with an endorsement “5.1.0 unknown

address” and “550-5.4.1 Recipient address rejected”. Thereafter, the

respondent obtained e-mail address from the official website of Federal Bank

and sent an e-mail dated 22.06.2023 to Federal Bank, Chandni Chowk

Branch, New Delhi and the respondent received a reply from the said bank

that Bank Guarantee submitted by the petitioner did not belong to their

branch. Therefore, the learned counsel appearing for the respondent

submitted that Federal Bank itself confirmed that the Bank Guarantee

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W.P.No.38829 of 2024

submitted by the petitioner was a bogus one. He further submitted that the

petitioner clearly admitted that the Bank Guarantee submitted by it was a

bogus one. But, however shifted the blame on one Ashok Kumar and

Varadharajan who said to have procured the Bank Guarantee for the

petitioner. By taking this Court to the complaint made by the petitioner to

police, he submitted that in the police complaint, the petitioner clearly

admitted that Ashok Kumar was a co-worker of the complainant (Managing

Director of petitioner). It is further submitted that though in the affidavit

filed in support of the writ petition it was asserted by the petitioner that

Ashok Kumar and Varadharajan furnished forged Bank Guarantee to it and

the petitioner bonafidely believing them submitted the same along with the

bid, the petitioner in it's affidavit failed to reveal that said Ashok Kumar was

it's employee. However, in the police complaint it was clearly admitted by

the petitioner that said Ashok Kumar was it's employee and therefore, the

petitioner is guilty of suppression of material facts and consequently, the writ

petition is liable to be dismissed on the very ground itself.

7. The learned counsel by taking this Court to the affidavit filed

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W.P.No.38829 of 2024

in Annexure 'D' to the bid document submitted that the petitioner clearly

undertook that if any information or document submitted by it was found to

be fabricated/false/incorrect, the bid submitted by it shall be considered null

and void and action may be taken against it including action of

suspension/banning of the petitioner's company as per the tender conditions

and law. Therefore, the petitioner having agreed for action of suspension by

submitting an affidavit is not entitled to turn around and question the

impugned order.

8. The learned counsel further submitted that Clause 3.9.1 (vii)

(e) of tender clearly provides for banning of the bidder who submitted

forged/bogus documents and in the case on hand the petitioner submitted

bogus bank guarantee and therefore, the respondent was justified in invoking

the said Clause. He further submitted that as per Clause 3.30(ii) of tender,

any bidder who furnishes wrong information / manipulated / forged

documents is liable to be disqualified from participating in the tender, for a

period of two years and therefore, the respondent is justified in passing the

impugned order.

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W.P.No.38829 of 2024

9. As far as genuineness or otherwise of the Bank Guarantee

submitted by the petitioner is concerned, it is an undisputed fact, the Bank

Guarantee submitted by the petitioner along with its bid was not a genuine

document. It has been clearly confirmed by the e-mail of the Federal Bank,

Chandni Chowk Branch which said to have issued Bank Guarantee to the

petitioner. The petitioner in its affidavit clearly admitted that based on

information furnished by the respondent it came to understand that the Bank

Guarantee submitted by it was not genuine and hence it preferred a police

complaint against Ashok Kumar and Varadharajan who said to have procured

Bank Guarantee for the petitioner. In this regard, it would be appropriate to

extract the averment in Para No.11 of writ affidavit which reads as follows:

“11. It is submitted that immediately, thereafter, on

10.07.2023, the Petitioner informed the Respondent that they

are taking action against Mr.Varadarajam and Mr.Ashok Kumar

and through its director lodged a complaint with the Karnataka

State Police regarding the fraud committed by Mr.Varadarajan

and Mr.Ashok Kumar.”

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W.P.No.38829 of 2024

10. Therefore, it is the specific case of the petitioner that Bank

Guarantee was procured by Ashok Kumar and Varadharajan and reposing

faith in them, petitioner submitted a Bank Guarantee procured by them along

with its bid. It is submitted by the learned senior counsel appearing for the

petitioner that though there was negligence on the part of the petitioner, in not

verifying the genuineness of the Bank Guarantee procured by the petitioner's

agents, the same cannot be treated as wilful negligence, when petitioner was

not aware of real facts at the time of submission of bids. The submission

made by the learned senior counsel appearing for the petitioner regarding the

bonafide belief of the petitioner cannot be accepted for the simple reason that

the above said Ashok Kumar is none other than the employee of the

petitioner. A perusal of the police complaint preferred by the petitioner

would indicate that complaint was lodged by one Ravishankar, Managing

Director of petitioner's company. In the complaint, said Ravi Shankar has

stated that the above mentioned Ashok Kumar is his co-worker. The relevant

averment in the complaint reads as follows:

“The complainant Sri.Ravi Shankar .S. came

to the station and filed a complaint, the summary of the

complaint is that, the complainant is working as Managing

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W.P.No.38829 of 2024

Director of AMPOLT Electrical Contractor Company.

One Sri.Vardarajan Chinnaswamy owner of the JOY

ENTERPRISES acquainted with complainant through

Ashok Kumar, the Co-worker of the complainant. The said

person said that he has got Bank Guarantee Limit and he

assured that, out the said guarantee he will give Bank

Guarantee for a sum of Rs.1,91,84,000/- on behalf of

AMPOLT Company in the Name of NLC LIMITED

Company owned by the Government of India. Accordingly,

he gave original copy of the Bank Guarantee on dated:

12.06.2023. Later on, when scrutinized the same by NLC

LIMITED Neyveli, the Bank Guarantee is found to be

bogus.”

11. The police complaint was lodged by the petitioner only

against Varadharajan and not against Ashok Kumar, who is the employee of

the petitioner's company as per the averment in the complaint. However, in

the affidavit filed in support of the writ petition, the petitioner asserted as if,

the police complaint was laid against both Ashok Kumar and Varadharajan

who were 3

rd

parties. Therefore, it is clear, one of the employees of the

petitioner company arranged for Bank Guarantee with a help of Varadharajan.

When the petitioner submits a bid along with Bank Guarantee it has a duty to

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W.P.No.38829 of 2024

verify the genuineness of Bank Guarantee procured and submitted by it.

When the bogus Bank Guarantee submitted by the petitioner is procured by

petitioner's own employee, the submission made by the learned senior

counsel for the petitioner that the petitioner's company was not aware of its

invalidity and it bonafidely believed the above said Ashok Kumar and

Varadharajan is not acceptable to this Court. In any event, the petitioner is

liable for the action of its agent who procured the Bank Guarantee on its

behalf. Therefore, the contention of the petitioner that without knowing the

forged nature of the Bank Guarantee it was submitted by the petitioner is not

acceptable to this Court.

12. It was vehemently contended that the word 'document' is not

available in Clause 3.9.1 (vii) (e) of tender and the same was conveniently

included by the respondent in the impugned order and therefore the impugned

order gets vitiated. Clause 3.9.1 (vii) (e) of tender reads as follows:

“(vii) The Bid Guarantee shall be

forfeited and the bidder will be banned for two

years for breach of the following condition(s);

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W.P.No.38829 of 2024

............

(e) The bidder furnished Forged/Bogus

Certificates.”

13. A reading of above Clause would make it clear that in case

of submission of forged/bogus certificate, the bidder shall face two

consequences, firstly, the bid guarantee will be forfeited and secondly, the

bidder is liable to be banned for two years and by invoking this Clause the

two years ban has been imposed by the respondent. Now the question has to

be decided is whether the expression forged/bogus certificate would include

bogus documents. It was vehemently contended by the learned senior

counsel that relevant clause does not include the expression 'document' and

the same has been clandestinely included in the impugned order. The word

certificate is defined by Merriam webster dictionary as follows:

“A document containing the certified

statement especially as to the truth of something.”

The Oxford dictionary defines the word 'certificate' as follows:

“an official document that may be used to

prove that the facts it states are true;”

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W.P.No.38829 of 2024

14. Therefore, as per the dictionary meaning the word

'certificate' includes a document because it has been defined as documents

containing a certified statement especially as to the truth of something

contained therein. In the Bank Guarantee submitted by the petitioner, the

Federal Bank, Chandni Chowk Branch, New Delhi, undertook to pay

immediately on demand by Neyveli Lignite Corporation India Limited, a sum

of Rs.1,91,84,000/-. The word 'certificate' is also defined as a document

evidencing ownership of an item or fulfilment of legal requirements.

Therefore, the Bank Guarantee certified by Federal Bank is a document

which will fit into the definition of the word 'certificate'. Therefore, the

respondent is not at fault in including the word 'documents' along with

certificates in the impugned order. Even in the absence of the inclusion of

the word 'documents' in the impugned order, the word 'certificate' which is

already available in relevant clause, includes a document as per the

dictionary meaning and therefore, the respondent is fully justified in invoking

Clause 3.9.1(vii) (e) of tender for imposing ban of two years on the petitioner

for its fault of submitting a bogus Bank Guarantee along with its bid.

15. The respondent issued a show cause notice mentioning its

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W.P.No.38829 of 2024

proposal to invoke Clause 3.9.1(vii) (e) of tender for imposing a ban on the

petitioner. The petitioner submitted its reply and thereafter the impugned

order was passed clearly referring to the e-mail of Federal Bank, disowning

the Bank Guarantee submitted by the petitioner and non receipt of SFMS

confirmation. The explanation offered by the petitioner that it was cheated by

above mentioned Ashok Kumar and Varadharajan was found to be

unsatisfactory, therefore, the impugned order was passed by invoking Clause

3.9.1(vii) (e). Therefore, before passing the impugned order, sufficient

opportunity has been given to the petitioner and hence there is no violation of

natural justice principles. Submitting a forged/bogus Bank Guarantee, in

order to fulfil the tender conditions can not be treated as an ordinary breach

of contract. As admitted by the petitioner in the police complaint, the above

mentioned Ashok Kumar is none other than the employee of the petitioner. In

such circumstances, the petitioner cannot disown him and say it was carried

away by the action of third parties. In the light of the said position, the

judgments pressed into service by the learned senior counsel for the petitioner

will not advance their case.

16. As discussed earlier, Clause 3.9.1 (vii) (e) of tender provides

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W.P.No.38829 of 2024

for imposition of two years ban in case of submission of bogus/forged

certificate. This Court has already came to the conclusion that the expression

'certificate' includes a document and therefore, the respondent is justified in

invoking said Clause. Further, as rightly pointed out by the counsel for the

respondent, the petitioner submitted an affidavit in annexure “D” agreeing for

any action including suspension/banning, in case any information or

document submitted by it was found to be false or fabricated or incorrect.

Therefore, the impugned order blacklisting the petitioner for a period of two

years from participating in the tender floated by the respondent and its

subsidiaries is justified, having regard to the seriousness of the act committed

by the petitioner in submitting a forged document along with bid. Therefore,

this Court finds no reason to interfere with the impugned order and

accordingly, this writ petition stands dismissed. No costs. Consequently,

connected miscellaneous petition is closed.

25.02.2025

Index : Yes

Speaking order: Yes

Neutral Citation: Yes

ub

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W.P.No.38829 of 2024

To

NCL India Limited,

Represented by its Secretary, No.135,

EVR Periyar High Road,

Kilpauk, Chennai – 600 010.

S.SOUNTHAR, J.

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W.P.No.38829 of 2024

ub

Pre-delivery order made in

W.P.No.38829 of 2024

25.02.2025

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