There is no need for interference when decision of the respondents to reject tender is well considered, based on a study, understanding of the relevant facts and legal opinion : Delhi High Court
Conflict of Interest is a complicated arena to justify and prove one’s true interests and intents. Therefore, the party that is questioning has the right to make a decision after sufficient research and understanding. This was held in the judgment passed by a two-judge bench comprising HON’BLE MR. JUSTICE VIPIN SANGHI HON’BLE MR. JUSTICE JASMEET SINGH, in the matter of STERLITE GRID 20 LIMITED V. PFC CONSULTING LIMITED &amp; ANR [W.P.(C) 5768/2021 &amp; CM APPLs.18096/2021 &amp; 18781/2021], dealt with an issue where the petitioner filed a petition seeking that the court allows the Petitioner to participate in bidding process of the respondents. The Petitioner company (SGL 20) is a wholly owned subsidiary of Sterlite Power Transmission Limited. SPTL is a global developer of power transmission infrastructure with projects in India and Brazil. The commercial objectives of IndiGrid are, inter alia, to plan, promote, invest, own, construct, process, develop, maintain, manage, repair, accumulate, store, trade, lease, permit, license and operate all kinds of assets, designs, technologies and resources in relation to transmission of power, and generation and/or transmission of renewable energy. The Respondent No. 1 is PFC Consulting Limited. It is a wholly owned subsidiary of Power Finance Corporation Limited, which is a Schedule-A, Nav-Ratna Public Sector Enterprise. The Respondent No. 2 is U.P. Power Transmission Corporation. UPPTCL is engaged in acquiring, establishing and operating electrical transmission lines and network and associated sub-stations and connected ancillary services in the State of Uttar Pradesh. The Respondent No. 1 issued the RfQ (Request for Qualification), inviting responses from prospective bidders for shortlisting the bidders for the next stage of bidding i.e. Request for Proposal, as part of the process of selection of the prospective Transmission Service Provider (“TSP”) in accordance with the Tariff Based Competitive Bidding Guidelines for Transmission Service and Guidelines for Encouraging Competition in Development of Transmission Project issued by the Government of India, Ministry of Power. The Petitioner submitted its response to the RfQ. The Petitioner sought qualification on the basis of the technical and financial qualifications of its affiliate, Talwandi Sabo Power Limited (“TSPL”) for the purpose of meeting the qualification requirements under the RfQ. The Petitioner argued that the impugned decision is arbitrary, illegal and violative of Article 14 and 19(1)(g) of the Constitution of India. The Petitioner submitted that there was no “Conflict of Interest” between the Petitioner and the IGL. After hearing both the parties The Hon’ble Delhi High Court dismissed the petition and held that the respondent was not called upon to examine the situation at hand with a microscopic lens, and determine whether, as a matter of fact, information was exchanged. All that the respondent was required to examine was, whether, the two companies were in a position so as to have access to information of the other company with regard to their bids. In the light of the discussion above, we are of the view that the conclusion drawn by the respondent that both companies were in a position to access information of each other, was reasonable, well informed and justified.
 10 IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.(C) 5768 2021 & CM APPLs. 18096 2021 & 18781 2021 Pronounced on: Reserved on: 26.07. 2021 STERLITE GRID 20 LIMITED ..... Petitioner Through: Mr. Saurabh Kirpal Sr. Adv. with Mr. Gaurav Juneja Mr. Aayush Jain Ms. Swastika Chakravarti Advs. PFC CONSULTING LIMITED & ANR. ..... Respondents Through: Mr. Tushar Mehta Ld. SGI with Mr.Vijay Kundal Mr. Nitish K. Sharma Advs. HON BLE MR. JUSTICE VIPIN SANGHI HON BLE MR. JUSTICE JASMEET SINGH JUDGMENT OF THE COURT The present writ petition has been filed by the Petitioner seeking amongst others the following substantial reliefs: Issue a writ of Mandamus or any other appropriate writ(s) order(s) direction(s) directing the Respondent No. 1 to produce the entire record in so far as it pertains to the Impugned Decision dated 18.05.2021 of the Respondent No. W.P.(C) 5768 2021 1 to reject disqualify the bid submitted by the Petitioner in the tender to select a Transmission Service Provider to for Construction of 400 220 132kV GIS Substation Mohanlalganj with associated 400kV lines and other 765kV and 400kV LILO lines at 765kV GIS Substation Rampur and 400kV LILOat 400kV GIS Substation Sector 123 Noida Issue a writ of Certiorari or any other appropriate writ(s) order(s) direction(s) quashing the Impugned Decision dated 18.05.2021 taken by the Respondent No. 1 in respect of the above tender to the extent that the bid submitted by the consequently issue a direction to the Respondent No. 1 to allow the Petitioner to participate in the abovementioned bidding process ” Briefly stated the facts giving rise to the filing of the present writ petition are as follows: i) The Petitioner companyis a wholly owned subsidiary of Sterlite Power Transmission LimitedIndiGrid 1 Limitedis a company earlier known as Sterlite Grid 2 Limited which was subsequently acquired by IndiGrid Trust in June 2019. The commercial objectives of IndiGrid are inter alia to plan promote invest own construct process develop maintain manage repair accumulate store trade lease permit license and operate all kinds of assets designs technologies and resources in relation to transmission of power W.P.(C) 5768 2021 and generation and or transmission of renewable energy. The Respondent No. 1 is PFC Consulting Limitedwhich is a Schedule A Nav Ratna Public Sector Enterprise. The Respondent No. 2 is U.P. Power Transmission Corporation Limited PTC Mohanlalgunj dated 09.02.2021 UPPTCL notified the Respondent No. 1 as the Bid Process Coordinator for the purpose of selecting a Transmission Service for Construction of 400 220 132kV GIS Substation Mohanlalganj with associated 400kV lines and other 765kV and 400kV LILO lines at 765kV GIS Substation Rampur and 400kV LILOat 400kV GIS Substation Sector 123 Noida on build own operate and maintain basis. The Respondent No. 1 accordingly issued the RfQ on 12.02.2021 inviting responses from prospective bidders for qualifying shortlisting the bidders for the next stage of bidding i.e. Request for Proposal as part of the process of selection of the prospective Transmission Service Providerin accordance with the „Tariff Based Competitive Bidding Guidelines for Transmission Service‟ W.P.(C) 5768 2021 and „Guidelines for Encouraging Competition in Development of Transmission Projects‟ issued by the Government of India Ministry of The Petitioner submitted its response to the RfQ on 15.03.2021. The Petitioner sought qualification on the basis of the technical and financial qualifications of its affiliate Talwandi Sabo Power Limited for the purpose of meeting the qualification requirements under the RfQ. IGL1 also submitted its response to the RfQ in joint venture with Techno Electric and Engineering Company Ltd. Vide letter dated 07.04.2021 addressed to the Petitioner Respondent No. 1 sought certain additional information documents clarification. Vide the said letter the Respondent No. 1 sought clarification with regard to the relationship between the petitioner and IGL 1. 10) The clarifications sought by Respondent No.1 from the petitioner were as under: IGL 1 had claimed technical expertise of NRSS XXIX Transmission Limited which was earlier owned by Sterlite Power Grid Ventures Limitedand subsequently acquired by the India Grid Trustin June 2019ii) As per the balance sheet of IGL 1 for F.Y. 2019 2020 SPGVL was mentioned as shareholder of IGL 1 till 31.03.2020 iii) Sterlite Grid 20 Limited i.e. the Petitioner herein was the wholly owned subsidiary of SPGVL and had submitted a separate response to the RfQ iv) From the balance sheet of NRSS XXIX the Project Management Fee and Investment Management Fee paid to W.P.(C) 5768 2021 SPGVL qualified as a „Related Party Transaction‟ v) From the response submitted it appeared that SPGVL was the shareholder for both IGL 1 and SGL 20 which amounted to a relationship in terms of the definition of Conflict of Interest under the RfQ.” 11) The Petitioner was called upon to clarify the relationship between the Petitioner IGL 1 SPGVL and IGT along with documentary evidence to prove that there was no conflict of interest between the Petitioner and IGL 1. 12) On 08.04.2021 the Petitioner addressed an e mail to the Respondent No. 1 seeking time upto 13.04.2021 for the submission of its clarifications. However on 09.04.2021 the Respondent No.1 directed the Petitioner to submit its responses latest by 11:00 AM on 12.04.2021. In compliance the Petitioner vide letter dated 12.04.2021 clarified that it was incorporated as a wholly owned subsidiary of SPGVL. SPGVL was earlier a wholly owned subsidiary of SPTL but later got merged with SPTL pursuant to the approval of a scheme of merger between SPTL and SPGVL by the National Company Law Tribunal Mumbai on 15.11.2020. In terms thereof all the assets and liabilities of SPGVL became the assets and liabilities of SPTL. It was further clarified that Twin Star Overseas Limited a company incorporated under the laws of Mauritius holds 71.38% of equity stake in SPTL and Volcan Investment Limited a company incorporated under the laws of Bahamas holds 100% equity stake in Twin Star Overseas Limited. Thus Volcan Investment Limited was the Ultimate Parent Company of the Petitioner SGL 20. The Petitioner also provided the following responses to the specific queries clarifications sought by the Respondent No. 1 along with the relevant documents: W.P.(C) 5768 2021 IGL 1 was earlier a subsidiary of SPGVL and was transferred by SPGVL to IGT in June 2019. Thus as on 31.03.2020 IGL 1 ceased to be a subsidiary of SPGVL since it was already transferred way back in June 2019. Moreover as on 02.08.2019 IGT held 100% shares in IGL 1SGL 20 i.e. the Petitioner was 100% owned by SPTL and had submitted a proposal for the bid on 15.03.2021. Moreover none of SGL 20‟s affiliate parent ultimate parent as defined in the RfQ had submitted a separate response to the RfQ iii) Transfer of IGL 1 with NRSS XXIX was completed in June 2019. Post June 2019 SPGVL and NRSSXXIX ceased to be related parties under the provisions of the Companies Act 2013 iv) That neither the Petitioner nor any of its parent companies had any relationship with IGL 1 or any of its parent companies either directly or through a common company that put them in a position to access confidential information or influence the bidding of each other That SGL 20 and IGL 1 were not affiliates. vi) That SPTL holds 0.35% stake in IGT.” 14) Respondent No. 1 after scrutinising the clarifications additional information submitted by the Petitioner sought further clarification on 12.04.2021 with respect to the Petitioner‟s response dated 12.04.2021. The Respondent No. 1 sought the following additional information latest by 3:00 PM on 13.04.2021: “(i) Details of balance shareholding of SPTL given that 71.38% equity was held by Twin Star Overseas Limited ii) Board members of Volcan Investment Limited Twin Star Overseas Limited SPTL the Petitioner NRSSXXIX and the W.P.(C) 5768 2021 Trustees Key Managerial Personnel of IGT ” 15) The information as sought by Respondent No. 1 was duly provided by the Petitioner on 13.04.2021. As regards the details of Board Members Trustees of NRSS XXIX and IGT it was stated that the Petitioner had no access to the information pertaining to these entities. It was confirmed that none of the representatives of the Petitioner was on the board of NRSS XXIX IGL 1 or IGT. 16) On 15.04.2021 the Respondent No.1 further sought additional information from the Petitioner to be provided latest by 16.04.2021: “(i) List of Directors Key Managerial Personnel of Petitioner ii) List of Directors of all the parent affiliate companies of the Petitioner e.g. Directors of SPTL Twin Star Overseas Limited Volcan Investment Limited etc. iii) Key Managerial Personnel of the parent affiliate companies of the Petitioner.” 17) The Petitioner vide email dated 16.04.2021 and 20.04.2021 duly provided the information as sought by respondent No.1. 18) Even though no further clarifications were sought by the Respondent No. 1 the Petitioner on its own addressed a letter dated 11.05.2021 to the Respondent No.1 requesting for a personal hearing to present its responses on the observations of the Respondent No. 1 and clarify the issue in further detail. 19) The Petitioner has stated in the petition and also argued before us: A. As on 02.08.2019 IGT held 100% shares in IGL 1. IGT is W.P.(C) 5768 2021 registered with the Securities and Exchange Board of Indiaas an Infrastructure Investment Trust under Regulation 3(1) of the SEBI Regulations 2014of IGT and as mentioned earlier holds a nominal 0.35% stake in IGT. B. Indigrid Investment Managers Limited(earlier known as Sterlite Investment Managers Limited) the „Investment Manager‟ of IGT in terms of InvIT Regulations. SPTL holds 40% stake in IIML and the Managing Director of SPTL is also a Non Executive Director on the Board of IIML as a nominee of SPTL. A Bidding Committee was constituted by IIML in August 2020 specifically for taking bidding and investment decisions. IIML made sure that SPTL‟s nominee was excluded from the Bidding Committee to preserve confidentiality and avoid any „access‟ to information. As a result SPTL‟s nominee was not even on the Bidding Committee which was responsible for any bid decisions on behalf of IGT its subsidiaries. There could not have been any question of a Conflict of Interest between the IGL 1 Consortium and the Petitioner in these circumstances. In fact even the Code of Conduct prescribed under Schedule VI of the InvIT Regulations mandates that the InvIT and the parties thereto shall try to avoid conflicts of interest as far as possible in managing the affairs of the InvIT and keep the interest of all unit holders paramount in all matters. W.P.(C) 5768 2021 C. The IGL 1 Consortium withdrew its bid response to the Project on 18.05.2021. Thus the question of conflict of interest in any event did not survive. 20) On the same day as IGL 1 Consortium withdrew its bid response i.e. 18.05.2021 Respondent No.1 issued the impugned decision stating: “…The bids of the following two bidders are not qualified at RfQ stage for participation in next stage of bidding i.e. RfP stage as both bidders having a conflict of interest which puts them in a position to have access to information of the other Bidder and as per clause 2.1.5 of the RfQ the bids of both bidders are rejected: 1. IndiGrid 1 Limited & Techno Electric and Engineering Company Ltd. Consortium 2. Sterlite Grid 20 Limited” 21) The Petitioner has argued that the impugned decision is arbitrary illegal and violative of Article 14 and 19(1)(g) of the Constitution of India. The Petitioner submits that there was no “Conflict of Interest” between the Petitioner and the IGL 1. The Petitioner further submits that Clause 2.1.5 of the RfQ categorically defines “Conflict of Interest” and the Petitioner and IGL 1 were in no way in a position to access each other‟s commercial information or influence each other‟s commercial decisions. It has been further submitted that the Bid Evaluation Committee BEC) on 28.04.2021 had taken a decision to reject the Petitioner‟s response. However the Board of Respondent No.2 took cognizance of the same after 2 weeks i.e. on 15.05.2021 clearly showing that the justification offered by Respondent No.1 is false suspicious and concocted. The said decision was communicated to the Petitioner only on 18.05.2021. W.P.(C) 5768 2021 It is further submitted that after withdrawal of bid by IGL 1 Consortium there was no “Conflict of Interest” and the withdrawal of bid by IGL 1 on 17.05.2021 was not taken into account before issuance of the impugned decision. 2.1.5 of RfQ is misplaced. 24) The Petitioner submits that the reliance of Respondent No.1 on Clause It has further been submitted that the Bidding Committee was formed by IIMLin August 2020 for taking bidding and investment decisions and SPTL‟s nominee was specifically excluded from the Bidding Committee formed by IIML to preserve confidentiality and avoid any access to information. As a result SPTL‟s nominee was not even in the Bidding Committee responsible for any bid decisions on behalf of the IGT its subsidiaries. There could not have been any question of a Conflict of Interest between the IGL 1 Consortium and the Petitioner in these circumstances. 26) The respondents have filed a counter affidavit and stated in their response that the bids were opened online at MSTC portal on 15.03.2021 at 15:30 hrs in the presence of the representatives of the Bidders who wished to be present. Simultaneously the hard copies of RfQ responses were also opened by BPC. Thereafter on evaluation of the RfQ received from IGL 1 & Techno Electric and Engineering Company Limited Consortiumthe Respondent No. 1 found that SPGVL was mentioned as a shareholder of IGL 1 till 30.03.2019. Further as per the Financial Statements of IGL 1 from June 2019 the shares which were held by SPGVL in IGL 1 have been transferred to India Grid Trust5768 2021 27) On evaluation of the RfQ received from the Petitioner BPC found that SPGVL is a 100% shareholder in the Petitioner and subsequently SPGVL got merged into SPTL in November 2020. It is in this context that various queries and clarifications were sought by Respondent No.1. Similar queries were also put to IGL 1 on 07.04.2021 12.04.2021 and 15.04.2021. 28) After examining the reply by IGL 1 it transpired that Mr. Pratik Pravin Agarwal is a Non Executive Director of the Indigrid Investment Managers Limited and also the Managing Director of SPTL. It was only then that IGL 1 disclosed the factum of Mr. Pratik Pravin Agarwal being Non Executive Director of IIML and also disclosed that SPTL is a sponsor of IGT. It has been further stated that the Energy Department Govt. of UP vide office order dated 04.05.2018 had intimated the constitution of Bid Evaluation Committee for transmission projects to be taken by Respondent No. 2. The BEC is constituted by the State Government in case of intra state transmission of electricity. The BEC comprises of the members who possess the technical and financial expertise for bid evaluation. The composition of the BEC has been disclosed which comprises of the following: “i) Chairman UPPTCL Lucknowii) Managing Director UPPTCL Lucknow Sh. Senthil Pandian C. IAS) iii) Managing Director UPPCL Lucknow DirectorUPPTCL LucknowDirectorUPPTCL LucknowW.P.(C) 5768 2021 vi) Director UPPTCL Lucknow DirectorUPPTCL Lucknowviii) Director UPPTCL Lucknow DirectorUPPTCL Lucknowxi) One member from CEACEA")” 30) The BEC in its meeting dated 15.04.2021 reviewed the responses to the RfQ submitted by the 8 bidders in the context of the provisions of RfQ and decided that the following 5 bidder met all the qualification and compliance requirements as per the RfQ: “i) Power Grid Corporation of India Limited Torrent Power Limited iii) Renew Transmission Ventures Private Limited iv) DBL Transmission Private Limited Kalpataru Power Transmission Limited” 31) As regards the remaining 3 bidders the BEC advised the BPC as “i) Adani Transmission Limited: To seek clarification from the bidder w.r.t. board resolution authorizing Mr. Anil Kumar Sardana MD & CEO to sign the specific format of the bid IndiGrid 1 Limited and Sterlite Grid 20 Limited: To legally examine the aspects of common directors on the boards of “IndiGrid 1 Limited” W.P.(C) 5768 2021 “Sterlite Grid 20 Limited” and their parent companies with respect to the provisions of RfQ.” 32) Consequently based on the examination of the issue the BEC in its meeting dated 28.04.2021 decided on the rejection of bids of the Petitioner and IGL 1. BEC before taking the decision sought legal opinion from M s 33) The grounds for rejection given by the Committee against the Petitioner are as under: As per the definition of RFQ “Conflict of Interest A bidder shall be considered to be in a Conflict of Interest with one or more Bidders in the same bidding process if they have a relationship with each other directly or through company that puts them in a position to have access to information about or influence the Bid of another Bidder.” b. Mr. Pratik Agarwal being the Non Executive Director of Investment Manager of IGT which is a holding company of Indigrid 1 Limited and Managing Director of Petitioner’s holding company is in a position to have access to information of both the bidders. It qualifies under “conflict of interest” as both the bidders have a relationship with each other through Mr. Pratik Agarwal. As per Clause 2.1.5 of the RFQ if any bidder is having a Conflict of interest with other bidders participating in the same bidding process the bids of all such bidders shall be rejected.34) Thereafter the board of Respondent No. 2 took cognizance of the decision of BEC on 15.05.2021 and informed the Respondent No. 1 of the same on 17.05.2021 and accordingly the Respondent No. 1 informed the W.P.(C) 5768 2021 qualification status of the bidders at the RfQ level to all the bidders and uploaded the same on the website on 18.05.2021. 35) The respondents point out that the Petitioner sought to contend that Indigrid 1 Limited vide its letter dated 18.05.2021 had informed the Respondents that they are withdrawing their proposal in response to RfQ and their submission of RfQ should not be treated as a qualification citing COVID 19 affecting their team members. In response the Respondent No. 1 replied vide its letter dated 27.05.2021 to the Petitioner stating that: “a. The withdrawal of the Bid by IGL 1 has been done on 18.05.2021 which is after the decision on qualification status had already been taken by the BEC on 28.04.2021 so the same becomes infructuous and cannot be taken into consideration. b. Further there is no provision in the RfQ document for withdrawal of Bid. Therefore the letter of IGL 1 Limited dated 18.05.2021 is void.” 36) The Respondent has further stated that the project is of national importance and the timeline of the bidding process is underway as follows: Time from Zero Actual Anticipated timeline for present UPPTCL Project Publication of RFQ Zero Date Submission of Responses of 30 days Short listing based on 60 days Issuance of RFP Pre Bid Meeting W.P.(C) 5768 2021 Bid clarification conferences Final clarification and revision of RFP 85 days Technical and price bid submission 120 days e reverse bidding after opening of initial Price Offer Short listing of bidder and issue of LOI 127 days 135 days 13.08.2021 Signing of Agreements 145 days And on the date of hearing the technical and price bid submission were 37) The respondents further submit that keeping in view the increasing electricity consumption load in the near future in Lucknow & its adjoining area the substation at Mohanlalganj is urgently required to be installed to take care of the overloading of the existing substation and lines to provide uninterrupted electricity supply. 38) We have heard learned senior counsels for the parties and the case laws cited by them. Analysis and Conclusion of the Case: The short point that arises for our consideration is: whether the reasoning adopted by BEC and subsequently confirmed by Respondent No.2 for disqualifying the petitioner on the ground of there being conflict of interest between the two bidders viz. the petitioner and IGL 2 is reasonable and rational based on the relevant information provided by the parties and not hit by malafides arbitrariness and the Wednesbury principle of unreasonableness. W.P.(C) 5768 2021 At this stage we may notice the relevant clauses of the Request for Qualification. Clause 2.1.5 of the RfQ reads as under: “A Bidder shall submit only one response in the same bidding process either individually as Bidding Company or as a Member of a Bidding Consortium “Conflict of Interest” has also been defined in the RfQ as under: “A Bidder shall be considered to be in a Conflict of Interest with one or more Bidders in the same bidding process if they have a relationship with each other directly or through a common company that puts them in a position to have access to information about or influence the Bid of another Bidder ” underlining supplied) On the basis of the information provided by the petitioner the respondents have graphically depicted the inter se relationships between the different corporate entities. There is no dispute raised by the petitioner to the said tabulation in so far as the structure relationships as depicted is concerned though the petitioner claims that the said Mr. Pratik Pravin Agarwal who was found to be a common Director on the Board of Directorsof STPL and the BOD of IIML was not involved in the decision making process of IGL 1 with regard to bidding and investment. The relationship between Petitioner and IGL 1 highlighting the position of Mr. Pratik Pravin Agarwal in IIML and SPTL is as under: W.P.(C) 5768 2021 W.P.(C) 5768 2021 1. During course of arguments it has been submitted by the learned Solicitor General that the fact that SPTL held 40 % share in IIML was not known to the Respondent No.1 at the time of rejection of the bid of the Petitioner and hence did not form part of the decision making process. Clause 2.1.5 categorically states that in the event of “Conflict of Interest” the bids of the bidders shall be rejected. The bid of the Petitioner has been rejected due to conflict of interest between the Petitioner and IGL Conflict of interest as conceptualized in the RfQ is wide and encompassing. The key words used in the “Conflict of Interest” Clause are “relationship with each other” and “that puts them in a position to have access to information about”. The scope of judicial scrutiny in disputes arising out of rejection award of public tenders is limited. We cannot examine the decision on its merits. We are primarily concerned with the decision making process. Thus we are only to see whether the decision of BEC as affirmed by the Respondent is reasonable non arbitrary and if mala fides are alleged whether the same is mala fide. Thus we need to examine whether the decision of the respondents to invoke Clause 2.1.5 is a plausible and reasonable view. If it is then no interference would be called for. Coming back to the facts of the present case to determine whether the petitioner and IGL 2 had conflict of interest on the advice of the BEC legal opinion was sought by the respondent from M s SRGR to the following “i) As per the provisions of the RfQ is there a conflict of interest W.P.(C) 5768 2021 between “IndiGrid 1 Ltd. Whether there is a direct or indirect relationship between IndiGrid 1 Ltd. And Sterlite Grid 20 Ltd. which is such that it puts them in a position to have access to information about or influence the Bid of the other iii) Access of information by Mr. Pratik Pravin Agarwal who is Non Executive Director of the Board of IndiGrid Investment Management Limited and also Managing Director of SPTL holding company of Sterlite Grid 2 Limited). iv) What are the provisions as per the RfQ if there is a conflict of interest between two bidders ” 10. On the advice of the Legal Advisor additional clarifications were also sought from IGL 1 and Sterlite Grid 20. The Legal Advisor opined as under: “5. BPC informed that on the advice of Legal Advisor additional clarifications were sought from IndiGrid 1 Limited and Sterlite Grid 20 Limited. The responses received from both the bidders were examined by the Legal Advisor. The brief of the opinion is given below: As per the information submitted by IndiGrid 1 Limited and Sterlite Grid 20 Limited it may be seen that the two bidders are not “Affiliates” within the meaning of the RFQ document. SPTL holds 0.35% unit in the IndiGrid Trustwhich is less than the threshold required as per the RFQ document. As per information provided by Sterlite Grid 20 Ltd. Mr. Pratik Agarwal is the Managing Director of SPTL which is the holding companyof Sterlite Grid 20 Ltd. iii) As per information provided by IndiGrid 1 Limited India Grid Trust holds 100% equity in IndiGrid 1 Limited5768 2021 Consortium). India Grid trust is a trust established Investment Trusts) under SEBI Regulations 2014. Further as per SEBI regulations IndiGrid Investment Management Limitedhas been appointed as the Investment Manager of India Grid Trust and Mr. Pratik Agarwal is the Non Executive Director of IIML. As per regulation 10 of SEBI Regulations the rights the present Memorandum) of the Investment Manager inter alia investment manager shall make investment decisions with respect to the underlying assets or projects of the InvIT including any further investment or disinvestment of the assets. The investment manager shall submit to the trustee the decision to acquire or sell or develop or bid for any asset or project or expand existing completed assets or projects along with rationale for the same Further IndiGrid 1 Limited clarified that “Mr. Pratik Agarwal is not involved in any manner relating to IndiGrid IGL1‟s participation in the bid. In course of being on Investment Manager and IIML has constituted an independent bidding committee which is responsible for taking all decisions with respect to participating in bids for transmission projects by IndiGrid. This committee has no representative from Sterlite Power. Consequently Mr. Pratik Agarwal not to any documentation or discussion transpires at the bidding committee.” IndiGrid vi) As per the Companies Act 2013 read with SS 1 the Directors have right to inspect the minutes of the board meeting as well as the committee meetings and there are no specific provisions which provide for W.P.(C) 5768 2021 exclusion of an interested Director from inspecting Minutes of Board and Committee meetings. A Director is privy to the Minutes of Board and Committee Meeting in view of statutory provisions and is entitled to inspect Minutes of meetings”. emphasis supplied) 11. Hence as per the opinion of the Legal Advisor Mr. Pratik Pravin Agarwal was in a position to access information of the two bidders and this “amounts to a conflict of interest between Sterlite Grid 20 Ltd. and IndiGrid 1 Ltd”. twin questions before us 12. Mr. Saurabh Kirpal Ld. Senior Counsel for the Petitioner had raised a. Whether in case of common directors in two corporate entities flow of information of one company to the other company can be imputed b. Whether any information had been disclosed between the two companies in question i.e. the petitioner and IGL1 13. Mr. Kirpal has relied upon the following judgments to substantiate his arguments The Texas Company v. The Bombay Banking Company Limited Privy Council)1 T.R. Pratt Ltd. v. E.D. Sassoon & Co Ltd. Bombay High Court)2 T.R. PrattLtd. v. E.D. Sassoon & Co. Ltd. Bombay High Court)3 Halifax Mortgage Services Ltd. v. Stepsky and Anr. Chancery Division)4 Halifax Mortgage Services Ltd. v. Stepsky and 1 AIR 1919 PC 20. 2 ILR60 Bom 326. 3 ILRBom 421WLR 701. W.P.(C) 5768 2021 Anotherit was observed by relying on Cave v. Cave and Young v. David Payne & Co. that “I understand the law to be this: that if a communication be made to an agent which it would be his duty to hand on to his principals.......and if the agent has an interest which would lead him not to disclose to his principals the information which he has thus obtained and in point of fact he does not communicate it you are not to impute to his principals knowledge by reason of the fact that their agent knew something which it was not his interest to disclose and which he did not disclose.” emphasis supplied) 16. Young v. David Payne & Co was also relied upon in Sri Meenakshi Mills Ltd. and Other vs. Commissioner of Income Tax Madras and the same position was accepted in Commissioner of Income Tax Madras vs. Sri Meenakshi Mills Ltd. & Others. In the former case the Madras High Court 5 1996WLR 230. 62 Ch. 608. 750 ITR 769. 81 SCR 934. W.P.(C) 5768 2021 observed the following “20. Mr. Venkataraman learned counsel for the assessees has referred to In re David Payne & Co. Ltd.1 That was a case where it had to be considered whether when a director of a company knew in his private capacity that another company to which money was to be advanced intended to utilise that money outside the scope of its business such knowledge could be imputed to the company of which he was a director. It was held that it could not be so imputed. It is not necessary to refer to the details of the reasoning of the learned judges. The position here is analogous and even if Thyagaraja Chettiar as one of the directors of the assessee mills knew in his capacity as the director of the Madurai Bank that the money placed in fixed deposit by the mills would be transferred to the taxable territory that knowledge could not be imputed to the assessee mills much less can it be said that the transfer was part of the integral arrangement of the loan transaction.” 5768 2021 as the Committee Meetings and it has not been shown by Mr. Kirpal that there is any specific legal provision which provides for exclusion of an interested Director from inspecting the Minutes of the Board of Directors and Committee Meetings. A Director has access to the Minutes of the Board and Committee Meetings under the statutory scheme contained in the Companies Act 2013 and therefore the potential of communication of information relating to bidding in commercial investment matters between the petitioner and the IGL1 was very much present on account of the presence of the common Director Mr. Pratik Pravin Agarwal on the Board of the petitioner company as well as on the Board of Directors of the investment company i.e. IIML which was managing investments of the Indiagrid Trust and which in turn wholly owns and controls IGL1. 18. The Division Bench of Calcutta High Court in M s Sharma Transport v. Coal India Limited and Other9 has succinctly described the extent of judicial review in tender matters. Following is the observation of the Ld. High Court “41. Tender matters are not decided by running a fine tooth comb over the process to discover which „i‟ has not been dotted or which „t‟ not crossed. The writ court always maintains a dispassionate distance from the process and in course of the adjudication does not imagine itself being in the position of the tender committee or as evaluators of the bids. It is only if the writ court finds the decision or the decision making process to be utterly illegal or patently irrational or totally unreasonable that it would seek to intervene. If an executive authority has jurisdiction has adopted a reasonable acted within 9 FMA No. 21118 with CAN No. 31718 dated 14.12.2018. W.P.(C) 5768 2021 procedure and has rendered a cogent decision at the end of the process: the writ court will ask for nothing more…..” 19. Additionally the Supreme Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. & Anr.10 while relying on Central Coalfields Ltd. v. SLL SML SCC 818. 11 2016SCALE 99 8 SCC 622. W.P.(C) 5768 2021 a common director i.e. Mr. Prateek Agarwal as the Non executive Director of IIMLand also as Managing Director of SPTL that holds 100% in Sterlite Grid 20 and 40% in IIML) indeed puts both the companies in a position to access information of each other. It is important to reiterate that the respondent was not called upon to examine the situation at hand with a microscopic lens and determine whether as a matter of fact information was exchanged. All that the respondent was required to examine was whether the two companies were in a position so as to have access to information of the other company with regard to their bids. In the light of the discussion above we are of the view that the conclusion drawn by the respondent that both companies were in a position to access information of each other was reasonable well informed and justified. 23. Hence we do not find any unreasonableness arbitrariness malafides or perversity in either the decision making process or the decision of the Respondent. We find the decision of the respondents to be well considered based on a study and understanding of the relevant facts and based on the legal opinion. The same is reasonable and rational and within the ambit of clause 2.1.5 of the RfQ. 24. Therefore for the reasons stated above the petition is dismissed for lack of merit in the present petition. The parties are left to bear their respective costs. VIPIN SANGHI J SEPTEMBER 10 2021 „ms‟ JASMEET SINGH J W.P.(C) 5768 2021 