The infrastructure sphere witnessed a pivotal decision as the High Court of Karnataka delivered a judgment that supports the progression of a significant hydroelectric venture. The court dismissed an appeal by a prominent construction entity, enabling Karnataka Power Corporation Limited (KPCL) to proceed with its tendering for the Sharavathy Pumped Storage and Hydroelectric project valued at ₹8,005 crore, spanning across Shivamogga and Uttara Kannada districts.
The appeal in question, put forth by Larsen & Toubro Ltd. (L&T) based in Mumbai, was rejected by a Division Bench steered by Chief Justice N.V. Anjaria and Justice Krishna S. Dixit. It was a challenge to a March 6 ruling from a single judge who had previously dismissed a petition from L&T. The petition questioned the 21-day timeframe provided for submission of tenders for the extensive project which, according to L&T, necessitated a more detailed analysis warranting an extended submission period of 90-120 days as per customary rules.
Before the Division Bench’s interim order on March 11 to maintain a status quo concerning the tender process, KPCL had already accepted a bid from M/s Megha Engineering and Infrastructure Ltd, Hyderabad, following the single judge’s verdict.
The Bench, upon passing the final verdict on April 25, elucidated that the tender inviting authority holds the discretion to stipulate the timeframe within which bids are to be submitted by the tenderers, based on the urgency and scale of the tender work. They asserted that in this instance, the period of 21 days was not unreasonably short to prevent the participation of interested parties, observing that other bidders managed to submit their proposals well within the given timeframe.
Importantly, the court inferred that L&T’s plea for an extension was likely a result of their commercial interests, as they were unable to finalize an agreement with an electro-mechanical expert essential for their bid. The specialised focus of L&T is on the civil works, lacking in-house electro-mechanical expertise. The Bench criticized any attempt by a bidder to impose its own terms or conditions on the tender, stating that such a conditional offer is unacceptable and that bidders cannot impose their preferences over the tender authority.
The Bench highlighted the ambivalent participation of L&T in the tender process, noting that despite showing initial interest and even suggesting certain conditions for the bid submission, L&T eventually did not submit a bid and withdrew from the process. This act of fence-sitting was supported by evidence such as the company’s visits to the project site, correspondence expressing interest, and ongoing negotiations with potential partners.
This ruling has significant implications for the transparency and fairness of tender processes, reinforcing the autonomy of tender authorities in determining their requirements, as well as setting a precedent for future disputes of a similar nature. Additionally, it paves the way for the Sharavathy project to move forward, promising enhanced hydroelectric capacity and a boost to the regional energy infrastructure.
As the legal tussle concludes with this judgment, attention now shifts to the project execution, with industry observers keenly watching how the KPCL-Sharavathy venture unfolds. The project stands as a testament to the complex and often intricate interplay between legal frameworks, commercial interests, and public infrastructure developments.
