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Chhattisgarh High Court · body

2023 DIGILAW 300 (CHH)

Maa Shakambari Steel Ltd. v. South Eastern Coalfield Ltd.

2023-07-10

RAJANI DUBEY, RAMESH SINHA

body2023
ORDER : 1. Challenge in this petition is to the legality, validity and propriety of the order dated 16.06.2021 (Annexure P/1) passed by the respondent No. 2 by which the existing Coal/Fuel Supply Agreement (for short the ‘FSA’) has been terminated with a direction to appropriate the respective performance security and disqualifying the petitioner from participating in subsequent trenches of NRS Linkage Auction conducted by the Coal India Limited (for short ‘CIL’) in perpetuity. 2. The facts, as projected by the petitioner is that the petitioner is registered company engaged in manufacture of sponge iron and MS ingots and is a MSME unit having its plant at village Sambalpuri, Hamairpur Road, Raigarh, Chhattisgarh, and it is in relation to the said end use plant, that the petitioner is in constant need of assured periodic supply of coal in order to run, manage and operate its unit. The petitioner is completely dependent upon Coal India Ltd. and its subsidiary coal companies (SCCL) in providing coal to its plant. Under the scheme of auction for providing coal linkage to a manufacturer, the latter has to register itself with the service provider identified by CIL/SCCL under the Scheme Document for Auction of Coal Linkages in the Sponge Iron Sub-sector under various tranches. The successful bidders in the auction process are issued the Letter of Intent (Lol) followed by the formal execution of Fuel Supply Agreement, which usually stands for a period of 5 year. Under the said scheme of auction for grant of coal linkage for assured supply of coal to the sponge iron plant at Raigarh (specified end use plant) run by the petitioner, the latter participated in the auction proceeding held in the year 2018 for tranche IV with a Bidder ID 103335 based upon its normative coal requirement for the plant. The bidder ID is created by the service provider and the bidder ID is basically for assisting the bidders to participate in the auction process. The petitioner being successful was issued Lols bearing Nos. 1406, 1407, 1408 and 1409, all dated 31.07.2018, and after submission of performance security, the respondent SECL executed a Fuel Supply Agreement (FSA) with the petitioner on 03.11.2018 with respect to the said four Lols. The said FSA was for a period of 5 years, to conclude on 02.11.2023. The petitioner was required to submit the bank guarantees worth Rs. 1406, 1407, 1408 and 1409, all dated 31.07.2018, and after submission of performance security, the respondent SECL executed a Fuel Supply Agreement (FSA) with the petitioner on 03.11.2018 with respect to the said four Lols. The said FSA was for a period of 5 years, to conclude on 02.11.2023. The petitioner was required to submit the bank guarantees worth Rs. 64,00,000/- There was no dispute with respect to the said FSA, and regular coal was being supplied to the petitioner. Thereafter, in December 2019, the respondents proposed to auction coal linkage in the sponge iron sub section under tranche V. In this regard, the Scheme Document 2019 was floated. The petitioner participated in the bidding process. The petitioner participated in the said bidding process and gave the details of its normative coal requirement, and furnished the details of the existing FSA and the quantity assured by SECL in its undertaking dated 16.12.2019. The petitioner participated in the auction proceeding. Unfortunately, at the time of bidding, the electronic platform on which the bidding was being conducted had certain technical glitches leading to creation of a new bidder ID No. 76730 for the petitioner. The petitioner uploaded the requisite documents including the PAN, GST registration certificates etc. belonging to the petitioner company, which remained the same as they were in Tranche IV auction. The petitioner also made full disclosure of the existing linkages held by it. There was neither any suppression nor any misrepresentation made at its end. The electronic platform managed by the service provider led to creation of a new Bidder ID, without even prompting to the petitioner as to what had happened. The normative coal requirement for the petitioner remained the same and it was in relation to the said normative coal demand that the petitioner participated in the auction proceeding after disclosing the complete facts and figures. The petitioner duly complied with all the requisite formalities and after scrutiny of the documents etc. the petitioner was issued two Lols bearing No. 2289 and 2290 for coal linkage in Tranche V on 14.01.2020. According to the terms of the said Lols, the petitioner was required to deposit the performance security and also to submit additional documents within 75 days. The petitioner submitted the performance security to the tune of Rs. 42,00,000/- in form of bank guarantees. According to the terms of the said Lols, the petitioner was required to deposit the performance security and also to submit additional documents within 75 days. The petitioner submitted the performance security to the tune of Rs. 42,00,000/- in form of bank guarantees. All the Lols issued to the petitioner under Tranche IV and Tranche V taken together were within the normative coal requirement of the petitioner's end use plant situated at Raigarh. It was thereafter that the respondents examined the entire documents and proceeded to execute the Fuel Supply Agreement on 23.12.2020 in relation to the two Lols dated 14.01.2020. The petitioner was served with a letter dated 04.06.2021 seeking clarification regarding the two bids against same end use plant of the petitioner by different bidder IDs. According to the petitioner, it is admitted by the respondent-SECL that the documents submitted by the petitioner were same and identical for the same end use plant, and this was well within their knowledge. What the clarification sought to elicit were the reasons for having generated two bidder IDs for the same end use plant by the petitioner. The clarification sought was purely of a fact which had occurred on the electronic platform during the bidding process by the service provider. The auction proceeding might have generated two bidder IDs, but there was no allegation against the petitioner that the latter in any manner drew any undue advantage in the bidding process by having procured quantity which the petitioner was not entitled to. The documents were well within the domain of the respondent SECL and each time, it was after a thorough scrutiny of the documents that the respondent SECL proceeded to first issue the Lol and thereafter, almost after a lapse of more than 12 months, issued the FSA. The petitioner did not conceal any fact and the petitioner further did not misrepresent/ mislead the respondent authorities. The respondent authorities after having had a considerable deliberation on the issue as to grant of Lol and FSA, issued the same to the petitioner in a most objective manner. The tenor of the said letter seeking clarification was plain and simple. The petitioner submitted its explanation/reply on 09.06.2021, explaining the events as to how the two IDs could have been generated. The tenor of the said letter seeking clarification was plain and simple. The petitioner submitted its explanation/reply on 09.06.2021, explaining the events as to how the two IDs could have been generated. However, as a sudden shock and surprise, the petitioner was served with the order dated 16.06.2021 whereby all the Lols issued to the petitioner and both the FSAs executed with the petitioner were terminated and the performance security was directed to be appropriated. It was further directed that the petitioner was restricted/restrained from participating in subsequent tranche of non-regulated sector linkage auction conducted by CIL. The order dated 16.06.2021 is wholly arbitrary and appears to have been issued with a pre-meditated, pre-determined and pre-conceived fact against the petitioner only to prejudice the interest of the petitioner and to give it a death blow. There was no notice for termination of FSAs, neither FSA dated 03.11.2018 nor the FSA dated 23.12.2020. There was no notice as to why the performance security should not be appropriated by SECL. Furthermore, there was no prior notice to the petitioner regarding blacklisting/restraining participation in any future auction. The said reasons demonstrate the arbitrariness in issuance of the order dated 16.06.2021. The petitioner company has a sponge iron plant for which the FSAS were executed. Coal is the most vital raw material for the manufacture of sponge iron and without the assured supply of coal, the petitioner's plant at Raigarh shall come to a standstill with its entire paraphernalia including labour, staff and others, rendered idle. Hence, this petition seeking quashing of the impugned order dated 16.06.2021 (Annexure P/1) and further to direct the respondent SECL to supply coal to the petitioner unhindered in terms of the FSAs dated 03.11.2018 and 23.12.2020. 3. Mr. Amrito Das, learned counsel for the petitioner submits that the petitioner participated in the auction proceeding with utmost transparency and disclosure without there being any iota of misrepresentation or suppression. The petitioner also duly complied with all the requisite formalities and after scrutiny of the documents etc. he was issued two LoIs bearing No. 2289 and 2290 for coal linkage in Tranche V on 14.01.2020 for which he had duly submitted the bank guarantees. The respondents examined the entire document and proceeded to execute the FSA on 23.12.2020 in relation to two LoIs dated 14.01.2020. he was issued two LoIs bearing No. 2289 and 2290 for coal linkage in Tranche V on 14.01.2020 for which he had duly submitted the bank guarantees. The respondents examined the entire document and proceeded to execute the FSA on 23.12.2020 in relation to two LoIs dated 14.01.2020. The petitioner was served with a letter dated 04.06.2021 seeking clarification regarding two bids against same end use plant of the petitioner by different bidder IDs, however, admitting that the documents submitted by the petitioner were same and identical. There is no allegation against the petitioner that the latter in any manner drew any undue advantage in the bidding process by having procured quantity which the petitioner was not entitled to. The documents were well within the domain of the respondent SECL and each time it was after a thorough scrutiny of the documents that the respondent SECL proceeded to first issue the Lol and thereafter almost after a lapse of more than 12 months, issued the FSA. The petitioner did not conceal any fact and the petitioner further did not misrepresent/ mislead the respondent authorities. The respondent authorities after having had a considerable deliberation on the issue as to grant of Lol and FSA, issued the same to the petitioner in a most objective manner. The tenor of the said letter seeking clarification was plain and simple, to say that in case the petitioner didn't submit its explanation within a period of 7 days, the authorities shall proceed further. The petitioner submitted its explanation/reply on 09.06.2021, explaining the events as to how the two IDs could have been generated. The petitioner categorically explained that the petitioner had applied only for the quantity it was entitled to though the portal displayed that the petitioner was entitled to a higher quantity. It was further stated that taking the quantity of both Tranche IV and Tranche V, it does not exceed the quantity of coal which the petitioner was entitled to. But even then the petitioner was served with the order dated 16.06.2021 whereby all the Lols issued to the petitioner and both the FSAs executed with the petitioner were terminated and the performance security was directed to be appropriated further directing that the petitioner was restricted/restrained from participating in subsequent tranche of non-regulated sector linkage auction conducted by CIL. But even then the petitioner was served with the order dated 16.06.2021 whereby all the Lols issued to the petitioner and both the FSAs executed with the petitioner were terminated and the performance security was directed to be appropriated further directing that the petitioner was restricted/restrained from participating in subsequent tranche of non-regulated sector linkage auction conducted by CIL. The order dated 16.06.2021 is wholly arbitrary and appears to have been issued with a pre-meditated, pre-determined and pre-conceived fact against the petitioner only to prejudice the interest of the petitioner. There was no notice for termination of FSAs, neither FSA dated 03.11.2018 nor the FSA dated 23.12.2020 nor appropriation of performance security by the SECL. Furthermore, there was no prior notice to the petitioner regarding blacklisting/restraining participation in any future auction. The said reasons demonstrate the arbitrariness in issuance of the order dated 16.06.2021. The petitioner company has a sponge iron plant for which the FSAS were executed. Coal is the most vital raw material for the manufacture of sponge iron and without the assured supply of coal, the petitioner's plant at Raigarh shall come to a standstill. The action of the respondent/SECL is most arbitrary, reckless and illegal, de hors the provisions of the agreement and contrary to established legal principles. Respondent SECL is a ‘State’ under Article 12 of the Constitution of India and therefore its actions are required to stand on the touchstone of Article 14 and Article 21 of the Constitution Arbitrariness is antithesis to equality and therefore the impugned order dated 16.06.2021 passed by the respondent SECL is wholly illegal. The standing FSAS which assured regular supply of coal to the petitioner's plant, gave rise to a legal right in the petitioner based upon which the petitioner altered his position in a detrimental manner by having abide by the terms and conditions as laid down by SECL. SECL invited bids and it was SECL alone which evaluated the bids submitted by the auction participants. The allegation is not against the petitioner to accuse the petitioner of any misrepresentation in any manner. It is also not an allegation against the petitioner that the petitioner in any manner drew undue advantage out of its misdeeds. It is also not the case against the petitioner that the petitioner made any gain, trivial or substantial, at the cost of the respondent SECL or any other bidder. It is also not an allegation against the petitioner that the petitioner in any manner drew undue advantage out of its misdeeds. It is also not the case against the petitioner that the petitioner made any gain, trivial or substantial, at the cost of the respondent SECL or any other bidder. On the contrary, the letter seeking clarification clearly stated that the petitioner acted in a most bona-fide manner by placing during the auction proceeding all the documents as they stood without manipulation and subversion. The petitioner participated on the electronic platform with complete disclosure, transparency and bona-fide. There was neither any intent to mislead nor from the facts it could be deciphered that the petitioner at any point of time intended to gain unlawfully. Respondent SECL was in hold of the complete auction proceeding and subsequent to the auction, even the execution of the agreement. 4. Mr. Das would further submit that the auction was held in December 2019 while the agreement was executed on 23.12.2020, i.e., almost after a year. There was never any objection made against the petitioner, but all of a sudden the impugned order dated 16.06.2021 was issued without any appropriate notice to the petitioner. The said order dated 16.06.2021 passed by the respondent SECL has a serious civil consequences on the petitioner and therefore the same could not have been issued by respondent SECL without due adherence to the provisions of law and the principles of natural justice. He would refer to Clause 3.1.1 which is a bidding instruction to the bidders prescribing that the bidders must register themselves with the service provider. The bidders upon registration by the service provider shall be generated an ID number. It was also instructed that the bidders should not register again and must use the given ID necessarily. The said provision does not prescribe any penalty for a mistaken re-registration by a party, or a penalty for a re-registration by the system itself. The said guideline was therefore merely directory in nature. Re-registration of a bidders does not inherently imply an intent to deceive or cheat, when there was no such adverse prescription. Registration and creation of bidder ID is only to ensure and enable participation in the bidding process. Eligibility, entitlement and rights for grant of linkage are being considered independently in an objective manner which is in no way determinate on the ID. Registration and creation of bidder ID is only to ensure and enable participation in the bidding process. Eligibility, entitlement and rights for grant of linkage are being considered independently in an objective manner which is in no way determinate on the ID. The ID does not ensure any entitlement/grant of linkage. Clause 3.4(a) prescribe that the bidder must satisfy all the eligibility conditions. In this regard it is pertinent to refer to Annexure II of the said document which clearly prescribe that the bidders are required to furnish the complete disclosure regarding the existing linkages for the same end use plant. Thus, there is no bar for an existing linkage holder from participating in the bidding process. The only rider is that the subsequent award of linkage cannot exceed the normative coal requirement for the end use plant. In this regard reference can also be made to Clause 3.5.2(m) of he Scheme Document. Further, Clause 4 of the Scheme Document which lays down the bid eligibility conditions and the status of the end use plant. The petitioner admittedly satisfied the said eligibility condition and the petitioner uploaded/submitted the very same documents which the petitioner has for its plant, which were already available with the respondent SECL. There was neither any fabrication in documents nor was there any manipulation. The petitioner with utmost bonafide submitted each and every document in his possession. This itself demonstrates that there was neither an intent to deceive nor an intent to cheat the respondent authorities. The petitioner never had any intent to draw undue advantage by make a false representation or a misrepresentation. It further demonstrate that the respondents had to apply their mind to the documents submitted by the petitioner, and the respondents after due scrutiny found the petitioners bid responsive and accepted the same. Similarly, Clause 5.5.1 of the Scheme Document clearly provide that the respondent authorities have a right to verify the documents, information and material submitted by the petitioner. Admittedly the documents submitted by the petitioner were not forged or fabricated. This itself demonstrate that the petitioner never had any intent to deceive or cheat. There was no misrepresentation on part of the petitioner in having submitted its bid for Tranche V. 'Misrepresentation' necessarily require presence of an animus to cheat or deceive in order to draw undue advantage. Admittedly the documents submitted by the petitioner were not forged or fabricated. This itself demonstrate that the petitioner never had any intent to deceive or cheat. There was no misrepresentation on part of the petitioner in having submitted its bid for Tranche V. 'Misrepresentation' necessarily require presence of an animus to cheat or deceive in order to draw undue advantage. The respondent SECL served the petitioner with a letter dated 04.06.2021 seeking clarification. It did not specify anything else and the petitioner in response to the said letter submitted its stand. The said letter is neither a letter to show cause why the existing agreements and linkages be not terminated and further, the said letter was also not a notice before blacklisting. There was absolutely no iota of reference to any penal action being proposed against the petitioner. The said letter cannot satisfy the rigors of adherence to the principles of natural justice before issuance of any order which has serious civil consequences. The Hon'ble Supreme Court in UMC Technologies Pvt. Ltd. vs. Food Corporation of India, (2021) 2 SCC 551 , have reiterated the principles laid down in Gorkha Security Services vs. Government (NCT of Delhi), (2014) 9 SCC 105 , with regard to grant of reasonable opportunity before issuance of any such order of blacklisting and penalty. The Hon'ble Supreme Court have emphasised as to what should be the content of a notice to be issued by the authorities before taking any such penal step. It is also relevant to refer to the dictum laid down by the Hon'ble Supreme Court in Oryx Fisheries Pvt. Ltd. vs. Union of India, (2010) 13 SCC 427 . Except the letter dated 04.06.2021 there was no notice issued to the petitioner and the respondent vide order dated 16.06.2021 have directed for cancellation of the Lols and Agreements, with a direction to appropriate the performance security and with a gross penalty of blacklisting for infinity. The order dated 16.06.2021 is not just bad in the eye of law having violated the principles of natural justice, however the same is even bad for being arbitrary and excessive. The FSA dated 03.11.2018 was not at all tainted, but then the respondents cancelled the same without any reason or rhyme, in an arbitrary exercise of power. The order dated 16.06.2021 is not just bad in the eye of law having violated the principles of natural justice, however the same is even bad for being arbitrary and excessive. The FSA dated 03.11.2018 was not at all tainted, but then the respondents cancelled the same without any reason or rhyme, in an arbitrary exercise of power. The order of blacklisting have been issued in perpetuity, despite the fact that the petitioner clearly stated that the same might have occurred due to technical glitch. 5. According to Mr. Das, neither was there any undue advantage gained by the petitioner nor was the respondent SECL made to suffer for any act. The petitioner was entitled to have participated again in the bidding up to the deficit normative coal requirement for its end use plant, and the petitioner exactly did the same. There was neither any material to show intention to deceive nor was there any material to demonstrate any mala-fide to cheat the authorities. The petitioner uploaded the documents with utmost circumspection disclosing each and every fact without concealment, but despite the sad fact the petitioner has been penalised by the order cancelling the FSAs as well as blacklisting the petitioner. The entire plant of the petitioner shall come to a standstill and the impugned order dated 16.06.2021 is therefore a death warrant for the industrial concern. 6. On the other hand, Mr. Vaibhav Shukla, learned counsel appearing for the Respondents No. 1, 2 and 3 submits that in the return filed on 24.07.2021, an objection was raised with regard to maintainability of the petition on the ground of non-joinder of necessary and proper party i.e. the respondent No. 4. However, the petitioner later moved an application for impleading MSTC as respondent No. 4 which was allowed by this Court on 24.09.2021. Mr. Shukla would further submit that on the ground of alternative remedy under clause 16 of the FSA, this petition is not maintainable. Further, since the matter involves contractual disputes particularly relating to termination, blacklisting etc. the Courts have limited scope for judicial review and can only be done with regard to decision making process. After giving due opportunity to the petitioner, the impugned order was passed which needs no interference. Further, since the matter involves contractual disputes particularly relating to termination, blacklisting etc. the Courts have limited scope for judicial review and can only be done with regard to decision making process. After giving due opportunity to the petitioner, the impugned order was passed which needs no interference. The FSAs were signed on 03/11/2018 under Bidder ID No. 103335 in Tranche-IV between South Eastern Coalfields Limited (Seller) and Maa Shakambari Steel Limited (Purchaser) for supply of coal to the Specified End Use Plant i.e. Sponge Iron Plant: 200 (Unit 1-100 and Unit 2-100) (DRI Unit only), located at Village Sambalpuri, Hamairpur Road, Raigarh (CG)-496001 for the period of 5 years from 03/11/2018 to 02/11/2023. Further, another Coal Supply Agreements (FSAs) were signed on 23/12/2020 under Bidder ID No. 76730 in Tranche-V between South Eastern Coalfields Limited (Seller) and Maa Shakambari Steel Limited (Purchaser) for supply of coal to the Specified End Use Plant i.e. Sponge Iron Plant: 200 (Unit 1-100 and Unit 2-100) (DRI Unit only), located at Village Sambalpuri, Hamairpur Road, Raigarh (CG)-496001 for the period of 5 years from 23/12/2020 to 22/12/2025. From the aforesaid, it can be seen that M/s Maa Shakambari Steel Limited participated in two separate tranches of NRS Linkage Auction under separate Bidder IDs for same Specified End Use Plant thereby grossly violating the terms and conditions of the scheme documents as well as fuel supply agreements by way of misrepresentation. A clarification was sought in this regard vide letter no. SECL/BSP/M&S/FSA/T-IV&V/SIP/239 dated 04.06.2021. In response, the petitioner vide letter no. MSSL/ACCTS/21-22/42 dated 09.06.2021 submitted clarification in this regard wherein they have stated that the registration took place due to some technical error at the end of the Service Provider i.e. MSTC. Subsequently, the same was forwarded to the Service Provider i.e. MSTC Limited for their comments. The comments of MSTC Limited have been received on 11.06.2021, the summary of which is as under: “(i) As per clause 3.1.1 of the Scheme Document December 2019, Bidders already registered for the coal linkage auctions of either CIL and/or SCCL, must necessarily use the same registration for the same Specified End Use Plant and should not register again. This is non-compliance of scheme documents. (ii) The buyer by applying for separate registration for the same EUP has also given a false undertaking (refer to Annexure-II of Scheme documents). This is non-compliance of scheme documents. (ii) The buyer by applying for separate registration for the same EUP has also given a false undertaking (refer to Annexure-II of Scheme documents). (iii) In the MSTC portal there is a Provision for a bidder to apply for separate registration for different EUP on same PAN and GST number.” 7. Reliance is placed on the relevant portion of the clause no. 3.1.1 of the Scheme Documents dated 4th June 2018 and December 2019 which reads as under: “Bidders already registered for the coal linkage auctions of either CIL and/or SCCL must necessarily use the same registration for the same Specified End Use Plant & should not register again.” 8. Mr. Shukla would submit that from the above, it is evident that despite having a registration under Bidder ID No. 103335 the petitioner registered again with Bidder ID No. 76730 at MSTC portal against same Specified End Use Plant, which amounts to misrepresentation and non-compliance of provisions of Scheme Documents/FSAs. In view of the above after giving show cause, since satisfactory reply was not submitted by the Petitioner termination letter vide no. SECL/BSP/M&S/FSA/103335 and 76730/MSSL/309 dated 16.06.2021 has been issued against the above referred FSAS (A552, A553, A554, A555) dated 03/11/2018 and (A1253, A1254) dated 23/12/2020 along with appropriation of respective Performance Security and disqualification from participating in subsequent tranche of NRS Linkage Auction conducted by the CIL. The bidder ID has been given due importance at clause 3.1.1 of the relevant Scheme Document as the same is used for identifying the coal requirement of Specified End Use plant and in the absence of the petitioner adhering to the same against the eligible required quantity of 74956.4 i.e. of G10 grade coal, the petitioner was allowed to participate for higher quantity i.e. 149912.8 i.e. of G10 grade coal due to multiple ID for the same end use plant Furthermore, the document verification prior to execution of FSA is being done on the basis of Bidder ID and generation of multiple id for the same end use plant, misleads in assessing the coal requirement of the specific end use plant. The petitioner participated in the said bidding process and gave the details of its normative coal requirement and furnished the details of the existing FSA and assured quantity. The petitioner participated in the said bidding process and gave the details of its normative coal requirement and furnished the details of the existing FSA and assured quantity. The status of the documents received from Service Provider as per details of RFPs are as stated in paragraph 22 of the reply and from perusal of the same, it is evident that as per the RFPs details received from service provider, MSTC Limited, the petitioner hid/modified some facts i.e. name of contact person, email ID, contact numbers and also has not filled GST No. on MSTC portal at the bidding time under tranche-V vide Bidder ID No. 76730 Sponge Iron Sub-Sector. Further, the comments as received from M/s MSTC states as below: (i) As per clause 3.1.1 of the Scheme Document December 2019, Bidders already registered for the coal linkage auctions of either CIL and/or SCCL, must necessarily use the same registration for the same Specified End Use Plant and should not register again This is non-compliance of scheme documents. (ii) The buyer by applying for separate registration for the same EUP has also given a false undertaking (refer to Annexure-II of Scheme documents). 9. Mr. Shukla would further submit that against the eligible required quantity of 74956.4 i.e. of G10 grade coal, the petitioner was allowed to participate for higher quantity i.e. 149912.8 i.e. of G10 grade coal (200% of normative coal requirement of the petitioner) due to multiple ID for the same end use plant. A clarification was sought from the petitioner vide letter no. SECL/BSP/M&S/FSA/T-IV&V/SIP/10335 and 76730/SIP/239 dated 04.06.2021. In response, the petitioner vide MSSL/ACCTS/21-22/42 dated 09.06.2021 letter no submitted clarification in this regard wherein they have stated that the registration took place due to some technical error at the end of the Service Provider. After seeking the clarification from the petitioner, the same was forwarded to the Service Provider i.e. MSTC Limited for their comments. The comments of MSTC Limited have been received on 11.06.2021, the summary of which is as under: (i) As per clause 3.1.1 of the Scheme Document December 2019, Bidders already registered for the coal linkage auctions of either CIL and/or SCCL, must necessarily use the same registration for the same Specified End Use Plant and should not register again. This is non-compliance of scheme documents. This is non-compliance of scheme documents. (ii) The buyer by applying for separate registration for the same EUP has also given a false undertaking (refer to Annexure-II of Scheme documents). (iii) In the MSTC portal, there is a provision for a bidder to apply for separate registration for different EUP on same PAN and GST number. 10. Despite having a registration under Bidder ID No. 10335, the consumer registered again with Bidder ID No. 76730 at MSTC portal against same specified End Use Plant, which amounts to misrepresentation and non-compliance of provisions of the Scheme Document/FSAs. So far as the delay in execution of the FSA is concerned, the same is attributable to the petitioner as he having submitted the requisite documents belatedly. The petitioner has misrepresented just to secure excess coal from the respondents. The petitioner was duly noticed and after following the due process of law, action was taken in accordance with the terms and conditions of the FSA. Hence, this petition deserves to be dismissed. 11. Mr. Animesh Tiwari, learned counsel for the respondent No. 5 would submit that the respondent No. 5 is a Mini Ratna Category-1 PSU under the administrative control of the Ministry of Steel, Government of India. The answering respondent is a major e-commerce company today which provides a virtual marketplace for buyers and sellers to transact business in minerals, agriculture and forest produce, metal scrap, surplus and obsolete stores etc. It is a service provider to many State Government and Central Government departments and PSUs and autonomous institutions such as ONGC, Coal India Limited, NTPC, RBI, Ministry of Defense, Government of AP, Government of Telangana etc. MSTC Limited is the only PSU in India to offer the full range of ecommerce services: e-tender, e-auction and eprocurement. The e-auction services of MSTC Limited have been accepted by the highest offices of the country. The Hon'ble Supreme Court of India has engaged the services of MSTC Limited for the sale of confiscated Iron Ore in Goa and Karnataka. In the case of allocation of Coal Blocks/Mines the Ministry of Coal had appointed MSTC Limited for the e-auction of 204 Coal Mines in 2014 whose allocation had earliest been cancelled by the Hon'ble Supreme Court of India. The processes have been successfully completed and have earned the government significant revenue. In the case of allocation of Coal Blocks/Mines the Ministry of Coal had appointed MSTC Limited for the e-auction of 204 Coal Mines in 2014 whose allocation had earliest been cancelled by the Hon'ble Supreme Court of India. The processes have been successfully completed and have earned the government significant revenue. MSTC host the Scheme Document, Timeline, Model Fuel Supply agreement provided by respondent no 2 into its web site. As per timeline Pre bid Consumer meeting is done in which intended bidders, representatives of respondent no 2 and 5 are present and the policy is briefed to all the customers and customer query are replied. MSTC also publish the detailed offer mentioning the date of auction, time of e-auction, grade, mode, source, notified price etc. Mock auction are conducted by MSTC as per the time line for the intended bidders. As per time line the auction are conducted by respondent no 5 the intended bidders are to submit EMD at least one day prior to the date of auction. Only on being approached by the Respondent No 2, for conducting e-auction for the NRS coal linkages, the answering respondent had conducted the present e-auction for NRS coal linkages. The CIL publishes the Scheme document for each sub-sector before the start of the auction. Buyers interested in the NRS linkage e-auction are required to get them self-registered with the answering respondent. The buyers who are already registered with the answering respondent for a specific End Use Plant in the past are required to bid from the existing registration only. Against each registration, the prospective buyers are required to enter the capacity of the End Use Plant and based on the detail entered by the buyer into answering respondent's system, the normative coal required are automatically computed by the system and the buyer can buy coal only up to their respective normative coal requirement. The auto calculation of the normative coal requirement done by answering respondent's system are as per the scheme documents provided by CIL. If a buyer bid and books some quantity of coal in one of the auctions, the balance normative coal requirement of the buyer is automatically reduced considering the booking done by the buyer in the earlier auction. It is pertinent to mention that the bidding is done in the system of the answering respondent and the buyer has to sign his bid through Digital Signature. It is pertinent to mention that the bidding is done in the system of the answering respondent and the buyer has to sign his bid through Digital Signature. The above process is a continuous process and the NRS linkage auctions are conducted in Tranches. The scheme document contains the terms and condition of the auction. The Model FSAs are also published by CIL prior to the auction. In other words, all the terms and condition, model FSA documents are made available to the buyer prior to the auctions. The buyers who are successful in the linkage auction are issued a LoI by the Coal Companies and the buyer have to submit the required documents as per LO1 directly to the coal companies. On receipt of the required documents, the buyer and coal company enter into a fuel supply agreement. The validity date of the Fuel supply agreement is mentioned in the Agreement. It is usually for 5 years. In the present case, it is submitted that as per the Scheme Document For Auction Of Coal Linkages In The Sponge Iron Sub-sector Under Tranche V December 2019 “Annexure V Technical Details with respect to electronic auction”, it has been categorically mentioned that Bidders already registered for the coal linkage auctions of either CIL and/or SCCL, must necessarily use the same registration for the same Specified End Use Plant. However in spite of this the buyer has applied for multiple registration for the same End Use Plant. As per clause 3.1.1 of the Scheme Document For Auction Of Coal Linkages In The Sponge Iron Sub-Sector Under Tranche V, under the clause no. 3 of Auction processes states that “Bidders already registered for the coal linkage auctions of either CIL and/or SCCL must necessarily use the same registration for the same Specified End Use Plant and should not register again.” Therefore, the petitioner buyer has, by applying for multiple registration for same EUP has violated the terms of the scheme document in spite of having an earlier registration for the same EUP. Though the answering respondent's system has treated this registration as a separate identity, the terms and conditions of the scheme document clearly mandates to the Bidders that once they are already registered for the coal linkage auctions of either CIL and/or SCCL, they must necessarily use the same registration for the same Specified End Use Plant. Though the answering respondent's system has treated this registration as a separate identity, the terms and conditions of the scheme document clearly mandates to the Bidders that once they are already registered for the coal linkage auctions of either CIL and/or SCCL, they must necessarily use the same registration for the same Specified End Use Plant. As per Scheme Document, MSTC portal has provision for a bidder to apply for separate registration for different EUP on same PAN and GST number. 12. Mr. Tiwari would further submit that the contention of the petitioner that there has been any technical error on MSTC's part is false submission of facts and thereby vehemently denied. The petitioner had applied for two separate registration and they have also deposited registration fee for each registration separately. For registration no. 76730 the registration fee was paid on 24.08.2016 and for registration no. 103335 the registration fee was paid on 31.03.2018. As already mentioned, in the Clause 3.1.1 of the Scheme Document, bidders already registered for the coal linkage auctions of either CIL and/or SCCL must necessarily use the same registration for the same Specified End Use Plant and should not register again It is submitted that the second registration done by the petitioner for the same End Use Plant is in gross violation of the scheme document. Mr. Tiwari would once again vehemently deny that the second registration done by the petitioner for the same EUP is due to any technical error in MSTC portal. The duty is on the petitioner to not to get them self registered twice for the same Specified End Use Plant. In this case the petitioner has registered twice for the same Specified End Use Plant. In this case, the buyer has applied for two separate registration and they have also deposited registration fee for each registrations separately. For registration no. 76730 the registration fee was paid on 24/8/2016 and for registration no. 103335 the registration fee was paid on 31/3/2018. The petitioner has consciously registered twice even by paying the registration amount at two different dates in the year 2016 and 2018, and this cannot be called as technical glitch on the part of MSTC as for each registration the buyer has consciously paid separate registration fee. The contention that there was a technical error on the answering respondent's system is vehemently denied. The contention that there was a technical error on the answering respondent's system is vehemently denied. The petitioner has to submit an online form in answering respondent's web site to get themselves registered with MSTC as a NRS Coal Linkage buyer. The buyer has to create his user id and password at the time of online submission of the form. Thus, it is not correct that the bidder ID is provided by MSTC/answering respondent. The contention of the petitioner that subsequent to the bidding process, the bidder ID becomes insignificant once the LoI is issued and FSA is executed is erroneous as once the buyer is registered the buyers normative coal required are maintained in the buyer registration and as and when buyer books coal in the auction through bidding process the normative coal requirement keeps on reducing. This is the process though which the system ensures that no bidder is allocated coal beyond his normative coal requirement. If the petitioner was aware that he already has a FSA from the earlier registration, the petitioner should not have registered for the second time and should have used the previous registration for booking the coal for the balance normative coal requirement. Mr. Tiwari would lastly submit that in light of the above submissions the petitioners are not entitled to any of the reliefs as claimed by them in the present petition and the same deserves to be dismissed. 13. We have heard learned counsel for the parties, perused the pleadings and documents appended thereto. 14. On going through the entire pleadings and averments made in the writ petition as well as the returns and rejoinder, it is evident that the bidders already registered for the coal linkage auctions of either CIL and/or SCCL must necessarily use the same registration for the same Specified End Use Plant and should not register again. In the instant case, according to the petitioner, the electronic platform on which the bidding was being conducted had certain technical glitches leading to creation of a new bidder ID No. 76730 for the petitioner. In the instant case, according to the petitioner, the electronic platform on which the bidding was being conducted had certain technical glitches leading to creation of a new bidder ID No. 76730 for the petitioner. However, the return of the respondent/SECL and the MSTC clearly states that the petitioner has consciously registered twice even by paying the registration amount at two different dates in the year 2016 and 2018, and this cannot be called as technical glitch on the part of MSTC as for each registration the buyer has consciously paid separate registration fee. If the petitioner was aware that he already has a FSA from the earlier registration, the petitioner should not have registered for the second time and should have used the previous registration for booking the coal for the balance normative coal requirement. 15. The contention of learned counsel for the petitioner that clause 3.1.1 nowhere prescribes any penalty for a mistaken re-registration by a party, or a penalty for a re-registration by the system itself and that the said guideline was therefore merely directory in nature, is noticed to be rejected. If the party intends to participate in any auction for Coal Linkages, it has to adhere to the guidelines and instructions issued by the authority who has floated the auction. Clause 3.1.1 of the Scheme Document dated 04.06.2018 and December, 2019 specifically states that Bidders already registered for the coal linkage auctions of either CIL and/or SCCL must necessarily use the same registration for the same specified end sue plant and should not register again. Here, the petitioner got itself registered twice for the specified end use of plant. The further contention of the petitioner that taking the quantity of both Tranche IV and Tranche V, it does not exceed the quantity of coal which the petitioner was entitled to, also does not appears to be appealing as the petitioner was allowed to participate for higher quantity of coal due to multiple ID for the same end use plant which is not at all permissible. Despite having a registration under Bidder ID No. 10335, the petitioner registered again with Bidder ID No. 76730 at MSTC portal against same specified End Use Plant, which amounts to misrepresentation and non-compliance of provisions of the Scheme Document/FSAs. Despite having a registration under Bidder ID No. 10335, the petitioner registered again with Bidder ID No. 76730 at MSTC portal against same specified End Use Plant, which amounts to misrepresentation and non-compliance of provisions of the Scheme Document/FSAs. The respondent/SECL, vide paragraph 22 of its return, has tried to demonstrate that the petitioner had hidden/modified some facts i.e. name of contact person, email ID, contact number and had also not filled GST Number of MSTC portal at the bidding time under Tranche-V vide Bidder ID No. 76730 Sponge Iron Sub Sector and at paragraph 24 of its return, the respondent/SECL states that against the eligible required quantity of 74956.4 i.e. of G10 grade coal, the petitioner has been allowed to participate for higher quantity i.e. 149912.8 i.e. G10 grade coal (200% of normative coal requirement of the petitioner) due to multiple ID for the same end use plant. 16. So far as disqualification of the petitioner from participating in subsequent tranche of NRS Linkage Auction conducted by the CIL is concerned, from perusal of the materials available on record i.e. the clarification sought by the SECL regarding two bids against same End Use Plant of the petitioner, vide communication dated 04.06.2021 (Annexure R/3), it is evident that there was no mention with regard to the proposed steps that may be taken against the petitioner disqualifying him from participating in subsequent tranche of NRS Linkage Auction conducted by the CIL. The same amounts to blacklisting of the petitioner firm which is unjust and unfair. 17. The Supreme Court, Gorkha Security Services (supra) has described blacklisting as being equivalent to the civil death of a person because blacklisting is stigmatic in nature and debars a person from participating in government tenders thereby precluding him from the award of government contracts. It was held thus: “16. It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as “civil death” of a person who is foisted with the order of blacklisting. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as “civil death” of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts.” 18. The said principle has been reiterated by the Supreme Court in UMC Technologies (supra) which reads as under: “14. Specifically, in the context of blacklisting of a person or an entity by the state or a state corporation, the requirement of a valid, particularized and unambiguous show cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatization that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into government contracts. This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting takes away this privilege, it also tarnishes the blacklisted person’s reputation and brings the person’s character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.” 19. In light of the said decisions, it is clear that a prior show cause notice granting a reasonable opportunity of being heard is an essential element of all administrative decision-making and particularly so in decisions pertaining to blacklisting which entail grave consequences for the entity being blacklisted. In this case, furnishing of a valid show cause notice is critical and a failure to do so would be fatal to any order of blacklisting pursuant thereto. 20. Accordingly, in view of what has been stated above, we find no merit in the contentions advanced by the learned counsel for the petitioner to quash the termination of existing Coal/Fuel Supply Agreement by respondent No. 3 vide order dated 16.06.2021 (Annexure P/1) is hereby refused as the same has no substance. 20. Accordingly, in view of what has been stated above, we find no merit in the contentions advanced by the learned counsel for the petitioner to quash the termination of existing Coal/Fuel Supply Agreement by respondent No. 3 vide order dated 16.06.2021 (Annexure P/1) is hereby refused as the same has no substance. However, the impugned order dated 16.06.2021 (Annexure P/1), so far as it relates to disqualification of petitioner from participating in subsequent tranche of NRS Linkage Auction conducted by CIL is concerned, the same is quashed. 21. The writ petition stands partly allowed.