Patna High Court

Patna, May 18: Patna High Court today gave the green signal to the Bihar State Electricity Board (BSEB) to go ahead with the process for appointment of franchisees to supply electricity in four cities of the state, including the capital, but put a bar on awarding the contract to anyone.

The division bench of Justice Shiva Kirti Singh and Justice Ravi Ranjan gave the direction on an appeal filed by the board seeking vacating of the stay ordered by a single bench on the entire process of appointment of franchisees in four cities — Patna, Muzaffarpur, Gaya and Bhagalpur.

The single-judge bench order had come on an appeal filed by CESC Ltd, the Calcutta-based power utility.

After hearing the plea of the board and CESC Ltd, the division bench today said: “We do not want to go into the merits of the case at this juncture. Considering the larger interest of the petitioner and the board, we modify the order in part so that the writ petition is heard for admission on a priority basis. Interim order (of the single judge bench) is also modified to the extent that the board may take further action to process the bid.”

The court, however, also made it clear to the board that it can’t finalise the settlement in favour of any party till the disposal of the case.

CESC, which had been awarded the franchisee for Patna and Muzaffarpur in 2009, had approached the court after its bid was cancelled on January 25 this year. The board had returned to the company the cheque of Rs 80 lakh paid as earnest money deposit.

The court today said that return of CESC’s cheque shall not prejudice the company’s rights in the re-tendering process.

Appearing for the board, advocate Anand Kumar Ojha submitted that his client, on January 25, decided to rescind the proposal because the tender was floated on the basis of tariff as it existed in 2007-08, which could prove financially detrimental to the board.

On the basis of the 2007-08 tariff, the board could collect hardly Rs 369 crore as revenue, whereas at current rates, it could mop up more than Rs 800 crore, Ojha contended.

Replying to the court’s query on whether the board reserved the right to cancel the tender document, the counsel said: “Yes, we can. The provision was there in the document itself.”

The fresh tender document, which was invited in April, was to be opened on April 27, but the court stayed it, he added.

CESC counsel S.D. Sanjay submitted that the board had come out with the tender document in 2009.

CESC, which applied for Patna and Muzaffarpur, emerged the highest bidder among three in the race, the others being Reliance Infra and Glodyne Power, Sanjay said. But, the counsel contended, the board sat on it for two years before suddenly deciding to cancel the bid without citing any concrete reason.

Sanjay said the board’s defence was that “data” had changed. The data, the CESC counsel argued, would obviously change if the board or anyone else sat on it for two years, but the company cannot be penalised or faulted for the delay.

Sanjay alleged that the board had changed the yardstick in the tender document for the fresh bid, the alterations being technical ones.

In the fresh request for proposal (bid), more than 50 parties have evinced interest and filed tender documents. About a dozen-and-half parties have filed tender documents for supplying electricity in Patna alone.

Sources said that in the new tender, the board wants a higher share of the revenue generated by distributing the power. The bid CESC won stipulated that the private firm would keep 70 per cent of the revenue with itself while giving the rest to the board.

Under the new tender, the Bihar board has kept the provision of equal share, thereby increasing its pie substantially, the sources said.

CESC has objected to this change, terming it arbitrary. However, it is learnt that the Sanjiv Goenka-owned company had bought the tender document for the fresh bid like many others. But it is yet to decide on participation, the sources said.

The matter would come up for hearing after June 20, once the court resumes after the summer vacation.