Gujarat High Court
Bvishal Oil And Energy Limited Through ... vs Oil And Natural Gas Corporation Limited on 18 August, 2021
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, Vaibhavi D. Nanavati
C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7771 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA Sd/-
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI Sd/-
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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BVISHAL OIL AND ENERGY LIMITED THROUGH BABUBHAI
SHANKARBHAI CHAUDHARY
Versus
OIL AND NATURAL GAS CORPORATION LIMITED
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Appearance:
MR. SHALIN MEHTA, LD. SR. COUNSEL WITH MS ROMA I FIDELIS(3529)
for the Petitioner(s) No. 1
MR BC DAVE(245) for the Respondent(s) No. 3
MR.DEVANG VYAS, LD. ADDL. SOLICITOR GENERAL WITH MR RITURAJ
M MEENA(3224) for the Respondent(s) No. 1
MR ZUBIN F BHARDA(159) for the Respondent(s) No. 3
MR.ANKIT M TALSANIA(7300) for the Respondent(s) No. 2
TIRTH NAYAK(8563) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 18/08/2021
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C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. By this writ application under Article 226 of the Constitution of India, the writ applicant, a Company, has prayed for the following reliefs;
"(a) Your Lordship may be pleased to admit and allow this petition;
(b) Your Lordships may be pleased to issue a writ, order or direction in the nature of mandamus quashing and setting aside the action of the respondent authority in considering the bid submitted by the respondent No.2 and No.3 as qualified for Tender No.BN6RC21001 issued on 08.01.2021 for work of Hiring of O & M services of Drilling Rig of Cambay for a period of 03 years and Mehsana Asset for a period of 2 years and also consequential decisions taken thereof;
(c ) Your Lordships may be pleased to direct the respondent No.1 to hold an inquiry against the respondent No.2 and 3 for conducting a proper enquiry into the work experience certificate/documents submitted by the respondent No.2 and No.3 ascertaining their eligibility;
(d) Pending the admission, hearing and final disposal of this petition, Your Lordship may be pleased to stay the proceedings and to restrain the respondent No.1 from further proceeding with the tender process by considering the bid submitted by the respondent No.2 and No.3 in respect of tender No.BN6RC21001 issued on 08.01.2021 for the work of Hiring of O & M services of Drilling Rig of Cambay for a period of 03 years and Mehsana Asset for a period of 2 years;
(e ) Pending the admission, hearing and final Page 2 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 disposal of this petition, Your Lordships may be pleased to direct the respondent No.1 to conduct a proper enquiry into the work experience certificate/documents as submitted by the respondent No.2 and No.3 and further be pleased to direct the respondent No.1 to submit the status report of the said enquiry before this Hon'ble Court.
(f) Any other and further relief or reliefs to which this Hon'ble Court deemed fit in the interest of justice."
2. The facts, giving rise to this writ application, may be summarized as under;
2.1 The writ applicant is a Company incorporated under the Companies Act, 2013 (for short "the Act, 2013") and is engaged in the business of handling operation and maintenance of Drilling Rigs. It is the case of the writ applicant that it has been providing services to the respondent No.1-Oil & Natural Gas Corporation Ltd. (for short "the Corporation") for the past 15 years and has been handling operation and maintenance of Drilling Rigs for the Corporation in various parts of its operation.
2.2 It appears from the materials on record that the Corporation floated a tender No.BN6RC21001 dated 8 th January, 2021 for the work of Drilling Rigs of Cambay for a period of three years and Mehsana Asset for a period of two years.
2.3 It is not in dispute that the writ applicant along with Page 3 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 the other bidders participated in the said tender proceedings and offered their respective bids.
2.4 The Clause No. B.1.2 of the tender document lays down the eligibility criteria and experience of the bidder.
2.5 Clause B.1.2 reads thus;
B.1.2 Eligibility and Experience of the bidder:-
B.1.2.1 (I) Bidder (i.e., Single Bidder/Indian Joint Venture Company Incorporated) should have minimum 2 (two) years' experience (730 days) of Chater Hiring/opration & maintenance of drilling rigs.
(II) Bidder should have executed at least 1 (one) contract of similar nature of minimum one-year period (i.e. Charter Hiring/operation & maintenance of drilling rigs engaged in oil /gas well drilling) in the last 5 (five) years reckoned from the date of techno-commercial bid opening.
Experience in work-over operation even working with Drilling Rig will not be considered as working experience of drilling rig.
Note:- For B.1.2.1 (a)-I & II above, the following will be considered
i) "Operation" services means: Services for Drilling / operations on oil / gas wells and not the operations of any equipment.
ii) "Maintenance" means: Maintenance of equipment available on the rig (where drilling operations pertaining to oil/gas wells to be carried out under the same contract).
Page 4 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Iii) Duration of satisfactory execution of ongoing contracts shall also be considered for evaluation purpose.
(iv) The Bidders' experience in ongoing contract involving multiple services (with no interdependence) shall also be considered in meeting the experience subject to condition that the relevant service has been satisfactorily completed.
v) For experience of contracts executed / services provided concurrently, the common period shall not be added for calculating the minimum experience of 730 days.
To substantiate the required experience against para B.1.2.1 (a) - I & II above, Bidder to submit duly notarized copies of respective contracts (having details of (a) name of Operator with complete address (b) Duration (start & end) of contract (c ) Scope of work &
(d) Type of Rig offered in the Contract (s)), along with documentary evidence in respect of satisfactory execution of each of those contracts, in the form of notarized copies of any of the following documents (indicating respective contract number and type of services), such as (I) Satisfactory completion / performance report (OR) (ii) proof of release of Performance Security after completion of the contract (OR) (iii) proof of settlement / release of final payment against the contract (OR) (iv) any other documentary evidence that can substantiate the satisfactory execution of each of the contracts cited above.
(a) (III) An undertaking from the Bidder that "in case of documents / information provided by them proves to be incorrect or misleading, their offer shall be rejected by ONGC and also ONGC reserve the right to itself to put them on holiday.
Page 5 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 2.6 Thus, from the aforesaid, it is evident that the bidder should have minimum two years of experience (730 days of Charter Hiring / Operation and Maintenance of Drilling Rigs, and at the same time, the bidder should have also executed at least 1 (one) contract of the similar nature of minimum one year period of Charter Hiring / Operation and Maintenance of Drilling Rigs engaged in Oil / Gas Well Drilling in the last five years from the date of techno- commercial bid opening.
2.7 The tender document further clarifies that the experience in work-over operation even working with the Drilling Rig would not be considered as working experience of Drilling Rig.
2.8 It is the case of the writ applicant that on 5 th February, 2021, the technical bids of all the participants, i..e, the bidders were opened and at that point of time, it came to the knowledge of the writ applicant that the respondents Nos.2 and 3 respectively herein do not possess or are not fulfilling the eligibility criteria as prescribed in the Clause B.1.2 of the tender document referred to above. It is the case of the writ applicant that both the private respondents may be fulfilling the eligibility criteria so far as two years experience is concerned, but there is nothing on record to indicate that the two respondents, in last five years, had actually Page 6 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 executed at least one contract of similar nature of minimum one year period.
2.9 We also take notice from the pleadings in the memorandum of the writ application that it is also the case of the writ applicant that the two companies, i.e, the respondents Nos.2 and 3 respectively do not own any Oil/ Gas Well.
2.10 It is the case of the writ applicant that so far as the respondent No.2 M/s. Pallavi Industries is concerned, while offering its bid, submitted its work experience certificate issued by one another company by name M/s. Simplex Infrastructure Ltd. In other words, what is sought to be pointed out by the writ applicant is that M/s. Pallavi Industries (respondent No.2) had worked as a sub- contractor of M/s. Simplex Infrastructure Ltd. who was assigned the contract by the Oil India Ltd. According to the writ applicant, the respondent No.2 could be said to have worked as a sub-contractor and cannot be said to have executed any contract of Charter Hiring / Operation & Maintenance of Drilling Rigs on its own.
2.11 In the same manner, it is pointed out by the writ applicant that the respondent No.3 M/s. South Asia Consultancy has also relied upon the documents of contracts for the work undertaken by it for a Company by name Strata Oilfield Services Ltd. based at Dubai.
Page 7 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 According to the writ applicant, the Strata Oilfield Services Ltd. is merely an operation and maintenance service provider and does not have any oil or gas well of its own/ownership/lease. It is pointed out that the respondent No.3 had only executed a man management contract with the Strata Oilfield Services Ltd., which is sought to be portrayed as an O & M work experience contract. In other words, it is the case of the writ applicant that the respondent No.3 could be said, at the best, be said to have provided services to the Strata Oilfield Services Ltd. only to the extent of supplying man power and not for "O & M" for rigs operation and maintenance of drilling rigs.
2.12 Thus, the case put up by the writ applicant is that the respondents Nos.2 and 3 respectively are not qualified to offer their bids having regard to the Clause B.1.2, i.e, the clause providing for the eligibility and experience of the bidder.
2.13 According to the writ applicant, the two private respondents herein could be said to have furnished false or rather incorrect information and, in such circumstances, on such ground alone, the Corporation ought to have rejected the bids offered by the private respondents.
2.14 It is the case of the writ applicant that having regard to the aforesaid, vide the letter dated 14 th May, 2021, the Page 8 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Corporation was informed that the bids offered by the respondents Nos.2 and 3 respectively are liable to be rejected as both the respondents do not fulfill the eligibility criteria as prescribed in the tender document.
2.15 As the Corporation paid no heed to the representation of the writ applicant, referred to above, the writ applicant had to come before this Court with the present writ application.
3. On 8th June, 2021, this Court passed the following order;
"1. Amendment, as prayed for, is allowed. Necessary incorporation shall be carried out at the earliest.
2. We have heard Mr. Shalin Mehta, the learned senior counsel assisted by Ms. Roma I. Fidelis, the learned counsel appearing for the writ applicant.
3. It appears from the materials on record that the ONGC has issued a Notice of tender for drilling rigs of cambay for a period of three years. The writ applicant is one of the bidders of the tender floated by the ONGC along with the respondents nos.2 and 3 herein. It is pointed out that in all eleven individuals have bidded for the tender floated by the ONGC. It has been pointed out that the technical bids of all the parties were opened by the ONGC way back on 5 th February, 2021. It is further pointed out that the financial bids are now to be opened in near future. According to the writ applicant, the respondents nos. 2 and 3 are not eligible to bid having regard to the eligibility criteria as prescribed in the tender document.
4. Our attention was drawn at page 120 of the paper Page 9 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 book. Page 120 of the paper book is a part of the tender document which prescribes the eligibility and experience of the bidder. One of the eligibility criteria as prescribed in the tender document is that the bidder should have executed at least one contract of similar nature of minimum one year period (i.e. chartered hiring/operation and maintenance of drilling rigs engaged in oil/gas well drilling) in the last five years reckoned from the date of technocommercial bid opening. According to the writ applicant, the respondents nos.2 and 3 do not fulfill this eligibility criteria and in such circumstances, the ONGC should have rejected their bids outright.
4. Our attention has been drawn to page 153 of the paper book which is a representation addressed by the writ applicant dated 14.05.2021 to the ONGC in this regard. Mr. Mehta pointed out that his client has not heard anything from the ONGC as regards to the representation dated 14.05.2021.
5. Let Notice be issued to the respondents, returnable on 17.06.2021. Direct service is permitted."
4. In response to the notice issued by this Court vide order referred to above, all the three respondents have appeared and file their respective replies.
Submissions on behalf of the Writ Applicant
5. Mr. Shalin Mehta, the learned senior counsel assisted by Ms. Roma Fidelis, the learned advocate appearing for the writ applicant vehemently submitted that as the two private respondents are not fulfilling the eligibility criteria as prescribed in the tender document, the Corporation Page 10 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 should have rejected the bids offered by them at the threshold. According to Mr. Mehta, the interpretation or rather the construction of the Clause B.1.2 sought to be put forward by the Corporation is not in consonance with the plain language of the eligibility criteria as contained in the tender document. According to Mr. Mehta, the Corporation, being a "State" within Article 12 of the Constitution is expected to act in a fair manner and once it is brought to the notice of the Corporation that the private respondents are not fulfilling the eligibility criteria, then it owes a duty to reject the bids offered by the private respondents.
6. Mr. Mehta would submit that the Corporation should not be permitted to put forward its own interpretation of Clause B.1.2 detrimental to the interest of the writ applicant.
7. Mr. Mehta would submit that had it been a case where two constructions are possible of the eligibility clause, then probably the Court may be justified not to interfere but if only one construction is possible as put forward by the writ applicant, then the Court would be justified in interfering in the present matter.
8. Mr. Mehta would submit that so far as B.1.2.1 (I) is concerned, it could be said that the two private respondents may be possessing the requisite experience Page 11 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 of minimum two years in the filed of Charter Hiring / Operation and Maintenance of Drilling Rigs. However, so far as Clause B.1.2.1 (II) is concerned, the same is very clear, and by any stretch of imagination, it cannot be said that the two respondents had executed, in the past, at least one contract of similar nature of minimum one year period. The emphasis put by Mr. Mehta is on the word "executed". According to Mr. Mehta, what could be said to be in the mind of the Corporation at the time when it thought fit to prescribe the eligibility criteria is that the Company should have actually executed one contract on its own for a minimum period of one year. If any company like the two private respondents herein have worked as a sub-contractor, then it cannot be said that they have executed a contract of similar nature of minimum one year period.
9. Mr. Mehta, thereafter, invited the attention of this Court to Clause-B.1.2.1 (II)(V). Mr. Mehta would submit that in accordance with the said clause, the bidder is obliged to submit duly notarized copies of respective contracts along with the documentary evidence in respect of satisfactory execution of each of those contracts. According to Mr. Mehta, the documents produced by the private respondents would suggest or rather indicate that the documents evidence an agreement between the company and the contractor. The company means "the company who has been assigned the work of drilling" and Page 12 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 the contractor means "the contractor who has been assigned the contract of drilling". Therefore, according to Mr. Mehta, the two private respondents could be said to be sub-contractors. First there is a company who wants the drilling work to be undertaken; the said company assigns the work to "X" company and the "X" company in turn appointed the private respondents for supply of certain specialized crew positions for purpose of manning services onboard the rig. According to Mr. Mehta, such is not what the Corporation intended. The Corporation was very clear while prescribing the eligibility criteria that the bidder himself should have undertaken at least one contract on its own for a minimum period of one year,.
10. Mr. Mehta would submit that the Corporation should not be permitted, at this stage, to put forward its own interpretation or construction of the eligibility criteria as that would be very unfair on their part. According to Mr. Mehta, the stance of the Corporation in the present matter gives an impression that the Corporation is trying to show undue favour to the two private respondents.
11. Mr. Mehta, in support of his aforesaid submissions, has placed reliance on certain decisions of the Supreme Court (I) Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. & Ors., (2016) 16 SCC 818 and (ii) Vidarbha Irrigation Development Corporation vs. M/ s. Amoj Kumar Garwala, Civil Appeal No.1049 of 2019, Page 13 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 decided on 23rd January, 2019 (iii) The Silppi Constructions Contractors vs. Union of India & Anr., Special Leave Petition No.13802-13805 of 2019, decided on 21st June, 2019 and (iv) M/s. Galaxy Transport Agencies, Contractors, Traders, Transports & Supplies vs. New J.K. Roadways, Fleet Owners & Transport Contractors & Ors., Special Leave Petition (Civil) No.12766 of 2020.
12. Mr. Mehta, relying upon the aforesaid decisions of the Supreme Court, vehemently submitted that the words used in the tender document cannot be ignored or treated as redundant or superfluous, they must be given meaning and their necessary significance. He would submit that the eligibility criteria as prescribed in the tender document, which had to be strictly complied with, could be said to be not complied with and the Corporation has no power to condone lack of such eligibility criteria once having prescribed in the tender document. Mr. Mehta would submit that if the Corporation is permitted, at this stage, to put forward its own interpretation contrary to the real intent as reflected from the tender condition, the same would amount to perversity in the understanding or appreciation of the terms of the tender conditions.
13. In such circumstances, referred to above, Mr. Mehta prays that there being merit in his writ application, the same be allowed and the relief, prayed for, may be Page 14 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 granted.
Submissions on behalf of the Corporation
14. Mr. Devang Vyas, the learned Addl. Solicitor General of India assisted by Mr. Rituraj Meena, the learned advocate appearing for the Corporation, on the other hand, has vehemently opposed this writ application submitting that the writ application is not maintainable as the same has been filed at a premature stage. According to Mr. Vyas, the Corporation has yet to look into all the relevant aspects of the matter including the issues which have been raised in the present writ application.
15. However, according to Mr. Vyas, as the Corporation has been called upon by this Court to make its stance clear, it has thought fit to file reply clarifying all the relevant aspects of the matter.
16. Mr. Vyas straightway invited the attention of this Court to the following averments relevant for the purpose of deciding the present writ application, which reads thus;
"5. it is submitted that the petitioner has essentially raised the following contentions with respect to the eligibility of respondent No.2 and 3:-
i) That respondent No.2 and 3 are not having any oil/gas well of its own and hence, they do not meet eligibility criteria.
ii) That the respondents has only provided an Page 15 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 power supply and has no experience for operation and maintenance of any drilling rigs operation oil & gas well.
6. Be that it may be so, the answering respondent herein states that, so far as the first contention of the petitioner with respect to both the respondents not having any oil/gas of its own is concerned, the same is devoid of merits, in light of the fact that, there is no such condition the tender that requires the bidders to have oil/gas wells of their own. What is required under the tender is that:-
I. Minimum 2 years (730 days) Experience of Charter Hiring/Operation & Maintenance of drilling rigs.
II. There has to be executed at least one contract of "similar nature".
III The period of contract of similar nature should be of minimum one year period (i.e. Charter Hiring/Operation & Maintenance of drilling rigs engaged in oil/gas well drilling) IV) In the last five years reckoned from the date of techno-commercial bid opening.
The only negative covenant in the tender is that, experience in work over operation even working with drilling rig will not be considered as working experience of drilling rig.
Therefore, from the aforesaid conditions, it would be clear that both respondent No.2 and 3 based on the document submitted by them would be eligible in light of the fact that, it is never the requirement of the answering respondent that the bidder should have their own oil and gas wells.
So far as the second contention of the petitioner is concerned, it would be pertinent to point out that the scope of the work in the tender requires the operator to have partial man-management service contract for Page 16 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 drilling oil & gas wells with a maximum depth of 2200 meters will operator's one (01) no. Trailer mounted mobile drilling rig i.e. CW-IX drilling services, Cambay Asset. For the sake of convenience of this Hon'ble Court Clause 1.0 to Clause 1.2 of the tender are reproduced herewith:-
"1.0 Scope of work:-
The scope of work inter alia includes but not limited to the following The operator (Drilling Services, Cambay Asset ONGC herein after referred as Operator or ONGC) desires to have partial man-management service contract for drilling & gas wells with a maximum depth of 2200 meters with operator's one (01) no. trailer mounted mobile drilling rig i.e. CW-IN of Drilling services, Cambay Asset.
1.1 The contractor will have to deploy manpower for aforesaid O & M contract as per para 3.2 1.2 The contractor shall deploy manpower to accomplish the scope of work as per para 3.2. The contractor has to provide partial man-management services for the operation & maintenance of drilling rig to be deployed for drilling wells upto a maximum depth of 2200 meters in the state of Gujarat, India.
Therefore looking to the aforesaid scope of the work, it would be clear that, the operator is required to provide/ deploy man power for aforementioined Operation & Maintenance contract. It would be pertinent to note that, once the contract is awarded, the operator is required to bring in personnel as required under the scope of work, whose credentials, shall thereafter, once again will be checked by the answering respondent herein.
Therefore, the entire scope of the work for the contract is only to bring required man power which shall be verified by the answering respondent herein.
Page 17 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 That even, as per clause 2.0 dealing with responsibilities & obligations of contractor, requires that the personnel deployed by the contractor shall carry out the operations and maintenance of drilling rig as per the program given to them by shift in charge's/rig Engineer/DIC/Chemist or any authorized representative/administrative supervisor of the operator 24 hours as day (General shift during inter- location movement) & seven days a week conforming to standard drilling practices as per IADC.
For the sake convenience of this Hon'ble Court, responsibilities and obligations of contractor reproduced herein:-
4.0 RESPONSIBILITIES & OBLIGATIONS OF CONTRACTOR 4.1 The personnel deployed by the Contractor shall carry out the operations and maintenance of drilling rig as per the program given to them by Shift In charge's Rig Engineer/ DIC / Chemist or any authorized representative / administrative supervisor of the Operator 24 hrs a day (General shift during inter-location movement ) & seven days a week conforming to standard drilling practices as per IADC.
4.2 The Contractor personnel shall also carry out normal routine maintenance & preventive maintenance of the Operator's drilling units & its equipment as well sites as per the ONGC's requirement. If required, in case of shortage of staff, topman & rigman can work one step below & above to complete the norm, with permission of SIC/DIC.
4.3 In case of any loss to well/rig and Operator's material due to operational negligence / mishandling improper maintenance by contractor's personnel, the amount of loss as decided by Operator will be charged from the contractor any theft, subotage, pilferage noticed by contractor or the personnel deployed by him, it is to be brought to the notice of ONGC's drilling in charge / shift in charge Page 18 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 immediately.
1.5 The Contractor shall provide and bear the cost of personnel Protective Equipment (PPE) medical examination training & following during the entire period of contract.
2.5.1 Contractor's shall be responsible for boarding and lodging of his personnel Contractor will have to make his own arrangement of his cost for establishing any base camp (s) if so decides for providing boarding and lodging to his personnel Contractor shall also be responsible for transportation of all his personnel from base camp to worksite drilling rig and back.
2.5.2 Provide partable drinking water to the contractor's rig crew.
2.5.3 Provide a new Emergency vehicle at the time of deployment with Driver and fuel as his cost on 24 hours basis which will be stationed at site during the operations. The emergency vehicle shall contain stretcher and first aid kit.
2.5.4 Maintain all drilling / service and safety equipment in good working condition at all time; 2.5.5 Comply with all Indian Rules and Regulations and Acts pertaining to oil filed operation eg. Mines Act, 1952. Oil Mines Regulations 1984 including amendments thereof, OISD guidelines and all National Enactments.
2.5.6 Provide competent and efficient personnel with qualification and experience as laid out in clause 3.0 sub-clause 3.2 & 3.4.1 of manpower under scope of work acceptable to ONGC at the time of deployment of Contract and during currency of contract for operation in round the clock shift pattern. The duty off schedule of contractor's personnel must conform to Mines Act 1952 including amendments thereof and other guidelines specified by Directorate General of Page 19 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Mines Safety (DGMS). Dhanbad local labour shall be deployed wherever possible and the persons engaged should be physically and mentally fit.
2.5.7 The provision of safety kits as per DGMS requirement e.g. safety shoes, safety helmets & protective clothing/uniform to contractor's personnel according to the climate condition of the area where the rig is deployed will be Contractor's responsibility.
The contractor has to comply with all safety requirement as per QHSE and DGMS requirement and other statutory bodies like Oil Industry, Safety Directorate (OISD) . State and / or Pollution Control Boards Oil Mines Regulations. ONGC's safety observations, etc. well shall provide personal accident insurance coverage for personnel deployed by the contractor and will also submit necessary documentary proof to the Operator before deployment of its personnel at drill sites Operator shall not be liable in respect of any damage or compensation payable in respect of or in consequence of any health hazard due to reasons whatsoever be at working place or otherwise to contractor's personnel. Its agents or servants.
2.6 Contractor shall ensure that personnel deployed should be physically and mentally fit to undertake the jobs contained herein the contract. The contractor shall get the Initial Medical Examination & PME (Periodical Medical Examination) done as per Mines Rule and shall submit the physical fitness certificate along with the reports to ONGC for acceptance before deployment.
The bare view of the aforesaid scope or work and responsibilities and obligations of contractor would clearly indicate that the primary requirement of the contractor is to provide personnel for operation and maintenance of the rig whose credentials shall once again be verified by the answering respondent herein.
Page 20 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 In light of this fact, it is submitted that, the second contention of the petitioner that, respondent no.2 and 3 do not have any experience of operating and maintaining rig is incorrect and inconsequential. The copy of the tender documents having tender no.BN6RC21001 is annexed herewith and marked as Annexure RI. The copy of the certificate produced by respondent no.2 and 3 are annexed herewith and marked as "Annexure R2 colly."
17. Thus, from the aforesaid stance of the Corporation, it is clear that it has laid much stress on the scope of work, responsibilities and obligations of the contractor. According to the Corporation, the primary requirement of the contractor is to provide personnel / skilled manpower for operation and maintenance of the rig whose credential would be verified by the Corporation. According to the Corporation, the respondents Nos.2 and 3 do possess the requisite eligibility criteria as prescribed in the tender document.
18. Mr. Vyas clarified that there is no condition in the tender document which would require the bidders to have oil-gas well of their own. According to Mr. Vyas, the bidders should have minimum two years (730 days of experience of which at least 1(one) year in a continues contract duration of operation and maintenance of drilling rig owned either by the ONGC/OIL or any other similar oil company operating in India during the last five years prior to the date of opening of techno-commercial bid.
Page 21 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021
19. The aforesaid argument of Mr. Vyas gives us an impression that what is sought to be conveyed on behalf of the Corporation is that B.1.2.1 (I) and B.1.2.1 (II) are not two distinct clauses prescribing the eligibility criteria. Clause (I) is sought to be read in continuation with (II).
20. Mr. Vyas would submit that the tender has been floated by the Corporation. The tender conditions have been prescribed by the Corporation. The Corporation knows best its requirement, and if the Corporation at the threshold would have noticed that the bids offered by the private respondents are not in accordance with the eligibility criteria, then it would have accordingly rejected the bids. However, the Corporation should be permitted to put forward its own construction of the eligibility criteria and having regard to the documents furnished by the private respondents, the Corporation is of the view that the respondents Nos.2 and 3 respectively do fulfill the eligibility criteria as prescribed in the tender document. Ultimately, it is for the Corporation to take the final call whom it should assign the contract upon acceptance of the bid from amongst the bidders. However, according to Mr. Vyas, the writ applicant could not have come with the present writ application at this stage saying that the Corporation should be asked to reject the bids offered by the two private respondents.
21. In such circumstances, referred to above, Mr. Vyas Page 22 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 prays that there being no merit in the present writ application, the same be rejected.
Submissions on behalf of the respondent No.2
22. Mr. Tirth Nayak, the learned counsel appearing for the respondent No.2 has also vehemently opposed the present writ application. Mr. Nayak would submit that his client fulfills the eligibility criteria as prescribed in the tender document. Mr. Nayak invited the attention of this Court to few relevant averments made in the affidavit-in- reply on behalf of his client. The same reads thus;
"4.1 I deny that the Respondent No.2 has been participating in the O & M drilling tenders for the past many years in almost all the tenders which are floated by the assets of the ONGC all over India quoting the same experience, or that it has been disqualified at the stage of technical bid itself. I say and submit that the eligibility criteria mentioned in the said tenders was different to the one mentioned in the said Tender No.BN6RC21001. Even otherwise, I say and submit that the Respondent No.2 qualifies as per the eligibility criteria mentioned in the Tender No.BN6RC21001. I deny that the Respondent No.2 is an incompetent bidder as it is not a contractor for any of the Public/Private Oil Companies and is only a subcontractor which has only performed man- management and has not provided any O & M of drilling rigs engaged in Oil/Gas well. I say and submit that the Respondent No.2 has provided various services including drilling services and operation and management services to various customers. I deny that the Respondent is not a recognized service provider or that the experience of the Respondent No.2 cannot be held as valid. I deny that the Respondent No.2 has submitted any concocted or Page 23 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 fabricated documents. The same is nothing but a wild, baseless and unsubstantiated allegation and the Petitioner is put to strict proof in respect of the same.
6.1 I say and submit that the Respondent No.2 has duly executed and successfully completed a contract for operation, man management and relevant services for operation and management of one 1500 HP Capacity Drilling Rig in Assam and Arunachal Pradesh dated 3rd July, 2015 (Copy at Annexure A hereto) of Simplex Infrastructure Ltd. I say and submit that the scope of work of the said contract specifically inter alia required the Respondent No.2 to undertake drilling and Operation and Management in respect of Oil and Gas Rigs of Oil India Ltd. The work order dated 24.08.2015 and the subsequent letters extending the said contract upto September, 2020 are annexed herewith and marked as Annexure-B copy hereto.
7. I say and submit that the said Simplex Infrastructure Ltd. Was awarded one contract by Oil India Ltd. For inter alia providing drilling and Operation and management services for its 500 drilling rig. I say and submit that the Respondent No.2 was to provide various services which inter alia specifically included drilling and Operation and Management services. I say and submit that various employees including several employees of the Respondent No.2 were Approved as manpower by the said Oil India Ltd. Vide its letter dated 4.12.2005 (Copy at Annexure C hereto). The Employees Provident Fund statement which illustrate that the said employees were employees of the Respondent No.2 is at Annexure D hereto. I state that the said contract was duly executed by the Respondent No.2 and Oil India Ltd. Was pleased to issue a demobilization letter dated 28.06.2020 (Copy at Annexure E hereto) to Simplex Infrastructure Ltd. Consequently, on 8.10.2020 (Copy at Annexure F hereto) Simplex Infrastructure Ltd. was pleased to Page 24 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 issue a completion certificate to the Respondent No.2.
8. I say and submit that the Respondent No.2 was also an approved vendor of Oil India Ltd for the said project and various payments were made directly to the Respondent No.2 by Oil India Ltd. Therefore, the Respondent No.2 was duly recognized by Oil India Ltd.,as well as a service provider. A copy of the payment advice in respect of the payments done by Oil India Ltd are attached herewith and marked as Annexure G hereto.
9. In view of the above, it is clear that the Respondent No.2 has successfully executed and duly completed various works pursuant the aforementioned contract with Simplex Infrastructure Ltd. which specifically included work and Operation and Management Services in respect of the 1500 HP Capacity Drilling Rig of Oil India Ltd in Assam and Arunachal Pradesh between 2015 and 2020. I say and submit that therefore, the Respondent No.2 satisfies the requirements mentioned in Clause B.1.2.1 which require 2 (two) years experience of Charter Hiring/operation and maintenance of drilling rigs and at least 1 (one) contract of similar nature of minimum one year period (i.e. Charter Hiring / Operation & Maintenance of drilling rigs engaged in oil /gas well drilling) in the last 5 (five) years. I state that the said eligibility criteria does not require that the said rigs in respect of which the work is done are required to be self owned by the other contracting party. Moreover, the terms of the contract with Simplex Infrastructure Ltd clearly illustrate that the scope of work included various other work including drilling and Operation and Management and therefore it cannot be said that the Respondent No.2 has experience only provided man power. I say and submit that the Respondent No.2 has executed the contract of Oil India Ltd which included drilling, operation and maintenance of the 1500 HP rig of the Oil India Ltd.Page 25 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022
C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021
10. I further state that the petitioner has filed this petition only to eliminate healthy competition posed by new bidders who may have put in more competitive rates which might ultimately benefit the Respondent No.1. I further crave liberty to add, amend, alter, remove, delete, rescind or modify the averments stated hereinabove and also crave leave to file a further and fuller affidavit if required and called upon by this Hon'ble Court."
23. Thus, according to Mr. Nayak his client could be said to have successfully executed and duly completed various works pursuant to the contract with the Simplex Infrastructure Ltd., which specifically included the drilling work and operation and maintenance services in respect of the 155 HP capacity drilling rig of Oil India Limited at Assam and Arunachal Pradesh between 2015-2020. It is argued by Mr. Nayak that the terms of the contract with Simplex Ltd. do indicate the scope of work that included various other works like drilling and operation and maintenance.
24. Mr. Nayak also invited the attention of this Court to Page 484 of the paper-book. At Page-484, the contract agreement between M/s. Simplex Infrastructure Ltd. and M/s. Pallavi Industries (respondent No.2) has been annexed. The plain reading of the said contract agreement at page-484 would indicate that M/s. Simplex Infrastructure (Company) was awarded the contract from "Oil India Ltd." for drilling services in the State of Assam and Arunachal Pradesh. As the "Company" required the Page 26 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 services of "Operation Man Management and relevant services, it entered into an agreement in that regard with the respondent No.2(Contractor). Thus there was an agreement between the"Company" and the "Contractor". The contractor means, the respondent No.2.
25. Mr. Nayak, in support of his aforesaid submissions, has placed reliance on the following decisions;
(i) Municipal Corporation, Ujjain & Anr. vs. BVG India Limited & Ors., reported in (2018) 5 SCC 462;
(ii) Jagdish Mandal vs. State of Orissa & Ors., reported in (2007) 14 SCC 517;
25. In such circumstances, referred to above, Mr. Nayak prays that the case put up by the writ applicant may not be accepted and the writ application be rejected.
Submissions on behalf of the respondent No.3
26. Mr. Zubin Bharda, the learned counsel appearing for the respondent No.3 also vehemently opposed the present writ application submitting that the writ application has been filed with a mala fide intention. Mr. Bharda would submit that his client could also be said to be fulfilling the eligibility criteria as prescribed in the tender document. Mr. Bharda invited the attention of this Court to the following averments made in the affidavit-in-reply filed on behalf of his client;
Page 27 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 "3. The allegation levelled by the petitioner in the writ petition under reply that Strata Drill Oilfield Services incorporated in the United Arab Emirates and having its registered office situated in the UAE upon inquiry made by the petitioner is merely an operation and maintenance service provider and it does not have nay oil or gas well of its own / ownership/ lease. It is further alleged that the Respondent No.3 has only executed a man management contract with Strata Drill Oilfield Services Limited and the same is being portrayed as an O & M work experience contract. It is further alleged that according to the petitioner, Strata Drill Oilfield Services Limited was provided by manpower supply by the respondent No.3 and not for the O & M for rigs operating for any oil / gas wells and therefore, when experience documents pertaining to O. & M Experience have been submitted they are according to the petitioner fabricated and although the ONGC is required to look into the matter in detail is deliberately not inquiring and according to the petitioner, the representations made by the petitioner have also not been adhered to and ignored. Therefore, according to the petitioner, as the Respondent No.3 has concocted or fabricated documents to illegally get qualified for the tender in question despite not meeting with the criteria mentioned in the tender document as per Clause 40 of the tender notice submission of forged documents for fulfill it of any of the tender conditions shall immediately call for rejection of the bid by the ONGC. As against that it is submitted that the above alleged assertions and allegations made by the petitioner in the petition are absolutely false, frivolous and devoid of any truth and not admitted. In fact, these allegations are levelled for creating a panic in the mind of the person reading them so as to interfere in the writ petition which is otherwise premature, not maintainable and contains allegations which are false. The certificate produced by the Respondent No.3 along with the tender document which is dated 14.08.2017, which is a completion Page 28 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 certificate for contract No.SOSBMCC/SAC/JC-DCI- PGFK/2015 issued by Stratadrill appreciating the successful execution of the contract by the Respondent No.3 herein is produced herewith the reply affidavit as Annexure-RA-1. A bare perusal of the certificate clearly reads as under:-
"This is to certify that South Asia Consultancy has been awarded contract for supply of Junior Crew for Operation and Maintenance of Jack-up Drilling Rig DCI0I (F & GL, Super Mod-II) and DCI-II (F & GL Super Mod-II) operating in the Persian Gulf, comprising of painter, Roustabout, Floor man, Derrick Man, Assistant Driller, Welder, Mechanic, Electrician, Radio Operator, Crane Operator, HSE Officer, Media, Motor Man, Deck Foreman, and Assistant Barge Master.
We hereby certify that South Asia Consultancy has successfully executed the contract for supply of manpower to Stratadrill Oilfield Services DMCC as per scope of work from 1 st June, 2015 to 31st May, 2017 for a period of 2 (two) years and during this time the rigs where the cres have been deployed have successfully drilled more than 2 wells of depth more than 3000 meters."
It is therefore, submitted that the completion certificate which has been produced by the Respondent No.3 along with the tender document has successfully executed the contract and it has been also mentioned in the certificate that the Respondent No.3 had been awarded the contract for supply of Junior Crew for operation and maintenance of Jack-up Drilling Rig DCI-I (F & GL, Super Mod-II) and DCI-II (F & GL, Super Mod-II) and the crew which was deployed by the Respondent No.3 has successfully drilled more than two wells of depth more than 300 meters. To eliminate the confusion sought to be created by the petitioner that the Respondent No.3 hadonly provided services to Strata Drill Oilfield Service limited towards manpower supply and not for O & M (Operation and Page 29 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Maintenance). I crave leave to annex as Annexure- RA-2, the agreement which was executed between Strata Drill Oilfield Services DMCC and the Respondent No.3 wherein it has been specifically under the head titled APPOINTMENT in Clause 1.1 specified that the company (Strata Drill Oilfield Services DMCC) appoints contractor / South Asia Consultancy as its contractor for the supply of certain crew positions as specified under APPENDIX-A below for operation and maintenance services of offshore rigs at company site location in the Persian Gulf. In the definition of Contractor in the said agreement also it has been specified that the contractor represents that it is a company that specializes in the supply and management of specialized human resources to the oil and gas well drilling industry, which would mean that the Respondent No.3 even at the relevant point of time had the specialization and work experience for supply and managing the specialized human resources / work force and for the specialization of management and operation required for the Oil and Gas drilling industry and upon successful completion of the work contract, the certificate has come to be issued from Strata Drill Oilfield Services which is being misinterpreted by the petitioner in the writ petition by alleging that the certificate that has been produced by the Respondent No.3 is concocted or fabricated. I state that these documents which have been produced along with the tender document by the Respondent No.3 are at large before the ONGC and they are being inquired into to test their genuineness and veracity. However, as stated hereinabove, only with an ulterior intention of eliminating healthy completion at its inception as the petitioner feels threatened by the presence of the Respondent No.3 as one of the tenderer, the writ petition under reply which is absolutely premature has come to be filed and by making false and baseless assertions, a prejudice is being created against the petitioner and on the other hand, undue pressure is being created on the ONGC to also disqualify the Respondent No.3 Page 30 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 which is a clear tactic adopted by the petitioner which should not be entertained as the purpose for inviting open bids from qualified operation and maintenance service providers is to ensure that the best work force or the best contractor is awarded the works contract. However, by filing petitions which are devoid of any merit, the writ petitioner is trying to create a prejudice and eliminate healthy competition which should not be permitted.
4. The petitioner has also contended in the writ petition that Strata Drill Oilfield Services do not have or possess oil field of their own and therefore, the Respondent No.3 which has claimed to have operated and mamaged or provided services for drilling of the rigs to another service provider such as Strata Drill Oilfields Services Limited would not be eligible for being considered as per the eligibility criteria. As against that it is submitted that such assertion is made by the petitioner in the writ petition on the basis of its own conjectures and surmises without there being any force in the contention raised in the writ petition. It is submitted that the tender document does not contain any such requirement or condition or an embargo which prohibits a contractor or a company from bidding or taking part in the tender process, if it has not provided operation and maintenance services to companies owning oil rigs or wells. In fact, what is stipulated in the tender document is that ONGC seeks to hire operation and maintenance services for drilling rigs of Cambay for a period of three years and Mehsana Asset for a period of two years. The eligibility criteria as stipulated in Clause B.1.2.1 of the tender document, stipulates that a bidder should have minimum two years experience of charter hiring / operation and maintenance of drilling rigs, whereas Sub Clause-ii further stipulates that the bidder should have executed at least one contract of similar nature of minimum one year (either of charter hiring or operation and maintenance of drilling rigs engaged in Oil / Gas drilling in the last five years Page 31 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 reckoned from the date of Techno Commercial bid opening. A further embargo has been raised by stipulating that experience in work over experience even working with drilling rig will not be considered as working experience of drilling rig. A bare perusal of the Clause of Sub Clause II of Clause B.1.2.1 indicates that bidder should have executed at least one contract of similar nature of minimum one year period for either charter hiring or operation and maintenance of drilling rig engage in Oil / Gas well drilling, which would mean that ultimately the tenderer who bids for the works contract should have experience of operated / managed drilling rigs engage in Oil / Gas well drilling which experience the Respondent No.3 possess as per the certificate issued by Strata Drill Oilfield Pvt. Limited. The condition does not require that the operation and maintenance of drilling rigs engaged in Oil and Gas well drilling should have been performed for the company owing rigs or oil wells. Therefore by creating confusion by smart drafting a prejudice is sought to be created so as to eliminate the Respondent No.3 from further participation of the tender bid, which is not permissible. Moreover, as stated hereinabove, ONGC which is the Principal which has floated the tender document has an in all likelihood would constitute and expert committee as it is into the business of oil exploration as well as drilling of rigs as well as oil / gas wells since the past many years and therefore, it should be left to the discretion of the expert committee which would ultimately determine as to whether the Respondent No.3 is eligible for further participation in the tender. It is also required to be stated that the manpower in the form of skilled and unskilled professional that would be provided by the contractors including the Respondent No.3 would also have to undergo further scrutiny by way of interviews by the committee appointed by the ONGC to justify the work force provided by the contractors and the ONGC is not likely to accept with a blind eye the work force skilled / unskilled that would be supplied by the contractor/s Page 32 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 as ultimately the works contract relates to not only to services or operation but also the management of the rigs. Therefore, by merely assuming that the ONGC has not taken into consideration the representations made by the petitioner about the likelihood of the Respondent No.2 and 3 not fulfilling the eligibility criteria is not well founded as the ONGC being into the business of the oil exploration having its own specialized committee which would be inquiring into the certificate of experience submitted by the Respondent Nos.2 and 3 would be taking a conscious decision after undertaking the process of verification which cannot be got thwarted by the petitioner by filing a writ petition which is absolutely premature. The contention of the petitioner that the ONGC which is into the business of drilling of oil rigs since the past 25 years or more would not look into the eligibility criteria of the tenderers is absolutely ill-founded and as stated hereinabove, it is a tactic deployed by the petitioner to eliminate healthy competition. Upon such circumstance, when the petition is premature, and when everything is at large before the ONGC, it is humbly urged that this Hon'ble Court may not exercise its extraordinary power and dwell it an inquiry with respect to the genuineness and veracity of the documents submitted by the Respondent No.3 and in turn be pleased to dismiss the writ petition."
27. Mr. Bharda also invited the attention of this Court to the certificate issued by the Strata Drill for whom his client had worked as a contractor. The certificate dated 14th August, 2017 is at page-177, Annexure-RA-1. In the certificate relied upon by Mr. Bharda, it has been stated that the South Asia Consultancy has successfully executed the contract for supply of man power to Strata Drill Oil Field Services in accordance with the scope of work for the Page 33 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 period between 1st June, 2015 and 31st May, 2017 for a period of two years and during this period, the rigs where the crews had been deployed had successfully drilled more than two wells of depth of more than 3000 meters. Mr. Bharda also invited the attention of this Court to the agreement executed between his client and Strata Drill Oil Field Services DMCC dated 1st June, 2015 which is at page 178, Annexure-RA-2.
28. Mr. Bharda laid much emphasis on Clause-7 of the agreement which prescribes the responsibilities and obligations of the contractor, i.e, his client. We quote Clause-7;
"CONTRACTORS RESPONSIBILITIES AND
OBLIGATIONS
The CONTRACTOR undertakes to provide full crew management services, including but not limited to, the following 7.1 Contractor shall perform the work in accordance with this Agreement, in accordance with good oilfield practice and with all applicable regulations in force in the Operating Area and Site Location, consistent with the status of an independent CONTRACTOR all with due diligence and care and without unnecessary delays and interruptions.
7.2 CONTRACTOR shall provide experienced and qualified personnel, curriculum vitae of all personnel to be submitted on the COMPANY prior to appointment the for approval and COMPANY reserve the right to interview personnel if required.
7.3 CONTRACTOR shall organize personnel's shifts Page 34 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 in accordance with COMPANY's instructions and shift scheduled to complete shifts so that no language problem arise between and among CONTRACTOR's personnel, and COMPANY'S personnel.
7.4 CONTRACTOR shall ensure that none of its personnel shall stay on site for a period in excess of forty two (42) consecutive days without written approval of COMPANY.
7.5 CONTRACTOR shall ensure that all personnel are medically fit for the job they are assigned to; hold the requisite medical fitness certificates at all times, renew the relevant medical fitness certificates, on an annual basis and provide proof of medical fitness certificate to COMPANY at any time. All personnel shall undergo a fresh medical fitness check prior to joining the Site Location for the first time and on a yearly basis thereafter, The medical checks to confirm to OGUK (formerly UKOOA) standards, ABERMED or Director General of Shipping India approved. Alternative standards ofmedical checking may be acceptable if they can be shown to meet or exceed above standards.
7.6 CONTRACTOR to ensure that all personnel hold the requisite safety training certificate provide trained personnel in accordance with the training requirements outlined in Appendix A and are deemed to be included within the CONTRACTOR's quoted day rates for the crew.
7.7 CONTRACTOR to maintain an up to date Training Marks at all times for COMPANY's reference for all their personnel. Any additional training requirements over and above what was been included in the quoted day rate shall be either arranged by COMPANY OR organized by CONTRACTOR and invoiced to COMPANY according to the general terms of this agreement.
7.8 CONTRACTOR , at its sole cost and expense, Page 35 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 shall:-
(a) provide the full crew as specified in APPENDIX A enclosed herewith.
(b) obtain all necessary permits, licenses, certificate or other such authorization required by the laws of the Operating Area, for its operations contemplated herein;
(c ) pay all necessary sales or gross receipt taxes, duties, corporate taxes, governmental fees and other financial liabilities of Contractor and personnel income taxes relating to its services and its employees levies currently or hereafter, as required by the laws of the Operating Area.
(d) Provide adequate insurance coverage for its employees as specified in APPENDIX B enclosed herewith and also produce proof of such at COMPANY's request including the insurance certificates."
29. In such circumstances, referred to above, Mr. Bharda prays that there being no merit in the present writ application, the same be rejected.
30. Mr. Bharda, in support of his aforesaid submissions, has placed reliance on the following case law;
(i) Caretel Infotech Ltd. vs. Hindustan Petroleum Corporation Ltd. & Anr., reported in (2019) 14 SCC 81;
(ii) JSW Infrastructure Ltd. & Anr. vs. Kakinada Seaports Ltd. & Ors., reported in (2017) 4 SCC 170;
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(iii) Afcon Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited & Anr., reported in (2016) 16 SCC 818
31. In such circumstances, referred to above, Mr. Bharda prays that there being no merit in this writ application, the same be rejected.
ANALYSIS
32. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the writ applicant is entitled to any of the reliefs prayed for in the present writ application.
33. We have given more than a fair idea as regards the controversy involved in the present litigation. What should be the approach of this Court in the matters of the present type?. What should the Court look into?
34. We propose to address ourselves on the following questions;
(i) Whether Clause B.1.2.1(I) and Clause B.1.2.1 (II) are two separate and distinct eligibility criteria?
(ii) Whether only one meaning or construction of the eligibility clause is possible or a different view is possible?.
(iii) In what manner, the word "executed" in Clause Page 37 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 B.1.2.1 (II) should be construed so as to give a meaningful purpose to the eligibility criteria as fixed by the Corporation?
(iv) Whether the Corporation is trying to put forward altogether a different interpretation of its eligibility criteria as prescribed in the tender document while opposing the present writ application? In other words, is the Corporation trying to make out a new eligibility criteria than the one it intended at the time when the eligibility criteria was fixed and incorporated in the tender document?
(v) Having regard to the specific stance of the Corporation, could it be said that the Corporation is trying, in one way or the other, to favour respondents Nos.2 and 3 respectively?
(vi) Is any case of mala fide or arbitrariness or irrationality or perversity has been made out by the writ applicant?
35. Before we proceed to advert to the rival submissions canvassed on either side and record our findings, we must look into the position of law which should ordinarily be made applicable in the litigations of the present type.
36. In Afcons Infrastructure Limited (supra), the Supreme Court has observed as under;
Page 38 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 "11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622 it was held by this Court, relying on a host of decisions that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us.
12. In Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, (1989) 3 SCC 293, it was held that the constitutional Courts are concerned with the decision making process. Tata Cellular v. Union of India, (1994) 6 SCC 651, went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional Courts can interfere if the decision is perverse. However, the constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. This was confirmed in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, as mentioned in Central Coalfields.
13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met Page 39 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 before the constitutional Court interferes with the decision making process or the decision.
14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. In this context, the use of the word 'metro' in Clause 4.2
(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.
15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given."
37. What is discernible from the aforesaid decision of the Supreme Court is that the owner or the employer of a project could be said to be the best person to understand and appreciate its requirements and interprete its documents as those could be said to have been offered by them. The Supreme Court has sounded a note of caution saying that the constitutional Courts must defer to such Page 40 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 understanding and appreciation of the tender documents unless there is a mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions.
38. The aforesaid decision of the Supreme Court in Afcons Infrastructure Ltd. (supra) has been referred to and relied upon in Vidharbha Irrigation Development Corporation (supra) wherein the Supreme Court has observed in Para-15 as under;
" It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court."
39. Thus, from the aforesaid, it is evident that what is sought to be conveyed by the Supreme Court is that an essential tender condition must be asked to be strictly complied with and there is no power to condone the matter of such strict compliance. In a given case, such contention may amount to perversity in the understanding or appreciation of the terms of the tender conditions. If that be so, than the Constitutional Court must interfere.
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40. In J.S.W. Infrastructure Limited (supra), the Supreme Court has laid down the principles which the Writ Courts must bear in mind while dealing with contractual matters. We quote the relevant observations as under;
"7. On a bare reading of the Policy Clause some weightage and meaning has to be given not only to the word "next" as done by the High Court but also to the words "only one private operator" appearing in the opening part of the Clause. The words "only one private operator" cannot be treated as surplusage. The entire clause has to be read as a whole in the context of the purpose of the policy which is to avoid and restrict monopoly. In our opinion, this Clause will apply only when there is one single private operator in a port. If this single private operator is operating a berth, dealing with one specific cargo then alone will he not be allowed to bid for next berth for handling the same specific cargo. The High Court erred in interpreting the clause only in the context of the word "next" and ignored the opening part of the Clause which clearly indicates that the Clause is only applicable when there is only one private berth operator. It appears to us that the intention is that when a port is started, if the first berth for a specific cargo is awarded in favour of one private operator then he cannot be permitted to bid for the next berth for the same type of cargo. However, once there are more than one private operators operating in the port then any one of them can be permitted to bid even for successive berths. In the present case, as pointed out above there already 5 private operators other than the first consortium.
9. We may also add that the law is well settled that superior courts while exercising their power of judicial review must act with restraint while dealing with contractual matters. A Three Judge Bench of this Court in Tata Cellular vs. Union of India, (1994) 6 SCC Page 42 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 651, held that (i) there should be judicial restraint in review of administrative action; (ii) the court should not act like court of appeal; it cannot review the decision but can only review the decision making process (iii) the court does not usually have the necessary expertise to correct such technical decisions.; (iv) the employer must have play in the joints i.e., necessary freedom to take administrative decisions within certain boundaries."
41. In M/s. Galaxy Transport Agencies (supra), the Supreme Court, after referring to Afcons Infrastructure (supra) and few of its earlier decisions, has observed as under;
"In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings."
42. Thus, the Supreme Court reiterated saying that the authority that authors the tender document is the best person to understand and appreciate its requirements and its interpretation should not be in the form of guess by a Court in judicial review proceedings.
43. In Jagdish Mandal (supra), the Supreme Court observed in Para-22, as under;
"Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is Page 43 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say :
'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.'
ii) Whether public interest is affected.
If the answers are in the negative, there should be no Page 44 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 interference under Article 226. Cases involving black- listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
44. In Municipal Corporation, Ujjain (supra), the Supreme Court observed the following in Paras-14,20, 27,42 and 45 as under;
"The judicial review of administrative action is intended to prevent arbitrariness. The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; if the process adopted or decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference under Article 226.
In Karnataka State Industrial Investment & Development Corporation Limited v. Cavalet India Ltd. & Ors. (2005) 4 SCC 456, this court after taking into consideration various questions on various subjects laid down the following legal principles, viz.-
"(i) The High Court while exercising its jurisdiction under Article 226 of the Constitution does not sit as an appellate authority over the acts and deeds of the Financial Corporation and seek to correct them. The doctrine of fairness does not convert the writ courts into appellate authorities over administrative authorities.Page 45 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022
C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021
(ii) In a matter between the Corporation and its debtor, a writ court has no say except in two situations:
a There is a statutory violation on the part of the Corporation, or b Where the Corporation acts unfairly i.e. unreasonably.
(iii) In commercial matters, the courts should not risk their judgments for the judgments of the bodies to which that task is assigned.
(iv) Unless the action of the Financial Corporation is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however, more prudent, commercial or businesslike it may be, for the decision of the Financial Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable.
(v) In the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold and this could be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer.
(vi) Public auction is not the only mode to secure the best price by inviting maximum public participation, tender and negotiation could also be adopted.
(vii) The Financial Corporation is always expected to try and realise the maximum sale price by selling the assets by following a procedure which is transparent and acceptable, after due publicity, wherever possible and if any reason is indicated or cause shown for the default, the same has to be considered in its proper perspective and a conscious decision has to be taken as to whether action under Section 29 of the Act is called for. Thereafter, the modalities Page 46 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 for disposal of the seized unit have to be worked out.
(viii) Fairness cannot be a one-way street. The fairness required of the Financial Corporations cannot be carried to the extent of disabling them from recovering what is due to them. While not insisting upon the borrower to honour the commitments undertaken by him, the Financial Corporation alone cannot be shackled hand and foot in the name of fairness.
(ix) Reasonableness is to be tested against the dominant consideration to secure the best price.
Thus, only when a decision making process is so arbitrary or irrational that no responsible authority proceeding reasonably or lawfully could have arrived at such decisions, power of judicial review can be exercised. However, if it is bona fide and in public interest, the Court will not interfere in the exercise of power of judicial review even if there is a procedural lacuna. The principles of equity and natural justice do not operate in the field of commercial transactions. Wherever a decision has been taken appropriately in public interest, the Court ordinarily should exercise judicial restraint. When a decision is taken by the concerned authority upon due consideration of the tender document submitted by all tenderers on their own merits and it is ultimately found that the successful bidder had in fact substantially complied with the purpose and object for which the essential conditions were laid down, the same may not ordinarily be interfered with.
That the authorities should be given latitude in making a decision on the offers was also observed in Sterling Computers (supra). Therein, the Court observed that any judicial interference amounts to encroachment on the exclusive right of the executive to take a decision.
Evaluating tenders and awarding contracts are Page 47 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 essentially commercial transactions/contracts. If the decision relating to award of contract is in public interest, the Courts will not, in exercise of the power of judicial review, interfere even if a procedural aberration or error in awarding the contract is made out. The power of judicial review will not be permitted to be invoked to protect private interest by ignoring public interest. Attempts by unsuccessful bidders with an artificial grievance and to get the purpose defeated by approaching the Court on some technical and procedural lapses, should be handled by Courts with firmness. The exercise of the power of judicial review should be avoided if there is no irrationality or arbitrariness. In the matter on hand, we do not find any illegality, arbitrariness, irrationality or unreasonableness on the part of the expert body while in action. So also, we do not find any bias or mala fides either on the part of the corporation or on the part of the technical expert while taking the decision. Moreover, the decision is taken keeping in mind the public interest and the work experience of the successful bidder."
45. In Silppi Constructions Contractors (supra), the Supreme Court, after referring to various of its earlier decisions including Jagdish Mandal (supra), Afcons Infrastructure Ltd. (supra), Municipal Corporation, Ujjain (supra), observed in Paras-19 and 20 as under;
"19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clearcut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many Page 48 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, Page 49 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
46. The following is discernible from the above referred decision of the Supreme Court;
(a) The Writ Court, being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias;
(b) The Courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters;
(c ) The Court should ordinarily be loathe to interfere with in contractual matters unless a clear cut case of arbitrariness or mala fides or bias or irrationality is made out;
(d) The bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of the superior courts but this discretionary power must be exercised with a great deal of restraint and caution;
(e) In contracts involving technical issues the Courts should be more reluctant because judges do not possess the expertise to adjudicate upon such technical issues;
(f) The Courts must give "fair play in the joints" to the Page 50 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Government and public sector undertakings in the matters of contract;
(g) The Court must bear in mind that the authority floating the tender is the best judge of its requirements and, therefore, the Courts interference should be minimal. The authority which floats the contract or tender and has authored the tender documents is the best judge as to how documents should be interpreted;
(h) If two interpretations are possible, then the interpretation of the author must be accepted;
(I) The Courts would be justified to interfere only with a view to prevent arbitrariness, irrationality, bias, mala fides or perversity;
47. Bearing in mind the aforesaid principles of law, as explained by the Supreme Court, we now proceed to consider the case on merits.
48. We are sure of one thing that the eligibility criteria as prescribed in the tender document is in two parts. The first requirement is that the bidder (i.e. single bidder/company should possess minimum two years of experience (730 days) of Charter Hiring / Operation and Maintenance of drilling rigs. Over and above this requirement, the bidder should also have executed at least 1 (one) contract of Page 51 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 similar nature of minimum one year period in the last five years reckoned from the date of techno-commercial bid opening.
49. When tender document says "contract of similar nature" it means the contract of Charter Hiring / Operation and Maintenance of Drilling Rigs. Thus, there are two mandatory requirements which a bidder needs to fulfill before he could be said to be fulfilling the eligibility criteria. B.1.2.1 (I) and B.1.2.1 (II) are separate and distinct.
50. Upon scrutiny of the documents, as produced by the bidder, if it is found that one of the requirements is not being fulfilled, then it could be said that bidder does not possess the required or the requisite eligibility to participate in the tender proceedings.
51. We are of the view that so far as the requirement of minimum two years of experience is concerned, such experience could be in varied forms. When we say in varied forms, of course what we mean is that such experience has to be in connection with the operation and maintenance of drilling rigs. However, our understanding of (I) is that for the purpose of minimum two years of experience, it is not necessary that he should have executed at least one contract of similar nature. We are saying so because again at the cost of repetition, we state that experience can be in many forms. However, the Page 52 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 issue does not rest over here. The second requirement is about actual execution of atleast one contract of similar nature of minimum one year period in the last five years reckoned from the date of techno-commercial bid opening. If this requirement is not shown to be fulfilled, the bidder is out of the tender proceedings.
52. The word used in "B.1.2.1(II)" is "executed". What should we understand by the word "executed" with reference to the eligibility criteria as prescribed in the tender document and also the nature of the contract. The plain meaning which can be ascribed to the word "executed" is to undertake the work of Charter Hiring/Operation and Maintenance of Drilling Rigs engaged in oil/gas well drilling.
53. In the aforesaid context, the question that arises for our consideration is that when execution of atleast one contract has been insisted upon, then whether such execution should have been undertaken directly as a contractor or a sub-contractor. According to Mr. Mehta, in this regard, a company should have assigned the entire work of maintenance of drilling rigs to the private respondents herein, however, such is not the case because the private respondents have shown that they have worked as the sub-contractors. By way of illustration, we may explain that there is"A" company who wants the drilling work to be undertaken. "A" enters into Page 53 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 an agreement with "B" and "B" is asking "C" to undertake the work. This "C" are the two private respondents herein in the present writ application. According to Mr. Mehta, the execution of the work should be pursuant to a contract between "A" and "C" directly and not that "C" works for "B" pursuant to the agreement between "A" and "B".
54. We are of the view, having regard to the materials on record, that if it is the stance of the Corporation that the private respondents could also be said to be fulfilling the eligibility criteria as they could be said to have executed at least one contract of maintenance of drilling rigs for a period of minimum one year, may be on behalf of a different company, then having regard to the scope of work, the Corporation cannot be said to be guilty as alleged in any manner of putting forward altogether a different interpretation of its eligibility criteria then the one it intended at the time of framing of the tender document.
55. We must pave some way for the Corporation to interpret the two clauses of the eligibility criteria in accordance with the stance put forward before us.
56. It is difficult for us to take the view that only one interpretation is possible. Had it been the case, we would not have permitted the Corporation to put forward its own interpretation of the eligibility criteria at this point of time. However, both the respondents could be said to have Page 54 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 undertaken the operation and maintenance of drilling rigs engaged in oil/gas well drilling pursuant to the contract entered into between the private respondents and the two companies named above. So far as the respondent No.2 is concerned, it is Oil India Ltd.- M/s. Simplex Infrastructures Ltd.-and the respondent No.2 and so far as the respondent No.3 is concerned, it is the Company Site in Persian Gulf- Strata Drill Oil Field Services DMCC- and the respondent No.3.
57. At this stage, we may look into the certificate of the work order dated 24th August, 2015 issued in favour of M/s. Pallavi Industries (respondent No.2) by Simplex Infrastructure Ltd. It reads thus;
"No.OIL/CDG3434/DRLG/15/PI To, M/s. Pallavi Industries House No.15 M-Lane, West Milan Nagar Dibrugarh-786003, Assam
1. You are hereby ordered to commence the under noted work within 10 days from issue of this work order, against the Contract agreement for the work of "For Operation Man Management and Relevant Services for operation & maintenance of 1 No.1500 HP Capacity Drilling Rig in Assam & Arunachal rd Pradesh dated 3 July, 2015.
WORK For operation, Man Management and Relevant Services for operation & maintenance of one number 1500 HP Drilling in Assam & Arunachal Pradesh for 3 years.Page 55 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022
C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Work Order Value Rs.15,36,30,000.00 (Rupees Fifteen Crore Thirty Six Lakh Thirty Thousand Only).
Location: Assam & Arunachal Pradesh Time of Completion: 36 Months (3 years)
2. Should you fail to make a start on the work to our satisfaction within the time mentioned above the contract will become invalid.
3. The target date of completion will be 31 st Aug. 2018. If in the course of execution of work, you feel that you are entitled to the grant of extension of time such application must be submitted at least one week before the expiry of this original target date.
4. Please note the following special instructions.
(a) The name of your authorized representative of supervision of work etc. is to be furnished immediately.
(b) Every person engaged by you for the above work, must comply with standing Rules of the company in respect of security and safety as applicable.
Signature Sd/-
Full name: Anil Kumar Tiwari Head-Business (Oil & Gas)"
58. It is not in dispute that the aforesaid execution of work was undertaken by the respondent No.2 successfully which came to be extended for a period of one year with effect from 1st September, 2008 and, thereafter, for a further period of one year with effect from 1 st September, 2009.
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59. In the same manner, we may also look into the certificate of execution of the work so far as respondent No.3 is concerned. The same reads thus;
"TO WHOM IT MAY CONCERN Completion Certificate-Contract No.SOSDMCC/SAC/C- DCI-PGFK/2015 This is to certify that South Asia Consultancy has been awarded contract for supply of Junior Crew for Operation and Maintenance of Jack-up Drilling Rig DCJ-I (F & GL, Super Mod-II) and DCJ-II (F & GL, Super Mode-II) operating in the Persian Gulf, comprising of Painter, Roustabout, Floor Man, Derrick Man, Assistant Driller, Welder, Mechanic, Electrician, Radio Operator, Crane Operator, HSE Officer, Medic, Motor Man, Deck Foreman, and Assistant Barge Master.
We hereby certify that South Asia Consultancy has successfully executed the contract for supply of manpower to Stratadrill Oilfield Services DMCC as per scope of work from 1 st June, 2015 to 31st May 2017 for a period of 2 (two) years and during this time the rigs where the crews have been deployed have successfully drilled more than 2 wells of depth more than 3000 meters.
We appreciate South Asia Consultancy for successful execution of the contract."
60. It is evident from the above that the respondent No.3 had successfully executed the contract for supply of manpower to Strata Drill Oilfield Services DMCC in accordance with the scope of work for the period between 1st June, 2015 and 31st May, 2017, i.e, two years, and during this period, the rigs where the crews had been Page 57 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 deployed, had successfully drilled more than two wells of depth of more than 3000 meters.
61. If the aforesaid execution of the work undertaken by the two private respondents is construed by the Corporation as sufficient enough to fulfill the eligibility criteria as prescribed in the tender, then in our opinion, it cannot be said that the Corporation is wrong in any manner in condoning strict compliance of the conditions as prescribed in the tender document. In other words, it is difficult for us to take the view that the Corporation is ignoring or treating the words used in the tender document as redundant or superfluous.
62. It is well settled that the award of contract, whether it is by a private party or by a public body or by the State, is essentially a commercial transaction. In arriving at a commercial decision, the considerations which are of paramount importance are commercial considerations. These would include, inter alia, the price at which the party is willing to work; whether the goods or services offered are of the requisite specifications; and whether the person tendering the bid has the ability to deliver the goods or services as per the specifications. It is also by now well settled that the authorities/State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation.
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63. The State, its corporations, instrumentalities and agencies have a public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the Court must exercise its discretionary power under Article 226 with great caution and should exercise them only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should interfere. (See the judgment in the case of Air India Limited v. Cochin International Airport Limited (2000) 2 SCC 617).
64. In Karnataka State Industrial Investment & Development Corporation Limited v. Cavalet India Ltd. & Ors., (2005) 4 SCC 456, the Supreme court after taking into consideration various questions on various subjects laid down the following legal principles, viz.-
"(i) The High Court while exercising its jurisdiction under Article 226 of the Constitution does not sit as an appellate authority over the acts and deeds of the Financial Corporation and seek to correct them. The doctrine of fairness does not convert the writ courts into appellate authorities over administrative authorities.
(ii) In a matter between the Corporation and its debtor, a writ court has no say except in two situations:
a) There is a statutory violation on the part of the Page 59 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 Corporation, or
b) Where the Corporation acts unfairly i.e. unreasonably.
(iii) In commercial matters, the courts should not risk their judgments for the judgments of the bodies to which that task is assigned.
(iv) Unless the action of the Financial Corporation is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however, more prudent, commercial or businesslike it may be, for the decision of the Financial Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable.
(v) In the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold and this could be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer.
(vi) Public auction is not the only mode to secure the best price by inviting maximum public participation, tender and negotiation could also be adopted.
(vii) The Financial Corporation is always expected to try and realize the maximum sale price by selling the assets by following a procedure which is transparent and acceptable, after due publicity, wherever possible and if any reason is indicated or cause shown for the default, the same has to be considered in its proper perspective and a conscious decision has to be taken as to whether action under Section 29 of the Act is called for. Thereafter, the modalities for disposal of the seized unit have to be worked out.
(viii) Fairness cannot be a one-way street. The Page 60 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022 C/SCA/7771/2021 JUDGMENT DATED: 18/08/2021 fairness required of the Financial Corporations cannot be carried to the extent of disabling them from recovering what is due to them. While not insisting upon the borrower to honour the commitments undertaken by him, the Financial Corporation alone cannot be shackled hand and foot in the name of fairness.
(ix) Reasonableness is to be tested against the dominant consideration to secure the best price."
65. In the overall view of the matter, we have reached to the conclusion that no case has been made out to interfere.
66. In the result, this writ application fails and is hereby rejected.
(J. B. PARDIWALA, J) (VAIBHAVI D. NANAVATI,J) Vahid Page 61 of 61 Downloaded on : Sun Jan 16 08:46:52 IST 2022