Gujarat High Court
Tolani Projects Private Limited vs Oil And Natural Gas Corporation Limited ... on 7 June, 2017
Bench: M.R. Shah, B.N. Karia
C/SCA/4355/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 4355 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
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1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
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TOLANI PROJECTS PRIVATE LIMITED....Petitioner(s)
Versus
OIL AND NATURAL GAS CORPORATION LIMITED & 7....Respondent(s)
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Appearance:
MR RAVISH D BHATT, ADVOCATE for the Petitioner(s) No. 1
MR RITURAJ M MEENA, CAVEATOR for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 5
UNSERVEDREFUSED (N) for the Respondent(s) No. 6
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 07/06/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, direction and order quashing and setting aside the impugned decision of the CPA dated 28.01.2017, inter alia, approving respondent nos. 2 to 6 herein for opening of their price bids against Page 1 of 12 HC-NIC Page 1 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT E Tender No.ANK/MM/P4/04/201617/ES/A15KC16001, which was scheduled to take place on 23.2.2017.
2.0. The facts leading to the present Special Civil Application in nutshell are as under:
2.1. That respondent no.1 ONGC floated tender document being E Tender No.ANK/MM/P4/04/201617/ES/A15KC16001 on 06.06.2016 for "Supply and Laying of 457 MM ND X 9.5 MM WT 3LPE Coated HP Gas Pipeline From GGS3 To CPF, Gandhar". That E Tenders were invited. That the Tender documents consisted of invitation for bid and NIT and various annexure thereto which comprised of instructions to bidders, general contract conditions, list of appendices, scope of work, technical specifications, special conditions of contract, bid matrix and bid evaluation, criterion, price bid format/ response sheet, integrity pact, undertaking / declaration etc. That in response to the same, the petitioner submitted its bid along with other participants/ bidders.
2.2. It is the case on behalf of the petitioner that post of the submission of bids by the different participants / bidders, respondent no.1 sought for declaration / confirmation compliance etc. with respect to the bids submitted by the different participants.
It is the case on behalf of the petitioners that post clarification / confirmation etc. and evaluation of technical eligibility in terms of the tender document, the petitioner and the respondent nos. 7 and 8 emerged to be technically eligible bidders and consequently were in receipt of email dated 10.11.2016 from the MMO of respondent Page 2 of 12 HC-NIC Page 2 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT no.1. According to the petitioner and as per the said Email eligible bidders were shortlisted and were invited for opening of the price bids, which was opened on 16.11.2016. According to the petitioner, its representative remained present at the time of opening of the bids and the petitioner was found to be lowest bidder on opening of the price bid. It is the case on behalf of the petitioner that after petitioner having emerged as lowest bidder way back in the month of November 2016, there was no correspondence at all from the side of the respondent no.1 to the petitioner. However, surprising enough the petitioner was on receipt of caveat filed by the respondent no.1 in the Court of learned Principal Senior Civil Judge, Bharuch on 18.02.2017. It is the case on behalf of the petitioner that thereafter the petitioner tried to inquire about what actually was transpiring and was able to lay hands on a letter dated 20.02.2017 addressed to Advance Infrastructure Private Limited, inter alia categorically informing that the respondent no.2 to respondent no.6 have been shortlisted for opening of their bids on 23.02.2017 at 15.00 hours. Being aggrieved and dissatisfied with the impugned decision of the CPA dated 28.01.2017, considering the respondent no.2 to 6 eligible and consequently shortlisting them for opening the price bids and the proposed action of the respondent no.1 of opening the price bids of the respondent nos.2 to 6 on 23.02.2017, the petitioner has preferred present Special Civil Application under Article 226 of the Constitution of India.
3.0. It is vehemently submitted by Shri R.D. Bhatt, learned advocate for the petitioner that as such the impugned decision of the CPA holding respondent nos. 2 to 6 herein eligible and Page 3 of 12 HC-NIC Page 3 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT shortlisting them also for opening price bids and to consider their bids is absolutely illegal, most arbitrary and contrary to the terms and conditions of the tender document. It is submitted that when initially the price bids were opened on 16.11.2016 the petitioner and respondent nos. 7 and 8 only technically qualified bidders and as such the petitioner emerged as lower bidders. It is submitted that the decision of shortlisting petitioner and respondent nos. 7 and 8 and not including the names of the respondent nos. 2 to 6 in the shortlisting was absolutely as per the terms and conditions of the tender notice, more particularly, as per the eligibility criteria of the tender notice. It is submitted that any further action thereafter is absolutely illegal and arbitrary and it lack of transparency and fair play and is in gross violation of Article 14 of the Constitution of India.
3.1. It is further submitted by Shri Bhatt, learned advocate for the petitioner that as per the the terms and conditions the eligibility criteria mentioned in the tender notice, none of the respondent nos. 2 to 6 can be said to have been technically eligible as they do not fulfill the eligibility criteria mentioned in the tender notice, more particularly, requisite experience in procurement of line pipe only and activities in detailed design and engineering as required, as per clause 2.1(a) of the Tender notice.
3.2. It is further submitted by Shri Bhatt, learned advocate for the petitioner that any subsequent relaxation, by which, those who were earlier found to be ineligible are now considered / found eligible is absolutely illegal and arbitrary and mala fide only with a Page 4 of 12 HC-NIC Page 4 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT view to favour respondent no.6 herein.
3.3. Shri Bhatt, learned advocate for the petitioner has submitted that even otherwise considering clause 2.1(a) and as the respondent no.6 is not having any independent experience of executing as Turnkey contractor and is having experience through collaboration agreement and therefore, respondent no.6 can be said to be technically ineligible.
Making above submissions and relying upon the following the decisions, it is requested to allow the present petition.
(1). M/s. Poddar Steel Corporation vs. M/s. Ganesh Engineering Works and Others reported in AIR 1991 SC 1579. (2). W.B. Electricity Board vs. Patel Engineering Co Ltd and Ors reported in AIR 2001 SC 682.
(3). Tata Cellular vs. Union of India reported in AIR 1996 SC 11. (4). Central Coal Fields Limited and Another vs. SLLSML reported in (2016) 8 SCC 622.
(5). Konark Infrastructure Pvt Ltd Unr vs. Commissioner, Ulhasnagar Municipal reported in BCR 2003 (2) 838.
4.0. Present petition is vehemently opposed by Shri Meena, learned advocate for the respondent no.1 ONGC. An affidavit in reply is filed on behalf of the respondent no.1 ONGC opposing the present petition.
4.1. It is vehemently submitted by Shri Meena, learned advocate for the respondent no.1 that the impugned decision of the CPA is absolutely in consonance and on true interpretation of clause 2(a) Page 5 of 12 HC-NIC Page 5 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT and 2(b) of the Tender notice. It is submitted that initially the petitioner and respondent nos. 7 and 8 emerged to be technically eligible bidders, however 5 to 6 bidders i.e. respondent nos. 2 to 6 were rejected on technical eligibility. That thereafter, respondent no.6 made a representation on 17.11.2016 to IEM (Independent External Monitor), which is independent body, representing that they are eligible considering clause no.2 as nowhere it is mentioned that the bidder must have the experience of "procurement of the line pipes". It is submitted that by letter dated 28.11.2016, IEM meeting was scheduled on 08.12.2016. That thereafter, IEM meeting was held on 16.12.2016. It is submitted that in the said meeting IEM, recommended and / or took the decision and requested ONGC management to look into the contradiction in clause 2.1(a) and 2.1(b) of BEC and the issue of rejection of the offer of Trije and take appropriate decision in this regard. It is submitted that thereafter tender committee reconsider its earlier decision of rejecting the offer of the respondent nos. 2 to 6 herein and accepted the recommendation of the IEM and thereafter considering recommendation of IEM and approval of competent purchase authority, for accepting the remaining 5 offers, the respondent nos.2 to 6 are also held to be technically eligible which were earlier rejected on the ground of not having experience of line pipes procurement. It is submitted that therefore, the said criteria / decision is applicable to all and it cannot be said to be only with a view to favour respondent no.6 only. It is submitted that IEM is an independent body / authority to consider such grievance. It is submitted that after due deliberation and after considering the recommendation of the IEM, the impugned decision has been Page 6 of 12 HC-NIC Page 6 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT taken, which in any case, cannot be said to be illegal and / or arbitrary and / or lack of transparency and / or fair play.
4.2. It is vehemently submitted by Shri Meena, learned advocate for the respondent no.1 that as such thereafter pursuant to the liberty granted by the Division Bench of this Court in the order dated 27.02.2017 the bids of all the bidders including the petitioner and the respondent nos. 2 to 8 herein are opened and the petitioner is found to be L3 and respondent no.6 is found to be L1 and respondent no.5 is found to be L2. It is submitted that there is a huge difference of Rs.3 crores between the offer made by petitioner and the respondent no.6. It is submitted that therefore, even otherwise and the petitioner is found to be L3 and there is a huge difference of approximately Rs. 3 crores between the offer made by the petitioner and respondent no.6 impugned decision is in the larger public interest. Therefore, it is requested to dismiss the present petition.
5.0. In reply to the submission made by Shri Meena, learned advocate for the respondent no.1, Shri Bhatt, learned advocate for the petitioner has vehemently submitted that as such reference to the IEM itself was not permissible. It is submitted that only in a case where there are allegations of corruption and / or integrity, one can approach the IEM. It is submitted that even otherwise the decision of IEM is recommendatory in nature and not binding to the respondent no.1. It is submitted that Tender Committee of the IEM has mechanically accepted the recommendation of the IEM. It is submitted that therefore, the impugned decision itself based on Page 7 of 12 HC-NIC Page 7 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT the recommendation of the IEM is absolutely illegal and it shows non application of mind on the part of the appropriate authority i.e. Tender Committee and CPA and therefore, same deserves to be quashed and set aside.
6.0. Heard the learned advocates for the respective parties at length.
6.1. At the outset, it is required to be noted that what is challenged in the present petition is impugned decision of the CPA dated 28.01.2017 in holding and considering the respondent nos. 2 to 6 herein as technically eligible and thereby to consider their price bids.
6.2. From the material on record, it appears that considering clause 2.1(a) and on interpreting that each bidders should have independent and separate experience also in procuring the line pipe. The respondent nos. 2 to 6 were found technically ineligible and at the relevant time the petitioner and the respondent nos. 7 and 8 only were found technically eligible. However, subsequently the respondent no.6 approached the IEM which is independent authority to look into the grievance with respect to tender / contract and having found that there are contradiction in clause 2.1(a) and 2.1(b) of BEC and having found that the separate experience in procurement of line pipe is not the requirement and what is mentioned is procurement only, the IEM recommended and requested the ONGC to reconsider its earlier decision. That thereafter, after due deliberation and considering the Page 8 of 12 HC-NIC Page 8 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT recommendation of IEM, the CPA has taken the impugned decision to consider respondent nos.2 to 6 as technically eligible. The said decision is made applicable to all the participants including respondent nos. 2 to 6 herein. At the relevant time, even the price bids were not opened and therefore, it cannot be said that the said decision was mala fide decision and favouring respondent no.6 alone. All are / were treated equally and price bids of the participants have been considered accordingly. From the affidavit in reply, it appears that while taking the impugned decision, CPA and Tender Committee have considered recommendation of the IEM and after due deliberation the impugned decision has been taken. Therefore, it cannot be said that the impugned decision is mechanical on accepting the recommendation of IEM.
6.3. The impugned decision also cannot be said to be lack of transparency and / or fair play as the decision has been applied to all and after considering the recommendation of the IEM, which is an independent authority.
6.4. Even otherwise, considering clause 2.1(a), it cannot be said that the recommendation of the IEM which subsequently came to be accepted by the CPA (Tender Committee) can be said to be illegal. Clause 2.1(a) reads as under:
"2.1(a): The bidder must possess, prior to the deadline for submission of bids, minimum experience of executing as turnkey contractor at least 01 project or job in last 07 years of minimum 8 pipeline laid for atleast 3 km involving engineering, procurement supply, fabrication, Page 9 of 12 HC-NIC Page 9 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT construction, installation, testing and commissioning for laying of underground Trunk pipeline works carrying oil/ gas/hydrocarbon effluent/ hydrocarbon /petrochemical. The Bidder must himself (and not through collaboration agreement or other subcontracts) have the relevant experience in the completed project as indicated above with laying of underground Trunk Pipeline works carrying oil /gas/ hydrocarbon effluent/ hydrocarbon /petrochemical by himself and of at least one of the following main activities:
(a) Details Design and Engineering
(b) Procurement.
Nowhere, it specifically mentioned procurement of line pipe. What is required to be considered first whether the bidder is having minimum experience of executing as turnkey contractor at least one project or job in last seven years of minimum 8 pipeline laid for atleast 3 km involving engineering, procurement supply, fabrication, construction, installation, testing and commissioning for laying of underground Trunk pipeline works carrying oil/ gas/hydrocarbon effluent/ hydrocarbon /petrochemical or not. Under the circumstances, case on behalf of the petitioner that bidder must have an experience of procurement in line pipe, cannot be accepted.
7.0. Now, so far as submission on behalf of the petitioner that respondent no.6 is not having independent experience and therefore, considering clause 2.1(a) any experience through collaboration agreement shall not be considered is concerned, it is Page 10 of 12 HC-NIC Page 10 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT required to be noted that clause 2.1(a) is required to be read with clause 2.1(b). Clause 2.1(b) reads as under:
Clause 2.1(b):In case the bidder is an Indian Company/ Indian joint venture company, either the Indian company/ Indian Joint venture company or its technical collaborator / joint venture partner should meet the criteria laid down at 2.1(a)."
Considering the aforesaid and the material on record, it cannot be said that the respondent no.6 is technically ineligible as sought to be contended on behalf of the petitioner.
7.1. Considering the aforesaid facts and circumstances, the decisions which are relied upon by the learned advocate for the petitioner shall not be applicable to the facts of the case on hand and / or same shall not be of any assistance to the petitioner.
7.2. Even otherwise, it is required to be noted at this stage that pursuant to the liberty reserved by the Division Bench of this court in its order dated 27.02.2017, which was reserved after considering the interpretation of clause 2.1(a) and 2.1(b) and opinion of IEM, the respondent no.1 ONGC has opened price bids and are placed on record. As per the same, the petitioner is found to be L3 who has offered Rs. 18,19,24,975/ and the respondent no.6 is found to be L1 who has offered Rs. 15,86,10,458/. Respondent no.5 who is found to be L2 has offered Rs.18,01,74,100/. Thus, there is a difference of approximately about Rs. 3 crores between the offer of the petitioner and respondent no.6. Therefore, even otherwise the Page 11 of 12 HC-NIC Page 11 of 12 Created On Sun Aug 13 23:08:08 IST 2017 C/SCA/4355/2017 JUDGMENT petitioner is not likely to get contract / work order being L3. 8.0. In view of the above and for the reasons stated above, petition fails and same deserves to be dismissed and is accordingly dismissed. Notice discharged. Adinterim relief granted earlier stands vacated forthwith.
At this stage, Shri Bhatt, learned advocate for the petitioner has requested to continue adinterim relief / stay considering the facts and circumstances, more particularly, when the petitioner is found to be L3 and there is a huge difference of approximately Rs. 3 crores between the offered made by the petitioner and the respondent no.6 even otherwise also the petitioner is not likely to get contract/ work order, the request of the petitioner is rejected.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Kaushik Page 12 of 12 HC-NIC Page 12 of 12 Created On Sun Aug 13 23:08:08 IST 2017