Document Fragment View

Matching Fragments

Dt:29.12.2020 Per Lalitha Kanneganti, J This appeal under Clause 15 of Letters Patent is filed assailing the order passed by the learned Single Judge in W.P.No.28527 of 2017 dated 15.11.2019, whereby the learned Single Judge has allowed the writ petition.

2. For the sake of convenience, the parties in this appeal are referred to as they are arrayed in the writ petition.

3. The facts of the case, in a nutshell, are that the first respondent has published a notice inviting tenders for hiring Gas Dehydration System at its Rajahmundry Asset for a period of 3 years at 5 production Installations located in 5 different places. The petitioner entered into a Memorandum of Understanding / Agreement dated 27.01.2015 with Croft Productions Systems Inc (for brevity "CPS") a registered and certified Natural Gas and Oil Equipments Leasing & Selling Company based in the United States of America, as its Technical Collaborator for successful execution of the contract, if awarded by the 1st respondent. The petitioner submitted a bid, for all five locations, along with documents, which indicate the requisite experience of the Technical Collaborator. The 1st respondent vide letter dated 13.3.2015 informed the petitioner that the petitioner is qualified as per the technical requirements, and is therefore, shortlisted for opening the price bid of the tender. In fact, the petitioner was the only bidder, who was technically qualified and participated in the bid. Thereafter on 13.03.2015 the petitioner was declared as lowest bidder. A meeting was conducted on 23.03.2015 and the petitioner agreed to reduce the quoted price to Rs.1.752 crores.

6. The respondents preferred Writ Appeal No.1149 of 2017 challenging the interim orders passed by the Court in Writ Petition No.26448 of 2017 pertaining to Phase-II of the contract. The said writ appeal was disposed of, maintaining the interim suspension. The respondents conceded that no final decision of blacklisting was taken. The respondents were directed to put the petitioner on notice prior to such final decision. Thereafter on 17.08.2017 the respondents issued impugned communication dated 17.08.2017 to the petitioner stating that Phase-I contract was awarded to the petitioner on the understanding that its technical collaborator had requisite experience and that since the said technical collaborator lacks experience, the petitioner was not entitled to contractually agreed rate of Rs.1.58 for Phase-I or Rs.0.78 for Phase-II. Therefore, by the impugned communication dated 17.08.2017, the respondents called upon the petitioner to remit an amount of Rs.66.95 crores excessively paid towards Phase-I contract. Assailing the same, the petitioner has approached this Court.

7. The respondents filed their counter mainly contending that when there is an arbitration agreement between the parties, the writ petitioner cannot approach the Court invoking the jurisdiction of the Court under Article 226 of the Constitution of India. It is also stated that they have received complaints against the writ petitioner during the tendering process of awarding Phase-I contract and again during the tendering process of Phase-II that its technical collaborator did not have experience stipulated in the tender conditions. As that goes to the very root of the matter and determines the eligibility of the petitioner, the 1st respondent has every right to direct the petitioner to prove its eligibility and the experience of its technical collaborator. However, due to urgency, the contract was awarded to the petitioner with the undertaking submitted by them.

8. It is stated in the counter that Article 36 of these contracts empowers the 1st respondent to terminate the contracts in question if it is subsequently found that any information submitted by the petitioner is not genuine. Even a vigilance enquiry was also conducted and it is found that the experience of the technical collaborator of the petitioner is not as per the requirement, as such they have issued a show cause notice on 28.04.2017 as to why the undertaking should not be revoked and the contract awarded should not be terminated. A reply was given on 15.05.2017 without any proper explanation, as such on 31.07.2017 proceedings were issued terminating the contracts. Challenging the same, the petitioner approached this Court, wherein this Court by order dated 17.08.2017 directed the petitioner to remit an amount of Rs.66.95 crores, being the excess amount received by the petitioner.