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Gujarat High Court

Superior Securitas ­ A Proprietorship ... vs Oil And Natural Gas Corporation Ltd & on 6 February, 2017

Bench: S.R.Brahmbhatt, A.Y. Kogje

                     C/SCA/14725/2016                                                         JUDGMENT




                      IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                         SPECIAL CIVIL APPLICATION  NO. 14725 of 2016
                                             With
                             CIVIL APPLICATION NO. 12729 of 2016
                                              In 
                         SPECIAL CIVIL APPLICATION NO. 14725 of 2016

          
         FOR APPROVAL AND SIGNATURE: 
          
          
         HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
          
         and

         HONOURABLE MR.JUSTICE A.Y. KOGJE
          
         ======================================

         1      Whether   Reporters   of   Local   Papers   may   be   allowed   to   see   the 
                judgment ?

         2      To be referred to the Reporter or not ?

         3      Whether their Lordships wish to see the fair copy of the judgment ?

         4      Whether   this   case   involves   a   substantial   question   of   law   as   to   the 
                interpretation   of   the   Constitution   of   India   or   any   order   made 
                thereunder ?


         ======================================
            SUPERIOR SECURITAS ­ A PROPRIETORSHIP FIRM....Petitioner
                                    Versus
           OIL AND NATURAL GAS CORPORATION LTD  &  1....Respondents
         ======================================
         Appearance:
         MR. I. H. SYED, ADVOCATE with MR. PRITHU PARIMAL with MR.ADITYA MEHTA with 
         MR. JEET PATEL for the LEGAL, ADVOCATE for the Petitioner
         MR NEERAJ J VASU, ADVOCATE for the Respondent No. 2
         MR. R. R. MARSHALL, SENIOR ADVOCATE WITH MR RITURAJ M MEENA, ADVOCATE 
         for the Respondent No. 1
         ======================================




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HC-NIC                                                Page 1 of 65      Created On Sun Aug 13 09:33:21 IST 2017
                   C/SCA/14725/2016                                                  JUDGMENT



             CORAM: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
                    And
                    HONOURABLE MR.JUSTICE A.Y. KOGJE
          
                                         Date : 06/02/2017
          
                                     COMMON ORAL JUDGMENT

(PER : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT)

1. The   petitioner,   a   partnership   firm   through   its   authorized  signatory has approached this Court by way of this petition under Article  226   of   the   Constitution   of   India   with   following   prayers,  inter   alia  challenging the action of the respondents in canceling of the Letter of  Award (LOA) no. ANK/MM/P4    (SERVICE) - RB/CATERING/02/2016­ 17/A16RC16010   dated   24/08/2016   vide   its   letter   dated   29/08/2016  against   ONGC   e­tender   no.ANK/MM/P4   (SERVICE)   -  RB/CATERING/02/2016­17/A16RC16010   for   hiring   services   for  Catering   &   Housekeeping   Services   at   Muller   Colony,   CPF   Gandhar,  North Gandhar Colony and GGS Olpad of Surface Section and at DSA  Gandhar and DSA Dabka of Drilling Section of Ankleshwar Asset for a  period of 3 years.

(A) Issue   an   appropriate   writ   to   quash   and   set   aside the letter dated 29th August 2016 issued by the   Respondent, cancelling the Letter of Award issued in   favour   of   the   Petitioner   (Copy   at   Annexure   'A'   hereto).

(AA) Issue   an   appropriate   writ   directing   the   RESPONDENT to issue amended Letter of Award after   correctly calculating AA as 480 x 615 x 365 x 3 =   32,32,44,000   in   the   LOA   dated   24th  August   2016   (Copy at Annexure "B" hereto).

(AAA) Issue   an   appropriate   Writ   to   direct   the   Respondent   to   foreclose   the   agreement   with   the   current contractor as per clause BB. Of the LOA dated   30th August 2016 and/or set aside the LOA dated 30 th  August 2016 alloted to respondent no.2.



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                     C/SCA/14725/2016                                                    JUDGMENT



(B) During the pendency and final disposal of this   petition; 

(i) Stay the operation, implementation and effect   of the letter of cancellation dated 29th  August 2016   (Copy at Annexure 'A' hereto).

(ii) Restrain   the   respondent   from   extending   the   term  of the  previous  contractor  any  further  and/or   restrain the respondent from allotting  the tender to   the   second   highest   bidder   and/or   restrain   the   respondent   from   re­inviting   the   tender   for   the   said   service  and  /or  restrain  the  respondent  from  either   appointing or allotting the tender on a temporary or   other basis and/or entering into any contract relating   to this tender.

(iii) Allow  the petitioner  to start the execution  of   the contract as per the rate of Rs.480 per person/day   for   providing   catering   service   and   providing   mechanized housekeeping services as per the scope of   work defined in the bid document.

(C) Award costs of this petition;

(D) Pass   such   other   and   further   orders   may   be   deemed just and expedient." 

2. The facts in brief as could be gathered from the memo of  the petition and the written submissions of the parties deserve to be set­ out herein below for understanding the actual controversy between the  parties.

2.1  The petitioner is a proprietorship firm and engaged in the  business of Facility Management Services. The respondent ONGC floated  tender   No.   ANK/MM/P4   (SERVICE)   -   RB/CATERING/02/2016­ 17/AI6RC16010   for   hiring   of   services   for   Catering   &   Housekeeping  Services  at Muller Colony, CPF,  Gandhar, North  Gandhar  Colony and  GGS OLPAD  OF SURFACE Section and At DSA Gandhar and DSA Dabka  of Drilling Section of Ankleshwar Asset for a period of 3 years. The same  Page 3 of 65 HC-NIC Page 3 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT tender   was   floated   on­line   from   6th  May   2016   to   30th  June   2016.  According  to   tender  details,   the   last  date   for   submission  of   e­bidding  system   was   30th  June   2016   at   14:00   hrs   and   the   date   and   time   of  opening of the e­bid in the system was 30 th June 2016 at 15:00 hrs. As  per the tender document the last date of physical documents and for  opening of physical documents was 7th July 2016 at 14:00 hrs and 15:00  hrs  respectively.     The   petitioner   has   submitted  its  E­bid   on   28th  June  2016   on   ONGC   E­portal.   The   petitioner   has   submitted   its   documents  with its letter dated 27th June 2016.

2.2 The tender comprised in two parts viz. providing catering  services   and   providing   mechanized   housekeeping   services   as   per   the  scope of work defined in the bid document and the price bid consisted of  three components namely;

(i) AA = { providing Catering services as per the Scope of   Work defined in bid document per person per day (A) +   providing   Mechanized   Housekeeping   Services   as   per   the   Scope Work defined in bid document per person per day   (B)} X 615 (no. of persons) X 365 (no. of days in a year)   X 3 (three years);

(ii) BB = (rates for extra/optional items) per plate/per   serving/bottle basis; and

(iii) CC = (Providing Special Meals as per the Scope of   Work defined in bid document) per person basis.

The   said   items   were   submitted   by   the   petitioner   in   the  prescribed   format   as   per   the   requirement   of   ONGC.   The   petitioner  quoted the total price of Rs.480 on per day basis consisting of Rs.420 per  person per day for providing catering services and Rs.60 for providing  Page 4 of 65 HC-NIC Page 4 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT mechanized housekeeping services per person per day for a period of  1095   days   for   a   minimum   of   615   persons   towards   AA,   Rs.220   per  plate/per serving/bottle basis for BB and Rs.450 per meal per person  basis for CC. The tender document also comprised of tender as well as  the integrity pact, which was also required to be accepted and signed by  the bidders.

2.3 Thereafter   on   24th  August   2016,   the   respondent   issued   a  Letter of Award (LOA) to the petitioner mentioning the total calculated  contract value for 3 years at Rs.49,50,030/­. The respondent calculated  the total price at Rs.49,50,030/­ as against Rs.32,81,93,550/­. Pursuant  to the above, the office of the respondent issued LOA dated 24th August  2016   with   the   above   figure   of   Rs.49,50,030/­   and   asked   for   a   bank  guarantee of Rs.1,65,000/­. In the said LOA the petitioner was required  to mobilize complete man­power, material along with equipment, etc.  for commencement of services at the specified location by 1st September  2016 and start services w.e.f. 2nd  September 2016 (00:00) i.e. from 1st  September 2016 midnight.

2.4 Immediately   upon   receipt   of   the   said   LOA   the   petitioner  vide   its   e­mail   dated   25th  August   2016   brought   to   the   notice   of   the  respondent that the total contract value has been wrongly calculated by  taking contract value under AA for 3 years as only Rs.480 actually were  charges for Catering & Housekeeping  per person per day. It was  also  requested   by   the   petitioner   to   the   respondent   to   issue   amended   LOA  after correcting the contract value and the amount of performance bank  guarantee. In response to the aforesaid e­mail, the respondent vide its e­ mail dated 25th August 2016 stated that the total AA has been indicated  by the petitioner as Rs.480 in the price format which was considered by  ONGC   and   requested   to   arrange   and   execute   the   contract   as   per  conditions of LOA.




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HC-NIC                                        Page 5 of 65     Created On Sun Aug 13 09:33:21 IST 2017
                   C/SCA/14725/2016                                                  JUDGMENT




         2.5            The   petitioner   vide   its   e­mail   dated   25th  August   2016 

clarified the issue that the petitioner has quoted Rs.420 per head/day  under Row­A and Rs.60 per head/day under Row­B and the formula for  calculating AA is (A+B) x 615 x 365 x 3 where 615 is the minimum no.  of persons to whom the services would be provided to 365 is the no. of  days in a year and 3 is the no. of years (tenure of the contract) and the  same   is   to   be   calculated   by   the   respondent   accordingly.   It   was   also  further clarified that the sum of Rs.480 as mentioned under Column­3 is  a total of the amount mentioned under Row­A (Catering Charges) and  Row­B (Housekeeping Charges), which is for per head/day only. In the  said   e­mail,   the   petitioner   also   raised   a   question   as   to   how   the  respondent considered the contract value for three years for 615 persons  as   only   Rs.480,   when   the   petitioner   are   quoting   Rs.420   as   catering  charges per head per day and Rs.60 as mechanized housekeeping service  charges per head per day. It was also pointed out in the said e­mail that  the respondent in case of BB and CC has placed the value in formula  instead   of   taking   the   contract   value   as   Rs.220   and   Rs.450   for   three  years, respectively.

2.6 The petitioner also wrote a detailed letter dated 25th August  2016. It was pointed out in the said letter that the amount mentioned in  the third column as Rs.480, as sum of catering and Housekeeping per  head per person which incidentally fell against the total contract value  AA which has been taken by the tender committee as the contract value  for   3   years   for   615   persons   without   calculating   as   per   formula.   The  petitioner put Rs.480 as the sum of Row­A & Row­B at the bottom of 3 rd  column which respondent took as the contract value under AA.

2.7 The   petitioner   vide   e­mail   dated   26th  August   2016  questioned the fact that how could the tender committee consider the  contract value for 615 persons for 3 years to be Rs.480 and why the  Page 6 of 65 HC-NIC Page 6 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT value in case of BB and CC was put in the formula and left out in case of  AA.

2.8 Thereafter   respondent   issued   a   letter   dated   29.08.2016  cancelling the LOA dated 24th August 2016.  On receipt of the aforesaid  letter, the  petitioner  sent an  e­mail  dated  30th  August 2016  inter alia  stating that the petitioner never said or communicated that they will not  start the work w.e.f. 2nd September 2016 and also stated that in all the  communications of the petitioner after issuance of LOA in favour of the  petitioner, raised the logic of arriving at the contract value under the  head - AA by tender committee and have sought clarification as to how  the payment would be regulated as bills would be raised on the basis of  rates per head/day for housekeeping in Appendix­I and as per Appendix­ III, IV & V for catering which is given and accepted by the respondent in  the LOA. Hence, this petition.     

3. The learned counsel for the petitioner has filed the written  submissions, which are reproduced in verbatim from paragraph no.4 as  under :­ "4.The grounds on which the said petition is filed are briefly stated as   under :

a. Letter   of   Award   dated   24.08.2016   awarded   to   the   petitioner  (Annexure - B at page 16 of the petition).
→  In the note (c) below Appendix­I, clearly states that the number of   persons (part of the formula for AA) indicated above is for purpose of   evaluation only and that the same may increase / decrease every day,   based on the operational requirements and also that the payment will be   made on actual volume of service provided.  Therefore it can be said that   the formula was to be filled up just for evaluation purpose only and for   no other purpose and that the same would have no bearing at the time   Page 7 of 65 HC-NIC Page 7 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT of billing. 
→ Further in the note (1) below Appendix­III, it is clearly stated that the   aforesaid   break­up   of   rates   will   be   applicable   for   persons   consuming   individual  items.    From  this  it can  be  easily  concluded  that  the  rates   mentioned in Appendix­III are substantive part of the price bid and the   total of AA is only for evaluation purposes.
b. Clarification as per clause 24.2 of the Tender Document  (Annexure­D at page 20 of the petition, relevant clause at page 48) → The  respondent in view of the clause  24.2 of the Tender  document   could have sought clarification regarding the unit price or the total price   quoted by the respondent.  By doing so and by correcting the same, the   substance of the bid could not have been changed as the petitioners were   to   raise   their   invoice   based   on   the   rates   for   the   items   mentioned   in   Appendix­III   of   the   Price   Bid   Format   (page   154)   submitted   by   the   petitioner which is the very substance of the bid. 
c. Manual   of   Purchase   and   Procedures   for   Purchase   of   Goods  (Annexure­K at page 175 of the petition)  → The   respondent   failed   to   act   in   accordance   with   the   said   Manual   issued by the Finance  Secretary on 31/08/2006,  which is in force  till   date and that the action of the respondent is in contravention of Clause­ 11.2.3 (a) (at page 177 of the petition) of the said Manual.

→ It is relevant to point out that during the course of the hearing the   petitioner   had   tendered   a   copy   of   a   Tender   document   floated   by   the   respondent for the same type of services at Panvel.  It is pertinent to note   that the said document was for sale from 30/08/2016.    (On the very   next  day after  the LOA  was cancelled  by the  respondent.    At internal   page 122 of the said Tender Document Clause­E.1 (iii) it clearly reflects   Page 8 of 65 HC-NIC Page 8 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT what is mentioned in the aforesaid Manual.  Even on the last page of the   said document in Note no.5 the same is reiterated.

→ The argument of the respondent is that the aforesaid Manual is not   binding and that the respondent even wishes to accept the clarification of   the petitioner than also the Integrated materials Management Manual   issued   by   ONGC   ("IMMM")   does   not   permit   any   clarification   or   correction.  Assuming without admitting that even if the said Manual is   not   binding   on   the   respondent   than   also   it   cannot   be   said   that   the   IMMM   does   not   give   power   to   the   respondent   to   correct   its   bid,   as   looking at the tender conditions floated by the ONGC for Panvel area, it   clearly shows that in case of any discrepancy is found in the total quoted   price  and  its break­up prices,  the  evaluation  shall be done  as per the   corrected amount duly worked out by ONGC based on Unit Rate quoted   by the bidder.  This clearly goes to show that the power to do so in the   Panvel Tender comes from the Manual and that if the same can be done   in the Panvel Tender than the respondent could have done the same in   the   tender   awarded   to   the   petitioner.     Therefore,   it   is   clear   that   the   ONGC  has such powers  but chose  not to exercise the same in view to   favor   the  existing   contractor   and   with   a  view   to   make   sure   that   the   petitioner   could   never   participate   in   future   tenders   issued   by   the   respondent or any other tenders floated by any other authorities.

d. Integrity Pact (Annexure­D at page 157 to the petition)  → The   respondent   is   also   in   clear   breach   of   the   Integrity   Pact   more   particularly clause 1(1)(2) (at page 158) which mandates the principal   to   treat   the   petitioner   with   equity   and   reasons.     The   action   of   the   respondent   in   issuing   the   LOA   for   providing   food   and   for   providing   housekeeping services to 615 people for 1095 days at a consolidated sum   of Rs.480, lacks all possible reasoning and equity.





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                C/SCA/14725/2016                                                      JUDGMENT




e. Integrated   Materials   Management   Manual   issued   by   ONGC   (IMMM)  (Annexure­M at page 188 to the Additional Affidavit filed by   the petitioner) → The   respondent   ignored   its   own   manual   more   particularly   clause   14.1.1 (at page 189) which clearly states that if the rates of L­1 bidder   are substantially high as compared to cost/estimates  or  Last Purchase   Rates   or   not  in line  with  the  price  trend  prevailing  in the  market, a  decision   shall   be   taken   as   to   whether   price   negotiation   need   to   be   conducted.  Therefore, it is clear that even as per their own manual that   if the price quoted by the L1 Bidder seems to be not in line with the price   trend in the market then, it the Respondent shall be duty bound to call   upon the petitioner and seek clarification, which the respondent failed to   do so in this case.

f. High   ended   Action   of   the   respondent   during   the   period   from   issuance of LOA and thereafter.

(i) Invitation   for   Board  Purchase   even  before  cancellation  of  the   LOA:

→ On   the   very   next   day   of   issuing   of   LOA   to   the   petitioner,   before   cancelling   of   the   LOA,   the   respondent   started   process   of   inviting   quotation for Board Purchase.   The respondent, before the cancellation   also received quotation from only one Company who was a L03 in the   bid and was a current contractor at a much higher rate then quoted by   the same company in the current tender.   The respondent also started   negotiations with the existing contractor and even before cancellation of   the LOA decided to award the contract for a period of six months at a   much higher cost what was quoted by the petitioner and was also at a   much higher rate then what was quoted by the same contractor in the   Tender proceedings.   It is pertaining to note that the entire process of   board purchase was completed during the existence of the LOA issued to   Page 10 of 65 HC-NIC Page 10 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT the   petitioner   and   also   at   a   much   higher   rate   than   quoted   by   the   petitioner causing a loss of more than Rs.20,00,000/­ approximately (by   approximately more than 25%) to the public ex­checker with a period of   6  months  and  the  said   action  of the  respondent  prima  facie  reeks  of   malice.
(ii) Procedure for Board Purchase :
→ The respondent failed to follow the procedure of Board Purchase as   per their own manual.  As per the manual the respondent should have   called  for  quotation,  the  respondent  should  have  called  from  multiple   people/companies, which are located, near the proximity where the said   scope   of   work   is   required   to   be   executed.     However,   the   respondent   received only more quotation and on that basis the board purchase was   made.

→ The Procedure for Board Purchase as per the manual should be taken   only in exceptional circumstances during extreme urgency.  Even as per   their   own   terms   and   conditions  of   the   tender   document,  as   amended   (Annexure­N page 197), the definition of mobilization period reads as   under :

"Mobilization period :­ Since, existing contract is expiring on   01.09.2016,   the   contractor   shall   be   required   to   mobilize   complete manpower, material along with equipment etc.   for   commencement   of   services   at   the   specified   locations   by   01.09.2016 and start services w.e.f. 02.09.2016 (00:00 Hrs)   31.08.2016,   contract   will   be   given   07   days'   time   for   completion of mobilization." 

Therefore, even as per the aforesaid definition, one can easily imply that,   the respondent was prepared to make some alternative arrangement on   their own from the date of end of term of the previous contract for a   Page 11 of 65 HC-NIC Page 11 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT minimum   period   of   7   days,   if   the   contract   is   placed   on/after   31/08/2016   as   the   successful   bidder   was   given   7   days   time   for   completion of mobilization.

e. Internal Documents produced by the respondents. i. Minutes   of   meetings   of   the   TC   held   on   23/08/2016   (at   page  

280) & 25/08/2016 (at page 209).

→ In   the   minutes   of   the   meeting   by   the   tender   committee   dated   23/08/2016 (at page 281) the TC has calculated the actual evaluated   price   on   its   own   and   has   further   gone   to   state   that   there   was   an   apparent mistake by the bidder as the bidder has not multiplied the sum   by   the   multiplier.     The   TC   has   even   stated   that   even   if   the   same   is   corrected and the correct value of AA is worked out the bidder would be   still L1 and his total evaluated price would still be the lowest.

→ In the same minutes on page 282 the TC has evaluated the financial   criteria's   subsequent   to   opening   of   the   price   bids   on   the   basis   of   the   correct/   intended   value   of   the   tender   i.e.   an   amount   of   Rs.32,81,93,550/­.     The   TC   in   the   said   meeting   has   approved   the   financial criteria of the petitioner based on the correct evaluated price   and not the evaluated price on which LOA was issued.

→ Further,   the   Rate   Reasonability   was   considered   at   Rs.480/­   per   person per day and that the TC had arrived at a conclusion that the rate   of Rs.480/­ per person per day can be considered as reasonable.

→ In the minutes of the TC dated 25/08/2016 also the TC has made an   observation that the corrected value if worked out, the petitioner would   still be L­1.  The TC also observed that there is no provision in IMMM for   seeking   any   clarification   subsequent   to   opening   of   price   bids   and   clarification   worth   regard   to   workability   and   hence   the   LOA   was   awarded  at  Rs.49,50,030/­.    The  said   observation   of  the   TC   is false,   Page 12 of 65 HC-NIC Page 12 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT erroneous and baseless in view of what is stated herein above.

→ During   that   meeting,   the   TC   has   even   gone   to   the   extent   of   recommending the petitioner for putting on holiday for non­performance   of LOA.  This clearly shows the intention of the respondent, to favor the   current contractor i.e. the respondent no.2 herein and to ensure that the   petitioner is debarred from participating in the future tenders issued by   the respondents.

ii. Proceedings of minutes of Board of Officers held on 25/08/2016   (at page 215), 29/08/2016 (at page 222) & 30/08/2016 (at page  

225)  → The respondent by the said minutes has decided to award the contract   for 6v months by way of Board Purchase to respondent no.2 herein, who   was also the previous contractor.

→ In the meeting  held on 25/08/2016,  has worked  out the financial   implication for a period of 6 months considering the current tender.  It is   pertinent to note that the respondent has for calculating the financial   implication   for   6   months   has   compared   with   the   rate   of   Rs.32,81,93,550/­  being the amount quoted by the petitioner and not   the amount of which the LOA was issued to the petitioner.

→ In   awarding   the   work   by   Board   Purchase   the   Board   has   for   the   purpose of deciding the rate reasonability has considered the amount of   Rs.32 crores (approx.) rather than amount of Rs.49 lacs (approx.).

iii.Invitation for Bid issued by ONGC for Board Purchase (at page  

235): 

→ The respondent in the invitation for Board Purchase in Appendix­1,   the   price   bid   format   (at   page   238)   has   mentioned   that   the   total   AA   would be worked out by ONGCV and that the bidders would be required   Page 13 of 65 HC-NIC Page 13 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT to till up only the substantive price quotes.
iv. Proposal for administrative approval and expenditure sanction  through board purchase (at page 294) :
→ In the said proposal it is clearly stated  by the respondent that the   petitioner has quoted the lowest rate and that if the grand total AA is   corrected  the  same  would  be Rs.32,32,44,000/­.   The  respondent  has   further gone to state that the evaluated price for 3 years i.e. Rs.49 lacs   (approx.) (as awarded is exorbitantly low than the corrected evaluated   price of Rs.32 crores (approx.)).
f. Loss to the Public Exchequer :   The respondent chose to award the   contract  to the  respondent  no.2 herein by Board  Purchase  at a much   higher rate that was quoted by him in the tender proceedings, where the   petitioner  was L­1 and the respondent no.2 was L­3.   The respondent   even failed to consider that the respondent no.2 therein, was the existing   contractor and therefore the question of expenses for mobilization and   other major expenses would not have to been incurred by the respondent   no.2 and still with a view to enrich the respondent no.2 herein chose to   award   the   contract   at   a   much   higher   rate   and   thereby   incurring   additional expense of more than Rs.20 lacs from the pockets of the public   exchequer.
g. The   reply   to   the   respondent's   contention   that   there   was   no   binding contract between the parties.   The respondent has wrongly   portrayed that there was no existing contract between the petitioner and   the respondent no.1 and therefore, the respondent had right to cancel   the   award   at   any   point   before   a   contract   entered   into   between   the   parties.  Clause­EE & FF of the LOA (at Annexure­B at page 16, relevant   at page  18)  it is clear  that the  scope  of work  and  all T & C's of the   contract shall be as per the tender document and that the LOA shall be   binding   contract   till   signing   of   the   formal   contract.     Therefore,   the   Page 14 of 65 HC-NIC Page 14 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT respondents   arguments   miserably   fails   from   their   own   document   and   that the issuance of LOA would itself be considered as a binding contract   between the parties and that the same cannot be terminated or cancelled   without   assigning   any   reasons   or   without   giving   an   opportunity   of   hearing to the petitioner.
h. Judgments relied on by the petitioner.
(i) The Hon'ble High Court of Punjab and Haryana (Coram: Hon'ble Mr.   Justice J.S. Khekar and Hon'ble Ms.Justice Nirmaljit Kaur) has held in   SAB   Industries   Limited   V.   State   of   Haryana   and   Ors.   [C.W.P.   No.970 of 2008] that ­­ "The error, as pointed out by the petitioner  was also a similar patent   error   on  the  face  of record   and  a bonafide   human   error.    No  bidder   would  quote  such  a ridiculously  low  rate.  Thus,  the  petitioner  should   have been allowed to correct this error instead of rejecting the same by   mechanically applying Clause 25 of the bid document.  The respondents,   in this case, have done nothing but taken a very hyper­technical view of   the   clause  and   have   wrongly  applied  the   same  by  not   permitting   the   correction which was an error on the face of it and not an arithmetical   error." 

In   the   aforementioned   judgment,   the   Hon'ble   High   Court   also   placed   reliance on a judgment of the Hon'ble Supreme Court of New Jersey in  Spina   Asphalt   Paving   Excavating   Contractors,   Inc.   V.   Borough   of   Fairview [304 NJ Super 425] and observed as follows :­ "The   error   was   allowed   to   be   corrected   which   was   erroneously   mentioned as 400 dollars instead of 4 dollors.  It was held that the   error in the bid was non­matrial and subject to waiver.  The error   was considered as patent and the failure  to waive the deviation   would thwart the public bidding laws."



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                 C/SCA/14725/2016                                                      JUDGMENT




Lastly, the Hon'ble High Court was pleased to observe that "the failure of   the respondents to correct a bonafide clerical error which was apparent   on the face of it has led to the frivolous litigation.  The petitioner shall be   accordingly entitled to its cost which is quantified as Rs.50,000/­."  

(ii) The Hon'ble High Court of Delhi (Coram : Hon'ble Mr. Justice   Sanjay Kishan Kaul and Hon'ble Mr. Justice Vipin Sanghi) in the case of   M/s. Supreme Infrastructure India Limited V. Rail Vikas Nigam Limited   and Anr. [W.P.(C.) No.3817/2012] held that -

"If the process of evaluation of bids is to be done so mechanically as done   in the present case, and without the use of mental faculties, intellect and   exercise   of   human   discretion,   the   exercise   could   have   been   left   to   be   completed by machines/computers.  However, that is not done because,   in the matter of evaluation of bids in a tender process, the employer -   particularly   when   it   is   a   public   body   dealing   with   public   funds,   is   expected   to   function   and   conduct   itself   with   reasonable   prudence   expected of any common man in the business.  The employer cannot get   bogged down by the literal rule, even if there be one (which we do not   find in the present case), and throw to winds the basic common sense   approach and shut its eyes to such obvious errors, to defeat not only the   rights  of a deserving  bidder,  but also  sacrifice  interest  in the  process.   Respondent no.1 has failed to prudently exercise the discretion vested in   it by the tender conditions to deal with the aforesaid situation."

5. The   Letter   of   Cancellation   of   LOA   does   not   explain   the   cause   of   cancelling the same and thus the said Letter is erroneous, bad in law and   issued with a mala­fide intention and thus deserves to be quashed and   set aside by this Hon'ble Court.

6. Therefore, in view of what is stated herein above and in view of the   pleadings and documents produced before this Hon'ble Court, the prayers   Page 16 of 65 HC-NIC Page 16 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT as prayed for by the Petitioner is required to be allowed.  The petitioner   also   states   that   such   action   of   the   respondent   requires   serious   investigation   upon   the   officers   who   were   the   part   of   the   TC   and   the   officers who were the part of the Board Purchase.  Such a conduct of the   officers   of  the   Respondent   should  be   curtailed   and   the  hidden   motive   behind the said action should be brought before the people whose hard   earned money is blown­off in order to enrich either themselves or to a   particular set of people.

7. The petitioner also submits that the respondent no.1 and its officer's   in­charge   of   such   decision/action   should   be   saddled   with   heavy   costs/penalties.

8. The petitioner  also prays to this Hon'ble Court that the respondent   no.1   may   not   be   allowed   to   go   for   re­tendering   for   the   following   reasons :

a. In   this   Special   Civil   Application,   the   petitioner   has   impugned   the   cancellation  of its LOA and not the tendering  process.    Therefore,  the   issue at hand is whether the cancellation of the LOA of the petitioner   was valid or not.  Thus, if such cancellation is deemed to be invalid the   petitioner ought to be reinstated as L1 and be granted an LOA at the   corrected   price   of   Rs.32,81,93,550/­   for   a  period   of   3   years   and   the   respondent no.1 may not be allowed to go for re­tendering.   
b. Sets a dangerous precedent by conveniently allowing the respondent   to bypass the tender process and grant the tender to a favorable party   (L2/L3) by going for re­tendering."
4. The learned counsel for the respondent no.1 has filed the  written submissions, which are required to be reproduced in verbatim as  under :­ Page 17 of 65 HC-NIC Page 17 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT
1. It humbly submits that the present petition and the reliefs as   prayed for by the petitioner are misconceived and without any basis   either in law or in facts. It is also submitted that the petitioner has not   come out with complete and accurate facts and circumstances of the   case, rather has presented before this Hon'ble Court totally distorted,   incomplete and false facts.
2. That   the   petitioner   inter   alia   has   prayed   for   quashing   and   setting   aside   the   cancellation   of   the   Letter   of   Award   (LOA)   No.   ANK/MN P4 (SERVIE) - RB/CATERING/02/20 16­17/A16RC16010   dated   24/08/2016   vide   its   letter   dated   29/08/2016.   (Copy   at   Annexure   "A"   hereto)   against   ONGC   e­tender   No.   ANK/MM   P4   (SERVICE) - RB/CATERING/02/2016­17/A16RC16010 for hiring of   services for Catering & Housekeeping Services at Muller Colony, CPF   Gandhar, North Gandhar Colony and GGS Olpad of Surface Section   and   at   DSA   Gandhar   and   DSA   Dabka   of   Drilling   Section   of   Ankleshwar Asset  for a period of 3 years for short "Tender) and for   restraining the Respondent from extending  the work of the previous   contractor   on   the   grounds   inter­alia   that   the   said   action   of   the   Respondent in calcelling the LOA is arbitrary, capricious, colourable   exercise   of   power   and   in   violation   of   Article   14   and   19   of   the   Constitution of India.

Facts of the case:

3. It is submitted that the Respondent ONGC, floated tender No.   ANK/MN P4 (SERVIE) - RB/CATERING/02/20 16­17/A16RC16010   for hiring of services for Catering & Housekeeping Services at Muller   Colony,   CPF   Gandhar,   North   Gandhar   Colony   and   GGS   Olpad   of   Surface   Section   and   at   DSA   Gandhar   and   DSA   Dabka   of   Drilling   Section  of Ankleshwar  Asset  for  a period  of 3 years.  That  the  said   tender   was   floated   on­line   for   the   given   time   frame   i.e.   from   Page 18 of 65 HC-NIC Page 18 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT 06.06.2016 to 30.06.2016, for e­bidding, last date of submission of e­ bidding was 30.06.2016 and the last date of submission of physical   document was 07.07.2016. That, the Petitioner herein submitted the   bid for  providing  services  to Respondent  within  due  date  and  time.  

Furthermore,  as per  the  tender  conditions  Petitioner  also submitted   physical documents duly signed within due date and time.

4. It   is   submitted   that,   Tender   issued   by   the   corporation   comprised of two parts, for providing catering services and providing   mechanized   housekeeping   services.   The   price   bid   consisted   of   three   components : (i) AA (ii) BB and (iii) CC, the Petitioner duly submitted   and quoted the total price of :

"i.  AA = Rs.480/­ (Rs. 420/­ for catering services and Rs. 60/­   for mechanized housekeeping) for the period of 1095 days for   minimum of 615 persons.
ii. BB - Rs.220/­ per plate / per service / bottle. iii. CC - Rs.450/­ per meal per person.

5. It is submitted that, on 24.08.2016,  Letter of Award "LOA"   was   issued   to   Petitioner   by   the   Respondent   with   a   price   of   Rs.49,50,030/­   (which   was  lowest  amongst   all   bidders)   and   which   was   calculated   as   per   the   figures   provided   by   the   petitioner.   The   Respondent   corporation   also   asked   for   a   bank   guarantee   of   Rs.1,65,000/­  and  asked  the petitioner  to provide  the services  from   02.09.2016 (00.00 hrs) . That on 25.08.2016, petitioner through an   email informed the Corporation requesting to amend the LOA amount   along with the amount of bank guarantee. That the said email was   responded  by the  corporation  by which  the  petitioner  was  asked  to   execute   the   contract   as   per   the   conditions   of   LOA   as   per   the   price   submitted by him. That despite series of communication the petitioner   continuously refused to perform the contract as per the price quoted   by   him   resulting   into   approval   of   cancellation   of   LOA   by   ED­AM   Page 19 of 65 HC-NIC Page 19 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT (Executive Director - Asset Manager) on 25.8.16 and in pursuance to   approval   of   ED­AM   (Executive   Director,   Asset   Manager)   LOA   was   cancelled  and  same  was  informed  to petitioner  on 29.08.16  due to   pre­occupation with other jobs and 27.08.2016 and 28.08.2016 being   Saturday   &   Sunday.   The   statement   of   petitioner   in   the   written   submission   that   25.08.2016   was   a   holiday   and   ONGC   arranged   Tender Committee meeting on holiday is not correct as it was working   day for ONGC, Ankleshwar. That a separate Board hiring (through a   Board of Officers as per ONGC's Integrated MM Manual Para 8.9 Page   290 of petition) was done for a period of 6 months (with a foreclosure   clause for closing the contract on 1 month notice) to take care of the   immediate requirement and re invitation of tender was approved by  Director   on   31.08.16.   The   copy   of   the   noting   wherein   decision   to   cancel   the   LOA   was   taken   is   annexed   with   affidavit   in   reply   as   "Annexure - R1"

6. It is submitted that since the earlier contract was expiring on  01.09.2016, a fresh contract was required to be made available from   02.09.2016  (0000  hrs) i.e. 01.09.2016  midnight.  Considering  that   oilfield   services   are   essential   services   &   non   providing   catering   &   housekeeping services to field people will disrupt in operations leading   to   IR   (Industrial   Relations)   problem   and   affecting   exploration   and   production   of   hydrocarbons   leading   to   heavy   loss   to   the   nation,   a   separate   Board   hiring   was   done   for  a  period   of  6   months   (with   a   foreclosure clause for closing the contract on 1 month notice) to take   care of the immediate requirement. It would also be pertinent to note   that  the  area   where   the  services  are  to be  provided,  are  at  remote   location  and  none  of  the   other   alternative   options   were   viable  and   practical. Thus, considering the necessity, parallel action was needed   to   be   taken   considering   the   time   involved   in   the   tender   process.   However, LOA against Board Hiring Contract was awarded after due   deliberations, approval and after cancellation of LOA of the petitioner.  



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               C/SCA/14725/2016                                                    JUDGMENT



Moreover, the Board Hiring contract was awarded with a one­month   foreclosure notice. Thus, it is an interim / stop gap arrangement only   and not a long term contract.
7. It is submitted that as per price bid, bidder was quoted AA =   Rs.480/­ BB = Rs.220/ and CC - Rs. 450/­. Hence, its total evaluated   price "DD" (DD= AA+ (BB X 3795 X 3 years) + (CCX1811X3 years)   worked  out as Rs.49,50,030.00  From above, it would  be clear  that   M/s. Superior Securities, New Delhi has indicated 'AA' in Appendix - I   as Rs.480.00 Further bidder has quoted BB as Rs.220.00 and CC as   Rs.450.00 Hence taking 'AA' as Rs.480.00 as quoted by the bidder as   per BEC Clause indicated above, its total evaluated price 'DD' (DD=   AA+(BBX3795X3   years)+   CCX1811   years))   shall   become   Rs.49,50,030.00. That thereafter based on the communication of the   bider subsequent to issue of LOA as brought out above, TC held on   25.08.2016   construed   as   refusal   to   accept   the   LOA,   TC   has   recommended the following, in terms of various provisions of IMMM   and Terms and Conditions of subject tender document:
(i) No cognizance may be given to the communication of   the party M/s. Superior Securities, New Delhi;
(ii) To cancel the LOA dated 24.08.2016, issued to M/s.  
Superior Securities, New Delhi.
(iii) To   re­invite   the   tender   for   Hiring   of   Catering   &  Housekeeping   Services   at   Muller   Colony,   CPF   Gandhar, North Gandhar Colony, and GGS Olpad of   Surface Section and DSA Gandhar and DSSA Dabka   of Drilling Section of Ankleshwar Asset for a period of   three years.
(iv) To   initiate   the   action   against   the   bidder   M/s.  

Superior Securities, New Delhi for putting on holiday   in terms of Para 18.6 Consequence of termination in   Page 21 of 65 HC-NIC Page 21 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT Annexure - II (Model Contract and General Contract   Condition) at Page 52 of e­Tender Document and in  terms of Integrated MM Manual Para 17.5.2."

8. It   is   submitted   that   after   approval   of   CPA   (Competent   Purchase Authority) i.e. ED­AM (Executive Director - Asset Manager),   the   LOA   has   been   cancelled   on   29.08.2016.   Recommendation   at   3   regarding re­invitation has been approved by Director (Onshore) on   31.08.2016 and fax copy of approval received on 01.09.2016. Hence,   canceling the LOA was as per tender conditions and prevailing practice   of the Corporation. Further, the services of previous contractor have   not been extended. The earlier contract was expiring on 01.09.2016   and fresh contract was required to make available from 02.09.2016   (00:00   hrs.)   i.e.   01.09.2016   midnight.   Considering   that   oilfield   services are essential services & non providing catering & housekeeping   services   to   field   people   will   disrupt   in   operations   leading   to   IR   (Industrial Relation) problem and affecting exploration & production   of hydrocarbons leading to heavy loss to the nation, a separate Board   hiring  was done  for 6 months  period (with a foreclosure  clause  for   closing the contract on 1 month notice) to take care of the immediate   requirement,   as   an   interim   /   stop   gap   arrangement.   The   date   of   commencement   of   services   through   Board   Hiring   Contract   is   02.09.2016   (0000hrs.)   and   not   02.08.2016   as   mentioned   in   the   written submission of the petitioner. Thus, the actions taken in this   regard were all purely due to the need of the hour and the immediate   requirement and with a view to avoid heavy loss to public exchequer   in case of disruption of operations in production of Hydrocarbons if   continued  services  not provided.   It would  also be pertinent to note   that  the  area   where   the  services  are  to be  provided,  are  at  remote   location  and  none  of  the   other   alternative   options   were   viable  and   practical.





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               C/SCA/14725/2016                                                    JUDGMENT




9. Regarding   mobilization   period   as   mentioned   in   the   written   submission of petitioner, the mobilization period modified after pre­ bid conference and before tender opening, which was accepted by the   petitioner also, as stipulated as under :­ Mobilization period :­ Since, existing contract is expiring on   01.09.2016,   the   contractor   shall   be   required   to   mobilize   complete  manpower, material along with equipment  etc. for   commencement   of   services   at   the   specified   locations   by   01.09.2016 and start services w.e.f. 02.09.2016 (00:00 Hrs.)   i.e.   01.09.2016   midnight.     In   case   LOA   is   placed   on/after   31.08.2016,   contract   will   be   given   07   days'   time   for   completion of mobilization.

Thus, in case of LOA being placed on or after 31.08.2016 only, action   was required  to be taken  to take  care of the 7 days time  given for   mobilization.   In this case, after finalization of regular open tender,   LOA   was   placed   on   24.08.2016   itself.     However,   since   it   failed,   parallel action through board hiring was taken to ensure continuity of   services to field personnel.

Arguments of the Respondent Corporation :­

10. Writ  petition   in  Contractual  Matters   :­ That,  it is  a settled   legal proposition that matters/disputes relating to contract cannot be   agitated   nor   terms   of   contract   can   be   enforced   through   writ   jurisdiction under Article 226 of the Constitution.  Thus, a writ Court   cannot be a forum to seek any relief based on terms and conditions   incorporated   in   the   agreement   by   the   parties.     The   respondent   corporation relies on decision passed by the Hon'ble Supreme Court of   India   in   the   case   of   Rajasthan   State   Industrial   Development   and   Investment   Corporation   V/s.   Diamond   and   Gem   Development   Corporation   reported   in   2013   (5)   SCC   470.     The   answering   Page 23 of 65 HC-NIC Page 23 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT respondent Corporation also relies on a decision of this Hon'ble Court   in   the   case   of  Assistant   Excise   Commissioner   V/s.   Issac   Peter  reported  in  1994  (4)  SCC 125  and  Tata Cellular  V/s. Union of   India reported in 1994 (6) SCC 651. 

11. It is submitted that the corporation relies on clause 32 of the   tender which gives the corporation right to reject all or any of the bids.   For the convenience of this Hon'ble Court the said clause is reproduced   herewith :­ "32 ONGC's RIGHT TO ACCEPT  ANY BID AND TO REJECT   ANY OR ALL BIDS.

32. ONGC reserves the right to reject, accept or prefer any bid   and to annual the bidding process and reject all bids at any   time   prior   to   award   of   contract,   without   thereby   Incurring   any   liability   to   the   affected   Bidder   or   Bidders   or   any   obligation   to   inform   the   affected   Bidder   or   Bidders   of   the   ground for ONGC's action.   The ONGC also reserves to itself   the right to accept any bid in part or spilt the order between   two or more bidders." 

It is submitted that, though such clause is existing on ONGC's Tender   Document   (which   was   issued   to   the   firm   and   the   firm   has   given   undertaking   in   the   e­bid   that   he   has   accepted   the   all   terms   and   conditions), the aforesaid clause 32 has not been operated.  ONGC has   not rejected the offer of M/s.Superior Securitas, New Delhi and ONGC   awarded the contract on M/s. Superior Securitas, New Delhi, as per   their quoted/indicated rates.

12. It is submitted that the action of the respondent corporation   was   taken   as   per   tender   condition   and   prevailing   practices.     It   is   submitted that there is no question of any clarification as the bid of   Page 24 of 65 HC-NIC Page 24 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT the petitioner being the lowest was accepted by the corporation and if   the   petitioner   is   not   willing   to   perform   his   promise   then   the   corporation has no option but to cancel the LOA and proceed for re­ invitation of tender.   It is respectfully submitted that cancellation of   LOA is done as brought out above, as per guidelines/ practice.   It is   respectfully submitted that, the award was based on the quoted rate   for AA as brought out above.

13. It is submitted that as stated earlier, there were four qualified   bidders   in   the   present   case   and   all   the   four   bidders,   including   the   petitioner were well aware of the procedure to fill the bidding forms.   That   the   price   bid   documents   of   all   the   four   qualified   bidders   is   annexed with the additional affidavit of the respondent corporation as   Annexure R1 Colly.   That  pursuant  to the  opening  of bidding  the   same   was   deliberated   by   the   tender   committee.     The   copy   of   the   notings of deliberation by the tender committee is annexed with the   additional affidavit of the respondent corporation as Annexure R2. 

14. It   is   submitted   that   at   the   time   of   opening   of   bids,   the   representative of petitioner himself was present along with the other   bides.   That the petitioner  has never raised any objection when the   figure quoted by him was quoted in front of all the other bidders.  It is   only   after   the   issuance   of   letter   of   award   that   the   petitioner   had   started raising frivolous excuses for not performing the contract.  The   copy of the attendance sheet, showing that the representative of the   petitioner was present at the time of opening of bids is annexed with   the additional affidavit as Annexure "R2". 

15. It is further submitted that the documents produced on page   175   at   Annexure   K   have   no   relevance   to   the   present   case,   as   the   Corporation  only  follows  its  own  manual  (Integrated  MM  manual)   referred   to   on   page   188,   which   has   been   approved   by   the   ONGC   Page 25 of 65 HC-NIC Page 25 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT board.     That   the   argument   of   Malafide   raised   by   the   petitioner   is   without   any   substance   as   the   sole   reason   for   awarding   the   tender   through board purchase was due to the fact that there was hardly any   time between the refusal of the petitioner to perform the contract and   the expiry of the earlier contract.  It is submitted that if the aforesaid   process was not carried out, the same would have ultimately resulted   into heavy losses which would have resulted into Crores of rupees each   day to the exchequer.  Thus, the fresh contract awarded is through a   separate Board Hiring and not by extension of existing contract.

16. It is submitted that the petitioner has placed reliance on clause   24.2.1   at   page   49   of   the   petition   that   the   purchaser   may   at   its   discretion   ask   the   bidder   for   clarification/confirmation   deficient   documents   of   bid,   however   such   an   argument   cannot   be   accepted   because   the   clarification/confirmation   can   only   be   called   from   the   bidder   when   there   is   deficiency   in   the   documents   provided   by   the   bidder.

For example in a bid if the bidder has stated that he has 5   years of experience and had produced the documents relating   to   that   of   3   years,   in   such   a   situation,   the   purchaser   i.e.   respondent corporation can call for clarification/confirmation   from the bidder.

17.       It   is   further   submitted   that   the   aforesaid   argument   of   petitioner does not hold any water for a reason that the second part of   the same clause specifies that if the bidder is called for clarification   and thereafter the purchaser respond back with reason for it, under   such circumstance "no change in the price of substance of the bid shall   be sought or permitted".    As any clarification  in this regard  would   lead   to   change   in   price   of   substance   and   this   tender   condition   prohibits  the  same,  no clarification  could  be sought  and  evaluation   Page 26 of 65 HC-NIC Page 26 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT was   done   as   per   amount   indicated/   quoted   by   the   bidder   as   per   various   appendices   and   methodology   as   mentioned   in   the   tender,   which were accepted by the petitioner also.

18. It is submitted that the petitioner had further placed reliance   on clause 26.1 at the page 49 of the petition wherein the petitioner   has argued that ONGC has to examine the bids to determine whether   they are complete, whether any computational errors have been made,   whether required sureties have been furnished, whether the documents   have been properly signed and whether the bids are generally in order.

In   response   to   this   it   is   submitted   that   the   manual   of   the   ONGC   duly   approved   by   the   board   members   only   requires   that   the  bid  submitted  is  in  prescribed  format  without  any   deviations.   It is submitted that as no such discrepancy was   found   in   the   bid   document   and   as   the   same   was   in   the   prescribed  format,  the  question  of raising  any objection  did   not arise. 

19. It   is   submitted   that   the   petitioner   has   placed   reliance   on   clauses relating  to evaluation  of bids and its scrutiny by the ONGC   however, it is submitted that the bid submitted by the petitioner was   in   prescribed   format   and   there   was   no   anomaly   with   the   details   provided by the petitioner, the respondent corporation could not have   rejected the same as the offer was lowest of all.

20. Regarding the reference of ONGC Panvel Tender, respondent's   counsel   during   arguments   stated   that   being   the   concluding   part   of   argument, it may not be taken into record.  However, in the written   submission by the petitioner,  again the same is mentioned.    In this   regard,  it is submitted  that Integrated  MM Manual and  the Tender   Document conditions from the basis for evaluation and award.  Based   on   experience,   and   with   a   view   to   avoid   lack   of   clarity,   certain   Page 27 of 65 HC-NIC Page 27 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT conditions might be incorporated in the local level, with appropriate   approvals, in the tender as improvement in the initial stage itself (i.e.   before   tender   opening).     In   the   board   hiring   tender   also,   the   total   amount   was   indicated   to   be   worked   out   by   ONGC   to   avoid   the   problem.     But,   the   petitioner's   allegation   that   ONGC   chose   not   to   exercise   is   to   prevent   them   in   ONGC/   other   tenders   is   totally   meaningless and baseless as the ONGC tender conditions are common   to all bidders and being open tender any bidder can be L­1.  Moreover,   any   such   clause/   conditions   can   be   executed   only   if   originally   incorporated in the tender itself, which are issued to all the bidders.

21. It is submitted that the petitioner has placed reliance on para   12.1.1 of IMM manual page 189 of the petition wherein it is stated   that the tender committee shall be required to establish and certify the   reasonability of rates of L1 bidder.

In response to this it is submitted that the said provision were   modified   with   effect   from   28/04/2015   wherein   the   tender   committee was not required to work on the workability of the   rates of L1 bidder.  It is submitted that as bid was processed   after the modification in the IMM manual it is the modified   manual which will be applicable to the petitioner's case.    

22. It is submitted that before the modified provision of the ONGC   IMM  manual   para  14.1.1   reasonability  rate   should  be  sought   only   when the rates received in L1 bid is more than cost estimate and if L1   rates   are   lower   than   85%   of   estimate   workability   need   to   be   established   by   seeking   clarifications   etc.     It   is   submitted   that   subsequently   on   28­04­2015   by   circular   no.17/2015   cum   IMMM   amendment MM/04/2015 workability provisions were deleted.   It is   submitted   that   in   the   present   case   reasonability   of   rates   was   established  as  per  the  laid  down  procedure  of ONGC  by comparing   Page 28 of 65 HC-NIC Page 28 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT with cost estimate, LPR (Last Purchase Rate) of Ankleshwar Asset and   recently awarded contract of Rajahmundry Asset for similar services   and various escalations.  Further, the provision of reasonability of rate   in para 14.1.1 of IMM manual for the cases not under the preview of   tender committee and not dealt by MM are not relevant in this case as   this case is finalized by tender committee.  Lastly, concluding lines in   para   14.1.1   of   IMM   manual   says   that   a   decision   to   go   for   price   negotiation need to be taken only if L1 rate is subsequently higher.  In   this case, since the L1 rate was considered reasonable, no negotiation   was  considered  and  contract   was  awarded.    It is  further   submitted   that para 14.1.1 of IMM manual provides guidelines for negotiations   only   if   rates   are   higher   and   does   not   provide   for   seeking   any   clarifications.

23. Regarding   the   petitioner's   contention   of   binding   contract   between   the   parties,   the   respondent   Corporation   had   awarded   the   LOA   for   performance   of   the   Job   as   per   the   bid   of   the   contractor.   However,   since   the   petitioner   failed   and   neglected   the   same,   the   respondent   Corporation   has   terminated   the   same.     The   fact   of   the   matter is that the matter is contractual in nature and it well settled in  catena   of   judgments   that   in   a   contract   matter,   this   Hon'ble   Court   should not interfere under Article 226 of the Constitution of India.

24. It   is   submitted   that   the   say   of   the   petitioner   that   there   is   inconsistency   between   the   ONGC   management   and   the   Finance   department  is   incorrect  as  all  the   decisions   including  final  decision   dated 31­08­2016 was also signed by in­charge Finance and Accounts   (I/c. F&A).

25. In light of the aforementioned facts and circumstances of the   case,   it   is   humbly   submitted   that   the   prayer   of   the   petitioner   be   rejected and the present petition be dismissed."   




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                    C/SCA/14725/2016                                                    JUDGMENT




5. As against this learned counsel for the petitioner has filed  additional   written   submissions,   which   are   also   required   to   be  reproduced in verbatim as under :­ "1. On 23/12/2016 both the parties has exchanged their written   submission.   At the time of hearing, the Advocate for the respondent   no.1 requested that the parties may be permitted to file an additional   written   submissions   if   required,   after   going   through   the   written   submissions tendered by the other side.

2. For  the  sake  of brevity,  the  petitioner  herein  is  not  dealing   with   the   entire   written   submissions   and   is  denying  each  and   every   contention as submitted by the respondent no.1 in view of the written   submissions to be filed by the petitioner and in view of the pleadings   filed by the petitioner.

3. The   petitioner   files   this   additional   written   submission   to   specifically deal with para­13 of the written arguments filed on behalf   of the respondent no.1.   The petitioner states that the facts stated in   the  said  paragraph  are  completely  false.    The  petitioner  states  that   even   during   the   course   of   the   arguments,   the   Hon'ble   Court   orally   directed the respondent no.1 to produce the copy of a screen shot or   any proof showing as to which figures were disclosed to the bidders at   the time of opening the bid which till date they failed to do so.  The   respondent  no.1  has  deliberately  not  produced  such  proofs  and  has   only   produced   the   copy   of   the   attendance   sheet.     The   petitioners   during the course of the arguments stated that during the opening of   the bid only the figures of (A+B), BB & CC were disclosed and the   evaluated   price   bids   of   none   of   the   parties   were   disclosed   and   therefore,   the   question   the   petitioner   raising   any   objections   during   that period does not arise.

4. In view of what is stated herein above and in view of what is   Page 30 of 65 HC-NIC Page 30 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT stated   in  the   written  submission   filed  by  the   petitioner  and  on  the   basis of the records available before this Hon'ble Court, the petitioner   requests   this   Hon'ble   Court   that   the   prayers   as   prayed   for   in   the   petition be allowed with heavy costs."  

6. The   Court   has   heard   learned   counsel   appearing   for   the  parties and perused the documents produced on the record.  In the first  instance,   as   it   appears   from   the   controversy   and   facts   mentioned  hereinabove, there were total four qualified bidder's bid were taken for  evolution   by   the   respondent   -   ONGC.     The   bidder   was   required   to  specifically mention in the bid format the total evaluated price i.e. grand  total indicated as 'DD' and the formula was again DD = AA + (BB x  3795 x 3 years) + (CC x 1811 x 3 years).  The present petitioner under  that column below Appendix - I has mentioned as under :­  (Appendix - I) PRICE BID FORMAT Sr.  DESCRIPTION RATE IN  RATE IN  No. RUPEES PER  RUPEES PER  PERSON PER  PERSON PER  DAY DAY [IN WORDS] [IN FIGURES] (A) Providing   Catering   Services   as   per   the   420 Four Twenty Scope of Work defined in bid document.

For   Full   Meals   as   defined   in   scope   of   work   (Break   -   up   of   which   is   to   be   provided at Appendix - III) (B) Providing   Mechanized   Housekeeping   60 Sixty Services   as   per   the   Scope   of   Work   defined in bid document.

                       GRAND  TOTAL  AA = [{(A) + (B)}  x                             480               Four Eighty
                       615   (no.   of   persons   in   total)   x   365  
                       (days) x 3 years].
         Note :           a)        Bidder should quote firm prices as per the price bid format(s)  
                                    given   in  the   tender   document.     Bidder   should   quote   rates   in  
                                    Indian Rupees.




                                                             Page 31 of 65

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                    b)        Quoted rate should be inclusive of all taxes, duties, levies etc.  

Bidders should furnish the details of taxes, levies and duties etc.,   considered in the quoted prices in Appendix­II of the priced Bid   Format which will be used for the purpose of operating Change   in Law provisions of the tender document.

c) Number   of   persons   indicated   above   is   for   the   purpose   of   evaluation  only which may increase/decrease  every day based   on the operational requirements. Payment will be made based   on the actual volume of services provided each day.

.Amit Kumar.

(Name/Signature & Seal of the bidder)

7. Thus,   against   the   column   grand   total,   the   figure   is  mentioned and the grand total is not mentioned.   As against this, the  another bidder i.e. M/s. Saraf Corporation India Pvt. Ltd. has quoted as  under :­     (Appendix - I) PRICE BID FORMAT Sr.  DESCRIPTION RATE IN  RATE IN  No. RUPEES PER  RUPEES PER  PERSON PER  PERSON PER  DAY DAY [IN WORDS] [IN FIGURES] (A) Providing   Catering   Services   as   per   the   482 Rs Four   Scope of Work defined in bid document. Hundred   Eighty Two   For   Full   Meals   as   defined   in   scope   of   only  work   (Break   -   up   of   which   is   to   be   provided at Appendix - III) (B) Providing   Mechanized   Housekeeping   2.00 Rs Two Only Services as per the Scope of Work defined   in bid document.

                  GRAND   TOTAL   AA   =   [{(A)   +   (B)}   x   32,59,37,700.00              Rs Thirty Two  
                  615   (no.   of   persons   in   total)   x   365                              Crore Fifty  
                  (days) x 3 years].                                                             Nine Lacks  
                                                                                                Thirty Seven  
                                                                                                 Thousand  
                                                                                                   Seven  
                                                                                               Hundred only 
         Note :     a)        Bidder should quote firm prices as per the price bid format(s)  



                                                     Page 32 of 65

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                  C/SCA/14725/2016                                                          JUDGMENT



                            given   in  the   tender   document.     Bidder   should   quote   rates   in  
                            Indian Rupees.

                   b)       Quoted rate should be inclusive of all taxes, duties, levies etc.  

Bidders should furnish the details of taxes, levies and duties etc.,   considered in the quoted prices in Appendix­II of the priced Bid   Format which will be used for the purpose of operating Change   in Law provisions of the tender document.

c) Number   of   persons   indicated   above   is   for   the   purpose   of   evaluation  only which may increase/decrease  every day based   on the operational requirements. Payment will be made based   on the actual volume of services provided each day.

For Saraf Corporation India Pvt. Ltd. - Deepak Saraf (Name/Signature & Seal of the bidder)

8. The another bidder i.e. M/s. Jyoti Hospitality Services Pvt. 

         Ltd. has quoted as under :­    
                                                (Appendix - I)
                                            PRICE BID FORMAT
          Sr.                   DESCRIPTION                                RATE IN               RATE IN 
          No.                                                            RUPEES PER            RUPEES PER 
                                                                         PERSON PER            PERSON PER 
                                                                            DAY                    DAY
                                                                                               [IN WORDS]
                                                                        [IN FIGURES]
          (A)    Providing   Catering   Services   as   per   the          568.86              Rupees Five  
                 Scope of Work defined in bid document.                                          Hundred  
                                                                                               Sixty Eight  
                 For Full Meals as defined in scope of work                                    and Eighty  
                 (Break - up of which is to be provided at                                    Six Paise only
                 Appendix - III)
          (B)    Providing   Mechanized   Housekeeping                        16.53                Rupees  
                 Services as per the Scope of Work defined                                      Sixteen and  
                 in bid document.                                                                Fifty Three  
                                                                                                 Paise Only
                 GRAND   TOTAL   AA   =   [{(A)   +   (B)}   x   39,42,16,260.7                Rupees Thirty  
                 615   (no.   of   persons   in   total)   x   365      5                        Nine Crore  
                 (days) x 3 years].                                                              Forty Two  
                                                                                               Lakhs Sixteen  
                                                                                                 Thousand  
                                                                                               Two Hundred  
                                                                                                  Sixty and  
                                                                                                Seventy Five  
                                                                                                Paise Only 



                                                   Page 33 of 65

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         Note :      a)        Bidder should quote firm prices as per the price bid format(s)  
                               given   in  the   tender   document.     Bidder   should   quote   rates   in  
                               Indian Rupees.

                     b)        Quoted rate should be inclusive of all taxes, duties, levies etc.  

Bidders should furnish the details of taxes, levies and duties etc.,   considered in the quoted prices in Appendix­II of the priced Bid   Format which will be used for the purpose of operating Change   in Law provisions of the tender document.

c) Number   of   persons   indicated   above   is   for   the   purpose   of   evaluation  only which may increase/decrease  every day based   on the operational requirements. Payment will be made based   on the actual volume of services provided each day.

.SANTOSH SHETTY  (Name/Signature & Seal of the bidder)

9. M/s. Sai Hospitality Services has quoted as under :­   (Appendix - I) PRICE BID FORMAT Sr.  DESCRIPTION RATE IN  RATE IN  No. RUPEES PER  RUPEES PER  PERSON PER  PERSON PER  DAY DAY [IN WORDS] [IN FIGURES] (A) Providing   Catering   Services   as   per   the   448.61 Rupees Four   Scope of Work defined in bid document. Hundred Forty   Eight and Paise   For   Full   Meals   as   defined   in   scope   of   Sixty One only work   (Break   -   up   of   which   is   to   be   provided at Appendix - III) (B) Providing   Mechanized   Housekeeping   40.25 Rupees Forty   Services   as   per   the   Scope   of   Work   and Paise   defined in bid document. Twenty Five   Only  GRAND  TOTAL  AA = [{(A) + (B)}  x   32,92,10,545.50 Rupees Thirty   615   (no.   of   persons   in   total)   x   365   Two Crore   (days) x 3 years]. Ninety Two   Lacs Ten   Thousand Five   Hundred Forty   Five and Paise   Page 34 of 65 HC-NIC Page 34 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT Fifty Only  Note : a) Bidder should quote firm prices as per the price bid format(s)   given   in  the   tender   document.     Bidder   should   quote   rates   in   Indian Rupees.

b) Quoted rate should be inclusive of all taxes, duties, levies etc.   Bidders should furnish the details of taxes, levies and duties etc.,   considered in the quoted prices in Appendix­II of the priced Bid   Format which will be used for the purpose of operating Change   in Law provisions of the tender document.

c) Number   of   persons   indicated   above   is   for   the   purpose   of   evaluation  only which may increase/decrease  every day based   on the operational requirements. Payment will be made based   on the actual volume of services provided each day.

............... 

(Name/Signature & Seal of the bidder)

10. The aforesaid figures reflects only part of the components of  the  contract and the  total value and the  way it has been worked­out  could   easily   be   understood   by   closely   perusing   the   working   paper  produced   at   page   no.280   in   this   compilation,   which   is   O.N.G.C.'s  working paper, part of the said working paper would explain in depth as  to how the O.N.G.C.'s Tender Committee has evaluated the price bids.  It  is   the   part   of   page   no.280   working   paper,   which   is   reproduced   as  under :­  "MINUTES   OF   THE   TENDER   COMMITTEE   HELD   ON   23.08.2016   TO   CONSIDER OFFERS RECEIVED AFTER PRICE BID OPENDING FOR "HIRING   OF   CATERING   &   HOUSEKEEPING   SERVICES   AT   MULLER   COLONY,   CPF   GANDHAR,   NORTH   GANDHAR   COLONY,   AND   GGS   OLPAD   OF   SURFACE   SECTION AND DSA GANDHAR AND DSA DABKA OF BRILLING SECTION OF   ANKLESHWAR   ASSET   FOR   A   PERIOD   OF   THREE   YEARS"   AGAINST   E   TENDER   NO.   ANK/   MM/   P4   (SERVICES)­RB/   CATERING/   02/   2016­17/   A16RC16010.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ AA) CONSTITUTION OF TC :

1. GGM­Surface Manager - Indentor
2. GM - HDS - Indentor
3. GM - In­charge Finance Page 35 of 65 HC-NIC Page 35 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT
4. DGM­ In­charge MM BB) BRIEF/BACKGROUND OF THE CASE :­
1. Case   pertains   to   Hiring   of   Catering   Services   for   Drilling   Services   and   Surface Team, Ankleshwar Asset for a period of three years."

TC   held   on   12.08.2016   had   recommended   for   price   bid   opening   of   following offers being TA­CA :­

i) M/s. Superior Securitas, New Delhi

ii) M/s. Saraf Corporation India Pvt. Ltd., Mumbai.

iii) M/s. Sai Hospitality Services, Mumbai.

iv) M/s. Jyoti hospitality Services Pvt. Ltd., Mumbai.

The above recommendations were approved by CPA on 12.08.2016 at NP­ 67.

2. Accordingly, Price bids were opened on 16.08.2016 of following bidders:­

i) M/s. Superior Securitas, New Delhi

ii) M/s. Saraf Corporation India Pvt. Ltd., Mumbai.

iii) M/s. Sai Hospitality Services, Mumbai.

iv) M/s. Jyoti hospitality Services Pvt. Ltd., Mumbai.

3. Print out of e­price bids are placed at Sr..... in the file, C.S. prepared on   17.08.2016   and   financial   vetting   of   C.S.   Carried   out   on   22.08.2016.   Vetted CS by finance is placed at Sr.73. 

4. File  was  sent   to  Indentor  for   ascertaining  the   reasonability   of  rates   on   dtd.17.08.2016,   Indentor   has   furnished   the   reasonability   of   rates   on   23.08.2016 (Sr.75).

5. RANKING OF BIDDERS :

Page 36 of 65
HC-NIC Page 36 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT The Price Evaluation Criteria of this tender at BEC Para C.1.1(b) and (c)   are as under :­ Quote
(b) ONGC   will   evaluate   the   priced   offer   based   on   filled   in   price­bid   evaluation   format   (schedule   of   rates)   in   the   tender   document,   of   all   technically   &  commercially  acceptable  bidders.     To   facilitate   evaluation   and comparison of the bids, bidders are requested to state their bid price   strictly   in   accordance   with   the   price   format   of   the   tender   document.  

ONGC may reject any bid where the pattern of prices indicated varis from   the format.

(c) Evaluation shall be made as per "Total Evaluated Price i.e. Grand   Total" quoted by the bidder of the Price Format at Annexure - V of Tender   Document Unquote.

In   the   price   bid   format,   "Total   Evaluated   Price   i.e.   Grand   Total"   is   indicated as 'DD' and the formula is DD = AA + (BB x 3795 x 3 years) +   (CC x 1811 x 3 years) "Total Evaluated Price i.e. Grand Total" as per vetted CS (Sr. 73) are as   under :

                            M/s. Superior          M/s. Saraf       M/s. Jyoti               M/s. Sai  
                            Securities, New       Corporation       Hospitality             Hospitality  
                              Delhi, e­Rfx      India Pvt. Ltd.,   Services Pvt.              Service,  
                             Response No.:      Mumbai, e­Rfx   Ltd. Mumbai, e­            Mumbai, e­Rfx  
                              650054727          Response No.:     Rfx Response            Response No.:  
                                                   65003531            No.:                 650054836
                                                                   650054459
         Total evaluated  
         price i.e. DD =  49,50,030.00*

Grand Total =   ­­­­­­­­­­­­­­­­­­­­­­ 33,60,07,740.00 40,10,19,180.75 33,37,56,220.50** AA + (BB x  32,81,93,550.00* 3795 x 3  years) + (CC x   1811 x 3  years)

a) *In case of M/s. Superior Securitas, New Delhi : the bidder has indicated   quoted 'AA' in Appendix - I of Price format as under :

Page 37 of 65
HC-NIC Page 37 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT Sr.  DESCRIPTION RATE IN RUPEES  RATE IN  No. PER PERSON PER  RUPEES PER  DAY  PERSON PER  [IN FIGURES] DAY [IN WORDS] (A) Providing Catering Services as per the Scope of   420 Four twenty work defined in bid document.

For   Full   Meals   as   defined   in   scope   of   work  (Break   -   up   of   which   is   to   be   provided   at   Appendix - III) (B) Providing Mechanized Housekeeping Services as   60 Sixty per the Scope of Work defined in bid document.

GRAND TOTAL AA = [{(A) + (B)} x 615 (no.   480 Four eighty of persons in total) x 365 (days) x 3 years] It seems that apparently by mistake, bidder while indicating 'AA' has not   multiplied the sum of 'A' + 'B' by the multiplier (i.e. 615 x 365 x 3).  Even   if the same is corrected and correct value of 'AA' is worked out, the bidder   is   still   L­1   as   his   Grand   Total   /   Total   Evaluated   Price   i.e.   Rs.32,81,93,550.00   is   lowest.     However,   considering   his   quoted   Grand   Total   'AA'   (i.e.   Rs.480.00),   total   evaluated   price   'DD'   shall   be   Rs.49,50,030.00

b) ** In case of M/s. Sai Hospitality Services, Mumbai : as per price format   bidders are to quote for catering charges per person per day at appendix -   I and breakup of the same should be indicated at Appendix - III of Price   Format.  Appendix - III is for break - up rates and as per foot note 2 of   Appendix - III, break­up of rates will be applicable for payment for persons   consuming individual items.  As per foot note 1 of Appendix - III, the sum   total  of all  the  items   should  be   equal  to the  rate   of  providing  catering   services per person per day (A) quoted by the bidder as per Appendix - I of   the price format.  The bidder has quoted Rs.448.61 at Appendix - I and in   Break­up of rates at Appendix - III, the summation of break - up comes   out to be Rs.397.00.   As per practice in vouge, evaluation is carried out   with the higher value i.e. Rs.448.61, which is indicated by the bidder in  Appendix - I.   With this the total evaluated  price  'DD' comes  out to be   Page 38 of 65 HC-NIC Page 38 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT Rs.33,37,56,220.50.

6. Financial Criteria.  The price bids of the bidders were opened on the basis   of their confirmation of meeting the Financial Criteria of BEC.  Subsequent   to opening of price bids, a comparison of offers is made as under (Sr. 74) :

BIDDER M/s. Superior  M/s. Saraf  M/s. Jyoti  M/s. Sai  Securities, New  Corporation  Hospitality  Hospitality  Delhi, e­Rfx  India Pvt. Ltd.,  Services Pvt. Ltd.  Service,  Response No.:  Mumbai, e­Rfx  Mumbai, e­Rfx  Mumbai, e­Rfx  650054727 Response No.:  Response No.:  Response No.: 
                                                      65003531         650054459          650054836
         TOTAL QUOTED 
         VALUE (refer CS  32,81,93,550.00          33,60,07,740.00      40,10,19,180.75      33,37,56,220.50
          at Sr. 73 in the 
                file)
         Total annualized  10,93,97,850.00         11,20,02,580.00      13,36,73,060.25      11,12,52,073.50
            bid value
           30% of total 
          annualized bid       3,28,19,355.00      3,36,00,774.00       4,01,01,918.08       3,33,75,622.05
              value
              Average turn 
                  over         2,66,06,697.03*     26,32,09,738.50      5,36,45,274.50       26,37,59,111.50
           Is Average turn 
          over >=30% of              Yes*                 Yes                  Yes                  Yes
          total annualized 
               bid value


*After   TBO   and   receipt   of   deficient   documents,   while   working   out   the   average   turnover   of   M/s.   Superior   Securitas,   New   Delhi,   'trading   sales'   indicated in 'Income and Expenditure A/c' in FY 2015­16, was not taken,   considering it to be 'other income' or 'non­operational income'.  However,   after opening  of price bids, Finance  Section  has pointed  out to consider   'trading  sales'  also  for  calculating  average   turnover  (NP­68  refers).    In   view   of  the  observations,  the  turnover  of M/s.  Superior   Securitas,  New   Delhi will be as under :­ Turn over of FY 14­15 Rs.2,64,25,268.06 Turn over of FY 15­16 Rs.9,47,29,631.00 (=2,67,88,126.00 +  6,79,41,505.00) Average Turn over Rs.6,05,77,449.53 Page 39 of 65 HC-NIC Page 39 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT Hence,  as  vetted  by  Finance  vide  Sr.   74,  M/s.  Superior   Securitas,   New   Delhi also is meeting the Financial Criteria of BEC i.e. BEC Clause B2.6.0.   From above, all the bidders are meeting the Financial Criteria of BEC.

7. Reasonability of Rates Indentor's comments on ROR is as under :­ Quote → As per comparative  statement  (CS)  vetted  by finance,  the  bidder   M/s   Superior   Securitas,   New   Delhi   (1.1)   has   been   considered   L1   for   establishing/providing input for reasonability.

→ LPR : LPR of similar services hired by Ankleshwar Asset for 3 years   (SAP OLA No.9010018589)  was considered  for the purpose  of sanction   with an escalation of 5% per annum.  Further, rates of recently awarded   similar   contract   at   Rajahmundry   Asset,   has   also   been   extracted   from   system and the comparative is as under :

All figures in INR Sr.  Item LPR of  Estimated   LPR of  Quoted   Remarks No. Ankleshwar   Value with   Rajahmundry   rates of  Asset 5%   Asset SAP  bidder  escalation  (9010022364) M/s.  
Superior  Securitas,   New Delhi.
              1   Providing   catering            353.15        408.82          517.57          420         1.(+)  
                  services   per   person                                                                   2.73%   wrt 
                  per   day   at   Muller                                                                   PR Estimate.  
                                                                                                            2.       (­)  
                  colony, CPF Gandhar, 
                                                                                                            18.85%   wrt 
                  North   Gandhar   and 
                                                                                                            Rajahmund­
                  GCS Olpad                                                                                 ry LPR.
              2   Providing                        8.12           9.4           191.43           60         1.(+)  
                  Housekeeping services                                                                     538.29%  
                  per person per day at                                                                     wrt   PR 
                                                                                                            estimate. 
                  Muller   colony,   CPF 
                                                                                                            2.         (­)  
                  Gandhar,   North 
                                                                                                            68.65%   wrt 
                  Gandhar   and   GCS                                                                       Rajahmund­
                  Olpad                                                                                     ry LPR.
                  Total   per   person   per      361.27        418.21         709.00.        480.00.       1.   (+)  
                  day                                                                                       14.77%
                                                                                                            2. (­) 32.29



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                  C/SCA/14725/2016                                                      JUDGMENT




1. From   above,   if   computed   for   three   years   the   total   quoted   amount   works   out   to   be   Rs.32,44,000.00   as   against   Rs.28,12,75,152.94 wherein the quoted price of the vendor is   higher by 14.92% as compared to the estimated price of PR.  

The   estimated   cost   includes  service  tax   @ 14%   whereas  the   quoted one has 15% service tax.

2. When   compared   with   the   latest   contract   agreement   of   Rajahmudry   Asset   (SAP   OLA   No.90100023364)   the   quoted   rates   are   Rs.32,32,44,000.00   as   compared   to   the   value   of   referred   OLA   for   same   number   of   persons   is   Rs.47,74,58,325.00 and works out to be lower by 32.29%.

3. As   downloaded   from   the   site   of   labourbureau.nic.in   it   is   calculated   that   the   average   rate   of   inflation   for   the   period   2013 - 2015 stood at 9.75, whereas the escalation considered   in estimates was only 5%.   If escalated with average rate of   inflation the estimated cost shall be Rs.477.58 per person per   day with 14.00% service tax, which will be Rs.481.77, if the   rate of service tax is considered as 15%.  Here the total value   of the contract works out to be Rs.32,44,35,962.25, and thus   the quoted rates are lower by 0.37%.

Conclusion  :   In   view   of   the   above   information   about   the   quoted rates versus estimated cost, LPR of Rajahmundry Asset   and the comparison with the average inflation data, the rates   quoted   by   M/s.   Superior   Securitas,   New   Delhi,   can   be   considered as reasonable.

CC) TC OBSERVATIONS & DELIBRATIONS

1. Instant   case   was   invited   as   Open   e­tender   under   two   bid   system   and   against   this   tender   there   are   four   TA­CA   offers   whose   price   bids   were   Page 41 of 65 HC-NIC Page 41 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT opened.

2. TC   noted   that  the   L­1   status,   as  per   "Total   Evaluated  Price   i.e.  Grand   Total" as per vetted CS (Sr.73) are as under :­ M/s. Superior   M/s. Saraf   M/s. Jyoti   M/s. Sai   Securities, New   Corporation   Hospitality   Hospitality   Delhi, e­Rfx   India Pvt. Ltd.,   Services Pvt.   Service,   Response No.:   Mumbai, e­Rfx   Ltd. Mumbai, e­ Mumbai, e­Rfx   650054727 Response No.:   Rfx Response   Response No.:  

                                                    65003531            No.:                650054836
                                                                    650054459
         Total evaluated  
         price i.e. DD =  49,50,030.00*

Grand Total =   ­­­­­­­­­­­­­­­­­­­­­­ 33,60,07,740.00 40,10,19,180.75 33,37,56,220.50** AA + (BB x  32,81,93,550.00* 3795 x 3  years) + (CC x   1811 x 3  years) Ranking L­1 L­3 L­4 L­2 TC noted  that  bidder  M/s. Superior  Securitas,  New Delhi  has indicated   'AA'  in Appendix­I  as  Rs.480.00   instead  of  Rs.32,32,44,000.00  (as  per   actual calculation), as brought out at Para BB)5a) above.   So, if 'AA' is   taken   as   Rs.480.00   its   Total   evaluated   price   'DD'   shall   become   Rs.32,81,93,550.00.     Hence,   even   if   the   same   is   corrected   and   correct   value of 'AA' is worked out, the bidder is still L­1 as his Grand Total/Total   Evaluated Price 'DD' is lowest.  As per practice in vogue, evaluation needs   to   done   on   the   higher   value   and   for   award   lower   value   needs   to   be   considered.     ONGC   cannot   award   contract   for   higher   amount   than   indicated by the bidder, after correcting the bidder's indicated rate in 'AA',   as   the   evaluation   was   based   on   the   values   indicated   by   the   bidders.   Moreover, there is no provision in integrated MM Manual for seeking any   clarification   subsequent   to   opening   of   price   bids   and   clarification   with   regard to workability and hence, LOA needs to be awarded with 'AA' as   Rs.480.00   and   with   Total   evaluated   price   /   Grand   Total   price   'DD'   of   Rs.49,50,030.00 for 3 years, inclusive of all taxes and duties.



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                 C/SCA/14725/2016                                                      JUDGMENT




Further,   as   brought   out   at   Para   BB)5b)   above,   M/s.   Sai   Hospitality   Services, Mumbai, has quoted Catering Charges as Rs.448.61 per person   per day, at Appendix - I but in Break ­up of rates at Appendix - III, the   sum comes out to be Rs.397.00, instead of Rs.448.61.  As per practice in   vogue, evaluation was carried out with the higher value i.e. Rs.448.61, as   indicated by the bidder at Appendix - I, and the total comes  out to be   Rs.33,37,56,220.50, and thus the bidder is L­2.

3. As   per   Reasonability   of   Rates   furnished,   the   rates   quoted   by   L­1   is   reasonable,   but   indicated   for   rates   of   "AA"   i.e.   Appendix   -   I   only.   Therefore, with regard to reasonability in respect of Appendix­IV (BB) and   Appendix - V (CC) against query of TC, indenting members stated that   compared to LPR for Special meals and on overall basis also, quoted rates   are reasonable.

4. In view of above deliberations, TC proposes to award the case for hiring of   catering & housekeeping services at Muller Colony, CPF Gandhar, North   Gandhar  Colony,  and  GGS  Olpad  of surface  section  and  DSA  Gandhar   and  DSA Dabka  of drilling  section  of Ankleshwar  Asset for  a period  of   three years to L­1 bidder viz. M/s. Superior Securitas, New Delhi, at their   quoted rates.

However, TC also deliberated that in case of non­acceptance of the LOA by   the L­1 bidder, in view of the issue of rates of 'AA', there is a likelihood of   cancellation of this tender and re­invitation as per guidelines.  Indenting   members intimated that the existing contract is expiring on 01.09.2016   and  the  services  shall  be  required  on  continuous  basis.    It is therefore,   deliberated that indenting sections may take parallel action to meet the   short gap.

5. Total   financial   implication   is   Rs.49,50,030.00   inclusive   of   all   taxes   &   duties   for   265   persons   of   drilling   section   and   350   persons   for   surface   Page 43 of 65 HC-NIC Page 43 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT section, as under :

              Sr.                              DESCRIPTION                                 RATE IN RUPEES 
              No.                                                                          PER PERSON PER 
                                                                                                 DAY
              (A)   Providing Catering Services as per the Scope of Work defined in bid          420.00.

document.  For Full Meals as defined in scope of work (Break­up of  which is to be provided at Appendix - III) (B) Providing Mechanized Housekeeping Services as per the Scope of   60.00.

Work defined in bid document.

GRAND TOTAL AA = [{(A) + (B)} x 615 (no. of persons in total)   480.00. (as  x 365 (days) x 3 years] indicated by bidder) Appendix - III ITEM WISE BREAK UP OF RATES (FULL MEAL).

              Sr.                              DESCRIPTION                                 RATE IN RUPEES 
              No.                                                                          PER PERSON PER 
                                                                                                 DAY
              1                         Bed Tea (05.30 - 06.30 Hrs)                               8.00.
              2                         Breakfast (07.00­10.30 Hrs)                              60.00.
              3                               Tea (11.00 Hrs)                                     5.00.
              4                           Lunch (12.00­14.30 Hrs)                                140.00.
              5                 Evening Tea & Snacks (1600­1800 Hrs)                             30.00.
              6                          Dinner (19.00­23.00 Hrs)                                140.00.
              7                           Tea/Coffee after Dinner                                 5.00.
              8                 Two Fruity/Jumpin or equipment item                              30.00.
              9                         Mid Night Tea & Refreshment                               2.00.
                                                                                   Total         420.00.

           

(Appendix - IV) RATES FOR EXTRA/OPTIONAL ITEMS  Sr. DESCRIPTION RATE(INR) PER  No. PLATE/SERVING/B OTTLE  1 Dry Fruits (Cashew nuts 20 gms + Pista 30 gms) - 50 Gms 60.00. 2 Tender Coconut Water 35.00.

3 Fresh Fruit Juice 25.00.

4 Sweets / Pastry - 50 Gms 45.00.

5 Samosa / Pakoda - One Plate 20.00.

6 RasMalai or any other sweets (2 pieces). 35.00.

                                 Grand Total BB = (1+2+3+4+5+6)                                  220.00.


                                              (Appendix - V)



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              Sr.                             DESCRIPTION                                  RATE IN RUPEES 
              No.                                                                           PER MEAL PER 
                                                                                           PERSON PER DAY
              1       Providing Special Meals as per the Scope of Work defined in                450.00.
                                            bid document.
                                           GRAND TOTAL CC =                                      450.00.


                       Total evaluated Price i.e. DD = Grand Total = AA + (BB x              49,50,030.00
                                 3795x 3 years) + (CC x 1811x3 years) 



As per Appendix - II of price format of bidder, the above rate is inclusive of   Service Tax for Catering Services @ 60%, Service Tax for Housekeeping   Services @ 15% on 100%, Over­all sales tax / VAT @ 2% on 100%, and   Any other Tax Nil, as indicated by bidder.

6. Availability of sanction  :­ Total contract value of 265 persons of drilling   section   and   350   persons   for   surface   section   (total   615   persons)   is   Rs.49,50,030.00   and   total   sanction   is   available   for   Rs.   28.12   Crores,   which covers the proposed contract value.

7. BID & BID VALIDITY OF OFFERS :

          Sr.                            Bidder Name                         Bid Validity        Bid Bond 
          No.                                                                                    Validity
              1     M/s. Superior Securitas, New Delhi                        29.09.2016           MSME
              2     M/s. Saraf Corporation India Pvt. Ltd, Mumbai             29.09.2016            NSIC
              3     M/s. Jyoti Hospitality Services Pvt. Ltd. Mumbai          29.09.2016           MSME
              4     M/s. Sai Hospitality Services, Mumbai.                    29.09.2016           MSME

The two bidders rejected earlier i.e. M/s. SB Catering Services, Locknow   and M/s. Aedicon Engineering Services Pvt. Ltd., Vadodara being MSME   and NSIC firms respectively, no EMD is involved.

         DD)        RECOMMENDATIONS :                 


                    In view of the above, TC recommends as under :




                                                     Page 45 of 65

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                    C/SCA/14725/2016                                                       JUDGMENT




1. To   award   the   contract   for   hiring   of   catering   &   housekeeping   services at Muller Colony, CPF Gandhar, North Gandhar Colony, and GGS   Olpad  of surface  section  and  DSA  Gandhar  and  DSA Dabka of drilling   section of Ankleshwar asset for a period of three years to M/s. Superior   Securitas, New Delhi on Total financial implications of Rs.49,50,030.00   inclusive   of   all   taxes   &   duties,   considering   the   rates   as   quoted   by   the   bidder.

                 PR value                            :        Rs.28.12 Crore.
                 Proposed Contract Value             :        Rs.49.50 lakhs.
                 CPA                                 :        L­1 as per item 24.1 (a) of BDP­2015.


                 Submitted for approval please.


                Sd/­                     Sd/­                        Sd/­                      Sd/­
         (Dr. KRM Rao)             (R.S.Shah)                 (Dipak Patel)              (K.Manivannan)
         GM(M)­offtgSM             GM(D)­HDS                  GM­I/C­(F&A)               DGM­I/C­MM "


11. Thus,   it   can   well   be   said   that   the   Tender   Evaluation  Committee was absolutely mindful of the fact that the error on the part  of   the   present   petitioner   in   the   bid   if   taken   on   its   face   value,   was  rendering the offer absolutely viable and workable looking to the volume  of the contract.  However, the Tender Committee was mindful of the fact  that it did not have any power, scope or justification for undertaking on  its own behalf the grand totaling of the items so as to substitute  the  figures mentioned by the petitioner in the column below Appendix­I and  therefore, the Tender Committee perceived its inability to recommend  issuance of Letter of Award on the basis of Rs.32,81,93,550/­, which was  offered meant by the petitioner, but recommended issuance of LOA on  the   basis   of   actual   mentioned   figure,   which   worked­out   to  Rs.49,50,030/­ and in the same breath the Committee also elaborately  mentioned   after   due   deliberation   that   the   LOA   issued   on   that   basis  would not result into fructifying  of the contract or acceptance on the  Page 46 of 65 HC-NIC Page 46 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT part of the petitioner and ultimately as it is observed hereinabove, the  petitioner   reacted   and   submitted   indicating   the   absurdity   of   the  calculation and lack on the part of the authorities in not appreciating the  fact   that   the   same   was   absolutely   unworkable   and   could   not   have  resulted into LOA and accordingly requested the  authorities  to rectify  and correct the LOA.

12. The refusal to correct the LOA and petitioner's inability to  work   the   contract   was   viewed   as   petitioner's   refusal   to   execute   the  contract and as it was required to be envisaged by the authorities, they  had   to   provide   immediate   services   on   emergency   basis   to   the   staff  members as the existing contract was come to an end by 1st September  2016.  The said exigency warranted board purchase.

13. The question therefore, requires to be addressed is whether  it was open to the respondent - ONGC to exceed to the request of the  petitioner, which would have amounted to changing or permitting the  change of figures mentioned by the petitioner in its own offer.  The said  question   is   required   to   be   assessed   and   viewed   from   the   terms   and  conditions   of   the   tender,   the   manual   material   management   prevalent  with the O.N.G.C. and the extant provision of law.

14. The item no.24 of instructions to bidders under caption "E.  Evaluation of bids" reads as under :­  24.0 EVALUATION AND COMPARISON OF BIDS 24.1 Evaluation and comparison of bids will be done as per provisions of Bid   Evaluation Criteria at Annexure­IV (to be supplied separately alongwith bidding   document against individual tenders.) (Circular No. 05/2013 dated 23.01.2013) Page 47 of 65 HC-NIC Page 47 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT 24.2 CLARIFICATIONS OF BIDS :

24.2.1 During evaluation of bids, Purchaser may at its discretion ask the Bidder   for clarifications/confirmations /deficient documents of its bid.   The request for   clarification and the response shall be in writing and no change in the price of   substance of the bid shall be sought or permitted.
15. Learned   counsel   appearing   on   behalf   of   the   petitioner  heavily   pressed   into   service   the   provision   of   item   no.24.2.1   and  submitted that the discretion was left to the authorities to ask the bidder  for clarification/confirmation/ deficient documents and bids.   Learned  counsel   of   the   petitioner   has   submitted   that   this   clause   enables   the  respondent   authorities   to   seek   any   clarification,   which   includes   the  clarification in which the petitioner could have been asked to indicate  the grand total of the figures mentioned therein.   The non­mentioning  was omission on the part of the petitioner, but was not so fatal as to  misconstrue the entire tender and rendering it absolutely non­workable. 

This submission is required to be dealt with, but before that it is also  required to be noted that there are few other conditions also, which may  be reproduced for the ready reference of the instructions to tenderer.

25.0 UNSOLICITED POST TENDER MODIFICATIONS :

25.1 Unsolicited post­tender modification will lead to straight away rejection of   the offer.

(Circular No. 05/2013 dated 23.01.2013) 25.2 In case certain clarifications are sought by ONGC after opening of bid then   the reply of the Bidder should be restricted to the clarification sought.  Any bidder   who modifies his bid (including all modifications which have the effect of altering   his offer) after the closing  date, without any specific reference  by ONGC,  shall   Page 48 of 65 HC-NIC Page 48 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT render   his   bid   liable   to   be   ignored   and   rejected   without   notice   and   without   reference to the bidder.

26.0 EXAMINATION OF BID 26.1 The ONGC will examine the bids to determine whether they are complete,   whether   any   computational   errors   have   been   made,   whether   required   sureties   have   been   furnished,   whether   the   documents   have   been   properly   signed   and   whether the bids are generally in order. 

16. Learned counsel for the petitioner also heavily relied upon  the provision of the Manual containing Chapter - 11 on page no.175  under   the   caption   'Evaluation   of   Tenders   Formulations   of   Purchase,  Proposal and Placement of Contract' and laid special emphasis upon item  no.11.2.3, which reads as under :­  "11.2.3 Non­conformities   between   the   figures   and   words   of   the   Quoted   Prices - Sometimes, non­conformities/errors are also observed between the quoted   prices in figures and that in words.  The same is to be taken care of as indicated   below :

(a) If, in the price structure quoted for the required goods, there is discrepancy   between the unit price and the total price (which is obtained by multiplying the   unit   price   by   the   quantity),   the   unit   price   shall   prevail   and   the   total   price   corrected accordingly, unless in the opinion of the purchaser there is an obvious   misplacement of the decimal point in the unit price, in which case the total price   as quoted shall govern and the unit price corrected accordingly.
(b) If there is an error in a total corresponding to the addition or subtraction   of subtotals, the subtotals shall prevail and the total shall be corrected; and Page 49 of 65 HC-NIC Page 49 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT
(c) If there is a discrepancy between words and figures, the amount in words   shall prevail, unless the amount expressed in words is related to an arithmetic   error, in which case the amount in figures shall prevail subject to (a) and (b)   above.

If there is such discrepancy in an offer, the same is to be conveyed to the   tenderer with target date on the above lines and if the tenderer does not agree to   the observation of the purchaser, the tender is liable to be ignored."

17. Learned   counsel   appearing   for   the   petitioner   also   relied  upon   the   decision   of   the   Delhi   High   Court   in   case   of  M/s.   Supreme  Infrastructure India Limited V/s. Rail Vikas Nigam Limited and another, in   Writ   Petition   ©   No.3817   of   2012   decided   on   12th  December   2012  and  submitted that the Tender Committee of the respondent could not have  acted mechanically like robots and it was required to apply it's mind.  The  non­mentioning  of the   total  of the   daily charges was  an  obvious  mistake, which either could have been rectified on their own or could  have been rectified by calling the petitioner to do so.  The observations  of   the   Division   Bench   of   the   Delhi   High   Court   from   the   aforesaid  decision were pressed into service to support this contention.   Learned  counsel for the petitioner invited Court's attention to the observation of  Delhi High Court in paragraph no.7 to show the facts, and attention was  also drawn to paras 14, 16 and 17 to support his contention.   Learned  counsel  for   the  petitioner  also invited   Court's  attention   to the  similar  decision rendered earlier by the Chandigarh High Court in case of  SAB  Industries Limited V/s. State of Haryana and others in C.W.P. No.970 of   2008   decided   on   7th  January   2009  to   support   the   contention   that   the  Tender Committee or Tender Evaluation Committee is not required to  act   mechanically   in   assessing   and   evaluating   the   offers,   the   Tender  Committee is required to apply it's mind to the facts in question and if  there is an obvious mistake, the rectification thereof cannot be said to be  unjustified and therefore, non­rectification was viewed to be arbitrary,  Page 50 of 65 HC-NIC Page 50 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT capricious and was deprecated.  In the instant case, it was submitted on  behalf   of   the   petitioner   that   the   respondent   authorities   were   under  obligation to go by their own understanding, which they have calculated  and also to see the offer of the petitioner correctly, but only on account  of petitioner's non­mentioning of the said figure in terms at the column  in which he was to mention them, ridiculously took the unit price before  and price for the entire quantity for three years and how absurd it was is  demonstrated by the petitioner's counsel in his submission, which is set­ out   hereinabove.     Therefore,   on   this   account,   it   was   urged   that   the  petition deserve to be allowed.

18. Learned counsel for the petitioner also contended that the  malafide action on the part of the respondents are clear as despite they  being  in knowledge  of  the  fact that  the  non­mentioning  of the  grand  total below Appendix - I was not so fatal, they chose to insist upon the  ridiculously law figure and issued LOA knowing full well that it is not  likely to be accepted by the petitioner, which will in turn warrant them  to go for other alternate situation and when it happened, they did not  invite the petitioner's offer when they resorted to board purchase, which  was required to be resorted for meeting their so­called exigency.

19. Learned counsel  for the   respondent - O.N.G.C.  submitted  that   the   close   perusal   of   the   aforesaid   provision   set­out   hereinabove  would   not   permit   the   Tender   Committee   or   for   that   matter,   the  Management of O.N.G.C. to ignore what was expressly mentioned in the  document, as it would amount to re­write the tender or permitting the  petitioner to substitute its own offer.   The petitioner's counsel was not  justified in contending that the arithmetical calculation rightly done at  their end should have been reflected in the LOA ignoring the offer of the  petitioner.





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                    C/SCA/14725/2016                                                    JUDGMENT




20. Learned counsel for the respondent also contended that the  corporation   was   all   along   acting   on   its   toe   for   seeing   to   it   that   the  canteen and other services may not seize from 1st September 2017 and it  may continue uninterruptedly.   The petitioner's inability to accept the  LOA was obvious, but at the relevant time, the Committee had no choice  but to not invite the petitioner as per the provision and procedure and  practice prevalent, as the petitioner was to be classified as the offerer,  who did not accept the LOA.  In that situation, there was no question of  any  malafide  being attributed to the staff and officers of the O.N.G.C.  Suffice it to say that the ONGC and the respondent worked strictly in  accordance   with   law,   as   there   was   no   other   way   open   to   the  respondents.  

21. Thus,   the   entire   controversy   in   the   present   petition   is  required   to   be   viewed   and   examined   against   the   aforesaid   factual  aspects, legal submissions and the prayers made in this petition.   The  fact remains to be borne in mind is that the petitioner prior to receipt of  the LOA dated 24th  August 2016 had never realised that there was an  error on the part of the petitioner in filling in the tender.  Unfortunately,  the subsequent communication, after receipt of LOA dated 24th  August  2016 also do not indicate any attempt on the part of the petitioner to  seek any rectification in its own bid.   The Court hastened to add here  that it is a different question altogether weather such rectification would  have   been   permissible   or   not.     The   petitioner   after   receipt   of   LOA  entered into correspondence with the respondents on the basis of the  existing   bid,   which   he   has   submitted   and   attempted   to   fasten   the  obligation/burden   upon   the   respondents   that   they   either   could   have  worked­out the final price and offer on their own or could have sought  clarification from the petitioner.   The mentioning  of the figure in the  column below Appendix - I viz. price bid format if taken to its face value  shall   obviously   not   leading   to   any   absolute   result   and   therefore,  Page 52 of 65 HC-NIC Page 52 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT according   to   the   petitioner,   a   duty   was   cast   upon   the   respondent  authorities   either   to   work­out   on   their   own   the   final   offer   of   the  petitioner or ask the petitioner to clarify the same.   In our considered  opinion, this proposition is wholly misconceived, not tenable in eye of  law and hence, requires to be rejected.   The petitioner, as a tenderer,  was under obligation to read the tender document closely and required  to   mention   scrupulously   and   unequivocally   its   offer.     The   tender  document leaves no room for any ambiguity, benefit whereof could be  claimed by the petitioner.  The extracted table below Appendix­I on page  no.152 contains 4th  row, which clearly provides that the grand total of  the   items was  required to be  mentioned there  under.   The  petitioner  unfortunately mentioned per person and rates per day only ignoring the  words "Grand total AA = [{(A) + (B)} x 615 (no. of persons in total) x  365 (days) x 3 years].  It is also required to be noted that the petitioner  has not omitted to mention in column against the afore said total, but  has mentioned incorrect figure, which was obviously incapable of being  mention   there   on   account   of   it   being   rendering   the   said   quotation  unworkable.     The   question   arise   as   to   whether   in   the   scenario   could  petitioner   argue   successfully   relying   upon   the   provision   of   item  no.24.2.1,   as   the   first   part   of   the   said   provision   as   it   is   extracted  hereinabove   in   judgment   may   give   an   impression   that   the  clarification/confirmation from the bidder is left to the discretion of the  purchaser.     But,   the   nature   of   clarification   and   confirmation   is   again  restricted   if   one   reads   the   later   part   of   the   said   clause,   which   in  unequivocal terms makes it clear that the request for clarification and  the   response   shall   be   in   writing   and   'no   change   in   the   price   of  substance of the bid shall be sought or permitted' (emphasis supplied).  This clause would govern the earlier clause in which the discretion is left  in   the   purchaser   to   seek   clarification   and   confirmation.     The   said  confirmation /clarification shall have no effect upon the substance of the  bid in the instant case.  The clarification would essentially have effect of  Page 53 of 65 HC-NIC Page 53 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT changing   the   figure   and   therefore   the   O.N.G.C.   cannot   be   said   to   be  acting arbitrarily when it did not think it fit to seek clarification.   The  decision  cited  at the  bar in  case of Delhi High Court in  case  of  M/s.  Supreme Infrastructure (supra)  in our view also would not support the  contention of the petitioner inasmuch as the facts prevalent there and  the facts of the case on hand are distinctly different and the observations  of the Division Bench of Delhi High Court is required to be viewed in  light of the facts narrated thereunder.   It would not be out of place to  mention few facts of the case of M/s. Supreme Infrastructure (Supra)   in  order   to   understand   and   appreciate   the   appreciation   of   the   Division  Bench of Delhi High Court.  The Rail Vikas Nigam had invited the bids  for execution of doubling of Hospet­Tinai Ghat line in Hubli division of  South Western Railway in the State of Karnataka.  The bids were to be  submitted in three packages, or combination thereof.  In package no.1,  work was to be executed between Hospet and Harlapur; in package no.2  work   was   to   be   executed   between   Harlapur   to   Hebsur   and   Hubli   to  Dharwad;   and,   in   package   no.3   work   was   to   be   executed   between  Kambarganvi   and   Londa.     The   petitioner   along   with   its   joint   venture  company submitted three packages separately and also in combination  for packages  1  and 3.   Item  no.2061  of  the  Bill of  Quantities   (BOQ)  schedule 2(c) in all the packages pertained to supply of steel items.  The  bidders were required to specify the rate of T.M.T. Fe­500 reinforcement  steel.     Since,   the   estimated   quantities   of   the   various   items   were  mentioned in the BOQ, the bidders were also required to fill the total  amount after multiplying  the estimated quantity provided in the BOQ  with the specified rate.   There petitioner therein contended that since  the work involved in all the three packages was identical, the petitioner  offered   rate   of   Rs.54,000/­   per   M.T.   Under   the   said   item   no.2061,  schedule 2(c) of BOQ in all the packages uniformly, and also stated the  respective total amounts corresponding to the said rate.  The same rate  of Rs.54,000/­ per M.T. Was quoted in the combination package nos.1  Page 54 of 65 HC-NIC Page 54 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT and 3 for the aforesaid BOQ item as well.  The petitioner and his partner  found   to   be   lowest   as   the   total   price   bid   aggregating   to  Rs.158,76,29,854/­.     The   petitioner   therein   received   the   impugned  communication   from   the   respondent   no.1   therein   stating   that   for   the  item   no.2061   in  schedule   2(c),   the  petitioner  had   quoted   the   rate   of  Rs.2820/­ per M.T. For package no.1 and the total amount for this item  comes   to   Rs.79,52,400/­   instead   thereof,   the   petitioner   had   claimed  Rs.15,22,80,000/­.     By   referring   to   the   clause   number   33.1   of   the  'Instructions to Bidders', the respondent therein claimed that if there is a  discrepancy   between   the   unit   price   and   the   total   price,   i.e.   the   price  obtained by multiplying the unit price with the quantity, it is the unit  price, which will prevail and the total price shall be corrected unless, in  the opinion of the employer, there is an obvious mistake in decimal point  in   the   unit   price.     In   order   to   appreciate   the   controversy,   paragraph  nos.6, 7 along with the detail therein deserve to be set­out as under :­ "6. The   petitioner   submits   that   on   04.05.2012,   it   received  the  first of the  impugned  communication  from   the   respondent   no.1   stating   that   for   item   no.2061   in   Schedule 2(c),i.e. for supply of steel item, the petitioner   had quoted the rate of Rs.2820/­ per M.T. for package 1.   Respondent   no.1   claimed   that   by   calculation   (i.e.,   by   multiplication  of the estimated  quantity with  the  rate),   the total amount for this item comes to Rs.79,52,400/­.   However,  the petitioner  had indicated  the total amount   against this item as Rs.15,22,80,000/­.   The respondent   referred   to   clause   33.1   of   the   'Instructions   to   Bidders'   (ITB) which states that if there is a discrepancy between   the unit price and the total price, i.e., the price obtained   by multiplying the unit price with the quantity, it is the   unit price which will prevail and the total price shall be   Page 55 of 65 HC-NIC Page 55 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT corrected unless, in the opinion of the employer, there is  an obvious mistake in the decimal point in the unit price.   The respondent stated that since in the rate quoted there   is no decimal involved, the price quoted by the petitioner   for   supply   of   T.M.T.   Fe­500   steel   has   to   be   taken   as   Rs.2820/­   per   M.T.     The   respondent   also   referred   to   clause   33.2   of   the   ITB   to   state   that   if   the   bidder   who   submits   the   lowest   evaluated   bid   does   not   accept   the   correction of errors, its bid shall be disqualified  and its   bid security may be forfeited.   The petitioner was called   upon to accept the correction in the amount which was   sought to be arithmetically corrected.  As per clause 33.1   of   the   ITB,   the   respondent   sought   the   petitioner's   acceptance within a week.

7. The submission of the petitioner is that when the   said communication was received, the petitioner realized   that in its bid document pertaining to package no.1, in   respect   of   the   aforesaid   item   no.2061   of   the   BOQ,   schedule   2(c),   i.e.,   for   supply   of   TM.T.   Fe­500   reinforcement   steel,   a   writing/   typographical   error   had  crept in inasmuch, as, in the column where the rate was   to be quoted, the person filling in the bid document had   inadvertently   filled   in   the   figure   "Rs.2820/­"   both   in  figures   and   words.     The   error   is   explained   by   pointing   that the estimated quantity of this item as mentioned in   the BOQ form was 2820 M.T.  The submission is that this   was  an obvious  typing  / typographical  error  inasmuch,   as, the total amount for this BOQ item was mentioned by   the petitioner as Rs.15,22,80,000/­ which would be the   total   amount   if   the   rate   of   Rs.54,000/­   per   M.T.   is   multiplied by the estimated quantity of 2820 M.T.   His   Page 56 of 65 HC-NIC Page 56 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT further   submission   is   that   the   rate   of   Rs.54,000/­   per   M.T. for this BOQ item had uniformally been quoted by   the petitioner in respect of the other bids made by it in   respect of packages 2, 3 and the combined package 1 and

3.  The submission of the petitioner is that, in fact, there   was no arithmetical error and the same was a bona fide   human error  which occurred  on account  of fatigue  and   tiredness of the person filling the tender form as a result   of repetitive work.   To appreciate this submission of the   petitioner, we may extract herein below the relevant entry   in the BOQ which contains the rates/amounts mentioned   by the petitioner:

"Package - 1 : HSPET - HARLAPUR SECTION  BOQ PART - 1  Schedule 2C Supply of Steel Items Sr. Description of item Unit Qty Rate (Rs.) Amount  No. (Rs.) in Fig. In Fig In words 2061 Supplying   TM.T.   Fe­ M.T. 2820 Rs.2820/­ Rs. Two  Rs.
                500   reinforcement                                         thousand  15,22,80,000
                steel  conforming   to                                         eight 
                IS:1786­1985 including                                       hundred 
                de­coiling,                                                   twenty 
                straightening,   cutting,                                      only
                bending,   placing   in 
                position,   binding   with 
                1mm   dia   GI   binding 
                wire.
                Note :
                Reinforcement, shall be 
                measured in length for 
                different   diameters 
                used in the works and 
                then   paid   as   per 
                standard   weights   as 
                per IS 1732.  Wastages, 
                overlaps,   coupling, 
                welded   joints,   space 


                                               Page 57 of 65

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                    C/SCA/14725/2016                                                    JUDGMENT



                  bars chairs and binding 
                  wire   shall   not   be 
                  measured   and   cost   of 
                  these   items   shall   be 
                  deemed to be included 
                  in the rates.
                  Total   for   Bill   2   C                                                      Rs.
                  (Carried   forward   to                                                    15,22,80,000
                  Summary of Part ­ 1)

(Rs. Fifteen Crore Twenty Two Lakh Eighty Thousand only)"

The words and figures filled in by the petitioner in hand have been put in   italics above."

22. The   aforesaid   facts   would   indicate   that   the   petitioner  therein   had   committed   mistake   in   indicating   the   unit   price   which  according to petitioner was Rs.54,000/­ per M.T., in that column it was  mentioned 2820 that was the quantity required.  But, under the column  amount in figures after multiplying the unit or ton rates the figure of  Rs.15,22,80,000/­  was  mentioned correctly.   Now, if one divides  that  figure by the quantity i.e. 2820 then it would be Rs.54,000/­ only.  Thus,  there   was   a   discrepancy   between   the   unit   price   and   the   total   and  Railway insisted for going by the unit price mentioned as per Clause -  33.1 of the 'Instructions to bidder', which was termed to be absurd and  the   Court   made   various   observations.   The   correctly   mentioned   total  figure was clear indication of offered unit price and it did not require  great exercise on the part of either side. Whereas in in case on hand the  missing of total without any further clarity and mentioning of the figure  which if subjected to logical inference did lead to desired result but fine  question arises as to that fine exercise was permissible under the given  set   of   terms,   rules   and   principles   for   assessing   offers   in   present   day  situation the answer would be obvious and emphatic "NO". As a result  thereof, the contract was rendered unworkable that in itself would not  attract   the   clause,   permitting   the   ONGC   to   seek   clarification   or  Page 58 of 65 HC-NIC Page 58 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT permitting even the bidder to change the bid.  The bidder, unfortunately,  has not come forward at any stage for seeking rectification rather it has  all along contended that it was a duty cast upon the employer ONGC to  understand the bid logically.   According to us, this being a proposition  not well founded in law and the same cannot be accepted.

23. The   observations   made   by   the   Supreme   Court   in   case   of  W.B.   State   Electricity   Board   V/s.   Patel   Engineering   Co.   Ltd.,   and   others,  reported  (2001)   2   Supreme   Court   Cases   451,   have   been   pressed   into  service   for   illustrating  the   requirement   of   evaluating   the   bids   for  governing the evaluation of the bids.  The Delhi High Court has as stated  hereinabove,   viewed   the   facts   in   the   case   before   it   of  M/s.   Supreme  Infrastructure (supra) to be one in which the clause 27.1 was treated to  be a clause, which could have been pressed into service for avoiding an  absurd action on the part of the employer and it was observed that the  discretion embedded therein could have been fruitfully exercised by the  employer in seeking clarification from the bidder, as the Court had even  gone on noticing that the bidder had offered his bid for all the three  packages in which the said error or omission of not mentioning the rates  of the TM.T. Fe­500 had not occurred as in two other packages, where  the   identical   bid   was   made,   the   tenderer   did   quote   the   unit   price   of  Rs.54,000/­   per   M.T.   bid   figure   in   the   prescribed   column   and   Court  noticed that the same officer had assessed and worked on all the bids  and this omission in the bid in question could have been well noticed,  which was on the face of it quite absurd, as the bidder would not have  logically   quoted   20   times   or   more   the   lesser   amount   than   the   actual  market   value   of   the   commodity.     The   Court   therefore,   has   said   that  instead of being restricted on account of the Clause 33 of the NIT, Clause  27.1   could   have   been   resorted   for   avoiding   an   absurd   conclusion.  Therefore,  the   Court  while   treating   the   same   to   be   a   validly   invoked  case,   in   a   given   situation,   issued   directions   as   recorded   in   paragraph  Page 59 of 65 HC-NIC Page 59 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT no.56   of   the   judgment.     The   Court   also   extensively   referred   to   the  observations of the Supreme Court in case of  Patel Engineering (supra)  and submitted that the Patel Engineering case's submission rather would  support   the   opportunity   being   granted   to   the   bidder   for   rectifying  instead of arriving at an absurd conclusion.

24. With profound respect to the views expressed by the Delhi  High Court in the decision of M/s. Supreme Infrastructure (supra), we are  unable   to   agree   to   the   said   view   inasmuch   as   the   Clause   27   of   the  judgment in case of M/s. Supreme Infrastructure (supra) could be said to  be   similar   to   Clause   24.2.1   of   the   case   on   hand   in   which   the   close  reading of the said Clause would indicate that though the discretion in  the first instance appears obvious in the employer to seek clarification  from the bidder, but that being  not unfettered as is  obvious  on plain  readings of the latter part thereof and which appears to be absolutely in  consonance with the public policy and public interest viz. "the request  for clarification and the response shall be in writing and no change in  the price of substance of the bid shall be sought or permitted."     This  restriction is required to be viewed, which is required to be said to be an  essential condition answering the public policy and public interest both.  This condition obviates the plausible mischief at anyone's end, which is  likely to occur in a case of such nature.  Therefore, on all tender notices  issued   by   public   corporations   and   government   bodies   such   restrictive  clauses   are   always   found   essential   and   strict   their   strict   adherence   is  rather rule of law.  With profound respect, as we have said hereinabove  this Clause in our view would not give much discretion to the employer  ONGC as to permit it to seek clarification on the grand total of the unit,  which column has been duly filled­in though taking the same column to  its logical conclusion would definitely render the entire it absurd.   The  question arises at this stage as to whether can bidder be said to have  offered a non­responsive bid.  At the first blush, omission to mention the  Page 60 of 65 HC-NIC Page 60 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT figures as mentioned or as required under the column may render it to  be a non­responsive bid.  But, the bidder - petitioner has mentioned the  figure, though the said figure taken on its face value appears to have  been indicative of the unit and not the total.  In other words, if the same  was taken to be non­responsive, there could have been question against  the Corporation also as to how the Corporation can decide unto itself  that   the   bidder   is   not   desirous   of   offering   goods   at   the   price   quoted  though it may obviously appear to be economically non­viable for him to  have offered. Though the exercise can be undertaken by ONGC and its  tender   valuation   committee,   which   speaks   volume   about   the  deliberation, which was undertaken and it reflected in the minutes also.  The ONGC has in fact appreciated, understood and deliberated upon the  obvious mistake by the tenderer, but as at the same time not ventured  into invoking Clause 24.2.1, which in our view cannot be said to be so  grave and arbitrary calling an for interference from the Court.   Rather  the ONGC has decided to consider and well claimed by them of going by  the   letters   of   the   law.     There   could   be   possibility   of   incurring   some  expenses   on   account   of   this   ultimate   eventuality,   which   even   ONGC  envisaged as reflected in its meeting, but that in itself would not permit  them   to   invoke   the   clause,   which   would   have   rendered   a   substantial  change in the price.

25. It would have been rather appropriate if the wordings of the  tender document were more articulate and elaborate as it has been done  in the subsequent tender process and the counsel for the petitioner did  attempt to highlight those by saying that the working­out of final grand  total was left to the ONGC and then why it was not attempted in the  instant case, which would have resulted into avoiding undue burden on  public exchequer.  

26. We are unable to accept this submission on the ground that  Page 61 of 65 HC-NIC Page 61 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT the ONGC was bound by terms of the tender document and the decision  rendered   by   the   Supreme   Court   in   case   of  Patel   Engineering   (supra)  especially   in   paragraph   No.24   would   indicate   that   the   terms   of   the  tender are to be adhered to scrupulously and no deviation much less any  substantive deviation was permissible. The deviation in the instant case  was on the face of it attempted to be shown not to be very material, but  it is if considered from the view point of other bidders, who in fact did  mention   the   correct   total   figure   in   the   column   prescribed   unlike   the  present petitioner, then it would in our view change the entire scenario.  The paragraph no.24 of the said judgment of the Supreme Court in case  of Patel Engineering (supra) reads as under :­ "24. The controversy in this case has arisen at the threshold.  

It cannot be disputed that this is an international competitive   bidding which postulates keen competition and high efficiency.  

The   bidders   have   or   should   have   assistance   of   technical   experts.     The   degree   of   care   required   in   such   a   bidding   is   greater   than   in   ordinary   local   bids   for   small   works.     It   is   essential to maintain the sanctity and integrity of process of   tender/bid   and   also   award   of   a   contract.     The   appellant,   Respondents 1 to 4 and Respondents 10 and 11 are all bound   by the ITB which should be complied with scrupulously.  In a   work of this nature and magnitude where bidders who fulfill   pre­qualification   alone   are   invited   to   bid,   adherence   to   the   instructions   cannot   be   given   a   go­by   by   branding   it   as   a  pedantic   approach,   otherwise   it   will   encourage   and   provide   scope for discrimination, arbitrariness and favouritism which   are totally opposed to the rule of law and our constitutional   values.     The   very   purpose   of   issuing   rules/instructions   is   to   ensure   their   enforcement   lest   the   rule   of   law   should   be   a   casualty.   Relaxation or waiver of a rule or condition, unless   so provided under  the ITB,  by the State or its agencies  (the   Page 62 of 65 HC-NIC Page 62 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT appellant)   in   favour   of   one   bidder   would   create   justifiable   doubts in the minds of other bidders, would impair the rule of   transparency and fairness and provide room for manipulation   to suit the whims of the State agencies in picking and choosing   a bidder for awarding contracts as in the case of distributing   bounty or charity.  In our view such approach should always   be   avoided.     Where   power   to   relax   or   waive   a   rule   or   a   condition exists under the rules, it has to be done strictly in   compliance with the rules.   We have, therefore, no hesitation   in concluding  that  adherence  to the  ITB or rules is the  best   principle   to   be   followed,   which   is   also   in   the   best   public   interest." 

27. The   Supreme   Court's   observation   in   the   case   of  Patel  Engineering   (supra),   in   our   view   clearly   mandates   with   the   discretion  envisaged in Clause 24.2.1 has to be governed by the latter part and in  case   if   the   clarification   results   into   change   in   the   substance   or   price  irrespective   of   its   magnitude,   then   the   said   discretion   is   not   to   be  invoked.  In that view of the matter, the impugned action of the ONGC  cannot   be   said   to   be   so   arbitrary   or   capricious   as   to   call   for   any  interference.  We are therefore, of the view that the petition being bereft  of merits on this count and deserves to be dismissed.     

28. In   case   of  Siemens   Public   Communication  Networks   Private   Limited and Another V/s. Union of India and others, reported in (2008) 16  Supreme Court Cases 215, the Supreme Court in paragraph nos.35 and 36  held as under :­ "35. The appellants have also not been able to establish that   Respondent   2   adopted   a   pick­and­choose   policy   or   discriminated against Appellant 1.  Respondent 2 dealt with all   the three bidders with an even hand as the same method was   Page 63 of 65 HC-NIC Page 63 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT adopted for arriving at the total price of materials specified in   Item 11 in respect of all the three bidders.  It is not the case of   the appellant that they had not quoted the said price as that of   a   single   unit.     There   is   nothing   on   record   by   way   of   any   remarks in the bid document to the effect that the said price of   a single unit was to hold good for 100 units on the ground that   Appellant  1 was granted a software  licence  which  catered  to   100 users at one time.    A basic distinction  has  to be drawn   between  a case where  against  an item,  no rates or prices  or   quantities  are   quoted,  and  those  where  some  rate  is  quoted.  

Appellant 1 having quoted a rate on a unit basis in respect of   Item 11, Respondent 2 had no option but to make the said rate   the basis for arriving at the total price.

36. Accepting  the  interpretation  as  sought  to be  given  by   the appellants would amount to rewriting the entries in the bid   document and reading into the bid document, terms that did   not exist therein.    An international  bidding of such a nature   being   highly   competitive,   is   also   expected   to   be   extremely   precise.     The   technical   nature   of   the   subject­matter   of   the   contract   itself   postulated   assistance   of   technical   experts   and   thus, a very high degree of care and meticulous adherence to   the requirements of the bid was inherent in such a bidding.  On   its   part,   Respondent   2   was   under   an   obligation   to   not   only   maintain a great degree of transparency and fair dealing on its   part,   but   was   also   expected   to   maintain   the   sanctity   and   integrity of the entire process.   Thus, it was incumbent upon   Respondent   2   to   ensure   that   no   different   yardsticks   were   adopted for any of the vendors and at the same time, to ensure   that there was not the remotest  possibility of discrimination,   arbitrariness   or   favouritism.     There   was   no   scope   for   Page 64 of 65 HC-NIC Page 64 of 65 Created On Sun Aug 13 09:33:21 IST 2017 C/SCA/14725/2016 JUDGMENT Respondent 2 to read into the documents, terms and conditions   which did not exist in the bid documents.  The appellants have   also   not   levelled   any   personal   allegations   of   mala   fides   or   favouritism against Respondent 2."

29. In light of the above, we are therefore, of the considered  view   that   the   petition   being   bereft   of   merits   and   is   accordingly  dismissed.   Notice discharged.   However, there shall be no order as to  costs.

30. At this stage, learned counsel for the petitioner Shri Mehta,  makes a request to extend the  status­quo, which was earlier granted by  this Court.  We are of the view that the pleadings and the proceedings of  this   matter,   as   all   along   against   the   backdrop   of   the   exigency   and  urgency pleaded on behalf of the ONGC for less uninterrupted services,  which was subject matter of the petition and therefore, we are unable to  accept his request and the request is hereby rejected.

31. In view of the order passed in the main matter, no orders in  Civil Application.  Hence, the civil application is disposed of.   

(S.R.BRAHMBHATT, J.)  (A.Y. KOGJE, J.)  Rathod...

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