w w w . L a w y e r S e r v i c e s . i n



Sanghi Finance And Investments Limited v/s Oil And Natural Gas Commission

    Special Civil Application Appeal No. 8974 of 1999

    Decided On, 09 December 1999

    At, High Court of Gujarat At Ahmedabad

    By, THE HONOURABLE MR. JUSTICE A.M. KAPADIA

    For the Appearing Parties: Ajay Mehta, P.K. Jani, Advocates.



Judgment Text

A.M. KAPADIA, J.


(1) PETITIONER herein challenges the action on the part of the respondent Oil and Natural Gas Corporation Limited ("o. N. G. C. " for short hereinafter) of rejecting its technical bid with regard to Tender Notice no. WM/lgsts/tpt/tc/5/1999 as being unjust and illegal.


(2) ACCORDING to the petitioner, the Location Manager (Logistics) of o. N. G. C. issued tender notice No. WM/lgsts/tpt/tc/5/1999 for hiring emergency jeeps for 24 hours duty. Sealed tenders in two bid system were invited by the respondent from reputed transport contractors/fleet owners for providing Mahindra and Mahindra Diesel Jeep Taxies of 1998 or later model for use within the limits of O. N. G. C. Mehsana at site and outstation duties. The tender forms were made available upto 27th September, 1999. The last date for submission of the tender was 28th September, 1999. The technical bids were to be opened on 28th September, 1999 at 15. 00 hours. The petitioner had applied for the document and tender document bearing Sr. No. 2 was given to the petitioner. The petitioner had submitted the tender for supplying 25 Mahindra and Mahindra Diesel Jeep Taxies. The tender documents were submitted within the time-limit. However, the petitioner's price bid was not opened on 8th November, 1999 on the ground that though the petitioner has supplied copy of the registration certificate duly notarized showing the ownership of the vehicles but the petitioner has not supplied the latest ownership certificate of the said vehicles from the Regional Transport Officer ("r. T. O. " for short).


(3) THOUGH on 8th November 1999 the price bids were opened the petitioner's price bid was not opened. The petitioner had submitted offer for Rs. 18,946/- per vehicle, per jeep upto 2500 Kms. , as against the offer submitted by the lowest tenderer of approximately Rs. 19,400/- which is higher by Rs. 454/- per vehicle. The work contract is for two years plus six months. If Rs. 454/- are considered to be the additional amount per vehicle per month, then the amount will come to approximately Rs. 5448/- per year, per vehicle. Accordingly, for 45 vehicles for two and a half years O. N. G. C. will be required to pay approximately an excess amount of Rs. 6,12,900 and thus if the petitioner's offer is not accepted, O. N. G. C. will be required to pay approximately rs. 6,12,900/- more. According to the petitioner, in spite of the aforesaid compliance of the requirements, O. N. G. C. did not open up the price bid of the petitioner company and on 8th Novembers for supply of jeeps.


(4) ON the aforesaid ground, petitioner prayed for issuance of a writ of mandamus or any other appropriate writ, order or direction, declaring that the action of the respondent in rejecting the technical bid of the petitioner company with regard to Tender Notice No. WM/lgsts/tpt/tc/5/1999 is bad in law and to declare that the petitioner's technical bid is in order and further to direct the respondent to open the price bid of the petitioner with regard to the said tender notice and to consider the offer of the petitioner for supply of Jeep Taxies at Rs. 18,946/- per month against the lowest offer of Rs. 20,400/- from amongst the other tenderers.


(5) ON service of notice, respondent O. N. G. C. filed its appearance and contested the petition on various grounds and mainly on the ground that so far as the technical bid is concerned, as per Clause III of Part (A) of the techno-Commercial Bid Evaluation Criteria ('t. C. B. E. C. ' for short hereinafter), petitioner did not fulfill obligations cast upon it by producing latest ownership certificate of the R. T. O. It is contended that the aforesaid clause is mandatory in nature and in the tender notice itself it was explicitly explained that the bidder should comply with the clauses and failure to comply with them shall lead to rejection of the bid summarily and hence the bid of the petitioner is rejected on the ground that the petitioner has failed to comply with the said clauses. Besides this, the respondent has also contended about the past conduct of the petitioner. It is contended that in December 1998 when the respondent had floated a tender for issuance of contract for supply of vehicles to the respondent, the petitioner had also participated in the said bid but as the petitioner had not been the lowest bidder but was the fifth lowest bidder, the petitioner had made uncalled for wild allegations not only against other bidders but against officers of O. N. G. C. also and because of this the respondent had been forced to conduct an inquiry into the allegations made by the petitioner and due to the pendency of inquiry tenders could not be finalized and in the meantime the validity of the offer made by other successful bidders had lapsed. It is further contended by the respondent that the petitioner had also in writing undertaken to supply vehicles at the rate quoted by the lowest bidder but after lapse of validity of other offers, the petitioner also conveniently did not respond to the respondent's call for supply of vehicles at the lowest quoted rate. It is further contended that the petitioner is in the habit of making allegations not only against other bidders but also against officers of the respondent. In sum and substance, the respondent had taken a stand that the petitioner has not fulfilled T. C. B. E. C. as the petitioner has not annexed certificate of R. T. O. showing latest ownership of vehicles and hence the technical bid of the petitioner is not accepted, and therefore, the respondent prayed that the petition may be rejected and the ad-interim relief granted earlier may be vacated.


(6) LEARNED Advocate Mr. Jani for the petitioner has contended that there is no justifiable reason for rejecting the technical bid of the petitioner solely on the ground that the petitioner has not submitted certificate of R. T. O. showing latest ownership of the vehicles. Relying upon Annexure-B wherein xerox copy of registration certificate dated 25-8-1999 issued by R. T. O. is produced, Mr. Jani for the petitioner has contended that as per Clause III, the petitioner had to offer minimum 6 vehicles of its ownership with latest ownership certificate issued by R. T. O. and the petitioner has fulfilled the said requirement. In spite of this, its technical bid is rejected and this action on the part of the respondent is bad in law, and therefore, the said action of the respondent is liable to be quashed and set aside by issuing appropriate writ, order or direction and appropriate direction may also be issued to the respondent to accept technical bid of the petitioner and to open its price bid.


(7) LEARNED Advocate Mr. Ajay Mehta for the respondent has strenuously contended that petitioner has not produced the original registration certificate showing the petitioner's ownership of the vehicles and by virtue of Clause III of Part (A) of the T. E. B. E. C. each bidder is bound to comply with the clauses and having not been complied with the said clauses the petitioner's technical bid came to be rejected and the said clauses being mandatory in nature there was no option for O. N. G. C. but to reject the technical bid of the petitioner on the ground of non-compliance of Clause III of Part (A) of the said T. C. B. E. C. Besides this, considering the past conduct of the petitioner of making allegations against other bidders as well as officers of the O. N. G. C. as highlighted in paragraph 9 of the affidavit-in-reply, the petitioner is not entitled to get relief as prayed for in the petition.


(8) THE only question calls for determination in this Special Civil Application is as to whether Clause III of Part (A) of the T. C. B. E. C. is mandatory in nature and whether non-compliance of the clauses would result into the rejection of the technical bid?


(9) TO answer the aforesaid question, let us have a look at the relevant clauses of T. C. B. E. C. which read as under :


"techno-COMMERCIAL B. E. C. : The bidder should comply to the following clauses, failure to comply shall lead to summary rejection of the bid. 1. E. M. D. : tender should be accompanied with an Earnest Money Deposit (E. M. D.)of Rs. 0. 75 lakhs for a minimum offer of 12 vehicles. For any additional offer, an additional E. M. D. of Rs. 6115/- per vehicle should be enclosed. Any additional offer without additional E. M. D. shall not be considered. The E. M. D. should be in the form of Bank Guarantee/demand Draft drawn in favour of Dy. Manager (F and A)-Logistics, O. N. G. C. Mehsana from any Nationalised/scheduled Bank. In case the E. M. D. is in the form of Bank Guarantee, then it should be in the format given in the tender document and should have a validity of 180 days from the date of opening of bids.


2. Minimum Offer of Vehicles : this tender is for hiring of 45 Diesel Mahindra and Mahindra Emergency jeeps. The bidder should offer minimum 12 Diesel Mahindra and mahindra Jeep Taxies of model 1998 and above.


3. Ownership of Vehicles : for filling the tender, the bidder should own minimum 06 Taxies of 1997 or later model for an offer of 12 and above at least 21 days prior to the date of opening of the tender. In support of establishing the ownership, the following documents are to be submitted in respect of owned taxies : (i) Latest Ownership Certificate of R. T. O. (ii) Registration Certificate.


4. Offer for other type of vehicles : the offer other than M and M Diesel Jeep shall lead to summary rejection.


(10) HAVING perused the aforesaid T. C. B. E. C. it is explicitly clear and there cannot be two opinion that said criteria are mandatory in nature and person who offers the tender is bound to comply with all the criteria mentioned therein. The beginning sentence of that criteria are that "the bidder should comply to the following clauses, failure to comply shall lead to summary rejection of the bid". I emphasis the word "shall". Therefore, according to me, O. N. G. C. has no power to give concession on that score. If the minimum criteria are not fulfilled, the obvious result would be summary rejection of the bid.


(11) SO far as non-supply of latest ownership certificate of R. T. O. , is concerned, having perused the said certificate which is at Annexure-B it could be seen that the xerox copy of the registration certificate produced is relating to registration of six vehicles which were offered in technical bid showing that those vehicles were of the ownership of the petitioner. However, the latest ownership certificate of R. T. O. , has not been produced. As per Clause III of Part (A), the bidder was required to supply the latest ownership certificate of R. T. O. , and Registration certificate and it is mandatory that bidder must supply the documents as required by O. N. G. C. Admittedly, the petitioner has not supplied the latest ownership certificate of R. T. O. in respect of six vehicles. Since the said criteria are mandatory in nature, non-supply of latest ownership certificate of R. T. O. would obviously result into rejection of the technical bid of the defaulter and hence the rejection of petitioner's technical bid by the o. N. G. C. does not require any interference in exercise of powers under Art. 226 of the Constitution of India.


(12) AS held by the Hon'ble Supreme Court in the case of Tata Cellular v. Union of India, 1994 (6) SCC 651, the right to choose the best person cannot be considered to be an arbitrary exercise of power. It has been held that the principles laid down in Art. 14 of the Constitution of India are required to be kept in mind while accepting or refusing a tender, but there can be no question of infringement of Art. 14 if the Government tries to get the best person or the best quotation. Judicial review in such matters is considered not on the merits of the decision, but on the decision making process itself. Thus, this Court cannot substitute its own decision for the decision of the Standing committee which has given adequate opportunity to both the tenderers to put up their case in support of their tenders. In that case, it was held that the selection of the respondent No. 2 cannot be said to be arbitrary or unjust nor can the rejection of the petitioner be said to be arbitrary. It is not the function of this Court to sit as a super Board over the decision of the Standing committee. . . . . . . "


(13) IN the case of Raunaq International Limited v. I. V. R. Construction ltd. , AIR 1999 SC 393 : 1999 (1) SCC 435, the Hon'ble Apex Court has held that unless the Court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the Court should not intervene under Art. 226 in disputes between two rival tenderers. It is for the offerer to decide which of the tenderer suits its offer and by recording reasoned order if bid of one of the parties is accepted, it would not be a subject-matter for review in exercise of powers under Art. 226 of the Constitution of India.


(14) AS observed hereinabove, so far as the instant case is concerned, technical bid of the petitioner has been rejected for non-compliance of the requisite criteria mentioned therein and hence there is not question opening its price bid.


(15) IT would not be out of place to mention that the respondent has contended in paragraph 9 of the affidavit-in-reply about the conduct of the petitioner though it has been denied by the petitioner by filing affidavit-in-rejoinder. However, the petitioner has admitted that the petitioner having found something wrong with regard to the tender floated in the month of December 1998, had addressed a letter to the Chairman of O. N. G. C. , and tried to justify his past conduct. Moreover, the petitioner has not denied the averment made in the affidavit-in-reply with respect to the fact that when it was called for supply of vehicles at the lowest quoted rate, it did not respond to the O. N. G. C. If the petitioner was very much mindful to supply the vehicles it ought to have supplied the vehicles when it was called upon to supply the vehicles in pursuance of the tender floated in December 1998 instead of conveniently shirking at that time. The action of the petitio

Please Login To View The Full Judgment!

ner as averred by the respondent O. N. G. C. , reflects its conduct. (16) IN view of the discussion made hereinabove and in view of the latest pronouncements of the Hon'ble Supreme Court and the technical bid of the petitioner having been rejected for non-compliance of T. C. B. E. C. , the petitioner's tender came to be rightly rejected and once the technical bid is rejected, it is not necessary for the O. N. G. C. , to open price bid howsoever it may be low. (17) IN these circumstances, there is no substance in the petition and the petitioner requires to be rejected and accordingly it is rejected with no order as to costs. Notice is discharged. Interim relief granted earlier stands vacated. (18) AT this stage, learned Advocate Mr. Jani for the petitioner submits that the ad-interim orders as have been operating may be allowed to continue to enable the petitioner to challenge this order before the appellate forum. Learned Advocate Mr. Ajay Mehta for O. N. G. C. , has objected to continuing of interim relief any more as the finalisation of contract will be affected. In the instant case,, it is pointed out that since 1998 O. N. G. C. , could not finalise the bid, and therefore, it could not give the contract for service of the vehicles. The petitioner however ought to have its chance of challenging this order in appeal, and therefore, it would be proper and in the fitness of things to continue ad-interim relief granted earlier up to 20-12-1999. Therefore, ad-interim relief granted earlier is extended for a further period up to 20-12-1999.
O R