Dismissed

M/s. Ellison Oil Field Services Private Limited, v. Oil and Natural Gas Corporation Limited

Andhra Pradesh HC18 Mar 2021WP/21394/2019

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging the rejection of a tender for gas compressor services. The petitioner, relying on its US Joint Venture partner's experience, failed to produce original documents to substantiate claims. The Court held that the technical bid was correctly rejected as the petitioner could not meet eligibility criteria despite multiple opportunities.

What did the court decide?

Writ petition dismissed; no costs; interlocutory applications closed.

M/s. Ellison Oil Field Services Private… — Company and Corporate | Andhra Pradesh HC (2021)

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HON'BLE SRI JUSTICE U. DURGA PRASAD RAO Writ Petition No. 21394 of 2019

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ORDER :

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The petitioner seeks writ of mandamus declaring the action of the 1^st respondent in finalising the tender No.K167C17017 dated 20.06.2017 in favour of the 4^th respondent and thereby returning the bank guarantee furnished by the petitioner without considering the tender of the petitioner in spite of petitioner possessing all the required qualifications and even after the opinion of Independent External Monitors (for short “IEM”) as illegal, violative of Article 14 and 19 (1)(g) of Constitution of India and consequently set aside the same and direct the 1^st respondent to undertake the re-tendering process and pass such other order deemed fit.

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2. Petitioner’s case succinctly is thus: a) The petitioner is a private limited company engaged in providing the services of gas compressors for production, installation of the package of compressors at the natural gas outlet points. Earlier the petitioner already executed such contracts with the respondent corporation in Assam and Gujarat.

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b) Pursuant to the tender notification No.K167C17017, dated 20.06.2017 issued by the 1^st respondent for hiring gas compressors services for production, installation, Mori-GCS and Pasarlapudi-GCS of Rajahmundry for five years, the petitioner submitted its tender duly

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complying eligibility criteria. The 1^st respondent issued letters dated 08.01.2018 and 28.05.2018 calling upon the petitioner to furnish certain clarifications on his documents and the petitioner submitted detailed representations dated 16.01.2018 and 16.06.2018. Thereafter, there was no intimation from the respondent corporation. The petitioner addressed letter dated 12.10.2018 enquiring about the status and stage of technical bid. When there was no reply, the petitioner sent an application dated 13.10.2018 to the IEM as per Clause-38.2 of the general contract conditions issued by the respondent corporation. When the said application was pending, the petitioner from reliable source came to know that the price bids of other tenderers were opened on 24.10.2018 and the lowest tenderer therein had quoted a price of Rs.840/- per 1000 cubic meter (Mori-GCS) and Rs.1,620/per 1000 cubic meter (Pasarlapudi-GCS), which is substantially more than the price bid of the petitioner. Hence, assailing the action of the 1^st respondent in not considering its tender, the petitioner filed W.P.No.38950 of 2018 and this Court disposed of writ on 22.11.2018 leaving it open to the petitioner to pursue the remedy available under Law as the petitioner has already approached the IEM for redressal of his grievance.

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c) The IEM in its opinion dated 04.06.2019, observed that the processing of the tender relating to the subject contract was not proper and due to the delay in the tender process, the MoU between the petitioner and its equipment supplier was no longer valid and accordingly instructed the respondent to consider the above facts and

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take appropriate decision based on merits to redress the grievance of the petitioner. Accordingly, the 1^st respondent also initiated verification of the documents submitted by the petitioner along with the tender and though found no fault with the documents, however, returned the EMD of the petitioner submitted by way of bank guarantee and communicated the same on 17.12.2019.

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d) Pursuant to the opinion given by IEM dated 04.06.2019, the petitioner submitted a representation dated 20.06.2019 and requested the respondent corporation to re-invite the tender for the subject contract in view of the inordinate delay of two years in processing the contract and if so, the petitioner would be in a position to offer more competitive rates as well as better equipment to the advantage of ONGC and the petitioner will be in a position to mobilise the machinery within 90 days.

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e) During the pendency of the application of the petitioner before IEM, on the instructions of the respondent, the petitioner used to extend the bank guarantee periodically and the latest extension was on 14.11.2019 till 31.12.2019.

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f) The petitioner again filed a representation dated 19.11.2019 requesting to re-tender the contract as per the present requirements. However, the 1^st respondent issued the impugned communication dated 17.12.2019 informing that the tender has been finalized and hence the bank guarantee was being returned to the petitioner. The petitioner addressed letter dated 23.12.2019 to the 1^st respondent seeking the reasons for rejection of its bid and also the details of the

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company which was awarded the contract. There was no response from the 1^st respondent. On enquiry, the petitioner came to know that bid was finalized in favour of 4^th respondent. As per clause-33.1 of tender conditions, the bid will be valid only for 90 days before which the successful bidder has to be notified. Since the said even has not happened, the 1^st respondent has to undertake the process of retendering. Even assuming the bid validity is extended, still the petitioner’s bid ought to be considered.

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g) The value of the contract is about 100 crores and the corporation can save Rs.38 Crores if the contract is awarded to the petitioner. Since the respondent corporation is an instrumentality of the state, its action should be fair and transparent. As against the petitioner’s quote of Rs.441/- per 1000 cubic meter (Mori-GCS) and Rs.1102.50 per 1000 cub.met. (Pasarlapudi-GCS), the 4^th respondent quoted Rs.840/- and Rs.1620/- respectively. Hence, discarding of petitioner’s bid without assigning reason is unjust and illegal.

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Hence the writ petition.

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3. Respondents 1 to 3 filed counter inter alia contending thus: a) The 3^rd respondent, Government of India, is not a necessary

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party to the writ petition as it has not taken any action in view of clause-22 of general tender contract which stipulates that the 2^nd respondent entered into the agreement on its own behalf.

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b) The allegation of the petitioner that its tender was not considered and contract was awarded to 4^th respondent illegally is not correct. The notification of tender (NIT) was issued on 20.06.2017

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and due to various reasons attributable to the petitioner, the tender process was delayed and ultimately contract was awarded to the 4^th respondent on 16.12.2019 after considering all the objections and submission made by the petitioner regarding its eligibility. The decision of ONGC was based on cogent reasons and hence the writ petition is not maintainable.

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c) The bidding system for Compressor Services is in two stages. Techno commercial bids of all the tenderers including petitioner were opened on 30.10.2017. During the evaluation, the ONGC sought for certain clarifications twice from the bidders vide letters dated 08.01.2018 and 28.05.2018. ONGC received a complaint against the petitioner on 01.03.2018 alleging that the petitioner has submitted false documents in support of its experience to qualify the tender. Hence, the ONGC sought for clarification from the petitioner because in the documents uploaded by the petitioner along with e-bid, there was no clarity about the experience of its Joint Venture partner company in USA. The petitioner does not possess on its own the required qualifying experience. Hence, the petitioner claimed the experience allegedly possessed by a US based company which was shown as its Joint Venture partner for the subject contract work. Therefore, the ONGC had to verify the authenticity of the experience said to have been possessed by the US company and other aspects of the offer made by the petitioner. In that context, ONGC sought for certain clarifications from the petitioner.

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d) The petitioner uploaded certain documents in compliance of the clarifications as sought for. However, the tender committee opined that they did not clarify fully and properly the information sought for. Hence, vide letter dated 28.05.2018 further clarification was sought for by giving time till 18.06.2018. On 27.07.2018 Sri Vasanth Vyas, Director of Petitioner company, has presented a set of documents to the tender committee and on verification, a joint report was prepared. The said joint report confirmed that there are certain discrepancies in the documents presented as originals and documents uploaded along with e-bid. The said fact was accepted by the representative of the petitioner by signing on the joint report. From this fact, it is established that the petitioner failed to produce the original documents of information and it also failed to fulfil the experience criteria mentioned in BEC under Clause-2.1(b) ii and iii and equipment acceptance criteria 3.1-category-II(A & B) and accordingly the offer of the petitioner was technically not acceptable.

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e) At that juncture, the petitioner sought for additional time to present original documents and the petitioner in its letters dated 18.06.2018, 26.06.2018 and mail dated 02.07.2018 stated that it was in possession of original documents. Therefore, two opportunities were given to produce originals but the petitioner failed to submit clarification and failed to establish its tender experience and equipment acceptance criteria. Hence, the technical bid submitted by the petitioner, was rejected holding that the petitioner was indulged in falsification of documents. The petitioner’s contention that the bid

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was rejected without proper consideration is absolutely false. A letter dated 26.10.2018 was addressed to the petitioner informing about further action to be taken by ONGC as against submission of false documents by the petitioner. It was reiterated therein that the technical bid of the petitioner had been rejected for not meeting the requirements of the tender condition. A decision was also taken to forfeit EMD submitted by the petitioner. Recommendation was also made to initiate further action against the petitioner. In the mean time, the petitioner invoked IEM mechanism which was a forum established by the ONGC to examine the complaints of tenderers. The IEM made certain remarks favourable to the petitioner and observed that the processing of tender was not proper and ONGC should consider the facts mentioned in their recommendation and take appropriate decision.

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f) Apart from above, the ONGC also conducted an enquiry for blacklisting the petitioner. However, basing on the recommendations in the enquiry report and also the IEM recommendations, the ONGC dropped the further actions contemplated against the petitioner. g) The price bids of technically qualified bidders, have been opened on 15.10.2018 and after price negotiation with the respondent No.4 who is the L1 bidder, contracts were awarded to him at -52.94% of the estimated rate of compression services at Mori for Rs.767/- per 1000 SCM and at -13% of the estimated rate for compression services at Pasarlapudi for Rs.1404.20 per 1000 SCM.

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h) Since the petitioner admitted in the joint report dated 27.07.2018 that it failed to show the originals of the documents, the petitioner has no right to file the writ petition. i) It is further contended that the petitioner’s averment that it engaged in the field of providing services of gas compressors is false. In fact, the petitioner company (incorporated joint venture company comprising M/s Visat Oil Tech Private Limited, Ahmedabad and M/s EI Campo Compressor Rental Inc., Texas, USA) has been constituted as a Joint Venture company in the name of the petitioner i.e., M/s Ellison Oil Field Services Pvt Ltd., Ahmedabad only on 20.10.2017 with paid up capital of Rs.1,00,000/- just 10 days before the tender submission dated 30.10.2017.

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j) As per the ONGC policy, the details of short listed bidders for opening of price bids will be indicated in one common letter addressed to all the bidders who are short listed. No communication is required to be sent to the bidders who are not techno commercially qualified. The said procedure was followed in the instant case and the price bids of techno commercially qualified bidders were opened on 15.10.2018. No communication was sent to other bidders who were not techno commercially qualified.

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k) IEM opined that the petitioner provided justification for the differences in the documents uploaded and documents produced for verification by them. Thus, IEM acknowledged the difference in documents. However, IEM refrained from commenting on the

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differences in view of enquiry conducted by ONGC being pending and left the issue for the decision of the ONGC.

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l) Regarding the competitiveness, it is submitted that five offers have been received against the tender and three offers were techno commercially qualified and contracts were awarded for a total amount of Rs.83.76 crores against the estimated cost of Rs.121.97 crores which is 31% lower than the estimates. The tender of the petitioner was validly rejected for not having submitted the authenticated documents to prove its experience in the field. There are no merits in the writ petition and hence the same may be dismissed.

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4. The 4^th respondent filed counter identical to respondents 1 to 3 and opposed the writ petition. Its allegations briefly are thus: a) Respondent 4 company was duly qualified and eligible and having significant experience in providing gas compression services, maintenance and operations in the energy and crude oil sector since 1989 and hence participated in the present tender process and ultimately the notification of award (NOA) dated 16.12.2019 was issued in its favour. Basing on the said NOA, the 4^th respondent already submitted bank guarantees from SBI to ONGC on 19.12.2019. b) The petitioner company was incorporated only on 20.10.2017 i.e., 10 days prior to the submission of bid. Hence, its claim that it has been in the field for several years is false and misleading.

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c) In spite of being given multiple opportunities to present original documents whose copies were submitted as a part of e-bid, the petitioner failed to do so and hence the bid evaluation committee

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rejected its bid. The IEM held that the documents submitted online and actual physical documents in possession of the petitioner were different but the contents of both documents were similar and hence it cannot be construed as forgery. In the other enquiry held by ONGC, the enquiry officer opined that petitioner should be issued a warning to maintain proper documentation.

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d) There is no illegality, arbitrariness, unreasonableness or improper exercise of power in the distribution of State largessee by the ONGC. Hence, there is no scope for judicial review.

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5. The petitioner filed reply against the counter affidavit of the respondent 1 to 3. a) It is contended that the impugned order does not contain any reason as to why the petitioner’s tender was not considered when on the same set of papers the earlier contracts were awarded to the petitioner for similar work.

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b) The petitioner has given all the clarifications vide its letter dated 16.01.2018. When again further clarification was sought by the corporation vide its letter dated 28.05.2018, detailed clarification was again given by the petitioner vide letter dated 16.06.2018. Surprisingly, the tax invoices, proof of payment of tax under the contract between M/s EI Compo and M/s Cactus were sought for only in case of petitioner but not others which violates the equality. M/s John Energy Limited had made frivolous and unsubstantive

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allegations against the petitioner obviously to continue its expired contract.

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c) As per bid evaluation criteria, if bidder does not possess the required experience, bid can be submitted basing on the experience of its joint venture partner. The petitioner is qualified basing on the experience of its JV partner and this aspect has been made clear. d) The joint report was made to be signed by Sri Vasanth Vyas without allowing him to record the petitioner’s stand. It is false to say that the petitioner failed to produce the original documents for verification. During the meeting held on 27.07.2018 the 1^st respondent insisted for showing the original contract copy and instead the petitioner’s representative presented the notary attested copy. The BEC of tender does not stipulate for submission of original documents. Nevertheless petitioner agreed to submit original documents vide letter dated 29.07.2018 and requested to give time followed by letters dated 30.07.2018, 07.08.2018, 07.09.2018, 25.09.2018. However, no opportunity was given by the 1^st respondent to show the original documents. Thereafter, all original documents were produced before IEM as well as the internal enquiry officer of the 1^st respondent. The observation of IEM to that effect itself is indicative that the originals were produced. The Enquiry Officer also did not find any fault with the petitioner. The 1^st respondent failed to answer as to why the tender of the petitioner was not considered despite the same being the lowest one. Earlier the petitioner was awarded contract for identical work at Assam on identical set of

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documents. Hence, the rejection is not justified. For all these reasons the tenders may be re-invited.

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6. Heard the arguments of Sri Sricharan Telaprolu, learned counsel for petitioner, and Sri K.Venkata Rao, Standing Counsel for the respondents 1 & 2, Sri B.Krishna Mohan, Assistant Solicitor General of India representing 3^rd respondent, and Sri Soma Raju Yelisetti, counsel for respondent No.4.

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7. The point for consideration is whether there are merits in the writ petition to allow?

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8. Point: Briefly stating, the contention on behalf of the writ petitioner is that its technical bid was unduly rejected by the respondent Corporation without assigning any reasons, despite the fact that the petitioner produced all the relevant documents showing the technical qualification of petitioner’s JV partner. It is argued that the rejection was done on the false complaint of the existing contractor who would get extended period of contract if the contract process is delayed. It is further contended that the bid of the petitioner is lower by Rs.38 Cr. than the bid of 4^th respondent which was accepted.

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9. In oppugnation, it is contended on behalf of the respondent Corporation that the documents filed in support of the petitioner’s claim of experience of its JV partner are false documents and in spite of granting sufficient time the petitioner could not produce the

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relevant documents and as such the bid of the petitioner was rightly rejected. It is further contended that pursuant to awarding contract, the 4^th respondent has already submitted bank guarantee and was about to mobilize the machinery. Hence, the writ petition is not maintainable.

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10. Learned counsel for 4^th respondent advanced arguments similar to the respondents 1 to 3.

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11. I gave my anxious consideration to the facts and above respective arguments. The chronology of the events would show that the 1^st respondent issued Notice Inviting Tenders (NIT) notification dated 20.06.2017 for hiring of gas compression services for production, installations at Mori GCS and Pasarlapudi GCS of Rajahmundry Asset for a period of 5 years.

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As per clause 6 of the NIT, the bidders have to download the tender document from e-procurement web portal and submit e-tender. Bidder is required to comply with all the requirements mentioned in the tender document.

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So far as eligibility and experience of the bidder is concerned, clause No.1 of Annexure-1 of NIT says that in case the bidder is an incorporated Indian Joint Venture company registered in India and incorporated under the Companies Act, 1956, then the technical experience criteria laid down in technical DEC should be met i.e,.

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(i) the Joint Venture company by itself should meet the experience criteria or

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(ii) the Joint Venture partner (who can be either a indian or a foreign company) having a stake of atleast 26% in the Joint Venture company should meet the technical experience criteria stipulated in the tender on its own and cannot rely on any other arrangement such as consortium or supporting company of the JV partner for meeting the technical experience criteria. The documentary evidence in support of the above should be submitted along with techno commercial bid.

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(iii) An undertaking from the JV partner, based on whose experience the JV has qualified, shall be submitted with the techno commercial bid stating that they shall maintain minimum 26% shareholding in the JV till the execution of the contract.

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(iv) Further, details of experience and past performance of the bidder and the JV partner on the works/jobs done of similar nature in the past and details of the current work in hand and other contractual commitments, indicating areas and clients are to be submitted along with techno commercial bid in support of the experience.

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12. It should be noted that in the writ petition, the petitioner has not specifically mentioned that the petitioner is a Joint Venture company and petitioner on its own has no qualifying experience to execute the contract and therefore, it was submitting the bid basing on the qualification and experience of its Joint Venture partner. However, this fact was exposed in Paragraph No.5 of the counter by the respondents 1 to 3 stating that the petitoner claimed the experience through the alleged experience of its JV partner company viz, M/s. EL Campo Compressor Rental Inc of USA and therefore, the ONGC has to verify the authenticity of the experience said to have been possessed by the said US company and also the other aspects of the

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offer made by the petitioner. The petitioner has not denied this aspect and in fact, in Paragraph No.6 of its reply affidavit, the petitioner clarified that in view of the facilitating condition in the bid that in case a bidder does not possess the required experience, bid could be submitted based on the experience of its Joint Venture partner, the petitioner can be said to be qualified basing on the experience of its Joint Venture partner.

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13. Thus, there is no demur that the petitioner has submitted its e- tender as a Joint Venture company basing on the alleged experience of its Joint Venture partner company M/s. EL Campo Compressor Rental Inc of USA. Now, the bone of contention is that while the respondent Corporation, basing on the complaint received by it, contend that the Joint Venture partner has no required qualification and experience and the documents submitted by the petitioner at the time of bid were not genuine documents and though the Corporation requisitioned the petitioner to submit the documents showing the qualification and experience of its JV partner and time was extended periodically, the petitioner failed to do so, in turn, the contention of the petitioner is that its JV partner is fully qualified and experienced to execute the contract and in fact the petitioner submitted genuine documents at the time of bid and subsequently also but without considering the same and without hearing the petitioner its bid was unduly rejected by the Corporation.

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14. Admittedly, the respondent Corporation addressed letter dt. 08.01.2018 to the petitioner seeking following clarifications/ confirmations / deficit documents:

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(a) In the experience certificate uploaded, since the petitioner has not mentioned about the capacity of the compressors deployed by its JV Partner in the work which was shown as its experience, hence it should submit detailed scope of work and data sheets pertaining to the said work indicating the capacity of the compressors deployed and work done etc. in regard to the assignment which was shown as experience of the JV partner to meet the qualifying criteria in the present tender.

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(b) In the certificate dated 16.10.2017 said to have been issued by M/s Cactus Compression Inc, Houston for whom the JV partner of the petitioner worked, the capacity of the compressors deployed by JV partner was mentioned as 3.2 MMSCFD. However, in the work completion certificate, the project Number/quote number was not mentioned.

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(c) The petitioner was requested to submit details of experience and past performance of the bidder and JV Partner on the works/jobs done of similar nature and details of the current work etc.

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(d) The petitioner was requested to submit requisite approval of SIA (Secretariat for Industrial Assistance) as required under Clause-B-1-2.5 of BEC.

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(e) For Mori-GCS the petitioner was asked to clarify how the compressor proposed to be acquired from M/s Deep Industries Limited can be considered because the said compressor is already under hire with ONGC under an existing contract w.e.f 08.09.2017.

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(f) For Mori-GCS the petitioner was requested to submit the complete data sheet for compressor package (compressor Sl.No.F-35259 and Engine Sl.No.5283701254) including remarks mentioned at Sl.No.10 duly signed by packager and bidder.

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(g) For Pasarlapudi-GCS, the petitioner was requested to submit the complete packager data duly signed by both packager and bidder.

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(h) The petitioner was requested to submit the certificate from the statutory auditor of the bidder as well as JV company to establish their equity percentage holding.

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(i) The petitioner was requested to submit the experience of

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the crew to be deployed.

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(j) The petitioner was asked to submit list of items/services to be procured from Indian manufacturers/service providers.

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(k) The petitioner was asked to confirm the submission of additional bank guarantee for an amount of 12.2% on the contract value.

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The petitioner said to have sent letter dated 16.01.2018 giving clarifications to the respondent Corporation. However, having been not satisfied with those clarifications, the respondent Corporation addressed letter dated 28.05.2018 calling for further clarifications as follows:

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You have submitted a Quote No.08-29-16 dated 29.08.2016 duly signed by M/s. ECCR and M/s Cactus Compression Inc. with certain terms and conditions. However you are requested to submit a copy of the contract (as per BEC Clause NO.2.1 (a). (ii) 2^nd paragraph) entered into by M/s. ECCR and M/s Cactus for further evaluation of technical acceptance.

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You are requested to produce all the supporting documents submitted w.r.t BEC technical criteria; in Original for verification.

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You are requested to submit an Affidavit on Non-judicial stamp paper of requisite value duly signed by the signatory of the bid, that all the documents/certificates/information submitted by them against the tender are genuine. In case any of the documents/certificates/information submitted by the bidder is found to be false or forged, at later stage action as deemed fit may be initiated by ONGC at its sale discretion.

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You are requested to submit the certified/authenticated copy of Registration Certificate of M/s EI Campo Compressor Rentals Inc., USA from the concerned Authority of USA.

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You are requested to submit the certified copy of Board resolution/specific Power of Attorney in favour of Authorised Signatory of M/s EI Campo Compressor Rentals Inc., USA who has signed the Joint Venture agreement with M/s Visat Oil Tech, Ahmedabad.

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An undertaking on a non-judicial stamp paper shall be submitted by the petitioner that it will make a one time outright purchase of re-compressors from M/s Deep Industries Ltd., Ahmedabad and that there will be no association with them thereafter.

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Whereas JV agreement of Joint Venture of M/s Visat Oil Tech Private Limited with M/s EL Campo Compressor Rentals Inc., Texas shows that Visat Oil Tech Private Limited nominated three Directors, but names of only two Directors were mentioned. Hence, the petitioner shall clarify in that regard.

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15. The petitioner submitted clarification letter dated 16.06.2018 to

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the above letter. It appears the respondent Corporation was not satisfied with the above clarifications and the discussions went on between the parties for some period. Thereafter, during a meeting held by the tender committee, one Sri Vasant Vyas, the Director of the petitioner, attended and produced original documents relating to certain aspects, but failed to produce in respect of others. A joint report was prepared by the tender committee regarding the verification of original documents produced by the petitioner on 27.07.2018 which was signed by the tender committee members and Sri Vasant Vyas. In the said joint report, the following documents were stated to have been produced on behalf of the petitioners.

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1. M/s ECCR (M/s EI Campo Compressor) letter dated 31/05/2018 Covering letter.

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1. Contract copy in original as mentioned in the bidder’s letter dated 25.06.2018 is not produced. However a copy

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of notary attested is shown. (Not original). With regard to detailed scope of work M/s. ECCR stated that they have not signed any separate contract document other than the document dated 29.08.2016.

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1. Cactus compression completion certificate dated 16.10.2017 shown in original.

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1. JV agreement between M/s Visat Oil Tech and M/s ECCR in Original.

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1. Appendix-B-IV (undertaking for offered Natural gas compressor) in original.

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1. Appendix-B-III (undertaking for offered Natural gas compressor) in original.

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1. Valerus covering letter dated 12/06/2018 stating that originals of data sheets submitted along with initial offer are destroyed. Submitted attested data sheets which are not as per the copies uploaded along with initial bid in the e portal.

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1. Ariel Performance report – Produced Color printout stating that originals are destroyed. Attested Performance report shown is not as per the copies uploaded in the e portal during initial bid.

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1. JV 26% undertaking dated 25.10.2017 – Produced photocopy only but claimed submission of original in the physical document. However same is not submitted in physical documents.

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1. Against Data sheets i.e., of compressor and engine for Mori as well as Pasarlapudi bidder neither shown original documents nor attested copies w.r.t. uploaded documents in the e portal along with the initial bid.

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Thus, it is mentioned in the joint report that the bidder though stated that it was in possession of original documents which were sought for substantiating the experience of the bidder, however, during the verification failed to show the documents in original.

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16. At this juncture, it must be noted that the contents of the correspondence between the petitioner and the respondent Corporation and also the contents of the joint report are vividly mentioned by me so as to indicate that the respondent Corporation insisted for the original documents showing the experience of the petitioner’s JV partner i.e., the original contract between M/s. ECCR and M/s Cactus Compression Incorporation for whom the former company said to have undertaken certain works. So also joint venture partners undertaking in original was also sought for. Originals of the data sheet were also sought for. These documents were requisitioned because the petitioner mainly depended on the experience of its JV partner as it had no independent experience. Since the aforesaid documents were not submitted, the respondent Corporation has rejected the technical bid of the petitioner. Regarding non-production of the documents Sri Vasant Vyas, the Director of the petitioner has admitted and signed on the joint report. It is contended by the petitioner in the reply affidavit as if the joint report was drafted unilaterally and got signed by the representative of the petitioner without allowing him to record the petitioner’s stand and therefore, joint report does not reflect the true status. This argument of the petitioner cannot be accepted for the reason that the petitioner did not send any letter making a protest that the joint report was drafted unilaterally on which the signature of its Director was obtained perforce. On the other hand, the petitioner addressed a letter dated 29.07.2018 to the respondent Corporation stating that the original

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documents which were not produced before the tender committee at the time of preparation of joint report will be produced shortly and so an opportunity may be given to the petitioner. In the said letter, no whisper is made about the alleged unilateral preparation of the joint report and obtaining the signature of its Director. So, such a contention cannot be countenanced now. So far as the request of the petitioner in its letter dated 29.07.2018 is concerned, the respondent Corporation did not respond and accord further time. The respondent Corporation rejected the technical bid of the petitioner and proposed to initiate an enquiry against the petitioner for falsification of documents vide its letter dated 26.10.2018. The petitioner cannot harp that no opportunity was given to it and principles of natural justice have been violated for the reason that sufficient opportunity was given to it for a long time, but the petitioner did not produce the crucial original documents to evaluate the experience of its JV partner. Thus, on a conspectus of the record, I find no merits in the case of the petitioner to entertain the writ.

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17. Above all, as already discussed supra, the main issue is whether the JV partner of the petitioner had requisite qualification and experience to get through the technical bid. As can be seen, the qualification and experience are technical issues and such factual matters need a detailed evidence to be appreciated. In my considered view, this Court while exercising the writ jurisdiction cannot go into such details. So, on this ground also the writ petition is not

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maintainable. The scope and ambit of judicial review in contractual matters involving the Government or its instrumentalities is limited to the extent whether level playing field has been maintained i.e., a fair and equal chance has been afforded to all the competing parties or whether the decision has been tainted by arbitrariness, subjectivity and discrimination. In B.Sailesh Saxena v. Union of India¹ a Division Bench of the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh happen to discuss the scope of judicial review the matter of qualification, requirements in the tender notification. Its observations which are as follows, are squarely applicable to the present case:

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“20. Commercial transactions, of a complex nature, involve balancing and weighing all relevant factors, and a final decision is taken on an overall view of the transaction. ( Air India Ltd. v. Cochin International Airport Ltd. (20)(2000) 2 SCC 617 = (2000) 1 SCR 505). When the power of judicial review is invoked, in matters relating to inviting tenders or award of contracts, certain special features should be borne in mind. Inviting tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. The limited scope of judicial review by the High Court envisages examination of the question whether there is any material irregularity in the decision making process. If the decision, relating to the award of contract, is bonafide and in public interest, Courts will not interfere even if a procedural aberration or prejudice to a tenderer is made out. The power of judicial review will not be invoked to protect private interest at the cost of public interest. ( Jagdish Mandal ) (5 supra); Sterling Computers Ltd. v. M & N Publications Ltd. (21) AIR 1996 SC 51; Tata Cellular (18 supra); Raunaq International Ltd (19 supra); Air India Ltd. (20 supra); Association of Registration Plates (6 supra); B.S.N. Joshi v. Nair Coal Services Ltd. (22) AIR 2007 SC 437; Siemens Public Communication Networks (P) Ltd. V. Union of India (23)(2008) 16 SCC 215 = 2009 (6) ALT 21.3 (DN SC)).

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21. The High Court should, normally, exercise judicial restraint unless illegality or arbitrariness, on the part of the employer, is apparent on the face of the record. ( B.S.N. Joshi (22 supra); Jagdish Mandal (5 supra). The award of contract, whether

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1 2018 (4) ALT 36 (D.B.)

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it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are paramount are commercial considerations. ( Air India Ltd (20 supra)). But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down, and cannot depart from them arbitrarily. The Court can examine the decision making process, and interfere if it is found vitiated by mala fides , unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. ( Air India Ltd . (20 supra)). While contractual matters are not beyond the realm of judicial review, its application is limited ( Noble Resources Ltd. v. State of Orissa (24) (2006) 10 SCC 236; Indian Oil Corpn. Ltd. v. Amritsar Gas Service (25) 1990 4 JT 601; and LIC of India v. Escorts Ltd. (26) 1985 8 SCR 909) primarily to the infirmity in the decision making process, and whether it is reasonable and rational or arbitrary and in violation of Article 14 of the Constitution of India. ( Sterling Computers Ltd (21 supra)).

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22. The Court does not sit as a court of appeal, but merely reviews the manner in which the decision was made. Although the terms of the invitation to tender is not open to judicial scrutiny, as it is in the contractual realm, Courts examine the award of contract, by the Government or its agencies, to prevent arbitrariness or favouritism. ( Noble Resources Ltd (24 supra); Binny Ltd. v. V. Sadasivan (27) 2005 7 JT 214; G.B. Mahajan v. Jalgaon Municipal Council (28) 1991 1 JT 605; Sterling Computers Ltd. (21 supra); Tejas Constructions and Infrastructure (P) Ltd. v. Municipal Council, Sendhwa (29) (2012) 6 SCC 464 = 2012 (6) ALT 13.2 (DN SC); Directorate of Education v. Educomp Datamatics Ltd (30) 2004 Suppl 1 JT 502).”

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As can be seen, in the instant case the petitioner cannot clamour

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that its technical bid was unduly rejected. The NIT conditions themselves are clear to the effect that if the bidder relies upon the experience of the Joint Venture partner, the said Joint Venture partner is obligated to establish that it has requisite qualification and experience to qualify the technical bid. In that context, the petitioner was granted sufficient opportunity, but he failed to establish the same. At the outset, the respondent Corporation cannot be found fault for finalizing the tender in favour of 4^th respondent.

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Accordingly, the Writ Petition is dismissed. No costs.

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As a sequel, interlocutory applications pending, if any, shall

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stand closed.

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_________________________ U.DURGA PRASAD RAO, J

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18^th March, 2021 krk/mva

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