Allowed

Ranjan Ku.Sahoo v. Bharat Petroleum Corp.Ltd.

Orissa HC23 Nov 2016WP(C)/11008/2016

Case brief

AI extract

What is this about?

Petitioner challenged rejection of technical bid for transporting bulk petroleum products. Petitioner offered 12 tank lorries; one was later found in litigation. Court held subsequent litigation does not justify rejection of valid bid submitted earlier and directed authorities to accept eligible vehicles.

What did the court decide?

Quashing of order rejecting technical bid; direction to invite bidder to participate in financial bid.

Ranjan Ku.Sahoo Vs Bharat Petroleum Corp.Ltd. — Company and Corporate | Orissa HC (2016)

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HIGH COURT OF ORISSA : CUTTACK

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W.P.(C) No.11008 of 2016

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In the matter of an application under Article 226 of the Constitution of India.

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AFR

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----------Sri Ranjan Kumar Sahoo .....… Petitioner -Versus-

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Bharat Petroleum Corporation Ltd. ........ Opp. Party

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For Petitioner : Ms. Sabitri Ratho, Advocate For Opp. Party : Mr. S.D. Das, Senior Advocate, along with M/s M.M. Swain, H.K.Behera, S.Biswal, H. Mohanty and S.Pattnaik, Advocates.

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR. VINEET SARAN AND THE HONOURABLE DR. JUSTICE B.R. SARANGI

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------------------------------------------------------------------------------Date of hearing : 17.11.2016 :: Date of judgment : 23.11.2016

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Dr. B.R. SARANGI, J Ranjan Kumar Sahoo, as the proprietor of M/s

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CBM Transport, has filed this writ application challenging

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rejection of his technical bid of the tender for “Road Transportation of bulk POL products (MS/HSD/SKO/Branded Fuels) Ex BPCL location at Paradeep in the State of Odisha” vide email dated 23.05.2016, annexure-5. The reason for such rejection has been indicated as non-compliance of criteria mentioned in K.h of NIT as well as Clause- 14 of Attachment-1, Attachment-2, Clause 15(c) of Attachment-5, Clause-3 & 5 of Attachment-8 and Clause-14 of Attachment-1 of NIT.

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The fact of the case, in a nutshell, is that Bharat Petroleum Corporation Ltd. (BPCL) invited sealed tender for “Road Transportation of bulk POL products (MS/HSD/ SKO/Branded Fuels) Ex BPCL location at Paradeep in the State of Odisha” for a period of five years from the tank-lorry owners, quoting minimum five tank lorries for award of contract. The bid contained two parts, namely, technical bid and financial bid. The last date and time of submission of tender documents was fixed to 16.03.2016 at 14.30 hrs. In response to the said tender call notice, the petitioner submitted his bid offering 11 tank lorries of his own and another tank lorry bearing registration no. OD 09E 4650 belonging to one Nirupama Padhi with an undertaking, as provided in Clause-14, that neither the tenderer nor any tank

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lorry offered by him was involved in any litigation. Before offering the vehicle of Nirupama Padhi, the petitioner had checked up the papers of her vehicle and found the same in order.

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Meanwhile, on 03.05.2016, Keonjhar Town P.S. Case No. 306 of 2016 was registered against Nirupama Padhi, the owner of the vehicle no. OD 09E 4560 (which was offered by the petitioner in his bid as one of the twelve vehicles), showing as an accused. So far as other 11 vehicles of the petitioner are concerned, even though not a single scrap of paper was furnished indicating their involvement in any litigation, the petitioner’s technical bid was rejected vide annexure-5, the email dated 23.05.2016 apparently for non-compliance of the criteria mentioned in K.h of NIT as well as Clause- 14 of Attachment-1, Attachment-2, Clause 15(c) of Attachment-5, Clause-3 & 5 of Attachment-8 and Clause-14 of Attachment-1 of NIT. On receipt of the same, though the petitioner made a representation along with price bid through email, the same was not accepted. Hence, this writ application.

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Ms. S. Ratho, learned counsel for the petitioner states that by the time the petitioner submitted the technical bid

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on 16.03.2016, 11 vehicles of the petitioner including the vehicle bearing registration no. OD 09 E4560 of Nirupama Padhi were not involved in any litigation and, as it transpires from record, only on 03.05.2016, after the last date of submission of technical bid, Keonjhar Town P.S. Case No. 306 of 2016 was registered against Smt. Nirupama Padhi, the owner of the vehicle bearing registration no. vehicle no. OD 09 E4560 showing as an accused. Consequentially, the entire technical bid was cancelled on various grounds as mentioned above. Such action of the authority is absolutely outcome of non-application of mind and contrary to the provisions of law. To substantiate her argument, she relied upon the judgments in State of Punjab v. Bandeep Singh and others, (2016) 1 SCC 724, Rashmi Metaliks Limited and another v. Kolkata Metropolitan Development Authority and Others, (2013) 10 SCC 95, Union of India and others v. Dinesh Engineering Cooperation and another, (2001) 8 SCC 49, Sterling Computers Limited v. M/s. M & N Publications Limited and others, (1993) 1 SCC 445, Raunaq International Ltd. V. IVR Construction Ltd. AIR 1999 SC 393,

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M/s. Jadumani Transport & Others v. Bharat Petroleum

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Corporation Ltd. (W.P.(C) No. 9523 of 2016 disposed of on

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24.06.2016) and Mahender Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405.

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Mr. S.D. Das, learned Senior Counsel appearing for the opposite party-Corporation urged before this Court that since one of the vehicles was involved in litigation, the petitioner incurred disqualification from participating in technical bid and, as such, the authorities are justified in rejecting the offer made by the petitioner in technical bid on the grounds mentioned in the rejection order itself. It is further contended that the terms of the contract have been construed strictly. As such, the Court has no jurisdiction in exercise of power under judicial review to relax any clause of the contract, thereby, the authorities are justified in their action in rejecting the technical bid of the petitioner, as one of the vehicles, which was offered by him, was involved in the litigation, which is contrary to clause 14 of the contract itself. To buttress his submission, he has relied upon the decisions in Central Coalfields Limited and Ors. V. SLLSML (Joint Venture Consortium) and others (2016) 8 SCC 622, Bakshi Security and Personnel Services Pvt. Ltd. V. Devkishan Computed Pvt. Ltd. And Ors ., (2016) 8 SCC 446

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and SSMPLJRT (JV) V. Mahanadi Coalfields Ltd. and another, (W.P.(C) No. 13850 of 2016 disposed of on 19.09.2016)

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On the basis of the facts pleaded above, it is not disputed that the opposite party had issued a tender call notice for “Road Transportation of bulk POL products (MS/HSD/SKO/Branded Fuels) Ex BPCL location at Paradeep in the State of Odisha”. Pursuant to the same, the petitioner submitted his tender by offering 12 tank lories and participated in technical bid by submitting documents which is prior to the last date of submission of technical bid, i.e., on 16.03.2016. The technical bid of the petitioner was rejected primarily on the ground that one of the vehicles, which the petitioner had offered, bearing registration no. OD 09 E4560 belonging to Nirupama Padhi, was involved in litigation (Keonjhar Town P.S. Case No. 306 of 2016). The criteria on which the technical bid of the petitioner has been rejected, as communicated to the petitioner vide email dated 23.05.2016, is as follows:

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(1) K.h of NIT

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K. REJECTION CRITERIA:

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Tenders will be rejected in the event of the bidders not complying with any of the following tender guidelines.

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xx xx xx

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h . Tenders not meeting any of the Tender Terms and conditions or incomplete in any respect or with any additions, deletions or modifications are liable to summarily rejected without any further communication to the tenderer and decision of BPCL in this regard shall be final and binding.

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xx xx xx

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Attachment-1- Technical (Pre-Qualification) Bid.

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xx xx xx

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Clause 14. We confirm that neither tenderer nor any TANK LORRY offered are involved in any litigation, which would render the performance of any obligation imposed in case, the contract is awarded to us.

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xx xx xx

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Attachment-2 (Technical Bid)

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PATICULARS OF TANK LORRIES OFFERED (12 KL)

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xx xx xx

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Note : Any discrepancy/mismatch of details provided at the time of e-tendering and the above details observed during the technical bid scrutiny will disqualify and the tender will be rejected.

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xx xx xx

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Attachment-5.

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AGREEMENT FOR HIRING OF TANK LORRIES FOR MOVEMENT OF PETROLEUM PRODUCTS.

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xx xx xx

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Clause 15(c). If road permits or statutory licenses/permissions granted to Carrier/it’s

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tank-lorries by transport or any statutory authorities is cancelled or revoked.

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Attachment-8- UNDERTAKING .

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xx xx xx

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Clause-3 & 5 of

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(3) That the subject tank-lorries are not involved in any litigation other than routine cases of road accident or any violation of Motor Vehicles Act.

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(5) We further confirm that the details as furnished by us have been verified and found correct. We undertake to place the tank-lorries at the disposal of BPCL in case the contract is awarded in our favour. If any information is found to be incorrect, the contract if awarded to us shall be liable to be cancelled and we shall be liable to pay to BPCL such damages/losses/claims as BPCL may put to due to termination of the contract. We also undertake that, should there be any action against BPCL resulting in damages of whatsoever nature to BPCL on account of award of contract in our favour on the basis of the misrepresentations, we shall keep BPCL completely indemnified against all the claims/losses/damages/litigations/court action etc.”

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On consideration of the above mentioned provisions,

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it is clear that tenders not meeting any of the tender terms and conditions or incomplete in any respect or with any additions, deletions or modifications are liable to be summarily rejected without any further communication to the tenderers and decision of BPCL in this regard shall be final and binding. As per

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the tender conditions, the petitioner offered 11 number of tanklorries of his own and one tank lorry of Nirupama Padhi and on the date of submission of the technical bid none of the vehicles was involved in any litigation. As such, by the time the tender of the petitioner was submitted, the same was inconsonance with the terms and conditions of the NIT.

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Clause-14 of the Attachment-1 clearly requires a confirmation by the tenderer that neither tenderer nor any tanklorry offered is involved in any litigation. The details of the vehicles offered by the petitioner were given in the format prescribed in the attachments and on the date of such offer none of the vehicles were involved in any litigation at the time of submission of technical bid on 11.03.2016, the last date being 16.03.2016. But, subsequently, on 03.05.2016 one of the vehicles bearing registration no. OD 09E 4560, whose owner is Nirupama Padhi, was stated to have been involved in Keonjhar Town P.S. Case No. 306 of 2016. Subsequent detection of the vehicle involved in litigation cannot have any role to play to reject the tender offered by the petitioner.

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Reliance was also placed on Clause -15(c) of the NIT for rejection of the petitioner’s bid. But, as a matter of fact, the said clause has no application to the present context in view of the fact that the same is only applicable after agreement is executed between the parties, but this is case where at the stage of consideration of technical bid, the tender of the petitioner has been rejected. Furthermore, if the undertaking provided in clause-3 of Attachment-8 is scrupulously interpreted, it would mean that a relaxation has been given to the effect that the subject tank-lorries are not involved in any litigation other than routine cases of road accident or any violation of Motor Vehicles Act.

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Above apart, nothing has been transpired from the materials available on record that except one of the vehicles, which was belonging to Nirupama Padhi, none of the other 11 vehicles offered by the petitioner was involved in any type of litigation so as to disqualify the petitioner. The opposite party Corporation in paragraphs 5, 6, 8 and 11 of the preliminary counter affidavit has specifically stated:-

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“5. That it would be clear from the tender documents itself under Annexure-1, i.e. notice inviting tender under Clause-K thereof (sub- Clause-H), the same reads as follows:

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“K. REJECTION CRITERIA:

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XX XX XX XX

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h. Tenders not meeting any of the Tender Terms and conditions or incomplete in any respect or with any additions, deletions or modifications are liable to summarily rejected without any further communication to the tenderer and decisions of BPCL in this regard shall be final and binding.”

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6. That it may be relevant to mention here that under the Tender Covering Letter (2.1), the petitioner while submitting tender had to certify that as would be clear from Clause-14 of Tender Covering Letter (2.1), which reads as under :

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“14. We confirm that neither tenderer nor any TANK, LORRY offered are involved in any litigation, which would render the performance of any obligation imposed in case, the contract is awarded to us.”

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xx xx xx

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8. That it may not be out of place to bring to the notice of this Hon’ble Court that in the Tender Agreement for having a tank lorry for petroleum products Attachments-5 also provides a clause, i.e. even after the acceptance of the tender and an agreement having been entered into with the prospective tenderer, Clause-15 provides that notwithstanding to the contrary contained hereinabove, Company reserves the right to terminate this agreement forthwith upon or at any time after happening any of the following:

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(a) If the Carrier, its’ proprietor or any partner is adjudicated insolvent or become bankrupt or goes into liquidation whether voluntary or otherwise.

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(b) If attachment in execution of a decree is passed against the Carrier’, its proprietor or any of its partners.

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(c) If road permits or statutory licenses/permissions granted to Carrier/it’s tank-lorries by transport or any statutory authorities is cancelled or revoked.

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(d) If any of the information submitted by the Carrier in the tender is found incorrect at any time

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(e) Breach of any of the terms or conditions of this Agreement by the Carrier.

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(f) If the Carrier commits or suffers to be committed any act which in the opinion of the Company whose decision shall be final is prejudicial to the god name/image of the Company or its’ products or its services.

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(g) If the Carrier causes disruption in transportation of bulk petroleum products. The decision of Company will be final and binding on the Carrier.

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(h) On the death or retirement of Proprietor or any of the partner of the Carrier firm. However, in case, Company does not exercise this option, the Agreement shall continue as between the Company and surviving/continuing partners of the Carrier. The legal representatives of the deceased partner or the retiring partner himself shall be liable for all the obligation of the Carrier incurred upto the date of death or retirement but shall not be entitled to claim from the company any portion of Security Deposit (Bank Guarantee). Company shall account for Security Deposit (Bank Guarantee). Company shall account for Security Deposit (Bank Guarantee) to the surviving or any partners shall be notified by the Carriers to the Company in writing within 24 hours of such death or retirement.

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(i) If the crew of the carrier commits any unsafe act such as rash driving, accident, non-adherence to safety guidelines and not using safety/protective equipments etc. within or outside BPCL premises.

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(j) If the Carrier, its proprietor or any partners Tank lorry crew misbehaves (abuse/threat/assault/ manhandles) with the consumers/dealers or with the employees of the BPCL.”

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xx xx

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11. That as would be clear from the own admission of the petitioner that he had offered 12 vehicles including OD-09 E4560 and on scrutiny of the documents it was found that the said vehicle which was registered with the R.T.O.,

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Keonjhar, on the basis of forged documents and Town P.S. Case No. 306, dated 03.05.2016 has been registered against the owner of the said vehicle and on the basis of the letter dated 03.05.2016, the R.T.O., Konjhar, wrote to the IIC, Town P.S., Keonjhar, that the registration certificate of 15 vehicles have been cancelled as the owner could not show-cause with regard to the fake document for registration and it was reported by the Addl. Commissioner (Transport) that these vehicles have been registered on the basis of fake documents.

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The reason, as has been assigned, is that one of the twelve vehicles offered by the petitioner bearing registration no. OD 09 E4560 belonging to Nirupama Padhi having been involved in litigation on the allegation of forged documents, the petitioner’s technical bid has been rejected. The same has no consequence, in view of the fact that production of forged registration certificate is also a matter covered under violation of Motor Vehicles Act, as provided in Claue-3 of the Attachment-8 of the tender document.

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As it seems, the authorities have lost sight of Clause23 of the NIT, which provides as follows:

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“23. Bharat Petroleum Corporation Ltd. Reserves the right to accept or reject any of all the tenders in part or in totality, or to negotiate with any or all the tenderers, or to withdraw/cancel/modify this tender without assigning any reason whatsoever, or to accept some or all of the tank-lorries offered.

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From the above, it is apparent that the authorities are vested with power to accept some or all the tank lorries offered or they can withdraw/cancel/ modify the tender without assigning any reason. If the vehicle bearing registration no.OD 09E 4560 belonging to Nirupama Padhi, which was one of the 12 vehicles offered by the petitioner, has been found to be involved in litigation much after the last date of submission of technical bid on the ground of furnishing forged documents, which is of course subject to investigation, and also a matter which comes under the MV Act, which covers the conditions of undertaking furnished in Clause- 3 of Attachment-8, then the authorities could not have rejected all the 12 vehicles. Rather, in exercise of power conferred under Clause-23, with all prudence, they could have accepted the 11 vehicles, whose papers are correct in all respect and allow the petitioner to participate in the financial bid instead of rejecting the same at the stage of technical bid.

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Be that as it may, the order impugned in Annexure-5 dated 23.05.2016 does not indicate any reason for rejection of the technical bid save, except indicating some clauses of the tender documents.

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In Bandeep Singh (supra), the apex Court held as

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follows:

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“Every decision of an administrative or executive nature must be a composite and selfsustaining one, in that it should contain all the reasons which prevailed on the official taking the decision to arrive at his conclusion. It is beyond cavil that any authority cannot be permitted to travel beyond the stand adopted and expressed by it in the impugned action. Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.”

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Similar view has also been taken in Mohinder Singh

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Gill (supra), wherein reference has been made to the Commissioner of Police v. Gordhandas Bhanji, AIR 1952 SC

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The apex court has also held in aforementioned judgment that-

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“The Government does not have a carte blanche to take any decision it chooses to; it cannot take a capricious, arbitrary or prejudiced decision. Its decision must be informed and impregnated with reasons.”

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Similar view has also been taken in Sterling

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Computers Ltd (supra) and Tata Cellular v. Union of India,

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AIR 1996 SC 11 and Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517.

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At paragraph-9 of the judgment in Rashmi Metaliks Limited (supra) a reference has also been made to paragraph 77

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of the Tata Cellular (supra), where it has been specifically stated

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that-

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“xxxxx it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:

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(i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.

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(ii) Irrationality, namely, Associated Provincial Picture Houses Ltd. Wednesbury Corpn., (1948) 1 KB 223 unreasonableness.

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(iii) Procedural impropriety.

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The above are only the board grounds but it does not rule out addition of further grounds in course of time.”

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Similar view has also been taken in Raunaq

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International Ltd. (supra) which reads as follows:

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“Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons

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after a fair consideration of all offers, the court should hesitate to intervene”

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This Court has also taken similar view in M/s.

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Jadumani Transport (supra).

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In Bakshi Security and Personnel Services Pvt. Ltd. (supra), referring to the earlier judgments of the apex Court in Poddar Steel Corpn. V. Ganesh Engineering Works, (1991) 3 SCC 273, B.S.N. Joshi and Sons Ltd. V. Nair Coal Services Ltd., (2006) 11 SCC 548 and General Assurance Society Ltd. V. Chandmull Jain (1996) 3 SCR 500 held that conditions of tender have to be strictly complied with. There is no dispute on the proposition laid down by the apex Court to the aforesaid extent.

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Similar view has also been taken by this Court in SSMPLJRT (JV) mentioned supra.

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Reference made to the aforementioned judgment by the learned Senior Counsel for the opposite party, instead of supporting the opposite party, it squarely supports the case of the petitioner.

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In view of the factual and legal analysis made above, this Court is of considered opinion that the position as on the date, i.e.,16.03.2016, when the tender was submitted by the petitioner, which has to be taken into consideration and subsequent event which occurred on 03.05.2016, cannot have any role for determination of technical bid submitted by the petitioner. Even otherwise, if one of the vehicles submitted by Nirupama Padhi was involved in Keonjhar Town P.S. Case No. 306 of 2016 on the ground of forged documents, which is a matter covered under the M.V. Act, cannot also be taken into consideration in view of Clause 3 of Attachment-8 of the tender documents. Furthermore, assuming for a moment that one of the twelve vehicles offered by the petitioner was involved in litigation, that by itself cannot be a ground for rejection of the petitioner’s technical bid, especially when other 11 tank-lorries offered by the petitioner were free of allegations and the same should have been accepted by the authority for technical bid by invoking the relaxation provided in Clause-23 of the NIT.

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In view of the aforesaid facts and circumstances, we are of the considered view that the opposite party may invoke Clause-23 of the NIT for consideration of the tender submitted

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by the petitioner in respect of the technical bid so as to enable him to participate in the financial bid in accordance with law. Consequentially, the order dated 23.05.2016 in Annexure-5, rejecting the technical bid of the petitioner cannot sustain in the eye of law and the same is hereby quashed. The writ petition is

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allowed to the extent indicated above. No order as to cost.

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Sd/- VINEET SARAN CHIEF JUSTICE

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Sd/- DR. B.R.SARANGI, JUDGE

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Orissa High Court, Cuttack The 23^rd November, 2016, Ajaya/GDS

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True copy

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Secretary

Ranjan Ku.Sahoo v. Bharat Petroleum Corp.Ltd.

Case brief

What is this about?

What did the court decide?

Ranjan Ku.Sahoo v. Bharat Petroleum Corp.Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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