Judgment and Order, (Cav)
1. Drillmec S.p.A., a Company registered in Italy and working in the area of manufacture and supply of land rigs for the purpose of exploration and development of Oil and Gas, has filed the present petition praying for a writ in the nature of mandamus directing the Oil India Limited (in short, âOILâ) to settle the tender process initiated vide tender notices Nos.SDG9008P11/07 and SDG7289P13/07 in strict compliance of the mandatory provisions of law and other guidelines formulated and also restraining the respondent OIL from awarding the contract in favour of the respondent No.4, apart from a direction to award the contract in favour of the petitioner by quashing the 430th meeting of the Corporate Business Committee (in short, âCBCâ) held on 27th December, 2012 in relation to the aforesaid tender notices, contending inter alia that though the petitioner, the respondent No.4 and the respondent No.5 were found to be technically responsive in the technical bids, there is a move to bestow undue benefit to the respondent No.4 by flauting the mandatory guidelines of the Central Vigilance Commission, guidelines of the respondent OIL issued in respect of the said tender process and other mandatory provisions of law, despite emergence of the petitioner as the lowest bidder. According to the petitioner, the respondent OIL entered into negotiation with the respondent No.4, whose bid was higher than that of the petitioner, ignoring the lowest bid offered by the petitioner by taking cognizance of unsolicited communications issued by the respondent No.4 challenging the fresh price bid of the petitioner, even without asking for any clarification from the petitioner on the fresh price bid, if they have any doubt on the offer of the petitioner. It is also the case of the petitioner that they have never been informed about the grounds, if any, for rejection of their offer and why negotiation has not been done with it, though was the lowest bidder and instead was negotiating with the respondent No.4. Further case of the petitioner is that they, for the first time, came to know about the reasons for rejection of their bids while they have been served with a copy of the affidavit-in-opposition filed by the respondent OIL, disclosing the grounds on which the petitioners bid has been rejected.
2. The writ petition has been opposed by the respondent OIL as well as the respondent No.4 by filing separate affidavits, basically contending that the writ petition is not maintainable because of suppression of material facts; the petitioner being a company registered in Italy and not a natural person, is not entitled to file writ petition for enforcement of the fundamental rights under Articles 14 and 19 of the Constitution; the writ petition is not maintainable, the same being supported by an affidavit by a person, who has not been authorized to do so and the petitioner being guilty of the violation of the terms and conditions of the tender is not entitled to the relief claimed.
3. The relevant undisputed facts leading to filing of the writ petition may be noticed as under:-
(i) A process, initially for supply and commissioning of two 2000 HP VFD rig package, one with top drive and another with provision for top drive, was initiated by the respondent OIL in the month of August, 2010, by floating open global e-tender inviting bid under single stage 2(two) bid system, fixing 21st and 22nd September, 2010 as the dates for Pre-bid Conference. 27(twenty-seven) parties, who have purchased the tender documents, including the petitioner, the respondent No.4 and the respondent No.5 participated in the Pre-bid Conference. 5(five) parties, which includes the petitioner, respondent No.4 and the respondent No.5, submitted their technical and commercial bids. On 15th June, 2011, the technical bids of all the bidders were opened. The petitioner, respondent No.4 and the respondent No.5 were found to be technically responsive. The Head-Material of the respondent OIL thereafter, on 20th January, 2012 submitted a proposal before the Tender Committee-cum-Approving Authority for putting up of a note to the CBC recommending opening of the price bids of 3(three) technically responsive bidders, namely, the petitioner, respondent No.4 and the respondent No.5. In the said proposal, the approving authority was informed about the various deviations in the bids submitted by all the 3(three) bidders, which have been accepted by the user department while evaluating the offer, which includes the deviation by the petitioner relating to non furnishing the price of 63 major rig components, apart from non extension of the bid validity by the respondent No.5, M/s BHEL. The Tender Committee-cum-Approving Authority having approved the said proposal placed the same before the Local Management Committee (in short, âLMCâ), on whose recommendation note dated 16th February, 2012 was placed before the CBC of the respondent OIL seeking approval for opening of the commercial bids of the aforesaid 3(three) bidders indicating the deviations including the deviation relating to the stipulation of the petitioner that it would not disclose the price of 63 major rig components. The CBC in its 425th meeting held on 2nd March, 2012, has approved the opening of the price bids of 2(two) bidders, namely, the petitioner and the respondent No.4, condoning the deviations as mentioned above. The CBC, however, in view of non extension of bid validity, decided not to open the price bid of the respondent No.5. Accordingly, price bid of the petitioner and the respondent No.4 were opened on 7th March, 2012.
(ii) Note dated 23rd May, 2012 was, thereafter, placed before the CBC, pursuant to the decision of the LMC taken in its meetings dated 1st May, 2012; 8th May, 2012 and 15th May, 2012, pointing out certain discrepancies in the bids. The CBC in its 427th Meeting held on 11th June, 2012 decided to refer the matter to the Independent External Monitors (in short, âIEMsâ) for their opinion, as envisaged in Clause-7 of the tender conditions, who have on 19th July, 2012 recommended invitation of fresh price bid. The CBC in its 427th Meeting held on 9th August, 2012, accordingly, decided to re-invite the fresh price bid from all the 3(three) technically acceptable bidders, namely, the petitioner, respondent No.4 and the respondent No.5, for 2(two) numbers of 2000 HP drilling rig packages with top drive, instead of one number each with and without top drive. Consequently the respondent OIL on 1st September, 2012 informed the aforesaid 3(three) technically responsive bidders to submit the fresh price bids fixing 26th September, 2012 as the last date for such submission, which, however, was subsequently extended to 3rd October, 2012. All the aforesaid 3(three) bidders accordingly submitted their fresh price bids. The petitioner in the fresh price bid has inserted the following clause, which was not put in the earlier price bid submitted by it:- âDrillmec reserved the right to manufacture and test the rigs, or part of them, in any of its facilities, which belong to us as per their availability at the time of contract awarding.â The petitioner in the fresh price bid has indicated the consolidated price of 19 components instead of 63 major rig components. The respondent No.5 also did not disclose the price of all the 63 major rig components.
(iii) The fresh price bid of the bidders were opened on 3rd October, 2012 and thereafter, it was sent to the user department, which has confirmed that the offers are in order as per the tender requirement as far as type and the quantity of spares are concerned with the further observation that the offer made by the petitioner is the lowest. The LMC in its proceeding dated 9th October, 2012 scrutinized the offers made by all the 3(three) bidders and found that the petitioner has put the aforementioned clause in the price bid. The LMC having regard to the attending facts and circumstances decided to have the clarification from the petitioner and to reconfirm that all the points agreed by them in their technical bids and during technical clarification sought by OIL will be honoured by them. The LMC, however, before obtaining such clarification decided to place the matter before the CBC for approval/concurrence. The decision of the LMC was also approved by the Appropriate Authority-cum-Tender Committee on 12th October, 2012. A note dated 13th October, 2012 was, accordingly, placed before the CBC, which was considered on 3rd December, 2012 in its 429th Meeting. In the meantime, 3(three) unsolicited communications dated 12th October, 2012; 16th October, 2012 and 19th October, 2012 were received by the respondent OIL form the respondent No.4 contending that the fresh price bid submitted by the petitioner is to be rejected because of incorporation of the aforesaid clause in the price bid, in view of Clause-1 of the Bid Rejection Criteria (Commercial), as well as for not providing the cost of all 63 major rig components.
(iv) The CBC in its 429th Meeting held on 3rd December, 2012 took up the aforesaid note dated 13th October, 2012 as well as the unsolicited communications received from the respondent No.4, for consideration. A decision was taken in the said meeting to obtain the opinion from the learned Solicitor General of India. An opinion dated 14th December, 2012 was then obtained from the learned Attorney General of India, based on which the CBC in its 430th Meeting held on 27th December, 2012 decided to accept the said opinion and to call the respondent No.4 for negotiation on price to match with the price quoted by the petitioner.
4. I have heard Mr. PK Goswami, learned senior counsel for the petitioner, Mr. KN Choudhury and Mr. AK Ganguly, learned senior counsel appearing for the respondent Nos.1, 2, 6 and respondent No.4, respectively. The respondent No.5 has not contested the writ petition.
5. Mr. Goswami, learned senior counsel appearing for the petitioner, submits that the petitioner for the first time, from the affidavit-in-opposition filed by the respondent OIL, came to know about the grounds on which the petitioners bid has been rejected, namely, (i) insertion of a new condition in the form of a foot note, in the commercial bid of the petitioner, reserving the right to manufacture and test the rigs, or part of them, in any of the facilities, which belong to them, as per their availability at the time of their contract awarding, (ii) quotation of the price of only 19 major components against the tender requirement of 63 major components, prescribed in the Price Bid Format and (iii) inability of the respondent OIL to determine whether or not the API certificates furnished by the petitioner alongwith the bid documents covers other facilities of the petitioner, where the petitioner reserve the right to manufacture or test the rigs or part of them. According to the petitioner, they have never been informed by the respondent OIL, at any time, prior to filing of the affidavit-in-opposition, about the grounds on which their bids have been rejected and as such, they did not have any knowledge about the same. The learned senior counsel submits that the petitioner has filed the petition apprehending disqualification, as they came to learn that the respondent OIL had decided to disqualify the petitioner in the tender process, and for directing the respondent authorities to settle the tender process, initiated vide tender notices, in strict compliance of the mandatory provisions of law and other guidelines formulated thereunder and also for restraining the respondent OIL from awarding the contract in favour of the respondent No.4.
6. Referring to the first ground of rejection of the petitioners bid, as disclosed by the respondent OIL in their affidavit-in-opposition, it has been submitted by Mr. Goswami, learned senior counsel, that the foot note in the price bid, reserving the right to manufacture or test the rigs or part of them in any facilities belonging to the petitioner, has been incorporated in the price bid to inform the respondent OIL that the petitioner is open to the idea of manufacturing the aforesaid rig components in any of its facilities available, as during the course of deliberation, the IEM, to whom earlier price bid was sent for verification, enquired with the representative of the petitioner as to whether it is feasible on the part of the petitioner company to manufacture the components in Italy or elsewhere. According to the learned counsel, by putting such Clause in the price bid, the petitioner does not intend to manufacture the aforesaid components in any units other than the manufacturing unit in respect of which API license has been furnished and was mentioned only to make its position clear that if the respondent OIL wants that such components are to be manufactured other than in Italy, they are free to do so. The learned senior counsel further submits that such deliberation between the representative of the petitioner and the IEM has not been denied by the respondent OIL in its additional affidavit filed on 1st April, 2013. The learned senior counsel submits that the said foot note does not in any manner indicate that the petitioner would manufacture the components of the rigs in violation of the terms and conditions of the bid documents, which requires manufacture of certain components in API licensed manufacturing unit with specification 4F.
7. Mr. Goswami further submits that the bid of the petitioner has been rejected on the ground of violation of clause-1.0 of the Commercial Bid Rejection Criteria, on the ground that the price bid of the petitioner contains the aforementioned Clause, reserving the right to manufacture the rig components in any of its factory, which cannot be done as in the said clause, there is no negative stipulation of rejection of the price bid in case of insertion of such clause. The learned counsel referring to the various clauses of the bid document, more particularly, the stipulation under the head âmake of rig accessories, has also submitted that the petitioner has no option but to manufacture 2(two) components, namely, Crown Block Assembly and Mast and Sub-structure in API licensed factory with specification 4F and to procure other equipments from any of the approved vendors specified by the respondent OIL. In any case, according to the learned senior counsel, there being provision for inspection and test of all the rig components during manufacture, prior to dispatch as well as Third Party Inspection of the rig components and the rigs to be supplied, to ensure manufacture of the rig components and the rig as per specification, in the manufacturing unit having API specification 4F, putting a condition in the price bid, in the form of foot note, cannot be the ground for rejection of the petitioners bid, as the petitioner cannot, under the terms and conditions of the bid, manufacture the rig components in any non API licensed manufacturing unit.
8. The learned senior counsel has also submitted that since the port of origin has been mentioned as Italy, the petitioner would not, therefore, manufacture those 2(two) components in its manufacturing unit at Houston in USA and carry it to Italy for transhipment to Kolkata (India), incurring heavy cost. The learned senior counsel submits that since the petitioners technical bid was accepted and the petitioner having submitted the technical bids with a stipulation of manufacturing of those 2(two) components in a manufacturing unit in respect of which the API license has been submitted, no reasonable person would have taken the view that the petitioner would manufacture those 2(two) equipments in any factory other than the API certified factory. The learned senior counsel further submits that there being a provision for clarification in Clause-2 of the additional notes appended to Section-20 of the bid documents, the respondent OIL, in case of any doubt whether the rig components would be manufactured in the manufacturing unit, in respect of which API license was submitted alongwith the bid, would have sought for clarification from the petitioner, as recommended by the LMC, more so when the price difference is substantial, which would not have caused any further delay in finalization of the process, which has already taken more than 2(two) years from the date of floating the tender, for no fault of the petitioner. The learned senior counsel submits that the respondent OIL has taken the decision to reject the bid of the petitioner on that count, not based on its independent decision but based on the opinion of the Law Officer of the Union of India, and unsolicited communications received from the respondent No.4, despite the stipulation in Clause-14.1 of the terms and conditions of the bid.
9. Referring to Clause-15 of the technical bid rejection criteria, it has further been submitted that though a bidder is required to furnish, alongwith the bid documents, a valid license of API specification 4F for a period of not less than 10(ten) years continuously without any break, preceding the technical bid opening date, it has nowhere been mentioned in the tender documents or in the guidelines issued by the respondent OIL, in the matter of awarding the contract, that the components of the rigs must be manufactured in the manufacturing unit in respect of which the API license with specification 4F has been furnished alongwith the bid documents. The learned senior counsel, therefore, submits that reserving the right by the petitioner to manufacture the rig components in any of the manufacturing unit belonging to the petitioner, do not violate any of the conditions in the bid documents.
10. The learned senior counsel also submits that the bid of the petitioner cannot be rejected on the ground of putting such condition, on the ground that such condition has no relation with the commercial bid but has relation to the technical bid, once the petitioner is found to be technically responsive. According to the learned senior counsel, the stage for scrutinizing as to whether the bidder is technically responsive, being over and the petitioner having been found technically responsive and consequently the price bid being opened, the respondent OIL cannot subsequently reject the bid of the petitioner on the ground that such condition, put in the price bid in the form of a foot note, renders the petitioners bid technically non-responsive.
11. The learned senior counsel, in relation to the second ground of rejection of petitioners bid, has submitted that the petitioner from the very beginning has informed the respondent OIL that it will not disclose the price of individual major rig components, by indicating it in the checklist appended to the technical bids. The respondent OIL having taken note of the same, in its proceeding dated 16th February, 2012 and pursuant to the decision of the CBC, decided to open the first price bid of the petitioner alongwith the price bid of M/s BHEL (respondent No.5), who also refused to disclose the price of individual rig components, and hence, the respondent OIL cannot contend that since the petitioner did not disclose the price of the individual rig components, its bid is in violation of the terms and conditions of the bid documents. The learned senior counsel further submits that the stipulation in the new price format supplied to the various bidders on 1st September, 2012, requiring providing breakup of prices alongwith the bid format, wherever specified in original tender document, has to be interpreted accordingly, inasmuch as, the requirement of disclosure of price of all the rig components has been relaxed by the respondent OIL by its conduct by accepting the petitioners stipulation of non disclosure. It is also submitted that the respondent OIL has taken a conscious decision to accept the offer without disclosure of the price of all 63 major rig components and hence it cannot reject the second price bid of the petitioner on that count.
12. The learned counsel submits that the non disclosure of the price of each major rig components being necessary for accounting purpose of the respondent OIL, and the petitioner having undertaken to disclose the same in case the contract is awarded, the purpose for which such price of individual rig components is necessary would be served and cannot be treated as essential condition, so as to reject the bid of the petitioner. The learned senior counsel further submits that had disclosure of the price of 63 major rig components been the essential condition of the bid, the respondent OIL would not have taken the decision to open its price bids, namely, the first as well as the fresh. The learned senior counsel further submits that quotation of the price of 63 major components having no relation to the object of procuring rigs, such condition, in any case, cannot be termed as mandatory, hence, violation, if any, would not make a bidder commercially non responsive.
13. The learned senior counsel, referring to Clause-5.1 of the Bid Evaluation Criteria (Commercial), has submitted that the price of the individual 63 major rig components cannot be the basis for commercial evaluation of the bid submitted by the bidders, as in the said clause it has specifically been stipulated that the comparison of the bid will be done on the basis of the grand total value and not on the basis of the price of individual 63 major rig components. The learned counsel, therefore, submits that non disclosure of the price of individual 63 rig components, in any case, cannot be the basis for rejection of the price bid of the petitioner, whose offer is much lower than the offer of the respondent No.4, which, according to the learned senior counsel, has been done by the respondent OIL at the instance of the respondent No.4 acting on the unsolicited communications issued by them.
14. Referring to the âcommercial bid format summary furnished to the bidders by the respondent OIL, before submission of the fresh price bid, it has been submitted that what the bidders were asked to furnish is the price of the components under 19 heads and accordingly the petitioner having submitted the price bids disclosing the price under those 19 heads, its price bid cannot be rejected on the ground of non furnishing of the price of 63 major components, as stipulated in Annexure-A4 to the bid documents, which, according to the learned senior counsel, is not required to be complied with, in view of the subsequent commercial bid format supplied to the bidders.
15. The learned senior counsel, with regard to the third ground of rejection of the petitioners bid, has submitted that the same is not at all tenable in facts and law, as the respondent OIL could have obtain the clarification from the petitioner on the foot note. That part, there being provision for inspection, monitoring and checking, apart from the ultimate rejection of the rigs as well as forfeiture of the guarantee money, it would absolutely be not difficult on the part of the respondent OIL to ensure that the rig components are manufactured only in a manufacturing unit belong to the petitioner having API license with specification 4F, which components, in any case, have to be manufactured in such API licensed unit with specification 4F. The learned senior counsel further submits that Section-20 of the bid documents having provided that the rig components must have the API monogram die stamped on the body, it would not be difficult on the part of the respondent OIL to verify as to whether the rig components have been manufactured in API licensed manufacturing unit with specification 4F. The learned senior counsel submits that the grounds on which the petitioners bid has been rejected are irrational and unreasonable and no person having properly instructed in law would have rejected the petitioners bid on such unreasonable, arbitrary and irrational ground.
16. The learned senior counsel further submits that though the power, under the terms and conditions of the bid, to seek clarification by the respondent OIL in any matter, is discretionary, it becomes the duty on the part of the respondent OIL to seek clarification from the petitioner on the foot note appended to the price bid, if it has any doubt in that respect, as, such power is coupled with a duty to seek clarification, in the interest of the respondent OIL for procuring the best available rig system that too at a much lesser price. Learned counsel further submits that the respondent OIL while exercising the discretion did not take into consideration all relevant facts and took into consideration the opinion of the Law Officer of the Union of India only. It has also been submitted that the difference of price quoted by the petitioner and the respondent No.4 being substantial and the rig system offered having found to be technically suitable, the rejection of the petitioners bid on irrational, arbitrary and unreasonable conditions is against the public interest, as the respondent OIL in that case would acquire the rig system at a much higher price from the respondent No.4.
17. The learned senior counsel in support of his contention has referred to the decisions of the Apex Court in Hirday Narain -Vs- Income Tax Officer, Bareilly reported in 1970 (2) SCC 355; in Khudiram Das -Vs- The State of West Bengal and Ors. reported in AIR 1975 SC 550; G.B. Mahajan and Ors. -Vs- Jalgaon Municipal Council and Ors. reported in (1991) 3 SCC 91; in Poddar Steel Corporation -Vs- Ganesh Engineering Works and Ors. reported in (1991) 3 SCC 273; in Tata Cellular -Vs- Union of India reported in (1994) 6 SCC 651; in Monarch Infrastructure (P) Ltd. -Vs- Commissioner, Ulhasnagar Municipal Corporation and Ors. reported in (2000) 5 SCC 287; in Directorate of Education and Ors. -Vs- Educomp Datamitcs Ltd. and Ors. reported in (2004) 4 SCC 19; in Jagdish Mandal -Vs- State of Orissa and Ors. reported in (2007) 14 SCC 517; in Meerut Development Authority -Vs- Association of Management Studies and Anr. reported in (2009) 6 SCC 171 and in Indian Railway Catering and Tourism Corporation Ltd. and Anr. -Vs- Doshion Veolia Water Solutions Private Ltd. and Ors. reported in (2010) 13 SCC 364 as well as of this Court in Sterlite Technologies Ltd. and Anr. -Vs- Assam Power Distribution Co. Ltd. and Ors. reported in 2011 (5) GLT 600.
18. Mr. K.N. Choudhury, learned senior counsel appearing for the respondent OIL, referring to the first and the third grounds of rejection of the petitioners bid, has submitted that the bid of the petitioner has rightly been rejected, the same being not in conformity with the terms and conditions of the NIT. According to the learned counsel, the bid of the petitioner becomes non responsive technically, in view of the clause put in the commercial bid, reserving the right to manufacture and test the rights or part of them in any facilities belong to the petitioner as per the availability at the time of contract awarding, in as much as Clause-15 of the bid rejection and bid evaluation criteria, in respect of evaluation of the technical bids, provides for manufacturing of the rig or part of them in such unit, which has a valid license of API specification 4F for a period of not less than 10(ten) years continuously without any break preceding the bid (technical) opening date. The learned senior counsel submits that by putting such condition, the petitioner reserves the right of manufacturing the rigs or any part of it in any manufacturing unit, which may or may not have a valid API license with specification 4F for a period of not less then 10(ten) years. The learned counsel, therefore, submits that though such a condition has been put in the price bid of the petitioner, without putting the same in the technical bid, it amounts to violation of the conditions in the technical bid even though the petitioner was earlier found to be technically responsive and hence the bid of the petitioner was rightly rejected by the respondent OIL, which decision of the authority, therefore, cannot be termed as arbitrary. It has also been submitted that the submission of the petitioner that under the terms and conditions of the NIT, since certain components of the rigs cannot be manufactured in a manufacturing unit not having the valid license of API with specification 4F, putting such clause in the price bid would not violate the terms and conditions of the bid, more so, when the bid documents stipulates that the equipments must have API monogram die stamped on the body and as such, whether the equipments manufactured in another unit other than the unit in respect of which the valid license of API specification 4F has been submitted with the bid documents, could be ascertained by such API monogram, cannot be accepted in view of the fact that under the terms and conditions of the NIT, the bidder has to manufacture those components in the unit in respect of which the license has been furnished with the bid. It has also been submitted that in any case from such API monogram die stamped on the body of the equipments, it is not possible to ascertain whether the manufacturing unit where such equipments are manufactured has the valid license of API with specification 4F for a period of not less than 10(ten) years. According to the learned senior counsel, there being a specific condition in that respect in the NIT, the bidders have to comply with such conditions.
19. Mr. Choudhury further submits that the inspections either by the TPI Agencies or Pre-dispatched or during manufacturing or at the time of delivery, as provided in the terms and conditions of the NIT, being relate to the inspections after awarding of the contract in favour of a bidder, to ensures manufacture of the required components or equipments in a validly licensed manufacturing unit having API specification 4F, the petitioner cannot contend that in view of such in built checks provided in the terms and conditions of the bid, the authority ought not to have rejected the bid of the petitioner on the ground of putting a condition. The learned senior counsel submits that the inspection as provided in the terms and conditions relates to the quality, control and not for verifying as to whether the manufacturing unit where the equipments or parts of the rigs have been manufactured have the valid API license with specification 4F for a continuous period of 10(ten) years before submission of the technical bids. That apart, the cost of such inspections is to be borne by the respondent OIL, which would be an additional financial burden and hence there is no reason as to why the respondent OIL would be exposed to such burden for the fault of the petitioner.
20. The learned senior counsel, referring to the deliberation during the Pre-Bid Conference held with the intending bidders on 28th and 29th September, 2010, has submitted that the petitioner in fact during the discussion in the Pre-Bid Conference requested for reduction of the period of API license with specification 4F from 10(ten) years to 5(five) years, which was rejected and as such, the petitioner knew that the equipments are to be manufactured only in the manufacturing unit having API license with specification 4F continuously for a period of 10(ten) years prior to submission of the technical bids. The petitioner despite participation in the Pre-Bid Conference and rejection of their offer for reduction of the period of API license with specification 4F did not even made any whisper in the writ petition relating to the same, thereby suppressing material facts, which itself disentitled the petitioner from getting the relief under Article 226 of the Constitution of India.
21. The learned senior counsel, relating to the submission of the petitioner that the respondent OIL could have, in respect of the said clause reserving the right to manufacture the rigs or any components in any manufacturing unit belonging to the petitioner, seek clarification from the petitioner instead of straightway rejecting the bid, has submitted that the same also cannot be accepted as Clause-14 of Section 20 of the general terms and conditions of the tender prohibits acceptance of any offer or modification to offers after the bid closing date and time. It has also been submitted that though the discretion under Clause-14.2 has been given to the respondent OIL to seek clarification from the bidder, the same has to be read alongwith Clause-8.0, which provides that the bids not complying with the OILs requirement may be rejected without seeking any clarification. The learned counsel further submits that it is within the discretion of the respondent OIL to seek clarification and if such discretion has been validly exercised by the OIL in not asking for any clarification without any malafide intention, the writ Court may not interferer with the decision of the respondent OIL not to exercise the discretion, more so, when it is obligatory on the part of the bidders to comply with the terms and conditions of the bid documents, who were informed that bids not complying with the OILs requirement may be rejected without asking for any clarification. According to the learned senior counsel, the petitioner, therefore, cannot, as a matter of right, claim that the respondent OIL must seek clarification relating to the said clause appended to the price bid.
22. The learned senior counsel further submits that the discretion exercised by the respondent OIL not to seek the clarification from the petitioner in the matter of the said clause cannot be termed as irrational or arbitrary, more so when there is no malafide alleged and such decision was taken by the respondent OIL having regard to the attending facts and circumstances. It has also been submitted that even assuming but not admitting that the respondent OIL in exercising its discretion should have asked the petitioner to clarify on the aforesaid clause, the petitioners bid being defective in not furnishing the price of all 63 major rig components, the petitioner in any case, is not entitled to any relief.
23. Mr. Choudhury further submits that the averments of the petitioner in the affidavit-in-reply filed against the affidavit-in-opposition of the respondent No.4 that the intention of the petitioner is to manufacture the rig components in Italy facility, in respect of which API license of specification 4F was submitted alongwith the tender documents, cannot be reconciled or accepted, in view of the specific condition put by the petitioner in the form of the said clause, in the price bid, reserving the right to manufacture the rig components in any of its facilities, which may be other than the facility at Italy. The learned senior counsel, therefore, submits that since the decision making process has not been vitiated by any arbitrary, irrational or unreasonable action on the part of the respondent authority, the petitioner is not entitled to any relief in exercise of the writ jurisdiction, more so, when it is a contractual matter.
24. Referring to the second ground, on which the petitioners bid was found to be non responsive, i.e. failure to mention the price of all 63 major rig components, in terms of Annexure-A4, it has been submitted that though the petitioner in the checklist appended to the technical bid informed the respondent authority about the companys policy of not disclosing the price of components and the petitioner was found to be technically responsive, it does not mean that the respondent OIL cannot reject the petitioners bid on the ground of violation of the conditions in the NIT, more particularly, of Clause-5 of the additional note appended to Section-20 of the bid documents, which provides that the bidders must indicate the price of all major rig components as specified under different Sections for drilling rig packages in the format furnished in Annexure-A4. It has also been submitted that in the bid format (summary) supplied to the bidders alongwith the communication dated 1st September, 2012, for submission of the fresh price bid, the bidders were informed to provide breakup of price alongwith the bid format furnished wherever specified in the original tender document and as such, the bidders are required to give the breakup of the price in respect of all 63 major rig components as specified in Annexure-A4 to the bid documents and hence, it does not fit in the mouth of the petitioner that by supplying the bid format on 1st September, 2012, the respondent OIL has given up the requirement of giving breakup of prices in respect of all 63 major rig components.
25. The learned counsel further submits that though in the technical checklist, the petitioner has mentioned about the companys policy of not disclosing the price of each of the major rig components and consequently in the first price bid submitted, the petitioner did not mention the price of any of the 63 major rig components, the petitioner, by conduct, has given up its policy of not disclosing the price of rig components, as in the fresh price bid submitted they have disclosed the price of 19 rig components, instead of 63 major rig components, which they are required to give in terms of Annexure-A4 to the bid documents. The learned senior counsel submits that the petitioners price bid being contrary to the terms and conditions of the bid documents, has rightly been rejected by the respondent OIL, as the petitioner having chosen to submit the bids, they must comply with all the mandatory requirements of the bid documents, which includes disclosure of the price of all 63 major rig components.
26. The learned senior counsel, referring to Clause-1.0 of Annexure-B to the bid documents, which provides the bid rejection criteria and bid evaluation criteria in respect of the commercial bids, submits that since the petitioner has failed to disclose the price of all 63 major rig components, in terms of Annexure-A4, the respondent authority has no alternative but to reject the commercial bid of the petitioner, as the said clause provides that the price bid must contain the price schedule and the bidders commercial terms and conditions and for its non compliance, the bid will be rejected. The learned senior counsel submits that Clause-1.0 has been violated by the petitioner in two ways, namely, by non conforming to Annexure-A4 of the bid documents and also by putting a condition, in the form of a clause reserving the right to manufacture the rig components in any of its facilities, which is not a commercial condition but a technical condition. The learned senior counsel further submits that during the Pre-Bid Conference, all the bidders were informed about the requirement of submission of the price bid in terms of Annexure-A4 to the bid documents by rejecting the contentions of the bidders including the petitioner to waive such requirement.
27. Referring to Clause 7.2.1 of the OILs Booklet for e-Procurement ICB Tenders, which were also made available to the bidders and applicable in the present process, informing the bidders, that they shall have to fill in completely all fields in the price schedule furnished in the bidding documents in respect of the items quoted, it has been submitted that despite that the petitioner has chosen to mention the prices of 19 components instead of 63 as required. The learned senior counsel submits that the respondent No.5, M/s BHEL, also though in the checklist of the technical bid informed the respondent OIL against its policy of non disclosure of the price of major rig components, it has, however, in the fresh price bid mentioned the price of all the 63 major rig components, as required by Annexure-A4 to the bid documents.
28. It has also been submitted that the requirements of having the price of all the 63 major components is for compliance of the International Financial Reporting System (IFRS) and for correct booking of capital expenditure and as such, it cannot be said that such condition is not mandatory requirement. It has also been submitted that the requirement of mentioning the price of all the 63 major equipments is also felt necessary by the respondent OIL, so that the bidders whose bid is ultimately accepted, in case of requirement of replacement of any major components, do not charge the high price, thereby avoiding unnecessary spending of public money. In any case, according to the learned counsel, since the bidder is bound to comply with the terms and conditions of the NIT, which includes furnishing the price of all 63 major equipments, the bid submitted by the petitioner cannot be accepted, as he has admittedly quoted the price of 19 components only.
29. Referring to the decisions cited by the learned senior counsel for the petitioner, it has been submitted by the learned senior counsel that those are not applicable in the facts and circumstances of the present case. It has also been submitted that as held by the Apex Court in Poddar Steel Corporation (supra) since the petitioner has failed to conform to the mandatory requirement of the bid documents, the petitioners bid has rightly been rejected by the respondent OIL. Referring to the decision of the Apex Court in Gursharan Singh and Anr. -Vs- New Delhi Municipal Committee and Ors. reported in (1996) 2 SCC 459, it has been submitted that the guarantee of equality before law being a positive concept, it cannot be enforced by a citizen or Court in a negative manner, i.e. if an illegality or irregularity has been committed in favour of any individual or a group of individuals, others cannot invoke the jurisdiction of the Court that the same irregularity or illegality be committed by the State or an authority within the meaning of Article 12 of the Constitution, so far such petitioners are concerned, on the reasoning that they have been denied the benefits, which have been extended to others although in an irregular or illegal manner, the petitioner cannot claim the relief in the present writ petition solely on the ground that the unsolicited communications from the respondent No.4 has been accepted by the respondent OIL, despite the stipulation in Clause-14 of the bid documents, when the petitioner itself is guilty of violation of the mandatory conditions of the bid documents.
30. Placing reliance on the decision of the Apex Court in Raunaq International Ltd. -Vs- I.V.R. Construction Ltd. and Ors. reported in (1999) 1 SCC 492, it has also been submitted that the price being not always the sole criteria for awarding the contract and the same being only one of the criterias, public interest does not require acceptance of the petitioners bid when its bid is defective being violative of the mandatory conditions of the bid documents and as such, it cannot be said that since the petitioners bid is found to be the lowest, his bid, irrespective of the violation of the mandatory requirements of the bid documents, must be accepted. The learned senior counsel further submits that as held by the Apex Court in Larsen and Toubro Ltd. and Anr. -Vs- Union of India and Ors. reported in (2011) 5 SCC 430, that after the price bid is opened, there cannot be any change of the offer of the bidders in any respect, the respondent OIL has not committed any illegality in not asking for clarification in respect of the aforesaid clause, reserving the right to manufacture the rig components in any of the petitioners unit other than the unit in respect of which the API license has been submitted, more so, when such a course of action is not permissible under the terms and conditions of the bid documents. The learned senior counsel referring to the decision in W.B. State Electricity Board -Vs- Patel Engineering Company Ltd. and Ors. reported in (2001) 2 SCC 451 submits that the best way to adhere to the transparency being to follow the tender conditions, the action on the part of the respondent OIL in rejecting the bid of the petitioner, cannot be termed as arbitrary, irrational or unreasonable, such action being to adhere the transparency in the decision making process.
31. The learned counsel placing reliance on the decisions of the Apex Court in Rajasthan Housing Board and Anr. -Vs- G.S. Investments and Anr. reported in (2007) 1 SCC 477 and in Siemens Public Communication Networks Private Ltd. and Anr. -Vs- Union of India and Anr. reported in (2008) 16 SCC 215, further submits that the scope of judicial review of the decision making process, in exercise of the power under Article 226 of the Constitution of India, being very limited, which is required to be exercised with great care and caution and only in furtherance of public interest and not on the ground of making out of a legal issue by the person seeking a writ and where two views are possible and no malafide or arbitrariness is alleged or shown, the High Court cannot interfere with the view taken by the authority in the commercial matter and if the decision of awarding the contract is bonafide and in public interest, the Court will not exercise the power of judicial review and interfere with the decision making process of the authority, even if it is accepted, for sake of argument, that there is a procedural lacuna. The learned counsel referring to the facts and circumstances of the instant case, has submitted that since it is admitted by the petitioner that they have not mentioned the price of all the 63 major rig components, which is a mandatory requirement, this Court may not interfere with the decision making process of the respondent OIL merely on the ground that the petitioner has offered the lowest price. The learned counsel, therefore, submits that the writ petition filed by the petitioner deserves dismissal.
32. Mr. Ganguly, learned senior counsel appearing for the respondent No.4, raising the question of maintainability of the writ petition supported by an affidavit filed by Shri Vamaraju Sree Satyamurti, has submitted that since the respondent No.4 has challenged the authority purportedly given by the petitioner in favour of said Sree Murti for filing the writ petition, it was incumbent on the part of the petitioner to produce such authority before this Court, when Sree Murti has claimed that he has been authorized by the petitioner to file the writ petition and to swear the affidavit, which having not been done, the writ petition supported by an affidavit by an unauthorized person deserves to be dismissed. It has also been submitted that Drillmec India Private Limited, of which Sree Murti claims to be the Director, being not a bidder in the bidding process, the writ petition filed with the affidavit of the Director of Drillmec deserves to be dismissed as not maintainable.
33. Referring to the corporate entity of the petitioner, it has also been submitted by the learned senior counsel that since the petitioner has claimed a right under Article 19(1)(g) as well as under Article 14 of the Constitution of India, the petitioner is not entitled to any relief, such protection of specific fundamental rights being only guaranteed to a natural person and not to corporate entities, as held by the Apex Court in State Trading Corporation of India Ltd. -Vs- Commissioner of Tax Officer and Ors. reported in (1964) 4 SCR 99; in Barium Chemicals Ltd. -Vs- Company Law Board reported in 1966 Supp SCR 311; in Divisional Forest Officer -Vs- Biswanath Tea Company Ltd. reported in (1981) 3 SCC 238. It has also been submitted that the petitioner being a foreign entity, registered in Italy, is not entitled to invoke the fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution of India and the writ petition being based on the claim of violation of the fundamental rights under Article 14 and 19(1)(g) of the Constitution of India, the same deserves to be dismissed. The learned senior counsel in support of his contention has placed reliance on the decision of the Apex Court in Indo-China Steam Navigation Co. Ltd. -Vs- Jasjit Singh, Addl. Collector of Customs reported in (1964) 6 SCC 594 as well as in British India Steam Navigation Co. Ltd. -Vs- Jasjit Singh, Addl. Collector of Customs reported in AIR 1964 SC 1451.
34. Mr. Ganguly further submits that the petitioner is not entitled to the discretionary relief under Article 226 of the Constitution of India, as it has suppressed material facts relating to the condition put by it in the price bid, reserving the right to manufacture and test the rig, or any part of them in any of its facility as per their availability at the time of awarding the contract, and also about non disclosure of the price of all 63 major rig components, as per the format Annexure-A4 to the bid documents. According to the learned counsel, had those facts been disclosed in the writ petition, the Court would not have passed an interim order, as has been passed in the instant case. The learned senior counsel submits that because of such suppression and consequent interim order passed, the entire project has suffered, thereby exposing the respondent OIL to financial loss, which in turn is against the public interest. The learned counsel in support of his contention has placed reliance on the judgments passed by the Apex Court in Prestige Lights Ltd. -Vs- State Bank of India reported in (2007) 8 SCC 449 as well as in Kishore Samrite -Vs- State of Uttar Pradesh and Ors. reported in (2013) 2 SCC 398.
35. On the merit of the writ petition, the learned senior counsel submits that since the respondent OIL has followed the transparent bidding process, the decision making process has not been vitiated warranting interference by this Court in exercise of the writ jurisdiction under Article 226 of the Constitution of India. It has been submitted that despite clear stipulation in the bid documents, in different clauses, intimating the bidders that in case of failure to furnish all the information may entail rejection without seeking any clarification and also despite the direction issued to submit the bids in the format only, the petitioner has put a condition reserving the right to manufacture the rig components in any of its manufacturing unit, that too in such a manner, which has the possibility of overlooking it, since there is no indication in the bid documents submitted by the petitioner relating to putting such condition in the price bid.
36. The learned senior counsel further submits that in the terms and conditions of the bid documents as well as during the Pre-Bid Conference of the bidders, which was attended by the petitioner also, the respondent OIL has informed all concerned about the requirement of disclosing the price of each of the 63 major rig components as per Annexure-A4 to the bid documents and the terms and conditions of the bid documents having stipulated that failure to furnish all the information, as required, would entail the rejection of the bids without any clarification, the petitioner cannot file writ petition claiming that its bid has to be accepted despite failure to furnish the price of each of the major 63 rig components as well as despite violation of the terms and conditions of the bid. The learned senior counsel submits that the requirement to furnish the price of all the 63 major components is not a empty formality so as to render such requirement as non essential as contended by the petitioner, as, such requirement was in conformity with the International Financial Reporting System (IFRS) as well as the accounting system, which is also a relevant factor in taking a decision by the respondent OIL relating to the bidder in whose favour the contract has to be awarded. The learned counsel submits that though normally the lowest bidder is to be preferred in public interest, such principle applies when the bidder fulfills the condition of bid. The learned senior counsel submits that in the instant case, the petitioner having violated the conditions of the bid, cannot clam that it should be awarded with the contract solely on the ground that it has quoted the lowest price. The learned senior counsel further submits that the public interest requires adherence to the rules and conditions of the NIT and merely because the bid was lowest, the requirement of the compliance of the conditions of the bid cannot be ignored.
37. Mr. Ganguly also submits that in the instant case, it is being an international bidding, which is highly competitive, and the nature of work being highly technical and very high degree of care and meticulous adherence to the requirement of bid is inherent in such bidding and as the petitioner admittedly having violated the terms and conditions of the bid document, they are not entitled to the relief as claimed in the writ petition. The learned senior counsel in support of his contention has placed reliance on the decisions of the Apex Court in W.B. State Electricity Board -Vs- Patel Engineering Co. Ltd. and Ors. reported in (2001) 2 SCC 451 and in Siemens Public Communication Networks Private Ltd. (supra).
38. The learned senior counsel further submits that it is apparent from the stipulation in the bid documents that the respondent OIL had decided to purchase the rigs manufactured by only those manufactures, who has valid license of API specification 4F and that too for not less than 10(ten) years continuously without any break preceding the technical bid opening date. In the instant case, as the petitioner, by putting a condition in the price bid, has reserved the right to manufacture the rig components in any of the manufacturing unit, other than the manufacturing unit in respect of which such API license with specification 4F has been submitted alongwith the bid documents, which condition relates to the technical bid, has violated the technical qualification, which a bidder must have. Such condition, submitted by the learned counsel, also violates the terms and conditions of the bid. The petitioner in fact has stipulated an additional condition in the price bid and if such condition was put in the technical bid its bid would have been non responsive technically and rejected and as such, the respondent OIL has not taken any arbitrary, irrational or unreasonable decision to reject the bid of the petitioner.
39. The learned senior counsel, referring to the submissions advanced by the learned senior counsel for the petitioner claiming that the respondent OIL ought to have sought clarification from the petitioner on the aforesaid conditions put in the price bid as well as non disclosure of the prices of 63 major rig components, submits that by Clause-4.2 as well as Clause-8 of the bid documents all the bidders have been informed that if they do not conform to the OILs terms and conditions and the bid evaluation criteria, the bid of such bidders may be rejected without seeking any clarification. The learned senior counsel submits that though in Clause-14.2 of the bid documents, the respondent OIL reserves the right to get the clarification from the bidders, the petitioner having violated the terms and conditions of the bid cannot claim a right that despite violation of the terms and conditions, the OIL is duty bound to seek clarification on such violation. It has also been submitted that, in any case, the respondent OIL cannot seek clarification on such violation of the terms and conditions, as it would amount to treating other bidders unfairly, who have submitted their bids in full compliance of the terms and conditions of the bid documents and it would also be in violation of the requirement of adoption of fair and transparent procedure in the bidding process.
40. The learned senior counsel further submits that the petitioner being at fault and having not complied with the terms and conditions of the bid documents, cannot claim a right. It has also been submitted that as the respondent OIL has not rejected the technical bid of the petitioner at the threshold, even though they have disclosed in the checklist that it is against their policy to disclose the price of the rig components, the petitioner cannot claim a right flowing from a mistake committed by the respondent OIL in not rejecting the technical bid of the petitioner at the threshold, as the mistake does not confer any right on the parties, more so when such mistake can be corrected at any subsequent stage. The learned senior counsel in support of his contention has placed reliance on the judgment of the Apex Court in Union of India -Vs- S.R. Dhingra and Ors. reported in (2008) 2 SCC 229. The learned counsel referring to the decision of the Apex Court in Poddar Steel Corporation (supra) and in B.S.N. Joshi and Sons Ltd. -Vs- Nair Coal Services Ltd. and Ors. reported in (2006) 11 SCC 548 further submits that essential conditions of the bid documents must be adhered to and the authority issuing the tender is required to enforce such conditions rigidly and in case of non adherence, the contract cannot be awarded to a bidder, whose bid is otherwise lowest.
41. Countering the pleadings of the petitioner that the rigs supplied by the respondent No.4 are not working well, it has been submitted by the learned senior counsel for the respondent No.4 that the respondent/ OIL never at any point of time informed the petitioner that the rig supplied by them are not working well and, on the other hand, the respondent OIL has taken a stand that the rigs supplied are working well. The learned senior counsel submits that such an aspersion on the respondent No.4 is not at all warranted, the same having no basis on the facts.
42. The learned senior counsel also submits that the scope of judicial review of the commercial decision being very limited, which is available only when the process adopted or decision made by the authority is malafide or intended to favour someone or when the process adopted or decision made is so arbitrary and irrational that no responsible authority acting reasonably should have reach such decision and such decision affects the public interest, the petitioner is not entitled to the relief claimed in the writ petition as the petitioner has claimed that the contract is to be awarded even if they have violated the terms and conditions of the bid documents. It has also been submitted that merely because a legal point is made out, the writ Court will not exercise the writ jurisdiction in commercial contract, which jurisdiction is to be exercised with great caution and only in furtherance of public interest. It has also been submitted that unless the decision making process is contrary to law or actuated by malice or suffers from consideration of irrelevant materials, the writ Court would not exercise its jurisdiction under Article 226 of the Constitution, that too at the instance of a bidder, who admittedly has not submitted the bid complying with the terms and conditions of the bid document. The learned senior counsel, therefore, submits that the writ petition deserves to be dismissed with compensatory costs. The learned counsel in support of his contention has placed reliance on the decision of the Apex Court in Tata Cellular (supra); in Air India Ltd. -Vs- Cochin International Airport Ltd. and Ors. reported in (2000) 2 SCC 617; in Centre for Public Interest Litigation and Anr. -Vs- Union of India and Ors. reported in (2000) 8 SCC 606; in Jagdish Mandal (supra) as well as in Arun Kumar Agarwal -Vs- Union of India and Ors. Writ Petition (C) No.69/2012. decided on 9th May, 2013.
43. Mr. Goswami, learned senior counsel for the petitioner in reply to the submissions advanced by the learned counsel appearing for the respondents and referring to the first and the third grounds, on which the petitioners bid has been rejected by the respondent OIL, reiterating his earlier submission, has submitted that even the LMC in the proceedings dated 13th October, 2012 as well as on 1st November, 2012 recommended to have the clarification as provided in the terms and conditions of the bid. It has further been submitted that the petitioners bid has been rejected, as is apparent from the aforesaid proceedings of the LMC, based on the unsolicited communications issued by the respondent No.4. The respondent OIL, though, never at any point of time was inclined to reject the bid of the petitioner on those ground, as the petitioner has made known the respondent OIL that it will abide by its undertaking earlier given for strict compliance of all the tender conditions including the manufacture of the aforesaid rig components in its Italy unit, it has taken the decision to do no at the instance of the respondent No.4 submits the learned counsel.
44. The learned senior counsel submits that the CBC has taken a conscious decision to open of the price bid of the petitioner as well as of M/s BHEL, the respondent No.5, despite non disclosure of the price of individual 63 major rig components, and not to reject the offer of the petitioner on the aforesaid grounds, based on the recommendation of the LMC meeting held on 1st November, 2012 opining that the Drillmec specifically confirmed during clarification of the technical bid that the mast and sub-structure and the other drilling equipments requiring API monogram would be built in Italy and the breakup of cost of major rig components being required for accounting purpose to comply with IFRS. The learned senior counsel further submits that in the said meeting of the LMC, it has also been pointed out that requirement of the disclosure of the breakup of cost of major rig components is a non essential condition, which view the CBC in its 430th meeting, however, did not at all consider and took the decision to reject the offer of the petitioner only on the opinion of the Law Officer of the Union of India, without considering all relevant materials including the minutes of the LMCs and without arriving at its independent decision.
45. It has also been submitted that since the LMC in its proceedings dated 13th October, 2012 as well as 1st November, 2012 recommended to obtain the clarification of the doubt, which according to the LMC, has created because of the condition put by the petitioner in the price bid, reserving the right to manufacture the equipments in any of its unit, the respondent OIL ought to have exercise the discretion of have clarification, as stipulated in the terms and conditions of the bid, in case it had any doubt that the petitioner would manufacture those equipments in a non API certified manufacturing unit, keeping in mind the difference of the price quoted by the petitioner and the respondent No.4 as well as the time, the respondent OIL has already consumed since the date of issuance of the global tender, more so when in the earlier stage of the process, clarifications were sought for and furnished by different bidders on some other issues. According to the learned senior counsel no further clarification in fact was required as the LMC in its proceeding dated 1st November, 2012 recorded that the petitioner confirmed during clarification of technical bid that the mast and sub-structure and other drilling equipments requiring API manufacture would be built in Italy in respect of which API license with specification 4F was submitted alongwith the tender documents. The learned senior counsel submits that the entire action on the part of the respondent OIL was directed to show undue favour and to award the contract in favour of the respondent No.4 by ignoring the legitimate bid of the petitioner.
46. Referring to the submissions advanced by the learned senior counsel for the respondent No.4, questing the maintainability of the writ petition, it has been submitted by the learned senior counsel that since the petitioner has challenged the decision making process of awarding the contract in favour of the respondent No.4, it cannot be said that the petitioner is not entitled to the relief it being a foreign company. The learned senior counsel also submits that the respondent No.4, for the first time, alongwith the written submission advanced has filed certain documents in support of the contention that the person swearing the affidavit has not been authorized to swear the affidavit on behalf of the petitioner, which is a foreign company, even though the petitioner in its affidavits has specifically stated about the authorization of the deponent to swear the affidavit on behalf of the petitioner. The learned senior counsel further submits that the affidavit supporting the facts narrated in the writ petition can be sworn by any person, who is conversant with the facts of the case and since the deponent, who has been authorized to represent the petitioner on their behalf pertaining to all matters relating to the global tender in question as well as subsequent fresh price bid and accordingly participated in all the proceeding and represented the petitioner in all the stages of such tender process, he is competent to swear the affidavit being conversant with the facts and having authorized by the petitioner. Referring to documents filed by the respondent No.4, during the course of argument, it has also been submitted that Drillmec India Private Limited, of which the deponent is a Director, has shareholding in the petitioner Company and Drillmec India Private Limited in the meeting of the Board of Directors held on 7th January, 2013, has authorized the deponent, Mr. Murti and another Director, to deal with the matters regarding the global tender issued by the respondent OIL and hence, it cannot be said that the deponent has not been authorized to swear the affidavit.
47. The learned senior counsel further submits that the submissions made by the learned counsel for the respondent No.4 that the writ petition suffers from the vice of the suppression of material facts, is misplaced, as the petitioner has filed the writ petition seeking the reliefs at a stage when they were kept in dark by the respondent OIL relating to the award of contract and also never at any point of time were informed about the grounds on which their bids were rejected, prior to filing of the affidavit-in-opposition by the respondent OIL in the writ petition. It has, therefore, been submitted that such submission of the learned senior counsel for the respondent No.4 does not deserve any consideration.
48. Before proceeding to deal with the merit of the case, I propose to consider the plea of maintainability of the writ petition raised by the respondent No.4.
49. The maintainability of the writ petition has been questioned on the following 3(three) grounds:-
(i) Competence of Shri Vamaraju Sree Satyamurthy to swear the affidavit in support of the writ petition and to maintain the same on behalf of the writ petitioner Drillmec SpA;
(ii) The writ petitioner being a foreign entity, registered in Italy, which is a corporate entity, being not entitled to invoke the fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution of India, cannot maintain the writ petition; and
(iii) The writ petition suffers from gross suppression of material facts.
50. Rule 1 of Chapter V-A of the Gauhati High Court Rules provides that an application for a direction or order or writ under Article 226 of the Constitution of India, other than writ of habeas corpus, shall be drawn in the form contained in the Schedule to that Chapter and shall be accompanied by an affidavit verifying the facts relied upon. Rule 7 of Chapter-IV of the said Rules provides that the facts stated in the application shall be verified by the solemn affirmation of the applicant or by an affidavit to be annexed to the application. Note appended to Rule 7 stipulates that such affidavit may be by any person having cognizance of the facts stated. It also provides that several persons may join in the affidavit, each deposing separately to the facts, which are within their own knowledge.
51. The word âcognizance has not been defined in the said Rules. In Webster's Encyclopedic Unabridged Dictionary (new revised edition), the meaning of the word âcognizance is given as âknowledge, notice, perception. In Blacks Law Dictionary (Seventh Edition) meaning of the word âcognizance is given as acknowledgment or admission of an alleged fact. A person, therefore, who has the knowledge, notice or perception of facts narrated in the writ petition, can swear the affidavit in support of the writ petition filed.
52. In the instant case, the writ petition filed by the Drillmec S.p.A. is supported by an affidavit filed by Mr. Murthy claiming to be the Director of Drillmec India Private Limited and duly authorized to represent the petitioner and to swear the affidavit. The petitioner, in reply to the affidavit filed by the respondent No.4, questioning the authority of Mr. Murthy to swear the affidavit, has stated that he is the Director of Drillmec India Private Limited, which works in collaboration of the petitioner Company, which has the equity participation in Drillmec India Private Limited and has been duly authorized to represent the petitioner in the case. The respondent No.4 in support of the contention that the petitioner has no equity participation with the Drillmec India Private Limited, has filed a document issued by the Ministry of Cooperate Affairs, Government of India as well as a certificate issued by a Company Secretary, containing the names of the shareholders of Drillmec India Private Limited, alongwith the written submission filed, without, however, filing any affidavit in support of those documents, though required to be filed. Those documents having been filed during the course of argument by the respondent No.4 and without any supporting affidavit as well as after the hearing of arguments of the petitioner was over, normally should not be taken into consideration in support of an issue raised by any parties to the proceeding. I am, however, not proposing to reject those documents on that ground. The petitioner during the reply argument advanced has also produced 2(two) documents, i.e. a certificate issued by the petitioner Drillmec S.p.A. authorizing Drillmec India Private Limited to represent them on their behalf pertaining to all matters related to the global tender issued by the respondent OIL and the resolution adopted by the Board of Directors of Drillmec India Private Limited in its proceeding dated 7th January, 2013 authorizing Mr. Murthy to deal with the matters relating to the respondent OILs aforesaid tender submitted by Drillmec S.p.A, as per the authority given by the petitioner. From the aforesaid 2(two) documents it, therefore, appears that the petitioner Drillmec S.p.A. has authorized Drillmec India Private Limited to represent them on their behalf in all matters pertaining to the aforesaid global tender issued by the respondent OIL, which Company in turn has authorized Mr. Murthy to deal with the matters relating to the said global tender, by virtue of which Mr. Murthy has filed the affidavit in support of the petition filed by the petitioner Drillmec S.p.A. Mr. Murthy has also claimed that he is acquainted with the facts and circumstances of the case, which has not been disputed by the respondent No.4. Hence, Mr. Murthy, who is conversant with the facts and circumstances relating to the global tender issued by the respondent OIL, has the competence to swear the affidavit supporting the pleadings in the writ petition. Therefore, the first objection raised by the respondent No.4 relating to the maintainability of the writ petition cannot be sustained.
53. The respondent No.4 has also questioned the maintainability of the petition filed by the petitioner Drillmec S.p.A. on the ground that the same being a foreign corporate entity is not entitled to invoke the fundamental rights guaranteed under Articles 14 and 19 of the Constitution of India, in support of which reliance has been placed in the Apex Court judgments in State Trading Corporation of India Ltd. (supra); Barium Chemicals Ltd. (supra); Biswanath Tea Company Ltd. (supra); Indo China Steam Navigation Co. Ltd. (supra) and British India Steam Navigation Co. Ltd. (supra).
54. The petitioner is a foreign corporate entity, who has filed the petition challenging the decision making process of awarding the contract, and at a stage when they were not informed about the outcome of the tender submitted by them alongwith the respondent Nos.4 and 5 and also about the grounds of rejection of their tender. The petitioner has claimed that the decision making process has been vitiated because of non adherence to the terms and conditions of the bid, and not claiming fundamental right as guaranteed to a citizen under Article 19 of the Constitution of India.
55. Article 14 of the Constitution, which confers the right of equality before law, unlike Article 19 of the Constitution, secures a right to âany person of equality before law and equal protection of law within the territory of India, which right cannot be denied by the State. While under Article 14, such right is protected to any person, in Article 19, the rights mentioned therein is protected to the citizens of the country only and not to any person.
56. In State Trading Corporation of India Ltd. (supra), the question, which arose for consideration by the Apex Court was whether the said Corporation can maintain a writ petition under Article 32 of the Constitution of India for enforcement of the fundamental right under Article 19 of the Constitution. A 9(nine) Judges Bench of the Apex Court in the said case has, upon consideration of the provisions of Part-III of the Constitution, held that the makers of the Constitution deliberately and advisedly made a clear distinction between the fundamental rights available to âany person and those guaranteed to âall citizens and since the right under Article 19 of the Constitution is available to the citizens only, the same cannot be enforced by a corporation, it is being not a natural person but a juristic person. The Apex Court in the said case has not held that the right under Article 14 of the Constitution cannot be invoked by a corporation, as submitted by the learned senior counsel for the respondent No.4. On the other hand, having regard to use of the expression âcitizen and âany person in different provisions of Part-III of the Constitution, it has been held that the most reasonable view to take of the provisions of the Constitution is to say that whenever any particular right was to be enjoyed by a citizen of India, the Constitution takes care to use the expression âany citizen or âall citizens in clear contradiction to those rights, which were to be enjoyed by all, irrespective of whether they are citizens or aliens, or whether they were natural persons or juristic persons.
57. A constitutional Bench of the Apex Court in Barium Chemicals Ltd. (supra) placing reliance on the State Trading Corporation of India Ltd. (supra) reiterated the said proposition of law that the Company or the Corporation being not a citizen has no fundamental right under Article 19 of the Constitution. The same view has also been taken by the Apex Court in Biswanath Tea Company Ltd. (supra). In Indo-China Steam Navigation Co. Ltd. (supra), a constitutional Bench of the Apex Court, while considering the penal action taken against the appellant before it, under the provisions of the Sea Customs Act, 1878, has held that a foreign company, being not a citizen within the meaning of Article 19 of the Constitution is not entitled to claim the benefit of the said provision, as such right is guaranteed only to the citizens of India. In the said case, the Apex Court has also held that, the plea that mens rea being not regarded as an essential element of Section 52-A of the Sea Customs Act the said provision would be ultra vires Articles 14, 19 and 31(1) of the Constitution and as such unconstitutional and invalid, cannot be sustained for the simple reason that in supporting the said pleas, inevitably the appellant has to fall back upon the fundamental right guaranteed by Article 19(1)(f) of the Constitution. The Apex Court has further held that certain rights guaranteed to the citizens of India under Article 19 are not available to the foreigners and pleas which may successfully be raised by the citizens on the strength of the said rights guaranteed under Article 19 would be not available to the non-citizens. In British India Steam Navigation Co. Ltd. (supra), another constitutional Bench of the Apex Court, referring to the decision in the State Trading Corporation of India Ltd. (supra), has also held that a foreign company being not a citizen of India is not entitled to claim the right under Article 19(1) of the Constitution of India.
58. From the aforesaid decisions, on which the learned senior counsel for the respondent No.4 has placed reliance in support of the contention that the petitioner being a foreign entity cannot maintain a writ petition for violation of the right under Articles 14, 19 and 21 of the Constitution of India, it, therefore, transpires that the foreign company being not a natural person, but a juristic person, cannot maintain a writ petition for enforcement of certain rights guaranteed to a citizen under Part-III of the Constitution of India, like the right under Article 19(1) of the Constitution, which specifically provides that those rights are available to the âcitizen, unlike the rights under Article 14, which is available to âany person. The Corporation including the foreign entity, however, also cannot maintain a writ petition alleging violation of the right under Article 14 of the Constitution of India if, to be successful in such plea, such Corporation including the foreign entity has to fall back upon the fundamental right guaranteed under Article 19(1) of the Constitution.
59. The petitioner, which is a foreign company, as noticed above, has filed the present petition challenging the decision making process on the ground of violation of the terms and conditions of the bids as well as non maintenance of the transparent, fair and open procedure resulting in arbitrariness and unreasonableness in action, within the meaning of Article 14 of the Constitution, therefore, can maintain the writ petition. Hence, the second ground of challenge to the maintainability of the writ petition also cannot be sustained.
60. The third ground of maintainability, as raised by the respondent No.4, is relating to the suppression of the material facts. According to the respondent No.4, the petitioner in the writ petition did not disclose about putting a condition in the price bid reserving the right to manufacture the rig components in any of its facility available at the time of awarding the contract as well as non furnishing the price of 63 major rig components, in terms of Annexure-A4 of the bid documents, thereby suppressed those material facts and had those facts been disclosed, the writ Court would not have entertain the writ petition and pass an interim order and hence, the writ petition suffers from the vice of suppression of material facts.
61. Material facts are those primary facts, material to the party pleading, which must be pleaded by a party to establish the existence of a cause of action. The relief claimed under Article 226 of the Constitution of India being discretionary and equitable relief, the writ Court naturally would dismiss a writ petition in case of suppression of material facts or pleading of twisted facts, as the person claiming such relief is required to approach the Court with clean hands, as held by the Apex Court in Kishore Samrite (supra) and Prestige Lights Ltd. (supra).
62. In the instant case, as discussed above, the petitioner was not informed about rejection of its bid, not to speak of disclosure of the grounds thereof. The petitioner has filed the writ petition claiming strict adherence of the terms and conditions of the bid and to award the contract, having regard to the lowest bid offered by it, contending inter alia that despite such bid submitted by them, the respondent OIL did not inform them anything and instead was pursuing negotiation with the respondent No.4. They having not been informed about the outcome of the tender process initiated as well as the grounds for rejection of their bid, their petition cannot be dismissed on the ground that the aforesaid facts have not been pleaded in the writ petition. The respondent Nos.1 to 3 in their affidavit-in-opposition filed, for the first time, has disclosed the factum of rejection of the bid as well as the grounds of such rejection. Had the petitioner been informed about the rejection of the bid, even without disclosing the ground therefor, the writ petition would have suffered from vice of suppression of material facts, had, the stipulation relating to incorporation of a clause reserving the right to manufacture the rig components in any of its facility available at the time of the contract as well as non furnishing the price of 63 major rig components, not been pleaded in the writ petition, which being not the case in hand, the third ground of maintainability also stands rejected.
63. Having held that the writ petition is maintainable, I shall now proceed to deal with the scope of judicial review, under Article 226 of the Constitution of India, in contractual matters.
64. A contract being a commercial transaction, evaluation of tender and awarding the contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If a decision relating to the award of contract is bonafide and is in public interest, the Courts will not, normally, in exercise of its power of judicial review, interfere even if procedural abrasion or error in assessment or prejudice to a tenderer is made out. The Court while exercising the power of judicial review is also required to bear in mind the public interest. If any process initiated by the State or its instrumentality is not transparent, fair and open and if the decision making process is vitiated by arbitrariness in action or unreasonable or malafide, such decision making process can no doubt be interfered with by the High Court in exercise of the power of judicial review. The State or its instrumentalities or agencies are bound to adhere to the norms, standards and the procedures laid down by them, in the matter of distribution of State largesse and cannot be allowed to depart therefrom arbitrarily. However, the Court should be slow in interfering with the decision making process in exercise of its discretionary power under Article 226 of the Constitution, unless it requires in furtherance of public interest. This view has been taken by me in Sterlite Technologies Ltd. (supra) placing reliance on various judicial pronouncements of the Apex Court including in Air India Ltd. (supra), Monarch Infrastructure (P) Ltd. (supra) and Siemens Public Communication Networks Pvt. Ltd. (supra).
65. The State or its instrumentalities though has freedom of contract, its decision can be tested by the application of the Wednesburys principle of reasonableness and if such decision is not free from arbitrariness or affected by the bias or actuated by malafide, such decision can no doubt be interfered with by the Court in exercise of the power of judicial review.
66. The Apex Court in a recent judgment in Michigan Rubber (India) Ltd. -Vs- State of Karnataka and Ors. reported in (2012) 8 SCC 216, taking into account its earlier decisions including the decisions in Tata Cellular (supra); Raunaq International Ltd. (supra) and Jagdish Mandal (supra) has restated the nature and scope of judicial review of the contractual matter awarding the contract by the Government or its instrumentalities. It has been held that the basic requirement of Article 14 of the Constitution being fairness in action by the State or its instrumentalities and the non arbitrariness being in essence and substance of the heartbeat of fairplay, these actions are amenable to judicial review only to the extent that the State or its instrumentalities must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities. It has further been held that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, interference by the Court is very restrictive since no person can claim a fundamental right to carry on business with the Government. In paragraph 24 of the said report, the Apex Court has laid down the following test, in the matter of interfering in tender or contractual matter, in exercise of the power of judicial review-
(i) whether the process adopted or made by the authority is malafide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the Court can say: the decision is such that no reasonable authority acting reasonably and in accordance with the relevant law could have reach? and
(ii) whether the public interest is affected.
If the answers to the aforesaid test are in negative then there should be no interference under Article 226 of the Constitution of India.
67. The Apex Court, in the said case, referring to the limitations relating to the scope of judicial review of administrative decision and the exercise of the power of awarding contract and the need to find out a right balance between the administrative discretion to decide the matters onto the one hand and the need to remedy any unfairness on the other hand, reiterates that:-
(1) The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The Court does not have the expertise to correct the administrative action. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury Principle of reasonableness (including its other facets pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. It has also been observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied.
68. In Centre for Public Interest Litigation (supra), the Apex Court has held that in a matter when, while accepting the bid offered, the authority is required to take into consideration various factors like commercial/technical aspect, prevailing market condition, both national and international and immediate needs of the country etc., the Court should not interfere unless it is satisfied that the allegations levelled are unassailable and there could be no doubt as to the unreasonableness, malafide, collateral considerations. The same view has been reiterated by the Apex Court in Arun Kumar Agarwal (supra) by observing that in the matters relating to the economic issues, there being always an element of trial and error, so long as the trial and error bonafide and with best intention, such decision cannot be questioned as arbitrary, capricious and illegal.
69. In Larsen and Toubro Ltd. (supra) the Apex Court reiterating its earlier view expressed in Ramana Dayaram Shetty -Vs- International Airport Authority of India and Ors. reported in (1979) 3 SCC 489., has opined that the standard of eligibility laid down in the notice for tenders cannot be changed arbitrarily as that would be hit by the provisions of Article 14 of the Constitution and the executive authority has to rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation. In the said case the issue was whether a bidder could amend its bid by withdrawing a condition of the bid document, whereby the bid was considered to be non-responsive. The second issue was whether a bidder would be entitled to contend that a non-responsive bid be treated as responsive since the offending condition was withdrawn after the bid documents had been opened. The Apex Court having regard to the opinion expressed in Ramana Dayaram Shetty (supra) has answered those issues in negative.
70. The Apex Court in Gursharan Singh (supra) has held that equality before law as guaranteed by Article 14, is a positive concept and it cannot be enforced by a citizen or court in a negative manner. It has been observed that if an illegality or irregularity has been committed in favour of any individual or a group of individuals, others cannot invoke the jurisdiction of the High Court or of the Supreme Court, that the same irregularity or illegality be committed by the State or an authority which can be held to be a State within the meaning of Article 12 of the Constitution, so far such petitioners are concerned, on the reasoning that they have been denied the benefits which have been extended to others although in an irregular or illegal manner. In S.N. Dhingra (supra), the same view has been taken by the Apex Court observing that the mistake committed by the authority does not confer any right to any party, which mistake can be corrected subsequently.
71. In Indian Railway Catering and Tourism Corporation Ltd. (supra), the Apex Court placing reliance in Tata Cellular (supra) and following the decision in West Bengal State Electricity Board as well as referring to the decision in Jagdish Mandal (supra) has held that a tender cannot be rejected on a ground, in the absence of any express stipulation in the instruction to the bidders or special terms and conditions that the tender can be rejected for breach of such essential terms.
72. In Meerut Development Authority (supra), the Apex Court following its earlier decisions including the decision in Tata Cellular (supra); Air India Ltd. (supra) well as Directorate of Education (supra) has held that the bidders participating in the tender process has no right, except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by the interested persons in response to Notice Inviting Tender in a transparent manner and free from hidden agenda. It has further been held that the terms and conditions of the tender, except for the aforesaid ground, the reason being the terms of the invitation to tender are in the realm of the contract, cannot be challenged. The Apex Court further held that no bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of the notice so provided for such negotiation. It has also been held that the method to be adopted for disposal of the public property must be fair and transparent, providing all the opportunities to the person participated in the said process. Relating to the scope of judicial review in contractual matters, it has been held that while the Court cannot sit over the decision of the authority as appellate authority, it can certainly examine whether the decision making process was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution of India. The same view has also been reiterated in Rajasthan Housing Board (supra).
73. Having noticed the aforesaid judicial pronouncements on the scope of judicial review, in exercise of the jurisdiction under Article 226 of the Constitution of India, in contractual matter, I shall now proceed to deal with the grounds on which the bid of the petitioner has been rejected and whether the decision making process of the respondent OIL is in conformity with the terms and conditions of the bid document as well as the equality clause enshrined in Article 14 of the Constitution.
74. The petitioners bid, as disclosed by the respondent OIL in the affidavit-in-opposition filed on 24th January, 2013, has been rejected on the following 3(three) grounds:-
(i) Insertion of the clause- Drillmec reserved the right to manufacture and test the rigs, or part of them, in any of its facilities, which belong to us as per their availability at the time of contract awarding- in the fresh price bid, in violation of Clause-1 of Bid Rejection Criteria (Commercial);
(ii) Disclosure of composite price of only 19 major rig components against the tender requirement of 63 major rig components, in the format Annexure-A4 and as prescribed in the price bid format, thereby contravening the mandate of the bid documents; and
(iii) Inability of the respondent OIL to determine whether or not the API license with specification 4F submitted by petitioner alongwith the tender document covers the other facilities of the petitioner, where it reserves the right of manufacture and test the rigs.
75. The respondent OIL, in the global tender notice issued in the month of August, 2010, has informed all the intending bidders that the tender would be governed by the general terms and conditions for e-procurement as per the OILs Booklet. The bidders were also informed by the said notice, about the details of the technical requirements, apart from the general instructions/notes to the bidders in Section 20 thereof. Bid Rejection Criteria and Bid Evaluation Criteria have also been spelt out in Annexure-B to the said tender notice, detailing when and under what circumstances, the bid of a bidder can be rejected and also the parameters of bid evaluation. The respondent OIL having stipulated the criteria for rejection and evaluation of bids, the rejection of bids has to be only on the ground(s) stipulated therein.
76. The Bid Rejection Criteria stipulates that the bids must conform generally to the specification and terms as well as the conditions laid down in the tender. Bids, which do not conform to the required parameters stipulated in the technical specifications, will be rejected. It is also stipulated that the requirements, stipulated in the Bid Rejection Criteria, both technical and commercial, will have to be met by the bidders, without which the same shall be considered as non responsive and would be rejected. Clause-14 of the Bid Rejection Criteria (Technical) provides for submission of bids by the manufacturers of the rig package or their duly authorized d