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2019 Supreme(Cal) 754
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
SHAMPA SARKAR, J.
Medium Packaging Pvt. Ltd. - Petitioner
Versus
Indian Oil Corporation Limited & Others - Respondent
W.P. No. 1591 (W) of 2019
Decided On : 01-10-2019
For the Petitioner:Mainak Bose, Suvadeep Sen, Sumit Mondal, Advocates.
For the Respondents:S.N. Mookherjee, Soumya Mazumdar, Sharmistha Ghosh, S. Bhattacharya, V. Chatterjee, Joydeep Kar, Lokenath Chatterjee, Jaydeb Ghorai, Suman Chatterjee, Advocates.
The authority of the tender evaluation committee to assess the eligibility of bidders and the limited scope of judicial review in contractual matters.
Headnote:
Tender Process - Companies Act, 1956 - 1.4, 1.6, 1.8, 3.2, 3.2, 5.1.1, 5.4, 5.6, 6, 7, 10, 12 - The court discussed the eligibility of the respondent No.6 to participate in the tender process and the award of the contract. The judgment highlighted the transfer of assets, liabilities, and work experience from Bharat Barrels to the respondent No.6 as per the scheme of demerger under the Companies Act, 1956. The court emphasized the authority of the tender evaluation committee to assess the eligibility of bidders and the limited scope of judicial review in contractual matters.
Fact of the Case:
The petitioner, a company under the Companies Act, 1956, contested the non-consideration of their bid in a tender process and the subsequent award of the contract to the respondent No.6. The petitioner alleged that the respondent No.6 did not meet the technical qualifications and that the decision to award the contract was arbitrary, discriminatory, and biased.
Finding of the Court:
The court found that the respondent No.6 was entitled to claim the work experience of Bharat Barrels as its own, as per the scheme of demerger under the Companies Act, 1956. The court held that the decision of the tender evaluation committee was reasonable and not affected by bias or mala fide. The court dismissed the writ petition, stating that there was no illegality or arbitrariness in the decision of the Indian Oil Corporation Limited (IOCL) to award the contract to the respondent No.6.
Issues: The eligibility of the respondent No.6 to participate in the tender process, the transfer of assets and work experience from Bharat Barrels to the respondent No.6, and the fairness of the decision to award the contract.
Ratio Decidendi: The court emphasized the authority of the tender evaluation committee to assess the eligibility of bidders and the limited scope of judicial review in contractual matters. The court held that the decision of the tender evaluation committee was reasonable and not affected by bias or mala fide.
Final Decision: The court dismissed the writ petition, stating that there was no illegality or arbitrariness in the decision of IOCL to award the contract to the respondent No.6.
JUDGMENT :
1. The petitioner is a company incorporated under the Companies Act, 1956.
The petitioner carries on business of fabrication, manufacturing and supply of iron and steel drums/barrels. The petitioner was supplying drums to Haldia Refinery of the Indian Oil Corporation Limited (hereinafter referred to as IOCL).
The said contract was valid till May 2019. The IOCL issued a Notice Inviting e-Tender (hereinafter referred to as the NIT), on July 24, 2018.
The last date for submission was September 12, 2018.
The techno commercial bid was opened on September 15, 2018.
The list of bidders who were successful in the techno commercial bid was uploaded on December 19, 2018. They were the petitioner, one M/s. Zetadel Technology Private Limited, Steel Barrel Private Limited, the respondent No.6 and Pearson Drums and Barrels Private Limited, the respondent No.7. The financial bid/price bids were opened on December 20, 2018 and the L-1 price was Rs.5,25,21,000/-.
Consequent, a reverse auction was carried out on December 24, 2018. The petitioner's name was not included in the list of qualified bidders eligible to participate in the reverse auction. The petitioner was auto rejected by the system being the H-1 bidder. The respondent No.6 was the L-1, the respondent NO.7 was L-2 and M/s. Zetadel Technology Private Limited was L-3, even after the reverse auction.
2. Aggrieved by non-consideration of the petitioner at the reverse auction stage, and further aggrieved by the decision of the IOCL in considering the respondent No.6, technically eligible to participate in the tender process, this writ petition has been filed.
3. By an order dated February 19, 2019, the writ petition was admitted for hearing with a direction for exchange of affidavits. As no interim order was passed, an appeal was preferred by the petitioner, being MAT 331 of 2019 along with CAN 2347 of 2019. By judgment and order dated March 7, 2019 the Hon'ble Division Bench disposed of the appeal and application with the following order:-
"Considering the respective contentions of the parties, we are of the view that since the subject-matter of challenge before the writ Court is a tender process based on which the work order has been issued, such issuance of the work order in favour of the private respondent no.6 shall abide by the result of the writ petition. The respondent Indian Oil Corporation Limited shall disclose before the First Court, in its affidavit, the reason(s) as to why the private respondent no.6 was considered to be qualified for the purpose of issuance of the work order. It shall also disclose before the First Court the reason(s) as to why the appellant/writ petitioner was considered as not being qualified for the reverse auction.
We also propose to modify the directions for exchange of affidavits in the manner as indicated hereinbelow.
Let affidavit-in-opposition be filed within a period of three weeks from date. Reply thereto, if any, be filed a week thereafter.
Immediately upon exchange of affidavits, the appellant/writ petitioner will be at liberty to mention for early hearing of the matter before the First Court having appropriate determination.
With the above observations/directions, the appeal and the application for appropriate order stand disposed of."
4. During the pendency of the appeal the respondent No.6 was issued the work order on March 5, 2019.
Thereafter the parties exchanged their affidavits and the matter has now come up for final hearing.
5. The first contention of Mr. Mainak Bose, learned Advocate appearing on behalf of the petitioner is that, the respondent No.6 did not have the requisite qualifications to qualify at the technical bidding stage.
IOCL with mala fide intention and in order to favour the respondent No.6, had relaxed the terms and conditions of the NIT. According to Mr. Bose, the requisite qualifications laid down in serial No.10, 17 and 20 of the NIT was not fulfilled by the respondent No.6.
Thus, in order to favour the respondent No.6 with
