SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img



IN THE HIGH COURT OF DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
Dynamic Drilling and Services Private Limited - Appellant
Versus
Oil and Natural Gas Corporation Limited - Respondent
W.P.(C) 15749 of 2022 & CM Appl. 49021 of 2022
Decided On : 22-12-2022




Judicial review of tender decisions is limited to instances of mala fides or arbitrary actions; a tendering authority's judgment on technical specifications is paramount unless proven fundamentally flawed.

Headnote:(A) Constitutional Law - Article 226 - Dispatch of tenders - Disqualification of bid for non-compliance with technical requirements pertaining to operational status - The bidding party claimed compliance with the criteria, but the court found the documentations indicated the rig was non-operational due to being declared a 'Constructive Total Loss' by the insurance agency. The court stated that the decision of the tendering authority is valid unless proven arbitrary or illegal. (Paras 23, 31, 38)

Facts of the case:
The petitioner sought to quash the decision by the respondent to disqualify its bid for a tender concerning offshore drilling rigs, claiming damages from Cyclone Tauktae had rendered its rig inoperable. The Respondent argued that acceptance of a non-operational rig was inconsistent with the tender's stated commercial requirements.

Findings of Court:
The decision to reject the Petitioner's bid was upheld as being reasonable, aligned with national interests, and not arbitrary or illegal. The court emphasized the need for operational rigs for the efficiency of critical projects.

Issues: Whether the petitioner's bid was unjustly disqualified and if the respondent's actions constituted arbitrary decision-making.

Ratio Decidendi: The court affirmed that judicial review in tender matters is limited and a tendering authority's decision can be interfered with only in cases of mala fides or perverse decision-making, which was not established in this instance.

Result: Writ Petition dismissed.

Table of Content
1. petitioner's prior experience and claims regarding the tender process. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. the respondent's decision communicated post-filing of the petition. (Para 7 , 8)
3. petitioner argues compliance with technical specifications. (Para 9 , 10 , 11 , 12 , 13 , 14)
4. respondent's emphasis on functional rigs and non-compliance arguments. (Para 15 , 19 , 21)
5. assessment of the rig's condition and its implications for the tender. (Para 22 , 23 , 24 , 25)
6. legal thresholds for judicial interference in tender decisions. (Para 28 , 30 , 31 , 32)
7. dismissal of the writ petition. (Para 39)

JUDGMENT

Subramonium Prasad, J. The Petitioner before this Court has filed the present writ petition seeking to quash any decision purported to have been taken by the Respondent herein to disqualify the Petitioner's techno-commercial bid dated 29.09.2022 for the Tender issued by the Respondent being Tender No. MR/DS/MM (CH)/12 JU Rigs/2022/P46JC22005 dated 26.07.2022 (hereinafter referred to as 'the Impugned Tender').

2. The Petitioner claims that it is a well-known offshore drilling rigs operator in India and has previously operated six offshore Jackup Rigs and one Drillship in India for long term contracts with the Respondent herein. It is stated that the Petitioner's Rig, Valiant Driller, (hereinafter referred to as "the Rig") was awarded a contract in 2018, being Contract No. MR/DS/MM(CH)/8 RIGS/2017/P46JC17001/9010026434 dated 26.03.2018 (hereinafter referred to as 'the 2018 Tender') for a period of three years commencing from 08.10.2018. It is stated that while the Rig of the Petitioner was operating for the Respondent under the 2018 Tender, the Respondent herein issued another tender on 21.12.2020, being Tender No. MR/WS/MM (CH)/2020/P66JC20001 (hereinafter referred to as 'the 2020 Tender'), for a Charter Hire of two Drilling Work over Rigs and the Petitioner offered the Rig for hire to the Respondent herein. It is stated by the Petitioner that the Bid Evaluation Criteria and the Technical Qualifications under the 2020 Tender are identical to the Impugned Tender.

3. It is stated that on 17.05.2021, while the Rig was operating under the 2018 Contract, it got caught in the eye of the Super Cyclone 'Tauktae' and suffered damage due to the impact of the Cyclone and was rendered incapable of continuing operations. As a consequence of the damage suffered by the Rig, the contract was terminated on 05.08.2022 with effect from 17.05.2021.

4. It is pertinent to mention at this juncture that since the Petitioner had also submitted a bid for the 2020 Tender, the Respondent herein wrote a letter to the Petitioner dated 12.06.2021, seeking details of the equipment on the Rig that have suffered damage due to the Super Cyclone 'Tauktae', latest status of major repair jobs already completed after the Cyclone, the timeline for removing debris from the sea bed and moving the rig out of Respondent's location. The Respondent also sought a feasibility report duly approved from the Classification Agency stating that the Rig can be modified/upgraded/re-activated so it can be available for inspection. The Petitioner gave a reply to the aforesaid letter of the Respondent vide letter dated 23.06.2021 giving details sought for by the Respondent along with the feasibility report as requested.

5. It is stated that on 26.07.2022, the Respondent issued the Impugned Tender inviting fresh bids for Charter Hire of 12 Jack up Drilling rigs for a period of three years for three categories, namely:

1) Category-I: MLT/BMC Design for Drilling Section

2) Category-II: MLT/BMC Design for Workover Section

3) Category-III: F&GL Design for Workover Section

The Petitioner submitted a bid dated 29.09.2022 wherein he offered his Rig - Valiant Driller, for Category II. In its bid, the Petitioner has stated that the Rig will be mobilized on the first drilling location to be nominated by the Respondent in West Coast of India within the prescribed mobil

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top