( 1 ) IN this petition under Article 226 of the Constitution, the petitioner has challenged the terms of the tender issued by the respondent " The Oil and Natural Gas corporation Limited ("ongc" for short) as arbitrary, unreasonable, unconscionable and against the public policy.

( 2 ) ON 24. 6. 2005, the ONGC issued the tender notice inviting tenders for hiring of Natural Gas Compression services at Sobhasan GGS " II for a period of two years. The last date for collection of tender documents was 25. 7. 2005 and the last date of seeking clarifications before the pre-bid conference was 3. 8. 2005 and the pre- bid conference was fixed on 5. 8. 2005. The tenders were to be opened on 25. 8. 2005.

( 3 ) THE material terms of the tender which are under challenge in this petition, broadly stated, are as under :- (i) Supplying on hire two compressors operating having minimum capacity of 1,00,000 SCMD each and one standby compressor of minimum capacity of 1,00,000 SCMD. (ii) The original date of manufacturing the offered natural Gas Compressor package should not be older than five years as on the date of opening of techno-commercial bid. In case brand new compressor package is not offered, the bidder must submit along with the unpriced techno- commercial bid, a certificate from the manufacturer for manufacturing date and soundness of machine and must confirm to submit a certificate from any of the reputed third party inspection agencies named in the tender document for soundness and conformance to applicable code prior to shipment. (iii) In case new compressor is offered, the successful bidder will have to submit necessary documents in support of it within one month from the date of LOI/noa. (iv) The mobilization period shall be 180 days from the date of LOI/noa and the contract shall be for a period of two years.

( 4 ) THE petitioners case is that it has a compressor with capacity of 2,00,000 SCMD which is about six years old. The main challenge is to the condition requiring that the package shall not be older than five years. The query/objection of the petitioner as submitted in its letter dated 3. 8. 2005, and that is also the principal contention raised in this petition, was as under:-"the Original date of compressor package, if not older than 5 years is acceptable to ONGC, irrespective to the date of manufacturing date of the compressor, engine and cooler " It is a noticeable fact that a compressor and Gas engine has life well beyond 5 years say 20 + years. Such units must be working satisfactorily in ONGC for several years or ongc is scrapping the compressor packages, which are older than 5 Years " By limiting the year of manufacturing to 5 years ONGC is needlessly increasing the cost of compression. Also it does not encourage competitive bidding as except a couple of bidders no one else has the used compressor that is not more than 5 years. Thereby giving advantage to the already existing players in this field. Also it is a national waste after five years since there is no open market for these kind of compressor packages in India. ONGC should allow compressor packages that are more than five years old but remanufactured or zero-houred by manufacturer or authorized dealer. This is a standard practice worldwide and if the manufacturer is certifying the soundness of machines after Remanufacture then ONGC should accept the same. As in similar charter hiring contracts in ONGC viz equipment more than five years / re-manufactured / zero-hour etc are acceptable based on Third Party inspection. Then why this disparity" Kindly clarify would it be acceptable to ONGC if we offer such package""

( 5 ) AT the pre-bid conference, the ONGCs reply to the above query was as under :-"the date of manufacturing of the oldest machine (Compressor, Engine) in the offered natural gas compressor package shall be considered as the date of manufacturing of the offered natural gas compressor package. Rest of the para remains the same. "

( 6 ) IN