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2021 Supreme(Guj) 696

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B.PARDIWALA, VAIBHAVI D. NANAVATI, JJ.
BVISHAL OIL AND ENERGY LIMITED THROUGH BABUBHAI SHANKARBHAI CHAUDHARY - Appellant
Versus
OIL AND NATURAL GAS CORPORATION LIMITED - Respondent
SPECIAL CIVIL APPLICATION NO. 7771 of 2021
Decided On : 18-08-2021

Advocates Appeared:
For The Appellant : MR. SHALIN MEHTA, LD. SR. COUNSEL WITH MS ROMA I FIDELIS
For The Respondent: MR BC DAVE, MR.DEVANG VYAS, LD. ADDL. SOLICITOR GENERAL WITH MR RITURAJ, M MEENA, MR ZUBIN F BHARDA, MR.ANKIT M TALSANIA, TIRTH NAYAK

Point of Law: Fairness cannot be a one-way street. The fairness required of the Financial Corporations cannot be carried to the extent of disabling them from recovering what is due to them. While not insisting upon the borrower to honour the commitments undertaken by him, the Financial Corporation alone cannot be shackled hand and foot in the name of fairness.

Headnote:

Constitution of India,1950 – Article 12 and 226 - Companies Act, 2013 – Bidding - Doctrine of fairness - Writ applicant is a Company incorporated under Companies Act, 2013 and is engaged in the business of handling operation and maintenance of Drilling Rigs - It is the case of writ applicant that it has been providing services to respondent -Oil & Natural Gas Corporation Ltd. for past 15 years and has been handling operation and maintenance of Drilling Rigs for Corporation in various parts of its operation - It appears from the materials on record that Corporation floated a tender for work of Drilling Rigs of Cambay for a period of three years and Mehsana Asset for a period of two years - It is not in dispute that writ applicant along with other bidders participated in said tender proceedings and offered their respective bids- Whether action under Section 29 of Act is called for.

Finding of the Court :

High Court while exercising its jurisdiction under Article 226 of Constitution does not sit as an appellate authority over the acts and deeds of Financial Corporation and seek to correct them - Doctrine of fairness does not convert the writ courts into appellate authorities over administrative authorities - Financial Corporation is always expected to try and realize maximum sale price by selling assets by following a procedure which is transparent and acceptable, after due publicity, wherever possible and if any reason is indicated or cause shown for default, the same has to be considered in its proper perspective and a conscious decision has to be taken as to whether action under Section 29 of Act is called for - Modalities for disposal of the seized unit have to be worked out - Fairness cannot be a one-way street - Fairness required of Financial Corporations cannot be carried to extent of disabling them from recovering what is due to them - While not insisting upon the borrower to honor the commitments undertaken by him, Financial Corporation alone cannot be shackled hand and foot in the name of fairness.

Result: Application rejected

JUDGMENT :

J.B.PARDIWALA, J.

1. By this writ application under Article 226 of the Constitution of India, the writ applicant, a Company, has prayed for the following reliefs;

    “(a) Your Lordship may be pleased to admit and allow this petition;

(b) Your Lordships may be pleased to issue a writ, order or direction in the nature of mandamus quashing and setting aside the action of the respondent authority in considering the bid submitted by the respondent No.2 and No.3 as qualified for Tender No.BN6RC21001 issued on 08.01.2021 for work of Hiring of O & M services of Drilling Rig of Cambay for a period of 03 years and Mehsana Asset for a period of 2 years and also consequential decisions taken thereof;

(c) Your Lordships may be pleased to direct the respondent No.1 to hold an inquiry against the respondent No.2 and 3 for conducting a proper enquiry into the work experience certificate/documents submitted by the respondent No.2 and No.3 ascertaining their eligibility;

(d) Pending the admission, hearing and final disposal of this petition, Your Lordship may be pleased to stay the proceedings and to restrain the respondent No.1 from further proceeding with the tender process by considering the bid submitted by the respondent No.2 and No.3 in respect of tender No.BN6RC21001 issued on 08.01.2021 for the work of Hiring of O & M services of Drilling Rig of Cambay for a period of 03 years and Mehsana Asset for a period of 2 years;

(e) Pending the admission, hearing and final disposal of this petition, Your Lordships may be pleased to direct the respondent No.1 to conduct a proper enquiry into the work experience certificate/documents as submitted by the respondent No.2 and No.3 and further be pleased to direct the respondent No.1 to submit the status report of the said enquiry before this Hon’ble Court.

(f) Any other and further relief or reliefs to which this Hon’ble Court deemed fit in the interest of justice.”

2. The facts, giving rise to this writ application, may be summarized as under;

    2.1 The writ applicant is a Company incorporated under the Companies Act, 2013 (for short “the Act, 2013”) and is engaged in the business of handling operation and maintenance of Drilling Rigs. It is the case of the writ applicant that it has been providing services to the respondent No.1-Oil & Natural Gas Corporation Ltd. (for short “the Corporation”) for the past 15 years and has been handling operation and maintenance of Drilling Rigs for the Corporation in various parts of its operation.

2.2 It appears from the materials on record that the Corporation floated a tender No.BN6RC21001 dated 8th January, 2021 for the work of Drilling Rigs of Cambay for a period of three years and Mehsana Asset for a period of two years.

2.3 It is not in dispute that the writ applicant along with the other bidders participated in the said tender proceedings and offered their respective bids.

2.4 The Clause No. B.1.2 of the tender document lays down the eligibility criteria and experience of the bidder.

2.5 Clause B.1.2 reads thus;

B.1.2

Eligibility and Experience of the bidder:-

B.1.2.1

(I) Bidder (i.e., Single Bidder/Indian Joint Venture Company Incorporated) should have minimum 2 (two) years’ experience (730 days) of Chater Hiring/opration & maintenance of drilling rigs.

(II) Bidder should have executed at least 1 (one) contract of similar nature of minimum one-year period (i.e. Charter Hiring/operation & maintenance of drilling rigs engaged in oil /gas well drilling) in the last 5 (five) years reckoned from the date of techno-commercial bid opening.

Experience in work-over operation even working with Drilling Rig will not be considered as working experience of drilling rig.

Note:- For B.1.2.1 (a)-I & II above, the following will be considered

(i) “Operation” services means: Services for Drilling / operations on oi

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