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2007 Supreme(Gau) 222
IN THE HIGH COURT OF GAUHATI
Iqbal Ahmed Ansari, J.
G.R. Engineering Works Ltd.
Vs.
Oil India Ltd. and Ors.
Decided On: 19.03.2007
The past experience of the persons behind the company, who has offered the bid, is a relevant consideration in a tender process.
Headnote:
Tender Process - Eligibility Criteria - NIT Paragraph 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.5, 6.2.1, 6.2.2, 6.2.3, 6.2.4 - The court held that the experience and financial capability of M/s. Fabtech Engineers could be counted in favor of respondent No. 3, as the business of M/s. Fabtech Engineers had been taken over by respondent No. 3. The court emphasized that the decision-making process of allotment of a contract can be judicially reviewed under article 226 and not the decision itself. The court also highlighted that the past experience of the persons behind the company, who has offered the bid, is a relevant consideration.
Fact of the Case:
The petitioner challenged the selection of respondent No. 3 in a tender process, alleging that respondent No. 3 did not satisfy the eligibility criteria. The petitioner claimed that the bidding documents submitted by respondent No. 3 were invalid and could not be accepted for awarding the contract. The petitioner also alleged that the recommendations made by respondent No. 2 in favor of respondent No. 3 were mala fide and cannot be sustained.
Finding of the Court:
The court found that the experience and financial capability of M/s. Fabtech Engineers could be counted in favor of respondent No. 3, as the business of M/s. Fabtech Engineers had been taken over by respondent No. 3. The court emphasized that the decision-making process of allotment of a contract can be judicially reviewed under article 226 and not the decision itself. The court also highlighted that the past experience of the persons behind the company, who has offered the bid, is a relevant consideration.
Issues: The main issue was whether the experience and financial capability of M/s. Fabtech Engineers could be counted in favor of respondent No. 3, as the business of M/s. Fabtech Engineers had been taken over by respondent No. 3.
Ratio Decidendi: The court held that the experience and financial capability of M/s. Fabtech Engineers could be counted in favor of respondent No. 3, as the business of M/s. Fabtech Engineers had been taken over by respondent No. 3. The court emphasized that the decision-making process of allotment of a contract can be judicially reviewed under article 226 and not the decision itself. The court also highlighted that the past experience of the persons behind the company, who has offered the bid, is a relevant consideration.
Final Decision: The writ petition failed and was dismissed with cost. The interim directions were vacated. The court also noted that the petitioner had come to the court with unclean hands.
I.A. Ansari, J.
1. In order to reduce safety hazard, M/s. Oil India Ltd. ('OIL'), a Government of India Enterprise, proposed to replace its existing LPG storage bullets with mounded LPG storage bullets. For the purpose of implementing the said proposal, OIL, (i.e., the respondent No. 1 herein), appointed respondent No. 2, namely. Engineers India Ltd. ('EIL'), as their consultant. Acting upon this appointment, the EIL, on behalf of the OIL, published, on 26.4.2006, a notice inviting tender (NIT). This NIT was followed by a corrigendum published on 29.5.2006. By the NIT, so published, respondent No. 2 invited sealed bids for the said project under single stage two envelope system from competent Indian agencies with sound technical and financial capabilities and meeting the qualification criteria as stated in Para 6.0 of the said NIT. The writ petitioner, namely, M/S. G.R. Engineering Works Ltd., a public limited company, registered under the Companies Act, and the respondent No. 3, namely, M/s. Fabtech Projects & Engineers Private Limited, which is also a company, though private limited, registered under the Companies Act, participated in the said tender process. The technical, bids offered by these two tenderers, were opened, on 15.6.2006, as scheduled. Having held both the bidders technically sound as per the NIT, the respondent No. 2 fixed 4.8.2006 as the date for opening of the price bids. The price, bids were accordingly opened and it was found that the respondent No. 3 had offered to carry out the work of the said project at a sum of Rs. 34,20,00,000 and the present petitioner's price bid was at Rs. 50,52,00,000. The respondent No. 2, then, recommended, by their letter, dated 23.8.2006, to the respondent No. 1 that the respondent No. 3 be awarded the contract. The recommendation, so made by the respondent No. 2, was accepted by the respondent No. 1 and accordingly respondent No. 1, by its letter, dated 21.7.2006, informed the respondent No. 2 that their recommendations stood approved.
2. Before the contract could, however, be awarded to the respondent No. 3, the petitioner came to this Court, on 15.9.2006, with the present application, made under article 226 of the Constitution of India, seeking, inter alia, a declaration that the bids, offered by the respondent No. 3, were invalid and defective and no recommendation for allotment of work could have been legally made by the respondent No. 2 in favour of the respondent No. 3. While issuing notice of motion, on 15.9.2006, an interim order was passed, on 15.9.2006 itself, directing the parties to maintain status quo, as on that day, in respect of the impugned NIT. The respondent No. 3 appeared in the writ petition and sought to get the said interim order vacated. In course of time, all the respondents filed their affidavits-in-opposition and, having considered the fact that the nature of reliefs, which the parties had sought for, and also the public interest involved necessitated expeditious disposal of the writ petition, the writ petition was, as agreed to by the learned Counsel for the parties, taken up for final disposal at the stage of admission.
3. I have heard Mr. R.L. Yadav, learned Counsel for the petitioner, and Mr. S.N. Sarma, learned senior counsel, appearing on behalf of the respondent No. 1,I have also heard Mr. R.P. Sharma, learned senior counsel, for the respondent No. 2, and Mr. N. Dutta, learned senior counsel, appearing on behalf of the respondent No. 3.'
4. The challenge to the selection of the respondent No. 3 is posed by the petitioner on the ground that the respondent No. 3 did not satisfy the eligibility criteria embodied in the NIT, the case of the petitioner being, in brief, thus: The petitioner had enclosed, in its bidding documents, all the essential materials, which were required for the purpose of enabling a person to participate in the tender process. As against this, the documents, necessary to make a person eligible to participate in the te
