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1983 Supreme(Gau) 128
GAUHATI HIGH COURT
T.S.Mishra, K.N.Saikia, JJ.
Sheba Wheels Private Limited and Another -Appellant
Versus
Assam Gas Company Limited -Respondent
Civil Rule No. 1070 of 1983
Decided On : 22-11-1983
A.B.Choudhury, A.Sarma, B.Dutta, D.N.Choudhury, K.Basar, M.K.Bhattacharjee
The court held that the Gas Company had acted reasonably and in the public interest in rejecting the petitioner company's tender, particularly in view of the shortcomings already admitted by the petitioner company in its communications with the Gas Company and the patent defects in its tender as pointed out by the Technical Committee.
Headnote:
TENDER - REJECTION - ARBITRARINESS - DISCRIMINATION - ARTICLE 14 - CONTRACTUAL OBLIGATION - WRIT JURISDICTION - ESSENTIAL VALIDITY OF CONTRACTS - GOVERNMENT CONTRACTS - MANDAMUS - PUBLIC INTEREST - ELIGIBILITY OF TENDERERS - REASONABILITY - PUBLIC INTEREST - SHORTCOMINGS - DEFECTS IN TENDER - TECHNICAL COMMITTEE - NIT - GAS COMPANY - PETITIONER COMPANY - ARTICLE 226 - CONSTITUTION OF INDIA.
Fact of the Case:
The petitioner company, M/s. Sheba Wheels (P) Ltd., impugns the decision of the respondent, Assam Gas Company Ltd., shortly 'the Gas Company', rejecting its tender for works of laying natural gas pipelines.
Finding of the Court:
The court found that the Gas Company had considered the petitioner company's tender along with other tenders and rejected it on two express grounds, namely, that the tender was incomplete as it failed to quote for 8'- dia pipeline and their speculation like wastage rate of 1. 5% for pipes were found to be unreasonable. The court also found that the Gas Company had acted reasonably and in the public interest in rejecting the petitioner company's tender, particularly in view of the shortcomings already admitted by the petitioner company in its communications with the Gas Company and the patent defects in its tender as pointed out by the Technical Committee.
Issues: 1. Whether the Gas Company had considered the petitioner company's tender along with other tenders? 2. Whether the Gas Company had acted arbitrarily or discriminatorily in rejecting the petitioner company's tender? 3. Whether the petitioner company's tender was eligible under the terms and conditions of the NIT?
Ratio Decidendi: 1. The court held that the Gas Company had considered the petitioner company's tender along with other tenders and rejected it on two express grounds, namely, that the tender was incomplete as it failed to quote for 8'- dia pipeline and their speculation like wastage rate of 1. 5% for pipes were found to be unreasonable. 2. The court held that the Gas Company had acted reasonably and in the public interest in rejecting the petitioner company's tender, particularly in view of the shortcomings already admitted by the petitioner company in its communications with the Gas Company and the patent defects in its tender as pointed out by the Technical Committee. 3. The court held that the petitioner company's tender was not eligible under the terms and conditions of the NIT.
Final Decision: The petition was dismissed and the Rule was discharged. The interim stay order dated 11.10.1983 passed in Civil Misc. Case No.725 of 1984 stands vacated.
The petitioner Company, M/s. Sheba Wheels (P) Ltd., impugns the decision of the respondent, Assam Gas Company Ltd., shortly 'the Gas Company', rejecting its tender for works of laying natural gas pipelines.
2. The Gas Company by a tender notice dated 13.9.1982 (Annexure I to the writ petition) invited sealed itemwise rated tenders from "competent and experienced API Standard Steel Pipeline Laying Contractors and of testing inspection of Welding, Radiography and Hydraulic Testing contractors of repute with sound technical and financial capabilities and possessing required construction equipment, skilled manpower etc" for its works of laying Cross-Country natural gas pipeline, namely,-
“1. (a) Laying of 200 MM dia Cross-Country natural gas pipeline from ASEB to HFCL at Namrup, Assam and all its related works strictly as per API specifications.
Length : 3 K. M. (approx). Time to complete : One month from the date of letter of intent.
(b) Laying of 350 MM dia Cross-Country natural gas pipeline from Duliajan to Namrup, Assam and all its related works strictly as per API specifications. Length : 30 K. M. (approx). Time to complete : THREE MONTHS from the date of letter of intent.
(c) Laying of 350 MM dia Cross-Country natural gas pipeline from Duliajan to Naharkatia, Assam, DCS and all its related works strictly as per API specifications Length & K. M. (approx). Time to complete : TWO MONTHS from the date of letter of intent.
(d) Laying of 400 MM dia Cross-Country natural gas pipeline from LAKWA to NAMRUP (One portion with 400 mm x 55 K. M. and other portion with 600 x 5 K. M.) and all the related works strictly as per API specifications. Length : 60 K. M. (approx). Time to complete : FIFTEEN months from the date of letter of intent.
(e) Testing of welders as per API standard and approving the same welding joint inspection during construction at site, for 10% (approx. of welded joints) Radiographic Testing and technical analysis to ensure proper work as per API specifications, for (a) to (d) above.
(f) Pig passing, Hydraulic testing of the pipeline and purging with natural gas of the above pipelines as per API specifications."
3. The terms and conditions were clearly stated in the Notice Inviting Tenders, shortly "the NIT". The Gas Company reserved the rights to issue tender documents to eligible contractors only on application; accept or reject any or all tenders without assigning any reason thereof: and the right to award the said works in SI. No. 1(a) to (d) to one or more contractors. In paragraphs 1 and 3 of the NIT, while applying for tender documents, the tenderers were required to submit, inter alia, documentary evidence of previous experience in similar jobs financial soundness, equipments, manpower etc. to enable the Gas Company to decide the eligibility of the tenderer.
4. The petitioner company claims to be an Engineering Construction Company undertaking and carrying out various engineering contracts, including construction contracts through qualified experts and skilled personnel having adequate experience and skill of high standard, employed by the company.
5. Altogether 13 parties were issued tender papers out of which only 8, including the petitioner company, submitted tenders, each depositing earnest money of Rs. 15,000/- with its tender.
6. The petitioner company submitted its tender dated 29.12.82 (Annexure-II to the writ petition). By its letter of the same date (Annexure-III to the writ petition) it also offered 5% (five percent) rebate on scheduled rates for laying and construction of 400 mm O. D. 54 K. M. long (approximately) referring to Drawing Set No. AGC/PROJ. IV/82, pipeline and this latter was to form an integral part of its offer enclosed. The Gas Company in its letter dated 4.2.83 (Annexure-IV to the writ petition) raised objection as follows :-
"1. We thank you for showing your interest for the pipe laying work of our company. We have gone through your offer and noted the following :
(a) Till da
