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2025 Supreme(Ker) 379
IN THE HIGH COURT OF KERALA AT ERNAKULAM
V.G.ARUN, J
Bhanushali Dilip S/o. Bhanushali Govind – Appellant
Versus
Indian Oil Corporation Limited – Respondent
WP(C) NO. 20359 OF 2024
Advocate Appeared:
For the Appellant : PHILIP T.VARGHESE, THOMAS T.VARGHESE, ACHU SUBHA ABRAHAM, V.T.LITHA, K.R.MONISHA, JIJO PAUL
For the Respondent: NITHIN GEORGE, Sunil Shankar A, VIZZY GEORGE KOKKAT(K/141/1998), RITHU JOSE(K/2314/2023), VIDYA GANGADHARAN(K/000424/2020), ARYA SATHEESH(K/002139/2024)
IMPORTANT POINT
The court upheld that foreign-flagged vessels can be eligible for tender bids if they comply with requirements before the work order, emphasizing the interpretation of tender criteria rests with its author.
Headnote:
(A) Merchant Shipping Act, 1958 - Sections 3(18), 23 to 29, and 34 - Tender for supply of barges - Petitioner challenged the eligibility of a foreign-flagged vessel offered by the 3rd respondent, arguing it violated tender criteria - Court held that the tender did not restrict foreign-flagged vessels and the 3rd respondent complied with requirements before the work order was issued. (Paras 1 , 3 , 5 , 6 )
(B) Tendering Process - The interpretation of tender requirements lies with the author of the tender, and courts should exercise restraint if the interpretation aligns with the document's language and purpose - The successful bidder met all necessary criteria before placement of the work order. (Paras 5 , 6 )
Facts of the case:
Petitioner, a bunker supplier, contested the award of a tender to the 3rd respondent, claiming their offered vessel did not meet pre-qualification criteria due to its foreign registration. The 1st respondent maintained that the vessel complied with all requirements by the time of the work order.
Findings of Court:
The court found that the 3rd respondent's vessel satisfied the tender requirements, and the petitioner,s arguments were unfounded.
Issues: The primary issue was whether the foreign-flagged vessel could be accepted under the tender criteria and whether the 1st respondent acted illegally in awarding the contract.
Ratio Decidendi: The court concluded that the tender criteria did not prohibit foreign-flagged vessels and affirmed the principle that the interpretation of tender requirements is best left to the author of the document.
Result: Writ petition dismissed.
JUDGMENT :
Petitioner is the proprietor of Bharat Chemical, an enterprise engaged in the business of supplying bunkers (ship fuel) to vessels/ ships in both inner and outer anchorage of ports across India. The proprietary concern of the petitioner and the 3rd respondent had participated in a tender/bid invited by the 1st respondent for providing two barges for supply of Black Oil Bunkers to the coastal/foreign-run vessels berthed in the Cochin Port, Ernakulam-Berths and Outer Anchorages under Kerala State Office. After submission of the bid, petitioner received reliable information that one of the Barges, MV Shaun-I, offered by the 3rd respondent is a foreign-flagged vessel registered with Tuvalu Ship Registry and flying the flag of Tuvalu. As a foreign-flagged barge cannot be offered as per the tender notification, the petitioner addressed Ext.P2 representation to the 1st respondent, raising this issue. It was also pointed out that MV Shaun-I being a foreign vessel, does not possess the necessary licences to ply fuel/bunker in Indian waters. Some time later, petitioner received Ext.P5 e-mail dated 15.04.2024, informing that his representations were rejected, as there was no restriction against foreign-flagged vessels operating in India and being offered in the subject tender. It was also stated that, the successful bidder need only comply with the requirement by the time the work commenced. This, the 3rd respondent had done by registering MV Shaun-I under the Indian Merchant Shipping Act, 1958 as a River Sea Vessel (RSV) Type Barge. Accordingly, the quotes were considered and 3rd respondent being the lowest bidder (L1), the work was awarded to it. Aggrieved, this writ petition is filed seeking the following reliefs;
“i. issue a writ of certiorari or any other appropriate writ or direction calling for the records resulting in Exhibit P5 proceedings and set aside the same;
ii. issue a writ of certiorari or any other appropriate writ or direction calling for the records resulting in the selection as the impugned tender No. SRCC/PT/134/KES0/2023-24 (notified as per Exhibit P1) and declare that the 3rd respondent was ineligible for the tender.”
2. Heard, Adv.Philip T Varghese for the petitioner, Adv.Nithin George for respondents 1 and 2 and Adv.Sunil Shanker for the 3rd respondent.
3. Learned counsel for the petitioner submitted that as per Ext.P1, of the two barges offered, one should be of 1200 MT capacity or above, of RSV Type IV and necessarily IRS or equivalent certified and the other, of 1000 MT capacity or above and in IV Class. Referring to the pre-qualification criteria stipulated in the tender notification, more particularly, Clause 22.3 therein, it is submitted that the barge having capacity of 1200 KL and above should be registered as “Type-IV River Sea Vessel” and should be having a certificate of Class issued by the Indian Registry of Shipping or any classification society. Contrary to this, MV Shaun-I is an Oil Products Tanker (OPT) carrying a foreign-flagged with Tuvalu Country Registration, as evidenced by Ext.P4 Vessel Report. According to the learned counsel, since one of the barges offered by the 3rd respondent did not satisfy the pre-qualification criteria, the 3rd respondent's bid ought to have been rejected, and petitioner's proprietary concern being the only other qualified bidder, it should have been awarded the work. Instead, 3rd respondent's bid was accepted and to justify the illegal action, 1st respondent has taken the stand that the Director General of Shipping has not restricted the operation of any foreign-flagged vessel in Indian Ports and there was no restriction in offering foreign-flagged vessel(s). Drawing attention to the definition of “Indian ship” in Section 3(18) of the Merchant Shipping Act, 1958 ('the Act' for short) and the procedure for registration stipulated in Sections 23 to 29 of the Act, it is submitted that the stand adopted by the 1st respondent is contrary to the statutory provision.
