IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)

Transcription

1 IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH) WP(C) No.154 of 2013 Drillmec S.p.A, 12, Via 1 Maggio, Gariga di Podenzan, Piacenza, Italy. -Versus- Petitioner 1. Oil India Limited, Having its registered office at PO: Duliajan , District: Dibrugarh, Assam, India and the Corporate Office at Plot No.19, Sector 16-A, Near Film City, Noida , Uttar Pradesh, India. 2. Central Business Committee, Oil India Limited, Plot No.19, Sector 16-A, Near Film City, Noida , Uttar Pradesh, India. 3. The Head Materials, Materials Department, Oil India Limited, PO: Duliajan , District: Dibrugarh, Assam, India. 4. China Petroleum Technology and Development Corporation Tower B, No.8, Jinxingyuan, Talyangong, Chaoyang Disrict, Beijing, China Bharat Heavy Electricals Limited, Integrated Office Complex, Lodi Road, New Delhi , India. 6. Independent External Monitors, C/o Oil India Limited, Plot No.19, Sector 16-A, Near Film City, Noida , Uttar Pradesh, India...Respondents Advocates for the petitioner :- Mr. P.K. Goswami, Sr. Advocate, Mr. C. Chowdhury, Mr. A. Gayan, Mr. A. Deka, Mr. B. Bora, Advocates. WP(C) No.154 of 2013 Page 1 of 69

2 Advocates for the respondents :- Mr. S.N. Sarma, Standing Counsel, OIL, Mr. K N Choudhury, Sr. Advocate, Mr. A Sarma, Mr. S Choudhury, Advocates for the respondent Nos.1 to 3 and 6, Mr. A.K. Ganguly, Sr. Advocate, Mr. K. Goswami, Mr. R.R. Kaushik, Mr. R. Kaman, Mr. R. Kalita, Advocates respondent No.4. - B E F O R E - THE HON BLE MR. JUSTICE B.P. KATAKEY Dates of Hearing : 2 nd May, 2013; 7 th May, 2013; 9 th May, 2013; 16 th May, 2013; 17 th May, 2013; 27 th May, 2013; 28 th May, 2013; 30 th May, 2013 and 31 st May, Date of Judgment & Order : 28 th June, JUDGMENT & ORDER (CAV) Drillmec S.p.A., a Company registered in Italy and working in the area of manufacture and supply of land rigs for the purpose of exploration and development of Oil and Gas, has filed the present petition praying for a writ in the nature of mandamus directing the Oil India Limited (in short, OIL ) to settle the tender process initiated vide tender notices Nos.SDG9008P11/07 and SDG7289P13/07 in strict compliance of the mandatory provisions of law and other guidelines formulated and also restraining the respondent OIL from awarding the contract in favour of the respondent No.4, apart from a direction to award the contract in favour of the petitioner by quashing the 430 th meeting of the WP(C) No.154 of 2013 Page 2 of 69

3 Corporate Business Committee (in short, CBC ) held on 27 th December, 2012 in relation to the aforesaid tender notices, contending inter alia that though the petitioner, the respondent No.4 and the respondent No.5 were found to be technically responsive in the technical bids, there is a move to bestow undue benefit to the respondent No.4 by flauting the mandatory guidelines of the Central Vigilance Commission, guidelines of the respondent OIL issued in respect of the said tender process and other mandatory provisions of law, despite emergence of the petitioner as the lowest bidder. According to the petitioner, the respondent OIL entered into negotiation with the respondent No.4, whose bid was higher than that of the petitioner, ignoring the lowest bid offered by the petitioner by taking cognizance of unsolicited communications issued by the respondent No.4 challenging the fresh price bid of the petitioner, even without asking for any clarification from the petitioner on the fresh price bid, if they have any doubt on the offer of the petitioner. It is also the case of the petitioner that they have never been informed about the grounds, if any, for rejection of their offer and why negotiation has not been done with it, though was the lowest bidder and instead was negotiating with the respondent No.4. Further case of the petitioner is that they, for the first time, came to know about the reasons for rejection of their bids while they have been served with a copy of the affidavit-in-opposition filed by the respondent OIL, disclosing the grounds on which the petitioner s bid has been rejected. [2] The writ petition has been opposed by the respondent OIL as well as the respondent No.4 by filing separate affidavits, basically contending that the writ petition is not maintainable because of suppression of material facts; the petitioner being a company registered in Italy and not a natural person, is not entitled to file writ petition for enforcement of the fundamental rights under Articles 14 WP(C) No.154 of 2013 Page 3 of 69

4 and 19 of the Constitution; the writ petition is not maintainable, the same being supported by an affidavit by a person, who has not been authorized to do so and the petitioner being guilty of the violation of the terms and conditions of the tender is not entitled to the relief claimed. [3] The relevant undisputed facts leading to filing of the writ petition may be noticed as under:- (i) A process, initially for supply and commissioning of two 2000 HP VFD rig package, one with top drive and another with provision for top drive, was initiated by the respondent OIL in the month of August, 2010, by floating open global e-tender inviting bid under single stage 2(two) bid system, fixing 21 st and 22 nd September, 2010 as the dates for Pre-bid Conference. 27(twenty-seven) parties, who have purchased the tender documents, including the petitioner, the respondent No.4 and the respondent No.5 participated in the Pre-bid Conference. 5(five) parties, which includes the petitioner, respondent No.4 and the respondent No.5, submitted their technical and commercial bids. On 15 th June, 2011, the technical bids of all the bidders were opened. The petitioner, respondent No.4 and the respondent No.5 were found to be technically responsive. The Head-Material of the respondent OIL thereafter, on 20 th January, 2012 submitted a proposal before the Tender Committee-cum-Approving Authority for putting up of a note to the CBC recommending opening of the price bids of 3(three) technically responsive bidders, namely, the petitioner, respondent No.4 and the respondent No.5. In the said proposal, the approving authority was informed about the various deviations in the bids submitted by all the 3(three) WP(C) No.154 of 2013 Page 4 of 69

5 bidders, which have been accepted by the user department while evaluating the offer, which includes the deviation by the petitioner relating to non furnishing the price of 63 major rig components, apart from non extension of the bid validity by the respondent No.5, M/s BHEL. The Tender Committee-cum- Approving Authority having approved the said proposal placed the same before the Local Management Committee (in short, LMC ), on whose recommendation note dated 16 th February, 2012 was placed before the CBC of the respondent OIL seeking approval for opening of the commercial bids of the aforesaid 3(three) bidders indicating the deviations including the deviation relating to the stipulation of the petitioner that it would not disclose the price of 63 major rig components. The CBC in its 425 th meeting held on 2 nd March, 2012, has approved the opening of the price bids of 2(two) bidders, namely, the petitioner and the respondent No.4, condoning the deviations as mentioned above. The CBC, however, in view of non extension of bid validity, decided not to open the price bid of the respondent No.5. Accordingly, price bid of the petitioner and the respondent No.4 were opened on 7 th March, (ii) Note dated 23 rd May, 2012 was, thereafter, placed before the CBC, pursuant to the decision of the LMC taken in its meetings dated 1 st May, 2012; 8 th May, 2012 and 15 th May, 2012, pointing out certain discrepancies in the bids. The CBC in its 427 th Meeting held on 11 th June, 2012 decided to refer the matter to the Independent External Monitors (in short, IEMs ) for their opinion, as envisaged in Clause-7 of the tender conditions, who have on 19 th July, 2012 recommended invitation of fresh price bid. The CBC in its 427 th Meeting held on 9 th August, 2012, accordingly, decided to re-invite the fresh WP(C) No.154 of 2013 Page 5 of 69

6 price bid from all the 3(three) technically acceptable bidders, namely, the petitioner, respondent No.4 and the respondent No.5, for 2(two) numbers of 2000 HP drilling rig packages with top drive, instead of one number each with and without top drive. Consequently the respondent OIL on 1 st September, 2012 informed the aforesaid 3(three) technically responsive bidders to submit the fresh price bids fixing 26 th September, 2012 as the last date for such submission, which, however, was subsequently extended to 3 rd October, All the aforesaid 3(three) bidders accordingly submitted their fresh price bids. The petitioner in the fresh price bid has inserted the following clause, which was not put in the earlier price bid submitted by it:- Drillmec reserved the right to manufacture and test the rigs, or part of them, in any of its facilities, which belong to us as per their availability at the time of contract awarding. The petitioner in the fresh price bid has indicated the consolidated price of 19 components instead of 63 major rig components. The respondent No.5 also did not disclose the price of all the 63 major rig components. (iii) The fresh price bid of the bidders were opened on 3 rd October, 2012 and thereafter, it was sent to the user department, which has confirmed that the offers are in order as per the tender requirement as far as type and the quantity of spares are concerned with the further observation that the offer made by the petitioner is the lowest. The LMC in its proceeding dated 9 th October, 2012 scrutinized the offers made by all the 3(three) bidders and found that the petitioner has put the aforementioned clause in the price bid. The LMC having regard to the attending facts and circumstances decided to have the clarification from the petitioner and to reconfirm that all the WP(C) No.154 of 2013 Page 6 of 69

7 points agreed by them in their technical bids and during technical clarification sought by OIL will be honoured by them. The LMC, however, before obtaining such clarification decided to place the matter before the CBC for approval/concurrence. The decision of the LMC was also approved by the Appropriate Authority-cum-Tender Committee on 12 th October, A note dated 13 th October, 2012 was, accordingly, placed before the CBC, which was considered on 3 rd December, 2012 in its 429 th Meeting. In the meantime, 3(three) unsolicited communications dated 12 th October, 2012; 16 th October, 2012 and 19 th October, 2012 were received by the respondent OIL form the respondent No.4 contending that the fresh price bid submitted by the petitioner is to be rejected because of incorporation of the aforesaid clause in the price bid, in view of Clause-1 of the Bid Rejection Criteria (Commercial), as well as for not providing the cost of all 63 major rig components. (iv) The CBC in its 429 th Meeting held on 3 rd December, 2012 took up the aforesaid note dated 13 th October, 2012 as well as the unsolicited communications received from the respondent No.4, for consideration. A decision was taken in the said meeting to obtain the opinion from the learned Solicitor General of India. An opinion dated 14 th December, 2012 was then obtained from the learned Attorney General of India, based on which the CBC in its 430 th Meeting held on 27 th December, 2012 decided to accept the said opinion and to call the respondent No.4 for negotiation on price to match with the price quoted by the petitioner. [4] I have heard Mr. PK Goswami, learned senior counsel for the petitioner, Mr. KN Choudhury and Mr. AK Ganguly, learned WP(C) No.154 of 2013 Page 7 of 69

8 senior counsel appearing for the respondent Nos.1, 2, 6 and respondent No.4, respectively. The respondent No.5 has not contested the writ petition. [5] Mr. Goswami, learned senior counsel appearing for the petitioner, submits that the petitioner for the first time, from the affidavit-in-opposition filed by the respondent OIL, came to know about the grounds on which the petitioner s bid has been rejected, namely, (i) insertion of a new condition in the form of a foot note, in the commercial bid of the petitioner, reserving the right to manufacture and test the rigs, or part of them, in any of the facilities, which belong to them, as per their availability at the time of their contract awarding, (ii) quotation of the price of only 19 major components against the tender requirement of 63 major components, prescribed in the Price Bid Format and (iii) inability of the respondent OIL to determine whether or not the API certificates furnished by the petitioner alongwith the bid documents covers other facilities of the petitioner, where the petitioner reserve the right to manufacture or test the rigs or part of them. According to the petitioner, they have never been informed by the respondent OIL, at any time, prior to filing of the affidavit-in-opposition, about the grounds on which their bids have been rejected and as such, they did not have any knowledge about the same. The learned senior counsel submits that the petitioner has filed the petition apprehending disqualification, as they came to learn that the respondent OIL had decided to disqualify the petitioner in the tender process, and for directing the respondent authorities to settle the tender process, initiated vide tender notices, in strict compliance of the mandatory provisions of law and other guidelines formulated thereunder and also for restraining the respondent OIL from awarding the contract in favour of the respondent No.4. WP(C) No.154 of 2013 Page 8 of 69

9 [6] Referring to the first ground of rejection of the petitioner s bid, as disclosed by the respondent OIL in their affidavit-in-opposition, it has been submitted by Mr. Goswami, learned senior counsel, that the foot note in the price bid, reserving the right to manufacture or test the rigs or part of them in any facilities belonging to the petitioner, has been incorporated in the price bid to inform the respondent OIL that the petitioner is open to the idea of manufacturing the aforesaid rig components in any of its facilities available, as during the course of deliberation, the IEM, to whom earlier price bid was sent for verification, enquired with the representative of the petitioner as to whether it is feasible on the part of the petitioner company to manufacture the components in Italy or elsewhere. According to the learned counsel, by putting such Clause in the price bid, the petitioner does not intend to manufacture the aforesaid components in any units other than the manufacturing unit in respect of which API license has been furnished and was mentioned only to make its position clear that if the respondent OIL wants that such components are to be manufactured other than in Italy, they are free to do so. The learned senior counsel further submits that such deliberation between the representative of the petitioner and the IEM has not been denied by the respondent OIL in its additional affidavit filed on 1 st April, The learned senior counsel submits that the said foot note does not in any manner indicate that the petitioner would manufacture the components of the rigs in violation of the terms and conditions of the bid documents, which requires manufacture of certain components in API licensed manufacturing unit with specification 4F. [7] Mr. Goswami further submits that the bid of the petitioner has been rejected on the ground of violation of clause-1.0 of the Commercial Bid Rejection Criteria, on the ground that the price bid of WP(C) No.154 of 2013 Page 9 of 69

10 the petitioner contains the aforementioned Clause, reserving the right to manufacture the rig components in any of its factory, which cannot be done as in the said clause, there is no negative stipulation of rejection of the price bid in case of insertion of such clause. The learned counsel referring to the various clauses of the bid document, more particularly, the stipulation under the head make of rig accessories, has also submitted that the petitioner has no option but to manufacture 2(two) components, namely, Crown Block Assembly and Mast and Sub-structure in API licensed factory with specification 4F and to procure other equipments from any of the approved vendors specified by the respondent OIL. In any case, according to the learned senior counsel, there being provision for inspection and test of all the rig components during manufacture, prior to dispatch as well as Third Party Inspection of the rig components and the rigs to be supplied, to ensure manufacture of the rig components and the rig as per specification, in the manufacturing unit having API specification 4F, putting a condition in the price bid, in the form of foot note, cannot be the ground for rejection of the petitioner s bid, as the petitioner cannot, under the terms and conditions of the bid, manufacture the rig components in any non API licensed manufacturing unit. [8] The learned senior counsel has also submitted that since the port of origin has been mentioned as Italy, the petitioner would not, therefore, manufacture those 2(two) components in its manufacturing unit at Houston in USA and carry it to Italy for transhipment to Kolkata (India), incurring heavy cost. The learned senior counsel submits that since the petitioner s technical bid was accepted and the petitioner having submitted the technical bids with a stipulation of manufacturing of those 2(two) components in a manufacturing unit in respect of which the API license has been submitted, no reasonable WP(C) No.154 of 2013 Page 10 of 69

11 person would have taken the view that the petitioner would manufacture those 2(two) equipments in any factory other than the API certified factory. The learned senior counsel further submits that there being a provision for clarification in Clause-2 of the additional notes appended to Section-20 of the bid documents, the respondent OIL, in case of any doubt whether the rig components would be manufactured in the manufacturing unit, in respect of which API license was submitted alongwith the bid, would have sought for clarification from the petitioner, as recommended by the LMC, more so when the price difference is substantial, which would not have caused any further delay in finalization of the process, which has already taken more than 2(two) years from the date of floating the tender, for no fault of the petitioner. The learned senior counsel submits that the respondent OIL has taken the decision to reject the bid of the petitioner on that count, not based on its independent decision but based on the opinion of the Law Officer of the Union of India, and unsolicited communications received from the respondent No.4, despite the stipulation in Clause-14.1 of the terms and conditions of the bid. [9] Referring to Clause-15 of the technical bid rejection criteria, it has further been submitted that though a bidder is required to furnish, alongwith the bid documents, a valid license of API specification 4F for a period of not less than 10(ten) years continuously without any break, preceding the technical bid opening date, it has nowhere been mentioned in the tender documents or in the guidelines issued by the respondent OIL, in the matter of awarding the contract, that the components of the rigs must be manufactured in the manufacturing unit in respect of which the API license with specification 4F has been furnished alongwith the bid documents. The learned senior counsel, therefore, submits that reserving the right by WP(C) No.154 of 2013 Page 11 of 69

12 the petitioner to manufacture the rig components in any of the manufacturing unit belonging to the petitioner, do not violate any of the conditions in the bid documents. [10] The learned senior counsel also submits that the bid of the petitioner cannot be rejected on the ground of putting such condition, on the ground that such condition has no relation with the commercial bid but has relation to the technical bid, once the petitioner is found to be technically responsive. According to the learned senior counsel, the stage for scrutinizing as to whether the bidder is technically responsive, being over and the petitioner having been found technically responsive and consequently the price bid being opened, the respondent OIL cannot subsequently reject the bid of the petitioner on the ground that such condition, put in the price bid in the form of a foot note, renders the petitioner s bid technically non-responsive. [11] The learned senior counsel, in relation to the second ground of rejection of petitioner s bid, has submitted that the petitioner from the very beginning has informed the respondent OIL that it will not disclose the price of individual major rig components, by indicating it in the checklist appended to the technical bids. The respondent OIL having taken note of the same, in its proceeding dated 16 th February, 2012 and pursuant to the decision of the CBC, decided to open the first price bid of the petitioner alongwith the price bid of M/s BHEL (respondent No.5), who also refused to disclose the price of individual rig components, and hence, the respondent OIL cannot contend that since the petitioner did not disclose the price of the individual rig components, its bid is in violation of the terms and conditions of the bid documents. The learned senior counsel further submits that the stipulation in the new price format supplied to the WP(C) No.154 of 2013 Page 12 of 69

13 various bidders on 1 st September, 2012, requiring providing breakup of prices alongwith the bid format, wherever specified in original tender document, has to be interpreted accordingly, inasmuch as, the requirement of disclosure of price of all the rig components has been relaxed by the respondent OIL by its conduct by accepting the petitioner s stipulation of non disclosure. It is also submitted that the respondent OIL has taken a conscious decision to accept the offer without disclosure of the price of all 63 major rig components and hence it cannot reject the second price bid of the petitioner on that count. [12] The learned counsel submits that the non disclosure of the price of each major rig components being necessary for accounting purpose of the respondent OIL, and the petitioner having undertaken to disclose the same in case the contract is awarded, the purpose for which such price of individual rig components is necessary would be served and cannot be treated as essential condition, so as to reject the bid of the petitioner. The learned senior counsel further submits that had disclosure of the price of 63 major rig components been the essential condition of the bid, the respondent OIL would not have taken the decision to open its price bids, namely, the first as well as the fresh. The learned senior counsel further submits that quotation of the price of 63 major components having no relation to the object of procuring rigs, such condition, in any case, cannot be termed as mandatory, hence, violation, if any, would not make a bidder commercially non responsive. [13] The learned senior counsel, referring to Clause-5.1 of the Bid Evaluation Criteria (Commercial), has submitted that the price of the individual 63 major rig components cannot be the basis for commercial evaluation of the bid submitted by the bidders, as in the WP(C) No.154 of 2013 Page 13 of 69

14 said clause it has specifically been stipulated that the comparison of the bid will be done on the basis of the grand total value and not on the basis of the price of individual 63 major rig components. The learned counsel, therefore, submits that non disclosure of the price of individual 63 rig components, in any case, cannot be the basis for rejection of the price bid of the petitioner, whose offer is much lower than the offer of the respondent No.4, which, according to the learned senior counsel, has been done by the respondent OIL at the instance of the respondent No.4 acting on the unsolicited communications issued by them. [14] Referring to the commercial bid format summary furnished to the bidders by the respondent OIL, before submission of the fresh price bid, it has been submitted that what the bidders were asked to furnish is the price of the components under 19 heads and accordingly the petitioner having submitted the price bids disclosing the price under those 19 heads, its price bid cannot be rejected on the ground of non furnishing of the price of 63 major components, as stipulated in Annexure-A4 to the bid documents, which, according to the learned senior counsel, is not required to be complied with, in view of the subsequent commercial bid format supplied to the bidders. [15] The learned senior counsel, with regard to the third ground of rejection of the petitioner s bid, has submitted that the same is not at all tenable in facts and law, as the respondent OIL could have obtain the clarification from the petitioner on the foot note. That part, there being provision for inspection, monitoring and checking, apart from the ultimate rejection of the rigs as well as forfeiture of the guarantee money, it would absolutely be not difficult on the part of the respondent OIL to ensure that the rig components are manufactured only in a manufacturing unit belong to the petitioner WP(C) No.154 of 2013 Page 14 of 69

15 having API license with specification 4F, which components, in any case, have to be manufactured in such API licensed unit with specification 4F. The learned senior counsel further submits that Section-20 of the bid documents having provided that the rig components must have the API monogram die stamped on the body, it would not be difficult on the part of the respondent OIL to verify as to whether the rig components have been manufactured in API licensed manufacturing unit with specification 4F. The learned senior counsel submits that the grounds on which the petitioner s bid has been rejected are irrational and unreasonable and no person having properly instructed in law would have rejected the petitioner s bid on such unreasonable, arbitrary and irrational ground. [16] The learned senior counsel further submits that though the power, under the terms and conditions of the bid, to seek clarification by the respondent OIL in any matter, is discretionary, it becomes the duty on the part of the respondent OIL to seek clarification from the petitioner on the foot note appended to the price bid, if it has any doubt in that respect, as, such power is coupled with a duty to seek clarification, in the interest of the respondent OIL for procuring the best available rig system that too at a much lesser price. Learned counsel further submits that the respondent OIL while exercising the discretion did not take into consideration all relevant facts and took into consideration the opinion of the Law Officer of the Union of India only. It has also been submitted that the difference of price quoted by the petitioner and the respondent No.4 being substantial and the rig system offered having found to be technically suitable, the rejection of the petitioner s bid on irrational, arbitrary and unreasonable conditions is against the public interest, as the respondent OIL in that case would acquire the rig system at a much higher price from the respondent No.4. WP(C) No.154 of 2013 Page 15 of 69

16 [17] The learned senior counsel in support of his contention has referred to the decisions of the Apex Court in Hirday Narain -Vs- Income Tax Officer, Bareilly reported in 1970 (2) SCC 355; in Khudiram Das -Vs- The State of West Bengal & Ors. reported in AIR 1975 SC 550; G.B. Mahajan & Ors. -Vs- Jalgaon Municipal Council & Ors. reported in (1991) 3 SCC 91; in Poddar Steel Corporation -Vs- Ganesh Engineering Works & Ors. reported in (1991) 3 SCC 273; in Tata Cellular -Vs- Union of India reported in (1994) 6 SCC 651; in Monarch Infrastructure (P) Ltd. -Vs- Commissioner, Ulhasnagar Municipal Corporation & Ors. reported in (2000) 5 SCC 287; in Directorate of Education & Ors. -Vs- Educomp Datamitcs Ltd. & Ors. reported in (2004) 4 SCC 19; in Jagdish Mandal -Vs- State of Orissa & Ors. reported in (2007) 14 SCC 517; in Meerut Development Authority -Vs- Association of Management Studies & Anr. reported in (2009) 6 SCC 171 and in Indian Railway Catering and Tourism Corporation Ltd. & Anr. -Vs- Doshion Veolia Water Solutions Private Ltd. & Ors. reported in (2010) 13 SCC 364 as well as of this Court in Sterlite Technologies Ltd. & Anr. -Vs- Assam Power Distribution Co. Ltd. & Ors. reported in 2011 (5) GLT 600. [18] Mr. K.N. Choudhury, learned senior counsel appearing for the respondent OIL, referring to the first and the third grounds of rejection of the petitioner s bid, has submitted that the bid of the petitioner has rightly been rejected, the same being not in conformity with the terms and conditions of the NIT. According to the learned counsel, the bid of the petitioner becomes non responsive technically, in view of the clause put in the commercial bid, reserving the right to manufacture and test the rights or part of them in any facilities belong to the petitioner as per the availability at the time of contract awarding, in as much as Clause-15 of the bid rejection and bid evaluation criteria, in respect of evaluation of the technical bids, provides for manufacturing of the rig or part of them in such unit, WP(C) No.154 of 2013 Page 16 of 69

17 which has a valid license of API specification 4F for a period of not less than 10(ten) years continuously without any break preceding the bid (technical) opening date. The learned senior counsel submits that by putting such condition, the petitioner reserves the right of manufacturing the rigs or any part of it in any manufacturing unit, which may or may not have a valid API license with specification 4F for a period of not less then 10(ten) years. The learned counsel, therefore, submits that though such a condition has been put in the price bid of the petitioner, without putting the same in the technical bid, it amounts to violation of the conditions in the technical bid even though the petitioner was earlier found to be technically responsive and hence the bid of the petitioner was rightly rejected by the respondent OIL, which decision of the authority, therefore, cannot be termed as arbitrary. It has also been submitted that the submission of the petitioner that under the terms and conditions of the NIT, since certain components of the rigs cannot be manufactured in a manufacturing unit not having the valid license of API with specification 4F, putting such clause in the price bid would not violate the terms and conditions of the bid, more so, when the bid documents stipulates that the equipments must have API monogram die stamped on the body and as such, whether the equipments manufactured in another unit other than the unit in respect of which the valid license of API specification 4F has been submitted with the bid documents, could be ascertained by such API monogram, cannot be accepted in view of the fact that under the terms and conditions of the NIT, the bidder has to manufacture those components in the unit in respect of which the license has been furnished with the bid. It has also been submitted that in any case from such API monogram die stamped on the body of the equipments, it is not possible to ascertain whether the manufacturing unit where such equipments are manufactured has the valid license of API with specification 4F for a period of not less than WP(C) No.154 of 2013 Page 17 of 69

18 10(ten) years. According to the learned senior counsel, there being a specific condition in that respect in the NIT, the bidders have to comply with such conditions. [19] Mr. Choudhury further submits that the inspections either by the TPI Agencies or Pre-dispatched or during manufacturing or at the time of delivery, as provided in the terms and conditions of the NIT, being relate to the inspections after awarding of the contract in favour of a bidder, to ensures manufacture of the required components or equipments in a validly licensed manufacturing unit having API specification 4F, the petitioner cannot contend that in view of such in built checks provided in the terms and conditions of the bid, the authority ought not to have rejected the bid of the petitioner on the ground of putting a condition. The learned senior counsel submits that the inspection as provided in the terms and conditions relates to the quality, control and not for verifying as to whether the manufacturing unit where the equipments or parts of the rigs have been manufactured have the valid API license with specification 4F for a continuous period of 10(ten) years before submission of the technical bids. That apart, the cost of such inspections is to be borne by the respondent OIL, which would be an additional financial burden and hence there is no reason as to why the respondent OIL would be exposed to such burden for the fault of the petitioner. [20] The learned senior counsel, referring to the deliberation during the Pre-Bid Conference held with the intending bidders on 28 th and 29 th September, 2010, has submitted that the petitioner in fact during the discussion in the Pre-Bid Conference requested for reduction of the period of API license with specification 4F from 10(ten) years to 5(five) years, which was rejected and as such, the petitioner knew that the equipments are to be manufactured only in WP(C) No.154 of 2013 Page 18 of 69

19 the manufacturing unit having API license with specification 4F continuously for a period of 10(ten) years prior to submission of the technical bids. The petitioner despite participation in the Pre-Bid Conference and rejection of their offer for reduction of the period of API license with specification 4F did not even made any whisper in the writ petition relating to the same, thereby suppressing material facts, which itself disentitled the petitioner from getting the relief under Article 226 of the Constitution of India. [21] The learned senior counsel, relating to the submission of the petitioner that the respondent OIL could have, in respect of the said clause reserving the right to manufacture the rigs or any components in any manufacturing unit belonging to the petitioner, seek clarification from the petitioner instead of straightway rejecting the bid, has submitted that the same also cannot be accepted as Clause-14 of Section 20 of the general terms and conditions of the tender prohibits acceptance of any offer or modification to offers after the bid closing date and time. It has also been submitted that though the discretion under Clause-14.2 has been given to the respondent OIL to seek clarification from the bidder, the same has to be read alongwith Clause-8.0, which provides that the bids not complying with the OIL s requirement may be rejected without seeking any clarification. The learned counsel further submits that it is within the discretion of the respondent OIL to seek clarification and if such discretion has been validly exercised by the OIL in not asking for any clarification without any malafide intention, the writ Court may not interferer with the decision of the respondent OIL not to exercise the discretion, more so, when it is obligatory on the part of the bidders to comply with the terms and conditions of the bid documents, who were informed that bids not complying with the OIL s requirement may be rejected without asking for any clarification. According to the WP(C) No.154 of 2013 Page 19 of 69

20 learned senior counsel, the petitioner, therefore, cannot, as a matter of right, claim that the respondent OIL must seek clarification relating to the said clause appended to the price bid. [22] The learned senior counsel further submits that the discretion exercised by the respondent OIL not to seek the clarification from the petitioner in the matter of the said clause cannot be termed as irrational or arbitrary, more so when there is no malafide alleged and such decision was taken by the respondent OIL having regard to the attending facts and circumstances. It has also been submitted that even assuming but not admitting that the respondent OIL in exercising its discretion should have asked the petitioner to clarify on the aforesaid clause, the petitioner s bid being defective in not furnishing the price of all 63 major rig components, the petitioner in any case, is not entitled to any relief. [23] Mr. Choudhury further submits that the averments of the petitioner in the affidavit-in-reply filed against the affidavit-inopposition of the respondent No.4 that the intention of the petitioner is to manufacture the rig components in Italy facility, in respect of which API license of specification 4F was submitted alongwith the tender documents, cannot be reconciled or accepted, in view of the specific condition put by the petitioner in the form of the said clause, in the price bid, reserving the right to manufacture the rig components in any of its facilities, which may be other than the facility at Italy. The learned senior counsel, therefore, submits that since the decision making process has not been vitiated by any arbitrary, irrational or unreasonable action on the part of the respondent authority, the petitioner is not entitled to any relief in exercise of the writ jurisdiction, more so, when it is a contractual matter. WP(C) No.154 of 2013 Page 20 of 69

21 [24] Referring to the second ground, on which the petitioner s bid was found to be non responsive, i.e. failure to mention the price of all 63 major rig components, in terms of Annexure-A4, it has been submitted that though the petitioner in the checklist appended to the technical bid informed the respondent authority about the company s policy of not disclosing the price of components and the petitioner was found to be technically responsive, it does not mean that the respondent OIL cannot reject the petitioner s bid on the ground of violation of the conditions in the NIT, more particularly, of Clause-5 of the additional note appended to Section-20 of the bid documents, which provides that the bidders must indicate the price of all major rig components as specified under different Sections for drilling rig packages in the format furnished in Annexure-A4. It has also been submitted that in the bid format (summary) supplied to the bidders alongwith the communication dated 1 st September, 2012, for submission of the fresh price bid, the bidders were informed to provide breakup of price alongwith the bid format furnished wherever specified in the original tender document and as such, the bidders are required to give the breakup of the price in respect of all 63 major rig components as specified in Annexure-A4 to the bid documents and hence, it does not fit in the mouth of the petitioner that by supplying the bid format on 1 st September, 2012, the respondent OIL has given up the requirement of giving breakup of prices in respect of all 63 major rig components. [25] The learned counsel further submits that though in the technical checklist, the petitioner has mentioned about the company s policy of not disclosing the price of each of the major rig components and consequently in the first price bid submitted, the petitioner did not mention the price of any of the 63 major rig components, the petitioner, by conduct, has given up its policy of not disclosing the WP(C) No.154 of 2013 Page 21 of 69

22 price of rig components, as in the fresh price bid submitted they have disclosed the price of 19 rig components, instead of 63 major rig components, which they are required to give in terms of Annexure-A4 to the bid documents. The learned senior counsel submits that the petitioner s price bid being contrary to the terms and conditions of the bid documents, has rightly been rejected by the respondent OIL, as the petitioner having chosen to submit the bids, they must comply with all the mandatory requirements of the bid documents, which includes disclosure of the price of all 63 major rig components. [26] The learned senior counsel, referring to Clause-1.0 of Annexure-B to the bid documents, which provides the bid rejection criteria and bid evaluation criteria in respect of the commercial bids, submits that since the petitioner has failed to disclose the price of all 63 major rig components, in terms of Annexure-A4, the respondent authority has no alternative but to reject the commercial bid of the petitioner, as the said clause provides that the price bid must contain the price schedule and the bidders commercial terms and conditions and for its non compliance, the bid will be rejected. The learned senior counsel submits that Clause-1.0 has been violated by the petitioner in two ways, namely, by non conforming to Annexure-A4 of the bid documents and also by putting a condition, in the form of a clause reserving the right to manufacture the rig components in any of its facilities, which is not a commercial condition but a technical condition. The learned senior counsel further submits that during the Pre-Bid Conference, all the bidders were informed about the requirement of submission of the price bid in terms of Annexure-A4 to the bid documents by rejecting the contentions of the bidders including the petitioner to waive such requirement. WP(C) No.154 of 2013 Page 22 of 69

23 [27] Referring to Clause of the OIL s Booklet for e- Procurement ICB Tenders, which were also made available to the bidders and applicable in the present process, informing the bidders, that they shall have to fill in completely all fields in the price schedule furnished in the bidding documents in respect of the items quoted, it has been submitted that despite that the petitioner has chosen to mention the prices of 19 components instead of 63 as required. The learned senior counsel submits that the respondent No.5, M/s BHEL, also though in the checklist of the technical bid informed the respondent OIL against its policy of non disclosure of the price of major rig components, it has, however, in the fresh price bid mentioned the price of all the 63 major rig components, as required by Annexure-A4 to the bid documents. [28] It has also been submitted that the requirements of having the price of all the 63 major components is for compliance of the International Financial Reporting System (IFRS) and for correct booking of capital expenditure and as such, it cannot be said that such condition is not mandatory requirement. It has also been submitted that the requirement of mentioning the price of all the 63 major equipments is also felt necessary by the respondent OIL, so that the bidders whose bid is ultimately accepted, in case of requirement of replacement of any major components, do not charge the high price, thereby avoiding unnecessary spending of public money. In any case, according to the learned counsel, since the bidder is bound to comply with the terms and conditions of the NIT, which includes furnishing the price of all 63 major equipments, the bid submitted by the petitioner cannot be accepted, as he has admittedly quoted the price of 19 components only. WP(C) No.154 of 2013 Page 23 of 69

24 [29] Referring to the decisions cited by the learned senior counsel for the petitioner, it has been submitted by the learned senior counsel that those are not applicable in the facts and circumstances of the present case. It has also been submitted that as held by the Apex Court in Poddar Steel Corporation (supra) since the petitioner has failed to conform to the mandatory requirement of the bid documents, the petitioner s bid has rightly been rejected by the respondent OIL. Referring to the decision of the Apex Court in Gursharan Singh & Anr. -Vs- New Delhi Municipal Committee & Ors. reported in (1996) 2 SCC 459, it has been submitted that the guarantee of equality before law being a positive concept, it cannot be enforced by a citizen or Court in a negative manner, i.e. if an illegality or irregularity has been committed in favour of any individual or a group of individuals, others cannot invoke the jurisdiction of the Court that the same irregularity or illegality be committed by the State or an authority within the meaning of Article 12 of the Constitution, so far such petitioners are concerned, on the reasoning that they have been denied the benefits, which have been extended to others although in an irregular or illegal manner, the petitioner cannot claim the relief in the present writ petition solely on the ground that the unsolicited communications from the respondent No.4 has been accepted by the respondent OIL, despite the stipulation in Clause-14 of the bid documents, when the petitioner itself is guilty of violation of the mandatory conditions of the bid documents. [30] Placing reliance on the decision of the Apex Court in Raunaq International Ltd. -Vs- I.V.R. Construction Ltd. & Ors. reported in (1999) 1 SCC 492, it has also been submitted that the price being not always the sole criteria for awarding the contract and the same being only one of the criterias, public interest does not require acceptance of the petitioner s bid when its bid is defective WP(C) No.154 of 2013 Page 24 of 69

25 being violative of the mandatory conditions of the bid documents and as such, it cannot be said that since the petitioner s bid is found to be the lowest, his bid, irrespective of the violation of the mandatory requirements of the bid documents, must be accepted. The learned senior counsel further submits that as held by the Apex Court in Larsen & Toubro Ltd. & Anr. -Vs- Union of India & Ors. reported in (2011) 5 SCC 430, that after the price bid is opened, there cannot be any change of the offer of the bidders in any respect, the respondent OIL has not committed any illegality in not asking for clarification in respect of the aforesaid clause, reserving the right to manufacture the rig components in any of the petitioner s unit other than the unit in respect of which the API license has been submitted, more so, when such a course of action is not permissible under the terms and conditions of the bid documents. The learned senior counsel referring to the decision in W.B. State Electricity Board -Vs- Patel Engineering Company Ltd. & Ors. reported in (2001) 2 SCC 451 submits that the best way to adhere to the transparency being to follow the tender conditions, the action on the part of the respondent OIL in rejecting the bid of the petitioner, cannot be termed as arbitrary, irrational or unreasonable, such action being to adhere the transparency in the decision making process. [31] The learned counsel placing reliance on the decisions of the Apex Court in Rajasthan Housing Board & Anr. -Vs- G.S. Investments & Anr. reported in (2007) 1 SCC 477 and in Siemens Public Communication Networks Private Ltd. & Anr. -Vs- Union of India & Anr. reported in (2008) 16 SCC 215, further submits that the scope of judicial review of the decision making process, in exercise of the power under Article 226 of the Constitution of India, being very limited, which is required to be exercised with great care and caution and only in furtherance of public interest and not on the ground of WP(C) No.154 of 2013 Page 25 of 69

26 making out of a legal issue by the person seeking a writ and where two views are possible and no malafide or arbitrariness is alleged or shown, the High Court cannot interfere with the view taken by the authority in the commercial matter and if the decision of awarding the contract is bonafide and in public interest, the Court will not exercise the power of judicial review and interfere with the decision making process of the authority, even if it is accepted, for sake of argument, that there is a procedural lacuna. The learned counsel referring to the facts and circumstances of the instant case, has submitted that since it is admitted by the petitioner that they have not mentioned the price of all the 63 major rig components, which is a mandatory requirement, this Court may not interfere with the decision making process of the respondent OIL merely on the ground that the petitioner has offered the lowest price. The learned counsel, therefore, submits that the writ petition filed by the petitioner deserves dismissal. [32] Mr. Ganguly, learned senior counsel appearing for the respondent No.4, raising the question of maintainability of the writ petition supported by an affidavit filed by Shri Vamaraju Sree Satyamurti, has submitted that since the respondent No.4 has challenged the authority purportedly given by the petitioner in favour of said Sree Murti for filing the writ petition, it was incumbent on the part of the petitioner to produce such authority before this Court, when Sree Murti has claimed that he has been authorized by the petitioner to file the writ petition and to swear the affidavit, which having not been done, the writ petition supported by an affidavit by an unauthorized person deserves to be dismissed. It has also been submitted that Drillmec India Private Limited, of which Sree Murti claims to be the Director, being not a bidder in the bidding process, the writ petition filed with the affidavit of the Director of Drillmec deserves to be dismissed as not maintainable. WP(C) No.154 of 2013 Page 26 of 69

27 [33] Referring to the corporate entity of the petitioner, it has also been submitted by the learned senior counsel that since the petitioner has claimed a right under Article 19(1)(g) as well as under Article 14 of the Constitution of India, the petitioner is not entitled to any relief, such protection of specific fundamental rights being only guaranteed to a natural person and not to corporate entities, as held by the Apex Court in State Trading Corporation of India Ltd. -Vs- Commissioner of Tax Officer & Ors. reported in (1964) 4 SCR 99; in Barium Chemicals Ltd. -Vs- Company Law Board reported in 1966 Supp SCR 311; in Divisional Forest Officer -Vs- Biswanath Tea Company Ltd. reported in (1981) 3 SCC 238. It has also been submitted that the petitioner being a foreign entity, registered in Italy, is not entitled to invoke the fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution of India and the writ petition being based on the claim of violation of the fundamental rights under Article 14 and 19(1)(g) of the Constitution of India, the same deserves to be dismissed. The learned senior counsel in support of his contention has placed reliance on the decision of the Apex Court in Indo-China Steam Navigation Co. Ltd. -Vs- Jasjit Singh, Addl. Collector of Customs reported in (1964) 6 SCC 594 as well as in British India Steam Navigation Co. Ltd. -Vs- Jasjit Singh, Addl. Collector of Customs reported in AIR 1964 SC [34] Mr. Ganguly further submits that the petitioner is not entitled to the discretionary relief under Article 226 of the Constitution of India, as it has suppressed material facts relating to the condition put by it in the price bid, reserving the right to manufacture and test the rig, or any part of them in any of its facility as per their availability at the time of awarding the contract, and also about non disclosure of the price of all 63 major rig components, as per the format Annexure-A4 to the bid documents. According to the learned WP(C) No.154 of 2013 Page 27 of 69