JAY BEE ENERGY SERVICES PVT LTD Vs. OIL INDA LTD

JUDGEMENT

(1.) In this writ petition, the case of the petitioner is that on 20.11.99 by the Notice Inviting Tenders, the Oil India Limited, a Government of India undertaking, invited international competitive bids under single stage - 2 bids system for hire of services for operation and maintenance of Coil Tubing Units, Nitrogen Pumper and other related units. As per the said Notice Inviting Tenders, the technical bids were to be opened first and the commercial bids were to be opened later if the technical bids were found to be eligible. The petitioner and the respondent No. 7 amongst others submitted their bids. The technical bids were opened on 1.2.2000 and it was found that the bids of the petitioner and the respondent No. 4 were only technically eligible. The price bids of the petitioner and the respondent No. 7 were opened on 8.6.2000 and while the bid of the petitioner for the work was Rs.4.18 crores, the bid of the respondent No. 4 was at Rs.12.88 crores. The petitioner's grievance in this writ petition is that notwithstanding the fact that the price bid of the petitioner was Rs.4.18 crores and that the price bid of the respondent No. 4 was 3 times higher than that of the petitioner at Rs.12.88 crores, the Oil India Limited has not awarded the contract in favour of the petitioner and is about to award the said contract to the respondent No. 4. The petitioner has filed this writ petition with a prayer for directing the respondent Nos. 1, 2 and 3 to award the contract to the petitioner.

(2.) Mr B.K. Sharma, learned counsel for the petitioner, submitted that one of the conditions stipulated in the Bid Rejection Criteria was that the bidders as primary entities must have a minimum experience of 5 years in execution of various stimulation jobs using CTU and Nitrogen Pumper units and the petitioner filed along with its tender documents to show that it had such minimum 5 years experience, more than 3 years in similar works carried on for Oil and Natural Gas Corporation Limited and about 2 years of similar work for Coil Tubing Inc. Hoston, USA and further the petitioner had also some experience in similar work with another American Company M/s Eclipse Packer Co., USA. He referred to the correspondences in Annexure-A series annexed to the writ petition to show that clarification in this regard was sought for from the petitioner by the Oil India Limited and was furnished by the petitioner along with separate documents and yet the Oil India Limited has not awarded the contract in favour of the petitioner and is intending to award the contract in favour of the respondent No. 4 even though the bid value quoted by the respondent No. 4 is 3 times more than that of the bid value quoted by the petitioner. Mr Sharma submitted that it would be clear from the averments made in paragraph-7 of the affidavit-in-reply filed on behalf of the petitioner on 4,10.2001 that the petitioner has been found to be technically qualified by as many as three committees of Oil India Limited, namely Proposing Committee, Tender Committee and Approving Committee. He submitted that after the commercial bids of the petitioner and the respondent No. 4 were opened and it was found that the bid of the petitioner was only Rs.4.18 crores where as that of the respondent No. 4 was Rs. 12.88 crores, the respondent No. 4 made some false complaints and the vigilance officials of the Oil India Limited being influenced by such complaints made by the respondent No. 4 have prevented the award of the contract by the Oil India Limited to the petitioner even though the bid of the petitioner is the lowest. He also referred to the letter dated 22.6.2000 of one Shri Ashok Kumar Saikia to the Union Minister, Ministry of Petroleum and Natural Gases, Government of India, New Delhi, copy of which has been annexed to the affidavit-in-reply as Annexure-P/1 to show that it was only at the instance of the said Shri Ashok Kumar Saikia that the award of the contract to the petitioner has been stopped by the Oil India Limited. Mr Sharma pointed out that respondent No. 4 had clearly indicated in his tender papers that it had no agent in India and, therefore Shri Ashok Kumar Saikia was not the agent of the respondent No. 4 and he had no locus standi whatsoever to make any complaint against the petitioner before the authorities or canvas for the award of contract to the respondent No. 4. Mr Sharma submitted that in any case the respondent No. 4 cannot be awarded the contract even on negotiation because the Central Vigilance Commission by its circular dated 18.11.98, copy of which has been annexed to the said affidavit-in-reply as Annexure-P/II, has issued instruction that post-tender negotiations which are a source of corruption are banned except in case of negotiations with the lowest tenderer. Mr Sharma further submitted that the respondent No. 4 was also not technically qualified at the time of opening of the technical bids on 1.2.2000 because it did not have minimum 5 years experience in execution of various stimulation jobs using CTU and Nitrogen Pumper as primary entity, the respondent No. 4-Company having been incorporated only in the year 1996.

(3.) Mr G.K. Bhattacharjee, learned counsel appearing for the respondent Nos. 1, 2 and 3, Oil India Limited and its officers, submitted relying on affidavit-in-opposition' filed on behalf of the respondent Nos. 1,2 and 3, that one of the conditions stipulated in the Bid Rejection Criteria is that bidder as primary entity must have a minimum experience of 5 years in execution of stimulation jobs using CTU and Nitrogen Pumper Units. The petitioner in its technical bid indicated that it had such 5 years experience as primary entity, 3 years with Oil and Natural Gas Corporation Limited and 2 years with an American Company, M/s. Oil Tubing Inc. and during the evaluation of the technical bids, as routine manner check up in order to satisfy vigilance angle, the Oil India Limited initiated an investigation for checking the authenticity of the information documents furnished by the bidders and pending completion of such investigation, the commercial bids of the petitioner and the respondent No. 4 were opened on 8.6.2000 as the bids of the petitioner and the respondent No. 4 prima facie, met the general tender requirements. He further submitted that, after the price bids were opened and while the internal investigation was on, a written complaint dated 15.6.2000 was received from the respondent No. 4 complaining that the information documents furnished by the petitioner with regard to 2 years work experience with M/s. Coil Tubing Inc. were not correct and the petitioner did not meet the experience criteria of the tender. Thereafter a detailed investigation was carried out by the Oil India Limited and certain shortcomings in the information documents furnished by the petitioner with regard to its 2 years work experience with M/s. Coil Tubing Inc. were observed as indicated in details in paragraph-13 of the affidavit-in-opposition filed on behalf of the respondent Nos. 1, 2 and 3. Mr Bhattacharjee further submitted relying on the affidavit-in-reply of the respondent Nos. 1,2 and 3 filed on 30.6.2001 that there was no involvement of Proposing Committee, Tender Committee and approving Committee as contended on behalf of the petitioner, but the Local Management Committee based on the available records with them recommended by giving benefit of doubt to the petitioner for consideration of the Corporate Business Commiee for allotment of work to the petitioner. But the Corporate Business Committee, which is ultimate approving authority, did not agree with the recommendation of the Local Management Committee because there was doubt about the genuineness of 2 years experience of the petitioner with M/s. Coil Tubing Inc. USA and accordingly returned the recommendation of the Local Management Committee with the direction to reply to the query raised by the Vigilance Department on the authenticity of the documents furnished by the petitioner in respect of its 2 years experience as primary entity with M/s. Coil Tubing Inc. USA. He further submitted that since the petitioner did not satisfy the Bid Rejection Criteria, the work cannot be awarded to the petitioner even if its tender was lowest. Mr Bhattacharjee pointed out that the respondent No. 4 may have been incorporated in 1996 but the agreement between the respondent No. 4 and M/s. Moraik Development and Oil Fields Services International Limited would show that the know-how, technical knowledge and assessment of M/s. Moraik Development Oil Fields Services International Limited were transferred to the respondent No. 4 and the respondent No. 4 had the requisite 5 years experience in the field as primary entity. Mr Bhattacharjee further submitted that the bid of the respondent No. 4 is of course Rs. 12.88 crores and 3 times more than that of the petitioner, but price fixation for the work in question is a technical matter and should be best left to the authorities of the Oil India Limited. He cited the observation of the Supreme Court in Center for Public Interest Litigation and another-Vs-Union of India and others, (2000) 8 SCC 606, that price fixation is a highly technical and complex procedure and it will be extremely difficult for Court to decide whether a particular price agreed to be paid under the contract was fair and reasonable or not. He also relied on the decision of the Supreme Court in Ramana Dayaram Shetty-Vs-International Airport Authority of India and others, AIR 1979 SC 1628, in support of his contention that if the eligibility criteria is relaxed in the case of the petitioner, it will amount to denial of opportunities of those who did not submit their tenders considering themselves to be ineligible. He cited the decision of the Supreme Court in Air India Limited-Vs-Cochin International Airport Limited, (2000)2 SCC 617, in which it has been held that the Court must exercise its power under Article 226 of the Constitution with great caution and-only in furtherance of public interest and not merely on makiing out of legal points when the question of award of contract is before the Court for judicial review. Mr Bhattacharjee submitted that as yet no final decision has been taken by the authorities of Oil India Limited to award the contract to the respondent No. 4.