Dwijen Chutia vs Oil and Natural Gas Corporation Ltd. and Another

Ranjan Gogoi, J.—The challenge in the instant writ application is against a tender notice dated 18.12.2001 issued by die authorities of the Oil and Natural Gas Corporation Ltd. (hereinafter referred to as the O.N.G.C.) certain items of work for which tenders were invited by notice dated 23.7.2001 and 4.9.2001 in which process the writ petitioner had participated after being withdrawn by the authority were re-tendered by the impugned tender notice in question.

The brief facts of the case may be noted as hereunder:

By a tender notice dated 23.7.2001 published in the newspapers on 31.7.2001 tenders were invited for two items of civil works at Drill site B.D.A.A. and K.H.A.F. Both the civil works in respect of the two Drill sites for which tenders were invited were identical'' and the same related to the construction of foundation for electrical rig and construction of internal hardening. The petitioner submitted his tender pursuant to the aforesaid notice dated 23.7.2001 for the work relating to construction of internal hardening in Drill site KHAP. Another tender notice dated 17.7.2001 was issued by the authority of the ONGC and published in the newspapers on 27.7.2001 inviting bids for the construction of approach road to the Drill site KHAF. The aforesaid work was split up into four different items. As no contractor had submitted any bid in response to the aforesaid notice dated 17.7.2001, the aforesaid works were re-invited by a short tender notice which was published in the newspapers on 4.9.2001. The petitioner, pursuant to the aforesaid tender notice dated 4.9.2001, submitted his bid for three out of four items of works relating to the construction of approach road to the Drill site KHAF. Subsequently, it appears that both the civil works relating to Drill site KHAF as well as the four items of work in respect of construction of the approach road to the Drill site KHAF were withdrawn and by the impugned notice fresh bids were invited for the aforesaid works. Aggrieved, the instant writ application has been filed.

Mr. N.C. Phukan, learned counsel appearing for the writ petitioner has submitted that for the four items of works in respect of which the writ petitioner had submitted tender pursuant to the earlier notice, the price offered by him was found to be the lowest and, therefore, die petitioner entertained a legitimate gspectadon of being settled with the contract. However, for reasons not disclosed and known, the authority withdrew the work for which tenders were invited and in response to which the petitioner submitted his tender and fresh-tenders for the said works were re-invited by notice dated 18.12.2001. Mr. Phukan has also submitted that in. respect of the civil works relating to the Drill site KHAF as many as four tenders were received and m respect of the works relating to the construction of the approach, road to the Drill site KHAF as many as 70 lenders were received. According to the learned, counsel, the actions of the authority in not proceeding with the tenders received and instead resorting to the impugned tender notice re-inviting bids for the same works has been taken for reasons collateral and not bonafide and the same have the effect of transgressing the rights of the petitioner. Hence, the impugned tender notice dated 18.12.2001 is liable to appropriate interference by this Court in exercise of powers under Article 226. Mr. Phukan, in order to bring home the point that the impugned actions are liable to interference in exercise of writ powers has placed reliance on two decisions of the Apex Court namely Centre for center For Public Interest Litigation and Another Vs. Union of India and Others, and Asia Foundation and Construction Ltd. Vs. Trafalgar House Construction (I) Ltd. and Others,

Ms. U. Baruah, learned counsel for ''the respondent ONGC controverting the arguments advanced on behalf, of the writ petitioner in the present application has pointed out that the writ petitioner having participated in the tender process pursuant to the impugned tender notice dated 18.12.2002 it will not be open to him to challenge the validity of the said notice. The learned counsel by placing reliance on the affidavit filed on behalf of the respondent has sough to contend that m respect of three out of the four items of work for which the petitioner had submitted tender, the price quoted by the writ petitioner was found to be the lowest. However, the aforesaid price and its acceptance thereof was required to be examined by the tender committee and the bids in question were also not placed before the tender committee. On the said basis it is contended by the learned counsel for the respondents that no enforceable right accrues to the writ petitioner in order to enable hint to maintain the challenge brought forward in the present application. Ms. Barua by relying on the affidavit filed has taken me through the averments made to show the reasons which had impelled the authority to withdraw the earlier tender notices and issue the impugned tender notice dated 18.12.2001. According to the learned counsel, it has been averred in the affidavit that Drill site KHAF is located in the somewhat disputed Assam-Nagaland boundary and that the area around the Drill site is under encroachments by the Naga people. A complaint was received from a public leader of Nagaland complaining that the tender process in respect of die works pertaining to the aforesaid drill site was somewhat irregular. The matter was examined and it was found that the mandatory period between the date of notice and the date fixed for submission of bids as per guidelines prevailing in the ONGC were not adhered to in the present case. Consequently to enable larger participation of the local people the ONGC had decided to withdraw the earlier tender notice and instead issued the impugned notice dated 18.2.2001. The learned counsel submitted that in the process initiated by the authority no prejudice has been caused to the writ petitioner in as much the bids submitted pursuant to the said tender notice have not been finalized. Ms. Barua, learned counsel relying on the Judgments of the Apex Court m me Case of Raunaq International Limited Vs. I.V.R. Construction Ltd. and Others, in the case of Air India Ltd. Vs. Cochin Int., Airport Ltd. and Others, has sought to impress upon the court that in exercise of powers under Article 226 this Court should be slow in interfering with the actions of the authority which the stated to be guided by public interest. According to me learned counsel this court is required to strike a balance between the public interest and the interest of the writ petitioner and on appropriate balance been arrived at, it is submitted, the public interest in the present case is overwhelming and, therefore, the impugned actions of the authority ought not to be disturbed.

Before adverting to the very elaborate arguments advanced by the learned counsel for the parties and the case laws cited, this Court notices that the writ petitioner has approached this Court challenging the notice dated 18.12.2001 after having participated in the tender process pursuant to the said notice. There is a certain amount of adventurism in the present litigation inasmuch as, on one hand the petitioner had taken part in the tender process pursuant to the notice dated 18.12.2001 and at the same time he seeks to challenge the same. However, in view of me very elaborate arguments advanced by the learned counsel for the/parties on the other aspect of the case, this Court is not inclined to non-suit the petitioner on the aforesaid limited ground.

The law with regard to Judicial interference in the matters relating to grant of contracts has developed over the last two decades by a series of decisions of the Apex Court. For the purposes of the present case the starting point may be taken to be the case of Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, The actions of public bodies including the State and its instrumentalities in the matter of grant and awards of contract have been made amenable to Article 14 necessitating the State authority to be fair in its dealings even in contractual and commercial transactions. The later decisions of the Apex Court have been judicial endeavours to lay down the limits and contours of judicial intervention in such contractual and commercial transactions of the. State. In the case of Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and Kashmir and Another, the Apex Court had visualized that government''s decision in contractual and commercial transactions may be based on an infinite variety of considerations and the eventual decision reached may be based on total evaluation of all such considerations. But in so far the judicial approach is concerned, the core issue to be determined is as to whether the government''s action is reasonable and fair and not .... .by malafide or collateral reasons. In Tata Cellular v. Union of India (supra) the Apex Court has laid down that the judicial endeavour in overseeing administrative action in contractual and commercial matters should always be to strike a right balance between, administrative discretion and Judicial intervention. In the aforesaid judgment the Apex Court has laid down that the three grounds on which judicial review would be available against such administrative actions are illegality, irregularity and procedural impropriety. In two subsequent decisions of the Apex Court the role of public interest in such matters have been emphasized. In the case of Raunak International (supra) the Apex Court has laid down that before a writ petition raising challenge in contractual matters is entertained and interim orders are passed by the High Court the Court must carefully weigh the competing public interests and only if it goes to show that there is overwhelming public interest in entertaining the same, the Court should intervene. In the said decision the Apex Court was of me view that if the Court, however, is satisfied that the decisions has been taken malafide or for collateral purposes, the Writ Court would be entitled to entertain the petition and pass appropriate orders. In the case of Air India Ltd. (supra) referred to above the Apex Court has laid down that the award of contract is primarily a commercial transaction and in arriving at a commercial decision, considerations which are paramount to such commercial transactions may be taken by the State. In the aforesaid Case the Apex Court has further laid down that even if some defect is found in the decision making process, the Writ Court in exercise of its jurisdiction ought to proceed with great-caution and should grant relief only if such relief is necessary in furtherance of overwhelming public interest. Such relief ought not to follow only uponmaking out of legal point.

Having traced the development of the law and its present position now we may proceed to apply the same to the facts of the present case. The admitted position with regard to the fact that the petitioner had submitted the lowest price in respect of three items out of four for which he had tendered does not vest the writ petitioner with an enforceable right to be granted the contract. Price is only one of me factors which would determine the suitability of an intending contractor. The overall suitability naturally will have to be judged on the basb of wide Variety of other factors apart from the price. That apart, the lowest price offered by thp writ petitioner was not scrutinized by the tender committee and the acceptance of the said price was not finalised. The entitlement of the writ petitioner to the reliefs, claimed in the present petition on the basis of the price offered by him. therefore,, would remain doubtful. By the tender notice dated 23.7.2001 and 4.9.2001, tenders both for civil works and works relating to construction of approach road were invited for me two Drill sites namely BDAA and KHAF. The defect in the issuance of the aforesaid tender notices on the grounds stated in the respondent''s affidavit would be common to both the Drill sites. The respondents, however; have withdrawn the tender only in respect of the Drill site KHAF not in respect of the other Drill site, i.e.,, BDAA, The entitlement of the petitioner to have any grievance in this regard would again be a matter of great doubt in as much as, the petitioner did not submit any tender in respect of any of the works with respect to Drill site BDAA. The tender submitted by the writ petitioner being only in respect of the Drill site KHAF, the aforesaid alleged irregularity or illegality can at best be raised by a person who had submitted tender in respect of Drill'' site BDAA. Even otherwise the actions of the authority in withdrawing the works only in respect of one Drill site, i.e., KHAF while maintaining it for me other Drill site, i.e., BDAA has to be judged in me context of the explanations furnished in me affidavit for such decision of the authority. In the affidavit filed the respondents have given some indication as to the reasons why they had resorted to the impugned actions. It is very difficult for the Court as laid down in the case of Centre for Public Interest Litigation (supra) to visualise the various factors which had impelled the State authority to take the impugned action and to judge the same by application of judicially manageable standards. This court would be primarily concerned with the correctness of the decision of the authority from a limited standpoint, i.e., whether the actions have been taken bonafide or reasonably. There is no material on record to indicate that the impugned actions complained of in the present writ application suffers from any such vice which would make it amenable to Interference under Article 226. It is not the province of the Court to sit in judgment over such decisions of the authority in what are primarily policy matters. Accordingly, this court is constrained to hold that-the actions of the authority complained of in the instant writ petition would not fall within the known and established parameters justifying interference under Article 226 of the Constitution.

This writ petition, therefore, will have to be dismissed which I accordingly do. But having regard to the facts of the ease, there shall be no order as to coats.