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Judgment
A.K. Menon, J.—By the present Petition, the Petitioner impugns the communication dated 6th January, 2014 whereby Respondent No. 1 informed the Petitioner and four other bidders, whose price bid was opened, that the price bid of Respondent No. 2 would be opened on 8.10.2013 pursuant to representation made against rejection of bid of Respondent No. 2 for aforesaid project. This representation was made by Respondent No. 2 to Independent External Monitor ("IEM") appointed pursuant to the tender. The subject matter of the tender is the setting up of new Onshore Terminal Facilities alongwith integration with the existing terminal at Odalarevu. The Petitioner, Respondent No. 2 and four other parties were bidders for aforesaid project.
The facts giving rise to present Petition are set out as under :
On 29th November, 2011 Respondent No. 1 issued notice inviting a tender for the project. The tender was an open tender under International Competitive Bidding through e-procurement. The last date for submission of bids was 29th August, 2012. On 29th August, 2012, the Petitioner and 17 other bidders including Respondent No. 2 submitted their bids. The technical bids were opened on the same day. On 13th June, 2013, Respondent No. 1 wrote to Respondent No. 2-Technip KT India Ltd. (Technip") listing out following deficiencies in the bid :
(a) The Power of Attorney in favour of one Pradeep Sharma who was Authorised Signatory of Respondent No. 2 and believed to empower the signatory to conclude the agreement had not been provided.
(b) Technip failed to provide agreement between its parent company and itself. (c) The agreement between Technip and parent company as submitted contained changes in the tender requirement. (d) The parent company guarantee submitted alongwith bid was not in accordance with form required.
On 26th June, 2013 Technip submitted power of attorney dated 7th May, 2012 executed by one Shamik Mukherjee in favour of one Prashant Sharma. The Power of Attorney did not authorise Sharma to submit tenders or enter into agreements on behalf of Respondent No. 2. Technip contended that modification in the agreement and guarantee were in accordance with earlier ONGC bid and therefore, they requested ONGC to accept existing document at Appendix 11, namely, the agreement between the parent company and Respondent No. 2. On 17th September, ONGC wrote to Technip that the Power of Attorney dated 7.6.2012 was not acceptable.
On 25th September, Technip wrote to ONGC to state that Power of Attorney submitted by Mr. Prashant Sharma was given by him in capacity of the Company Secretary of Respondent No. 1 and had been accepted in all prior proposals. It further contended that the parent''s guarantee was in line with an earlier guarantee which was accepted by ONGC in an earlier project. On 1st October, 2013 the tender committee of Respondent No. 1 found that though Power of Attorney executed in favour of said Mukherjee contained an authority to sign agreements on behalf of Respondent No. 2 and such power is not contained in the Power of Attorney issued by Mr. Shamik Mukherjee to Mr. Prashant Sharma. As such bid of Respondent No. 2 should be rejected since Respondent No. 2 failed to provide a valid Power of Attorney. On 5th October, 2013 the tender committee''s objection was accepted by Respondent No. 1 and bid of Technip was rejected on 8th October, 2013. It appears that bid of Petitioner and four other qualifying bidders was opened and the Petitioner''s bid was found to be lowest.
On 9th October, Technip wrote to the Independent External Monitor ("IEM") that its price bid had not been opened with other price bids despite Technip having technically qualified. Along with the representation Respondent No. 2 submitted that Power of Attorney dated 30th May, 2012 by which its Managing Director had delegated the power to execute the subject tender to its company secretary, Respondent No. 2 had inadvertently not submitted the Power of Attorney earlier. On 16th December, 2013, the IEM after considering the submissions issued opinion to the Management of the Petitioner to the effect that (a) ONGC has rightly rejected the offer of Technip, however, it referred the matter back to ONGC management to take final decision and to consider whether the conditions relating to Power of Attorney and parent company guarantee were "essential conditions", warranting strict compliance or whether they were ancillary conditions which could be relaxed by ONGC.
On 3rd January, 2014 Executive Purchase Committee (for short "EPC") considered the IEM''s opinion and concluded that the conditions relating to submission of Power of Attorney and parent company guarantee were not essential conditions for eligibility and are ancillary conditions, therefore, they could be relaxed. The EPC concluded that bid of Respondent No. 2 should be considered as acceptable and short-listed it for price bid opening. On 4th January 2014, the Petitioner issued a communication to ONGC asking them to refrain from opening the price bid of Respondent No. 2. On 6th January, 2014 ONGC issued a communication to all bidders stating that price bid of Technip be opened on 8th January. On 6th January 2013 a further communication was issued by ONGC to Technip informing it about opening of its price bid and requesting extension of bid''s validity upto 31st March, 2014. The Petitioner being aggrieved by the decision to open price bid filed the Petition on 7th January, 2014.
On 8th January, 2014 this court passed an order directing Respondent No. 1 ONGC to open price bid of Respondent No. 2 and clarified that it would be subject to further orders that may be passed in the Writ Petition. On 29th January 2014 further order was modified since the price bid had been opened and ONGC was permitted to take decision in the matter of awarding the contract but such decision would be subject to final orders in the Petition. On 4th February, 2014 it is submitted that ONGC and EPC took a decision to award the contract to Technip noting inter alia that ONGC stood to save 42.63 crores if contract was awarded to Technip.
In other words, the Petitioner had quoted Rs. 42.63 crores more than that of Technip. Thus, Technip would be lowest bidder. It must be stated here that the Petitioner has not made any allegation of manipulation of the price bid of Respondent No. 2 but has objected to the opening of price bids of others. However, the Petitioner contends that the Power of Attorney dated 30th May, 2012 which had not been submitted by Technip earlier has been provided only through IEM subsequently, was fabricated document. The stamp paper upon which it was printed was issued only on 8th May, 2013. The Respondents relied upon affidavit dated 14th February, 2014 filed in this proceedings to which is annexed copy of letter dated 13.2.2014 of the Senior Treasury Officer, Gautam Budh Nagar, U.P. confirming that the stamp paper in question used in Power of Attorney dated 30th May, 2012 was executed and printed on 24th March, 2013. The Petitioner therefore contends that the Power of Attorney is ex facie fabricated and could not have been available with Respondent No. 2-Technip on 30th May, 2012 when it is purported to have been executed.
On 14th March, 2014 Respondent No. 2 Technip filed further affidavit in which it stated that the Power of Attorney dated 30th May, 2012 was meant to reflect the authority granted by the Managing Director to Company Secretary at meeting on 30th May, 2012 and therefore, it was believed that the Power of Attorney should be of the same date of the meeting and contended that Technip has duly ratified the bid submitted by its employees and thus there was no lack of authority in the employees on the given date. The Petitioner has also filed written submission in which it highlights the aforesaid fact leading upto IEM decision. It is highlighted that IEM in its meeting held on 16th December, 2013 considered opinion of the Chief Legal Officer of ONGC wherein it is recorded that PCG and POA was not acceptable and POA was not furnished and therefore Technip was not correct and not technically valid and observed that ONGC may reject outright. Subsequently, at the meeting of EPC on 3rd January 2014, it was found by EPC that POA were valid POA and PCG as per tender form was acceptable and it was decided that it would not be prudent to reject the bid of Technip only on that ground.
The main thrust of the Petitioner''s argument is that POA is challenged, fabricated and got up document and the inquiries made with stamp vendor, whose name appear on the stamp paper revealed that the stamp paper was issued in the name of Mohammad Shadab son of Mohammad Shaukat, New Delhi and submitted inquiries under the Right to Information Act revealed that the stamp paper sold by Vendor Arvind Kumar was sold to said Mohammad Shadab on 8th May 2013 and that these revelations clearly establish the fabrication of POA that Technip had admitted that POA was dated 30th May 2012 and after 9th October 2013 and thus admitted to ante dating the same on seemingly tampered stamp paper. The Petitioner submitted that having resorted to filing fabricated document itself dis-entitles Technip from the tender process. It is submitted that despite ONGC repeated the demanding such POA and PCG, Technip had failed to do so and, therefore, its bid was rightly rejected. It is alleged that the IEM proceeded on the basis that the POA was valid document without knowing that POA was fabricated document and that the production of a false and fabricated document by Technip was to deceive ONGC and meet requirement post rejection and that such conduct tantamounts to forgery.
The learned Senior Advocate appearing on behalf of the Petitioners submits that fabrication of the POA clearly falls within definition of forgery being an act of fraudulently making a false document or altering a real one to be used as if genuine. It is submitted further by the counsel that explanation given by Technip in affidavit in reply fails to inspire confidence since Technip admitted that POA was ante dated but contends that old stamp paper was purchased on 9.10.2013 from one Yash Sharma.
Counsel further submitted there was nothing by way of resolution or otherwise to suggest that the authority was given on 30th May, 2012. The counsel submits the acts of Technip in having fabricated document vitiate the bid and disentitles Technip from participating in the tender process. It is further submitted that ONGC has not filed any affidavit after such disclosure made by the Petitioner. Learned counsel further submits that the integrity pact signed by Respondent No. 2 clearly envisaged that Technip would not indulge in any form of corruption and conduct such as the present violates the integrity pact.
Learned counsel relied upon some of the terms of tender including clause 8 of Invitation for Bids read with clause 10.3 of Instructions to bidders (Section A-A1-25) Section A-A4 Page 221 which according to him shows that the submission of valid authorization of the person signing the bid as also the submission of PCG and the agreement in the format set out in Appendix B10 and B11 are mandatory and essential terms of the tender. Learned counsel relied upon the judgment of Andhra Pradesh High Court in A. Krishna Reddy Vs. Government of the State of A.P. and Others, wherein in paragraph 8 to 11 the High Court had concluded that the use of the word "invariably" has its own significance. The word means that the subject or phenomenon, which is qualified by it is "never changing and constant". In other words even if there exists valid and justifiable ground for non compliance, the condition remains constant and unchangeable. Thus, according to the affidavit the requirement of a valid POA was an invariable condition and failure to comply with the same would result in disqualification of bid of Respondent No. 2. It is submitted that Technip not only failed to comply but also subsequently submitted fabricated documents that the stand taken by ONGC to contend that the requirement of POA and PCG were not essential. It is arbitrary that the Respondent accepted the documents and material after the process of assessing technical qualifications was over and after the price bid had been opened.
Learned counsel then relied upon the observation of the Hon''ble Supreme Court in West Bengal State Electricity Board Vs. Patel Engineering Co. Ltd. and Others, and made reference to paragraph 23 and 24 wherein the Supreme Court observed that in an international competitive bidding which postulates keen competition and high efficiency, the bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. In a work of this nature and magnitude the bidders who fulfill prequalification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide for scope for discrimination, arbitrariness and favouritism which are totally opposed to the rule of law and constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition unless provided under the instructions to the bidders, in favour of one bidder would create justifiable doubts in the minds of other bidder, would impair the rule of transparency and fairness.
In that case the Petitioner also relied upon the affidavit filed in the Karnataka High Court in case of M/s. Udyog Enterprises Vs. The Principal Secretary, Transport Department & Others and urged that "there was no other contrary material placed on record to come to conclusion that decision was either perverse or without basis since Appellate Authority after referring to materials and discrepancies pointed out had came to conclusion that documents were not genuine. If some documents were not genuine, then it would vitiate entire system for pre-qualification and by adopting undesirable methods it would have bearing on entire process. The Petitioner, therefore, submitted that the claim requires rejection and therefore rejection was in order and there is no justification for the change of mind by ONGC pursuant to the meeting of IEM. In Udyog Enterprises the Karnataka High Court held that the Petitioner in that case has sought to push his pre-qualification credentials based on the documents which are not genuine. It was held that where the documents are not genuine, the same cannot be utilised for benefit of pre-qualification that it would vitiate the claim for pre-qualification.
On behalf of Respondent No. 1, the affidavit in reply was filed by Mr. M. S.K. Sarma, Deputy General Manager of ONGC wherein he has denied the contentions taken in the petition. It is stated that the submission of Technip was considered by the tender committee on 1st October, 2013 and the tender committee decided to reject the bid since no document had been filed by Technip showing delegation of powers to execute contracts in the ordinary course of business by its Managing Director to Company Secretary and the parent company guarantee was not in the prescribed form. It is stated on oath that the requirement to submit proof of authority of the signatory is not a mandatory condition and, therefore, not furnishing of the POA from the Managing Director to Technip to its Company Secretary was not a material deviation from the tender conditions and not sufficient to reject the bid of Technip. It is submitted that proforma of PCG restricts the liability of the guarantor to 50% of the annualized contract price, which portion was deleted, as a result the liability of parent company guarantee was 100% annualized contract price, the liability under proforma guarantee was thus rendered unlimited by virtue of the said deletion and consequently, more beneficial for ONGC. As a result, ONGC found the changes acceptable.
Furthermore, it is submitted that IEM was approached since clause 34 of the Instruction to Bidders provides that the bidders may raise disputes/complaints, if any, directly with the nominated IEM c/o Chief Vigilance Officers, ONGC, Jeevan Bharti Tower II, New Delhi. The IEM is an independent and impartial body. The Monitor can in this regard submit non-binding recommendations. It is contended that on 16th December 2013 after considering the submissions made by Technip, the IEM gave its opinion to the management that although Respondent No. 1 was justified in rejecting bid of Respondent No. 2, it suggested that the management of Respondent No. 1 consider whether conditions pertaining to POA and PCG are essential conditions requiring strict compliance or whether they could be relaxed. It is submitted that the EPC consists of all the full time Directors of ONGC including its Chairman and Managing Director and CMD. The tender committee was subordinate to the EPC and EPC is final decision making authority in ONGC which is vested with full powers in relation to award of contracts. It is contended that the EPC has absolute power to consider the opinion of IEM and take appropriate action. In the present case, EPC concluded that POA and PCG were not essential conditions. It is further contended that after the price bid of Technip was opened on 8th January, 2014, it was declared L-1 being approximately 43 crores, lower than that of the Petitioners. The EPC, therefore, had concluded that it is appropriate that the contract be awarded to Technip-Respondent No. 2. The copies of the price bid of the Petitioner and Respondent No. 2 are also annexed with the affidavit to support.
Learned Advocate General for Respondent No. 1 submitted that the conditions of POA and PCG were not essential conditions. An affidavit in rejoinder of one Sanjiv Kapoor is filed on behalf of the Petitioner denying the contents of the affidavit in reply dated 21st January, 2013 and it proceeds on the basis of denials.
A further rejoinder of the same date is filed on behalf of Respondent No. 2. Respondent No. 2 has filed affidavit in reply of one Anitesh Pattanyak denying the allegations of the Petitioner highlighting the fact Technip is a technology driven, environment and safety conscious licensed contractor serving oil and gas, LNG, fertilisers, chemicals etc. and has annual sales turnover of USD 8.2 billion and has 36,500 employees across the globe. It has presence in India since 42 years in providing services in the hydro carbon sector.
It is contended that Mr. Prashant Sharma was duly authorised by Respondent No. 2. It is submitted that the deviation from prescribed form of PCG and non submission of POA were not serious deviation and that Respondent No. 2 was shocked and surprised that the price bid was opened on 8th October, 2013, while price bid of Respondent No. 2 was not opened and it has been rejected on the basis of non submission of POA hence PCG in original form. That Respondent No. 2 thereafter took it up with IEM and submitted that alleged shortcomings were superficial and could not warrant that bid of Respondent No. 2 be cancelled or rejected. It is submitted that IEM has rightly determined entitlement of Respondent No. 2 to have its price bid opened by leaving it to Management of ONGC. He denied the allegations of collusion between Respondents No. 1 and 2 and allegations of subversion of integrity. It is further submitted that the Petitioner has by challenging IEM views and the decision of ONGC based on IEM''s view is contravening and undermining the integrity pact. The allegations of arbitrariness or perverse behavior are denied. It is further stated that the fact that price bid of Respondent No. 2 is about Rs. 43 crores lower than that of the Petitioner has been highlighted.
A further affidavit is filed on behalf of the Petitioner pursuant to the rejoinder dated 4th February 2014, in order to bring to the attention of the court that the Petitioner has received information from the Senior Treasury Officer, Gautam Buddha Nagar, U.P. dated 13th February, 2014 stating that stamp paper in question was sold to Shadab Mohammed. On behalf of Respondent No. 2 an affidavit in sur-rejoinder dated 14th March, 2014 has been filed dealing with issue relating to POA. Respondent No. 2 has stated that Prashant Sharma-Company Secretary was already authorised alongwith other representatives of Respondent No. 2 to take all steps necessary in relation to ONGC tender including executing and signing necessary documents and conclude agreement on behalf of Respondent No. 2. It is submitted that Respondent No. 2 believed that the POA granted was mean to reflect the authority already granted to Prashant Sharma for the aforesaid purpose. The stamp paper of 30th May, 2012 being of earlier date was purchased from Yashpal Singh. The deponent admits that it now bears the date was result of alteration made by the employee and he is not aware who has effected such alternation. It is stated that Prashant Sharma had already been authorised at the meeting held on 30th May, 2012 and in any event Respondent No. 2 fully ratified the submissions made by its employees in relation to the bid and that Respondent No. 2 had not made any wrongful gain by obtaining the stamp paper. Respondent No. 2 admits that stamp paper was purchased by Respondent''s peon Ashok Kumar from a vendor Yashpal Singh and stamp paper carried date of 8th May, 2012. It is also stated that although the stamp vendor Mr. Arvind Kumar claims to have sold the same stamp paper to a person other than Respondent No. 2, however, the name of said person does not appear on the stamp paper. The name of Respondent No. 2 was endorsed on the said stamp paper by said Yashpal Singh at the time of selling the stamp paper to Respondent No. 2.
Mr. Khambata, learned Advocate General appearing on behalf of ONGC submitted that the requirements of POA and that of the submission of Parent Company''s guarantee bond form were not essential and mandatory conditions. He made reference to clause 10.8 of the instructions to the bidders and submitted that the bidders were clearly required to indicate their legal constitution and the person signing the tender shall state his capacity and also the source of his authority in order to bind the bidder. That apart proper POA or authorisation or any other document constituting adequate proof of authority of the signatory to bind the bidder, was required to be submitted. The ONGC had a right to reject outright any tender unsupported by adequate proof of the signatory''s authority. He submitted that it is not mandatory to submit only a POA and that clause 10.8 itself provided that "any other document constituting adequate proof of authority of signatory" was sufficient. He also made reference to Appendix A-6 being bid evaluation criteria and made specific reference to clause 10.3 (2) which clause reiterates that the POA or other authorisation or any other document consisting of adequate proof of the ability of the signatory to bind the bidder was required to be submitted.
Further reference was made to clause 27 of the bid evaluation criteria and it was submitted that clause 27 specifies 11 kinds of offers which will be rejected for e.g. offers made without bid security, offers not made in e-form, offers made by agents/consultants, offers where price and not firm were bound to be rejected. According to the learned Advocate General clause 27 does not contemplate non submission of POA or submission of a PCG in a modified form to be an offer(s) that are bound to be rejected. None of the items in clause 27 required contemplated mandatory condition of POA. He further submitted that under condition A-4 the PCG was not required to be submitted along with submission of the tender itself but could be provided even later and clause A-4 was enabling provision which entitled to these bidders, who did not meet experience or financial criteria stipulated in bid evaluation criteria can also be considered provided the bidder was 100% subsidiary of the parent company which met the experience and financial capability criteria. It is further submitted that in fact two different PCG were submitted by Respondent No. 2, one in the modified form which in fact increases liability of the parent company and a second PCG exactly in the form prescribed in Appendix B-11 to bid package.
The learned counsel further submitted that once the clause/condition is found to be non essential the same could be waived in the discretion of the EPC. Learned Counsel submitted that ONGC had sought opinion of the independent external monitor which had observed that ONGC was correct in rejecting the offer of Technip by valid reason that they had failed to provide authority of POA and PCG. That the POA submitted had infirmities set out and certain infirmities which have been set out in the report, PCG also did not comply with the format. The IEM further observed that Technip should have submitted the documents with ONGC within time limit specified. The IEM further observed that after considering the legal opinion of ONGC, Chief of Legal, Justice Khare, Former Chief Justice of India and Mr. Balsubramaniam, the IEM referred the matter to ONGC''s management to take considered view as to whether POA and PCG as essential conditions. It is pursuant to this said recommendation that EPC considered the IEM recommendations and decided to open price bid. Learned Counsel submitted that the impugned decision is in accordance with law and in keeping with the terms of tender and it cannot be faulted.
Learned Advocate General on behalf of Respondent No. 1 has relied upon the decision of the Supreme Court in M/s. Poddar Steel Corporation Vs. M/s. Ganesh Engineering Works and others, , in support of his contention that as a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories-those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the conditions. In case of essential conditions the authority issuing the tender will be required to enforce them rigidly and in the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. According to learned Advocate General the ratio in Poddar Steel Corporation applies to the present case. He also relied upon the decision of Kanhaiya Lal Agrawal Vs. Union of India (UOI) and Others, to support the contention that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to the consequence of non compliance thereto. If non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only a collateral term. The learned Advocate General further relied on the decision of Supreme Court in case of Indian Railway Catering and Tourism Corporation Limited and Another Vs. Doshion Veolia Water Solutions (P) Limited and Others, , once again to buttress the submission that the tender may be rejected only for failure to comply with essential conditions of the tender notice and absence of any mention of the consequence of rejection of offer for not indicating the total excise duty amount in rupees included in the price of plants and equipments in the tender documents, it cannot be held that the party had committed breach of essential term or condition of the tender notification or the tender format. In that case Ion Exchange had failed to indicate total excise duty amount included in the prices for plants and equipments and it was held that the High Court could not have concluded that Ion Exchange has committed breach of essential condition and in the said decision reliance is placed on Kanhaiya Lal Agrawal''s case.
Mr. Khambata also relied upon recorded notes of discussions held in EPC meeting on 4.2.2014 wherein deliberations of the EPC were noted and EPC after considerable deliberations found that there is saving of approximately of Rs. 43.62 crores and ONGC being a Public Sector undertaking, this saving is in the national interest.
Mr. Saraf, the learned counsel for the Petitioner in rejoinder submitted that PCG submitted was not given in form required by ONGC and, therefore, it was not in the interest of ONGC, when the technical bid was opened on 29.12.2012 and price bid was opened on 8th October, 2013 almost one year after opening of the technical bid. He submits that on 9.10.2013 Respondent No. 2 provided fabricated POA. He submitted that ONGC considered the recommendations of IEM and eventually decided to open price bid was not disclosed on affidavit and was questionable as arbitrary and unreasonable. He submitted that the provisions of clause 25 were very material and POA ought to have been submitted and that ONGC should have issued strict compliance with these provisions. He further submitted that in the integrity pact itself the bidder had declared that he would not commit any offence under anti-corruption laws and Respondent No. 2''s conduct sufficiently qualified as a corrupt practice which calls for disqualification from the tender process and execution from future contract under clause 3 of the integrity pact. He submitted that EPC had not disclosed the process by which it reconsidered the decision and decided to open the price bid. That an affidavit should have been filed disclosing the stages in taking final decision to award the contract to Respondent No. 2 and that the entire process lacked transparency. Mr. Saraf, the learned counsel for the Petitioner then sought to distinguish the judgments in M/s. Poddar Steel Corporation Vs. M/s. Ganesh Engineering Works and Others, Indian Railway Catering and Tourism Corporation Ltd. Vs. Doshion Veolia Water Solutions Pvt. Ltd. & Others and Kanhayalal Agarwal vs. Union of India on the ground that in Poddar Steel Corporation the court was considering an essential term of contract as distinguished from an ancillary term and that in Indian Railway Catering and Tourism Corporation Ltd., it was not a case where the tendering authority initially held that the term was an essential term of tender and thereafter decided to deviate from the same. That in case of Kanhayalal Agarwal, the judgment pertained to case where the tenderer made an attractive offer at a concessional rate, if the tender was finalized in a shorter time. Although the High Court in its order held the offer to be conditional and one that could not be permitted, the Supreme Court found it otherwise. He, therefore, submits that the aforesaid pronouncement are of no assistance to Respondent No. 1 and that the impugned decision are required to be quashed.
Mr. Sen, the learned Senior Counsel appearing on behalf of Respondent No. 2 submits that he adopts argument of learned Advocate General and according to him the signatories to POA legitimately held necessary authority and that the allegations of collusion, arbitrariness etc. were uncalled for and even baseless.
Having considered submissions of the parties we find that thrust of the Petitioner''s arguments is based on the fact that POA submitted was a fabricated one and such conduct would not justify award of contract to Respondent No. 2. While it is true that Respondent No. 1 had initially rejected the Respondent No. 2''s bid on the ground of non compliance with Condition No. 10.3(2) and 10.8 of the bid package. Subsequently, Respondent No. 1 found that those conditions were not essential conditions after the IEM requested the management to have relook at the offer made by Respondent No. 2, especially since Respondent No. 2 was otherwise technically qualified and none of the bidders had any objections qua capability of Respondent No. 2 to execute the project in question. Respondent No. 1 has relied upon provisions of the Bid evaluation process and criteria for acceptance of bid and in particular Section "A" thereof Item 27 list out 11 kinds of offers that "Will" be rejected :
"(a) Offers made without Bid security (Earnest money deposit/Bank Guarantee) alongwith the offer.
(b) Offers not submitted in e-form through ONGC''s e-procurement engine.
(c) Offers made by Agents/Consultants/Retainers/Representatives/Associates of foreign principals.
(d) Offers where price are not firm and/or with any qualifications.
(e) Offers which do not conform to ONGC''s Price Proforma Appendix A-2 & Appendix A-3 as provided in Tender documents in the e-bidding engine.
(f) Deleted.
(g) Offers which do not conform to the completion period indicated in the bid document.
(h) Offers received without integrity pact duly signed by the authorized signatory of the bidder.
(i) Offers of the bidder violating the provisions of integrity pact.
(j) Offers and all attached documents not digitally signed using digital signatures issued by an acceptable Certifying Authority (CA) as per Indian IT Act 2000 by the person as per power of attorney submitted.
(k) Offers not accompanied with a declaration that neither the bidders themselves, no any of its allied concerns, partners or associates or Directors or proprietors involved in any capacity, are currently serving any banning orders issued by ONGC debarring them from carrying on business dealings with ONGC.
(l) Offers not accompanied with a copy of valid registration certificate under Service Tax Rules or an undertaking for submission of copy of requisite certificate under Service Tax Rules or an undertaking for submission of copy of requisite service tax registration certificate along with the first invoice under the contract. (Applicable for Indian bidders and foreign bidders having fixed establishment or permanent address in India)
OR
Offers not accompanied with a declaration to the effect that the bidder do not have any fixed establishment or permanent address in India (Applicable for foreign bidders, who do not have any fixed establishment or permanent address in India)."
It is seen that non submission of Power of Attorney and the parent company guarantee are not criteria, non-compliance of which will entail rejection of an offer. In the circumstances, we find that ONGC was justified arriving and concluding that these deficiencies were not fatal to the tender viewed in backdrop of the fact that there were no allegations that price bid of the Second Respondent had been altered after opening of price bids of all other bidders. The action of ONGC does appear to be a bonafide exercise of discretion in the national interest as evidenced by deliberations of IEM which concluded that bid of Respondent No. 2 was lower than that of the Petitioner (which was earlier declared L-1) by approximately Rs. 43.62 crores. This fact appears to have weighed heavily on the minds of members of the EPC which considered recommendations of IEM and in exercise of commercial wisdom decided to open the price bid of Respondent No. 2 and award the contract to them. The Petitioner''s grievance as to fabrication/forgery and inappropriate conduct notwithstanding the EPC decided to award contract to Respondent No. 2 while waiving deficiencies. No doubt the sequence of events does indicate POA provided subsequently, does appear to be on stamp paper inappropriately used for executing ante dated document. Although such action cannot be countenanced under normal circumstances, in the present case, Respondent No. 2 in affidavit filed by one Samik Mukherjee dated 14th March, 2014, has dealt with Petitioner''s objections relating to POA dated 30th May, 2012. In paragraph 15 of the affidavit, the deponent states that POA was made to reflect the authority already granted by deponent to Prashant Sharma on 30th May, 2012 and in view of this indication it was thought that the document was to bear same date or earlier date. Accordingly, Respondent No. 2 bought stamp paper dated 8th May, 2012 from one Yashpal Singh. The deponent accepts the position that there appears to be alteration in the date and that no such alteration was done by any officials of Respondent No. 2. They are not aware who effected such alteration. Respondent No. 2 drew up a POA which was typed on the said stamp paper since Respondent No. 2 has granted liberty to Prashant Sharma. In any event Respondent No. 2 has ratified submission of tender document of its employee, therefore, there is no attempt to make any wrongful gain from execution of POA. The affidavit goes on to state that although the stamp vendor claim to have sold stamp paper with serial No. AK896347 to a person other than Respondent No. 2, however the name of said person does not appear on the stamp paper and that name of Respondent No. 2 was endorsed on the said stamp paper by said Yashpal Singh.
After considering rival contentions of the parties apropos issuance as regards procurement of stamp paper, its use for procuring POA and execution of POA leading to its submission and we do not propose to enter into this aspect as they deal with partially disputed questions of fact which cannot be gone into. However, this controversy does not take away from the fact that Respondent No. 2 was technically qualified and that its price bid was lower than that of the Petitioner by approximately Rs. 42.63 crores which by no means is small sum and accordingly this has weighed on the mind of EPC. Moreover, Respondent No. 2 has not shied away from the fact that the stamp paper was purchased and that there has been some irregularity. The Petitioner have on the other hand not questioned the right of Respondent No. 2 to make representation to the IEM and right of IEM to make recommendations. Nor have they questioned the power of EPC to consider recommendations. The price bid of Respondent No. 2 was also opened in pursuance of other bidders with due notice to them, although not without protest from the Petitioner. Taking overall view of the matter we find that the decision of Respondent No. 1 to waive the conditions of submission of POA and parent company bond (which was subsequently replaced) and the controversy relating to execution of POA and apparently ante dating does not restrict the right of Respondent No. 1 to award the contract to Respondent No. 2 who came out as the lowest bidder.
In the circumstances we are of the view that no interference is called for and the ad-interim order dated 29th January, 2014 as modified by order dated 5th February, 2014 stands vacated. In view of the above the Petition is dismissed.
At this stage, learned counsel appearing for the Petitioner requested for continuation of interim order. This request is opposed by the learned counsel appearing for the Respondents. He submitted that Respondent-ONGC is suffering loss of Rs. 6 crores every day. Taking into consideration the said fact, request for continuation of an interim order is declined.