Explore the fascinating legal nuances involved in the court’s analysis of bid revisions in public contracts. The case delves into the challenges of allowing one bidder to modify their offer without providing similar opportunities to other applicants, raising critical questions around fairness and due process in procurement procedures. Stay tuned for a detailed exploration of the court’s legal reasoning and its implications on public contract bidding processes.
Facts
- ONGC invited ‘Expressions of Interest’ (EOI) on 22.07.2020 for demand assessment for natural gas produced from the two fields.
- Three applicants showed interest in sourcing the natural gas – Nobel Cera Coat, Vaibhavi Enterprise, and Tanish Cerachem Private Limited.
- Writ applicant offered to lift gas within 75 days, while Tanish Cerachem revised its response to 65 days.
- ONGC re-invited bids after Tanish Cerachem’s revision, but writ applicant did not submit a fresh bid.
- Writ applicant filed a writ petition challenging ONGC’s letter dated 08.03.2021, seeking to proceed with the original offer from 22.07.2020.
- Union of India was later made a respondent in the High Court case.
- Writ applicant reduced days for gas lifting to 65 days during the hearing.
- High Court directed ONGC to finalize the contract with the writ applicant based on the 65-day condition.
- ONGC noted the submissions made on behalf of the writ applicant regarding the agreement to lift the gas within 75 days.
- There was a discrepancy as one of the applicants was prepared to lift the gas within 65 days, causing ONGC to be in a dilemma.
- Due to this difference in readiness to lift the gas, the offer in favor of the writ applicant was not finalized.
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Arguments
- Shri Santosh Krishnan appeared for the appellant.
- Shri Saurav Agrawal appeared for the original writ applicant on caveat.
- Shri Vikramjit Banerjee appeared as the learned ASG on behalf of ONGC.
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Analysis
- The High Court’s procedure in allowing the writ applicant to modify its offer without giving the other applicants an opportunity to do the same was deemed unsustainable.
- The High Court passed the order without hearing the other applicants, who had also submitted Expressions of Interest.
- The original writ applicant initially offered to lift the gas within 75 days, but later revised it to 65 days during the course of the petition.
- The other applicants were not made parties to the writ petition, and even the Union of India was not initially included until later directed by the Court.
- The High Court’s decision to permit the modification of the offer under Article 226 of the Constitution was considered to be against the law.
- High Court’s decision to allow one bidder to revise their offer under Article 226 of the Constitution of India questioned
- High Court did not give similar opportunity to other applicants to revise their bids
- High Court issued mandamus directing ONGC to finalize the contract with a specific bidder without providing reasoning
- High Court disposed of the writ petition instead of allowing it and making the Rule absolute
- Impugned order lacks reasons on merits and is deemed unsustainable
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Decision
- The impugned order passed by the High Court on 20.09.2021 in Special Civil Application No.5815 of 2021 has been quashed and set aside.
- The matter is remitted back to the High Court for a fresh decision.
- Special Civil Application No.5815 of 2021 is to be restored to the file of the High Court.
- The appellants are to submit an appropriate application for impleading them as party respondent nos. 4 and 5, which is to be allowed by the High Court.
- The High Court is to pass a fresh order in accordance with law and after giving opportunities to all respondents, including ONGC, Union of India, and the appellants.
Case Title: VAIBHAVI ENTERPRISE Vs. NOBEL CERA COAT (2021 INSC 657)
Case Number: C.A. No.-006289-006289 / 2021
