IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 25.08.2011 CORAM THE HONOURABLE MR. JUSTICE K.N.BASHA WP.No.13950/2011 & MP.Nos.2 and 3/2011, 4 and 5/2011 M/s.SAARG RR India Limited rep.by its Authorised Signatory S.Ramabadhran, Mylapore, Chennai 600 004. .. Petitioner Versus 1.Chairman and Managing Director Oil and Natural Gas Corporation Limited 3rd Floor, 11-High, ONGC Office Complex, Sion-Bandra Link Road, Mumbai-400 017. Also having its Regional Office at Thalamuthu Natarajar Building, No.1, Gandhi-Irwin Road, Egmore, Chennai 600 008. 2.The Executive Director – Chief Drilling Service Oil and Natural Gas Corporation Limited 11-High, ONGC Office Complex, Sion-Bandra Link Road, Mumbai-400 017. .. Respondents Writ petition filed under Article 226 of the Constitution of India praying for a writ of certiorarified mandamus calling for the records of the impugned order dated 26.03.2010 passed by the 2nd respondent, quash the same and consequently, direct the 1st respondent to allow the petitioner to participate in all the tenders floated by the 1st respondent and accept the tender submission of the petitioner for evaluation and qualification including that of the current tender No.MR/WS/MM/CT/CH/MODRIG/2011/P66JC11002 dated 18.02.2011 for charter hire of one number of offshore modular work over rig having 6" drain hole drilling capacity. For Petitioner : Mr.V.T.Gopalan, Senior Counsel for M/s.Chennai Law Associates For Respondents : Mr.G.Masilamani, Senior Counsel for M/s. King and Partridge https://hcservices.ecourts.gov.in/hcservices/ ORDER Though the miscellaneous petitions are listed today, by consent of the learned Senior Counsel appearing for the petitioner and the learned Senior Counsel appearing for the respondents, the main writ petition itself is taken up for final disposal. 2. The petitioner has come forward with this writ petition seeking for the relief of quashing the order of the 2nd respondent dated 26.03.2010 and consequently, direct the 1st respondent to allow the petitioner to participate in all the tenders floated by the 1st respondent and accept the tender submitted by the petitioner for evaluation and qualification including that of the current tender No.MR/WS/MM/CT/CH/MODRIG/2011/P66JC11002 dated 18.02.2011 for charter hire of one number of offshore modular work over rig having 6" drain hole drilling capacity. 3.1. The factual background of this matter arises out of a tender floated by the respondents dated 18.01.2008 for hiring operation and maintenance service of 3 off-shore jack up rigs, viz., Sagar Sakthi, Sagar Kiran and Sagar Jothi. Originally the respondents floated a tender on 31.07.2007 and modified the tender subsequently on 18.01.2008. Along with the tender document, an addendum was issued to the tender document and the relevant clauses are extracted here under:- 1.1 [a] The Bidder should be an Operation and Maintenance / Offshore drilling contractor and should have minimum experience of 3 [three] years on Offshore drilling Rigs. Out of which, at least, one year experience should be on Jackup rig. They should have executed at least 1 [one] such contract during preceding five years and should submit documentary evidence to this effect. [b] In case the bidder is an Indian Company / Indian Joint Venture company, the Indian Company / Indian Joint Venture company or its technical Collaborator/Joint Venture partner should meet the criteria laid down at 1.1[a]. 1.2. Details of experience and past performance of the bidder and the collaborator [in case of collaboration] or of joint venture partner [in case of a joint venture], on works/jobs done of similar nature in the past and details of current work in hand and other contractual commitments, indicating areas and clients are to be submitted along with the techno commercial bid, in support of the experience laid down 1.1 [a] and 1.1 [b] above. https://hcservices.ecourts.gov.in/hcservices/ 1.4 [a] Bidders should submit Memorandum of Understanding [MOU]/Agreement with their technical collaboration/Joint Venture partner [in case of joint venture] clearly indicating their roles under the scope of work. 1.4 [c] MOU/Agreement concluded by the bidder with technical collaboration/joint venture partner [in case of joint venture], should also be addressed to ONGC, clearly stating that the MOU/Agreement is applicable to this tender and shall be binding on them for the contract period." 3.2. The petitioner intended to submit its bid for the aforesaid tender and as the petitioner did not possess technical expertise and experience for executing the works contained in the aforesaid tender, it entered into a Memorandum of Understanding [MOU] dated 24.01.2008 with another company known as "Miden Systems", Nigeria for support through a technical collaboration for off shore jack up rigs Operations and Maintenance services and related activities and technical know how and skills including assistance in selection of crew and equipment. 3.3. Thereafter, the petitioner submitted its bid on the strength of the MOU signed with Miden Systems, Nigeria, for hiring of Operation and Maintenance services for ONGC rigs-Sagar Sakthi, Sagar Kiran and Sagar Jothi. The petitioner along with the bid submitted the contract signed by Miden Systems with MOBIL producing Nigeria Unlimited provided by Miden systems to prove its experience in the works covered in the tender. 3.4. As per the tender conditions precedent for participation in the said tender, the petitioner furnished a Bank guarantee dated 28.02.2008 for a sum of Rs.2 crores in favour of the 1st respondent as bid security. The Guarantee cover under the Deed of Guarantee was initially from 28.02.2008 to 30.06.2008 and later it was extended up to 30.09.2008. The petitioner received a letter dated 05.05.2008 from the 1st respondent stating that the petitioner's bid was under evaluation and sought for certain confirmations and documents. In response to the said letter, the petitioner furnished the required documents. The Miden Systems, Nigeria by enclosing the letter dated 08.07.2008 from Mobil Producing Nigeria Unlimited, had addressed a letter dated 09.07.2008 to the 1st respondent, confirming the experience criteria and the agreement entered between Mobil Producing Nigeria Unlimited and Miden Systems Limited, Nigeria. 3.5. The respondent issued a Firm Order / Letter of Award [LOA] dated 07.08.2008 to the petitioner after scrutinising the documents submitted by the petitioner and the technical Collaborator. https://hcservices.ecourts.gov.in/hcservices/ The petitioner has further stated the sequence of events relating to the earlier tender, viz., cancellation of Letter of Award on certain allegations, invocation of Bank Guarantee etc. Apart from the said factor, it is also stated by the petitioner about the receipt of the show cause notice dated 14.10.2009 from the Enquiry Officer of the 1st respondent relating to the cancellation of the aforesaid Firm Order on the allegation of violations in not complying with the conditions of the Letter of Award as well as the terms and conditions of the tender and the doubt raised about the genuineness of the documents submitted by the petitioner and calling upon the petitioner to show cause as to why the business dealings of the petitioner should not be severed by the 1st respondent and be considered for banning of future business dealings with the 1st respondent. The petitioner sent a reply dated 10.11.2009 and also sent several representations dated 07.12.2009; 14.12.2009; 15.01.2010; 15.03.2010 and 25.03.2010. Under the above said circumstances, the 1st respondent had floated a new tender under No.MR/WS/MM/CT/CH/MODRIG/2011/P66JC11002 dated 18.02.2011 for charter hire of one number of offshore modular work over rig having 6" drain hole drilling capacity. The entire process of bidding was made online by the 1st respondent as e-bidding. On application for e-bidding and payment of prescribed fees of Rs.45,000/-, the petitioner was allotted a password to access the e- tender and pre-bid conference to be held on 17.03.2011. 3.6. The petitioner's team had attended to the pre-bid conference on 17.03.2011 and only at the conference hall, it was informed to the shock and surprise of the petitioner that the respondent had already issued a ban order dated 26.03.2010 whereby it had decided to stop any further business with the petitioner and its allies for participation in future tenders of the 1st respondent, whatsoever for a period of two years from the date of issue of the said letter, hence any tender submission made by the petitioner will not be considered for evaluation or qualification. 3.7. Thereafter, the petitioner's team had immediately informed to the 1st respondent that it had not received any communication of such alleged letter dated 26.03.2010 from the 1st respondent till date. Further, the petitioner had also immediately made representation to the 1st respondent to that effect vide its letters dated 05.04.2011; 06.06.2011; 10.06.2011 and 11.06.2011 and requested to lift the ban order imposed erroneously on them and allow the petitioner to participate in the current tender dated 18.02.2011 by the 1st respondent. 3.8. Thereafter, the petitioner did not receive any reply from the 1st respondent till date. In the meanwhile, the 1st respondent had announced in its e-bidding web-site that the last date for submission of the documents for the current tender dated 18.02.2011 was to close by 17.06.2011. The 1st respondent during previous discussions had given a copy of the circular No.23/2010 https://hcservices.ecourts.gov.in/hcservices/ dated 09.07.2010 regarding the amendment made in the banning procedure and 'consequences of termination' clause. As per the said circular of the 1st respondent, it is seen that the clause 'consequences of termination' in the tender documents are to be amended subsequent to the circular so as to give effect of the ban order from the date of issue of the order and in all previous tenders prior to the circular date 09.07.2010 to the condition followed being to give effect to the ban order from the date of termination of the contract. Though not agreeing but for argument sake, even if the impugned ban order is said to be applicable to the petitioner, even then, it arises only out of the firm order dated 07.08.2008 which is prior to the aforesaid circular dated 09.07.2010 and hence, the impugned ban order, if at all said to be imposed will only have effect from the date of termination of the said firm order which is on 26.09.2008 and not with effect from 26.03.2010. In such case, by now, the alleged two years ban period also got expired as on 25.09.2010 and the petitioner is entitled to apply for the current tender dated 18.02.2011. 3.9. Under the above said circumstances, the petitioner has filed the present writ petition with the above said prayer seeking for the relief of quashing the order passed by the 2nd respondent dated 26.03.2010 with the consequential prayer to direct the 1st respondent to allow the petitioner to participate in all the tender floated by the 1st respondent including the current tender and accept the tender submitted by the petitioner after evaluation and qualification of the current tender. 4.1. The respondents filed a common counter, inter-alia, denying the averments and allegations contained in the affidavit filed by the petitioner except those that are specifically admitted by them. It is stated that in respect of the earlier tender floated by the respondents, the petitioner emerged as L1. It is stated that the Letter of Award was to be issued on 07.08.2008. As serious allegations were levelled against the petitioner creating genuine suspicion, in clause 9 of the LOA it was provided that the LOA is subject to verifications by ONGC. The following documents were submitted by the petitioner:- a. Verification from M/s.Miden System Limited regarding MOU between M/s.Miden System Limited and SAAGRR Infra Chennai. b. Verification from M/s.Mobil Producing Nigeria Ltd., regarding agreement [vide agreement No.MPN/O&W 0906] between M/s.Mobil Producing Nigeria Ltd and Miden Systems Ltd. https://hcservices.ecourts.gov.in/hcservices/ c. Verification of experience of M/s.Miden Systems Ltd., from the operator. It is also to mention that the LOA was issued on 07.08.2008 without completing the verification process which would have been a time consuming and the since validity of the bid submitted by SAAG was expiring on 07.08.2008 itself. Moreover, in response to ONGC's request to SAAG on 04.08.2008 to extend the validity of its bid, SAAG had already refused the extension on 06.08.2008. 4.2. In response to the query of ONGC, the Mobil Producing Nigeria Unlimited categorically declared vide email dated 12.08.2008 that the certificate and the contract document produced by the petitioner are fraudulent documents. This e-mail was followed by a letter dated 29.08.2008 from Mobil Producing Nigeria Unlimited reiterating the contents of the email dated 12.08.2008. 4.3. The respondents further stated that for the above said declaration of Mobil Producing Nigeria Unlimited declaring that the documents furnished by the petitioner are forged one, the petitioner had no direct answer except giving a vague reply. The Miden System, Nigeria is also not giving any answer except making vague statements. 4.4. The respondents further stated about the Integrity Pact with ONGC signed by the petitioner. The respondents also stated about the issuance of notice and agreeing to extend the bid bond till 30.09.2008 and verification of documents would be provided till 11.09.2008. It is stated that the petitioner has miserably failed to prove the genuineness of the documents and the committee submitted its report dated 16.09.2008 declaring that the petitioner failed to establish the genuineness of the documents furnished by it. On receipt of the recommendations of the committee, ONGC decided to cancel the LOA and forfeit the bid bond and a letter dated26.09.2008 was issued to that effect and accordingly, the Bank Guarantee submitted by the petitioner was invoked. 4.5. The respondents also stated about the issuance of the show cause notice dated 14.10.2009 calling upon the petitioner to show cause as to why the business dealings with the petitioner should not be severed. An enquiry was conducted by giving opportunity to the petitioner and pursuant to the submission of the enquiry report, the Highest Decision Making Body, as per the decision dated 22.03.2010 accorded approval for banning effective two years from the date of issuance of the order. It is stated that the order dated 26.03.2010 was immediately sent to the petitioner and the petitioner has sent a letter dated 25.03.2010 and informed ONGC that they are aware of the contents of the enquiry report based on which the ONGC has imposed the ban on participation in future tender for a period of two years. It is stated that in view of the ban order passed on https://hcservices.ecourts.gov.in/hcservices/ 26.03.2010, ONGC cannot have any further business dealings with the petitioner for a period of two years from 26.03.2010 and as such, the petitioner is not entitled to be considered in the tender floated on 18.2.2011. 5. Mr.V.T.Gopalan, learned senior counsel appearing for the petitioner would put forward the following contentions in respect of the merits of the case:- a. The impugned order which is a non speaking order is not passed by a competent authority. b. The impugned order was passed by a quasi-judicial authority without conducting any proper enquiry and without affording reasonable opportunity to the petitioner. c. No reason is assigned in the impugned order as to on what ground the petitioner has been prevented from participating in the tender. d. The 2nd respondent has not officially communicated the impugned ban order dated 26.03.2010 to the petitioner and handed over the same only during the pre-bid meeting for the current tender held on 17.03.2011. e. In all previous tenders, the condition being followed was to give effect to the ban order from the date of termination of the contract and even if the impugned ban order is said to be applicable to the petitioner, it arises only out of the firm order / Letter of Award dated 07.08.2008 which is prior to the Circular dated 09.07.2010 and as such, the impugned ban order will only have effect from the date of termination of the said Firm order which is on 26.09.2008 and not with effect from 26.03.2010 and by now, the alleged two year ban period also got expired as on 25.09.2010 and as such, the petitioner is entitled to apply for the current tender dated 18.02.2011. 6. As Mr.G.Masilamani, learned senior counsel appearing for the respondents raised a preliminary objection on the ground of lack of jurisdiction to entertain the writ petition filed by the petitioner, Mr.V.T.Gopalan, learned senior counsel appearing for the petitioner has put forward the following contentions:- a. The tender was downloaded by the petitioner from a web-site at the petitioner's office at Chennai which comes well within the jurisdiction of this court and the tender fee of Rs.45,000/- was also paid at Chennai through on-line. b. The respondents' branch office is also located at Chennai and all communications / correspondences addressed to the respondents by the petitioner are written from Chennai and invariably, all communications from the respondents were addressed to the petitioner's address at Chennai and were received by the petitioner at Chennai. https://hcservices.ecourts.gov.in/hcservices/ c. The current tender dated 18.02.2011 floated by the 1st respondent itself is a E-Bidding Process where the procurement of the tender documents and submission of the documents were all made on- line by the 1st respondent and as such, no particular jurisdiction can be confined to such an E-Bidding Process. d. The access to the tender documents is not open to all. But only on allocation of password and payment of the required fees by the 1st respondent, the petitioner had received the allotment of password from the 1st respondent via E-Mail and received the same at Chennai on 03.03.2011. e. A Division Bench of this court has held in 2006-1-CTC-732 [Ex.RECT [MP] A.MADURAI VEERAN No.7779447K VS. UNION OF INDIA, REP.BY ITS SECRETARY TO GOVERNMENT, MINISTRY OF DEFENCE, NEW DELHI AND OTHERS] referring to the decision of the Hon'ble Apex Court reported in 1994 [4] SCC 711 [ONGC Vs. UTPAL KUMAR BASU AND OTHERS], that a liberal view should be taken on the question of jurisdiction. f. While determining the cause of action, one has to consider whether such facts constitutes a material, essential or integral part of the cause of action even if a small faction of the cause of action arises within the jurisdiction of the particular court, the Court would have territorial jurisdiction to entertain the petition. g. The prayer in the writ petition is two fold. One is for certiorarified mandamus to quash the impugned order dated 26.03.2010 placing the petitioner on holiday [blacklisting] and the other part is to enable the petitioner to participate in the tender process. Therefore, the cause of action has to be viewed in the light of both the aforesaid prayers. As far as the first part is concerned, the correspondences including the show cause notice were received by the petitioner at Chennai. Therefore, the receipt of the said show cause notice in Chennai constitutes or form part of material, essential and integral part of the cause of action. The explanation given, notice of hearing all of which culminating in the communication of the order pursuant to the show cause notice received at Chennai forms the material, essential and integral part of the cause of action. h. As regards the second part of the cause of action relating to the mandamus, it is relevant to state that the respondent is a Public Sector Undertaking having offices throughout India including Chennai and already it is stated that the current tender dated 18.02.2011 is floated through on-line which was viewed and downloaded by the petitioner at the petitioner's office at Chennai. i. It is contended that the Model Contract conditions in the tender confines the jurisdiction to Mumbai courts, but the contract between the petitioner and the respondent was not signed at all in view of the cancellation of the contract at the stage of Letter of Award itself. 7. The learned senior counsel appearing for the petitioner, in support of his contentions, would place reliance on the following decisions:- 1.2006 [1] CTC 732 [Ex.RECT [MP] A.MADURAI VEERAN No.7779447K https://hcservices.ecourts.gov.in/hcservices/ VS. UNION OF INDIA, REP.BY ITS SECRETARY TO GOVERNMENT, MINISTRY OF DEFENCE, NEW DELHI AND OTHERS]; 2.2010 [9] SCC 496 [KRANTHI ASSOCIATES [P] LTD., Vs. MASOOD AHAMED KHAN]; 3.1985 [3] SCC 398 [UNION OF INDIA Vs. TULSIRAM PATEL]; 4.1978 [1] SCC 405 [MOHINDER SINGH GILL & ANOTHER Vs. THE CHIEF ELECTION COMMISSIONER & Ors]; and 5.2003 [6] SCC 545 [UNION OF INDIA Vs. CHAJJU RAM [DEAD BY LRS. AND OTHERS] 8. Mr.G.Masilamani, learned senior counsel appearing for the petitioners would mainly raise the preliminary objection regarding the lack of jurisdiction. It is vehemently contended that this court has no jurisdiction to entertain the writ petition as the cause of action has not at all arisen within the jurisdiction of this court. It is contended that merely because the petitioner downloaded the tender form and remitted the fees through internet, he cannot claim that the cause of action had arose within the jurisdiction of this court. It is pointed by the learned senior counsel for the respondents that the tender was floated from Mumbai and it can be downloaded by anyone from any part of the world and as such, the contention of the petitioner to the effect that the petitioner had downloaded the tender through web-site at Chennai on payment of Rs.45,000/- through on-line payment at Chennai and as such, the cause of action had arose within the jurisdiction of this court, is untenable. It is further contended that as per clause 26 of the Tender Document, the exclusive jurisdiction of the Indian Courts at Mumbai was agreed by the parties and as such, the petitioner now cannot contend that the cause of action arose within the jurisdiction of this court. 9. The learned senior counsel appearing for the respondents would contend that the petitioner cannot claim that the matter would come within the jurisdiction of this court merely on the basis of the communications and correspondences addressed to the respondents by the petitioner from Chennai and the communications from the respondents were addressed to the petitioner's address at Chennai and received by the petitioner at Chennai. In support of his contentions, the learned senior counsel would rely upon the following decisions:- 1. 1994 [4] SCC 711 [OIL AND NATURAL GAS COMMISSION Vs. UTPAL KUMAR BASU AND OTHERS]; and 2. 2007 [11] SCC 335 [ALCHEMIST LIMITED AND ANOTHER Vs. STATE BANK OF SIKKIM AND OTHERS] 10. In respect of the merits of the case, it is contended by the learned senior counsel appearing for the respondents that the petitioner has been served with the show cause notice dated https://hcservices.ecourts.gov.in/hcservices/ 14.10.2009 and as such, the petitioner is well aware about the reasons for passing the impugned order and therefore, it cannot be contended that the impugned order was passed in violation of the principles of natural justice. It is also pointed out by the learned senior counsel that the reply given by the petitioner dated 25.03.2010 to the show cause notice reveals that the petitioner is well aware about the contents of the enquiry report based on which ONGC has imposed the ban on the petitioner to participate in the future tender for a period of two years. Finally it is submitted that as the petitioner lacked the reliability and credibility on the basis of the reasons stated in the show cause notice, the impugned ban order was rightly passed by the respondents. 11. I have given my anxious and careful consideration to the rival contentions put forward by either side and thoroughly scrutinised the materials available on record and perused the affidavit of the petitioner; common counter filed by the respondents; reply affidavits and the additional affidavit filed by the petitioner and the reply filed by the petitioner to the submissions made by the respondents and also perused the impugned ban order. 12. As the respondents raised the preliminary objection of lack of jurisdiction and the learned senior counsel appearing for both sides have argued at length on that aspect, it is desirable for this court to consider the said question before considering the submissions made on the merits of this case. 13. The petitioner claimed that the cause of action had arisen within the jurisdiction of this court on the following grounds:- a. The tender was downloaded by the petitioner from a web-site at the petitioner's office at Chennai which comes well within the jurisdiction of this court and the tender fee of Rs.45,000/- was also paid at Chennai through on-line. b. The show