IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 586 OF 2008 M/s Global Offshore International ) Limited a company organized under ) the laws of Cayman Islands and ) having its registered office at 1,) Regis Place, Fort and Mary Streets) P.O.Box 472, George Town Cayman ) Islands and having their Project ) Office at 403, Alpha, Hiranandani ) Garden, Powai, Mumbai 400 097 ... ) Petitioner V/s 1. Oil and Natural Gas ) Corporation Limited a company ) incorporated under the ) companies Act, 1956 and having) its office at Materials ) Management Dept 4th floor, ) 11 High Building, Bandra Sion ) Link Road, Mumbai 400 017 ) 2. Leighton Contractors (India) ) Pvt.Ltd. a company incorporated under the Companies Act 1956 ) having its office at 032-303 ) windsor Building, CST Road ) Kalina, Santacruz ) Mumbai 400 098 ) 3. Das Offshore Engineering Pvt. ) Ltd. a company incorporated ) under the Companies Act, 1956 ) having its registerd office ) at Sagar Uday, Plot No F-3 ) Behind CIDCO Bhavan, Airoli ) CBD Belapur, Navi Mumbai 400 614 .. Respondents Mr.Darirus Shroff with Gaurav Joshi and divesh Chambuwalla i/b R.J.Agarwal for Petitioner Mr.Ravi Kadam with Sehal Paranjape, isht Dhhorwin and Prakash Shinde i/b M.Dhruva and Co. for Respondent no.1 Mr.Janak Dwarkadas with Zal Andhyarujinha i/b - 2 - Cr.Bayley and Co. for Respondnt nos.2 and 3 CORAM : BILAL NAZKI & A.P.BHANGALE, JJ. DATED : 6TH MAY, 2008. JUDGMENT JUDGMENT JUDGMENT (Per A.P.Bhangale,J):- 1. By this writ petition, the Petitioner - Global Offshore International Limited, is a company organized under the laws of the Cayman Islands having its registered office at One Regis Place, Fort and Mary Streets, P.O. Box 472, George Town, Cayman Islands. The Petitioner is a foreign company. By this petition the Petitioner prayed for issuance of writ against the Respondent no.1, Oil and Natural Gas Corporation Limited, (in short ONGC), for its decision to consider the price bid of Respondent nos 2 and 3 and to declare them L1 under the notice inviting bid for Pipeline Replacement Project -2 (for short "said project"). The Petitioner also prayed for to quash and set aside the decision of Respondent no.1 to award contract under the project to the Respondent nos.2 and 3 and issuance of NOA in favour of Respondent nos. 2 and 3. The Petitioenr seeks further direction in the nature of writ of mandamus against Respondent no.1 to forebear it from awarding the contract in any manner to or executing any - 3 - contract with Respondent nos 2 and 3; to forebear the Respondent no.1 from proceeding with the contract entered into with Respondent nos.2 and 3 and direction against Respondent no.1 to forthwith award the contract to the next highest bidder i.e. Petitioner herein. 2. Sum and substance of the petitioner’s grievance appear that Respondent no.1 ONGC, acted arbitrarily and wrongfully while awarding contract to Respondent no.2 - Leighton Contractors (India) Pvt.Ltd. and Das Offshore Engineering Pvt.Ltd. (Respondent nos.3 and 4 herein). According to the Petitioner, ONGC ought to have considered minimum experience of executing as turnkey contractor in last 10 years for, laying of minimum 60 Kms of submarine pipelines of minimum 60 kms rigid and/or flexible in one or more segments including risers and associated modifications of Offshore Platforms in one project. It is alleged that Respondent nos.2 and 3 failed to submit documents of requisite experience but Respondent no.1 issued NOA to Respondent nos 2 and 3 hurriedly and in illegal and arbitrary manner contrary to the requirements of the tender terms and conditions. Thus, according to the Petitioner, the decision making process followed by Respondent no.1 was - 4 - unreasonable, irrational and arbitrary to award contract in favour of Respondent nos.2 and 3 though they were not technically qualified. A reference was made to the Bid document for Pipeline replacement Project II to contend that bidder must possess minimum experience of contractor in last 10 years for laying of minimum 60- Kms of submarine pipelines of minimum 60- Kms rigid and or flexible in one or more segments including risers and associated modifications of Offshore Platforms. 3. The Petitioner claims that it is a leader in the installation of submarine oil and gas pipelines and risers and was awarded contracts by the Respondent no.1 ONGC. Over the past three years, it has successfully executed the first pipe line Replacement Project for Respondent no.1 which involves 52 pipeline segments approximately 246 kms of rigid and flexible submarine pipelines, installation of 100 pipelines risers and associate activities for installing the replacement of pipeline connected between offshore oil and gas platforms in Mumbai High, Heera and Neelam Fields in Western Offshore India. According to the Petitioner, Respondent no.1 failed to apply or neglect the mandatory/essential conditions set out in the bid eligibility criteria in - 5 - the matter of invitation of tenders for the Pipeline Replacement Project-2. While accepting the technical bid of consortium of Respondent nos 2 and 3. According to the Petitioner, the contract was awarded to ineligible bidder - Respondent nos.2 and 3 and it is therefore liable to be quashed or set aside. 4. The Petitioner made a reference of ruling in M/s M/s M/s B.S.N.Joshi and Sons Ltd. v/s Nair Coal Services B.S.N.Joshi and Sons Ltd. v/s Nair Coal Services B.S.N.Joshi and Sons Ltd. v/s Nair Coal Services Ltd. and Ors. Ltd. and Ors. Ltd. and Ors. reported in AIR 2007 SC -437. AIR 2007 SC -437. AIR 2007 SC -437. Learned Counsel for the Petitioner submitted that essential conditions of eligibility in the tender documents must be adhered to and principle of strict compliance would be applied where it is possible for the parties to fully comply with all the eligibility conditions. Thus according to the Petitioner, the Respondent no.1 ONGC did not have the power to relax the eligibility criteria contained in clause 2.1 and clause 2.2 of the Bid Evaluation Criteria (BEC). The action of Respondent no.1 ONGC, to relax or ignore the essential eligibility criteria in favour of Respondent nos.2 and 3 was thus challenged as wholly illegal and without jurisdiction. A reference is also made to a ruling in M/s Monarch Infrastructure M/s Monarch Infrastructure M/s Monarch Infrastructure (O) Ltd V/s Commissioner, Ulhasnagar Municipal (O) Ltd V/s Commissioner, Ulhasnagar Municipal (O) Ltd V/s Commissioner, Ulhasnagar Municipal Corporation and Ors. Corporation and Ors. Corporation and Ors. reported in AIR 2000 SC AIR 2000 SC AIR 2000 SC 2272, 272, 272, - 6 - contending that the Government is free to enter into contract with the citizen but the court may interfere where it is a case contrary to the public interest. The petitioner also relied upon a case of New New New Horizons Limited and anr v/s Union of India and Ors. Horizons Limited and anr v/s Union of India and Ors. Horizons Limited and anr v/s Union of India and Ors. reported in (1995) I SCC 478 (1995) I SCC 478 (1995) I SCC 478. In para 17 of the said ruling it was observed : 17. At the outset, we may indicate that in the matter of entering into a contract, the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State, in exercise of it various functions, is governed by the mandate of Article 14 of the Constitution which excludes arbitrariness in State action and requires the State to act fairly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion. Moreover a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such - 7 - selection. The decisions of this Court, therefore, insist that while dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at it sweet will and like a private individual, deal with any person it pleases, but its action must be in conformity with the standards or norms which are not arbitrary, irrational or irrelevant. It is, however, recognised that certain measure of "free play in the joints" is necessary for n administrative body functioning in an administrative spher. 5. While opposing the submissions made on behalf of the Petitioner, the learned Counsel for Respondent no.1 contended that Respondent no.1 has to evaluate the tender to ensure compliance of commercial, financial and technical qualification of the bidder. The technical, commercial and financial soundness of the bidder was evaluated under the process "bid evaluation criteria". The BEC i.e. Bid Evaluation Criteria which has taken into consideration all the parameters of general nature and also project specific. It was submitted that the system has been - 8 - working for more than 30 years and is time tested, established and also updated. According to Respondent no.1 ONGC it had received 7 bids from the parties, viz. 1. M/s Larsen and Toubro Ltd Mumbai and Valentine Marttime (M) Ltd.. Consortium; 2. M/s Hyudai Heavy In.Co.Ltd. Korea; 3. M/s Punj Lloyd Ltd. Gurgaon,New Delhi; 4. M/s National Petroleum Construction Co.United Arab Emirates; 5. M/s Global Offshore International Ltd. Grand Cayman, (Petitioner herein); 6. M/s Leighton Contractors India Pvt.Ltd.; and Das Offshore Consortium, respondent nos.2 and 3; 7. M/s Iranian Offshore Engg and Const.Co. Iran; 6. Respondent no.1- ONGC had sought clarification from all 7 bidder within five working days and had received replies from all of them. Thereafter, - 9 - Engineering Services Department, carried out evaluation was carried out in respect of 7 bidders. According to Respondent no.1- ONGC, Respondent nos.2 and 3, consortium of Leighton Contractors (India) Pvt Ltd. and M/s Das Offshore Engineering Pvt Ltd (with M/s Leighton Contractor (India) Pvt Ltd. as the leader) was found complied with BEC requirement. After detailed study was carried out by Respondent no.1 with respect to the bid by M/s Leighton Contractors (India) Pvt.Ltd. it was found technically acceptable bid by Respondent no.1. Learned Counsel for Respondent no.1 made reference to the ruling in case of Indo China Steam Navigation Co. Indo China Steam Navigation Co. Indo China Steam Navigation Co. Ltd. v/s Union of India and Ors Ltd. v/s Union of India and Ors Ltd. v/s Union of India and Ors reported in AIR 1964 AIR 1964 AIR 1964 SC 1140 SC 1140 SC 1140 and raised contention that a foreign company like Petitioner is not entitled to claim the benefit of Article 19 of Constitution since only citizen of India have been guaranteed the fundamental right to freedom enshrined in the said Article. He submitted further that the plea of the Ptitioner under Article 31(1) as well as Article 14 cannot be sustained. 7. Reference is also made to the case of State of State of State of Arunachal Pradesh v/s Khudiram Chakma reported in Arunachal Pradesh v/s Khudiram Chakma reported in Arunachal Pradesh v/s Khudiram Chakma reported in 1994 Supp (1) SCC 615 1994 Supp (1) SCC 615 1994 Supp (1) SCC 615. It was observed thus that: - 10 - "Even a foreigner has a fundamental right, but that fundamental right is confined only to Article 21 and does not include the right to move freely throughout and to reside and stay in any part of the territory of India, as conferred under Articles 19(1)(d) and (e). Such a right is available only to the citizens. The appellants being foreigners cannot invoke Article 14 of the Constitution to get the same right denied to them under Article 19 since Article 14 cannot operate in regard to a right specifically withheld from non-citizens. 8. The learned Counsel for the Respondent no.1 also relied upon a case of Master Marine Services Pvt. Master Marine Services Pvt. Master Marine Services Pvt. Ltd. V/s Metcalfe and Hongkinson Pvt. Ltd. and Ltd. V/s Metcalfe and Hongkinson Pvt. Ltd. and Ltd. V/s Metcalfe and Hongkinson Pvt. Ltd. and Anr. Anr. Anr. reported in AIR 2005 SCC 2299, AIR 2005 SCC 2299, AIR 2005 SCC 2299, It was observed in para 9 thus : 9.......‘The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of - 11 - Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down’. . According to the learned Counsel for Respondent no.1 the decision making process adopted by Respondent no.1 involved sound exercise of discretion and unless the overwhelming public interest requires interference, the court shall not be justified to interfere with such discretionary power in the matter of awarding contract to successful bidder pursuant to bid evaluation criteria. 9. In the course of submission by the learned Counsel for Respondent no.1, our attention was also invited to the communication to the Chairman ONGC received from M.P. Shri Ram Dev Bhandari regarding representation made to him in respect of the tender invited by the Respondent no.1 ONGC for Replacement of Pipe lines Project-2. In the communication addressed to the Chairman, ONGC, on 11-3-2008, M.P. Shri Bhandari made a reference to the representation made in Loksabha on the subject of award of Pipeline - 12 - Replacement Project- II to Leighton Contractors (India) Pvt. Ltd. The MP only desired to investigate into the allegations made against ONGC in the matter of awarding Pipe line Replacement Project II in accordance with rules and desired necessary action. Our attention is also invited to the fact that MP was informed about ONGC’s parawise reply to the said representation. A reference to the said representation in Parliament by which Respondent no.1 clarified that all large contracts are awarded through international competitive bid under two bid system and that ONGC has a well defined evaluation criteria to ensure compliance of commercial, financial and technical qualifications of the bidder. In two bid system, the technical, commercial and financial soundness of the bidders are evaluated before opening of the price bids. The BEC is time tested, established and also updated to address all parameters both of general nature and project specific. The BEC is duly approved by competent authority of ONGC. This system has been working for more than 30 years and is well established.The ONGC offshore Engineers have successfully completed more than 200 project till date. The ONGC has also clarified about the number of bids received and approved by the BEC and also about experience of - 13 - bidders and their track record. It was a right of Respondent no.1 ONGC to disqualify the bid or to permit the contract. Thus Respondent no.1 was entitled to disqualify the bidder during the tender process or to terminate the contract. Considering the above position there is no reason to believe that ONGC while it decided to award contract in Leighton’s favour, disregarded national interest and the interest of ONGC. There is no reason to believe that the honest tax payers and every citizen of India will be affected because Oil and Gas is a commodity that touch every person. It was argued that ONGC is the largest Public Sector Undertking and biggest wealth creator in India. The ONGC is the only Indian company to feature in the fortune list of worlds most admired companies in the year 2007. The interest of the company and tax payer is also paramount for the company. The ONGC finalized all their larger projects through inter -national competitive bidding under two bid system to get the best agency with the competitive price. In this case also consortium of Leighton Contractor India Pvt. Ltd. and Das Offshore was the L-1 bidder and bid was lower by more than @ 55 million i.e. about 220 Crs. from the L-2 bidder. This would definitely be beneficial to the nation, organization and would protect the precious - 14 - money of the tax payers and their interest. Decision must have been taken purely on public interest. 10. Our attention was also invited to the agreement entered into by Respondent no.1 ONGC with Respondent nos. 2 and 3. Thus, it appears that Respondent no.1 has already entered into a conclusive contract with Respondent nos.2 and 3 on 14-4-2008 after inviting its bid, examining tenders on merits and found that successful bidder had substantially complied with tender conditions. 11. The learned Counsel for the Respondent nos.2 and 3 made a reference to a case Raunaq International Raunaq International Raunaq International Ltd. v/s I.V.R.Construction Ltd. and Ors. reported Ltd. v/s I.V.R.Construction Ltd. and Ors. reported Ltd. v/s I.V.R.Construction Ltd. and Ors. reported in (1999) 1 SCC 492 in (1999) 1 SCC 492 in (1999) 1 SCC 492 to canvass the principle in respect of examining tenders. According to the learned Counsel for Respondent nos.2 and 3, when tender conditions were considered and if any relaxation was granted bonafide to arrive at a decision taken in the fair manner after considering all offers then court’s intervention is not called for if rational, non discriminatory norms were laid down and there was no departure from those norms. Relaxation on valid principles is permissible. The Court can examine whether tender conditions have been - 15 - considered and if any relaxation was granted bonafide and decision was taken in a fair manner after considering all the offers. The learned Counsel for Respondent nos.2 and 3 also made a reference to a case of Reliance Airport Developers (P) Ltd V/s Reliance Airport Developers (P) Ltd V/s Reliance Airport Developers (P) Ltd V/s Airports Authority of India and Ors. reported in SCC Airports Authority of India and Ors. reported in SCC Airports Authority of India and Ors. reported in SCC (2006) 10 SCC page 1 (2006) 10 SCC page 1 (2006) 10 SCC page 1- and also the unreported decision of Division Bench of this Court in Writ Petition NO.769 of 2004 (CMS Traffic Systems Ltd. (CMS Traffic Systems Ltd. (CMS Traffic Systems Ltd. V/s Municipal Corporation of Greater Mumbai and Ors.) V/s Municipal Corporation of Greater Mumbai and Ors.) V/s Municipal Corporation of Greater Mumbai and Ors.) decided on 6-4-2004. In para 11, the Division Bench observed that ".....More over it is well settled that the Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. It is not permissible for the Court to review an administrative decision and substitute the same by its own decision without necessary expertise which itself may be fallible. The Court will intervene only where the facts taken as a whole could not logically warrant conclusion of the decision maker". 12. While we examined the grievances of the Petitioner on the basis of affidavits filed on record and upon hearing the submissions at the Bar, we are of the view that Respondent no.1 ONGC did exercise - 16 - due care and caution to serve its best commercial interest while choosing Respondent nos. 3 and 4’s consortium as a bidder which was thought as a better and economically viable option in the facts and circumstances of the case. The Petitioner which is a foreign company cannot insist that the contract should have been awarded to it. We are of the view that there is no violation of Article 14 of the Constitution of India. No judicial interference is required in the facts and circumstances of the case and the impugned administrative action cannot be labelled as irrational, illegal or unreasonable. In the facts and circumstances there is no reason to believe that choice of bidder by Respondent no.1 was arbitrary, capricious or wrongful. 13. Thus, after having heard submissions at the Bar, in the light of affidavits filed on record as also reliance placed by respective Counsel and well settled legal position as to judicial restraint in the matter of administrative decisionss we do not see any justification to issue writ or direction as prayed for in this petition. We do not find any fault in the bid evaluation process adopted by Respondent no.1 -ONGC in awarding contract in favour of Respondent nos.2 and 3 pursuant to settled bid - 17 - evaluation criteria. 14. In our considered opinion, therefore, the Petitioner is not entitled for any relief as prayed for. Therefore, writ petition is dismissed. [ BILAL NAZKI, J. ] [ A.P.BHANGALE, J.] Per Bilal Nazki, J.: Per Bilal Nazki, J.: Per Bilal Nazki, J.: I have gone through the judgment prepared by my brother Justice A. P. Bhangale. I agree with the conclusion drawn by my Brother. But I would like to add few paragraphs. The facts have been dealt with in detail by my Brother. Therefore, it is not necessary to refer to the factual aspect of the matter. 2. One of the contentions of the learned Counsel appearing for the Petitioner was that respondent Nos. - 18 - 2 and 3 were not technically eligible to have put their bids for consideration as according to him they did not satisfy the Bid Evaluation Criteria. It is submitted that sub-Clause 2.1 and sub-Clause 2.2 of Clause A-2 of the "Bid Package for Pipeline Replacement Project-2" were not satisfied by respondent Nos.2 and 3. Therefore, they should not have been at all considered by the concerned Authority. In fact the Technical Evaluation Committee should have rejected their bids. In this connection reference to sub-clause 2.1 and sub-clause 2.2 of the Clause A-2 "Technical" of Bid Package is made. The same are reproduced below : "2.1: Bidder must possess prior to the deadline for submission of bids, minimum experience of executing as turnkey Contractor in last 10 years for, laying of minimum 60 Kms of submarine pipelines of minimum 60 Kms rigid and or flexible in one or more segments including risers and associated modifications of Offshore Platforms in one project / season / year and successfully accomplishing each of the relevant activities viz. Project Management, Surveys (including pre-engineering, pre and post construction survey) Engineering, Procurement, Fabrication, anti-corrosion and weight coating (in case of rigid pipelines), transportation, laying, hook up, pre-commissioning & commissioning and testing of pipelines. 2.2 The Bidder (being either a single bidder or a Consortium / Joint Venture comprising of two or more partners being jointly and severally liable to the Company) must himself (and not through collaboration agreement or to her subcontracts) have the relevant experience for offshore project - 19 - management and for at least one of the following activities: (a) Detailed Design and Engineering; (b) Installation/Laying of Submarine Pipelines. (c) Procurement. The argument of the learned Counsel for the petitioner was that a minimum experience for a bidder was that he should have executed a contract as turnkey Contractor a work of laying of minimum 60 Kms. of submarine pipelines which could be rigid or flexible in one or more segments including risers and associated modifications of Offshore Platforms in one project. Learned Counsel submitted that the construction of 60 Kms. pipelines over a period of 10 years was necessary but this 60 Kms. could not be rigid or flexible pipelines only. This 60 Kms. should include rigid and/or flexible pipelines and also the risers. So the contention is unless the bidder has an experience of construction of a pipeline of 60 Kms. part of which was also risers, he should not be considered to be eligible. 3. On plain reading of sub-clause 2.1 of clause A-2 of the