Coastal Marine Construction and Engineering Limited v. Bharat Petroleum Corporation Ltd.
2025-04-22
ALOK ARADHE, M.S.KARNIK
body2025
DigiLaw.ai
JUDGMENT : M.S. KARNIK, J. 1. The petitioner - Coastal Marine Construction & Engineering Limited and another is one of the six bidders who bid for the project 'Offshore Pipeline Laying Works for Mahul-Rasayani Pipeline Project of Respondent No.1 - Bharat Petroleum Corporation Ltd. ('BPCL' for short) in the first tender. 2. Invoking the jurisdiction of this Court under Article 226 of the Constitution of India the Petitioners pray for setting aside the cancellation dated 10 th February 2025 of the tender bearing tender ID 16010 and dated 1 st April 2024; for a direction to the BPCL to proceed with opening of the price bids of technically qualified bidders and award of the aforementioned tender from where it stood before the cancellation; for an appropriate direction for setting aside the new tender bearing tender ID 20077 and dated 22 nd February 2025 issued by the BPCL for the work of the project; for a direction to adopt appropriate proceeding against Respondent No.3 - Corrtech International Ltd., Indian JV partner of Respondent No.4 and Respondent No.4 - Westfield Energy Resources Ltd., Nigeria based JV partner of Respondent No.3. 3. Mr. Bimal Rajasekhar, learned counsel appearing for the Petitioners assailing the cancellation of the tender submitted that the said decision was taken only to favour Respondent Nos.3 and 4. It is then vehemently submitted that fraudulent documents are submitted by Respondent Nos.3 and 4. There is no response from the BPCL despite the Petitioners’ pointing out by cogent evidence that the experience certificate produced by Respondent Nos.3 and 4 are fake/forged. 4. Learned counsel for the Petitioners relying on Clause 5.4.6 of the Invitation for Bids submitted that the said clause stipulates “It is Bidder’s prime responsibility to submit genuine and authentic documents. BPCL/EIL at its discretion reserves its right to verify information submitted...” Reliance is then placed on Clause 8.7 of the Invitation for Bids that “Bidders may raise disputes/complaints, if any, with the Independent External Monitor, as nominated from time to time.” It is then pointed out that Clause 11.11 of the Invitation for Bids stipulates “EIL/BPCL reserves the right to reject any/or all the Bids received or annul the Bidding process at any time at their sole discretion without assigning any reason thereof.” Learned counsel invited our attention to the following clauses in support of his submissions:- “Annexure I to Invitation for Bids- BQC [Pg.
63] - Clause 5(b)@ 65 relevant when comparing with the 2nd Tender - "Bidder's experience acquired as a Sub-Contractor shall not be considered for meeting Bidder Qualification Criteria (BQC)." Clause 2.1 of the Instructions to Bidders- "Corrupt and Fraudulent Practices - The Owner requires that Bidder/ Vendors/ Supplier observe the highest standard of ethics during the award execution of Contract. "Fraudulent Practice" means a misrepresentation of facts in order to influence the award of a Contract to the detriment of the Owner…" Clause 2.3 of the Instructions to Bidders - "Bidder is required to furnish the complete and correct information/ documents required for evaluation of their bids. If the information/ documents forming basis of evaluation is found to be false/forged, the same shall be considered adequate ground for rejection of bids." Clause 2.6 of the Instructions to Bidders- "Further, such bidder/ vendor/ Supplier shall be put on Blacklist/ Holiday/ Negative List of Owner/EIL debarring them from future business with Owner/ EIL for a time period, as per the prevailing policy.” 5. Learned counsel for the Petitioners submitted that the request for four week extension of bid submission (till 30 th May 2024) made by the Petitioners was denied by BPCL on the ground that the work to be executed was urgent. It is submitted that on 29 th April 2024 was the last date of submission of bids. Petitioner No.1 was a bidder, as was the consortium comprising of Respondent Nos.3 and 4. Learned counsel submitted that one Pinnacle Oil and Gas Ltd. (impleaded as Respondent No.6), to whom Respondent Nos.3 and 4 had specified as a client in their PQC documents, responded to BPCL's email stating that the documents submitted by Respondent Nos.3 and 4 were fake. Our attention is then invited to the communication of Respondent No.6 dated 18 th July 2024 as regards the fraudulent aspects of the documents relied upon by Respondent Nos.3 and 4. 6. BPCL recommended annulling of the old tender on 30th January 2025 and floating a new tender due to the fact that if the contact was awarded now, there would require to be mobilisation and demobilisation, increasing the costs and possibility of the disputes.
6. BPCL recommended annulling of the old tender on 30th January 2025 and floating a new tender due to the fact that if the contact was awarded now, there would require to be mobilisation and demobilisation, increasing the costs and possibility of the disputes. The subject tender was cancelled on 10 th February 2025 on the ground that “In order to enhance the competition and to overall optimise the cost of project, the tender is annulled as per provision of clause 11.11.” 7. On 22 nd February 2025 the second tender is issued with relaxed criteria. Learned counsel for the Petitioners emphasised on Clause 3.3 to compare it with the first tender as now the criteria was “Bidder’s experience acquired as a Sub-Contractor shall be considered for meeting Bidder Qualification Criteria (BQC) subject to submission of necessary documentation from End user/ Owner/ PMC.” It is submitted that this criteria eliminates the requirement of a direct certificate of work from the end user. This revised clause benefits the Respondent Nos.3 and 4. Respondent No.2 on 28th February 2025 confirmed to Respondent No.1 that it had referred the case to PDD CELL for further action under the EIL banning/suspension policy. 8. On 4 th March 2025 the prebid meeting for second tender was conducted and Respondent No.3 participated in it along with six other participants. A show cause notice dated 5 th March 2025 was sent on 6 th March 2025 by Respondent No.2 to Respondent No.3. According to the learned counsel for the Petitioners a false reply stating incorrect facts was sent by Respondent No.3 to the show cause notice issued. 27 th March 2025 was the last date for submission of bids. The tender No.2 was awarded on August 2025. 9. Learned counsel for the Petitioners on the basis of the record therefore submits as under :- 1. Despite knowing about the fake/forged documents in July 2024, neither Respondent no.1 nor Respondent no. 2 took any action whatsoever against Respondents no. 3 & 4 for over 8 months. Instead, Respondent no.2 requested Respondent no.3 to extend its bid validity period in October and December 2024. 2. Respondent no.2 finally issued a Show Cause Notice to Respondent no.3 & 4 one day after this writ petition was served on it. 3. Till date Respondent no.1 has taken no action against Respondents no.3 & 4. 4. Respondents no.
Instead, Respondent no.2 requested Respondent no.3 to extend its bid validity period in October and December 2024. 2. Respondent no.2 finally issued a Show Cause Notice to Respondent no.3 & 4 one day after this writ petition was served on it. 3. Till date Respondent no.1 has taken no action against Respondents no.3 & 4. 4. Respondents no. 1 and 2 have the power to cancel the tender - however, this cannot be exercised arbitrarily. Tender no.1 was cancelled on specious grounds. a. It was purportedly cancelled to increase competition and optimise the cost of the project. b. However, only 4 bidders have submitted their bids in Tender no.2. c. Without even knowing the price bid of the Petitioners, they decided they had to optimise the cost of the project. d. The justification of intervening monsoon season is untenable. 5. To counter the submission of learned Advocate General that this writ petition is infructuous since Respondent no.3 has not participated in Tender no.2, learned counsel for the Petitioner submitted that the ex post facto act of Respondent No.3 not participating in Tender no.2 cannot purify the arbitrariness of the cancellation of Tender no. 1 and floating of Tender no.2. Even one day before the writ petition was served on the Respondents, Respondent no.3 attended the prebid meeting for Tender no.2. It is urged that Respondent no.3 has orchestrated a "non-participation" by Respondent nos.3 in Tender no. 2. If not for the writ petition, Respondent no.3 would have participated in Tender no.2 and taken advantage of the relaxed condition. 10. Dr. Birendra Saraf, learned Advocate General appearing for BPCL, Mr. Zal Andhyarujina, learned Senior Advocate for Respondent No.2, Mr. Gaurav Joshi, learned Senior Advocate for Respondent No.3, Mr. Dhruva Gandhi, learned counsel for Respondent No.4 and Mr. S.S. Ambedkar, learned counsel for Respondent No.5 argued in support of the decision taken by BPCL. 11. We have heard learned counsel and perused the pleadings and the materials on record. It is pertinent to note that BPCL took a decision to cancel the first tender for the reasons which have been placed on record. It is further pertinent to note that the Respondent No.3 has not participated in the second tender floated after the cancellation of the first tender.
It is pertinent to note that BPCL took a decision to cancel the first tender for the reasons which have been placed on record. It is further pertinent to note that the Respondent No.3 has not participated in the second tender floated after the cancellation of the first tender. The Petitioners are raising a grievance as to the eligibility of Respondent Nos.3 and 4 to participate in the tender process on the ground that Respondent Nos.3 and 4 have submitted fake and forged documents. It is an admitted position that the tender has already been awarded. 12. Let us first deal with the objection of the Respondents that an entity of a consortium has no locus standi in its individual capacity and cannot submit or raise a dispute singularly. The Writ Petition has been filed by Petitioner No.1 i.e. Coastal Marine Construction & Engineering Limited and not by the consortium viz. 'COMACOE - HAFAR consortium' which comprises of the Petitioner No.1 and an entity named PT Hafar Daya Konstruksi which had participated in the bidding process (“Petitioner Consortium”) of a tender floated by BPCL on 1st April 2024. The objection therefore is that it was the consortium which had participated in the bidding process (“Petitioner Consortium”). The argument of learned Senior Advocate for the Respondent is that since it was the Petitioner Consortium which had submitted its bid during the bidding process of tender No.1, the Petitioners herein individually in its own capacity have no locus to file the present Petition. 13. Learned counsel for the Petitioners relied upon the decision of the Aurangabad Bench of this Court in Pride Ventures (I) Pvt. Ltd. vs. the State of Maharashtra and others, Writ Petition No. 2098 of 2024 decided on 5th August 2024. Paragraphs 28 and 29 of the order read thus:- “28. As far as the preliminary objections are concerned,admittedly, the petitioner was one of the members of the consortium of the joint venture which had submitted the bid. Therefore, it cannot be said that the petitioner has no locus. Besides, as has been mentioned in the rejoinder, the petitioner is also not avers to make necessary correction in the title of the writ petition so as to include the name of the other member of the consortium. We, therefore, are of the view that it cannot be said that the petitioner is not an aggrieved person. 29.
Besides, as has been mentioned in the rejoinder, the petitioner is also not avers to make necessary correction in the title of the writ petition so as to include the name of the other member of the consortium. We, therefore, are of the view that it cannot be said that the petitioner is not an aggrieved person. 29. As far as the authority of the individual through whom the petition as well as the rejoinder has been filed, the petitioner has filed a general power of attorney expressly titled as 'For signing of bid (Exh. R1)'. A bare look at this power would demonstrate that it is a general power of attorney enabling the holder to do, in the name of Laxmi Construction Company and as authorized signatory of Pride Ventures, to submit bids and deal with the Public Works Division, Aurangabad, in the matter of the tender process. Ex facie it does not authorize him to initiate any litigation for and on behalf of Laxmi Construction Company, which is the partner in the joint venture. However, in our considered view, when it has been expressly mentioned in the rejoinder that the petitioner is not avers to carrying out necessary correction in the title, in our considered view, one need not go into the aspect of authority of the person, who has filed the petition for and on behalf of one of the partners of the joint venture, which submitted the bid.” 14. In our opinion, the said decision is of no assistance as the same is distinguishable on facts. Their Lordships in paragraph 28 specifically observed that the Petitioner-Pride Ventures (I) Pvt. Ltd. was not averse to make necessary correction in the title of the Writ Petition so as to include the name of the other member of the consortium and in such circumstances this Court was of the view that the Petitioner therein is an aggrieved person. The decision in Pride Ventures (I) Pvt. Ltd. (supra) is therefore distinguishable on facts. The Petitioners in the affidavit-in-rejoinder annexed the power of attorney dated 4 th April 2025 of PT Hafar Daya Konstruksi duly signed by the President Director authorising Mr. Rajan K. Sood, the Director of Coastal Marine Construction & Engineering Limited to file or withdraw suits on any proceedings in any Court on behalf of PT Hafar Daya Konstruksi. 15.
The Petitioners in the affidavit-in-rejoinder annexed the power of attorney dated 4 th April 2025 of PT Hafar Daya Konstruksi duly signed by the President Director authorising Mr. Rajan K. Sood, the Director of Coastal Marine Construction & Engineering Limited to file or withdraw suits on any proceedings in any Court on behalf of PT Hafar Daya Konstruksi. 15. Learned counsel for the Respondents have raised objections to the power of attorney placed on record at this distance of time and therefore submit that at this stage such a power of attorney should not be entertained. Reliance is placed on the decision of this Court in Gujarat Apollo Industries Ltd. vs. State of Maharashtra and another, 2023 SCC OnLine Bom 620. Paragraphs 9 and 10 of the said decision which has a bearing on this case read thus :- “9. We have heard the learned counsels for the parties and have perused the records. We first examine objection relating to maintainability of the petition. The objection is that Petitioner is not the bidder and metely a part of a consortium and other companies in that consortium have chosen not to challenge the action of Municipal Corporation. That therefore petition filed by Petitioner alone is not maintainable. In pursuance of earlier tender notice dated 4 th May 2020 a consortium of following 4 companies had submitted its bid: (i) Gujarat Apollo Industries Ltd. (Petitioner) (ii) Eco Pro Environmental Services (iii) Susajja enterprises Pvt. Ltd. (iv) Vardig Pvt. Ltd. 10. Petitioner in its individual capacity has not submitted the bid. Contract, if any, could have been awarded to the consortium, and not to petitioner alone. However, present petition is not filed by all 4 consortium companies, but is filed by petitioner alone. Though it is sought to be contended by Mr. Wani that petitioner is the lead party in the consortium, the same would not mean that petitioner alone can file the petition when the bid is submitted in the name of consortium. In absence of other 3 members of the consortium being party to the petition, the present petition filed by petitioner alone would nit be maintainable.” 16.
Wani that petitioner is the lead party in the consortium, the same would not mean that petitioner alone can file the petition when the bid is submitted in the name of consortium. In absence of other 3 members of the consortium being party to the petition, the present petition filed by petitioner alone would nit be maintainable.” 16. Apart from the fact that the decision in Pride Ventures (I) Pvt. Ltd. (supra) relied upon by the Petitioners was rendered after the decision in Gujarat Apollo Industries Ltd. (supra), we have already observed that the decision in Pride Ventures (I) Pvt. Ltd. (supra) is distinguishable on facts. In any case we are relying on the observations in Gujarat Apollo Industries Ltd. (supra) in support. It is significant to note that at the time of filing of the Petition, the same was not filed by the consortium but by an entity of consortium in its individual capacity. In the meantime, the contract was awarded and the work has already commenced. It is in these circumstances that we are inclined to uphold the objection of the learned Senior Advocates for the Respondents that the Petition as filed was not maintainable at the instance of an entity of a consortium in its individual capacity. 17. Nonetheless, we have proceeded to consider the submissions of the learned counsel for the Petitioners on merits as we wanted to be satisfied that the bidding process is conducted in a just and fair manner. 18. Learned counsel for the Petitioners submitted that the first tender was cancelled only to favour Respondent Nos.3 and 4 and the revised tender was issued stipulating criteria to ensure the participation of Respondent Nos.3 and 4 in the bidding process. From the pleadings it transpires that as per Clause 5.4.8 (b) of the Instructions to Bidders forming part of the tender No.1 documents, BPCL had the right to conduct verification of Bidder Qualification Criteria (‘BQC’) documents submitted by the bidders in order to evaluate the credentials of the bidders. During the said evaluation, in the event that any fraudulent document by any bidder was discovered by BPCL, the processing department rejects the bid being fraudulent in nature. After the unpriced bids were opened on 18 th June 2024, BPCL carried out the process of evaluation of credentials of bidders as specified in the bidding document. 19.
During the said evaluation, in the event that any fraudulent document by any bidder was discovered by BPCL, the processing department rejects the bid being fraudulent in nature. After the unpriced bids were opened on 18 th June 2024, BPCL carried out the process of evaluation of credentials of bidders as specified in the bidding document. 19. The Consortium of Respondent Nos.3 and 4 had submitted documents along with their bid to Respondent Nos.1 and 2 wherein they claimed to have done the work for Pinnacle which is based in Nigeria. In compliance with process as stipulated in the tender documents and the verification process was also conducted for the Consortium of Respondent Nos.3 and 4. BPCL had issued communications to Pinnacle dated 12 th July 2024, 15 th July 2024 18 th July 2024 to inquire about the purported work executed by Respondent No.4 for Pinnacle. Pinnacle vide its communications clarified to BPCL that no work was executed by Respondent No.4 for Pinnacle at any given time and therefore, the documents submitted by the Consortium of Respondent Nos.3 and 4 are fake. There were issues regarding the bid submitted by other bidders as well, therefore BPCL was constrained to take various actions seeking clarification from other bidders also in order to complete the evaluation process. BPCL proceeded with the other aspects of evaluation process of the bids received and post completion of the verification process of all the contesting bidders, the concerned officer of BPCL on 30th January 2025 proposed annulment of tender No.1 owing to several reasons stated therein. In the said letter of January 2025, the information about fabricated documents submitted by the Consortium of Respondent Nos.3 and 4 was also stated along with recommendation for taking suitable action against the Consortium of Respondent Nos.3 and 4. It was also recommended that while the EMD of other bidders is released, the bank guarantee of Consortium of Respondent Nos.3 and 4 will be forwarded to BPCL for suitable action as per the procedure. We are in agreement with the submissions of learned Advocate General for BPCL that there is no basis for coming to the conclusion that the officials of BPCL are hand in glove with Respondent Nos.3 and 4 as contended by the learned counsel for the Petitioners. 20.
We are in agreement with the submissions of learned Advocate General for BPCL that there is no basis for coming to the conclusion that the officials of BPCL are hand in glove with Respondent Nos.3 and 4 as contended by the learned counsel for the Petitioners. 20. Further to the communication dated 30 th January 2025, the office of BPCL also issued communications dated 6th February 2025 and 28 th February 2025 wherein details of the fraudulent actions committed by the Consortium of Respondent Nos.3 and 4 were explained. Further, next steps under the suspension/banning policy of BPCL were proposed to be considered. A show cause notice dated 5 th March 2025 was issued by BPCL to Consortium of Respondent Nos.3 and 4 in respect of the fake documents submitted by it during the bidding process. So far as blacklisting is concerned, it is matter of serious concern and the action has to be taken in accordance with law. Dr. Birendra Saraf, learned Advocate General appearing for BPCL assures that the show cause notice will be taken to its logical conclusion in accordance with law. 21. So far as cancellation of the tender is concerned, Clause 11.11 of the Invitation for bids provides that “EIL/BPCL reserves the right to reject any/or all the Bids received or annul the Bidding process at any time at their sole discretion without assigning any reason thereof.” BPCL in the affidavit- in-reply has stated that it considered various aspects such as cost optimisation and better competition amongst the bidders since the tender works required the contesting bidders to carry out the job of a specialised nature with very few agencies available for carrying out such works involving use of barge which shall be suitable for shallow depth. The reason for cancellation of tender No.1 was also mentioned on the website of BPCL wherein it was mentioned that in order to enhance competition and for overall cost optimisation of the project the tender No.1 was being annulled. There was lack of effective competition for tender No.1 and owing to large and capital intensive nature of the project any variation in the execution would have significantly impacted the overall cost of the project. This was further exacerbated in the instant case as pursuant to evaluation, single techno commercial bid was emerging.
There was lack of effective competition for tender No.1 and owing to large and capital intensive nature of the project any variation in the execution would have significantly impacted the overall cost of the project. This was further exacerbated in the instant case as pursuant to evaluation, single techno commercial bid was emerging. Thus, to ensure effective competition and best price optimisation for the project, it was imperative to have multiple techno-commercially acceptable bidders. It is then stated that the timelines mentioned in the scope of work of tender No.1 coupled with the fact that due to very complex nature of work and very limited time-frame to work in a situation was arising wherein the tender No.1 would necessitate mobilisation and demobilisation of the barge more than once due to limited time before monsoon sets in and the barge mobilisation was becoming a significant cost factor which attributed to cancellation of tender No.1. Therefore, only to eliminate the cost factor, the Answering Respondent proceeded with proposing the cancellation and annulment of tender No.1. Since, the clashing of works with the monsoon season would only increase the burden on the successful bidder, disrupt laying off pipelines, enhance the possibility of disputes between the successful bidder vis-a-vis the Tendering Authority and further alienate bidders from participating in tender No.1, the action to cancel the tender was taken. It is stated that any disruption in the subject tender would have caused unprecedented losses to the public exchequer, thus, in order to minimise the losses, along with the fact that only single bidder was emerging as techno-commercially qualified, the concerned office of BPCL was constrained to recommend annulment of tender No.1 and refloat the tender vide its letter dated 30 th January 2025. 22. It is well settled that “a contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out.
Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.” According to us, the decision of BPCL cannot be said to arbitrary or irrational or without any basis. Further, it is not possible for us to substitute our opinion with that of the BPCL which is best suited to assess the relevant aspects and its commercial considerations. We are satisfied that cancellation of the first tender is not arbitrary or made with a view to favour Respondent Nos.3 and 4. Further, it is the BPCL which is best suited to assess the requirements for the project and therefore, the essential conditions are set out depending on the requirements of the project. There is no basis to conclude that revised conditions are tailor made to suit Respondent Nos.3 and 4 in the bidding process. 23. In any case, there is no prejudice caused to any of the bidders as they could participate in tender No.2. BPCL did not restrain any bidder to participate in the bidding process of tender No.2 including Petitioner No.1. Petitioner No.1 has in fact attended the pre-bid meeting with respect to tender No.2 held on 4 th March 2025. We are in agreement with learned Senior Advocate appearing for BPCL that the Petitioner has no locus to dictate the terms of the qualification and restrict the Consortium of Respondent Nos.3 and 4 from participating in the new tender. It is for BPCL to examine all the documents and in fact BPCL has taken a stand that the show cause notice issued to Respondent Nos.3 and 4 will be taken to its logical conclusion in accordance with law. 24. We therefore do not find any merit in this Writ Petition.The Writ Petition is dismissed with no order as to cost.