HKRP Innovations Ltd. v. Oil and natural gas corporation ltd.
2025-07-16
A.S.SUPEHIA, R.T.VACHHANI
body2025
DigiLaw.ai
ORDER : A.S. SUPEHIA, J. 1. The petition is filed by the petitioner-HKRP Innovations Ltd., assailing the award of tender to respondent No.2-Dutt Innovation Private Limited by respondent No.1-Oil and Natural Gas Corporation Limited (ONGC). 2. It is informed to us by the respondents that the contract has been awarded on 20.11.2024 and by now, 100% installation of devices is completed by respondent No.2 and measurement and data collection work will be continued for (03) three years and the system is set-up and the reading of the system is already commenced. 3. The brief facts of the case are that : the tender in question was published on 23.01.2024 and the Bid Document suggests that the Bid Date was declared on or before 04.03.2024 at 19:00 hours and the date and time for opening of Bid was scheduled on 04.03.2024 at 19:30 hours. However, the last date was extended till 13.05.2024 for opening the Technical Qualification Bid. 4. The petitioner-Company participated in the tender process and when the writ petition was filed, an averment was made that for the best reasons known to the respondent No.1-ONGC, the Bids were not opened on the scheduled date i.e. on 04.03.2024, whereas it was opened on 13.05.2024 and the validity of submission of the said Bid was for 45 days and it was extended for multiple times by respondent No.1. It appears that thereafter, respondent No.2 was declared as L-1 and the petitioner made a representation to the Vigilance CVO Cell, ONGC DUB, New Delhi on 15.10.2024 and also filed a physical complaint. A formal complaint was also made regarding the discrepancies in qualifying the respondent No.2, through an e-mail on 17.10.2024. 5. A complaint was also made to the Central Vigilance Commission, New Delhi, on 18.10.2024 about the doubtful pre-qualification eligibility and opening of the Price Bid. 6. Learned Advocate Mr.Mihirkumar Patel appearing for the petitioner has submitted that neither respondent No.1 nor respondent No.2 has supplied any reasons for extending the time limit and it is not known as to when the date was extended for the Bid evaluation. It is submitted that respondent No.2 is neither having three years’ experience nor GST Registration Number at the time of the bid process.
It is submitted that respondent No.2 is neither having three years’ experience nor GST Registration Number at the time of the bid process. While referring to the clauses of the Bid documents, more particularly the “Eligibility and Experience of the Bidder”, he has submitted that respondent No.2 is failing in the said criteria and he has not executed at least one contract of supply and commissioning of minimum 500 numbers Internet of Things (IoT). It is also submitted that it is impossible to commission 650 (IoT) in 22 days, hence the contract awarded to respondent no.2 appears to be tainted. 7. It is further submitted by learned Advocate Mr.Patel that respondent No.2 lacks necessary experience and qualifications and it is allotted contract through the Joint Venture (JV), whereas on the other hand, the petitioner is having wide experience in the said field and have been doing the similar nature of work since long. 8. It is submitted by learned Advocate Mr.Patel that, it can be seen from the timelines of the last 10 months, that the respondent No.1 has time and again extended the dates and accommodated the respondent No.2, though they do not have necessary qualification, nor they have GST number and nor have any experience. 9. It is further contended by learned Advocate Mr.Patel that the Independent External Monitor has not supplied the reasons for the extension of time for the bidding process. As per the notice of tender, it was first scheduled on 04.03.2024 at 19:30 hrs and later on the said process was extended only for the purpose of accommodating respondent No.2. Thus, by making these submissions, it is urged that the contract awarded to respondent no.2 may be cancelled. 10. Learned advocate appearing for the respondent no.2, Ms.Maitri Patel has submitted that after evaluation of the price bids of all the eligible (techno-commercially acceptable) bidders, the respondent No.2 was declared as L-1 bidder and the petitioner was declared as L-2 bidder on 12.10.2024 and thereafter, the Independent External Monitor (IEM), examined the issues raised by the petitioner in detail, and after hearing them has found that there is no irregularity or illegality committed by respondent no.1 in awarding the contract to respondent no.2. 11.
11. Learned advocate Ms.Patel has invited the attention of this Court to clauses 2.1 (a)(ii)and (b) under the “Eligibility and Experience of the Bidder”, and has submitted that the respondent No.2 is a Joint Venture. It is submitted that respondent No.2 is an incorporated a Joint Venture Company incorporated with CIN U27100GJ2024PTC149817 having GST Certificate No.24AAKCD7340K1ZH, wherein Vimal Flexsol Limited and Dutt AdTech Private Limited have 51% and 49% shareholdings respectively. It is submitted that as per the conditions of the tender, the experience criteria could be fulfilled either by the incorporated Joint Venture itself or by its partner, provided the partner holds at least a 26% stake in the JV and the bid of respondent No.2 has been submitted based on the technical experience of Dutt AdTech Private Limited, which holds entity of more than 26% shareholding in the bidding entity. It is thus, urged by learned advocate Ms.Patel that at this stage, the writ petition may not be entertained. 12. Learned Senior Advocate Mr.Devang Vyas, appearing for respondent No.1-ONGC has submitted that the petition may not be entertained, since the interference at this stage will create great prejudice. It is submitted that the interference by the Courts in the contract matters is very restricted. It is submitted that no illegality is committed in awarding the contract to respondent No.2. 13. We have heard the learned advocates appearing for the respective parties at length. 14. The respondent No.1-ONGC sought Hiring of Services of Real Time Monitoring System (RTMS) for SRP / PCP Wells at the ONGC, Mehsana for a period of three (3) years. The tender was floated on GeM Portal on 23.01.2024, and the bidders were required to submit their bid on or before 04.03.2024. It appears that time was extended for opening the Technical Bid due to various queries submitted by the bidders. From the contents of the affidavit-in-reply dated 16.12.2024, filed by respondent No.1-ONGC, it appears that pending issuance of such clarifications by respondent No.1, the date was extended till 18.03.2024 and on the very same day, respondent No.1 issued the replies to the queries raised by the bidders in the pre-bid conference. Thereafter, to enable the bidders to submit their offers in light of the clarifications, the date was further extended by twenty-one (21) days, i.e. 08.04.2024. 15.
Thereafter, to enable the bidders to submit their offers in light of the clarifications, the date was further extended by twenty-one (21) days, i.e. 08.04.2024. 15. Thereafter, it appears that the requests were received from Geosafe Technologies Private Limited, Skyrise Tools Private Limited, and Rudraveer Electromech Projects Private Limited seeking additional time for submission of the responses against the tender and, in order to facilitate broader competition, the date was extended till 22.04.2024 and thereafter, requests were received from Weatherford, AKS Automations & Pressings Private Limited and Utthunga Technologies Private Limited seeking additional time for submission of the responses against the tender and, therefore, the date of Technical Bid Opening was further extended till 29.04.2024. 16. Accordingly, on 23.04.2024, the Policy Management Cell (PMC) issued Circular No.19/2024 notifying revisions to the standard clauses of service tenders and as per the guidelines, these revisions were required to be incorporated into tenders that were yet to be opened. In compliance with the provisions of the GeM Portal, which mandate a minimum of 07 days for the bidders to submit their responses following any amendment, the Technical Bid Opening Time (TBO) of the tender was further extended to 06.05.2024 in view of the PMC circular however, due to internal re- organization matters, necessitating the review of processing group of the subject, the Technical Bid Opening was extended till 13.05.2024. 17. As on the Technical Bid Opening of the tender, the respondent No.1 received offers from eight (08) bidders. The result of the bids were published on GeM Portal on 10.10.2024, and three bidders were declared qualified to be techno- commercially acceptable. The bidders were also provided 48 hours window to submit their representations. Since no representation was received, the price bids were opened on 12.10.2024. After the evaluation of the price bids, respondent no.2 was declared as L-1 bidder. 18. The aforementioned facts are not denied by the petitioner. As mentioned hereinabove, the petitioner made complaint(s) to the respondent authority. The opinion of the Independent External Monitors (IEMs) was also called for. The IEMs rendered their opinion regarding the representation received from the petitioner on 20.11.2024 and respondent No.1, via email dated 20.11.2024, supplied the petitioner with the operative portion of the IEMs' opinion. 19.
As mentioned hereinabove, the petitioner made complaint(s) to the respondent authority. The opinion of the Independent External Monitors (IEMs) was also called for. The IEMs rendered their opinion regarding the representation received from the petitioner on 20.11.2024 and respondent No.1, via email dated 20.11.2024, supplied the petitioner with the operative portion of the IEMs' opinion. 19. The leading contention raised on behalf of the petitioner is with regard to the Eligibility and Experience criteria, as mentioned in Clause-B 2.1 (a)-1 and 2.1 (b) of the Bid Document. The IEM in this regard has clarified, which is not disputed by the petitioner that respondent No.2 is an incorporated Joint Venture Company incorporated with CIN U27100GJ2024PTC149817, having GST Certificate No.24AAKCD7340K1ZH, wherein Vimal Flexsol Limited and Dutt AdTech Private Limited have 51% and 49% shareholdings respectively. As per the offer, the bid has been submitted on the basis of the technical experience of Dutt AdTech Private Limited, which holds more than 26% shareholding in the bidding entity and the financial strength of Vimal Flexsol Limited, which holds more than 50% shareholding in the bidding entity, which are allowed as per Clause-B 2.1 (a)-1 and 2.1 (b) respectively. A careful reading of Clause-B 2.1 (a)-1 and 2.1 (b), reveals that the experience criteria could be fulfilled either by the incorporated Joint Venture itself or by its partner, provided the partner holds at least 26% stake in the JV and the bid of respondent No.2 has been submitted based on the technical experience of Dutt AdTech Private Limited, which holds more than 26% shareholding in the bidding entity. 20. We have also perused the report / opinion dated 20.11.2024 of the IEMs, threadbare. The petitioner was provided sufficient opportunity to present its case. It is noticed by us that all the issues, which are raised by the petitioner, are dealt with exhaustively. This Court cannot substitute the commercial wisdom of IEM, which is an expert and independent body to examine all the technical issues, unless such decision is tainted with mala fide or is extremely arbitrary. The Supreme Court, in the case of Banshidhar Construction Pvt.Ltd. vs. Bharat Coking Coal Limited & Ors., (2024) 10 S.C.C. 273 , has reiterated the restricted scrutiny by the Courts in the tender and contract matters. The observations are as under: “22.
The Supreme Court, in the case of Banshidhar Construction Pvt.Ltd. vs. Bharat Coking Coal Limited & Ors., (2024) 10 S.C.C. 273 , has reiterated the restricted scrutiny by the Courts in the tender and contract matters. The observations are as under: “22. At this juncture, we may reiterate the well- established tenets of law pertaining to the scope of judicial intervention in Government contracts. 23. In Sterling Computers Limited vs. M/s. M & N Publications Limited and Others, (1993) 1 SCC 445 , this Court while dealing with the scope of judicial review of award of contracts held: "18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the "decision making process". In this connection reference may be made to the case of Chief Constable of the North Wales Police vs. Evans [(1982) 3 All ER 141 ] where it was said that: (p. 144a) "The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court." By way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time as was said by the House of Lords in the aforesaid case, Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] the courts can certainly examine whether "decision-making process" was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution." 24. In Tata Cellular vs. Union of India, (1994) 6 SCC 651 , this Court had laid down certain priniciples for the judicial review of administrative action. "94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision.
"94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles." 25. It has also been held in ABL International Limited and Another vs. Export Credit Guarantee Corporation of India Limited and Others, (2004) 3 SCC 553 , as under: - "53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution." 26. In Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517 , this Court after discussing number of judgments laid down two tests to determine the extent of judicial interference in tender matters. They are: - "22.
In Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517 , this Court after discussing number of judgments laid down two tests to determine the extent of judicial interference in tender matters. They are: - "22. (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached;" (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action." 27. In Mihan India Ltd. vs. GMR Airports Ltd. and others, (2022) SCC Online SC 574 , while observing that the government contracts granted by the government bodies must uphold fairness, equality and rule of law while dealing with the contractual matters, it was observed in Para 50 as under: - "50. In view of the above, it is apparent that in government contracts, if granted by the government bodies, it is expected to uphold fairness, equality and rule of law while dealing with contractual matters. Right to equality under Article 14 of the Constitution of India abhors arbitrariness. The transparent bidding process is favoured by the Court to ensure that constitutional requirements are satisfied. It is said that the constitutional guarantee as provided under Article 14 of the Constitution of India demands the State to act in a fair and reasonable manner unless public interest demands otherwise. It is expedient that the degree of compromise of any private legitimate interest must correspond proportionately to the public interest." 21. In view of the settled legal precedent of restricted scope of interference by the Courts in commercial transactions, we are not inclined to pass any orders non-suiting the respondent No.2- Dutt Innovation Private Limited at this stage, when the substantial work has been completed. Any order passed by us at this stage will cause irreparable loss to the respondents No.1 & 2, and also disrupt the ongoing project. 22.
Any order passed by us at this stage will cause irreparable loss to the respondents No.1 & 2, and also disrupt the ongoing project. 22. In view of the aforesaid observations, the writ petition, stands dismissed.