Case Note & Summary
The Supreme Court heard appeals challenging a High Court order in a dispute over allocation of natural gas contracts by ONGC. ONGC had invited Expressions of Interest for natural gas from two fields, with three applicants showing interest: Nobel Cera Coat (the original writ applicant), Vaibhavi Enterprise, and Tanish Cerachem Private Limited. During the process, Tanish Cerachem revised its offer to lift gas within 65 days instead of the initial period, prompting ONGC to re-invite bids from all three applicants. Nobel Cera Coat did not submit a fresh bid but instead filed a writ petition challenging ONGC's re-invitation and seeking mandamus to award the contract based on the original EOI. The High Court, during proceedings, permitted Nobel Cera Coat to revise its offer from 75 to 65 days and directed ONGC to finalize the contract with them, disposing of the writ petition. The other two applicants, who were not impleaded as parties, appealed to the Supreme Court. The core legal issues were whether the High Court's procedure in permitting bid modification under Article 226 without hearing all affected parties was sustainable, and whether the order was properly reasoned. The Supreme Court analyzed that the High Court had acted ex-parte without giving the appellants an opportunity to be heard, violating natural justice principles. It held that allowing one bidder to modify its offer without similar opportunity to others was unsustainable and unknown to law. The Court also noted that the High Court should have allowed the writ petition rather than disposing it after issuing mandamus, and that the order lacked reasons on merits. Consequently, the Supreme Court quashed the High Court's order, remanded the matter for fresh decision with directions to implead the appellants as parties and hear all stakeholders, emphasizing the urgency of the matter. The Court clarified it expressed no opinion on the merits.
Headnote
A) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - High Court cannot permit bid modification without hearing all affected parties - Dispute involved allocation of natural gas contracts where High Court allowed writ applicant to revise offer from 75 to 65 days - Supreme Court held procedure unsustainable as other bidders were not heard and no opportunity given to them to modify their offers - High Court's exercise of power under Article 226 was improper in these circumstances (Paras 4-5). B) Administrative Law - Natural Justice - Audi alteram partem principle - Right to be heard for affected parties in contractual disputes - Appellants were not impleaded as parties to writ petition despite being competing bidders - Supreme Court held High Court violated natural justice by not giving appellants opportunity to be heard before permitting modification of bid - Procedure adopted was unsustainable and unknown to law (Paras 4-5). C) Contract Law - Government Contracts - Bid modification and fresh tendering - ONGC's decision to re-invite bids after revised offer from one applicant - High Court directed ONGC to finalize contract with writ applicant after permitting bid modification - Supreme Court held if High Court felt fresh bids unnecessary, similar opportunity should have been given to all applicants - Remanded matter for fresh decision with all parties heard (Paras 4-6). D) Judicial Procedure - Writ of Mandamus - Proper issuance and disposal of writ petitions - High Court disposed of writ petition while issuing writ of mandamus - Supreme Court held once writ of mandamus issued, High Court should have allowed writ petition instead of disposing it - Impugned order also lacked reasons on merits (Paras 4-5).
Issue of Consideration
Whether the High Court's procedure in disposing of the writ petition by permitting the original writ applicant to modify its offer and directing ONGC to finalize the contract was sustainable in law
Final Decision
Impugned order passed by the High Court dated 20.09.2021 in Special Civil Application No.5815 of 2021 is quashed and set aside. Matter remitted back to High Court for fresh decision. Special Civil Application No.5815 of 2021 restored to file of High Court. Appellants to submit application for impleading as party respondents. High Court to pass fresh order in accordance with law and on merits after giving opportunities to all respondents. High Court requested to decide writ petition within four weeks. Appeals allowed. No order as to costs.
Law Points
- Natural justice requires hearing all affected parties
- High Court cannot permit modification of bids under Article 226 without giving opportunity to other bidders
- writ of mandamus must be properly issued
- reasoned orders are essential
