Case Note & Summary
The Petitioner, Punj Lloyd Ltd., a domestic company, filed a writ petition under Article 226 of the Constitution challenging the award of a contract by the Oil and Natural Gas Corporation Limited (ONGC) to the Third Respondent, a Singapore-based company, for a SubSea Pipeline Project. The Petitioner claimed entitlement to a price preference as a domestic bidder under the Bid Evaluation Criteria. The Bid Evaluation Criteria required, inter alia, submission of a certificate in original from the statutory auditor indicating that no more than 50% of the work measured in terms of value has been subcontracted to foreign bidders, and such certificate had to be submitted with the unpriced bid. ONGC rejected the Petitioner's claim for price preference on the ground that the certificate submitted did not fulfill the conditions and was not furnished with the unpriced bid. The court held that the Petitioner failed to comply with the mandatory conditions of the bid, and the decision of ONGC was neither arbitrary nor mala fide. The court dismissed the petition, upholding the contract award to the Third Respondent.
Headnote
A) Judicial Review - Contractual Matters - Scope of Interference - The court's power to interfere in contractual matters is limited to cases of arbitrariness, mala fides, or violation of statutory provisions. The court will not sit in appeal over the decision of the tendering authority. (Paras 1-10) B) Price Preference - Eligibility - Strict Compliance - A domestic bidder claiming price preference must strictly comply with the conditions laid down in the Bid Evaluation Criteria, including submission of a certificate from the statutory auditor in the prescribed format and within the stipulated time. (Paras 2-8) C) Bid Evaluation - Certificate from Statutory Auditor - Non-Compliance - The certificate submitted by the Petitioner's statutory auditor did not fulfill the conditions as it did not indicate that no more than 50% of the work measured in terms of value has been subcontracted to foreign bidders. Moreover, the certificate was not submitted with the unpriced bid. (Paras 3-6) D) Tender Process - E-Procurement - Submission of Documents - The requirement to submit documents through the e-procurement site and the stipulation that the certificate be submitted with the unpriced bid are mandatory. Failure to comply results in disqualification from price preference. (Paras 2-8)
Issue of Consideration
Whether the Petitioner, a domestic bidder, is entitled to price preference under the Bid Evaluation Criteria, and whether the decision of ONGC to award the contract to the Third Respondent is arbitrary or mala fide.
Final Decision
The court dismissed the writ petition, holding that the Petitioner failed to comply with the mandatory conditions of the Bid Evaluation Criteria, and the decision of ONGC was neither arbitrary nor mala fide.
Law Points
- Judicial review of contractual matters
- limited to arbitrariness or mala fides
- Price preference eligibility
- Strict compliance with bid conditions
- Certificate from statutory auditor
- Timely submission of documents
