Case Note & Summary
The petitioners, Afcons Infrastructure Limited and others, challenged the decision of Oil & Natural Gas Corporation Ltd. (ONGC) to treat a consortium of Larsen & Toubro Limited (Respondent 2) and Sapuracrest Petroleum Berhad (Respondent 3) as technically qualified for a tender for the conversion of a Mobile Offshore Drilling Unit (MODU) 'Sagar Pragati' to a Mobile Offshore Production Unit (MOPU). The tender required bidders to have experience in conversion of MODU to MOPU or similar projects. The consortium submitted a bid relying on the experience of its members, including Sapuracrest's experience in converting a drilling rig to a production unit. ONGC's technical evaluation committee found the consortium technically qualified. The petitioners argued that the consortium did not meet the specific experience criteria and that ONGC's decision was arbitrary. The court held that the scope of judicial review in tender matters is limited to examining whether the decision is arbitrary, mala fide, or perverse. It found that ONGC's decision was based on a reasonable interpretation of the tender conditions and that the consortium's experience was relevant. The court dismissed the petition, upholding ONGC's decision.
Headnote
A) Constitutional Law - Judicial Review of Tender Decisions - Scope of Interference - Article 226 of the Constitution of India - The court's power to review tender decisions is limited to cases of arbitrariness, mala fides, or perversity; it does not sit as an appellate authority over technical evaluations. The court must defer to the expert judgment of the tendering authority unless the decision is so unreasonable that no reasonable authority could have reached it. (Paras 2-5) B) Contract Law - Interpretation of Tender Conditions - Eligibility Criteria - The tender conditions must be read as a whole, and eligibility criteria must be strictly adhered to. However, minor deviations that do not affect the core requirements of the tender may be condoned if the authority reasonably considers the bidder to be qualified. (Paras 6-10) C) Administrative Law - Arbitrariness - Mala Fides - The burden of proving mala fides or arbitrariness lies on the petitioner. Mere suspicion or allegations without evidence are insufficient to vitiate a tender decision. (Paras 11-15)
Issue of Consideration
Whether the decision of the First Respondent (ONGC) to treat the consortium of Respondents 2 and 3 as technically qualified for bidding was arbitrary, mala fide, or perverse, warranting interference under Article 226 of the Constitution.
Final Decision
The petition was dismissed. The court upheld ONGC's decision to treat the consortium as technically qualified and found no grounds for interference under Article 226.
Law Points
- Judicial review of tender decisions is limited to arbitrariness
- mala fides
- or perversity
- courts do not sit as appellate authorities over technical evaluations
- tender conditions must be interpreted as a whole
- eligibility criteria must be strictly adhered to but minor deviations not affecting core requirements may be condoned.
