Larsen & Toubro Ltd. vs Union Of India And Ors.
1995 Latest Caselaw 364 Del

JUDGMENT

M.K. Sharma, J.

(1) This writ petition has been preferred by the petitioners challenging the action of the respondent No.2, Oil India Limited in seeking to award a contract relating to a Turn-Key Project for Offshore oil exploration in blocks known as L1, L2, L3 and L4 covered by tender No.BEP/ENG/F/ 93/135 to respondent No.3, M/s. Essar Oils Limited on the ground that the said action of the respondent No.2 is illegal and arbitrary and is in contravention of various terms and conditions of the notice inviting tender read with the various amendments made thereto from time to time. After filing of the aforesaid writ petition, by our order dated 20.2.1995 we issued notice to the respondents to show cause as to why Rule Nisi be not issued. On the stay application filed by the petitioners we issued notice for 1.3.1995. Subsequently on 21.3.1995, after hearing the counsel for the parties and on the basis of the statement made by counsel for the respondents 1 & 2 we recorded that "in the nature of the case the learned counsel for respondents 1 & 2 has fairly offered that till the final decision of this case the said respondents would not issue the formal contract in favor of respondent No.3."

(2) Brief facts leading to the filing of the present writ petition are that a tender for Charter Hire of one Self-Propelled Floater and Associated Services for Drilling Offshore Wells on Turn- Key basis was floated by Oil India Limited, respondent No.2 vide tender notice dated 19.7.1993. Para 18 of Section Iii of the Tender Notice stipulated that the bidder should be an expert and fully qualified as a Drilling Organisation, having a minimum 2 years experience in drilling and completing similar wells on turn-key basis and amongst other things should be capable of providing what is stipulated in the said paragraph for the successful performance of the work covered by the tender. Subsequent to the issuance of the aforesaid notice inviting tenders two amendments namely - amendment No.1 and amendment No.2 were issued by respondent No.2 on 1.10.1993 and 6.10.1993 respectively. The said amendments however, do not have any significant bearing on the facts of the present case and accordingly we do not propose to deal with the said amendments extensively herein. However, another amendment namely - amendment No.3 to the notice inviting tender was issued by the Oil India Limited, respondent No. 2 on 3.11.1993. Original paragraph 26.0 of Section No.(iii) of the notice inviting tender stipulated that the offered drilling unit must be in offshore drilling atleast for the last 2 years. In terms of the aforesaid amendments inter alia the stipulation of drilling of one well during the past 2 years to the satisfaction of the operator was waived and the following was substituted:- "I)The contractor should provide documentary evidence testifying the fitness and drill-worthiness of the hull, the equipment on board carried out within the last 2-1/2 years. The certificate should be from an Internationally reputed and recognised inspecting agency in the shipping line for the hull portion and Api approved agency for the drilling and associated equipment. ii) Oil shall in addition have the right to deploy a reputed 3rd party agency of its choice and get the drilling unit and the ancillary equipment inspected/tested before the technical/commercial acceptance of the bid. Such inspection report shall be final and binding and correspondence on this score will not be entertained by OIL."

A further amendment namely - the amendment No.4 to the notice inviting tender was issued on 22.11.1993. The said amendment was further to amendment No.3 dated 3.11.1993 and paragraph 1.1.2 (i) now reads as follows:- "i) The Contractor should provide documentary evidence testifying the fitness and drill worthiness of the hull, the equipment on board carried out within the last 2-1/2 years. The certificate should be from an Internationally reputed and recognised inspecting agency in the shipping line for the hull portion. Third party reputed inspecting agencies such as Lloyd Shipping, Vetco, Dnv, etc. can be utilised for purposes of inspection and certification. Alternatively manufacturers' Inspection Certificates qualifying function worthiness of major drilling and associated equipment on board the offered drilling unit, e.g. Hoisting and Rotating equipment, Slush Pumps, Mud Processing Equipment, Power Pack, Drillers instrumentation, Motion Compensator, Riser Tensioners, Bop Stack, Choke Manifold, SubseqCameras, Anchors, Mooring Line, etc. shall be acceptable to OIL."

The petitioners as well as 4 other parties including the respondent No.3 submitted their bids in pursuance of the aforesaid notice inviting tender as amended on 13.12.1993 which was opened on the same date. After opening of the technical bids discussions were held at New Delhi on 19.1.1994 and in February, 1994 at Bhubaneshwar. On 6.8.1994 an amendment being amendment No.5 was issued to the notice inviting tender, by which the bidders were permitted to change their offered rig. By virtue of the aforesaid amendment each of the bidders was given a chance to offer either the original drilling unit or any other drilling unit in line with the same terms and conditions as specified in the tender documents and subsequent amendments issued in that regard. In the said amendment it was further stipulated that only one drilling unit could be offered by one bidder and offer for an alternative drilling unit would make the bids unacceptable.

(3) Yet another amendment namely - amendment No.6 was issued on 2.9.1994 in terms of which it was clarified that the customs duty payable, if any, should be included in the lumpsum charges quoted by the bidders. Following the said amendment the bidders including the petitioners and the respondent No.3 submitted their revised bids. Pursuant thereto technical bid was opened on 15.9.1994 and the price bid was opened on 26.10.1994. Meeting of the Steering Committee was held on 23.12.1994 for consideration of the bids submitted by different parties including the petitioners and respondent No.3 and after discussion it was decided to ask for revised price offer in view of clarification received in respect of payment of customs duty. In pursuance of the same the respondent No.2 on 27.12.1994 issued a Fax message to all the bidders asking for revised price of work along the lines contained in the said message. The petitioners, it appears, wrote a letter to respondent No.2 protesting as to reopening of the bid and stating inter alia that the idea was to scuttle the petitioner's lowest bid and to favor the other parties. However, in the said letter the petitioners asked for extension of the revised bids up to 16.1.1995 by one week, so as to enable them to submit their revised bid. On 7.1.1995 a Fax message was issued from respondent No.2 to the petitioners inter alia extending the date for revised price bids up to 16.1.1995 with a further intimation that the bids will be opened on 16.1.1995. The revised price bids submitted by the bidders were opened in the presence of all the bidders. On 17.1.1995, the petitioners wrote a letter to respondent No.2 stating inter alia that the other bidders have not complied with proportionate costs of interlocution move and that the bid of the petitioners would be the lowest. On 16.2.1995 the Steering Committee held its meeting and decided to award the contract in favor of respondent No.3 after taking into account the recommendations made by Oil India Limited, the qualifications set by Oil India Limited, the allegations and the protest made by the petitioners and the response of Oil India Limited in that regard. On 20.2.1995, the respondent No.2 issued the letter of intent to respondent No.3 awarding the contract on Turn-Key project for Offshore Oil Exploration in blocks known as L-1, L-2, L-3 and L-4. Being aggrieved by the aforesaid actions on the part of respondent No.2 in awarding the contract to respondent No.3, the petitioners preferred this writ petition on 20.2.1995, on which date the respondent No.2 issued the Letter of Intent to respondent No.3.

(4) The learned counsel appearing for the parties brought to our notice the various judgments of the Supreme Court dealing with the aspect of judicial review in the field of exercise of contractual powers by government bodies. It has been repeatedly held by the apex court in the case of Ramanna Dayaram Shetty Vs. International Airport Authority of India, ; Kasturi Lal Lakshmi Reddy Vs. State of J & K, ; Union of India Vs. Hindustan Development Corporation, and also in the case of New Horizons Limited and another Vs. Union of India and others, , that in the matter of entering into a contract the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State in exercise of its various functions, is governed by the mandate of Article 14 of the Constitution which excludes arbitrariness in State actions and requires the State to act fairly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion.

(5) The aforesaid decisions of the apex court further held that while dealing with the public, whether by way of giving jobs or entering into contract or issuing quotas or licenses or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and like a private individual deal with any person it pleases, but its action must be in conformity with the standards or norms which are not arbitrary, irrational or irrelevant. At the same time it is equally well recognised that certain measure of `free play in the joints' is necessary for an administrative body functioning in an administrative sphere.

(6) In a recent decision in the case of Tata Cellular Vs. Union of India; , the Supreme Court examined at length the scope of judicial review in the field of exercise of contractual powers by Government bodies. After noticing the current mood of judicial restraint in England, the Court has laid down the following principles: "(1)THEmodern 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 term 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 facets 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."

(7) In Tata Cellular case (supra) the Court referred to the 'Wednesbury principle of reasonableness' as enunciated in the case of Associated Provincial Picture Houses Ltd. Vs. Wednesbury Corporation Limited; reported in 1947(2) All England Reports 680. In that case Lord Greene M.R, has held that a decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that a decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. In Tata Cellular's case (supra) the Court has identified the following two other facets of irrationality:- (1)IT is open to the court to review the decision maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. (2)A decision would be regarded as unreasonable if it is partial and unequal in its operation as between different classes.

(8) In the backdrop of the aforesaid legal propositions we propose to examine the various contentions put forth by the counsel for the parties in order to come to a decision as to whether the decision of respondent No.2 in awarding the contract in favor of respondent No.3 is in any manner arbitrary, irrational or unreasonable.

(9) Mr. Anil Dewan, the learned counsel appearing for the petitioners submitted that the bidders to the tender in terms thereof were required to submit technical bids to respondent No.2 providing, inter alia, a fully equipped drill-ship which would satisfy the conditions, requirements and clarifications mentioned in the tender read with the various amendments thereto. According to the learned counsel the drill ship provided for by respondent No.3 failed to satisfy the said conditions. Besides the drill ship of the respondent No. 3, namely - `ESSAR DISCOVERER' was inspected by M/s. Opspray Ltd., U.K. the third party inspecting agency in terms of the tender notice and the same was found to require major repair/over- hauling/replacement, and accordingly, action of respondent No.2 in awarding the contract in favor of respondent No.3 is arbitrary, unreasonable and irrational. The further submission of the learned counsel for the petitioners was that there was a secret correspondence between respondents No.2 & 3 sent behind the back of the other bidders in contravention of the terms and conditions of the notice inviting tender as amended, which proved and established that the respondent No.2 in April, 1994 itself made up its mind to unduly favor respondent No.3 and granted Letter of Intent and the contract, and in that view of the matter, according to the learned counsel for the petitioners, the drill ship of respondent No.3 not being technically fit, it was not technically qualified and accordingly should not have been permitted to participate in the commercial bid. The further submission of the learned counsel for the petitioners was that the various amendments, particularly the amendments No.4,5 & 6 to the Notice Inviting Tender have been brought in and issued by respondent No.2 in order to unduly favor respondent No.3 and the same were tailor-made to suit the needs and requirements of respondent No.3. According to the learned counsel favoritism qua respondent No.3 is writ large on the face of the record of the case which is further corroborated from the fact of resorting to undue haste by respondent No.2 in awarding the contract to respondent No.3.

(10) Countering the aforesaid arguments advanced by the learned counsel for the petitioners, Mr. Kapil Sibbal appearing for respondents No.1 & 2 placed before us the Objects and Reasons for issuing the various amendments to the Notice inviting Tender. The learned counsel for respondent No.2 submitted before us that the Indian parties who purchased the tender documents including the petitioners and respondent No.3 wrote to respondent No.2 to relax some of the stringent conditions in the tender requiring Turn-Key drilling unit being in operation for a period of atleast 2 years even before the submission of tenders and that newspaper articles also charged Oil India Limited for selling out in the name of liberalisation to multinationals, consequent to which the respondent No.2 considered it appropriate to relax some of the conditions of the tender which led to amendment No.3 dated 3.11.1993, and amendment No.4. It was further submitted by learned counsel for respondent No.2 that for the first time on 13.12.1993 five parties submitted their bids in response to tender notice as amended and said bids were submitted in two separate envelops - one being the Technical bid and the other being the Price Bid and that the envelops containing those containing the Technical Bid were opened but not the Price Bids on 13.12.1993. The counter affidavit filed by respondent No.3 also stated in respect of the same that between January, February 1994, after opening of the technical bids the respondent No.2 met with all the bidders together and clarified certain issues between themselves and after such meetings and discussions the respondent No.2 found that only the bidders who were found technically acceptable were M/s. Sonat Offshore Drilling of Usa and M/s. Foraner of France and that during the course of aforesaid discussions the respondent No.2 also came to the conclusion that the drilling units offered by the respondent No.3 being the `ESSAR DISCOVERER' and by M/s. Amer Shipping Management, being `FORESIGHT Driller II' were found not in conformity with the tender requirements with reference to various statutory certificates. It is further stated in the said counter affidavit that pursuant to the amendments No.3 & 4 Oil India Limited instead of outright rejecting both Essar Oil Ltd.'s and Amer Shipping Management's bids, decided, in terms of the amendments, to exercise its right to inspect both the drilling units. It is also stated that as the changes required according to the inspecting agency deputed by respondent No.2, could be rectified and the drilling units could be made ready for the purpose of carrying out drilling operations within a period of 10 weeks, it was found appropriate to direct, in tandem with the assurances given by both Essar Oil Ltd. and Amer Shipping Management that the short-falls pointed out by the Inspecting Agency ought to be rectified within a period of 10 weeks of issuance of the Letter of Intent by respondent No.2 in the event of respondent No.2 deciding to issue the Letter of Intent to either of these parties. As far as the petitioners were concerned, their drilling unit `CHANCELLOR'S VILLE' was not in conformity with specifications provided by respondent No.2 in the notice inviting tender.

(11) Relying on the aforesaid statements made in the counter affidavit the learned counsel for respondent No.2 submitted before us that by April 18, 1994, the respondent No.2, in the context of the aforesaid facts emerging from the tender negotiations in respect of the technical aspects of the bid, could have rejected the bids of all the Indian participants and could have decided to award the tender to either M/s. Sonat Offshore Drilling of Usa or M/s. Foraner of France. The further submission of the learned counsel for respondent No.2 was that at that stage the petitioners in any case were not found to be technically qualified and consequently, the offer of inspection of the drilling units extended to Essar Oil Limited and Amer Shipping Management was not extended to the petitioners. It is also brought to our notice by the learned counsel for respondent No.2 that as on 18.4.1994 the price bids which were enclosed in a separate envelop had not been opened. The learned counsel for respondent No.2 also drew our attention to the objects and reasons for issuance of the amendments to the notice inviting tender, namely - amendments No.5 & 6. According to the learned counsel the amendment No.5 was issued in terms of which each of the bidders was given an opportunity to offer either the original drilling unit or any other drilling unit in line with the same terms and conditions as specified in the tender documents and subsequent amendments issued in that regard. In the said amendment it was further stipulated that only one drilling unit could be offered by one bidder and offer for an alternative drilling unit would make the bid unacceptable. Similarly, amendment No.6 was by way of a clarification regarding the customs duty payable, if any, should be included in the lumpsum charges to be quoted by the bidders. Learned counsel for respondent No.2 drew our attention to the contents of various communications between the Ministry of Finance on the one hand and the respondent No.2 on the other, in support of his submission that Oil was not clear about the applicability of customs duty on the importation of the drilling unit till issuance of a clarification by the Excise and Customs Department in this regard on 28.9.1994 where upon the Steering Committee in its meeting held on 23.12.1994 thought that in the light of the unclear position in respect of the extent of applicability of customs duty with respect to drill ship and its equipment it would be more appropriate to ask the parties to make revised price bids.

(12) The counsel for the petitioners vehemently urged before us that the amendments, particularly amendment No.3,5 & 6 have been brought in by respondent No.2 in order to give an undue favor to respondent No.3 and thereby the entire decision making process in the instant case is wrong.

(13) Mr. Mukul Rohtagi appearing for respondent No.3 submitted before us that not only no favoritism was shown to the respondent No.3 by respondent No.2 but in fact favors were shown to the petitioners on various occasions in as much as extension of time for submitting the revised price bid was asked for only by the petitioners by their letter dated 4.1.1995 which were duly granted, to which no other bidder protested. Again the stipulation as to the age of the drill ship meant in the tender notice is 20 years whereas Foresight Driller offered as one of the drill ships by the petitioners and M/s. Amer Shipping, which owned this drill ship, was more than 20 years old, which subsequently in pursuance of discussions between the petitioners and respondent No.2 was relaxed to 22 years. The learned counsel for respondent No.3 further drew our attention to the fact that since Foresight Driller was sold by M/s. Amer Shipping and Chancellor Ville was not technically qualified, the respondent No.2 allowed change of the drill ship by issuance of amendment No.5 thereby favoring the petitioners. The learned counsel for respondent No.3 further submitted before us that the respondent No.3 was admittedly the lowest bidder and that reduction in price by the lowest bidder is neither arbitrary nor prejudicial to other bidders. According to him negotiating with the successful bidder is a well accepted norm and there is nothing unfair about it. In order to support his contention he relied upon the ratio of the decision of the Supreme Court in the case of Haji T.M.Hassan Rawther Vs. Kerala Financial Corporation; .

(14) On careful consideration of the records of the case we find that amendment No.3 was brought in by respondent No.2 in pursuance of various letters of the petitioners, the respondent No.3 and other parties who purchased the tender documents requesting to relax some of the stringent conditions in the tender requiring turn-key drilling unit being in operation for a period of atleast 2 years even before submission of tenders. We find that in view of the aforesaid request made by intending bidders the respondent No.2 considered it appropriate to relax some of the conditions of the tender which in fact led to the amendments No.3 & 4. It further appears from the records that by April 18, 1994 none of the Indian bidders could satisfy the technical aspects of the bid and therefore, the respondent No.2 would have been justified in rejecting the bids of all the Indian participants as on that date. The records further reveal that by that date namely 18.4.1994 the petitioners were found to be not technically qualified and their tender could have been rejected by the respondent No.2. Inspite of the petitioners and other Indian bidders being so disadvantageously placed, the respondent No.2 did not consider it appropriate to exclude either the petitioners or the other Indian parties and bonafide issued the letter of 18.4.1994 hoping that the Indian parties would be in a position to undertake the venture. It has also been brought to our notice that at that stage no inspection was carried out in respect of the offer of the petitioners since its drill ship `CHANCELLOR VILLE' was otherwise not found to be technically suitable. The Price Bids which were separately enclosed in separate envelops were also not opened by 18.4.1994 and in our opinion, therefore, no prejudice was caused to any of the parties including the petitioners on account of respondent No.2 issuing the letter dated 18.4.1994 on which much stress was placed by the counsel for the petitioners in order to assail the decision of respondent No.2 in awarding the contract in favor of respondent No.3. So far as amendments No.5 & 6 are concerned, we find that in terms of amendment No.5 each of the bidders was given a chance to offer either the original drilling unit or any other drilling unit in line with the same terms, conditions and specifications as specified in the tender documents and subsequent amendments issued in that regard. It may be noted herein that just prior to that stage the drill ship offered by the petitioners was not available to the petitioners and a representation to this effect was also received from M/s. Amer Shipping Management o19.7.1994 wherein they requested that they be permitted to change the offer of `FORESIGHT Driller II' which was earlier short-listed but was not available any more. By the aforesaid amendment No.5, each of the bidders was permitted to change and offer a new drilling unit, if they so desired, with a further stipulation that only one drilling unit could be offered by one bidder and offer for an alternative drilling unit would make the bid unacceptable. We find on record that the petitioners who were originally found to be technically unacceptable were given an opportunity to participate in the tender by offering a new drilling ship or to provide specific clarification in respect of `CHANCELLOR VILLE'. Similarly the amendment No.6 was necessitated to be issued in view of the clarification issued by the Excise and Customs Department with regard to applicability of Customs Duty on the importation of the drilling unit, including equipment, accessories and consumables required for the drilling operation. In view of the aforesaid factual and legal position we can not hold that the changes brought in by respondent No.2 through the aforesaid amendments to the terms and conditions of the Notice Inviting Tender and the alleged deviations made by respondent No.2 to the conditions thereof were tailor made so as to suit the respondent No.3 and to oust the petitioners from the competition. We are satisfied that the aforesaid changes and/or deviations brought in by the respondents to the original terms and conditions of the Notice inviting Tender did not result in arbitrariness or discrimination either to the petitioners or to any other party. In our opinion these changes affect all the intending bidders alike and could not be said to be objectionable inasmuch as the same were necessitated because of the request made by the bidding parties including the petitioners and are based on weighty reasons. In this connection we may also appropriately refer to the decision of the apex court in the case of G.J.Fernandez Vs. State of Karnataka; , wherein under similar circumstances it was held that the courts should not interfere.

(15) We also find from records that even after the revised bids were submitted by the re- spective bidders, the petitioners in particular wrote to respondent No.2 on 4.1.1995 asking them to clarify as to whether the customs duty shall be applicable to materials and consumables and whether such materials and consumables would be treated as part of the rate referred to by the respondent No.2.

(16) On consideration of all the relevant material we feel that the only deduction that is possible is that all the amendments that have been brought in by respondent No.2 to the tender were in the interest of all the bidders collectively including the petitioners and the respondent No.3 and were necessitated because of the circumstances. In our opinion the explanation given by the respondent No.2 in their counter affidavit and explained later on during the course of his arguments by the learned counsel for respondent No.2, cannot be said to be in any way devoid of merit and justification. Nor could it be said that the object behind the said amendments were to shower undue benefit and favor on the respondent No.3. In our opinion the said amendments were necessitated in view of the facts as explained by respondent No.2. Therefore, we cannot accept the contention of the learned counsel for the petitioners that the same was tailor made in order to suit the need of the respondent No.3. We also cannot hold that in any part of the decision making process the respondent No.2 indulged in any act of favoritism and that any undue favor was shown to respondent No.3. In our opinion, the records of the case which are placed before us do not leave any scope for such allegations and we accordingly reject the same.

(17) The learned counsel for the petitioners also laid great stress on the aspect of the drill worthiness of respondent No.3's drill ship `ESSAR DISCOVERER'. On going through the records of the case we find that a proper inspection was carried out by respondent No.2 and an independent expert namely - M/s. Opsray Ltd., U.K. in respect of the said drill ship was offered by respondent No.3. Similarly the drill ship of M/s. Amer Shipping called `FORESIGHT DRILLER' was also inspected at Singapore and letters dated 18.4.1994 were issued to M/s. Essar Oil Limited and M/s. Amer Shipping Management, giving the report of the inspection and asking both the bidders to ensure that their drill ship must be properly repaired, serviced and replaced within 10 weeks after the issue of Letters of Intent in the event they are successful bidders.

(18) We find that such a letter could not be issued by respondent No.2 to the petitioners as the petitioners were not found to be technically qualified till that date inasmuch as its drilling unit `CHANCELLOR'S VILLE' and equipments thereto were found to be not in conformity with all specifications of Notice inviting Tender. Besides some discrepancies were discovered in their technical offer vis-a-vis literature of `CHANCELLOR'S VILLE' available with OIL. Accordingly, the offer of inspection of the drill ship unit extended to respondent No.3 and Amer Shipping Management, could not have been extended to the petitioners. It is also significant to note that the 10 weeks period granted to respondent No.3 and Amer Shipping Company is within the period of mobilisation which is 90 days from the issue of the letter of intent and accordingly we find no reason to hold that any favor was shown by respondent No.2 to respondent No.3 while issuing letter dated 18.4.1994,

(19) In respect of inter location movement charges the learned counsel for the petitioners submitted that the notice inviting tender initially asked the bidders to make lumpsum bid which would include charges for inter-location movement of the drill ship between 4 drilling sites. According to the counsel for the petitioners, after the bids made by the petitioners and other bidders were opened on 26.10.1994 by respondent No.2 and after it was found that the petitioner's bid was admittedly the lowest, the respondent No.2 by its letter dated 27.12.1994 asked for fresh bids on various counts including that the `inter-location movement charges should be proportionate as per the distance of the locations'. The counsel for the petitioners vehemently urged before us that there was non-compliance by the respondent No.3 in its bid of the aforesaid condition. It was submitted that the petitioner's bid was of Usd (for Us Dollars) 30,499.500 while that of respondent No.3 which was not based on the above ratio of inter-location movement charges was for Usd 29,700,000. According to the counsel for the petitioners a difference of Usd 799,500 in favor of respondent No.3 was only because it did not adhere to the proportionate inter-location movement charges of 1:2/3:60 as laid down in para 6.0. The alternate submission of the learned counsel for the petitioners in this respect was that if the petitioners were permitted to submit its inter-location movement charges in the same ratio i.e. at 1:1:15 as used by respondent No.3 then its inter-location movement charges would be reduced compared to that of respondent No.3 and therefore, the respondent No.2 should have considered the bid of petitioners as the lowest and much lower than that of the respondent No.3 and in not doing so the respondent No.2 has acted illegally and arbitrarily in awarding the contract to respondent No.3.

(20) Mr. Kapil Sibbal, the learned counsel appearing for respondent No.2 during the course of his arguments submitted before us that although the respondent No.3 did not quote the inter- location movement charges proportionate to the distance between the wells, it could not be said that technically speaking the petitioners also quoted the inter-location movement charges proportionately. According to him the purpose for asking the bidders to give proportionate charges was to ensure that the bidders do not recover a major part of the value of the contract after completing the first three locations leading to the possibility of their abandoning the work on the fourth location.

(21) Mr. Mukul Rohtagi, learned counsel appearing for respondent No.3 also submitted in this behalf that since the tender is on a turn-key basis the actual cost of movement is not of much relevance as the over-riding consideration is the lowest lumpsum cost of the project. He further submitted that the actual distance as well as movement time from one location to another location being already known, accurate computation of cost was possible. He further submitted that the total inter-location movement charges were just 3% of the total cost of the project. Therefore, this aspect does not deserve the importance being attached to it by the petitioners.

(22) We have given our anxious consideration to the rival submissions of the learned counsel for the parties. In our opinion a turn-key tender or project means lumpsum cost and whoever bids the lowest lumpsum cost could be the successful bidder provided technical specifications are complied with. On record we find that the respondent No.3 was the lowest bidder when the comparative bids are considered as it had offered the lowest lumpsum cost. As the tender is on a turn-key basis the actual cost of movement is not of much relevance as the over-riding consideration is the lowest lumpsum cost of the whole project. In our opinion the stand of the petitioners that they were misled in stating their charges in the ratio of 1:2/3:16 in view of the fact that the distance of the wells is 60 Kms., 40 Kms., 3600 Kms., cannot be considered to be a well reasoned argument. Further we note that this aspect of bid was not a part of the bid rejection criteria. The argument has to be judged on the basis of substance and not form. Since we have found that the respondent No.3 has given its bid with the lowest lumpsum cost it is to be considered to be the successful bidder in the present case since it has also successfully met the technical specifications and in accepting the bid of respondent No.3, therefore, the respondent No.2, in our opinion did not commit any illegality nor did the respondent No.2 act unreasonably.

(23) At this stage, we may also appropriately refer to the submissions of the learned counsel for respondent No.2 and supplemented by the counsel for respondent No.3 in respect of the technical bid of the petitioners being unavailable for consideration at the stage when the decision was taken for issuance of the letter of intent for respondent No.3. On perusal of the records we find that even though the price bid of the petitioners was kept alive till the grant of the letter of intent on 28.1.1995 yet its technical proposals had lapsed on 15.1.1995 and in any case on or before 28.1.1995 inasmuch as the letter dated 4.1.1995 issued by the petitioners to respondent No.2 categorically stated that if the award was not confirmed by 15.1.1995, the technical proposals offered by the petitioners would lapse. Our attention, was drawn to the letter dated 6.1.1995 written by the petitioners to respondent No.2 wherein it was stated that "15.1.1995" in clause 11.0 referred to above was a mistake and that the same should be read as `28.1.1995'. When we take note of the contents of the aforesaid letter of the petitioners written to respondent No.2, we find that the technical bid of the petitioners, in any case, had lapsed on 28.1.1995 and therefore, the said technical proposal of the petitioners was not available for consideration by the respondent No.2 on 20.2.1995 when the letter of intent was issued to respondent No.3 nor on the date when the present writ petition was filed by the petitioners seeking issuance of a mandamus in its favor. We also find on record that the petitioners' drill ship 'CANMAR EXPLORER-3' was also not available with the petitioners on the date of filing of the writ petition as would be established from 'Petro Data, Daily, International Edition, dated March 17, 1995, wherein it was stated that the said drill ship had been issued a letter of intent to drill a well off the coast of Seychelles. The aforesaid fact is also admitted by the petitioners as the petitioners have submitted an undertaking to this court towards the fag end of hearing that in case the petitioners are awarded the contract they would make a new drill ship available for executing the contract. However, in view of the amendment No.5 no bidder has a right at the present stage to offer any new drill ship as the one time opportunity granted by amendment No.5 was duly availed of by the petitioners when it offered the drill ship `CANMAR EXPLORER-3'. In view of the aforesaid facts and circumstances, on this ground alone the petitioners cannot seek any remedy at all.

(24) As regards the submission of the learned counsel for the petitioners that they had better track record as compared to the respondent No.3, we do not find any substance in the said submission also. Records available before us disclose that the petitioners had no previous experience in similar job whereas the respondent No.3 possessed of such experience. Besides the drill ship offered by the petitioners is also at present not available to undertake the job, even if the same is awarded in its favor.

(25) All the relevant aspects including the objections of the petitioners were duly considered by the Steering Committee on the basis of the material on record and the recommendations of the OIL. We find nothing to persuade us to upset the decision of the Steering Committee.

(26) In view of the aforesaid findings recorded by us, in our opinion, the action of respondent No.2 in offering the contract in question to respondent No.3, which has been challenged by the petitioners in this writ petition, cannot be said to be in any manner arbitrary or unreasonable nor can we hold that the said action is irrational or unfair.

(27) In the result, we do not find any merit in this writ petition and the same is dismissed but without any order as to costs.