Gujarat High Court
Geosafe Technologies Private Limited vs Oil And Natural Gas Limited on 4 September, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 16041 of 2024
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GEOSAFE TECHNOLOGIES PRIVATE LIMITED & ANR.
Versus
OIL AND NATURAL GAS LIMITED & ANR.
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Appearance:
MR SHALIN MEHTA, SENIOR ADVOCATE With HIREN J TRIVEDI(8808) for
the Petitioner(s) No. 1,2
MR DEVANG VYAS, SENIOR ADVOCATE with
MS AISHWARYA REDDY, ADVOCATE With MS PRABHDEEP KAUR for
GUPTA LAW ASSOCIATES(9818) for the Respondent(s) No. 1
MS MAITRI P PATEL(8126) for the Respondent(s) No. 2
PARITOSH R GUPTA(7583) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR.JUSTICE R. T. VACHHANI
Date : 04/09/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. By way of this petition under Articles 226, 14, 19(1)(g), and
21 of the Constitution of India, the petitioners have
challenged the action of the respondent No.1 rejecting the
technical bid of the petitioner No.1-Company in the tender for
hiring of services for Real Time Monitoring System (RTMS)
for Sucker Rod Pump/Progressive Cavity Pump wells
("SRP/PCP" for short) of ONGC Mehsana Asset vide tender
No. GEM/2024/B/4522437 dated 23.01.2024.
2. The brief facts of the case are as under:
2.1. Respondent No.1 floated a tender for hiring of services for
RTMS for SRP/PCP wells of ONGC Mehsana Asset vide tender
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No. GEM/2024/B/4522437 dated 23.01.2024. The time limit for
submitting online bid was expiring on 04.03.2024 at 19:00, and bid
were to be opened on the same day at 19:30. As per the tender
conditions, the Technical Bid Opening ('TBO') dated 04.03.2024
was at 19:30 PM which was subsequently extended from time to
time i.e. from 04.03.2024 to 13.05.2024 and then to 19.05.2024.
The petitioner No.1-Company participated in the tender and
submitted the documents on 20.04.2024 and uploaded the same
on Government e-marketplace website i.e.,
https://bidplus.gem.gov.in/all-bids and made an offer.
2.2. As per Bid Evaluation Criteria (hereinafter referred to as
'BEC') clause D of the tender document the bidder was to meet the
Financial Criteria which required the turnover of the bidders to be
more than or equal to Rs. 16,00,77,600/-, and since the petitioner
did not qualify for such criteria independently, the petitioner No.1,
as per clause 5D(v) of the BEC, a bidder (other than a consortium)
that is not able to meet the Financial Criteria by itself, can also
submit its bid on the basis of the financial capability of a
Supporting Company, for which the petitioner No.1-Company took
support of MSS Meditechno (India) Pvt. Ltd (hereinafter referred to
as "Supporting Entity"). Further, in terms of BEC clause F.1.0 (a)
for seeking benefits reserved for Micro & Small Enterprises ('MSE')
i.e., exemption from payment of Earnest Money Deposit
(hereinafter referred to as "EMD"), in cases of support from MSE,
the supporting MSE(s) shall have to fulfill all the obligations
prescribed for a supporting company as per BEC conditions.
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Further, in case of a bid from an incorporated JV/consortium, in
order to avail the benefits, all the members of the bidder i.e.
Incorporated JV/consortium shall have to be MSEs.
2.3. As per clause 5(D)(i)(a) of BEC, the bidder was required to
submit its Audited Consolidated Financial Statement with all its
subsidiaries, which shall be the basis for meeting the requirement
under the Financial Criteria, and in cases where the
bidding/supporting company is not required to prepare
Consolidated Financial Statement, as per the statute of the country
of the bidding/supporting company as applicable, the bidder shall
provide justification for the same along with a certificate from a
practicing Chartered Accountant or equivalent to this effect.
2.4. The petitioner No.1-Company submitted the relevant
documents on 20.04.2024, including disclosing the turnover of the
Supporting Entity along with the bidder, etc.
2.5. Thereafter, the bid of the petitioner No.1-Company was
evaluated, and petitioner No.1-Company was intimated vide mail
dated 07.08.2024 received at 11:27 AM. The petitioner No.1-
Company was called upon to provide
clarifications/confirmations/deficient documents. Such
communication was made through the website of the Government
called as Government e-marketplace at https://gem.gov.in/.
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2.6. The petitioner No.1-Company tried uploading its response on
the website directly; however, due to some technical errors on the
website, the petitioner No.1-Company was not able to upload its
response and thus vide mail dated 12.08.2024, informed the
respondent No.1 regarding the technical glitch.
2.7. Vide email dated 11.10.2024 at 9:38 AM, the petitioner No.1-
Company was intimated that technical evaluation results are
available in the Bid results section. Upon receiving such mail, the
petitioner checked the GEM portal and found in the technical
evaluation history that the technical bid has been rejected and it
was rejected on 10.10.2024 at 17:52:21; however, the mail was
received on 11.10.2024 at 9:38 AM.
2.8. The Technical Bid of the petitioner no.1 was rejected by
assigning twin reasons. The reasons assigned are 1) that as on
date of TBO of the tender i.e. 13.05.2024, the MSE categorization
of the Supporting Entity, i.e MSS Meditechno(India) Pvt. Ltd.
having Udyam certificate No. UDYAM-GJ-01-0065432 is 'Medium
Enterprise' and the Supporting Entity is found to be not complying
with requirement of BEC clause F.1.0 (a) which clearly states that
in order to avail benefits reserved for MSEs viz EMD exemption
and purchase preference, the MSE bidder shall have to rely on
their own strength or on the strength of another MSE only to meet
the various tender requirement including Technical and Financial
Evaluation Criteria when read in conjunction with provisions of ITB
clause 19, notwithstanding circular dated 18.10.2022 and 2) the
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consolidated audited accounts of the Supporting Entity has not
been uploaded violating clause D(i)(i)(a) of BEC, and in view of
these two reasons, the offer was commercially rejected. Hence,
the respondent no.2 was declared as L1.
2.9. As per the Integrity Pact signed between the petitioner No.1-
Company and the respondent No.1, respondent No.1 appoints
Independent Expert Monitors (hereinafter referred to as 'IEMs')
who ensures that the tenders are awarded as per the
organizational procedures and adhere to fairness and
transparency and thus the petitioner No.1-Company, vide mail
dated 12.10.2024 sent at 22:24, raised a detailed grievance before
the IEM and also sent the physical copy of the representation
through RPAD on 14.10.2024.
2.10. Pursuant to the Integrity Pact, the petitioner No.1-Company
vide mail dated 12.10.2024, was informed to be remained
personally present on 05.11.2024 along with a Power Point
Presentation of the grievance raised along with all the supporting
documents. The petitioner was present there finally, and the
hearing was concluded on 05.11.2024. Vide mail dated
20.11.2024, respondent No.1 informed that IEM has opined in
petitioner No.1-Company's favour insofar as MSE status and
eligibility are concerned; however, on the other issue of providing a
consolidated Financial Statement, the IEM has stated that as per
BEC, financial parameters such as turnover and net worth of the
supporting company will be considered for evaluation, and for
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which the bidder was required to submit an Audited Consolidated
Financial Statement with all its subsidiaries of the Supporting
Entity. However, the bidder has not submitted any Financial
Statement citing that the Supporting Entity does not have joint
operations /subsidiaries/associates necessitating preparation of
Consolidated Financial Statements. Since, the Supporting Entity
does not have a subsidiary company, the requirement of a
Consolidated Financial Statement effectively becomes a
Standalone Financial Statement. Accordingly, the bidder should
have submitted the Standalone Financial Statement of the
Supporting Entity, which could be used to ascertain financial
parameters i.e., turnover and net worth as per BEC. In absence of
Financial Statement of the Supporting Entity, turnover and net
worth cannot be determined, and hence it was found that the offer
is non-compliant with reference to the Financial Criteria.
3. Mr. Shalin Mehta, learned Senior Advocate for the
petitioners, submits that BEC clause D(i)(i)(a) never required the
petitioner No.1-Company to upload Consolidated Financial
Accounts by the auditor of the Supporting Entity and since there
was no requirement for the Supporting Entity, to statutorily prepare
Consolidated Financial Accounts, a certificate of Chartered
Accountant for both i.e., petitioner No.1-Company and Supporting
Company was shared. It is submitted that the respondent No.1,
vide its letter dated 07.08.2024, or through any communication,
never asked to upload any other documents apart from
Consolidated Financial Accounts, which the petitioner No.1-
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Company and Supporting Entity were not required to prepare.
Thus, Mr. Mehta, learned Senior Advocate has submitted that the
respondent No.1 has acted contrary to the recitals of the bid
document, more particularly, Clause 5(D)(i)(a) of BEC. It is
submitted that ultimately the petitioners were already having the
Financial Statements; however, since it was not called upon to
submit the same, there was no need to submit the same, hence
rejection of the bid by the respondent No.1 is illegal.
4. In response to the aforesaid submissions, Mr. Devang Vyas,
learned Senior Advocate appearing for the respondent No.1, at the
outset has submitted that this Court, vide order dated 15.07.2025
in Special Civil Application No. 16680 of 2024 in the case of HKRP
Innovations Ltd. Vs. Oil And Natural Gas Corporation Ltd. & Anr.,
assailing the award of the tender to respondent No.2, has already
dismissed the writ petition. It is submitted that by now, substantial
work has been completed by the respondent No.2, while he was
awarded the tender. Mr. Devang Vyas, learned Senior Advocate
has submitted that the respondent No.1 was supposed to verify the
financial health of the petitioner No.1 - Company and, accordingly
the respondent No.1 had rejected the bid of the petitioner No.1 for
want of necessary documentary evidence, pointing out financial
feasibility for undertaking the contract. It is submitted that
ultimately, the IEM conducted a hearing on 05.11.2024 and all the
grievances which had been raised by the petitioner No.1 were also
considered and it was opined that the documents as required
under the bid as per the recitals of the bid documents were asked
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for, and hence, since the same were not supplied, the bid was not
accepted. Thus, it is urged that this Court may not interfere with
the awarding of the tender to the respondent No.2.
5. We have heard the learned advocates for the respective
parties at length.
6. The entire case of the respective parties hinges on Clause
5(D)(i)(a) of BEC which specifies about the Financial Criteria which
is submitted by the bidder. The relevant portion is as under:
"FINANCIAL CRITERIA
"D(i)(a):
The bidder shall the Audited consolidated financial statement with all
its subsidiaries which shall be the basis for meeting the requirement
under Financial Criteria. In cases where the bidding/supporting
company is not required to prepare consolidated financial statement
as per the statute of the country of the bidding/supporting company
as applicable, the bidder shall provide justification for the same
along with certificate from a practicing Chartered Accountant or
equivalent to this effect. In such cases the bidder shall submit the
consolidated financial account as per the accounting standards of
the country of the bidding/supporting company as the case may be,
which are not required to be audited but are required to be duly
certified by the practicing chartered accountant or equivalent".
7. The petitioner No.1 - Company invited reasons for its
disqualification on 10.10.2024 at 17:52:21 hours, reciting two
reasons, the same are as under:
"1. As on date of TBO of the tender i.e. 13.05.2024, the MSE
categorization of M/s MSS MEDITECHNO (INDIA) PRIVATE
LIMITED having Udyam certificate No. UDYAM-GJ-01-0065432 is
MEDIUM enterprise. M/s MSS MEDITECHNO (INDIA) PRIVATE
LIMITED is found to be not complying with requirement of BEC
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clause F.1.0 (a) which states clearly that in order to avail the
benefits reserved for MSEs i.e. exemption from payment of EMD
and purchase preference, the MSE bidder shall have to rely on their
own strength or on the strength of another MSE only to meet the
various tender requirement including technical and financial
evaluation criteria, when read in conjunction with provision of ITB
clause 19, S.O. 4926 (E) dated 18.10.2022 notwithstanding. 2.
Consolidated financial accounts audited by the statutory auditor of
M/s MSS MEDITECHNO (INDIA) PRIVATE LIMITED has not been
uploaded to meet BEC clause D (i) (1) (a). In view of the above two
reasons, offer is commercially rejected."
8. As per the GEM portal, a 48 hours window was provided for
filing a one time representation to challenge the reasons for
rejection of the techno-commercial evaluation. It is not in dispute
that no representation was received from the petitioner within 48
hours, and accordingly the price bids were opened by the
respondent No.1 on 12.10.2024 at 17:57:54 hours, and after
proper evaluation, the respondent no.2 was declared as L1.
9. The petitioner appealed against the aforesaid rejection
before the IEM, and accordingly, the petitioner No.1 - Company
was heard by the IEM, and it was opined as under:
"6.2 GEOSAFE is drawing financial support from its supporting
company i.e. MSS MEDITECHNO. Therefore, as per BEC, financial
parameters such as turnover and net-worth of the supporting
company will be considered for evaluation, and for which the bidder
was required to submit Audited consolidated financial statement
with all its subsidiaries of Supporting Company. However, bidder
has not submitted any financial statement citing that MSS
MEDITECHNO does not have joint operations / subsidiaries
associates necessitating preparation of consolidated financial
statements. Since, MSS MEDITECHNO does not have subsidiary
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company, the requirement of consolidated financial statement
effectively becomes standalone financial statement. Accordingly,
bidder should have submitted Standalone Financial Statement of
MSS MEDITECHNO, which could be used to ascertain financial
parameters i.e. Turnover and Net-worth as per BEC. In absence of
Financial Statement of supporting company, Turnover and Net-
worth cannot be determined. In view of this, the offer is non-
compliant w.r.t. Financial Criteria. We agree with the evaluation of
offer by ONGC on this issue."
10. Thus, one of the reasons which was mentioned hereinabove
was not accepted by the IEM, but the IEM, being a technical body,
has opined that the Financial Statement, which was required to be
submitted as per the second part of the aforementioned Clause
(D), would become a Standalone Financial Statement, and
accordingly, the bidder should have submitted a Standalone
Financial Statement of the Supporting Entity, which can be used to
ascertain financial parameters.
11. We are of the opinion that the intention behind the aforesaid
incorporation of the aforesaid Clause (D)(i)(a) is to read in
conjunction with clause (v) of the BEC. Clause (v) and other
clauses read as under:
"(v) : (v)-(a) A bidder(other than consortium) which is not able to
meet the financial criteria by itself, can also submit its bid on the
basis of financial capability of a Supporting Company provided each
of the following conditions are fulfilled.
2. The supporting company by itself and not through any other
arrangement safisfies the financial criteria of the BEC."
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(v)-b: Documents to be submitted by the bidder, along with its
techno-commercial bid, in case it is taking financial support from a
supporting company.
1) Audited Consolidated Annual financial statement as detailed
above in respect of the supporting company. Bidder will provide a
statement containing the value of each financial parameter required
in the tender based on supporting company's consolidated financial
statement as defined in BEC."
12. Unquestionably, the petitioner No.1 did not supply any
Consolidated Annual Financial Statement of the supporting
company as mandated in the aforesaid clauses. Thus, at the time
of submitting the certificate dated 07.08.2024 from the Chartered
Accountant, the petitioner ought to have also submitted the
Financial Statement, pointing out its financial capability for
undertaking the contract; however, the same was not submitted. In
order to ascertain financial health and to verify the turnover, net
worth, etc. of the supporting company, it was within the domain of
the respondent No.1 to call upon such documents from the
petitioner No.1 and in the absence of a Financial Statement of the
bidding Company, which would reveal its turnover, net worth, etc.,
the respondent no.1 has precisely rejected the technical bid of the
petitioner No.1 - Company.
13. We have also perused the report / opinion dated 20.11.2024
of the IEM, 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
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of IEM, which is an expert and independent body to examine all
the technical issues, unless such a 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:
"30. At this juncture, we may reiterate the well-established tenets
of law pertaining to the scope of judicial intervention in
Government contracts.
31. 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-
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making process" was reasonable, rational, not arbitrary and
violative of Article 14 of the Constitution."
32. 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. 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."
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33. 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."
34. 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."
35. 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 65 as under: -
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"65. 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."
14. In light of the legal precedent as enunciated by the Supreme
Court, we are not inclined to set aside the award of contract to the
respondent no.2. By now, the respondent no.2, who has been
awarded the contract, has completed more than 30% of the work,
hence, any interference at this stage will be a financial disaster for
the respondents. Hence, the present petition fails, and the same is
rejected.
Sd/- .
(A. S. SUPEHIA, J)
Sd/- .
(R. T. VACHHANI, J)
MVP/SNB./1
