VAIBHAVI ENTERPRISE versus NOBEL CERA COAT & ORS. on 21 October 2021

VAIBHAVI ENTERPRISE

v.

NOBEL CERA COAT & ORS.(Civil Appeal No. 6289 of 2021)

OCTOBER 21, 2021

[M. R. SHAH AND A. S. BOPANNA JJ.]

Constitution of India: Art.226 – Tender – Bid – RespondentONGC invited “Expression of Interest” (EOI) for demand assessmentfor natural gas produced from two fields – Three applicants – ONGCsought approval of Ministry in terms of EOI for gas allocation –When matter was pending consideration before the UnionGovernment, one of the applicant revised its response, and offeredto commence off take of gas within 65 days of allotment – ONGCby letter dated 08.03.2021 re-invited the bids from the threeshortlisted applicants to place fresh bid – The other applicantsubmitted fresh bid – However, writ applicant did not submit anyfresh bid and filed writ petition challenging letter dated 08.03.2021so far it calls for “expected period of readiness to offtake gas” andalso praying for issuance of writ of mandamus to ONGC to proceedwith award of gas allocation on the basis of its offer – In the writpetition, neither the Ministry nor other applicants were impleadedas party respondents – Matter came up before High Court on19.08.2021 and Union of India was ordered to be arrayed asrespondent no.3 – At the time of hearing of writ petition, writapplicant reduced days for lifting gas from 75 days to 65 days –High Court disposed of writ petition by directing ONGC to finalizethe contract with the applicant on condition that the writ applicantshall lift the gas within 65 days from the date of allotment – Onappeal by other applicants, held: The procedure adopted by HighCourt while disposing of writ petition in favour of writ applicantwas unsustainable – High Court passed impugned order ex-parteand without giving any opportunity of being heard to the otherapplicants – Before the High Court, it was brought on record thatthere were two other applicants who submitted their EOI and evenone of the applicants was ready and willing to lift the gas within 65days – Till writ petition was filed and matter was heard by HighCourt on 19.08.2021 and 16.09.2021, the original writ applicant

765

A

B

CDEFGH

Aoffered to lift the gas within 75 days – Only at the time of hearingon 20.09.2021, writ applicant revised its offer and High Courtallowed writ applicant to revise its offer and that too in exercise ofpowers under Art.226 – When High Court allowed the writ applicantto modify its offer, in that case, the opportunity ought to have beengiven to the other applicants – So the procedure adopted by HighBCourt while disposing of writ petition by permitting the originalwrit applicant to modify its offer and that too in exercise of powersunder Art.226 is unsustainable – Matter remitted to High Court forits fresh decision.

Allowing the appeals and remitting the matter to High Court,Cthe Court HELD: 1. When High Court permitted / allowed the writapplicant to modify its offer, in that case, the opportunity ought tohave been given to the other applicants. Either they might haveobjected to permitting such modification of the offer in exerciseDof powers under Article 226 of the Constitution of India or theyalso could have modified their offer further and reduce numberof days for lifting gas. It is not in dispute that neither of theappellants were impleaded as party to the writ petition. Not onlythat even initially Union of India was also not joined as a partyEand for the first time Union of India was directed to be impleadedas respondent no.3 pursuant to the order dated 19.08.2021 andthat too not at the instance of the writ applicant but as the HighCourt felt that presence of the Union of India is required. So theprocedure adopted by the High Court while disposing of the writpetition by permitting / allowing the original writ applicant toFmodify its offer and that too in exercise of powers under Article226 of the Constitution of India, is unsustainable and unknown tolaw. [Para 4.0][770-D-F[

2. Though the High Court has, as such, directed and issuedthe writ of mandamus directing ONGC to finalize the contractGwith the writ applicant on the condition that the writ applicantshall lift gas within 65 days from the date of allotment, instead ofallowing the writ petition and making the Rule absolute, HighCourt has used the word writ petition is disposed of. Once thewrit of mandamus was issued, instead of disposing of the writ H

petition, the High Court ought to have allowed the writ petition.Even otherwise also, the impugned order passed by the HighCourt is unsustainable in as such no reasons whatsoever havebeen assigned by the High Court on merits. Except narratingthe prayer clause and two earlier orders passed on 19.08.2021and 16.09.2021 there is no further discussion by the High Courton merits of the matter. [Paras 4.0, 5.0][770-H; 771-A-C]

3. The appellants to submit appropriate application forimpleading them as party respondent nos. 4 and 5 and same tobe allowed by the High court and thereafter the High Court topass a fresh order in accordance with law and on merits and aftergiving fullest opportunities to all the respondents includingONGC, Union of India and the appellants herein. In the facts andcircumstances of the case and looking to the urgency, we requestthe High Court to finally decide and dispose of the writ petitionin accordance with law and on its own merits at the earliest andpreferably within a period of four weeks from the date of receiptof the present order. Either of the parties to place the presentorder before the High Court forthwith. [Para 6.0][771-D-F]

CIVIL APPELLATE JURISDICTION: Civil Appeal No.6289 of2021

From the Judgment and Order dated 20.09.2021 of the High Courtof Gujarat at Ahmedabad in SCA No. 5815 of 2021.

With

C.A. No. 6290 of 2021

Devan Parikh, Sr. Adv., Santosh Krishnan, E.C. Agrawala, Advs.for the appellant.

Vikramjit Banerjee, ASG, Som Raj Choudhury, Saransh Kumar,Shrutee Aradhana, Saurav Agrawal, Trinath Tadakamalla, Ishaan Chhaya,Sahil Tagotra, Advs. for the respondents.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1.0. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court of Gujarat passed in Special Civil AB

C

D

E

F

G

H

AApplication No.5815 of 2021 preferred by the respondent no.1 herein-original writ petitioner (hereinafter referred to as the “original writapplicant”), by which, the High Court has disposed of the said writ petitionby directing the respondent no.2- ONGC to finalize the contract with theoriginal writ applicant on the condition that the writ applicant shall lift thegas within 65 days from the date of allotment instead of 75 days asBoffered by it earlier.

2.0. That the respondent ONGC invited “Expressions of Interest”(EOI) on 22.07.2020 for demand assessment for natural gas producedfrom the two fields. As per the EOI, the demand assessment for thenatural gas in the area was to be undertaken by ONGC and the ultimateCapproval for allocation was to come from Ministry of Petroleum andNatural Gas, Government of India. If allotted, the gas supply wouldoperate for a period of five years from the date of award.

It appears from the pleadings that only three applicants wereinterested in sourcing the natural gas from two fields advertised by ONGCDviz. (1) original writ applicant – Nobel Cera Coat, (2) Vaibhavi Enterprise-appellant in Civil Appeal No. 6289 of 2021 and (3) Tanish CerachemPrivate Limited – appellant in Civil Appeal No. 6290 of 2021. NobelCera Coat submitted their interest in sourcing natural gas from bothVAD#3 and VAD#5. Vaibhavi Enterprise submitted their interest forEVAD#3 and Tanish Cerachem Private Limited submitted their interestfor sourcing gas for VAD#5. That thereafter, ONGC sought approval ofMinistry for gas allocation. When the matter was pending considerationbefore the Union Government, in December 2020, one of the applicant-Tanish Cerachem Private Limited revised its response and offered tocommence offtake of gas within 65 days of allotment. At this stage, it isFrequired to be noted that the writ applicant offered to lift gas from thefield / block situated at a place called Vadtal, District Bhavnagar withina period of 75 days. As per the case of the appellant having regard to therevised offer from Tanish Cerachem Private Limited, the ONGC thoughtit fit to re-invite the bids from all the three shortlisted applicants andGaccordingly on 08.03.2021, ONGC invited all the three applicants to placefresh bids. As per the case of the appellant, Vaibhavi Enterprise submittedto the fresh tendering process and submitted its bid. However, the writapplicant did not submit any fresh bid. The writ applicant filed a writpetition before the High Court challenging the ONGC letter dated08.03.2021 so far as it calls for “expected period of readiness to offtakeH

gas from ONGC’s offer letter”. The writ applicant also prayed forissuance of writ of mandamus directing the ONGC to proceed with theaward of gas allocation on the basis of offer received in response to theONGC/EOI/Vadtal GAS/2020 dated 22.07.2020. At this stage, it isrequired to be noted that though the Union of India was the ultimateauthority to approve the bid / allocation of gas, in the writ petition neitherthe Ministry nor other applicants viz. Vaibhavi Enterprise and TanishCerachem Private Limited were impleaded as party respondents. Fromthe impugned order passed by the High Court, it appears that the mattercame up before the Division Bench on 19.08.2021 and Union of Indiawas ordered to be arrayed as respondent no.3 and notice was madereturnable on 26.08.2021. Thereafter, matter was heard by the DivisionBench on 16.09.2021. Before the High Court, learned ASG appearingon behalf of the Union of India placed on record the communicationdated 08.03.2021, which was directed to be taken on record. Thereafter,the matter was kept for further hearing on the very next date i.e.20.09.2021. At the time of hearing of the writ petition, the writ applicantreduced days for lifting gas from 75 days to 65 days. Having noted thesubmissions on behalf of the ONGC that the writ applicant has agreedto lift the gas within 75 days, however, in view of the fact that one of theapplicant was ready and willing to lift the gas within 65 days and therefore,the offer in favour of the writ applicant was not finalized and therefore,the ONGC was in dilemma. That thereafter by permitting the writ applicantto reduce the days for lifting gas from 75 days to 65 days, thereafter, theHigh Court by the impugned judgment and order has disposed of thesaid writ petition by directing the Corporation to finalize the contractwith the writ applicant on the condition that the writ applicant shall liftthe gas within 65 days from the date of allotment.

Feeling aggrieved and dissatisfied with the impugned order passedby the High Court, the other to applicants viz. Tanish Cerachem PrivateLimited and Vaibhavi Enterprise have preferred present appeals.

3.0. We have heard Shri Santosh Krishnan, learned counselappearing for the appellant and Shri Saurav Agrawal, learned counselappearing for the original writ applicant who is on caveat and ShriVikramjit Banerjee, learned ASG appearing on behalf of the ONGC.

4.0. Having heard the learned counsel for the respective partiesand considering the impugned order passed by the High Court, we areof the opinion that the procedure which has been adopted by the High AB

C

D

E

F

G

H

ACourt while disposing of the writ petition in favour of the writ applicantis unsustainable. The High Court has passed the impugned order ex-parte and without giving any opportunity of being heard to the otherapplicants – appellants herein. It is required to be noted that before theHigh Court it was brought on record that there are two other applicantswho submitted their EOI and even one of the applicants was ready andBwilling to lift the gas within 65 days. At this stage, it is required to benoted that it appears that till writ petition was filed and the matter washeard by the Division Bench on 19.08.2021 and 16.09.2021, the originalwrit applicant offered to lift the gas within 75 days. Only at the time ofhearing on 20.09.2021 and / or during the pendency of the petition, theCoriginal writ applicant revised its offer and unfortunately High Courtallowed / permitted the original writ applicant to revise its offer to lift thegas from 75 days to 65 days and that too in exercise of powers underArticle 226 of the Constitution of India. When High Court permitted /allowed the writ applicant to modify its offer, in that case, the opportunityought to have been given to the other applicants. Either they might haveDobjected to permitting such modification of the offer in exercise of powersunder Article 226 of the Constitution of India or they also could havemodified their offer further and reduce number of days for lifting gas. Itis not in dispute that neither of the appellants were impleaded as party tothe writ petition. Not only that even initially Union of India was also notEjoined as a party and for the first time Union of India was directed to beimpleaded as respondent no.3 pursuant to the order dated 19.08.2021and that too not at the instance of the writ applicant but as the HighCourt felt that presence of the Union of India is required. So theprocedure adopted by the High Court while disposing of the writ petitionby permitting / allowing the original writ applicant to modify its offer andFthat too in exercise of powers under Article 226 of the Constitution ofIndia, as observed herein above, is unsustainable and unknown to law.We have our own doubt whether in exercise of powers under Article226 of the Constitution of India, the High Court could have permittedone of the bidder to revise / modify its offer. Even in the facts andGcircumstances of the case, the High Court felt that instead of invitingfresh bids, the same could be allowed, in that case also, similar opportunityought to have been given to the other applicants also.

It is also required to be noted that though the High Court has, assuch, directed and issued the writ of mandamus directing ONGC toHfinalize the contract with the writ applicant on the condition that the writ applicant shall lift gas within 65 days from the date of allotment, insteadof allowing the writ petition and making the Rule absolute, High Courthas used the word writ petition is disposed of. Once the writ of mandamuswas issued, instead of disposing of the writ petition, the High Court oughtto have allowed the writ petition.

5.0. Even otherwise also, the impugned order passed by the HighCourt is unsustainable in as such no reasons whatsoever have beenassigned by the High Court on merits. Except narrating the prayer clauseand two earlier orders passed on 19.08.2021 and 16.09.2021 there is nofurther discussion by the High Court on merits of the matter.

6.0. In view of the above and for the reasons stated above,impugned order passed by the High Court dated 20.09.2021 in SpecialCivil Application No.5815 of 2021 is hereby quashed and set aside. Thematter is remitted back to the High Court for its fresh decision. SpecialCivil Application No.5815 of 2021 is ordered to be restored to the file ofHigh Court. The appellants herein to submit appropriate application forimpleading them as party respondent nos. 4 and 5 and same to be allowedby the High court and thereafter the High Court to pass a fresh order inaccordance with law and on merits and after giving fullest opportunitiesto all the respondents including ONGC, Union of India and the appellantsherein. In the facts and circumstances of the case and looking to theurgency, we request the High Court to finally decide and dispose of thewrit petition in accordance with law and on its own merits at the earliestand preferably within a period of four weeks from the date of receipt ofthe present order. Either of the parties to place the present order beforethe High Court forthwith. It is made clear that this Court has not expressedanything on merits and the impugned order of the High Court has beenset aside for the reasons stated above. Both these appeals succeed andaccordingly allowed. However, there shall be no order as to costs.

Devika Gujral

Appeals allowed.

A

B

C

D

E

F

G

H