Jagson International Ltd v. Oil & Natural Gas Corporation Ltd

1. The petitioner challenges Clause 4.[1] of the Bid Evaluation Criteria of the subject tender. The respondent (ONGC) had issued an invitation to bid on 24.04.2015 for charter hire of offshore rigs, as detailed in the said notice inviting tender. The petitioner had earlier been issued a letter of award in respect of its 2015:DHC:5475-DB drilling unit. However, that drilling unit never became functional. There is a letter on record (Annexure-K to the writ petition) dated 07.05.2014 cancelling the earlier letter of award. It is specifically stated there in paragraphs 3.0, 4.0, and 5.0 as under:- “3.0 You failed to mobilise the Drilling Unit in terms of the LOA and requested for extension of time on several occasions. ONGC extended the mobilisation period for the Drilling Unit with levy of liquidated damages, the latest extension being upto 07.05.2014.

4.0 Despite several extensions in mobilisation period for the Drilling Unit, you have not mobilised & deployed the Drilling Unit so as to commence the operations till date. Instead of mobilising the Drilling Unit, you have once again vide your letter dated 23.04.2014 requested for an extension of time till 31.10.2014 for mobilisation of the Drilling Unit.

5.0 Please note that ONGC will not be able to give you any more extension for mobilisation of the Drilling Unit. In case you fail to mobilise & deploy the Drilling Unit so as to commence the operations by 24:00 hours on 07.05.2014 in terms of Clause 3.0 of the LOA, the LOA / Contract shall stand terminated with immediate effect. You shall be liable for all the consequences of such termination/ breach of the terms and conditions of the LOA / Contract, including adjustment / recovery of inspection charges incurred by ONGC from amounts payable to you under any other contract with ONGC.” It is clear from the above, as has been pointed out by Mr Tushar Mehta, the learned ASG appearing on behalf of the ONGC, that the petitioner could not mobilise the drilling unit.

2. Clause 4.[1] referred to above, which is the subject matter of challenge, reads as under:- “4.[1] The bidders should offer drilling rig(s) suitable for drilling wells for the water depth and environmental criteria mentioned in the bid document. The bidders, should offer only Serviceable Drilling Units and idling period of the Drilling Unit should not be more than 3years on the date of submissions of bids i.e., the drilling rig should have carried out operations on at least one well during last 3 years on the date of opening of unpriced bids. The bidders shall submit documentary evidence towards operation of the drilling unit alongwith unpriced bid. The complete details of the last operator, the last contract taken up and the period during which the drilling unit was last in operation shall be indicated. The bidders shall also furnish certificate from any one of the third parly inspection agencies like LRDIS, Oil Field Audit Services Inc., DNVGL NDA or ABS alongwith the un-priced bid bringing out clearly the condition and status of the drilling unit and equipments on board the drilling unit. However, the above mentioned conditions are not applicable for bidders offering rigs under construction.” (Underlining added)

3. Actually, the challenge to Clause 4.[1] is only with regard to the portion after ‘i.e’. In other words, there is no challenge to the portion prior to the expression ‘i.e’. The portion which has been added in the subject tender which was not there earlier is only explanatory and clarificatory of the earlier condition that bidders should offer only Serviceable Drilling Units and idling period of the Drilling Unit should not be more than three years on the date of submissions of bids. It has been clarified by the additional portion that the drilling rig should have carried out operations on at least one well during last 3 years on the date of opening of unpriced bids. In the present case, the drilling rig / unit of the petitioner was supposed to be deployed pursuant to the letter of award given earlier by the respondent. That, as we have seen from the letter dated 07.05.2014 could not be deployed / mobilized by the petitioner despite repeated opportunities having been given by the respondent. It is, therefore, clear that the petitioner’s drilling unit remained idle for more than three years prior to the date of submission of the bids. Even if we do not look at the clarificatory portion of Clause 4.1, the petitioner would have no case. This is particularly so because the cancellation / termination letter dated 07.05.2014, placing the blame on the petitioner that it failed to mobilize the drilling unit in terms of the LOA, has not been challenged by the petitioner before any forum.

4. The learned counsel for the petitioner seeks to draw our attention to pages 77, 78 and 82 of the paper book to indicate that the drilling unit was ready and that there was a default on the part of the respondents. Be that as it may, the final seal to the matter was furnished by the termination letter dated 07.05.2014, to which there is no challenge.

5. In view of the foregoing, there is no merit in the writ petition. The same is dismissed. Dasti.

BADAR DURREZ AHMED, J JULY 14, 2015 SANJEEV SACHDEVA, J SR