Mahmud Ali vs. The Union Of INDIA And 2 Ors

Facts

The petitioner, Mahumd Ali, challenged Clause C.2 of a Notice Inviting Tender (NIT) issued by the Oil and Natural Gas Corporation (ONGC) for hiring 9 KL Water Tanker Services. This clause stipulated that the quoted basic running rate per KM, exclusive of GST, should not be less than 0.275 times the diesel rates declared by Indian Oil Corporation Limited (IOCL) for Sivasagar on the Techno-Commercial Bid Opening date, which was March 6, 2023. The petitioner contended that IOCL did not declare a single, standard daily rate for High Speed Diesel (HSD) in Sivasagar, making the clause unworkable. The ONGC and IOCL argued that IOCL does declare standard rates accessible through their official website and a mobile application. During court proceedings, it was observed that the IOCL mobile app showed variations in HSD rates across different retail outlets in Sivasagar.

Held

The Court held that Clause C.2 of the NIT was unworkable. This was based on the observation, made during the court proceedings with the participation of all counsel, that the 'Indian Oil One Mobile App' showed variations in the rates of HSD for various retail outlets in Sivasagar District. This variation meant that a single, standard rate for Sivasagar, as required by the tender condition, could not be reliably ascertained. Consequently, the disqualification of the petitioner's Technical Bid was deemed improper. The Court directed ONGC to issue a fresh tender notice for Sivasagar District. This new notice must include a clear method for tenderers to ascertain the standard rate of HSD for Sivasagar District on a daily basis. The respondents were also restrained from issuing any notification of Award for the impugned NIT concerning Sivasagar District.

Key Issues

1. Whether Clause C.2 of the NIT, which requires bidders to quote a minimum basic running rate per KM based on diesel rates declared by IOCL for Sivasagar, is workable and legally valid, considering the accessibility and uniformity of such declared rates? (Question of law and fact, concerning Clause C.2 of the NIT and the accessibility of IOCL's diesel rates). Petitioner's Arguments: The petitioner argued that IOCL does not declare a single, standard daily rate for HSD in Sivasagar, and the rates vary across different outlets, rendering Clause C.2 unworkable. They relied on their observation that various diesel outlets in Sivasagar District had different prices. Respondents' Arguments: The ONGC and IOCL contended that IOCL declares a standard rate for HSD in Sivasagar daily, which is available on the official IOCL website and through a dedicated mobile application ('Indian Oil One Mobile App'). They also highlighted the SMS facility to obtain Retailer Sales Price (RSP) by providing a dealer code.