Defodil Das And 3 Ors. vs. The Oil And Natural Gas Corporation LTD. And 9 Ors.

Facts

The petitioners, Defodil Das and three others, filed a writ petition challenging the cancellation of an Invitation to Bid (ITB) dated July 2023 by the Oil and Natural Gas Corporation Ltd. (ONGC). The ITB was for hiring 372 light passenger vehicles for a period of four years in Assam. The petitioners had submitted bids, but before they were opened, ONGC issued an email on September 18, 2023, cancelling the ITB. Subsequently, on September 19, 2023, a new policy was issued to hire vehicles on a 'one applicant - one vehicle' basis using a draw of lots, at rates offered by ONGC. The petitioners contended that this cancellation was influenced by threats from certain organizations to disrupt ONGC's activities, as evidenced by the minutes of a tripartite meeting held on August 8, 2023.

Held

The Court held that the petitioners had not acquired a judicially enforceable right because their bids, submitted pursuant to the Invitation to Bid (ITB) dated July 2023, were never opened. Citing the Supreme Court in Ayaaubkhan Noorkhan Pathan vs. State of Maharashtra, the Court stated that a petitioner must demonstrate a legal injury. As no contract was concluded and the offers were not even opened, no right of the petitioners had been violated. Regarding the new policy, the Court referred to Shimnit Utsch India Private Limited vs. West Bengal Transport Infrastructure Development Corporation, which permits government policy changes to serve public interest, provided they are reasonable and free from arbitrariness. The Court found no evidence that the change in policy to a 'one applicant - one vehicle' basis through a lottery system was unreasonable, arbitrary, or biased. The change was based on the minutes of a tripartite meeting involving the District Administration, ONGC, and various organizations, which aimed to resolve issues and was considered to be in the public interest. The Court also noted that the doctrine of legitimate expectation cannot be claimed as a right in itself but only when its denial violates Article 14, which was not established here. Therefore, the Court found no grounds to interfere with the cancellation of the ITB.

Key Issues

1. Whether the petitioners have a judicially enforceable right that has been violated, entitling them to relief under Article 226 of the Constitution, given that their bids were not opened and no contract was concluded. 2. Whether the new policy of hiring vehicles on a 'one applicant - one vehicle' basis through a lottery system can be applied when tenders were already submitted pursuant to an existing ITB, and if so, whether this policy change is vitiated by arbitrariness, irrationality, bias, or malice. Petitioner's Arguments: The petitioners argued that the cancellation of the ITB was influenced by external threats and organizations, as indicated in the minutes of the tripartite meeting. They contended that the new policy should only be applied after the conclusion of the current ITB, and the lottery system could be used in future bidding processes. They believed the cancellation was unlawful and should be set aside. Respondent's Arguments: The ONGC argued that no right had accrued to the petitioners to compel the conclusion of the selection process. They asserted that the new policy was for the benefit of a larger section of society and that Rule 32(1) of the ITB allowed them to reject all bids without incurring liability. They maintained that the change in policy was reasonable and served public interest, and therefore, the writ petition should be dismissed.