Vaibhavi Enterprise vs Nobel Cera Coat on 21 October, 2021


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Supreme Court of India

Vaibhavi Enterprise vs Nobel Cera Coat on 21 October, 2021

Author: M.R. Shah

Bench: M.R. Shah, A.S. Bopanna

                                                                          REPORTABLE

                                      IN THE SUPREME COURT OF INDIA
                                       CIVIL APPELLATE JURISDICTION

                                         CIVIL APPEAL NO. 6289 OF 2021

                         Vaibhavi Enterprise                              …Appellant(s)

                                                     Versus

                         Nobel Cera Coat & Ors.                         …Respondent(s)



                                                      With

                                         CIVIL APPEAL NO.6290 OF 2021

                         Tanish Cherachem Private Limited                …Appellant(s)


                                                     Versus

                         Nobel Cera Coat & Ors.                          …Appellant(s)


                                                  JUDGMENT

M.R. SHAH, J.

1.0. Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the High Court of Gujarat
passed in Special Civil Application No.5815 of 2021
preferred by the respondent no.1 herein- original writ
Signature Not Verified

Digitally signed by R
Natarajan
Date: 2021.10.21
petitioner (hereinafter referred to as the “original writ
16:32:23 IST

applicant”), by which, the High Court has disposed of the
Reason:

said writ petition by directing the respondent no.2- ONGC to

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finalize the contract with the original writ applicant on the
condition that the writ applicant shall lift the gas within 65
days from the date of allotment instead of 75 days as offered
by it earlier.

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

It appears from the pleadings that only three applicants
were interested in sourcing the natural gas from two fields
advertised by ONGC viz. (1) original writ applicant – Nobel
Cera Coat, (2) Vaibhavi Enterprise- appellant in Civil Appeal
No. 6289 of 2021 and (3) Tanish Cerachem Private Limited –
appellant in Civil Appeal No. 6290 of 2021. Nobel Cera Coat
submitted their interest in sourcing natural gas from both
VAD#3 and VAD#5. Vaibhavi Enterprise submitted their
interest for VAD#3 and Tanish Cerachem Private Limited
submitted their interest for sourcing gas for VAD#5. That
thereafter, ONGC sought approval of Ministry for gas
allocation. When the matter was pending consideration
before the Union Government, in December 2020, one of the
applicant- Tanish Cerachem Private Limited revised its
response and offered to commence offtake of gas within 65

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days of allotment. At this stage, it is required to be noted that
the writ applicant offered to lift gas from the field / block
situated at a place called Vadtal, District Bhavnagar within a
period of 75 days. As per the case of the appellant having
regard to the revised offer from Tanish Cerachem Private
Limited, the ONGC thought it fit to re-invite the bids from all
the three shortlisted applicants and accordingly on
08.03.2021, ONGC invited all the three applicants to place
fresh bids. As per the case of the appellant, Vaibhavi
Enterprise submitted to the fresh tendering process and
submitted its bid. However, the writ applicant did not submit
any fresh bid. The writ applicant filed a writ petition before
the High Court challenging the ONGC letter dated
08.03.2021 so far as it calls for “expected period of
readiness to offtake gas from ONGC’s offer letter”. The writ
applicant also prayed for issuance of writ of mandamus
directing the ONGC to proceed with the award of gas
allocation on the basis of offer received in response to the
ONGC/EOI/Vadtal GAS/2020 dated 22.07.2020. At this
stage, it is required to be noted that though the Union of
India was the ultimate authority to approve the bid /
allocation of gas, in the writ petition neither the Ministry nor
other applicants viz. Vaibhavi Enterprise and Tanish
Cerachem Private Limited were impleaded as party
respondents. From the impugned order passed by the High
Court, it appears that the matter came up before the Division
Bench on 19.08.2021 and Union of India was ordered to be
arrayed as respondent no.3 and notice was made returnable
on 26.08.2021. Thereafter, matter was heard by the Division

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Bench on 16.09.2021. Before the High Court, learned ASG
appearing on behalf of the Union of India placed on record
the communication dated 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 applicant reduced
days for lifting gas from 75 days to 65 days. Having noted
the submissions on behalf of the ONGC that the writ
applicant has agreed to lift the gas within 75 days, however,
in view of the fact that one of the applicant 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 applicant to reduce the days for lifting gas from 75 days
to 65 days, thereafter, the High Court by the impugned
judgment and order has disposed of the said writ petition by
directing the Corporation to finalize the contract with the writ
applicant on the condition that the writ applicant shall lift the
gas within 65 days from the date of allotment.

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

3.0. We have heard Shri Santosh Krishnan, learned counsel
appearing for the appellant and Shri Saurav Agrawal,
learned counsel appearing for the original writ applicant who
is on caveat and Shri Vikramjit Banerjee, learned ASG

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appearing on behalf of the ONGC.

4.0. Having heard the learned counsel for the respective parties
and considering the impugned order passed by the High
Court, we are of the opinion that the procedure which has
been adopted by the High Court while disposing of the writ
petition in favour of the writ applicant is unsustainable. The
High Court has passed the impugned order ex-parte and
without giving any opportunity of being heard to the other
applicants – appellants herein. It is required to be noted that
before the High Court it was brought on record that there are
two other applicants who submitted their EOI and even one
of the applicants was ready and willing to lift the gas within
65 days. At this stage, it is required to be noted that it
appears that till writ petition was filed and the matter was
heard by the Division Bench on 19.08.2021 and 16.09.2021,
the original writ applicant offered to lift the gas within 75
days. Only at the time of hearing on 20.09.2021 and / or
during the pendency of the petition, the original writ
applicant revised its offer and unfortunately High Court
allowed / permitted the original writ applicant to revise its
offer to lift the gas from 75 days to 65 days and that too in
exercise of powers under Article 226 of the Constitution of
India. When High Court permitted / allowed the writ
applicant to modify its offer, in that case, the opportunity
ought to have been given to the other applicants. Either they
might have objected to permitting such modification of the
offer in exercise of powers under Article 226 of the
Constitution of India or they also could have modified their

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offer further and reduce number of days for lifting gas. It is
not in dispute that neither of the appellants were impleaded
as party to the writ petition. Not only that even initially Union
of India was also not joined as a party and for the first time
Union of India was directed to be impleaded as respondent
no.3 pursuant to the order dated 19.08.2021 and that too not
at the instance of the writ applicant but as the High Court felt
that presence of the Union of India is required. So the
procedure adopted by the High Court while disposing of the
writ petition by permitting / allowing the original writ applicant
to modify its offer and that too in exercise of powers under
Article 226 of the Constitution of India, as observed herein
above, is unsustainable and unknown to law. We have our
own doubt whether in exercise of powers under Article 226
of the Constitution of India, the High Court could have
permitted one of the bidder to revise / modify its offer. Even
in the facts and circumstances of the case, the High Court
felt that instead of inviting fresh bids, the same could be
allowed, in that case also, similar opportunity ought to have
been given to the other applicants also.

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

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writ petition.

5.0. Even otherwise also, the impugned order passed by the
High Court is unsustainable in as such no reasons
whatsoever have been assigned by the High Court on
merits. Except narrating the prayer clause and two earlier
orders passed on 19.08.2021 and 16.09.2021 there is no
further 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 Special Civil Application No.5815 of 2021 is hereby
quashed and set aside. The matter is remitted back to the
High Court for its fresh decision. Special Civil Application
No.5815 of 2021 is ordered to be restored to the file of High
Court. The appellants herein to submit appropriate
application for impleading them as party respondent nos. 4
and 5 and same to be allowed by the High court and
thereafter the High Court to pass a fresh order in
accordance with law and on merits and after giving fullest
opportunities to all the respondents including ONGC, Union
of India and the appellants herein. In the facts and
circumstances of the case and looking to the urgency, we
request the High Court to finally decide and dispose of the
writ petition in accordance with law and on its own merits at
the earliest and preferably within a period of four weeks from
the date of receipt of the present order. Either of the parties
to place the present order before the High Court forthwith. It
is made clear that this Court has not expressed anything on

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merits and the impugned order of the High Court has been
set aside for the reasons stated above. Both these appeals
succeed and accordingly allowed. However, there shall be
no order as to costs.

………………………………….J.

                                   [M.R. SHAH]



NEW DELHI;                           ……………………………….J.
OCTOBER 21, 2021.                    [A.S. BOPANNA]




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