High Court Cannot Let Party Modify Its Offer Unless Other Parties Are Also Heard

Key Takeaways

• The High Court passed an order in favour of the applicants, directing the ONGC to finalise a contract with the applicant.
• The other two applicants were also interested in sourcing gas from ONGC, but weren’t given a chance to be heard by the High Court. Aggrieved the approached the supreme court.
• The Court found the method adopted by the High Court to be unsustainable. The other applicants ought to have been given to the opportunity to be heard.

Facts of the Case

• The Cases of Vaibhavi Enterprise v. Nobel Cera Coat &Ors. And Tanish Cherachem Private Limited v. Nobel Cera Coat &Ors. are filed against a Judgement in a writ petition passed by the High Court.
• The respondent ONGC invited “Expressions of Interest” (EOI) for a demand assessment of natural gas produced from the two fields. As per the EOI, the demand assessment for the natural gas would be undertaken by ONGC, but the ultimate approval for allocation would come from Ministry of Petroleum and Natural Gas.
• Three applicants were interested in sourcing gas from the fields advertised by ONGC. The ONGC sought the Ministry’s approval for gas allocation. While this was still pending, one of the applicants, Tanish Cerachem Private Limited, revised its response.
• The ONGC decided it was best to reinvite bids, from all three applicants. The appellant in the present case filed their bid, but the writ applicant did not submit a bid, and filed a petition praying for writ of Mandamus against the ONGC. They wanted the ONGC to continue with the bids previously received.
• The High Court dismissed the writ, by directing the ONGC to finalise the contract with the Writ Applicant. Aggrieved by this, the other two applicants filed the present appeal.

Supreme Court’s Analysis

• The Court found the method adopted by the High Court to be unsustainable. The High Court’s order was ex parte, and the other applicants were not heard.
• The writ applicant revised their original offer only during the proceedings before the High Court. This opportunity ought to have been given to the other applicants.
• The procedure adopted by the High Court in exercise of its powers under article 226, was seen to be “unknown to law”. The Court even doubted whether in exercise of powers under Article 226 the High Court had the authority to permit one bidder to revise its offer.
• Further, despite issuing the writ of mandamus, the High Court Used the wording “disposed of the application”, when they should have “allowed the application”.
• The High Court’s decision was quashed, and the case is remitted back to the High Court for a fresh decision.

Questions

• What is the writ of Mandamus?
• Why was High Court’s order seen to be unsustainable?

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