Case Law Details
Ravinder Singh Bawa Vs Oil And Natural Gas Corporation Limited (Competition Commission of India)
The moot question that arises for consideration is whether ONGC had sufficiently indicated its requirements upfront while issuing the tender in question so as to enable interested bidders to assimilate and factor such requirements while placing their technical and financial bids or whether it had failed to notify so. Further, whether the blacklisting of the Informant on the purported ground of it not adhering to the terms and conditions of award of contract unilaterally decided by ONGC and any alleged procedural irregularity attendant thereto, amounts to an abuse of dominant position by ONGC.
The Commission notes that the Informant has alleged that the blacklisting clause applied to it, for a period of two years e., from 06.10.2020 to 05.10.2022 by ONGC, stating that the Informant, inter alia, has failed to adhere to the stipulated conditions of submissions of performance security within 15 days of award of contract as well as mobilisation of workforce and thus, has been done in an unfair manner, without any justification and without due opportunity and is thus violative of the provisions of Section 4 of the Act. Per contra, ONGC has submitted that the entire fault lies with the Informant, who placed its bid without having been fully abreast of the stipulations and requirements mainly in relation to the clauses pertaining to the applicability of FWP of ONGC, which was squarely applicable to the tender in question. Further, if the Informant had any lack of understanding or clarity on these aspects it should have sufficiently raised these issues during the pre-bid meetings which Informant failed to do. It has also been submitted that after the Informant having been declared L-1 and it being awarded contract, Informant has raised untenable issues and delayed in performance of its part of the obligations, owing to which the project of ONGC got delayed, award had to be cancelled and new tender had to be floated etc. According to ONGC, all due processes as were envisaged in various clauses of the General Conditions of Contract (GCC) besides other stipulations were scrupulously followed in relation to the termination of award of contract, which was previously issued in favour of the Informant and its subsequent blacklisting by ONGC.
The Commission notes that on the aspect of the invocation of the blacklisting clause by ONGC against the Informant, thereby debarring it to bid in future tenders of ONGC for a period of two years, ONGC has submitted that it has followed a proper procedure by giving sufficient opportunity to the Informant to explain as to why the blacklisting clause not be made applicable on account of the alleged shortcomings on the part of the Informant. ONGC has further submitted that the present matter relates to contractual issues and does not fall within the confines of the competition matrix, over which the Commission has no jurisdiction. Also, the Commission has no powers to grant compensation as has been sought by the Informant, as a separate prayer in its Information. A feeble attempt has also been made to show that only courts at Sivasagar, Assam, will have jurisdiction to deal with the dispute.
The Informant in its further response/rejoinder while interdicting the submissions of ONGC has, inter alia, stated that it is an MSME company and the only Indian company providing specialised field cementing services to oil companies for over 10 years, whilst competing with big international companies in this space. According to the Informant, based on the tender invited by ONGC, hiring of services for operation and maintenance of cement built handling plant and allied cementing equipment and annual maintenance contract for mobile bulk carriers units for cementing services is the relevant product market. The relevant geographic market where both Informant and ONGC operates is the whole of India or, in the alternative, ONGC sought to procure its works in Nazira, Assam, which is the relevant geographic market. ONGC’s oil and natural gas production in the offshore region accounts for 70% of the country’s hydrocarbon output and is one of the top 5 companies in Asia and amongst the top 20 companies in the world in this area and is a dominant procurer of various services related to and operating within the confines of the production and oil and natural gas industry. The Informant has further submitted that ONGC can, as is evident, modify, add and alter the terms of the tender after issuing notification of award and further insist on adherence thereof and also insist on such terms upon a party even when such terms are absent in the present tender, which not only shows abuse of dominant position, but also its dominance to be able to do so. Also dominance of ONGC is also established by the fact that it can get away by introducing different skill set requirements for contract labourers as also different terms in relation to their employment, in different tenders.
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