Sub-criteria for award of gas blocks arbitrary: Singhvi

Congress functionary and leading lawyer Abhishek Manu Singhvi has said two sets of criteria, which are a part of the petroleum ministry's offer notice for awarding contracts for exploration and production of coal bed methane, are so subjective as to be arbitrary and unconstitutional.

Answering a query from Anil Ambani's Reliance Natural Resources Ltd, Singhvi has said it is entirely possible that the criteria, if appropriately challenged, could be struck down as being violative of Article 14 (equality before law).

"Obviously, if the uncanalised, discretionary part overshadows and overwhelms the objective part of the criteria, the results would necessarily be liable to be challenged on grounds of excessive and canalised discretion", he said.

However, Singhvi clarified that he gave his opinion purely on the nature and language of the criteria specified and not on the facts of the case of any bidder or of any particular case.

The two sets of sub-criteria in question, under the parameters of capability and work programme of the bidders, are for three of 100 marks.

Of these, two marks are to be given based on the technical assessment made by the government and the Directorate General of Hydrocarbons, while the remaining is meant for any other work considered necessary by the bidder subject to acceptance by the evaluation committee.

These sub-criteria are set out in an appendix of the notice inviting offers (NIO) for the coal blocks.

"The contrast between the first set of objective criteria and these two sets of subjective criteria could not have been greater or more stark. The subjective criteria resemble the proverbial Chancellor's foot...They inherently allow the treating of equals unequally and unequals equally, thus giving an unfettered discretion to the authority and would be invalid in law," the opinion states.

Under the terms of the NIO, all 10 blocks can be bid and awarded to any bidder.

Reliance Natural Resources had bid for all the blocks on offer. Immediately after the bid opened and before evaluation could be undertaken (on June 30, 2006), based on the details read out in the pre-bid meeting which dealt with the 97 per cent criteria, reports suggested that the company was leading in two blocks, closely followed by the consortium of Gail-Arrow Energy.

After a few days during which the petroleum ministry and the DGH carried out evaluation, other reports suggested that the position had reversed and Reliance was actually trailing Gail-Arrow.

Reliance Natural Resources cried foul saying the three marks would give a leeway to the government to override the otherwise better marks secured by a probable winner under the other (97%) parameters.