Gujarat High Court
Shreenathji Sakhi Seva Mandal vs State Of Gujarat on 11 October, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/SCA/11071/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11071 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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SHREENATHJI SAKHI SEVA MANDAL
Versus
STATE OF GUJARAT
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Appearance:
MR. YATIN N. OZA, SR COUNSEL WITH MR JIT P PATEL(6994) for the
PETITIONER(s) No. 1
MR S.I. NANAVATI SR COUNSEL WITH MR SAURIN MEHTA WITH MR
HARDIK H PANDIT(5820) for the RESPONDENT(s) No. 4
MR RITURAJ M MEENA(3224) for the RESPONDENT(s) No. 3
NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 1,2
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 11/10/2018
Page 1 of 10
C/SCA/11071/2018 JUDGMENT
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The petitioner has challenged the decision of respondent no.2 to disqualify the petitioner at the technical stage in connection with the tender invited by the said respondent on 25.5.2018 for the purpose of supplying meals to residential and non residential schools in the District of Chhota Udepur run by the said respondent.
2. Brief facts are as under. The petitioner is a society stated to be registered under the Mission Mangalam Scheme framed by the State Government. Respondent no.2 Gujarat State Tribal Education Society is an organization fully funded by the State Government and is engaged in the activities of education in the tribal areas. Respondent no.2 society runs several schools in the tribal areas of Chhota Udepur District. These schools are residential boys schools, residential girls school as well as Day schools. The students of the schools would need regular meals. Respondent no.2 therefore, invited tenders from interested agencies to apply with their rates for supplying three meals a day to the students of residential schools and two meals a day for non residential schools. The petitioner in response applied to such tender invitation. The petitioner's tender was however rejected by respondent no.2 on the ground that the petitioner did not fulfill several essential requirements of the tender.
3. Case of the petitioner in brief is that the petitioner had been supplying such meals to the students of respondent no.2 society since several years satisfactorily. Respondent Page 2 of 10 C/SCA/11071/2018 JUDGMENT no.4 herein is the only surviving tenderer after the technical stage, thereby leaving no competition in the field. The petitioner has been unlawfully ousted from the tender process. The rates of the petitioner are competitive and likely to be substantially lower than the rates offered by respondent no.4.
4. Case of respondent no.2 is that the petitioner did not fulfill the requirements of tender conditions. A list of such non compliances have been mentioned in the communication dated 13.7.2018 made by the Project officer to the petitioner. The said respondent no.2 also pointed out that price bid of respondent no.4 is not yet opened. There is no question of therefore, comparing the interse bids.
5. Respondent no.4 also opposed the petition. Case of respondent no.4 is that respondent no.2 authority has correctly applied the tender terms. The petitioner did not fulfill the essential conditions. Petitioner's case was therefore, rightly rejected. Bid of the said respondent is within the ceiling imposed by the Government across the State for supplying meals to the Government and other similar schools.
6. Learned advocate Shri Yatin Oza for the petitioner submitted that the authorities have committed a serious error in appreciating the conditions and documents provided by the petitioner in terms thereof. The petitioner had not breached any of the conditions. A minor or technical breach would not be fatal to the petitioner's case. The petitioner's rates are extremely competitive, which Page 3 of 10 C/SCA/11071/2018 JUDGMENT should be one of the considerations for the Court to weigh. He drew our attention to several documents on record to which we would refer at a later stage. In support of his contentions, counsel relied on the following judgments :
1) In case of Poddar Steel Corporation v. Ganesh Engineering Works and others reported in (1991) 3 Supreme Court Cases 273 in which the Court held that the cheque drawn on Union Bank of India as against State Bank of India specified in the tender conditions was not a breach which should render the tenderer disqualified.
2) In case of B.S.N. Joshi & sons Ltd. v. Nair Coal Services Ltd and others reported in (2006) 11 Supreme Court Cases 548, in which the decision of the public sector undertaking to accept the bid of a tenderer by accepting minor variations in the tender conditions was upheld on the ground that such decision was based on financial consideration.
7. On the other hand, learned counsel Shri Meena for the authorities opposed the petition contending that the breaches have been indicated in the impugned communication. The petitioner has not satisfied the essential requirements. The petitioner's bid was therefore, rightly not accepted.
8. Learned counsel Shri Sudhir Nanavati for respondent no.4 opposed the petition contending that the breaches are not of technical conditions. All the conditions are essential conditions. The Court cannot direct the authorities to Page 4 of 10 C/SCA/11071/2018 JUDGMENT ignore such breaches. In this respect, reliance was made on the following decisions :
1) Decision in case of B.S.N. Joshi & sons Ltd.(supra), was cited, in which it was observed that if there are essential conditions of the terms of tender, the same must be adhered to and if the authorities have no general power of relaxation, the principles of strict compliance should be applied.
2) In case of Jagdish Mandal v. State of Orissa and others reported in (2007) 14 Supreme Court Cases 517, in which the Court discussed the contours and limitations of judicial review in the field of awarding contracts by the Government or its agencies through tender process.
3) In case of Bakshi Security and Personnel Services Private Limited v. Devkishan Computed Private Limited and others reported in (2016) 8 Supreme Court Cases 446, in which the Supreme Court once again reiterated the boundaries of judicial review. It was observed that judicial review cannot be invoked to protect private interest over public interest.
9. The tender published by respondent no.2 contained specified certain eligibility criteria. Clause 10 of these criteria provided that if the tenderer does not satisfy any of the conditions or does not produce the documents in support thereof, its bid will be automatically rejected. Clause 12 required the tenderer to fill up the eligibility criteria requirements in a tabular form.
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10. After examination of the tender of the petitioner and the documents accompanying therewith, the authorities came to the conclusion that the petitioner did not satisfy as many as five eligibility criteria. These objections are mentioned in the impugned communication dated 13.7.2018 and read as under :
1) The petitioner does not possess service tax registration number.
2) The petitioner does not have certificate of Commercial Tax department.
3) Whether enjoys professional tax registration or not, is not clear.
4) TIN/VAT number is obtained on 25.5.2016. There is no VAT clearance of past two years.
5) The petitioner had to obtain GST number in July 2017 which the petitioner obtained only on 26.1.2018. Thus the application of GST is not made within time.
11. We are in agreement with the suggestion of Shri Oza that the objection with respect to service tax registration was not valid. The petitioner had produced a notification dated 11.7.2014 issued by the Government of India providing that any services provided to an education institution by way of catering including any midday meals scheme sponsored by the Government, would be exempt Page 6 of 10 C/SCA/11071/2018 JUDGMENT from payment of service tax. The petitioner had also produced certificate issued by Taluka Development Officer suggesting that the petitioner Mandal was registered under the Gujarat State Tax on Professions, Trades, Callings and Employments Act, 1976.
12. The main difficulty that the petitioner would face is with respect to VAT registration and VAT clearances for past two years. Condition no.2. of the eligibility criteria specified, besides other things, the requirement that tenderer must produce certificate of registration of GST, Sales tax, Incometax, etc. Condition no.5 provided that the tenderer must have minimum of three years of experience of similar work. Condition no.6 further provided that the tenderer must have a minimum turnover of providing prepared meals of minimum of Rs. 6 crores in at least one of the last two years and further should have done similar work of atleast 50% of the quantity in other similar institutes.
13. In its tender, the petitioner had produced a certificate dated 6.6.2018 issued by the Assistant Commissioner of State Tax, Vadodara which certified as under :
"This is certify that M/S. SHREENATHJI SAKHI SEVA MANDAL, has been Reegister Dealer under the Gujarat VAT Act and was Holding Registration Certificate No.24193100325 From Dated : 21/05/2016. And above Dealer also Holding GST No.24AAKTS7153A2ZK FROM 26/01/2018.
It is further certified that the dealer has filed return and Challan for last two Years Under Gujarat vat and GST act dues as per return have been paid. No dues are pending as Page 7 of 10 C/SCA/11071/2018 JUDGMENT per return as on today.
Normal amount is due.
This certificate is issue only for GOV. Tender purpose only."
14. This certificate reveals two things. Firstly that VAT registration was granted on 21.5.2016 and GST registration was granted on 26.1.2018. As against this, respondent no.4 along with an affidavit dated 10.9.2018 has produced a snapshot of the Gujarat State Tax & Commercial Tax official website which shows that the petitioner's TIN number was cancelled on 1.7.2016. In response to this averment, the petitioner has in the rejoinder affidavit dated 27.9.2018 clarified that after registration under the VAT Act, there existed confusion with regard to registration, exemption and filing of returns under the VAT Act. The petitioner therefore addressed a letter dated 3.12.2016 and requested the Government to exempt the petitioner. It is further stated that "It is submitted that since no returns were filed, the said resulted into default cancellation of the certificate issued under VAT Act". It is further stated that only on 19.1.2018, the petitioner was given proper guidance and that is how registration under the GST Act was obtained.
15. We are conscious that these documents were not before the authorities when the petitioner's tender was examined and rejected as per communication dated 13.7.2008. Nevertheless, the objections of respondent no.2 at serial no.4 regarding not obtaining VAT registration for the past period and not showing VAT clearance for the past Page 8 of 10 C/SCA/11071/2018 JUDGMENT two years needs to be appreciated in light of these documents and facts.
16. As noted, all that the petitioner against such requirements had produced was certificate of Assistant Commissioner of State Tax, Vadodara which certified three things :
1) that the petitioner was granted VAT registration on 21.5.2016;
2) that GST Registration was granted on 26.1.2018; and
3) that the petitioner has no VAT or GST dues as on that date.
17. This however does not fulfill the necessary requirements of the tender conditions. The petitioner admits that the VAT registration was valid only for a short time and stood cancelled barely about two months later. This was because the petitioner had not filed the requisite returns. It is not the case of the petitioner that petitioner was not required to be registered under the VAT Act or that there was any other general or special exemption which would enable the petitioner not to obtain such registration. As noted, one of the important conditions of eligibility was that the tenderer must have minimum turn over of Rs. 6 crores in one of the two immediately preceding years. If the petitioner claims that it fulfills such requirement, immediate question of registration under the VAT Act would become germane. The authorities were therefore, Page 9 of 10 C/SCA/11071/2018 JUDGMENT correct in not accepting the petitioner's declaration that it fulfilled the necessary requirements merely based on said certificate dated 6.6.2018 issued by the Assistant Commissioner of State Tax, Vadodara.
18. In the result, petition is dismissed. Interim relief stands vacated.
19. At this stage Shri Oza requested that the interim relief previously granted on 18.7.2018 be continued to enable the petitioner to prefer the appeal. We notice that the interim relief was granted exparte. The tenders were invited for supplying meals to the students for one academic year. We are already in the month of October. With the coming Diwali vacation, first term of academics would be over. While vacating the interim relief, therefore, we provide that any further process that respondent no.2 may initiate would be subject to further proceedings that the petitioner wishes to undertake.
(AKIL KURESHI, J) (B.N. KARIA, J) Raghu Page 10 of 10