Gujarat High Court
Jay Corporation vs Amreli Nagar Palika on 24 January, 2020
Equivalent citations: AIR 2020 GUJARAT 51, AIR 2020 GUJRAT 51, AIRONLINE 2020 GUJ 23
Author: Harsha Devani
Bench: Harsha Devani, Sangeeta K. Vishen
C/SCA/19465/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 19465 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
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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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JAY CORPORATION
Versus
AMRELI NAGAR PALIKA
==========================================================
Appearance:
MR NL RAMNANI(2400) for the Petitioner(s) No. 1
DS AFF.NOT FILED (N)(11) for the Respondent(s) No. 4
KISHAN Y DAVE(8293) for the Respondent(s) No. 1
MR SHIRISH H GOHIL(3253) for the Respondent(s) No. 5
NOTICE SERVED BY DS(5) for the Respondent(s) No. 2,3,6,7
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CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
Date : 24/01/2020
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this petition under article 226 of the Constitution of India, the petitioner seeks a direction to the first respondent - Amreli Nagar Palika (hereinafter referred to Page 1 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT as "the respondent municipality") to open all the bids which are qualified, including the bid of the petitioner, and after scrutiny of all the bids, to award the work order of work in question to the L-1 bidder.
2. The petitioner is a registered partnership firm having registration of 'AA' Class and is, therefore, qualified for participating in tenders of any value. The respondent - municipality invited e-tenders for the work of construction of Cement Concrete Road with Tri-Mix at various areas in Amreli District with tender I.D.-376841 under the Mukhya Mantri Shaheri Sadak Yojana, 2018-19. The tenders were to be submitted online on or before 24.09.2019, and were to be opened on 27.09.2019.
3. The estimated cost of the tender was Rs.6,08,94,009/- with tender fee of Rs.12,000/- which was not refundable. Earnest money deposit of Rs.6,08,950/- was to be paid by the bidder along with the tender. Since the petitioner company was interested as well as eligible, it filled in the tender form and submitted the same along with tender fee of Rs.12,000/- and earnest money deposit of Rs.6,08,950/-. It is the case of the petitioner that bid was submitted within time. The preliminary bids and technical bids were to be opened on 30.09.2019. It is the case of the petitioner that it had offered a bid around 11% below the estimated cost of tender put by the respondent.
4. The grievance raised in the petition is that though the petitioner had submitted the online tender as well as its bid in physical form in time to the first respondent, the bid of the petitioner was not opened at all and the petitioner was disqualified at the initial stage by the Page 2 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT respondent municipality without assigning any reason for such disqualification. This fact came to the knowledge of the petitioner when the online result was declared by the respondent municipality. It is further averred in the petition that apart from the petitioner there were six other tenderers, viz., the respondents No.2 to 7 herein. Thus, in all there were seven tenderers who had submitted their bids pursuant to the NIT by the respondent municipality. Out of the seven bids received by the respondent municipality, only three bids were opened and the other four bids, including the bid of the petitioner, were not opened.
5. Since the bid of the petitioner was not opened by the respondent - municipality, the petitioner approached the said respondent by a letter dated 14.10.2019, requesting it to assign the reason for the petitioner's disqualification. Along with the said letter, the petitioner had also issued a statutory notice upon the respondent municipality, whereby it had raised grievances against the illegal practice and procedure adopted by the municipality in awarding tenders, stating that the procedure followed during the course of the tender process was against the norms and guidelines issued by the Government.
6. Since the petitioner's bid was not opened at all and no reasons were assigned for not opening its bid, the petitioner approached the Chief Officer of the respondent municipality to inquire about the reason of its disqualification. It is the case of the petitioner that upon meeting the Chief Officer and requesting him to assign the reason for not opening its bid, the Chief Officer was Page 3 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT annoyed and behaved rudely with the petitioner. It is alleged that the Chief Officer has stated that he can raise many grounds for the disqualification of the petitioner and everything is within his power and control and that he is not answerable to the petitioner. That the Chief Officer had said that the work will be awarded to the contractor of his choice and the petitioner may do whatever he wants to do.
7. Since the petitioner has not been informed about the reason as to why its bid was not opened, the petitioner has approached this court by way of the present petition seeking the relief noted hereinabove.
8. Mr. N. L. Ramnani, learned advocate for the petitioner, submitted that the petitioner had duly complied with all the requirements set out in the notice inviting tenders and the conditions annexed therewith. Referring to the special instructions annexed along with the tender notice, it was pointed out that condition 8 thereof says that all the documents which have been called for as well as the demand draft for tender fee and fixed deposit receipt for earnest money deposit are required to be scanned and mandatorily submitted online. Moreover, the documents referred to in the tender that have been called for, are required to be self attested and the original demand draft and fixed deposit receipt shall all be required to be sent within time. It was submitted that therefore, the first part of the condition wherein the documents as well as demand draft for tender fee and fixed deposit receipt for earnest money deposit are required to be scanned and submitted online is mandatory, whereas the second part Page 4 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT of the condition is not mandatory. It was contended that once the scanned copy of the demand draft is placed online, even a xerox copy of the same is sufficient for the first respondent municipality to encash the demand draft. Hence, non-receipt of the original demand draft does not come in the way of the respondent municipality from encashing the demand draft, and hence, also the condition of submitting the original demand draft cannot be construed to be mandatory.
8.1 It was contended that the petitioner had duly forwarded the demand draft along with the other documents and that the submission made on behalf of the respondent municipality that the demand draft was not enclosed along with the other documents is not correct. It was urged that petitioner had no reason to withhold the demand draft once it had obtained the same, more so, considering the fact that the fixed deposit receipt of more than Rs.6,00,000/- towards the earnest money deposit had already been submitted. It was submitted that some of the officers of the respondent municipality had manipulated things so as to throw the petitioner out of zone of consideration and that the allegation regarding non submission of tender fee is absolutely vague and brought up with some ulterior motive.
8.2 Reliance was placed upon a circular dated 18.1.2008 of the Roads and Buildings Department, Government of Gujarat, to submit that the respondent municipality has not followed the procedure laid down therein during the course of the tender process.
8.3 Next it was submitted that assuming for the sake of argument that the demand draft was not found in the cover Page 5 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT containing bid and relevant documents submitted by the petitioner, considering the language employed in condition No.8 of the special instructions, it is evident that the condition for submitting the original demand draft is not mandatory, and hence, the petitioner's bid could not have been treated as non- compliant on that ground. It was submitted that even if the petitioner had forgotten to enclose the demand draft in physical form, the lapse on the part of the petitioner is not such as would take him out of the zone of consideration. It was contended that non-submission of the original demand draft along with the physical bid cannot be a ground for treating the petitioner's bid as non-compliant, more so, when the petitioner's bid is the lowest and acceptance of the petitioner's tender would result in a huge financial benefit to the respondent municipality. It was accordingly urged that the petition deserves to be allowed by granting the reliefs as prayed for.
9. Opposing the petition, Mr. H.M. Parikh, Senior Advocate, learned counsel for the respondent municipality, submitted that on a conjoint reading of conditions No.8 and 11 of the special instructions attached along with the tender notice indicates that furnishing of the original demand draft along with the other documents is mandatory, failure whereof, would entail disqualification. It was submitted that the petitioner had not forwarded the demand draft for a sum of Rs.12,000/- along with the physical documents submitted with the respondent municipality and hence, the bid of the petitioner could not be accepted as it did not meet with the requirement of condition 8 of the special instructions.
Page 6 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020C/SCA/19465/2019 JUDGMENT 9.1 Dealing with the allegation with regard to manipulation of the documents, the attention of the court was drawn to the communication dated 09.10.2019 of Design Point, a Government Approved Panel Engineer, addressed to the Chief Officer of the first respondent, wherein it has been stated that the five parties mentioned therein had, for the purpose of physical submission, submitted sealed covers which were opened by drawing the necessary rojkam, and upon checking the documents, the agencies mentioned at serial No.1, 3 and 4 had submitted all the documents in terms of the tender criteria whereas insofar as the petitioner Jay Corporation is concerned, the original demand draft of the tender fee was not enclosed. It was submitted that thus, it is evident that the petitioner had not submitted the demand draft with the other documents submitted in the sealed cover.
9.2 It was submitted that the circular dated 18.01.2008 on which reliance has been placed by the learned advocate for the petitioner does not pertain to local bodies and relates to Government contracts and that so far as the first respondent is concerned, it has its rules which have been incorporated in the conditions. It was submitted that the tender process is governed by the said rules, which were duly annexed along with the tender notice.
9.3 It was contended that the petitioner having not enclosed the original demand draft in the sealed envelope, the respondent municipality cannot be called upon to prove the negative and that it is for the petitioner to show that along with other documents, it had sent the demand draft. It was argued that the petitioner contends that it had sent the original demand draft; whereas it is the categorical case of the Page 7 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT respondent municipality as borne out from the record, that the original demand draft was not enclosed along with the other documents. Thus, as to whether or not the petitioner had enclosed the demand draft in the sealed cover is a disputed question of fact, which cannot be decided by this court in exercise of its writ jurisdiction under article 226 of the Constitution of India and that the remedy lies elsewhere.
9.4 In support of his submissions, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Trade Tax Officer, Gorakhpur, U.P. and Others v. Roadways India and Others, (2000) 9 SCC 343, wherein the court has held that questions of fact as to the manner in which motor vehicles were used were involved in the writ petition and hence, the High Court ought not to have entertained the writ petitions. Reliance was also placed upon the decision of the Supreme Court in Rourkela Shramik Sangh v. Steel Authority of India Ltd. and Another, (2003) 4 SCC 317, wherein the court has held that a disputed question of fact normally would not be entertained in a writ proceeding.
9.5 Reliance was placed upon the decision of the Supreme court in Akhil Bharat Gosewa Sangh v. State of A.P. and Others, 2006 AIR SCW 1832, for the proposition that it is now well settled that the findings of expert bodies in technical and scientific matters would not ordinarily be interfered with by courts in the exercise of their power under article 226 of the Constitution. It was submitted that a technical body has taken a decision, and this court in exercise of powers under article 226 of the Constitution of India ordinarily would not interfere with such decision. It was submitted that the allegations of mala fides and favour have no foundation as the expert body Page 8 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT has no axe to grind against the petitioner. It was, accordingly, urged that the petition being devoid of merits deserves to be dismissed.
10. Mr. G. M. Joshi, Senior Advocate, learned counsel for the respondent No.5 - successful tenderer, invited the attention of the court to the communication dated 09.10.2019 of Design Point, Government Approved Panel Engineer, to submit that this is an independent agency provided for the purpose of handling the tender process and they have nothing to do with the Chief Officer, the municipality or any of the bidders. On opening the physical tender documents, observations have been made that three agencies remained in the fray, and that at that time no one knew the rates offered by the bidders. It was submitted that the decision that the petitioner had not submitted the original demand draft within the time provided and, therefore, stands disqualified, is taken by an independent agency on the basis of the documents. Reference was made to condition 8 of the special instructions annexed along with the tender notice, to submit that it provides that over and above uploading scanned copies of all the documents including demand draft for tender fee and fixed deposit for earnest money deposit being mandatory, the condition further provides that the documents specified in the tender which are called for within the prescribed time shall all be required to be sent after self attestation as well as the original demand draft and fixed deposit receipt. It was pointed out that the condition further provides that physical submission made beyond the prescribed period shall not be taken into consideration Page 9 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT and that such physical submission cover shall be sent back by the municipality to the agency, which the agency shall take note. It was submitted that the condition for furnishing the original demand draft is mandatory as it provides for a consequence for non compliance thereof. It was urged that the decision regarding disqualification of the petitioner was taken by an independent body and hence, there is no question of any ill motive being attributed to such agency. It was submitted that when the words are mandatory, the condition is interpreted as essential. To bolster his submission, the learned counsel placed reliance upon the decision of the Supreme Court in Shobikaa Impex (P) Ltd. and another v. Central Medical Services Society and others, (2016) 16 SCC 233, wherein the court has held thus:
"19. The thrust of the matter is whether the decision by the Registration Committee by itself can be regarded as grant of registration certificate. It is luminescent that its decision to grant registration certificate is subject to conditions. Apart from that, it had not granted any certificate but only a decision was taken. There is a clear distinction between a decision taken and the decision acted upon or given effect to. Therefore, the appellant cannot claim benefit of the said decision. The appellants cannot lay stress on clause 5.4.1 to avail the benefit of treating itself as a responsive bidder. As far as Instructions to Bidders is concerned, the initial clause was that the bidder must be registered under CIB under the Act and the documentary evidence in this regard shall be submitted along with the bid. Amendment elaborating the same postulates that the registration Page 10 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT certificate shall be submitted along with the bid at the time of opening of the tender and if it is not done, the bid shall be held as non-responsive. A submission is advanced by the first respondent that it is a clarificatory condition. As we have already opined, decision by the Registration Committee of CIB to provisionally approve registration does not amount to registration by itself with the CIB. So the condition, as such, was not satisfied under the unamended stipulation. The amended clause only provides about the consequence thereof. It can be stated without any shadow of doubt that even if clause 6 would not have been amended, the first respondent, on the ground of non-production of the registration certificate, would have been legally justified to reject the bid. It is an essential condition incorporated in the instructions to bidders. In this context, we may profitably refer to the authority in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. where a two-Judge Bench, after referring to series of judgments has culled out the following principles:
"(i) if there are essential conditions, the same must be adhered to;
(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another Page 11 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;
(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;
(vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint."
11. In the backdrop of the aforesaid facts and contentions, the principal contention raised on behalf of the petitioner is that it had duly complied with the tender conditions and had forwarded the original tender fee demand draft along with other documents to the first respondent. It has been contended that when the petitioner had submitted a fixed deposit receipt for a sum of more than Rs.6,00,000/- and had got a demand draft for a sum of Rs.12,000/- prepared in favour of the first respondent towards tender fee, there was no reason why it would not submit the same along with the other papers; it has been alleged that the first respondent has manipulated the papers to favour some other party.
12. The other contention is that assuming for the sake of Page 12 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT argument that the original demand draft had not been submitted by the petitioner along with the other documents, submission of the original was not a mandatory condition and hence, the tender of the petitioner could not have been held to be non-compliant of the tender conditions.
13. Insofar as the first contention is concerned, it has been asserted by the petitioner that it had enclosed the original demand draft along with the other documents and that the officers of the first respondent have manipulated things to throw the petitioner out of the zone of consideration and that the alleged non- submission of the tender fee by the petitioner is got up with some ulterior motive.
14. In this regard, it may be noted that Design Point, the Government Approved Panel Engineer, has submitted a report/letter dated 09.10.2019 to the Chief Officer/President of the respondent municipality stating that the tenders of six parties named therein namely (1) V.C. Project and Infrastructure Private Limited - Ahmedabad, (2) Tirupati Construction - Surat, (3) Maruti Enterprise - Rajkot, (4) Om Infrastructure Company - Bhavnagar, (5) Madhuram Construction Company - Junagadh and (6) Jay Corporation - Mehsana, were received within the time provided. The six parties have forwarded sealed covers for physical submission, which have been opened after drawing the necessary rojkam, wherein upon scrutinizing the documents, the agencies at serial No.1, 3 and 4 have annexed all the documents in accordance with the criteria. It is stated that serial No.6 Page 13 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT Jay Corporation, Mehsana (the petitioner herein) has not enclosed the original demand draft of tender fee in the cover.
15. Thus, the Government Approved Panel Engineer who is an independent agency, has stated that upon opening the sealed cover by drawing the necessary rojkam, it was found that the petitioner had not enclosed the original tender fee demand draft in the cover. It is not the case of the petitioner that such agency bears any animosity towards it. Thus, when an independent agency has opened the sealed covers in accordance with the procedure provided therefor, there is no valid reason to disbelieve such agency. Besides, whether or not the petitioner had enclosed the tender fee demand draft along with original documents is essentially a disputed question of fact and it is by now well settled that this court in exercise of powers under article 226 of the Constitution of India would not embark upon any inquiry into disputed questions of fact. The first contention, therefore, does not merit acceptance.
16. The next contention, namely that the condition for submitting the original demand draft is not mandatory and hence, non-compliance of such condition would not entail disqualification may now be adverted to. To understand this controversy, it would be necessary to refer to condition 8 of the special instructions issued along with the tender notice, which provides that it is mandatory that all documents demanded as well as the demand draft for tender fee and fixed deposit receipt for earnest money deposit be scanned and submitted online.
Page 14 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020C/SCA/19465/2019 JUDGMENT Over and above that, the documents specified in the tender which are called for within the prescribed time shall all be required to be sent after self attestation so also the original demand draft and fixed deposit receipt. The condition further provides that physical submission made beyond the prescribed period shall not be taken into consideration and the physical submission cover shall be required to be sent back by the municipality to the agency.
17. Thus, while the first part states in clear words that uploading of all documents as well as demand draft and fixed deposit receipt after scanning them is mandatory. The second part though does not use the word mandatory, it provides that the documents specified in the tender shall be sent within the prescribed time limit and further provides for the consequences of non- compliance of such condition, namely that physical submission made beyond the prescribed period shall not be taken into consideration. Moreover, condition 11 of the special instructions says that tenders that are non- compliant of the instructions shall be liable to be rejected.
18. The Supreme Court, in Shobikaa Impex (P) Ltd. v. Central Medical Services Society (supra), was dealing with a case wherein, in the instructions to bidders, the initial clause was that the bidder must be registered under CIB under the Act and the documentary evidence in this regard shall be submitted along with the bid. The amendment elaborating the same, postulated that the registration certificate shall be submitted along with the Page 15 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT bid at the time of opening the tender and if it is not done, the bid shall be held as non-responsive. The Supreme Court held that the first respondent, on the ground of non-production of the registration certificate, would have been legally justified to reject the bid inasmuch as it was an essential condition incorporated in the instructions to the bidders.
19. Examining the facts of the present case in the light of the above decision, condition 8 of the special instructions not only says that the original demand draft of the tender fee has to be enclosed with the documents within the prescribed time, but it also provides for the consequence of non-compliance thereof, namely that physical submission made beyond the prescribed period shall not be taken into consideration. Thus, condition 8 even on a standalone basis, indicates that furnishing the original tender fee demand draft with other documents within the prescribed time is an essential condition incorporated in the instructions to bidders, non-compliance whereof would entail rejection of the bid. Furthermore, condition 11 of the special instructions provides that the tenders which are non-compliant of the above instructions shall be liable to be set aside, which again is indicative of the fact that the instructions set out above condition 11 are essential conditions. The contention that submission of original demand draft is not an essential condition therefore does not merit acceptance.
20. To summarise:
- the question as to whether the petitioner had enclosed the tender fee demand draft in the sealed envelope is a Page 16 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020 C/SCA/19465/2019 JUDGMENT disputed question of fact, which cannot be decided in a writ petition under article 226 of the Constitution of India;
- The condition regarding submission of original tender fee demand draft at the time of physical submission of documents is a mandatory condition, non-compliance whereof would entail rejection of the bid.
- The tender bid of the petitioner having been found to be non-compliant of the condition 8 of the special instructions by an independent agency, the contention of mala fide do not merit acceptance.
21. In the light of the above discussion, no case is made out so as to warrant interference. The petition, therefore, fails and is accordingly dismissed. Notice is discharged with no order as to costs.
(HARSHA DEVANI, J) (SANGEETA K. VISHEN,J) RAVI P. PATEL Page 17 of 17 Downloaded on : Mon Jun 15 08:09:36 IST 2020