Rajasthan High Court - Jodhpur
Shiva Corporation India Ltd vs State Of Raj. & Ors on 13 April, 2009
Equivalent citations: AIR 2009 (NOC) 2049 (RAJ.)
Author: Gopal Krishan Vyas
Bench: Gopal Krishan Vyas
1
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
:ORDER:
S.B. Civil Writ Petition No.1100/2009.
(Shiva Corporation India Ltd. Vs. State of Rajasthan & Others)
DATE OF ORDER : April 13th, 2009.
PRESENT
HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS
____________________________________
Reportable :
Mr. Sandeep Mehta and Mr. Vineet Jain for the petitioner.
Mr. Rajesh Joshi for respondent No.2.
Mr. P.K. Lohra for respondent No.3.
BY THE COURT :
In this writ petition, the petitioner has prayed for direction for quashing award of contract to respondent No.3 and further that the same may be awarded to it. In the alternative, the respondents may be directed to invite fresh bids.
The petitioner's case is that the petitioner company is a limited company involved in the business of collecting royalty, sales tax, excavation and other construction related projects which the company undertakes in various parts of the country including moving heavy earth and development of construction sites as per the orders received. The petitioner company is also registered with the Registrar of the companies and is registered as A Class contractor with the Addl. Director, Mines, Udaipur 2 Zone, Udaipur. The company has five Directors viz., Meghraj Singh, Asu Singh, Hari Singh, Manvendra Singh and Ashok Chandak.
Respondent No.2 invited tenders for two jobs at Mohangarh group of mines for the works to be carried out at the site which included following :
(a) cleaning of bushes, decomposed substances, dumping of waste in systematic manner and stacking of gypsum and loading of R.O.M. Gypsum into trucks at mines by a suitable hydraulic excavator with back hoe attachment;
(b) shifting of R.O.M. Gypsum from Mohangarh mines through Thayat to Hamira railway station; and,
(c) loading of R.O.M. Gypsum into 'N' or 'T' rake wagons by mechanic loaders at Thayat Hamira railway sidings.
As per the petitioner, prior to issuance of the present NIT bearing No.8/08, NIT bearing No.7/08 was issued on 12.08.2008 for this very same job wherein the tenders were invited from the interested parties. The job description, eligibility criteria and other specifications were identical in NIT No.7/08. The said NIT was responded by five parties, one of them being Ashok Chandak & Company, Jaipur, and Ashok Chandak is also one of the Directors in the petitioner company. Since there were certain discrepancies, owing to which, the committee of FAGMIL thought it proper that in view of the problems envisaged by the Area Manager, Mohangarh, the NIT No.7/08 may be cancelled and fresh NIT may be issued which suites the requirement so 3 that the jobs at the mines may be carried out smoothly without any hindrance. After taking the above decision, the present NIT No.8/08 was issued and the petitioner is also interested in the work, therefore, the petitioner company filed its bid as required by the specifications contained in NIT No.8/08 along with the earnest money.
As per the terms and conditions of the NIT, the bid was to be submitted in two parts, first, containing the technical bid and, the other, containing the price bid. The technical bid was to be opened on 16.01.2009 at 3.00 P.M. in the office of respondent No.2 and the price bid was to be opened on 06.02.2009 at 3.00 P.M. in the office of respondent No.2. The petitioner company also submitted its bids in two separate envelopes. The petitioner quoted price at Rs.89.07 per metric ton for the contract. Besides the petitioner, five other bids were received by the respondent which were :
1. M/s Shri Mohangarh Construction Company, Jaisalmer,
2. M/s R.K. Carriers India Pvt. Ltd., Udaipur,
3. M/s Ujjwat Granite Pvt. Ltd., Jaipur,
4. M/s Jain Transport Company, Bikaner, and
5. M/s Jain Carrying Corporation, Bikaner.
Contention of the petitioner is that the petitioner company has wide experience of the area of work, for which, the tenders were invited. The company has carried out similar nature of work and the petitioner was given contract by Acurite Contractors & Engineers for the work in relation to construction 4 of cross taxi way in Delhi International Airport. Similarly, the petitioner was also given contract for minor mineral sand quarries in Panipat district in Haryana where the petitioner made a bid of Rs.17.50 crores. The petitioner has produced on record document Annex.-7 which was issued to M/s S.S. & Company of which the petitioner is a partner as is evident from the partnership deed Annex.-8.
The further contention of the petitioner is that one of its directors is also director of M/s Ashok Chandak & Company and he was also awarded the contract for removal and excavation of gypsum by using hydraulic excavators etc. and loading of same into truck/trolla at Ballar Group of Gypsum Mines, Tehsil Pugal (district Bikaner). That contract was for a quantity of work approximated at 30 lakh metric tones. For evidence thereof, the petitioner has produced on record the letter of accepatance.
While narrating the above facts, it is contended by the petitioner company that on 06.02.2009, when the representative of the company appeared at 3.00 P.M. before the respondent No.2 in connection with opening of the price bid, he was denied participation on the ground that since their technical bid has been rejected, they have been ousted from participating in the bidding for the contract. No reason whatsoever was made known for rejection of the technical bid of the petitioner. Thereafter, the contract has been awarded to respondent No.3 who has quoted approximately Rs.106/- per metric ton for the job which is approximately Rs.16/- per metric ton higher than 5 the price quoted by the petitioner.
As per contention of the petitioner, for last more than 12 years, respondent No.3 is doing the job at the same site of rspondent No.2 and ousting of the petitioner was clearly with a view to favour respondent No.3 because by rejecting the technical bid, the petitioner has been ousted from participating in the proceedings and though the technical bid was opened on 16.01.2009, but till date, no information or ground of rejection has been supplied to the petitioner. But, as per information of the petitioner, the contract has been awarded to respondent No.3 whereas the petitioner's rate was Rs.89.07 per metric ton. Therefore, as per the petitioner, not only the petitioner has been ousted from participation in the tenders, contract has been awarded on a higher rate than the petitioner's rate, therefore, this action of respondent No.2 is totally illegal and suffers from arbitrariness showing favouritism which causes loss to the public exchequer, therefore, judicial intervention is required in this case.
Learned counsel for the petitioner vehemently argues that the action of the respondents is illegal because all the documents show that the petitioner was fully eligible and it has been ousted on the ground of lack of experience which is obviously illegal because it has wide experience in the area of work for which the tenders were invited and similar nature of works have been carried out by the petitioner since long. Further, it is contended on behalf of the petitioner that one of its 6 Directors Shri Ashok Chandak is having the required experience, therefore, the petitioner company cannot be ousted from participation in the tender proceedings.
It is submitted by learned counsel for the petitioner that at the time of opening the finance bid when the petitioner appeared before respondent No.2, then, representative of the petitioner was verbally informed that its technical bid has been rejected on the ground of lacking experience in mechanical wagon loading but this reason assigned by respondent No.2 is bereft of any foundation. The petitioner company has already undertaken similar work under the contract granted by RSMML where the petitioner by the use of hydraulic excavator and executed the work. It is contended by learned counsel for the petitioner that non-communication of rejection of technical bid of the petitioner despite time-gap of 20 days is clear indication of the fact that the respondents were acting in a manner so as to prevent the petitioner from causing any hindrance in their endeavour to grant contract to respondent No.3. Further, it is argued that till today no official communication has been received for rejection of the petitioner's technical bid.
Learned counsel for the petitioner vehemently argued that the private respondent has been awarded contract for last more than 12 years and is obviously favoured contractor of the respondents and, therefore, the petitioner has been arbitrarily and illegally ousted from the tender proceedings. In support of his argument, learned counsel for the petitioner invited my 7 attention towards recent judgment of the Supreme Court in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd Vs. Union of India & Another, reported in JT 2009 (1) SC 67, in which, as per learned counsel for the petitioner, Hon'ble Supreme Court has held that as per the ratio in the case of New Horizons Ltd. & Another Vs. Union of India & Others, reported in (1995) 1 SCC 478, in similar set of facts, it has been held that High Court was not justified in dismissing the writ petition and direction was given to consider the technical bid in that case.
Learned counsel for the petitioner argued that the controversy involved in this case is also of the similar nature because the question of considering experience was originally decided in the case of New Horizons Ltds & Another Vs. Union of India & Others, (1995) 1 SCC 478 and the judgment in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd. is based on the said judgment. Therefore, it is submitted that the reasons for rejection of the technical bid of the petitioner are totally unwarranted and, so also, the petitioner company was also assigned works by the Acurite Contractors and Engineers, which is evident from Annex.-6, therefore, the reasons assigned for rejection of the petitioner's technical bid for lacking experience is totally unfounded and the petitioner has been declared disqualified whereas, as per the condition of the NIT, the petitioner company was having requisite experience of 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years, therefore, this writ 8 petition may be allowed and the relief prayed for by the petitioner may be granted.
Per contra, learned counsel for respondent No.2, first of all, vehemently argued that this writ petition is not maintainable on the ground that the petitioner has not impleaded FCI Aravali Gypsum and Minerals India Ltd. (FAGMIL) which is Government of India undertaking and on whose behalf the impugned notice was issued. Neither FAGMIL has been impleaded as party in the array of respondents nor the Chief Engineer, Mines has been impleaded as party who has issued the NIT, therefore, this writ petition deserves to be dismissed on this ground.
As per the respondents, the tender notice No.FAGMIL - 8/08 was published in all the important news-papers, so also, was available on the web-site. In the said tender notice, there is eligibility condition at S.No.13 which is as follows :
"The offers of only that tenderer may be considered who have executed and completed one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at lest 30% of the quantity proposed in one year in the job specification in any of the immediately preceding Five years"
Contention of learned counsel for the respondents is that as per eligibility condition No.13(iii) the offers of only that tenderer may be considered who have executed and completed one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at least 30% of the quantity proposed in one year in the job specification in any of the 9 immediately preceding five years. Admittedly, the petitioner company is not having any experience in its own name.
Further, it is argued by learned counsel for the respondents that in the writ petition it is specifically stated by the petitioner company that the company is not having such experience in its own name but one of its Directors Shri Ashok Chandak is having the said experience. Likewise, the petitioner company was given contract of similar nature for the work in relation to construction of cross taxi way in Delhi International Airport, New Delhi; meaning thereby, one of the Directors is having the experience but, as per the terms and conditions of the tender, the company itself should have the experience to execute and complete one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at least 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years. It is pointed out that as per the decision, the quantity prescribed is 11,00,000 metric tonne ROM Gypsum. In this view of the matter, at the time of consideration, the pre-requisite eligibility was that the tenderer must possess experience of having executed and completed one assignment/work of similar nature and magnitude in their own name for at least 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years and, as per the petitioner company itself, the company is not having such experience in its own name but one of its Directors Shri Ashok Chandak is having 10 the said experience so also one acurite Contractors & Engineers gave contract of similar nature which is evident from Annex.-6; meaning thereby, in fact, the work was given to the Acurite Contractors & Engineers and the petitioner was allowed to execute all the earth work by the contractor who was assigned the work. In this view of the matter the petitioner has no right to say that the experience of one of its Directors may be considered for satisfaction of the eligibility condition and, so also, the petitioner company cannot claim any right for opening its technical bid because as per the respondents the petitioner was not technically qualified for participating in the technical bid. Learned counsel for the respondents invited my attention towards certain judgments of the Hon'ble Supreme Court and submitted that the respondents are having the jurisdiction to assess the eligibility for participation of the tenderers in the bid proceedings and if it is found that any tenderer is lacking in satisfaction of the eligibility condition, then, proper decision can be taken for the purpose of allowing or not allowing any tenderer for participating in the technical bid.
Learned counsel for respondent No.3 pointed out that the petitioner company is a company registered under the Companies Act and Shri Ashok Chandak is one of the Directors of the company and he cannot be treated to be partner of the company, therefore, his personal experience cannot be counted as experience of the petitioner company as experience in its own name.
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Learned counsel for respondent No.3 invited my attention towards following judgments of the Hon'ble Supreme Court :
(1) (1989) 2 SCC 116, (2) (2000) 2 SCC 617, (3) (2001) 2 SCC 451, and (4) (2005) 4 SCC 43.
While citing the above judgments, it is vehemently argued by learned counsel for the department as well as learned counsel for respondent No.3 that the allegation of favouritism and accommodation of respondent No.3 are imaginary and, therefore, not tenable. In fact, the petitioner company has failed in the eligibility test for the technical reasons and has ventured to question the validity of acceptance of the tender of the private respondent. The petitioner is registered under the Companies Act and, therefore, it is a legal entity and is separate and distinct from an individual member of the company, therefore, merely because Shri Ashok Chandak is one of the Directors of the petitioner company, any work executed by the other company in which Shri Ashok Chandak is Director cannot be counted as experience of the petitioner company. It is vehemently urged that the respondents considered this aspect of the matter and found that the petitioner company is not possessing eligibility for the technical bid. All the tenders were scrutinized at the stage of the technical bid and the tender committee declared private respondent technically qualified besides the other qualified tenderers while considering the 12 tenders objectively, in which, the petitioner company was not found technically qualified because the petitioner company has failed to produce any documentary evidence for the purpose showing its own experience in terms of the eligibility condition prescribed, therefore, obviously the petitioner company was not eligible to participate in the technical bid as well as price bid. On 06.02.2009, the tender of respondent No.3 was found to be the lowest after opening the technical bid in the price bid, therefore, its tender was accepted and communication dated 07.02.2009 was sent by the answering respondent to respondent No.3 and he was asked to deposit the security amount of Rs.51,79,000/-; and, in response to the letter of intent, respondent No.3 conveyed its acceptance on 09.02.2009 and, thereafter, requisite amount of security was deposited by respondent No.3 and work has also been commenced; meaning thereby, the petitioner has not furnished the correct facts before this Court on 10.02.2009 that the work has already commenced on 09.02.2009 and, before passing order on 09.02.2009, the tender was already finalized.
According to the respondents, the award of contract whether it is by a private party or a public body or State is essentially a commercial transaction and for arriving at a commercial decision, the considerations which are paramount are essentially commercial considerations. The State or any public body can choose its own method to arrive at the decision and it can fix its own terms in accordance with law which is not 13 open to judicial scrutiny. Therefore, it is argued that if the grievance of the petitioner company is examined, then, it is clearly revealed that the petitioner company was not eligible to qualify the technical bid by virtue of condition 13 (iii) of the NIT as aforequoted. Upon perusal of the above clause (iii) of condition 13 it is clear that the petitioner company was rightly adjudicated ineligible for the technical bid by the tender committee. If the documents submitted by the petitioner company are scrutinized, then, it will reveal that none of those documents - Annex.-6 to Annex.-9, respectively referred to execution and completion of one assignment of similar nature of 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years. As per learned counsel for the respondents, Annex.-6 pertains to Acurite Contractors & Engineers and is of different nature and Annex.-9 pertains to Shri Ashok Chandak, therefore, assertion of the petitioner company that it is a limited company registered with the Registrar of the companies clearly reveals that the company is a legal person whereas the word "company" imports an association of persons for some common purpose. Such an association may be incorporated or it may be unincorporated and an incorporated company is a legal person and separate and distinct from the individual members of the company. Therefore, it is obvious that company being a creature of the statute is controlled by the statute. In these circumstances, documents submitted by the petitioner company which is in the 14 name of one of its Directors is of no avail, therefore, the decision of the committee declaring the petitioner company ineligible for the technical bid and, so also, petitioner company has no locus standi to challenge the acceptance of the tender by the tender committee.
Learned counsel for the respondents submits that in respect of the nature and magnitude of the work, bidders who fulfill pre-qualification alone are invited to the bid and adherence to instructions cannot be given good-bye by branding it a pedantic approach. In this view of the matter, it is submitted by learned counsel for the respondents that in this writ petition, the petitioner is claiming his right on baseless grounds and, so also, claiming right on the premise of experience acquired by one of its directors should be considered; but, in fact, the experience of one of the Directors of the company as its own. In this view of the matter, the petitioner company has failed to qualify for the technical bid. Therefore, there was no occasion for the representative of the petitioner company to appear before the tender committee on 06.02.2009 at the time of the price bid. Further, It is submitted that all the allegations levelled against the respondents are far from truth and are being made by the petitioner company out of personal vengeance. The rejection of the technical bid of the petitioner company is outcome of its ineligibility because the tender committee after due objective consideration found that the petitioner did not qualify for entertaining its technical bid. In this view of the matter, it is 15 submitted that the petitioner company has no case in its favour and, so also, admittedly the petitioner company itself does not possess the experience but, somehow, the petitioner is claiming right that the experience of one of its directors may be considered for the purpose of eligibility. So also, the petitioner has wrongly prayed before this Court that action of the respondents is illegal and has no foundation to stand before the eye of law. In fact, the matter was finalized in all fairness by the tender committee, so also, the ground of the petitioner is not tenable because at the time of considering the candidature of the tenderer, first of all, pre-eligibility qualification has to be seen because the tender is required to be accepted in two stages, at the first stage technical bid is to be opened and, thereafter, price bid is to be opened. It is the duty of the respondent department to see the eligibility and, then, to allow the tenderer to participate in the price bid. The case of the petitioner company was scrutinized and it was found that the petitioner company is lacking in experience, therefore, if the petitioner company was not allowed to participate in the technical bid, then, there is no question of opening the finance bid.
I have considered the rival submissions made by both the parties and learned counsel for respondent No.3 Shri P.K. Lohra.
The controversy involved in this case is whether the experience acquired by one of the directors of the petitioner company can be termed as experience of the company. 16 Further, if any work is assigned by Acurite Contractors and Engineers for the works in relation to construction of cross taxi way in Delhi International Airport and work contract for minor mineral sand quarry was given to the petitioner company in Panipat district of Haryana, can the same be considered to be sufficient experience for the purpose of allowing the petitioner company to participate in the tender proceedings or the company was eligible for participation in the technical bid.
Undisputedly, the petitioner company is raising voice in this writ petition with regard to experience that one of the directors of the company Shri Ashok Chandak was having experience of the required work and being one of the directors of the petitioner company, petitioner is entitled to have his experience reckoned in respect of the eligibility condition in the tender. For the said purpose, the main emphasis of the petitioner's claim is upon the judgment rendered by the Hon'ble Supreme Court in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd. Vs. Union of India & Another, reported in JT 2009 (1) SC 67. While citing the said judgment, it has been submitted by learned counsel for the petitioner that in this judgment Hon'ble apex Court has while taking note of para 23 in the judgment in the case of New Horizons Ltd. & Another Vs. Union of India & Others, (1995) 1 SCC 478, held that where a person having past experience has entered into a partnership and the tender has been submitted in the name of the partnership firm which may not have any past experience in its 17 own name, that does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. Para 23 of the judgment of New Horizons Ltd. case (supra) runs as follows :
"Even if it be assumed that the requirement regarding experience as set out in the advertisement dated 22-4-1993 inviting tenders is a condition about eligibility for consideration of the tender, though we find no basis for the same, the said requirement regarding experience cannot be construed to mean that the said experience should be of the tenderer in his name only. It is possible to visualise a situation where a person having past experience has entered into a partnership and the tender has been submitted in the name of the partnership firm which may not have any past experience in its own name. That does not mean that that the earlier experience of one of the partners of the firm cannot be taken into consideration. Similarly, a company incorporated under the Companies Act having past experience may undergo reorganisation as a result of merger or amalgamation with another company which may have no such past experience and the tender is submitted in the name of the reorganised company.
It could not be the purport of the requirement about experience that the experience of the company which has merged into the reorganised company cannot be taken into consideration because the tender has not been submitted in its name and has been submitted in the name of the reorganised company which does not have experience in its name. Conversely there may be split in a company and persons looking after a particular field of the business of the company form a new company after leaving it. The new company, though having persons with experience in the field, has no experience in its name while the original company having experience in its name lacks persons with experience. The requirement regarding experience does not mean that the offer of the original company must be considered because it has experience in its name though it does not have experienced persons with it and 18 ignore the offer of the new company because it does not have experience in its name though it has persons having experience in the field. While considering the requirement regarding experience it has to be borne in mind that the said requirement is contained in a document inviting offers for a commercial transaction. The terms and conditions of such a document have to be construed from the standpoint of a prudent businessman. When a businessman enters into a contract whereunder some work is to be performed he seeks to assure himself about the credentials of the person who is to be entrusted with the performance of the work. Such credentials are to be examined from a commercial point of view which means that if the contract is to be entered with a company he will look into the background of the company and the persons who are in control of the same and their capacity to execute the work. He would go not by the name of the company but by the persons behind the company. While keeping in view the past experience he would also take note of the present state of affairs and the equipment and resources at the disposal of the company. The same has to be the approach of the authorities while considering a tender received in response to the advertisement issued on 22-4-1993.
This would require that first the terms of the offer must be examined and if they are found satisfactory the next step would be to consider the credentials of the tenderer and his ability to perform the work to be entrusted. For judging the credentials past experience will have to be considered along with the present state of equipment and resources available with the tenderer. Past experience may not be of much help if the machinery and equipment is outdated.
Conversely lack of experience may be made good by improved technology and better equipment. The advertisement dated 22-4- 1993 when read with the notice for inviting tenders dated 26-4-1993 does not preclude adoption of this course of action. If the Tender Evaluation Committee had adopted this approach and had examined the tender of NHL in this perspective it would have found that NHL, being a joint venture, has access to the benefit of the resources and strength of its parent/owning companies as well as to the experience in database management, sales and publishing of 19 its parent group companies because after reorganisation of the Company in 1992 60% of the share capital of NHL is owned by Indian group of companies namely, TPI, LMI, WML, etc. and Mr. Aroon Purie and 40% of the share capital is owned by IIPL a wholly-owned subsidiary of Singapore Telecom which was established in 1967 and is having long experience in publishing the Singapore telephone directory with yellow pages and other directories. Moreover, in the tender it was specifically stated that IIPL will be providing its unique integrated directory management system along with the expertise of its managers and that the managers will be actively involved in the project both out of Singapore and resident in India."
Therefore, the petitioner company at the strength of the above adjudication is submitting that if one of the company's directors Shri Ashok Chandak was having the required experience, then, it was to be taken into account for the purpose of treating the petitioner company eligible to participate in the tender and, so also, in the technical bid.
On the other hand, it is pointed out by learned counsel for the respondents that the above judgments of New Horizons case and in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd. Vs. Union of India & Another (supra) are not applicable in the present case because in para 4.5 of the judgment in M/s Ganpati RV's case, the apex Court has held that action of the respondents in subsequently rejecting the duly approved technical bid of the appellant without assigning any reasons is highly illegal, malicious, arbitrary, irrational and unjustified. But, in this case, the eligibility was to be seen prior to opening of the technical bid and as per terms and conditions of the 20 tender it is specifically provided at para 13 (iii) in respect of eligibility that offer of only those tenderers may be considered who have executed and completed one assignment of similar nature of 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years; meaning thereby, in the present case, there was mandatory eligibility condition that the company should have experience in its own name in respect of having performed work of similar nature and, admittedly, in this case, the case of the petitioner is that one of the directors of the company Shri Ashok Chandak was having such experience, therefore, the judgments cited by learned counsel for the petitioner are not applicable.
In my opinion, after perusing the eligibility condition enumerated in condition No.13 (iii) it is obvious that no documentary proof has been filed by the petitioner company to show that the required experience of at least having executed and completed one assignment of similar nature of 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years in its own name. In the judgments cited by the petitioner company, the condition was altogether different and, so also, in that case, the rejection was made after opening the technical bid but, here, in this case, the petitioner was found ineligible before opening the technical bid, therefore, its technical bid was not opened. In this view of the matter, the petitioner company cannot claim the entitlement of contract on the basis of experience acquired by one of its 21 directors Shri Ashok Chandak. Therefore, this argument of the petitioner company has no force of law that the company should be treated eligible on the basis of past experience of one of its directors.
The next point which requires adjudication is whether in the event of petitioner company having submitted lesser bid, then, the department was justified to accept the higher bid of the private respondent. In this connection, the case of the petitioner company is that the petitioner quoted price at Rs.89.07 per metric ton for the contract whereas private respondent gave bid of Rs.106 per metric ton which is approximately Rs.16/- higher than the price quoted by the petitioner. Further, the case of the petitioner is that respondent No.3 is doing the job at the same site of respondent No.2 for last more than 12 years and ousting the petitioner on illegal premises clearly shows that respondents rejected the technical bid of the petitioner mala fide and ousted the petitioner from participating in the bid which is totally illegal and unconstitutional and, so also, by the action of the respondents the State has suffered financial loss.
In this connection, respondent No.2 submits that as per terms and conditions of the tender the eligibility was to be seen prior to opening of the technical bid and all the tenderers were required to be found eligible before opening technical bid. At that stage, the price offered by any tenderer was higher or lower was not relevant. Moreover, the respondents are 22 required to grant work to qualified and experienced tenderer after scrutinizing the eligibility of the tenderer, therefore, at the time of opening the technical bid eligibility was to be seen first and petitioner was not found up to the mark, therefore, the petitioner's contention that its price bid was lesser than the price bid accepted by the department is totally baseless and has no foundation to stand in the eye of law. In the judgment reported in (2000) 2 SCC 617, Air India Ltd. Vs. Cochin International Airport Ltd. & Others, the Supreme Court has held that even when some defect is found in the decision-making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.
Likewise, in the judgment reported in (2005) 4 SCC 435, Global Energy Ltd. & Another Vs. Adani Exports Ltd. & Others, in para 10, the apex Court has held that the Court cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. Para 10 of the said judgment runs as under:
"The principle is, therefore, well settled that the 23 terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition and allowed the appellants to deposit the earnest money by furnishing a bank guarantee or a bankers' cheque till three days after the actual date of opening of the tender. The order of the learned Single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench."
In another judgment reported in (2001) 2 SCC 451, W.B. State Electricity Board Vs. Patel Engineering Co Ltd. & Others, in para 24, 31 and 33, the apex Court has held that in the tender process the competent authority is not obliged to award contract to the lowest bidder; and, further held that looking to the nature and magnitude of the work the bidders who fulfill pre- qualification alone are invited to bid and adherence to instructions cannot be given go-by by branding it a pedantic approach. It is also further observed that the very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty.
I have perused the said judgment, more specifically para 24, 31 and 33 of the said judgment which run as under :
"24. The controversy in this case has arisen at the threshold. It cannot be disputed that this is an international competitive bidding which postulates keen competition and high efficiency. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of 24 tender/bid and also award of a contract. The appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfill prequalification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules. We have, therefore, no hesitation in concluding that adherence to the ITB or rules is the best principle to be followed, which is also in the best public interest.
31. The submission that remains to be considered is that as the price bid of Respondents 1 to 4 is lesser by 40 crores and 80 crores than that of Respondents 11 and 10 respectively, public interest demands that the bid of Respondents 1 to 4 should be considered. The Project undertaken by the appellant is undoubtedly for the benefit of the public. The mode of execution of the work of the Project should also ensure that the public interest is best served. Tenderers are invited on the basis of competitive bidding for execution of the work of the Project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in competing for the contract relating to execution of the work and, on the other hand it affords the appellant a choice to select the best of the competitors on a competitive price without prejudice to the quality 25 of the work. Above all, it eliminates favouritism and discrimination in awarding public works to contractors. The contract is, therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. It is obvious that the bid of Respondents 1 to 4 is the lowest of bids offered. As the bid documents of Respondents 1 to 4 stand without correction there will be inherent inconsistency between the particulars given in the annexure and the total bid amount, it (sic they) cannot be directed to be considered along with the other bids on the sole ground of being the lowest.
33. We may, however, clarify that the appellant is not obliged to award contract to any of the bidders at their quoted price bid. It is always open to the appellant to negotiate with the next lowest bidder for awarding the contract on economically-viable price bid."
After perusing the above judgment, I am of the opinion that in this case, the petitioner was to fulfill pre-qualification/eligibility as per terms and conditions of the tender. In para 13 (iii) of the conditions of tender, following condition was incorporated :
"The offers of only that tenderer may be considered who have executed and completed one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at lest 30% of the quantity proposed in one year in the job specification in any of the immediately preceding Five years"
Upon perusal of the said condition, the petitioner company was required to possess the experience of at least having executed and completed one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for 26 at lest 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years. Admittedly, the case of the petitioner is that there was no experience in its own name but one of the directors of the company Shri Ashok Chandak was having experience, therefore, its tender was wrongly rejected. In my opinion, the petitioner cannot be treated as qualified to participate in the tender on the ground that its bid was lowest because, at the first instance, there was no occasion left with the department to even open the technical bid and price bid of the petitioner, therefore, it was not within the knowledge of the respondents that the petitioner's bid is lesser than the bid accepted by them.
Respondent No.2 rightly acted to assess the eligibility of the tenderers at the very threshold because at that stage only eligibility was to be seen and, admittedly, the petitioner company was not having any experience in its own name and in that event the respondent department was right in rejecting the petitioner's tender in view of condition No.13 (iii) of the tender. The petitioner has tried to satisfy this Court that experience of one of its directors was to be taken into consideration and company was to be treated eligible. In my opinion, such argument cannot be accepted because as per the judgment of the Supreme Court in the case of W.B. State Electricity Board Vs. Patel Engineering Co Ltd. & Others (supra), the respondents were right in considering the pre-eligibility condition before opening the technical bid. They cannot be allowed to give 27 good-bye to the terms and conditions as per the ratio laid down by the apex Court.
In this view of the matter, it is obvious that the company has filed this writ petition on absolutely imaginary grounds and has tried to persuade this Court that due to action of the respondents in granting tender in favour of respondent No.3, they caused financial loss to the State. In my opinion, every authority of the welfare State is not required to see only the price bid quoted but, prior to it, eligibility of the company for execution of the tender work is required to be seen in public interest. The company which has no experience as required under the terms and conditions cannot be permitted to raise voice that it quoted lesser price bid than the price bid quoted by the tenderer in whose favour ultimately the contract was awarded. The respondents were well within their jurisdiction to assess the suitability of the tenderer in public interest and, if the petitioner company was, at the threshold, declared disqualified upon not possessing the experience in its own name as per terms enumerated in para 13
(iii) of the tender in toto, then, no interference is required in exercise of jurisdiction under Article 226 of the Constitution of India.
It may be observed that every failed person raises voice with allegation of mala fide because it is easier to condemn any person but, at the time of adjudication, all the facts and circumstances are required to be considered and I have considered all aspects of the matter in this case. Moonshine arguments and grounds have been taken by the petitioner company that 28 experience of one of its directors Shri Ashok Chandak was to be considered as experience of the company, which is not permissible. Therefore, the action of the respondents is fully justified and there is no ground made out in this case for interfering in the matter.
Hence, this writ petition is dismissed. No order as to costs.
(Gopal Krishan Vyas) J.
Ojha, a.