Gujarat High Court
Spire Enterprise vs Executive Engineer & 2 on 12 September, 2017
Bench: M.R. Shah, B.N. Karia
C/SCA/9113/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9113 of 2017
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
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1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
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SPIRE ENTERPRISE, A PROPRIETARY FIRM HARSHABEN KISHOREBHAI
VEGAD....Petitioner(s)
Versus
EXECUTIVE ENGINEER & 2....Respondent(s)
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Appearance:
MR HB CHAMPAVAT, ADVOCATE for the Petitioner(s) No. 1
MR RJ GOSWAMI, ADVOCATE for the Petitioner(s) No. 1
MR HS MUNSHAW, ADVOCATE for the Respondent(s) No. 1 2
MR SI NANAVATI, SR. ADVOCATE with MR RAJAN J PATEL, ADVOCATE for the Respondent(s)
No. 3
MR NJ MEVADA, ADVOCATE for the Respondent(s) No. 3
NOTICE SERVED BY DS for the Respondent(s) No. 1 2
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 12/09/2017
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, direction Page 1 of 13 HC-NIC Page 1 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT and order to quash and set aside the action of the respondent No.1 dated 15.04.2017 in declaring the respondent No.3 as a successful bidder for etender notice bearing No.02/2017 (Store). It is also further prayed to direct the respondent No.1 to open the financial bid of the petitioner and to proceed in accordance with law as per the aforesaid etender notice.
[2.0] The facts leading to the present Special Civil Application in nutshell are as under:
[2.1] That the respondent No.1 herein had floated the tender being Etender Notice 2/201617 (Store) dated 15.03.2017 for providing Kacheri Suvidha Vyasthapan Service at Taluka Level Offices under District Panchayat. The last date for submission of tender was 23.03.2017. The technical bid was to be opened on 24.03.2017.
The last date for submitting the technical bid documents and to pay the tender fees and EMD was 30.03.2017. The price bid was to be opened on 30.03.2017. That pursuant to the said tender notice the petitioner also submitted its tender. According to the petitioner the petitioner fulfilled all the terms and conditions of the tender notice and submitted all the necessary documents alongwith the tender form / bid. It is the case on behalf of the petitioner that thereafter vide communication dated 29.03.2017 all the eligible bidders viz. the petitioner; one M/s. D.G. Nakrani, (2) Harshil Enterprise, (3) M/s. M.J. Solanki were requested to attend the office on 30.03.2017 for the verification of the documents, before the price bids of the parties are opened. It is the case on behalf of the petitioner that thereafter as the bid submitted by the petitioner was Page 2 of 13 HC-NIC Page 2 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT found to be technically qualified, it was requested by the petitioner and other parties to open the financial bids. However, concerned officer of the respondent No.1 told that the price bids will be opened subsequently and the date will be communicated subsequently and therefore, the Manager of the petitioner left the office of the respondent No.1. It is the case on behalf of the petitioner that thereafter the financial bid was opened on 15.04.2017 and the petitioner came to know when he checked the website that its financial bid is not opened as he has been disqualified at technical stage along with one Harshil Enterprise. It is the case on behalf of the petitioner that the petitioner came to know that respondent No.3 - M/s. D.K. Nakrani has been declared as successful bidder. It is the case on behalf of the petitioner that thereafter the petitioner vide commuincation dated 28.03.2017 brought to the notice of the respondent No.1 that the respondent No.3 is a partnership firm and the day to day affairs of the respondent No.3 is looked after by one Shri D.G. Nakrani. It was pointed out tht Shri D.G. Nakrani was Director of one of the firm viz. M/s. D.G. Nakrani and Associates and in the said firm also the day to day affairs of the firm were looked by same management of M/s. D.G. Nakrani. It was pointed out that M/s. D.G. Nakrani and Associates was blacklisted by Circular dated 10.12.2015 by Employment and Training Department, Gandhinagar and after M/s. D.G. Nakrani and Associates was blacklisted, a new partnership firm as M/s. D.G. Nakrani has been formed and have placed the bid. Therefore, it was brought to the notice of the respondent No.1 that the bid of the respondent No.3 could not have been accepted. It is the case on behalf of the petitioner that thereafter the Page 3 of 13 HC-NIC Page 3 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT petitioner served a legal notice on 25.04.2017 calling upon the respondent No.1 to open the price bid of the petitioner by pointing out that the petitioner is wrongly disqualified in the technical bid. However, as there was no response the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India for the aforesaid reliefs.
[3.0] Shri Goswami, learned Advocate appearing on behalf of the petitioner has vehemently submitted that the impugned action of the respondent Nos.1 and 2 in not opening the price bid of the petitioner and also accepting the bid of the respondent No.3 are absolutely illegal and bad in law.
[3.1] It is vehemently submitted by Shri Goswami, learned Advocate appearing on behalf of the petitioner that as such the price bid of the petitioner is not opened by the respondent Nos.1 and 2 on the wrong premise as if the petitioner was blacklisted and/or debarred from participating in the contract.
[3.2] It is submitted that as such earlier at no point of time any decision was taken to actually blacklist and/or debar the petitioner. It is submitted that therefore when the price bid of the petitioner has not been opened on the premise considering the petitioner as blacklisted and/or debarred and otherwise the petitioner was eligible, the respondent Nos.1 and 2 ought to have considered the price bid of the petitioner on merits.
[3.3] It is further submitted by Shri Goswami, learned Advocate appearing on behalf of the petitioner that as such the respondent Page 4 of 13 HC-NIC Page 4 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT No.3 whose bid has been accepted i.e. M/s. D.G. Nakrani as such was not eligible inasmuch as earlier the person in management of M/s. D.G. Nakrani was as such blacklisted and/or debarred inasmuch as the firm which was managed by him - M/s. D.G. Nakrani & Associates was earlier debarred / blacklisted for the irregularities and thereafter by changing the name, a new firm M/s. D.G. Nakrani was constituted under whose banner / name the business continued. It is submitted that therefore what could not have been achieved directly has been achieved by the respondent No.3 - M/s. D.G. Nakrani indirectly. It is submitted that when the aforesaid was pointed out, a thorough inquiry was required to be conducted by the appropriate authority including the constitution of both the above firms, the persons in management of both the firms and to ascertain whether management of M/s. D.G. Nakrani & Associates and M/s. D.G. Nakrani are the same or not?
Making above submissions it is requested to admit/allow the present petition.
[4.0] Present petition is vehemently opposed by Shri H.S. Munshaw, learned Advocate appearing on behalf of the respondent Nos.1 and 2. An affidavit in reply is filed on behalf of the respondent No.1 - Executive Engineer, R&B Division, Bhavnagar District Panchayat.
[4.1] It is submittedby Shri Munshaw, learned Advocate appearing on behalf of the respondent Nos.1 and 2 that as such the impugned decisions have been taken by the Committee known as Tender Committee for undertaking necessary exercise for selection of Page 5 of 13 HC-NIC Page 5 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT outsourcing agency. It is submitted that the said Committee consists of Officers of the District Panchayat. It is submitted that therefore where a conscious decision has been taken by the respondent Nos.1 and 2 and the dispute is with respect to the contract, this Court may not exercise the jurisdiction under Article 226 of the Constitution of India.
[4.2] Shri Munshaw, learned Advocate appearing on behalf of the respondent Nos.1 and 2 has submitted that so far as not opening the price bid of the petitioner is concerned, after legal notice dated 03.04.2017 was received by one social worker pointing out several irregularities committed by one agency resulting into certain actions against it by the District Panchayat through order dated 10.03.2015 and therefore, such agency which was a defaulter in past should not be considered, a meeting of the tender committee was convened on 13.04.2017. That during the meeting, it came to the light that the tender of the petitioner was accepted for year 201516 but inspite of issuance of three notices, it failed to furnish security deposit and execute the agreement and therefore, EMD was forfeited and it was declard disqualified for future contracts. It is submitted that the Committee, considering the earlier decision, decided not to open the price bid of the petitioner. It is submitted that Committee took into consideration Minutes of Meeting dated 18.06.2015 by which the petitioner was declared disqualified for future contracts. It is submitted that the decision taken against the petitioner on 18.06.2015 disqualifying it was in existence and therefore, the impugned decision was taken by the Tender Committee on 13.04.2017.
Page 6 of 13HC-NIC Page 6 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT [4.3] It is submitted that thereafter only two bidders remained in fray viz. M/s. M.J. Solanki and M/s. D.G. Nakrani and therefore, it was decided to open the price bid of the aforesaid two bidders. It is submitted that accordingly the price bid of the aforesaid two parties were opened and as the offer of respondent No.3 herein - M/s. D.G. Nakrani was lowest, it was decided to accept the Tender Committee. It is submitted that therefore the impugned decision is absolutely just and proper. It is submitted that as such the contract is already executed and the work order has been given in favour of respondent No.3 on 24.04.2017.
Making above submissions and relying upon the affidavit in reply filed on behalf of respondent No.1 and relying upon the earlier order dated 16.05.2015, it is requested to dismiss the present petition.
[5.0] Present petition is opposed by Shri S.I. Nanavati, learned Senior Advocate appearing on behalf of the respondent No.3. It is submitted that as such M/s. D.G. Nakrani & Associates and M/s. D.G. Nakrani - respondent No.3 herein are different entities and both are having separate licenses issued by the concerned Labour and Employment Department. It is submitted that merely because some action was taken against M/s. D.G. Nakrani & Associates earlier, the respondent No.3 herein - M/s. D.G. Nakrani cannot be considered disqualified, as sought to be contended on behalf of the petitioner.
[5.1] It is further submitted by Shri Nanavati, learned Counsel appearing on behalf of the respondent No.3 herein that even Page 7 of 13 HC-NIC Page 7 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT otherwise so far as the petitioner is concerned, as per the terms and conditions of the tender notice and in view of the earlier order dated 16.05.2015, the petitioner was not eligible for future contract.
[5.2] It is further submitted by Shri Nanavati, learned Counsel appearing on behalf of the respondent No.3 that even otherwise considering the terms and conditions of the tender notice for which the contract was awarded earlier and for which the EMD of the petitioner was forfeited, petitioner was disqualified for future contract. It is submitted that therefore the petitioner is rightly held to be disqualified for the contract in question. It is submitted that once the petitioner was disqualified for the contract in question, thereafter it is not open for him to challenge the order awarding the contract in question in favour of respondent No.3. In support of his above submissions, Shri Nanavati, learned Counsel appearing on behalf of the respondent No.3 has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Raunaq International Ltd. vs. I.V.R. Construction Ltd. and Others reported in (1999) 1 SCC 492 more particularly paras 27 of the said decision.
[5.3] It is further submitted by Shri Nanavati, learned Counsel appearing on behalf of the respondent No.3 that even otherwise now the contract is already executed in favour of respondent No.3 and that the work order is also issued in the month of April 2017, it is requested to dismiss the present petition.
[6.0] Heard learned Advocates appearing for respective parties at Page 8 of 13 HC-NIC Page 8 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT length.
At the outset it is required to be noted that by way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the impugned action/s of the respondent Nos.1 and 2 in not opening the price bid of the petitioner and also challenging the action in opening / accepting the price bid of the respondent No.3 and awarding the contract to the respondent No.3.
[6.1] Now, so far as the challenge to the impugned action of the respondent Nos.1 and 2 in not opening the price bid of the petitioner is concerned, from the Minutes of Meeting of the Tender Committee dated 13.04.2017, it appears that considering the earlier decision dated 16.05.2015 by which according to the respondent Nos.1 and 2, the petitioner was debarred / blacklisted / disqualified for future contracts, the price bid of the petitioner has not been opened. However, on considering the Minutes of Meeting dated 18.06.2015 of the District Panchayat, Bhavnagar and the subsequent communication dated 26.06.2015 of the Executive Engineer, R&B Division, Bhavnagar District Panchayat, it appears that impugned action / decision is on misreading of the aforesaid decisions. On reading the said documents it cannot be said that any decision was taken to actually blacklist / debar the petitioner for future contracts. From the aforesaid documents it appears that it was proposed to blacklist / debar the petitioner for future contracts. However, it is an admitted position that thereafter no further decision has been taken. Even by communication dated 26.06.2015 by the Executive Engineer addressed to the petitioner, Page 9 of 13 HC-NIC Page 9 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT the petitioner was informed that a decision has been taken by the District Panchayat in its meeting held on 18.06.2015 to initiate the proceedings under Clause 14 and it has been proposed to debar the petitioner for future contracts. At the cost of repetition it is to be noted that as such neither there was any showcause notice was issued upon the petitioner nor any decision has been taken to debar the petitioner for future contracts. Merely a proposal cannot be considered to be a decision debarring the petitioner for future contracts. Under the circumstances, as such the impugned decision of the respondent Nos.1 and 2 in not opening the price bid of the petitioner relying upon the Minutes of Meeting dated 18.06.2015 and treating the petitioner as debarred for future contracts cannot be sustained as the same is on a wrong premise.
[6.2] Now, so far as the submission of Shri Nanavati, learned Counsel appearing on behalf of respondent No.3 relying upon terms and conditions of the earlier contract that if for any reason the contract is required to be canceled and the earnest money is forfeited, such tenderer / bidder shall be disqualified for future contract is concerned, at the outset it is required to be noted that by such a clause there shall not be any automatic disqualification for future contract. Such a condition provides future action which can be taken. However, even for such an action an opportunity of hearing is required to be given to the bidder / tenderer.
[6.3] In view of the above when the petitioner could not have been treated as disqualified and/or could not have been considered as debarred, the impugned decision of the respondent Nos.1 and 2 in Page 10 of 13 HC-NIC Page 10 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT not opening the price bid of the petitioner cannot be sustained and the same deserves to be quashed and set aside.
[7.0] Now, so far as the challenge to the impugned action of the respondent Nos.1 and 2 in accepting the price bid of the respondent No.3 is concerned, at the outset it is required to be noted that so many things can also be said against the respondent No.3. It is not in disptue that earlier one M/s. D.G. Nakrani & Associates has been blacklisted because of serious allegations of paying less remuneration / wages to the employees and its license issued by the Employment and Training Department, Gandhinagar came to be canceled and it was debarred permanently from participating in future contracts. It is alleged that by creating new firm and indirectly now the respondent No.3 has submitted the bid. Though it is specifically stated in the petition as well as in affidavit inrejoinder on behalf of the petitioner that management of both the firms is one and same, the constitution of both the firms is not forthcoming. It is the case on behalf of the respondent Nos.1 and 2 that thereafter as it was found that respondent No.3 is also having the license of the concerned Department which was valid at the time of submitting the bid, it was decided to open its bid. However, the issue which was to be inquired by the respondent Nos.1 and 2 and/or which was required to be considered by the Tender Committee was the allegation that both M/s. D.G. Nakrani & Associates and M/s. D.G. Nakrani are virtually same and are run by the same management. It appears that no further inquiry has been conducted qua the aforesaid. In any case and be that as it may as observed hereinabove, action of respondent Nos.1 and 2 in not Page 11 of 13 HC-NIC Page 11 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT opening the price bid of the petitioner cannot be sustained for the reasons stated above.
[8.0] Now, so far as the submission on behalf of the respondents that the contract in favour of respondent No.3 has already executed in the month of April 2017 and the work order has already been issued and therefore, the same may not be interfered with at this stage is concerned, it is required to be noted that immediately within a period of 10 days the petitioner has preferred the present Special Civil Application and challenged the action of respondent Nos.1 and 2 in not opening the price bid of the petitioner as well as in awarding the contract to the respondent No.3. Merely because some time is taken in court proceedings, petitioner cannot be denied the relief which otherwise the petitioner is entitled to and for which immediate, prompt action was taken by the petitioner.
[9.0] Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case Raunaq International Ltd. (Supra) by Shri Nanavati, learned Counsel appearing on behalf of the respondent No.3 is concerned, on facts the said decision shall not be applicable to the facts of the case on hand. In the aforesaid case admittedly the petitioner as such was found to be disqualified and not fulfilling the qualifying criteria and it was also found that the relaxation of criteria in favour of the successful bidder was permissible and no malafides were alleged.
[10.0] In view of the above and for the reasons stated above, present Special Civil Application succeeds. Impugned action of the respondent Nos.1 and 2 in not opening the price bid of the Page 12 of 13 HC-NIC Page 12 of 13 Created On Fri Sep 15 22:41:03 IST 2017 C/SCA/9113/2017 CAV JUDGMENT petitioner and awarding the contract to the respondent No.3 treating the respondent No.3 as lowest (without opening the price bid of the petitioner) deserves to be quashed and set aside and is, accordingly, quashed and set aside. Respondent No.2 / Tender Committee is directed to open the price bid of the petitioner and thereafter take appropriate decision in accordance with law and on its own merits. The aforesaid exercise shall be completed within a period of 3 weeks from today. Rule is made absolute accordingly.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) FURTHER ORDER At this stage, learned Counsel appearing on behalf of the respondent No.3 has requested to stay the present judgment and order. Prayer is opposed by Shri Goswami, learned Advocate appearing on behalf of the petitioner.
However, considering the request made by the learned Counsel for the respondent No.3, implementation of the present judgment and order shall be stayed for a period of two weeks from today.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 13 of 13 HC-NIC Page 13 of 13 Created On Fri Sep 15 22:41:03 IST 2017