Madhya Pradesh High Court
Triveni Prasad Mishra vs State Of M.P. And Ors. on 10 August, 2005
Equivalent citations: 2005(4)MPHT498
Author: Dipak Misra
Bench: Dipak Misra
ORDER Dipak Misra, J.
1. The Water Resources Department of the State of Madhya Pradesh invited tenders for construction of 21.03 Kms of W.B.M. Internal Roads including 134 number of Hume Pipe Culverts at Model Village New Mirgouti, District Satna. The estimated amount of contract was stated to be Rs. 159.08 lakhs. The time for completion of work was 12 months which included the rainy season. The earnest money that was determined in the NIT was Rs. 1,19,310/-. The pre-qualification document for item rate tender Form B was issued by the respondent No. 1. The said document has been brought on record as Annexure P-1. It is put forth that the said document stipulated certain instructions to the tenderers. The eligibility criteria were provided in the pre-qualification document. One of the stipulations in the pre-qualification document postulated that a Joint Venture firm may apply for consideration.
2. According to the writ petitioner, he and one Kedar Nath Chaturvedi entered into a Joint Venture for carrying out the business of contract in question in the name and style of M/s. Triveni Prasad Mishra, which was for the execution of the work in question and the present petitioner was treated as the lead party having sole right of signing the documents for tender work and execution thereof. The profit and loss were to be shared in the ratio of 60% and 40% respectively. The deed of Joint Venture agreement dated 29-1-2005 is brought on record as Annexure P-2.
3. The petitioner submitted the tender duly filled by him by depositing the requisite earnest money. All the relevant documents of experience were also submitted along with the tender form. It is contended that the petitioner is A-IV Class Contractor having registered himself in the concerned Department of Irrigation and Kedarnath Chaturvedi is a A-III Class Contractor in the Department of Irrigation. They fulfill all the necessary eligibility conditions as are required of a Joint Venture Firm. It is put forth that the tender forms were submitted by various parties. The tender forms were to be opened on 10-2-2005 but the same was not so done for the reasons best known to the respondents. Despite repeated enquiries made by the petitioner, no information was given. However, upon further enquiries, the petitioner was informed that the tenders of two bidders were rejected for the reason that the same were not properly sealed whereas tenders of two other bidders were rejected on the ground that they did not fulfill the eligibility criteria as per Annexure P-1. It is highlighted that the respondents had already made up their mind to award the contract in question to one M/s S.K. Jain of Bhopal and for that reason, they took recourse to some extraneous pleas in order to oust the petitioner from the field of competition. Non-supply of detailed information by the respondents has been seriously criticised by the petitioner. He submitted a letter dated 23-4-2005 to the Commissioner, Rewa Division, Rewa, putting forth the stand the matter should be finalized without changing criteria inasmuch as it was stipulated that a Joint Venture could be constituted by contractor A-IV class and a contractor of A-III Class, but it appears that there has been a change in the tender condition which has been done in an unilateral manner. When the petitioner was apprehensive that such a thing has taken place, the said apprehension was concretized when a letter was issued on 25-4-2005 by the Executive Engineer to the Commissioner, Land Acquisition and Rehabilitation, Ban Sagar Project, Rewa to the Superintending Engineer that upon examination of the documents, he had found that M/s. S.K. Jain of Bhopal be awarded the work in question as he was eligible. Though the said letter clearly stated tenders could be opened on 28-4-2005 at 3.00 p.m., it is highlighted that the petitioner is aggrieved by non-consideration because of unilateral alteration/change of the condition in the tender which is arbitrary, capricious and invites the frown of Article 14 of the Constitution. In this factual matrix, the petitioner has prayed for calling for the original record and to command the respondents 2 and 3 to allow the tender of the petitioner as he had fulfilled the terms and conditions and further adhered strictly to the terms and conditions as had been set forth in Annexure P-l.
4. A counter reply has been filed by the answering respondents pleading inter-alia that on 28-12-2004, the respondents had published a tender relating to construction of work in question and the said work was advertised as per Annexure R-1, dated 28-12-2004. Initially, the date for receiving the tender was 19-1-2005 upto 15.00 hours which was extended on 10-1-2005 up to 1-2-2005. The petitioner was issued pre-qualification document on payment of requisite fees and he submitted the documents within the stipulated time. As the estimated value of contract was more than rupees one crore, A-IV class contractor was entitled either individually or by entering into a Joint Venture with another contractor of A-IV category. A circular to that effect, vide Annexure R-2, dated 16-7-1999, has been brought on record. The documents submitted by the petitioner vide Annexure P-1 is not the document issued or submitted before the answering respondents. It is asseverated that the document contained in Annexure P-l, filed by the petitioner, is the document which was sent by the respondent No. 3 to the competent authority before floating the tender regarding the work and, therefore, the said document is inconsequential. In fact, it is the format which was sent for approval but the final document is as per Annexure R-3, which clearly and unequivocally postulates about A-IV class contractor, as far as the Joint Venture is concerned, deleting A-III class contractor. After submission of pre-qualification document, the respondent No. 3 found that M/s S.K. Jain and the petitioner are holding necessary qualifications and accordingly recommended for approval of the Commissioner. It is noticeable M/s S.K. Jain is a registered A-V Class Contractor in Water Resources Department and has the requisite experience whereas the petitioner was registered as A- IV Class Contractor and he made Joint Venture with one Kedarnath Chaturvedi who is registered as A-III class contractor. It is asserted that while considering the pre-qualification document, the respondent No. 3 had submitted that as per Clause 2.5 (ii) of the Pre Qualification Document, both the parties to the Joint Venture should have been registered in the appropriate class, i.e., Class IV but only for a better competition, the respondent No. 3 had recommended the case of the petitioner along with M/s. S.K. Jain. Copy of comparative statement of all the contractors has been brought on record as Annexure R-4. On 21-4-2005, the Five Member Tender Committee constituted under the Chairmanship of Commissioner (Land Acquisition and Rehabilitation), Rewa, considered the pre-qualification documents and found that the petitioner was not fulfilling the criteria mentioned in Clause 2.5 (ii) of the pre-qualification document, which specifically required, in case of value of contract being rupees one crore, the Joint Venture should be between A-IV and there can not be the Joint Venture of lower category. According to the respondents, in view of the aforesaid, no illegality has been committed.
5. A rejoinder affidavit has been filed by the petitioner that the tender document has been fabricated by scoring out A-III class and substituting A-IV class with the solitary purpose to eliminate the petitioner from the competition and conferring the benefit on M/s. S.K. Jain. The correction made in the pre- qualification document is without any authority. It is the stand in the rejoinder affidavit that whenever correction is made, the same indicates the designation of the officer with its seal as has been done in respect of NIT No. 11 of 2003-04, Annexure P-6 and Annexure P-7 and that goes a long way to show that the correction has been made in an unilateral manner. That apart, stand has been taken that on earlier occasion, identical tenders had been issued for joint ventures of two classes but in the case at hand, the same has been manipulated to oust the petitioner.
6. I have heard Mr. N.S. Kale, learned Senior Counsel for the petitioner along with Abhijeet Bhowmik, Advocate, Mr. P.N. Dubey, learned Deputy Advocate General for respondents 1 to 3 and Mr. R.K. Gupta, learned Senior Counsel for the intervener. It is submitted by Mr. Kale, learned Senior Counsel for the petitioner that when the State or its instrumentality enters into a contract, it can not do so like a private individual and it has to be governed by the basic facets of Art. 14 of the Constitution. It is his submission that the action of the authority should be non-arbitrary, fair, rational, reasonable and should not smack of any kind of capriciousness. Pyramiding the aforesaid submission, it is urged by Mr. Kale that change of the condition in the tender in the manner which exposes malafide and gives rise to tremendous suspicion, invites the wrath of conscience of Article 14 of the Constitution. Learned Senior counsel argued that the authorities do not have unfettered and unbridled power to change a condition unilaterally as that would lead to total chaos and anarchy and destroy the conception of rule of law, which is the basic feature of the democratic polity governed by the Constitution, and organic document.
7. Mr. P.N. Dubey, learned Deputy Advocate General appearing for respondents 1 to 3 and Mr. R.K. Gupta, learned Senior Counsel appearing for the intervener, resisting the aforesaid submissions, contended that what has been argued are the basic principles and there can not be any cavil over the same, but in the present case, the whole scenario depends upon the appreciation of facts. It is canvassed by them that the petitioner is placing reliance on Annexure P-1 and the respondents are placing reliance on the original document, which has been directed to be produced before this Court and it would be unmistakably clear that there has been no manipulation and in fact there is a distinction and difference between the documents filed by the petitioner and the respondents and this gives rise to a colossal factual dispute which can not be adjudicated under Article 226 of the Constitution. It is their further contention that the plea put forth by the petitioner is fundamentally unacceptable as the criteria is in consonance with the circular and basically inherent in the pre-qualification document. It is their further proponement that the stand taken by the petitioner that there has been recommendation to give the contract to M/s S.K. Jain is absolutely incorrect and unsound inasmuch as the recommendation would clearly reveal that it was appreciation of the pre-qualification document and has nothing to do with any kind of selection. On the contrary, it would show that the said authority has also recommended the case of the petitioner to have a fair competition.
8. Before I proceed to deal with the controversy at hand, I think it appropriate to refer to certain decisions in the field to appreciate the factual scenario in proper perspective.
9. In the case of Union of India v. Hindustan Development Corporation, , it was ruled that Government while entering into contracts or issuing quotas is expected not to act like a private individual but should act in conformity with certain healthy standards and norms. Such actions should not be arbitrary, irrational or irrelevant.
10. In the case of Tata Cellular v. Union of India, (1994) 6 SCC 651, the Apex Court culled out the following principles:
"(1) The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made.
(3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender can not be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness including its other facets pointed out above but must be free from arbitrariness not affected by bias or actuated by malafides.
(6) Quashing decisions may impose heavy administrative burden on the administrative and lead to increased and unbudged expenditure.
Based on these principles we will examine the facts of this case since they commend to us as the correct principles."
11. In the case of Union of India v. Graphic Industries Col, , it has been expressed that even in contractual matters public authorities have to act fairly; and if they fail to do so approach under Article 226 would always be permissible because that would amount to violation of Article 14 of the Constitution. Their Lordships have further held that the arms of the High Court arc not shackled with technical rules or procedure.
12. In the case of Air India Ltd. v. Cochin International Airport Ltd., , it has been held that award of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction and in arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision and fix its own terms of invitation to tender and that is not open to judicial scrutiny. Their Lordships further expressed the view that it can enter into negotiations before finally deciding to accept one of the ' offers made to it and it has freedom to grant relaxation. It is worthwhile to state here that in the said case it has been held that 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 the conclusion that over-whelming public interest requires interference, the Court should intervene.
13. In this context the decision referred in West Bengal SEB v. Patel Engineering Co. Ltd., , is also to be taken note of. It has been ruled that rule of law and constitutional values must be adhered to while awarding contract. Their Lordships expressed the view that relaxation by State or its agencies of a rule or a condition in favour of a particular bidder will not be permissible unless expressly provided for in the rules.
14. Recently in the case of Assn. of Registration Plates v. Union of India, , it has been pronounced that certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Their Lordships have expressed the view that no person can claim a fundamental right to carry on business with the Government.
15. The present factual matrix has to be decided on the anvil of aforesaid pronouncements of law. The core dispute that has merged is whether there has been a different stipulation in the pre-qualification document, which was supplied to the petitioner and the pre-qualification document which has been relied upon by the respondents. Submission of Mr. Kale, learned Senior Counsel is that as far as the Joint Venture is concerned, A-IV class contractor could take A-III class contractor on certain conditions. The conditions which find place in the pre-qualification document in this regard read as under:
(i) Copy of the agreement entered into the joint venture may be submitted.
(ii) All items of joint venture shall meet the criteria for registration in category A-III and above with Water Resources Department of Government of M.P.
(iii) One of the firms shall be treated as leading party and joint venture deed duly registered must be submitted to department.
(iv) The leading party shall be authorised to incur liabilities and receive instructions for and on behalf of joint venture and entire execution of the contract including payment shall be done exclusive with the 2nd party.
(v) Both of the joint venture party shall be liable jointly and severally for execution of the contract in accordance with contract of terms and a relevant statement of this effect shall be included in the authorisation.
(a) Experience, resources, men and machinery of each party to joint venture will only be taken into account to the extent that party is responsible for performing tasks under the proposed joint venture.
(b) To ensure that the weaker member of the joint venture can complete with the 'joint and several' commitment to the contract, no member of joint venture shall have less than 10% of any of the qualifying requirements.
(c) The leading party shall meet not less than 60% of the qualifying requirement.
(vi) No firm, individual company or corporation may join more than one joint venture.
The original pre-qualification tender which has been called, stipulates the same conditions but Clause 2.5 (ii), 'A-III has been deleted and A-IV has been incorporated, but there is no signature and no seal. Learned Counsel submits that this document was not supplied to the petitioner but he has collected the form from some other source and produced before the Court. There can be no doubt in law that a condition relating to pre-qualification tender can not be unilaterally changed as that would attract a sense of arbitrariness. If it is changed, it has to be made known to all the tenderers. But it is canvassed before this Court that it has been changed in an unilateral manner. The counter submission is that all the joint ventures were aware of it as they had obtained the pre-qualification tender which was correct but the petitioner has approached this Court in a different spectrum by building a castle in Spain. At this juncture, I think it seemly to take note of certain facts. Be it noted in the beginning that I am only inclined to enumerate the same how a factual dispute has really emerged. Annexure P-1 starts with Government of Madhya Pradesh, Water Resources Department, Pre-Qualification Document for Item Rate Tender Form B. The original document that has been filed, while after mentioning the same mentions "for works costing more than Rs. 60.00 lakhs" and thereafter estimated cost, NIT No., date of receipt offenders, pre-qualification information, document issued to. There is a space for signature on the same. This page has not been annexed to Annexure P-1. It is also perceivable in Annexure P-1 that NIT number has not been mentioned. The stand of the respondents is that a number is always mentioned. The original document which has been filed and that had been submitted by the petitioner indicates the NIT number.
16. In the document Annexure P-1 also does not mention 'for works costing more than 60.00 lakhs'. There also the NIT number does not find mention. At the bottom of the said document, pre-qualification information is mentioned which is absent in Annexure P-1. In addition, there is a column, 'Document issued to' whereas in Annexure P-1, it is mentioned 'issued to'. Quite apart from the above, after the 'document issued to', the name of the petitioner is mentioned in Hindi whereas in Annexure P-1, it is mentioned in English. That apart, in the original document, 'A-III' has been scored and 'A-IV has been written and signature is there. The language used as 'A-IV and above' whereas it is mentioned in Annexure P-1 'A-III and above'. If the disparities are taken into consideration, it is difficult to hold in a categorical and unequivocal manner that there has been unilateral change by the respondents. In any case, it will not be beyond the disputed questions of fact.
17. It is well settled in law that under Article 226 of the Constitution of India, where there are disputed questions of fact, writ course is not a proper remedy. In this context, I may profitably place reliance on the decision rendered by the Apex Court in the case of State of Jammu and Kashmir v. Gulab Mohd (AIR 2004 SC 510). Similar view was expressed in the case of National Textile Corporation Limited v. Haribax Sabiram (AIR 2004 SC 1998)
18. The next aspect that Mr. Kale, learned Senior Counsel has highlighted is that the respondent No. 2 has pre-judged the matter before the date of opening of tenders. Be it placed on record that it was a pre-qualification tender. The communication that has been sent by the respondent No. 2 to the respondent No. 3 is an evaluation of pre-qualification of tenderers for the work of construction in question. The said authority has commended the case of M/s. S.K. Jain indicating as under:
"(1) Registered A-5 class contractor in WRD vide Engineer in Chief WRD No. 4213040, Bhopal dated 13-11- 02 valid up to 13-11-07."
As far as M/s. Triveni Prasad Mishra is concerned, the said authority has expressed the view as under:
"As per Clause 2.5 (ii) of pre-qualification document both the parties involved in a joint venture should have been registered in the appropriate class viz., in class A-4 ion the present case. Shri Triveni Prasad Mishra, A-4 class contractor has formed the joint venture with Shri Kedar Nath Chaturvedi who is registered in A-3 Class. As such the joint venture should not be considered as a legal joint venture.
However, for better competitions Shri Triveni Prasad Mishra joint venture with Shri Kedar Nath Chaturvedi may be qualified, since he fulfils all other criteria of qualification."
Thereafter towards the end, the said Authority has recommended the case of M/s S.K. Jain and the petitioner to have been qualified for pre-qualification tender for this work. If this document is taken into consideration, the submission of Mr. Kale, learned Senior Counsel has no legs to stand upon. The higher authorities have not accepted the recommendation as the petitioner had not qualified in the pre-qualification tender as it did not meet the requisite criteria.
19. In view of my preceding analysis, I am inclined to hold that it is difficult to arrive at the conclusion that there has been unilateral change in the pre-qualification tender conditions. That apart no arbitrariness has been shown by the respondent No. 2 as per document Annexure R-4 and, thus, the petitioner can not have any grievance, as far as the awarding of work in favour of any other contractor is concerned, since he is ousted at the pre-qualification stage. Ergo, the writ petition is sans merit and the inevitable result is dismissal of the same which is accordingly directed. In the peculiar facts and circumstances of the case, there shall be no order as to costs.