Delhi High Court
Subash Chander Gupta And Ors. vs Municipal Corporation Of Delhi And Ors. on 7 March, 1996
Equivalent citations: 62(1996)DLT510
Author: R.C. Lahoti
Bench: R.C. Lahoti, Lokeshwar Prasad
JUDGMENT R.C. Lahoti, J.
(1) This order shall also govern the disposal of Cwp No. 3488/ 95 M/s. Subhash Chander Gupta & Co. v. MCD; and Cw 4229/95 Shn Puma Nand and eight Others v. MCD. The three petitions raise common questions of fact and. law and have been heard analogously.
(2) In Cwp 3686/95 the petitioner has been registered by Municipal Corporation of Delhi (Engineering Department) as a contractor Class I, eligible to submit tenders for unlimited amount as a contractor for buildings and roads, vide certificate of registration dated 29.4.94 2.1On 31.8.1995, the Municipal Corporation of Delhi (Engineering Department) Div. Xxv issued a 'Notice Inviting Tenders, ( hereinafter referred to as the 'NIT') bearing No. Ee XXV/95-95/7, for the following works : "1. Sub. Widening & improvement of approach road to Nizamuddin Railway Station from Mathura Road (Rajdoot Hotel side) S/H: Construction of bridge over Barapulla Nallah. ______________________________________________________________ Tender Earnest Cost of Time of Amount Money Tender form completion ______________________________________________________________ Rs.1,71,54,532.00 20,000.00 RS.1000.00 18 months ______________________________________________________________ 2.1.1There is a term in the Nit which is the core of controversy and is impugned in the petition. It reads as under : "Tenders will be issued to the contractors those having experience in construction of similar work and have executed at least one similar work costing not less than Rs. 100 lacs during the last three years in Govt, Semi Govt Deptt. They are also required to submit a certificate of satisfactory performance of similar type of work from the deptt."
2.2According to the petitioner, he is entitled to tender for unlimited amount of work in view of his being registered as a contractor of Class I vide certificate dated 29.4.94 and, therefore, insertion of the above said impugned term in the Nit and the respondent's refusal to issue tender forms to the petitioner for his failure to furnish a certificate of experience and performance of one similar work costing not;less than Rs. 100 lacs is arbitrary and unreasonable and liable to be struck down. It is further submitted that there are other NITs being issued by the respondent where in the works are of similar nature but the respondent-corporation has not insisted on certificates of experience of similar work and previous performance by the intending tenderers. Therefore the Corporation is behaving with unjust discrimination and arbitrariness. Illustrations given are as under : _______________________________________________________________ Tender Description Amount No.&date of work Rs. __________________________________________________________________ 39 Const of Pucca school 82,94,743.00 20.7.95 Building at Pry school in Rani Bagh Rohini Zone Auction of Pucca Bids. pry School in Rani Bagh in Rohini Zone 22 Const of 25 Nos pucca 82,94,743.00 _________________________________________________________________ classroom in school building at Indira Park (NG Zone) Widening and improvement of road from Rawat Morh of Ujwa Ph-l Sh c/o drains (right side) Construction of pacca school bldg at Mc Primary school Dda slum Kalkaji Nd Zone Construction of pucca school bids at Mc primary school Shekh Sarai Phase Ii Construction of 30 pucca class rooms bids in primary school at Uttam Nagar Santosh Park. , 87,10,418.00 96,09,061.00 20 Const. of subway at Rohtak 21.6.95 Road nerampura Crossing 41,86,777.00 (3) Cwp 3488/95 is also by the same petitioner holding the registration certificate dated 29.4.94 referred to hereinabove (see para 2). A similar term in 3 NITs mentioned below is impugned in this petition.
3.1NIT No. EEXX/95-96/11 dated 26.5.95 is in respect of the following work and tender amount :- Description Amount of work Rs 41,32,181.00 Construction of pedestrian subway across Najafgarh Road in front of Kirti Nagar Market.
3.1.1The impugned term reads as under : "Tenders will be issued to the approved contractors of the Mcd only, those having experience in similar work and have executed the work of subway/ bridges costing at least Rs. 30 lacs (during the last three years in Govt semi Govt deptt). They are also required to submit a certificate of satisfactory performance of similar type of work from the Deptt."
3.2NIT No. Ee XX/95-96/32 dated 29.8.95 is in respect of the following wwk for the following tender amount : Description Amount of work Rs N/W: Construction of Grade separator at Ng Road and Jail Road inter- section at Tilak Nagar. S/H Const. of subway on Ganesh Nagar side. Rs.41,69,692.00 3.2.1The impugned term reads as under :- "Tenders will be issued to the approved contractors of the Mcd only, those having experience in similar work and have executed the work of subway/ bridges costing at least Rs.30 lacs ( during the last three years in Govt semi Govt deptt). They are also required to submit a certificate of satisfactory performance of similar type of work from the Deptt."
3.3NITNO.EEXVILL/TC/95-96/16DATEDL4.8.95ISINRESPECTOFTHEFOLLOWINGWORKtor the following tender amount : Description Amount of work Rs. Const. of pucca school building at H.I.BIock Karampura. 56,07,014 .00 3.3.1The impugned term reads as under :-" "The intending tenderers will have to produce a certificate that at least two building works of the magnitude of at least Rs. 40.00 lacs have been satisfactorily completed. The certificate must be from an officer of the rank of Executive Engineer duly countersigned by respective Superintending Engineer."
3.4The petitioner in support of his submission that the above said term is arbitrary, unreasonable an discriminatory has cited the same five examples by way of illustration as have been cited in Cwp 3686/95.
(4) In Cwp No. 4229/95 there are nine petitioners. All of them are registered as contractors in category Ia for executing the work of roads and buildings for unlimited amount as per certificates of registration issued by the respondent Mcd on dates prior to the issuance of NITs which are impugned in the petition.
4.1The respondent Mcd has issued a notice inviting tender bearing No. Ee .XX/95-96/32 dated 29.8.95. for the following work for the following tender amount :- Description Amount of work Rs. N/H.Construction of 41,69,692.00 grade sepei'ator at Ng Road and jail road intersection at Tilak Nagar. S/H: Construction of subway on ganesh Nagar side.
4.1.1In the Nit there is the following term, inter aha which is impugned by the petitioners: "Tenders will be issued to the approved contractors of the Mcd only, those having experience in similar work and have executed the work of subway/ bridges costing at least Rs. 30 lacs (during the last three years in Govt semi Govt dept). They are also required to submit a certificate of satisfactory performance of similar type of work from the Deptt."
4.2According to the petitioners they have been enrolled as contractor category I-A and authorised to bid for contracts of unlimited amounts. They cannot be prevented from bidding the tenders so long as their registrations subsist.
4.3What is the difference between contractors of Category I and those of Category I-A is not clear. For the purpose of this order we will assume that there is no practical difference between the two.
(5) The respondent Mcd has filed its counter in Cwp No. 3686/95 and 3488/ 95. The same counter has been adopted for the purpose of Cwp 4229/95.
(6) We may briefly notice the pleas raised by the respondent Mcd in its counters.
6.1The principal submission of the Mcd is that the NITs where in term as to requirement of previous work of similar nature has been introduced are all tenders meant for carrying out jobs of special nature. Cpwd Manual 1988 has been adopted by the Mcd and the tenders are invited, processed and acted upon in accordance with the provisions of Cpwd Manual, 1988 mutates mutants. The Manual has a provision for calling 'restricted tenders' which are meant for only those contractors who either have special qualification or special equipment with them for carrying out the special job, experience also being a relevant factor. Reliance has been placed on paras 18.4 and 19.3 of the Manual which will be noticed at their appropriate places.
6.2It is also submitted that along with the tender forms a list of quantities of material requisite is enclosed. The type of material to be used, the details of work to be carried out, as also the rates of each item go to show that these are special items such as anti-termite treatment which cannot be expected to be performed by each and every contractor.
6.3The charge of hostile discrimination i s sought to be met by submitting that in the NITs requiring performance of works which are specialised items, terms relevant to restricted tenders should have been introduced; the non-introduction of such terms in the NITs (cited as illustrations by petitioners) appears to be an accidental or unintentional omission which does not vitiate the introduction of a similar term in the impugned NITs. The petitioners cannot make any capital out of it.
6.4It is further submitted that it will not be in public interest to insist on such terms being excluded.
(7) From the pleadings and keeping in view the contentions advanced during the course of hearing the following questions can be formulated which arise for decision in these petitions :
(1)Whether the petitioners having been issued with registration certificates of Class I or Class Ia contractors qualifying them to bid for tenders without restriction as to amount, the respondent Mcd is estopped from excluding the petitioners from bidding so long as the registration certificates stand ? (2) Whether the term as to previous experience and performance of contracts of a particular amount could be said to be arbitrary perse and discriminatory as the same has not been introduced in NITs for similar types of other works. (3) Whether the petitioners could be excluded from purchasing and submitting their tenders at the very threshold and would it not be a proper exercise of discretion or tender practice on the part of the respondent to apply the test of previous experience only at the time of short listing the tenders ?Question Nos. 1 & 2
(8) As already noticed the petitioners have all been registered as Class I or Class Ia contractors and the registration certificates issued to them make them eligible to submit tenders for unlimited amounts as contractors for buildings and roads. It is submitted by the learned Counsel for the respondent Mcd that the registration confers general eligibility on the registered contractors but that does not mean that if a building contract forming subject matter of a particular Nit is of a very heavy amount and requires some specialised job or work to be performed looking to the nature of the work still the respondent is not free to devise additional criteria; if an aspiring contractor may not fit in the criteria laid down by the Nit he cannot complain of being discriminated against or unreasonably excluded merely because he holds a certificate of registration of contractor Class I/IA,.
(9) At the very outset we may mention that none of the parties has introduced in the pleadings such relevant facts nor brought on record such adequate material as would enable finding out how a contractor is registered in Class l/lA; what are the relevant factors taken into consideration for determining eligibility for registration; and what is the data or material taken into consideration while granting such registration. In absence thereof a very definite opinion on plea of estoppel cannot be formulated. However, we would proceed to examine and determine the question on the basis of whatever material made available to us.
(10) During the course of hearing the petitioner in Cwp 3686/95 and Cwp 3488/95 has made available for our perusal a printed proforma of application for enlistment of contractors issued by Cpwd New Delhi. The application format is followed by guidelines for registration of contractor in CPWD. The genuineness of this pamphlet has not been disputed.
(11) We extract and reproduce below the relevant portions of the guidelines in so far as necessary for the disposal of these petitions.
GUIDELINES for Registration of Contractors in Cpwd The enlistment of contractors in Cpwd is done in the following categories/ classes:- 3(i) Contractors seeking enlistment/promotion in various categories/classes should have satisfactorily completed at least three works during the last five years as on the date on which the application is received in the office of Registering Authority. The gross value of such works should not be less than the amounts shown in the undernoted table :- Magnitude of each work to be considered for promotion/enlistment in the Class/ category.
For works completed For work completed on or after 1.4.1992 after 31.2.92 Class/Category Upto Rs. Upto Rs. Class-I (B&R) 25,00,000.00 15,00,000.00 Class-II (B&R) 10,00,000.00 3,00,000.00 Class-III(B&R) 3,00,000.00 1,50,OUO.00 Class-IV (B&R) l,00,000.00 30,000.00 xxx xxx xxx xxx
4. Contractors (individuals and/or partnership firms) having no past experience of works are also eligible for enlistment in certain categories/classes provided they have a working capital as mentioned below and the individual or one of the partners of the firm is Qualified Engineer with necessary experience as mentioned below.
Category Class Working capital Qualification B&R Ii 4,00,000.00 Graduate Civil Engineer with 10 years of experience B&R Iii l,50,000.00 Graduate Civil Engineer with 3 years of experience Or Diploma holder in Civil Engg. with 10 years experience B&R Iv 50,000.00 Graduate Civil Engineer Or Diploma Holder in Civil Engineering. The following (either in original or attested true copy thereof) must accompany the application for enlistment as class-V( B&R) and Class Iv (Furniture) contractors. xxx xxx xxx xxx
2. Certificate of experience from the registered Govt, Contractors/Architects, worked as Supervisor under them or works done independently, indicating therein clearly the name of work, reference to Agreement/Work Order, Sub-Head of the work, if any, year and amount. In case the applicant has worked as Supervisor, the period of supervision should also be given. Certificates obtained from registered Govt Contractors/Architects should clearly contain a reference to their registration number. xxx xxx xxx xxx (12) A perusal of the above said guidelines shows that Cpwd contractors are divided into five categories. For Construction works there is only one category which is of Building and Roads. There appears to be no separate category for bridges, sub-ways etc. It appears that they are included in Building and Roads. Before granting registration, satisfactory completion of at least three works of the specified magnitude is expected. Completion of works of the magnitude of Rs. 25 lakhs (after 1.4.92) and Rs. 15 lakhs (upto 31.3.92) has been considered enough so as to qualify for registration under Class 1. Without such experience a contractor cannot be registered under Clause 1.
(13) In all the impugned NITs which incorporate the impugned term, the work is of construction of a bridge or a sub-way except in the case of one Nit referred to in para 3.3 above which is for construction of a school building merely.
(14) It was submitted on behalf of the petitioners that the impugned term incorporated in the NITs would have the effect of narrowing down the field of competition. That is true. However, the learned Counsel for the petitioner went on to submit that this term was purposely devised so as to narrow down the number of eligible contractors to such an extent that only the chosen few in whom the officials of the Mcd are interested would only be left eligible and entitled to participate in the tenders. This tall submission is to be discarded for the simple reason that no material has been brought on record to form foundation therefor and to enable the Court arriving at that finding. We find substance in the submission that the field of competition would be narrowed down. We have, therefore, to examine whether the impugned term is so arbitrary and unreasonable as to fall foul of Article 14 of the Constitution.
(15) The plea taken by the respondent Mcd is that Cpwd Manual permits restricted tender of works being called and special terms can be introduced where specialised items/jobs/works are involved. Para 18.4 of Cpwd Manual (Vol II) provides as under: "RESTRICTED Tenders 18.4 Call of Restricted Tenders for Works. 18.4.1 Restricted tenders can be called for, on the following grounds : (i) The work is required to be executed with very great speed which not all contractors are in a position to generate; (ii) Where the work is of special nature requiring specialised equipment which is not likely to be available with all contractors; and (iii) Where the work is of secret nature and public announcement is not desirable. 18.4.2 This procedure should be adopted only when it is absolutely necessary.
It is not necessary to dwell at length on the above said provisions of the Manual in as much as it is clear that the grounds on which alone restricted tenders can be called arc not available in these cases. This is apart from the fact that restricted tender procedure is to be adopted only when it is absolutely necessary and such an absolute necessity has not been shown to exist in the case at hand.
(16) Provision for issuing of tender documents for specialised jobs reads as under : "Issue of Tender Documents for Specialised Jobs 19.3 In order to obviate difficulty to get competitive rates in respect of all specialised jobs it is necessary that the tenders for specialised works should be issued to the firms concerned who deal in the items of the works for which tenders are being invited in addition to registered contractors. For this purpose, the following items should be taken as special items of work."
Below para 19.3 of the Manual is given a list of specialised items/jobs/works in respect of which where resort can be had to para 19.3 of the Manual. The tenders should be issued to "the firms concerned who deal in those items of works" in addition to registered contractors. The provision itself goes to show that the registered contractors arc not to be excluded merely because of special items. Far from excluding the registered contractors, the provision permits tenders being issued to other firms in addition to the registered contractors. The dual pleas raised by the respondent based on restricted tenders and special item work are wholly unsustainable on the provisions of Cpwd Manual as brought to our notice and dealt with hereinabove.
(17) Learned Counsel for the petitioners have relied on a Division Bench decision of this Court in M/s. Paragon Construction v. Uoi, [CWP 4528/93 and 4498/93 decided on 18.10.1993.] There the petitioner was admittedly Class I (B&R) contractor of Cpwd and eligible to submit tenders for buildings and roads without any limit in the whole of Indian Union. The Nit impugned therein contemplated tenders being issued only to those who had completed at least three works of Rcc framed structures-residential/non residential buildings of the value of at least 4 crores each during the last five years. The amount of Rs. 4 crores was later on reduced to Rs. 3 crores. The learned Chief Justice speaking for the Division Bench has held:-
"THE respondent declare only a limited class of contractors as Class-I contractors who otherwise have proven ability, capability and financial soundness and have capacity of executing the work. These contractors can take up the work of any amount. Once this clarification has been made by the respondent and the petitioner has been listed as Class-I contractor by Cpwd vide office memo dated 24.1.1979, then the petitioners cannot be made ineligible by imposing a condition. The impugned condition in the notice inviting tender dated 31.8.1993 of completion of three works of Rcc framed structure residential/non residential of the value of Rupees 3 crores each during the last five years, for the said work of multi-storeyed complex building is untenable and arbitrary."
17.1This decision has been followed by another Division Bench of this Court in M/s. Unibros v. All India Radio and Others, [CWP 3426/94 decided on 7.2.1995]. Therein the eligibility condition in the Nit required the tenderers to have executed satisfactorily at least one building work of the value of not less than Rs. 10 crores or 3 works of Rs. 5 crores each of the total value of the work done not less than Rs. 15 crores, in not more than 3 works in the last five years. This condition had the effect of excluding the petitioner who was a registered Class Ia contractor for the last more than 20 years in the trade eligible to submit tender for building without any limit in the whole of India. The term was held to be arbitrary and untenable, in view of the law laid down in M/s. Paragon Construction case (supra) and particularly in view of the absence of any intelligible or reasonable basis or reasons disclosed from the official files of the respondent for laying down such condition/criterion.
(18) In the case before us also the respondent has not brought on record any intelligible data or reasonable basis based whereon the respondent might have taken a decision for introducing the impugned term in the NITs.
(19) It may make a difference if the respondent may revise its policy of registration and issuing NITs. It may have further classifications. It might be reasonable to pose a question to oneself if a contractor who has had to his credit successful completion of works upto Rs. 25 lakhs only, can he be depended on for entrusting works of the magnitude of crores ? The experts in Cpwd, or in Mcd for the matter of that, may examine if the broad category of building and roads needs to be further sub-categorized or fresh categories are required to be devised, if they may feel that a contractor having an experience of building and roads merely - in the sense in which the words building and roads are commonly understood- deserves to be placed in a class or category apart from the contractors experienced in bridge and sub-way works.
(20) It is clear that satisfactory completion of works as formulating past experience of the contractor is taken into consideration while allowing the registration, as the guidelines show. If the Cpwd in its wisdom has thought fit to treat the experience of works of the magnitude upto Rs. 25 lakhs enough for enlisting a contractor in Class I to qualify as tenderer for works without any limit as to magnitude and the Mcd has chosen to adopt the Manual then Mcd must be held bound the standards chosen and laid down by it so long as they exist.
(21) A similar term, as has been impugned herein, has been held to be arbitrary by two Db decisions referred to herein above. We are bound by the view so taken in the two Division Bench decisions. In addition, we find the terms arbitrary and discriminatory for yet another reason. Though the stand taken by the respondent is that where ever there is a work/item/job of specialised nature involved such a term is being inserted by the Mcd in the NITs. We have in the factual part of the petition quoted by way of illustrations several NITs contemporaneously issued by Mcd where in such a term has not been introduced though all the NITs relate to construction works covered in the category of buildings and roads. The respondent is not following a uniform policy and therefore the impugned term as introduced in some NITs certainly smacks of arbitrariness and discrimination.
(22) We are of the opinion that the impugned term cannot be permitted to operate as a bar against bidding tenders by Class I/IA contractors. Question No. 3 (23) We are not impressed by the submission that the petitioners must be permitted to bid and the criterion as to past experience may be utilised by the respondents while short-listing the tenders. Such an action of the respondent may be open to challenge on the ground that the respondent cannot devise a criterion which was not made known previously to the bidders.
(24) For the forgoing reasons all the petitions are allowed. The impugned term inserted in the NITs referred to in paras 2.1 and 2.1.1, 3.2 and 3.2.1, 3.3 and, 3.3.1, 4.1 and 4.1.1. is held liable to be struck down and is quashed accordingly.
(25) As to Nit No. EEXX. 95-96/11 dated 26.5.95 in Cwp 3488/95 (page 24 of the Paper book) the last date of receiving tenders was 12.7.95 and by the time the petition was filed the date had already expired and we had not allowed any interim relief to the petitioner for that reason. The tenders were already submitted and may be that they have already been finalised. It is, therefore directed that this order shall not affect the validity of any contract which might have been entered into by the respondent pursuant to that NIT.
(26) In view of the impugned term having been struck down, the respondent would issue those NITs afresh. The tenders which have been filed pursuant to the impugned NITs shall be returned sealed and unopened to the respective bidders on their approaching the respondent-MCD for the purpose.
(27) All the petitions stand disposed of accordingly. No costs.