Kerala High Court
N.B. Krishna Kurup vs Union Of India (Uoi) And Ors. on 9 June, 2006
Equivalent citations: AIR2006KER309, AIR 2006 KERALA 309, (2006) ILR(KER) 3 KER 134
Author: S. Siri Jagan
Bench: S. Siri Jagan
ORDER S. Siri Jagan, J.
1. In both these writ petitions, the challenge is against the award of licence to M/s. Hotel Royal, of which the 4th respondent is the Managing Partner, to run a mobile catering service to Train No. 2617/ 18 Mangala Lakshadweep express running between Ernakulam and Nizamuddin, pursuant to notification inviting tenders for the purpose. In W. P. (C) No. 11667/2006, the petitioner is one of the partners of a firm, which also participated in the tender proceedings. The petitioner is W. P. (C) No. 8 13847/2006 is another tenderer. Since the reliefs prayed for, in both these writ petitions are identical, these writ petitions are being heard and disposed of together by this common judgment. For convenience the averments and exhibits are referred to in this judgment with reference to the pleadings in W. P. (C) No. 11667/2006.
2. The contention of the petitioner is that " since M/s. Hotel Royal, which claims to be g a partnership firm represented by the 4th respondent, does not satisfy the eligibility conditions prescribed in Ext. PI notification inviting tenders, the pre-qualification of the said firm is illegal and unsustainable and therefore their price bid ought to have been rejected. According to the petitioner, M/s. Hotel Royal is not a registered firm, it does not have 5 years' experience in the field of catering/hospitality business and does not have the minimum annual turnover of Rs. 3 crores in catering/hospitality business for the completed financial year 2004/05, which are necessary qualifications prescribed for eligibility to participate in the tender. The petitioners even go to the extent of alleging that the documents submitted by the 4th respondent for proving eligibility for pre-qualification are fabricated, which even if acceptable, themselves do not go to prove that the firm Hotel Royal has the qualifications prescribed. The 4th respondent would stoutly deny these allegations and claim that his firm does have the necessary qualifications, by filing a counter affidavit and an additional counter affidavit. Respondents 2 and 3, who are the Indian Railway Catering and Tourism Corporation Limited, which invited tenders and its Group General Manager, have also filed a counter affidavit and additional counter affidavit supporting the 4th respondent. The question to be decided in these writ petitions is whether the firm M/s. Hotel Royal, of which the 4th respondent is the Managing Partner, satisfies the eligibility conditions prescribed by Ext. PI notification inviting tenders for pre-qualification.
3. The qualifications prescribed in Ext. PI are,
(i) must be a reputed individual company/ partnership firm/proprietorship firm/sole proprietor duly incorporated/registered for catering/hospitality business for handling food and beverages in India,
(ii) must have a minimum of 5 years of experience in the field of catering/hospitality business,
(iii) must have minimum annual turnover of Rs. 3 crores in catering/hospitality and F & B services related to business of last completed financial year 2004-05,
(iv) should have sufficient number of qualified personnel with at least three years diploma from a recognised catering institution in food and hospitality (hotel management) in its regular employment,
(v) should have catering establishments/ base kitchen with modern equipment and gadgets and
(vi) should be an income tax payer.
4. While challenging the qualifications of M/s. Hotel Royal in this regard, the petitioners would concentrate on the first three qualifications. The petitioners would submit that the first eligibility condition requires, in the case of partnership firms, a registration, which, according to the petitioners, is a registration as a partnership firm before the Registrar of Firms. Petitioners contend that since the 4th respondent's partnership firm is not a registered partnership firm, the first condition is not satisfied. The petitioners also contend that Hotel Royal does not have 5 years' experience in the field of catering/hospitality business and annual turnover of 3 crores during the financial year 2004-05, which are also eligibility conditions for participating in the tender as per Ext. PI. The allegations in this regard as contained in paragraphs 2 and 3 of the memorandum of writ petition in W. P. (C) 11667/2006 are as follows:
He however does not satisfy any of the aforesaid stipulations quoted above. The 4th respondent applied in the name of Hotel Royal which is neither a registered company nor is a registered partnership firm. Besides Hotel Royal does not have minimum of 5 years experience in the field of catering/hospitality. Nor has it got an annual turnover of Rs. 3 crores during the completed financial year 2004-05. The petitioner gathers that Hotel Royal used to be run by one Sri A. P. Muhammed in Building No. 402 of Ward No. 17 of Kozhikode Corporation and the same is not run by the person who applied for the same and has ceased to be in existence from the year 2004. During the period 2004-05 Hotel Royal which is the applicant as indicated by the 4th respondent was not in existence at all and therefore it cannot admittedly satisfy the stipulation of having a turn over of Rs. 3 crores for the financial year 2004-05. The records of the Kozhikode Corporation show that in the premises where Hotel Royal was run earlier as claimed by the 4th respondent, is now actually run in the name and style of "Dilstar" by a different person. The true extracts of the Register of Industries maintained by the Kozhikode Corporation for the years 2003-04, 2004-05 and 2005-06 is produced herewith and marked as Exhibit P2. Thus the very application submitted by the 4th respondent is of a non-existing firm. To support the claim for award of the licence it would appear that the 4th respondent had managed to produce various forged false documents including the income tax return. No income tax return or certificate as regards Hotel Royal could be produced as the said hotel ceased to exist. Obviously therefore the 4th respondent must have made an application with false and fraudulent certificates. Besides any dealer in Kerala doing business in excess of Rs. 5 lakhs must have apparently registration under the Sales Tax Act. Admittedly, the 4th respondent does not have any such licence as has been communicated to the petitioner by the Deputy Commissioner, Commercial Taxes. True copy of the same is produced herewith and marked as Exhibit P3. Under Clause 4(7) of the General Conditions of Licence any licensee who is engaged in corrupt or fraudulent practices in competing for or in executing the licence is entailed with termination of his licence. The expression "Corrupt and fraudulent practices" means misrepresentation of facts to procure the licence is admittedly the action of the 4th respondent clearly false in the expression "corrupt practice" as well as "fraudulent practice". True copy of the model of the tender conditions is produced herewith and marked as Exhibit P4.
3. In spite of the aforesaid clear and factual position the petitioner gathers that rejecting his tender, the 4th respondent has been awarded the tender on the 20th of April, 2005, when the bid was opened he being the highest bidder for Rs. 1.55 crores. The petitioner, however, gathers that steps are taken to grant the tender to the 4th respondent immediately and 4th respondent will be able to run the catering services shortly. In addition to the aforesaid disqualification the 4th respondent also suffers from another serious ineligibility as the 4th respondent had been blacklisted by the Corporation. As the 4th respondent has been blacklisted being the Managing Partner of Arenco Catering, Kozhikode by the 2nd respondent Corporation from bidding further in any of the tenders for a period of one year from disqualification being made in force. The 4th respondent had challenged the blacklisting before this Hon'ble Court by way of W. P. (C) No. 1952 of 2006 which however was dismissed by a Division Bench of this Hobble Court in the judgment rendered along with Writ Appeal No. 103 of 2006 dated 17-3-2006. Thus the blacklisting of the 4th respondent has been confirmed by a Division Bench of this Hon'ble Court. It maybe stated here that in the aforesaid judgment while upholding the blacklisting of the 4th respondent the challenge against the blacklisting of another caterer was interfered with by this Hon'ble Court.
In Ground (A) of the writ petition, the petitioner has further specifically alleged as follows:
...It is significant that the 1st respondent Corporation has not cared to examine whether the 4th respondent is really eligible....
5. In the counter affidavit of respondents 2 and 3, the above said allegations are dealt with in paragraphs 4 and 8, which reads as follows:
4. It is submitted that in the fresh tender floated as per Ext. P2 and P4, the said existing licencees have participated. In fact there were 12 bidders. The technical bids of the 12 bidders were opened on 20-1-2006. The tender committee of 3 officers, found that out of the 12 bidders, 3 are not eligible as per the tender conditions. Therefore, the tenders of the other 9 were only considered further. Accordingly the financial bid of the said 9 eligible bidders were opened on 10-4-2006, when it was found that M/s. Hotel Royal has quoted the highest amount (Rs. One Crore Fifty Five Lakhs and Fifty Thousand) as annual licence fee and the petitioner's firm (M/s. N.B.K. Catering Service) has quoted the lowest amount (Rs. 63,33,330/-). All the other 1 bidders have quoted annual licence fee of more than Rs. One Crore. In this connection, the true copy of the minutes of the Tender Committee in respect of the financial bid opened on 10-4-2006 is produced herewith and marked as Exhibit R2(C).
xx xx xx The statements and allegations of the petitioner regarding black-listing, non-eligibility of M/s. Hotel Royal, etc. are misleading and incorrect To the knowledge of IRCTC, the said firm has not been blacklisted so far. It is another firm by name M/s. Arenco Catering which has been blacklisted. In this connection, the order dated 19-12-2005, of IRCTC, black-listing the firm M/s. Arenco Catering is produced herewith and marked as Exhibit R2(G). It can be seen that it has nothing to do with the partners or other firms. It is seen that the said firm M/s. Arenco Caterers, is a firm constituted in October, 2003, with two partners, viz; M/s. K. P. Shaffique and his wife Smt. A. P. Hazeena. At the same time, M/s. Hotel Royal is a different firm with 4 partners constituted in 1997, and operating as such. Under such circumstances, the black-listing of M/s. Arenco Catering Service, or the fact that a partner in it, is one of the partners and even the Managing Partner in M/s. Hotel Royal, will not make the firm M/s. Hotel Royal, as a black-listed firm. It is submitted that the credentials and certificates of M/s. Hotel Royal, as also that of other 11 bidders, have been verified by the Tender committee and they have been satisfied of the genuineness and eligibility of M/s. Hotel Royal.
6. In the reply affidavit of the petitioner dated 16-5-2006, in paragraph 2, the petitioner in W. P. (C) No. 11667/2006 has submitted thus:
2. Without prejudice to the above, it is submitted that the various averments made in the counter affidavit, are incorrect if not false. Most of the averments in the counter affidavit, are irrelevant to the issues and relates to the method of issuing the tender, which is not in dispute at all. The question whether the Hotel Royal is qualified or disqualified and whether it is a registered firm which is mandatory under the tender conditions. Nothing is mentioned in the counter affidavit about that which means that the Corporation itself is accepting that the 4th respondent is ineligible. Apparently the Corporation is not aware of the various statements made by me in my writ petition regarding the ineligibility and disqualification of the 4th respondent. Unless the corporation is able to show that the 4th respondent is eligible he cannot be considered for award of a licence. No attempt, however, is made in the counter affidavit for justifying the award and show before this Hon'ble Court that the 4th respondent is eligible to be so awarded with the licence. In the absence of that it is submitted that none of the averments made in the counter affidavit of respondents 2 and 3 needs to be controverted in detail as the crucial questions raised by the petitioner is not denied. I am canvassing the correctness of the steps taken by the railways an attempting to patronage a firm which is not eligible to get an award at all I being an experienced person for so many years in the concerned field. The petitioner therefore, may be permitted to refrain himself from referring in detail to the unnecessary and irrelevant averments made in the counter affidavit of respondents 2 and 3.
7. Counsel for the petitioners, during arguments on 25-5-2006, banked on the fact that respondents 2 and 3, in their counter affidavit, have not denied the specific allegations in the writ petition and reply affidavit. After hearing in part on 25-5-2006, the case was adjourned and the same came up for hearing again on 2-6-2006. By that time, respondents 2 and 3 filed an additional counter affidavit dated 30-5-2006 apparently, in an attempt to make up the above said deficiency pointed out by the petitioner's counsel. In the said additional counter affidavit, respondents 2 and 3 submitted as follows:
2. At the outset it is submitted that the assumption of the petitioner that himself and 4th respondent has submitted the tenders in question, is not correct. It is the firms M/s. N. B. K. Catering Services and M/s. Hotel Royal who have submitted tenders and not the petitioner, N. B. Krishna Kurup or Sri K. P. Shaffique. In fact the signatory to the tender of M/s. N. B. K. Catering Service, is not Sri. N. B. Krishna Kurup. While considering the tenders of firms, the qualifications and disqualifications if any of other firms in which any of the partners are common partners, is not normally adverted to or considered. Similarly the registration certificates of the firms, under Partnership Act, are also not normally insisted or called for production. What is required is only registration needed for handling food and beverages in India. Main importance is given to the aspects such as whether one is an Income-tax payee, and whether one is having the required turn over etc. The Tender Committee was satisfied that generally the firm Hotel Royal satisfies the eligibility conditions. It is submitted that normally searching microscopic investigations are not generally conducted in such matters. Licence is awarded after calling for and verifying the originals of the documents, copies of which were submitted in the tender. However, the genuineness of the originals, whether forged etc., are not normally put to test. Moreso because, the licence will be granted only after remitting the full security amount and annual licence fee in advance. There is also the aspect that in case any deficiency or misrepresentation is noted later, in such a manner adversely affecting the qualitfy of service etc., the IRCTC is empowered to terminate the licence.
Of course, the 4th respondent has, in his counter affidavit, denied the allegations of the petitioner in his own way seeking to prove the same by producing documents, the acceptability of which also I shall discuss, and has also filed an additional counter affidavit (rejoinder) supplementing the counter affidavit earlier filed.
8. Now, I shall proceed to decide whether the petitioners have made out a case that Hotel Royal, the chosen tenderer, possesses the qualifications prescribed in Ext. PI. For convenience, I shall first deal with the question as to whether Hotel Royal possesses the third qualification prescribed in Ext. PI, namely, whether the firm had the minimum annual turnover of Rs. 3 crores in catering/ hospitality related to business of last completed financial year 2004-05.1 must, at the outset, say that apart from Ext. R4(g), none of the documents produced before me even purports to prove that the firm Hotel Royal did have the annual turnover of Rs. 3 crores for the year 2004-05. Ext. R4(g) is stated to be a consolidated balance sheet and consolidated trading account of the firm for the year ended 31-3-2005. Although, the same is seen signed by a Chartered Accountant, it does not bear any authentication either by the Income-tax Department or any other authority which makes it a self-serving document. Ext. R4(h) is stated to be the income-tax return filed by Hotel Royal for the previous year 2004-05. The 4th respondent, in his counter affidavit, does not say that Ext. R4(g) accompanied Ext. R4(h) income-tax return. Nor does the same contain any indication to the effect that the same forms part of Ext. R4(h) return. Although the net profit of Rs. 2,05,858/- shown in the consolidated trading account Ext. R4(g) is shown as the gross total income in Ext. R4(h), Ext. R4(h) by itself would not show that the turn over of Hotel Royal for that year was above Rs. 3 crores. Along with the additional counter affidavit (styled as rejoinder), the 4th respondent has produced some more income-tax returns stated to have been filed by him for the years 1998-99 and 1999-2000. Interestingly, the business profit for 1998-99 is only Rs. 2865.62 and that of 1999-2000 Rs. 34,552.40. 4th respondent has not produced the income-tax returns for the years 2000-2001 to 2003-2004. In this connection, it is pertinent to note that as per Ext. P4, at page 17 of the writ petition (instructions to the tenderer) which is part of the tender documents, the tenderer is to produce income-tax returns with enclosures dating more than five years. As such, the 4th respondent has not produced the income-tax returns or income-tax assessment orders for five years before me. That would essentially mean that he had not produced the same before the 2nd respondent also because, if he had, there would have been no difficulty for him to produce the same along with his counter affidavit also. Further, counsel for the 4th respondent candidly admitted before me in the course of arguments that the firm Hotel Royal does not have registration under the Employees Provident Fund and Miscellaneous Provisions Act, Employees State Insurance Act and Kerala General Sales Tax Act. It does not require elucidation of law under those Acts to learn that a firm having an annual turn over of above Rs. 3 crores should mandatorily have registration under these Acts. The liability to register under these Acts has also been not disputed by the counsel for the 4th respondent before me. The fact that the 2nd respondent also expected the tenderers to have registration under these Acts is also clear from the instructions to the tenderers accompanying the tender documents Ext. P4, Clause 6.4 of which reads thus:
4. In support of five years experience, attested copy of authentic documents clearly proving applicant's existence in catering/ hospitality business since at least 5 years, such as:
Award of licence in favour of applicant by Railways/IRCTC or by any statutory/private or public organisation, dating more than five years.
ESI Registration for the catering/hospitality related business, dating more than five years.
Food license/PFA registration dating more than five years.
Income-tax return copy along with enclosures dating more than five years.
Income-tax Assessment order copy dating more than five years.
Sales tax registration certificate dating more than five years.
Sales tax registration order copy dating more than five years.
Sales tax returns duly acknowledged by the sales tax authorities dating more than five years.
Certificate indicating turnover of the applicant from catering/hospitality business issued by sales tax officer/trade tax officer dating more than five years.
Registration under the Shops and Establishments Act dating more than five years in catering/hospitality business.
Of course, deriving support from the word 'such as' occurring in the above said clause, counsel for the 4th respondent would submit that the tender conditions do not require the tenderer to produce all those documents, but those which would sufficiently prove the eligibility of the tenderer. He would also submit that the lack of registration under those Acts does not ipso facto go to prove that Hotel Royal does not have the minimum required turnover. He would submit that perhaps Hotel Royal may have to suffer the consequence of not taking out those registrations, but that should not affect its eligibility for pre-qualification is not sufficient to disqualify the 4th respondent from participating in the tender on the ground that the lack of registration under those Acts is proof enough of want of required minimum turnover.
9. According to me, the question is not as to whether the tenderer is required to produce those documents mentioned in Clause 6.4. On the other hand, the fact that admittedly, Hotel Royal does not have those registrations, the liability to take out which is not disputed even by the 4th respondent, would certainly go to show that the claim of the firm that it has the minimum required turnover of Rs. 3 crores and above is not believable, especially in the absence of any acceptable evidence in that regard. It does not need a lot of intellectual exercise to derive a conclusion that a firm having more than 3 crores annual turnover should certainly have such registrations under law. I feel that the fact that Hotel Royal does not have those registrations itself would disqualify them on another ground. The 2nd respondent is an instrumentality of the biggest organization under the Government of India, namely, the Indian Railways. As such, the 2nd respondent cannot be party to condescending to violation of statutory provisions of one of its licensees, that too, in respect of beneficial legislations like Employees Provident Fund and Miscellaneous Provisions Act, ESI Act, Shops and Commercial Establishments Act and taxation legislations like Kerala General Sales Tax. I would strongly condemn acts on the part of any instrumentality of the State in accepting tenders from a party who has willingly violated those laws with impunity. As I have said earlier, the fact that documents regarding those registrations are specifically mentioned in Clause 6.4 to prove their eligibility for pre-qualification would itself show that the 2nd respondent itself wanted its tenderers to have those registrations as part of the eligibility conditions. It need not be separately stated as, under law, an entity having turnover of above 3 crores is expected to have those registrations and the 2nd respondent itself, as is clear from the above said instructions, expects the tenderers to have those registrations. As such, Hotel Royal should be taken to be lacking for necessary qualifications to be pre-qualified on either of the two reasons stated above.
10. Here, it may be noted that out of the 8 documents enumerated in Clause 6.4, the 4th respondent has produced only income tax return, that too for 3 years. Therefore, even assuming that in view of the presence of the words 'such as' in Clause 6.4, Hotel Royal need not have produced all of them, he should have produced at least some of them to prove his eligibility which he has not done. He also has made a vain attempt to show that he had applied for a certificate from the Income-tax Authorities as evidenced by Ext. R4(v) and it was not his fault that the same was not issued. But that was only on 29-5-2006, after the matter was partly heard on 25-5-2006, during the course on which the lack of sufficient proof regarding eligibility was pointed out. His bona fides is suspect since he did not make the attempt before filing the first counter affidavit.
11. The fact that Hotel Royal does not have the registrations mentioned above would go to a great extent in proving that Hotel Royal did not have the said pre-qualification of minimum annual turnover of above 3 crores. Even if Hotel Royal has in fact that qualification, then also they should be disqualified because they have deliberately violated the legal provisions as per which, any law abiding citizen of India having annual turnover of Rs. 3 crores and above, should necessarily comply with. This is all the more so since the licence is to be under an instrumentality of the State.
12. In this connection, I may also note another aspect. In W. P. (C) No. 11667/2006, the petitioner specifically averred that in the premises where the 4th respondent claims to be running Hotel Royal, another Hotel by name "Dhinsar" is being run by a different person. In support of this contention, the petitioner has also produced Exts. P5 and P6 photographs. This was controverted by the 4th respondent in paragraph 12 of the counter affidavit dated 27-4-2006 in the following words:
The averment that the premises where Hotel Royal was run is now run on the name and style of 'Dilstar' by a different person is absolutely false and hence denied. Ext. P2 belies the contention of the said contention of the petitioner.
Ext. P2 is the extract of the Register of Industries maintained by the Kozhikode Corporation for the years 2003-04, 2004-05 and 2005-06. This document consists of three pages. In the first page, the name of the party is shown as A. P. Muhammed Haris and in the address column. Hotel Royal is also mentioned. In the second and third pages, although the name of A. P. Muhammed Haris is mentioned, the name of Hotel/Restaurant is not mentioned. The 4th respondent's claim is that A. P. Muhammed Haris is one of the partners of the firm Hotel Royal. But, in the counter affidavit dated 27-4-2006, he does not specifically say that the restaurant in the premises, namely, bearing Corporation Door No. 17/402 is run by Hotel Royal under the name and style of "Hotel Dhinsar". Therefore, in the course of arguments on 25-5-2006,1 suggested to the learned Counsel for the 4th respondent to produce the photograph of his restaurant by name Hotel Royal. Thereafter, he produced Ext. R4(w) along with his additional counter affidavit (rejoinder) dated 30-5-2006, which is a photograph of the same hotel as shown in Exts. P5 and P6 taken from a different angle. The name of the hotel is Dhinsar itself. By showing the words "Hotel Royal Group" in smaller letters at the bottom of the board, the 4th respondent would claim that Hotel Royal group is running a restaurant in the name and style of Hotel Dhinsar. This, as such, may not be conclusive either way. But, taking into account the other circumstances described above, I must say that the round about way in which the 4th respondent has framed his pleadings to say the least thoroughly unsatisfactory. Ext. R4(w) photograph, would not also inspire confidence in anybody as a hotel having annual turnover of 3 crores although that itself may not necessarily be conclusive in that regard.
13. The result of the above discussion is that I am not satisfied that the 4th respondent has proved that Hotel Royal had the required pre-qualification, namely, minimum annual turnover of Rs. 3 crores and above for the year 2004-05 and the contention of the petitioners in this regard has to be accepted as proved.
14. Now, I shall turn to condition No. 1 of Ext. PI for which purpose, I shall again extract the said condition here:
(i) must be a reputed individual company/partnership firm/proprietorship firm/ sole proprietor duly incorporated/registered for catering/hospitality business for handling food and beverages in India.
According to the petitioners, this essentially stipulates that in the case of a partnership firm, the firm should be registered before the Registrar of Firms. Learned Counsel for the petitioners would submit that although the condition contains partnership firm and sole proprietor also, the word 'registered' contained therein relates to registration before the Registrar of Firms. On the other hand, learned Counsel for respondents 2 and 3 as also learned Counsel for the 4th respondent would submit that the presence of the words 'partnership firm' and 'sole proprietor' would exclude the interpretation that the word 'registered' mentioned therein is registration as a partnership before the Registrar of Firms since the sole proprietor and a proprietorship firm cannot be registered under the Registrar of Firms. But, counsel for those respondents could not give any satisfactory explanation as to what the word 'registered' denotes. They simply said that the same mentions registration for catering/ hospitality business. I specifically asked them as to under which law a registration for catering/hospitality business is to be made. They could not give any satisfactory explanation. On an interpretation of the said clause, especially in view of the presence of the word 'incorporated' along with the word 'registered', I am of opinion that the word 'registered' does relate to partnership firm, which registration must be as a partnership firm before the Registrar of Firms. This view, I am taking because of the presence of the word 'incorporated'. The word 'incorporated' without any doubt would relate to the word 'Company'. It cannot relate to the other entities mentioned therein. Therefore, the words 'incorporated' and 'registered' are not intended to qualify the words 'individual', 'proprietor', 'firm' or 'sole proprietor' but are intended to qualify the words 'Company' and 'partnership firm'. Therefore, going by Clause (i), the tenderer, if a partnership firm, should have registered his partnership firm before the Registrar of Firms, giving a strict interpretation to the said clause as is required, while interpreting the tender conditions. I am supported In this view by the technical criteria prescribed in Annexure A to the tender documents at page 22 of the writ petition. Serial Nos. 3 and 5 of the same reads thus:
3. Status of the bidder: Company/Partnership Firm/Individual Please specify.
xx xx xx
5. In case of firm registered under the Partnership Act, 1932 Please enclose details of partners along with the certificate of registration, details of their business and partnership deed etc., duly attested by Notary.
Again, in the check list of documents to be submitted, at page 19 of the writ petition, item 3 reads thus:
3. In case of Firm registered under the Partnership Act, 1932 Proof of partners along with certificate of registration, details of business and partnership deed etc., duly attested by notary.
Counsel for respondents would contend that it is required only if the firm is registered and in case of unregistered firms, it is not necessary. However, I feel that viewed in conjunction with other circumstances discussed above, the plausible interpretation is that in case of partnership firms, registration as a firm is a mandatory condition for eligibility to participate in the tender.
15. Admittedly, Hotel Royal does not have a registration as a partnership firm. Here, it is Interesting to note another aspect. Ext. R4(a) is the partnership deed relating to Hotel Royal. The same is dated 1-2-1997. According to the 4th respondent, he is running Hotel Royal at Shop No. 17/402, Rajaji Road, Calicut, of which the landlords are three persons, namely, Aboobacker Siddique A.P. Abdul Raheem and A.P. Muhammed Yoonus, which building was taken on lease by Hotel Royal as per Ext. R4 (b) lease agreement. This lease agreement is dated 31-1-1997, one day prior to the formation of the partnership firm Hotel Royal as per Ext. R4 (a). As such, on the date of execution of Ext. R4(b), Hotel Royal was not in existence. Further, in Ext. R4(b), the lessee is described as "M/s. Hotel Royal, Partnership Firm registered under the Indian Partnership Act." At the same time, the 4th respondent admits that Hotel Royal does not have a registration as a partnership firm.
16. As such, I find that since Hotel Royal did not have registration as a firm, the firm did not satisfy the first eligibility condition in Ext. PI.
17. The third condition raised by the petitioner is that the firm Hotel Royal does not also have the second qualification, namely, minimum of 5 years of experience in the field of catering/hospitality business. This allegation is controverted by the 4th respondent by producing Ext. R4(c) licence from the Southern Railway, Palakkad whereby the 4th respondent had a licence to run a fast food stall on the platform of the Coimbatore Railway Station for a period of five years from 1-8-1999. I doubt very much whether running a fast food stall would amount to experience in catering/ hospitality business, that too, in relation to a tender, which requires the tenderer to have had turnover of more than Rs. 3 crores in 2004-2005, for becoming eligible to take part in the tender. Of course, the 4th respondent would now contend that in relation to that, as evidenced by Exts. R4(d) and R4 (e), Hotel Royal did have licences from the Calicut Corporation under the Municipalities Act and under the Prevention of Food Adulteration Act. Exts. R4 (d) and R4(e) are for the same period for the same licences paid by the 4th respondent and A.P. Muhammed Harris, who is stated to be one of the partners of Hotel Royal. It is baffling that two different partners should pay fee for the same licences for the same period separately. The name 'Hotel Royal' is also not mentioned therein. The 4th respondent has also not chosen to produce that licences obtained by the firm pursuant to Exts. R4 (d) and (e). As such, I am not satisfied that the 4th respondent has proved that he has five years' experience in the catering/hospitality business, because, a reading of conditions 2 and 3 together, the said five years experience must be in respect of a business having annual turnover of Rs. 3 Crores and above and not that of a fast food stall in a Railway Platform.
18. Further, the very fact that Hotel Royal does not have registrations under the Employees Provident Funds Act, Employees State Insurance Act and Sales Tax Acts would go a long way to prove that the claim of the firm that it has five years' experience as a reputed firm cannot be accepted as correct. Still further, the 4th respondent has produced none of the documents stipulated as per Clause 6.4 of the instructions to the tenderers, except the income tax return, that too only for one year.
19. It is trite law that the tender conditions are to be strictly complied with. Therefore, before a tender is accepted, the authority concerned should scrupulously ascertain whether the tenderer concerned satisfied the eligibility conditions, especially in a case where the tender consists of two separate parts of technical bid and price bid and a pre-qualification in the technical bid is a precondition for participating for the price bid as in this case. It is disturbing to note that, in the additional counter affidavit of respondents 2 and 3, they themselves admit that they have not scrupulously ascertained whether the tenderers satisfied the eligibility conditions, but accepted the documents produced by the tenderers without any scrutiny into the genuineness of the documents. In any event, even before me, no satisfactory documents have been produced to conclusively prove the claim of the 4th respondent that Hotel Royal did have the turnover of Rs. 3 crores and above as required as per the tender conditions.
20. In addition to the above, the petitioners have pointed out another disqualification regarding Hotel Royal which makes it ineligible to participate in the tender to the effect that the firm by name Arenco Catering, Kozhikode, of which-the 4th respondent was the managing partner, was blacklisted by the 2nd respondent-Corporation, which would render Hotel Royal, of which the 4th respondent himself is the managing partner, ineligible to participate in this tender. The defence of respondents 2 and 3 as also the 4th respondent to this is that the two firms are distinct and separate and therefore the blacklisting of one cannot be cited to disqualify the other firm simply because the managing partner of the blacklisted firm is the managing partner of the successful tenderer. I am unable to accept the contentions of respondents 2 to 4 in this regard. If the same is accepted as a proposition of law, it would lead to dangerous and anomalous results insofar as unscrupulous individuals would become able to defeat the very purpose of blacklisting by forming another firm with a different partner. It is settled law that the individual partners of a partnership firm are jointly and severally liable for all the actions of the firm. Conversely, the disqualification arising from the actions of the firm should apply to each and every partners of the firm. Viewing thus, the consequences of blacklisting of a firm should attach to all the partners of the firm. When a partner, that too, a managing partner of a blacklisted firm, is a partner of another firm with other partners, the consequences of the blacklisting which gets attached to that partner should necessary attach to the firm also going by the same reasoning. A different interpretation would certainly enable unscrupulous businessmen to defeat the purpose of blacklisting itself. In this case, the partners of the blacklisted firm are the 4th respondent and his wife. The 4th respondent Is the managing partner of the firm Hotel Royal. Although, Hotel Royal consists of some other partners also who do not have the disability of blacklisting, the fact that the managing partner of the blacklisted firm is the managing partner of the firm Hotel Royal, would certainly result in the disability as a consequence of blacklisting of the firm being attached to the other firm namely, Hotel Royal. Therefore, I am satisfied that the blacklisting of M/s. Aranco Catering should render Hotel Royal also liable for the consequence of blacklisting.
21. In the above circumstances, I am of opinion that on all counts, M/s. Hotel Royal was not pre-qualified to participate in the price bid pursuant to Ext. PI notification inviting tenders.
22. The petitioner in W. P. (C) No. 13847/ 2006 who is also the additional 5th respondent in W. P. (C) No. 11667/2006, who is one of the unsuccessful tenderers pursuant to Ext. PI notification, would raise a further contention that once M/s. Hotel Royal is disqualified, then the tender should be awarded to the next highest bidder who has been found to be pre-qualified to participate in the price bid. He would submit that since going by Ext. R2(c), the petitioner in W. P. (C) 13847/2006 is a pre-qualified tenderer, being the next highest tenderer, he is entitled for award of the tender. Respondents 2 and 3 have produced Ext. R2(a) along with their counter affidavit to W. P. (C) No. 13842/2006 to contend that once the highest tenderer is disqualified, there should be re-tender and therefore the tender cannot be awarded to the next highest tenderer. Counsel for the petitioner would submit that Ext. R2(a) would apply only when the highest tenderer backs out and not when the highest tenderer is disqualified.
23. Although, I find some force in the contention of the petitioner, I am not inclined to consider the same now since the petitioner in W.P. (C) No. 13842/2006 approached this Court only on 26-5-2006 in spite of the fact that the tender was confirmed in favour of Hotel Royal as early as on 10-4-2006 as evidenced by Ext. Rule 2(c). However, in this connection, I must note the contentions of respondents 2 and 3 in W.P. (C) No. 11667/ 2006 to the effect that on account of the petitioner in that writ petition backing out after quoting Rs. 2.16 crores in the earlier tender, there was a delay of more than six months in completing the selection of the new licensee, which has resulted in huge loss to the Corporation, as the petitioner in W.P. (C) No. 11667/2006 is continuing to run the catering contract at a much lesser rate on an ad hoc basis. The contention of the Corporation is that the whole purpose of this writ petition is to enable the petitioner to continue to hold on to the licence at the lesser rate as long as possible. If the matter is to be re-tendered as submitted by the Corporation, it would certainly mean further delay in selecting the new licensee during which time, going by the averments of the Corporation itself, the petitioner in that writ petition would be continuing to run the catering service at a much lesser rate, resulting in further loss to the Corporation. Therefore, respondents 2 and 3 should consider whether it is in the interest of the Corporation to re-tender the contract. I am not issuing any directions in this regard for the aforesaid reason. It is for respondents 2 and 3 to take a decision in that regard after taking into account the best interests of the Corporation and the observations contained in this judgment. I leave it at that.
24. Accordingly, the writ petitions are allowed on the above terms. The award of the contract to M/s. Hotel Royal as per Ext. P6 in W.P. (C) No. 13847/2006, pursuant to Ext. PI, is hereby set aside leaving it open to respondents 2 and 3 to take further steps in the matter of award of the contract in accordance with law and the observations made in this judgment.
25. Before parting with the case, I would like to comment on certain disturbing aspects revealed in these cases. This is a tender which would have direct nexus with the health and well being of the passengers of the train, who are the ultimate consumers of the food that the licensee to be selected is to serve in the train. As such, the 2nd respondent should normally ensure that the amount of licence fees the tenderer quotes is such that by paying that amount as licence fees, he would be able to serve quality food while making reasonable profit, that too, after paying all statutory benefits to his employees and other levies like sales tax etc. Otherwise, the only casualty would be the quality of the food, which the passenger is destined to consume. Therefore, while considering the award of the tender, the 2nd respondent should consider not only the higher amount they would get but also the quality of the food the licensee would be able to serve to the passengers. Otherwise, either the quality would suffer or they would be forced to increase the price of the food items, in which event also, the passengers would be at the receiving end.
Secondly, the averments in the additional counter affidavit filed by the respondents 2 and 3 makes disturbing reading. It does not augur well when an instrumentality of State states that when scrutinising a tender, which has direct relation to the health and well being of the passengers, they do not scrupulously verify the qualifications of the tenderer, since the licence would be granted only after remitting the full security amount and annual licence fee in advance. As I have stated earlier, in such contracts, the primary concern of the 2nd and 3rd respondents should be whether the tenderer would be able to deliver the goods keeping in mind the fact that what is at stake is the health of the passengers and not merely monetary considerations. With the fervent hope that the 2nd and 3rd respondents would keep in mind this vital aspect while taking further decisions in the matter of award of this tender. I conclude this judgment.