Madhya Pradesh High Court
M/S Ramalingam Construction Co. ... vs The State Of Madhya Pradesh on 31 October, 2023
Author: Pranay Verma
Bench: Sushrut Arvind Dharmadhikari, Pranay Verma
Page 1 of 13
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND
DHARMADHIKARI
&
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 31th OF OCTOBER, 2023
WRIT PETITION No. 14454 of 2023
BETWEEN:-
M/S RAMALINGAM CONSTRUCTION CO. PVT.
LTD. THROUGH ITS AUTHORISED SIGNATORY
PUJAN SOMAIYA S/O SHRI JAYESH SOMAIYA,
AGED ABOUT 31 YEARS, REGD OFFICE NO. 1 NR
TOWER 4TH FLOOR SIRSI CIRLCE TO BINNI
MILL ROAD NEAR ETA NAMMA MALL K.H.
RANGANATHA COLONY BANGLORE
(KARNATAKA)
.....PETITIONER
(BY SHRI PIYUSH MATHUR, SENIOR ADVOCATE ALONGWITH SHRI MANU
MAHESHWARI, ADVOCATE FOR THE PETITIONER)
AND
1. THE STATE OF MADHYA PRADESH
THROUGH ITS PRINCIPAL SECRETARY
WATER RESOURCES DEPARTMENT,
MANTRALAYA, VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)
2. ENGINEER-IN-CHIEF, WATER RESOURCES
DEPARTMENT SANSADHAN BHAWAN,
BHOPAL (MADHYA PRADESH)
3. CHIEF ENGINEER, WATER RESOURCES
DEPARTMENT, DIVISION UJJAIN (MADHYA
PRADESH)
4. EXECUTIVE ENGINEER, WATER
Signature Not Verified
Signed by: SHILPA
NAGDEVE
Signing time: 31-10-2023
17:26:54
Page 2 of 13
RESOURCES DEPARTMENT UJJAIN
DIVISION UJJAIN (MADHYA PRADESH)
5. VENSAR UJJAIN PROJECT THROUGH ITS
DIRECTOR (A JOINT VENTURE OF M/S.
VENSAR CONSTRUCTIONS COMPANY
LIMITED AND M/S RIVERVOLT HYDRO
LLP) OFFICE AT PLOT NO. 20, FLAT NO. 201,
SRI CHAITANYA RESIDENCY, ROAD NO. 2,
SAGAR SOCIETY, BANJARA HILLS,
HYDERABAD (TELANGANA)
6. IRCON INTERNATIONAL LIMITED
THROUGH ITS CHAIRMAN AND
MANAGING DIRECTOR OFFICE AT C-4
DIST. CENTRE, SAKET, NEW DELHI
(DELHI)
.....RESPONDENTS
(BY SHRI DUVVA PAVAN KUMAR - ADVOCATE FOR RESPONDENT NO.5.
BY SHRI ANIKET NAIK - DEPUTY ADVOCATE GENERAL FOR THE STATE)
Reserved on :- 09.10.2023
Pronounced on :- 31.10.2023
_____________________________________________________________
This petition having been heard and reserved for orders coming on
for pronouncement this day, Justice Pranay Verma pronounced the
following:
ORDER
By this petition preferred under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:-
"I. Issue a Writ declaring that Respondent No.5 and Respondent No.6 companies do not fulfil the Physical Experience Criteria required under the Tender and thus should have been disqualified at the stage of Technical Evaluation of bids.
II. Issue a Writ in the nature of mandamus directing Respondent No.3 and Respondent No.4 to disqualify/reject the bids of Respondent No.5 and Respondent No.6 as they do not fulfil the minimum qualification criteria.Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 3 of 13
III. Issue a Writ in the nature of mandamus directing Respondent No.3 and 4 to declare the Petitioner Company as being the L-1 (lowest) bidder from amongst the Companies which fulfil the Physical Experience Criteria.
IV. Issue a Writ in the nature of mandamus directing Respondent No.3 and 4 to issue a letter of acceptance in favour of the Petitioner Company.
V. Issue any other Writ, order or direction as this Hon'ble Court deems fit."
2. As per the petitioner, the respondent Water Resources Department by a notice inviting tender dated 22.12.2022 had invited offers from prospective bidders for award of the work of:-
"Survey, Design, Excavation, Construction of Closed Duct and refilling along with disposal of excess material in nearby Government land for Kanh River Diversion near village Gothda to Kaliadeh palace with minimum discharge of 40 cumecs and including provision of shafts of 5 m dia at every 1 Km to lift dirt/on left side of duct along the total length of duct, provision of EOT 2 no's in shaft as per instructed by Engineerincharge, four access road into closed duct connecting tar road, construction of barrage to divert non-monsoon flow near village Gothda with minimum height of 5.55 m for the diversion project on turnkey basis comprising of preparation of construction drawings and design, obtaining approvals of all construction drawing and design from the competent authority including construction and installation of all civil, mechanical and electrical works involved in the construction of project. The work includes survey of Closed Duct, Barrage line and its submergence with Fixing of Chainage cum Boundary Stone, geological investigations, preparation and submission of complete LA cases to competent authority for permanent and temporary land acquisition of closed duct and submergence area of barrage and pursuing LA cases for award with concern department, construction of permanent/temporary road required for the project including removal of defect for 180 months in defect liability period, construction, planning and design of control room, staff room and chaukidar quarter building with supply of generator and procurement, and maintenance of all components for fifteen Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 4 of 13 years after completion of the project, including foundation stone laying ceremony and inauguration ceremony and as directed by the Engineer-in- Charge as per details given in scope of work."
3. The aforesaid work was basically regarding "Kanh Diversion Closed Duct Project". Clause 5.2 of the tender document regarding instruction to bidders provided that for being qualified for award of contract, the bidders should satisfy the minimum qualification criteria prescribed in Section-II which provided for the pre-qualification criteria which the bidder was required to fulfill. The pre-qualification criteria was further sub categorized into financial criteria, physical criteria and technical criteria. The bidder was to fulfill all the said criteria. The petitioner company had also submitted its bid pursuant to the NIT dated 22.12.2022. The bidder while submitting the bid was required to furnish the details of the physical experience criteria under form 4-A and the petitioner company confirmed to the said criteria. Total seven companies had submitted their bids and at the stage of technical evaluation three companies were disqualified. The tender evaluation committee declared petitioner and respondent Nos.5 and 6 as technically qualified.
4. As per the petitioner, respondents 5 and 6 do not fulfill the physical experience criteria required under the tender. The clause in that regard is clause No.2(II) which is as under:-
" 2. Qualifying Criteria ........
II. Physical:-
The bidder or JV should have substantially completed/constructed 5.75 km of closed duct/tunnel having minimum cross-section area of 18 sqm in last 5 financial years (i.e. 2017-18 to 2021-22) in single contract. AND Bidder or JV should have executed 15955 cum of RCC in any one financial year during last 5 financial years (i.e. 2018-18 to 2021-22) Note: The experience during the financial year )2022-23) may be considered subject to the condition that total number of financial Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 5 of 13 years under consideration shall not be more than 5 continuous financial years."
5. Though respondents 5 and 6 did not fulfill the physical criteria yet the same was ignored by the tender evaluation committee which declared them technically qualified and thereafter proceeded to open Envelope-C containing the price bid of the technically qualified bidders. The price bid could have been considered only if the pre-qualification criteria had been fulfilled. Respondent No.5 has been adjudged as L-1 (lowest bidder) and respondent No.6 has been adjudged as L-2 bidder. The petitioner company has been adjudged as L-3. Being aggrieved by declaration of respondents 5 and 6 as technically qualified, the petitioner company had submitted a detailed representation before the respondent authorities but the same did not yield any result hence this petition has been preferred.
6. Learned senior counsel for the petitioner has submitted that respondents 5 and 6 company do not fulfill the physical experience criteria required under the tender yet their bids have been illegally accepted. The physical experience criteria was an essential condition of the tender and was required to be strictly complied with and no relaxation in the same could have been given. From the experience certificate submitted by respondent No.5, it is clear that the same was issued by Konkan Railway Corporation Limited stating that respondent No.5 was a sub agency of M/s Hindustan Construction Company Limited which was the principal contractor. Respondent No.5 was not the principal contractor. It hence did not fulfill the physical experience criteria. Even otherwise certificate of respondent No.5 shows that it has done only excavation work for the required length and not the other mandatory works i.e. the tunnel work and lining work. Respondent No.5 was required to have completed 5.75 kms. of completed tunnel work whereas it has done only 584 meter of lining work of tunnel.
Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 6 of 137. It is further submitted that respondent No.6 had submitted a certificate issued to it by Northern Railway for the work executed by it during 2004 to 2019. It hence did not fulfill the physical experience criteria which required completion/construction of 5.75 km of closed duct/tunnel having minimum cross-section area of 18 square meter in last five financial years i.e. 2017-18 to 2021-22. Its certificate hence ought to have been limited to the last five financial years which was the mandatory provision. Due to illegal consideration of bids of respondent Nos.5 and 6, the petitioner has been wrongly placed at L-3 which would have the effect of illegally depriving it from award of the work in question. Reliance has been placed on the decision of the Supreme Court in Bakshi Security and Personnel Services Private Limited Vs. Devkishan Computed Private Limited and Others (2016) 8 SCC 446 and Electrical Manufacturing Company Limited Vs. Power Grid Corporation of India Limited and Another (2009) 4 SCC 87 to contend that the essential conditions of the tender document cannot be relaxed or deviated from and for non-compliance of the same the bid has to be rejected.
8. Reply has been filed by respondents 1 to 4 and the learned Deputy Advocate General appearing on their behalf has submitted that upon due satisfaction in accordance with the tender conditions with regard to qualification of respondents 5 and 6, they have proceeded further in declaring them to be qualified. Respondent No.5 was qualified to be declared as successful bidder in all the terms inclusive of pre-qualifying criteria. In order to derive clarity on the work completion certificate dated 28.01.2023 of respondent No.5 submitted by it along with its bid, they wrote a letter dated 09.05.2023 to Konkan Railway Corporation Limited which in response reverted vide letter dated 12.05.2023 affirming the genuineness of the certificate. Yet another email regarding clarification of the certificate was written. In reply Konkan Railway Corporation Limited reiterated its earlier response. It was thus found that respondent No.5 has fulfilled the pre-
Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 7 of 13qualification criteria. Sublet work and its inclusion for the purpose of assessing qualifying eligibility is permissible under Clause 4.11 of the tender document on strength of which it is eligible and qualified. Respondent No.6 has also fulfilled the criteria of qualification embodied in the tender conditions. Respondents 1 to 4 had written a letter dated 09.05.2023 to Northern Railway, Jammu & Kashmir for verifying the documents of respondent No.6 in reply to which Northern Railway duly certified the work done by respondent No.6 in respect of main tunnel and escape tunnel which was in financial year 2017-18 and 2022-23 respectively from which it became clear that it has completed the requisite length of tunnel construction in the requisite period. The RRC work executed by respondent No.6 was also duly certified by Ircon Vadodara Kim Expressway Limited. Thus, respondents 5 and 6 are eligible and qualified to bid competitively in the subject tender. It was further submitted that interference in the present tender matter ought to be cautiously and sparingly made keeping in mind that public interest is to be protected. Reliance has been placed on the decision of the Supreme Court in Bharat Coking Coal Limited and Others Vs. AMR Dev Prabha and Others (2020) 16 SCC 759, BTL EPC Limited Vs. Macawber Beekay Private Limited and Others 2023 SCC Online SC 1223 and Tata Motors Limited Vs. The Brihan Mumbai Electric Supply and Transport Undertaking (Best) and Others, Civil Appeal No.3897/2023 decided on 19.05.2023.
9. Reply has also been filed by respondent No.5 making almost the same pleadings as have been made by respondents 1 to 4 in their reply and learned counsel for respondent No.5 has also made more or less the same submissions as made by learned counsel for respondents 1 to 4. Further reliance has been placed on the decisions of the Hon'ble Supreme Court in Bharat Coking Coal Limited Vs. AMR Dev Prabha and Others (2020) 16 SCC 759, Jagdish Mandal Vs. State of Orissa (2007) 14 SCC 517, P.C. Snehal Construction Company Vs. Municipal Corporation, AIR 2017 MP 200, B.S.N. Joshi and Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 8 of 13 Sons Limited Vs. Nair Coal Services Limited (2006) 11 SCC 548, N.G. Projects Limited Vs. Vinod Kumar Jain and Others (2022) 6 SCC 127, Uflex Limited Vs. Government of Tamil Nadu (2022) 1 SCC 517, Silppi Constructions Contractors Vs. Union of India (2020) 16 SCC 489, Montecarlo Limited Vs. National Thermal Power Corporation Limited (2016) 15 SCC 272 and Agmatel India Private Limited Vs. Resoursys Telecom and Others (2022) 5 SCC 362.
10. In rejoinder submissions the learned senior counsel for the petitioner has referred to the averments as made in the rejoinder and has made submissions which had been initially made by him and has taken us in detail through the tender conditions and documents of respondents 5 and 6 to highlight the fact that they had not fulfilled the pre-qualification criteria as required under the tender.
11. We have considered the submissions of the learned counsel for the parties.
12. The scope of judicial interference in tender matters has been considered by the Supreme Court as well as this Court on numerous occasions and the law as laid down in that regard is no longer res-Integra. In Jagdish Mandal (Supra) it was held as under:-
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 9 of 13 to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
13. In BTL EPC Limited (Supra), it was held as under:-
"35. It is settled law that in contracts involving complex technical issues, the Court should exercise restraint in exercising the power of judicial review. Even if a party to the contract is 'State' within the meaning of Article 12 of the Constitution, and as such, is amenable to the writ jurisdiction of the High Court or the Supreme Court, the Court should not readily interfere in commercial or contractual matters. This principle has been reiterated in a recent judgment of this Court. Justice J B Pardiwala, speaking for the Bench in Tata Motors Limited v. BEST held:Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 10 of 13
"48. This Court being the guardian of fundamental rights Is duty- bound to Interfere when there Is arbitrariness, irrationality, mala fides, and bias However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review In contractual or commercial matters This Court Is normally loathe to Interfere In contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or Irrationality Is made out One must remember that today many public sector undertakings compete with the private industry The contracts entered Into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless Interference in commercial matters can cause. In contracts Involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical Issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give fair play In the Joints' to the government and public sector undertakings In matters of contract. Courts must also not Interfere where such interference will cause unnecessary loss to the public exchequer.
36. The Court ought to defer to the discretion of the tender inviting authority which, by reason of having authored the tender documents, is best placed to interpret their terms. The Courts ought not to sit as courts of appeal but review the decision- making process and examine arbitrariness or mala fides, if any."
14. In Agmatel India Private Limited (Supra) it was held as under:-
"26. The abovementioned statements of law make it amply clear that the author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 11 of 13 to the constitutional court, that, by itself, would not be a reason for interfering with the interpretation given."
15. For considering whether the work executed by respondent No.5 as a sub-contractor does not fulfill the criteria as laid down in the tender document it would be relevant to reproduce its Clause 4.11 which is as under:-
"4.11. The financial, experience and physical performance of sub-contractor of the bidder will not be taken into consideration. Also, the financial experience and physical performance of the bidder will not be taken into consideration for the works executed as a subcontractor. However, the same will be taken into consideration if the work is executed for Government Organization/ Undertaking/ Municipality/ Corporation and relevant certificates are issued by Officers not below the Rank of Executive Engineer or Equivalent and the financial turnover of the Main Contractor is more than Rs.100 Crore in the years of execution by the bidder as a subcontractor."
16. In this regard, it is seen that respondent No.5 had submitted a work completion certificate along with its bid for showing its technical qualification in order to become eligible. This was a certificate dated 28.01.2023 issued by Konkan Railway Corporation Limited. The official respondents wrote a letter on 09.05.2023 to Konkan Railway for verification of the certificate in response to which Konkan Railway by its letter dated 12.05.2023 affirmed genuineness of the certificate. The official respondents sought further clarification on the work completion certificate by its email dated 19.05.2023 in reply to which Konkan Railway Corporation Limited again re-affirmed the same. Though, it is contended by the petitioner that the work which was done by respondent No.5 was as a sub-contractor but as stated in the certificate it was not only on the basis of a sub-contract having been awarded to it by the principal contractor i.e. M/s Hindustan Constructions Company Limited. The certificate states that a tripartite agreement dated 10.10.2018 had been entered into between Konkan Railway Corporation Limited, M/s Hindustan Construction Company Limited and respondent No.5 under which the work was agreed to be allotted to Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 12 of 13 respondent No.5. Thus, Konkan Railway Corporation Limited itself directly entered into an agreement with respondent No.5 with M/s Hindustan Construction Company Limited being the third party. There was hence direct privity of contract between Konkan Railway Corporation Limited and respondent No.5 which was hence not merely a sub-contractor but its status was much more than that. The tripartite agreement has been filed by respondent No.5 as Annexure-R/5 with its reply. Thereunder, the work which respondent No.5 has claimed to have been done by it was given to it completely. Payment was also made directly by Konkan Railway Corporation Limited to respondent No.5 and not through M/s Hindustan Construction Company Limited. The contention of petitioner that respondent No.5 was merely a sub-contractor excluded by Clause 4.11 of the tender document hence cannot be accepted.
17. In so far as the amount of work done by respondent No.5 is concerned, the work completion certificate dated 28.01.2023 submitted by it clearly shows that the length of tunnel excavation executed under its work was 395 meters for wider section, 3972 meters of main tunnel and 3982 meters of escape tunnel the total of which was 8.349 kms. which is much more than the requirement as laid down in the tender. The length of construction of tunnel has to be calculated by including construction of main tunnel with escape tunnel being an integral part of the main tunnel. It cannot be contended that construction of tunnel would only be confined to the main tunnel and nothing else. The escape tunnel is so intertwined with the main tunnel that both of them have to be taken as a whole. Excluding the escape tunnel would be completely illogical and absurd. When the length of work of main tunnel and escape tunnel completed by respondent No.5 is taken into consideration even by excluding the wider section still the total of the same comes to 7.94 kms. which itself is much more than the requirement of 5.75 kms. of construction of tunnel as per the tender document. There is no dispute as regards minimum cross-section area of work done by respondent No.5 or of the same not being within the last Signature Not Verified Signed by: SHILPA NAGDEVE Signing time: 31-10-2023 17:26:54 Page 13 of 13 5 financial year. The contention of petitioner regarding length of work done by respondent No.5 also cannot be accepted.
18. The challenge to the work completion certificate submitted by respondent No.6 is on the ground that the same is of the period 2004 to 2019 whereas as per the requirement the same ought to have been for last five financial years. In this regard, it has been clarified by official respondents that they had written a letter on 09.05.2023 to the issuing authority i.e. Northern Railway, Jammu & Kashmir for verifying the certificate. In reply Northern Railway certified the work done by respondent No.6 by way of its letter dated 16.05.2023 from which it is apparent that for work T-74 RA done by respondent No.6 from the financial year 2018-2019 and completed in December, 2019, it had done the work of main tunnel of 3.29 km. and escape tunnel of 4.03 km i.e. 7.32 km. which is much more than the requirement of construction of 5.75 km of tunnel. As stated earlier the tunnel work would include main tunnel as well as escape tunnel. The letter of Northern Railway clarifies the certificate filed along with its bid by respondent No.6 and shows that the required tunnel work had been done by it during the last five financial years itself and not from 2004 to 2019 as contended by the petitioner.
19. In view of the above discussion, we have not found substance in any of the ground raised by the petitioner to challenge the decision of the official respondents in declaring respondent No.5 as L-1 and respondent No.6 as L-2 in the matter. The petition is found to be devoid of any merits and is hereby dismissed.
(S. A. DHARMADHIKARI) (PRANAY VERMA)
JUDGE JUDGE
Shilpa
Signature Not Verified
Signed by: SHILPA
NAGDEVE
Signing time: 31-10-2023
17:26:54