Madras High Court
M/S.Chandragiri Construction Company vs State Of Tamil Nadu on 1 April, 2010
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:01.04.2010 CORAM: THE HONBLE MR. JUSTICE T.S.SIVAGNANAM W.P.Nos.25281/2009, & M.P.Nos.1&2/2009 & M.P.No.1/2010 W.P.No.24906/2009 &M.P.Nos.1&2/2009 W.P.No.24905/2009 &M.P.No.1/2009 & W.P.No.26126/2009 & M.P.Nos.1&2/2009 & M.P.No.1/2010 W.P.No.25281/ 2009 M/s.Chandragiri Construction Company, Thekkil Post, Kasargod, Kerala 671 541, rep. by its partner Mohideen Kunhi ... Petitioner -vs- 1.State of Tamil Nadu, rep, by its Secretary to Government, Animal Husbanbdry and Fisheries Deparment, Fort St. George, Chennai -9. 2.Tamil Nadu Fisheries Development, Corporation, rep. by its Commissioner, D.M.S. Complex, Chennai 600 018. 3.Tender Award Committee, rep. by its Chairman/Commissioner, Tamil Nadu Fisheries Development Corporation, D.M.S. Complex, Chennai 600 018. 4.The Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018. 5.Mr.L.Ramasamy, Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018. 6.M/s.Sripathy Associates, No.62, Thangaperumal Street, Erode 638 001. .. Respondents W.P.No.24906/ 2009 M/s.Chandragiri Construction Company, Thekkil Post, Kasargod, Kerala 671 541, rep. by its partner Mohideen Kunhi ... Petitioner -vs- 1.State of Tamil Nadu, rep, by its Secretary to Government, Animal Husbanbdry and Fisheries Deparment, Fort St. George, Chennai -9. 2.Tamil Nadu Fisheries Development, Corporation, rep. by its Commissioner, D.M.S. Complex, Chennai 600 018. 3.The Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018. 4.Mr.L.Ramasamy, Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018. 5.M/s.Sripathy Associates, No.62, Thangaperumal Street, Erode 638 001. ... Respondents (R5 impleaded as per order dated 10.12.2009 in M.P.No.2/2009) W.P.No.24905/ 2009 Manickavasalu ... Petitioner Vs. 1.The Superintending Engineer, Fishing Harbour Project Circle, Tamilnadu Fisheries Department, DMS Compound, Chennai 600 006. 2.M/s.Sripathy Associates, No.62, Thangaperumal Street, Erode 638 001. ... Respondents (R2 impleaded as per order dated 10.12.2009 in M.P.No.3/2009) W.P.No.26126/ 2009 Manickavasalu ... Petitioner Vs. 1.State of Tamil Nadu, rep, by its Secretary to Government, Animal Husbanbdry and Fisheries Deparment, Fort St. George, Chennai -9. 2.Tamil Nadu Fisheries Development, Corporation, rep. by its Commissioner, D.M.S. Complex, Chennai 600 018. 3.Tender Award Committee, rep. by its Chairman/Commissioner, Tamil Nadu Fisheries Development Corporation, D.M.S. Complex, Chennai 600 018. 4.The Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018. 5.Mr.L.Ramasamy, Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018. 6.M/s.Sripathy Associates, No.62, Thangaperumal Street, Erode 638 001. ... Respondents Prayer in W.P.No.25281/2009: The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Certiorarified Mandamus to call for the entire records relating to the impugned orders of the third respondent proceedings No.DB/D3/F.666-A/2009 dated 01.12.2009 and consequential work order issued by the fourth respondent in Lr.No.DB/D3/F.666-A/2009 dated 02.12.2009 in favour of the 6th respondent herein and quash the same and consequently the respondents 1 to 3 to evaluate and finalise the tender afresh in respect of the contract work viz., "Construction of Back Water and its approaches for Fishing Harbour at Thangapattinam in Kanniyakumari District" based on their qualifications and experience. Prayer in W.P.No.24906/2009: The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Declaration to declare the entire tender process vide letter No.DB/D3/F/6006/A-09 dated 18.08.2009 issued by the third respondent in respect of "Construction of Back Water and its approaches for Fishing Harbour at Thangapattinam in Kanyakumari District" as null and void and consequently direct the first respondent to award the contract work viz., "Construction of Back Water and its approaches for Fishing Harbour at Thangapattinam in Kanyakumari District" to the tender based on their qualification and experience. Prayer in W.P.No.24905/2009: The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Certiorarified Mandamus to call for the records pertaining to the second tender notification No.DB/D3/F. 114 N/2009 dated 03.06.2009 issued by the respondent and to quash the same and to call for a fresh tender with the same terms and conditions as stipulated in the TamilNadu Transparency Tenders Act, 1998 and Tamil Nadu Transparency in Tenders Rules, 2000. Prayer in W.P.No.26126/2009: The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Certiorarified Mandamus to call for the entire records to the impugned orders of the third respondent proceedings No.DB/D3/F. 666-A/2009 dated 01.12.2009 and consequential work order issued by the fourth respondent in Lr.No.DB/D3/F.666-A/2009 dated 02.12.2009 in favour of the 6th respondent and to quash the same and direct the respondents from 1 to 3 to call for a fresh tender with respect to work "Construction of breakwaters and its approaches for fishing at Thengapattinam in Kanyakumari District" and evaluate and finalise the same based on the qualifications and experience. For Petitioner in W.P.No.25281 & :Mr.Vijay Narayan Senior Counsel W.P.No.24906/2009 for Mr.S.Srinivasan For Petitioner in W.P.No.24905/09:Mr.R.Thiyagarajan Senior Counsel & W.P.No.26126/09 for M/s.S.Haja Mohideen Gisthi For Respondents in W.P.25281/09:Mr.P.S.Raman Advocate General & W.P.No.24906/09 assisted by Mr.M.Dhandapani Spl Govt Pleader for RR1 to 4 & for R1 to R3 in W.P.No.24906/09 For Respondents in W.P.26126/09:Mr.P.S.Raman Advocate General & W.P.24905/09 assisted by Mr.M.Dhandapani Spl Govt Pleader for RR1 to 4 & R1 in W.P.No.24905/2009 For Respondents :Mr.K.M.Vijayan Senior Counsel for Mr.R.Suresh Kumar for R6 in W.P.25281/09, for R5 in W.P.24906/09, for R6 in W.P.26126/09 & for R2 in W.P.24905/09 COMMON O R D E R
Tenders floated for construction of facilities for a fishing harbour in Kanyakumari District has landed in troubled waters giving rise to the present litigation.
2. Four writ petitions have been filed by two tenderers raising identical questions and by consent all writ petitions are taken up for disposal and disposed of by an common order.
3. Prayer in four writ petitions and the parties:-
i) W.P.No.25281/2009 has been filed for issuance of a writ of certiorarified mandamus to quash the order passed by the third respondent dated 01.12.2009 and the consequential work order issued by the fourth respondent in letter dated 02.12.2009 in favour of the sixth respondent and consequently direct the respondents 1 to 3 to evaluate and finalise the tender afresh in respect of the subject contract, based on their qualification and experience. This writ petition has been filed by M/s.Chandragiri Construction.
ii) W.P.No.24906/09 has also been filed by M/s.Chandragiri Construction for issuance of writ of declaration to declare the entire tender process vide letter dated 18.08.2009 issued by the third respondent in respect of the subject work as null and void and consequently direct the first respondent to award the work to the tenderer, based on their qualification and experience.
iii) W.P.No.24905/2009 has been filed by Mr. Manickavasalu for issuance a writ of certiorarified mandamus to quash the tender notification dated 03.06.2009 issued by the first respondent and to call for fresh tender with the same terms and conditions as stipulated in the Tamil Nadu Transparency of Tenders Act 1998 and rules framed there under.
iv) W.P.No.26126/2009 has also been filed by Mr.Manickavasalu, praying for issuance of a writ of certiorarified mandamus to quash the order passed by the third respondent dated 01.12.2009 and the consequential work order issued by the fourth respondent dated 02.12.2009 in favour of the sixth respondent and consequently direct the respondents 1 to 3 to call for fresh tender with respect to the subject work and evaluate and finalise the same, based on the qualification and experience.
4. Subject in Issue:-
The petitioners, who are stated to be class I registered contractors with the Tamil Nadu Government are before this Court, aggrieved by the order of rejection of their tenders submitted by them for construction of breakwaters and its approaches for fishing harbour at Thengapattinam in Kanyakumari District at the pre-qualification stage and to quash the work order issued in favour of M/s.Sripathy Associates, impleaded as the sixth respondent in W.P.No.25281/2009 and 26126/2009 and as the fifth respondent in W.P.No.24906/2009 and the second respondent in W.P.No.24905/2009.
5. Undisputed facts:-
The Government of Tamil Nadu proposed for the construction of a fishing harbour at Thengapattinam in Kanyakumari District vide G.O.Ms.No.126, Animal Husbandry, Dairying and Fisheries Department, dated 21.12.2005 at an estimated cost of Rs.30.55 crores. The proposal was forwarded to the Government of India for its approval and the Government of India accepted the proposal and accorded administrative approval for the project by proceedings dated 25.09.2008. Based on such approval, the Government of Tamil Nadu issued G.O.Ms.No.27 dated 05.03.2009 under centrally sponsored scheme to be shared between the Government of India and the State Government in a phased manner on 50:50 basis. The work was scheduled to be commenced and completed in two stages within a period of four years from the date of handing over of the site. The first stage of the proposed work was construction of main breakwater, lee ward breakwater and its approaches, at an estimated cost of Rs.22.84 crores to be completed within two years time. Accordingly, a notification dated 03.06.2009 was issued by the Superintendent Engineer, Fishing Harbour Project Circle, Chennai-6, inviting tenders for the subject work under sealed two cover tender system i.e., qualification schedule and price tender (Item rate tenders). First cover to contain EMD and qualification conditions and other details and the second cover containing price tender schedule. The EMD was fixed at Rs.12.00 lakhs and the estimated amount of the tender was fixed at Rs.2284.00 lakhs, the date of tender was fixed as 10.07.2009 and tenders were to be issued from 08.06.2009 to 09.07.2009.
6. The contractors registered with the Tamil Nadu Public Works Department, other Departments of Tamil Nadu Government, other State Government, Government of India, State and Central Government undertaking, under class I (State Level) with monetary limit of Rs.75.00 lakhs and above, and with proven record were eligible to participate in the tender. That the applicants should have been under the name and style in the civil engineering construction field atleast for the past five years. The applicant should have completed atleast one "breakwater" work of similar nature with value not less than Rs.916.00 lakhs under "single agreement" in any one of the preceding '5' years, for this purpose construction of road, building, industrial estates, workshops would not be considered. The annual turn over of the applicant should not be less than Rs.1300.00 lakhs per year in any one of the preceding '5' years. The tender documents were made available in the office of the Superintendent Engineer from 08.06.2009 to 09.07.2009 and the price tender schedule was also issued along with the pre-qualification schedule and all tender documents could be downloaded from the official website. Under the condition scope and status of work, the work was described under three heads, namely main breakwater, lee ward breakwater and approaches to breakwaters, the period of completion was 24 calendar months, which is inclusive of monsoon period from the date of handing over of site and the percentage of progress of work was also stipulated. The EMD of Rs.12.00 lakhs was directed to be enclosed along with the qualification schedule for the work. Security Deposit for an amount equivalent to 2% of the contract value, which includes the EMD already paid was required to be paid by the successful tenderer within 21 days from the date of receipt of work order. English was stipulated as the language of the two cover tender system and the price tender was to be valid for a period of 90 days from the date notified for the opening of the price tender. The tender condition further spelt out how the price tender should be submitted by two cover system. The qualification schedule was to be opened by the Superintendent Engineer on 10.07.2009 at 15.30 hours, in the presence of tenderers or their authorised representatives and the price tenders of only qualified contractors would be opened. The tender conditions further issued detailed information and instructions for the tenderers, which included the minimum criteria for qualification, the evidence to be produced for such purpose. It was mentioned in the tender document that the details furnished without supporting certificate will not be considered.
7. In response to the tender notification dated 03.06.2009, six tenderers participated, which includes the two writ petitioners and the six respondent. One of the participants, namely M/s. Associates Engineering Consultant, Pune did not enclose the EMD and consequently its bid was rejected. The tenders submitted by the remaining five were evaluated by the tender scrutiny committee and all the five were found to be not fully qualified as per the tender conditions prescribed in the pre-qualification. Ultimately by order dated 18.08.2009 all the five tenders were rejected and the EMD furnished by all of them, including the petitioners, were returned.
8. Thereafter, a second tender notification was issued by the Superintendent Engineer on 18.08.2009, inviting tenders for the subject work and the EMD was fixed at Rs.12.00 lakhs, the estimate of the work was fixed at Rs.2300.00 lakhs and tender forms were issued from 25.08.2009 to 22.09.2009 and the tenders were opened on 23.09.2009. Under Clause 2(iii) of the notification, it was stated that the applicants should have completed atleast one breakwater work of similar nature with value not less than Rs.800.00 lakhs under "single agreement" in any one of the preceding five years. The scope and status of the work was described in Clause 5 consisting of the main breakwater, leeward breakwater and approaches to breakwaters. The time of completion, EMD, Security Deposit, language of the tender, validity of the price tender, procedure for submission of price tender were identical to that of the first tender notification. The tenders were to be opened by the Superintendent Engineer on 23.09.2009. The minimum criteria for qualification and the evidence to be produced were mentioned in the tender. Schedule 'A' of the notification dealt with the Structure and Organisation, Schedule 'B' the Financial Capability, Schedule 'E' was a declaration to be furnished giving information regarding current litigation/ debarring /expelling of applicant or abandonment of work by the applicant, Schedule 'F' the format of the affidavit to be sworn to by the applicant and Schedule 'G' was the format of the undertaking to be furnished by the applicant stating that they will abide by the terms and conditions if any modified by the Government in the contract conditions subsequent to the submission of qualification schedule/price schedule or subsequent to they execution of the agreement. In the later part of this order, the conditions regarding pre-qualification would be dealt with in detail as the dispute raised in the present writ petitions arise on account of the petitioners bid having been rejected at pre-qualification stage.
9. Pursuant to the second tender notification, five bidders submitted their offers, which included the two writ petitioners and the sixth respondent, the tenders were opened as scheduled on 23.09.2009. M/s. Chandragiri Construction filed W.P.No.22576/2009 before this Court, praying for a direction to direct the Superintendent Engineer to constitute a new Tender Evaluation Committee to evaluate the tender forms. Writ Petition was disposed of of this Court by order dated 18.09.2009, permitting the tender scrutiny committee to evaluate all tenders and place the same to the tender award committee, which would verify all the tenders received, approve and award the contract to the successful tenderer. The operative portion of the order reads thus:-
"4....As such, I am of the opinion that by the participation of the Superintending Engineer in the Tender Evaluation Committee, no damage will be caused to the petitioner. Even, in case of any mischief or any false report as against the petitioner, when there is a second stage of scrutiny of the report to be filed by the Tender Evaluation Committee, the apprehension of the petitioner cannot be accepted. Apart from this, each tenderer may have one reason or the other to seek exclusion of one officer or the other. If the participation of any officer in any Committee has to be decided only on the basis of the request of the tenderers, then there will be no end to it. Consequently, recording the above submission of the learned Advocate General, I am of the opinion that this writ petition can be closed. Accordingly, the writ petition is closed."
10. It is stated that the first cover containing the pre-qualification was opened and the tender scrutiny committee evaluated the pre-qualification bids and the same were placed before the tender award committee on 26.11.2009. The tender award committee rejected three tenderers, namely the two writ petitioners and M/s.Engineering Project India Ltd and declare that the sixth respondent and M/s.Aster Infratek Private Ltd were qualified at the pre-qualification stage and proceeded to open the price bid submitted by both of them. It is stated that the price bid was opened in the presence of the two tenderers and placed before the tender award committee on 01.12.2009 and after negotiation with the sixth respondent, the lowest tenderer, the work order was issued to the sixth respondent on 02.12.2009. Aggrieved by such action the petitioners are before this Court by way of the present writ petitions. Initially, since the order of rejection was not communicated to the petitioners, had sought for writ of declaration to declare the entire tender process as illegal by filing W.P.No.24906/2009 and 24905/2009. After the communication of the order of rejection, the petitioners have filed the other two writ petitions, namely W.P.No.25281 & 26126/2009, challenging the rejection of their tenders and the work order issued in favour of the sixth respondent.
11. Case of the petitioner in W.P.No.24906/09 & W.P.No.25281/09 filed by M/s.Chandragiri Construction Company:-
The Petitioner is a registered State Level Class 1 contractor with the Public Works Department and Highways Departments of the State of Tamilnadu and entitled to do work for more than Rs.1 crore. The Petitioner participated in the tender conducted on 10.07.2009 and filed their bids. The Petitioner also enclosed the EMD for Rs.12 lakhs along with necessary enclosures. According to the Petitioner they have executed similar works and they are fully qualified as per the qualification prescribed in the tender document and were expecting to be declared as successful tenderer. While so, the 4th Respondent by letter dated 18.08.2009 rejected the Petitioner's tender as well as the tenders submitted by others without assigning any reasons. It has been further stated that on enquiry the Petitioner came to know that the entire tender process was cancelled by the 5th Respondent and other officials of Tamilnadu Fisheries Development Corporations to reduce and change the norms of the tender so as to enable the 6th Respondent to become qualified. In the 2nd tender called on 18.8.2009 the cost of the project was revised to Rs.2300 lakhs with EMD of Rs.12 lakhs. In the 2nd Tender one of the eligibility condition was changed and the applicant was required to complete a contract work of not less than Rs.800 lakhs and according to the Petitioner this was done to facilitate the participation of the 6th Respondent and to rule out others for flimsy reasons. According to the Petitioner the 4th Respondent was proceeding to evaluate the tenders in an arbitrary manner and therefore the Petitioner filed W.P.No.22576 of 2009 before this Court praying for issuance of a Writ of Mandamus to forbear the official respondent from proceeding with the finalisation of the tenders dated 18.8.2009 and consequently to direct the 1st Respondent to constitute a new tender evaluation committee to evaluate the tender forms and award the same to the successful and most eligible tenderer within reasonable time. The Writ Petition was disposed off by this Court by order dated 18.8.2009. According to the Petitioner the Respondents acted in total contravention of the direction issued by this Court. While so, the 4th Respondent by proceedings dated 26.11.2009 rejected the petitioner's tender and the order was not communicated and therefore the Petitioner's filed W.P.No.24906 of 2009 for declaring the entire tender process as illegal. When the Writ Petition came up for admission on 2.12.2009 it was represented on behalf of the Respondents that evaluation of tenders are under progress and based on such submission this Court adjourned the Writ Petition to 3.12.2009 at 2.15 pm. On 3.12.2009 when the matter was taken up it was represented on behalf of the Respondents that the tenders had already been evaluated and the work was awarded to the 6th Respondent and the work order was issued to the 6th Respondent on 2.12.2009 in a function presided over by Hon'ble Ministers. Therefore the Petitioner filed W.P.No.25281 of 2009 challenging the rejection order dated 1.12.2009 and the work order issue to the 6th Respondent dated 2.12.2009. It has been further stated that the 5th/4th Respondent, the Superintending Engineer, from the beginning has been supporting the cause of the 6th Respondent. By relying upon the various dates commencing with the 1st tender till the work order was issued pursuant to the 2nd tender, the Petitioner submits that the entire tender process is vitiated on the ground of malice and the Respondents 2 to 5 reduced the original norms, particularly the value of the work already done by the Applicant to favour the 6th Respondent whose tender was rejected in the 1st call and the value of the work was reduced to Rs.800 lakhs to facilitate the 6th Respondent and yet the 6th Respondent has completed work only to the tune of Rs.6.06 crores which does not satisfy the norms. It is contended that the 3rd Respondent did not independently apply its mind and merely relied on the evaluation report of the 4th Respondent. The bid submitted by the 6th Respondent had to be rejected inlimine as the 6th Respondent failed to meet the first condition namely the applicant should have carried out work of similar nature not less than Rs.800 lakhs, and the evaluation report itself state that the 6th Respondent has completed only work of Rs.6.06 crores in a single contract of similar nature in the last preceding 5 years. Though the Respondent 2 to 4 had sufficient power under Section 27 (4) of the Tamilnadu Transparency in Tenders Act, 1998 to seek for clarification from the tenderers the failed to do so and proceeded to reject the Petitioner's tender which is violative of Article 19 and 21 of the Constitution. As regards the reasons given for rejecting the Petitioner's pre-qualification bid, it is submitted that the Petitioner had annexed the letter written to Concrete Layer Innovation (CLI) dated 18.9.2009 along with the tender documents which ought to have been taken into consideration. As regards the Petitioner's registration with the PWD Department, Kerala State, it is submitted that the Respondent erroneously stated that the Petitioner has not submitted documentary evidence that they are class I contractor while the Petitioner had produced the certificate issued by the Superintending Engineer PWD National Highway, North Circle, Kozhikode, which establishes that the Petitioner is registered as A category contract. As regard the solvency certificate, it is submitted that the Respondents rejected the same on the ground that the details of the survey field numbers of properties were not furnished. It is contended that this observation is erroneous since the solvency certificate was issued by the Tashildar, Kasaragod to the extent of Rs.8 crores and if there was any clarification required the Respondents could have sought for the same from the Petitioner. Though the attested copy of the Sales Tax verification certificate was enclosed the Respondents stated that the Petitioner did not meet the pre-qualification criteria by observing the Sales Tax remittance and Sale Tax clearance for 2008-2009 has not been furnished when the requirement under Clause 3 of the tender conditions, the Sale Tax Registration details and sales tax verification certificate valid for the current period was alone required to be produce. Therefore the rejection on this ground is erroneous. It is further stated that the Petitioner did not disclose the termination of a tender issued by the SE project circle, Vellore and certain other details. As far as the rejection by the SE project circle, Writ Petition was pending against the said termination and with regard to the other matter relating to a road maintenance work in Dharmapuri after the Writ Petition filed challenging the termination of the said work was dismissed by this Court, thereafter the petitioner initiated arbitration proceedings and an award was passed in favour of the Petitioner awarding damages for wrongful termination and as against the disallowed portion of the arbitration claim the petitioner has preferred an original petition before this Court and the State Government has also filed an OP against the award. The contention that the Petitioner did not produce the Income Tax Clearance Certificate valid for the current period is also incorrect and the Audit Statement of Accounts Bank Certificates and other documents were enclosed along with the tender and interms of the Government of India circular dated 13.2.2003 the Income Tax Clearance Certificate is not required to be produced. Further it is submitted that 10% weightage for the period 2007-2008, 2008-2009 and 2009-2010 was given to the 6th Respondent inorder to make them eligible and this was a deliberate attempt to help the 6th Respondent and it amounts to gross misuse of power and the action is tainted with malafide and for extraneous considerations. It has been further submitted that the action of the tender award committee blindly accepting the justification report for paying more than Rs.5.00 crores to the 6th Respondent over and above the estimated value is illegal. On the above grounds the Petitioner sought for setting aside the order of rejecting the pre-qualification bid and to quash the work order issued to the 6th Respondent.
12.Case of the Petitioner in W.P.No.24905 of 2009 and W.P.No.26126 of 2009 filed by Mr.Manickavasalu The Petitioner is a registered Clause 1 contractor doing business for the past 7 years and Petitioner has undertaken one Central Government Contract for a sum of Rs.11 crores for the Chennai Port Trust and the Petitioner is an experienced registered contractor. The Petitioner, in the affidavit filed in support of the writ petition, has raised similar contentions as stated by the petitioner in W.P.No.248906 of 2009 and W.P.No.25281 of 2009 and in addition the Petitioner has contended that according to the Government Rules, to participate in a tender a contractor should have been either awarded or completed a Government work not less than 50% of the tender value as per the notified tender. In the instant case the 1st tender value was Rs.2284 lakhs and the eligibility criteria was fixed as Rs.916 lakhs instead of Rs.1124 lakhs, but when the tender value in the 2nd Tender was raised to Rs.2300 lakhs the eligibility criteria was lowered to Rs.800 lakhs which is illegal and against the provisions of the Transparency in Tenders Act and Rules framed thereunder. Further in the first tender there was no mention about the weightage and the same was introduced only in the 2nd tender. The weightage factor can be only 5% as per the PWD norms but the authorities fixed it as 10% which is a clear violation of the Government norms. Similar contentions has been raised stating that the tender process was carried on in a hasty and confined manner in order to favour the 6th Respondent. According to the Petitioner the reduction in the eligibility criteria is only to favour the 6th Respondent. As regards the dis-qualifying of the Petitioner, it is submitted that it is incorrect to state that the Petitioner has not done work of the value upto Rs.8 crores since the work done by the Petitioner for Chennai Port Trust is Rs.11 crores. That the Pre-qualification criteria there is no clear stipulation in the tender schedule. The pages 133 to 142 has 13 criteria as mentioned for pre-qualification but in the page 142 it is mentioned as the contractor should fulfill the conditions mentioned in the 11 criteria mentioned above and it should be considered that the contractor should fulfill any 11 criteria out of the 13 mentioned. Further in page 144, it is said that the contractor should fulfill the 9 criteria mentioned above. Hence as far as the qualification criteria are concerned there is no clarity in the number of criteria to be fulfilled and which criteria that would be taken into consideration. Though there was increase in the contract value in the second call the criteria for value of single work done was lowered because the value of road work had increased and since the Break water work was the major portion it was taken into account and also that the increase in value was due to the increase or addition of the approach road in the second call. But on looking into the tender schedules for the first call and second call in page 11 & 127 where the split of the nature of work has been mentioned there is no change in the tenders. Whereas in page 98 & 214 in the first schedule the quantity of stones for break water construction is 318200 mtr of granite stones and 19700 cu.m of concrete and it has increased to 359630 mtr of granite stones and 19840 cu.m of concrete in the second tender which clearly implies the increase in value of the tender in the second call is only due to the increase in the quantum of the breakwater work. Hence the contention for decrease in the criteria for value of single work is null and void. It is further contended that there is no proper justification given for the 19.96 % increase in the tender value than the original tender value. On the above grounds the Petitioner has prayed for setting aside the rejection of his pre-qualification bid and the work order issued to the 6th Respondent.
13.Contentions of the Respondents 1 to 4:
The first tender was called on 3.6.2009 for the execution of main breakwater, leeward breakwater and its approaches at an estimated cost Rs.22.84 crores under two cover system. The last date for receipt of tenders was fixed as 10.7.2009. It was specifically notified that one of the pre-qualifications is the tenderer should have completed single breakwater work with the cost of Rs.9.16 crores. Six tenders were received on 10.7.2009 of which one was rejected for not enclosing EMD. The other 5 tenders which included the tenders of the Writ Petitioners and the 6th Respondent were scrutinized and evaluated by the tender scrutiny committee and all 5 tenders were found to be not fully qualified in the pre-qualification stage.
14. Based on the inspection of the damages caused in the breakwater on the ongoing Fishing Harbour Project at Muttom, Kanyakumari District which is also in the same west coast, and with a view to avoid possible damage in the current project, the Superintending Engineering decided to modified the cross section of breakwater at Thengapattinam in consultation with Institute of Hydraulics and Hydrology (IHH), Poondi and CLI, France who are the licensed authority of coreloc concrete armour layer. Accordingly the breakwater design was changed and the bill of quantities in the estimates were modified without increasing the cost of estimates. Due to the above reasons and also since none qualified at the pre-qualification stage of the 1st tender, the same was cancelled and all the 5 tenders were rejected on 18.8.2009 and the EMD amount was refunded to all the 5 contractors including the Petitioners and they also received the same without any protest and none of the contractors objected while receiving the EMD amount. Thereafter the 2nd tender notification was issued by the 4th Respondent on 18.8.2009 by fixing the last date for receipt of tenders as 23.9.2009 with modifications in the pre-qualification criteria to enable participation of more bidders and to have fair competition. It is further submitted that the tender inviting authority has discretionary power to make changes in the design according to site conditions and modify the pre-qualification criteria exercising powers under the amended Section 17 of the Transparency in Tenders Act. The Pre-qualification has been modified based on the precedents in PWD, DRDA and also the guidelines issue by the Central Vigilance Commission, New Delhi vide letter dated 7.5.2004. Under the 2nd tender notification 13 requirements have been prescribed as pre-qualification criteria. Pursuant to the 2nd tender notification 5 tenders submitted on 23.9.2009, which included the two Petitioners, the 6th Respondent, M/s.Engineering Project India Ltd., and M/s.Aster Infratek Pvt. Ltd. The 1st cover for pre-qualification was opened on 23.9.2009 in the presence of the tender scrutiny committee constituted as per G.O.222 dated 8.4.1999 and at that stage W.P.No.22576 of 2009 was filed and this Court by order dated 18.11.2009 disposed of the Writ Petition permitting the tender scrutiny committee to evaluate all tenders and place the same to the tender award committee, who shall verify, approve and award the contract to the successful tenderer. Based on the direction issued by this Court all the pre-qualification tenders were evaluated by the tender scrutiny committee and placed before the tender award committee on 26.11.2009. The tender award committee was constituted in terms of the guidelines in G.O.Ms.No.46 dated 16.5.2005. After verification of records the tender award committee rejected 3 tenders of out of 5 tenders and accorded approval to open the price bid of the 2 qualified bidders namely M/s.Aster Infratek Pvt. Ltd., and the 6th Respondent. The price bid was opened by the scrutiny committee in the presence of the representatives and placed before the tender award committee and 1.12.2009 and on verification of the price bid and after negotiation with the lowest tenderer, the tender award committee approved the lowest bidder, the 6th Respondent, and necessary work order was issued to be contractor on 2.12.2009 by the 4th Respondent and the same was received by the successful bidder from the Hon'ble Deputy Chief Minister in a function at Nagercoil. This Court by order dated 3.12.2009 at 2.30 pm granted an order of status quo. It is further submitted that the Petitioner's having accepted the cancellation of the 1st tender and received the EMD amount without protest cannot make allegations against the Respondents regarding the cancellation of the 1st tender.
15. The 2nd tender is called for construction of breakwater and its approaches at Thengapattinam in Kanyakumari District and it consist of 3 separate works at the cost of Rs.23 crores namely (i) Construction of main breakwater to a value of Rs.19 crores (ii) Construction of Lee Ward breakwater to a value of Rs.3 crores, and (iii) Approaches to breakwater to a value of Rs.1.00 crores. Taking into consideration the main breakwater work at the value of Rs.19.00 crores and after deducting the cost of Rs.3.00 crores towards the fee for patent rights and technical assistance for casting and placing the same in breakwater construction work and the balance was Rs.16.00 crores and pre-qualification norm was fixed at Rs.8.00 crores being 50% of the value of the work. Accordingly the pre-qualification amount was reduced from Rs.9.16 crores in the first tender call to Rs.8.00 crores in the second tender. The allegation that this change was effected to favour the 6th Respondent is without any basis. Necessity to change the design of breakwater was to ensure safety and stability of the breakwater from damages due to high wave action in that area. The allegations of the Petitioner's is purely on assumptions and presumptions. The tender evaluation was done properly in accordance with the provisions of Section 26 of the Act and there is no violation or favourtism. The letter from CLI, France is essential and except the 6th Respondent and M/s.Aster Infratek the others did not fulfill the said condition. The tender award committee consisted of the Commissioner of Fisheries as Chairman, Chief Engineer PWD, State Port officer, Superintending Engineering, Executing Engineering, Deputy Secretary, Animal Husbandry and Fisheries Departments. Since the Writ Petitioners failed to qualify on fundamental aspects the rejection of their pre-qualification bid was fully justified. In the Counter Affidavit it has been stated that the Petitioner, M/s.Chandragiri Constructions are not justified in not disclosing about the termination of an earlier work wherein the Petitioner was found unfit regarding technical knowledge, organisation, financial capacity etc. In the present tender the Petitioner (Mr.Manikavasalou) did not satisfy 5 out of 13 conditions in the pre-qualification criteria and the Petitioner (M/s.Chandragiri) did not satisfy 6 out of 13 conditions. It is further submitted that the project is of a special nature funded by the Tamilnadu Government and Government India and it is a time bound program and to be completed early. The project is of utmost public interest to facilitate the safe berthing of mechanized boards and it is a welfare measure to the down trodden fishermen community who have already suffered due to Tsunami. Therefore the Respondent prayed for dismissal of the Writ Petitions.
16. Case of the sixth respondent M/s.Sripathy Associates:-
It is submitted that as against the order of rejection of the tender submitted by the writ petitioners, they should have availed the appellate remedy under Section 11 of the Transparency in Tenders Act and on that ground, the writ petitions are liable to be dismissed. It is further submitted that the writ petitioners do not have the coreloc armour unit and it is a patented technology and without obtaining the approval from CLI, France, the writ petitioners do not possess the prescribed qualification for participating in the tender. It is further stated that it is understood by the sixth respondent, the writ petitioner's sales tax clearance certificate was withdrawn by the concerned authority on 25.07.2006 and the registration of the writ petitioner with the Public Works Department, Pollachi Circle was cancelled, since they had dues with the Government of Tamil Nadu. It is submitted that the sixth respondent has produced the income tax clearance certificate and the writ petitioner does not have the same and no valid proof have been produced to show that the income tax return was submitted. That even though, the language of the tender is mentioned as English, the writ petitioner has purposely filed documents in Malayalam to mislead the authority without furnishing sufficient details and therefore, the rejection of their pre-qualification bids are justified. It is further stated that number of contracts by the writ petitioner have been cancelled and mere filing of writ petition cannot absolve them from the liability. It is further stated that the sixth respondent has completed most of the work well before the estimated time and there has been no termination of contract or delay in the work by the sixth respondent and the present contract was awarded on 02.12.2009 in a public function and the project is a dream project of Kanyakumari based fisherman for more than 50 years and that the sixth respondent has invested huge money for arranging machinery and labour and therefore prayed for dismissal of the writ petition.
17. Factual and Legal submissions of the learned Senior counsels appearing for the writ petitioners:-
Heard Mr.Vijay Narayan and Mr.R.Thiyagarajan learned Senior counsels appearing for the petitioners. At the outset, the learned senior counsels would submit that the entire tender process has been conducted with undue haste and the sequence of events would establish that the same has been done only to favour the sixth respondent. At this stage, the learned Senior counsels referred to the various dates commencing from the issuance of the first tender notification upto the award of the contract in favour of the sixth respondent, pursuant to the second tender notification. It is the assertion by the learned Senior counsels that the essential condition regarding qualification to participate in the tender was reduced in the second tender notification with a view to favour the sixth respondent and the fact that the tender itself was awarded in favour of the sixth respondent in a public function arranged at Nagarcoil on 02.12.2009 would establish that every thing was pre-arranged when the normal process of award of the contract is by sending the order by registered post or by handing over to the contractor in the office of the respondent. Therefore, it is submitted that the procedure adopted in the matter of award of the contract in favour of the sixth respondent itself establishes that the process was not fair and equitable. It was further submitted that the award in favour of the sixth respondent has been made at an enhanced rate and the question of granting escalation would come in only after commencing of work and the award for an increased rate even prior to the handing over of the work order is illegal. It is further submitted that the weightage clause granting 10% weightage for each year was included only to favour the sixth respondent and it did not find place in the first tender notification, and the same is contrary to the norms fixed by the Public Works Department and as per the information furnished by the Chief Engineer, Water Resources Department, dated 03.11.2009, the weightage could be given only at 5% per year. Therefore, it is submitted that 10% weightage was granted only with a view to make the sixth respondent eligible to participate in the tender as without such weightage, the sixth respondent would not satisfy the essential requirement. Therefore, it is submitted that the entire tender process is vitiated by malafides.
18. It is further submitted that the entire decision making process both in the matter of rejection of the petitioners' bids as well as the grant of work in favour of the sixth respondent are vitiated and calls for interference. It is further submitted that the contract work cannot be divided into separate parts and the reason assigned in the counter affidavit saying that the eligibility criteria was fixed in the second tender by splitting up the work of breakwater into main breakwater, leeward breakwater work and approaches to breakwaters is not tenable and this dissection of the breakwater work as main and leeward is only to make the sixth respondent eligible. Therefore, it is submitted that the splitting up of the work into three compartments for a value of Rs.19,00,00,000/-, 3,00,00,000/-, 1,00,00,000/- and after deducting Rs.3,00,00000/- from the cost of main breakwater for the patent fee, thus arriving at Rs.16,00,00,000/- and then fixing 50% of such Rs.16,00,00,000/- at Rs.8,00,00,000/- as the minimum eligibility is unsustainable and there is absolutely no reference or indication in the tender conditions that this was the manner in which the eligibility criteria was fixed. It is further submitted that the basic principle would be if the value of the work is increased, the experience or the qualification required to be possessed to carry out the said work should also see an upward trend, but in the instant case curiously the respondent Department in the second tender notification has reduced the minimum eligibility from Rs.960 lakhs to Rs.800 lakhs. It is further submitted that in the first tender notification all the tenderers including the sixth respondent and the petitioners were not found to be qualified and within a short span of time, when the second tender notification was invited, the sixth respondent had become qualified and the reduction of the eligibility criteria is on account of manipulation. Mr.Vijay Narayan, learned Senior counsel would submit that the respondents have brought certain new material before this Court, which were not the basis for rejecting the petitioner's tender and the same has been done only with a view to cause prejudice in the mind of this Court and such material should not be looked into. It is further submitted that the tender accepting authority did not independently exercise their power and merely accepted the recommendations of the Superintending Engineer, which is established on perusal of the record placed before this Court.
19. It is further submitted that the reasons assigned for rejecting the petitioner's pre-qualification bids are very minor reasons and the same has been assigned only to exclude the petitioner and the other bidders from the zone of consideration. It is further submitted that the first writ petition was moved before this Court as lunch motion on 02.12.2009 and when the matter was heard, it was represented that the tender is in the process of evaluation and the case was posted on 03.12.2009 at 2.15 p.m. When the case was taken up on the next day, it was informed to the Court that the tender was finalised. Therefore, it is submitted that the decision making process has been made in such a way only to favour the sixth respondent. The learned Senior counsel would contend that the order of rejection of the petitioner's pre-qualification bid was arbitrary and unreasonable tainted with malafide and out come of non-application of mind. The learned Senior counsel referred to the minutes of the tender award committee in its meeting held on 26.11.2009, wherein the tabulated statement has been prepared containing three columns, column No.1, furnishing the details required as prescribed in the pre-qualification, column 2, the details furnished by the bidder with evidence and column 3, the observations of the tender award committee. In so far as the petitioner M/s.Chandragiri Construction, the observations of the tender award committee is that out of 13 pre-qualification criteria, the petitioner did not satisfy six criteria. The learned Senior counsel would submit that all the six reasons assigned are erroneous. It is submitted that the petitioner is a category 'A' contractor in the Public Works Department in Kerala State and a certificate to the said effect was produced. Next, it is submitted that solvency certificate to an extent of Rs.8.00 crores was furnished by the Tahsildar, Kasargod, the Income Tax clearance certificate is not required to be produced as per the Government of India notification and therefore, the first three reasons assigned in the tabulated statement are erroneous. Alternatively, the learned Senior counsel would submit that the tender inviting authority or the tender award committee could have sought for clarification from the petitioner and as per the tender conditions and the provisions of the Transparency in Tenders Act, they were empowered to seek for such clarification. Failure to resort to such reasonable procedure clearly establishes that the tender award committee had wanted to exclude the petitioner. It is further submitted that as regards the eligibility to participate in the tender, it is submitted that the respondents fail to take into consideration the work done by the petitioner in the Karaikal Fishing Harbour. The learned Senior counsel submitted that CLI, France by their letter dated 28.10.2009 addressed to Mr.L.Ramaswamy, Superintending Engineer had stated that they have sent the proposal to three companies, which includes the sixth respondent. In the said communication, it was also mentioned that it is their understanding that those three contractors have been pre-qualified by the Fisheries Department. The learned Senior counsel by placing heavy reliance on the contents of the letter dated 28.10.2009, would submit that the question of entertaining any communication between CLI and the Superintending Engineer, does not arise and on what basis CLI stated that the sixth respondent was pre-qualified is not forthcoming and the cumulative turn of events does not inspire confidence in the minds of the petitioner and goes to show that the procedure adopted was tainted with malafide. As regards the non-disclosure of the termination of the earlier contract, it is submitted that as against the order of the Superintending Engineer, Project Circle, Vellore, dated 15.10.2009, the petitioner had filed a writ petition and the same is still pending. In respect of the other contract, which was terminated by order dated 29.03.2006, the petitioner had filed W.P.No.10782/2006, which was dismissed by this Court on 17.04.2006 and thereafter, the petitioner initiated arbitration proceedings and portion of the award is in favour of the writ petitioner and against the disallowed portion, the petitioner has filed an original petition in O.P.No.387/2009, before this Court and against the award, the Government has also preferred a original petition in O.P.No.596/09, and both the original petitions are pending. Therefore, it is contended that the termination having been agitated before the appropriate forum, and the termination having been held to be bad by the Arbitral Tribunal, the same cannot be treated to be a non-disclosure. As regards the non-furnishing of Income Tax clearance certificate, it is submitted by the learned Senior counsel that as per the circular issued by the Government of India dated 13.02.2003, contractors are not required to submit Income Tax clearance certificate from the department and therefore, the rejection on the said ground is not tenable. The learned Senior counsel appearing for the petitioner placed reliance on the following decision in support of his contentions.
i)MAHABIR AUTO STORES AND OTHERS Vs. INDIAN OIL CORPORATION AND OTHERS, (1990) 3 SCC 752
ii)NOBLE RESOURCES LTD., Vs. STATE OF ORISSA AND ANOTHER, (2006) 10 SCC 236
iii)ZENIT MATAPLAST PRIVATE LTD., Vs. STATE OF MAHARASHTRA AND OTHERS (2009) 10 SCC 388
iv)M/s.ADILAKSHMI CONSTRUCTION Vs. CHIEF ENGINEER (R&B) BUILDINGS, HYDERABAD AND ANOTHER, AIR 1999 ANDHRA PRADESH 437
20. Mr.R.Thiyagarajan, learned Senior counsel appearing for the petitioner Mr.Manickavasalu, would contend that there is no valid reason as regards the splitting up of the work into three parts and there is no indication or reference in the tender notification that such step is resorted to and if the drawings in the first tender notification is compared with the second tender, it is seen that there is no signature in the drawings in the second tender and no date has been mentioned. The learned Senior counsel would submit that there is no independent exercise of power by the tender awarding committee and it was merely guided by the recommendations made by the Superintending Engineer. The learned Senior counsel laid emphasis on the tenor of the proceedings dated 01.12.2009, awarding the contract in favour of the sixth respondent. It was submitted that the said letter states that the Superintending Engineer has sponsored the lowest bidder, the sixth respondent and the tender award committee discussed the recommendation and based on the strength of the information furnished by the Superintending Engineer accepted the bid of the sixth respondent. Therefore, the learned Senior Counsel submits that the tender award committee was solely guided by the sponsorship and recommendation of the Superintending Engineer and there was no independent application of mind. The learned Senior counsel would further submit that the 10% weightage clause is found in clause 7 of the tender condition, which condition itself speaks about the annual turn over of the applicant and such weightage cannot be applied under clause 6, which deals with the minimum eligibility requirement of having performed atleast one breakwater work not less than Rs.800.00 lakhs, under single agreement, in any one of the preceding five years. Reliance was placed on the Government order in G.O.Ms.No.60, Public Works Department (G2 Department) dated 14.03.2008 stating that the Government have given recommendations on price adjustment clause and one of the recommendation is that with the advent of price adjustment mechanism, there is no justification for allowing tender excess based on price related factors and it needs to be given in rare cases of non-input difficulties and these powers shall vest only with the tender award committee. It is further submitted that when there is no provision for price adjustment in the second tender, the increase award in favour of the sixth respondent is illegal. It was reiterated that the reduction in the eligibility criteria is only with the intention to favour the sixth respondent. The learned Senior appearing for the petitioner placed reliance on the following decision in support of his contentions.
i)RAMANA DAYARAM SHETTY Vs. INTERNATIONAL AIRPORT AUTHORITY OF INDIA AND OTHERS, (1979) 3 SCC 489
ii)STATE OF U.P. AND OTHERS Vs. MAHARAJA DHARMANDER PRASAD SINGH AND OTHERS (1989) 2 SCC 505
21. Factual and Legal submissions of the learned Advocate General appearing for the Respondent State:-
The learned Advocate General prefaced his submission by stating that if the respondents succeed in establishing that the decision taken to disqualify the petitioners at the pre-qualification was proper and legal, then the petitioners cannot be permitted to agitate the decision of the respondent Department in awarding the contract in favour of the sixth respondent. Therefore, if the question relating to the petitioners pre-qualification is decided then the second question as to whether the award of the contract in favour of the sixth respondent need not be considered, more so, when the present writ petition is not a public interest litigation. Nevertheless, the learned Advocate General submitted that he would be able to establish that the award in favour of the sixth respondent is legal, valid and proper. It is submitted that the concept of breakwater is to stop the tied and to create a pacific area for the welfare of the fisherman and the requirement of a fishing harbour at Thengapattinam was a public demand for over 50 years and any delay in completion of the project would be against public interest. After elaborately setting out about the tender process adopted in the first tender and the second tender, it is submitted that on account of the failure of the fishing harbour at muttam, the experts decided for a change of design and such decision was taken after the recommendation from the Institute of Hydrology, Poondi and National Institute of Ocean Technology and thereafter the second tender was notified. It is submitted that under the second tender, the work was split into three parts, namely the construction of main breakwater, for a value of Rs. 19.00 crores, construction of leeward breakwater for a value of Rs.3.00 crores and approaches to breakwater for a value of Rs.1.00 crores. The learned Advocate General, while answering the question of reduction in the value of work for pre-qualification, submitted that the power to refix the eligibility criteria is vested with the respondents and if such power has not been exercised either arbitrarily or irrationally, the same does not call for any interference at the hands of this Court.
22. It is further submitted that 40% of Rs.22.84 crores was taken as the minimum requirement in the first tender and after the change of design, when the second tender was invited the value of the main tender i.e. tender for construction of main breakwater was taken, which was estimated at Rs.19.00 crores and since the tender condition stipulated that coreloc technology has to be used and such technology being a patented technology, the patent fee payable by the contractor to CLI, France, which was Rs.3.00 crores, was deducted from Rs.19.00 crores, thus, arriving at Rs.16.00 crores and the minimum requirement was fixed as 50% of the said value at Rs.8.00 crores. Alternatively, it was submitted that if they had taken the value at Rs.20.00 crores and applied 40%, it would have still been Rs.8.00 crores and therefore, when the respondents have established a basis for fixing Rs.8.00 crores as minimum requirement, the same cannot be termed to be irrational nor a haphazard mode and this Court will not enter into such controversy, while deciding the present writ petitions. It is further submitted that the present project is a project of the Central Institute of Coastal Engineering for Fisheries, which is a Government of India organisation and 50% of the project cost is funded by the Central Government and therefore, the technology to the adopted has been decided by technical experts to adopt the coreloc technology and in the absence of any challenge to such decision, the petitioners cannot raise a complaint as regards the manner in which the tender was invited adopting a patented technology and therefore, the respondent department was fully justified in deducting the patent fee of Rs.3.00 crores, while determining the minimum monetary qualification. It is further submitted that after the cancellation of the first tender, all the bidders including the petitioners have received their earnest money deposit without any demur and they are estopped from challenging the decision of the respondent to cancel the first tender. The second tender called for is a fresh contract and therefore, the petitioners are estopped from challenging the second tender, based on certain conditions contained in the first tender. The learned Advocate General would submit that M/s.Chandragiri Construction Company's pre-qualification bid was rejected as they were found disqualified by six points of which, four are very vital and fundamental breach and the other two disqualifications are regarding the value of the work done for the Karaikal Project and the certificate given by the Government of Kerala regarding clause 'A' contractor. The fundamental breach is that the petitioner failed to produce the certificate from CLI, France, which is an essential requirement under the contract. By relying upon, clause 6 of the tender condition, it is submitted that the letter from CLI, France has to be enclosed along with the pre-qualification bid and in the absence of production of such letter, the petitioner cannot be held to be qualified.
23. The next fundamental breach pointed out by the learned Advocate General is the requirement to produce the Income Tax clearance certificate, it is submitted that in terms of clause 3 in the tender condition, the petitioner is required to produce Income Tax clearance certificate valid for the current period and Sales Tax Registration details and Sales Tax verification certificate valid for the current period, Income Tax Clearance certificate issued by the competent authority valid for the current period, duly attested and income tax claimed and paid during the past five years and the total contract amount received in the past five years should be indicated in the Income Tax clearance certificate. The petitioner having accepted to such condition is bound to comply with the same and the petitioner cannot rely upon any Government of India instructions in this regard. It is further submitted that in terms of clause 10 of the tender condition, the applicant should not have any of his contract terminated/rescinded due to breach of contract on the part of the applicant during the past five years by any agency and the applicant is required to file an affidavit in this regard and is required to furnish information as per Schedule 'E' of the notification and furnish an affidavit as per the format in Schedule F of the notification. The petitioner having not disclosed the cancellation of the contract, the initiation of arbitration proceedings, the pendency of the writ petition and pendency of the original petition before this Court is violation of condition 10 of the notification and it is a fundamental breach.
24. The learned Advocate General would further submit that the non-disclosure of the information has to be viewed seriously and cannot be brushed aside. Reliance was placed upon a proceedings of the Principal Secretary to Government, Public Works Department, Chennai, dated 15.09.2009, wherein certain observations have been made against the petitioner and recommendation was made to blacklist the petitioner. At this stage, it is pointed out by the learned Senior counsel appearing for the petitioner that the communication dated 15.09.2009 has been challenged before this Court and interim stay has been granted. It was further submitted that the solvency certificate produced by the petitioner does not give the details of the survey nos. extent and value as required under the tender condition. The encumbrance certificate produced is also in malayalam, when the language of the tender was stipulated as English. It is further submitted that with regard to the work done by the petitioner for the Karaikal Port, a case has been registered by the CBI on 26.09.2008 for various offences under the Indian Penal Code and the Prevention of Corruption Act and the partner of the petitioner M/s.Chandragiri Construction company has been arrayed as the second accused and this fact was also not brought to the notice of the respondents.
25. The learned Advocate General would fairly submit that as regards the classification of the petitioner as class A contractor, the point need not be pressed at this stage. Therefore, it is submitted that the rejection of the petitioner's bid at pre-qualification stage was fully justified and there is no favouritism or arbitrariness in the decision making process and the decision was arrived at independently by committee of experts and the same cannot be faulted and this Court would not substitute its reason for the decisions arrived at by the committee. As regards the weightage of 10%, it is submitted that the weightage is given only for the work done in the previous years and weightage is not on the annual turnover and this 10% weightage was given not only to the sixth respondent, but also to the petitioners and other tenderers. The 10% weightage being one of the conditions of the tender, the same cannot be questioned by the petitioner, after they have participated in the tender. As regards the valuation of the tender, the calculation was made by taking Rs.28,51,10,418/- as the market value arrived at, based on the factored value as against the offer made by the sixth respondent and the decision is supported by sound reasoning and approved practices and there is no arbitrariness or illegality in adopting such value. The learned Advocate General explained the manner in which the justification report was prepared and as to how the award in favour of the sixth respondent is fair and reasonableness and justified.
26. The learned Advocate General further submitted that there was no haste in the decision making process and there was no violation of any of the procedure. The verification process had commenced after the disposal of W.P.No.22576/2009 on 18.11.2009 and the decision was arrived at on 26.11.2009 and all that was required to be done, thereafter was to open the price bids of the two of the bidders, who were found to be qualified in the pre-qualification stage and the tender was awarded to the sixth respondent, after negotiation who was the lowest tenderer. Therefore, the procedure adopted cannot be faulted. The learned Advocate General would further submit that the matter pertaining to the Sales Tax certificate relating to cancellation of registration and other matters, which were submitted need not be gone into at this stage. Finally, it is submitted that the value of the construction of main breakwater was taken for the purpose of arriving at the minimum qualification, since admittedly, all the three works cannot go on simultaneously and the construction of Main breakwater was the main work and of higher value and therefore such value was taken and after deducting the patent fee, the eligibility was fixed at 50% of said figure of Rs.1600.00 lakhs, which works out Rs.800.00 lakhs. It is submitted that none of the tenderers had questioned the fixation of Rs.800.00 lakhs as the minimum qualification and now, it is not open to the petitioners to question the same after having participated in the tender.
27. In so far as the other writ petitioner, Mr.Manickavasalu, it is submitted that as the said contractor did not comply the requirement of work for Rs.8.00 crores, and the question of considering his case does not arise and despite the fact, the petitioner's tender was evaluated on all aspects and rejected on the ground that the petitioner did not meet five of the pre-qualification criteria. It is further submitted that though the Superintending Engineer has been impleaded in his personal capacity as the respondent no specific allegations of malafide have been raised against the Superintending Engineer and unless specific personal malafide is pleaded and proved the allegation of the petitioner's does not deserve consideration and the mere use of the word malafide would not make the impugned decision as tainted with the malafide. It is further submitted that the price bids submitted by the petitioners are of no consequence at this stage of the matter, since the bids of the petitioners have been rejected at the pre-qualification stage and therefore, the petitioners are not justified in placing reliance on the price bid offered by them. The learned Advocate General relied on the decision of the Hon'ble Supreme Court in JAGDISH MANDAL Vs. STATE OF ORISSA AND OTHERS, (2007) 14 SCC 517, in support of his Contention.
28. Factual and Legal submissions of the learned Senior counsels appearing for the sixth respondent:-
Mr.K.M.Vijayan, learned Senior counsel appearing for the sixth respondent would submit that both the writ petitioners did not produce the certificate from CLI, France, which is a patented technology and cannot be permitted to participate in the tender, as the same is an essential requirement to be satisfied at the pre-qualification stage. It is further submitted that the petitioner M/s.Chandragiri construction committed perjury and he referred to paragraph 21 of the affidavit filed in support of the W.P.No.25281/2009, wherein the petitioner had stated that with regard to the Sales Tax certificate, it is submitted that the same was produced by the petitioner along with the tender documents and the same was purposely ignored by the fourth respondent. In fact the Sales Tax clearance certificate issued by the Sales Tax authorities of Kerala was not at all considered by the respondents. On the contrary as could be seen in the tender document in Annexure 2, clause 12, the petitioner has stated that Sales Tax clearance certificate will be submitted within three months from the award of work (Page 92 of Volume 2 of the typed set). Therefore, it is submitted that the averment in the affidavit is contrary to the statement given by the petitioner in Annexure 2. It is further submitted that in paragraph 17 of the affidavit in W.P.No.25281/2009, it has been mentioned that a letter from CLI, France, dated 18.09.2009 was annexed with a list of documents and the same is the false statement. It is further submitted that when the language of the tender has been mentioned as English, the petitioner is bound to produce the documents in English language and it is false to state and the English translation has given. Reliance was placed on Section 23(3) of the Transparency in Tenders Act and stated that the petitioner cannot bring pressure, after the tender was awarded to the sixth respondent and the petitioner quarreled with the Superintending Engineer and a police complaint was given and a FIR was also registered. It is further submitted that the CBI has also registered a FIR against the petitioner for allegation of inflated bills in another contract and these details were not disclosed by the writ petitioner. In any event, if the petitioners are aggrieved, their only remedy is by way of filing an appeal under Section 11 of the Act and the writ petition is not the remedy. The writ petitioners, who have not satisfied the essential qualification at the pre-qualification stage have no locusstandi to challenge the award of contract in favour of the sixth respondent and the present writ petition is not a public interest writ petition and there is no infringement of Article 21 of the Constitution of India. The learned Senior counsel would submit that the reliance placed by the petitioner on the decision of the Hon'ble Supreme Court in Ramana Dayaram Shetty Vs. International Airport Authority of India, (1979) 3 SCC 489, does not apply to the facts and circumstances of the present case and by relying on paragraph 9 of the said Judgment, would submit that the decision has been misquoted and would not apply to the facts of the present case. The learned Senior counsel placed reliance on the decision of the Hon'ble Supreme Court in INDIA LTD Vs. COCHIN INTERNATIONAL AIRPORT LTD AND OTHERS, AIR (2000) 2 SCC 617 and DIRECTORATE OF EDUCATION AND OTHERS , (2004) 4 SCC 19, in support of his contentions.
29. Having considered the elaborate submissions made by the learned Senior counsels appearing for the petitioners and sixth respondent and the learned Advocate General appearing for the official respondents, the following points arise for consideration in the present writ petition.
a) Whether the action of the respondent state in rejecting the petitioner's pre-qualification bid is legal, valid and justified?
b) Whether the respondent State had made a deliberate attempt to favour the sixth respondent by suitably amending the eligibility criteria for the second tender notification with a view to award the work to the sixth respondent ?
c) Whether the action of the respondent State and the fifth respondent (Superintending Engineer) is vitiated by malafide and bias?
d) Whether there are procedural errors in the decision making process in the scrutiny of the tender and whether, it vitiates the award of the work in favour of the sixth respondent ?
30. Before considering the points which arise for consideration in the present writ petitions, it is necessary to examine the position of the law as laid down by the Hon'ble Supreme Court on the scope of the interference of this Court in such matters under Article 226 of the Constitution of India.
31. The issue as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders had been examined in depth by the Hon'ble Supreme Court in Tata Cellular Vs. Union of India, reported in 1994 6 SCC page 651. After examining the entire case laws on the subject, the following principles have been laid down by the Hon'ble Supreme Court (1)The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made.
(3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5)The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by malafides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (Emphasis supplied)."
32. The Hon'ble Supreme Court in Air India Limited V. Cochin Internatinoal Airport Limited [2000 (2) SCC 617] while holding that the State can choose its own method to arrive at a the decision, held as follows:-
"... But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness." (Emphasis supplied)
33. The Hon'ble Supreme Court in Reliance Energy Limited and another Vs. Maharashtra State Road Development Corporation Limited and others [2007 8 SCC page 1] while considering the scope of judicial review in such contractual matters, held as follows:-
"39. In Reliance Airport Developers (P) Ltd. V. Airports Authority of India, the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms..." (Emphasis supplied)
34. Further in the following decisions of the Hon'ble Supreme Court, it has been indicated that interference in the contractual matters is permissible if decision-making process is illegal, irrational, arbitrary and procedural impropriety and it must meet the test of reasons and relevance:-
i) Noble Resources Ltd., V. State of Orissa and Another [AIR 2007 SC 119];
ii)Ramana v. I.A. Authority of India [AIR 1979 SC 1628];
iii)Ram Singh Vijay Pal Singh and Others V. State of U.P. and Others, [2007 6 SCC 44];
iv)Balco Employees' Union (Regd) V. Union of India and Others [(2002) 2 SCC 333]
v)Delhi Science Forum v. Union of India [AIR 1996 SC 1356]
35. Thus, on the basis of the law laid down by the Hon'ble Supreme Court, as referred to above, there is power for this Court while exercising jurisdiction under Article 226 of the Constitution of India, to interfere in contractual matters while inviting bids by issuing tenders if the decision-making process is illegal, irrational, arbitrary and there is any procedural impropriety and if it does not meet to test of reasons and relevance.
36. Discussion:-
Bearing the above legal principles in mind, the points arising for consideration are examined.
The undisputed facts are that, the respondent Department issued tender notification dated 03.06.2009(first tender), calling for tenders for construction of breakwater and its approaches for fishing harbour at Thengapattinam in Kanyakumari district. The estimated amount for the work was Rs.2284.00 lakhs and the intending bidders were required to pay an earnest money deposit of Rs.12.00 lakhs. The tender documents were issued from 08.06.2009 to 09.07.2009 and the date of opening of the tender was fixed as 10.07.2009. The tender was under two cover tender system i.e., qualification schedule and price tender (item rate tenders). One cover to contain earnest money deposit, qualification conditions and other details and the second cover containing price tender schedule. The contractors registered with the Tamil Nadu Public Works Department, other Departments of Tamil Nadu Government, other State Government, Government of India, State and Central Government undertaking under class I (State level) with monetary limit of Rs.75.00 lakhs and above and proven record were eligible to participate in the tender. That the applicant should have been under the same name and style in civil engineering construction field atleast for five years. The applicant should have completed atleast one breakwater work of similar nature with value not less than Rs.916.00 lakhs under single agreement, in any one of the preceding five years. For this purpose, construction of road, building, industrial estates, workshops would not be considered. The annual turn over of the applicant should not be less than Rs.1300.00 lakhs per year, in any one of the preceding five years. Under the columns scope and status of work, the construction of two breakwaters involved the main breakwater, leeward breakwater and the approaches to breakwaters. One other salient feature in the tender was that the work should be done using the coreloc technology, which is a patent technology and the contractor was required to comply with all sub-licence formalities associated with the use of the concrete armour unit and obtain the approval from CLI, France for getting technical assistance for casting and placing of the concrete armour units. The contractors were required to submit the concerned letter obtained from CLI, France stating that CLI, France would provide all kinds of technical assistance for casting the coreloc unit and for placing in position etc., complete on award of the contract. The tender documents also stipulated the other conditions to be fulfilled by the bidder and the type of documents and evidence to be produced in support of such requirements. The petitioners as well as the sixth respondent and three other bidders participated in the tender and on evaluation, it was found that all the applicants were not qualified and consequently the tenders were rejected and the earnest money deposit was returned to the bidders. Subsequently, a decision has been taken by the respondent department to cancel the tender dated 03.06.2009. The reasons assigned by the respondents for cancelling the first tender is on account of the damage, which was caused to the Muttam fishing harbour project and the respondents took the assistance of the Institute of Hydrology, Poondi and the National Institute of Ocean Technology and the design of the breakwater was changed and thereafter the second tender notification dated 18.08.2009 came to be issued. The difference between the first and the second tender was relating to the estimated amount of the work, which was fixed at Rs.2300.00 lakhs and the minimum value for eligibility to participate in the tender was fixed at Rs.800.00 lakhs. It was stated that 10% weightage for each year will be given for the works, while computing the amount of work done in the previous year.
37. Apart from these differences the second tender notification was on the same lines as that of the first notification. It is contended by the learned Advocate General that there is a rational behind fixing the value of the eligibility as Rs.800.00 lakhs, since the work involved construction of three items, namely construction of main breakwater, leeward breakwater and approaches to breakwaters and as all the works cannot simultaneously proceed, the value of the work for the main breakwater, which was estimated as Rs.1900.00 lakhs, was taken and after deducting the patent fee payable to CLI, France at Rs.300.00 lakhs, which has to be remitted for obtaining the permission from CLI, France, the amount was arrived at Rs.1600 lakhs and 50 % of the said value was fixed as the minimum eligibility. Therefore, it is submitted that the fixation of Rs.800.00 lakhs as the minimum eligibility criteria is fully justified. The other addition in the second tender was regarding the weightage to be granted, this according to the respondents is in consonance with the PWD norms and such 10% weightage was given to all the bidders including the petitioners. Totally five applicants participated in the second tender, which included the two writ petitioners and the sixth respondent. The pre-qualification tenders were evaluated and it was held that one M/s.Aster Infratek Private Ltd and the sixth respondent satisfied all the 13 conditions prescribed as pre-qualification criteria. Thereafter, the price bid was opened and it was found that the sixth respondent was the lowest tenderer and after negotiation, the work order was issued in favour of the sixth respondent. The grievance of the petitioners is two fold, firstly by stating that rejection of their pre-qualification bid was arbitrary, unsustainable, illegal and tainted with malafide. The second limb of the argument is that the award in favour of the sixth respondent is tainted with malafide and the first tender was cancelled and the second tender was invited and the minimum value of the work was reduced to Rs.800.00 lakhs only with a view to favour the sixth respondent and that the 10% weightage clause was also introduced in the second tender, with a view to make the sixth respondent eligibility. At this stage, it is relevant to consider the submission of the learned Advocate General, who submitted that if a decision is rendered on the challenge to the disqualification of the petitioners at the pre-qualification stage and if this Court finds that the action of the respondents was justified, the second question regarding the award in favour of the sixth respondent need not to be gone into, at the instance of the petitioners, since they would have the locus-standi to question the award in favour of the sixth respondent.
38. In my view, the submission of the learned Advocate General is well founded. Therefore, I proceed to decide the question as to whether the rejection of the petitioner's bid at the pre-qualification stage was justified and whether it calls for interference. In the case of JAGDISH MANDAL, referred supra, the Hon'ble Supreme Court considered the scope of judicial review of tender processes and award of contracts. The decision came to be rendered, after relying upon the decision of the Hon'ble Supreme Court in various Judgments, some of which have been referred to in the earlier part of this order. The Hon'ble Supreme Court held that a Court before interfering in tender or contractual matters in exercise of power of judicial review should pose 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.
The Hon'ble Supreme Court held that the purpose of Judicial review of administrative action in such matters is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound" and if the questions above mentioned are answered in the negative, there should be no interference under Article 226 of the Constitution.
39. In the instant case, the petitioner, M/s.Chandragiri Construction, were found to have not satisfied 6 pre-qualification criteria out of 13. The first of such criteria was regarding the certificate issued by the Public Works Department in Kerala State regarding the category of the petitioner as registered contractor. During the course of argument, the learned Advocate General would fairly submit that the nature of certificate, which was produced by the petitioner to prove that he was a category 'A' contractor could be taken as it is and it is not a fundamental breach, but however, the other criteria are very vital. Therefore, the disqualification of the petitioner (M/s.Chandragiri) under criteria No.1 is not gone into.
40. The second ground stated is that the petitioner has not produced the solvency certificate in the required form. In the tender conditions, it has been mentioned that Revenue Solvency Certificate for Rs.500.00 lakhs issued by the Tahsildar concerned with necessary S.F.No., details of property and value has to be produced. Further, Encumbrance certificate issued by the Registration Department on the properties listed in the solvency certificate on or after 01.06.2009 has to be enclosed. If the date of solvency certificate is on current date, separate Encumbrance certificate need not be produced. From Volume II of the typed set of papers filed by the petitioner, (M/s.Chandragiri), it is seen that the solvency certificate has been issued by the Tahsildar, Kasargod, dated 01.07.2009, certifying that Sri. T.B.Kunhi Mahin Haji, PWD contractor, Managing partner, M/s.Chandragiri Construction Company is solvent to extent of Rs.8.00 crores, based on immovable properties standing in his name over which he has independent saleable rights, which are not encumbered. It has been further hand written in the certificate that it is issued to produce before Fisheries Department, Madras. Thus, admittedly, the certificate does not contain the survey No. of the property, the details of property and the value, which has been specifically mentioned in the tender conditions.
41. The learned Senior Counsel appearing for the petitioner would contend that the petitioner has furnished bank certificate and solvency certificate from the Federal Bank Limited and Catholic Syrian Bank and these documents would clearly establish that the petitioner is sufficiently solvent. Further, it is submitted by the learned Senior counsel that the Encumbrance certificate was also produced. As stated above, the tender conditions are very specific by stating that the solvency certificate for Rs.500.00 lakhs has to be issued by the concerned Tahsildar with necessary S.F.No., details of property and value. In the absence of these details, the solvency certificate produced by the petitioner cannot be stated to being compliance with the tender condition. The Encumbrance certificate produced by the petitioner is also in Malayalam language, when the language of the tender has been stipulated as English. One fact to be noted is that the Encumbrance certificate has to be produced for the properties listed in the solvency certificate. Therefore, in the absence of the Survey No. and details of property in the solvency certificate, the Encumbrance certificate produced would become meaningless and would not serve the object for which the such certificate has been insisted upon. Therefore, in my view, the petitioner has failed to produce the solvency certificate in the manner contemplated under the tender conditions and this is a material breach and the respondent Department were justified in rejecting the solvency certificate.
42. The next criteria is relating to Income Tax and Sales Tax clearance certificate. According to the petitioner, Income Tax clearance certificate is not required to be produced in terms of the Government of India notification. However, it is to be noted that in the tender conditions, the applicant is required to produce Income Tax clearance certificate valid for the current period and Sales Tax Registration details and Sales Tax verification certificate valid for the current period, Income Tax claimed and paid during the past five years and the total contract amount received in the past five years should have been indicated in the Income Tax clearance, attested copy of Registration certificate showing that TNGST/CST No. assigned by the Commercial Tax Department of the State or Central Government, attested copy of the Sales Tax verification certificate issued by the competent authority are essentially required to be produced. The petitioner having participated in the tender is bound by the tender conditions and is estopped from stating that he need not comply with the conditions by relying upon a Government of India notification. Once, it is factually established that the certificates as required under the tender conditions pertaining to Sales Tax and Income Tax having not been produced, the petitioner cannot be stated to have complied with the terms and conditions and therefore, the respondents were justified in holding that the petitioner does not satisfy the said pre-qualification criteria.
43. The next criteria, which applicant is stated to have not fulfilled is regarding the letter from CLI, France. As seen above, the construction of the breakwater has to be done by using the Coreloc Technology and the said technology is a patented technology of CLI, France. In clause 6 of the tender condition, it has been stated that letter from CLI, France has to be enclosed for coreloc concrete armour layer casting (Patented) stating that CLI provides all kinds of technical assistant for mould fabrication casting and placing in position etc., if the tender was awarded. Admittedly, the petitioner did not produce such letter. The learned Senior counsel appearing for the petitioner would vehemently contend by relying upon a communication from CLI, France to the Superintending Engineer and state that all was not well with the manner in which, the whole process was undertaken and much has to be said about the conduct of the respondent department, more particularly the fifth respondent, Superintending Engineer. In my view, these allegations would not absolve, the petitioner from complying with the tender conditions. The condition that such a letter is required from CLI, France would be a fundamental condition, since unless the patent holder agrees to provide technical assistant with that patented technology, an intending bidder cannot compete in the tender. In other words, this sponsorship letter of CLI is a pre-requisite for participating in the tender. The petitioner having failed to enclose certificate, it has to be necessarily held that it is a fundamental breach and the respondents were justified in rejecting the pre-qualification bid on this ground.
44. The next ground, on which the petitioners were disqualified is on the ground of non-disclosure of information, conditions No.1 of the tender conditions states that the applicant should not have any of his contract terminated/rescinded due to breach of contract on the part of the applicant during the past five years by any agency and the applicant is required to file an affidavit attested by Notary Public in the specimen given in Schedule 'F' of the tender. In Schedule 'E', which is the specimen of the declaration, wherein the applicant is required to state whether they are involved in any arbitration /litigation relating to the contract works, whether applicant or any of its constituent partners been debarred/expelled by any agency during the last five years and whether the applicant or any of its constituent partners failed to complete the contract work during the past 5 years. The applicant was required to answer Yes/No in the said Schedule 'E'. The foot note to the declaration states, if any information in Schedule 'E' is found to be incorrect or concealed, the qualification application will be summarily rejected and price tender will not be opened. In the specimen affidavit given in Schedule 'F', the applicant is required to make solemn declaration regarding various issues and also stating that the contract awarded to them has not been terminated, rescinded, due to breach of contract on their part during the last five years. The petitioner has given the answer "No" for all the three questions in Schedule 'E' and filed the affidavit in the format as given in Schedule 'F'. However, it is seen that the work of formation of reservoir across the Malathar river in Gudiyatham Taluk, which was awarded to the petitioner was terminated and aggrieved by such termination, the petitioner has filed W.P.No.3379/09 and the same is pending before this Court. In respect of another work for formation of reservoir across Sirumalaiyar, Nilakottai Taluk, the petitioner is stated to have completed only 75% of the work as on 13.03.2005 and the contract was terminated on 28.07.2006. The petitioner challenged the termination of the road maintenance contract in Krishnagiri Division by filing writ petition before this Court and after writ petition was dismissed, the petitioner initiated arbitration proceedings and an award came to be passed by the Arbitral Tribunal on 28.07.2006, in which, the petitioner has been awarded, damages. In respect of the disallowed portion of the petitioner's claim, the petitioner has filed O.P.No.387/2009 under Section 34(2) of the Arbitration and Conciliation Act, 1996, before this Court and the said O.P. is pending. As against the arbitral award dated 28.07.2006, the State Government has also filed the petition to be set aside the award under Section 34 of the Act, in O.P.No.596/09 and the same is pending. It is contended by the learned Senior Counsel for the petitioner that since the award has already been passed and the Arbitral Tribunal held that the termination of the said contract was not in accordance with law and awarded damages, the non-disclosure of such details cannot be stated to be in violation of the conditions of tender. The submissions made by the learned Senior counsel cannot be countenanced. The conditions of tender are clear and lucid and all that is sought for from the applicant is disclosure of information regarding any arbitration/litigation and a solemn undertaking is required to be given on stamp paper attested by the Notary Public. Further, it has been clearly stated if any information furnished is found to be incorrect or concealed, the application is liable to be summarily rejected and price tender will not be opened. Therefore, failure to disclose all these details in the tender application is not only incorrect, but it is concealment of material information from the tender evaluating authority. On account of such concealment and non-disclosure, the respondents were fully justified in disqualifying the petitioner.
45. In respect of other writ petitioner, Mr.Manickavasalu, has been disqualified for not having fulfilled five pre-qualification criteria. As in the case of M/s.Chandragiri, Mr.Manickavasalu also failed to produce the letter from CLI, France, which is a pre-requisite for participating in the tender. That apart, the contractor has not executed, one breakwater construction work not less than Rs.800.00 lakhs and has not also satisfied the other requirements regarding the working capital, construction equipments, tools and plans and the annual turnover. Therefore, having failed to satisfy the minimum eligibility condition, the decision of the respondents to disqualify the writ petitioners cannot be faulted. Therefore, the first point is answered against the writ petitioners.
46. Strenuous submissions were made by the learned Senior counsel appearing for the petitioner on the terms and conditions of the second tender notification, stating that the conditions were tailor made to suit the sixth respondent. The eligibility criteria was reduced and the 10% weightage clause was introduced. The Hon'ble Supreme Court in the case of DIRECTORATE OF EDUCATION, referred supra, has held that terms of invitation to tender, are not open to Judicial scrutiny as the same being in the realm of contract and the Government must have a free hand settling the terms of the tender and it must have reasonable play in its joints as a necessary concomitant for an administrative body functioning in an administrative sphere and the Court cannot strike down the tender prescribed by the Government because the Court feels that some other terms in the tender would have been fair or wiser or logical. The Hon'ble Supreme Court in "Puravankara Projects Ltd Vs. Hotel Venus International, (2007) 10 SCC 33 held:
"Tender terms are contractual and it is the privilege of the Government which invites its tenders and courts do not have jurisdiction to judge as to how tender terms should be framed."
47. The learned Advocate General had set out the manner in which the minimum value of eligibility was fixed at Rs.800.00 lakhs. The justification being that the work consist of three parts and all the three works done cannot be done simultaneously and the value of the major work of the three works was taken, which is of the highest value and after deducting the patent fees payable to CLI, France, 50% of the remaining balance was fixed as eligibility criteria. Though, it has been repeatedly asserted by the petitioner's that this has been done to favour the sixth respondent, there is no material on record produced before this Court to show that the reduction in the value of the work was done only to favour the sixth respondent. On the other hand, the respondents have justified their action by giving an explanation as to how the figure of Rs.800.00 lakhs was arrived at. In my view, the process adopted by the respondents for fixing Rs.800.00 lakhs cannot be termed to be arbitrary or irrationally for interference by this Court under Article 226 of the Constitution.
48. Likewise, the weightage of 10% given in the tender is stated to be in accordance with the PWD norms and such weightage has been given to all the tenders including the petitioners. Admittedly, both the writ petitioners did not question the tender conditions, but participated in the tender without any demur. Therefore, at this stage, the petitioners are estopped from challenging the terms and conditions of the tender, after they have been disqualified at the pre-qualification stage. Therefore, it is held that there is no material placed to establish the allegation made by the petitioner that the eligibility criteria and the 10% weightage in the second tender was a deliberate attempt to favour the sixth respondent and accordingly, this question is also answered against the petitioners.
49. On facts the official respondents have been able to establish that the process of evaluation commenced on 26.11.2009 and culminated in the opening of the price bid on 01.12.2009 and the work order was issued on 02.12.2009. The record of the evaluation has also been placed before this Court by the petitioners themselves in the typed set of papers. It has been specifically stated by the official respondents that the project is a time bound work and it has to be commenced before the onset of the monsoon and before the waves rise. Therefore, I am convinced that there was no haste in the decision making. Learned Advocate General pointed out that the Department could not have been faulted, if the pre-qualification bids were rejected only on the ground of non-production of sponsorship letter from CLI, France, but the Department evaluated the pre-qualification bids on all the criteria and then came to a conclusion to reject the bid. Therefore, it cannot be stated that the action of the Department was unfair, arbitrary or hasty. In view of such factual position, the decisions relied on by the learned Senior counsel for the petitioner in the case of MAHABIR AUTO STORES, NOBLE RESOURCES LTD, ZENIT MATAPLAST PRIVATE LTD., and RAMANA DAYARAM SHETTY, referred supra does not in any manner advance the case of the petitioners.
50. The fifth respondent, Thiru.L.Ramasamy, Superintending Engineer, Fishing Harbour Circle he has been impleaded by name as a party respondent in the writ petitions and according to the petitioners, the entire blame is thrown on the fifth respondent and that the fifth respondent acted as the sponsor of the sixth respondent. Though the words malafides, favoritism have been used in several places in affidavit filed in support of the writ petition, there is no specific pleadings to the effect as to how the action of the fifth respondent in his official capacity is an malafide action. Not only, there are no pleading to the said effect, but there is no proof either. The Hon'ble Supreme Court has time again held that mere use of the words "malafides" cannot render an action of administrative authority as being tainted with malafide. To establish the plea of malafide, it has to be established that there is a personal bias or an oblique motive and whether the action of the fifth respondent does not satisfy the requirements and conditions of a valid exercise of administrative power. The plea of the malafide has to be specifically pleaded and proved, which has not been done in the present cases and therefore the said contention is rejected.
51. The learned Senior counsel appearing for the petitioner would submit that the award in favour of the sixth respondent is vitiated on account of error in procedure. By placing reliance upon the proceedings of the Tender Award Committee, it is submitted that the Tender Award Committee did not independently apply its mind, but accepted the decision of the Superintending Engineer, who had sponsored the lowest bidder, the sixth respondent and they have acted solely, based on the information furnished by the Superintending Engineer. Reliance was placed on the work order, dated 01.12.2009, by stating that there is no independent application of mind by the Tender Award Committee and consequently, the award in favour of the sixth respondent is vitiated. Further, it is contended that though the estimated value of the tender was Rs.23,02,87,700/-, the contract value has been enhanced and given to the sixth respondent at Rs.27,62,60,930/-. On perusal of the minutes of the tender award committee, it is seen that the tender award committee met on 01.12.2009, in the chamber of the Commissioner of Fisheries, Chennai and under his Chairmanship and the other members being, Chief Engineer, PWD, DR&CS, State Port Officer, Tamil Nadu Maritime Board, Superintending Engineer FHPC, Executive Engineer FHP Division and Deputy Secretary to Government (AHD) and the pre-qualification bid received and evaluated by the tender scrutiny committee is stated to have been evaluated by the tender award committee on 26.11.2009 based on the documents furnished by the applicants and the Tender Award Committee recommended to accept to open the price bids of M/s.Aster Infratek Private Ltd and M/s.Sripathy Associates (sixth respondent). The out come, the opening of the price bids was recorded and that the sixth respondent is the lowest tenderer. Accordingly, the following decision was taken by the Tender Award Committee:-
1."Tender Award Committee suggested engaged third party quality monitoring by either the IIT, Chennai or IHH POONDY or any other reputed Government Institution for ascertaining the work quality and appropriate certificate before passing bill for every payment.
3.The Tender Award Committee took note of the observations submitted by the Superintending Engineer, justifying the reasons for the tender excess at 19.96% (Copy of justification enclosed).
5.Hence the lowest bidder M/s.Sripathy Associates, Erode, may be awarded the work for an amount of Rs.27,62,60,930/- after negotiation, which is in excess of Rs.4,59,73,230/- i.e. (+)19.96% over the department estimate value put to tender."
52. Appended to the said minutes is a justification report. In fact the learned Advocate General had taken strenuous efforts to explain the manner in which the justification report has been prepared. It is submitted that each of the materials involved in the contract were listed out, which includes raw material as well as labour, the quantity required either in metric-tonnes or Nos. and the PWD Schedule of rates for 2008-09 compared with the market rate was worked out and a detailed calculation was made and it was recorded in the justification report as follows:-
"Percentage of contract less as per prevailing market rates of value of Rs.28,51,10,418(-)3.1% Percentage excess as per T.S estimate (schedule of rates 2009 2010) (+)19.96% This work site for the construction of break waters and its approaches for fishing harbour at Thengapattinam is located at a distance of 40 km from Nagercoil district head quarters.
The work is a special nature of work involving high risk in execution during high wave action period and also under rough sea weather conditions. For first time in India Coreloc armour layer concrete blocks has to be cast, transported and placed as primary layer on sea side of the break water. The coreloc blocks are under patent, for which necessary license are to be obtained from Concrete Layer Innovation France by the contractor for getting technical knowhow for casting, placing etc. The nature of work involves specialised technical knowhow. It may be difficult to mobilize and manage the plant and machineries and labour force simultaneously in both sides of breakwater to maintain the time schedule of contract period.
The negotiated tender M/s.Sripathy Associates Erode @+19.96% over Departmental value amounting to Rs.276260930 is found reasonable when compare to market (prevailing) rate and is recommended under price escalation to tender award committee for acceptance."
53. The petitioner (M.Manickavasalu) has raised the ground that there was no clarity in the number of criteria to be fulfilled for being eligible at the pre-qualification stage. At the first instance, it has to be noted that the petitioner having not challenged the tender conditions is estopped from questioning the same, after participating in the tender. Secondly, it is an essential requirement to satisfy all the pre-qualification criteria for a bid to be considered as responsive. On facts, it is clear that the petitioner's pre-qualification bid is not responsive and therefore petitioner has to be non-suited on this ground alone. As regards the justification report submitted by the respondent Department, they have technically evaluated the same and justified their action. In the absence of any material placed by the petitioner to establish that the figures given in the justification report are erroneous or factually incorrect, this Court cannot be compelled to review the administrative decision of the experts in that regard.
54. Thus, based on such justification report, the tender has been awarded in favour of the sixth respondent and there is no other material placed before this Court by the petitioners to establish as to whether the rates, which have been mentioned and the manner in which calculation was done is either irrational or unreasonable. As cautioned by the Hon'ble Supreme Court in the decisions referred to above, the scope of Judicial review by this Court is only for the examination of the question whether there was any material irregularity in the decision making process and whether there was any irrationality or unreasonableness or arbitrariness in the rejection of the petitioners tender. The validity of the decision of the Tender Award Committee taken on the material available on record, while they examined the tender cannot be tested by this Court in the present writ petition and this Court is not an appellate authority over the decision of either the Tender Evaluation Committee or Tender Award Committee. The official respondents have satisfactorily established that the award in favour of the sixth respondent has been done in a manner which cannot be stated to be either arbitrary or irrational, which would vitiate the work order issued in favour of the sixth respondent. Accordingly, this question is also answered against the petitioners. Though the learned Advocate General relied on certain materials, which came to the knowledge of the Department after the pre-qualification bid of M/s.Chandragiri were rejected these matters are not taken up for consideration in this writ petition as they were not the basis for the impugned disqualification.
55. In the result, all the four points, which arise for consideration in these writ petitions are answered against the petitioners and consequently, the above writ petitions are dismissed. Connected miscellaneous petitions are closed. However, there shall be no order as to costs.
01.04.2010 Index :Yes Internet:Yes pbn Note: Issue order copy on 05.04.2010 To
1.State of Tamil Nadu, rep, by its Secretary to Government, Animal Husbanbdry and Fisheries Deparment, Fort St. George, Chennai -9.
2.Tamil Nadu Fisheries Development, Corporation, rep. by its Commissioner, D.M.S. Complex, Chennai 600 018.
3.Tender Award Committee, rep. by its Chairman/Commissioner, Tamil Nadu Fisheries Development Corporation, D.M.S. Complex, Chennai 600 018.
4.The Superintendent Engineer, Fishing Harbour Circle, Teynampet, Chennai 600 018.
T.S.SIVAGNANAM, J.
pbn Pre-Delivery Order in W.P.Nos.25281/2009, W.P.No.24906/2009, W.P.No.24905/2009 & W.P.No.26126/2009 01.04.2010