Madhya Pradesh High Court
M/S Adi Shakti Consturciton vs The State Of Madhya Pradesh on 16 February, 2024
Author: Chief Justice
Bench: Ravi Malimath, Vishal Mishra
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE RAVI MALIMATH,
CHIEF JUSTICE
&
HON'BLE SHRI JUSTICE VISHAL MISHRA
ON THE 16 th OF FEBRUARY, 2024
WRIT PETITION No. 27018 of 2023
BETWEEN:-
M / S ADI SHAKTI CONSTITUTION HAVING ITS
REGISTERED OFFICE AT JAGJIVAN RAM WARD JAIN
COLONY, NKJ, KATNI (M.P. ), THROUGH ITS
PROPRIETOR MS. PRERNA SINGH D/O SHRI UMESH
KUMAR SINGH AGED ABOUT 35 YEARS R/O 17
JAGJIVAN RAM WARD JAIN COLONY NKJ KATNI
(MADHYA PRADESH)
.....PETITIONER
(BY SHRI ANAND SINGH THAKUR - ADVOCATE)
AND
1. THE STATE OF MADHYA PRADESH THROUGH ITS
SECRETARY DEPARTMENT OF PUBLIC HEALTH
AND ENGINEERING VALLABH BHAWAN BHOPAL
(MADHYA PRADESH)
2. THE CHIEF ENGINEER PUBLIC HEALTH AND
ENGINEERING DEPARTMENT JABALPUR
REGION, JABALPUR (MADHYA PRADESH)
3. THE SUPERINTENDENT ENGINEER PUBLIC
HEALTH AND ENGINEERING DEPARTMENT
JABALPUR DIVISION, JABALPUR (MADHYA
PRADESH)
4. THE EXECUTIVE ENGINEER PUBLIC HEALTH AND
ENGINEERING DEPARTMENT PROJECT OFFICE,
KATNI (MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI ROHIT JAIN - GOVERNMENT ADVOCATE)
Signature Not Verified
Signed by: TAJAMMUL
HUSSAIN KHAN
Signing time: 2/22/2024
2:49:39 PM
2
This petition coming on for admission this day, Hon'ble Shri Justice
Vishal Mishra passed the following:
ORDER
T he present petition has been filed assailing the order dated 10.10.2023 passed by the respondent No.4 whereby the bid submitted by the petitioner in a joint venture has been rejected on flimsy grounds.
2. The case of the petitioner is that the petitioner firm is in joint venture with another proprietorship firm namely M/s Harshwardhan having its registered office at Ward No.6, Jai Prakash Nagar, Madhepura, Bihar and had participated in the Notice Inviting Tender (NIT) floated by the respondents for the purpose of construction of piped water supply scheme of 100 percent FHTC at Block Katni, District Katni, construction of RCC, OHT & RCC sumpwell with pump house, installation of electric submersible water motor pump, laying and jointing of rising main and distribution pipe line system, house hold tap connections and electric power connections at tubewell including cost with 90 days trial run commissioning period and operation and maintenance of entire scheme, Madai, Surkhi, Pondi, Bharoli and Bhanpura No.1.
3. During the scrutiny of the tender documents submitted by the petitioner firm it was observed by the respondent No.4 that though the petitioner firm has 70% stakes/partnership as a lead partner under the joint venture agreement and the second partner has 30% stakes/partnership, but for the purpose of financial eligibility the turnover of the petitioner firm is zero.
4. Counsel appearing on behalf of the petitioner has drawn attention of this Court to Annexure-G of the NIT documents which deals with joint venture companies/firms. He has placed reliance on Clause-2 of the aforesaid documents which provides that "the figures for each of the partners of a joint Signature Not Verified Signed by: TAJAMMUL HUSSAIN KHAN Signing time: 2/22/2024 2:49:39 PM 3 venture shall be added together to determine the Bidder's compliance with the minimum qualifying criteria required for the bid. All the partners collectively must meet the criteria specified in full. Failure to comply with this requirement will result in rejection of the joint venture's bid." Therefore, the reason for rejection is not acceptable, has prayed for quashment of the order impugned with a direction to the authorities to reconsider the bid documents submitted by the petitioner.
5. Counsel appearing on behalf of the respondents has filed the reply and supported the impugned order. It is argued that the other clause which is relevant for consideration as per Annexure-G is that the lead partner and the other partners shall have minimum 51% and 20% stakes respectively in the joint venture. The documents submitted by the petitioner have also been produced along with return as Annexure R-1. The financial capacity is required to be ascertained that was a prerequisite condition of the NIT document. He has drawn attention of this Court to Annexure R-1 which is an annual turnover of the leading partner of the firm for the financial years 2020-21, 2021-22 and 2022-23 wherein the turnover in all three years was pointed out to be 'Nil'. Therefore, as far as financial capacity of a leading partner is concerned, it should have 51% stake as per the requirement of the NIT documents, but the leading partner is having a turnover of 'Nil' in all the three financial years.
Therefore, his bid was rightly rejected by the authorities. He has drawn attention of this Court to the NIT documents Annexure-C i.e. pre-qualification criteria which shows that the bidder should have executed similar items of work during the last three financial years, which should individually be not less than 33% of the quantity/capacity of the items included in the BOQ. Admittedly, the lead partner of the joint venture i.e. the petitioner firm is having 'Nil' turnover in the Signature Not Verified Signed by: TAJAMMUL HUSSAIN KHAN Signing time: 2/22/2024 2:49:39 PM 4 last three years. For this reason his bid has rightly been rejected.
6. Counsel for the petitioner though has tried to justify the aforesaid on the ground that 51% stake was of the lead partner and he is having 70% stake in the present matter, but the language which has been used in the NIT documents shows that the lead partner and other partners shall have minimum 51% and 20% stakes respectively in the joint venture itself and they should have minimum 33% of the similar work being done by each of the partners individually. Both the aforesaid criteria are not being fulfilled by the lead partner.
7. The law is well settled by the Hon'ble Supreme Court as far as interference in the contract matter is concerned. Recently, the Hon'ble Supreme Court in the case of Tata Motors Limited Vs. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and others reported in 2023 SCC OnLine SC 671 has held as under:-
"48. This Court being the guardian of fundamental rights is duty- bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings Signature Not Verified Signed by: TAJAMMUL HUSSAIN KHAN Signing time: 2/22/2024 2:49:39 PM 5 in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC
489)."
8. Under these circumstances, the respondent No.4 has rightly rejected the bid of the petitioner firm. Therefore, no interference is called for in the present writ petition.
9. The writ petition sans merit and is accordingly dismissed. No order as to costs.
(RAVI MALIMATH) (VISHAL MISHRA)
CHIEF JUSTICE JUDGE
THK
Signature Not Verified
Signed by: TAJAMMUL
HUSSAIN KHAN
Signing time: 2/22/2024
2:49:39 PM