Madhya Pradesh High Court
P.C. Snehal Construction Company Thru. ... vs Municipal Corporation Ratlam on 18 January, 2017
Equivalent citations: AIR 2017 MADHYA PRADESH 200, (2017) 2 MPLJ 347
1
HIGH COURT OF MADHYA PRADESH : BENCH AT
INDORE
(D.B. Hon'ble Shri P.K. Jaiswal &
Shri Hon'ble J.K. JAIN, JJ.)
W.P. No.7214/2016
P.C. SNEHAL CONSTRUCTION COMPANY
Versus
MUNICIPAL CORPORATION, RATLAM & ANR.
*************
Shri Vijay Assudani, learned counsel for the petitioner.
Shri Umesh Gajankush,learned counsel for the respondent
No.1.
Shri Shekhar Bhargava, learned Senior counsel with Mrs.
Ritu Bhargava, Advocate for the respondent No.2.
*************
ORDER
(18.1.2017) Per P.K. JAISWAL, J : -
The petitioner, who is un-successfull bidder (L-2) for the contract for survey, design, construction and commissioning of sewerage network in Ratlam has filed the present writ petition for issuance of writ of mandamus directing the respondent No.2 to comply with the eligibility conditions of notice inviting tender and not to award the contract in question to any ineligible tenderer like the respondent No.2.
2. The facts of the case are that the Urban Development Department of the Central Government has issued "Atal Mission for Rejuvenation and Urban Transformation Scheme (AMRUT)", in June 2015, for providing water, sewerage and urban 1 transportation and the scheme was framed. The national level and state level high power committee was constituted, Clause 10.1 of the scheme provides constitution of national level high power committee and clause 10.2 provides for construction of State Level Committee chaired by the State Chief Secretary and National and State level High Power Committee was constituted under clause 10.2 (iii) (herein after referred as 'SLTC') is having the power of technical assessment and approval of the schemes like sewerage. The SLTC is the supreme body in the State for deciding of technical matters relating to tender including eligibility and assessment of capability, ability of all bidders to successful complete the project undertaken under the said scheme.
3. The seventh meeting of AMRUT scheme was conveyed on 1.7.2016 at the SLTC in which sewerage project of city Ratlam was approved by the committee and it was decided that for the said sewerage project tenders be called for the amount of Rs.120.54 Crore.
4. On 28.7.2016, the respondent No.1 - Municipal Corporation, Ratlam, issued NIT bearing No.1218/e - tendering for survey, design, construction and commissioning of sewerage network in Ratlam and other work as per NIT and directed the cost of the tender was Rs.12054.02/- lacs.
5. As per NIT the bidders were required to submit three envelops, ie., envelop A containing EMD/security 1 deposit (mandatory), second ie., envelop B containing technical proposal / eligibility condition criteria (technical), the third ie., envelop C containing financial bid (financial).
6. In response to the said NIT, the four bidders have submitted their bids. They being petitioner (P.C. Snehal Construction Company), respondent No.2 (Jay Varudi Construction Company), Kalthia Engineering and Construction Ltd., Ahmedabad (Gujarat) and Dinesh Chandra R. Agrawal Infracon Pvt. Ltd. On 14.9.2016 envelop (A) containing EMD was opened and on 17.9.2016, envelop (B) condition technical proposal was open. On opening of Envelop (B), it came to the notice of the petitioner that the respondent No.2 has not successfully executed two similar works each costing not less than Rs.36.16 Crores each, during the last 7 financial years. is not fulfilling the pre-qualification criteria yet he is being accommodated hence, the petitioner on 17.9.2016 raised a protest and requested for supplying of documents submitted by the respondent No.2.
7. As per tender condition following were pre- qualifications criteria :-
"PRE-QUALIFICATION CRITERIA Financial A. i. Experience of having successfully executed.
a) three similar works each costing not 1 less than the amount equal to 20% of the probable amount of contract during the last 7 financial years; or
b) two similar works each costing not less than the amount equal to 30% of the probable amount of contract during the last 7 financial years; or
c) one similar work of aggregate cost not less than the amount equal to 50% of the probable amount of during the last 7 financial years;
In case of Sewerage related works similar works shall mean work related to sewerage project comprising of essentially either of the following components, i. Providing, laying, jointing of sewer pipeline of any material or nature ii. Construction of Sewage Treatment plants (STP) /Common Effluent Treatment plants (CETP)/ Effluent Treatment plants (ETP)
d) For ascertaining the value of successfully executed works in support of experience of the Bidder in i(a), i(b) and i(c) under (A) Financial, the original cost of work can be adjusted as per increase in Whole Sale Price Index (WPI) as given by Reserve Bank of India, from the date of work order of the subjected work to till date. The certificate of the Chartered Accountant be produced for cost adjustment.
ii. Average annual construction turnover on the construction works not less than 50% of the probable amount of contract during the last 5 financial years.
iii. The Bidder shall have positive net- worth as per the audited Balance Sheet of last financial year.
iv. Bid-Capacity - (Deleted) B. Physical 1
(i) Physical qualifications for the work in case of Sewerage related works shall be as below. (Deleted).
Minimum Physical Requirement
Sr. No. Item of Work Quantity
1 II III
1 - -
2 - -
C. Successful Bidder shall employ 'A' Class Registered Electrical Contractor for electrical works.
Successfully executed would mean successfully completion and commissioning of the project."
8. According to the petitioner the eligibility conditions of tender in question are experience of having successful executed (successfully executed mean successfully completion and commissioning of project) (i) Three similar works each costing not less than amount equals to 20% of the probable amount of contract during last seven financial years, ie., 3 similar work of Rs.24.10 Crores; (ii) two similar works each costing not less than amount equals to 30% of the probable amount of work, ie., two similar work of Rs.36.16 Crores; (iii) one similar work costing not less than amount equal to 50% of the probable amount of work, ie., one work of Rs.60.27 Crores.
9. The respondent No.2 to show his eligibility has initially submitted a certificate dated 3.9.2015 (Annexure R/7) relating to construction of sewer collecting system, rising main, constructing pumping 1 station, pumping machinery highway crossing, providing jetting machineries tools and plant and O & M of two years of Deesa town under ground drainage project district Banaskantha (Gujrat), wherein it was mentioned that work completed as per specification satisfactorily. The said certificate was issued by junior officer of the department. According to petitioner as per the aforesaid certificate work was not successfully completed since the project is not yet completed and commissioned and thus the respondent No.2 was not eligible, but respondent No.1 on the basis of certificate dated 3.9.2015 conditionally accepted the tender of respondent No.2 vide order dated 28.9.2016 (Annexure R/8) and subsequently on account of raising of objection by the petitioner, the respondent No.1 vide order dated 12.10.2016 (Annexure R/10) adjudicated that technical proposal of respondent No.2 did not fulfill the eligibility condition, matter, however, was referred to the Urban Administration and Development Department, who vide its order dated 18.10.2016 has qualified the respondent No.2, despite of recording the fact that work is in progress and flow testing has been done but work has yet not commissioned.
10. It is submitted that the respondent No.2 has to complete three similar works of Rs.24.10 Crores or two similar works of 36.16 Crores or one similar work of 60.27 Crores during last seven financial years. According to the petitioner, the respondent No.2 has not 1 adjudicated two similar works each costing not less than Rs.36.16 Crores. The work of District - Banaskantha (Rajasthan) is neither completed nor commissioned. It is also submitted that the works of Bhiloda, Meghraj and Vijay Nagar were different works under different NITs and under different work orders. It is also alleged that the respondent no.2 is under joint venture of Jai Vavudi Construction Company and Bhagun Infracon Pvt. Ltd., ie., JVCC - BIPL whereas in various documents the respondent No.2 has been shown to be independent bidder and not under the joint venture and all this has been done since in a joint venture out of experience criteria lead partner has to fulfill part of criteria and other member has to fulfill part of criteria but respondent No.2 in that case also does not qualify since the joint venture condition have been mentioned at Clause 8 and respondent No.2 does not qualify even if he is in joint venture. Clause 8 reads as under :-
"8. For the meeting the minimum qualification criteria of experience of similar nature work, i. Out of 3 similar works of value more than 20% of PAC, at least 2 works must be done by lead partner and one work to be done by other partner, Or ii. Out of 2 similar works of value more than than 30% of PAC, at least 1 (one) work must be done by lead partner and 1 (one) work to be done by other partner, Or iii. In case of one similar work of value more than 50% of PAC the lead partner must have executed one work of value more than 25.50% of PAC (51% of 50%). However the other partner must satisfy the criteria in (i) above ie., at least one work of 20% of PAC.1
11. On 29.9.2006, the petitioner wrote a letter taking strong objection to the tender qualification of respondent No.2 and prayed for rejection of tender on the ground that he was not eligible as per pre- qualification criteria condition. On 18.10.2016, the respondent No.1 opened all tenders. As per financial bid, which was opened on 18.10.2016, the petitioner stands at L-2 and respondent No.2 stands at L-1. The bid of respondent No.2 to the tune of Rs.136,67,22,840.97/- was recommended and proposal was sent to the SLTC for approval vide Resolution No.192 dated 19.10.2016 (Annexure R/13). The SLTC approved the bid of the respondent No.2 and directed the respondent No.1 to proceed further for agreement.
12. The petitioner challenged the said action by filing the writ petition on 21.10.2016. On 24.10.2016, this court directed that the issuance of any work shall be subject to the final out come of the present petition. As per reply of the respondent No.1 - Municipal Corporation, Ratlam, the respondent No.2 in compliance to pre-qualification criteria has submitted a certificate of work of Deesa under ground drainage project district Banaskantha of work of Rs.43,72.281 lacs. The information given by the respondent No.2 in Form No.3(A) of the tender, upto 30.5.2015, he has completed the work of Rs.43,72,80,583/-. Form No.3(A) reads as under :-
FORM NO.3(A) 1 Referred in Rule No.5(B)(II) WORK WISE DETAILS OF WORK COMPLETED OR IN PROGRESS BY THE CONTRACTOR 1 Name of contractor Jay Varudi Construction Co. Dobhada 2 ............ .................... 3 Agreement No. GUDC/Project/SJMMSVY/2014/1313 Dt.27.3.2014 4 ............ .................... 5 Tender Amount Rs.43,74,02,325.95 6 ............ .................... 7 Date of completion of the work Date: 26.3.2016 (as per contract agreement) 8 Actual Date of completion of the Tender amount work is completed up to 30.5.2015 work Excess work under Approval 9 Amount of Work up to 30.5.2015 Rs.43,72,80,583.00 10 ............ .................... 11 State whether the contractor has Work completed as per specification satisfactorily.
executed the works in progress satisfactorily as per specification. If not give the correct position of the work 12 ............ .................... 13 ............ .................... 14 Any other Remarks Tender Work is completed as mentioned in page No.-2 Excess work under Approval.
13. The respondent No.2 on 23.9.2016 submitted a letter along with the certificates issued by the Gujarat Urban Development Corporation Ltd. The aforesaid certificate shows that the tender work was completed up to 30.5.2015 and excess work under approval and up to 28.2.2016, the respondent No.2 completed the work amounting to Rs.49,11,34,534/-. Column 7, 8 and 14 are relevant of certificate dated 23.9.2016 which reads as under :-
FORM NO.3(A) Referred in Rule No.5(B)(II) WORK WISE DETAILS OF WORK COMPLETED OR IN PROGRESS BY THE CONTRACTOR 1 Name of contractor Jay Varudi Construction Co. Dobhada 2 Name of works Construction of Sewer Collecting system, Rising main, Constructing of Pumping Station, Pumping Machinery, Highway crossing, Providing Jetting Machineries tools & plants and O & M of 2 years for Deesa town Under Ground Drainage project District: Banaskantha 1 3 Estimated amount put to the Rs.55,48,75,363.00 tender 4 Tender amount Rs.43,74,02l,325.95 5 Date of Starting the work Date: 27.3.2014 6 Date of completion of the Date: 26.3.2016 work (as per contract agreement) 7 Actual Date of completition of Work in progress (Excess Work Under Approval) the work 8 (1) Amount of Work Executed up Rs.49,11,34,534.00 (paid Rs.43,72,80,582.00) to 28.2.2016 9 State whether the details as Yes above given by the contractor are correct, if not state the correct information 10 State whether the contractor has Executed Works are satisfactorily.
executed the works in progress satisfactorily as per specification. If not give the correct position of the work 11 Period Rate and Amount of Nil compensation of levy 12 Period of Extension Nil 13 Reason for Delay Nil 14 Any other Remarks Flowing Testing done for executed works in time limit period but commissioning of project and Operation & maintenance not started Due to (1) N.H. Permission is Awaited (2) Approval of Excess Over BoQ.
14. The respondent No.1 vide letter dated 28.9.2016 informed all the bidders about the status of Envelops (A) & (B) and called the objections from the bidders. The petitioner puts it strong objection towards condition and qualifying of the respondent No.2 vide Annexure R/9. Thereafter, the matter was referred to the SLTC, Bhopal, who after examining the matter came to the conclusion that the respondent No.2 had successfully completed the work as per pre-qualification eligibility criteria and directed the Municipal Corporation to open the financial bid. Relevant proceeding reads as under :-
1- uxj ikfydk fuxe] jryke uxj ikfydk fuxe] jryke dh lhojst izkstsDV gsrq cykbZ xbZ 1 fufonk jkf'k :- 12054-02 yk[k esa pkj fufonk,sa izkIr gqbZ gSA fyQkQk ^^v** esa vekur jkf'k ds fy;s fufonkdkjksa }kjk ,Q-Mh-vkj- izLrqr dh x;h tks izko/kku vuqlkj gSA fyQkQk ^^c** esa rduhdh izLrko izLrqr fd;k x;kA fufonkdkjksa }kjk dk;kZuqHko ,oa VuZ vksoj ds fy;s izLrqr nLrkostks dk fooj.k fuEUkkuqlkj gS%& 20815/UADD/E-Tendering/Date 28/07/2016, PAC (Rs. 12054.02 Lacs) S. Name Financial Requirement' Technol Average annual construction Average annual construction Remar No of ogy turnover Lead Partner turnover Second Partner ks . Bidder Provider Annexur e -D Work and Year of Cost of Name Year Turn Over Net Year Turn Net certificateDeta Completi Work in ofTechn in Rs. Worth Over in Worth ils on Rs. Lakh ology Lakh Rs.
Provider Lakh
Tolod-Vadali, 5/29/201 5010.66 2014-15 100.98 2014-15 0 0
Drainage 5
system 2013-14 56216.53 2013-14 0 0
Dineshc MS SFC Bidder
2012-13 60893.46 2012-13 0 0
handra sewer 7/30/201 2567.15 Envirom fulfil
R. collection 4 ental 2011-12 41650.4 2011-12 0 0 the
1 Agrawal systemJamna Tech. 16009.06 technic
Infraco gar Pvt Ltd. 2010-11 36395.05 2010-11 0 0 al
n qualific
Pvt Ltd sewer Average 41037.88 Average 0 0 ation
collection 6/15/201 2858.82
system 6
Jamnagar
Zone II
Jay Deesa Town 30-05-15 4372.8 2014-15 11827.54 2014-15 1269
Varudi drainage (Excess
Constru system work 2013-14 5865.74 2013-14 8250
cti on Dist. under Bidder
2012-13 4205.77 2012-13 6037.58
co Banaskantha approval) MS SFC 109.15 fulfil
Swer 16-12- Environ 2011-12 3368.9 2011-12 3053.52 the
JV Collection 2013 2978.54 mental 2556.4 technic
2 Bhagun system for (Excess Tech. 2010-11 3359.45 2010-11 1558.5 al
Infraco Bhiloda, work Pvt. Ltd. qualific
n Pvt. Meghraj & underap Average 5725.48 Average 4033.72 ation
Ltd. vijaynagar. proval) 4211.56
Khedbrahma 3/20/201
Drainagesyste 5
m G.J.
Uderground Substaint 7905.8 2014-15 31892 2014-15 0 0
drainage ially
scheme complete MS SFC 2013-14 23268 2013-14 0 0
Kalthia atSurendra d Environ Bidder
2012-13 35786 2012-13 0 0
Enginee Nagar mental fulfil
3 ring Tech. 9106 the
and Sewerage 95% 2723.53 Pvt. Ltd. 2011-12 21368 2011-12 0 0 technic
Constru Collection Complet al
ed 2010-11 21180 2010-11 0 0
ction System for qualific
Ltd. Chhotaudepur Average 26698.8 Average 0 0 ation
a Dist.
Vadodara.
2014-15 24049.44 2014-15 0 0
PC
SNEHA Uderground MS SFC 2013-14 22908.57 2013-14 0 0 Bidder
L drainage 6608.94 Environ fulfil
2012-13 17806.77 2012-13 0 0
4 CONST scheme at 07/31/15 (With mental the
RUCTIO Mehsana WPI Tech. 2011-12 11196.54 4299.59 2011-12 0 0 technic
N Gujrat Adjustm Pvt. Ltd. al
ent) 2010-11 9195.31 2010-11 0 0 qualific
ation
Average 17031.33 Average 0 0
izkIr ruduhdh izLrkoksa ij Jay Varudi Construction Co. ds vuqHko ds lEcU/k esa f'kdk;r izkIr gksus ij vk;qDr uxj ikfydk fuxe jryke }kjk fnukad 20-09-2016 dks xqatjkr vcZu MsoyiesaV dEiuh fy- dks ,oa 22-09-2016 dks Bsdsnkj dks i= }kjk vuqHko izek.k i= ij tkudkjh Li"V djus dh lwpuk nh xbZA uxjikfydk fuxe dks xqtjkr vcZu MsoyiesaV dEiuh fy- }kjk bZesay ls tkudkjh ,oa izek.k i= dh izfr miyC/k djkbZ xbZ ,oa fnukad 28-09-2016 dks fn, x, izek.k i= esa ys[k fd;k x;k gS fd "Work in Progress, Excess work under approval" ,oa fd;s 1 x;s dk;Z ds fy, Q~yks VsfLVax dj yh xbZ gSA t; o:<h daLVªD'ku daiuh }kjk fn, x;s mRrj ls ys[k fd;k x;k gS fd muds }kjk fufonk dh jkf'k :- 4374-02 yk[k ds fo:) :- 4911-34 yk[k dk dk;Z fd;k x;k gSA izdj.k esa fLFkfr dks Li"V djus ds fy;s vk;qDr] uxjh; iz'kklu ,oa fodkl ds funsZ'kkuqlkj fcMj dks fnukad 14-10-2016 dks lquokbZ ds fy;s lapkyuky; esa cqyk;k x;kA vk;qDr ,oa izeq[k vfHk;ark ds le{k lquokbZ esa foMj }kjk bl dk;Z ds laca/k esa Li"V fd;k x;k fd muds }kjk le; lhek ds vanj fufonk esa Lohd`r jkf'k :- 4374-02 yk[k ds fo:) :- 4911-34 yk[k dk dk;Z fd;k tk pqdk gSA fd;s x;s vfrfjDr dk;Z dh Lohd`fr izfdz;k/khu gksus ls ,oa lhost VªhVesaV IykaV dk dk;Z vU; fufonkdkj }kjk fd;s tkus ds dkj.k] foHkkx }kjk vuqHko izek.k i= esa Work in progress (Excess work under approval) dk mYys[k fd;k x;k gSA foMj }kjk crk;k x;k fd muds Ldksi esa dsoy lhoj usVodZ fcNkus dk dk;Z Fkk ftls lQyrk iwoZd iw.kZ dj fy;k x;k gS ,oa foHkkx }kjk vko';d Flow Testing dh tk pqdh gSA foMj }kjk izLrqr nLrkostksa ,oa miyC/k tkudkjh dk ewY;kadu djus ij ik;k x;k fd fufonk ds Ldksi esa lhoj usVodZ fcNkus dk dk;Z Fkk ftls fcMj }kjk iw.kZ dj fy;k x;k gS ,oa foHkkx }kjk vko';d Flow Testing dh tk pqdh gSA vr% fcMj dh fufonk dks rduhdh :i ls fjlikaflo ik;k x;kA izdj.k esa dh xbZ lquokbZ dh izkslhfMaXl layXu gSA
15. The stand of the Municipal Corporation that the respondent No.2 has successfully executed the work as per pre-qualification criteria Annexure C to NIT and fulfilling the condition related to the tender. The process adopted by the respondent No.1 is fair, transparent, rational, reasonable and inconsonance with the guidelines of AMRUT project. The SLTC has considered all the bids in all fair and transparent manner and awarded the contract to the respondent No.2 only after finding that its financial bid was lowest by fairly large amount, among all the bidders found to be eligible. The stand of the respondent No.2 that as per certificate 1 from Gujarat Urban Development Corporation, he had completed the work, the initial tender amount, ie., 43,74,02,325 and had also done excess work to the tune of Rs.5,38,53,952/-, which was 'under approval'. On 2.11.2016, the Mayor - in - Council approved the award of the contract of the joint venture of the respondent No.2 subject to the result of the writ petition and prayed for the dismissal of the writ petition.
16. Per contra, Shri Vijay Assudani, learned counsel for the petitioner has submitted that entire procedure followed by the respondent No.1 and SLTC in accepting the tender of the respondent No.2 is unfair and opposed to the norms, which the Government should follow in such matters. He submitted that pre- qualification eligibility criteria is very clear and specific. As per NIT successfully executed would mean successfully completion and commissioning of the project. None of the certificate issued by the Gujarat Urban Development Corporation has stated that the contract awarded to the respondent No.2 was successfully completed and commissioned. The eligibility condition in NIT are to be strictly complied with and any relaxation in NIT cannot be given once the tenders have been submitted.
17. Learned counsel for the respondents submitted that the scope of interference in judicial review of tender process and award of contract is limited to only cases where there is material violation of terms relating 1 to scrutiny and acceptance of tenders or where the decision is vitiated either by arbitrariness/irrationality or by mala fides/favoritism. In Sterling Computer Ltd. V/s. M & N. Publications Ltd. [1993 (1) SCC 445], the Apex court has observed thus :-
"While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process the courts can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution."
18. In Tata Cellular V/s. Union of India, [AIR 1996 SC 11], the Apex Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus :
(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 action. 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 the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the 1 decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facets pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
This Court also noted that there are inherent limitations in the exercise of power of judicial review of contractual powers. This Court also observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14.
19. The Apex court also noted that there are inherent limitation in exercise of power of judicial review of contractual matters.
20. In B.S.N. Joshi & Sons Ltd. V/s. Nair Coal Services Ltd, 2006 (11) SCC 548, the observation made by the Apex Court in para 56 reads as under :-
"It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefor; the same ordinarily being within its domain, court's interference in such matter should be minimal. The High Court's jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record."
21. In the case of Datta Associates Pvt. Ltd V/s. Indo Mercantile Pvt. Ltd. reported as 1996 (8) Supreme 203, the Apex court held and observed that the procedure which the Government proposes to follow 1 in accepting the tender must be clearly stated in the tender notice and it should be transparent, fair and open and abuse of power of extraneous consideration should expose the authorities to appropriate penalties at the hands of the court.
22. The words "successfully executed" have been categorically defined in pre-qualifications criteria to mean that successful completion and commissioning of the project. Now, we have to see whether on the date the project of the respondent No.2, construction of sewerage collecting system rising main, constructing pumping station, pumping machinery highway crossing, providing jetting machineries tools, plant and O & M of Deesa town under ground drainage project, district Banaskantha, which was awarded on 27.3.2014 was successfully completed on 26.3.2016 or not. As per certificate issued by the Gujarat Urban Development Corporation Ltd, the contract value of the said project was Rs.43,74,021,325.95/-. The tender work was completed, but excess work was in progress. Up to 28.2.2016, the respondent No.2 completed the work of Rs.49,11,34,534/- and amount of Rs.43,72,80,582/- was paid to him. As per certificate issued to him, he satisfactorily executed the work. Flowing Testing done for executed works in time limit period but commissioning of project and Operation & maintenance not started Due to (1) N.H. Permission is Awaited (2) Approval of Excess Over BoQ. When the matter was 1 referred to the SLTC, a certificate was called from the Gujarat Urban Development Corporation and notice was issued to the respondent No.2 to appear before the Commissioner Urban Administration & Development Department on 14.10.2016. The respondent No.2 gave appearance before the Commissioner and Engineer - in
- Chief pointed out that he has completed the work successfully and during commissioned period an excess work was awarded to him and the same is in progress. He also pointed out that as per terms of the contract he has to lay down the sewerage network, which he was successfully completed and flow testing was done by the Department. Considering the aforesaid, the Directorate of Urban Administration & Development Department and SLTC accepted the technical bid of the respondent No.2 and rejected the objection raised by the petitioner. The Department came to the conclusion that the respondent No.2 has successfully completed the single work of the same nature amounting to Rs.36.16 Crores.
23. After rejecting the objection of the petitioner, the financial / price bid was open by the department between four successful tenderers. The respondent No.2 was declared successful bidder for the tender work in question because, he was lowest. The law related to the award of contract by the State and Public Sector Corporation has been reviewed by Hon'ble the Supreme Court from time to time and held that the 1 award of a contract , whether by a private party or a State, is to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. Even when some defect is found in the decision-making process, the Court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of the public interest and not merely on the making out of a legal point.
24. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should interfere. The principles of judicial review would apply to the exercise of contractual powers by the Government bodies in order to prevent arbitrariness or favoritism. The scope of judicial review is open to judicial interference only when it is arbitrary, discriminatory or bias, but not open to interference merely because court feels that some other terms would have been more preferable. The decision to accept the tender or award the contract is reached by process and negotiations through several tires and the Court does not sit as a Court of appeal, but merely reviews the manner in which the decision was made.
1Learned Senior counsel for the respondent No.2 was right in saying that the decision of the respondent No.1 is neither arbitrary, capricious nor nor actuated with malice.
25. While considering the requirement regarding experience it has to be home in mind that the said requirement is contained in a document inviting offers for a commercial transaction.The terms and conditions of such a document have to be construed from the standpoint of a prudent businessman. When a businessman enters into a contract whereunder some work is to be performed he seeks to assure himself about the credentials of the person who is to be entrusted with the performance of the work. Such credentials are to be examined from a commercial point of view which means that the company is having a capacity to execute the whole work. While keeping in view the past experience, he would also take note of the present state of affairs and the equipment and resources at the disposal of the company. For judging the credentials past experience will have to be considered along with the present state of equipment and resources available with the tenderer. In this case, the matter was examined by the respondent No.1 as well as by the Directorate of Urban Administration & Development Department. They have also called the report from the 1 Gujarat Urban Development Company. The Commissioner and Principal Chief Engineer, after going through the certificates and material came to the conclusion that the respondent No.2 had completed the work, which was awarded by the Gujarat Urban Development Company successfully. In proceeding on that basis, the department has accepted the tender of the respondent No.2, who was lowest tenderer and awarded the work to him. Acceptance of the tender of respondent No.2 does not suffers from the vice of arbitrariness and irrationality. The contention of the petitioner that the respondent No.2 did not fulfill the eligibility criteria was not correct. We are, therefore, of the view that there were good and adequate reasons for the committee to accept the lowest tender of the second respondent and no case is made out to interfere with the contract awarded to the respondent No.2.
26. For these reasons, the writ petition filed by the petitioner has no merit and is, accordingly, dismissed.
No costs.
(P.K. JAISWAL) (JARAT KUMAR JAIN)
JUDGE JUDGE
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