Gauhati High Court
Page No. 1/ vs The State Of Assam And 4 Ors on 9 October, 2023
Author: Manish Choudhury
Bench: Manish Choudhury
Page No. 1/10
GAHC010228822023
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/5944/2023
ALL ASSAM POLICE HOUSING CORPORATION CONTRACTORS
ASSOCIATION AND ANR
HAVING ITS REGISTERED ADDRESS AT ASSAM POLICE HOUSING
CORPORATION LIMITED HEAD QUARTER, MADHABDEBPUR, P.O.
REHABARI, P.S. PALTAN BAZAR, GUWAHATI, KAMRUP (METRO), ASSAM,
PIN- 781008, REPRESENTED BY ITS SECRETARY, SRI SIMANTA JYOTI
BORUAH
2: SRI SIMANTA JYOTI BORUAH
SECRETARY OF ALL ASSAM POLICE HOUSING CORPORATION
CONTRACTORS ASSOCIATION
SON OF SRI TOSHEN BORUAH
RESIDENT OF A-201
SUBHAM ENCLAVE
LAKHIMINAGAR
HATIGAON ROAD
GUWAHATI
KAMRUP (M)
ASSAM
PIN- 78103
VERSUS
THE STATE OF ASSAM AND 4 ORS.
REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE
GOVERNMENT OF ASSAM, HOME AND POLITICAL DEPARTMENT, DISPUR,
GUWAHATI- 781006, ASSAM
2:THE PRINCIPAL SECRETARY
GOVERNMENT OF ASSAM
HOME AND POLITICAL DEPARTMENT
ASSAM SACHIVALAYA
DISPUR
GUWAHATI- 781006
ASSAM
Page No. 2/10
3:THE ASSAM POLICE HOUSING CORPORATION LIMITED
MADHABDEBPUR
P.O. REHABARI
P.S. PALTAN BAZAR
GUWAHATI- 781008
ASSAM
REPRESENTED BY ITS CHAIRMAN
4:THE MANAGING DIRECTOR
ASSAM POLICE HOUSING CORPORATION LIMITED
MADHABDEBPUR
P.O. REHABARI
P.S. PALTAN BAZAR
GUWAHATI- 781008
ASSAM
5:THE CHIEF ENGINEER
ASSAM POLICE HOUSING CORPORATION LIMITED
MADHABDEBPUR
P.O. REHABARI
P.S. PALTAN BAZAR
GUWAHATI- 781008
ASSAM
Advocate for the Petitioner : MR. M K CHOUDHURY
Advocate for the Respondent : GA, ASSAM
BEFORE
HONOURABLE MR. JUSTICE MANISH CHOUDHURY
ORDER
Date : 09.10.2023 Heard Mr. M.K. Choudhury, learned Senior Counsel assisted by Mr. K. Uddin, learned counsel for the petitioners and Mr. K. Gogoi, learned Additional Senior Government Advocate, Assam for all the respondents.
2. The petitioner no. 1 association [hereinafter referred to as 'the petitioner association', for short] is a registered society consisting of members, who are registered contractors under the respondent no. 3, Assam Police Housing Corporation Limited.
Page No. 3/103. The petitioner association in this writ petition has assailed a 'Notice Inviting Bids for E- Tendering' dated 24.08.2023 [Annexure-3], whereby, bids from intending eligible contractors through Engineering, Procurement and Construction [EPC] mode of contract have been invited for the works of "Construction of RCC L/S Quarters at different locations of Assam"
[the Contract-Works', for short] under the Scheme, "Special Assistance to the States for Capital Investment, 2023-2024". The works of construction of RCC L/S Quarters would be for different locations in 16 [sixteen] districts viz. Sivasagar, Dibrugarh, Charaideo, Tinsukia, Jorhat, Sonitpur, Nagaon, Karbi Anglong, Hojai, Cachar, Darang, Nalbari, Barpeta, Bongaigaon, Kokrajhar and Dhubri.
4. The petitioner association has made a Notice Inviting Bids for E-Tendering dated 24.08.2023 published for Tinsukia District as part of the writ petition as Annexure-5 as the Notices Inviting Bids for other districts are also similar in nature. As per the Notice Inviting Bid dated 24.08.2023 [Annexure-5], the Contract-Work is as follows :-
Sl. No. 1Name of Work Construction Of RCC [S+4] Lower Subordinate [L/S] Quarter [16 Unit/Bldg] - Civil Works, Sanitary And Water Supply Works, Site Development, Deep Tubewell, Internal And External Electrification, Transformer, Diesel Generator, Street Light Etc. At Tinsukia Police Reserve In Tinsukia Dist. under the Scheme for Special Assistance to the States for Capital Investment 2023-24 on EPC Mode [Group No - IV] Estimated Bid Value [in Rs.] Rs. 7,02,02,550.00 [for Civil Rs. 5,81,56,832.00 & for Electrical Rs. 1,20,45,718.00] Bid Security [in Rs.] Rs. 14,04,051.00 [for General category] Rs. 7,02,026.00 [for reserved category] Cost of Document [in Rs.] Rs. 14,041.00 Completion period 18 [eighteen months] [Defect liability period] 24 months Eligible Contractor Open for all Eligible contractor/Firm Page No. 4/10
5. The petitioner association has made a specific challenge to a clause in the Notice Inviting RFP viz. Clause no. 2.2.2.4 of the Tender Document wherein the Tender Authority i.e. the respondent no. 3 has set forth an additional qualification for the bidders as qualification criteria. Clause 2.2.2.4 reads as under :
2.2.2.4 Additional Qualification The Contractor/Bidder should have experience of executing at least one building project of value not less than 50% of Estimated Cost during last 7 [Seven] years ending last date of the month previous to the one in which tenders are invited. These works should have been executed either on EPC mode or Design and Build [D&B] mode or the work was executed with in house architectural firm of the contractor/bidder having structural engineer and architect or the work was executed by the bidder/contractor by tie-up with an architectural firm having structural engineer and architect. [have to submit proof of payment of latest EPF ECR (electronic Challan cum Return) with member details i/c UAN, Educational Certificate and Professional Tax for last one year].
6. Mr. Choudhury, learned Senior Counsel appearing for the petitioner association has submitted that under the provisions of the Assam Procurement Act, 2017 and the Assam Public Procurement Rules, 2020, more particularly, Rule 19[1] thereof contain a mandate that it is only the registered contractors, who are empanelled with the procuring entity can submit the bids. A bidder who is not registered with the procuring entity is not permitted to submit the bid. His second limb of submission is to the effect that the Engineering, Procurement and Construction [EPC] mode of contract is a new type of contract, which has been introduced in the State very recently and the contractors in the State of Assam like the members of the petitioner association who otherwise have the experience and the capacity to execute the works of similar nature bids for which have been invited by the Notice Inviting RFP [Request for Proposal] [Annexure-3], would not be able to submit their bids in response to the Notice Inviting RFP dated 24.08.2023 in view of the onerous conditions incorporated in Clause 2.2.2.4. He has submitted that on publication of the Notice Inviting RFP dated 24.08.2023, Page No. 5/10 the petitioner association had submitted a detail representation before the respondent authorities on 19.09.2023 highlighting as to why the impugned Clause i.e. Clause 2.2.2.4 of the Notice Inviting RFP is discriminatory and is in violation of the provisions of the Assam Public Procurement Act, 2017 and the Assam Public Procurement Rules, 2020. He has brought references to other Notice Inviting Tenders published by other Departments including one by the respondent no. 3, to contend that Contract-Work sought to be executed by the impugned Notice Inviting RFP can also be executed by allowing the successful bidder to tie up with an architectural firm after the award of the contract in favour of the successful bidder.
The conditions incorporated in Clause 2.2.2.4 can be done away with by making such condition as a condition subsequent, rather than a condition precedent. It is the further contention that the Contract-Works which have sought to be executed by the Notice Inviting RFP are not of such complex nature that the same are mandatorily required to be undertaken in the EPC mode.
7. Refuting the submissions advanced on behalf of the petitioner association, Mr. Gogoi, learned Additional Senior Government Advocate, Assam has submitted that he has obtained instructions in deference to the order dated 06.10.2023 as regards the reason behind incorporation of Clause 2.2.2.4 in the Section 2 : Instruction to Bidders in the Tender Document pertaining to the Notice Inviting RFP. It is his submission that the contract-works are to be executed under the schemes for Special Assistance to States for Capital Investment, 2023-2024 of the Ministry of Finance, Government of India. One part of the scheme pertains to 'Housing for Police Personnel above or as part of Police Stations in Urban Areas'. The purpose and object of the scheme are to increase the housing facilities for the police personnel and their families in the urban areas. As per the condition of that part of the Scheme, the first instalment of 50% of the approved amount would be released to the State for transfer on approval of the project to the Bank and the second instalment of remaining 50% would be released on or before 31st of March, 2024 based on the progress made. The mandate of the scheme is to the effect that in case the Nodal Agency is not able to complete the project within the stipulated time period, the amount available in the bank account would be returned to the Central Government. Interest accrued on this amount would also be Page No. 6/10 deposited in the Consolidated Fund of India. Since the aforesaid scheme is a time bound project, it would require the Nodal Agency to ensure completion of the project within the stipulated time frame and to complete the project within the time period, it would require bidders with adequate financial capacity with sufficient experience of design and construction together, capable of completing the EPC project within time. Mr. Gogoi has further submitted that it is not for the first occasion that the respondent no. 3 has initiated a bidding process in the EPC mode. He has placed instances of bidding processes initiated on two occasions earlier by the EPC mode where sufficient number of qualified bidders took part and the works of those tenders had been executed successfully.
8. In reply, Mr. Choudhury, learned Senior Counsel appearing for the petitioner association has submitted that on earlier two occasions, when the respondent no. 3 had resorted to the EPC mode in bidding processes, the bidding processes were for high value contract. In the case in hand, each of the projects in the district is worth only ₹ 7,02,02,550/- each.
9. The matter would require further examination.
10. Issue notice, returnable on 06.11.2023.
11. As Mr. Gogoi has appeared and accepted notices on behalf of all the respondents, no formal notices need to be issued in response to the respondents. The learned counsel for the petitioners shall serve requisite nos. of extra copies of the writ petition along with annexures, to Mr. Gogoi within 2 [two] working days from today.
12. Mr. Choudhury has also pressed for the interim relief since as per the Notice Inviting RFP, dated 24.08.2023today is the last date for submission of bids.
13. Mr. Choudhury has referred to the two decisions in Chatradhar Das and others vs. State of Assam and others, reported in [2020] 1 GLT 645 and in Union of India and others vs. Dinesh Engineering Corporation and another, reported in [2001] 8 SCC 491, in support of his Page No. 7/10 submissions. On the other hand, Mr. Gogoi, learned Additional Senior Government Advocate, Assam apart from referring to the provision contained in Section 41 [ha] of the Specific Relief Act, 1963 has referred to the decisions in Michigan Rubber [India] Limited vs. State of Karnataka and others, reported in [2012] 8 SCC 216; Special Leave to Appeal [C] No[s]. 1616 & 1673/2022 [Balaji Ventures Private Limited vs. Maharashtra State Power Generation Company Limited and another] decided on 11.02.2022; and Civil Appeal no. 3897 of 2023 [Arising out of SLP[C] no. 15708 of 2022] [Tata Motors Limited vs. The Brihan Mumbai Electric Supply & Transport Undertaking [Best] and others], decided on 19.05.2023 wherein the decisions in Silppi Constructions Contractors vs. Union of India, reported in [2020] 16 SCC 489; and Montecarlo Limited vs. National Thermal Power Corporation Limited, reported in [2016] 15 SCC 272, have also been referred to.
14. In so far as the decision in Chatradhar Das [supra] is concerned, the said decision is clearly distinguishable in view of the fact that the bidding process was with regard to supply of school uniforms and the impugned Clause in the tender notice had restricted participation to manufacturers having composite textile mills/manufacturers of textile of having minimum annual turnover of 100 crores. The Court in Chatradhar Das [supra] had taken a note of the Financial Management and Procurement [FMP] Manual, more particularly, Clause 7.4 and Clause 7.7 thereof, which contained restriction of issuing an open tender only in case the supply order exceeds financial limits of Rs. 25 lakhs and not otherwise. It was observed that in case supply orders valued between 2.5 lakhs to 25 lakhs, the procedure prescribed under the FMP was for limited tender and therefore, there was no necessity to go for open tender. The Court had noticed that in the matter regarding procurement of uniforms, community participation was necessary and it was in that context, exclusion of State based entrepreneurs by the impugned Clause was found to be discriminatory and violative of the equality clause contained in the Article 14 of the Constitution of India. In the case in hand, each of the contract-works is related to construction on EPC mode and valued at Rs. 7,02,02,550/- and the same are to be completed at 16 different locations.
15. The decision in Dinesh Engineering Corporation [supra] was with regard to a policy decision to award the contract to a particular party till availability of alternative sources and Page No. 8/10 the Tendering Authority i.e. the Railway Board took a policy decision to procure such spares on the assumption that there was no other party to supply such spares with the requisite decree of sophistication, complexity and precision. The said policy was interfered with as it was found to have suffered from non-application of mind and arbitrariness.
16. It has inter alia been observed in Michigan Rubber [supra] that in the matter formulating conditions of a tender document and awarding a contract, greater latitude is to be conceded to the Tendering Authority. Unless the action of the Tendering Authority is found to be malicious and a misuse of its statutory power, interference by court is not warranted. It has also been observed that certain preconditions and prequalifications for tenderers have to be laid down to ensure that the contractor has the capacity and resources to successfully execute the work. The actions of the State are amenable to the judicial review only to the extent that the Tendering Authority should act validly for a discernible reason and not whimsically for any ulterior purposes. If the State or an instrumentality of the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities.
17. It has been held in Silppi Constructions [supra] that the Court while exercising power of judicial review under Article 226 of the Constitution of India shall exercise restraint and caution in matters of tender processes. The need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities, the court should be give away to the opinion of the experts unless the decision is totally arbitrary or unreasonable. The court while exercising the power of judicial review should not sit like a court of appeal over the Tendering Authority and it is to be kept in mind that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or the tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted.
18. In Montecarlo Limited [supra], it has been observed that the Tender Inviting Authority is the best person to understand and appreciate its requirement and the tender documents.
Page No. 9/10So long as there are no mala fide/arbitrariness, etc. the Tendering Authorities must have the freedom of contract and such action can be tested by applying Wednesbury principle and also examining whether it suffers from arbitrariness or bias or mala fide.
19. From the documents placed before the Court, it appears that it is not the first occasion that the respondent no. 3 as the Tendering Authority has called for tenders on EPC mode. The bids were invited on EPC mode atleast on two earlier occasions and it is represented that qualified bidders in good numbers participated in the said process. The total contract value of the present contract-works would be in excess of 100 crores. The impugned Clause i.e. Clause 2.2.2.4 has indicated that the contractors/bidders should have experience of executing atleast one building project of value not less than 50% of the estimated cost during the last 7 years either [i] on EPC mode; or [ii] on Design and Build mode; or [iii] the work was executed with in house architectural firm of the contract/bidder having structural engineer and architect; or [iv] the work was executed by the builder/contractor by tying up with an architectural firm having structural engineer and architect.
20. The impugned Clause prima facie does not go to indicate that because of the said Clause, the bidding process has been restricted to a few bidders. Having regard to the fact by the Notice Inviting RFP, the Tendering Authority is seeking to execute works relating to construction of RCC L/S Quarters in 16 [sixteen] different districts of Assam with the fund of the Central Government extended under the Special Assistance to State for Capital Investment, 2023-2024 which are projects for providing infrastructure to police department/personnel and which are to be completed in a time-bound manner, this Court is not inclined to pass any interim order, at this stage, to stall the bidding process initiated by the Notice Inviting RFP dated 24.08.2023, because of incorporation of the Clause 2.2.2.4, impugned herein.
21. In so far as the mandatory requirement of registration of bidder is concerned, as projected by the petitioner association on the basis of the provisions contained in the Assam Public Procurement Act, 2017 and the Assam Public Procurement Rules, 2020, more particularly, Rule 19 thereof, it is noticed that Rule 19[6] has provided for registration of new Page No. 10/10 bidders and contractors at any time, if they fulfil the required criteria and conditions and applied for such registration. The issue would require further examination.
22. In the above view of the matter, the respondents are directed to file their response on or before the returnable date.
23. The instructions placed by Mr. Gogoi, learned Additional Senior Government Advocate, Assam vide Communication bearing no. APHC/T/17/2023-24/3 dated 07.10.2023 of the Managing Director of Assam Police Housing Corporation Limited be kept with the case record.
JUDGE Comparing Assistant