Orissa High Court
Hon'Ble The Chief Justice Mr. Mohammad ... vs Hon'Ble The Chief Justice Mr. Mohammad ... on 4 December, 2020
Bench: Mohammad Rafiq, K.R. Mohapatra
W.P.(C) No. 33307 of 2020
HON'BLE THE CHIEF JUSTICE MR. MOHAMMAD RAFIQ
HON'BLE MR. JUSTICE K.R. MOHAPATRA
02. 04.12.2020 Mr. P.C. Nayak, Advocate - For the petitioners
Mr. P.K. Muduli, AGA - For Opp. Parties
ORDER
Heard learned counsel for the parties by Video Conferencing mode.
The contention of Shri P.C.Nayak, learned counsel for the petitioner is that pursuant to the Request for Proposal (RFP) dated 04.09.2020 under Annexure-1 issued by the opposite parties inviting applicants for Leasing-cum-Development /Upgradation, Operation & Management of Tourism Properties of Department of Tourism, Odisha, the petitioner submitted his bid along with all relevant documents, but the bid of the petitioner was rejected on the ground that the petitioner has not submitted the GST Registration Certificate in his name along with the bid documents.
Learned counsel for the petitioner submits that as per the conditions as specified in Clause-3.3.3.1 of Eligibility Criteria No. 3.3 of the RFP, a bidder having prior experience in hospitality industry shall meet the eligibility conditions as given in Table 5 of the Eligibility Condition-A. As per Condition No.3.3.3.2 of Clause-3.3, a bidder not having prior experience in hospitality industry shall meet the eligibility conditions as given in Table 6 of Eligibility Condition-B. Pursuant to the aforesaid eligibility conditions, the petitioner submitted his bid for 2 Panthanivas, Taptapani with a Proof of Net-worth Certificate (Annexure-3 series) of Rs.4755.75 lakhs as on 1st April 2019 issued by the Chartered Accountant as against required net-worth amount for Rs.20.00 crores and other relevant documents. As per scope of work as defined in Clause-2 of Condition No.2.1.2 of RFP, it has been prescribed that the lessee shall comply with certain conditions as his responsibility during the lease period. In Sub-Clause (g) thereof, it has been prescribed that the lessee can pay in a timely manner all taxes, duties, levies, cess and charges etc. in respect of the operation of the property and its business, including but not limited to income tax, Goods and Service Tax (GST), excise duty, customs duty and octroi that may be levied, claimed or demanded from time to time by any Government Authroity and furnish relevant clearance certificate/proof of payment annually to the Department of Tourism in this regard.
Argument of learned counsel for the petitioner is that since the petitioner is a new entrant in the hospitality industry, he was required to submit GST registration certificate only after his selection for award of the contract pursuant to the RFP. None of the conditions of the RFP specifically required a new bidder, without any experience in hospitality industry to submit the GST, regulation in advance. For this purpose, reference is made to various clauses of RFP. Learned counsel for the petitioner has referred to the Net Worth Certificate under Annexure-3, which was 3 certified by the Chartered Account that the petitioner has estimated net-worth as on 31st March, 2020 to the tune of Rs.4755.75 lakh as he is the Managing Director of M/s. Biraja Construction, Jajpur, a partnership firm, which already has GST Registration according to Annexure-4. However, the petitioner having submitted the bid in his individual capacity, he could have produced the GST Registration in terms of Section 22 of the GST Act after the contract was awarded. Learned counsel for the petitioner submits that the petitioner has quoted the highest upfront price and award of contract to a bidder having put lesser price would cause loss to the State exchequer. It is argued by learned counsel for the petitioner that as of now though the financial bid was opened but no contract has been signed.
Learned counsel for the petitioner in support of his argument has relied upon the decision of the Hon'ble Supreme Court in the case of Adani Gas Ltd. V. Petroleum & Natural Gas Regulatory Board and others; reported in (2020) 4 SCC 529, wherein it is held as follows:
"56.11 This Court is justified in reviewing the process adopted by the Board in evaluating the bids for the ninth round of CGD bidding. It is well settled that judicial review cannot be denied even in contractual matters to prevent arbitrariness.4
60. If the Board Note of 23-7-2018 were to be construed in the manner in which the learned Senior Counsel for the appellants urged, the automatic disqualification of bidders based on a criterion introduced by the Board Note would raise serious doubts about its fairness and legality. This is because the Board Note was not notified to bidders as a basis for the evaluation of bids before the date for the submission of the bids had closed. To disqualify a bidder on the basis of a criterion which was not notified and of which bidders had no knowledge would be arbitrary and would constitute an infraction of Article
14. The Board was thus correct in determining that the automatic disqualification of a bid on the basis of a criterion specified in the Board Note (which was never notified to the bidders) would not be "legally correct"ǁ. Hence, it would be reasonable to interpret the Board Note dated 23-7- 2018 as being the formulation of a guideline for the Board. As a guideline in the process of evaluation, the decision taken by the Board on 23- 7-2018 was not to the effect that every bid below 2% or above 100% would necessarily stand disqualified. Consistently with the use of the word "may be", as already noticed, the decision of the Board meant that the power which the Board reserved to itself in Clause 4.4.1 could be invoked if it came to the conclusion that the bid had not been justified to be reasonable. In other words, the breaching of the range of 2 to 100% was a trigger for the Board to scrutinise the bid and determine whether the power under Clause 4.4.1 should be invoked. Hence, the course of action which the Board followed of calling upon the bidders with the highest composite scores in GAs 51, 61 and 62 to justify their bids in terms of their reasonableness cannot be faulted. On the contrary, if the Board had rejected these bids solely on the ground that they were above the limit of 100% of households under the 2011 Census data, the decision would have been 5 seriously flawed for having applied a criterion which was not a part of the Regulations, was not embodied in the Bid Document and in any event, was not notified to bidders before they had submitted their bids."
Mr. P. K. Muduli, learned Additional Government Advocate for the State submits that as per Condition No. 4.5 of Clause-4, for Sealing and Marking of Proposal of RFP, the petitioner was required to submit seal and mark (a) Envelope No.1 containing the bid security deposit and bid application fee shall be marked as "Bid Security Deposit & Bid Application Fee" and (b) Envelope No.2 duly marked as 'Technical Proposal" for Leasing-cum-development/upgradation, operation & management of tourism properties of Department of Tourism, Odisha. Envelope No.2 is required to contain the following:
"Covering Letter as per format provided (Form annexed) Details of bidder (Form annexed) List of relevant works carried out (Form annexed) Copy of registration/incorporation certificate of the company/firm Proof of Net-worth Certificate not before 1st April, 2019, duly certified by Chartered Accountant.
Other relevant documents."6
He further submits that a person should submit his bid including GST Registration Certificate along with other relevant documents, particularly when in Form-2 of clause-5, Bidder Profile, it has been stated that company profile and Form-8 Financial Proposal has given a note that the upfront amount quoted by the bidder is exclusive of GST and that GST shall be paid separately, as applicable. According to him, the petitioner has submitted his bid without prior to registration of GST, which can be read impliedly in Form-8 and it would be applicable to the financial bid. Since he has not submitted the GST Registration Certificate along with the bid documents, his bid has been rightly declared disqualified. It is submitted that all the qualified bidders have submitted GST Registration Certificate along with their bid documents. Thus, the petitioner cannot be treated differently to qualify his bid.
Having regard to the submissions made by learned counsel for the parties, and considering that as of now, the financial bid has not been opened and the opposite parties have not taken any final decision and have not executed any agreement, we require the Commissioner- cum-Secretary, Tourism Department, Odisha, Bhubaneswar-opposite party no.1 to examine grievance of the petitioner and consider the validity of the decision of the Committee in disqualifying the bid of the petitioner in the light of the aforesaid decision of the Hon'ble Supreme Court in view of the fact that the case of the petitioner 7 comes under Eligibility Condition-B of Table-6 of the RFP and that the RFP conditions do not specifically require the bidders to submit GST Registration Certificate along with bid documents and take a decision on the same by passing a speaking order after providing opportunity of hearing to the petitioner as well as bidder likely to be affected thereby, before execution and signing of the agreement. The petitioner shall be requested to submit such representation along with a copy of this order within seven days.
As restrictions are continuing due to COVID-19, learned counsel may utilize the soft copy of this order available in the High Court's website or print out thereof at par with certified copies in the manner prescribed vide Court's Notice No. 4587 dated 25.03.2020.
(K.R. Mohapatra) (Mohammad Rafiq)
Judge Chief Justice
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