Gujarat High Court
Bms Projects Pvt Ltd & vs State Of Gujarat & 4 on 19 April, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, A.Y. Kogje
C/SCA/3254/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 3254 of 2016
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BMS PROJECTS PVT LTD & 1....Petitioner(s)
Versus
STATE OF GUJARAT & 4....Respondent(s)
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Appearance:
MR HRIDAY BUCH, ADVOCATE for the Petitioner(s) No. 1 - 2
ADVANCE COPY SERVED TO GP/PP for the Respondent(s) No. 1
MR NIRZAR S DESAI, ADVOCATE for the Respondent(s) No. 2
MR YV BRAHMBHATT, ADVOCATE for the Respondent(s) No. 5
NOTICE SERVED BY DS for the Respondent(s) No. 1 , 3 - 4
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE A.Y. KOGJE
Date : 19/04/2016
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The petitioner no.1 is a company registered under the Companies Act. Petitioner No.2 is the Managing Director. Respondent No.2 Sardar Sarovar Narmada Nigam Limited ("SSNNL" for short) had issued a tender notice dated 17.12.2015 inviting the bids for construction of RCC box and laying down RCC pipeline etc. We gather that in the course of laying down canals, the same have to pass through roads, railway lines and gas pipelines. We are concerned with the contract for laying down underground pipelines to enable the canals to cross gas pipelines. The petitioners were interested in being awarded said contract Page 1 of 11 HC-NIC Page 1 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER for a particular segment of Radhanpur sub branch canal and Manpura sub branch canal. Estimated cost of the contract was Rs.12.37 crores (rounded off). The petitioners therefore, applied in response to the tender notice. However, the petitioners' bid was disqualified at the technical stage upon which the petitioners have filed this petition and challenged the decision of the respondent authorities to disqualify them.
2. We may note that the tender filed by the petitioners was in the capacity as a joint venture between petitioner no.1 BMS Projects Pvt. Ltd. and one M/s. Nemi Engineering Services.
3. In response to the notice issued, the respondents no. 2 to 4 have filed an affidavit dated 22.3.2016. In such affidavit, they have raised following three objections against the petitioners' technical qualifications:
1) Both the joint venture partners i.e. BMS Projects Pvt.
Ltd. and M/s. Nemi Engineering Services did not have necessary experience of the related work in proportion of their financial stake in the joint venture. All the tenders including that of the petitioners were examined by a specially constituted technical committee who found that the following picture emerged :
Sr Name of Physical criteria Financial criteria the bidder Page 2 of 11 HC-NIC Page 2 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER Earth Concrete RCC Steel/ Turnover Min. Bid work in (in TCM) Box RCC (in lacs) one capacity LCM 2m x pipe work (in lacs) 2 m 1500 in Min. mm lacs in m. Dia.
Min in
m
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Required 0.7 2.408 33.63 171.84 974.84 618.94 1237.88
Criteria
performance
3 BMS Projects Pvt. Ltd. (Min. requirement considering in proportion to their
stake in JV@ 75%
Criteria 0.525 1.806 25.22 128.88 731.13 464.20 928.41
(75%)
Performance 0.95 1.6 0 184 1960.92 2215.00 2894.00
Nemi Engineering (Min. requirement considering in proportion to their stake in JV @ 25%) Criteria 0.175 0.602 8.41 42.96 243.71 154.74 309.47 (25%) Performance 0 0 148 0 1599.58 505.00 1063.42 Total JV 0.95 1.6 148 184 3560.50 2720.00 1830.58
2) As per the respondents for considering experience, work done only upto 31.3.2015 would qualify. Any work, done after such period cannot be taken into consideration.
The work experience certificate produced by the petitioners included the work performed after 31.3.2015.
3) The tenderers were required to submit solvency certificate of Joint Venture partner also along with online submission of the bid before the last date of submission i.e. 18.1.2016. Last date for physical submission was Page 3 of 11 HC-NIC Page 3 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER 19.1.2016. The solvency certificate of joint venture partnership was produced only on 20.1.2016.
4. We have heard learned counsel for the parties on these three issues.
5. Learned counsel Shri Hriday Buch for the petitioners submitted that admittedly the capacity of joint venture taking into account, the total work experience of both the joint venture partners was well above the required work experience. The tender conditions nowhere provided that each joint venture partner must have performance certificate of minimum quantity of work that too in the proportion of their financial stake in joint venture. Any such condition would destroy the very purpose of forming a joint venture. The relevant condition should therefore, be interpreted reasonably to avoid such an eventuality.
With respect to the work done after 31.3.2015, counsel submitted that the tender conditions never specified that the work experience should include only that work which has been completed before 31.3.2015 ignoring any work done by the tenderer after that date.
Regarding the submission of solvency of the joint venture partner, counsel submitted that same was supplied at the earliest opportunity. No such objection was raised at the time of considering technical bid of the petitioners. Such objection cannot be raised at a belated stage.
Page 4 of 11HC-NIC Page 4 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER
6. On the other hand, learned counsel Shri Nirzar Desai for the SSNNL opposed the petition contending that :
1) The tender conditions clearly provided that the work experience of the joint venture partner should be in the proportion of their financial stake in the joint venture. In the present case, such condition was not fulfilled. The petitioners were rightly disqualified.
2) With respect to the work done after 31.3.2015, counsel submitted that the tender conditions were clear and any work performed after 31.3.2015 would not count towards the work experience of the tenderer.
3) He submitted that the solvency certificate of joint venture partnership was not produced till the last date provided in the tender.
7. Learned counsel for respondent no.5, who is the sole surviving tenderer, opposed the petition on similar grounds.
8. We may take up the second objection first. An identical objection was raised by SSNNL in a connected petition being Special Civil Application No.3253/2016 filed by these very petitioners. Such objection was overruled in a judgement dated 18.4.2016 in the following manner :
"13. Coming to the second objection, we notice that the criteria of work done contained in clause 3.5 of the tender conditions reads as under :Page 5 of 11
HC-NIC Page 5 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER "3.5(II) CRITERIA FOR WORK DONE (PHYSICAL CRITERIA) The Tenderer/ Bidder must have carried out the following minimum quantities of the main items as shown in below mentioned table with respect to the peak annual requirement of the Work for which the Bid is invited.
Performance of the Bidder for this requirement shall be worked out by considering highest/best of last seven years performance.
Sr Name of work Minimum required quantities
No.
Item Required criteria
(with unit)
1 CONSTRUCTION OF GAS/OIL (a) Earthwork (a)0.234 LCM
PIPE LINE CROSSING
STRUCTURE AT (1) 3885 M (b)Cement
OF CHACHASANA DISTY OF Concrete (b)5.454 TCM
RBC (2) 3857 m OF MASALI
DISTY OF MSBC (3) (c) RCC Pipe (c)310.78 Rmt
2300/2345 m OF MASALI pushing/Min.
DISTY (4) 2775 m OF 900 mm
SANTHALI DISTY OF RBC (5) diameter)
2290 m OF BHADRAWADI
DISTY OF MSBC (6) 3500 m
OF KAMLAPUR DISTY OF
MSBC (7) 1851 m OF
KAMLAPUR DISTY OF MSBC
(8) 810 m OF UNN MINORIII
OF BHADRAWADI DISTY OF
MSBC (9) 540 m OF NANIPIPLI
MINOR OF VARAHI DISTY OF
RSBC (10) 9420 m OF
BAMAROLI BRANCH DISTY
OF KBC
criteria. However, for the works other than above, quantities of main items of similar nature of work shall be considered.
Page 6 of 11HC-NIC Page 6 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER 3.5(III) The details given/uploaded in :
(i) Statement S1(a), S1(b) & S1(c) shall only be considered for qualification criteria of physical performance,
(ii) Statement S2, AnnexureIII and IV shall only be considered for qualification criteria of similar nature of work and
(iii) Form E shall only be considered for qualification criteria of minimum annual turnover & Tangible Net Worth ( if applicable)
(iv) Form B shall only be considered for qualification criteria of staff requirement.
(v) Form C shall only be considered for qualification criteria of machineries and equipments.
(vi) If there are discrepancies in Form D1 & D2 and the statement S1(a), S1(b), S1(c) and S2 shall govern. No works other than specified in statement S1(a), S1(b), S 1(c), S2, AnnexureIII and IV shall be considered in qualification. No document shall be entertained/considered after the opening of Technical Bid."
14. As per this condition, therefore, a tenderer must have executed the minimum quantities shown in the table with respect to the peak annual requirement of the work for which the bid was invited. The condition further provides that the performance of the bidder for this requirement shall be worked out by considering highest/best of last seven years' performance. In other words, the tenderer would have to demonstrate before the authorities that it had executed the work of required quantity in any one of the last seven years. This condition nowhere provides that the period of last seven years would have to be judged on the basis of financial years. There is no cutoff, of any such nature, provided in this condition atleast. It only provides Page 7 of 11 HC-NIC Page 7 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER that the execution of the minimum quantities of the work would be considered on the basis of highest or best of last seven years' performance. Thus the essence of this condition is, that in one out of last seven years, the tenderer must have carried out a certain minimum quantity of work only upon which he would be technically qualified. It nowhere provides that last seven years would be compartmentalised according to the financial years which would mean that the last completed year would end with 31.3.2015 and any work performed after such period would be ignored."
No separate discussion would therefore, be necessary in this respect.
9. Coming to the first objection of the SSNNL, we may recall according to the SSNNL, joint venture partners did not have sufficient work experience in the proportion of their financial stake in the joint venture. In this context, SSNNL relies on condition no. 5.0 which pertains to bids submitted by a joint venture, relevant portion of which reads as under :
"5.0(ii) In case of Joint Venture Technical strengths and financial strengths of each of the JV members individually shall not be less than Minimum Qualifying Criteria (worked out proportionate to their financial stakes in the JV). The combined strength of JV shall meet the required physical and financial criteria except where specifically mentioned."
10. This condition in plain terms provides that in case of a tenderer being a joint venture, the technical strength and financial strength of each joint venture member should not be less than the minimum qualifying criteria worked out Page 8 of 11 HC-NIC Page 8 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER proportionate to their financial stakes in joint venture. In other words, when instead of an individual or a company, the tenderer is a joint venture, each joint venture partner must individually possess the minimum qualifying technical criteria which would be worked out on the basis of their proportionate financial stakes in the joint venture. By way of example, this would mean if in a joint venture, two partners have 75% and 25% financial stakes respectively, the dominant partner must have the work experience which would be 75% of the minimum prescribed requirement under the tender notice and other joint venture partner must have a minimum of 25% thereof. This is the plain meaning of the above noted condition. This condition is not possible of two meanings or any other interpretation, The request of the counsel for the petitioners to interprete this condition in such a way as to allow the joint venture to be qualified even though each individual partner may not have the technical strength in the proportion of its financial stake in the joint venture as long as their combined strength in each component exceeds the specific requirement, cannot be accepted. The petitioners have not challenged this condition, It is therefore, not open for the petitioners to argue that any such condition would destroy the very purpose of forming a joint venture. In absence of any challenge to the condition, we must interprete the same as the condition is contained in the tender notice. Having thus understood the implication of the said condition, we need to examine whether the petitioners fulfilled the requirement of the work experience. In this context, we have taken note of the figures provided by the official respondents in the affidavit Page 9 of 11 HC-NIC Page 9 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER in reply. There is no dispute about these figures. On the basis of these figures, in the affidavit in reply, it has been stated as under :
"i) I say and submit that the Expert Committee, mentioned herein above evaluated the case of the each of the bidder and found that out of 3 bidder at Sr. No.1 M/s. Sashin Construction Co. was fulfilling the pre qualification technical requirements whereas bidders at Sr. No.2 Rakesh Construction Co. was not fulfilling pre qualification technical requirements. As far as the present petitioner is concern, who was the bidder at Sr. No.3 i.e M/s. BMS Project JV with Nemi Engineering is a joint venture consortium. The lead partner BMS Projects has experience of steel pipe pushing and for RCC Box pushing, he has considered the experience of Nemi for qualification of this criteria. Similarly, Nemi has experience of RCC box pushing and for pipe pushing he has considered the experience of BMS Projects. As per tender provisions for joint venture bidder as stated herein above, each partner shall satisfy the criteria proportionate to their financial stake in the JV. Thus, both partners are not satisfying the criteria of pushing length. Nemi is also not satisfying the criteria of earthwork and concrete for which bidder has not submitted any document. The joint venture bidder therefore stands disqualified."
11. It can thus be seen that upon application of the said condition no. 5(ii) of the tender conditions, the joint venture fell short of various requirements. Regarding the application of this formula, as is explained in above noted portion of the affidavit in reply, the petitioners have not raised any dispute. It can thus be safely concluded that joint venture bidder did not fulfill the required technical criteria which was to be satisfied as provided in the said Page 10 of 11 HC-NIC Page 10 of 11 Created On Sat Apr 23 00:51:07 IST 2016 C/SCA/3254/2016 ORDER condition No.5(ii).
12. Heavy reliance was placed by Shri Buch on the decision of the Supreme Court in case of New Horizons Limited and another v. Union of India and others reported in (1995) 1 Supreme Court Cases 478 in which the Supreme Court considered the experience of joint venture partnership in order to hold the tenderer qualified. However, we do not find that in the said case, a pointed condition as in the present case contained in clause 5(ii) of the tender conditions requiring specific individual proportion of experience of joint venture partners, was there.
13. In view of such conclusion, we do not find that the decision of official respondents to disqualify the petitioner was erroneous. This being a substantial ground for disqualification, we do not find it necessary to examine the third objection of the respondents of late tendering of the solvency certificate of joint venture partnership.
14. The petition is dismissed, Notice is discharged. Interim relief is vacated.
(AKIL KURESHI, J.) (A.Y. KOGJE, J.) raghu Page 11 of 11 HC-NIC Page 11 of 11 Created On Sat Apr 23 00:51:07 IST 2016