Andhra Pradesh High Court - Amravati
Bng Fashion Gears Private Limited, vs The State Of Andhra Pradesh Department ... on 8 March, 2021
Author: Kongara Vijaya Lakshmi
Bench: Kongara Vijaya Lakshmi
HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI
Writ Petition No.5094 of 2021
ORDER:
This Writ Petition is filed to declare the action of the respondents in conducting the tender process with respect to tender notification dated 21.01.2021 and rejecting the petitioner's technical bid as arbitrary and illegal.
2. Case of the petitioner is that, the second respondent issued e-procurement tender notification on 21.01.2021 for supply of shoes and socks and as per the tender notification, last date for uploading of corrigendum is 03.02.2021, bid closing date is 06.02.2021, technical evaluation is on 08.02.2021, opening of financial bid is on 09.02.2021 and reverse auction is on 09.02.2021. As per corrigendum-3, last date for uploading of corrigendum is 08.02.2021, bid closing date is 10.02.2021, technical evaluation is on 11.02.2021 and 13.02.2021, opening of financial bids is on 16.02.2021 and reverse auction is on 16.02.2021. Section II of the tender document deals with instructions to the bidders and as per Clause 1.1 (h) of Section II, the firm should furnish solvency certificate; the second respondent issued corrigendum- I on 08.02.2021 amending clause (h) of Clause 1.1 as "the firm should furnish latest solvency certificate for minimum value of 50% of ECV"; as per the said amended clause, petitioner uploaded the solvency certificate dated 11.02.2021 issued by the Chartered Accountant; it is not mentioned either in the original bid document or in the corrigendums that the solvency certificate should be issued by the Bank; along with the petitioner Four other bidders participated in the tender and among them only Bata India Limited and the Fourth 2 KVL, J WP No.5094 of 2021 respondent submitted solvency certificates furnished by the Bank and one Manjeet Plastic Industries initially submitted solvency certificate issued by the chartered accountant, but later, after the bid closing date, they furnished solvency certificate issued by the Bank; the officers of the respondents informed the said Manjeet Plastic Industries about the requirement of submission of solvency certificate issued by the Bank in advance and hence they furnished the same and got themselves qualified in technical evaluation and participated in the reverse auction; on 23.02.2021 petitioner received a phone call from one Bharat Kumar, Joint Director, asking him to submit solvency certificate issued by the Bank and on 24.02.2021 the authorized signatory of the petitioner addressed a mail to the second respondent stating that as per the tender document petitioner has already submitted all the documents and if the petitioner has to submit any other document a request was made to send a mail, however no reply was received to the said mail and that on 25.02.2021 petitioner submitted solvency certificate issued by the bank through mail and informed the same to the second respondent i.e., Mr. Vijay Kumar and on 26.02.2021 morning petitioner tried to contact the second respondent, but there was no response; it was also informed to the Project Director through Whatsapp that the petitioner sent solvency certificate issued by the Bank through mail which was acknowledged by the said Vijay Kumar and in the noon the Project Director informed the petitioner that the time has lapsed for submission of solvency certificate; had the petitioner been informed about the requirement of furnishing of the solvency certificate issued by the Bank, the petitioner would have furnished the same at the earliest; the respondents informed about the requirement of furnishing of solvency certificate by 3 KVL, J WP No.5094 of 2021 the bank to some other bidders in advance with an intention to eliminate the petitioner and the Third respondent disqualified the petitioner in the technical evaluation and the reverse tendering was conducted on 26.02.2021 and the Fourth respondent was declared as L1; the procedure adopted is mala fide and to favour someone.
3. Counter affidavit is filed by the second respondent stating, inter alia, that as per Clause 6(b) of Section I of the tender document the bidder has to keep track of any changes by viewing addendum/ corrigendum on time to time basis in the e-procurement platform and in response to the notification, seven bidders participated and out of seven bidders only two firms i.e., Bata India Limited and the Fourth respondent herein have submitted all the required documents and the petitioner and another firm by name Manjeet Plastic Industries were asked on 17.02.2021 over phone to submit solvency certificates issued by the Bank by 24.02.2021 and subsequently the said Manjeet Plastic Industries submitted the solvency certificate dated 16.02.2021, issued by the Bank on 24.02.2021 and when the matter was placed before the procurement committee on 24.02.2021 and the committee took a decision to disqualify those firms who have not furnished the required documents as on 24.02.2021 and decided to qualify Manjeet Plastic Industries and disqualified the petitioner herein; Mr. Bharat Kumar, Joint Director, called the petitioner only to remind about the solvency certificate; three firms i.e., Bata, Lehar-4th respondent herein and Manjeet Plastic Industries have become technically qualified and hence, their financial bids were opened and reverse tendering was done.
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4. Reply-affidavit is filed by the petitioner stating inter-alia that, other two firms also submitted solvency certificate issued by the Chartered Accountant and not bank, which shows that there is ambiguity in the said condition; even in the corrigendum-I issued on 08.02.2021, it is not stated that the solvency certificate has to be issued by the bank and no time limit is prescribed for submission of the solvency certificate; as per clause 3.2 of Section II the tender document any such addenda/corrigenda shall be posted on the e- procurement website only and no other communication shall be made to any firm in this regard; petitioner was not informed on 17.02.2021 and that it was informed only on 23.02.2021 through telephone call with regard to furnishing of solvency certificate issued by the bank, without prescribing any time limit for submission of the same; petitioner submitted solvency certificate issued by the bank on 25.02.2021 and that the respondents did not dispute the submission of the solvency certificate issued by the bank on 25.02.2021 in the counter-affidavit.
5. Additional counter-affidavit is filed by the 2nd respondent after reply affidavit has been filed, stating inter-alia that the tender evaluation committee has decided in its meeting held on 16.02.2021 to extend the time limit by one week to submit the solvency certificate issued by the bank and informed all four bidders on the very same day i.e., 16.2.2021, which was confirmed by the petitioner at page 66 of the writ affidavit (whatsapp message) and that the petitioner despite receiving the information did not submit the said document by cut-off date i.e., 23.02.2021.
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6. In the light of the above pleadings, whether tender process adopted by the respondents 1 to 3 is fair and transparent or not has to be analyzed.
7. Heard Sri C.Subodh, learned counsel for the petitioner, learned Advocate General, appearing on behalf of respondents 1 to 3 and Sri Ch. Dhanamjaya, learned counsel appearing for the 4th respondent.
8. Section II of the tender document deals with instructions to bidders. Clause 1 deals with minimum eligibility criteria for participating in the bid and as per clause 1.1(h), the firm should furnish solvency certificate. Corrigendum was issued on 08.02.2021 and clause 1.1(h) was amended as 'the firm should furnish latest solvency certificate for a minimum value of 50% of the ECV'. Complying with the said condition in corrigendum, petitioner submitted solvency certificate, issued by the Chartered Accountant, as the original bid document and the Corrigendum-I does not say that the solvency certificate should be issued by the bank. As seen from the counter- affidavit, in addition to the petitioner, two other firms also submitted solvency certificates issued by the Chartered Accountant which shows that the tender document is vague. According to the petitioner, he received a phone call on 23.02.2021 from one Bharath Kumar, Joint Director, asking him to submit solvency certificate issued by the bank and he submitted the same on 25.02.2021 and informed the same through e-mail and also informed to one Mr. Vijay Kumar on 26.02.2021 and also informed the Project Director through whatsapp message that the petitioner sent solvency certificate through email. In the counter- affidavit, which was filed on 01.03.2021, the 2nd respondent did not 6 KVL, J WP No.5094 of 2021 deny making of a phone call to the petitioner on 23.02.2021, but according to him, it was only a reminder call and that the petitioner was asked to submit solvency certificate issued by the bank on 17.02.2021 itself. In the additional counter-affidavit, at paragraph 7 of the affidavit, it is stated that all the four bidders were informed to submit solvency certificate issued by the bank on 16.02.2021. In the additional counter-affidavit, at paragraph 8, it is also stated that the same was confirmed by the petitioner at page 66 of the writ petition. Page 66 of the writ papers show a whatsapp message sent by the petitioner's employee by name Kavitha. It shows that the said employee sent the said message informing that one day before they have submitted solvency certificate and the same was confirmed by Mr. Vijay Kumar and they also pasted the copy of the solvency certificate in the said whatsapp message. It also shows that a reply has been sent by the 2nd respondent stating that the time has lapsed for submission of the solvency certificate. But no date is visible in the said whatsapp message. There is no confirmation by the petitioner in the said whatsapp message about the receipt of information with regard to submission of solvency certificate on 16.02.2021 as is stated in the additional counter-affidavit, in the whatsapp message.
9. Though Sri Ch. Dhanamjaya, learned counsel appearing for the 4th respondent submits that the petitioner was informed about the solvency certificate by the bank much prior to 23.02.2021 and that a reminder phone call was made on 23.02.2021, there is no proof produced to that effect by the respondents.
10. As seen from the pleadings, admittedly, petitioner submitted solvency certificate issued by the bank on 25.02.2021 and the financial 7 KVL, J WP No.5094 of 2021 bid was opened on 26.02.2021 and the reverse tender was also conducted on the same day. Assuming for a moment that the petitioner was only reminded on 23.02.2021 to give solvency certificate issued by the bank and that he was originally informed on 17.02.2021 according to the first counter-affidavit and according to the additional counter- affidavit on 16.02.2021, petitioner has in fact submitted the same on 25.02.2021 that is one day before the financial bids were opened, but the same was not taken into consideration.
11. In the counter-affidavit, it is stated that petitioner and Manjeet Plastic Industries were informed through phone on 17.02.2021 about furnishing of the solvency certificate issued by the bank. It is also admitted by the 2nd respondent that the said Manjeet Plastic Industries has submitted the solvency certificate of the bank which is dated 16.02.2021 on 23.02.2021. The allegation of the petitioner is that as the said Manjeet Plastic Industries was informed in advance with regard to submission of the solvency certificate issued by the bank and hence the said Manjeet Plastic Industries could obtain the same on 16.02.2021. As the said Manjeet Plastic Industries is not a party to the present writ petition, this court is not going into further details of the said aspect.
12. According to the first counter-affidavit filed by the 2nd respondent, the e-procurement committee has decided in its meeting held on 24.02.2021 to disqualify the firms who have not submitted the said certificates, even though admittedly petitioner was asked to furnish the same on 23.02.2021. A reasonable time of two days is also not given to the petitioner herein. Admittedly he submitted the said certificate before opening of financial bid. It is also relevant to note 8 KVL, J WP No.5094 of 2021 that according to the corrigendum-3, financial bids have to be opened on 16.02.2021, but in fact, they were opened on 26.02.2021.
13. The discrepancies in the two counter-affidavits filed by the respondents are, (a) in the first counter-affidavit, it is stated that in the Procurement Committee meeting it was decided to disqualify those firms who have not furnished the required documents as on 24.02.2021. In the additional counter-affidavit, it is stated that the petitioner did not submit the certificate by the cut-off date i.e., 23.02.2021. Both the counter-affidavits gave different cut-off dates. (b) In the first counter- affidavit, it is stated that the petitioner was informed about the solvency certificate issued by the Bank on 17.02.2021 and according to the additional counter-affidavit, petitioner was informed on 16.02.2021.
14. Clause 3 of Section II deals with amendment of bid document. Clause 3 of Section II reads as follows:
"3.1 At any time prior to the deadline for submission of bids, the tender calling authority may, for any reasons, whether at its own initiative or in response to a clarification requested by a prospective bidder, modify the bidding documents by amendment.
3.2 Any such addenda/corrigenda shall be posted on the e-procurement website only and no other communication shall be made to any firm in this regard.
3.3 In order to allow prospective bidders reasonable time in which to take the amendment into account in preparing their bids, the purchaser, at its discretion, may extend the deadline for the submission of bids."
15. As seen from the said clause, any addenda/corrigenda shall be posted on the e-procurement website only and no other communication shall be made to any firm in this regard. But admittedly, in this case, communication was made through phone calls to produce the solvency certificate issued by the bank. 9
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16. Learned Advocate General relies upon the Clause 5.1 (o.p.q) of Section-II of the tender document, which reads as under:
"5.1 (o) Balance sheet, P&L account for the financial years 2017-18, 2018-19 & 2019-20 duly certified by the CA shall be uploaded.
(p) CA certified audit reports for last 3 years shall be uploaded and
(q) Positive net worth certified by CA for the last 2 years shall be uploaded."
and submits that the petitioner ought to have submitted solvency certificate of the bank as per the above clauses.
17. Clause 5.1 'o' and 'p' did not deal with the solvency certificate at all. As seen from 5.1 (q), it only says that positive net worth certified by the Chartered Accountant for the last 2 years has to be uploaded. Even the said clauses deal with the Chartered Accountant certificates and not the Bank certificates. The said certificate is different from what is sought now according to the corrigendum. Admittedly, petitioner has submitted the solvency certificate issued by the Chartered Accountant for Rs.44.00 crores vide letter dated 11.02.2021.
18. Learned Advocate General also relied upon G.O.Ms.No.94 Irrigation and CAD (PW-COD) Department dated 01.07.2003, which is issued by the Irrigation and CAD Department with regard to tender procedures and registration of contractors. Annexure-II of the said G.O. deals with the rules for registration of contractors. Relying upon the said Annexure-II learned Advocate General submits that the solvency certificate has to be produced only from the scheduled bank.
19. Clause (1)(f) of Annexure-II reads as follows: 10
KVL, J WP No.5094 of 2021 "(f) The following documents shall be submitted along with the application seeking registration as a contractor in a particular class or category.
(i) Application form (in the proforma prescribed in the Annexure-VI with Rs.2/- court fee stamp, affixed thereon.
(ii) Proof of payment of registration fees;
(iii) Solvency certificate:
(a) The solvency certificate for the amounts shown under item (iv) of the Annexure-III shall be obtained from the officer of the Revenue Department of the rank not below the Tahsildar in the proforma in Annexure (V)(a);
(b) The certificates may also be obtained from a scheduled bank in the proforma given in the Annexure (V)(b)."
20. As seen from clause 1(f), the said documents are required for seeking registration of contractor and not for submission of the bid in a tender document. Secondly, Clause 1(f)(iii)(b) says that the solvency certificate may also be obtained from the scheduled bank. Burt it does not say that compulsorily it has to be obtained from the bank. The word 'may' is mentioned therein and hence, the above G.O. does not come to the aid of the respondents.
21. Learned Advocate General also relies upon the copy of the solvency certificate issued by the bank in favour of the petitioner on 03.04.2020 for submission along with a bid and states that the petitioner is aware of the said condition even in 2020. But the tender document for which such a solvency certificate is submitted by the petitioner is not available on record and hence, it is not known as to what was the tender condition at that particular period of time, which mandated the petitioner to produce such a certificate.11
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22. Learned Advocate General submits that it is not the case of the petitioner that tender conditions are tailor made, or to qualify some one or disqualify some one, or they are impossible of performance and that the condition with regard to solvency certificate is also not challenged. The challenge of the petitioner is not with regard to tender condition and that it is impossible of performance but his contention is that proper procedure is not followed before finalizing the tender and that the tender is vague.
23. The judgment of the Division Bench of this Court relied upon by the learned Advocate General in 'Universal Cables Ltd. vs. State of Andhra Pradesh1' will not come to the aid of the respondents.
24. As seen from the facts of the present case, there is violation of doctrine of a level playing field. The Division Bench of this Court in the above mentioned judgment at paras 15 and 16 held as follows:
"Although a citizen has a fundamental right, under Article 19(1)(g), to carry on a trade or business, he does not have the fundamental right to insist that the Government, or any other individual, should carry on business with him. The Government, or the individual concerned, has the right to enter into a contract with a particular person or to determine person or persons with whom he or it will deal. Krishnan Kakkanth v. Government of Kerala, (1997) 9 SCC 495). If the State, or its instrumentalities, act reasonably, fairly and in public interest, interference by Courts is restricted, since no person can claim a fundamental right to carry on business with the Government. (Michigan Rubber (India) Ltd.'s case (supra)). All that such a person can claim is that, in competing for the contract, he should not be unfairly treated and discriminated to the detriment of public interest. (Association of Registration Plate's case (supra); Erusian Equipment & Chemicals Ltd. v. State of W.B.,: (1975) 1 SCC 70). In determining the infringement of the right, guaranteed under Article 19(1) of the 1 2018(5) ALD 130 12 KVL, J WP No.5094 of 2021 Constitution of India, the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, enter into the judicial verdict. (Laxmi Khandsari v. State of U.P.,: AIR 1981 SC 873; Treveli v. State of Gujarat, AIR 1968 SC 1323; Herekchand Ratanchand Banthia v. Union of India, : AIR 1970 SC 1453; Krishnan Kakkanth's case (supra)).
A "level playing field" is a situation in which everyone has a fair and equal chance of succeeding. This, in commercial parlance, is a concept of fairness and requires all eligible players to be permitted to play by the same set of rules. A playing field is at a level if no external interference affects the ability of players to compete fairly. In the matter of awarding Government contracts, the doctrine of 'level playing field' plays an important role. (Shree Ostwal Builders v. State of Maharashtra, : 2008 (4) Mh. LJ 404). This doctrine, embodied in Article 19(1)(g) of the Constitution, provides space within which equally-placed competitors are allowed to bid so as to subserve larger public interest. The terms and conditions, of the invitation to tender, must indicate, with legal certainty, norms and benchmarks. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment, and may violate the doctrine of "level playing field".
(Reliance Energy Ltd. v. Maharashtra State Road Development Corporation Ltd., (2007) 8 SCC 1). In the matter of inviting tenders, and in awarding Government contracts, public interest is the paramount consideration. (Shree Ostwal Builder's case (supra))."
25. In the said case, the Division bench of this Court held that although a citizen has no fundamental right to contract, in competing for the contract, he should not be unfairly treated and discriminated to the detriment of public interest. All the participating bidders are entitled to a fair and equal treatment. It was also held that the High Court should, normally, exercise judicial restraint unless illegality or arbitrariness, on the part of the employer, is apparent on the face of 13 KVL, J WP No.5094 of 2021 the record and that the courts can examine the decision making process and interfere if it is found vitiated by unreasonableness and arbitrariness. The court does not sit as a court of appeal, but merely reviews the manner in which the decision is made.
26. But as seen from the facts of this case, this is not a simple procedural violation, but because of the procedure adopted, prejudice is caused to the petitioner herein. When the petitioner has admittedly submitted the solvency certificate on 25.02.2021 itself, the respondents ought to have considered the case of the petitioner also instead of disqualifying him on 26.02.2021 as there is vagueness in the conditions of tender which resulted in unequal and discriminatory treatment and violated the doctrine of 'level playing field'. Admittedly, the tender notification does not say that the solvency certificate has to be produced from the Bank. No proof is produced by the respondents to show that the petitioner was in fact informed on 17.02.2021 about the submission of solvency certificate issued by the Bank. But it is admitted by the respondents that a phone call was made asking or reminding about the solvency certificate on 23.02.2021 and the same was produced on 25.02.2021. In these circumstances, it cannot be presumed that the petitioner was informed about the submission of solvency certificate on 17th or 16th February, 2021 and in spite of the same, he could not produce the same till 25.02.2021.
27. In the facts and circumstances stated above, the writ petition is allowed setting aside the impugned tender notification dated 21.01.2021 and the respondents are directed to issue fresh tender notification without any vagueness, as expeditiously as possible, as the issue pertains to supply of shoes and socks to the students studying in 14 KVL, J WP No.5094 of 2021 various schools. No order as to costs. Miscellaneous petitions, if any, in this writ petition, shall stand closed.
_________________________ KONGARA VIJAYA LAKSHMI, J Date: 08.03.2021 Note: Furnish CC forthwith.
(BO) NSR/BSS 15 KVL, J WP No.5094 of 2021 HON'BLE SMT. JUSTICE KONGARA VIJAYA LAKSHMI Writ Petition No.5094 of 2021 URGENT 138 Date: 08.03.2021 NSR/BSSs