Kerala High Court
K.C. Den And Co. vs P.P. Mathai And Ors. on 18 November, 2005
Equivalent citations: II(2006)BC36
Author: S. Siri Jagan
Bench: Rajeev Gupta, S. Siri Jagan
JUDGMENT S. Siri Jagan, J.
1. In these writ appeals, we perceive an unusual situation whereby the appellants are to be defeated by the very same weapon they brandish against their opponent, who is the 1st respondent in both these appeals. The essential facts necessary for the disposal of these appeals are summarised hereunder.
2. Government of Kerala, Water Resources Development, Project Circle, Muvattupuzha, by notification dated 10.12.2003, invited tenders for two works. For convenience, we shall adopt the very same nomenclature adopted by the Department for describing these two contracts, namely, PQ-26 and PQ-27. The tender had two parts. Pre-qualification bid and price bid. Price bids of only those persons whose pre-qualification bids are accepted would be opened. The bone of contention in both these appeals is the eligibility of the 1st respondent for pre-qualification. As we would note later in this judgment different people understood this eligibility for pre-qualification in different ways, which led to the litigation, The Malayalam notification described this eligibility for pre-qualification in terms of PAC (Probable Amount of Contract), which may be translated as follows:
The applicants should have experience in executing large works and they should have completed at least one work whose PAC should be at least 50% of the PAC of the present work.
We have adopted this translation since that is how the Malayalam version of the notification inviting tenders has been presented before us.
3. Eleven persons submitted tenders for the work. The Department pre-qualified 8 of them. The 1st respondent herein is one of the tenderers whose pre-qualification bid was not accepted. On the eve of the opening of the price bid, suspecting that his price bid would not be opened as, according to the Department, the 1st respondent was not pre-qualified, he filed W.P. (C) No. 21930/2004. The writ petition was filed on 22.7.2004. It came up for admission on 23.7.2004. The learned Single Judge posted the writ petition to 26.7.2004 to enable the Government Pleader to get instructions from the Department. On 26.7.2004, the learned Single Judge ordered notice by speed post and directed that status quo till 2.8.2004 be maintained. Later on, the status quo order was extended from time-to-time and ultimately, in I.A. No. 12586/2004, on 22.9.2004, the learned Single Judge passed an order directing that the award of contract, if any, would be subject to the result of the writ petition.
4. While so, on 17.8.2004, the learned Single Judge passed an order directing that in case the writ petitioner is pre-qualified, his price bid shall also be opened and considered along with other valid price bids made by rival contractors. The writ petitioner was permitted to file a representation along with a copy of the order. In the light of the said direction, the Chief Engineers' Committee took Ext. P13 decision on 2.9.2004 pre-qualifying the writ petitioner-1st respondent for the work PQ-27 and holding that the writ petitioner was not pre-qualified for the work PQ-26. Thereafter, the writ petition was amended challenging Ext. P13 decision of the Chief Engineers' Committee also, in respect of the work PQ-26. Lateron 15.10.2004, the learned Single Judge passed another order holding that the writ petitioner is pre-qualified for the work PQ-26 and directed the respondent to open the price bids in respect of that work. The writ petitioner's bid was found to be the lowest for that work. Pursuant to Ext. P13, the price bid submitted by the writ petitioner for the work PQ-27 was opened and found that he was the lowest bidder. In the above circumstances, the writ petitioner claimed award of both works as his price bids were lowest among all the tenders received in respect of both the works.
5. In the meantime, appellant in W.A. No. 1735/2005 impleaded himself in the writ petition as additional 5th respondent and the appellant in W.A. No. 1734/2005 impleaded himself as additional 6th respondent, Counter affidavits were filed and, ultimately, after final hearing of the writ petition, the learned Single Judge held that if the estimated probable amount of contract (PAC) or the final bill amount or the agreed amount of contract comes to 50% of the notified probable amount of contract in question, the concerned tenderer should be treated as pre-qualified. Accordingly, the learned Single Judge directed the official respondents to re-consider the award of contract of the work PQ-26. Further, since, by Ext. P1 3 decision, the Chief Engineers' Committee had already taken a decision that the writ petitioner is pre-qualified for the work PQ-27 and nobody had challenged the said decision, the Chief Engineers' Committee was directed to take a decision as to who are the contractors pre-qualified for the work PQ-26. It is the said decision which is under challenge in these writ appeals at the instance of the additional 5th and 6th respondents in W.P. (C) No. 21930/2004. In this connection, it may also be noted that this writ petition was heard along with W.P. (C) No. 24376/2004. Although, the writ petitioner in that writ petition is no longer on the scene, we have to refer to two documents produced as exhibits in that writ petition, which were relied on by the learned Single Judge.
6. The learned Single Judge found that there was difference in the language employed for describe in the eligibility criteria for pre-qualification in the Malay alam tender notice, the English tender notice and G.O (MS) No, 43/99/RD dated 9.6,1999 (which was produced as Ext. P9 in W.P. (C) No. 24376/2004), which is the basic document concerning award of tenders in the Irrigation Department. These three versions of the same eligibility condition may be reproduced as follows.
7. Going by the Malayalam tender notice, the eligibility condition is as follows:
The prospective applicant should have experience in executing large works and they should have completed at least one work whose PAC is not less than 50% of the average value of the work for which pre-qualification is sought.
In the English version as available in Ext. P4 in W.P. (C) No. 24376/2004, the eligibility criteria is described as follows:
The Superintending Engineer, Project Circle, Muvattupuzha on behalf of the Governor of Kerala, invites bids for pre-qualification and competitive tender for award of work in separate sealed covers for the following work from Registered A Class contractors/firms of water resources department/KPWD, who are financially stable. Intending contractors/firms should have previous experience of completing at least having on single similar work of like nature for an amount of 50% of the work intended to execute.
(Emphasis supplied) In Ext. P9 [W.P. (C) No. 24376/2004] G.O(MS) 43/99/IRD dated 9.6.1999, which is the basic order of the Government concerning award of tender in Irrigation Department, the eligibility criterion (as quoted by the learned Single Judge in paragraph 7 of the impugned judgment) is described as follows:
The prospective applicants should have experience in executing large works and they should have completed at least one work, having a magnitude of 50% of the average value of the work for which pre-qualification is sought.
8. Confronted with these three different exposition of the eligibility criteria for pre-qualification of the same work in three relevant documents, the learned Single Judge came to the conclusion that "if the estimated probable amount of contract or the final bill amount or the agreed amount of contract comes to 50% of the notified probable amount of contract of the concerned work, he should be treated as qualified."
9. In both these writ appeals, the contention of the appellants is that there is no vagueness of any kind in the tender notification and the eligibility criterion prescribed therein is that the tenderer should have completed at least one work earlier, the PAC of which is not less than 50% of the PAC of the present work. From a reading of the appeal memoranda in both the appeals, this contention of the appellants is unambiguously stated not only in the statement of facts, but also in the grounds, and strongly pressed into service against the impugned judgment. Therefore, it is abundantly clear that the appellants are challenging the impugned judgment only on the ground that the relevant criterion is the PAC of the earlier work and not the final bill amount.
10. In the course of arguments, in view of the divergence on this aspect, we wanted the learned Government Pleader to produce before us the files relating to the subject and the certificates produced by the parties to ascertain as to how each of the tenders have understood the eligibility condition. The files produced before us revealed a very peculiar situation to the chagrin of the appellants. In order to demonstrate this peculiarity, we shall extract below the certificates of the writ petitioner and the two appellants available in the files produced before us. The writ petitioner has produced a certificate dated 14.10.2003 from the Superintending Engineer, Project Circle, Muvattupuzha. The certificate reads thus:
CERTIFICATE This is to certify that Sri. P.P. Mathai, Government 'A' Class Contractor, Puzhayidayil House, Karukappilly P.O., Kolencherry has executed the work "M.V.I.P. Constructing Ooramana M.D. from Ch: Om. to 2000m. including C.D. Works (excluding aqueduct of Ch:1221m. to 1389m.)" vide Agreement No. 50/SEPCM/96-97 dated: 2.7.1996 satisfactorily. The agreed P.A.C. of the work was Rs. 1,03,52,065.
This Certificate is issued as per the request of the Contractor for producing along with other documents for the Pre-qualification works.
MUVATTUPUZHA, Sd/-
24.1.2002. SUPERINTENDING ENGINEER,
PROJECT CIRCLE, MUVATTUPUZHA.
The appellant in W.A. No. 1734 of 2005 has produced certificate dated 13.1.2004. The said certificate reads thus:
CERTIFICATE This is to certify that M/s. K.C. Den & Co., Kolencherry has undertaken the work of "MVIP - LBMC from Ch:3237om. to 34000m (32580 to 34210) -Balance work between Ch:33165m. to 34110m including rock blasting and CD, Works under Agreement No. 14/SEPCM/97-98 dated: 2.1.1998. The work was completed satisfactorily on 28.2.2003. Total value of work done as reported by the Executive Engineer, MVIP Dn. No. IV, Piravom is Rs. 74.77 lakh. (Rs. Seventy-four lakh, seventy-seven thousand). This certificate is issued as per the request of M/s. K.C. Den & Co., Kolencherry for attending Pre-qualification Tender.
Sd/-
V.T. PATRIS, SUPERINTENDING ENGINEER The appellant in W.A. No. 1735/2005 produced certificate dated 14.10.2003, which reads as follows:
CERTIFICATE This is to certify that Sri. K.P. Kuriakose, Kottanattu House, Kadayiruppu P.O., Kolencherry has undertaken the work of "MVIP-Constg. E.B.C. from Ch. 10204m to 10379m and from Ch. 10704m to 11154m including C.D. works" vide Agreement No. 1 l/SEPCM/95-96 dt: 16.6.1995. The contract was terminated without risk and cost. The value of work done, as reported by the Executive Engineer, MVIP Division No. V, Kuruppumthara is Rs. 70,77,122 (Rupees seventy lakh seventy-seven thousand one hundred and twenty-two only). This Certificate is issued as per the request of Sri. K.P. Kuriakose.
Sd/-
V.T. PATRIS SUPERINTENDING ENGINEER PROJECT CIRCLE, MUVATTUPUZHA All these three certificates were issued by the very same authority, namely, Superintending Engineer, Project Circle, Muvattupuzha, although, in the case of the writ petitioner, the incumbent of the post who issued the certificate is different. From these certificates, it is abundantly clear that the value of the works mentioned in the certificates of the appellants are not in terms of PAC or agreed PAC, but only in terms of final bill amount or, in other words, value of the work done, whereas that of the writ petitioner is in terms of agreed PAC. The contention in the appeals is that because the writ petitioner does not possess the qualification as per the notification which is completion of one work the PAC of which is not less than 50% of the PAC of the present work, the writ petition should be dismissed and the writ appeals should be allowed. If that contention of the appellants in these appeals are to be accepted, it is the appellants' pre-qualification bids which would have to be rejected, since their certificates are not in terms of either PAC or agreed PAC. That is why as a preamble to this judgment we said that the appellants are to be defeated by the very same weapon they brandish against their opponent. These writ appeals are liable to be dismissed on that short ground. However, since the appellant in W.A. No. 1734/ 2005 has raised another contention also, we shall deal with the same.
11. The contention runs like this. The price bids were opened on 23.7.2004. The appellant was awarded the work on 26.7.2004 and all the formalities required for completion of the contract was completed on 26.7.2004, which, according to the appellant, was before the learned Single Judge ordered status quo on 26.7.2004. There is a concluded contract between the appellant and the Department, which cannot be interfered with by this Court under Article 226 of the Constitution of India as has been held by the Hon'ble Supreme Court of India in the decisions of Sterling Computers Limited v. M&N Publications Limited and Ors. (1993) 1 SCC 445, TATA Cellular v. Union of India (1994) 6 SCC 651 and Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. and Anr. II (2005) BC 574 (SC) : (2005) 6 SCC 138. The argument of the appellant is that since the Supreme Court has categorically held that although judicial review in contractual matters of Government bodies is permissible to prevent arbitrariness and favouritism, only the decision making process can be interfered with and not the merits of the actual decision and since the writ petitioner had no contention regarding the eligibility of the appellant, the concluded contract between him and the Department cannot be interfered with by this Court as that would amount to interference in the actual decision itself and not in the decision making process.
12. Insofar as it is a fact that the legal position on the subject has been settled by those decisions, we need not go into the same elaborately. However, in this case, we are unable to agree with the contention of the appellants on the basis of the said legal proposition with regard to the facts of this case, since the learned Single Judge has not rendered his decision against the legal principles laid down in those decisions. The learned Single Judge has not interfered with the actual decision itself on merit. What the learned Single Judge has decided is that insofar as the criteria adopted by the Department in pre-qualification of tenders was not in consonance with the approved criteria fixed by the Government and the English and Malayalam versions of the tender notification differ on this aspect, either of the two criteria should be adopted. That amounts to only a judicial review of the decision making process adopted by the Department and not the actual decision as such. However, in the process of review of the decision making process, once it is found that the pre-qualification bid of the writ petitioner was wrongly rejected and the writ petitioner is entitled to be pre-qualified, necessarily his price bid would also have to be considered along with that of all eligible tenderers, which only has been directed by the learned Single Judge. Further, we have found that by awarding the contract to the appellant in W.A. No. 1734/2005, whose certificate showed his previous work in terms of value of work done and not in terms of PAC, the writ petitioner has been clearly and arbitrarily discriminated against which action would, in any event, clearly warrant a judicial review at the hands of this Court, as per the Supreme Court decision (supra).
13. Counsel for the appellant would also strenuously submit that since, by the time this Court had issued status quo order, he already had a concluded contract between himself and the Department, in the absence of any challenge against his pre-qualification, the concluded contract could not be interfered with by this Court in the writ petition filed by the 1st respondent on the ground that award of the contract is a dependent proceeding. We are unable to agree with this contention also. The writ petitioner had approached this Court on 22.7.2004. At that time, since admittedly, the price bids had not even been opened, there was no concluded contract. If the decision in such a writ petition is in favour of the writ petitioner, this Court is certainly invested with the power to set at right the wrong committed by the authorities by directing the appropriate authorities to re-consider the entire matter notwithstanding any intervening circumstances including execution of contract in favour of the appellant. Even otherwise, even if the contract had been concluded before 22.7.2004, then also this Court has ample powers to direct revision of the entire proceedings, if the process by which that decision was arrived at was tainted with arbitrariness. As such, there is absolutely no merit in any of the contentions of the appellant.
14. Although, it may not be strictly necessary, we wish to buttress the reasoning of the learned Single Judge with certain supporting facts which were revealed to us during the course of arguments before us. As we have already noted, there were at least three versions of the eligibility criteria for pre-qualification in three different relevant documents. Further, it has also come out that the certificates submitted by the appellants suffer from the very same vice which they attribute to that of the writ petitioner in the matter of eligibility criteria. In addition, we would also like to refer to Exts. P8 and P13 as also some of the documents relied on by the appellant in W, A. No. 1734/2005 in support of the finding. Ext. P8 is the minutes of the proceedings of the pre-qualification committee meeting of Chief Engineer of Irrigation Department held on 26.6.2004. In paragraph 3 at page 7 of Ext. P8, it is stated as under:
In the case of Sri. P.P. Mathai, the committee pointed out that he had already been pre-qualified for the works having PAC of this work and for the same nature of works of MVIP based on the recommendation by the same Superintending Engineer. The concerned bidder already represented his grievance to the committee with his evidence of pre-qualifying him for works under MVIP. The committee found that both the certificates of 103 lakh and 90.19 lakh were issued from the same office within a span of 1 year. The committee pointed out that the pre-qualification committee could not understand this strange circumstance that occurred in the project circle, Muvattupuzha and wanted to know the circumstances originated in the circle office.
In the same, the Chief Engineer considered the situation as one whereby the final bill amount of Rs. 103 lakh mentioned in the certificate produced by the appellant was later corrected by the same authority (although a different individual) to the effect that the final bill amount was only 90.19 lakh, although in the certificate, the amount of Rs. 103 lakh was mentioned as agreed PAC and not final bill amount. The above would conclusively indicate that the Chief Engineer had recommended pre-qualification of Sri. P.P. Mathai on the basis of the final bill amount of Rs. 90.19 lakh of his previous work. Therefore, what was in contemplation of the Chief Engineer in Ext. P8 was only the final bill amount and not the PAC.
15. Ext. P13 is the minutes of the proceedings of the pre-qualification committee meeting of Chief Engineers of Irrigation Department held on 2.9.2004. In this connection, it may be noted that originally, by Ext. P8, the Chief Engineer of Irrigation Department considered the pre-qualification and later this Court had, in the judgment dated 17.8.2004 in W.P(C) No. 22063/2004 and connected cases, held that as per rules, it is not the Chief Engineer, but the Committee of Chief Engineers who should conduct the pre-qualification proceedings, which resulted in Ext. P13. Then, in Ext. P13, at page 11, it is stated as follows:
(a) The pre-qualification committee after detailed discussion decided to pre-qualify Sri. P.P. Mathai for the work "MVIP-constructing Kuravilangad distributary from Ch. 5400m to 6400m including CD. works having estimate PAC Rs. 116.59 lakh as he has completed a single work costing 50% estimate PAC of this work.
2.(b) The pre-qualification committee also decided not to pre-qualify Sri, P.P. Mathai for the work "MVIP-Constructing Paimkulam aqueduct and flume bet. Ch. 690m to 1522m of Madakkathanam minor distributary" having estimate PAC of Rs. 137.45 lakh as the cost of single work completed by him is less than 50% estimate PAC of this work.
These findings would give the indication that what was in contemplation of the pre-qualification committee was PAC and not final bill amount. Strangely, what was before these Chief Engineers was also the same certificates produced by the parties which we had quoted earlier, which gave only the final bill amount or the final value of the work. As such, the Department adopted different yardsticks regarding the relevant criteria for deciding pre-qualification at different levels. In the circumstances, we do not find any infirmity whatsoever in the course adopted by the learned Single Judge in taking assistance from the basic order of the Government concerning award of tender in the Irrigation Department for deciding as to what is the criteria to be adopted in deciding whether the parties have been pre-qualified based on the tender notification.
16. While coming to this decision, we also had public interest in mind. Admittedly, in respect, of both the works, the writ petitioner was the lowest tenderer. In the course of arguments, the learned Counsel for the appellant in W.A. No. 1734/ 2005 drew our attention to the letter of the appellant dated 9,12.2004 produced by him as Ext. R6(3) along with his counter affidavit dated 5.6.2005. The body of the letter reads thus:
As regards the above work, we would like to bring to your kind notice that we are prepared to reduce the agreed rate up to 12.5% (twelve point five percentage) above estimate rate.
This was the rate quoted by the writ petitioner. However, there is no indication that this subsequent offer of the appellant was accepted. Neither Counsel for the appellant in W.A. No. 1734/2005 nor the learned Government Pleader could enlighten us about the same. In any case, there is no material before us to prove that it was accepted and as to why this voluntary reduction in rate was not accepted. By this, we do not mean that it would have made any difference to our decision in the matter, if it had been so accepted. Further, the learned Government Pleader would submit that if a re-tender is now ordered, it is likely that even the PAC of the amount may go considerably higher, which would result in great loss to the Government. This situation is of very relevant consideration in the context of public interest insofar as the present work is concerned, since given the present circumstances, there is no possibility of getting the work done below or even at the rate quoted by the writ petitioner. Therefore, it would be in the best of public interest also to sustain the judgment of the learned Single Judge.
17. Before closing finally, a desperate contention raised by the counsel for the appellant in W.A. No. 1734/2005 has to be dealt with. The contention is based on the statement filed on behalf of the third respondent dated 2.8.2004 and Ext. R3(a) produced along with the same. It is stated therein that although a certificate was issued showing the agreed PAC of the work as Rs. 1,03,52,065, on calling the details of work done, it was reported that the final bill amount of the said work comes to only Rs. 90,19,053. The contention on the basis of this statement in Ext. R3(a) i s that the writ petitioner had produced a false certificate and that is why his pre-qualification bid was not accepted. Even in the said statement, there is no such contention although it does vaguely mention about the certificate being false. Ext. R3(a) also shows that the earlier certificate issued by the Superintending Engineer, Project Circle, Muvattupuzha has been cancelled. It further states that although this discrepancy in the certificate produced by the writ petitioner was brought to the notice of the Chief Engineer, he ignored the same. With regard to this contention, four very interesting aspects emerge. First is that Ext. R3(a) order is seen dated 20.7.2004, namely, at the eve of the opening of the price bids although the certificate which it purported to cancel was issued as early as on 24.1.2002. The second is that both the certificates are issued from the very same office, although by two different Superintending Engineers. The third is that not only the Chief Engineer but the Committee of Chief Engineers also did not consider this fact worthy of consideration while taking Ext. PI 3 decision. The fourth is that the amount of Rs. 1,03,52,065 is the agreed PAC of the work and the amount of Rs. 90,19,053 is the final bill amount and what is corrected as per Ext. R3(a) is the final bill amount. Further, it is submitted at the bar that the said Shri. V.T. Patris who issued Ext. R3(a), is now under suspension. We also note here that the certificates of the two appellants herein were issued by the said Shri V.T. Patris who issued Ext. R3(a), whereas the certificate of the 1st respondent was issued by another Superintending Engineer. We specifically asked the Government Pleader as to whether the Department has got a case that the writ petitioner's pre-qualification bid was bad for the reason that he had produced a false certificate. He categorically answered in the negative. He asserted that going by the records, the pre-qualification bid of the writ petitioner was rejected only on the ground that the PAC of the previous work done by him did not come within the eligibility criteria as per the notification and the Department has no other case. In fact, if they had raised such a contention, the accusing finger would have pointed at themselves because both the certificate were issued by the Department itself. Importantly, the Department has not considered it feasible to challenge the judgment of the learned Single Judge in appeal also. For these reasons, there is absolutely no merit in this desperate contention of the appellant in W. A. No. 1734/2005, which even the Department does not subscribe to.
18. In view of the above findings, we see absolutely no infirmity whatsoever in the judgment of the learned Single Judge and therefore the writ appeals are without any merit whatsoever. Accordingly, the same are dismissed. However, in the circumstances of the case, we are not inclined to order costs.
Before parting with the case, we deem it appropriate and necessary in public interest to direct the department to take appropriate steps to streamline its procedure for inviting tenders in future, to conform to established norms, leaving no room for doubt regarding the eligibility criteria for intending tenders, or any of the tender conditions for that matter, so that unnecessary litigation and wasteful expenditure as also delay in carrying out the works caused thereby can be avoided. Exercising great restraint we leave it at that.