Kerala High Court
T.P.Constructions vs The Chief Engineer on 15 June, 2017
Author: P.N.Ravindran
Bench: P.N.Ravindran
IN THE HIGH COURT OF KERALA AT ERNAKULAM [C.R.]
PRESENT:
THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN
&
THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI
MONDAY, THE 12TH DAY OF FEBRUARY 2018 / 23RD MAGHA, 1939
WA.No. 1963 of 2017 IN WPC. 14966/2017
(AGAINST THE JUDGMENT IN WP(C) 14966/2017
of HIGH COURT OF KERALA, DATED 15-06-2017)
APPELLANT/3RD RESPONDENT:
T.P.CONSTRUCTIONS,
A.V.M. COMPLEX, CHIRANGARA,
KORATTY SOUTH P.O,
THRISSUR-680 308,
REPRESENTED BY
ITS PROPRIETOR, T.P. VARKEY.
BY ADVS.SRI.ANIL D. NAIR
SRI.R.SREEJITH
SRI.P.JINISH PAUL
KUM.MEKHALA M.BENNY
RESPONDENTS/1ST AND 2ND RESPONDENTS & PETITIONER:
1. THE CHIEF ENGINEER,
KERALA STATE HOUSING BOARD,
SANTHI NAGAR, THIRUVANANTHAPURAM
PIN 695 001.
2. THE EXECUTIVE ENGINEER,
KERALA STATE HOUSING BOARD,
SANTHI NAGAR, THIRUVANANTHAPURAM
PIN 695 001.
3. ABDUL NAZAR . M.A,
AGED 48 YEARS, S/O. M.A. ABDULLA KUNHI,
RESIDING AT NAFIH MANZIL,
MASTHIKUND KETTUNGAL,
P.O MULIYAR, KASARGOD- 671 121
R3 BY ADVS. SRI.SHIRAZ ABDULLA
SRI.M.S.IMTHIYAZ AHAMMED
R1&R2 BY ADV. SRI.MANOJ RAMASWAMY, SC, KERALA STATE HOUSING BOARD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 25.01.2018, THE COURT ON 12.02.2018,
DELIVERED THE FOLLOWING:
ss
C.R
P.N.RAVINDRAN, J
&
R.NARAYANA PISHARADI, J
---------------------------------------------
W.A.No.1963 of 2017
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Dated this the 12th day of February, 2018
JUDGMENT
R. Narayana Pisharadi, J The Kerala State Housing Board (hereinafter referred to as the 'Board') invited online tenders for construction of an indoor stadium for the LBS College of Engineering at Kasaragod. Three persons submitted tenders. The technical bid submitted by Sri.Abdul Nazar was not admitted for the reason that he did not submit a valid certificate of registration as 'A' class contractor. Then he filed the writ petition W.P.(C)No.14966 of 2017 for issuing a writ of mandamus directing the officials of the Board to process the financial bid submitted by him. Later, the tender submitted by T.P. Constructions, the appellant herein, was accepted.
2. A learned single Judge of this Court found that the writ petitioner had a valid certificate of registration/licence on the date of submission of the tender by him. The learned single Judge declared that the course adopted by the Board in rejecting the bid W.A.No.1963 of 2017 2 submitted by the writ petitioner and accepting the bid submitted by the appellant is arbitrary and illegal and directed the Board to resume the scrutiny of the tenders from the stage of the technical bids. Aggrieved by the judgment of the learned single Judge, this writ appeal is filed by T.P. Constructions.
3. We have heard Sri.Jinish Paul, learned counsel for the appellant, Sri.Manoj Ramaswamy, learned Standing Counsel for the Board and Sri.Shiraz Abdulla, learned counsel for the third respondent/writ petitioner.
4. Learned counsel for the appellant contended that writ jurisdiction of the court cannot be invoked in contractual matters for judicial review. Learned counsel submitted that administrative decisions can be reviewed by the court only in case of arbitrary and malafide exercise of power by the authorities in the decision making process. Learned counsel would further submit that in the absence of a valid certificate of registration submitted by the writ petitioner along with the tender, the authority concerned was justified in rejecting his tender. Learned counsel for the appellant submitted that the decision of the tender inviting authority is not vitiated by arbitrariness or malafides or favoritism. Learned counsel would also W.A.No.1963 of 2017 3 submit that in the absence of any malafide exercise of power by the tender inviting authority in rejecting the technical bid submitted by the writ petitioner, the learned single Judge went wrong in exercising the discretionary jurisdiction under Article 226 of the Constitution of India and in directing the authorities of the Board to accept the technical bid submitted by the writ petitioner. Learned Standing Counsel for the Board supported the aforesaid contentions.
5. Per contra, learned counsel for the third respondent/writ petitioner contended that the tender inviting authority could not have rejected the technical bid submitted by him on the premise that he had no valid registration certificate on the date of submission of the tender. Learned counsel would submit that the writ petitioner had a valid registration certificate and he had submitted a true copy of such registration certificate along with the technical bid. Learned counsel would further contend that the tender inviting authority was not justified in rejecting the technical bid for the reason that the copy of the certificate of registration submitted by him did not contain the signature of the registering authority.
6. We may at first refer to the time schedule fixed by the W.A.No.1963 of 2017 4 Board for receiving and opening the tenders. The following table in Ext.R1(a) tender notification dated 28.03.2017 gives the details in this regard.
1 Name of work Construction of Indoor auditorium
for LBS College of Engineering
Kasaragod - civil works including
water supply and sanitary
installation works
2 Estimate Amount (PAC) Rs.65009759/-
3 Earnest Money Deposit (EMD) Rs.200000/-
4 Tender Submission Fee Rs.10500/-
5 Period of completion 18 months from date of handing
over the site
6 Classification of Bidder 'A' Class
7 Tender documents Can be downloaded from the web
site www.etenders.kerala.gov.in
8(a) Pre-bid meeting date 11.4.2017 at 11.30 AM
8(b) Pre-bid meeting venue At Chief Engineer's chamber,
KSHB, Santhi Nagar,
Thiruvananthapuram.
9 Last date and time of Receipt of 18.04.2017 at 4.00 PM
Tender/Bids
10 Last date and time of receipt of 21.04.2017 at 1.00 PM
relevant document as
mentioned in (NIT) by speed
post
11 Date and Time of Opening of 21.04.2017 at 4.00 PM
Technical bids
7. Ext.R1(a) tender notification shows that the following documents had to be submitted along with the tender.
W.A.No.1963 of 2017 5 Sl.No Scanned copy (through online Through speed post . cover) (Superscribing name of work & tender No.) 1 Copy of Registration Certificate Copy of Registration Certificate attested by Gazetted Officer of attested by Gazetted Officer of Government department with Government department with validity & class of registration validity & class of registration 2 Copy of EMD exemption Copy of EMD exemption certificate/concession certificate/concession certificate certificate attested by attested by Gazetted Officer of Gazetted Officer of Government department, if any. Government department, if any. 3 Preliminary agreement, in Original preliminary agreement in
stamp paper worth Rs.200/- stamp paper worth Rs.200/- duly duly filled and signed by filled & signed by bidder. bidder.
4 Copy of Government orders & Copy of Government orders & proof eligibility in participation proof eligibility in participation in in tendering etc in case of tendering etc in case of Labour Labour Contract co-operative Contract co-operative society society 5 Duly filled E-payment Duly filled E-payment requisition requisition 6 Any other certificate required Any other certificate required for for tender acceptance tender acceptance 7 Print out of Tender document such as NIT, pre bid agreement (copy) with signature of the bidder.
8. Before we proceed further, it is necessary to point out some of the essential conditions of the tender. They are: (1) All bid/tender documents shall be submitted online only and no manual submission of the same shall be entertained. (2) Without necessary documents, the tenders will not be considered and shall be summarily rejected. (3) The technical bids shall be opened, W.A.No.1963 of 2017 6 evaluated and short listed as per eligibility and technical qualifications. (4) Pre-qualification/technical bid proposal shall contain the scanned copy of valid registration certificate. (5) Only those bidders having a valid and active registration on the date of submission of the bid shall submit the bids online. (6) Bidders who do not possess valid and active registration on the date of submission of the bid shall refrain from participating in the tender. (7) Correction of bids once submitted online shall not be permitted. (8) The contractor shall submit mandatorily an attested copy of his valid and active registration certificate on or before the date specified in the notice inviting tenders. (9) Non-receipt of the documents in time or failure to enclose any of the specified documents shall result in the rejection of the tender.
9. There is no dispute with regard to the fact that the third respondent/writ petitioner had submitted an online tender in response to Ext.R1(a) tender notification before the prescribed time. However, the technical bid submitted by him was not admitted on 24.04.2017, the date on which the technical bids were opened. The reason for rejection of the technical bid submitted by the writ petitioner was that he had failed to submit a valid registration W.A.No.1963 of 2017 7 certificate.
10. The plea of the writ petitioner is that he had submitted a copy of valid certificate of registration along with the tender. However, in the counter affidavit filed by the Board in the writ petition, it is stated that the attested photocopy of the registration certificate submitted by the writ petitioner was valid only upto 31.3.2017. It is stated by the Board that in the attested copy of the registration certificate uploaded and submitted by the writ petitioner, the endorsement regarding extension of the validity of the registration beyond 31.03.2017 did not contain the signature of the registering authority.
11. According to the writ petitioner, Ext.P3 is the copy of the attested copy of the registration certificate submitted by him along with the tender. Ext.P3 would show that the period of validity of the registration of the writ petitioner was only upto 31.03.2017. Of course, there is an endorsement in Ext.P3 that validity is extended upto 31.03.2020. But, this endorsement does not bear the signature of the Superintending Engineer who is the registering authority. Ext.R1(b) is the copy of the registration certificate uploaded by the writ petitioner and Ext.R1(c) is the attested W.A.No.1963 of 2017 8 photocopy of the registration certificate sent by the writ petitioner by post (these documents were produced by the Board in the writ petition). These documents also show that the endorsement regarding extension of validity of the registration certificate upto 31.03.2020 did not bear the signature of the registering authority. It is an admitted fact that copy of the certificate of registration uploaded by the writ petitioner and also the copy of the certificate of registration sent by him by post did not contain the signature of the registering authority below the endorsement made therein for extension of the validity of the registration up to 31.03.2020.
12. As noticed earlier, it was one of the conditions of tender that the bidder shall have a valid certificate of registration on the date of submission of the bid and that he shall submit a scanned copy of the valid certificate of registration along with online tender and that he shall send by speed post an attested copy of the valid certificate of registration. The tender was submitted by the writ petitioner on 18.04.2017. Admittedly, as per the copy of the registration certificate submitted by him, his registration was valid only upto 31.03.2017. Admittedly, the documents submitted by him did not show that his registration was valid on the date of W.A.No.1963 of 2017 9 submission of the tender, viz 18.04.2017.
13. The attempt of the writ petitioner is to explain that the signature of the Superintending Engineer below the endorsement regarding extension of the validity of registration in the certificate of registration is in coloured ink and when the scanned copy of it was uploaded in the website, the signature of the registering authority below the endorsement did not appear. Even if this explanation for the absence of signature of the registering authority in the scanned copy of the certificate of registration uploaded by the writ petitioner is accepted as correct, there is no explanation for the absence of the signature of the registering authority in the copy of the certificate of registration sent by the writ petitioner by speed post. It is to be noted that the writ petitioner had produced a coloured scanned copy of the registration certificate (Ext.P6) in the writ petition which bears the signature of the registering authority below the aforesaid endorsement regarding extension of the validity of registration. The writ petitioner produced the original certificate of registration for our perusal and then we satisfied ourselves that a photocopy of the same could be taken without disappearance of the signature, in coloured ink, of the Superintending Engineer in that W.A.No.1963 of 2017 10 document. The writ petitioner has not offered any explanation for not sending by speed post such a copy of the certificate of registration, which contained the signature of the Superintending Engineer below the endorsement regarding the validity of registration upto 31.03.2020, to the tender inviting authority.
14. Learned counsel for the third respondent/writ petitioner would contend that it was by an inadvertent mistake that the copy of the certificate of registration sent by him did not contain the signature of the Superintending Engineer beneath the endorsement regarding extension of the validity of the registration. Learned counsel would contend that such a mistake did not affect the validity of the tender submitted by the writ petitioner, especially when he really had a valid certificate of registration on the date of submission of the bid.
15. The principles in regard to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts are well settled. The modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal over administrative decisions but merely reviews the manner in which the decision was made. Administrative decisions W.A.No.1963 of 2017 11 have to be tested by the application of the principles of reasonableness, arbitrariness and mala fides. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process. The court can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether the choice or decision is made 'lawfully' and not to check whether the choice or decision is 'sound'. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. A court, before interfering in tender or contractual matters in exercise of power of judicial review, would examine whether the process adopted or decision made by the authority is mala fide or intended to favour someone or whether it is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with the W.A.No.1963 of 2017 12 relevant law could have adopted or made it. A mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision making process or the decision. Exercise of the power of judicial review would be called for if the approach is arbitrary or malafide or the procedure adopted is meant to favour one. But, where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible (See Tata Cellular v. Union of India: AIR 1996 SC 11, Sterling Computers Limited v. M & N Publications Limited : AIR 1996 SC 51, Jagdish Mandal v. State of Orissa: (2007) 14 SCC 517, Montecarlo Ltd v. NTPC Ltd: AIR 2016 SC 4946 and Afcons Infrastructure Ltd v. Nagpur Metro Rail Corporation: AIR 2016 SC 4305).
16. In the instant case, the tender process was in two stages. The first stage involved technical evaluation and the second W.A.No.1963 of 2017 13 stage involved financial evaluation. It was an essential condition of the tender that the technical bid proposal made online shall contain a copy of the registration certificate with validity and class of registration. It was also an essential condition of the tender that the tenderer shall send by speed post, a copy of the registration certificate. It was necessary for the tenderer to submit active and valid registration certificate along with the tender. Admittedly, the scanned copy of the certificate of registration uploaded by the writ petitioner did not bear the signature of the registering authority at the place where the endorsement regarding extension of the validity of the registration beyond 31.03.2017 was made. The copy of the certificate of registration send by him by post also did not bear the signature of the registering authority. It was in such circumstances, the authorities of the Board rejected the technical bid submitted by the writ petitioner.
17. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case, the authority issuing the tender may be required to enforce W.A.No.1963 of 2017 14 them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases (See Poddar Steel Corporation v. Ganesh Engineering Works : AIR 1991 SC 1579).
18. It is a well settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the court should not be prompt to ascribe superfluity to the language of a document "and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use". To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by others should be presumed to use words without a meaning. The court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable (See Ramana Dayaram Shetty v. The International Airport Authority of India : AIR 1979 SC 1628).
19. The acceptance or rejection of a bid should be looked at not only from the point of view of the unsuccessful party but also W.A.No.1963 of 2017 15 from the point of view of the employer. The terms of the notification inviting tenders cannot be ignored as being redundant or superfluous. They must be given necessary significance (See Central Coalfields Limited v. SLL-SML : (2016) 8 SCC 622). It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given (see Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd : AIR 2016 SC 4305).
20. Learned counsel for the third respondent relied upon the decision in Rashmi Metaliks Limited v. Kolkata Metropolitan Development Authority : (2013) 10 SCC 95 to contend that submission of a valid certificate of registration along with the tender cannot be found as an essential condition of the tender. It was a case in which the failure to submit the latest income tax return along with the bid was held to be not violative of an essential condition of the tender. The same is not the situation in the present case. Here, the basic document for proving the eligibility of the third respondent was not produced. Moreover, in Central Coalfields case (supra), it has been held that the decision in Rashmi Metaliks W.A.No.1963 of 2017 16 (supra) must be confined to its own peculiar facts.
21. It is settled law that when an essential condition of the tender is not complied with, it is open to the person inviting the tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to the consequence of non-compliance thereto. If non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender; otherwise it is only a collateral term (See Kanhaiya Lal Agarwal v. Union of India : (2002) 6 SCC 315).
22. In the instant case, submission of copy of a valid certificate of registration was an essential condition of the tender. It was a document which was necessary for the Board to decide whether the bidder was eligible, suitable and competent to do the work. A clause, the violation of which entails rejection of a tender, is an essential clause. It was one of the conditions of tender that the technical bid shall be opened, evaluated and short listed as per eligibility and technical qualifications. Assessment of eligibility and technical qualifications would necessarily require submission of the documents specified by the tender inviting authority, by the bidder.
23. In our view, the action of the Board in rejecting the W.A.No.1963 of 2017 17 technical bid submitted by the writ petitioner on the ground that he had failed to submit a valid registration certificate cannot be found to be arbitrary or malafide. There is also no allegation raised by the writ petitioner that such a decision was taken by the Board with a view to favour the appellant. When the tender conditions stipulated that the tenderer shall submit a copy of valid and active registration certificate along with the tender, submission of a copy of registration certificate, which did not bear the signature of the registering authority extending the validity of the registration beyond 31.03.2017, did not amount to due compliance with the essential conditions of the tender. The Board cannot be found fault with for rejecting the technical bid submitted by the writ petitioner for non-submission of a valid certificate of registration. The decision taken in that regard by the Board cannot be found to be arbitrary or malafide or perverse.
24. Learned counsel for the third respondent invited our attention to Ext.P5 Government order and contended that the Board should have taken note of the fact that the Government had ordered that the validity of all contractors' licences which expired on 31.03.2017 would be extended upto 31.08.2017. We see no merit W.A.No.1963 of 2017 18 in this contention. It is true that as per Ext.P5, the Government had ordered that the validity of all contractors' licences which expired on 31.03.2017 would be extended upto 31.08.2017. It is to be noted that Ext.P5 Government order is dated 25.04.2017. The writ petitioner had submitted his tender on 18.04.2017. The evaluation of the technical bids was completed on 25.04.2017. The technical bid submitted by the writ petitioner was rejected on 24.04.2017. Since the writ petitioner had submitted tender on 18.04.2017, he cannot take advantage of Ext.P5 Government order which was issued only on 25.04.2017. Moreover, Ext.P5 order issued by the Government did not automatically extend the validity of licences of contractors up to the date 31.08.2017. What is stated in Ext.P5 Gvernment order is only that the validity of all contractors' licences which expired on 31.03.2017 will be extended upto 31.08.2017. Therefore, it is evident that in each case the registering authority had to extend the validity of registration up to the date 31.08.2017 in the light of Ext.P5 Government order.
25. In view of the aforesaid conclusions reached by us, we find that the learned single Judge went wrong in exercising jurisdiction under Article 226 of the Constitution of India to find that W.A.No.1963 of 2017 19 the decision of the Board in rejecting the technical bid submitted by the writ petitioner is arbitrary and illegal. The learned single Judge should not have sat in appeal over the decision of the Board to reach such a conclusion. The real question was not whether the writ petitioner had a valid certificate of registration on the date of submission of the tender. The real question was whether the writ petitioner had submitted along with the tender, a copy of the certificate of registration which was valid on the date of submission of the tender. The Board found that the writ petitioner had failed to submit a copy of a valid certificate of registration. The decision taken by the Board in that regard, in our view, cannot be termed as arbitrary, mala fide or perverse. It therefore follows that the impugned judgment cannot be sustained.
In the result, we allow the writ appeal, reverse the judgment of the learned single Judge and dismiss the writ petition. No costs.
Sd/-
(P.N.Ravindran, Judge) Sd/-
(R. Narayana Pisharadi, Judge) //True Copy// P.A. To Judge ss