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Rajasthan High Court · body

2000 DIGILAW 1523 (RAJ)

Jain Construction Company v. State of Rajasthan

2000-12-18

J.C.VERMA

body2000
Honble VERMA, J.–Both the revision petitions have been filed against the order dated 2.9.2000 passed by the Additional District Judge No. 2, Ajmer by which order the order passed by the trial Court on 17.8.2000 on the application filed under Order 39 Rule 1 and 2 CPC have been reversed holding therein that the plaintiff petitioner was not entitled for any interim order pending the civil suit. (2). The petitioner plaintiff was one of the applicant applying for tender for construction of Satellite Hospital at Adarsh Nagar, Amer as per the advertisement dated 11.5.2000. The tender forms could be purchased from the office from 10.6.2000 to 24.6.2000 and submitted upto 26.6.2000 when the technical bid was to be opened at 4.00 p.m. It was the requirement of the tender that the applicants were to purchase book-lets containing the details required to be filled up in the shape of two booklets called `Technical bid and the `Financial bid. The Technical bid and the Financial bid booklets contains the instructions in regard to experience and documents to be attached along with the tender. Technical bid was to be opened on 26.6.2000 at 4.00 p.m. and if the technical bid submitted by the applicants were to be found in order, the other part of the bid i.e. Financial bid was to be opened on 3.7.2000. Initially the tender was for the approx. cost of the construction of Rs. 138 lacs with ernest money of Rs. 2.76 lacs. It was mentioned in the advertisement that 0.5% was to be deposited as ernest money by the registered contractors of the Government and the applicants shall be bound by the conditions as mentioned in RPWA 100. (3). Except the above-said details in the advertisement, no other conditions had been mentioned primarily for the reason the instructions and conditions and documents have been mentioned in the book-lets containing performas called the technical bid and financial bid. (4). Vide another letter dated 21.6.2000, the estimated cost was increasd to Rs. 145.63 lacs and with proportionate increase of the ernest money. As many as seven forms/government contractors applied in response to the advertisement including the petitioner plaintiff. (5). As per record, produced, out of seven bidders the technical bid was found to be in order in regard to two bidders only i.e. Ankit Construction and Gyarsi Lal Mohan Lal. 145.63 lacs and with proportionate increase of the ernest money. As many as seven forms/government contractors applied in response to the advertisement including the petitioner plaintiff. (5). As per record, produced, out of seven bidders the technical bid was found to be in order in regard to two bidders only i.e. Ankit Construction and Gyarsi Lal Mohan Lal. Three technical bids were found to be not in order only on the ground that the sales tax clearance certificate had not been attached i.e. the technical bidders of the petitioner Jain Construction, Shyam Lal and Asian Construction. (6). As per the order impugned, three contractors namely Jain Construction Company, the petitioner, M/s. Sujan Mal Gadia and Mukesh G. Goyal and another had filed the suits challenging the action of the respondents in rejecting their technical bid on the ground that as per the instructions of the booklet and performas issued by the department in regard to Technical bid, there was no requirement what-so-ever to attach the clearance certificate of Income tax or Sales tax and the documents as mentioned in the book-let of technical bid had been rightly submitted. It was the case of the plaintiff petitioner that if at all the income tax clearance certificate and sales tax clearance certificates are required to be filed, those could be attached only with the book- let of Financial bid which financial bid was to be opened on a subsequent date of opening of the technical bid. (7). Along with the suit, an application under Order 39 Rule 1 and 2 C.P.C. was also filed. The trial court after going through the various submissions made by the parties had granted the application under Order 39 Rules 1 and 2 CPC with a direction that the petitioner and other plaintiffs in other suits be considered in opening the Financial bid of the plaintiffs. For the reasons that the Technical bid was rejected, therefore, the department had not thought it proper or fit to open the Financial bid of the plaintiffs as as per the department instructions the Financial bid is to be opened only if the Technical bid is found to be in order. For the reasons that the Technical bid was rejected, therefore, the department had not thought it proper or fit to open the Financial bid of the plaintiffs as as per the department instructions the Financial bid is to be opened only if the Technical bid is found to be in order. It was observed by the trial court in its order dated 17.8.2000 that as per the submission made by the plaintiffs in the suits including the suit of the petitioner, it had been averred that they had already attached the required documents of Income tax and Sales tax clearance in the booklet of the Financial bid. It was also further observed by the trial court that in case this submission is found to the incorrect after opening the Financial bid of the plaintiffs including the petitioner, they can be penalised as per law by deducting Rs. 30,000/- from ernest money of each of the plaintiffs. (8). The order of the trial court was challenged in appeal before the appellate court of Additional District Judge No. 2, Ajmer. Three appeals were filed by Mohan Lal, respondent, Partner of Gyarsi Lal Mohan Lal firm whose technical bid had been accepted against the order passed under Order 39 Rules 1 and 2 CPC. The appellate court vide the impugned order dated 2.9.2000 had reversed the order of the trial court on the grounds mentioned therein. (9). Counsel for the petitioner states that the appellate court in Para 7 had held and observed that as per the condition No. 4 mentioned in the Technical bid booklet-proforma, there is no such provision that any sales-tax clearance certificate and Income-tax clearance certificates are required to be attached with the form of the Technical bid, but has observed that as per Cl.4(a) the applicant is to show the financial resources as per Schedule I. He has referred to the booklet of financial bid where it is mentioned that as per RPWA 100, there is a condition No. 14 to the effect that the applicant is required to attach the income tax and sales tax clearance certificates, but has also admitted that it is not clear that these certificates are to be attached along with form/booklet of Financial Bid or the document of the technical bid. It is the observation of the appellate court that from the bid document/form/booklet, it is not clear as to when said clearance certificates are to be attached. However, he observed that there is a provision that certain documents were to be attached with the technical bid and no such provision of attaching any such document with the financial bid. The court had formed an opinion that along with the technical bid as per Schedule I, the applicant was to show the financial resources and, therefore, it is implied that the clearance certificate of income tax and sales tax ought to have been attached with the technical bid even though it is not specifically required to be attached. (10). As per the admitted case of the parties, in response to the tenders, the parties are to submit two separate envelops containing the booklet/proforma of Technical Bid and booklet/proforma of Financial Bid. Both the envelops containing the Technical and Financial Bid are to be put in the third envelop at the time of submission. The Technical Bid is to be opened first and if the Technical Bid is in order only then Financial Bid is to be opened of the applicants whose Technical Bid is found to be in order. (11). For the reason that in the present case, we are concerned with the Technical Bid only and, therefore, it shall be material to enumerate hereunder the relevant portion of the requirement as per the booklet/proforma of Technical Bid. PUBLIC WORKS DEPARTMENT SPECIAL CONDITIONS OF CONTRACT POST QUALIFICATION OF CONTRACTORS Special conditions of contract for post qualification, as detailed hereinunder, shall be applicable in addition to all other terms and conditions already prescribed under standard agreement forms/rules and regulations relating to contracts Applicability: 1. The requirement of post qualification of contractors would be applicable only execution of works costing more than Rs. 100 lacs and less than Rs. 250 lacs. Procedure 2. The procedure for post qualification would be as follows:- (i) Two envelope system would be adopted for post qualification Envelope I being the Technical Bid and Envelope 2 being the Financial Bid. Each Envelope would be sealed separately and superscribed envelope I - Technical bid and envelope 2 - Financial bid respectively. Both envelopes would be placed in a third envelope bearing the name of the work, and the name of the bidding contractor. Each Envelope would be sealed separately and superscribed envelope I - Technical bid and envelope 2 - Financial bid respectively. Both envelopes would be placed in a third envelope bearing the name of the work, and the name of the bidding contractor. (ii) The Technical bid envelope would be opened on the date and time specified in the Notice Inviting Tenders, and the bid would be evaluated by the Committee to be presided by the Chief Engineer PWD concerned with the work, and comprising of one other Chief Engineer in the department, and the Financial Advisor PWD, according to the criteria for the post qualification laid down hereunder. (iii) The Financial Bid envelope would be opened on the time and date specified in this regard in the Notice Inviting Tenders in respect of only those bidders who fulfil the post qualification criteria. 3. ............ DOCUMENTATION (4) The bidder should furnish the following documents along with the Technical Bid; (a) Information regarding financial resources and capability, in schedule-I. (b) Information regarding works executed in the last five years in Schedule II(a) or II (b) or II (c), whichever is applicable. (c) Certificates from the concerned Engineer in charge in support and verification of the information in Schedule II(a), II(b) or II(c). (d) Information regarding machinery and equipment required for deployment, as detailed in Schedule III. IMPORTANT 5. The bidder must ensure that all the information required in the documents is furnished by him in all respects. He would not be allowed to withdraw any document, or to supplement any information furnished by him in these documents, or to rectify any information furnished therein, after submitting the bid. REJECTION OF BIDS: 6. ............. 7(i). If a bid is not accompanied with requisite document mentioned in clause 4(a) to 4(d), or is not in accordance with the procedure specified in para 2(i), or is not accompanied with the earnest money (if required), it would be liable for rejection. (12). Schedule I about the financial resources as per clause 4(a) contains the particulars to be supplied in regard to the financial turn over for three years with balance-sheet and profit and loss accounts, total financial turn over in the current financial year and the particulars if the bidder had even been debarred or declared solvent and the name of the banker. (13). (13). Schedule II(a) as per clause 4(b) above, requires the bidder to give the details of the quantity of works executing during the last financial year. (14). Schedule III as per clause 4(d) requires the bidder to give the details of machinary and equipment required to be deployed by the contractors. (15). From the complete reading of the form/booklet of the Technical Bid, the applicant is not required to attach any clearance certificate of Income tax or sales tax and if in such circumstances while examining the form/proforma/details submitted along with the Technical Bid, if any of the bidder had not submitted the clearance certificate of Income-tax or Sales- tax, it cannot be said that action of the respondent cannot be held to be justified to ignore the right of the said applicant to consider so far the Financial Bid is concerned. (16). The Appellate Court has also observed the facts that from the reading of the Technical Bid, requirement to be submitted of the documents, it was not necessary for the bidder to submit the clearance certificate of Income-tax or the Sales-tax. The Court while deciding the interim injunction application in not required to add or subtract of their own over and above which had been specifically mentioned in the forms and, therefore, the observation of the appellate court to the effect that even if the Income-tax or Sales-tax clearance certificate is not required to be submitted along with the Technical Bid, but it can be implidely read for Schedule I(a) so far as the financial resources are concerned. The Appellate Court had ignored the fact that the financial resources are meant for execution of the work as to satisfy the State Government that the bidder had a capacity to undertake the bid. (17). The respondent State has also produced the Technical Bid proforma of Gyarsi Lal Mohan Lal, private respondent, which was found to be in order by the authorities. This form had attached tax Tax clearance certificate in Form ST-19 (Photo-Stat attested copy). This certificate had been perused by me. There are only two columns in the certificate which reads as under:- FORM S.T. 19 TAX CLEARANCE CERTIFICATE This is to certify that M/s. Gyarsi Lal Mohan Lal, Ajmer having RST No. 0101/01217 and CST No. 0101/01217 (a) has to tax liability outstanding, or has outstanding tax liability amounting to Rs. This certificate had been perused by me. There are only two columns in the certificate which reads as under:- FORM S.T. 19 TAX CLEARANCE CERTIFICATE This is to certify that M/s. Gyarsi Lal Mohan Lal, Ajmer having RST No. 0101/01217 and CST No. 0101/01217 (a) has to tax liability outstanding, or has outstanding tax liability amounting to Rs. ________ which has been stayed by _______ upto _______ or is payable through instalments by _______ (date), and (b) has paid current tax upto the month of _____19____ This certificate is valid upto 30.9.2000. sd/- Assistant Commissioner/Commercial Taxes Officer/Assessing Authority Circle _______/ Ward ___________ Dated 23.6.2000 (18). The above said certificate of M/s. Gyarsi Lal Mohan Lal which has been reproduced extenso word by word does not show any where that any tax had been cleared or it amounts to tax clearance certificate. Everything has been left blank even the circle and the ward. The certificate only contains the name of the party with RST and CST number; date of issuance of the certificates; and the signature of the issuing authority and it nowhere says that the tax had been cleared and of what year and which circle and which ward. (19). Even though no certificate is required to be attached as per the booklet/proforma, but if above is the sample of the certificate, which a party is required to attach, it is unimaginable to see the use of such a certificate. (20). The department has also produced the booklet of Financial Bid which is to be filled up by the applicant and is to be submitted. This booklet contains RPWA No. 100 which is a notice inviting tenders for work. Clause 14 of these instructions in Financial Bids says that the tenders should be accompanied with Income tax and Sales Tax Clearance Certificates from the concerned departmental authorities, without which the tenders may not be entertained. For the reason that this instruction had been attached with the Financial Bid, if at all the submission of the Income Tax and Sales Tax Clearance Certificate is to be taken into account, it can definitely be taken into account by not opening the technical Bid, but may be considered at the time of opening the Financial Bid. (21). For the reason that this instruction had been attached with the Financial Bid, if at all the submission of the Income Tax and Sales Tax Clearance Certificate is to be taken into account, it can definitely be taken into account by not opening the technical Bid, but may be considered at the time of opening the Financial Bid. (21). Even though the interference by the High Court on revisional side can be made on set principles, but it is a case where the lower Appellate Court had not exercised its jurisdiction properly in relying on its own surmises and not on record and as such power of the appellate court reversing the order of the trial court in issuing the directions to the respondents for not considering the Financial Bid of the plaintiffs who had not attached the Income-tax or the Sales-tax Clearance Certificate with the Technical Bid cannot be sustained in the eyes of law and the order of the trial court so far this aspect is concerned, is restored and that of the appellate court is set aside. However, part of the order of the appellate court to the effect in quashing the order of the trial court only to the limit that if these certificates are not attached, even with the Financial Bid, a direction to deduct an amount of Rs. 30,000/- from the earnest money is upheld also on the reason that if any of the bidder whose bid is not accepted and had paid the earnest money at the time of preferring the application and if his bid is not accepted on the ground of non-attachment of the document or viability, the bid may be rejected if the bid is not in order, but it cannot be said that because of the reason that some document had not been attached at the time of tender of the bid, therefore, the bidder is to suffer a deduction of Rs. 30,000/- from the earnest money. This part of the order of the trial court has been rightly set aside by the appellate court. (22). For the reasons mentioned above, the revision petition is accepted in part with a direction to the respondent to open the Financial Bid of the plaintiff and all those bidders as well whose Technical Bid was rejected only on the ground of non- attaching the Income-tax or Sales-tax certificates. (22). For the reasons mentioned above, the revision petition is accepted in part with a direction to the respondent to open the Financial Bid of the plaintiff and all those bidders as well whose Technical Bid was rejected only on the ground of non- attaching the Income-tax or Sales-tax certificates. It is further made clear that the order of the trial court to the effect that if tender is found lacking in accompanying any document specially Income Tax or Sales Tax clearance certificate, would entitle the department to deduct an amount of Rs. 30,000/- from the earnest money could not sustained and the lower appellate court was right in setting aside this part of the order.