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2000 DIGILAW 316 (AP)

R. Narayana Reddy and Sons Private Limited v. Union of India, South Central Railway

2000-04-25

J.CHELAMESWAR

body2000
J. CHALAMESWAR, J. ( 1 ). THE petitioner is a Private Limited company carrying on the business in Civil contracts. It appears, they have been doing the various types of works of Indian railways for the last three decades and claimed some specialised knowledge of the works pertaining to the Indian Railways. ( 2 ). The South Central Railway called for tenders for various works in Karimnagar district of Andhra Pradesh by the tender notification dated 14-10-1999. In the said notification, 4 items of work are indicated regarding which tenders are called for. The relevant item for the purpose of the present writ petition is Item No. 1, which reads as follows; S. No. Description of work form Approx Earnest money to be deposited (FD/dd/cash) Cost of Tender PEDDAPALLI-KARIMNAGAR NEW BG RLY. Rs. Rs. Rs. 1. Laying and linking of track from Ch. 0. 500 to 11. 0000 KM including part of Peddapalli Yard and transportation of P. Way materials from different Stations to work spot reach I 73. 81 Lakhs 1. 50 Lakhs 1,200/- ( 3 ) APART from that the tender notification also stipulated various conditions which are required to be followed by the tenderers. The relevant condition for the purpose of the present writ petition is condition No. 5, which reads as follows:"5. The Tenderers must submit along with his/their tender a statement showing similar works executed by him/them and also credentials from the party with whom he/they worked for successful completion of his/their works (in the last 3 years ). They should also submit a list of their engineering Organization and equipment, construction tools and plant available with them. As a proof of experience/competence the tenderers should have completed successfully works nature similar to that this tender as follows: (a) For Tenders between Rs. 20 lakhs and Rs. l Crore the Tenderer should have completed at least one work of similar nature costing not less than 50% value of the work during the last three years preceding the date of Tender opening. (b) The Tenderers should submit certificate from an officer of government or semi-Government indicating therein the names of works completed, value of the works and period during which completed. The certificates should have the signatures and seal of the officer. In absence of such certificate, the tender may not be considered. (b) The Tenderers should submit certificate from an officer of government or semi-Government indicating therein the names of works completed, value of the works and period during which completed. The certificates should have the signatures and seal of the officer. In absence of such certificate, the tender may not be considered. No correspondence will be entertained with the tenderers after opening of the tenders on the subject. " ( 4 ) A reading of the above condition discloses the following factors: (i) to qualify for the work, the tenderer should have executed the work of similar nature in the last three years; (ii) and the value of such work should not be less than 50% of the tender quoted; and (iii) the above mentioned factors be supported by necessary evidence i. e. , appropriate certificates. ( 5 ) THE petitioner submitted his tender fulfilling all the conditions stipulated with reference to the above mentioned Item No1 of the tender notification. The value of the said item is Rs. 73. 81 lakhs as estimated by the respondents. The petitioner quoted 6% less than the estimated value for executing the work i. e. , Rs. 69,38,140/ -. On 8-11-1999, tenders were opened by the respondents. The petitioner became the second lowest bidder. The fourth respondent was the lowest bidder who quoted Rs. 2,94,000/- less than the petitioner. Therefore, the contract was awarded in favour of the fourth respondent by a letter dated 28-1-2000. ( 6 ) CHALLENGING the award of the contract in favour of the fourth respondent, the present Writ Petition is filed on the ground that the contract was awarded contrary to the conditions stipulated in the tender notification, ( 7 ) THE main grievance of the petitioner is that the fourth respondent though the lowest tenderer with reference to the work in question, he did not have the requisite experience as he did not execute in the preceding 3 years the work of similar nature, which according to the tender conditions, is at least 50% of the value of the bid of the fourth respondent. Admittedly, the fourth respondent had executed two items of work valued at Rs. 20. 42 lakhs and rs. 31. Admittedly, the fourth respondent had executed two items of work valued at Rs. 20. 42 lakhs and rs. 31. 40 lakhs respectively; however, the latter work was executed by the fourth respondent as a General Power of Attorney holder of M/s. Madhuri Constructions therefore, the petitioner submits the fact that the fourth respondent executed the work to the tune of Rs. 31. 40 lakhs as a general Power of Attorney holder of m/s. Madhuri Constructions should not have been taken into consideration to qualify the fourth respondent in terms of the tender conditions mentioned in the tender notification. ( 8 ) THE respondents filed a counteraffidavit wherein they stated in this regard as follows;"the qualifying value for satisfying eligibility criteria is Rs. 36. 29 lakhs. Counting of GPA experience (at sl. No. 2 above) of Vikarabad - Tandur doubling work total value of above two track works which are similar in nature for this work and for eligibility was taken into account only after Law officer of South Central Railway opined and cleared that GPA experience of respondent No. 4 can be considered. " ( 9 ) THE requirement of the tender condition is that the tenderer should have experience in executing similar work, which fact should appropriately be established by obtaining credentials from the person from whom the tenderer had worked earlier. The tenderer is also required to submit the details of the infrastructure which he has to carry out the work. The further condition under Clause 5 (a) quoted above:". . . . . . Tenderer should have completed at least one work of similar nature costing not less than 50% value. . . . . " ( 10 ) OBVIOUSLY, these conditions are included in the tender notification with a view to make an assessment whether a person tendering for the work has some experience in the matter or not. Once again experience can be of two kinds: The person might have the experience of having carried out similar work technically i. e. , the nature of the work be identical or similar, but experience is not only technical expertise; but the experience of executing similar work in a given time requires infrastructure apart from technical expertise. The condition as I understand requires both. The condition as I understand requires both. In my view, clause 5 (a) of the tender conditions extracted above, is significant when this tender condition stipulates that the tenderer should have completed one work of similar nature costing more than 50% and that stipulation takes care of the experience of the tenderer both as to the technical expertise and possession of the necessary infrastructure. To carry out one work or of a particular value within the given time, requires more infrastructure logically than to carry out six different works which are technically identical, but of lesser value individually but cumulatively of the same value of work as is in the earlier case at different points of time in a span of last 3 years. ( 11 ) WHAT the respondents are expected to make an assessment for evaluating the tenders are the above mentioned factors. In coming to the conclusion of awarding the contract in question in favour of the fourth respondent, no such enquiry appears to have been made by the respondents as can be seen from the relevant files produced by the learned Standing Counsel for the respondents. ( 12 ) NORMALLY, in view of my above discussion, the writ petition should have been allowed on this point, but I declined to do so for the following reasons: First of all, the objection of the writ petitioner is not that the 4th respondent does not have necessary infrastructure to carry out the work. If such an objection were raised by the petitioner, we do not know what would have been the stand of the 4th respondent. Apart from that the experience of either of the parties is not tested by the State from that perspective and if such a test were to be applied, whether the petitioner would qualify for the award of the contract or not is not known. His only objection is that the experience of the 4th respondent gained as a General Power of Attorney holder of m/s. Madhuri Constructions, cannot be taken into consideration. Such an objection, in my view, cannot be sustained in view of the earlier judgments of this Court as rightly opined by the respondents. Secondly, the fact remains that the 4th respondent quoted a lesser rate than the petitioner. Such an objection, in my view, cannot be sustained in view of the earlier judgments of this Court as rightly opined by the respondents. Secondly, the fact remains that the 4th respondent quoted a lesser rate than the petitioner. ( 13 ) THE other objection raised by the petitioner is that the experience of the fourth respondent is not in carrying out the work of similar nature, but work of "more or less of similar nature" as admitted by the respondents Nos. 1 to 3 in their counteraffidavit and therefore, the respondent No. 4 did not qualify to obtain the contract in question. I am afraid that I cannot go into this aspect, for the reason, what exactly is the nature of the work in question and what exactly is the nature of the experience the fourth respondent possesses to qualify or entering into the contract for the work in question, would require technical knowledge and if me respondents are satisfied that the experience of the fourth respondent-which according to them is that of having executed the work more or less of similar nature". I do not wish to substitute the same with my opinion nor is it permissible to substitute this opinion in such a situation barring an allegation of mala fide exercise of the power of the respondents. ( 14 ) THE last submission made by the petitioner is that certain correspondence took place between the fourth respondent and the other respondents after opening of the tender and on the basis of the said correspondence, the present contract in question has been awarded in favour of the fourth respondent. (15 ) THE respondents 1 to 3 do admit that the fourth respondent had in fact placed some documents before them after opening of the tenders, but those documents do not form the basis for the decision to award the contract in question in favour of the fourth respondent. The pleading in this regard in the counter-affidavit of the respondents is as follows:"it is true that the 4th respondent has submitted an Agreement of consortium after opening of the tender. As the Respondent No. 4 did not submit the consortium at the time of tendering and was silent about its existence, the same was dealt with on merits and tender decided only on qualifying eligibility criteria. As the Respondent No. 4 did not submit the consortium at the time of tendering and was silent about its existence, the same was dealt with on merits and tender decided only on qualifying eligibility criteria. Hence, it is denied that the consortium agreement has been considered as the work executed by respondent No. 4 it is submitted that no tender conditions or Article 14 or 19 of Constitution of india has been violated. " ( 16 ) IT is an absolutely vague and equivocating pleading. A perusal of the file discloses that the consortium agreement submitted by the fourth respondent was in fact taken into consideration before arriving at the conclusion that the contract in question is to be awarded in favour of the fourth respondent. The file further discloses elaborate discussions on the propriety of receiving and considering the said consortium agreement, meetings were held at various levels. ( 17 ) IN the circumstances, I am of the opinion that the respondents 1 to 3 have been less than candid in their pleading. The proceedings of the Tender Committee meeting held on 14th December, 1999 amply demonstrate this:"it is also seen that the tenderer has submitted a consortium agreement entered into with M/s. Siddartha constructions after opening of the tender, addressed to CAO/c/sc with a covering letter dated 15-11-1999. On verification of the same the Law officer, vide his letter No. G. 147/ works/719/99 Law dated 13-12-1999 has clarified that the credentials of m/s. Siddartha Constructions can be given to Sri P. V. S. Prasad if the experience of M/s. Siddartha constructions fulfils the tender condition. In this connection, the tender Committee was noticed that dy. CE/c. III/sc has issued a certificate stating that M/s. Siddartha constructions have executed "dismantling and track linking, dumping of stone ballast between nandyal and Dronachallam section vide agt No. 83/cao/c/sc/97 dated 1-4-1997 and 42/cao/c/sc/97, dated 12-2-1997 at a value of rs. 47,17,448. 26 and Rs. 19,03,383. 26 respectively. Therefore the credentials of M/s. Siddartha Constructions has fulfilled the eligibility criteria and the same can be given to Shri p. V. S. Prasad as per the legal opinion. Further the recommendations made earlier by the Tender Committee on 30-11-1999 stands good. 47,17,448. 26 and Rs. 19,03,383. 26 respectively. Therefore the credentials of M/s. Siddartha Constructions has fulfilled the eligibility criteria and the same can be given to Shri p. V. S. Prasad as per the legal opinion. Further the recommendations made earlier by the Tender Committee on 30-11-1999 stands good. " ( 18 ) ON this ground, the writ petition should have been normally allowed, but having regard to the fact that the work itself is required to be completed within a period of 3 months and the contract admittedly was awarded in favour of the fourth respondent on 28-1-2000, interference in the award of the present contract at this stage would not be good in the public interest. ( 19 ) IN the circumstances, while dismissing the writ petition, I deem it appropriate to direct the respondents to pay damages to the petitioner for violating the procedure in the matter of awarding the contract in question. The damages are quantified at Rs. 10,000/- {rupees ten thousand only) to be paid by the South central Railway, which amount, the railways is at liberty to recover from the incumbents of the respondents 1 to 3 officers. ( 20 ) THIS writ petition is disposed of accordingly.