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Rajasthan High Court · body

2002 DIGILAW 1964 (RAJ)

Spack Turnkey Projects Private Ltd. v. The Rajasthan Rajya Vidyut Utpadan Nigam Ltd.

2002-12-18

K.S.RATHORE

body2002
JUDGMENT 1. 1. The Rajasthan State Electricity Board vide tender notice No. TNM-16 on 22.4.2000 invited sealed tenders from manufacturers/suppliers having experience of protection system including designed, engineered, manufactured, supplied, erected, tested and commissioned at least one No. fire detection and protection system comprising of outdoor and indoor hydrant system, automatic IHW, MVM spray system and micro processor based fire detection and alarm system with conventional non-addressable detectors and addressable zone interface modules fire detection system and supply of portable fire extinguishers of soda acid. 2. The petitioner company in response to the said tender notice applied for and obtained tender documents from the then existing Rajasthan State Electricity Board and has submitted his bid in response to the tender notice No. TNM-16. 3. In clause 2.01.00 of the tender document certain conditions provided that the bidder should have designed, engineered, manufactured, supplied, erected, tested and commissioned at least one (1) No. each of the fire detection and protection systems and such plants must be designed to the recommendations of the Tariff Advisory Committee of India or any other internationally reputed authority and must be in successful commercial operation, for at least 2 years on the date of opening of the tender document, and indoor hydrant. 4. The last date for submitting the bids in response to the tender notice No. TNM-16 was extended by the Rajasthan State Electricity Board from time to time. In the meantime, RSEB came to be bifurcated into five companies and the Suratgarh Thermal Power Station including Stage-II thereof came to fall within the jurisdiction of the Rajasthan Rajya Vidyut Utpadan Nigam Ltd., one of the five succeeding companies. 5. The petitioner company submitted its bids in response to the tender document under specification No.99x03-SPC-M-2801. 6. Vide letter dated 31.7.2001 the Superintending Engineer (TD-H) of the respondent Nigam required the petitioner company to depute its fully authorised representative for techno-commercial discussions at Jaipur on 3.8.2001. The petitioner company has given the details of its experience in job of evaluation of more than Rs. 2 crores of similar nature as per pre-qualification clause of tender document. 7. Vide letter dated 1.9.2001 the petitioner was asked to submit the revised price bid in sealed cover and same has been given by the petitioner on 10.9.2001. 8. The petitioner company has given the details of its experience in job of evaluation of more than Rs. 2 crores of similar nature as per pre-qualification clause of tender document. 7. Vide letter dated 1.9.2001 the petitioner was asked to submit the revised price bid in sealed cover and same has been given by the petitioner on 10.9.2001. 8. The Tariff Advisory Committee (General Insurance) has issued a Fire Protection Manual on fire protection techniques and to encourage installation of fixed fire extinguishing appliances/alarm systems. 9. Learned counsel for the petitioner submitted that since petitioner company carried out jobs on turnkey basis in industries, such as CNG compressing and bottling plants and LPG bottling plants which are classified as risk similar to industries such as petroleum refineries, ammonia and urea synthesis plants under high risk categories. 10. As per clause 2.01.00 of the specifications as amended by the respondent Nigam, the petitioner company its dated 24.9.2001 addressed to the Chairman of the respondent Nigam pointed out that the terms of the specifications were not being properly construed and instead of assessing the capabilities of the bidders, innovative ways and means were being worked out to disqualify capable bidders on flimsy grounds. 11. The petitioner has stated hereinabove that the plant involving liquefied petroleum gas was categorised as the most hazardous along with four such more similar industries viz. petroleum refineries, LNG storage and explosive factories by the Tariff Advisory Committee in the Fire Protection Manual and he referred Clauses 7.2.1 and 7.2.3 and also referred Table 1 of Clause 7.3.6 of the Fire Protection Manual. 12. Mr. Alok Sharma further submits that in spite of its requisite experience of having executed over a dozen jobs, each involving over Rs. two crores towards fire protection systems, the petitioner company's financial bid was not opened and the petitioner company was not being considered for the award of the contract. It is also given out that apart from the gross injustice to the petitioner company and a complete contravention of constitutional imperatives y the respondent Nigam, non-consideration of the petitioner company has entitled a loss of about Rs. one crore to the public exchequer inasmuch as against the lowest bid of Rs. 6.76 crores made by the respondent No.2, petitioner company had submitted a bid of Rs. 5.76 crores. 13. one crore to the public exchequer inasmuch as against the lowest bid of Rs. 6.76 crores made by the respondent No.2, petitioner company had submitted a bid of Rs. 5.76 crores. 13. Aggrieving and dissatisfying with the non-consideration of the bid of the petitioner company the petitioner preferred this present petition on the ground that the petitioner company has experience in the highest of the high hazard industries such as CNG compressing and bottling plants and LPG bottling plant in view of the fire protection manual issued by the Tariff Advisory Committee and as such the petitioner company with experience in the highest high hazard occupancy is qualified to tender for and execute as require the installation, erection etc. of a fire protection system as required and specified in a thermal power plant. 14. It is also submitted that Clause 2.01.00 as amended was only illustrative with reference to the Tariff Advisory Committee of India and all industries included in the highest of the high hazard capacities as set out in category B of such high hazard occupancies as were eligible under the relevant clause for undertaking the contract in issue if otherwise their price bids were competitive as against other bidders. 15. Mr. Alok Sharma further submits that since the company has submitted its revised price bid vide letter dated 30.8.2001 the petitioner company has legitimate expectation that its price bid would be opened and considered for the award of contract pertaining to fire protection system in Suratgarh Thermal Power Station. Therefore, the petitioner seeks writ, order or direction of similar nature forbearing the respondent Nigam from proceeding further and signing a contract with the respondent No.2 in pursuance of the opening of the price bids in response to tender notice No. TNM-16. Alternatively, the petitioner also prayed writ of certiorari or a writ of similar nature quashing and setting aside the work order/contract in favour of respondent No.2 by the respondent No.1 to consider the tender of the petitioner in accordance with law. 16. On behalf of respondent No.1 Shri Virendra Lodha submits that this matter pertains to the contract and as held by the Apex Court in various judgments that in the matter of contract the High Court should least interfere. 17. With regard to price bid which is about Rs. 1 crore lower than the financial bid of the respondent No.2 Mr. On behalf of respondent No.1 Shri Virendra Lodha submits that this matter pertains to the contract and as held by the Apex Court in various judgments that in the matter of contract the High Court should least interfere. 17. With regard to price bid which is about Rs. 1 crore lower than the financial bid of the respondent No.2 Mr. Lodha submits that the price bid of the petitioner is yet not been opened since the petitioner did not fulfil the pre-qualification requirement as envisaged in the tender notice TNM-16 and till and unless the petitioner fulfils the requisite qualification, it can only be opened by the respondent No.1. 18. Regarding experience of the petitioner company Mr. Lodha submits that the petitioner company has only executed few jobs of fire protection system only in liquefied petroleum gas bottling plant of Indian Oil Company Ltd. The company has not carried out a single job of fire protection system in any of the Power Project, Refinery or Process Industry in India as per requirement of pre-qualifications. 19. Mr. Virendra Lodha also referred Clause-2 and other relevant clauses 2.02.01, 2.01.02, 2.01.03, 2.01.04, 2.02.00 and after referring these clauses he submits that the petitioner is not qualified to participate in the bid as per the terms and conditions of the tender document and since the petitioner does not fulfil the pre-qualification criteria as laid down under TNM-16 on the contrary in the Technical Expert Committee Meeting held on 13.9.2001 and 14.9.2001 for sorting out pre-qualified and techno-commercially acceptable offers received against TNM-16 for fire protection system package of Suratgarh Thermal Power Station regarding petitioner firm, the Committee observed as under:- This firm do not meet our basic requirement of pre-qualification requirement as they have not done a single job in any of the power project, refinery or process industry. The small job of FPS carried out by this firm are of a India Habitat Centre, New Delhi which is a Government commercial-cum-residence complex. The other job carried out by this firm are of LPF bottling plant of IOC Ltd. in which complete scope of FPS as per our specification is not covered. The firm is, therefore, not qualified and hence may not be considered. 20. Mr. The other job carried out by this firm are of LPF bottling plant of IOC Ltd. in which complete scope of FPS as per our specification is not covered. The firm is, therefore, not qualified and hence may not be considered. 20. Mr. Lodha also referred to the communication sent by the Rajasthan State Electricity Board to the Chief Engineer, Thermal Designs, Karnataka Power Corporation Ltd. Bangalore regarding the performance report of petitioner company of fire protection system wherein they have in catina of words have written has observed as under:- The fire protection system works are still in progress. Trial operations for hydrant and spray system of Unit 3 and 4 are partly complete. The firm (M/s. Spack Turnkey Projects Pvt. Ltd.) is yet to supply/erect/commission the fire detection system for Khaperkheda TPS Units III & IV (2 x 210 MOW). The firm has delayed the commissioning of fire protection system considerably. The performance of firm is discouraging. We are of the opinion that the firm Spack Turnkey Projects Pvt. Ltd. is not capable of handling works pertaining to thermal power stations. 21. Thus, the petitioner company is not having pre-requisite qualification as stipulated under the terms and conditions of the tender document and also not qualified to participate in the bid. 22. On behalf of the respondent No.2 Mr. A.K. Bhandari submits that the petitioner does not fulfil the pre-qualification criteria as laid down vide clause No.2.01.00 in tender No. TNM-16 which is having only experience in liquefied petroleum gas bottling plant to install fire petroleum plant in LPG plants. 23. Mr. Bhandari also submits that if the term of the tender document require qualification in a specified area or field then qualification and experience in that field can only be considered and qualification outside those areas cannot be taken into consideration. 24. Mr. Bhandari further submits that the Fire Protection Manual is of recommendatory nature and what type of fire fighting system is to be provided in a particular industry can be judged only by the technical recommendatory committee. Classification of category B is only for the purpose of hydrant system design. There is vast difference in Fire Protection System design for a thermal power plant, refineries and process industries as compared to LPG bottling plant. Classification of category B is only for the purpose of hydrant system design. There is vast difference in Fire Protection System design for a thermal power plant, refineries and process industries as compared to LPG bottling plant. In case of the hydrant system applicable for thermal power plant, comprises of a very large network of under ground pipe lines spread up over an area of 7-8 square Kms. and also comprising of very vast number of pump house equipments whereas in case of LPG bottling plant the hydrant system network is covered merely for an area of 1 square kilometre and very less number of pump house equipments. In such circumstances, opening of the price bid of petitioner will arise only when he is technically qualified. The difference in price as alleged by the petitioner is not known to any one in view of non-opening of his price bid by the respondent No.1 and the petitioner, therefore, has made a baseless statement only to win the sympathy of the Court on the ground of salvaging the public funds in spite of the fact that he has not been found technically qualified and experienced by the expert technical committee constituted by the respondent No.1. Moreover, the Apex Court has laid down that "price need not always be the sole criteria for awarding a contract". 25. Rejoinder as well as additional affidavit and counter affidavit has been filed by the respective parties. 26. Heard rival submissions of the learned counsel for the parties and gone through the material available on the record as well as the relevant provisions of the fire protection manual and the tender document. 27. The main dispute which has been raised in this present writ petition is whether the petitioner company having requisite experience in the highest of high hazard risk in dealing with fire is qualified to be considered for the award of the contract for designing, engineering, manufacturing, supplying, erecting, testing and commissioning fire protection system at the Suratgarh Thermal Power Plant (Stage-II). In regard to this, I have also examined the provisions of Fire Protection Manual as referred by the learned counsel for the petitioner. In regard to this, I have also examined the provisions of Fire Protection Manual as referred by the learned counsel for the petitioner. It is not disputed that the petitioner company is not having experience for installing the fire protection plant in LPG bottling plant and as per the fire protection manual, the LPG are under the Category B, the highest of high fire risk category. 28. Learned counsel for the petitioner relied upon the judgments reported in (1) 1995(1) SCC 478 , (2) 1994 (6) SCC 651 , (3) 1993(1) SCC 71 , (4) 1999(6) SCC 464 , (5) AIR 1990 Supreme Court 958 and (6) 2000(5) SCC 287 . 29. In Monarka Infrastructures case 2000(5) SCC 287 it has been observed that the Courts will interfere in the award of contracts by tender processes where the decision is (a) arbitra and/or discriminatory, (b) policy adopted has no nexus to be achieved and (c) mala fide. 30. Since no mala fide allegation has been alleged against the respondent while not considering the financial bid to the petitioner and the petitioner not able to show that as to how the condition as stipulated in the tender document is having no nexus with the policy, the petitioner company could not plead that non-consideration of the financial bid is tantamount discrimination. 31. As held by the Apex Court, this Court in the contractual matters can only interfere in case the court found that arbitrary and discriminatory action has been taken but in this case the petitioner has not been able to establish that action of the respondents is arbitrary and discriminatory and mala fide. And it is for the technical committee constituted by the respondent to establish that whether the petitioner has any experience in particular field or not. 32. Learned counsel for the respondents referred the judgment reported in (7) AIR 1999 Supreme Court 393 Para 16, (8) AIR 2000 Supreme Court 801 Paras 7, 11 and 12, (9) 1996(2) SCC Paras 4, 5, 21 and 22, (10) 2001(1) SCC 451 paras 14 and 24, (11) 2000(9) SCC 68 . 33. In the judgment reported in 1999 SC 393 the Apex Court has held that the court should not substitute its own decision for the decision of an expert of valuation committee. 34. In the case of AIR India Ltd. Vs. 33. In the judgment reported in 1999 SC 393 the Apex Court has held that the court should not substitute its own decision for the decision of an expert of valuation committee. 34. In the case of AIR India Ltd. Vs. Cochin International Airport, AIR 2000 Supreme Court 801 , the Apex Court observed that "The State can choose its own method to arrive at a reason. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny". It was further observed that "Price need not always be the sole criteria for awarding a contract". 35. In the case of Rounak International Vs. I.V.R. Construction Ltd. AIR 1999 Supreme Court 393 , the Apex Court has observed as under : "What is more relevant, M/s. IVR Construction Ltd. who have challenged this award of tender themselves do not fulfil the requisite criteria. They do not possess the prescribed experience qualification. Therefore, any judicial relief at the instance of a part which does not fulfil the requisite criteria, seems to be misplaced". 36. In the case of West Bengal State Electricity Board Vs. Patel Engineering Co. Ltd. (2001) 2 SCC 481 , the Apex Court held that the court cannot interfere with the decision of the expert committee. 37. And consistent view has been taken by the Apex Court and this court that in contractual matters the court should sparingly exercise the power vested under Article 226 of the Constitution of India. 38. Having gone through the ratio decided by the Apex Court and relevant provisions of clause of tender document as well as clause of fire protection manual I am of the firm opinion that no interference is required by this court as in contractual matters this court is not to interfere unless the petitioner proves the discriminatory action of the respondents which in this case was not proved. Thus the writ petition is not maintainable and same is dismissed accordingly with no order as to costs.Petition dismissed. *******