A. Ramanathan & Company, represented by its Managing Partner, R. Panneerselvam v. The Government of Tamil Nadu and others
2002-04-29
E.PADMANABHAN
body2002
DigiLaw.ai
ORDER: The petitioner, a registered Engineering Contractor prays for the issue of a writ of declaration declaring as Clause 3 of the pre-qualification prescribed in tender notification No.14/2002, dated 28.3.2002 of the second respondent in so far as it relates to insistence of completion of works under Items (i) to (viii) therein, to the extent therein under one single work, is arbitrary, illegal, ultra vires and unsustainable in law and direct the second respondent to issue tender schedule in respect of the said notification to the petitioner permitting the petitioner to participate in the said tender on merits and in accordance with law. 2. Heard Mr.AR.L.Sundaresan, learned counsel appearing for the petitioner and the learned Government Advocate taking notice for the respondents. 3. It is not necessary to set out the details regarding the petitioner, an Engineering Contractor. The petitioner is aggrieved by one of the stipulations in the tender conditions, namely eligibility qualification as to experience. In this respect, the following clause, as set out in the tender, is challenged by the petitioner as unconstitutional, arbitrary, illegal and unsustainable in law: “(c) that the contractor should have in the same name and style, within the preceding five years, undertaken and completed a single work comprising of 8 items described therein viz., (i) earth work (patching) 12640 cubic meters; (ii) formation of mud roads 8,240 kilometers; (iii) gravel mixing 3506 cubic metres; (iv) providing levelling course 5707 cubic metres; (v) coat 22,825 sq.metres; (vi) tack coating 22,825 sq.metres; (vii) providing bitumen Meckadam 1,370 cubic metres; (viii) Semi tens bitumen concrete 22,825 sq.metres.” 4. Factually, the tender notification consist of two stages, the first being, pre-qualification of the tenderer and the second being, price bid. If the particular contractor do not possess the eligibility qualification prescribed in the pre-qualification tender, his price bid will not be opened. Therefore according to the learned counsel for the petitioner, the petitioner apprehends that his price bid will not be opened at all as he does not possess the eligibility conditions or qualification as prescribed in respect of pre-qualification tender. According to the petitioner, the petitioner satisfies all other eligibility qualifications prescribed except the clause, which is being challenged. 5. Mr.AR.L.Sundaresan, learned counsel appearing for the petitioner contended that the eligibility qualification stipulated in Clause 3 of the tender qualifications is arbitrary, uncalled for, ultra vires and therefore the said clause has to be quashed.
According to the petitioner, the petitioner satisfies all other eligibility qualifications prescribed except the clause, which is being challenged. 5. Mr.AR.L.Sundaresan, learned counsel appearing for the petitioner contended that the eligibility qualification stipulated in Clause 3 of the tender qualifications is arbitrary, uncalled for, ultra vires and therefore the said clause has to be quashed. This contention of Mr.AR.L.Sundaresan, learned counsel for the petitioner, in my considered view cannot be sustained at all. It is a contract between the State and private individual and the State could very well stipulate the eligibility qualification for the tenderers. Such eligibility qualification is a relevant condition or criteria or prerequisite qualification for the execution of a particular work. It is well open to the State or public authorities to fix such qualification or eligibility criteria including past experience or capacity to execute the work being possessed as one of the prerequisite qualifications for execution of a particular work and the same is not liable to be interfered. 6. In contractual matters, the power of judicial review under Art.226 of the Constitution is very very limited and the ground of challenge advanced by the learned counsel for the petitioner in respect of a particular clause, which qualification the petitioner admittedly do not possess, cannot be sustained at all. The qualification fixed by the respondent in this respect cannot be held to be totally alien to the work or purpose, nor it could be stated that there is no nexus at all with the execution of the particular work. The respondents are mainly concerned about the execution of the work or money value of it or the time schedule and the capacity of the contractor to perform the particular work which is awarded under a tender. Laying of a public road is definitely important one and it has to be as per the standards. For completion of such important work, it is well open to the respondents namely the Superintending Engineer and other technical experts to prescribe such qualification and such qualification shall be relevant to the work and it should have a nexus to the work. It is the experience or the capacity to execute the work and proven track record is relevant for the contract in question.
It is the experience or the capacity to execute the work and proven track record is relevant for the contract in question. The stipulation in this respect cannot be said to be irrelevant or has no connection with the work which is proposed to be executed by inviting tenders. The experience of the contractor in the particular field and also the capacity could be tested by the volume of work which the contractor had performed in the near past. By mere estimation or on expectation alone the respondent may not be justified in awarding the contract. The failure of the contractor on a future date affects not only the public but also the national economy and the delay in the execution of the work attracts criticism, loss of investment and loss of interest as well. 7. The learned counsel for the petitioner relied upon the recent pronouncement of the Apex Court in Monarch Infrastructure (P) Limited v. Commissioner, Ulhasnagar Municipal Corporation, (2000)5 S.C.C. 287 , where the Apex Court held thus: 10. There have been several decisions rendered by this Court on the question of tender process, the award of contract and have evolved several principles in regard to the same. Ultimately what prevails with the Courts in these matters is that while public interest is paramount there should be no arbitrariness in the matter of award of contract and all participants in the tender process should be treated alike. We may sum up the legal position thus: (i) The Government is free to enter into any contract with citizens but the Court may interfere where it acts arbitrarily or contrary to public interest. (ii) The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly situate. (iii) It is open to the Government to reject even the highest bid at a tender where such rejection is not arbitrary or unreasonable or such rejection is in public interest for valid and good reasons. 11. Broadly stated, the Courts would not interfere with the matter of administrative action or changes made therein, unless the Government’s action is arbitrary or discriminatory or the policy adopted has no nexus with the object it seeks to achieve or is mala fide. 8.
11. Broadly stated, the Courts would not interfere with the matter of administrative action or changes made therein, unless the Government’s action is arbitrary or discriminatory or the policy adopted has no nexus with the object it seeks to achieve or is mala fide. 8. In the same judgement the Apex Court held that if the Government or the Municipal Corporation is not free to alter the conditions after invitation of tenders and after the last date, it has to be resorted to only by way of a fresh process of tender, which alone permissible in law. In the same judgement the Apex Court held thus: "We cannot say whether these conditions are better than what were prescribed earlier for in such matters the authority calling for tenders is the best Judge". 9. The Apex Court also held that terms and conditions could be prescribed bearing in mind the nature of the contract or such other consideration which are relevant and it is not as if a particular qualification which is relevant which has a nexus to the nature or volume of work cannot be stipulated at all. The test of eligibility laid down in the present case is an objective test and if a person submitting a tender do not possess the prescribed qualification as to experience or a particular number of years, of a particular level of past work, in the particular field, the tender cannot be accepted. These are relevant eligibility criteria to entrust the work. Such eligibility condition is definitely required to be satisfied by every person submitting a tender and such eligibility criteria which are relevant and reasonable could very well be fixed by the expert engineers. 10. In Ramana Dayaram Shetty v. International Airport Authority of India, (1979)3 S.C.C. 489 , the Apex Court held thus: "20. Now, obviously where a corporation is an instrumentality or agency of Government, it would, in the exercise of its power or discretion, be subject to the same constitutional or public law limitations as Government.
10. In Ramana Dayaram Shetty v. International Airport Authority of India, (1979)3 S.C.C. 489 , the Apex Court held thus: "20. Now, obviously where a corporation is an instrumentality or agency of Government, it would, in the exercise of its power or discretion, be subject to the same constitutional or public law limitations as Government. The rule inhibiting arbitrary action by Government which we have discussed above must apply equally where such corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test of reason and relevance. 21. This rule also flows directly from the doctrine of equality embodied in Art.14. It is now well settled as a result of the decisions of this Court in E.P.Royappa v. State of Tamil Nadu, A.I.R. 1974 S.C. 555 and Maneka Gandhi v. Union of India, (1978)1 S.C.C. 248 , that Art.14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory: it must not be guided by any extraneous or irrelevant considerations, because that would be denial of equality. The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Art.14 and it must characterise every State action, whether it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory." 11. The above passage is relied upon by Mr.AR.L. Sundaresan, learned counsel appearing for the petitioner. In my considered view, the above pronouncement far from supporting the contention advanced by Mr.AR.L. Sundaresan, is against the very contention advanced by the learned counsel. 12.
The above passage is relied upon by Mr.AR.L. Sundaresan, learned counsel appearing for the petitioner. In my considered view, the above pronouncement far from supporting the contention advanced by Mr.AR.L. Sundaresan, is against the very contention advanced by the learned counsel. 12. In my considered view, the standard or norm or experience or eligibility criteria stipulated by the respondents is not discriminatory, nor it is arbitrary, nor it could be held that the said stipulation is totally alien to the work, which is to be entrusted to the Contractor. The eligibility criteria is a relevant consideration and it cannot be held that it is arbitrary one. Further, the respondents cannot act arbitrarily and once if they fix particular norms, they cannot depart from it. However, if no one satisfies the tender conditions, it is well open to the respondents to invite fresh tenders imposing less stringent standards. 13. In the foregoing circumstances this Court holds that the challenge to the eligibility criteria viz., Clause 3 cannot be sustained at all and there are no merits. Therefore, writ petition is dismissed. Consequently, connected W.P.M.P., is also dismissed. No costs.