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J&K High Court · body

2004 DIGILAW 267 (JK)

Pardeep Kumar Sharma v. State

2004-09-24

PERMOD KOHLI

body2004
The petitioners are A-Class Contractors duly registered with the Public Works Department. The registration of the contractor is regulated under the provisions of J&K Registration of Contractors Act, 1956 and the Rules namely, J&K Registration of Contractors Rules, 1969 framed under the aforesaid Act. The registration is periodically renewed for each financial year on payment of requisite fee as prescribed under rules. The registered A-Class Contractor is entitled to execute all works costing more than Rs. 2.00 lacs in terms of SRO 232 dated 29.05.1984. The grievance of the petitioners as projected in this petition relates to the conditions incorporated in the Notice Inviting Tenders issued by the Chief Engineer, PW (R&B) Department, Jammu vide his No. 10317 dated 25.08.2004 whereby tenders have been invited for different works as enumerated therein. As many as 15 works have been put to tender for execution. Besides other stipulations NIT also contains stipulation for costs of documents in respect to different works on the basis of its estimated value. There is also a condition whereunder award of contract can be made in favour of pre-qualified bidders. The conditions relevant for the purpose of present petition and impugned in this petition are extracted from the tender document and noticed hereunder: " The earnest money should be deposited alongwith the tenders in the appropriate form as per the tender documents. The tender shall be issued on payment by demand draft (Non-refundable) drawn in favour of Executive Engineer PWD(R&B) Division Concerned for:- @Z_TBL_BEG = COLUMNS(3), DIMENSION(IN), COLWIDTHS(.5000,E1,E1), ABOVE(.1000), BELOW(.1000), HGUTTER(.0555), VGUTTER(.0555), KEEP(OFF), L1(R1C0..R1C3) @Z_TBL_BODY = TABLE TEXT, TABLE TEXT, TABLE TEXT S.No. , Estimated Cost, Cost of Document 1., Rs. 25 lacs to 50 lacs, Rs. 8000/- 2., Rs. 50 lacs to 100 lacs, Rs. 10000/- 3., Rs. 100 lacs to 250 lacs, Rs. 15000/- 4., Rs. 250 Lacs to 500 lacs, Rs. 25000/- @Z_TBL_END = Bid must be accompanied by the earnest money of the amount specified for the works in the table in separate cover marked, "Earnest Money". To qualify for award of contract each bidder should have in the last five years: (a) Achieved in any one year a minimum financial turnover (in all cases of civil engineer construction works only) volume of construction work of at least the amount equal to the estimated cost of works for which bid has been invited. To qualify for award of contract each bidder should have in the last five years: (a) Achieved in any one year a minimum financial turnover (in all cases of civil engineer construction works only) volume of construction work of at least the amount equal to the estimated cost of works for which bid has been invited. The turnover will be indexed at the rate of 8 percent for a year. (b) Satisfactorily completed, as prime contractor, at least one similar work equal in value to one-third of the estimated cost of work for which the bid is invited. Each bidder must produce: (i) Current Income Tax Clearance Certificate (ii) Sales Tax Clearance Certificate (iii) Profit and Loss statements and, (iv) Auditors Report for the last 3 years (v) Experience Certificate from concerned official not below the rank of Executive Engineer for civil nature and size of work. (vi) Evidence of access to cash in hand line(s) of credit and availability of other financial resources/facilities (10% of contract value) certified by banker (the certificate being not more than 3 months old). (vii) Authority to seek reference from bidders bankers with regards to litigation/arbitration in which the bidder is involved." The afore-noticed conditions are sought to be struck down on the ground that: (i) The cost for each document is disproportionately high and maximum cost of the paper for each tender document should not be more than Rs. 500/-. It is also stated that in CPWD Manual cost of documents for work costing more than Rs. 50 lac and upto to 2 crore is Rs. 1000/- and whereas cost of documents in respect to work costing above Rs. 2 crore is only 1500/- whereas cost of documents for the work arranging from Rs. 25 lac to 500 lac is between Rs. 8000/- to Rs. 25000/; (ii) The conditions (a) and (b) referred to above, amount to creating class within the class of contractors and same contravenes provisions of Contractors Registration Act and Rules framed thereunder; and (iii) The Chief Engineer has no authority to impose such conditions, which dis-entitles the petitioners from participating in the tender process. I have heard learned counsel for petitioners at length. The contention raised by the petitioners that the conditions incorporated in the NIT contravene provisions of Act and Rules is totally mis-placed. I have heard learned counsel for petitioners at length. The contention raised by the petitioners that the conditions incorporated in the NIT contravene provisions of Act and Rules is totally mis-placed. As far the provisions of J&K Registration of Contractors Act, 1956 are concerned, it has only made registration of contractors compulsory and no contractor without being registered can be allowed to participate in the tendering process or execute any contract with the Government. The rules framed under the Act as notified vide SRO 456 dated 19.08.1969 prescribe the manner and procedure for registration. It also provides classification of contractors and lays down other eligibility conditions for the purpose of registration as a contractor. The Act and Rules regulate the registration of contractors and have nothing to do in so far allotment of contract is concerned. As a matter of fact, there is no statute that regulates the allotment of contract by various Government departments as it falls within the executive function of the State. The issue of NIT, the conditions for issue of tender, eligibility of tenderer and other conditions relating to execution of contract, its technical aspects, quality of works and control, all are matters for which technical experts have to examine and lay down the conditions for the execution of the works. These are matters, which have to be decided by the department, its experts based upon their technical knowledge, nature of work and other allied matters. Who is best suitable for execution of work, what are its financial implications, period for execution, etc. can only be decided by the concerned department and its technical experts. The Court cannot venture into this area. The Court can examine the justifiability of conditions of contract only if the same contravene any statutory provisions are unfair, unreasonable, irrational and may be against public interest or if the same are arbitrary in nature. The examination of impugned conditions noticed hereinabove, do not lead to any inference that fall in any of the above mentioned categories. I am not in agreement with the contention of Mr. Bhardwaj, learned Senior Counsel that the conditions incorporated in the NIT violate the provisions of J&K Registration of Contractors Act, 1956 and/or Rules framed therein. The Act and Rules deal with the registration of contractors alone and not the allotment of contracts, both are distinct in nature. I am not in agreement with the contention of Mr. Bhardwaj, learned Senior Counsel that the conditions incorporated in the NIT violate the provisions of J&K Registration of Contractors Act, 1956 and/or Rules framed therein. The Act and Rules deal with the registration of contractors alone and not the allotment of contracts, both are distinct in nature. The allotment of contracts and the execution of works is not regulated by the provisions of Act and Rules referred to above. Regarding other aspects of the attack to the impugned stipulation that the same create class within the class of contractors, it is vehemently argued that A- Class contractor registered with the department is entitled to execute all works valuing more than Rs. 2 lac and, therefore, no further eligibility conditions can be brought in either for the purpose of qualification or disqualification of any contractor. The plea though appears attractive but a little in sight exposes fallacy of argument. Mere registration and fulfilling certain conditions do not make one eligible for award of contract nor does it certifies ones competence and capability to execute. A person may be entitled to enter into bid being a registered contractor. But it is for the department to see whether any such person has the competence and capability to execute any particular work which may require an expertise, financial status, manpower and such other related factors. With a view to judge ones capacity, the department is entitled to satisfy certain conditions. Applying this test to the present case, what has been communicated in the NIT is that successful bidder should have executed a particular volume of construction work of at least the amount equal to the estimated cost of works for which bid is made and also that he should have satisfactorily completed the similar work equal in value to one-third of the estimated costs of the work for which the bid is made by such contractor. These conditions cannot be said to be arbitrary, irrational or obnoxious in any manner. Stipulations are for judging the capability and capacity of the contractor as also his financial status to execute a particular work. In an era of competition where attempt is to improve the quality in every field one has to prove his worth. These conditions cannot be said to be arbitrary, irrational or obnoxious in any manner. Stipulations are for judging the capability and capacity of the contractor as also his financial status to execute a particular work. In an era of competition where attempt is to improve the quality in every field one has to prove his worth. It cannot be disputed that it is the prerogative of the respondents to lay down valid norms and conditions for allotment of works. Keeping in view the public interest sought to be secured, I do not find that any conditions incorporated are arbitrary, irrational or create any class amongst the class of contractors. It only lays down certain conditions to achieve the best result. No fault can be found in the conditions incorporated in tender documents. This petition being without any merit deserves dismissal alongwith connected CMP(s). I ordered, accordingly.