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2007 DIGILAW 696 (CAL)

HOOGHLY DIVISION P. H. E. CONTRACTORS ASSOCIATION v. STATE OF WEST BENGAL

2007-09-07

BHASKAR BHATTACHARYA, RUDRENDRA NATH BANERJEE

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BHASKAR BHATTACHARYA, J. ( 1 ) THIS mandamus appeal is the instance of the writ petitioners and is directed against order dated 12th July, 2007 passed by a learned Single Judge of this Court thereby rejecting the prayer of interim order by which the writ petitioners prayed for restraining the respondent authority from giving any effect or further effect to the notice inviting tender dated 30th May, 2007 till the disposal of the writ application. ( 2 ) THE writ petitioners are all Class-I contractors enlisted with the Public health Engineering Directorate and working with the respondent authority for years. By the writ application, they have challenged the notice inviting a tender dated 30th May, 2007 issued by the respondent No. 7 for improvement of drinking water supply facility of Ramkrishna Math and Ramkrishna Mission, belur Math, Howrah, on lump sum basis including the supply of all the requisite materials along with design, drawing and specification. ( 3 ) ACCORDING to the writ petitioners, in the said notice the respondent No. 7 has added an eligibility clause thereby imposing a condition that the applying agency must have the minimum financial turnover of Rs. 4. 50 crore for the last three successive years with the object of excluding the writ petitioners from the purview of such process of tender. According to the writ petitioners, even the Howrah Division of Public Health Engineering Directorate itself had no such turnover of Rs. 4. 50 crore for the last three consecutive years. ( 4 ) ACCORDING to the writ petitioners, as per PWD Code which is followed in all the departments of the Government of West Bengal, the Class I enlisted contractors are not required to produce any credential or supporting documents for the purpose of participation in the process of tender and as a matter of right, they can participate in any tender. The writ petitioners claim that the special eligibility criterion can only be introduced and demanded from the Class i contractors when specific and special permission is obtained from the government for imposing such condition. In other words, an enlisted Class I contractor, according to the writ petitioners, cannot be debarred from participating in a tender under ordinary circumstances unless the Government has approved the special eligibility condition. In other words, an enlisted Class I contractor, according to the writ petitioners, cannot be debarred from participating in a tender under ordinary circumstances unless the Government has approved the special eligibility condition. ( 5 ) THE writ petitioners complain that the notice impugned in the writ application had been issued violating the specific and categorical directives laid down by the Government through the PWD Code. ( 6 ) THE further grievance of the writ petitioners is that the disputed tender notice includes and constitutes several jobs clubbed together. According to them, the Public Health Engineering Directorate previously had been issuing separate tender notices for the work orders for each item of the job included in the present tender notice but this time, all those items are clubbed together so that the work-order takes the shape of a huge work whereby the respondents can demand a higher financial turnover from the concerned Class I contractors who usually do those individual jobs with an eye to deprive them of those jobs on the plea of want of eligibility for not having the higher financial turnover for the last three years. ( 7 ) AS indicated earlier, the learned Single Judge refused to grant interim order prayed for by the writ petitioners and being dissatisfied, they have come up with the present mandamus appeal. ( 8 ) MR. Mukherjee, the learned Advocate appearing on behalf of the writ petitioners has drawn our attention to Rules 217, 218 and 226 of the PWD code and submits that once a person is enlisted as a Class I contractor, he must be permitted to participate in the process of all the contracts of the highest category included in the PWD Code and by adding an extra clause demanding minimum financial turnover of Rs. 4. 50 crore, an enlisted Class I contractor cannot be excluded unless the State Government has approved the incorporation of such clause. Mr. Mukherjee further contends that in the case before us, the state Government has not given permission to incorporate such a clause in the notice inviting the tender. He, therefore, prays for permitting the appellants to participate in the process of tender by staying all further proceeding of the process of tender. ( 9 ) MR. Das, the learned Advocate appearing on behalf of the State respondent has, however, opposed the aforesaid contentions advanced by Mr. He, therefore, prays for permitting the appellants to participate in the process of tender by staying all further proceeding of the process of tender. ( 9 ) MR. Das, the learned Advocate appearing on behalf of the State respondent has, however, opposed the aforesaid contentions advanced by Mr. Mukherjee and has contended that the Class I contractors have the right to participate in the process of tender as a matter of right in respect of works valued upto Rs. 25 lakhs in case of civil work but for the works valued beyond Rs. 25 lakhs, the qualification of the bidders will be subject to the fulfilment of conditions laid down in the relevant notice inviting the tender. In support of such contention, mr. Das relies upon the notice dated 27th July, 2006 issued by the Engineer-in-Chief and ex Officio Secretary, Public Works Department. Mr. Das further relies upon the West Bengal Public Works Department Manual, First Edition, of the Government of West Bengal and relies upon clause 9 at page 132 which prohibits the enlisted contractors of one class from participating without the special permission of the Government in the process of tender for works above and below the financial limit prescribed for that particular class. Mr. Das, therefore, submits that in the case before us, the work-order being valued more than Rs. 25 lakhs, the respondents did not commit any illegality in demanding a further qualification of the yearly turnover of Rs. 4. 50 crore for the last three successive years. Mr. Das, therefore, prays for dismissal of the appeal. ( 10 ) THEREFORE, the only question that arises for determination in this appeal is whether in view of clause 226 read with clauses 217 and 218 of the PWD code, the enlisted Class I contractors are entitled to participate in a process of tender valued above Rs. 25 lakhs without complying with any additional eligibility criterion fixed in the notice of tender. ( 11 ) TO appreciate the point, it will be profitable to refer to the clauses 215, 216, 217, 218, 226 and 230 of the PWD Code, and sub-clause (9) of clause 132 of the West Bengal Public Works Department Manual which are quoted below: "215. ( 11 ) TO appreciate the point, it will be profitable to refer to the clauses 215, 216, 217, 218, 226 and 230 of the PWD Code, and sub-clause (9) of clause 132 of the West Bengal Public Works Department Manual which are quoted below: "215. (1) Lists of approved contractors shall be maintained in the Public works Directorate separately for three categories of works, namely, (a)general works, that is works other than sanitary and plumbing or electrical works, (b) sanitary and plumbing works, and (c) electrical works. List of approved contractors for each category shall be divided into three or four classes or as many classes as may be prescribed by Government from time to time. Enlistment of contractors in each class shall be made and the area of operation defined in each case as well as the financial and/or technical limit up to which each class may be entrusted with the execution of works fixed according to principles laid down in Appendix 8. (2) Besides the aforesaid three categories of contractors, another list of approved contractors for lightning conductors shall also be maintained for execution of the said category of works. The list shall be drawn up by the superintending Engineer, Electrical Circle, for approval of Government. (3) Lists of approved contractors once published shall continue to operate till amended. Subsequent vacancies in the lists as may occur for any reason whatsoever shall be filled up by issue of supplementary lists drawn up under the same principles laid down in the said Appendix 8. The enlisted contractors may be removed, blacklisted, banned or suspended in terms of the rules also laid down in the said Appendix 8. 216. (1) Original works upto Rs. 5,000/- and repair works up to Rs. 2,000/-may, at the discretion of the Executive Engineer or the Superintendent, governor's Estates and for reasons to be recorded in writing be distributed to contractors in the approved lists of the appropriate category without calling for tenders, provided that in case of plumbing works the financial limits stated above for original works and repair works shall be reduced to Rs. 2,500/- and Rs. 1,000/-respectively, and in case of electrical works to Rs. 500/- and Rs. 200/-respectively. But tenders should always be invited whenever there is sufficient time for such procedure. (2) In all other cases of a general work upto a limit of Rs. 2,500/- and Rs. 1,000/-respectively, and in case of electrical works to Rs. 500/- and Rs. 200/-respectively. But tenders should always be invited whenever there is sufficient time for such procedure. (2) In all other cases of a general work upto a limit of Rs. 1,00,000/- of a sanitary and plumbing work upto a limit of Rs. 50,000/-, and of an electrical work upto a limit of Rs. 25,000/-, competitive tenders shall be called for and the tenders shall be confined to the enlisted contractors of the appropriate class and area for such works, and the lowest tender of the contractor of the appropriate class shall be accepted by the competent authority. Every case in which a tender higher than the lowest is recommended for acceptance shall come upto Government for orders. (3) If upon calling for competitive tenders a single tender is received, that tender shall not be accepted ordinarily. Fresh tenders shall be called for again without delay. Where on the second also, a single tender is received, that tender may be accepted. Where on the second call no tender is received, or where by comparison with the tender (s) received at the second call, the single tender received at the first call is, in the opinion of the accepting authority, the most acceptable, the single tender received at the first call may be accepted provided consent of the contractor concerned has been obtained prior to such acceptance and issue of work orders to him. Under the circumstances stated, the acceptance of single tender shall not require a reference to Government provided that the total amount arrived at on the basis of tendered rates does not exceed the total estimated amount beyond 5 per cent. 217. (1) Open competitive tenders shall be called for from the public whenever the estimated cost of the work of each individual category (general, sanitary and plumbing or electrical) proposed for execution by the Directorate exceeds the financial limit stated in sub-rule (2) of the Rule 216 for that category of work. The enlisted contractors in Classes I and II of the lists of contractors for works other than sanitary and plumbing works the enlisted contractors in class I for sanitary and plumbing works shall also be eligible to submit tenders in such cases within their respective category. The enlisted contractors in Classes I and II of the lists of contractors for works other than sanitary and plumbing works the enlisted contractors in class I for sanitary and plumbing works shall also be eligible to submit tenders in such cases within their respective category. In case of works, not being an electrical work, the enlisted contractors of still lower classes may also form a combination of the appropriate number, such a combine will become a new firm and will be able to submit tender for such works. (2) The lowest tender for such works shall be accepted as a rule by the competent authority. If for any reason, economical or otherwise, the lowest tender is not accepted, reference shall be made to Government for order as to which of the contractors the work should be given. Note.- By the term 'combination of the appropriate number' it is intended that the contractors in lower classes should form a combination among themselves in such a way that the aggregate value in terms of the financial limits of the contractors forming the combination should at least be equal to the value of the work tendered for. 218. (1) When a big work worth above Rs. 1 (one) lakh (now enhanced to Rs. 25 lakhs) in value has to be divided into competent parts each below Rs. 1 lakh (now Rs. 25 lakhs) in value for the sake of expedition in execution of the work and for other administrative reasons, the tender for each section should be treated as part of the tender for the whole work and should accordingly be made in the open market and accepted as such according to rules governing open tenders provided that in such cases individual contractors in Class III or in Class IV shall also be eligible to tender for the component parts of such works if the value of the same falls within their respective financial limits. (2) Similarly, when contractors are invited to tender for the whole length of a road, the estimated cost of which exceeds Rs. 1 lakh (now Rs. (2) Similarly, when contractors are invited to tender for the whole length of a road, the estimated cost of which exceeds Rs. 1 lakh (now Rs. 25 lakhs), or for convenient sections of the entire length of that road, the character of the tenders should be evaluated with reference to the estimated cost for the whole length and the tenders should be regarded as open tenders and dealt with accordingly subject to the same proviso as provided in sub-rule (1 ). (3) In splitting up any work into component parts the following conditions should be carefully observed - (a) The primary consideration governing splitting up shall be expedition consistent with economy and efficiency. (b) The primary consideration governing splitting up shall be an expedition shall not be restroed to for the purpose of evading the financial powers of the officer distributing the work. (c) Care should be taken to see that splitting up does not technically damage the value of the work as a whole, and where such a possibility exists, the work shall not be split up into smaller segments. 226. Notices for open general tender shall not, as a general rule, include any clause requiring the intending tenderers to produce to the satisfaction of the Superintending Engineer concerned credentials regarding their past experiences, financial stability and special aptitude for the type of constructions for which tenders are called for. Particularly such credentials should not be demanded from the enlisted Class I and Class II contractors in issuing tender forms to them. In special cases when such restrictions are considered necessary even in respect of enlisted Class I and Class II contractors, prior sanction of Government shall be taken in each case. 230. (1) Enlisted contractors may deposit immediately a fixed permanent security, as detailed below, against which he will be eligible to submit tenders in all cases, other than open tender cases, for any number of works within his class without having to deposit the earnest money as before along with each individual tender: (2) In cases of open tenders for works valued above Rs. 1 lakh (now enhanced to Rs. 1 lakh (now enhanced to Rs. 25 lakhs) or for sections thereof, where enlisted (a) Class I contractors, or (b) Class II contractors, or (c) Class III and Class IV contractors forming a combination of the appropriate number, or (d) outside contractors are eligible to participate such contractors, if they so like, may each deposit with this Department a fixed permanent security amounting to Rs. 50,000/ -. This will entitle such depositors to submit open tenders under this department without having to deposit earnest money along with each individual tender as before. (3) In cases of tenders for works upto the limit of Rs. 1 lakh (now enhanced to Rs. 25 lakhs) for which enlisted contractors alone are eligible, earnest money at 5 per cent of the estimated value of the work tendered for shall have to be deposited by those tenderers who have not deposited the fixed securities as detailed in sub-rule (1 ). (4) In cases of the works in the open tenders costing more than Rs. 1 lakh (at present Rs. 25 lakhs), or any competent part thereof, an earnest money amounting to 2 per cent of the estimated value of the work for which tender has been called for, shall have to be deposited by those tenderers who have not deposited the fixed permanent security under sub-rule (2 ). (5) The successful tenderer in the open tenders, who has deposited an earnest money at 2 per cent as in sub-rule (4), shall, within 7 days of the receipt of an intimation sent to him by registered post, to the effect that his tender has been accepted deposit an additional sum which together with the 2 per cent of the earnest money, will amount to 5 per cent of the cost as per tendered rates of the works for which the tender has been accepted. Failing to deposit this additional sum within the period specified above, the earnest money shall forthwith stand forfeited to Government and the letter of acceptance of the tender will be considered as automatically cancelled. 132. (I) Enlistment of Contractors.- (i ). . . . . . . . . . . . (ii ). . . . . . . . . . . . (1 ). . . . . . . . . . . . (8 ). . . . . . . . . . . . 132. (I) Enlistment of Contractors.- (i ). . . . . . . . . . . . (ii ). . . . . . . . . . . . (1 ). . . . . . . . . . . . (8 ). . . . . . . . . . . . (9) The enlisted contractors of one class shall not without special permission of the Government be allowed to tender for works above below the financial limit prescribed for that particular class. " ( 12 ) AFTER hearing the learned Counsel for the parties and after going through the aforesaid provisions of the Code and the Manual, we find that there are four categories of contractors enlisted according to the financial limits fixed by the Manual. At present, the Class I contractors are classified for the jobs valued between Rs. 10 lakhs and Rs. 25 lakhs. Similarly, the Class II contractors are earmarked for the works valued between Rs. 1 lakh and Rs. 10 lakhs. ( 13 ) ACCORDING to clause 216 (2) of the Code, apart from the nature of the works mentioned in sub-clause (1) of clause 216, all other cases of the general work upto Rs. 25 lakhs would be given by calling "competitive tenders" among the enlisted contractors of the appropriate class and those are called reserved contracts open to enlisted contractors. As provided in clause 217 of the Code, tenders should be called from the public when the estimated costs of the works exceed the financial limit specified in sub-clause (2) of clause 216 and those are called "open competitive tenders". In such tenders, apart from the outsiders, the enlisted contractors can also participate as per restriction provided in the said clause. ( 14 ) ACCORDING to clause 226 of the Code, notice for "open general tender" shall not, as a general rule, include any clause requiring intending tenderers to produce to the satisfaction of the Superintendent Engineer concerned credentials regarding their past experience, financial stability and special aptitude for the type of construction for which tenders are called for. Particularly such credentials should not be demanded from the enlisted Class i and Class II contractors in issuing tender forms to them. Particularly such credentials should not be demanded from the enlisted Class i and Class II contractors in issuing tender forms to them. In special cases when such restrictions are considered necessary even in respect of Class I and class II contractors, prior sanction of the Government shall be taken in each case. By relying upon the aforesaid clause, Mr. Mukherjee, the learned Advocate appearing on behalf of the appellant, tried to impress upon us that for the enlisted Class I and Class II contractors, no restriction should be imposed regarding their experience, financial ability or special aptitude. In other words, mr. Mukherjee's contention was that once his clients are enlisted as the class I and Class II contractors, they are, as a matter of course, entitled to participate in any process or tender irrespective of valuation of such tender. We are afraid we are unable to accept such contention. On a plain reading of the said clause 226 it is apparent that all that the said clause has expressed is that if in an "open general tender" an intending tenderer, particularly , an enlisted Class I or Class II contractor wants to get tender paper for the purpose of participation, there should not be any clause requiring such tenderers to produce credentials regarding their past experience, financial stability or special aptitude for the type of construction for which the tender is called unless prior sanction of the Government is taken to that effect. ( 15 ) IN our view the phrase "open general tender" in clause 226 refers to those tenders which are specified in clause 216 (2) of the PWD Code and are not applicable to "open competitive tenders" as appearing in clause 217 of the Code. If we accept the contention of Mr. ( 15 ) IN our view the phrase "open general tender" in clause 226 refers to those tenders which are specified in clause 216 (2) of the PWD Code and are not applicable to "open competitive tenders" as appearing in clause 217 of the Code. If we accept the contention of Mr. Mukherjee that the clause 226 of the Code applies to an open competitive tender as provided in clause 217, where the public in general are entitled to participate, in that event, in view of the first sentence of clause 226, any person, even if he is not an enlisted contractor of any class and a rank outsider, can participate and demand tender papers for participation without showing their past experience, financial stability or special aptitudes for the construction for which the tender is called; on the other hand, if the phrase "open general tender" is taken to be the tenders open to the enlisted contractors mentioned in clause 216 (2), the clause will be quite reasonable because having regard to the fact that the work is of the reserved category among the enlisted contractors of different classes, there is no necessity of demanding production of the credentials regarding past experience, financial stability or special aptitude for the construction in question at least from the enlisted contractors of Class I and Class II (may be required for a Class III or class IV contractor) unless the Government gives special prior approval for incorporation of such clause having regard to the nature of the work. ( 16 ) WE are also unable to accept the contention of Mr. Mukherjee, the learned advocate appearing on behalf of the appellants that in the notice inviting the tender in respect of a work valued above Rs. 25 lakhs, there cannot be any clause demanding past experience of a particular amount in last specified years from the Class I or Class II or contractors. According to the classifications made by the Government, those are on the basis of value of the work and the maximum amount being restricted to Rs. 25 lakhs, for a work valued at above that amount, the Government can definitely impose conditions of having the experience and expertise in handling works of the similar nature and a classified contractor of Class I who is enlisted as such based on work valued upto Rs. 25 lakhs, for a work valued at above that amount, the Government can definitely impose conditions of having the experience and expertise in handling works of the similar nature and a classified contractor of Class I who is enlisted as such based on work valued upto Rs. 25 lakhs cannot claim any special privilege of ignoring the special conditions fixed in the notice inviting tender. ( 17 ) WE, therefore, find that in this case, the respondents did not commit any illegality in imposing a condition of financial stability and experience from the tenderers as the tender in question comes within clause 217 (2) of the Code and at the same time, no prior permission of the Government is necessary, for demanding credentials for such experience at the time of giving tender papers. ( 18 ) THE mandamus appeal is, thus, devoid of any substance and is accordingly dismissed. In view of our findings above, no purpose will be served by unnecessarily keeping the writ application pending and the same is also dismissed. No costs. Appeal dismissed.