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2010 DIGILAW 336 (GAU)

Syamal Sarmah v. State of Arunachal Pradesh

2010-05-13

P.K.MUSAHARY

body2010
JUDGMENT P.K. Musahary, J. 1. Heard Mr. T. Pertin, learned Counsel for the Petitioner. Also heard Mr. R.H. Nabam, learned senior Government Advocate, Arunachal Pradesh, for the State Respondents and Mr. K. Ete, learned Counsel for private Respondents No. 6 and 7. 2. A Notice Inviting Tender ('NIT') was issued by the Executive Engineer, RWD, Seppa, on 7.7.2009, in respect of Package No. AR/03/03/022 for Stage-1 from eligible and interested contractors and joint ventures for construction of roads from Domdila to Laching Bagang in East Kameng District of Arunachal Pradesh. The said Stage-1 work includes formation cutting, cross drainages and field testing. The eligible bidders are required to furnish their constitution or legal status including the statement on availability of major items of equipments for carrying out works as per the details of the Machineries indicated in the Appendix to Instructions to Bidders(ITB). The Petitioner, as a contractor, participated in the said tender process by submitting bids with necessary documents for the aforesaid work. The Respondents No. 6 and 7 also participated in the said tender process The tender Board opened the technical bid of the tenderers on 4.8.2009 in presence of the representatives of all the bidders. After examining the documents, the Board declared the bid documents of the Petitioner along with 2 (two) other bidders namely T.K. Enterprise and M/s. Promod Gogoi, deficient and treated them, as disqualified. On the other hand, the tender of Kusuk Construction Company (P.) Ltd. (private Respondent No. 7) was found responsive and the Board decided to recommend its case for awarding the said contract work. In respect of the Petitioner, the technical bid has been disqualified on the ground of non-fulfillment of conditions as laid down under Clause 1(1.1) and Clause 1.4 of Section 3 of Standard Bidding Document ('SBD'). The said decision was conveyed through Notice dated 10.8.2009 (Annexure P/5 to the writ petition). 3. As per the aforesaid communication dated 10.8.2009, the Petitioner was declared 'not qualified' as he could not demonstrate availability of key equipments for carrying out construction work including equipment required for establishing field laboratory to perform mandatory tests, etc., as indicated in the Appendix to ITB (Instructions to Bidders). 4. Mr. 3. As per the aforesaid communication dated 10.8.2009, the Petitioner was declared 'not qualified' as he could not demonstrate availability of key equipments for carrying out construction work including equipment required for establishing field laboratory to perform mandatory tests, etc., as indicated in the Appendix to ITB (Instructions to Bidders). 4. Mr. T. Pertin, learned Counsel for the Petitioner, submits that the aforesaid ground alone cannot be a valid ground for declaring the Petitioner as disqualified if the Petitioner can satisfy the authorities that he can procure the required machineries, equipments for execution of construction works. It is the resource and capability of the tenderer in procuring the required equipments/machineries that should be taken into consideration and it is not necessary that he should have the aforesaid equipments/machineries in his possession at the time of submitting the tender. According to Mr. Pertin, the private Respondent No. 7 also suffers from same deficiency and yet the Respondent authorities have accepted and recommended the tender of Respondent No. 7 merely on the statement made in the tender papers without actually verifying as to whether the said tenderer is intact possessing the machineries/equipments as specified in the Appendix to the Instructions to Bidders (ITB). 5. Mr. Pertin, learned Counsel, strenuously contends that private Respondent No. 7, M/s. Kusuk Construction Company (P.) Ltd., whose technical bid was accepted, is not possessing any equipments/machineries of its own but the said tenderer was not disqualified which is prima facie a case of arbitrary discrimination with intention to favour the said firm. The learned Counsel further contends that Respondent No. 6, Sri Tamchi Kusuk, is the Proprietor or Attorney holder of 3 different firms, viz., (1) M/s. Tamchi Kusuk, (2) M/s. Kusuk Construction Company (P.) Ltd., and (3) M/s. Koje Zengo Enterprise, which fact is well known to all concerned. Moreover, as contended by Mr. Pertin, Sri Tamchi Kusuk, Proprietor and Power of Attorney holder of the aforementioned firms, had already been awarded with 2 (two) contract works under PMGSY Scheme and they are currently under execution. As per the relevant clause in the said NIT, a contracting firm, who owns 2 (two) contracts under PMGSY Scheme and currently under execution within the State of Arunachal Pradesh, shall not be issued tender papers as per the State Government Notification dated 10.9.2008. As per the relevant clause in the said NIT, a contracting firm, who owns 2 (two) contracts under PMGSY Scheme and currently under execution within the State of Arunachal Pradesh, shall not be issued tender papers as per the State Government Notification dated 10.9.2008. The Respondent authorities are well aware of the same and as such, the tender papers of Respondent Nos. 6 and 7, should have been rejected straightway. 6. Mr. R.H. Nabam, learned Senior Government Advocate, submits that the Respondent authorities are not strictly insisting on Clause 4.4B(b)(i) of the Instructions to Bidders (ITB) with regard to availability of key equipments for construction work as specified in the Appendix to ITB. The Petitioner's technical bid was not rejected due to non-fulfillment of the aforesaid condition. The Petitioner was disqualified for noncompliance of requirement under Clause 1(1.1) of Section 3 of Standard Bidding Document (SBD) as has been clearly indicated in the impugned communication dated 17.8.2009 inasmuch as in his bidding documents, he annexed a special power of attorney to the effect that he has appointed and nominated one Sri Ramesh Bagang 'to do or execute work in his name and on his behalf whereas the aforesaid clause requires that execution of the work should be done by the principal contractor with its experienced team. The Petitioner was intact disqualified on the aforesaid ground alone without insisting on the fulfillment of other conditions. 7. Mr. K. Ete, learned Counsel appearing for Respondent Nos. 6 and 7, submits that Respondent No. 6 is not executing 2 (two) contract works under PMGSY Scheme in violation of the NIT terms and conditions as alleged by the Petitioner and as such, they earn no disqualification on that score. The learned Counsel also submits that Respondent No. 6 is not the Proprietor/power of attorney holder of 3 (three) different firms as alleged by the Petitioner. The learned Counsel, of course, admits that Respondent No. 6 is the Proprietor of M/s. Kusuk Construction Co. (P.) Ltd. (Respondent No. 7) but denies that he is a power of attorney holder of M/s. Koje Zengo Enterprise and states that the proprietor of M/s. Koje Zengo Enterprise is one Sri Anupam Tangu. The said Anupam Tangu is executing another PMGSY package in the district of West Siang, Arunachal Pradesh and they are not connected or related to each other in any manner. The said Anupam Tangu is executing another PMGSY package in the district of West Siang, Arunachal Pradesh and they are not connected or related to each other in any manner. The Respondent No. 7, M/s. Kusuk Construction Company (P.) Ltd., is a Company registered under the Companies Registration Act, 1956, and is having an independent identity as a juristic person although Respondent No. 6 is an individual as well as the Managing Director of Respondent No. 7's Company. The learned Counsel submits that no disqualification could be found in respect of the bids of Respondent Nos. 6 and 7 and as such, the Board has rightly recommended the case of Respondent No. 7, for approval. 8. From the aforesaid pleadings and submissions of the parties, the questions involved, in this case, would be: (a) as to whether the declaration made by the Petitioner in the special power of attorney authorizing the power of attorney holder to execute the work on behalf of the principal contractor, would amount to violation of relevant provision in the NIT regarding execution of work by the principal contractor with his/its experienced team and if so, whether the decision declaring the Petitioner as 'disqualified' would be valid? and, (b) as to whether Respondent No. 6 is having 2 (two) contract works at his hand under PMGSY Scheme in the State of Arunachal Pradesh in violation of the public policy of the State Government and thereby, he is also liable to be declared as 'disqualified'? 9. In order to decide the first point, it may require a reference to Clause 1(1.1) of Section 3 of SBD, which is extracted and quoted below: 1. The individual bidders: 1.1 Constitution or legal status of Bidder: (Place of registration [name of agency/department where registered indicating registration number and clause of registration] Principal placed of business: Power of attorney of signatory of [bid only to represent the contractor/firm but not for caution]. Execution should be done by the principal contractor with its experienced team." The Petitioner has furnished a copy of the special power of attorneyexecuted on 29.7.2009 before the Notary appointing/nominating one Sri Ramesh Bagang, S/o Late Myama Bagang, R/o village Laching Bagang, P.O. & P.S. - Chayang Tajo, District - East Kameng, Arunachal Pradesh, as attorney holder and authorizing him to do or execute the work under Package No. AR/03/03/022 "Road from Domdila to Laching Bagang". This fact of execution of special power of attorney has not been denied by the Petitioner. 10. From the aforesaid Standard Bidding Document (SBD) clause, it has been made clear that the power of attorney could be made only 'to represent the contractor or the firm but not for execution of the work'. Emphasis has been made in the said clause that execution of work should be done by the principal contractor with its experienced team. But, in the present case, the Petitioner, by virtue of the aforesaid special power of attorney, authorized the aforesaid power of attorney holder (Ramesh Bagang) to do and execute the work on behalf of the present Petitioner, i.e., principal contractor. An attempt was made by Mr. T. Pertin, learned Counsel for the Petitioner during the course of argument that it was a typographical error that crept inadvertently in the aforesaid special power of attorney authorizing the power of attorney holder to do or execute the work for and on behalf of the Petitioner which in fact, should have been only for the purpose of representing the Petitioner in the tender process. Such submission cannot be accepted in view of the fact that the aforesaid power of attorney was signed by the Petitioner himself and no such statement has been made in the writ petition to the effect that it was a typographical error that crept inadvertently in the said document. In my considered view, the aforesaid submission of the learned Counsel appearing for the Petitioner is an outcome of an afterthought to improve the Petitioner's case and the same cannot be accepted as correct and true. It is, therefore, rejected. It may be held that the Respondent authorities rightly disqualified the Petitioner as a bidder on the aforesaid ground and such decision is not liable to be interfered with by this Court. 11. Before dealing with the next question, it is necessary to consider and find out as to whether it is true and correct that Respondent No. 6, viz., Sri Tamchi Kusuk is not connected/related, in any manner, to M/s. Koje Zengo Enterprise. In order to ascertain this fact, I have perused the Departmental File bearing No. SRWD-96/2009 so produced by Mr. Nabam, learned Senior Government Advocate. The said File, amongst other documents, contains a list of "work award details report for Arunachal Pradesh" for the year 2007-08 (pp. 60-64). In order to ascertain this fact, I have perused the Departmental File bearing No. SRWD-96/2009 so produced by Mr. Nabam, learned Senior Government Advocate. The said File, amongst other documents, contains a list of "work award details report for Arunachal Pradesh" for the year 2007-08 (pp. 60-64). In the said list, the name of the companies as well as the name of the contractors have been shown. At p. 63, last but one column, the name of the Company has been shown as M/s. Koje Zengo Enterprise and the name of the contractor has been shown as Sri Tamchi Kusuk. The work allotted to this enterprise/Company in the district of West Siang, Arunachal Pradesh, has been shown as "in progress". The said list was prepared by the department concerned on 26.8.2009. If the aforesaid particulars as revealed from the connected file is taken to be correct, the contention of the learned Counsel appearing for the private Respondent Nos. 6 and 7 that Respondent No. 6 has no connection/relation with M/s. Koje Zengo Enterprise, cannot be treated as correct and true. It has also become clear from the aforesaid details that Sri Tamchi Kusuk, who is the proprietor of M/s. Koje Zengo Enterprise, is the same person who is the proprietor of M/s. Kusuk Construction Company (P.) Ltd. and he (Tamchi Kusuk) is also the same person who has been impleaded as Respondent No. 6, in the present writ petition and whose bid has been recommended by the Board, for approval, for carrying out the work, in question. From the aforesaid list (p. 61), it is also found that M/s. Tamchi Kusuk was awarded contract work in the year 2007-08 in the district of Lower Subansiri, Arunachal Pradesh and the same has been shown as "in progress" and Sri Tamchi Kusuk has been shown as the contractor of the said Company. Thus, it has become crystal clear that Respondent No. 6, Sri Tamchi Kusuk, is having 2 (two) contract works at hand - (1) in the name and style of M/s. Koje Zengo Enterprise, and (2) in the name and style of M/s. Tamchi Kusuk, in respect of which, he (Tamchi Kusuk) is the principal contractor. The allegation of the Petitioner against Respondent No. 6 as having 2 (two) ongoing contract works under PMGSY, is, thus, found well established. The allegation of the Petitioner against Respondent No. 6 as having 2 (two) ongoing contract works under PMGSY, is, thus, found well established. This being the position, the said Respondent No. 6 should also be declared as disqualified. Similarly, Respondent No. 7 M/s. Kusuk Construction Company (P.) Ltd., in which Respondent No. 6 is admittedly the Managing Director, should also be declared as disqualified for awarding the aforesaid contract work. 12. It may be noted that the State Government, as a matter of public policy, restricted awarding of contract work to 2 (two) Nos. only to a particular successful bidder vide Order No. RWD/PMGSY/19/2003-04 dated 10.9.2008. The same assumes relevance in deciding the instant case and as such, for ready reference, it is reproduced hereinbelow: GOVERNMENT OF ARUNACHAL PRADESH SECRETARIAT: RURAL WORKS DEPARTMENT ITANAGAR-791111 No. PMGSY/19/2003-04 Dated, 10th September, 2008 ORDER In the interest of smooth implementation and timely completion of PMGSY programme in the State of Arunachal Pradesh, the Government has decided to debar the contractors/contracting agencies from participating in the future PMGSY bid who has record of the following: The contractors/contracting agencies those who have been executing the PMGSY contracts but unable to complete the road works within the stipulated contract period and subsequent reasonable extended period of six months on account of the default on the part of the contractor. This bar remains in force till further order. 2. Further, it has been decided to put limit to each successful bidder to the extent of maximum two contract (two packages) of road construction under PMGSY, despite the firms meeting all qualification nouns including bid capacity. This condition shall also be applicable to the contracting agencies those already been assigned two or more contracts under PMGSY and projects are still under execution stage. 3. The above measures are initiated to check the abnormal delay in project completion under PMGSY that posed serious problems to the State in availing the benefits of this flagship programme of Government of India. 4. Moreover, for quality construction of road works and timely completion of projects, relevant provisions as contained in the SBD should strictly be adhered to by the DPIU for those contracting agencies who fail to abide by the conditions of the agreement. This order has come into force with immediate effect. Sd/- GaneshKoyu Commissioner, RWD. 13. 4. Moreover, for quality construction of road works and timely completion of projects, relevant provisions as contained in the SBD should strictly be adhered to by the DPIU for those contracting agencies who fail to abide by the conditions of the agreement. This order has come into force with immediate effect. Sd/- GaneshKoyu Commissioner, RWD. 13. From the foregoing discussions and examination of the matter on the basis of official records/file produced by the Respondent authorities, it is found that all the bidders namely the Petitioner, Respondent Nos. 6 and 7, are found disqualified on respective counts. It leaves no other bidder, from amongst who participated in the said tender process as per the NIT in question, qualified for settlement of the work. This being the position, the Respondent authorities are bound to issue a fresh Notice Inviting Tender (NIT) for settlement of the contract work, in question. 14. On the face of the aforesaid findings, it is felt unnecessary to refer to various decisions of the Apex Court and this Court, as cited by Mr. R.H. Nabam, learned Senior Government Advocate, regarding settled position in the matter of interference with the decisions of the Executive in contractual matters in exercise of power by writ court in judicial review. Suffice it, for this case, to refer to Jagdish Mandal v. State of Orissa (2007) 14 SCC 517 , wherein, in paragraph 22, it is held amongst other, as under: ... Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself, the following questions: (i) Whether the process adopted or decision made is mala fide or intended to favour someone; or Whether the process adopted or decision mad is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action." Enough has been demonstrated above that the Respondent authorities proceeded in a manner against the declared public policy in the matter of settlement of government contract that would affect the public interest. 15. Appropriate it is to refer to Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 671,wherein it is held that though decision in contractual matter is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fide, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have public duty to be fair to all concerned. The court, while exercising its discretionary power under Article 226 of the Constitution of India, should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. In the present case, the Respondent authorities, having failed to proceed or act in furtherance of public policy aforesaid, it has become imperative to hold that there is an overwhelming public interest requiring interference with the impugned decision/action of the Respondent authorities. 16. In view of the above, this writ petition is disposed of with a direction to the Respondent authorities to float fresh Notice Inviting Tender (NIT) forthwith in respect of the aforesaid construction works preferably within a period of 15 (fifteen) days from the date of receipt of a certified copy of this order and make settlement with qualified/eligible bidder in accordance with the terms and conditions as laid down in the NIT. 17. It is made clear that the Tender Committee/Board shall examine/verify the tender papers of the respective bidders in the light of State Government's Order No. RWD/PMGSY/19/2003-04 dated 10.9.2008 issued by the Commissioner, Rural Works Department, Government of Arunachal Pradesh, Itanagar, so that no contractor is awarded more than 2 (two) contracts/packages of road construction, as a matter of public policy, under the PMGSY Scheme and to check abnormal delay in completion of the projects. 18. There shall be no order as to costs.