Supreme Buildcon Pvt. Ltd. v. M. P. Tourism Development Corporation Ltd.
2011-08-25
AJIT SINGH, SANJAY YADAV
body2011
DigiLaw.ai
ORDER Sanjay Yadav, J. 1. Non-acceptance of Technical Bid of the petitioner is the cause which has led the petitioner to file this petition under Article 226 of the Constitution of India seeking direction to the respondents to consider the petitioner's Financial Bid for the allotment of work and further restraining the respondents from accepting the tender and not to issue work order in favour of any of the bidder pertaining to the NIT, dated 4-5-2011. 2. On-line tender in Form 'B' (Item Rate) with pre-qualification documents for construction of new Van Bhawan at Main Road No. 2, Tulsi Nagar, Bhopal was invited vide NIT No. 61, dated 4-5-2011. The tender documents along with pre-qualification documents were to be purchased on-line from 9-5-2011 : 10.00 a.m. to 22-5-2011 : 17.00 p.m. The expiry date was later on extended till 27-5-2011: 17.00 p.m. 3. The bidders were to submit their bid on line and upload the relevant documents as per time schedule. It was stipulated in the NIT that all documents/ certificates required to be submitted on line in Envelope 'A' and additional document mentioned therein were compulsorily to be submitted. It was stipulated, in case of any dispute, the decision of officer who is competent to decide the pre-qualification would be final. The Original Earnest Money Deposit Instrument and all other required documents were to be reached to the office by 2-6-2011 up to 17.00 p.m. The documents which were required to be attached :-- (1) MP PWD registration certificate in appropriate class, if not registered in MP PWD then he should be registered in any other State/Center PWD Deptt. in appropriate class, but before issuing order to commence the work he will have to submit within 15 days from issue of acceptance letter the registration in MP PWD failing which the earnest money will be forfeited. (2) Registration Certificate and Clearance Certificate of Employee Provident Fund. (3) Bank Solvency of Rs. 25 lacs of any Nationalized Bank and any Indian Scheduled Bank. The-Bank solvency should not be older than 12 months. (4) Revenue Solvency, (if required as per PWD Registration Certificate). (5) TIN No. (VAT Tax). (6) PAN No. (Income Tax). (7) Following deductions will be made from every running bills 5% security deposit, 2% Income Tax, 2% VAT Tax, 1% Nirman Upkar and all other taxes levied by State/Central Govt. time to time.
(4) Revenue Solvency, (if required as per PWD Registration Certificate). (5) TIN No. (VAT Tax). (6) PAN No. (Income Tax). (7) Following deductions will be made from every running bills 5% security deposit, 2% Income Tax, 2% VAT Tax, 1% Nirman Upkar and all other taxes levied by State/Central Govt. time to time. (8) Contractors/firms who has completed in last three years one single building work of similar nature costing Rs. 15 crores or two works of Rs. 10 crore each are eligible to participate in this tender bid (without proper certificate tender will not be opened). 4. Clause 5 of the special condition of the NIT stipulated that the Earnest Money Deposit Envelop (Envelop 'A') and Envelop 'C shall be opened on line between 3-6-2011 10.00 a.m. to 7-6-201117.00 p.m. in the presence of any intending contractors or their representatives. It further provided that after assessment of eligibility by the Competent Authority on the basis of pre-qualification documents submitted by the contractors in Envelop 'A' Envelop 'C (Price Bid in Envelop 'C') tenders of only pre-qualified contractors shall be opened on-line between 3-6-2011 10.00 a.m. to 7-6-2011 17.00 p.m. 5. Minutes of the meeting held on 24-6-2011, brought on record as Annexure R-2 with the return dated 3-8-2011; reveals that, total three tenders were received, i.e., of Ramky Infra Structure Ltd., Ramky House Rajbhawan Road, Somajiguda Hyderabad A.P., M/s IVCRL Infra Ltd., Pune and M/s Supreme Buildcon Pvt. Ltd., Bhopal. First envelop was opened on 20-6-2011. Since required Earnest Money was received, hence the 2nd envelop of Technical bid was opened on 21-6-2011 and was produced before the Committee for qualification/for opening of Financial bid. Along with the petitioner there were two other contractors who had submitted the experience certificate regarding type work in question, i.e., Ramky Infra Structure Ltd., Ramky House Rajbhawan Road, Somajiguda, Hyderabad, A.P., M/s IVCRL Infra Ltd., Pune. 6. The Committee qualified Ramky Infra Structure, Ltd., Ramky House Rajbhawan Road, Somajiguda, Hyderabad, A.P. and M/s IVCRL Infra Ltd., Pune for opening of Financial Bid whereas, the work experience shown by the petitioner was found to be inadequate as not of the similar type and hence Committee bid not approve for opening of the Financial Bid of the petitioner. 7. Vide letter dated 8-7-2011 (Annexure R-3) the petitioner was informed that he is not qualified technically by the Committee.
7. Vide letter dated 8-7-2011 (Annexure R-3) the petitioner was informed that he is not qualified technically by the Committee. It was said :-- To, M/s Supreme Buildcon (P) Ltd. Chamber No. 12, IInd Floor, Plot No. 138, Zone-II. M.P. Nagar, Bhopal-462011 Sub. : Tender for the Work of New Van Bhawan at Main Road No. 2, Tulsi Nagar, Bhopal. Rej. : Your Letter dated 1-7-11, regarding Tender dated 12-6-11 for New Van Bhawan This is to bring to your notice that your firm is not qualified technically by the Committee as you have enclosed the details of experience of only Municipal Corporation, Bhopal and not of any other department. The work experience is not found of similar nature of one big building. Your experience of 544 dwelling houses with infrastructure development (Rs. 15.327 crores) is not of one building, but it is of small dwelling units including development works, which is not considered as similar nature of work by the Committee and your financial bid is not opened. Sd/- (Vinod Singhal) Executive Engineer MP STDC, BHOPAL 8. It is this action of the respondents that the petitioner is aggrieved of. 9. We may mention in this stage that in pursuance to the acceptance of Financial Bid the respondents have short listed the contractors wherein M/s IVCRL Infra Ltd., Pune is placed at Serial No. 1 (L-1) and Ramky House Rajbhawan Road, Somajiguda, Hyderabad, A.P. at Serial No. 2 (L-2). It is informed that letter has been issued to the respective parties and the matter is at the stage of negotiation. Keeping in view these fact, we called upon the petitioner that, if he wishes to implead the two contractors who are placed at (L-1) and (L-2) as their right may be prejudicially effected, learned Counsel for the petitioner candidly submits that he does not wish to implead the two contractors in the petition; therefore, we proceeding with the hearing. 10. Contention of the petitioner is that with the downloading of tender documents and pre-qualification condition the qualifying criteria, which were made known were not the same as was stipulated at Item No. 8 of tender document 4-5-2011. Instead what was required was a different work experience then stipulated in the tender document. 11. To be more explicit condition No. 8 in the NIT, dated 4-5-2011 was "8.
Instead what was required was a different work experience then stipulated in the tender document. 11. To be more explicit condition No. 8 in the NIT, dated 4-5-2011 was "8. Contractors/firms who has completed in last three years one single building work of similar nature costing Rs. 15 crores or two works of Rs. 10 crore each are eligible to participate in this tender bid. (without proper certificate tender will not be opened.)". Whereas the condition which the petitioner down load was "2. Work Experience: (A) Similar Work Experience: The bidder should have satisfactorily completed in his own name as a prime contractor at least one similar work of minimum value of Rs. 15.00 crores or at least two similar works each of minimum value of Rs. 10.00 crores during the last 5 years prior to the date of submission of the bid. Works completed prior to the cut-off date shall not be considered. Similar work means, successful completion of multi-storied building work". 12. It was the condition stipulated vide Clause 2 (A), which the petitioner had adhered with while tendering. We therefore, propose to proceed with the matter to examine the sole issue as to whether, the petitioner had furnished experience certificate as per Clause 2 (A). 13. The petitioner in pursuance of tender call had submitted a certificate of work experience issued by Municipal Corporation, Bhopal, dated 23-5-2011, which was as under :-- CERTIFICATE This is to certify that the work of construction of 544 Houses with infrastructure development at Arjun Nagar, Bhopal under JNNURM Scheme awarded to Supreme Buildcon Private Limited, Bhopal amounting Rs. 10,50,20,283/- vide work order No. 70/Engg Dept/ Project Cell/09, dated 11-2-2009 has been extended and the cost of work is also increased and the contractor, i.e., Supreme Buildcon Private Limited, Bhopal executed the work amounting Rs. 15,32,77,184/- up to date with good quality. 14. Rejection of technical bid as apparent from Annexure R-3, dated 8-7-2011 is because of the work experience of the petitioner was not found similar in nature of one big building but it is of small dwelling units including development works which was not considered as similar nature of work by the Committee. 15. The grievance of the petitioner is that his tender bid has been rejected arbitrarily and on non-existing facts. 16.
15. The grievance of the petitioner is that his tender bid has been rejected arbitrarily and on non-existing facts. 16. Learned Counsel for the petitioner has strenuously taken us through various documents filed along with the petition as well as rejoinder, to bring home the submission that the rejection of the tender bid is erroneous as the petitioner was having requisite qualification as desired vide NIT and tender documents supplied therewith. 17. Respondents on their turn categorically denied the contention of the petitioner. 18. In a reply filed on 3-8-2011, it is stated that price bid of the petitioner was not opened for the reasons that:-- (i) According to Clause 8 of the tender notice it is evident that the specific condition was made that the contractors/firm who has completed in last three years one single building work of similar nature costing Rs. 15 crore or two works of Rs. 10 crore each are eligible to participate in this tender bid. (ii) That, in the instant case the certificate submitted by the petitioner which was issued by the Municipal Corporation, Bhopal states that the petitioner has executed the work of Rs. 15,32,77, 184/-regarding construction of 544 houses with infrastructure development at Arjun Nagar, Bhopal under JNNURM Scheme. (iii) That, the certificate of construction of 544 houses is not adequate to fulfill the requirement of construction of one single building work of similar nature costing Rs. 15 crore. (iv) That, in the minutes of the meeting dated 24-6-11 the Construction Committee has found that the work experience shown by the petitioner is inadequate as it is not similar type, hence the committee did not approve for opening the financial bid in favour of the petitioner. A copy of the tender notice is being filed herewith as Annexure R-1. A copy of minutes of the meeting dated 24-6-11 of the Committee is being filed herein with as Annexure R-2. (v) That, on 8-7-11 the petitioner was intimated that he does not fulfill the criteria as laid down in the tender document and hence the financial bid could not be opened. A copy of letter dated 8-7-11 is being filed herewith as Annexure R-3. 19.
(v) That, on 8-7-11 the petitioner was intimated that he does not fulfill the criteria as laid down in the tender document and hence the financial bid could not be opened. A copy of letter dated 8-7-11 is being filed herewith as Annexure R-3. 19. Respondents further filed the parawise reply to the rejoinder wherein reasons as to why the work experience of the petitioner was not found in respect of similar nature of the work is because :-- (i) Area of construction of proposed Van Bhawan building is 3,00,000 square feet. The petitioner has submitted a certificate of executing works worth Rs. 15 crores which comprises of 17 Blocks of 32 dwelling units each costing about Rs. 80 lacs each Block and each Block having area not more than 9600 square feet. The each dwelling house under JNNURM is not costing more than Rs. 2.30 lacs approximate. Each house has to be an independent one. The houses are mainly comprises of one Room with Kitchen and Toilet. All the houses are constructed similarly. (ii) Item No. 2.040 of Bill of Quantities prescribes that Concrete shall be procured from site batching plant, however, in case of ready mix concrete procured from RMC plant the probable concrete can be fetched from (Birla/L and T/RMC). The petitioner does not have its own RMC plant, therefore, it has obtained certificate of NIC Construction (India) Pvt. Limited, to allow the said facility for the use of the petitioner. A copy of certificate dated 2-6-11 is being filed herewith as Annexure R-1. The concrete is not allowed from any other company except as mentioned in the condition. The concrete quality is the main basis of any construction work, particularly the work of the present type, which is first building of its kind in Madhya Pradesh having green building concept. Green building concept is known for less energy consumption thus reducing the green house effect. The entire building is elliptical in shape comprises of 3 ellipses joined in single unit. (iii) There is no completion certificate enclosed of a completed work more than 15 crores. Work executed of 15 crore or more is one thing and successfully completion of the work is another thing. (iv) The work in question is a centrally air conditioned office building, however, no such experience is shown by the petitioner. The work of dwelling houses construction is altogether different.
Work executed of 15 crore or more is one thing and successfully completion of the work is another thing. (iv) The work in question is a centrally air conditioned office building, however, no such experience is shown by the petitioner. The work of dwelling houses construction is altogether different. New Van Bhawan will be the Central Office of Forest Department, Government of Madhya Pradesh. (v) The building in question requires attention of various technical aspects like proper installation of lifts at various places. Installation of Air Conditioning system and its outer facade will be treated with double walled glass surface and ACP work as per green certification requirement. The work in question is special kind of construction; however, the construction of 544 houses is common kind of construction. There are various other comparable aspects which will demonstrate that there is huge difference between construction of 544 houses and one building. All such aspects are not being mentioned here. 20. On being pointed out as to whether the reasons, which are now assigned vide the return in response to the petition are the reasons on record when the technical bid was considered on 21-6-2011, it is candidly submitted by learned Deputy Advocate General that, though the Committee dealt with the tender bid of the tenderers had objectively considered the respective tender bids and the experience certificate filed therewith and though minutes dated 24-6-2011 do not record in so many words regarding the assessment of similar type of work; however, the Committee being of experts besides objectively considering the bid of respective bidders had subjectively satisfied itself, as the similar nature of work experience certificates filed by respective bidders were before the Committee. 21. To substantiate the submission learned Deputy Advocate General has placed before us work experience certificate furnished by other two bidders. It is contended that, since the nature of work experience of the petitioner was in respect of 544 houses constructed as per certificate dated 23-5-2011, the Committee when tested the certificate on the anvil of Clause 2 (A) of tender condition similar work experience rejected the technical bid of the petitioner and did not approve for opening of its financial bid. 22.
22. When the factual background adverted at by respective parties is assimilated, the question which falls for consideration is as to whether the Committee was justified in non-suiting the petitioner on the ground that, his work experience did not match the stipulated condition in the technical documents. 23. Scope of judicial review in respect of contractual matter is well delineated by judicial pronouncements. In Tata Cellular Vs. Union of India, (1994) 6 SCC 651 , it is observed:-- 70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. 71. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justifiable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. 77. The duty of the Court is to confine itself to the question of legality. Its concern should be :-- (1) Whether a decision-making authority exceeded its powers ? (2) Committed an error of law; (3) Committed a breach of the rules of natural justice; (4) Reached a decision which no reasonable Tribunal would have reached; or (5) abused its powers. Therefore, it is not for the Court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken.
Therefore, it is not for the Court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:-- (i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesday unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R Vs. Secretary of State for the Home Department, ex Brind28. Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the Courts should, "consider whether something has gone wrong of a nature and degree with requires its intervention". 24. The question is whether the rejection of tender bid of the petitioner suffers from vice of arbitrary exercise of powers. Admittedly the requirement of tender condition was :-- 2. Work Experience: (A) Similar Work Experience : The bidder should have satisfactorily complete in his own name as a prime contractor at least one similar work of minimum value of Rs. 15.00 crores or at least two similar works each of minimum value of Rs. 10.00 crores during the last 5 years prior to the date of submission of the bid. Works completed prior to the cut-off date shall not be considered. Similar work means, successful completion of multi-storied building work. 25. The petitioner indisputably had relied upon the certificate dated 23-5-2011 issued by the Municipal Corporation, Bhopal. Question is whether the certificate in favour of the petitioner conforms with the criteria fixed vide tender document and whether the Committee was within its right in holding it otherwise. It must be remembered that the Committee comprised of experts. 26. In Tata Cellular (supra), it is observed that judicial review is concerned with reviewing not the merits of the decision of the decision in support of which the application for judicial review is made, but the decision-making process itself.
It must be remembered that the Committee comprised of experts. 26. In Tata Cellular (supra), it is observed that judicial review is concerned with reviewing not the merits of the decision of the decision in support of which the application for judicial review is made, but the decision-making process itself. It was observed that since the power of judicial review is not in any appeal the Court cannot substitute its own decision. It was held :-- 94. The principles deducible from the above are :-- (1) The modem trend points to judicial restraint in administrative action. (2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by malafides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. 27. In Raunaq International Ltd. Vs. I. V.R. Construction Ltd. and others, AIR 1999 SCW 53 , it was held :-- 16. It is also necessary to remember that price may not always be the sole criterion for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert committee's special knowledge plays a decisive role in deciding which is the best offer. Price offered is only one of the criteria.
It is also necessary to remember that price may not always be the sole criterion for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert committee's special knowledge plays a decisive role in deciding which is the best offer. Price offered is only one of the criteria. The past record of the tenderers, the quality of the goods or services which are offered, assessing such quality on the basis of the past performance of the tenderer, its market reputation and so on, all play an important role in deciding to whom the contract should be awarded. At times, a higher price for a much better quality of work, can be legitimately paid in order to secure proper performance of the contract and good quality of work, which is as much in public interest as a low price. The Court should not substitute its own decision for the decision of an expert evaluation committee. (Emphasis supplied) 28. In Siemens Public Communication Networks Private Limited and another Vs. Union of India and others, (2008) 16 SCC 215, it was observed :-- 40....When the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features have to be considered. A contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases, principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bonafide and is in public interest Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake of argument that there is a procedural lacuna. 29. In the case at hand, the Committee of experts evaluated the tender documents and found that the work experience certificate furnished by the petitioner does not fulfill the criteria that he had experience of similar nature of one big building. The Committee found that the work experience of the petitioner was of small dwelling units including development works. Since no iota of malafide is demonstrated by the petitioner, the evaluation of experience certificate produced by the petitioner by Committee of experts cannot be doubted as would lead for causing an interference in the decision taken by the said Committee in rejecting the tender bid of the petitioner. 30.
Since no iota of malafide is demonstrated by the petitioner, the evaluation of experience certificate produced by the petitioner by Committee of experts cannot be doubted as would lead for causing an interference in the decision taken by the said Committee in rejecting the tender bid of the petitioner. 30. Since we have held that the process of evaluation of the certificate of the petitioner's work experience by the Committee of experts was not infested malafide and the rejection was not in arbitrary exercise of power, the contention raised by the petitioner. In respect of additional reasons mentioned in the return filed by respondents are not gone into therefore, the reliance on decision in Mohinder Singh Gill and another Vs. The Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851 , is of no avail to the petitioner. 31. In view of above analysis we refrain to interfere. 32. In the result, petition fails and is hereby dismissed. No costs.