Research › Search › Judgment

Orissa High Court · body

2012 DIGILAW 302 (ORI)

Saroj Kumar Jena v. State of Orissa

2012-07-17

S.K.MISHRA, V.GOPALA GOWDA

body2012
Judgment S.K. Mishra, J. The petitioner in this case assails rejection of his technical bid by the opposite party no.3, the Superintending Engineer, Rural Works Circle, Cuttack with respect to construction of model school building at Madhapur under Sukinda Block in the district of Jajpur. Opposite party no. 5 is the successful bidder, in whose favour contract has been awarded. 2. Opposite party no.3 invited tender in the aforesaid work as per tender call notice and the technical bid was opened on 20.03.2012. The finance bid was opened on 26.03.2012. The petitioner as well as the opposite party no.5 submitted the technical bid and the finance bid online. However, his technical bid was rejected and it is alleged that he is not qualified to bid for the aforesaid work. The petitioner further submits that the opposite party no.5, which is a partnership firm, has neither any experience nor any turn over has been awarded with the work. It is submitted that the opposite party no.5 has relied upon the work executed by one Managing Partner in his individual capacity, as such the opposite party no.5 is not eligible to submit his technical bid. Therefore, the petitioner prays to award the technical bid in his favour and to quash the award of work in favour of opposite party no.5. 3. The opposite parties have filed their respective counter affidavits. It is borne out from the counter affidavits that this is a composite work involving civil construction, electrical fittings and P.H. works. As such, as per Clause 8 of the DTCN, a Civil Contractor, who is not having valid electricity contract license, is required to submit a sub-contract with another person. It is further pleaded that the petitioner has not submitted a sub-contract, rather he had submitted a joint venture agreement, which is not accepted as per the DTCN. Hence, the technical bid was rejected. 4. The specific case of the opposite party no.5 is that it is a partnership firm registered under the Partnership Act. Ramesh Das, one of the partners of the firm, was a ‘B’ Class Contractor. He has applied to the office of the Engineer-in-Chief, Orissa, Bhubaneswar for upgrading from ‘B’ Class to ‘A’ Class Contractor, which was accepted after following due procedure laid down under the O.P.W.D. Code and declared him as ‘A’ Class Contractor. Ramesh Das, one of the partners of the firm, was a ‘B’ Class Contractor. He has applied to the office of the Engineer-in-Chief, Orissa, Bhubaneswar for upgrading from ‘B’ Class to ‘A’ Class Contractor, which was accepted after following due procedure laid down under the O.P.W.D. Code and declared him as ‘A’ Class Contractor. Sri Das forming a partnership deed applied to the Government for registration under the Orissa State, P.W.D. Contractor Rule, after consideration and taking into account past performance of Ramesh Das, the partnership firm named M/s. Maa Nabadurga Construction was granted ‘A’ Class License vide Regd. No.8695 in the year 2011-12. It is therefore contended that the opposite party no.5 has the requisite qualification/experience to bid in the auction and it is further contended that the no illegality has been committed by the opposite parties 1 to 4 in awarding the contract in his favour. 5. On the basis of such pleadings; two moot questions arise for determination in this case; firstly, it is to be decided whether the petitioner, who has not submitted a sub-contract with respect to electrical works, is qualified technically to bid for the aforesaid work; secondly, whether the experience gathered by Sri Ramesh Dash as a partner should be taken into consideration as the work of the partnership firm justifying the award of work in favour of the opposite party no.5 firm. 6. The Instruction to Bidders (IBT) provides at paragraph 3.1 that the bids from joint ventures are not acceptable. Clause 8 of the Detailed Tender Call Notice (DTCN) provides for the eligibility for the composite tender. It reads as follows: “8. The companies or individuals registered with State Government and contractors equivalent Grade/class registered with Central Government/MES/Railways having registration for Civil, Electrical and P.H. works having both legal competency and expertise in Civil, Public Health and Electrical Engineering works need put tenders for this composite work and the documentary evidence under appropriate Act in support of their legal competency and expertise to execute Civil, Electrical and P.H. work invariably should accompany their tender papers. The Civil Contractor in order to take part in the Composite tender should enter into a sub-contract agreement with eligible Registered Electrical contractors having valid L.T./H.T. license (Associate with the sub-contractor) and a copy of such agreement after due registration should be attached with the Tender in original and this shall also form a part of the tender. If the Civil contractor is having registration in Electrical works under the same name and style, the question of joint venture does not arise. The tender papers shall bear signature of authorized person of the tender, the letter of authorization should accompany tender papers. The authorization should clearly indicate the name of legal person to sign and enter into agreement and receiving payment and will be responsible for all contractual obligations for execution of work for Civil, P.H. and Electrical items of work to the Engineer-in-Charge.” (Emphasis supplied) Clause 8 of the DTCN clearly provides that a Civil Contractor in order to take part in a bid should have entered into a sub-contract agreement with the Regd. Electrical Contractor. The plain meaning of the same is that a sub-contract should be executed by the bidder having Civil Contract license with an electrical contractor to make him eligible to submit his tender. It is not disputed that the petitioner has not entered into a sub-contract, rather relied upon a joint venture, which is distinguished from the sub-contract. Therefore, we are of the opinion that the rejection of the technical bid of the petitioner is legal and proper and requires no interference. 7. Acceptance of the technical bid of the opposite party no.5 has been hotly contested in the case. Reliance has been placed on Section 14 of the Partnership Act to argue that the property belonging to a person in absence of a contract to the contrary does not, on the person entering into a partnership with others become the property of the partnership merely because it is used for the business of the partnership. In this case, reliance has been placed on reported case of M/s. Boda Narayana Murthy and Sons v. Valluri Venkata Suguna and others, AIR 1978 AP 257 . The petitioner has also placed reliance on the unreported case of this Court bearing W.P.(C) No. 28101 of 2011 (Orissa Job.com v. State of Orissa and others) disposed of on 23.12.2011. In this case, reliance has been placed on reported case of M/s. Boda Narayana Murthy and Sons v. Valluri Venkata Suguna and others, AIR 1978 AP 257 . The petitioner has also placed reliance on the unreported case of this Court bearing W.P.(C) No. 28101 of 2011 (Orissa Job.com v. State of Orissa and others) disposed of on 23.12.2011. Learned counsel for opposite party no.5, on the other hand, placed reliance on the reported case of New Horizons Limited and another v. Union of India and others, (1995) 1 SCC 478 . The ratio decided in the earlier two cases is applicable to the case in hand, on the other hand, the ratio decided in the case of New Horizons Limited and another v. Union of India and others (supra) is not applicable. 8. In the reported case of New Horizons Limited and another v. Union of India and others, the appellant had submitted his tender for publication of telephone directory. The terms and conditions of the tender require that the tenderer should have experienced in compiling, printing and supply of telephone directories to the large telephone systems with the capacity of more than 50,000 lines. The tenderer was to substantiate such quotation with documentary proof. He was also required to furnish credentials in this field. The appellant was a joint venture and the different components of the joint venture have experiences in publishing similar materials. However, their experience were not taken into consideration and their auction was not accepted by the Delhi High Court, against which SLP has been filed before the Supreme Court, wherein the Supreme Court has come to the conclusion that even if it is assumed that the requirement regarding experience as set out in the advertisement dated 22.4.1993 inviting tenders is a condition about eligibility for consideration of the tender, though it found no basis for the same, the said requirement regarding experience cannot be construed to mean that the said experience should be of the tenderer in his name only. It is possible to visualize a situation, where a person having past experience has entered into a partnership agreement and the tender has been submitted in the name of the partnership firm, which may not have any past experience in its own name. It is possible to visualize a situation, where a person having past experience has entered into a partnership agreement and the tender has been submitted in the name of the partnership firm, which may not have any past experience in its own name. The Supreme Court further observed that it does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. Similarly, a company incorporated under the Companies Act having past experience may undergo reorganization as a result of merger or amalgamation with another company which may have no such past experience and the tender is submitted in the name of the reorganized company. In such a case, the Supreme Court ruled that it could not be the purport of the requirement about experience that the experience of the company which has merged into the reorganized company cannot be taken into consideration because the tender has not been submitted in its name and has been submitted in the name of the reorganized company, which does not have experience in its name. 9. The distinguishing feature between the reported case of New Horizons Limited and another v. Union of India and others (supra) and the present case is that in the reported case joint stock companies formed a joint venture, to which the Partnership Act is not applicable; whereas in the present case opposite party no.5 is a partnership firm, which is guided under the Partnership Act. Section 14 of the Partnership Act reads as follows: “14. The property of the firm-Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business. Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm, are deemed to have been acquired for the firm.” A plain reading of the provision leads us to an irresistible conclusion that any property of the individual partner cannot be the property of the partnership firm, unless a contrary intention appears. Experience of one partner namely, Ramesh Das is also an asset and it can be termed as property. Experience of one partner namely, Ramesh Das is also an asset and it can be termed as property. So his property cannot be taken to be the property of the partnership firm for the clear-cut provision of Section 14 of Partnership Act. In that view of the matter, opposite party no.5 does not have the requisite experience to be eligible to submit tenders with respect to the work in question. Since the petitioner and opposite party no.5 are not eligible for different reasons, the entire tender process has to be set aside and direction should be given for re-tender. 10. In the aforesaid view of the matter, the writ petition is allowed in part. The award of contract in favour of opposite party no.5 is hereby set aside. Opposite parties 1 to 4 are directed to re-tender the process of construction of the aforesaid school as expeditiously as possible. Petition allowed in part.