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2012 DIGILAW 794 (PAT)

G. L. R. Traders through its Proprietor Pankaj Kumar Jha v. State of Bihar

2012-05-16

BIRENDRA PRASAD VERMA, R.M.DOSHIT

body2012
Judgment R.M. Doshit, C.J, 1. Feeling aggrieved by the judgment and order dated 13th March 2012 passed by the learned single Judge in CWJC No. 8923 of 2011, the writ petitioner M/s G.L.R. Traders has, through its Proprietor Pankaj Kumar Jha, preferred this Appeal under Clause 10 of the Letters Patent. 2. The matter at dispute is the award of contract for supply, installation and maintenance of iron removal hand pump attachment units in rural schools under the project “JALMANI”. It appears that in certain areas of the State of Bihar, the iron content in ground water is too high rendering the water unsafe for drinking. To make the water potable, equipment is installed in the hand pump which removes extra iron from the water and the water is rendered potable. Under the tender notice issued by the Public Health Engineering Department, Bihar; tenders were invited for supply, installation and maintenance of such iron removal equipment in the schools in the Districts of Katihar and Purnea. Pursuant to the said notice, the appellant submitted its tenders – one for technical bid and one for financial bid, as required under the tender notice. Under the tender notice, the technical bid was scheduled to be opened on 11th January 2011.After the opening of the technical bid, the financial bid submitted by the appellant was not opened meaning thereby the appellant was disqualified in technical bid. 3. Feeling aggrieved, the appellant, after certain correspondence with the respondent authorities, challenged the action of the respondent authorities in disqualifying the appellant in its technical bid under Article 226 of the Constitution in CWJC No. 8923 of 2011. It was the grievance of the appellant that although it was fully qualified for the contract in question, it was wrongly disqualified and the contract was awarded to the respondent nos. 8 and 9 although they were not at all qualified for want of requisite experience. 4. The petition was contested by the respondents. According to the respondents, the appellant had failed to submit requisite certificates mentioned in the tender notice. Besides, the appellant did not possess licence for a contract worth more than Rs. 50 lakhs. 5. The learned single Judge has considered the rival contentions. 4. The petition was contested by the respondents. According to the respondents, the appellant had failed to submit requisite certificates mentioned in the tender notice. Besides, the appellant did not possess licence for a contract worth more than Rs. 50 lakhs. 5. The learned single Judge has considered the rival contentions. The learned single Judge has held that the appellant M/s G.L.R. Traders had secured licence under the Bihar Contractor Registration Rules, 2005 (hereinafter referred to as `the 2005 Rules’) and thus was not qualified for award of contract worth more than rupees fifty lakhs; whereas the Proprietor Sri Pankaj Kumar Jha was registered under the Bihar Contractor Rules, 2007 (hereinafter referred to as `the 2007 Rules’). The firm M/s G.L.R. Traders submitted the tender on the strength of the registration of the proprietor. That was not proper. The firm was not qualified for award of contract worth more than Rs. 50 lakhs, it was rightly disqualified at the stage of technical bid. Therefore, this Appeal. 6. Learned counsel Sri Jitendra Singh has appeared for the appellant. He has submitted that the learned single Judge has manifestly erred in holding that the tenderer Sri Pankaj Kumar Jha was not qualified for award of contract worth more than Rs. 50 lakhs. Mr. Singh has submitted that the Government of Bihar had, in its Public Health Engineering Department, framed Rules of 2005 for registration of the government contractors. The appellant was registered under the said Rules and had received licence for award of contracts worth up to Rs. 50 lakhs. The State Government in its Department of Road Construction framed similar Rules of 2007 for registration and grant of licence to the contractors in various categories. Under the general policy of the State Government, the Department of Public Health Engineering, under its Notification dated 28th May 2009, adopted the said Rules of 2007 for the purpose of registration of the contractors. Under the said Notification, the Rules of 2005 was repealed. The registration made under the Rules of 2005 was extended for a period of six months, i.e. up to 28th November 2009. Since 28th November 2009 all registrations made under the 2005 Rules stood extinguished. It was now compulsory for all contractors to get themselves registered under the 2007 Rules. Consequently, the appellant also applied for registration under the 2007 Rules. Since 28th November 2009 all registrations made under the 2005 Rules stood extinguished. It was now compulsory for all contractors to get themselves registered under the 2007 Rules. Consequently, the appellant also applied for registration under the 2007 Rules. The appellant has been registered under the 2007 Rules in Category 2, i.e. for award of contracts worth Rs. 2.70 lakhs upto Rs. 3.50 crores. The said registration is valid from 14th January 2010 to 13th January 2015. He has submitted that in view of the appellant’s registration under the 2007 Rules in Category 2, the appellant is eligible for award of contracts worth upto Rs. 3.50 crores. He has submitted that the learned single Judge has failed to appreciate that the Rules of 2005 have been repealed and the registration made under the Rules of 2005 stood cancelled as early as on 28th November 2009. For the purpose of processing of the contract in question, the appellant held registration under the 2007 Rules for award of contracts worth upto Rs. 3.50 crores. The appellant, therefore, could not have been non-suited on the ground that the appellant was not registered for award of contract worth more than Rs. 50 lakhs. 7. The above contentions are supported by the 2007 Rules and the Notification dated 28th May 2009 and the registration granted on 14th January 2010. The contention is not disputed. 8. Mr. Singh has also submitted that the learned single Judge has erred in holding that the Proprietor Sri Pankaj Kumar Jha was not registered under the 2007 Rules. He was, therefore, not qualified for the award of contract worth more than Rs. 50 lakhs. He has submitted that the appellant firm M/s G.L.R. Traders is not a juristic person; it is only a business name under which Proprietor Sri Pankaj Kumar Jha carries on his business. Unlike Company incorporated under the Companies Act, 1956, the proprietor and its firm are not two different legal entities. Even a partnership firm is not a juristic person. But for the provisions contained in Order XXX of the Code of Civil Procedure, a partnership firm can not sue or be sued in the name of the firm. So far as the proprietary business is concerned, a firm has no legal existence; a firm cannot sue or be sued. It is the proprietor himself who is responsible for the management and affairs of the firm. So far as the proprietary business is concerned, a firm has no legal existence; a firm cannot sue or be sued. It is the proprietor himself who is responsible for the management and affairs of the firm. It is the proprietor alone who can sue and be sued. 9. Mr. Singh has also submitted that the award of contract to the respondent nos. 8 and 9 calls for investigation. Mr. Singh has relied upon the comparative statements of the technical bids submitted by the petitioner and the other tenderers. He has submitted that the respondent authorities did not compare all relevant particulars of the tenderers. The requisite experience has been deliberately ignored as the other tenderers were definitely disqualified for want of required experience. An enquiry may be ordered in respect of the award of the contract to the respondent nos. 8 and 9. 10. In support of his submissions, Mr. Singh has relied upon the judgments in the matters of Ashok Transport Agency Vs. Awadhesh Kumar & Anr. [ (1998) 5 SCC 567 ]; of Arm Group Enterprises Ltd. Vs. Waldorf Restaurant & Ors. [ (2003) 6 SCC 423 ]; of Raghu Lakshminarayanan Vs. Fine Tubes [ (2007) 5 SCC 103 ] and of Universal Commercial Corpn. Vs. Collector of Customs, Delhi [1994 (69) E.L.T. 150 (Tribunal)]. 11. The Appeal is contested by the State of Bihar and the respondent nos. 8 and 9. Learned additional advocate general Mr. P.N. Shahi has appeared. He has relied upon the judgment in the matter of Glodyne Technoserve Limited Vs. State of Madhya Pradesh & Ors. [ (2011) 5 SCC 103 ]. We are informed that the contract has been awarded to the respondent nos. 8 and 9 and the major part of the contract has been completed in both the Districts of Katihar and Purnea. 12. In the matter of Ashok Transport Agency (Supra), the Hon’ble Supreme Court has held, “A proprietary concern is only the business name in which the proprietor of the business carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business.” Same is the view in the matter of Arm Group Enterprises Ltd. (Supra). The Hon’ble Supreme Court held that the trade name is not a legal entity independent of the proprietor of the business carried on in that name. 13. A suit by or against a proprietary concern is by or against the proprietor of the business.” Same is the view in the matter of Arm Group Enterprises Ltd. (Supra). The Hon’ble Supreme Court held that the trade name is not a legal entity independent of the proprietor of the business carried on in that name. 13. In the matter of Raghu Lakshminarayanan (Supra) also, the Hon’ble Supreme Court held, “A person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs.” 14. In the matter of Universal Commercial Corpn. (Supra), the Central Excise and Gold Appellate Tribunal has reiterated the above-referred principle to hold that in case of a proprietary unit, there is a total identity of interest of the unit and of the proprietor. The two cannot be considered as separate persons. 15. In the matter of Glodyne Technoserve Limited (Supra), the Hon’ble Supreme Court upheld the disqualification of the bidder for want of production of requisite certificates. 16. The contract having been awarded to the respondent nos. 8 and 9 as early as in February 2011 and the contract for supply and installment was to be completed within three/six months from the date of the award of the contract, we are not inclined to interfere and delay the completion of the contract work, if not completed already. In our opinion, what is paramount is providing potable water to the school children rather than entering into the niceties of the award of contract to one or the other party. 17. Nevertheless, we do hold that the learned single Judge has manifestly erred in treating the proprietary firm and its proprietor as two different persons who held separate registration; the proprietor under the Rules of 2005 and the firm under the Rules of 2007. As held in the above referred judgments of the Hon’ble Supreme Court, the proprietary firm is not a juristic person and has no legal existence. It is the proprietor thereof who is responsible for the management and affairs of the business. We, therefore, hold that the petitioner Pankaj Kumar Jha, Proprietor of M/s G.L.R. Traders, was duly registered under the 2007 Rules and was competent for award of contract worth more than Rs. 50 lakhs. 18. Mr. It is the proprietor thereof who is responsible for the management and affairs of the business. We, therefore, hold that the petitioner Pankaj Kumar Jha, Proprietor of M/s G.L.R. Traders, was duly registered under the 2007 Rules and was competent for award of contract worth more than Rs. 50 lakhs. 18. Mr. Singh has also vehemently argued that the Government of India and the State Government have under various orders issued by them done away with the requirement of producing certain certificates and credentials such as Income tax Clearance Certificate, Registration under the Labour Laws, Certificate under the Contract Labour (Regulation and Abolition) Act, 1970 prior to the award of the contract. Nevertheless, under the tender notice the respondents have asked for such certificates even before the award of the contract. The action of the respondent authorities is contrary to the policy decisions and the instructions issued by the Government of India and the Government of Bihar. 19. Be that as it may, although we are of the opinion that the terms and conditions mentioned in the tender notice should be in consonance with the policy decisions taken and the orders issued by the Government of India or the State of Bihar; as we have not entered into the niceties of the matter, we have not considered whether or not the general orders issued by the Government of India or the State of Bihar shall prevail upon the terms and conditions of the tender notice. Suffice that the respondent authorities shall reconsider the terms and conditions incorporated in the tender notice vis-à-vis the policy decisions of and the orders issued by the State of Bihar. This, of course, is for the tender notices which may be issued in future. 20. Appeal is allowed to the aforesaid extent. 21. The impugned judgment and order dated 13th March 2012 passed by the learned single Judge in CWJC No. 8923 of 2011 stands modified to the above extent. 22. Interlocutory Application stands disposed of.