Iqbal Motors Transport Services v. Food Corporation of India
2013-09-13
Hasnain Massodi
body2013
DigiLaw.ai
1. Petitioner-Firm is a carriage contractor with its registered office at Plot no. 2 Yard no. 6 Transport Nagar, Narwal Jammu. Its business activities include carried of food grains/stocks of Food Corporation of India from Godown Jammu to various Godowns in Kashmir province. The petitioner firm responded to tender Notice No. STG / 32(3)/ JK/ tender/ 2008-2009/Vol. I dated 09.02.2010 and bagged the contract for transportation of stocks from FSD New Godown Chatta and FSD New Godown Jammu to FCI Godowns/Centres at Budgam, Udhampur and Kargil. The contract was for a period of two years and the petitioner acted as Road Transport Contractor for Food Corporation of India till March, 2012. 2. The General Manager (R) Food Corporation of India on 27.03.2013 invited tenders from financially sound parties "having business competency" for appointment as Road Transport Contractors for movement of stocks by road from FSD New Godown, Jammu to PEG-Budgam, Doda, Udhampur for a period of two years i.e. 2013-2015 and PEG-Leh for a period of one year. The estimated value of the contract is Rs.12.60, 5.76, 2.69 and 10.00 crores respectively. The tenders are invited under "Two Bid System". The business concern intending to compete was required to submit a technical bid detailing experience to its credit and a "price bid" quoting the rates it was ready to carry stocks from New Godown, Jammu to the notified destinations. In terms of Tender Notice only the business concerns satisfying the eligibility criteria laid down therein were to be allowed to participate in the tendering process and their price bids opened and considered by the tendering committee, to qualify for participation in the tendering process, a tenderer was required to have executed in any of the immediate preceding five years, work of the value of 25% of estimated contract value in case of a single contract and 50% of the estimated contract value in case of more than one contract. A tenderer was required to append experience certificate from the customer stating proof of satisfactory execution and completion of the contract(s) as also nature and period of contract and value of the work handled. 3. The petitioner firm decided to compete for New Godown, Jammu to PEG-Budgam component of the Tender Notice dated 27.03.2013.
A tenderer was required to append experience certificate from the customer stating proof of satisfactory execution and completion of the contract(s) as also nature and period of contract and value of the work handled. 3. The petitioner firm decided to compete for New Godown, Jammu to PEG-Budgam component of the Tender Notice dated 27.03.2013. It accordingly, submitted "technical bid" and "price bid" to the extent of appointment of Road Transport Contractor for movement of stocks from New Godown, Jammu to PFG Budgam. It may be recalled that estimated contract value for movement of stocks from New Godown, Jammu to PEG-Budgam as per Tender Notice is 12.60 crore rupees, in view of Qualification, Conditions of Bidding. Petitioner firm was to show that it had executed a single contract of the nature detailed in the Tender Notice and of the value of Rs.3.15 crore (25% of estimated contract value), during any of preceding five years or more than one contracts of the value of Rs.6.30 crore (50% of estimated contract value) during any of the preceding five years. 4. Petitioner firm to substantiate and justify its eligibility relied on the Experience Certificate no. S&C-l(4)/RTC/IMTS/Jmu/Bud/Udh/Apptt/2010-11/76 dated 08.04.2013 issued by Area Manager, FCI, Jammu-respondent no. 4 in the petition (Annexure -K to the petition) whereby petitioner was satisfied to have "satisfactorily" executed the work of value of Rs. 13,5 1,57,353/- (Rupees thirteen crore fifty one lac fifty seven thousand three hundred fifty three only) for the period 27.03.2010 to 31.03,2011, 01.04.2011 to 28.03.2012. The Certificate gave details of the contract executed by the petitioner firm and the payment released in his favour on account of carriage of FCI stocks from different FCI centres in the Kashmir province. 5. The respondent no. 4 vide No. S&C- 1(4)/RTC/IMTS/ Jmu/Bud/Udh/Apptt/2010-11 /508 dated 11.04.2013 dated issued a Corrigendum deleting word "satisfactorily" appearing in line no. 8 of the Experience certificate No. S&C-1(4)/RTC/IMTS/Jmu/Bud/Udh/Apptt/2010-11/76 dated 08.04.2013 and directed it to be substituted by the word un-satisfactorily". The reason given in the Corrigendum justifying the deletion and substitution was "an acute short supply of trucks" by the petitioner firm against the trucks indented by PCI during the contract period 2010-2012.
8 of the Experience certificate No. S&C-1(4)/RTC/IMTS/Jmu/Bud/Udh/Apptt/2010-11/76 dated 08.04.2013 and directed it to be substituted by the word un-satisfactorily". The reason given in the Corrigendum justifying the deletion and substitution was "an acute short supply of trucks" by the petitioner firm against the trucks indented by PCI during the contract period 2010-2012. It is pertinent to point out that in terms of Tender Notice, a business concern aspiring for the contract is not only to show that it executed a similar contract of 25% of the estimated contract value or 50% of the estimated contract value in case of multiple contracts, during any of the preceding five years but also that such cont met / contract s were "satisfactorily" completed. The next result of the Corrigendum, therefore, is the petitioner firm notwithstanding the volume and value of the work executed by it, is pushed out of contest for the contract in question i.e. contract to be allowed pursuant to Tender Notice dated 27.03.2013. 6. Petitioner firm through medium of present petition questions the Corrigendum dated 22.04.2013 on the grounds set out in the petition. 7. The writ petition is opposed by the respondents on the ground that, the Certificated dated 08.04.2013 was issued by an officer of the respondent corporation who had assumed the office of Area Manager immediately before the certificate was issued and therefore, did not scrutinize the record before issuance of the certificate. It is pleaded that once the officer realize that the certificate dated 08.04.2013 did not reflect performance of petitioner while executing the previous contract, he issued corrigendum dated 22.04.2013 to bring two facts on record. It is pointed out that the Certificated dated 08.04.2013 otherwise is to be of no benefit to the petitioner it merely certified execution of contract for the period 16.04.2013 to 31.03.2013 i.e. period of one year, while the contract is for period of two years- 16.04.2012 to 15.04.2014. The respondents insist that as the contract is an ongoing contract and not completed, it was too early on 08.04.2013 to certify that whether the contract was satisfactorily completed/executed.
The respondents insist that as the contract is an ongoing contract and not completed, it was too early on 08.04.2013 to certify that whether the contract was satisfactorily completed/executed. The respondents point out that the petitioner for the same period obtained a certificate as regards performance of contract (16.04.2012 to 15.04.2014) on 30.01.2013 and there was no reason for the petitioner to obtain a fresh certificate on 08.04.2013 for the same contract period except a design to dilute the effect of certificate dated 30.01.2013. The certificate dated 30.01.2013 according to the respondents reflected unsatisfactorily execution of contract. Respondents deny/dispute infringement of any of the rights of the petitioner's firm so as to entitle him to invoke writ jurisdiction of the Court. 8. I have gone through the pleadings as well as record available on the file. I have heard learned counsel for parties. 9. From perusal of the record placed on the file, it transpires that petitioner firm was vide Award no. Stg-32(3)/JK/Tender/2008-09/Vol. 1/4246 dated 26.03.2010 read with no. 6365 dated 29.03.2010 and No. 82 dated 07.04.2011, was appointed Road Transport Contractor and awarded contract by the respondent Corporation for transportation of stocks from Jammu to Budgam, Udhampur, Kargil/Khurnbthang & Lethpora. The petitioner firm for the period 27.03.2010 to 02.2.2011 executed work of the value of Rs. 13,51,57,353/-. The petitioner firm was again vide no. Stg.32(3)/ JK/Tender/2011-12/3733 dated 9/14.03.2012 read with order dated 30.03.2012 appointed Road Transport Contractor and awarded by the respondent Corporation for transportation of stocks from Jammu to Mir Bazar, Kupwara, Srinagar, Baramulla, Budgam/Budgam PEG. The contract is for a period of two years i.e. 16.04.2012 to 15.04.2014 and is to be categorized as ongoing contract. The petitioner has during the period 16.04.2012 to 31.03.2013 executed the work of the value of Rs.24,28,29,574.00. Let us call these contracts as Contract I and Contract II. 10. While satisfactorily completion/execution of Contract I would make eligible petitioner for participating in subsequent contracts provide the value of the contract executed is 50% of 25% in case of single or multiple contracts executing during preceding five years, the part execution of the Contract II may not so entitle the petitioner firm, on the ground that the Contract No. II is an ongoing contract and it remains to be seen whether the petitioner is able to satisfactorily executed contract. However, this is not the subject of discussion in the present petition.
However, this is not the subject of discussion in the present petition. Furthermore, the stand of respondent-Corporation has been that a two or more years contract can be split for the purpose of assessing the experience of an aspirant for a fresh contract. Reference Contract II is found necessary because of the stand taken by the respondents in their objections that the Contract II is an ongoing contract and Certificate indicating its execution would be of no help to the petitioner firm and, therefore, Corrigendum, deleting expression satisfactorily" would not result in any harm or damage to the petitioner firm. 11. The respondent no. 4 has issued two certificates on 08.04.2013. The Certificate no. S&C- l(4)/RTC/IMTS/Jmu/Bud/Udh/Apptt/20 10-11/76 dated 08.04.2013 certifies "satisfactorily" execution and completion of the works of the value of Rs. 13,51,57,353.00 by the petitioner firm during the period 24.03.2010 to 25.03.2012. The Certificate, therefore, relates to contract awarded by the respondent Corporation to the petitioner firm and executed and completed on the date of issuance of the certificate. The Certificate no. S&C- l(4)/ RTC/IMTS/Jmu/Bud/Udh/ Apptt/ 2010-11/77 dated 08.04.2013 certifies "satisfactorily" execution and completion of the works of the value of Rs.24,28,29,574.00 by the petitioner firm during the period 16.04.2012 to 31.03.2013 as part of the carriage contract from Jammu to Mir Bazar, Kupwara, Srinagar, Baramulla, Budgam/ Budgam PEG for the period 16.04.2012 to 15.04.2014. It is important to note that Corrigendum No. S&C-l(4)/RTC/IMTS/Jmu/Bud/Udh/Apptt/2010-11/508 dated 22.04.2013 deletes expression "satisfactorily" from the Certificate No. S&C- 1 (4)/RTC/ IMTS/Jmu/Bud/Udh/Apptt/2010-l1/76 dated 08.04.2013 and substitute it by the word "unsatisfactorily". The reason given is that "there was an acute short supply of trucks by the petitioner firm against the trucks indented by the respondent Corporation during the contract period 2010-2012. The Corrigendum does not refer to or deal with the Certificate No. S&C-1 (4J/RTC/IMTS/Jmu/Bud / Udh / Apptt/2010-11 /77 dated 08.04.2013. In otherwords, expression "satisfactorily" is intact in Certificate no. S&C- 1 (4)/RTC/IMTS/ Jmu/ Bud / Udh /Apptt/2010-11/77 dated 08.04.2013 and petitioner firm is certified to have satisfactorily executed the work of the value of Rs.24,28,29,574.00 during the period 16.04.2012 to 31.03.2013. It may be asked as to why petitioner firm should be worried about the Corrigendum dated 22.04.2013 when it is restricted to S&C-1 (4)/RTC/IMTS/Jmu/E-Jud/Udh/Apptt/2010- 11/76 dated 08.04.2013 and the petitioner firm in any ruse having executed contract worth more than Rs.
It may be asked as to why petitioner firm should be worried about the Corrigendum dated 22.04.2013 when it is restricted to S&C-1 (4)/RTC/IMTS/Jmu/E-Jud/Udh/Apptt/2010- 11/76 dated 08.04.2013 and the petitioner firm in any ruse having executed contract worth more than Rs. 24 crore during 2012-2013 would be still entitled to participate in the tendering process. It is the answer is to be found in the stand taken by the respondent Corporation in its reply to the writ petition to the effect that the contract is an ongoing contract and one has to wait till 15.04.2014 to conclude whether the petitioner firm "satisfactorily" executes and completes the contract. It is important to point out that respondent Corporation in the earlier litigation to which petitioner firm was a party took a stand that the contract can be split for the purpose of assessing successful execution of the contract and because of such stand awarded a similar carriage contract to the petitioner firm. Be that as it may, the net result of the Corrigendum is that the petitioner firm is chased out of the competition and would be no more entitled to participate in the tendering process and get its price bid opened and considered by the respondent Corporation. Direct fall out of the exclusion of the petitioner firm would be on the public exchequer as well inasmuch as, the respondent Corporation would in absence of any competition allot contract in question to the sole tenderer at a higher price. The Corrigendum impugned in the' petition would have lethal effects not only on petitioners right to participate in the present contract but also on future contracts. The question that calls for an answer is whether the respondents could issue Corrigendum dated 22.04.2013 having disastrous consequences on business interests of the petitioner firm and the right of its partners/proprietors guaranteed under Part III Constitution of India without affording them an opportunity of being heard and an opportunity to project its stand. It is by now well settled that even an action or order purely administrative in character must satisfy the basic standards of fairness. The duty to act fairly is more onerous and invariably to be discharged, where an administrative order involves civil consequences. Fairness involves adherence to principle of natural justice.
It is by now well settled that even an action or order purely administrative in character must satisfy the basic standards of fairness. The duty to act fairly is more onerous and invariably to be discharged, where an administrative order involves civil consequences. Fairness involves adherence to principle of natural justice. In other words, an administrative order or action pregnant with civil consequences cannot be said to be fair if it is made or passed at the back of the person affected without affording him an opportunity of being heard. 12. Supreme Court in State of Orissa v. Dr. (Miss) Binapani Dei, AIR 1967 SC 1269 , emphasizing importance of adherence to principle of natural justice even while passing an order administrative in character observed:- "It is true that the order is administrative in character but even an administrative order which involves civil consequences as already stated, must be made consistently with the rules of natural justice after information the first respondent of the case of the State, the evidence is support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence. No such steps were admittedly taken; the High Court was in or judgment, right in setting aside the order of the State." The principle that even an administrative order is to satisfy the requirements of fairness and that one of the basic elements of fairness is adherence to the principle of natural justice, has found expression in all subsequent judicial pronouncement on the subject. It has been held in Harbhajan Singh Dhalla v. Union of India, AIR 1997 SC 9 that though an action is administrative, the observance of principle of natural justice is implicit. Supreme Court in Neelima Misra v. Dr. Harinder Kaur Paintal, AIR 1990 SC 1402 has reiterated the principle that an administrative order which involves civil consequences must be made consistent with a Rule audi alteram partem. Supreme Court in Shephard and ors. v. Union of India, AIR 1988 SC 686 observed:- "Mullan in "Fairness: The New Natural Justice has stated:- Natural Justice co-exists with, or reflected, a wider principle of fairness in decision-making and that all judicial and administrative decision-making and that all judicial and administrative decision-makers had a duty to act fairly." 13.
Supreme Court in Shephard and ors. v. Union of India, AIR 1988 SC 686 observed:- "Mullan in "Fairness: The New Natural Justice has stated:- Natural Justice co-exists with, or reflected, a wider principle of fairness in decision-making and that all judicial and administrative decision-making and that all judicial and administrative decision-makers had a duty to act fairly." 13. In the present case, the Corrigendum dated 22.04.2013 is to have disastrous consequences for the business interests and rights of the petitioner firm. It is therefore, an action having civil consequences for the petitioner firm. The Corrigendum dated 22.04.2013 practically deprives the petitioner firm of an opportunity to compete for the contract in question and all the carriage contracts in future as the petitioner firm in face of Corrigendum would not be competent to participate in the tendering process for next few years. In the circumstances, a duty was cast on the respondent no. 4 to afford the petitioner firm an opportunity to putforth its stand, touching the allegations of its failure to provide the requisite number of trucks corresponding to the indent received during the contract period 2010-2012. The respondent no. 4 having earlier on 08.04.2013 certified satisfactorily execution and completion of the contract on 08.04.2013 was not expected to make the certificate ineffective and inconsequential without affording an opportunity of being heard to the petitioner firm. The duty to adhere to the principle of audi alteram partem was required to be performed with much more care and caution for the following reasons. (I) That the respondent Corporation pursuant to tender Notice no. stg./32 (3)/JK/Tender/2011-12/3145 dated 21.01.2012 appointed petitioner firm as Road Transport Contractor for destination Jammu to (i) Mir Bazar (ii) Kupwara and (iii) Leh relying on its satisfactorily performance of the contract for the year 2010-2012 (subject matter of Certificate no. S&C-1 (4)/RTC/IMTS/Jmu/Bud/Udh/Apptt/2010-l 1/76 dated 08.04.2013. The stand taken by the respondent Corporation in respect lapses alleged to have been committed by the petitioner firm while executing the Contract 1 is reflected in para 10 of the judgment reported as M/s Ladakh Road Lines v. FCI & Ors. 2012 (4) JKJ[HC] 838 : AIR J&K 2012 47 and is required to be noticed:- "10........
The stand taken by the respondent Corporation in respect lapses alleged to have been committed by the petitioner firm while executing the Contract 1 is reflected in para 10 of the judgment reported as M/s Ladakh Road Lines v. FCI & Ors. 2012 (4) JKJ[HC] 838 : AIR J&K 2012 47 and is required to be noticed:- "10........ The official respondents downplay the claim made by the petitioners that the private respondents during the execution of the previous contracts were issued warnings more than once or conveyed displeasure for sluggish performance of the contracts vide Reference Nos. S&C- 6/RTC/T.T.Co./Jmu-Lethpora/10-11 dated 16.06.2011 and SAC/1(1)/RTC/GC/2011-12/6506 dated 18.02.2012. It is pointed out that such warnings and displeasures are intended to prompt the contractors to speed up execution of contract and cannot be interpreted as punititve measures." (II) The respondent-Corporation treated the year 2010-2011 as the best performance year for the respondent no. 5 (petitioner firm) having regard to the value of contract executed. The respondent Corporation has questioned the above referred writ Court judgment wherein the petitioner firm was held not to have furnished requisite certificate with its technical bid certifying "satisfactorily" execution and completion of the contract. The background material of the impugned Corrigendum i.e. Communication addressed by Area Manager to the Assistant General Manager (Cont) No. S&C/ 1 (4)/RTC/IMTS/Jmu/ Bud /Udh/Apptt/2010-201 1/6498 dated 30.01.2013. However, indicates short supply of trucks even during 2010-2011 treated as best period by the respondent Corporation while awarding contract to the petitioner firm pursuant to Tender Notice dated 27.03.2013. (III) That the Communication No. Stg./32(3)/JK/Tender/2011-12 dated 30.01.2013 whereby the Area Manager was asked to verify experience certificate for the financial year 2010-2011 was responded by the Area Manager on the same day vide his No. S&C/ 1 (4)/RTC/IMTS/ Jmu / Bud / Udh/Apptt/2010-2011/6498 dated 30.01.2013. The verification because of reliance placed by the respondent Corporation on the same experience while awarding contract pursuant to Tender Notice 27.03.2013 that was sought to be verified, required and called for an in-depth examination of the matter. 14. For the reasons discussed above. The Corrigendum dated 22.04.2013 called in question being violative of principle of natural justice is liable to be set aside. The petition is, accordingly, allowed and Corrigendum dated 22.04.2013 set aside.
14. For the reasons discussed above. The Corrigendum dated 22.04.2013 called in question being violative of principle of natural justice is liable to be set aside. The petition is, accordingly, allowed and Corrigendum dated 22.04.2013 set aside. The respondent Corporation would be at liberty to re-examine the matter after affording the petitioner firm an adequate and reasonable opportunity of projecting its stand in respect of the allegations of "unsatisfactorily" execution of contract I for the year 2010-2012. Resultantly, tendering process pursuant to Tender Notice dated 27.03.2013 shall not be finalized till the respondents take a decision in the matter and decide eligibility of the petitioner firm or in alternative decides to allow the petitioner firm to participate in the tendering process unmindful of the Corrigendum dated 22.04.2013. Since the officers of the respondent Corporation stationed at Regional Office, J&K Region, Jammu have taken conflicted stand as regards execution of the contract for the year 2010-2012, it would be appropriate that the matter is dealt with and decided by senior officer of the rank above the General Manager in the central office of the respondent Corporation, after affording the petitioner firm an opportunity to putforth its stand. 15. The petition is disposed of accordingly.