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2013 DIGILAW 738 (GAU)

Global Associates v. State of Assam

2013-10-07

UJJAL BHUYAN

body2013
JUDGMENT AND ORDER : Ujjal Bhuyan, J. This petition, filed under article 226 of the Constitution of India, seeks quashing of award of contract dated 26.03.2013 in favour of respondent No. 3. 2. Contract in question, is "Renovation and Modification of River Vessel TS Brahmaputra (CTC)". 3. Director of Inland Water Transport, Assam (respondent No. 2), issued Notice Inviting Tender (NIT) dated 22.02.2013, inviting sealed tenders for the above contract work, the estimated cost of which was Rs. 86,74,190.00. Earnest money fixed was 2% of the quoted value and the period of completion was 60 days from the date of issue of work order. 4. Petitioner responded to the NIT and submitted tender. Tenders were opened on 14.03.2013. It was found that out of the 7 bidders, respondent No.3 was the lowest bidder (L 1) at Rs. 72,66,758.00. Respondent No. 4 was the second lowest bidder at Rs. 82,38,007.00. Bid of the petitioner was the 3rd lowest at Rs. 83,50,183.00. Thereafter, by letter dated 26.03.2013, respondent No. 2 awarded the contract to the respondent No. 3 at his offered bid. 5. Aggrieved by the above, petitioner has filed the present writ petition questioning the legality and validity of the aforesaid award of contract dated 26.03.2013. 6. Contention of the petitioner is that as per Clause 3 of the NIT, a tenderer has to submit Income Tax (IT) Returns of last 3 financial years and must have minimum annual turnover of Rs. 1 crore in the last financial year. Earnest money at the rate of 2% of the total quoted value in the form of NSC/KVP/Bank Draft pledged in favour of respondent No. 2 should be submitted. Successful tenderer will have to make security deposit at the rate of 10% of the quoted rate which would include the 2% earnest money deposit. The tenderer should enclose documents in support of previous experience in performing works of similar nature. According to the petitioner, respondent No. 3 did not submit IT Returns for last 3 financial years and the turnover statement was not authenticated by Chartered Accountant. Moreover, respondent No. 3 submitted only an experience certificate without the specification and names of works done. Further, whole earnest money was not pledged in favour of respondent No. 2. After award of contract, petitioner has not deposited the security money. Therefore, the contract awarded to respondent No. 3 should be interfered with. 7. Moreover, respondent No. 3 submitted only an experience certificate without the specification and names of works done. Further, whole earnest money was not pledged in favour of respondent No. 2. After award of contract, petitioner has not deposited the security money. Therefore, the contract awarded to respondent No. 3 should be interfered with. 7. Respondent No. 2 in his affidavit stated that Tender Committee constituted by the Government after due verification of the tender documents submitted by the tenderers recommended award of contract in favour of respondent No. 3 being the L 1 tenderer. IT Returns for last 3 years were submitted by respondent No. 3. There is no requirement in the NIT that IT Return should be authenticated by Chartered Accountant. Respondent No. 3 was found to be an experienced contractor having executed similar nature of works in the past. Regarding deposit of earnest money, though the entire earnest money was not pledged in favour of respondent No. 2, but as per decision of Tender Committee, respondent No. 3 was allowed to deposit the balance earnest money before execution of agreement. Accordingly, respondent No. 3 deposited the balance earnest money pledged to respondent No. 2 before execution of agreement. As per work order, respondent No. 3 is required to deposit 10% of the security money, which would be deducted from his subsequent bills. Tender Committee notified by the Government comprised of following members :- (i) Director Inland Water Transport, Assam Ulubari, Guwahati – 07. Chairman (ii) Deputy Secretary to the Govt. of Assam, Transport Department, Dispur, Ghy – 06. Member (iii) Additional Chief Engineer (Mechanical) Assam, PWD, Guwahati Member (iv) Financial Adviser, Transport Department, Dispur Member (v) Deputy Director (Design) Inland Water Transport, Assam Ulubari, Guwahati – 07. Member Secretary 8. Tender Committee recommended award of contract with L 1 tenderer, following which contract was awarded. Thus work was allotted to Respondent No. 3 in a transparent manner. Respondent No. 3 has already completed 30% of the work. Quality and progress of work has been found to be satisfactory. 9. Respondent No. 3 has filed affidavit. He has denied the contention of the petitioners and has stated that all relevant documents were submitted by him. Regarding earnest money deposit, he has stated that he had deposited NSC for an amount of Rs. 90,000/- at the time of submission of tender out of which Rs. 9. Respondent No. 3 has filed affidavit. He has denied the contention of the petitioners and has stated that all relevant documents were submitted by him. Regarding earnest money deposit, he has stated that he had deposited NSC for an amount of Rs. 90,000/- at the time of submission of tender out of which Rs. 60,000/- was pledged in favour of respondent No. 2. Respondent No. 3 belongs to the Scheduled Tribe (Plains) and, therefore, is required to deposit earnest money at the rate of 1% of the quoted amount. Following decision of Tender Committee, balance amount of earnest money pledged in favour of respondent No. 2 was deposited prior to execution of agreement. Regarding security deposit, he has stated that the balance amount in addition to the earnest money deposited which would stand converted as security deposit would be deducted by the authority from his bills as per prevailing norms. According to him, there is no requirement of submitting tax return authenticated by Chartered Accountant. He has further stated that he has completed more than 50% of the work on the date of filing affidavit i.e. on 10.09.2013. 10. Petitioner has filed separate reply-affidavits to the affidavits filed by respondent Nos. 2 & 3. It is submitted that submission of IT Returns authenticated by Chartered Accountant is a statutory requirement under the Income Tax Act and even if it is not specified in the NIT, since it is a statutory requirement, a tenderer is bound to comply with such requirement. 11. Heard Ms. M. Dev, learned counsel for the petitioner and Mr. A.K. Bhuyan, learned Standing Counsel, IWT. Also heard Mr. U. Rajbongshi, learned Standing Counsel, Transport Department appearing for the State respondents and Mr. R. De, learned counsel for respondent No. 3. None appears for respondent No. 4 though served. 12. Mr. Bhuyan has also produced the relevant record. 13. Submissions of learned counsel for the parties are more or less on pleaded lines and, therefore, it is considered not necessary to delve into such submissions in detail. 14. Petitioner has contended that non submission of IT Returns authenticated by Chartered Accountant has vitiated the tender of respondent No. 3. This is a requirement under section 44AB of the Income Tax Act, 1961. Such requirement is for the purpose of filing return before the Income Tax authority only. 14. Petitioner has contended that non submission of IT Returns authenticated by Chartered Accountant has vitiated the tender of respondent No. 3. This is a requirement under section 44AB of the Income Tax Act, 1961. Such requirement is for the purpose of filing return before the Income Tax authority only. In so far submission of IT Return for the purpose of the NIT is concerned, it is only to ensure that the tenderer is a solvent party financially capable of executing the work. Similar is the requirement of earnest money deposit as well as security deposit. Such deposits are insisted upon to ensure that non serious parties are discouraged from participating in the tender process and making reckless bids. As observed by the Hon'ble Apex Court in Global Energy Ltd. v. Adani Exports Ltd., reported in (2005) 4 SCC 435 , the object is that only such parties who are financially sound and are serious in getting the work or contract, should make a bid. Otherwise, any number of persons who have no capacity, financial or otherwise, would like to take a chance by making a bid. 15. In Poddar Steel Corporation v. Ganesh Engineering Works & Ors., reported in (1991) 3 SCC 273 , the Hon'ble Apex Court held that as a matter of general proposition, it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the NIT in meticulous detail. It was held that requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary to the main object to be achieved. In the first case, the authority issuing the tender may be required to enforce them rigidly, while in the second case, such rigid enforcement is not insisted upon. 16. In the present case, admittedly, respondent No. 3 was the L 1 tenderer and there was substantial difference in the bid values between respondent No. 3 and petitioner. The high powered Tender Committee had scrutinised the tender documents of respondent No. 3 and found the same to be valid. 16. In the present case, admittedly, respondent No. 3 was the L 1 tenderer and there was substantial difference in the bid values between respondent No. 3 and petitioner. The high powered Tender Committee had scrutinised the tender documents of respondent No. 3 and found the same to be valid. A portion of earnest money deposited not being pledged in favour of respondent No.2 or depositing the remaining earnest money before execution of agreement cannot be said to be such a deviation so as to render the bid of respondent No.3 invalid. Admittedly, respondent No.3 had submitted the required earnest money deposit. In fact, it would be in the public interest if some latitude is shown in favour of respondent No. 3 who has, otherwise, been found to be a capable and competent tenderer. At this stage, recommendation of the Tender Committee may be seen. Relevant portion of the recommendation of the Tender Committee in favour of respondent No. 3 is as under :- "The Committee members examined the papers related to the tenders submitted by the 7 (seven) Nos. of tenderers against the renovation/repairing works of river vessel TS Brahmaputra (CTC). After threadbare examination of all the documents submitted by the tenderers the committee unanimously selected the lowest tenderer namely Sri Rajesh Rabha and suggested with following suggestion:- 1. Solvency regarding financial soundness must be verified in the concerned Bank from where the solvency certificate is issued in favour of the tenderer before awarding the works to the selected tenderer. 2. If the progress of work is not found satisfactory in current year within the financial allocation as awarded, the department will have the authority to cancel the order of the selected tenderer and may offer to any other contractor as per decision of the tender committee. 3. Periodical inspection by the Technical Cell must be carried out fortnightly and report should be submitted to the Director IWT. 4. The rest amount of earnest money have to be deposited by the selected tenderer at the time of issuing the work order. 5. An undertaking should be obtained from the selected tenderer to the effect that he will be able to execute the work at his offered price to the best satisfaction of the Departmental officers. 6. That the Department will not allow any upward revision of rate against the work." 17. 5. An undertaking should be obtained from the selected tenderer to the effect that he will be able to execute the work at his offered price to the best satisfaction of the Departmental officers. 6. That the Department will not allow any upward revision of rate against the work." 17. Thus, having regard to the above and taking an overall view of the matter, this Court finds no infirmity in the decision making process relating to the award of contract in favour of respondent No. 3. There is no merit in the writ petition, which is, accordingly, dismissed. However, there shall be no order as to costs. 18. Record produced by Mr. Bhuyan, learned Standing Counsel, IWT is returned back.