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2014 DIGILAW 769 (GUJ)

Sapara Dilip Bharatbhai v. State of Gujarat

2014-07-14

BHASKAR BHATTACHARYA, J.B.PARDIWALA

body2014
JUDGMENT : Bhaskar Bhattacharya, J. By this Public Interest Litigation, the writ-petitioner has prayed for quashing and setting aside the resolution dated 17th January 2014 empowering the respondent No.2, Surat Municipal Corporation [the Corporation, hereafter to enter into an agreement with the respondent No. 4, M/s Unique Construction Company, for construction of the Surat BRTS Phase 2, 2/3 lane flyover at Anuvratdwar Junction and Canal Road Junction at Udhana Magdalla road. 2. The grievance of the writ-petitioner in this Public Interest Litigation is that the selected contractor, the respondent No.4 - M/s. Unique Construction Company, Surat, should not have been awarded the contract as the selected contractor does not even possess the requisite qualifications prescribed in the tender notice. 3. According the terms of the tender, the following are the requisite qualifications for taking part in the process of tender:- "3.1 Experience [a] The Applicant shall provide evidence that their firm has been actively engaged in the civil works construction of Flyovers and Bridges during the last 7 years in the role of prime contractor/partner. The Work completed as Sub Contractor shall not be considered for evaluation. [b] Particular Construction Experience The applicant shall provide evidence that it has successfully completed or substantially completed within the last seven years completing on 31/03/2013. The works may have been executed by the Applicant as prime contractor or proportionately as member of joint venture. Substantially completed works means those works that are at least 90% completed as on 31/03/2013 and continuing satisfactorily on the date of application. For this, the Certificate from the employer shall be submitted along with the application incorporation clearly the Contract value-billing amount, date of commencement of works. Satisfactory performance of the contractor and any other relevant information should be forwarded in enclosed forms. The works completed/substantially completed during the current financial year will also be considered for counting the particular construction experience. 4. Qualifying Criteria of Applicant The applicant who is not capable of meeting requirement listed below shall not be qualified for the works. Post qualification will be based on Applicants all the following minimum criteria regarding their particular experience, financial position, personnel and equipment capabilities and other relevant information as demonstrated by the Applicants responses in the forms attached to the Letter of Application. Post qualification will be based on Applicants all the following minimum criteria regarding their particular experience, financial position, personnel and equipment capabilities and other relevant information as demonstrated by the Applicants responses in the forms attached to the Letter of Application. The qualifications, capacity and resources of proposed subcontractors will not be taken into account in determining the Applicants compliance with the qualifying criteria. The applicant to note specifically that all information given including those in the form of various formats must be supported by certificates from respective authorities [not less than Executive Engineer or equivalent]. Certificates from private individual, for whom the bidder has worked, shall not be considered. Certificates from only those organisations/institutions/bodies will be considered which execute work in Public View and maintain verifiable records. As such, organizations/bodies from which the certificate will be considered are as follows: [i] Government Departments, PSUs and other Government institutions. [ii] Public Limited Company. [iii] Private Limited Company. [iv] Government recognised institutions. [v] Cooperative registered with "Registrar of Cooperatives". [vi] Partnership firm registered with "Registrar of Cooperatives". [vii] Sole proprietary firms registered with "Registrar of Companies". However, the certificates should be on the organizations letter pad bearing contact address, telephone no. and fax no., email address etc. Further the certificates from sources listed from sr. no. [ii] to [vii] above, should invariably be accompanied with the proof of the organizations registration with, or recognition by Government, without which such certificates shall not be considered as adequate proof for the purpose of this letter. Public View is considered to be public works and thus "Similar Work" showcased must be public works carried out by Central, State or Local Governments, Public Sector Enterprises and Government companies for the benefits of Society/Public. Public View is considered to be public works and thus "Similar Work" showcased must be public works carried out by Central, State or Local Governments, Public Sector Enterprises and Government companies for the benefits of Society/Public. [a] Average Annual financial turnover during the last 3 years, ending 31/03/2013, should be at least 30% of the estimated cost [I.e. 30% ofRs.78.07 Crores : 23.42 Crores] [b] Experience of having successfully completed similar works during last 7 years ending last day of month previous to the one in which applications are invited should be either of the following: [i] Three similar completed works costing not less that the amount equal to 40% of the estimated cost [I.e.40% ofRs.78.07 Crores =Rs.31.23 Crores] OR [ii] Two similar completed works costing not less that the amount equal to 50% of the estimated cost [I.e. 80% ofRs.78.07 Crores =Rs.39.04 Crores] OR [iii] One similar completed works costing not less that the amount equal to 80% of the estimated cost [I.e. 80% ofRs.78.07 Crores =Rs.62.46 Crores] AND [iv] The Contractors/Companies having registration in class `AA State Govt. or Equivalent registration with Central Govt./CPWD/other State Govt./Semi Govt. Organization/MES. [c] The Contractors/Companies having solvency certificate of National or Scheduled Bank amounting toRs.31.23 Crores of current year [I.e. 40% of the estimated cost] Similar work shall mean construction of Fly Over Bridge for road or for railways or on river, in which they have successfully carried out the execution of work like pile foundation/Well foundation, Cast in Situ RCC Solid slab, precast, pre-tensioned, Prestressed concrete girders, Launching of girders etc. In case of large projects, executed on "package" basis, a separate detail of individual bridge work shall be given for the evaluation. In short, any Package chain of projects as a whole shall not be considered while evaluation. The execution of pile foundation and pres tressing in a single or separate job will also be taken into consideration. It is further to clarify that if any of work[s] is/are on hand with the applicant, but if the amount of the work done at the site is more than 90% of the total Project/Tender cost as on date I.e. 31.3.2013 then those work[s] will also be taken into consideration while evaluation. Following enhancement factors will be used for the cost of works executed and the financial figures to a common base for the value of the works completed in India. Following enhancement factors will be used for the cost of works executed and the financial figures to a common base for the value of the works completed in India. Year before Multiplying factor 2012-13 1.10 2011-12 1.21 2010-11 1.33 2009-10 1.46 2008-09 1.61 2007-08 1.77 2006-07 1.95" (Emphasis supplied by us). 4. According to the petitioner, while selecting the respondent No.4 as the successful bidder, the Corporation has taken into consideration various works completed by the said respondent as subcontractor whereas according to the terms of the contract, work completed as subcontractor shall not be considered for evaluation. As pointed out in clause 3.1, the applicant should provide evidence that their firm has been actively engaged in the civil works construction of flyovers and bridges during the last 7 years in the role of prime contractor/partner, and, the work completed as subcontractor shall not be considered for evaluation. It is further alleged that the selected contractor has also not complied with the requirements of clause 4(b) of the terms of the tender quoted above, and it will appear from the documents submitted by the selected bidder that they worked mostly as subcontractor and in respect of only one transaction, they acted as a partner of a joint venture, but by virtue of that particular work, the condition specified in clause 4(b) are not complied with. 5. This application is opposed by the respondents including the Corporation and the selected contractor, the respondent No.4. The contentions of the respondents is that even the work done by the applicant as subcontractor was rightly taken into consideration by the Corporation in view of the provisions contained in clause 4 providing qualifying criteria of the applicant. According to the learned counsel appearing on behalf of the Corporation as well as the selected contractor, the fact that even the experience as subcontractor should be taken into account would appear from clause 4 (ii) to (vii) which provides for considering the certificate issued by even Public Limited Company, Private Limited Company, Cooperatives registered with Registrar of Co-operatives and partnership firm registered with Registrar of Co-operatives, which indicates that even subcontract done under those organizations should be taken into consideration. In other words, according to the learned counsel for the respondents, on a conjoint reading of the clauses 3.1 and 4, it is abundantly clear that there is no bar of taking into consideration the work done by an applicant in the role of subcontractor. 6. The only question, therefore, that arises for determination in this Public Interest Litigation is whether the Corporation was justified in selecting the respondent No.4 having regard to the essential qualifications prescribed in clauses 3.1 and 4 quoted above. 7. Mr. Desai, the learned Senior Counsel appearing with Mr. Pandya for the Corporation and Mr. Shalin Mehta, the learned senior counsel appearing with Mr. Daxay Patel and Mr. Venugopal Patel, however, fairly conceded that if we hold that the work done by the applicant, the respondent No.4, in the role of subcontractor should not be taken into consideration, in that event, the respondent No.4 has not proved the requisite qualification. However, their contention is that the terms of the tender permit taking into consideration the experience acquired by an applicant in the role of subcontractor having regard to the conjoined effect of clauses 3.1 and 4. 8. After hearing the learned counsel for the parties and after going through the aforesaid terms, we find that clause 3.1 specifically states that the applicant should provide evidence that their firm has been actively engaged in the civil works construction of flyovers and bridges during the last 7 years in the role of prime contractor / partner, and, the work completed as subcontractor shall not be considered for evaluation. This clause makes it abundantly clear that while evaluating the experience and qualification of the applicant, only the work done for construction of flyovers and bridges during the last 7 years would be considered, and that too, in the role of prime contractor/partner. There is thus a mandatory condition in the above clause which specifically provides that the work completed as subcontractor shall not be considered for evaluation as appearing from the last sentence of clause 3.1. Clause 4, paragraph 1 provides that the qualifications, capacity and resources of the proposed subcontractors will be not taken into account in determining the applicants compliance with the qualifying criteria. Clause 4, paragraph 1 provides that the qualifications, capacity and resources of the proposed subcontractors will be not taken into account in determining the applicants compliance with the qualifying criteria. In other words, according to the said clause, even if the applicant wants to take support of the work done by others as subcontractor for the purpose of the proposed work, the qualification, capacity and resources of such subcontractor shall not be taken into consideration. The second paragraph of clause 4 indicates that the certificates from private individual for whom the bidder has worked shall not be considered but the certificates only from those organizations/institutions/bodies will be considered which execute work in public view and maintain verifiable records, and as such, only the certificates from the following organizations/ institutions/bodies will be considered :- [i] Government Departments, PSUs and other Government institutions. [ii] Public Limited Company. [iii] Private Limited Company. [iv] Government recognised institutions. [v] Cooperative registered with "Registrar of Cooperatives". [vi] Partnership firm registered with "Registrar of Cooperatives". [vii] Sole proprietary firms registered with "Registrar of Companies". 8.1 By relying upon the aforesaid clause, both Mr. Desai and Mr. Mehta tried to convince us that the aforesaid clause indicates that the certificates given by the above organizations of work done by the applicant as subcontractor under them should be admissible and this clause 4 has overriding effect upon clause 3. 9. We are afraid, we are not at all impressed by such submissions. In our opinion, clause 3.1 having specifically prohibited consideration of any work done as subcontractor for evaluation, there is no merit in the above arguments. In fact, the certificates from the organizations referred to in sub-clauses (ii) to (vii) of clause 4 are only required in the event the applicant has worked as Partner of those organizations in its joint ventures. Those six classes mentioned in clause 4 refer to the certificate from those organizations certifying that the applicant as a partner of those organizations completed any transaction in the past as joint venture in respect of public works carried out by Central, State or Local Governments, Public Sector Enterprises and Government companies for the benefit of Society/Public as indicated in clause 4 itself. The sentence, "Further the certificates from sources listed from sr. no. The sentence, "Further the certificates from sources listed from sr. no. [ii] to [vii] above, should invariably be accompanied with the proof of the organizations registration with, or recognition by Government, without which such certificates shall not be considered as adequate proof for the purpose of this letter" appearing in clause 4 itself fortifies our above interpretation that the object of such certificate is to certify that the applicant was a partner in a joint venture under the work allotted by anyone of the serial no. (i) of the said clause to a joint venture of which the applicant and the said certifier were parties. On the other hand, if we accept the contention of the learned Advocates for the Respondents, the mandatory clause 3.1 of the term of tender is to be totally ignored, which is not possible. 10. It appears from the material placed before us that the respondent No.4 has completed work as prime contractor within a period of 7 years for construction of bridge across creek Tulsidham Society and Jay Ambenagar on 60 ft wide road at Bamroli in Surat and the cost of work isRs.2,65,54,002.96p. The respondent No.4 has also completed construction of bridge joining Pandesara to Bamroli near Dantora Old Jakatnaka in Surat where the amount involved isRs.1,26,27,558-60p. Apart from the above two constructions, the respondent No.4 has also done development of BRT corridor from Simada junction to Sarthana for Surat BRTS project including construction of bridge work ofRs.10.4 crore as joint venture, and the total cost of work isRs.35,64,29,574/- but the respondent No.4 had only 49% share whereas M/s. Ranjit, the other partner had 51% share. Such being the position, the respondent No.4 does not have requisite qualification as mentioned in clause 4 (b) (i) to (vii) even if we take into consideration the multiplying factor. 11. We have already pointed out that the learned counsel for the Corporation and the selected contractor, the respondent No.4, have admitted that if we do not take into consideration the work done by the respondent No.4 in the capacity of subcontractor, it has no requisite qualification. 12. Mr. 11. We have already pointed out that the learned counsel for the Corporation and the selected contractor, the respondent No.4, have admitted that if we do not take into consideration the work done by the respondent No.4 in the capacity of subcontractor, it has no requisite qualification. 12. Mr. Mehta, the learned counsel appearing on behalf of the respondent No.4 further strenuously contended that having regard to clause 3.1 and 4 indicated above, one cannot come to a definite conclusion that the work done by a subcontractor cannot be taken into consideration and in case of any ambiguity, his client should get the benefit of qualification clause. 13. We have already pointed out that clause 3.1 having specifically excluded work completed as subcontractor from consideration, there is no ambiguity or conflict between clause 3.1 and clause 4, and as such, any reasonable individual, on interpretation of clauses 3.1 and 4, would come to the conclusion that the role of an applicant as subcontractor cannot be taken into consideration and only other past experiences either as prime contractor or partner of a joint venture could be taken into consideration and the certificate from organizations referred to in clause 4 are provided for the certification of partnership with whom the applicant acted in the past as a partner of the joint venture. 14. Mr. Mehta, in this connection, relied upon decisions of the Supreme Court in the cases of M/s. Michigan Rubber (India) Ltd. v. State Of Karnataka And Ors., reported in AIR 2012 SC 2915 and Air India Ltd. v. Cochin International Airport Ltd. and Ors., reported in AIR 2000 SC 801 in support of his contention. 15. In the case of Michigan Rubber [supra], it was held that in the matter of formulating conditions of a tender document and awarding contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers and interference by Courts is not warranted. By relying upon the above decision, Mr. Mehta submitted that where two views are possible, we should not interfere with the discretion exercised by the Corporation. 15.1 We have already pointed out that in this case, clause 3.1 specifically excludes from the zone of consideration for evaluation the work completed as subcontractor. Thus, if those are excluded, the respondent No.4 lacks essential qualification. Mehta submitted that where two views are possible, we should not interfere with the discretion exercised by the Corporation. 15.1 We have already pointed out that in this case, clause 3.1 specifically excludes from the zone of consideration for evaluation the work completed as subcontractor. Thus, if those are excluded, the respondent No.4 lacks essential qualification. Thus, the above decision is of no help to Mr. Mehtas client. 16. In the case of Air India [supra], Mr. Mehta strongly relied upon paragraph 12 of the judgment wherein the Supreme Court held that Cochin International Airport Limited did not do anything wrong in taking into consideration the fact that Air India is an Airline and being a national carrier would be in a position to bring more traffic of Air India and other domestic lines if it was awarded the contract and as regards the merits of the rival offers, the Supreme Court did not think it proper to look at only the financial aspect and hold that Cochin International Airport Limited did not accept one Cambattas offer even though it was better because it wanted to favour Air India. The Supreme Court further held that in a commercial transaction of a complex nature, what may appear to be better on the face of it, may not be considered so when the overall view is taken and in such matter, the Court cannot substitute its decision for the decision of the party awarding the contract. 16.1 In the case before us, the construction is of a flyover wherein the Corporation has fixed guidelines for evaluating the qualification of the applicant and the tenders terms specifically provided that the role of an applicant as subcontractor shall not be taken into consideration. Even in spite of such prohibition, if the Corporation decides to select a particular applicant who has no requisite qualification, in our opinion, a writ-court, sitting in Public Interest Litigation, can definitely question the bona fide of the Corporation in not selecting others having requisite qualification. We thus, find that the above decision also is of no help to Mr. Mehtas client. 17. Mr. Mehta lastly tried to convince us that this PIL should be dismissed on the ground of delay. We thus, find that the above decision also is of no help to Mr. Mehtas client. 17. Mr. Mehta lastly tried to convince us that this PIL should be dismissed on the ground of delay. It appears that the decision was taken by the Corporation on 17th January 2014 and for preliminary investigation, it was further directed that the work should start after the expiry of 45 days from that date, meaning thereby that the work could be done only from month of March 2014. This petition is filed in the month of April 2014. Having regard to the public elements involved in the construction of a big flyover and having regard to the fact that such an important contract has been given to a party having even no eligible qualification, we do not find any reason to dismiss this writ-application on the ground of delay. Moreover, as it appears from the photographs placed before us, only a few pillars have been raised but those are not even of a considerable height. Therefore, having regard to the small amount of construction made, we do not propose to entertain the aforesaid plea and permit the respondent no. 4 to complete the flyovers notwithstanding the fact that it has no basic qualification fixed by the Corporation. In this connection, we may preferably rely upon the following observations of the Supreme Court in the case of West Bengal State Electricity Board v. Patel Engineering Co. Ltd reported in AIR 2001 SC 682 on the question of deviation from the essential conditions of a tender: "It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant respondent Nos. 1 to 4 and respondent Nos. 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfill pre-qualification alone are invited to bid, adherence to the instructions cannot be given a go-bye by branding it as a pedantic approach otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the Rule of law and our constitutional values. The very purpose of issuing Rules/instructions is to ensure their enforcement lest the Rule of law should be a casualty. The very purpose of issuing Rules/instructions is to ensure their enforcement lest the Rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubt in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the Rules, it has to be done strictly in compliance with the Rules. We have, therefore, no hesitation in concluding that adherence to ITB or Rules is the best principle to be followed, which is also in the best public interest." 17.1 In the case before us, there is even no provision of any right reserved in the hands of Corporation of waiver of the Clauses 3.1 and 4 as quoted by us above. 18. On consideration of the entire materials on record, we, therefore, hold that in the facts of the present case, the Corporation should not have selected the respondent No.4 who had no basic qualification for awarding such tender. We accordingly set aside the work order executed in favour of the respondent No.4. It is, however, for the Corporation to decide whether it will select a new contractor from the other participating contractors or by a fresh tender. However, since the respondent No.4 has done some preliminary work and started construction of few pillars for about 2 months before we entertained this writ-petition, it is for the Corporation to decide whether it would make payment for the work already done by the respondent No.4 having regard to the nature of the work done. However, if it decides to allow the newly appointed contractor pursuant to this order to make further construction over the partly made pillars erected by the respondent No.4, it will first verify the materials used and the stability of construction before proceeding further over those unfinished pillars for the safety and security of the public in general. The writ-application is allowed accordingly to the extent indicated above by quashing the selection of the respondent No. 4. The writ-application is allowed accordingly to the extent indicated above by quashing the selection of the respondent No. 4. Writ Application Allowed.