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2015 DIGILAW 288 (JHR)

Ankur Chemfood Limited v. State of Jharkhand

2015-02-21

SHREE CHANDRASHEKHAR

body2015
ORDER : Challenging its disqualification in the technical bid and for a direction to the respondents to open the price bid of the petitioner-company and restraining the respondents from finalising the tender, the present writ petition has been filed. 2. The brief facts of the case are that, the petitioner-company is a manufacturer and supplier of Iodised salt for which, it has received license from the Food Safety and Standard Authority of India. The petitioner-company has IS No.7224:2006 certificate for Iodised salt by the Bureau of Indian Standard. It has supplied refined flow Iodised salt in the State of Andhra Pradesh, Madhya Pradesh, Chhatisgarh, Punjab, Kathmandu and other States. In response to e-Tender procurement notice for supply of free flow refined Iodised salt for 24 districts in the State of Jharkhand, the petitioner submitted its bid however, on 29.05.2014 when the technical bid was opened, the petitioner-firm has been disqualified. On enquiry, it was revealed that in view of the fact that a vigilance enquiry was ordered, the petitionerfirm was disqualified however, as a matter of fact, the enquiry against the petitionerfirm was already dropped. 3. A counter-affidavit has been filed on behalf of respondent nos.2, 3 and 5 stating that the petitioner did not fulfill the requisite qualification under Clauses 5.5.9(a), 5.5.6, 5.11.4(a) and 5.11.10 and therefore, it was declared technically disqualified. It is further stated that one M/s. Shree Ram Chemfood Pvt. Ltd. has been issued the work order dated 20.06.2014. It is further stated that for the irregularities committed by the petitioner-firm in supplying salt for the financial year, 200809, the matter was referred to the Vigilance Bureau, Ranchi, which is still enquiring into the matter. 4. Heard learned counsel appearing for the parties and perused the documents on record. 5. Mr. Anil Kumar Sinha, the learned senior counsel for the petitioner refers to the comparative chart of the bidders prepared by the Tender Committee, Department of Food, Public Distribution and Consumer Affairs, a copy of which is annexed as Annexure 2 and submits that the only ground taken against the petitioner for disqualifying it in the technical bid is “legal issues with Jharkhand Government, Department of Food, Public Distribution and Consumer Affairs”. It is submitted that the petitioner-company has filed a writ petition before this Court being W.P.(C) No.540 of 2011 for release of security deposit for the work order issued in the year, 2008 and this has been taken as a ground for disqualifying the petitioner-firm in terms of Clause 5.5.3. It is further submitted that the plea taken by the respondent-State in the counter-affidavit that the petitioner does not fulfill other eligibility criteria is frivolous, in as much as, the petitioner was awarded contract for supply of Iodised salt for the financial year, 200809 also and moreover, the proceeding of the Tender Committee does not disclose any deficiency in the bid of the petitioner. 6. As against the above, Mr. Rajesh Kumar, the learned G.P.-V appearing for the respondents submits that in connection with Iodised salt supplied by the petitioner-firm during the financial year, 2008-09, the matter was referred to the Vigilance Bureau, which is still enquiring into the matter. Besides the pending vigilance enquiry, the petitioner did not fulfill other conditions in terms of the tender document and therefore, it was disqualified in the technical bid. Moreover, the period for which the e-Tender procurement notice was issued would end on 31.03.2015 and the successful bidder is executing the work in question and therefore, no interference is required in the present matter. 7. I have carefully considered the submissions of the learned counsel for the parties and perused the documents on record. 8. Leaving aside the allegation that the petitioner-firm did not fulfill conditions under Clauses 5.5.9(a), 5.5.6, 5.11.4(a) and 5.11.10, I find that the main ground taken against the petitioner is “pending legal issues with the department”. From the proceeding of the Tender Committee, which prepared a comparative chart of all the bidders, this is the only substantial ground taken against the petitioner-firm for disqualifying it. The relevant Clause in the Tender Document is 5.5.3 is extracted below: “5.5.3. Suppliers/firms who have not exercised fair dealing with and or are blacklisted with any Government Department shall not be considered by DFPD & CA. Suppliers/firms which have any legal dispute with any Government Department will not be considered.” 9. The relevant Clause in the Tender Document is 5.5.3 is extracted below: “5.5.3. Suppliers/firms who have not exercised fair dealing with and or are blacklisted with any Government Department shall not be considered by DFPD & CA. Suppliers/firms which have any legal dispute with any Government Department will not be considered.” 9. Insofar as, the condition that the supplier/firm which has not exercised fair dealings with any Government Department shall not be considered by DFPD & CA, the learned senior counsel for the petitioner fairly admits that if a firm/tenderer is guilty of using unfair means and/or if it has not been fair in its dealing in any manner whatsoever, which may include furnishing false information, submitting false and fabricated documents etc, the bid of such supplier/firm may not be considered. Insofar as, the bid of a supplier/firm, which has been blacklisted with any Government Department is concerned, there is unanimity amongst the counsel for the parties that such supplier/firm can be validly debarred from participating in tender. The main dispute pertains to interpretation of “suppliers/firms which have any legal dispute with any Government Department”. The learned senior counsel for the petitioner submits that there can be a legal dispute which may involve interpretation of a term of a contract or in a given case a dispute may arise insofar as, price escalation is concerned and in such situations, the pending legal dispute cannot be taken as a ground for debarring a tenderer from participating in the tender process. I am of the opinion that the contention of the learned senior counsel for the petitioner merits acceptance. The prohibition that the supplier/firm which has any legal dispute with any Government Department has to be read in the context of the prohibition that the supplier/firm which has not exercised fair dealing and/or is blacklisted with any Government Department, is disqualified. The expression “legal dispute” has to be interpreted in such a manner which will give a meaningful effect to the disqualification/prohibition contained in Clause 5.5.3. Mere pendency of a writ petition or mere pendency of a reference for vigilance enquiry cannot be made a ground for disqualifying a tenderer in the technical bid itself. The “legal dispute” with a tenderer must be referable to a dispute which may incur disqualification referred in Clause 5.5.3. Mere pendency of a writ petition or mere pendency of a reference for vigilance enquiry cannot be made a ground for disqualifying a tenderer in the technical bid itself. The “legal dispute” with a tenderer must be referable to a dispute which may incur disqualification referred in Clause 5.5.3. There cannot be a dispute that if a criminal case has been registered or a firm has been blacklisted or a firm has been found guilty of using unfair means in procuring the tender or in a given case, if a tenderer has intentionally furnished false information or submitted forged and fabricated document, in such cases, tenderer must be stopped from participating in the tender process. It is well settled that though the plain words of a contract must be given literal meaning however, it is also well settled that while assigning literal meaning to a provision if, it results in absurdity, such interpretation must be avoided. If the expression “legal dispute” is interpreted to mean any case pending in any court, it would lead to absurdity. The learned counsel for the respondent-State of Jharkhand has submitted that with respect to irregularities committed by the petitioner-firm, the Vigilance Bureau is enquiring into the matter. I am of the opinion that the fact that in the last six years nothing has been found against the petitioner is an important fact which needs to be considered by the Department whether on such ground, a tenderer can be disqualified in the technical bid itself. Had the enquiry been instituted recently or even pending since last one year or so, the Department after taking legal advice, can take a decision to disqualify a tenderer. Since, the work in question is nearing completion, I am not inclined to interfere in the matter. 10. The writ petition is dismissed with above clarification.