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2016 DIGILAW 618 (JK)

TBA Infrastructure (P) Ltd. v. State of J&K

2016-11-30

N.PAUL VASANTHAKUMAR, TASHI RABSTAN

body2016
JUDGMENT : N. Paul Vasantha Kumar, J. 1. This letters patent appeal is filed against the order made in OWP No. 1531/2015, dated 18.10.2016, whereby learned Single Judge dismissed the writ petition filed by the appellant seeking to quash the award of contract in favour of the 5th respondent by order dated 19.09.2015 pertaining to improvement (periodic renewal) of NH-1C (New NH-144) Domel-Katra Road from Km 5th to 10th for approximate cost of Rs. 212.50 lac and for allotment of the said contract work to the appellant. The case put forth by the appellant before the writ court was that the appellant is a private limited company registered under the Companies Act and is engaged in the business of infrastructure development with specialization in building of roads/highways Runways and bridge construction. The Executive Engineer, PW(R & B) Division, Katra-3rd respondent herein issued a notice inviting tender on 18.04.2015 from approved and eligible contractors registered with J&K State Govt./CPWD and railways for the allotment of the contract work above mentioned. The appellant as well as Respondent No. 5 and other bidders submitted their bids. The bidders were required to submit technical bid as well as financial bid. On 30.05.2015, the Chief Engineer-the 2nd respondent herein declared the names of the bidders, whose bids were found technically viable. The bids of the petitioner as well as 5th respondent were found technically viable. The appellant lodged protest to the 2nd respondent on 20.07.2015 stating that Respondent No. 5 does not fulfill the eligibility criteria in terms of Clause 4.5.5 of the NIT and without considering the same, 2nd respondent considered the financial bid of Respondent No. 5, on being found as lowest bidder, the contract was awarded in his favour on 19.09.2015. According to the appellant, it approached the Ministry of Road Transport and Highway, Govt. of India by submitting a representation, based on which the Ministry of Road Transport and Highways by communication dated 07.08.2015 requested the 2nd respondent to act on the representation of the appellant and submit action taken report. The grievance of the appellant is that even before considering the said communication of the Ministry of Road Transport and Highways, the allotment order was issued to the 5th respondent. The grievance of the appellant is that even before considering the said communication of the Ministry of Road Transport and Highways, the allotment order was issued to the 5th respondent. The only contention of the appellant put forth before the writ court was that the 5th respondent did not furnish any proof before the 2nd respondent either of ownership or assured ownership of the equipments, which are mentioned in Annexure-II of the instruction to the bidders. As the 5th respondent produced only a rent agreement dated 01.05.2015 regarding possession of equipments/machinery in question, he is not satisfying the requirement under Clause 4.5.5 of the instructions as such he is ineligible to apply for the award of the contract. 2. According to official respondents, the Chief Engineer on satisfaction about the capacity of the 5th respondent to do the work and his bid being found as the lowest allotment order was issued on 19.09.2015. The specific contention of the 2nd respondent was that Respondent No. 5 has obtained the equipments in question on lease and agreement was produced to prove the same and therefore, after satisfying the capacity of the 5th respondent, the allotment order was issued in his favour. 3. The writ court considered the limited scope of jurisdiction vested with the High Court and having regard to the fact that the Executive Engineer inspected the site to ensure that the equipments mentioned by Respondent No. 5 are in working condition and the equipments were taken on lease from M/s. R.A. Engineers and Contractor recommended to the Chief Engineer for the award of contract. The writ court considered the object behind incorporation of Clause 4.5.5. i.e. to ensure that contractor must have the requisite plant/equipments so as to ensure timely completion of the contract awarded to him and recorded a finding that the 5th respondent fulfills the eligibility criteria and the said decision arrived at by the official respondents cannot be termed as arbitrary and irrational particularly when no mala fide was alleged against the official respondents. The writ court has also noticed the fact that the bid amount of the 5th respondent was approximately 30 lacs below the bid amount quoted by the appellant and dismissed the writ petition against which this appeal is preferred and the very same ground is raised, particularly the ineligibility of the 5th respondent as he was not the owner or assured owner of the equipment/machinery to do the work. 4. Mr. R.K. Gupta, learned senior counsel appearing for the appellant argued that treating the lease agreement in lieu of ownership or assured ownership is an error of law committed by the 2nd respondent while awarding the contract, therefore, this Court even in writ jurisdiction is entitled to go into the said issue and empowered to set aside the order granted in favour of the 5th respondent and the appellant was willing to do the contract work at the rate quoted by the 5th respondent. Learned senior counsel also heavily relied on the judgments of Hon'ble the Supreme Court reported in AIR 1977 (All) 527 (Ram Deo Singh v. Executive Engineer, PWD), AIR 1979 SC 1628 (Ramana Dayaram Shetty v. The International Airport Authority & Ors.), 1994 (6) SCC 651 (Tata Cellular v. Union of India) and AIR 2007 SC 437 (BSN Joshi and Sons Ltd. v. Nair Coal Services Ltd.) in support of his contention. 5. Mr. Faraz Iqbal, learned Deputy Advocate General, appearing for the official respondents, on the other hand, justified the award of contract to the 5th respondent and the order of the writ court by contending that the Chief Engineer considered the objections raised by the appellant and on verifying the key items of equipments, namely hot mix plan, which the 5th Respondent has procured through rent agreement executed between him and Sh. Amit Mandla, proprietor of M/s. R.A. Engineers and Contractors R/o. Talab Tillo, Jammu, which is valid for a period of two years from 01.05.2015 with further extension by mutual consent which satisfied the requirement to show his capacity i.e. 5th respondent, gave a reply to the appellant on 23.09.2015 based on the inspection made on 11.09.2015. The technical aspects namely, capacity of the 5th respondent having been satisfied, the appellant is not justified in raising a hyper technical plea that the 5th respondent was not qualified and the award of contract in his favour be quashed and tender be awarded to the appellant. The technical aspects namely, capacity of the 5th respondent having been satisfied, the appellant is not justified in raising a hyper technical plea that the 5th respondent was not qualified and the award of contract in his favour be quashed and tender be awarded to the appellant. Learned Deputy Advocate General produced the file relating to award of contract containing lease agreement executed on 01.05.2015, directions issued by the Chief Engineer to the Superintending Engineer PWD(R & B) Circle, Udhampur on 09.09.2015 stating that before allotting work to the said contractor, Superintending Engineer shall inspect the hot mix plant of the bidder and submit a detailed report in three days to proceed further in the matter. The Superintending Engineer, in turn, directed the Executive Engineer, viz. 3rd respondent herein to make inspection and it was found that the 5th respondent is having Paver, Road Rollers, Tar Boilers, Air Compressor, Gen Set, Excavator Loader, Water Tanker, Dumpers/Tippers, Bitumen Extractor and quality control laboratory. The said report was sent on 11.09.2015. 6. Learned Dy. AG appearing for the official respondents based on the documentary proof argued that when the owner or the employer of the project, after satisfaction recorded in writing regarding capacity of the person, who is to be given contract, granted the contract (work), this court is not justified in going further into the matter and he heavily relied on a judgment of Hon'ble Supreme Court reported in AIR 2016 SC 4305 (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. & Anr.) and prayed for dismissing the L.P. Appeal. 7. We have considered the rival submissions and perused the records particularly the order passed by the Chief Engineer directing the Superintending Engineer to inspect the hot mix plant of the bidder and sent a report, who in turn directed the Executive Engineer to inspect and who after inspection submitted his report on 11.09.2015. The said report reads thus:- "Regarding the subject cited above undersigned visited the plant site and enquired about the plant. There is mutual Agreement in the shape of affidavit between Mr. R.L. Sharma S/o. Sh. Dhani Ram Sharma R/o. Jeari & M/A R.S. Engineers & Contractors that plant is with R.L. Sharma on rental basis. Copy of which is attached herewith. There is mutual Agreement in the shape of affidavit between Mr. R.L. Sharma S/o. Sh. Dhani Ram Sharma R/o. Jeari & M/A R.S. Engineers & Contractors that plant is with R.L. Sharma on rental basis. Copy of which is attached herewith. Moreover as per inspection they have Paver, Road Rollers, Tar Boilers, Air Compressor, Gen Set, Excavator Loader, Water Tanker, Dumper/Tippers, Bitumen Extractor and quality control laboratory. Hence submitted for further necessary action at your end please. 8. The object behind the incorporation of Clause 4.5.5. of the instructions to the bidders is to test the capacity of the person about his technical competence and availability of infrastructures to carry on the work, if assigned and complete the same. The 5th respondent produced a rent agreement dated 01.05.2015 for getting on lease the equipments for a period of two years with an option of renewal. The said rent agreement and the machineries mentioned therein was asked to be verified by the Superintending Engineer/Executive Engineer and they were found in possession of the 5th respondent to carry out the work as per the report above extracted. The writ court, taking the said fact into consideration and having noticed that no mala fide is alleged against the official respondents for awarding the contract in favour of the 5th respondent, dismissed the writ petition. 9. The capacity of the 5th respondent as to whether he can carry out the work to the satisfaction of the department has to be ascertained only by the employer/department on appreciation of the documents and after physically seeing the equipments, which are under the control of the 5th respondent. 10. Hon'ble the Supreme Court in the decision reported in AIR 2016 SC 4305 (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. & Anr.) considered the similar issue and set aside the judgment of the Bombay High Court, which held that the successful bidder was not eligible to bid. The Hon'ble Supreme Court in Paragraph Nos. 15 to 17 held thus:- "15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The Hon'ble Supreme Court in Paragraph Nos. 15 to 17 held thus:- "15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The Constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the under-standing or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the Constitutional Courts but that by itself is not a reason for interfering with the interpretation given. 16. In the present appeals, although there does not appear to be any ambiguity or doubt about the interpretation given by NMRCL to the tender conditions, we are of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by NMRCL was perverse or mala fide or intended to favour one of the bidders. This was certainly not the case either before the High Court or before this Court. 17. Under the circumstances, we find merit in the appeals filed by the appellants and set aside the judgment and orders passed by the High Court and restore the decision of NMRCL to the effect that GYT-TPLJV was not eligible to bid for the contract under consideration." 11. In the decision reported in AIR 2016 SC 4879 (Tamil Nadu Generation and Distribution Corporation Ltd. & Anr. v. CSEPDI & Anr.), Hon'ble the Supreme Court held that the capacity and efficiency of the bidder and the perception of feasibility of completion of the project has to be left to the wisdom of the experts and consultants. The courts cannot really enter into the said realm in exercise of power of judicial review. Hon'ble the Supreme Court set aside the judgment of Madras High Court, which had interfered with the tendering process. 12. The courts cannot really enter into the said realm in exercise of power of judicial review. Hon'ble the Supreme Court set aside the judgment of Madras High Court, which had interfered with the tendering process. 12. In the decision reported in 2012 (6) SCC 464 (Tejas Constructions and Infrastructure Pvt. Ltd. v. Municipal Council Sendhwa & Anr.), Hon'ble the Supreme Court while considering the evaluation of the bids and determination of the eligibility of the bidders in Para 31 has held thus:- "19. It is also noteworthy that in the matter of evaluation of the bids and determination of the eligibility of the bidders the Municipal Council had the advantage of the aid & advice of an empanelled consultant, a technical hand, who could well appreciate the significance of the tender condition regarding the bidder executing the single integrated water supply scheme and fulfilling that condition of tender by reference to the work undertaken by them. We, therefore, see no reason to interfere with the view taken by the High Court of the allotment of work made in favour of Respondent No. 2." 13. The judgment cited by the learned senior counsel appearing for the appellant, namely AIR 1977 Allahabad 527 (supra) is distinguishable on facts. The condition imposed in the said tender was that the tenderer must own the steamer. In this case, the condition mentioned in Clause 4.5.5 was to the effect that the tenderer be a owner or assured owner of the equipments. Therefore, assured owner can be liberally construed, which means the equipments should be useable as owner for the purpose of carrying on the assigned work. 14. The decision relied on by the learned senior counsel appearing for the appellant, namely, AIR 2007 SC 437 (supra) is a general principle of law holding that if there are essential conditions, the same must be adhered to and if relaxation is permissible, the same shall be given to all similarly placed persons. In paragraph No. 70 of the judgment, it is held that the fact put forth by the authority concerned is whether the contractor would be able to discharge his contractual obligation and once satisfaction is recorded by the competent authority that the contractor would be able to perform the contractual undertaking then Court is not expected to go into said satisfaction. 15. 15. The decision cited by learned senior counsel appearing for the appellant, namely, (1994) 6 SCC 651 (supra) is for the proposition that the Court will interfere where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way cannot be upheld. In this case as explained supra, the decision to award contract in favour of the 5th respondent was taken after taking note of his eligibility and capacity based on spot assessment and the said action cannot be found illogical. Hence the said judgment has no application to the facts of this case. 16. Applying the said judgments to the facts of this case, the decision rendered in the writ petition is just and proper. We are unable to find any reason to entertain this appeal. Accordingly, we affirm the order of the writ court. Appeal is dismissed. No costs.