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2025 DIGILAW 427 (GUJ)

Bhimji Velji Sorathia Construction Pvt. Ltd. v. State Of Gujarat, Roads And Buildings Department (State Highway)

2025-06-11

A.S.SUPEHIA, R.T.VACHHANI

body2025
JUDGMENT : (PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA) 1. The present writ petition has been filed by the petitioner– Company, which is engaged in the business of construction, seeking to quash and set aside the disqualification letter dated 08.05.2025 (Annexure-A), whereby the respondent – Roads and Buildings Department (State Highway), Government of Gujarat, has rejected the Technical Bid submitted by the petitioner–Company. 2. Learned advocate Mr.Munjaal M. Bhatt, appearing for the petitioner–Company, at the outset, submitted that the impugned decision passed by the respondent is liable to be quashed and set aside in light of the specific clauses contained in the tender document (at page No. 26), particularly Clause 3 of the pre-qualification criteria relating to other requirements. 3. It is contended that the petitioner–Company, in response to the tender floated on 28.03.2025, through National Competitive Bidding (on-line tender), submitted its bid, and as per the tender conditions, the bidder is required to possess 'AA' Class with Special Category–1 (Road) and Special Category–1 (Bridge), and in the event the bidder does not hold either of the Special Category–1 (Road) or (Bridge) registration, it must submit a Memorandum of Understanding (MoU) for the respective category with a contractor duly registered in Special Category–1 (Road) or (Bridge) with the Gujarat State Roads and Buildings Department / Narmada Water Supply and Kalpasar Department. It is submitted by him that in accordance with Clause 3(a)(ii) of the Resolution dated 20.06.2020, a contractor registered with C.P.W.D., M.E.S., Railways and Indian State Governments, upon applying for the bid and producing a valid registration certificate at the time of bidding, and subsequently obtaining the required registration in the appropriate class and category from the Gujarat State Roads and Buildings Department or Water Resources Department (W.R.D.) prior to issuance of the work order, shall be deemed eligible. It is submitted by him that the petitioner– Company has executed a MoU dated 17.04.2025 with M/s.Aarti Construction Company, which holds registration as a Special Category–1 (Bridge) contractor, and hence in light of this MoU, M/s.Aarti Construction Company is deemed to be eligible to obtain the requisite registration from the Gujarat Roads and Buildings Department prior to issuance of the work order, and the process for the same is already underway. Thus, it is submitted that in such factual scenario, the petitioner– Company satisfies the eligibility criteria stipulated in the tender. 4. Thus, it is submitted that in such factual scenario, the petitioner– Company satisfies the eligibility criteria stipulated in the tender. 4. Learned Advocate Mr.Bhatt, while referring to the Clause 23.4 of the Standard Bidding Document (SBD), has submitted that the tendering authority is required to seek necessary clarifications from the bidders before final evaluation. However, in the present case, the respondent has unilaterally disqualified the petitioner without affording an opportunity of clarification, which is in contravention of the said clause. Accordingly, it is urged that the impugned decision is arbitrary, unreasonable, and deserves to be quashed and set aside. 5. Reference is also made to the Government Resolution dated 20.06.2020, and it is contended that the respondent has lost sight of the fact that the National Competitive Bidding (NCB), which allows the bidders across India to participate, and in such circumstances the relaxation provided under the said resolution, which forms part of the Bidding Document becomes more relevant and the respondent cannot adopt a negative approach ignoring the relaxation. Thus, it is urged that the action of the respondent disqualifying the petitioner-Company’s Bid may be set aside. 6. In response to the aforesaid submissions, learned Assistant Government Pleader Ms.Shruti R. Dhruve, while pointing out the averments made in the affidavit-in-reply filed by the respondent has submitted that the petitioner-Company is having ‘AA’ class registration and Special Category-I (Road), however, the petitioner–Company does not possess Special Category-I (Bridge), as per the requirement of the Bid Document and in order to cure such defect, the petitioner– Company entered into an MoU with one M/s.Aarti Construction Company vide MoU dated 17.04.2025. She has submitted that in fact, M/s. Aarti Construction Company does not have Special Category-I (Bridge) registration and hence, they applied for upgrading Special Category-I (Bridge) vide communication dated 01.05.2025. Thus, it is submitted that while uploading the documents, the petitioner has made a false claim that M/s.Aarti Construction Company is a Special Category-I (Bridge) and has tried to defraud the respondent authority. 7. While referring to the provisions of Clause 3(a)(ii) of the Government Resolution dated 20.06.2020, learned AGP has submitted that the said clause stipulates that contractors (bidders), who are registered with the Central Public Works Department (CPWD) shall be entitled to participate in the tender process. 7. While referring to the provisions of Clause 3(a)(ii) of the Government Resolution dated 20.06.2020, learned AGP has submitted that the said clause stipulates that contractors (bidders), who are registered with the Central Public Works Department (CPWD) shall be entitled to participate in the tender process. However, in the present case, M/s.Aarti Construction Company cannot be considered as a 'contractor' in the capacity of a 'bidder' within the meaning of the said Resolution. Therefore, the benefit of producing the Special Category–I (Bridge) registration certificate at a later stage, i.e., prior to issuance of the work order, cannot be extended to M/s.Aarti Construction Company, as it does not qualify as a 'contractor' in terms of the said Government Resolution. 8. In rejoinder, learned advocate Mr.Munjaal Bhatt has submitted that the contention advanced by the learned Assistant Government Pleader, regarding the lack of Special Category–I (Bridge) and CPWD registration certificate by M/s.Aarti Construction Company, is factually incorrect and misleading. It is pointed out that in a previous tender floated by the Roads and Buildings Department in the year 2022, M/s.Aarti Construction Company was held eligible, having satisfied the specific requirement of 'AA' Class category and Special Category–I (Bridge) registration. It is submitted that M/ s.Aarti Construction Company was awarded the contract, thereby establishing its eligibility and compliance with similar pre-qualification criteria. Thus, it is urged that the stand taken by the respondent contradicts its own previous conduct and is therefore unsustainable in law. 9. We have heard the learned advocates appearing for the respective parties. 10. The petitioner-Company, which has participated in the bidding process pursuant to the National Competitive Bidding (on-line tender) floated by the respondent on 28.03.2025 for constructions of Widening and Strengthening of Pragpar to Mundra Port Aside Road. The petitioner – Company has been disqualified at the technical evaluation stage. The reason for disqualification is mentioned in the communication dated 07.05.2025. In the said communication, the respondent has invoked the provisions of Clause-I, paragraph No.7, and has informed the petitioner–Company that M/s.Aarti Construction Company, with which the petitioner–Company has entered into an MoU does not possess the Special Category-I (Bridge) and has not registered with the Roads and Buildings Department of Gujarat State and such MoU cannot be treated as valid. 11. 11. Before we proceed further on merits, we may refer to quintessential condition of the Bid Document, which mandates on having the Class of Registration / Category of Contractor, if required, which is as under : - “Class of Registration / Category of contractor if required. "AA" Class with Special Category-1 (Road) & Special Category-1 (Bridge) (if Bidder does not possess either special category-1 (Bridge) or (Road) registration then need Moll for (Bridge) or (Road) work with Special Category-1 (Bridge) or (Road), Registration with Gujarat State R&B department/Narmada Water Supply & Kalpasar Department”. 12. As per the case of the petitioner–Company, it is having “AA” Class Registration and Special Category-I (Road) qualification, however the petitioner–Company does not possess the Special Category-I (Bridge) qualification. In order to cure such defect, the petitioner – Company entered into an MoU with one M/s.Aarti Construction Company on 17.04.2025. The MoU, which is produced on record of writ petition, discloses that M/s.Aarti Construction Company has declared itself as a Special Category-I (Bridge) contractor. 13. At this stage, we may refer to the letter written by M/s.Aarti Construction Company to the Executive Engineer, Roads and Buildings Department, Bhuj-Kachchh on 01.05.2025, wherein M/s.Aarti Construction Company has requested the Executive Engineer to upgrade their Special Category-II (Bridge) to Special Category-I. This communication is not denied by the petitioner-Company. Thus, there appears to be dispute with regard to M/s.Aarti Construction Company having Special Category-I (Bridge) category since there was no need for M/s.Aarti Construction Company to request the Executive Engineer vide a communication dated 01.05.2025 to upgrade the status from Special Category-II (Bridge) to Special Category-I (Bridge). M/s.Aarti Construction Company, with which the petitioner–Company has entered into an MoU, is also not made a party to the present writ petition. The respondent, after considering the aforesaid facts, had concluded that the petitioner–Company has made a false claim that the said M/s.Aarti Construction Company is Special Category-I (Bridge), while uploading the Bid Document. This ground alone would be sufficient enough to disqualify the present petitioner–Company from the bidding process. 14. In order to justify that M/s.Aarti Construction Company is having Special Category-I (Bridge), the petitioner–Company has filed an affidavit and has sought shelter under the earlier tender process, in which, M/s.Aarti Construction Company has participated in the year 2022. This ground alone would be sufficient enough to disqualify the present petitioner–Company from the bidding process. 14. In order to justify that M/s.Aarti Construction Company is having Special Category-I (Bridge), the petitioner–Company has filed an affidavit and has sought shelter under the earlier tender process, in which, M/s.Aarti Construction Company has participated in the year 2022. We cannot give benefit of the aforesaid tender, which was awarded to M/s.Aarti Construction Company at the relevant time in the year 2022, since it appears that the bidder was the sole M/s.Aarti Construction Company, which had participated in the tender process in the year 2022. M/s.Aarti Construction Company would, in fact, fall under Clause-3(a)(ii) of the Resolution dated 20.06.2020 passed by the Roads and Buildings Department of the Government of Gujarat as it was the sole contractor or the bidder. In fact, the Executive Engineer of Roads and Buildings Department, by the communication dated 08.04.2025 requested M/s.Aarti Construction Company to obtain Special Category-I (Bridge), however neither M/s.Aarti Construction Company nor the petitioner–Company produced the same in order to satisfy the aforesaid requirement and on the contrary, M/s.Aarti Construction Company requested the Executive Engineer to upgrade their status. In view of the aforesaid disputed question of facts, while examining the Bidding Document and the tender process, this Court cannot delve into such aspects. 15. The petitioner–Company has also vehemently stressed upon the Clause 3(a)(ii) of the Resolution dated 20.06.2020. The same is incorporated as under : - “(3) OTHER REQUIREMENTS (a) BIDDER'S REGISTRATION i. XXXX…. ii. The contractors, who are registered in appropriate category of C.P.W.D., M.E.S., Railways and Indian State Governments, can also bid provided the bidder produce such registration certificate at the time of bidding and obtain registration in required class & category from the Gujarat State R & BD/W.R.D. before Issuing work order. Bidder will solely be responsible for obtaining the required registration.” 16. The respondent, after threadbare considering the documentary evidence produced by the petitioner–Company, has concluded that the petitioner–Company or M/s.Aarti Construction Company cannot take shelter under the provisions of Clause 3(a)(ii) of the Resolution dated 20.06.2020. 17. The requirement of “Class of Registration / Category of contractor if required,”, as mentioned hereinabove, has to be read in conjunction with the word “Contractors” used in Clause 3(a)(ii) of the Resolution dated 20.06.2020. 17. The requirement of “Class of Registration / Category of contractor if required,”, as mentioned hereinabove, has to be read in conjunction with the word “Contractors” used in Clause 3(a)(ii) of the Resolution dated 20.06.2020. If the caption of the categories i.e. Class of Registration / Category of contractor if required, is read keeping in mind the provisions of Clause 3(a) (ii), the same will exposit that the contractors referred in Clause 3(a)(ii) of the Resolution dated 20.06.2020, who are registered with the CPWD are entitled to bid in tender process and in light of the aforesaid provisions, M/s.Aarti Construction Company never be termed as a “Contractor’ or “Bidder”, in terms of the Resolution dated 20.06.2020. The provision extends the benefit to the bidder, who has participated in the bidding process as the expression used in Clause 3(a)(ii) is, “the contractors, who are registered -- in appropriate category of C.P.W.D.- can also “bid” provided that the bidder produce such registration certificate, at the time of bidding.” Thus, this clause enables the contractors/bidders, who are registered in appropriate category of C.P.W.D./M.E.S. to participate in bidding process to those contractors, and it will not apply to M/s. Aarti Construction Company, with which the petitioner – Company had entered the MoU. Company is not the bidder, but the petitioner-Company has made it a stepping stone for participating in the process since it does not possess “AA” Class with Special Category-I ( Bridge). 18. Assuming that M/s.Aarti Construction is encompassed under Clause 3(a)(ii) of Resolution dated 20.06.2020, then also the same cannot come to the rescue of the petitioner-Company since there is dispute with regard to possession of Special Category-I (Bridge) registration. Hence, we do not find any illegality in the decision taken by the respondent in disqualifying the petitioner–Company. In case, the bidder does not possess either Special Category-I (Bridge or Road) registration, then only the need arises to enter an MoU for the same with Special Category-I (Bridge or Road). In the present case, there are contrary claims by the petitioner–Company and the respondent with regard to Special Category-I (Bridge) of M/s. Aarti Construction Company. 19. At this stage, we may refer to the decision of the Supreme Court restricting the scope of judicial review in case of awarding of contracts. In the present case, there are contrary claims by the petitioner–Company and the respondent with regard to Special Category-I (Bridge) of M/s. Aarti Construction Company. 19. At this stage, we may refer to the decision of the Supreme Court restricting the scope of judicial review in case of awarding of contracts. It is no more res integra that the scope of judicial review in interfering with the contract process and tender process is very restricted. (Vide judgment in the case of Jagdish Mandal vs. State of Orissa and Ors. , (2007) 14 S.C.C. 517 , wherein the Supreme Court has observed thus : - “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :” 20. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :” 20. In the present case, we do not find that the process or decision taken by the respondent is tainted with mala fide or it is intended to favour someone, and we do not find that the action is so arbitrary and irrational, which will compel us to interfere in the tender process. 21. So far as the reliance placed by the learned advocate Mr.Bhatt, on Clause 23.4 of the Tender Bidding Document, is concerned, the same will not come to rescue of the petitioner–Company. The said Clause 23.4 (2) reads as under : - “23.4 xxxx…. (ii) If required, the bidder will be asked in writing to clarify his Qualification Documents with respect to any required clarification.” 22. Thus, the said clause can only be invoked at the discretion of the respondent only in cases, if it is warranted. Hence, looking to the present case, we do not find that the respondent can be compelled to call upon the petitioner– Company to clarify its qualification documents. It is the sole discretion of the respondent to call upon the bidders after verification of the documents in case, there is some discrepancy. 23. On an overall appreciation of the facts and analysis of the case, the present writ petition does not merit acceptance. The same is rejected accordingly.