Chennatt Constructions A Unit of B3 Macbis Ltd. v. The Director, Department of Sports and Youth Affairs, Government of Kerala; The Chief Engineer, Sports Engineering Wing, Department of Sports and Youth Affairs; State of Kerala; Ms. Bharathi Refrigeration Works; Masters Equipments

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **WEDNESDAY,THE 19TH DAY OF DECEMBER 2018/28TH AGRAHAYANA,1940** ## **WP(C).No. 588 of 2018** ## **PETITIONER:** **CHENNATT CONSTRUCTIONS A UNIT OF B3 MACBIS LTD, NO.414/XIII.N.H.BYEPASS ROAD, KUMBALAM, KOCHI,REPRESENTED BY ITS MANAGING DIRECTORBEYOJ S.NAIR.** **BY ADVS. SRI.ANTONY C. ETTUKETTIL SRI.S.SUJIN** ## **RESPONDENTS:** |**1**|**THE DIRECTOR**| |---|---| ||**DEPARTMENT OF SPORTS AND YOUTH**| ||**AFFAIRS,THIRUVANANTHAPURAM.695 033.**| |**2**|**CHIEF ENGINEER**| ||**SPORTS ENGINEERING WING,DEPARTMENT OF SPORTS**| ||**AND YOUTH AFFAIRS,THIRUVANANTHAPURAM.695 033.**| |**3**|**STATE OF KERALA**| ||**REPRESENTED BY CHIEF SECRETARY,GOVERNMENT**| ||**SECRETARIAT, THIRUVANANTHAPURAM.695 001.**| |**4**|**MS. BHARATHI REFRIGERATION WORKS**| ||**A-97, DASHRATH PURI, DABRI PALAM ROAD,NEW**| ||**DELHI.110 045.**| W.P.(C).No.588/18 2 **5 MASTERS EQUIPMENTS PLOT NO.63, SIDCO INDUSTRIES PARK,CHAMBANOOR ANGAMALY SOUTH.P.O.,ERNAKULAM-683 573, REPRESENTED BY ITSPROPRIETOR.** ## **BY ADV. GOVERNMENT PLEADER** **OTHER PRESENT:** **GP PRINCY XAVIER.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26.10.2018, THE COURT ON 19.12.2018 DELIVERED THE FOLLOWING:** W.P.(C).No.588/18 3 ## **JUDGMENT** 1. This writ petition is filed challenging Exhibit P9 proceedings by which the tender for providing kitchen equipments and modernisation of dining halls at Government G.V. Raja Schools Mylam, Thiruvananthapuram and Sports Division Girls VHSS Kannur had been awarded to the 4[th] respondent herein. 2. It is the contention of the petitioner that the tender submitted by respondents 4 and 5 were disqualified on account of the defects in the tender. However, all these violations of tender conditions were ignored and the contract is awarded in favour of the 4[th] respondent. The petitioner contends that he was the third lowest tenderer and since the bids of the 4[th] and 5[th] respondents which were LI and L2 respectively were disqualified, the work ought to have been awarded to the petitioner. It is stated that the objections raised by the petitioner before respondents 1 to 3 were not properly considered before the order was passed. 3. Heard learned counsel for the petitioner, learned Government Pleader and learned counsel for respondents 4 and 5. W.P.(C).No.588/18 4 4. The learned counsel for the petitioner submits that the 4[th] respondent had claimed tender fee and EMD exemptions. It is stated that Government Purchase Enlistment Certificate showing the items enumerated for claiming exemptions produced as Exhibit P4 would show that claims could be raised only in respect of said enumerated items and that since civil works are involved, for which there was no exemption the 4[th] respondent ought to have remitted earnest money. It is further contended that the condition with regard to uploading of the preliminary agreement duly signed is not satisfied by the 4[th] respondent. The requirement for uploading of complete set of bid documents is also not satisfied. Valid registration certificate of CPWD/KPWD/ Irrigation department is to be attached with hard copy cover is not satisfied. Several allegations are raised against the 5[th] respondent also but it may not be relevant since the work has been awarded to the 4[th] respondent. - 5.The learned counsel for the petitioner would point out the discrepancies in the bid submitted by the 4[th] respondent to W.P.(C).No.588/18 5 contend that the bid was not in proper format and the 4[th] respondent would have the opportunity to wriggle out of the contract. The learned counsel places reliance on the decisions of the Apex Court in **West Bengal State Electricity Board v. Patel Engineering Co.Ltd and others** [(2001) 2 SCC 451], **Central Coalfields Limited And Another v. SLL-SML (Joint Venture Consortium) And Others** [(2016) 8 SCC 622] and of the Delhi High Court in **P.K.Delicacies Pvt.Ltd.v. Union of India** [2005 0 Supreme (Del) 761. It is contended that relaxation or waiver of condition of tender in favour of one bidder is not justified since the other bidders would be put to a disadvantage by such waiver. 6. A counter affidavit has been filed by the 1[st] respondent contending that the 4[th] respondent was entitled for tender fee and bid security exemption in terms of the Government Orders in force and that this Court has held that even where civil works are involved, the MSMEs, as duly registered, would be entitled to such exemptions. It is stated that four tenders were received in time, out of which one was disqualified for W.P.(C).No.588/18 6 want of previous experience in similar works. It is stated that Exhibit P6 reply had been forwarded to the petitioner clearly pointing out that the tender inviting authority had not provided separate folder for preliminary agreement in the e- tender website and hence the 4[th] respondent had submitted preliminary agreement on stamp paper in hard copy along with pre-qualification documents before the opening of the technical bid. It is stated that the requirement for uploading bid documents was also duly complied with by the 4[th] respondent. ## 7.It is further stated as follows:- “As far as the tender fee and EMD are concerned, an exemption to provide EMD and tender fee as per clause 6.6.5, the documents submitted by the 4[th] respondent was sufficient for exemptions. The units registered under Single Point Registration Scheme of NSIC are eligible to get the benefits under “Public Procurement Policy for Micro & Small Enterprises (MSEs) Order 2012” as notified by the Government of India, Ministry of Micro, Small and Medium Enterprises, New Delhi vide Gazettee Notification dated 26.03.2012 for issue of tender sets free of cost, Exemption from payment of Earnest Money Deposit (EMD). In tender participation MSEs quoting price within price band of L1+15 percent, they shall also be allowed to supply a portion upto 20% of requirement by bringing down their price to L1 price where L1 is non W.P.(C).No.588/18 7 MSEs. The authencity of the certificate can be checked through the web portal www.nsicpronline.com. The department had verified the authenticity of the certificate produced by the 4[th] respondent. The EMD/tender fee exemption is as per prevailing rules and as per clause 3.6.5 of conditions of contract. The civil items included in kitchen equipment works are eligible and hence the certificate issued by NSIC is valid for claiming exemption of EMD/tender fee for works of kitchen equipments. 17. Under clause 4.3.10, it is the duty of the bidder to upload a complete set of documents with NIT using the digital signature as token of acceptance of all bid conditions and in the absence of complete set of document in the submitted bid, the same shall be treated as non-responsive and will be rejected. It is submitted that this condition is the general condition for any work entrusted with department and bidders except 5[th] respondent (L-2 bidder) and including the petitioner did not submit the same. However, the department instructed the 4[th] respondent L-1 bidder to submit full set of signed tender document at the time of execution of agreement. The 4[th] respondent had submitted full set of signed tender document as part of the agreement. 8. Detailed replies are given with regard to the 5[th] respondent also. 9. I have considered the contentions advanced. The question to be decided is whether the tender conditions have been relaxed in favour of the 4[th] and 5[th] respondents in an arbitrary and W.P.(C).No.588/18 8 unsustainable manner. It is specifically contended by the learned Government Pleader that the minor relaxation of the conditions of Exhibit P1 was in view of the fact that only four responses were available to Exhibit P1. It is stated that there was a complaint of food poisoning in one of the sports schools in the State and work had to be carried out without further delay. In view of the urgency in completion of work it is stated that certain relaxations have been granted uniformly to all the qualified bidders to speed up the process so that further loss of time could be avoided. The learned Government Pleader would rely on the decisions of the Apex Court as well as this Court to contend that the respondents should be granted the necessary leeway in the matter of awarding of contracts and that the required play in the joints is absolutely essential and is to be taken note of by this Court as well. It is further contended that it is only in cases of established _mala fides_ that this Court could interfere. 10.A Division Bench of this Court in **T.P constructions v. Chief Engineer, Kerala State Housing Board** [2018 (1) KLT 866] has at paragraph 15 stated as follows:- W.P.(C).No.588/18 9 “The principles in regard to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts are well settled. The modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal over administrative decisions but merely reviews the manner in which the decision was made. Administrative decisions have to be tested by the application of the principles of reasonableness, arbitrariness and mala fides. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process. The court can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether the choice or decision is made 'lawfully' and not to check whether the choice or decision is 'sound'. 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. A court, before interfering in tender or contractual matters in exercise of power of judicial review, would examine whether the process adopted or decision made by the authority is mala fide or intended to favour someone or whether it is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with the relevant law could have adopted or made it. A mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour W.P.(C).No.588/18 10 someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision making process or the decision. Exercise of the power of judicial review would be called for if the approach is arbitrary or mala fide or the procedure adopted is meant to favour one. But, where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible (See Tata Cellular v. Union of India (AIR 1996 SC 11), Sterling Computers Limited v. M & N Publications Limited (AIR 1996 SC 51), Jagdish Mandal v. State of Orissa ((2007) 14 SCC 517), Montecarlo Ltd. v. NTPC Ltd. (2016 (4) KLT 2081 (SC) = AIR 2016 SC 4946) and Afcons Infrastructure Ltd v. Nagpur Metro Rail Corporation (2016 (4) KLT 6 (SC) = AIR 2016 SC 4305)).” 11.On a consideration of the pleadings and the materials on record, I am of the opinion that the decision of the official respondents in relaxing the requirements uniformly for a speedy award of the work cannot be termed to be arbitrary or capricious. The writ petition, therefore, fails and the same is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj W.P.(C).No.588/18 11 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 RELEVANT PAGES OF THE TENDER DOCUMENT DATED /9/2017 INVITING BIDS AND INSTRUCTIONS TO BIDDERS.** **EXHIBIT P2 TRUE COPY OF THE TENDER DOCUMENT DATED 3.10.2017 SUBMITTED BY THE PETITIONER.** **EXHIBIT P3 TRUE COPY OF PRELIMINARY AGREEMENT DATED 3.10.2017 EXECUTED BY THE PETITIONER.** - **EXHIBIT P4 TRUE COPY OF THE PURCHASE ENLISTMENT CERTIFICATE DATED 15.12.2015 SHOWING THE ITEMS ENUMERATED IN THE REGISTRATION SCHEME FOR CLAIMING EXEMPTIONS.** **EXHIBIT P5 TRUE COPY OF REPRESENTATION DATED 16.10.2017 SUBMITTED BEFORE THE CHIEF ENGINEER BY THE PETITIONER. EXHIBIT P6 TRUE COPY OF REPLY DATED 17.10.2017 FROM THE CHIEF ENGINEER.** **EXHIBIT P7 TRUE COPY OF THE OBJECTION DATED 25.10.2017 TO THE DIRECTOR, DEPARTMENT OF SPORTS AND YOUTH AFFAIRS BY THE PETITIONER.** - **EXHIBIT P8 TRUE COPY OF THE REPLY ON 20.10.2017 FROM THE 1ST RESONDENT.** **EXHIBIT P9 TRUE COPY OF THE AWARD LETTER NO.E54370/17/DSYA DATED 28.11.2017 OF THE 2ND RESPONDENT.** **EXHIBIT P10 TRUE COPY OF THE TENDER SUMMARY REPORTS ISSUED BY THE RESPONDENT.** W.P.(C).No.588/18 12 **EXHIBIT P11** **TRUE COPY OF THE AFFIDAVIT DATED NIL SUBMITTED BY THE 5TH RESPONDENT BEFORE THE RESPONDENT.** **RESPONDENT'S/S EXHIBITS:** **EXHIBIT R1(A) :** TRUE COPY OF TECHNICAL EVALUATION REPORT. **EXHIBIT R1(B) :** TRUE COPY OF THE PRELIMINARY AGREEMENT ONLY AS HARD COPY (IN A STAMP PAPER WORTH RS.200/-) **EXHIBIT R1(C)** TRUE COPY OF THE FULL SET OF SIGNED TENDER DOCUMENTS AS PART OF AGREEMENT. **EXHIBIT R1(D) :** TRUE COPY OF EXPERIENCE CERTIFICATE DATED 26-9-2017 FROM HONORARY SECRETARY, REGIONAL SPORTS CENTRE, COCHIN. True copy PS to Judge