GKV Associates v. State of Kerala & Others

WP(C) NO. 1649 OF 2023 1 # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN MONDAY, THE 31[ST] DAY OF JULY 2023 / 9TH SRAVANA, 1945** ## **WP(C) NO. 1649 OF 2023** ## **PETITIONER/S:** GKV ASSOCIATES AGED 51 YEARS DOOR NO.58D2, VALLAMATTOM ESTATE, POST OFFICE JUNCTION, MUVATTUPUZHA, ERNAKULAM DISTRICT-686 670, REPRESENTED BY ITS MANAGING PARTNER GEORGE KURIAN, AGED 51 YEARS, VALLAMATTATHIL HOUSE, PANDIPPILLY P.O., MUVATTUPUZHA, ERNAKULAM DISTRICT, PIN - 686673 BY ADVS. GEORGE MATHEW M.D.SASIKUMARAN SUNIL KUMAR A.G MATHEW K.T. GEORGE K.V. STEPHY K REGI ADARSH KURIAN ## **RESPONDENT/S:** 1 STATE OF KERALA REPRESENTED BY ITS SECRETARY, WATER RESOURCES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001 2 KERALA WATER AUTHORITY REP. BY ITS MANAGING DIRECTOR, HEAD OFFICE, JALA BHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN - 695003 3 THE CHIEF ENGINEER& CHAIRMAN 3. THE CHIEF ENGINEER& CHAIRMAN, TENDER COMMITTEE, CENTRAL REGION,KERALA WATER AUTHORITY, GENERAL WP(C) NO. 1649 OF 2023 2 HOSPITAL ROAD, ERNAKULAM, KOCHI, PIN - 682011 4 . SUPERINTENDING ENGINEER , KERALA WATER AUTHORITY, P.H. CIRCLE, HOSPITAL ROAD, ERNAKULAM, KOCHI, PIN - 682011 5 SUNIL MATHEW AGED 50 YEARS , S/O. MATHEW, AGED ABOUT 50 YEARS, EDAPALAKKATTU CONSTRUCTIONS,EDAPALAKKATTU HOUSE, PIRAMADOM P.O.,PAMPAKUDA, ERNAKULAM, PIN - 683544 6 . M.K. HANSAR (AGE & FATHERS NAME NOT KNOWN TO PETITIONER), HASEENA COTTAGE, PANAYIKULAM P.O., ALANGAD, ALUVA, ERNAKULAM DISTRICT, PIN - 683502 BY ADVS. JOSHY VV SAJI VARGHESE KAKKATTIMATTATHIL-R5 AMALENDU A.(K/1980/2020) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 1649 OF 2023 3 # **P.V.KUNHIKRISHNAN, J** **---------------------------------------** ## **W.P.(C.) No. 1649 of 2023 -------------------------------------Dated this the 31[st] day of July, 2023** ## **JUDGMENT** ## The above writ petition is filed with following prayers : _i) to call for the records which lead to the issuance of Ext.P2 and to issue writ in the nature of certiorari or any other appropriate writ order or direction quashing the same;_ _ii) to declare that petitioner is qualified for executing the work tendered as per Ext.P1-Jal Jeevan Mission (JJM) - JJMWSS to Kalady Panchayath - providing distribution system and FHTCS Providing Distribution Networks, Providing OUR FHTCS and Road restoration works in Kalady Panchayath - Pipeline Work;_ _iii) to issue a writ in the nature of mandamus or any other appropriate writ, order or direction commanding respondents 2 to 4 not to open the price bid of 5[th] respondents submitted in JV with 6th respondent; iv) to grant such other reliefs and costs as this Hon'ble Court deems fit in the facts and circumstances of the case; v) the petitioner also prays that this Hon'ble Court may be pleased to dispense with production of translated copies_ WP(C) NO. 1649 OF 2023 4 _exhibits and documents produced in the case and are in vernacular language.” [SIC]_ 2. The petitioner herein is a partnership firm represented by its Managing Partner. The Managing Partner of the petitioner -firm is a registered A class contractor under Public Works Department (PWD) and has been awarded several works with different Government Departments, Governmental Agencies and its functionaries is the submission. The 4[th] respondent floated a Notice Inviting Tender ('NIT' for short) for the work viz., Jal Jeevan Mission (JJM) – JJM – WSS to Kalady Panchayat providing Distribution System and FHTCs- providing FHTCs and Road restoration works in Kalady Panchayat - Pipeline Work. It is the case of the petitioner that the petitioner quoted for the work and the 5[th] respondent in joint venture with the 6[th] respondent also quoted the work. Thereafter, tenders were taken for prequalification in the committee chaired by the 3[rd] respondent in which the 4[th] respondent is also a participant. In the prequalification meeting, it was found that both the bids are WP(C) NO. 1649 OF 2023 5 having sufficient financial capacity and standing. Thereafter, the petitioner's bid was disqualified holding that the firm is not having past experience as per Clause No. 7.17.1.2.14 in NIT. It is the case of the petitioner that through the very same order, tender submitted by the 5[th] respondent in joint venture with the 6[th] respondent was qualified and accepted. Et.P2 is the order passed by the 4[th] respondent. The reason for disqualifying the petitioner is that the petitioner is not having past experience. According to the petitioner, the findings in Ext.P2 are incorrect. It is submitted that, as per the value of contract compared with the conditions in Clause 7.17.1.2.14, past experience is not necessary for the subject work tendered by respondent Nos. 2 to 4. It is the case of the petitioner that the total value of work tendered is Rs. 23,06,35,652/- and total length of pipes of 500 mm is only 1208 meters and net value of that part of subject is much below 10% of the total amount kept apart for the work. Thus, the bid submitted by the petitioner was fit to be qualified and the reason in Ext.P2 is unsustainable is the submission. WP(C) NO. 1649 OF 2023 6 Hence, this writ petition. 3. Heard the learned counsel for the petitioner, the learned Standing Counsel appearing for respondent Nos. 1 to 4 and the learned counsel appearing for the 5[th] respondent. 4. The main contention of the petitioner is that Ext.P2 order is not sustainable and the experience is not necessary in this case because as per NIT, no experience is required for components costing less than 10% of the estimated PAC. This is disputed by the Standing Counsel appearing for the Water Authority and respondent Nos. 5 and 6. For the proper understanding of the case of the petitioner, it will be better to extract Clause 7.17.1.2.14. ## _7.17.1.2.14_ _**- Supplying and laying of Water Supply pipes above 400mm and upto and including 800mm diameter pipes of any material:-**_ _(a) Experience will be insisted with respect to the highest diameter of the pipe in the scope of the work, irrespective of its length in the scope of work, but subject to the general condition that no experience is required for components costing less than 10% of the estimated PAC. (b) Subject to the criterion (a) above, for works with the total length of laying greater than 1000 m-Must have supplied and laid a total of 1000m of 300mm or higher_ WP(C) NO. 1649 OF 2023 7 _sized pipes of any material in the past in a single work for his sole/Joint Venture/Partner of Joint venture._ _(c) Subject to the criterion (a) above, for works where the total length of pipeline to be laid is less than or equal to 1000m, the experience in supplying & laying of 500 m of 300mm or higher sized pipes of any material in the past in a single work for his sole/Joint Venture/Partner of Joint venture is enough.”_ 5. The petitioner is relying that part of Clause 7.17.1.2.14 (a) in which it is stated that, ‘...subject to the general condition that no experience is required for components costing less than 10% of the estimated PAC’. The respondent Nos. 5 and 6 filed a counter affidavit, in which this is disputed. It will be better to extract the relevant portion of the counter filed by respondent Nos. 5 and 6. _“6. It is submitted that the tendered PAC for the work is Rs 23,06,35,652/- The 10% of tendered PAC is Rs.2,30,63,565/The Cost of materials is Rs.8,61,20,112.62/- . Cost of the material which is one of the components of the work is more than 30% of tendered PAC. Hence the contention of the petitioner that he is entitled for the benefit of clause 7.17.1.2.1 and no experience is required is absolutely incorrect.”_ WP(C) NO. 1649 OF 2023 8 6. The respondent Nos. 2 to 4 also filed a counter in which the tendered PAC for the work and 10% of the tendered PAC is mentioned along with components in the work. It will be better to extract the same also. |_“Clause 7.17.1.2.14(a)_| |---| |_Tendered PAC for the work - Rs.23,06,35,652/-_| |_10% of Tendered PAC - Rs.2,30,63,565/-_| |**_Components in the work_**| |_1._<br>_Providing Distribution net work – Rs.69902041.99_| |_2._<br>_Cost of materials_<br>_- Rs.86120112.62_| |_3._<br>_Valves chambers and Anchor blocks – Rs.5375788.50_| |_Total- Rs.16,13,97,942.12”_| 7. Ext.P2 is the order passed by the authority rejecting the contention of the petitioner. It will be better to extract relevant portion of Ext.P2 also. _2. “M/s GKV Associates, Vallamattom Estates, Post Office Junction, Muvattupuzha-686661 Vide reference 4[th] cited above, the tender committee for pre-qualification held at the chamber of the Chief Engineer (CR), KWA Kochi-11, after verification of all the tender documents, the following suggestions and decisions taken and directions issued as follows:_ _The bidders 1) Sri. Sunil Mathew JV with SriM.K.Hansar and 2) M/s. GKV Associates both satisfy financial criteria stipulated in the NIT. M/s. GKV Associates does not have experience in pipe_ WP(C) NO. 1649 OF 2023 9 _laying. Hence the bidder do not satisfy technical criteria stipulated in the NIT clause 7.17.1.2.14b._ _Committee Decision: The Tender Committee evaluated the tenders (2nos) in detail. The bidders 1) Sri.Sunil Mathew JV with Sri. M.K Hansar and 2) M/s GKV Associates both satisfy financial criteria stipulated in the NIT. M/s. GKV Associates do not have experience in pipe laying. Hence the bidder do not satisfy the technical criteria stipulated in the NIT clause 7.17.1.2.14 b. The Tender Committee decided to disqualify M/s GKV Associates and Associates and prequalify the bidder Sri.Sunil Mathew JV with Sri. M.K Hansar. The tender then comes to the status of a single tender. However since this is a retender, the Tender Committee decided to direct the Superintending Engineer to proceed with the opening of Price Bid for the Prequalified tenderer. The Superintending Engineer shall obtain the attested copies of the submittals especially the documents supporting the financial standing as above and verify with originals. The Superintending Engineer shall take necessary action to comply with the direction of Hon'ble High Court regarding empanelled list of licensed plumbers._ _Under such circumstances, the bidder Sri.Sunil Mathew JV with Sri. M.K Hansar is prequalified for price bid opening and the bidder M/s GKV Associates disqualified from price bid opening of this tender. The prequalified bidder is directed to submit the attested copies of all the submittals especially the documents supporting the financial standing as above and originals for verification before opening price bid. Any objection/ complaint regarding pre qualification shall be_ WP(C) NO. 1649 OF 2023 10 _reported through email to this office within 2 days from the date of this order.”_ 8. From the above, it is clear that the tendering authority found that the petitioner is not qualified. I see no reason to interfere with the above finding. I am of the considered opinion that this Court cannot sit in appeal against the findings of the tendering authority. Moreover, a perusal of the contentions of respondents 2 to 4 and also the reasoning in Ext.P2 would show that the stand of the tendering authority is not arbitrary or illegal. The jurisdiction of this Court in such situation is very limited. The Apex Court in **PGCCPL & ARYACON Consortium (M/s.) v. Kerala State Electricity Board Limited** [2023 (3) KHC 499] observed like this: _“60. The question with respect to the sanctity or solemnity of the terms and conditions contained in a Notice Inviting Tender was considered by the Apex Court in various judgments. In Vidarbha Irrigation Development Corporation and Others v. Anoj Kumar, 2020 (17) SCC 577, it was held as follows at paragraph 16 thus:_ _16. It is clear even on a reading of this judgment that the words used in the tender document cannot be_ WP(C) NO. 1649 OF 2023 11 _ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional Court._ _61. In Sterling Computers Ltd. v. M & N Publications Ltd., 1993 (1) SCC 445, it was held by the Apex Court at paragraph 12 thus:_ _12. At times it is said that public authorities must have the same liberty as they have in framing the policies, even while entering into contracts because many contracts amount to implementation or projection of policies of the Government. But it cannot be overlooked that unlike policies, contracts are legally binding commitments and they commit the authority which may be held to be a State within the meaning of Art.12 of the Constitution in many cases for years. That is why the Courts have impressed that even in contractual matters the public authority should not have unfettered discretion. In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow_ WP(C) NO. 1649 OF 2023 12 _the norms recognised by Courts while dealing with public property. It is not possible for Courts to question and adjudicate every decision taken by an authority, because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi - judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the Courts, such decisions are upheld on the principle laid down by Justice Holmes, that Courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of play in the joint to the executive._ _62. In Raunaq International Ltd. v. I.V.R. Construction Ltd., 1999 (1) SCC 492, it was held as follows at paragraph 9 thus:_ _9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations. These would be:_ _(1) the price at which the other side is willing to do the_ WP(C) NO. 1649 OF 2023 13 _work;_ - _(2) whether the goods or services offered are of the requisite specifications;_ - _(3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important;_ - _(4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality;_ - _(5) past experience of the tenderer and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often_ - _(7) the ability of the tenderer to take follow - up action, rectify defects or to give post - contract services. xxxx xxxx xxxx'_ _63. In Global Energy Ltd. v. Adani Exports Ltd., 2005 (4) SCC 435, it was held that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of the tender, as they are in the realm of contract, unless they are wholly arbitrary, discriminatory or actuated by malice._ _64. In Air India Ltd. v. Cochin International Airport Ltd., 2000 (2) SCC 617, it is held as follows at paragraph 7:_ _7. The law relating to award of a contract by the State,_ WP(C) NO. 1649 OF 2023 14 _its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India, 1979 (3) SCC 489, Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, 1981 (1) SCC 568, CCE v. Dunlop India Ltd., 1985 (1) SCC 260 : 1985 SCC (Tax) 75, Tata Cellular v. Union of India, 1994 (6) SCC 651, Ramniklal N. Bhutta v. State of Maharashtra, 1997 (1) SCC 134 and Raunaq International Ltd. v. I.V.R. Construction Ltd., 1999 (1) SCC 492. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision - making process and_ WP(C) NO. 1649 OF 2023 15 _interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision - making process the Court must exercise its discretionary power under Art.226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene._ _65. Therefore, on the basis of the legal propositions of law laid down by the Apex Court, it is clear that the terms of invitation to tender are not open to judicial scrutiny, the same being a subject matter of a commercial venture entered into by and between a State authority and a contractor. It may be true, the authority may be having sufficient leverage and freedom for a necessary purpose and to deal with the possibility of functionality while executing the contract. However, the authority is not vested with power to overlook the criteria fixed by it as a mandatory requirement to pre - qualify a bidder to process the documents submitted by the bidder.”_ In the light of the above principle, I am of the considered WP(C) NO. 1649 OF 2023 16 opinion that there is nothing to interfere with Ext.P2. There is no malafides or unreasonableness or arbitrariness in the decision making which leads to Ext P2. Therefore there is no merit in this case and hence this writ petition is dismissed. SKS/JV Sd/- **P.V.KUNHIKRISHNAN JUDGE** WP(C) NO. 1649 OF 2023 17 ## **APPENDIX OF WP(C) 1649/2023** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF RELEVANT PAGES OF E-TENDER NOTICE NO.PHC/CHN/JJM/6267/2022 DTD. 23.11.2022 ISSUED BY 4TH RESPONDENT Exhibit P2 TRUE COPY OF ORDER NO.PHC/CHN/JJM/6267/2022 DTD. 12.01. 2023 ISSUED BY 4TH RESPONDENT Exhibit P3 TRUE COPY OF ORDER DTD. 12.01.2023 IN W.P. (C). NO. 966 OF 2023 RESPONDENT EXHIBITS EXHIBIT R5(a) True copy of the Notice Inviting Tender PETITIONER EXHIBITS Exhibit P4 . TRUE COPY OF PRICE SCHEDULE DTD. NIL APPENDED TO TOTAL BID