K.T. Manoj v. Kerala Water Authority & Ors. (W.P.(C) Nos. 3702/2023 & 3850/2023)

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE VIJU ABRAHAM`** ``` FRIDAY, THE 18[TH] DAY OF AUGUST 2023 / 27TH SRAVANA, 1945 ``` ``` WP(C) NO. 3702 OF 2023 ``` ## **`PETITIONER:`** ``` K.T.MANOJ, S/O THOMAS,AGED 47 YEARS, KEECHERI HOUSE,KUPPADI P.O., S.BATHERI, WAYANAD DISTRICT - 673592 ``` ``` BY ADV SAJEEV KUMAR K.GOPAL ``` ## **`RESPONDENTS:`** ``` 1KERALA WATER AUTHORITY REPRESENTED BY THE MANAGING DIRECTOR, JALA BHAVAN,THIRUVANANTHAURAM - 695003 2THE SUPERINTENDING ENGINEER OFFICE OF THE SUPERINTENDING ENGINEER, PUBLIC HEALTH CIRCLE, KERALA WATER AUTHORITY, MALAPARAMBU P.O.,KOZHIKODE- - 673009 ADDL.R3HRL ENTERPRISES REPRESENTED BY ITS MANAGING PARTNER, P. AHAMMEDKUTTY, AGED 61 YEARS, S/O. SAIDUTTY, RESIDING AT PARAKKAL HOUSE, CHERUVADI.P.O., MAVOOR, KOZHIKODE - 673 661. ``` ``` ADDL.R3 IMPLEADED AS PER ORDER DATED 20.03.2023 IN IA.1/2023 IN WP(C) NO.3702/2023 ``` ``` ADV.JOSHY V.V, SC ADV.P.M.JOHNY R3 BY ADVS.TESSY JOSE,ELDHO PAUL ``` ``` THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18.08.2023, ALONG WITH WP(C).3850/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) Nos.3702 & 3850 of 2023 2 ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE VIJU ABRAHAM`** ``` FRIDAY, THE 18[TH] DAY OF AUGUST 2023 / 27TH SRAVANA, 1945 WP(C) NO. 3850 OF 2023 ``` ## **`PETITIONER:`** ``` K.T.MANOJ,S/O THOMAS,AGED 47 YEARS, KEECHERI HOUSE,KUPPADI P.O., S.BATHERI, WAYANAD DISTRICT, PIN - 673592 ``` ``` BY ADV SAJEEV KUMAR K.GOPAL ``` ## **`RESPONDENTS:`** - **`1 KERALA WATER AUTHORITY REPRESENTED BY THE MANAGING DIRECTOR, JALA BHAVAN,THIRUVANANTHAURAM - 695003`** ``` 2THE SUPERINTENDING ENGINEER OFFICE OF THE SUPERINTENDING ENGINEER, PUBLIC HEALTH CIRCLE, KERALA WATER AUTHORITY, MALAPARAMBU P.O.,KOZHIKODE - 673009 ``` ``` ADDL.R3REENA ENGINEERING AND CONTRACTING COMPANY LTD., 602, SHIV TOWER, PATTO PLAZA, PANAJI, GOA: 403 001. REP. BY ITS MANAGING DIRECTOR. IS IMPLEADED AS PER ORDER DATED 10.03.2023 IN IA NO. 1/2023 IN WP(C) NO. 3850/2023. ``` ``` ADV.JOSHY V.V ``` ``` ADV.P.M.JOHNY R3 BY ADV.P.SHANES METHAR ``` ``` THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18.08.2023, ALONG WITH WP(C).3702/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) Nos.3702 & 3850 of 2023 3 ## **VIJU ABRAHAM, J.** **................................................................. W.P.(C) Nos.3702 & 3850 of 2023 .................................................................** Dated this the 18[th] day of August, 2023 ## **JUDGMENT** ## **W.P(C) No.3702 of 2023** Petitioner has approached this Court seeking to quash Exts.P8 and P9 and for a direction to the respondents to treat the petitioner as pre-qualified and consider him for further tender process with respect to the work mentioned in Exts.P1 and P2 tender notices. 2. Petitioner is a PWD contractor. The respondents invited Ext.P1 e-tender No.SE/PHC/KKD/71/2022/23 dated 17.12.2022 as part of the project, Jal Jeevan Mission (JJM)-CWSS to Tariyodu PozhuthanaKottathara and Vengapilly Panchayat in Wayanad District and the name of the work is “ _laying distribution system and providing FHTC in zone 1,2,3,4 and 5 of Pozhuthana Panchayat in Wayanad District”_ . The location of the project is Pozhuthana Panchayat. The 2[nd] respondent also invited Ext.P2 e-tender vide No.SE/PHC/KKD/78/2022-23 dated 17.12.2022 in connection with the project, Jal Jeevan Mission, (JJM)-CWSS to Vellamunda- WP(C) Nos.3702 & 3850 of 2023 4 Thondarnadu, Thavinjal and Panamaram in Wayanad District and the name of the work is “ _laying distribution system and providing FHTC to Thondarnadu Panchayat in Wayanad District”_ . The location of the work is at Thondarnadu Panchayat. 3. Ext.P3 is the notice Inviting tender and as per Ext.P3 the net worth of the applicant required for the work is more than Rs.256 lakhs. Clause No.7.17.1.1 of Ext.P3 is a criteria regarding financial standing and the petitioner submits that he qualifies the conditions contained therein. To substantiate the same, the petitioner has produced Exts.P5 to P7 income details as well as the certificates issued by the Chartered Accountant including the income tax return for assessment year 20222023 and also Ext. P12 format in Form Q4. The special committee for pre-qualification decided to disqualify the petitioner provisionally on the ground of lack of financial stability and the petitioner was directed to submit his objections. Petitioner submitted his objection and later on the committee considered the said objection and as per Ext.P8 decided to reject the tender pertaining to Ext.P1 tender notice. In respect of the tender pertaining to Ext.P2 tender notice was also rejected stating the very same reason as per Ext.P9. It is aggrieved by the same the petitioner has approached this Court. WP(C) Nos.3702 & 3850 of 2023 5 4. The specific case of the petitioner is that as per Clause 7.17.1.1 of Exts.P3 and P4 the net worth required is Rs.256 lakhs and Rs.306 lakhs respectively and the total net worth of the applicant is Rs.14.28 crores and the turn over for the year ending on 31.03.2022 is Rs.24,20,52,969.62 and therefore the applicant is having the required net worth as specified in Exts.P3 and P4. However, while issuing Exts.P8 and P9 the respondents took the net worth of the petitioner as Rs.93,89,421/- based on the annual return submitted by the petitioner which is the capital mentioned in the annual return which has nothing to do with the net worth. Therefore, it is contended that respondents grossly erred in taking the capital as net worth and rejected the tender and therefore Exts.P8 and P9 are vitiated. Ext.P12 which is the identification and financial data sheet submitted as directed by the Kerala Water Authority and the petitioner submits that he has satisfied the requisite financial stability requirement and that the stand taken in Exts.P8 and P9 are quite contrary to the same. 5. The respondent Water Authority has filed a detailed counter affidavit wherein it is stated that the tenders were invited for two works, viz., (i) tender No.SE/PHC/KKD/71/2022-23 dated 17.12.2022 in respect of the work “Jal Jeevan Mission (JJM) - CWSS to Thariyodu WP(C) Nos.3702 & 3850 of 2023 6 Pozhuthana - Kottathara and Vengapally Panchayat in Wayanad District - Laying distribution system and providing FHTCs in zone 1,2,3,4 and 5 of Pozhuthana Panchayat in Wayanad District” and (ii) tender No.SE/PHC/KKD/78/2022-23 dated 17.12.2022 in respect of the work “Jal Jeevan Mission (JJM) : CWSS to VellamundaThondarnadu, Thavinjal and Panamaram in Wayanad District - Laying distribution system and providing Functional Household Tap Connections to Thondarnadu Panchayat in Wayanad District”. It is submitted that the special committee verified the claim of the petitioner that he is qualified. As per Clause 7.17.1.1 of the notice inviting tender, the minimum net worth required for the first work "Jal Jeevan Mission (JJM) CWSS to Thariyodu Pozhuthana - Kottathara and Vengapally Panchayath in Wayanad District - Laying distribution system and providing FHTCS in zone 1, 2, 3, 4 and 5 of Panchayath in Wayanad District" is Rs.256 Lakhs. Ext.R1(a) is the copy of the notice inviting tender, Vol.I and as per the Clause 7.17.1.1.a of the notice inviting tender, the net is to be calculated from the certified annual accounts for the previous financial year submitted by the contractor. Further, the notice inviting tender, FORM Q4, also stipulates that the net worth is to be ascertained from the latest balance sheet. The net worth of the WP(C) Nos.3702 & 3850 of 2023 7 bidder, Sri. K.T. Manoj, the petitioner herein as per certified annual accounts (FY 2021-2022) was only Rs.93,89.421.00, which is not sufficient to meet the qualifying criteria. Under the circumstances, the committee decided not to review its earlier decision to disqualify the bidder, Sri. K.T. Manoj, the petitioner. It is submitted that as per Clause 7.17.1.1 of the notice inviting tender, the minimum net worth required for the second work "Jal Jeevan Mission (JJM): CWSS to Vellamunda Thondarnadu, Thavinjal and Panamaramin in Wayanad District - Laying distribution system and providing Functional Household Tap Connections to Thondarnadu Panchayath in Wayanad District" is Rs.306 Lakhs. The net worth of the petitioner as per certified annual accounts (FY 2021-2022) was only Rs.93,89,421/-, which was not sufficient to meet qualifying the criteria. So on the basis of the same it is the contention of the learned standing counsel appearing for the Water Authority, the petitioner does not meet the qualifying criteria as mandated in Clause 7.17.1.1 of the notice inviting tender. 6. The 3[rd] respondent has also filed a counter affidavit in which it is stated that the petitioner does not have the financial qualification as mentioned in Clause 7.17.1.1. As per the above Clause, the net worth WP(C) Nos.3702 & 3850 of 2023 8 is to be calculated from the certified annual accounts for the previous financial year and after evaluation what he owes and owns. Thus after evaluating in this manner, the net worth of the petitioner is only Rs.93,89,421/- which is less than the criteria mentioned as per the above clause. It is submitted that the special committee for prequalification met on 19.01.2023 and observed that all the other bidders except the petitioner has sufficient qualification and the petitioner was not pre-qualified. But the petitioner submitted representation for prequalifying him. But the committee after verifying the claim as per Clause 7.17.1.1. found that the net worth of the petitioner is only Rs.93,89,421/- which is much below the required criteria and thereby the petitioner was not pre-qualified. ## **W.P (C) No.3850 of 2023** 7. The above writ petition has been filed challenging Exts.P8 and P9 and for a direction to the respondents to treat the petitioner as prequalified and consider the petitioner for further tender process with respect to the work mentioned in Exts.P1 and P2. In this case, also the petitioner is same as in W.P(C) No.3702 of 2023. The petitioner has participated in Exts.P1 and P2 tenders, i.e., (i) e-tender No.SE/PHC/KKD/77/2022/23 dated 17.12.2022 as project, viz. Jal WP(C) Nos.3702 & 3850 of 2023 9 Jeevan Mission (JJM)-CWSS Vellamunda-Thondernadu-Tavinjal and Panamaram in Wayanad District. The name of the work is laying distribution system providing FHTC in Panamaram Panchayat in Wayanad District. The location of the project is Panamaram Panchayat and (ii) e- tender vide No.SE/PHC/KKD/65/2022-23 dated 09.12.2022 as project, viz. Jal Jeevan Mission(JJM)/CWSS to Eramala adjoining 7 Panchayats in Kozhikode District. The nature of the work is construction of 15 lakhs litres GLSR at Edakandi Kunnu and laying distribution system and providing FHTC to Onchiyam Panchayat. The location of the work is at Onchiyam Panchayat. Petitioner submits that he qualifies the tender conditions specified in the notice inviting tenders and accordingly, he participated in the e-tender proceedings. Clause No.7.17.1.1 of Exts.P1 and P2 deals with the financial standing and Clause No.7.17.1.2.14 deals with the experience. When the special committee rejected the tenders submitted by the petitioner in respect of the abovesaid two works stating the reason that the net worth of the petitioner as per the certified annual account for the financial year does not meet the qualifying criteria and further that since the petitioner has not produced any certificate of a completed work for proof of experience along with the tender documents. WP(C) Nos.3702 & 3850 of 2023 10 Petitioner on the strength of Exts.P5 to P7 documents would submit that he satisfies the qualification as prescribed in Clause 7.17.1.1 and as regard the non-production of experience certificate of a completed work petitioner would submit that as per Clause No.7.17.1.2.14, no experience is required for components costing less than 10% of the tender PAC and that Sub-clauses (b) and (c) of the said Clause are applicable if the cost of the item is above 10% of the estimated PAC. Petitioner submits that the cost of the components with respect to Ext.P1 is only 2.44% of the PAC. Similarly in respect of the work as per Ext.P2, the estimated PAC is Rs.30,49,13,862/- and the cost of components is only Rs.18,22,462/- which is only 0.6% of the PAC and in view of the same, no past experience is required in respect of the said works. Even regarding past experience, the petitioner has produced Ext.P10 which is an experience certificate issued by the Assistant Engineer, PH Section, Kerala Water Authority, Sulthan Bathery. Though the petitioner contended that no previous experience is required, going by Ext.P10 he had sufficient experience and on the basis of Ext.P10 the rejection as per Exts.P8 and P9 is absolutely arbitrary and unjust. WP(C) Nos.3702 & 3850 of 2023 11 8. Respondents 1 and 2 have filed a detailed counter affidavit wherein it is stated that the pre-qualification special committee verified the tender documents and found that the petitioner does not have sufficient qualification in terms of financial capacity as per Clause 7.17.1.1 of NIT (Notice Inviting Tender). As such the committee decided to disqualify the petitioner and to pre-qualify provisionally the remaining bidders who had sufficient qualification. Time of two days was given to the bidders for submitting their objections if any, regarding qualification. Accordingly, the petitioner submitted objection against his disqualification, requesting for pre-qualifying him for the tender by considering his eligibility based on the documents produced by him. The special committee verified the above claims. As per Clause 7.17.1.1 of Ext.R1(a) of NIT, Vol.I, the minimum net worth for the work is Rs.428 lakhs and as per Clause 7.17.1 1.a, the net worth is to be calculated from the certified annual accounts for the previous financial year submitted by the contractor. Further, in NIT FORM Q4, it is stipulated that the net worth from the latest balance sheet only is acceptable. The net worth of the petitioner as per certified annual accounts (FY 2021-2022) is only Rs.93,89,421/-, which is not sufficient to meet the required criteria. It is submitted that as per Clause WP(C) Nos.3702 & 3850 of 2023 12 7.17.1.2.1, no experience is insisted for any component of the work costing less than 10% of the PAC. A component means an appendix of the BOQ like "laying distribution system”, "cost of distribution system", etc. In this case cost of laying distribution system is more than 10% cost of PAC. As per clause 7.17.1.2.14 supplying and laying of water supply pipes above 400 mm and up to and including 800 mm diameter pipes of any material, experience will be insisted with respect to the highest diameter of the pipe in the scope of the work. The tender includes 488 m of 500 mm DI pipe and 1317 m of 450 mm Dl pipe. Hence experience in supplying and laying of 1000 m of 300 mm or higher sized pipes of any material in the past in a single work for his sole/joint venture/partner of joint venture is required. The bidder did not produce any experience certificate of a completed work for proof of experience along with tender documents. His claim is on an ongoing work which is not completed so far. Since the work is not completed and commissioned, his claim has no legal sanctity and as such not acceptable. Under the circumstances, the committee decided not to review its earlier decision to disqualify the bidder, the petitioner herein. Therefore, it is submitted by the learned standing counsel that WP(C) Nos.3702 & 3850 of 2023 13 the petitioner does not satisfy both these conditions and found that the petitioner is not pre-qualified. 9. A detailed counter affidavit has been filed by the 3[rd] respondent, who is the successful bidder. In paragraph 6 of the counter affidavit it is stated that the bid of the petitioner was disqualified for two reasons, (i) the petitioner does not have specific experience and (ii) the petitioner does not have sufficient financial capacity as per Clause 7.17.2.14. As per Ext.P3, the net worth required for the work is 305 lakhs as per 17.17.1.1. and Clause 7.17.1.1.a net worth is to be calculated from the certified annual accounts for the previous financial year. The petitioner has mischievously omitted to produce along with the writ petition a copy of certified annual accounts (FY-2021-2022), which he has produced along with his bid documents. From the certified annual account (FY-2021-22) his net worth is only Rs.93,89,421.00 which is far below the qualifying criteria of Rs.305 lakhs. Exts.P5 and P6 documents cannot be considered for the purpose of assessing the annual turnover. Those documents are not certified annual accounts. The averments in paragraphs 5 and 6 of the writ petition are denied as being false. It is a condition of the tender that the experience certificate should be of a completed project. A WP(C) Nos.3702 & 3850 of 2023 14 reading of Clause 7.17.1.2 in Ext.P3 would make it is clear that ongoing work cannot be taken as past experience for awarding the work. 10. It is the submission of the respondents including the Water Authority that JJM is a sub-limited public welfare water supply scheme which is also assisted by the Central Government. Any attempt to prolong the scheme on baseless grounds whatsoever is against the public welfare particularly people who live in urban areas and remote places where water is a rare commodity. In that view, delay in implementing the scheme is a basic human rights violation of such people who are the beneficiaries of the said project and therefore sought for dismissal of the writ petition. 11. I have heard the rival contentions of both sides. 12. In W.P.(C) No.3702 of 2023 two tenders submitted in respect of two works were rejected for the reason that the petitioner has no adequate financial stability. Whereas in respect of the other two works, the rejection of which is challenged in W.P.(C) No.3850 of 2023 the tenders have been rejected for the reason that the petitioner has no financial stability and also on the ground that the petitioner has no past WP(C) Nos.3702 & 3850 of 2023 15 ## experience. Clause 7.17.1.1 of Ext.P3 tender produced in W.P.(C) ## No.3702 of 2023 reads as follows: ## _“7.17.1.1. Financial Standing_ _In case of joint venture/partnership, financial standing of all partners may be added together for explaining the capacity for pre-qualification subject to clause 7.4.1 of this NIT. It should be ensured by the tenderer that all the documents furnished are duly verified and authenticated by him. No additional documents will be called for or accepted after the submission of the tender to prove financial standing. (A) Net worth_ _1. For all works above 300 lakhs, net worth alone shall be the main criteria for qualifying the tenderer financially irrespective of the bid capacity. From certified annual accounts for the previous financial year submitted by the contractor, his net worth shall be evaluated based on what he owns and owes. The amount owned consists of total assets in the form of fixed and current assets and the amount owed are the total liabilities. The details shall be furnished in the format Q4._ _The net worth of the applicant shall be more than 15% of annual turnover (taken as average over the preceding 3 years). Also the net worth shall not be less than 10% of the average annual estimated cost of this contract. Minimum period of calculation of net worth shall be considered as one year even if the time of completion of work is less than one year. For time of completion more than one year, the net worth calculation shall be done proportionate to the actual period. Example:_ _PAC ---6,00,00,000 Completion period 18 months_ - _(A) Net worth_ _1. 10% of annual estimate cost = (6,00,00,000/1.5) x (10/100) = 40,00,000 2. 15% of the annual turn overlooking_ _Minimum turn over as per clause B = 1,20,00,000_ _Minimum net worth = 1,20,00,000 x 15/100_ _= 18,00,000_ _Maximum of the two, Rs.40,00,000_ _2. The net worth of the applicant shall be more than Rs.256 Lakhs._ _3. In the case of joint venture, every member shall furnish credit rating from a scheduled bank, which shall be equivalent to a minimum of 10% of the estimated cost._ _4. If the Net worth is less than the required amount but greater than two third of the same, then there should be an over draft facility available from a scheduled Bank amounting to twice the amount by which the net worth is less which is to be submitted in format Q.4B._ - _(B) Annual Turn Over_ WP(C) Nos.3702 & 3850 of 2023 16 _The minimum average annual turnover of the tenderer submitting this bid shall be greater than 20% of the estimated cost of the work subject to a maximum requirement of Rs.500 lakhs._ _Example:_ _PAC = 600,00,000 Completion period = 18 months._ _Minimum annual turnover = 20% of the PAC subject to a maximum of 500 lakhs i.e.600,00,000 x 20/100 = 1,20,00,000_ _1 The minimum average annual turnover of the tenderer submitting this bid shall be greater than Rs.500 Lakhs._ _2. The average annual turnover of the tenderer shall be calculated from the certified annual accounts of the preceding 3 financial years._ _From the certified annual accounts of the bidder who is having the required average annual turnover for the preceding two years and turnover along with one year good financial standing during the last 5 years.”_ Clause 7.17.1.2. of Ext.P3 produced in W.P.(C) No.3850 of 2023 deals with the past experience. 13. Let me first consider whether the reason stated for rejecting the tender on the ground of financial stability is in accordance with the law. Petitioner submits that he has produced sufficient documents as is evident from Exts.P5 to P7 to substantiate that he has sufficient financial stability in respect of two works mentioned in W.P.(C) No.3702 of 2023. As contended by both sides, as per Clause 7.17.1.1 of notice inviting tender the net worth is to be calculated from the certified annual accounts for the previous financial year submitted by the contractor. As regard the first work in respect of W.P.(C) No.3702 of 2023, the minimum net worth required was Rs.256 lakhs and as regards the second work in the said writ petition, the minimum net WP(C) Nos.3702 & 3850 of 2023 17 worth required was Rs.306 lakhs. As regard the first work in W.P.(C) No.3850 of 2023, the net worth required was Rs.428 lakhs, whereas in respect of the second work, the net worth required was Rs.305 lakhs. But the net worth of the bidder, the petitioner herein, as per the certified annual accounts for the financial year 2021-2022 was only Rs.93,89,421/- and therefore not sufficient to meet the qualifying criteria. It is seen from Exts.P8 and P9 impugned orders that the prequalification selection committee verified the documents submitted by the petitioner to verify his net worth and found that as per Clause 7.17.1.1a, the net worth is to be calculated from the certified annual accounts for the previous financial year submitted by the contractor and further that NIT form Q4 identification and financial data sheet also stipulates that net worth from the last balance sheet only is acceptable. As per the pre-qualification selection committee, the net worth of the petitioner herein as per the annual accounts was only Rs.93,89,421/- which was not sufficient to meet the qualifying criteria and it is in the said circumstance that the petitioner was held to be not financially qualified. Petitioner has produced the format Q4 which is the identification and financial data sheet as Ext.P12 in W.P.(C) No.3702 of 2023 which shows that the total asset of the petitioner is WP(C) Nos.3702 & 3850 of 2023 18 Rs.7,31,04,042.95 whereas the total liability of the petitioner is Rs.6,37,14,621.63. On the basis of the said information given in Ext.P12, the learned standing counsel would contend that the difference between the said two amounts will come to only Rs.93,89,421/- which is far below the minimum net worth required for the works in question. Therefore, the claim of the petitioner was rejected on the said ground of not having the minimum net worth as required as per the tender condition. 14. In respect of the second reason stated in W.P.(C) No.3850 of 2023 for rejecting the tender submitted by the petitioner, it is the contention of the petitioner that Clause 7.17.1.2 of the tender condition is regarding past experience and Clause 7.17.1.2.1 of TPAC specifies that no experience is insisted for any component or work costing less than 10% of TPAC. The petitioner would contend on the basis of Ext.P15 which is the abstract estimate for various heads of works that none of these components of the work cost more than 10% of TPAC and on the said basis, it is the contention of the petitioner that no past experience is required. The alternative contention raised by the petitioner is that even if past experience is required, going by Ext.P10 petitioner has past experience in conducting similar works as certified WP(C) Nos.3702 & 3850 of 2023 19 by the department. To which the learned standing counsel for the Water authority on the basis of paragraphs 6 and 7 of the counter affidavit would contend that the argument of the petitioner that none of the components shown in the abstract estimate in Ext.P15 is more than 10% of the PAC is absolutely without any basis. He would contend that each item mentioned in the abstract estimate is not the component as provided in Clause 7.17.1.2.1 and whereas the component means an appendix of the BOQ like “laying distribution system, cost of the distribution system, etc”. 15. To explain the position further, the learned standing counsel as well as the learned counsel appearing for the 3[rd] respondent would contend that item No.1 shown in Ext. P15 comes under the head Appendix A : working charges - Panamaram Panchayat, the total amount was shown to be Rs.12,76,52,611.89 and whereas item No.2 comes under the head Appendix B : cost of materials - Panamaram Panchayat is shown as Rs.20,35,56,391.81. Likewise, each component shown in Ext.P15 was more than 10% of the PAC and therefore the contention of the petitioner that the components for work is less than 10% of the PAC is only to be rejected. It is further contended that as per Clause 7.17.1.2.14 for supplying and laying of WP(C) Nos.3702 & 3850 of 2023 20 water supply pipes above 400 mm upto and including 800 mm diameter pipes of any material, the experience will be insisted with respect to the highest diameter of the pipe in the scope of the work. It is further submitted that the petitioner could not produce any experience certificate of a completed work to prove experience along with the tender documents and that his claim being on an ongoing work which is not completed so far and commissioned. The petitioner cannot rely on Ext.P10 to prove that he has previous experience in doing a work of a similar nature. A perusal of Ext.P10 would also reveal that the certificate which was produced by the petitioner is in respect of a work of which the date of completion of the work is 22.09.2023 and therefore, Ext.P10 certificate is only in respect of an ongoing work and not a completed work. 16. As regards the rejection of the claim of the petitioner on the basis of financial capacity, it could be seen that the respondent Water Authority has taken a decision on the same after going through the details furnished in Ext.P12 especially regarding the total assets and liabilities, the difference of which is only 93,89,421/-. Going by the counter affidavit filed by the Water Authority, the technical bid was opened by the Chief Engineer, Northern Region for pre-qualification WP(C) Nos.3702 & 3850 of 2023 21 and the special committee for pre-qualification approval met on 19.01.2023 at the chambers of the Chief Engineer, Northern Region and verified the tender documents in detail and the committee observed that the petitioner does not have sufficient qualification in terms of financial capacity as per Clause 7.17.1.1 of the notice inviting tender and after a detailed discussion the committee decided to disqualify the petitioner and to pre-qualify provisionally the remaining bidders who have sufficient qualification. It is also stated in the counter affidavit that two days time was given to the petitioner for submitting his objection, if any, regarding pre-qualification and thereupon the petitioner has submitted a representation against disqualification requesting to pre-qualify him. The special committee verified the said claim again and found that the petitioner does not possess the minimum net worth required for the works in question and therefore decided to disqualify the petitioner. I am of the opinion that the details submitted by the petitioner have been fully considered by the special committee for pre-qualification approval and after a tentative decision objection was called for from the petitioner and after considering the objection that the present decision was taken to hold that the petitioner is not pre-qualified. I am of the opinion that the said process of WP(C) Nos.3702 & 3850 of 2023 22 disqualification was after affording an opportunity to represent and was taken in accordance with the law after verifying the details submitted by the petitioner. 17. As regards the second ground raised in respect of the lack of experience, the contention of the petitioner based on Ext.P15 produced in W.P.(C) No.3850 of 2023 that each of the components under various heads is less than 10% of the PAC and therefore no experience is required is only to be rejected. The Water Authority has taken a specific contention that each components are to be taken in full and if each component is taken into consideration, the component of the cost of work is more than 10% of the PAC and therefore petitioner has to produce an experience certificate in this regard. Furthermore, Ext.P10 experience certificate produced by the petitioner is admittedly in respect of ongoing work and not a completed work and therefore the committee decided not to accept the said certificate. I find no infirmity in rejecting Ext.P10 and the stand that the components of the work is costing more than 10% of the PAC. 18. The Apex Court has time again reminded the courts regarding the scope of judicial review/interference in contractual matters and reminded of the limited scope of judicial intervention. The Apex Court WP(C) Nos.3702 & 3850 of 2023 23 has also reminded that entertaining the writ petition and granting stay would ultimately delay the execution of the projects and that would seriously impede the execution of the projects of public importance and disables the State and its agencies/instrumentalities from discharging the constitutional and legal obligation towards the citizens and therefore the High Courts should be extremely careful and circumspect in exercise of its discretion while entertaining such petitions and while granting order of stay in such matters. The Apex Court in _**Tata Cellular v. Union of India (1994) 6 SCC 651**_ has categorically held that the court does not sit as a court of appeal but merely reviews the manner in which the decision was made and the court does not have the expertise to correct the administrative decision and if a review of the administrative decision is permitted it would be substituting its own decision without the necessary expertise which itself may be fallible. The Apex Court in _**Agmatel India Private Limited v. Resoursys Telecom and others (2022) 5 SCC 362**_ while considering a case where the High Court interfered with the view taken by the tender inviting authority in rejection of the technical bid of the petitioner therein for want of fulfilment of past performance criteria held that where a decision is taken that is manifestly in consonance with WP(C) Nos.3702 & 3850 of 2023 24 the tender document or subserve the purpose for which the tender is quoted the court should follow the principle of restrain and technical evaluation or comparison by the court would be impermissible. The Apex Court further held that the author of the tender document is taken to be the best person to understand and appreciate its requirements and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purpose of the tender, the court would prefer to keep restraint. Further it was also held that the technical evaluation or comparison by the court is impermissible and even if the interpretation given to the tender document by the person inviting offers is not at all acceptable to the constitutional court, that by itself would not be a reason for interfering with the interpretation given. Paragraph 26 of the said judgment reads as follows: _“26. The abovementioned statements of law make it amply clear that the author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that the technical evaluation or comparison by the Court is impermissible and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the constitutional court, that, by itself, would not be a reason for interfering with the interpretation given.”_ WP(C) Nos.3702 & 3850 of 2023 25 The Apex Court in _**Tata Motor Limited v. Brihan Mumbai Electric**_ _**Supply & Transport Undertaking (BEST) and others, 2023 SCC OnLine SC 671**_ has also considered a similar case and in paragraphs 52 to 54 held as follows: _“52. Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out. The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Association of Registration Plates v. Union of India and Others, reported in (2005) 1 SCC 679._ _53. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that 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 powers under_ Article 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_ WP(C) Nos.3702 & 3850 of 2023 26 _it comes to a conclusion that overwhelming public interest requires interference, the court should interfere._ _54. As observed by this Court in Jagdish Mandal v. State of Orissa and Others, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.”_ The Apex Court in _**N.G.Projects Limited v. Vinod Kumar Jain and others, (2022) 6 SCC 127**_ while considering a case relating to a tender and its rejection, etc. examined the scope of interference by the constitutional court and the nature of the reliefs that could be granted in such circumstances. The Court in _**N.G.Projects Limited**_ ‘s case supra has held that the court should be even more reluctant in interfering with the contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues and the approach of the court should be not to find fault with magnifying glass in its hand rather the court should examine as to whether the decision making process is after complying with the procedure contemplated by the tender conditions in full. Even if the WP(C) Nos.3702 & 3850 of 2023 27 court finds that there is total arbitrariness or that tender has been granted in a malafide manner, still the court should refrain from interfering in the grant of tender but instead, relegate the parties to seek damages for the wrongful exclusion rather than to injunct execution of the contract. The injunction or inference with the tender leads to additional cost on State and also against public interest which would result in sufferings to the State and its citizens. Paragraph 23 of the said judgment reads as follows: “ _23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the presentday Governments are expected to work.”_ WP(C) Nos.3702 & 3850 of 2023 28 I have found that the procedure followed by the tender evaluation committee was in accordance with the terms of the tender and the petitioner was given a chance to file his objection and thereafter only the tender evaluating committee decided to reject the tender of the petitioner on the two grounds stated above. In view of the facts stated above and also the judgments of the Apex Court as to the scope of interference of constitutional court in the matter of tenders, etc. I am of the view that the petitioner is not entitled for any of the reliefs sought for in these writ petitions and these writ petitions are accordingly dismissed. Sd/- ## **VIJU ABRAHAM** **JUDGE** cks WP(C) Nos.3702 & 3850 of 2023 29 ## **`APPENDIX OF WP(C) 3702/2023`** ``` PETITIONER EXHIBITS ``` - `Exhibit P1 TRUE COPY OF THE E-TENDER NOTICE NO.SE/PHC/KKD/71/2022/23 DATED 17-122022.` - `Exhibit P2 TRUE COPY OF THE E-TENDER NOTICE NO. SE/PHC/KKD/78/2022-23 DATED 17-122022.` - `Exhibit P3 TRUE COPY OF THE RELEVANT PORTION OF THE NOTICE INVITING TENDER WITH RESPECT TO E-TENDER NO. SE/PHC/KKD/71/2022/23.` - `Exhibit P4 TRUE COPY OF THE RELEVANT PORTION OF THE NOTICE INVITING TENDER WITH RESPECT TO E-TENDER NO. SE/PHC/KKD/71/2022/23.` - `Exhibit P5 TRUE COPY OF THE NET WORTH CERTIFICATE ISSUED BY THE CHARTERED ACCOUNTANT NAMELY THOMAS C.S. AND ASSOCIATES` - `Exhibit P6 TRUE COPY OF THE TURN OVER CERTIFICATE ISSUED BY THE CHARTERED ACCOUNTANT, THOMAS C.S. AND ASSOCIATES.` - `Exhibit P7 THE INCOME TAX RETURN OF THE PETITIONER FOR THE ASSESSMENT YEAR 2022-23` - `Exhibit P8 TRUE COPY OF THE ORDER VIDE NO.2649/D5/2022/PHC-KKD DATED 31-012023 WITH RESPECT TO REJECTION OF THE TENDER PERTAINING TO EXHIBIT P-1 TENDER NOTICE` ``` Exhibit P9TRUE COPY OF THE ORDER NO. TRUE COPY OF THE ORDER VIDE NO.2644/D5/2022/PHC- KKD DATED 30-01-2023 WITH RESPECT TO ``` WP(C) Nos.3702 & 3850 of 2023 30 ``` REJECTION OF THE TENDER PERTAINING TO EXHIBIT P-2 TENDER NOTICE ``` ``` Exhibit P10TRUE COPY OF THE SOLVENCY CERTIFICATE ISSUED BY THE SOUTH INDIAN BANK, SULTHANBATHERY BRANCH DATED 14-07-2022 Exhibit P11TRUE COPY OF THE FORMAL Q 4(A), FORM OF CERTIFICATE PRODUCED ALONG WITH THE TENDER DOCUMENTS Exhibit P12TRUE COPY OF THE FORMAT Q4 SUBMITTED BY THE PETITIONER ALONG WITH THE TENDER DOCUMENT DATED NIL ``` ``` RESPONDENT EXHIBITS EXHIBIT- R1(a)True copy of the NIT Vol. I. ``` WP(C) Nos.3702 & 3850 of 2023 31 ## **`APPENDIX OF WP(C) 3850/2023`** ``` PETITIONER EXHIBITS ``` ``` Exhibit P1TRUE COPY OF THE E-TENDER NOTICE NO.SE/PHC/KKD/77/2022/23 DATED 17-12- 2022 WITH RESPECT TO THE PROJECT Exhibit P2TRUE COPY OF THE E-TENDER NOTICE NO. SE/PHC/KKD/65/2022-23 DATED 09-12-2022 Exhibit P3TRUE COPY OF THE RELEVANT PORTION OF THE NOTICE INVITING TENDER WITH RESPECT TO E-TENDER NO. SE/PHC/KKD/77/2022/23 WHICH CONTAIN CLAUSE NO.7.17.1.1 DEALING WITH THE FINANCIAL STANDING AND CAUSE NO.7.17.1.2.14 WHICH DEALS WITH THE EXPERIENCE Exhibit P4TRUE COPY OF THE RELEVANT PORTION OF THE NOTICE INVITING TENDER WITH RESPECT TO E-TENDER NO. SE/PHC/KKD/65/2022/23 WHICH CONTAIN CLAUSE NO.7.17.1.1 DEALING WITH THE FINANCIAL STANDING AND CAUSE NO.7.17.1.2.14 WHICH DEALS WITH THE EXPERIENCE Exhibit P5TRUE COPY OF THE NET WORTH CERTIFICATE ISSUED BY THE CHARTERED ACCOUNTANT NAMELY THOMAS C.S. AND ASSOCIATES Exhibit P6TRUE COPY OF THE TURN OVER CERTIFICATE ISSUED BY THE CHARTERED ACCOUNTANT, THOMAS C.S. AND ASSOCIATES Exhibit P7TRUE COPY OF THE INCOME TAX RETURN OF THE PETITIONER FOR THE ASSESSMENT YEAR 2022-23 Exhibit P8TRUE COPY OF THE ORDER VIDE ``` WP(C) Nos.3702 & 3850 of 2023 32 - `NO.2643/D5/2022/PHC-KKD DATED 31-012023 WITH RESPECT TO REJECTION OF THE TENDER PERTAINING TO EXHIBIT P-1 TENDER NOTICE` - `Exhibit P9 TRUE COPY OF THE ORDER NO.3236/D1/2022/PHC-KKD DATED 02-022023 WITH RESPECT TO REJECTION OF THE TENDER PERTAINING TO EXHIBIT P-2` - `TENDER NOTICE` - `Exhibit P10 TRUE COPY OF THE EXPERIENCE` - `CERTIFICATE ISSUED BY THE ASSISTANT ENGINEER, PH SECTION, KERALA WATER AUTHORITY, SULTHANBATHERY DATED NIL` - `Exhibit-P11 True copy of the Solvency certificate issued by the South Indian Bank, Sulthanbathery Branch dated 14-07-2022` - `Exhibit-P12` - `True copy of the Format Q 4(A), Form of Certificate produced along with the tender document` ``` Exhibit-P13 ``` - `True copy of the general abstract pertaining to the work namely Jalajeevan Mission (JJM)-CWSS to Vellamunda-Thondarnadu -Tavinjal and Panamaram in Wayanad District` - `Exhibit-P14` - `True copy of the abstract estimate with respect to Jalajeevan Mission CWSS to Eramala` - `Exhibit P15` - `TRUE COPY OF THE ABSTRACT ESTIMATE IN` - `FULL WHICH IS A PART OF THE TENDER DOCUMENT WITH RESPECT TO EXHIBIT P-1 WORK, JAL JEEVAN MISSION (JJM)-CWSS TO VELLAMUNDA, THONDARNADU, THAVINJAL AND PANAMARAM IN WAYANADU DISTRICT DATED 17.12.2022` ``` Exhibit P16 ``` ``` TRUE COPY OF THE ABSTRACT ESTIMATE IN ``` WP(C) Nos.3702 & 3850 of 2023 33 ``` FULL WHICH IS A PART OF THE TENDER DOCUMENT WITH RESPECT TO EXHIBIT P-2 WORK JAL JEEVAN MISSION (JJM)-CWSS TO ERAMALA AND ADJOINING SEVEN PANCHAYATS IN KOZHIKODE DISTRICT ``` ``` RESPONDENT EXHIBITS ``` ``` EXHIBIT-R1(a)True copy of the copy of NIT Vol. I. (relevant pages) Exhibit-R3(a)A true copy of the proceedings of the Superintending Engineer, PH Circle, Kozhikode dated 20.1.2023 Exhibit-R3(b)A true copy of the proceedings of the Superintending Engineer, PH Circle, Kozhikode dated 2.2.2023 Exhibit-R3(c)A true copy of the financial bid opening summary ```