M.M. Varghese and M/S Parixit Industries Ltd. v. Kerala Water Authority and Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **FRIDAY, THE 23RD DAY OF NOVEMBER 2012/2ND AGRAHAYANA 1934** **WP(C).No. 6939 of 2012 (N) --------------------------** **PETITIONER(S): -----------------------** **1. M.M. VARGHESE, PROPRIETOR, COCHIN STEEL INDUSTRIAL COMPLEX, KIZHAKKAMBALAM P.O., ALUVA-683 562.** **2. M/S.PARIXIT INDUSTRIES LTD., 3RD, 7TH & 8TH FLOOR, SILVER OAKS, MAHALAXMI CROSS ROAD, PALDI, AHMEDABAD, (REP. BY ITS POWER OF ATTORNEY HOLDER SRI.M.M.VARGHESE).** **BY ADV. SRI.K.A.SALIL NARAYANAN.** ## **RESPONDENT/RESPONDENT:** **-------------------------------------------** **1. KERALA WATER AUTHORITY, JALA BHAVAN, THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING DIRECTOR, PIN- 695 001.** **2. THE SUPERINTENDING ENGINEER, KERALA WATER AUTHORITY, P.H.CIRCLE,** - **P.O. COLLECTORATE, KOTTAYAM-686 001.** **3. D.R.S. INFRA TECH PVT. LTD., FLAT NO.S.1, PRIYA APARTMENTS,** **RAJBHAVAN ROAD, SEMAGIGUDA, HYDERABAD.** **4. ABHIRAM INFRA PROJECTS PVT. LTD., FLAT NO.1A/4, 8-2618/2/2, R.K. RESIDENCY ROAD, NO.11 BANJARA HILLS, HYDERABAD.** **5. ALAPPUZHA MUNICIPALITY, MUNICIPAL BUILDINGS, ALAPPUZHA- 688 001, REPRESENTED BY IT'S SECRETARY.** **R1 & R2 BY ADVS. SRI.MILLU DANDAPANI, SC, KWA., SRI.JOSEPH JOHN, SC, KWA., SRI.GEORGE MATHEW, SC, KWA. R5 BY ADV. SRI.M.K.CHANDRAMOHAN DAS, SC, ALAPPUZHA MUTY.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17-11-2012, THE COURT ON 23-11-2012 DELIVERED THE FOLLOWING:** **rs.** **WP(C).No. 6939 of 2012 (N)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** - **EXHIBIT-P1. TRUE COPY OF THE ELECTRONIC TENDER NOTICE OF KERALA WATER AUTHORITY DATED 29.12.2011.** - **EXHIBIT-P2. COPY OF CLAUSE 2.3. REGARDING FINANCIAL CRITERIA AS STIPULATED BY THE RESPONDENT.** - **EXHIBIT-P3. COPY OF THE RELEVANT CLAUSE REGARDING EXPERIENCE CRITERIA.** - **EXHIBIT-P4. COPY OF THE ADDENDUM AMENDING P3.** - **EXHIBIT-P5. COPY OF THE WORK DETAILS SHOWING THE WORK EXECUTED BY THE 2ND PETITIONER.** - **EXHIBIT-P6. COPY OF THE LETTER FROM 1ST PETITIONER TO THE 1ST RESPONDENT DT. 06.03.2012.** - **EXHIBIT-P7. COPY OF THE LETTER FROM THE 1ST PETITIONER TO THE PRINCIPAL SECRETARY TO GOVERNMENT WATER RESOURCES DEPARTMENT DT. 10.03.2012.** - **EXHIBIT-P8 COPY OF THE RELEVANT PORTION OF THE BIDDING DOCUMENTS FOR UIDSSMT GURUVAYOOR-CHAVAKKAD WATER SUPPLY SCHEME** - **EXHIBIT-P9 COPY OF THE MINUTES OF THE MEETING HELD ON 30TH JANUARY 2010 IN THE CHAMBER OF THE PRINCIPAL SECRETARY, LSGD.** ## **RESPONDENT'S EXHIBITS:-** - **EXT.R1A COPY OF THE LETTER NO.PHCK/A2/2997/08 DATED 10/06/2009.** - **EXT.R1B COPY OF THE TECHNICAL EVALUATION QUALIFICATION CRITERIA DATED NIL.** - **EXT.R1C COPY OF THE LETTER DATED 21/05/2009 ISSUED BY PROJECT DIRECTOR, KSUDP.** - **EXT.R1D COPY OF THE FORM EXT.2A SUBMITTED BY THE PETITIONER ALONG WITH TECHNICAL BID.** - **EXT.R1E COPY OF THE CERTIFICATE PRODUCED BY THE PETITIONER ALONG WITH TECHNICAL BID.** **EXT.R1F COPY OF THE CERTIFICATE PRODUCED BY THE PETITIONER ALONG WITH TECHNICAL BID.** **WP(C).No. 6939 of 2012 (N)** **EXT.R1G COPY OF THE CERTIFICATE PRODUCED BY THE PETITIONER ALONG WITH TECHNICAL BID. EXT.R1H COPY OF THE CLAUSE 801 OF N.I.T. EXT.R1I COPY OF THE MINUTES OF MEETING DATED 23/07/2009. EXT.R1J COPY OF THE MINUTES OF THE 16TH EMPOWERED COMMITTEE MEETING. EXT.R1K COPY OF THE MINUTES OF THE 33RD EMPOWERED COMMITTEE MEETING.** ## **//TRUE COPY//** **P.S. TO JUDGE** **rs.** A.M.SHAFFIQUE, J. ---------------------------------------------------- W.P.(C) No. 6939 of 2012 --------------------------------------------------Dated this the 23[rd] November, 2012 **J U D G M E N T** The petitioners had submitted tender as a joint venture pursuant to a notice inviting tender issued by respondents 1 and 2 for the work relating to supply, laying, testing and commissioning of High Density Poly Ethylene (HDPE) pipes as part of the augmentation of water supply scheme to Alappuzha Municipality. The tenders were submitted online in respect of tender no. 13 and 14 and it was a two-bid-system. 2. According to the petitioners though they were technically qualified and having the requisite experience and turnover as specified in the tender conditions, the respondents 1 and 2 did not qualify them in respect of the said work. It is contended that the rejection of the petitioners' tender as technically not qualified is illegal and arbitrary as the petitioners were qualified in relation to all the parameters specified for the technical qualification. The petitioner also challenged introduction of an addendum to the qualification criteria. W.P.(C) No. 6939 2012 2 3. It is therefore contended that if the petitioners price bid was opened, they would have obtained the award by which the respondents 1 and 2 would have saved several crores of rupees. 4. While admitting the above writ petition this court had issued an interim order stating that finalization of the contract shall be subject to the result of the writ petition. 5. The respondents 1 and 2 have filed a counter affidavit inter alia contending that in respect of technical qualification the petitioners have qualified most of the qualification criteria, except clause 2.4.2 i.e. specific construction experience which reads as under: ## Specific construction experience (a) Contracts of similar size and nature - Contracts of similar nature and size, participation as contractor, management contractor or sub contractor in at least one contract within the last ten years each with a value of at least Rs.69 million those who have successfully or are substantially completed and that are similar to the proposed work. The W.P.(C) No. 6939 2012 3 similarity shall be based on physical size, complexity, methods, technology or other characteristics as described in Section 5 (Employer's requirements). Minimum physical size shall be 50% of the size/capacity & 12.5% of length of the present is required. (500 mm size & length 832 m. for tender No.12, 500 mm size & length 900m. for tender No.13,500 mm size & length 650 m. for tender No. 14/SE/PHCK/2011-12/UIDSSMT)”. 6. According to them the petitioners did not possess the qualification criteria of one work worth rupees 69 million for tender No. 14 and Rs. 90 million for tender No. 13. It was further contended that contracts of similar nature and size mentioned in clause 2.4.2 have to be with reference to HDPE pipe line work whereas the petitioners have produced document which qualifies for Ductile Iron (DI) pipes and in respect of HDPE pipes the value of work done is much below the financial achievement prescribed for the qualification. They produced Ext. R1 (a), letter dated 10.6.2009 to indicate that information was given to all the tenderers that the evaluation W.P.(C) No. 6939 2012 4 of the experience will be based on specific construction experience in respect of HDPE pipelines of size and length as specified in the tender. 7. Though respondents 3 and 4 were served with notices they did not choose to contest the matter. 8. The point for consideration in this writ petition is whether there is any illegality in the decision making process. When the case of the petitioners is that they were having the technical qualification and if such a person is not qualified necessarily it calls for judicial intervention to find out whether there is any arbitrariness or illegality in the decision making process as held in Tata Cellular v. Union of India (1994) 6 SCC 651). 9. The only dispute is with reference to the qualification criteria specified in clause 2.4.2. 10. Admittedly, the petitioner is a joint venture and they have produced Exts. P5, P6 and P7 along with tender documents. 11. The joint venture admittedly has the required financial qualification as they have done work for more than 69 million W.P.(C) No. 6939 2012 5 and 90 million as the case may be. But the complaint of the department is that the magnitude of the work done by them to enable them to get the financial and experience qualification is not in respect of HDPE pipes and therefore they are not technically qualified. 12. It is not in dispute that it is enough that any of the partners of the joint venture or both of them together can achieve the technical qualification as held by the Supreme Court in **New Horizons Ltd. and another v. Union of India and others (1995(1) SCC 478),** which is relied upon by the learned counsel for the petitioner. Paragraph 26 of the said judgment reads as under: “Once it is held that NHL is a joint venture, as claimed by it in the tender, the experience of its various constituents namely, TPI, LMI and WML as well as IIPL had to be taken into consideration if the Tender Evaluation Committee had adopted the approach of a prudent businessman”. 13. The contention of the department is that since the qualification criteria specified that the financial achievement W.P.(C) No. 6939 2012 6 should be in respect of a work “similar to the proposed work” and that the similarity shall be based on physical size, complexity, methods, technology or other characteristics as described in S. 5 (Employers requirements), according to the learned counsel, the nature of work done by the joint venture for their financial achievement is the work relating to DI pipes, which cannot be treated as a similar work. The learned counsel also relies upon S.5 of the tender, a copy of which is handed over, which indicates the work requirement regarding the materials to be procured and supplied as HDPE pipes and it's specifications etc. 14. Ext. R1(a) relied upon by the respondent will not help their purpose to show that specific construction experience is required in laying HDPE pipelines as it is not seen communicated to the petitioners and it is after the date of notification. 15. It is important to note that in clause 2.4.2 there is no specific mention that the financial requirement or other experience should be in relation to HDPE pipes. If that was the intention it could have been specifically stated in clause W.P.(C) No. 6939 2012 7 2.4.2, whereas a reference is made to S.5 of the contract documents to indicate that the similarity should be based on the physical size, complexity, methods, technology or other characteristics as described in Section 5. Other characteristics, if we go by S. 5 of the tender document it relates to various specifications regarding the quality of the HDPE pipes to be procured and the parameters to be observed while making the supply. Section 5 is in other words, the details of the materials to be supplied which will not by itself improve the qualification criteria in order to contend that the financial qualification and experience is confined only to HDPE pipes supply and laying. In that view of the matter similar works mentioned in clause 2.4.2 will have no meaning. The words “other characteristics as described in S. 5 (Employers requirements)” mentioned in the said clause may not help the department to exclude a qualification criteria of the petitioner since it relates to various other requirements to be observed. That apart petitioner do have experience in supply and laying of HDPE pipes, but the value of work done does not amount to 90 lakh which is available for DI pipes. W.P.(C) No. 6939 2012 8 16. A further argument raised is that the petitioner does not qualify for the size and length as well. In fact, while making the amendment to clause 2.4.2 the requirement had been reduced to 50% of the size/capacity and 12.5 % of the length for the respective works. It is not in dispute that the petitioner qualifies in respect of the said quantity as well. 17. In the light of my finding that the qualification of the work done by the petitioners in respect of DI pipes can also be taken into consideration for the purpose of qualification criteria prescribed under clause 2.4.2, I am of the view that the petitioner achieves the qualification criteria and is liable to be considered for the said award of work. In regard to the contention relating to amendment of conditions, I do not think that this Court can interfere with the tender conditions as long as equal opportunity had been given to all tenderers. 18. That being the situation the writ petition is allowed as follows: The respondents 1 and 2 are directed to qualify the petitioners in respect of the work relating to tenders 13 and W.P.(C) No. 6939 2012 **==> picture [7 x 10] intentionally omitted <==** 14 and consider their financial bid also before awarding the work. **A.M.SHAFFIQUE, JUDGE.** rka