M/S. P.C. Thomas & Co. v. State of Kerala and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN THURSDAY, THE 26TH DAY OF OCTOBER 2017/4TH KARTHIKA, 1939 WP(C).No. 37661 of 2016 (G) ---------------------------- PETITIONER: ---------M/S.P.C.THOMAS & CO. REPRESENTED BY ITS PARTNER SRI.PAUL THOMAS, AGED 45 YEARS, S/O. LATE P.C.THOMAS, RESIDING AT PUTHUSERRY HOUSE, MAAMANGALAM, KOCHI - 682 025. BY ADVS.SRI.A.JAYASANKAR SRI.MANU GOVIND SRI.ASHWIN SETHUMADHAVAN SMT.B.MEERA SRI.S.SABARINADH SRI.BECHU KURIAN THOMAS (SR.) RESPONDENTS: ------------ 1. STATE OF KERALA REPRESENTED BY ITS ADDITIONA CHIEF SECRETARY, PUBLIC WORKS DEPARTMENT, GOVERNMENT OF KERALA, SECRETARIAT, ANNEX, STATUE, THIRUVANANTHAPURAM, PIN - 695 001. 2. THE CHIEF ENGINEER (BUILDINGS) PUBLIC WORKS DEPARTMENT, PUBLIC OFFICE, MUSEUM P.O., THIRUVANANTHAPURAM - 695 033. 3. THE SUPERINTENDING ENGINER PUBLIC WORKS DEPARTMENT (BUIDLINGS), NORTH CIRCLE, PWD COMPLEX, OPP. HEAD POST OFFICE, MANACHIRA, KOZHIKODE. 4. M/S. PALAL CORPORATION ARANGATHU CROSS ROAD, COCHIN - 682 018, REPRESENTED BY ITS MANAGING DIRECTOR. 5. M/S. CREATOR CONSTRUTIONS, KURIEKAL TOWERS, PARUTHELIPALAM, EDAPPALYY P.O.O, EDAPPALLY- PUKKATTUPADY ROAD, KOCHI, EDAPPALLY, ERNAKULAM, KERALA - 682 024, REPRESENTED BY ITS MANAGING DIRECTOR. 6. SRI.A.IBRAHIM KUTTY GOVERNMENT CONTRACTOR, VALLIYATH HOUSE, PUTHENCHANDA P.O., CHAVARA, KOTTAYAM - 686 538. 7. SRI.J.ABDUL VAHID CONTRACTOR, KURUDANTAYATHU, DADATHOOR P.O., KARUNAGAPPALLY, KOLLAM - 690 523. WP(C).No. 37661 of 2016 (G) 2 8. SRI.A.M.MOHAMMED ALI CONTRACTOR, ATHIMANNIL HOUSE, NARUKARA P.O., MANJERI, MALAPPURAM. 9. M/S. MARYMATHA CONSTRUCTIONS COMPANY CHAKKOLAS HEIGHTS, CHAKKOLAS HEIGHTS 6TH FLOOR, SEAPORT-AIRPORT ROAD, CHITTETHUKARA, KERALA - 682 037, REPRESENTED BY ITS MANAGING DIRECTOR. 10. M/S. SEGURO FOUNDATIONS & STRUCTURES PRIVATE LTD 1/392, BEHIND MILMA DAIRY, EDAPPALY, KOCHI, KRALA - 682024, REPRESENTED BY ITS MANAGING DIRECTOR. 11. SRI.GIBU P MATHEW PLOT NO. 26, PURAPPADATHIL HOUSE, VRINDAVAN COLONY, VYTTILA, ERNAKULAM - 682 019. 12. M/S. A B M CIVIL VENTURES PRIVATE LTD OPPOSITE INDIRA GANDHI HOSPITAL, NEAR RAJEEV GANDHI STADIUM, KADAVANTHARA, ERNAKULAM - 682 020, REPRESENTED BY ITS MANAGING DIRECTOR. 13. M/S. M.C.LAKSHMANAN & COMPANY DOOR NO. XXXVI/897, ORIENTAL BUILDING HOSPITAL ROAD, THALASSERY, REPRESENTED BY ITS MANAGING DIRECTOR. R6 BY ADV. SRI.P.MARTIN JOSE R6 BY ADV. SRI.P.PRIJITH R6 BY ADV. SRI.THOMAS P.KURUVILLA R8 BY ADV. SRI.K.M.SATHYANATHA MENON R8 BY ADV. SMT.KAVERY S THAMPI R9 BY ADV. SRI.P.SHANES METHAR R2 BY SENIOR GOVERNMENT PLEADER SRI.N.MANOJ KUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26-10-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## WP(C).No. 37661 of 2016 (G) ---------------------------- ## APPENDIX PETITIONER'S EXHIBITS P1: A TRUE PHOTOCOPY OF THE ELECTRONIC TENDER WITH REF. NO.DBI/TN/2016-17(PQ) DATED 30.8.2016 PUBLISHED BY THE 3RD RESPODNENT INVITING REGISTERED BIDDERS FOR CONSTRUCTION OF MULTIPURPOSE HOSPITAL BLOCK FOR DISTRICT HOSPITAL, MANANTHAVADY, WAYNAD. P2: A TRUE PHOTOCOPY OF THE TENDER APPLICATIONS SUBMITTED BY THE PETITIONER ALONG WITH NECESSARY DOCUMENTS IN PURSUANCE TO EXT.P1 NOTICE. P3: A TRUE PHOTOCOPY OF THE AUTO-GENERATED ELECTRONIC REPLY DATED 16.11.2016 FROM THE 2ND RESPONDENT TO THE PETITIONER, REJECTING EXT. P2 APPLICATION. P4: A TRUE PHOTOCOPY OF THE REPRESENTATION PREFERRED BY THE PETITIONER WITH THE 2ND RESPODNENT DATED 18.11.2016 SEEKING REASONS FOR REJECTING EXT.P2. P5: A TRUE PHOTOCOPY OF THE SCREENSHOT OF THE 1ST RESPONDENT'S WEBSITE WHICH REVEALS THAT, RESPONDENTS 6-11 ARE SELECTED TO THE NEXT STAGE. P6: A TRUE PHOTOCOPY OF THE EXPERIENCE CERTIFICATE FURNISHED BY 6TH RESPONDENT BEFORE THE 2ND RESPONDENT. P7: A TRUE PHOTOCOPY OF THE EXPERIENCE CERTIFICATE FURNISHED BY 9TH RESPONDENT BEFORE THE 2ND RESPONDENT. P8: A TRUE PHOTOCOPY OF THE EXPERIENCE CERTIFICATE FURNISHED BY 10TH RESPONDENT BEFORE THE 2ND RESPONDENT. P9: TRUE COPY OF COMMUNICATION NO.CE/BLDGS/8192/WYND/2016 DATED 16.01.2017 SENT BY THE 2ND RESPONDENT TO THE PETITIONER. P10: TRUE COPY OF THE RECEIPT OF INCORRECT ENVELOPE DATED 28.1.2017 OF EXT.P9 LETTER. RESPONDENTS)' EXHIBITS R1(A): TRUE COPY OF THE GO RT NO.488/16/H & FWD DATED 15.02.2016 R1(B): TRUE COPY OF TECHNICAL SANCTION VIDE ORDER NO.21617/2015/2424 DATED 23.08.2016. R1(C): TRUE COPY OF REFUND AND SETTLEMENT OF EMD R2(A): TRUE COPY OF THE GO RT NO.488/16/H & FWD DATED 15.02.2016 R2(B): TRUE COPY OF TECHNICAL SANCTION VIDE ORDER NO.21617/2015/2424 DATED 23.08.2016. R2(C): TRUE COPY OF THE MINUTES OF THE CHIEF ENGINEER'S COMMITTEE DECISION DATED 14.11.2016. R2(D): A TRUE COPY OF THE RECEIPT OF THE EMD CREDITED IN THE PETITIONERS BANK ACCOUNT. R6(A): TRUE COPY OF JOINT VENTURE AGREEMENT WITH 7TH RESPONDENT. /TRUE COPY/- PA TO JUDGE ## **ANU SIVARAMAN, J.** ## **= = = = = = = = = = = = = = = W.P.(C).No.37661 of 2016** **= = = = = = = = = = = = = = = Dated this the 26[th] day of October, 2017** ## **JUDGMENT** ## 1.Prayers in this writ petition are as follows:- i.Issue a writ in the nature of certiorari quashing Exhibit P3 order, since the same is not a speaking order; and ii.Declare that, petitioner herein is prequalified as per Exhibit P1 tender, in the light of Exhibit P2 documents and hence liable to be permitted to participate in the Financial Bidding Process pursuant to Exhibit P1 tender and iii.Issue a writ in the nature of Mandamus commanding the 2[nd] respondent to permit this petitioner to participate in the financial bidding process, pursuant to Exhibit P1 Tender, disregarding Exhibit P3 order. iv.Declare that respondents 6,7,9 & 10 are not prequalified as per Exhibit P1 tender condition and that their selection by the 2[nd] respondent, through Exhibit P5 is illegal, arbitrary and improper and v.issue a writ in the nature of Mandamus commanding the 2[nd] respondent to consider Exhibit P4 representation and communicate the reason for rejecting Exhibit P2, within a time frame to be stipulated by this Hon'ble Court and vi.issue a writ in the nature of certiorari quashing the tender awarded, if any, in pursuance to Exhibit P1 proceedings, in which this petitioner was not permitted to participate. W.P.(C).No.37661/16 2 2.Petitioner had preferred Exhibit P2 application in response to Exhibit P1 notice inviting prospective bidders for the construction of Multipurpose Hospital Block for District Hospital, Mananthavady. Going by the terms set out in Exhibit P1, the probable amount of contract was Rs.33,68,92,942/-. Bids were invited from registered bidders of PWD who have successfully completed at least one similar work costing more than 40% of the estimate probable amount of contract of the work during the last five years. It is submitted that though the petitioner satisfied the condition set out in Exhibit P1, his technical bid was rejected by Exhibit P3 stating the reason “rejection as per order of CE”. The petitioner preferred Exhibit P4 representation before the Chief Engineer, PWD Buildings pointing out that he had all the necessary pre-qualifications and the rejection was therefore invalid. The petitioner contends that his bid has been rejected at the initial stage itself only to favour the contesting respondents who were unqualified going by the conditions in the tender document. W.P.(C).No.37661/16 3 3.A counter affidavit has been filed on behalf of the 2[nd] and 3[rd] respondents. It is contended that nine contractors had responded to Exhibit P1 and the technical bid was opened on 14.10.2016. It is stated that the 6[th] and 7[th] respondents and the 10[th] and 11[th] respondents had participated in the tender as Joint Ventures. It is submitted that the Committee of Chief Engineers, after detailed evaluation and scrutiny of documents of the petitioner rejected his bid on the following reasons:- - 1) Even though the petitioner qualified after initial scrutiny, on detailed evaluation of the documents submitted with the terms and conditions of the bidding document, the petitioner could not score enough mark to qualify (65%) overall in all structure, financial status recourses and experience. - 2) In recourses, he could not score any mark since no technical personnel details like certificates including experience certificates were produced. - 3) Also for work experience, he could produce experience of 14.49 cr similar work and got proportionate mark only in that category. Hence, he could not acquire overall percentage of 65% mark to qualify. Since the petitioner did not score enough mark to qualify, the Committee of Chief Engineers decided not to qualify the petitioner. As per the prevailing practice of CE's committee regarding scrutiny of PQ tenders, the decision taken by W.P.(C).No.37661/16 4 committee after evaluating the scrutiny of tenders is final. In this regard, committee is the sole authority to accept or reject any or all the tenders.” - 4.It is stated that the financial bid of the four pre-qualified bidders were opened on 14.11.2016 and the EMD of all bidders whose bids were rejected had been released to them. In the circumstances it is contended that the writ petition is not maintainable. - 5.A detailed counter affidavit was later filed by the 2[nd] respondent. With regard to the pre-qualifications of the joint venture it is contended at para 16 thereof as follows:- “It is humbly submitted that in PQ evaluation, regarding the experience of conducting similar work in nature for the last 5 years, the Chief Engineers evaluation committee considered the work experience of the Joint Venture formed by the 6[th] respondent and 7[th] respondent and also that of JV formed by 10[th] and 11[th] respondent. In first case, considered the work experience for construction of new building for Govt.College, Ambalapuzha Phase I, completed in 2014 with an amount of Rs.13.68 Cr which is more than 40% of Estimate PAC of the W.P.(C).No.37661/16 5 subject work. In the second case, considered the work experience for construction of court complex, Ernakulam completed in 2016 with an amount of Rs.17.30 Cr which is more than 40% of Estimate PAC of the subject work.” ## 6.In paragraph 19 of the detailed counter affidavit, it is stated as follows:- “19.It is humbly submitted that the petitioner's allegation in para 15 is false. It is clearly stated in clause 9.14(e) of the standard bid document for pre-qualification that to be eligible for award of contract, bidders shall provide evidence satisfactory to the Employer, not withstanding any previously conducted prequalification of potential bidders, of their capability and adequacy of resources affectively to carry out the subject contract. To this and all bids submitted shall include the following information. Qualification and experience of key personnel proposed for administration and execution of the contract both on and off site in the form prescribed in schedule C. From this criteria, it is very clear that information and supporting documents furnished must be sufficient to ascertain the qualification and experience of key personnel proposed to be deployed for the work. This is essential to establish the claims regarding qualification and experience. The petitioner produced only the details of man power for non technical wing. Accordingly during evaluation, marks were given only to non-technical wing. But in the column of human resource W.P.(C).No.37661/16 6 development, the petitioner could not furnish enough details. Hence the petitioner could not score any mark in the category of human resources for work management.” 7.A counter affidavit has been filed by the 6[th] respondent also. It is submitted that the Joint Venture of the 6[th] and 7[th] respondent had all the pre-qualifications necessary and had been therefore permitted to participate in the financial bid. In the financial bid held on 14.11.2016 the Joint Venture of the 6[th] and 7[th] respondents had quoted the lowest price and had been awarded the contract. It is therefore contended that the writ petition which is filed without any bona fides is liable to be dismissed. The learned Senior Counsel appearing for the 6[th] respondent also relied on the decisions of the Apex Court in **New Horizons Limited and Another v. Union of India and** **others** [(1995) 1 SCC 478] to contend that the experience of constituents of the joint venture is liable to be treated as the experience of the joint venture itself and there was no irregularity whatsoever in the consideration of the experience of the 7[th] respondent in the instant case. It is further W.P.(C).No.37661/16 7 contended that in view of the clear and uncontroverted reasons stated for the rejection of the contract, this Court is precluded from going into the details of the bids of the respective parties as the same is to be evaluated by the Committee of Chief Engineers, who is the competent authority so to do in terms of the norms for award of work tendered by the Department. 8.I have considered the contentions advanced. The complaint of the petitioner is to the effect that Exhibit P2 application contains all the relevant details which were called for in Exhibit P1. With regard to the requirements in Schedule C which sought the details of personnel with the applicant, it was only provided in Exhibit P1 that the qualification and experience of key personnel proposed for administration and execution of the contract, both on and off site, should be in the form as prescribed in Schedule C. Schedule C sought the details of the personnel and the name, qualification, present posting, professional and linguistic ability of the Project W.P.(C).No.37661/16 8 Manager and the Works Manager. It was stated in Exhibit P1 that the contractor must produce copies of other relevant documents along with original documents at the time of submission of the tender. The petitioner submits that he had produced solvency certificate and a certificate showing that he had completed a work of value of Rs.14,49,57,053/- within the stipulated period of five years and that he had given the details of the personnel employed by him as set out in Schedule C. A list of names and qualifications of the technical staff and the workers had been produced along with Exhibit P2. However, the documents evidencing such qualification were not produced since it was not required to be produced in terms of Exhibit P1. It is contended that since Clause 9.14 of the tender conditions regarding pre-qualification did not require the production of the certificates showing the qualification of the personnel, the rejection of the bid at the pre-qualification stage was completely erroneous and vitiated by extraneous considerations. Clause 9.14 of the tender which contains instructions to the applicants in Exhibit P1 reads as follows:- W.P.(C).No.37661/16 9 9.14To be eligible for award of contract, bidders shall provide evidence satisfactory to the employer, not withstanding any previously conducted prequalification of potential bidders, of their capability and adequacy of resources affectively to carry out the subject contract. To this and all bids submitted shall include the following information. (a)Copies of original documents defining the constitution of legal status, place of registration and principal place of business of the company of firm or partnership or if a joint venture of each party there to constituting the Bidder. (b)Where the Bidder is a joint venture of two or more firms a statement signed by all parties to the joint venture of the proposed Administrative arrangements to the management and execution of the contract, the duties, responsibilities and scope of works to be undertaken by each party, the authorised representative of the joint venture with an undertaking that the several parties are jointly and severally liable to the Employer for the performance of contract. (c)Details of the experience and past performance of the Bidder for the each party to a joint venture of works of similar nature within a past five years and details of current work in hand and other contractual commitments. (d)Major item of construction equipment of key personnel proposed for use in carrying out the contract in the form at prescribed in Schedule D. (e)The qualification and experience of key personnel proposed for administration and execution of the contract both on and off site in the form at prescribed in Schedule-C. (f)Proposal for sub-contracting elements of the works amounting to more than 10% of the tender amount for each elements the listed in Schedule-E (g)Reports on the financial standing of the tenderer of such party to a joint ventures including profit and loss statement balance sheets and auditor's for the past five years, on estimate financial projection for the next two years and on authority form the Bidder (or authorised representative of a joint venture, to seek reference from the Bidder bankers. (h)Information regarding any current litigation in which the Bidder is involved.” W.P.(C).No.37661/16 10 9. Clause 9.14 (e) thereof relates to qualifications and experience of key personnel proposed for administration and execution of contract both on and off site. It is submitted that going by the counter affidavit of the 2[nd] respondent the pre-qualification evaluation was done by Committee of Chief Engineers of PWD Buildings, Roads and National Highway wing. It is stated that as per the criteria devised, the petitioner did not score an aggregate of 65% marks for structure financial status and resources as per the guidelines approved by the Committee of Chief Engineers. It is stated that the four bidders who secured more than 65% marks had been selected as pre-qualified and their financial bids were also opened. - 10.The learned Senior Counsel appearing for the petitioner contended that there was no specific provision in Exhibit P1 which stated that the documents showing the educational qualifications and experience of the technical and non-technical employees should be produced along with the tender document. The learned Senior Counsel placed reliance on a decision of the Apex Court reported in **Michigan Rubber (India) limited v.** W.P.(C).No.37661/16 11 **State of Karnataka** [(2012) 8 SCC 216] to contend that the pre-conditions or pre-qualifications for the tender have to be specified and laid down and that the State or its instrumentalities must act reasonably, fairly and in public interest. It is stated that when the decision taken in the matter of pre-qualification is so arbitrary and irrational, the power to judicial review is automatically attracted and this Court has a duty to interfere in such circumstances. It is further contended on the basis of a progress report of budget works of the Kerala Public Works Department as on 31.03.2017, which does not form a part of the pleadings of the case, that the work executed by the 7th respondent was not of the value as claimed by respondents 2 and 6 in their respective counter affidavits. - 11.The scope of interference of this Court under Article 226 of the Constitution of India in the matter of award of Government contracts is limited to examining whether there is any arbitrary exercise of power or patent illegality in the award of such contract. In the instant case, we are examining only an issue of pre-qualification of bidders in terms of Exhibit P1. Specific W.P.(C).No.37661/16 12 reasons have been stated by the official respondents for the rejection of the petitioner's bid at pre-qualification stage itself. On his own showing, the petitioner is an experienced contractor . He cannot claim that he is unaware of the requirements of a valid bid in response to Exhibit P1. The criteria for awarding of marks by the Committee of Chief Engineers is not under challenge and the reliance on the criteria for the purpose of award of marks cannot be said to be an arbitrary exercise. Though the petitioner has alleged mala fide and extraneous considerations, such contentions have not been substantiated by even substantial pleadings in that regard. The allegations made against the consortium consisting of the 6[th] and 7th respondent also do not appear to be justified in the light of the pleadings and materials on record. I also do not propose to go into the allegations as raised at the time of final hearing of the writ petition based on material which was never placed on record. In the result, I do not find that the rejection of the bid of the petitioner at the pre-qualification stage is vitiated by arbitrary exercise of power so as to call for interference by this Court in W.P.(C).No.37661/16 13 exercise of its powers under Article 226 of the Constitution of India. The tendering of contracts and the execution of works in a time bound manner being totally within the realm of the executive power of the state, I am of the view that except in cases where arbitrariness and gross illegality is apparent, this Court would not be justified in interfering the award of works of this nature by the State Agencies. I am of the opinion that this court is not required to evaluate the comparative merits of the bid submitted by the petitioner and rival bidders and to come to a conclusion as to the desirability or otherwise of pre-qualifying one or the other of the bidders. Such an exercise is exclusively within the power of the official respondents. I find no merit in this writ petition warranting interference by this Court. The writ petition fails and is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj