M.T. Construction Company v. Superintending Engineer, PWD, Roads & Bridges (North) Circle, Kozhikode; P.M. Mansoor; C.L. Mohammed Hanifa; State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **WEDNESDAY, THE 1ST DAY OF NOVEMBER 2017/10TH KARTHIKA, 1939** **WP(C).No. 20546 of 2017 (P)** **----------------------------** ## **PETITIONER:** ## **----------** **M.T.CONSTRUCTION COMPANY, BEVINJE, PO THEKKIL FERRY, PIN-671 541, REPRESENTED BY M.T.MOHAMMED KUNHI, S/O.ABDUL RAHIMAN HAJI, AGED 37 YEARS, MANAGING PARTNER, M.T.CONSTRUCTION COMPANY, ARAFATH MAZIL, BEVINJE, THEKKIL FERRY, KASARAGOD, PIN-671 541.** **BY ADVS.SRI.K.V.PAVITHRAN SRI.JAYANANDAN MADAYI PUTHIYAVEETTIL SRI.P.SAJU SRI.NIAS MOOPAN SRI.E.M.UNNIKRISHNAN (MANJERI)** ## **RESPONDENT(S):** **--------------** **1. SUPERINTENDING ENGINEER, PWD, ROADS AND BRIDGES (NORTH) CIRCLE, KOZHIKODE-673 001.** **2. P.M.MANSOOR, FATHERS NAME NOT KNOWN, AGED 40 YEARS, PWD CONTRACTOR, AQUAMARIA FLAT, LB PAYYAMBALAM, KANNUR.670001.** **3. C.L.MOHAMMED HANEEFA, FATHER'S NAME NOT KNOWN, AGED 55 YEARS, PWD CONTRACTOR, THALANGARA HOUSE, KASARAGOD-671 122.** **4. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, PUBLIC WORKS DEPARTMENT, THIRUVANANTHAPURAM.695001. R1,R4 BY GOVERNMENT PLEADER SMT VINEETHA HARIRAJ R2 BY ADVS. SRI.ABDUL RAOOF PALLIPATH SRI.K.R.AVINASH (KUNNATH) SRI.E.MOHAMMED SHAFI** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-11-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **K.V** ## **WP(C).No. 20546 of 2017 (P)** ## **----------------------------** ## **APPENDIX** **PETITIONER(S)' EXHIBITS -----------------------** **EXHIBIT P1: TRUE COPY OF THE BID SUBMISSION CONFIRMATION AND NOTICE INVITING TENDER (NIT)** **EXHIBIT P2 : TRUE COPY OF THE BID SUMMARY REPORT SHOWING THE STATUS OF PETITIONERS BID.** **EXHIBIT P3 : TRUE COPY OF PARTNERSHIP DEED OF THE PETITIONER.** **EXHIBIT P4 : TRUE COPY OF THE CONTRACT REGISTRATION CERTIFICATE OF THE PETITIONER FIRM.** **EXHIBIT P5 : TRUE COPY OF THE CONTRACT REGISTRATION CERTIFICATE OF THE INDIVIDUAL PARTNERS.** **EXHIBIT P6 : TRUE COPY OF THE EXPERIENCE CERTIFICATE OF INDIVIDUAL PARTNERS WITHIN THE LAST 5 YEARS. EXHIBIT P7 : TRUE COPY OF THE LETTER DATED 12-5-2017 OF THE BANK OFFERING FINANCIAL REQUIREMENT TO THE FIRM. EXHIBIT P8 : TRUE COPY OF THE LETTER DATED 9-6-2017 OF THE PETITIONER ADDRESSED TO THE 1ST RESPONDENT. RESPONDENT(S)' EXHIBITS** **----------------------R2(A) TRUE COPY OF THE LETTER DATED 19/6/2017 BY PWD (ROADS & BRIDGES), NORTH CIRCLE, KOZHIKODE. R2(B) TRUE COPY OF THE COMPLETION CERTIFICATE DATED 18/2/2009. R2(C) TRUE COPY OF THE EXPERIENCE CERTIFICATE DATED 19/4/2013 ISSUED BY HARBOUR ENG. DIVISION KASARAGODE. R2(D) TRUE COPY OF THE PERFORMANCE CERTIFICATE ISSUED BY PWDROAD DIVISION, KANNUR. R2(E) TRUE COPY OF THE EXPERIENCE CERTIFICATE DATED 7/7/2014 ISSUED BY PWD ROADS, KANNUR. R2(F) TRUE COPY OF THE EXPERIENCE CERTIFICATE DATED 20/2/2016 ISSUED BY PWD-ROADS, KASARAGODE. R2(G) TRUE COPY OF THE COMPLETION CERTIFICATE DATED 2/2/2017 ISSUED BY PWD-KANNUR. /TRUE COPY/ K.V. P.S.TO JUDGE** ## **K. VINOD CHANDRAN, J.** **---------------------------------W.P(C). No.20546 of 2017 [P] ---------------------------------Dated this the 1[st] day of November, 2017** ## **JUDGMENT** The petitioner, a partnership firm, is before this Court apprehending that the petitioner would not be selected despite it having submitted the lowest tender. The petitioner had applied for a work as per Ext.P1 notification. The tenders were invited from registered bidders of PWD, who had successfully completed at least one similar work costing more than 40% of the estimated Probable Amount of Contract [PAC] during the last five years. The petitioner, as a firm, did not have such post qualification. 2. The petitioner's case is that three out of the four partners of the petitioner firm are _W.P(C). No.20546 of 2017 [P]_ **2** registered A class contractors, who have the experience, the Certificates of which were produced along with the tender documents. The learned counsel for the petitioner submits that partnership cannot be treated to be a separate entity from its partners and hence the qualification of the individual partners would be more than sufficient. It is also submitted that the Government has subsequently withdrawn the post qualification of works in which the PAC is lower than Rs.5 Crores. 3. The learned Government Pleader submits that the subsequent notification withdrawing the post qualification cannot have any effect on an already published notification inviting tenders, wherein there was a post qualification specifically prescribed. It is also submitted that the petitioner in addition to having no post qualification, had not uploaded the details of the _W.P(C). No.20546 of 2017 [P]_ **3** machinery required and the undertaking to provide required machineries. The petitioner had in fact produced an agreement with another firm for provision of the machineries. The learned counsel for the 2[nd] respondent, who is the second lowest bidder, submits that the notification specifically provided for the tenderer being qualified in so far as having executed similar work; costing more than 40% in PAC in the last five years. There cannot be any contention raised of the partners having such qualification especially since then any person could on the basis of the partnership created; get over the qualification and bid for the work on the basis of the experience of the other partners. A camouflage so engaged would defeat the very purpose of insisting for experience. 4. The learned counsel for the petitioner has relied on two decisions to contend that the _W.P(C). No.20546 of 2017 [P]_ **4** partnership is not an entity, which can be treated as separate from the partners; **M/s.Malabar Fisheries Co. v. The Commissioner of Income Tax [AIR 1980 SC 176** and **Comptroller & Auditor-General v. Kamalesh Vadilal Mehta [(2003) 2 SCC 349]** . 5. This Court is of the opinion that the said principle has absolutely no relevance in the facts and disputes in the present case. **Kamalesh Vadilal** was a case in which the Comptroller and Auditor General while empaneling Chartered Accountants to carry out audit of public sector undertakings; confined the empanelment to partnership firms. The Hon'ble Supreme Court found that there is no valid ground to discriminate individual Chartered Accountants and prefer partnership firms. The mere fact of certain people having decided to form a partnership with Chartered Accountants cannot raise a presumption of more excellence or better _W.P(C). No.20546 of 2017 [P]_ **5** efficiency in the work of audit. Likewise in the present case admittedly one of the partners does not have the experience stipulated as a post qualification and merely because he has roped in three other A class contractors; it cannot be said that the firm has the post qualification. 6. **M/s.Malabar Fisheries Co.** was a partnership firm carrying on six businesses. On a dissolution effected one business was taken over by one of the partners, the other five by two jointly and the remaining partner received a sum of money. The issue arose in so far as the Assessing Officer under the Income Tax Act, having withdrawn the development rebate availed by the firm for purchase of machineries. The withdrawal of rebate was on account of the condition of no transfer being permitted for 8 years, within which period the dissolution of the firm occurred. Transfer as _W.P(C). No.20546 of 2017 [P]_ **6** defined, included extinguishment of rights. The reasoning adopted by the Assessing Officer was that firms rights having ceased the rebate had to be withdrawn. The discussion was essentially centered on the rights over the partnership assets which, as long as the firm subsists, is a joint and common interest. On dissolution, after discharge of liabilities there is merely a mutual adjustment of rights and there cannot be found any extinguishment of rights was the finding. It was also found that the dissolution is anterior to the distribution of assets and when the distribution is effected there is no firm in existence and there is only distribution or division of assets _inter-se_ between the partners. The Supreme Court also found that the specific provision, ie: S 34 (3) (b) was not applicable to the case at hand. 7. In fact more apposite to the present case _W.P(C). No.20546 of 2017 [P]_ **7** would be the finding of the Privy Council in **Bhagwanji Morarji Goculdas Vs. Alembic Chemical Works Co.Ltd. AIR 1948 PC 100** , a paragraph of which was extracted with approval in **M/s.Malabar Fisheries Co.:** "Before the Board it was argued that under the Indian Partnership Act, 1932, a firm is recognised as an entity apart from the persons constituting it, and that the entity continues so long as the firm exists and continuous to carry on its business. It is true that the Indian Partnership Act goes further than the English Partnership Act, 1890, in recognising that a firm may possess a personality distinct from the persons constituting it; the law in India in that respect being more in accordance with the law of Scotland, than with that of English. But the fact that a firm possesses a distinct personality does not involve that the personality continues unchanged so long as the business of the firm continues. The Indian Act, like the English Act, avoids making a firm a corporate body enjoying the right of perpetual succession." 8. Ext.P1 notification specifically provided for the tenderer who has the post qualification as prescribed therein. The firm, the petitioner herein applied under the firm name and not under the name _W.P(C). No.20546 of 2017 [P]_ **8** of the partners. The subsequent notification would have also have no significance since it does not have any retrospective effect and can only be applied prospectively. This Court is inclined to accept the contention of the 2[nd] respondent that the tender, whether it be a partnership firm or an individual, has to have the post qualification. There can be no achievement of such qualification on the basis of the post qualification or experience of the partners. 9. The post qualification of experience in carrying out a similar work is specifically to ensure that the contractor, who is awarded the work is able to complete the work to the satisfaction of the authorities. The stipulation cannot be ignored merely on the basis of the eligibility of the partners of the firm. There was nothing stopping the partners of the firm, who had the essential _W.P(C). No.20546 of 2017 [P]_ **9** qualification for submitting the tender, which obviously has not been done. In the above circumstances, this Court does not find any reason to interfere in the tender process. It is also to be noticed that the difference between L1 & L2 is only an amount of Rs.50,000/-. Hence the above writ petition would stand dismissed. No costs. The Government would be entitled to proceed with the tender proceedings. Sd/- ## **K. VINOD CHANDRAN,** ## **JUDGE.** //True Copy// P.A. to Judge sp/01/11/17