Prathiba Developers (P) Ltd. v Malabar Regional Co-operative Milk Producers Union Ltd. (Malabar Milma) and others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **THURSDAY, THE 10[TH] DAY OF MARCH 2022/19TH PHALGUNA, 1943 WP(C) NO. 4896 OF 2022** ## **PETITIONER:** **PRATHIBA DEVELOPERS (P) LTD., KARUKUNNATHU BUILDING, KASIM LANE, KALOOR, COCHIN 682 017, REPRESENTED BY ITS DIRECTOR, GEORGE BIJOY, AGED 53 YEARS, S/O. E.V. JACOB.** **BY ADVS. SANTHOSH MATHEW ARUN THOMAS KARTHIKA MARIA ANIL SEBASTIAN PULICKEL ABI BENNY AREECKAL LEAH RACHEL NINAN MATHEW NEVIN THOMAS KARTHIK RAJAGOPAL** ## **RESPONDENTS:** |**1**|**MALABAR REGIONAL CO-OPERATIVE**| |---|---| ||**MILK PRODUCERS UNION LTD.,**| ||**(MALABAR MILMA), HEAD OFFICE,**| ||**KUNNAMANGALAM, KOZHIKODE 673 571,**| ||**REPRESENTED BY ITS MANAGING DIRECTOR.**| |**2**|**THE MANAGING DIRECTOR,**| ||**MALABAR REGIONAL CO-OPERATIVE**| ||**MILK PRODUCERS UNION LTD.,**| ||**(MALABAR MILMA), HEAD OFFICE,**| ||**KUNNAMANALAM, KOZHIKODE 673 571.**| |**3**|**P.C. THOMAS AND CO.,**| ||**PUTHUCHERY HOUSE, MAMANGALAM,**| ||**PALARIVATTOM, ERNAKULAM-682 025,**| ||**REPRESENTED BY ITS MANAGING DIRECTOR.**| WP(C)No.4896/2022 2 - **4 MAPSGLOBAL CONSTRUCTIONS PVT. LTD., VYAPARA BHAVAN, KARANTHUR, KOZHIKODE, KERALA 673 571, REPRESENTED BY ITS MANAGING DIRECTOR.** - **5 M/S. T.O. ITTOOP & ASSOCIATES, CHITTOOR ROAD, PACHALAM, KOCHI, KERALA 682 012, REPRESENTED BY ITS MANAGING DIRECTOR.** - **6 HILL TRACK CONSTRUCTIONS PVT. LTD., PANAMARAM, WAYANAD, KERALA 670 721, REPRESENTED BY ITS MANAGING DIRECTOR.** - **7 M/S. CRESCENT CONSTRUCTION COMPANY, TC 39/1295, POOJAPURA, THIRUVANANTHAPURAM-695 012, REPRESENTED BY ITS MANAGING DIRECTOR.** - **8 THE URALUNGAL LABOUR CONTRACT CO-OPERATIVE SOCIETY, P.O. MADAPPALLY COLLEGE, VATAKARA, KOZHIKODE, KERALA 673 102, REPRESENTED BY ITS MANAGING DIRECTOR.** **BY ADVS. R1-R2 SMT. LATHA ANAND R3 SRI.K.L.VARGHESE (SR.) R3 SMT.SANTHA VARGHESE R3 SRI.RAHUL VARGHESE R3 SRI.RANJITH VARGHESE** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C)No.4896/2022 3 ## **JUDGMENT** Dated this the 10[th] day of March, 2022 The petitioner, who is a Contractor and who has responded to Ext.P1 Notice Inviting Tender, has approached this Court seeking to quash Ext.P6 in so far as it rejects the bid submitted by the petitioner and to declare that the estimate value of the contract as per Ext.P1 NIT is `13,22,03,390/- (after excluding G.S.T.). 2. The petitioner states that the 2[nd] respondent invited e-tender for carrying out civil works for the construction of Milk Powder Plant Building, New Boiler House and Allied Works at Milma Malappuram Dairy Project site, Moorkkanad, Malappuram. Ext.P1 NIT stated that the estimated cost of the work is `15.60 Crores (including GST). Ext.P1 NIT stipulated that the bidder's financial turnover in WP(C)No.4896/2022 4 the same name and style during each of the last three financial year ending 31[st] March should not be less than 80% of the estimated contract value. The petitioner submitted their bid along with the documents to establish that the petitioner satisfies the financial turnover condition in Ext.P1. However, the petitioner was disqualified technically on the ground that the petitioner does not satisfy the conditions as to turnover. 3. The petitioner contends that the total estimated cost of work is `15.60 Crores. It is inclusive of GST. If the GST element is excluded from the said cost, the estimated value of the contract is `13,22,03,390/- and 80% of the same is `10,57,62,712/-. The petitioner satisfies the said limit for the year 2017-'18, 2018-'19 and 2019-'20, as evidenced by Exts.P2 to P4. Therefore, the respondents ought to have accepted the bid of the petitioner technically relying on Exts.P2 to P4, contends the petitioner. WP(C)No.4896/2022 5 4. The learned counsel for the petitioner urged that the estimated cost of work mentioned as `15.60 Crores, is including the GST. The actual estimated value of contract would be exclusive of the GST. Thus calculated, the estimated value of the contract comes to `13,22,03,390/-. 80% of the said amount is `10,57,62,712/-. Since the petitioner satisfies the said limit, the petitioner is legally entitled to clear technical bid and the petitioner's financial bid should be also considered by the respondents. 5. The learned counsel for the petitioner urged that the GST rate applicable makes no difference for verifying the capacity of the bidder and it will be highly illogical, arbitrary and irrational to include the GST component in the estimated contract value. Even in contractual, commercial and tender matters, State and instrumentalities of the State should act fairly, contended the counsel for the petitioner. WP(C)No.4896/2022 6 6. The learned Standing Counsel representing respondents 1 and 2 opposed the writ petition and submitted that in Ext.P1 NIT, the estimated cost of work was clearly stipulated as `15.60 Crores which is inclusive of the GST. Respondents 1 and 2 from the very beginning of the tender proceedings considered `15.60 Crores as the estimated cost of work. The bid condition as contained in Clause 3.3.3 of Ext.R1(a) provided that the rate quoted shall also include all statutory taxes including GST as on the date of submission of the tender. It is evident that estimated contract value would take in GST element also. Respondents 1 and 2 pointed out the part IV of Contract Data in Ext.R1(a), wherein also the Estimated Probable Amount of Contract was fixed as `15.60 Crores. 7. The learned counsel for respondents 1 and 2 submitted that the GST component was also taken as part of the estimated contract value with a view to have a threshold WP(C)No.4896/2022 7 limit which would result in making available qualified bidders in the tender proceedings. Respondents 1 and 2 have reduced and limited the amount to 80% in order to have a better competition. 8. The Standing Counsel for respondents 1 and 2 relied on the judgment of the Hon'ble Apex Court in **Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. and others** [(2016) 16 SCC 818] and the judgment in **Galaxy Transport Agencies, Contractors, Traders, Transports and Suppliers v. New J.K.Roadways, Fleet Owners and Transport Contractors and others** [2020 SCC Online SC 1035] to contend that the owner or the employer of a Project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is _mala_ WP(C)No.4896/2022 8 _fide_ or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. 9. I have heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents as also the learned counsel representing the 3[rd] respondent. 10. Ext.P1 NIT clearly stipulated that estimated cost of work is `15.60 Crores and that will be inclusive of GST element. The Contract Data as contained in Ext.R1(a) at Clause 3.3.3 provided that the rates quoted by the Bidder shall include cost of all materials and conveyance, labour charges, hire charges of plant and machinery, overheads and all incidental charges for execution of the contract. The rate quoted shall also include all statutory taxes including GST as on the date of submission of the tender. 11. The scheduled Contract Data at Sl. No.7 in Ext.R1(a) again reiterated that the Estimated Probable Amount of Contract is `15.6 Crores. Therefore, Ext.P1 NIT WP(C)No.4896/2022 9 and the conditions contained in the tender documents would show that the estimated value of contract was fixed at 15.60 Crores inclusive of GST, by respondents 1 and 2. When respondents 1 and 2 who are the tender authorities, have decided to treat the estimated cost of work as `15.60 Crores, including GST, a bidder cannot contend that the amount of GST should be reduced so as to assess the qualification of the participating bidders. 12. The Hon'ble Apex Court in **Afcons Infrastructure Ltd.** (supra) held that the owner or the employer of a Project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is _mala fide_ or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. The Hon'ble Apex Court further pointed WP(C)No.4896/2022 10 out that it is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given. The judgment of the Hon'ble Apex Court in **Afcons Infrastructure Ltd.** (supra) was held in approval in the decision in **Galaxy Transport Agencies** (supra). 13. The counsel for the petitioner also contended that there is _mala fide_ intention in fixing the estimated cost of contract as `15.60 Crores. As pointed out by the Standing Counsel for the respondents, the financial bids in response to Ext.P1 have not been opened so far. The parties to the tender proceedings are not aware of as to who will be the successful bidder. There is no other materials available in the writ petition to establish any _mala fide_ intention on the part of respondents 1 and 2. WP(C)No.4896/2022 11 In the circumstances, this Court is not inclined to interfere with Ext.P1 NIT tender proceedings. The writ petition is dismissed. Sd/- **N. NAGARESH JUDGE** ncd/10.03.2022 WP(C)No.4896/2022 12 ## **APPENDIX OF WP(C) 4896/2022** ## **PETITIONER'S EXHIBITS** **Exhibit P1 TRUE COPY OF THE RELEVANT PORTION OF THE NOTICE INVITING TENDER REF. NO. MRU/ENGG/MPF-CIVIL/2021-22 DATED 29.12.2021 ISSUED BY THE 2ND RESPONDENT. Exhibit P2 TRUE COPY OF THE DOCUMENT SHOWING THE TURNOVER FOR THE FINANCIAL YEAR 20172018 SUBMITTED BY THE PETITIONER ALONG WITH THE TENDER. Exhibit P3 TRUE COPY OF THE DOCUMENT SHOWING THE TURNOVER FOR THE FINANCIAL YEAR 2018-19 SUBMITTED BY THE PETITIONER ALONG WITH THE TENDER. Exhibit P4 TRUE COPY OF THE DOCUMENT SHOWING OF THE TURNOVER FOR THE FINANCIAL YEAR 2019-20 SUBMITTED BY THE PETITIONER ALONG WITH THE TENDER. Exhibit P5 TRUE COPY OF THE LETTER DATED 19.01.2022 SENT BY THE PETITIONER TO THE 2ND RESPONDENT. Exhibit P6 TRUE COPY OF THE TECHNICAL BID EVALUATION SUMMARY DATED 11.02.2022 ISSUED BY THE 2ND RESPONDENT RELATING TO EXT. P1 NOTICE INVITING TENDER. Exhibit P7 TRUE COPY OF THE BID SUMMARY DETAILS SHOWING THE DETAILS OF THE TENDERERS WHICH HAS BEEN ACCEPTED AND THE DETAILS OF THE TENDERERS WHICH HAS BEEN REJECTED. Exhibit P8 TRUE COPY OF THE BID SUMMARY DETAILS PUBLISHED BY THE 2ND RESPONDENT TO EXT. P1 NOTICE INVITING TENDER.** **RESPONDENTS' EXHIBITS** **Exhibit R1(a) TRUE COPY OF THE RELEVANT PAGES OF NOTICE INVITING E-TENDER AND BID** WP(C)No.4896/2022 13 **DOCUMENT DATED 29.12.2021.** **Exhibit R1(b) THE COPY OF THE MINUTES OF THE MEETING CONDUCTED ON 10.01.2022. Exhibit R1(c) TRUE COPY OF THE FORM OF TENDER SUBMITTED BY MANAGING DIRECTOR OF M/S.PRATHIBA DEVELOPERS (P) LTD. Exhibit R1(d) TRUE COPY OF THE INTEGRITY PACT**