V.K. Janardhanan Nair v. Chief Engineer, PWD (National Highway) & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE ANTONY DOMINIC** **WEDNESDAY, THE 19TH MARCH 2008 / 29TH PHALGUNA 1929** **WP(C).No. 3665 of 2008(J)** **-------------------------------------** **PETITIONER:** - **-------------------** **V.K.JANARDHANAN NAIR, GOVERNMENT CONTRACTOR, VADAKKEPUTHANPURA HOUSE, VARAPPETTY P.O., KOTHAMANGALAM.** **BY ADV. SRI.N.NANDAKUMARA MENON (SR.), ADV.SRI.MURALI PURUSHOTHAMAN, ADV. SRI.DEEPU LAL MOHAN** **RESPONDENTS:** - **-----------------------** **1. THE CHIEF ENGINEER, PWD (NATIONAL HIGHWAY), THIRUVANANTHAPURAM.** **2. THE SUPERINTENDING ENGINEER, NATIONAL HIGHWAY, CENTRAL CIRCLE, VYTTILA 682 019.** **3. THE CHIEF ENGINEER'S TENDER COMMITTEE FOR PREQUALIFICATION OF CONTRACTORS, REPRESENTED BY THE CHIEF ENGINEER, PWD, NATIONAL HIGHWAY, THIRUVANANTHAPURAM.** **4. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.** **5. ABDUL FAIZY, GOVERNMENT CONTRACTOR, TARMAC BUILDERS (INDIA), ROYAL PLAZA, BRIDGE ROAD, ALUVA.** **BY GOVERNMENT PLEADER SRI. M.R. SABU, ADV. SRI.RAJIV ABRAHAM GEORGE, ADV. SRI.EAPEN ABRAHAM GEORGE.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29/02/2008, THE COURT ON 19/03/2008 DELIVERED THE FOLLOWING:** **W.P.(C). NO.3665/2008-J:** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P.1: COPY OF THE INVITATION FOR BID NO. 30/SE/NH/CC/07-08/KOCHI DTD. 02/01/2008 ISSUED BY THE R.2.** ## **EXT.P.2: COPY OF THE INSTRUCTIONS TO BIDDERS APPENDED TO EXT.P.1.** **EXT.P.3: COPY OF THE EXPERIENCE CERTIFICATE DTD. 12/06/2007 ISSUED BY THE R.2.** **EXT.P.4: COPY OF THE ANOTHER EXPERIENCE CERTIFICATE DTD. 12/06/2007 ISSUED BY THE R.2.** **EXT.P.5: COPY OF THE LETTER DTD. 25/01/2008 SUBMITTED BY THE PETITIONER BEFORE THE R.1.** **EXT.P.6: COPY OF THE APPLICATION DTD. 25/01/2008 OF THE PETITIONER BEFORE THE R.1.** **EXT.P.7: COPY OF THE LETTER NO. NH4/D4/4066/07 DTD. 24/01/2008 ISSUED BY THE R.1. TO THE R.2.** **EXT.P.8: COPY OF THE TENDER NOTIFICATION NO. W1.D1.14/004 DTD. 28/01/2008 ISSUED BY THE R.2.** **EXT.P.9: COPY OF THE MINUTES OF THE MEETING OF THE PWD CHIEF ENGINEERS TENDER COMMITTEE DTD. 22/01/2008.** **EXT.P.10: COPY OF THE FAX SENDING REPORT EVIDENCING THE DELIVERY OF EXT.P.5. TO THE R.2.** ## **EXT.P.11: COPY OF THE ORDER G.O. (MS). NO. 52/87/PW&T DTD. 07/07/1987.** ## **RESPONDENT'S EXHIBITS:** ## **EXT.R2.A: TENDER NOTICE DTD. 05/12/2007.** **EXT.R2.B: LETTER NUMBER RW/NH/12014/1058/2007 DTD. 30/11/2007.** **prv.** **//TRUE COPY//** ## ANTONY DOMINIC, J. = = = = = = = = = = = = = = W.P.(C) No. 3665 OF 2008 - J = = = = = = = = = = = = = = Dated this the 19[th] day of March, 2008 ## J U D G M E N T The petitioner is a registered A-Class contractor. Exts. P1 and P2 are the invitation to bid issued by the Public Works Department (National Highway) for the work of “improvement of riding quality in Km 226/000 to 237000 of NH-49-Madura-Kochi Road” and copy of the instruction to bidders. According to the petitioner being an eligible contractor he submitted application for pre-qualification and tender documents. Exts. P3 and P4 are the experience certificates relied on by the petitioner which are issued by the 2[nd] respondent. 2. Petitioner submits that in response to Exts. P1 and P2 the 2[nd] respondent had received 4 applications for pre-qualification which were forwarded to the Chief Engineer's Tender Committee which met on 22.1.2008 for evaluation of the pre-qualification of the bidders. Petitioner submits that on 24.10.2008, he came to know that he was not pre-qualified and that only the 5[th] respondent **W.P.(C) No. 3665 OF 2008** - 2 - was pre-qualified for the work. Thereupon, the petitioner requested the 1[st] respondent to furnish a copy of the decision of the Tender Committee and also to issue necessary directions to the 2[nd] respondent not to proceed further with the matter until his request for pre-qualification is reconsidered. Ext. P5 is the letter that was issued by the petitioner in this behalf. Petitioner also submitted Ext. P6, an application under the Right to Information Act requesting for a copy of the minutes of the Pre-qualification Committee. 3. While so, the petitioner received a copy of Ext. P7 communication from the office of the 2[nd] respondent which was issued by the 1[st] respondent to the 2[nd] respondent stating that the 5[th] respondent is pre-qualified for the work. Petitioner submits that his pre-qualification was declined on the ground that the Assessed Available Bid Capacity of the petitioner does not satisfy the conditions specified in Clause 4.1.5 of Ext. P2 which is extracted below for reference: - “4.1.5 Bidders who meet the minimum criteria will be qualified only if their available bid capacity is more than the total bid value. The available bid capacity will be calculated as under: Assessed Available Bid Capacity = (AxNx2 - B) **W.P.(C) No. 3665 OF 2008** - 3 - where - A = Maximum value of Civil Engineering works executed in any one year during the last five years (updated to the price level of the year indicated in Appendix) taking into account the completed works as well as completed part of works in progress. - N = Number of years prescribed for completion of the works for which bids are invited. - B = Value (updated to the price level of the year indicated in (Appendix) of existing commitments and on-going works to be completed during the next.....years (period of completion of the work for which bids are invited).” Subsequently, Ext. P9 minutes of the Tender Committee was also served on the petitioner in response to Ext. P6. Admittedly, the petitioner does not satisfy the conditions specified in Clause 4.1.5 and according to the petitioner it is because of the period prescribed for completion of the work. Petitioner submits that the period of 4 months prescribed for completion of the work is hardly adequate and that this has been deliberately fixed to help the 5[th] respondent to make him alone qualified to the exclusion of others. It is the petitioner's contention that the period of completion of 4 months is not a mandatory condition of Exts. P1 and P2 and that **W.P.(C) No. 3665 OF 2008** - 4 - invariably in all tenders, the period of completion of work is extended repeatedly on the request made by the contractors. The petitioner has also a case that the 5[th] respondent had quoted 23% above the value of the work indicated in the tender documents and that the additional monetary liability, as compared to his quoted rates, is more than Rs.1 crore. It is also his contention that the period of work has been fixed in a discriminatory manner and he is relying on Ext. P8 to indicate that for a similar work, longer period of completion has been prescribed. 4. It is on the above pleadings petitioner is seeking to declare Clause 4.1.5 of Ext. P2 to be illegal, arbitrary, unreasonable and unconstitutional. A writ of mandamus directing the 2[nd] respondent to open the price bid of the petitioner and award the work covered by Ext. P1 to him being the lowest tenderer, is also sought for. 5. Counter affidavits have been filed by the 2[nd] respondent and also the 5[th] respondent. In the counter affidavit filed by the 2[nd] respondent it is stated that the bid capacity of a prospective bidder is to be calculated by the mathematical formula specified in clause **W.P.(C) No. 3665 OF 2008** - 5 - 4.1.5 of Ext. P2 and that this formula is being used for the last so many years to assess the bid capacity of a tenderer and that it is a well accepted formula, formulated by experts and is selfexplanatory. It is also stated that one of the factors of the formula is the number of years prescribed for completion of the work. It is stated that as per rule a reasonable time for completion of the work consistent with the magnitude and urgency of the work should be stipulated in the notice inviting tenders. It is stated that based on these principles, time for completion of work was stipulated in Ext. P2 as 4 months which, as stated in the counter affidavit, has been fixed by the 2[nd] respondent after technical analysis of the following aspects: a) The most important aspect regarding the work is the surface renewal in the reach. The renewal of the surface is urgently required since such works carried on this reach was years back. Now the condition of the road is very deplorable and totally damaged. The heavy monsoon of last year caused severe damage to the road. If surface is not renewed before the onset of coming monsoon, the traffic in the highway will be very difficult and may cause frequent accidents. Hence road has to be made smooth for traffic before monsoon for which only 4 months time is available. 4 months time is sufficient for completing the work for a well qualified contractor. If the work could not be competed before monsoon, the road itself may vanish and for **W.P.(C) No. 3665 OF 2008** - 6 - fresh maintenances great expense may be incurred to the state. b) The Ministry of Road Transport and Highways (MORT&H) of the Central Government sanctioned the work under challenge vide letter number RW/NH/12014/1058/2007-KL(P7) dated 30.11.2007 with a financial allocation of Rs.433.28 lakhs. (A copy of the same dated 30.11.07 is produced herewith and marked as Exhibit R2(b)). This Administrative Approval was issued by the Central Government with a condition that the Financial Sanction for the work will lapse after 5 months from the ate of its issue in case the work is not awarded within that period. Also there is another condition in the Financial Sanction that at least 10% of the allotted amount should be utilised before 31[st] March, 2008. So early completion of the work is highly imperative to utilise maximum allotted funds before the closure of the current financial year in order to get maximum central assistance to the State. c) Moreover the technical analysis of the nature and exigencies of the work and local site conditions show that 4 months time is sufficiently large to complete the work. Hence the tenders were invited for the work fixing time of completion as 4 months keeping the best interest of the public in mind. Therefore there is no substance in the contention of the petitioner that the fixation of time factor for the completion of the work is arbitrary and arrived at to assist the fifth respondent.” 6. The Assessed Available Bid Capacity of the petitioner is 298.6 lakhs as per paragraph 10 of the writ petition and this itself shows that the petitioner is not having the required qualification, **W.P.(C) No. 3665 OF 2008** - 7 - even if time factor is rounded to 6 months as against the 4 months prescribed. It is stated that the period of completion cannot be enlarged according to the choice of the petitioner and that if his plea is admitted other similar bidders also will come up with a request for enlargement of time fixed for the period of completion to match their individual requirements. It is stated that in such an event the tender system will become tentative rather than competitive. The allegation of malafides and discrimination, etc. raised by the petitioner are also denied. 7. In the counter affidavit filed by the 5[th] respondent he too has denied the allegations of malafides. It is stated that the petitioner has suppressed material facts. According to the 5[th] respondent clause 4.1.5 being a condition of the tender cannot be subjected to judicial review. It is stated that the Chief Engineer's Tender Committee which was bound by the tender conditions had applied the norms uniformly. The 5[th] respondent is also relying on clause 4.2(n) of Ext. P2 which provides that all bidders shall include the proposed methodology and programme of construction backed with equipment planning and deployment, duly supported with **W.P.(C) No. 3665 OF 2008** - 8 - broad calculations and quality assurance procedures proposed to be adopted, justifying their capability of execution and completion of the work as per technical specifications within the stipulated period of completion as per milestones, along with tender documents. It is stated that along with the application submitted by the petitioner for pre-qualification, he did give a programme of completion in compliance with 4.2(n) and that having done so, it is not open to the petitioner to challenge clause 4.1.5, after having realised that he did not get himself pre-qualified in the tender. 8. Petitioner has filed a reply affidavit controverting the contentions raised by the respondents in the counter affidavits referred to above. 9. The main contention raised by the counsel for the petitioner is regarding the validity of clause 4.1.5 of Ext.P2 which has already been extracted in the earlier part of this judgment. As can be seen from the writ petition itself in paragraph 10 it is stated as follows: “ Para 10. The Assessed Available Bid Capacity of the Petitioner is as follows: Assessed Available Bid Capacity = (A x N x 2 - B) A = 309 Lakhs **W.P.(C) No. 3665 OF 2008** - 9 - N = 4 months (rounded to 6 months) B = 10.4 Lakhs.” Going by the petitioner's own calculation, the Assessed Available Bid Capacity of the petitioner is much less than what is prescribed in the tender conditions and even according to the petitioner, if the period of completion of work is taken as 8 months, then only would the petitioner qualify for the work, as per the criteria laid down. Therefore, admittedly the petitioner does not satisfy the tender conditions. 10. It is true that the petitioner has a case that the period of completion specified as 4 months is discriminatory and arbitrary. As I have already noticed, petitioner is referring to Ext. P8 and is contending that for a similar work, 8 months period has been specified. But then, the fixation of the period of completion of the work will depend upon several factors such as the nature of the work, the quality of the work, urgency and such other relevant factors. In the counter affidavit filed by the 2[nd] respondent, the facts which have weighed with them while fixing this period have been explained by them. In my view, the 2[nd] respondent is the **W.P.(C) No. 3665 OF 2008** **==> picture [32 x 9] intentionally omitted <==** competent person for fixing the period, he having the expertise for the same. When applying relevant criteria the 2[nd] respondent has fixed the period as 4 months and also has explained the reasons in support of such fixation, this court, which lacks expertise in the matter shall not interfere with such fixation and invalidate the same accepting the uncorroborated and interested plea raised by the petitioner. Once the fixation of the period of completion of the work tendered is so upheld, necessarily the petitioner has to be held as one who does not satisfy the tender conditions to be prequalified. 11. I also find merit in the contention raised by the 5[th] respondent that the tender conditions are not subject to judicial review as it falls within the realm of contract. See in this connection the judgment of the Supreme Court in Tata Cellular v. Union of India {1994 (6) SCC 651}, Air India Ltd. v. Cochin International Airport Ltd. {2000 (2) SCC 617}, and Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation and others {2000 (5) SCC 287}. In any case when norms are fixed and are uniformly applied one tenderer cannot be allowed to impugn the **W.P.(C) No. 3665 OF 2008** **==> picture [32 x 8] intentionally omitted <==** same as discriminatory or arbitrary. 12. The question would still arise as to whether it is open to the petitioner to challenge clause 4.1.5. As already noticed, in terms of Clause 4.2.(n), petitioner had given a programme of completion which has been charted out applying the tender conditions including clause 4.1.5. After giving such a programme and finding that he is not pre-qualified, this writ petition has been filed challenging clause 4.1.5. In my view, petitioner has chosen to challenge clause 4.1.5 after taking his chance in the tender process and thus the conduct of the petitioner is one to which the theory of sitting on the fence applies. 13. For all these reasons, I do not find anything irregular or illegal in the respondents decision not to pre-qualify the petitioner. The writ petition is only to be dismissed and I do so. ANTONY DOMINIC JUDGE jan/-