Kriti Engineering And Services, vs The State Of Andhra Pradesh,
2021 Latest Caselaw 303 AP

            HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI

                     WRIT PETITION Nos.1353 of 2021


ORDER:

This writ petition is filed challenging e-tender, NIT No.110/MD/

APEWIDC/VJA/2020-21 dated 02.01.2021 for procurement of Purified

Drinking Water Systems Type - IV(B) to the Government schools, as illegal

and arbitrary."

2. Heard Sri G.R. Sudhakar, learned counsel for the petitioner and Sri

G.V.S. Kishore Kumar, learned standing counsel appearing for respondents 2

to 5 and with the consent of both the counsel, this writ petition is being

disposed of at the stage of admission.

3. Case of the petitioner is that, it is a partnership firm, doing

fabrication works of drinking water stainless steel tanks and compactor bins

etc.; Government of Andhra Pradesh has decided to procure requisite

drinking water systems Type -IV(B) through e-tendering from the eligible

bidders for 15715 schools in first phase at an estimated cost of Rs.56.25

crores; pursuant thereto, the 2nd respondent has issued e-tender dated

02.01.2021 to be downloaded from E-Procurement portal from 09.01.2021

to 16.01.2021 and for the very same work, earlier, the respondents issued

e-tender vide NIT No.40 dated 06.08.2020 for procurement of Purified

Drinking Water Systems, Type-III; as petitioner's samples were refused by

the respondents in the earlier tender, he filed WP No.15522 of 2020 and the

same is pending; now the impugned tender has been issued for the very

same work with certain changes to benefit a few tenderers; present tender

is customized to benefit a few; number of schools is not changed, but the

estimated cost has been reduced from Rs.63.70 crores to Rs.56.25 crores,

the minimum turnover of the bidder is enhanced from Rs.10 crores to

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Rs.30.00 crores and the solvency has been enhanced from Rs.1 crore to

Rs.7.50 crores; number of units required were 1200 and the value of the

each unit is enhanced from Rs.1,82,000/- to Rs.4,68,750/-; petitioner

satisfied all the conditions except with regard to minimum turnover of Rs.30

crores and solvency of Rs.7.50 crores; in the earlier tender, nearly nine

bidders participated but in the present tender only two bidders have

participated in view of the changed conditions who are sister concern; in

view of the change in design, there will be a loss to the government as the

tender cost would go up to Rs.34,41,00,000/- for the units; respondents

initially floated e-tender for the same work on 10.06.2020; petitioner has

participated in the said tender, stood as lowest bidder and was declared as

L1, but the said tender has been cancelled without assigning any reason;

therefore instant tender was floated; petitioner made a representation

through e-mail on 12.01.2021 requesting the authorities to reconsider the

conditions imposed in the tender and to follow procedure in terms of

G.O.Ms.No.94 dated 01.07.2003; financial bid is not yet opened and hence,

he seeks to set aside the impugned e-tender dated 02.01.2021. Hence, the

writ petition.

4. Counter-affidavit has been filed by the 2nd respondent stating

inter-alia that the government decided to provide pure drinking water

facilitate in all government schools in a phased manner and initiated the

process of procurement of water purifiers of different categories based on

the exigency and considering various technical, scientific and financial

implications; accordingly impugned tender was called for, for procurement

of 1200 purified drinking water systems (DWS) Type-IV (B); petitioner did

not participate in the present tender and could not even disclose his

eligibility to participate in the tender in the affidavit filed in support of the

writ petition; the equipment sought to be procured under NIT No.40 dated

06.08.2020 i.e., the previous tender is totally different and distinct and

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with dissimilar delivery mechanism and both are meant to meet different

situations; the present system for which tenders are called for, is much

more efficient in serving the needs of schools where the strength is more

than 300 students and the earlier system is designed to fulfill the needs of

the schools which have less than 300 students strength; the space occupied

by the earlier system is comparatively higher to that of the present system;

latest compact system of DWS model is hand operated with 10 taps as

against the 8 taps pedal press system, which was designed during the peak

Covid-19 period; tender committee approved the tenders on 20.01.2021

and letter of award was also issued on the same day for supply of 1200 units

of Type IV(B; last date for submission of the bid is 16.01.2021 and the writ

petition is filed on 19.01.2021; increase in the turnover limits and solvency

requirements is only due to the previous experience faced by the

Corporation where many bidders have failed to supply the required quantity

within the time specified; reduction in estimate cost is due to lesser

numbers of units with more output in compact single unit with 10 taps as

against 8 taps of previous model; three bidders have participated in the

tender and not two as stated by the petitioner; G.O.Ms.No.94 dated

01.07.2003 does not apply to the tender in issue, as the same is not

restricting the discretion of the respondents and prays for dismissal of the

writ petition.

5. Learned counsel for the petitioner reiterated the contentions

raised in the writ petition. Learned standing counsel appearing for

respondents 2 to 5 relied upon the judgment of the Division Bench of this

Court in 'B. Sailesh Saxena vs. Union of India1', wherein the scope of judicial

review of the qualifications, requirements in a tender notification was

discussed.

2018(4) ALT 36

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6. The 2nd respondent has issued notice inviting tenders (NIT) vide

NIT No.110 on 02.01.2021. According to which, the bid document can be

downloaded from 09.01.2021 to 16.01.2021 and the bid has to be submitted

before 4.00 p.m. on 16.01.2021. Technical bids were opened on 16.01.2021

and the declaration of eligibility is within seven days from the bid due date;

display and finalization of samples is on or before 16.01.2021 and the

declaration of financial bid and reverse tendering is within 14 days from bid

due date and the letter of award is within 21 days from bid due date and

the signing of agreement is within seven days of award of letter. The writ

petition was filed on 19.01.2021 and according to the counter-affidavit,

reverse tendering was completed on 19.01.2021 and the letter of award was

also issued on 20.01.2021. Petitioner earlier filed WP No.15522 of 2020

challenging the e-tender notification vide NIT No.40 dated 06.08.2020,

which is issued for procurement of water purifiers Type-III. In the said case,

the contention of the petitioner was that he was actually prevented from

giving samples and that he was waiting outside the office of the

respondents to present his simple. The main contention of the learned

counsel for the petitioner is that the impugned tender is issued for the very

same work by making certain changes to benefit few tenderers. But as seen

from the counter-affidavit, it is categorically stated that the equipment

now sought to be procured under the impugned tender is totally different

and distinct and with dissimilar delivery mechanism and both are meant to

meet different situations. It is also categorically stated that it is only the

number of schools that were identified for the purpose of implementation

of the scheme, but not the quantities or number of units that have to be

procured.

7. Next submission of the learned counsel for the petitioner is that

minimum turnover of the bidder is enhanced from Rs.10 crores to Rs.30

crores and the solvency has been enhanced from Rs.1 crore to Rs.7.50

KVL, J WP No.1353 of 2021

crores, is tailor made to benefit a particular bidder. Except alleging that

the same is tailor made, he could not demonstrate as to how the same can

be construed as tailor made. Merely because the turnover limits and

solvency limits are enhanced, it cannot be said that it is tailor made. Cost

of each unit now is Rs.4,68,750/- in view of change of design, where as

previously it was Rs.1,82,000/-. The specifications which are filed and the

copies of the photos clearly demonstrate that they are two different types

of water purifiers.

8. The contention of the petitioner that the cost would go up in the

impugned tender is also not correct, as the units that are going to be

procured in both the tenders are of different types and capacity. According

to the respondents, the units that are going to be procured through the

impugned tender can cater to schools where strength is more than 300 and

the ones in the earlier are cater to schools which have less than 300

strength. It is also stated that one new model is sufficient in place of three

old models. No reply has been filed denying the averments in the counter-

affidavit with regard to the specifications and capacity etc. of the two

different water purifiers. Hence, the calculation made by the petitioner

alleging that there would be a loss to the Government is not correct.

9. Learned counsel for the petitioner also relied upon G.O.Ms.No.94

Irrigation & CAD Department dated 01.07.2003, which deals with tender

procedures. He relied upon para 10 of the Annexure I of the said G.O. which

reads as follows:

"10. Qualification criteria:

A. To quality for award of the contract, each bidder in its name should have, during the last five years (specified financial years i.e. they should be immediately proceeding the financial year in which tenders are invited).

a. Satisfactorily completed as a prime contractor, similar works of value not less than Rs._/- @ (usually not less than 50% of estimated value of contract) in any one year.

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b. Executed in any one year, the following minimum quantities of works:

- Cement concrete including RCC and PSC____Cum.

- Earth work in both excavation and Embankment ____Cum.

- (relevant principal items be indicated).

- (usually 50 per cent of the expected peak quantities of construction per year).

B. Each Bidder should further demonstrate:

a. Availability (either owned or leased or to be procured against mobilization advances) of the following Key and critical equipment for this work."

10. As seen from the above it deals with minimum quantities of work

that should have been done by the contractor for a ward of contract. It

does not restrict the Government to prescribe higher quantities of turnover

and solvency. Even if the solvency limits and turnover limits are reduced as

requested by the petitioner, still the cost of a unit would be the same. It is

also specifically stated in the counter-affidavit that due to the previous

experience of not supplying within the time, turnover limits and solvency

requirements were increased. Three tenderers participated in the bid and

not two.

11. While dealing with the scope of judicial review, the Division

Bench of this Court in B.Sailesh Saxena's case (supra), held as follows:

"Before interfering in tenders or contractual matters, in the exercise of its power of judicial review, the court should pose to itself the following questions: (i) whether the process adopted or decision made by the authority is mala fide or is intended to favour some one or the process adopted or the decision made is so arbitrary and irrational that the court can say: 'the decision is such that no responsible authority acting reasonably and in accordance with the relevant law could have reached'; and (ii) whether public interest is affected. If the answers are in the negative, there should be no interference in proceedings under Article 226 of the Constitution of India."

12. In the present case, the writ petition is filed on the day when

reverse action is to be completed, after technical stage and commercial

stage, on 19.01.2021, even though the notice inviting tender is dated

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02.01.2021. Except alleging that tender is intended to favour someone,

merely on the ground that solvency criteria and the minimum turnover

criteria are enhanced, petitioner could not demonstrate before this Court

as to how it is tailor made. As held by the Division Bench of this Court in

B Sailesh Saxena's case (supra), although, a citizen has a fundamental right,

under Article 19(1)(g), to carry on a trade or business, he does not have the

fundamental right to insist that the government, or the individual

concerned, has to enter into a contract with a particular person or to

determine person or persons with whom he or it will deal. All that such a

person can claim is that, in competing for the contract, he should not be

unfairly treated and discriminated to the detriment of public interest.

13. While examining the scope of judicial review of the qualification

requirements in tender notification, in the above case the Division Bench

further held as follows:

"In examining the contention, urged on behalf of the appellants, regarding the validity of the qualification requirements stipulated in the tender notification, Courts must remain conscious that the scope of judicial review in such matters is extremely limited. In economic and commercial matters, decisions are taken by the government or its instrumentalities keeping in view several factors, and it is not possible for the Courts to consider competing claims and conflicting interests, and conclude which way the balance tilts. There are no objectives, justiciable or manageable standards to judge these issues nor can such questions be decided on a priori considerations. All that the participating bidders are entitled to is a fair, equal and non-discriminatory treatment.

Commercial transactions, of a complex nature, involve balancing and weighing all relevant factors, and a final decision is taken on an overall view of the transaction. When the power of judicial review is invoked, in matters relating to inviting tenders or award of contracts, certain special features should be borne in mind. Inviting tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. The limited scope of judicial review by the High Court envisages examination of the question whether there is any material

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irregularity in the decision making process. If the decision, relating to the award of contract, is bona-fide and in public interest, Courts will not interfere even if a procedural aberration or prejudice to a tenderer is made out. The power of judicial review will not be invoked to protect private interest at the cost of public interest.

14. In the facts and circumstances and in the light of the

observations in the judgment of the Division bench of this Court referred to

above, this Court does not find any merit in the writ petition and is,

accordingly dismissed. No order as to costs. Miscellaneous petitions,

pending if any, in this writ petition, shall stand closed.

________________________ KONGARA VIJAYA LAKSHMI, J Date: 22.01.2021 Note: Furnish CC by 27.01.2021.

(BO) BSS

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HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI

WRIT PETITION No.1353 of 2021

URGENT

Date: 22.01.2021

BSS