R.B. Contractors, Yavatmal vs State Of Maharashtra And Ors.
2006 Latest Caselaw 735 Bom

JUDGMENT

D.D. Sinha, J.

1. Heard Shri S.P. Dharmadhikari, learned Counsel for the petitioner, Shri A. B. Choudhari, learned Government Pleader for respondent Nos. 1 to 3 and Shri Atul Pande, learned Counsel for respondent No. 4.

Rule. Rule made returnable forthwith by consent of the parties.

2. Shri S. P. Dharmadhikari, learned Counsel for the petitioner has submitted that the petitioner is proprietary firm and is engaged in construction of roads since last five years. The petitioner has satisfactorily executed contracts of construction of road, not only with respondent but with other departments of the local bodies, such as Zilla Parishad, Yavatmal as well as Municipal Council, Yavatmal.

3. On 20-12-2005 a tender notice was published by respondent No. 2 by which sealed tenders for work of providing B.T. Renewal to Nagpur Bori Tuljapur Road, MSH No. 3 in Km. 180/00 to 184/00 Km. 187/00 to 191/00, Km. 199/00 to 203/99 and Pitching and construction of Gabian and Protection Wall with repairs to approaches in Km. 192/00, 204/800 to 205/400 and 212/150 and 214/950.

4. The learned Counsel for the petitioner has contended that as per condition of tender the petitioner is required to submit two envelopes and as per condition No. 1.3.1. "Envelope No. 1" shall contain documents mentioned in Sub-clause (i) to (xiv). It is mentioned in condition No. 1.3.1 that if any information/ document is not submitted, as required, Envelope No. 2 of such tenderer will not be opened. Shri Dharmadhikari, learned Counsel contended that the tenderer has to submit Envelope No. 2 as per condition No. 1.3.2. On 20-2-2003 respondent No. 1 opened Envelope No. 1 of all tenderers including the petitioner and though Envelope No. 2 of the other tenderers, including respondent No. 4, was opened, Envelope No. 2 of the petitioner was not opened by respondent on the ground that it did not fulfil additional condition No. 1 which pertains to 'Hot Mix Hot Waive' work, since Hot Mix Plant owned by the petitioner was not located within the radius of 60 kms. from the site of work on the date of submission of the tender.

5. Shri Dharmadhikari, learned Counsel for the petitioner has contended that the reason given by the department for not opening Envelope No. 2 of the petitioner is misconceived and cannot be sustained in view of tender Condition No. 1.3.1. (vii). It is contended that additional condition No. 1 as well as condition No. 1.3.1. are essential eligibility conditions and failure to fulfil any one of them results in rejection of the tender document. It is submitted that both these conditions are applicable to the work under tender irrespective of the fact that as to whether the work under tender is less or more than Rs. 50 Lakhs. It is contended that both these essential eligibility conditions are inconsistent with each other and therefore, non-fulfilment of condition No. 1 does not result in rejection of tender in view of Condition No. 1.3.1 (vii).

6. Shri Dharmadhikari learned Counsel for the petitioner further submitted that as per Clause (vii) of Condition No. 1.3.1 the tenderer is required to submit Form No. 1 and is also required to furnish information mentioned therein. In Form No. 1, Clause 'A' requires the tenderer to furnish information as to whether Hot Mix Plant as per MOST 2000 is owned by the tenderer and is available for immediate deployment on the work site. Clause 'B' stipulates that if answer to question No. 1 is "No", then the tenderer is required to state how the said machine will be procured by the contractor/tenderer, by :- (a) Taking on hire from another company, or (b) will Purchase from the manufacturer.

Similarly, as per clause 'C of Form No. 1 if the answer to question Nos. 'a' and 'b' is "No", in such situation, the tenderer is required to give details how machinery will be made available for use on work in question.

7. Shri Dharmadhinari, learned Counsel for the petitioner further contended that as per condition No. 1.3.1 (vii) as well as information required to be furnished under Form No. 1 it is evident that Hot Mix Plant, even if it is not owned by the tenderer, and even if it is not located within 60 kms. radius from the work site, the tenderer is merely required to give information as to how he shall procure such Hot Mix Plant and whether it is available for immediate deployment. The learned Counsel for the petitioner therefore, contended that though the petitioner has disputed the fact that the Hot Mix Plant of the petitioner is located beyond 60 kms. from the site of work, however, submitted that even if it is presumed, for the sake of argument, that the said Hot Mix Plant is located beyond 60 kms. from the site of work even then the tender of the petitioner cannot be rejected on the ground of non-fulfilment of additional condition No. 1, in view of the stipulations in condition No. 1.3.1 of the tender document. In any case, the action of respondent of not opening Envelope No. 2 on the ground referred to hereinabove cannot be sustained in law and therefore, direction be given to the respondent to open Envelope No. 2 of the petitioner and the respondent be directed to take appropriate decision for issuing work order.

8. Shri Choudhari, learned Government Pleader, on the other hand, supported the action of the respondent and contended that Envelope No. 2 of the petitioner is not opened since the petitioner failed to fulfil condition No. 1 of the tender document. It is submitted that Hot Mix Plant owned by the petitioner is located beyond 60 kms. from the radius of the work site. Shri Choudhari, learned Government Pleader further contended that Condition No. 1 makes it clear that if the tenderer fails to establish or give documentary proof in Envelope No. 1 about the location of his Hot Mix Plant whether it is within the radius of 60 Kms. from the site of work, in such situation, it is open for the respondent to reject the tender or not to open Envelope No. 2 of such bidder. In the instant case, since location of Hot Mix Plant owned by the petitioner is beyond 60 Kms. from the site of work, Envelope No. 2 of the petitioner was not opened and the action of respondent is consistent with Condition No. 1 of the tender document.

9. It is further contended that so far as Form No. 1 is concerned, it is required to be submitted only by the tenderer where cost of work under tender is less than Rs. 50.00 Lakhs. It is contended that so far as the work costing less than Rs. 50.00 Lakhs is concerned, tender condition No. 2 is attracted and the tenderer, who has submitted tender for the work costing less than Rs. 50.00 Lakhs requires to submit Form No. 1 as required under tender Condition No. 1.3.1. (vii). It is further contended by the learned Government Pleader that the contention canvassed by Shri Dharmadhikari, learned Counsel for the petitioner, in this regard, is misconceived since there is no inconsistency in these two terms and conditions of the tender document since they operate in different situations and do not overlap each other.

10. Shri Atul Pande, learned Counsel for respondent No. 4, has adopted contentions canvassed by the learned Government Pleader and further contended that so far as terms and conditions of the tender document are concerned, those terms and conditions cannot be relaxed in favour of the petitioner and therefore, the decision of respondent No. 3, not to open second envelope of the petitioner, in the circumstances of the case, is just and proper and is sustainable in law.

11. We have given our anxious thought to the contentions canvassed by respective counsel. Perused relevant conditions of tender documents.

12. In the instant case, following tender conditions are relevant for adjudication of the issue in question.

Condition No. 1 : When the cost of work is more than Rs. 50.00 Lakhs:

The Contractor must have an upto date established "Hot Mix Plant" of his own in working condition, within the radius of 60 k.m. from the site of work on the date of submission of Tender. The bidder should enclose the documentary proof in this regard in Envelop No. 1 Otherwise his Tender i.e. Envelop No. 2 is liable to be rejected.

Work costing less than Rs. 50.00 Lakhs Condition No. 2 : When the cost of item of Hot Mix Hot Laid Work is less than remaining other work.

The Contractor should certify that they have an upto date Established "Hot Mix" Plant of his own in working condition. The bidder should enclose the documentary proof.

In case the bidder does not own the hot Mix plant on the date of submission of Tender. The Contractor shall produce an undertaking on stamp paper of Hot Mix Plant owner whose plant is located within the 60 k.m. radius from work site that they shall supply the required Hot Mix materials throughout the contract period (including extension period if any) without any hindrance the bidder with his dated signature and other relevant documentary proof along with Rs. 100/- notarised stamp paper affidavit in this regard in the Envelop No. I otherwise his Tender i.e. Envelop No. 2 is liable to be rejected.

Similarly, Sub-clause (vii) of Condition No. 1.3.1 reads thus:

(vii) Details of Machinery and Plants immediately available with the Tenderer (information to be given in Form No. 1). " Format of Form No. 1 reads thus :

Form No. 1.

(To be included in Envelop No. 1)

List of Machinery and Plants

Proforma for information regarding availability/procurement of machinery required for this work.

 Lint of Machineries                      No. of Machineries
1. Concrete Mixer
2. J.C.B.
3. Needle Vibrator
4. Needle roller (10/12 tonnes capacity)
5. Tipper/Truck
6. Pumping set 5 H.P.
7. Plate Vibrator.
8. Steel centering plates and assembly.
9. Hot Mix Plant as per MOST 2.000
10. Water tanker of 6000 Ltr. Capacity.
 

A) Is the above listed machinery owned by you is available for immediate deployment on this work ?
 

i) Give information in this sample form.
 Type of   No. of Units    Names of work   Location   Output  Work in
Machinery                    on which                           Hand
And                          deployed at
Equipment                    present
  

ii) Contractor desired to hire some machinery, shall give details about the hiring machinery. If information is not submitted and machinery required are less in No. than given above the main bid document will not be opened.
 

B) If answer to question I is "No", please state how this machinery will be procured by the Contractor. Whether by -
  

a) Taking on hire from another company.
 

b) Purchase from the manufacturer.
 

If answer to "a" is "Yes", please attach an agreement on stamp paper executed for hire with the company who possesses this machinery and also give the information as in Question 2 above in respect of his company.
 

If answer to "b" is "Yes", please attach -
  

i) Copy of order placed with manufacturer along with receipt of advance payment made to the manufacturer.
 

ii) Firm acceptance of order from manufacturer giving dates of firm delivery.
 

c) If answer to "a" and "b" is "No", please give details how machinery will be made available for use on this work.
                                        Sign of Contractor.
Contractor     No. of Corrections      Executive Engineer.
 

13. In the instant case, the work under tender is admittedly above Rs. 50 Lakhs and therefore additional condition No. 1 of tender document is attracted. The requirement under Condition No. 1 is, the contractor must have up to date established "Hot Mix Plant" of his own in working condition, within the radius of 60 kms. from the site of work, on the date of submission of tender. The tenderer is also required to submit documentary proof in this regard in Envelope No. 1. Condition No. 1 further specifically stipulates that, if the tenderer does not fulfil condition No. 1 such tender shall be rejected and Envelope No. 2 of such tenderer shall not be opened. In other words, requirements of condition No. 1 are as follows:

a) The Contractor must have upto date Established "Hot Mix Plant" of his own which also should be in working condition on the date of submission of tender.

b) The Hot Mix Plant must be located within the radius of 60 Kms. from the site of work on the date of submission of tender.

c) The bidder should enclose documentary proof in this regard in Envelope No. 1, otherwise Envelope No. 2 of such tenderer shall not be opened and tender shall be rejected.

14. We want to express that the tender notice can be classified into two categories, namely, essential conditions of eligibility and ancillary and subsidiary conditions which are primarily for the purpose of achieving main object of tender work. The authority floating tender must insist upon compliance of essential conditions of eligibility and are not entitled to deviate from insistence on strict compliance of such essential condition of eligibility. However, in case of ancillary and subsidiary condition it is open to the authority to deviate therefrom, if necessary. Similarly, it is well settled that the lowest price bid though is an important criteria while awarding public work to the contractor, however, same cannot always be the only criteria and mode of execution of work under tender, but it must also be ensured that public interest is best served. The essential eligibility conditions stipulated in tender notice are to ensure that the object of tender can only be achieved by such contractor/tenderer who fulfils the essential eligibility criteria. In the instant case, it is evident that essential eligibility criteria mentioned in condition No. 1, that the "Hot Mix Plant" apart from being owned by the contractor must be located within the radius of 60 kms. from the site of work is for achieving and maintaining the quality of work. The temperature of mixed metal and bitumen at Hot Mix Plant remains at 165° C and best result can be achieved quality-wise, if at the time of laying the said material (mixture) on the work site, the temperature does not fall below 120° C. If such material is transported within the radius of 60 kms. maximum fall of temperature can be by about 40° C which is acceptable. However, further fall of temperature at the time of laying the material at the work site disturbs the quality of the work. Therefore, the material brought from beyond the distance of radius of 60 kms. cannot have temperature up to 120° C and there is likelihood of fall in temperature below 120 C and such material becomes useless for laying on the road. Keeping this aspect in mind, additional condition No. 1 was incorporated in the tender document.

15. At this stage, it will be appropriate for us to consider the nature and purport of condition No. 1.3.1 of the tender document. Condition No. 1.3.1 requires the tenderer to submit documents and information regarding Clauses (i) to (xiv) in "Envelope No. 1". It is specifically stipulated in condition No. 1.3.1 that, if any information/document is not submitted as required under Clauses (i) to (xiv) Envelope No. 2 of such tenderer will not be opened, in other words, tender of such tenderer shall be rejected. It is therefore, evident that condition No. 1.3.1 is another essential eligibility criteria/condition of the tender. Similarly, condition No. 1.3.1 is applicable irrespective of the fact, whether work under tender is more or less than Rs. 50 Lakhs and therefore, information and documents required to be furnished/submitted as per condition No. 1.3.1 is by all tenderers who have submitted tenders for work less or above Rs. 50 Lakhs.

16. The above stipulations in Condition No. 1.3.1 make it implicitly clear that it is not mandatory that the tenderer must own Hot Mix Plant on the day of submission of the tender. On the other hand, he is entitled to take such plant on hire from another company or can also purchase the same from the manufacturer and make it available for immediate deployment and therefore, by necessary implication it is also not mandatory that on the day of submission of tender the Hot Mix Plant must be located within the radius of 60 kms. from the site of work.

17. It is well settled that while construing/interpreting the terms and conditions of the tender document Courts are required to do so on the basis of the language used in such terms and conditions, the purpose for which they are incorporated, keeping in view the objective to be achieved and not on the basis of explanations given by the department in this regard in the reply/affidavit filed in the Courts.

18. Plain reading of both these conditions would show that force and mandatoriness of the essential eligibility criteria prescribed under condition No. 1 i.e. tenderer must own "Hot Mix Plant", which must be located within the radius of 60 kms. from the site of work on the day of submission of the tender is completely taken away by Clause (vii) of Condition No. 1.3.1. In other words, effect of essential eligibility conditions stipulated in column No. 1 rendered nugatory by condition No. 1.3.1 (vii) and reduced the said conditions as ancillary or subsidiary as well as destroyed the mandatory nature of the said conditions.

19. We want to express that public bodies/authorities which include State as well as instrumentalities of the State while discharging their public or statutory duties are required to do so in a fair and transparent manner and in the public interest. The respondent while floating tender in question, ought to have taken care to incorporate such terms and conditions which are unambiguous, clear and ought to have provided procedure which is transparent, straight-forward and which serves public purpose. It is no doubt true that the Government Departments are entitled to formulate/evolve terms and conditions (essential and otherwise) for carrying out the work under tender. However, such terms and conditions must be clear, unambiguous, complementary to each other and should be able to co-exist for the purpose of achieving the objective for which the tender is floated.

20. In the instant case, inconsistency between Condition No. 1 and 1.3.1 (vii) has provided option to the department to pick and choose a tender, by exercising discretion arbitrarily, e.g. if the department wants to reject a tender then the department can invoke condition No. 1 and can reject such tender for non-fulfilment of essential eligibility criteria stipulated in condition No. 1. At the same time, the department can accept the tender which does not fulfil the essential eligibility criteria stipulated in condition No. 1, in view of condition No. 1.3.1 (vii). It is therefore, evident that these terms and conditions of impugned tender notice are neither fair nor transparent. On the other hand it introduces element of arbitrariness in the process of allotment of work under tender. It is also informed at the bar that high officials of respondent department also expressed that the impugned tender notice should be cancelled for the same reason and fresh tender notice should be issued after formulating proper terms and conditions. In the backdrop of these facts and circumstances as well as looking to the nature of inconsistency in the conditions of tender notice, we are of the view that the impugned tender notice needs to be quashed and set aside since it does not serve public interest.

21. For the reasons stated hereinabove, the tender notice dated 20-12-2005 is hereby quashed and set aside. Similarly the work order, if any, issued by respondents, in favour of respondent No. 4, is also liable to be quashed and set aside. Respondent No. 2 is entitled to issue fresh tender notice for the same work after formulating proper terms and conditions, keeping in view the observations made by us in the present judgment.

Rule made absolute in the above terms. No order as to costs.