Bombay High Court
Narshima Constructions Pvt. Ltd vs Unknown on 9 December, 2009
Bench: Naresh H. Patil, K.U. Chandiwal
1
IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO.7080 OF 2009
Narshima Constructions Pvt. Ltd.
Through its Managing Director,
Mr.Mohan Kashinathrao Kale,
Age:47 Yrs., occu. Contractorship
r/o Dhanshree, Dhanora Road,
Beed, Dist. Beed (M.S.) - PETITIONER
VERSUS
1)
The State of Maharashtra
Through Secretary
Public Works Department,
Mantralaya, Mumbai-32.
2) The Chief Engineer,
Public Works Region,
Bandhkam Bhavan, Adalat Rd.,
Aurangabad.
3) The Superintending Engineer,
Special Project Circle,
Bandhkam Bhavan, Aurangabad.
4) The Executive Engineer,
Special Project Division No.1,
Nagar Road, Beed, Dist.Beed.
5) Government of India,
Through Secretary,
Ministry of Surface, Transport
Department of Road Transport &
Highway, New Delhi. - RESPONDENTS
*****
Mr.VJ Dixit, Sr. Counsel holding for
Mr.J.N.Singh, Advocate for Petitioner;
Mr.RP Phatke AGP for Respondent Nos. 1 to 4;
::: Downloaded on - 09/06/2013 15:23:44 :::
2
Mr.Alok Sharma, Assistant Solicitor General for
Union of India for Respondent No.5.
-----
CORAM : NARESH H. PATIL &
K.U.CHANDIWAL, JJ.
DATE : 9th December, 2009.
ORAL JUDGMENT (PER: NARESH H.PATIL, J.)
1)
Rule. Rule made returnable forthwith. By
consent of parties heard finally.
2) The petitioner, a private limited
company under the India Companies Act, 1956,
participated in the tender process, pursuant to
the Tender Notice/National Competitive Bid dated
26.8.2008 for carrying out the work for widening
two-lanes Kalyan-Nanded-Nirmal Road NH-222 KM
376/00 to 395/00 (hereinafter to be referred to
as the work under the tender). The estimated
cost put under the tender is Rs.9,39,87,460/-.
The petitioner submitted his tender bid with the
concerned authorities.
3) The petitioner mainly raises its
challenge on the ground that (i) carrying out
the work under the tender by joint venture is
prohibited by the respondents as per clause 4.4.
Part-I of National Competitive Bidding (for
short,NCB); (ii) Sub- Clause (A)(b) of clause
4.5 of the NCB as regards satisfactory completion
of earlier work to the extent of 90% of the
contract value was unreasonable; and (iii) The
respondents authorities claimed certain
amenities for the Department under the caption
`Errata'. We may here itself find it convenient
to quote Clauses 4.4; 4.5 (A)(b) and relevant
clauses shown under the caption "Errata", set
out in the National Competitive Bidding, which
read as under :
"4.4. Bids from Joint Ventures
are not acceptable; or Bids from
prequalified firms or prequalified
joint ventures only will be
acceptable.
4.5(A) To qualify for award of the
contract, each bidder in its name
should have in the last five years
as referred to in Appendix.
(a).................................
(b) Satisfactorily completed(not
less than 90% of contract value), as
a prime contractor (or as a
nominated subcontractor, where the
subcontract involved execution of
all main items of work described in
the bid document, provided further
that all other qualification
criteria are satisfied) at least one
similar work of value not less than
amount indicated in Appendix
(usually not less than 50% of
estimated value of contract).
Errata
Name of Work - Widening to two lane
KM 315/00 to 321/00 & km 332/00 to
336/600 Kalyan-Nagar-Pathardi-
Padalsingi-Gadhi-Majalgaon-Parbhnai-
Nanded-Nirmal Road NH-222 in the
State of Maharashtra.
Cost put to Tender :- Rs.
9,39,87,460/-
The following amendments are made in
Tender Booklet as per below :-
(I) In VOLUME-II (original and copy)
TECHNICAL SPECIFICATIONS Page No.40
Clause :- Amenities to department.
Inspection vehicles for
Engineer.
The entire Para is deleted and
instead, following shall be read:
Special Conditions :-
1) The successful contractor shall
provide one brand new vehicle to
department for inspection purpose of
TATA Sumo Victa Model CX seven
seater without any extra cost to
Government. The vehicle shall remain
in the custody of the department and
shall be the sole property of the
Government. The contractor shall
provide the above described vehicle
duly insured and getting RTO passed
at his own expenses in the name of
the Executive Engineer, Special
Project Division No.1, Beed. The
contractor shall provide above
vehicle within one month from the
date of issue of work order, failing
which an amount of 5.50 lakhs
(Rupees five lakhs and fifty
thousand) will be recovered from the
first R.A. Bill of this work.
2) In addition to this the
successful contractor shall provide
following amenities without any
extra cost to Government.
i) 4 nos. of 2.00 Ton carrier split
air conditioners model -2 T ESR ELLA
ii) 1. No.of Richo AFICIO MP 2000 Le
Xerox Machine.
iii) 1 No. of Fax machine, Model
Panasonic 981.
iv) 15 Nos. of Neelkamal Chairs.
V) 2 Nos. of Printer, model-Canon
2900 Laserjet.
vi) 2 Nos. of Luminous Make
Inverters Model-800 VA with 2 years
warranty with 1 No. Exide make SF
brand Fall tubular Battery model 150
Ah with 3 years warranty and
installation thereof."
4) The learned Senior Counsel Shri Dixit
submitted that Joint ventures are accepted
formula in the matters of carrying out huge work
under contract and the concept of joint-ventures
is not alien to bidding in tender. According to
the learned Counsel,the petitioner would be
ousted and deprived owing to arbitrary and
unreasonable conditions mentioned in the Clauses
4.4. and 4.5.(A)(b), for which, reliance was
placed by the learned Counsel on the reported
Judgment of the Apex Court in the matter of New
Horizons Limited and Anr. Vs. Union of India -
(1995) 1 SCC 478.
5) As regards clause 4.4.(A)(b) of the NCB,
it was submitted that in the matters of identical
nature, the respondents authorities have reduced
the value of the work completed by the bidder.
But, in the present case, the Respondent No.2 -
Chief Engineer erred in exercising his discretion
by fixing 90% of the value of the contract work
for deciding the eligibility of the petitioner.
The Counsel further submitted that the amenities
demanded by the Department from the
bidders/tenderers are arbitrary and unreasonable
and in identical situation of a tender of like
nature, the Chief Engineer had waived the
condition as regards providing the amenities and
had even reduced the value of the contract work.
Certain documents were placed on record by the
petitioner to substantiate their contention that
the Chief Engineer has wrongly exercised his
powers in rejecting the representation made by
the petitioner for making
corrections/amendments/alterations in the
conditions of the tender document.
6) The Respondent nos. 2 to 4 have filed
their affidavit in reply through Mr. Hemant
Sampatrao Pagare, Superintending Engineer,
Special Project Circle, Aurangabad. The deponent
states that the Ministry of Surface Transport,
Department of Road Transport & Highways,
Government of India, is a necessary party to the
proceedings of this writ petition. On the issue
raised by the petitioner in respect of value of
the work, it was contended by the deponent that
clauses 4.4. and 4.5(A)(b), Part-I, are the
conditions stipulated in the Standard Bidding
Document (SBD) and those conditions are commonly
applied throughout the area of operation wherever
the work of this nature is undertaken by the
Ministry/Department. The deponent further
submitted that in the present case the estimated
costs of the work is Rs.939.87 lakhs and,
therefore, the value of the similar work was
fixed at Rs. 846.00 lkahs, i.e. at 90% of the
estimated costs which is well above the limit of
50% and it is in tune with the conditions
stipulated in the SBD.
7) As regards the issue of joint-ventures,
it is submitted that clause 4.4 of the SBD
provides that Bids from joint ventures for the
projects above Rs.100.00 corers are acceptable.
Therefore, the present project/work being less
than Rs.100 crores, joint venture bidding is
declined.
8) As regards the various amenities to be
provided to the Department by the bidder, it is
contended that these clauses are general in
nature and routinely followed as they are
essential for effective supervision of the work
in question to be carried out by the bidder.
9) The learned Counsel for the respondents
placed reliance on reported judgment of this
Court in the matter of Bhaskar Industries Ltd.
Vs. Maharashtra State Electricity Distribution
Company Ltd. reported in 2007-EQ(BOM)-0-1230. The
learned Counsel Shri Sharma submitted that the
powers of judicial review by this Court, in
exercise of extra ordinary writ jurisdiction, are
limited. It was submitted that the State can
have its own terms of invitation of tender and it
is not open for the judicial scrutiny. According
to the learned Counsel, the Courts would not
interfere with the terms of the tender notice
unless it is shown to be either arbitrary or
discriminatory or actuated by malice.
10) We have considered the submissions
advanced by the learned Counsel for the parties
and perused the documents placed before us and
the Judgments cited by the parties. As regards
the challenge made by the petitioner in respect
of joint venture, we find satisfactory
explanation given by the respondents. These
clauses of tender are part of Standard Bidding
Document (SBD) issued by the Government of India,
Ministry of Surface Transport, Department of Road
Transport & Highway. As regards the issue
relating to value of the work, the Chief Engineer
had already considered the representation of the
petitioner and had reduced the value of the work
done earlier by the petitioner from Rs. 939.87
lakhs to Rs. 846.00 lakhs, which is above 50% as
provided in clause 4.5 (A)(b) in Part-I of the
tender document.
11) The issue regarding scope of judicial
review in the matters of contract, tender and
commercial nature are well-settled, for which we
may refer to the observations made by the Apex
Court in para 10 of the Judgment in the matter of
Global Enery Ltd. Vs. Adani Exports Ltd. reported
in 2005-EQ(SC)-0-450, which read as under :
"10. The principle is,
therefore, well settled that the
terms of the invitation to tender
are not open to judicial scrutiny
and the courts cannot whittle down
the terms of the tender as they are
in the realm of contract unless they
are wholly arbitrary discriminatory
or actuated by malice. This being
the position of law, settled by a
catena of decisions of this court,
it is rather surprising that the
learned Single Judge passed an
interim direction on the very first
day of admission hearing of the writ
petition and allowed the appellants
to deposit the earnest money by
furnishing a bank guarantee or a
bankers' cheque till three days
after the actual date of opening of
the tender the order of the learned
Single Judge being wholly illegal,
was, therefore, rightly set aside by
the Division Bench."
12) However, we are not convinced with the
submissions advanced by the learned Counsel Shri
Sharma on the issue of amenities to be provided
by the bidder to the Department and which are
shown under the caption `Errata' referred herein
above. On instructions of the Officer, present
in the Court, learned Counsel Shri Sharma
submitted that for effective supervision over the
work in question, a vehicle is necessary for the
offices concerned. At the most, the vehicle
taken from the bidder would be returned back to
the successful bidder after completion of the
work. We find that the special condition,
mentioned in the tender booklet, in respect of
binding the successful bidder to provide one new
brand vehicle to the department for inspection
purpose, would be unreasonable and
unconscionable. We also find that the condition
of providing the items, mentioned in clause no.2
of the Special Conditions, by the successful
bidder, is also unreasonable. We do not find any
justifiable reason as to why the Central
Governmental authorities are not equipped with
the infrastructural items for effective
supervision over the work of such a huge
magnitude. We are not convinced with the
submissions advanced by the learned Counsel for
the respondents on this aspect of the matter. We
are convinced that these conditions are arbitrary
in nature. We are, therefore, inclined to quash
and set aside the Special Conditions referred to
above under the caption "Errata".
13) The learned Senior Counsel during the
course of hearing has produced a copy of the
document, based on which, it was submitted that
the condition of joint venture was waived by the
authorities. To this, learned Counsel Shri Sharma
submitted that in that case, the tender costs was
below Rs. 5 crores. We are convinced with the
submissions advanced on that count by learned
Counsel Shri Sharma.
14) In view of the discussions made herein
above, the petition is required to be allowed
partly. The petition is accordingly allowed
partly. The petitioner fails in raising challenge
to the clauses 4.4 and 4.5(A)(b) of the tender
document in respect of joint venture and value of
the work. As regards the special conditions
under the caption "Errata", mentioned above, the
petition is allowed to that extent. We set
aside the aforesaid special conditions.
15) Rule made partly absolute in the
aforesaid terms. Interim relief stands vacated.
sd/- sd/-
(K.U.CHANDIWAL) (NARESH H. PATIL)
JUDGE JUDGE
bdv/wp7080.09
Authentic copy
(BD VADNERE,PS)
