M/S B. Ganga Transport And Sai ... vs M/S Western Coafields Limited, ...
2015 Latest Caselaw 547 Bom

                                                1




                                                                                      
                                                             
                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

                          NAGPUR BENCH : NAGPUR




                                                            
    Writ Petition No. 5356 of 2015

    Petitioner            :        M/s B. Ganga Transport and Sai Trade Link Joint




                                                   
                                   Venture, through its Power of Attorney Holder,
                                    
                                   Jitendra son of Gangadharrao Borde, aged about
                                   
                                   32 years, having its Office at Shetkari Mandir

                                   Road, Near Goft Hospital Road, Wani, District
          

                                   Yavatmal
       



                                   versus

    Respondents           :        1) M/s Western Coalfields Limited, Coal Estate,

through its managing Director-cum-Chairman,

Civil Lines, Nagpur

2) The General Manager (CMC), Western Coalfields

Limited, Coal Estate, Civil Lines, Nagpur

Mr Akshay Naik, Advocate for petitioner

Mr S. P. Dharmadhikari, Senior Advocate and Mr C. S. Samudra, Advocate with him for respondents

Coram : B. P. Dharmdhikari And V. M. Deshpande, JJ

Dated : 18th November 2015

Oral Judgment (Per B. P. Dharmadhikari, J)

1. Rule, made returnable forthwith and heard finally with consent

of parties.

2. The petitioner Firm questions the communication dated 7.9.2015

issued to it by respondent no. 2 pointing out that it has not submitted the

certificate of availability of credit from its banker towards the evidence of

adequacy of working capital as per notice inviting tenders (NIT).

3. This Court issued notice in the matter on 21 st September 2015

and at that time, passed the following order :

"Heard Shri A. a. Naik, learned counsel for the petitioner. It appears that in the earlier tender process dated

16.03.2015 and thereafter dated 18.05.2015, the petitioner has been permitted to participate on the basis of documents i.e. Certificate of Chartered Accountant showing his financial capacity. The Banker's certificate which is being insisted upon now, was then not asked for.

Notice, returnable on 29.09.2015.

Though the respondents may proceed further with

consideration of other offers, it is open to them to simultaneously evaluate offer of the petitioner also without prejudice to their defence in the present petition.

Though tender process may continue, work order shall not be issued till next date."

4. We have heard Mr Akshay Naik, learned counsel for the

petitioner and Mr S. P. Dharmadhikari, Senior Advocate with Mr C. S.

Samudra, learned counsel for respondents.

5. Mr Naik points out that in response to NIT dated 13 th June 2015

and as per terms & conditions, particularly clause 6B. Petitioner submitted

certificate issued by a qualified Chartered Accountant dated 13th April 2015.

He points out that as such, condition which required Banker's Certificate

regarding availability of access to credit is not an essential condition. On

earlier occasion also, certificate issued by the Chartered Accountant was

accepted as sufficient evidence of adequacy of working capital and price bids

submitted by the petitioner along with others were opened. He invited our

attention to two such previous occasions where certificate issued by the

Chartered Accountant was accepted as valid.

6. He contends that only explanation for deviating from this course

as offered by the respondents in their reply-affidavit is that the present NIT is

the on-line tender process while earlier, it was manual one. He submits that

whether process being followed is manual or on-line is not relevant and

nature of procedure has no bearing on the nature of condition. Once the

condition is accepted to be colateral one, merely because the process being

followed at this juncture is on-line, that condition cannot be elevated and

read as an essential condition. He submits that earlier the contract of

transportation of coal had been awarded to the petitioner in view of the price

bids which were opened on the strength of Certificate of Chartered

Accountant.

7. Mr S. P. Dharmadhikari, learned Senior Advocate relies upon

reply-affidavit. He submits that merely because on earlier occasions

certificates of Chartered Accountant were accepted, that by itself does not

make the condition mentioned supra colateral one. He points out that the

tender process itself consumes lot of time and looking to the same, it is

essential to determine the financial ability of the tenderer. Clause 6B,

therefore, stipulates that a certificate issued by a Scheduled Bank regarding

availability of access to credit and it is an essential condition. As earlier

certificates issued by the Chartered Accountant were accepted by the

respondents, not only the petitioner, but other four bidders were also given

opportunity to submit the Banker's Certificate of scheduled Bank and time of

ten days was given to them with understanding that no further extension

would be allowed in that respect.

8. Petitioner has on 17.9.2015 submitted an affidavit to the

respondent seeking time to submit the said certificate of banker and agreed

to furnish it befiore award of contract/issue of Letter of Acceptance, as early

as possible. Ultimately, on 16.11.2015 petitioner has submitted certificate of

Pusad Urban Cooperative Bank Limited, Pusad which is not a Scheduled

Bank.

9. He states that looking to the nature of work to be allotted, its

worth and considering the stake involved, condition imposed is rightly

viewed as an essential condition. Said condition is not being assailed as

arbitrary or irrelevant or unjust. Once the condition is found to be valid, the

use thereof by the respondents cannot be treated as arbirtrary. The condition

has been inserted in public interest and if said condition is viewed as

colateral one, the purpose of introducing it in the present e-tender notice

would be frustrated.

10. Mr Naik, learned counsel for petitioner has invited our attention

to other terms and conditions in an effort to demonstrate that after tender is

accepted, various securities and guarantees are required to be furnished and

those clauses, therefore, take care of the interest of respondents as also public

interest. He submits that in a hypothetical matter, even after submission of

the certificate of a Scheduled Bank regarding availability of access to credit,

the person submitting tender may go back and respondent may be required

to undertake the entire process afresh.

11. We find that the fact that not only the petitioner, but also other

tenderers had submitted certificates of Chartered Accountant only and their

tenders were not accompanied by certificate of Scheduled Bank, is not in

dispute. Apart from petitioner, four other bidders vide communication dated

7.9.2015, were given opportunity to submit the requisite Banker's certificate

regarding availability of access to credit. They were also given clear

understanding that no further extension would be granted to them and

its non-submission would disqualify them from further participation.

12. The petitioner has, after this communication, submitted an

affidavit which is sworn in on 17.9.2015. In this affidavit, there is express

reference to the communication dated 7.9.2015 and it stated that petitioner

has already submitted working capital certificate of Chartered Accountant. It

is added that petitioner is interested in participating further and, therefore,

aspired to qualify for oopening of Part-2 of tender process. Petitioner

asserts that it was in the process of procuring certificate from banker and that

process would take some time. After submitting this affidavit, present writ

petition came to be filed on 21.9.2015. Immediately on the very same day,

this Court has passed the order reproduced supra.

13. During the pendency of this petition, admittedly, petitioner has

not produced a certificate issued by any Scheduled Bank. Pusad Urban

Cooperative Bank Limited has issued certificates dated 16.11.2015 which

mention that petitioner has "loan to traders working capital cash credit limit"

of Rs. Four crores fifty lacs. Admittedly, this Bank is not a Scheduled Bank.

14. The eligibility criterian are laid down in clause 6 of NIT. Clause

6B which is relevant for present purposes, reads as under :-

"B. Working Capital : The bidder must produce the evidence of

adequacy of a minimum working capital either 20% of the annualized value of estimated cost of the work (for period of completion over one year) or 20% of the estimated cost of the

work (for period of completion upto one year), for this work.

Banker's Certificate (Scheduled Bank) regarding availability of

access to credit (issued within 3 months prior to the last date of submission of Bid)."

As per Clause 8 (d), entire information as required under

clauses 6 and 7 was required to be uploaded in the links cover-I. As per

clause 8 (e), the price Bid was to be submitted in cover-II.

15. Clause 23 in NIT is regarding notification of award and signing

of Agreement. Clause 24 to which our attention was drawn by petitioner, is

about performance security/security deposit. It speaks of security deposit in

two parts. The first part is about performance security to be submitted at

award of work and second part is about retention money to be recovered

from running bills. Clause 4.2 of the conditions of contract then stipulates

the quantum of performance security to be 5% of annualized value of

contract amount and it is to be submitted within 28 days of issue of Letter of

Acceptance by the successful bidder. Clause 4.3 requires the performance

security to be furnished by a bidder through a Scheduled Bank or by a

foreign bank located in India and acceptable to the respondents. Clause 4.5

is about refund of security deposit.

16. Thus, all these clauses come into picture after Letter of

Acceptance is issued by the respondents. Contingency that a successful

bidder may not furnish the later securities/guarantees cannot have any

relevance while construing clause 6B which is on availability of (i) working

capital and (ii) access to credit.

17. When Clause 6B is viewed in this background, it is apparent that

it determines eligibility and, therefore, enables the person to qualify at first

stage. Words used therein show that it is obligatory on the bidder to produce

evidence as to the adequacy of a minimum working capital. The very same

clause also stipulates certificate of a Scheduled Bank regarding availability of

access to credit and it should have been issued within three months prior to

the last date of submission of bid. In the light of this clause, petitioner

submitted only a certificate of Chartered Accountant. It is dated 13.4.2015

and it shows that petitioner has working capital of Rs. 2.08 crores as on

31.3.2015 in the business.

18. Thus, this certificate is not issued by a Scheduled Bank

regarding availability of access to credit. It only points out working capital

available with the petitioner as on 31.3.2015. It, therefore, takes care of first

part of Clause 6B and not its later part.

19. Subsequent conduct of petitioner in showing readiness and

willingness to comply with the demand as per communication dated

7.9.2015; submission of affidavit by him on 17.9.2015 and then providing a

certificate of a cooperative bank dated 16.11.2015 all show that the

petitioner was aware of the need of a certificate requiring him to establish

availability of access to credit in terms of said clause 6B. We find that

certificate issue by Chartered Accountant or certificates issued by a

cooperative bank on 16.11.2015 do not meet this requirement.

20. Petitioner does not claim that certificate of a non-Scheduled

Bank submitted by it after stipulated period of ten days should be accepted

as sufficient compliance. Petitioner did not seek any extension of time from

respondents for that purpose. Access to availability of credit is needed to

ascertain not only financial stability of contractor, but his competency to

arrange for finance for the work under NIT in case of any emergency. Such

a requirement cannot be treated as a non-essential or a colateral condition.

21. The submission that it has to be treated as a colateral condition

cannot be accepted. Access to credit is demanded to determine the

competency of petitioner who already has two contracts to complete the

work for which he is bidding. The fact that earlier respondents accepted

certificate of Chartered Accountant as sufficient compliance with Clause 6B is

not decisive looking to the purpose with which such a provision has been

made. The said stipulation, therefore, is an essential condition.

22. In view of this, no case is made out for interference. Petition

fails and is dismissed. Needless to mention, interim order dated 21.9.2015

stands vacated. Rule discharged. No costs.

            V. M. DESHPANDE, J                         B. P.  DHARMADHIKARI, J



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