Bombay High Court
M/S Komal Construction, Through ... vs The State Of Maharashtra Through ... on 8 August, 2016
Bench: B.P. Dharmadhikari
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
WRIT PETITION No. 3863 OF 2015.
1. M/s. Komal Construction,
a proprietorship firm duly represented
through its Proprietor Shri Rajendra
s/o Chunnilal Somani, aged about
52 years, having office at Varsha
Apartment, Mitra Nagar,
Aurangabad.
2. M/s. Dewashish Constructions
Company, a Proprietorship Firm
duly represented through its Proprietor
Shri Ashish Shriniwas Zawar
aged about 34 years, having office at 47
Jai Vishwabharti Coloney,
Aurangabad.
3. N.P. Bridge Infrastructure Pvt. Ltd.,
A company incorporated under
Indian Companies Act,
duly represented through its
Director Shri Nitin P. Tapadia,
aged about 42 years, having office at
E-6, Royale Arcade, Satara Road,
Pune. .... PETITIONERS.
VERSUS
::: Uploaded on - 09/08/2016 ::: Downloaded on - 10/08/2016 00:37:01 :::
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1. The State of Maharashtra,
through its Principal Secretary,
Public Works Department,
Mantralay, Mumbai - 32.
2. The Chief Engineer,
Public Works Department,
Regional Office, Amravati.
3. The Superintending Engineer,
Public Works Circle,
Akola.
4. The Executive Engineer,ig
Public Works Division,
Akola.
5. Sharda Construction and Per
Corporation Pvt. Ltd., Sharda
Tower, Plot No.72, Ashok Nagar,
Nanded, through its Power of
Attorney Holder Shri Madhav
Ramrao Eklare. ....RESPONDENTS
.
-----------------------------------
Mr. S.P. Dharmadhikari, Senior Advocate with Shri S.A. Dharmadhikari,
Advocate for Petitioners.
Mr. N.S. Rao, Asstt. Govt. Pleader for Respondent Nos. 1 to 4.
Mr. H.D. Dangre, Advocate for Respondent No.5.
------------------------------------
CORAM : B.P. DHARMADHIKARI &
KUM. INDIRA JAIN , JJ.
Date of Reserving the Judgment : 19.07.2016.
Date of Pronouncement : 08.08.2016.
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JUDGMENT. (Per B.P. Dharmadhikari, J)
By this petition filed under Article 226 of the Constitution of India,
3 petitioners, all artificial persons, question the action of respondent nos. 1
to 4 in rejecting their tender at the stage of opening of Envelope No.1 and to
set aside the communication dated 29.06.2015 informing them about it. A
further direction is sought by them to consider its price bid together with
other price bids. This Court has issued notice in the matter on 09.07.2015.
It appears that work order was issued on 21.07.2015 in favour of respondent
no.5. Petition was allowed to be amended on 20.04.2016 and on
05.05.2016, upon grievance that filing of reply by respondents was being
deliberately delayed, we stayed the work order.
2. The tender No. 27254 floated by respondents inviting bids for
construction of approach road to a Major Bridge across Purna River Ch.
106/400 near Gandhigram village and construction of slab drain at Ch.
105/00 to 108/00 on Akot- Akola road, State Highway No.204 in Akola
District, forms subject matter of the petition.
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3. Shri S.P. Dharmadhikari, learned Senior Counsel has pointed out
that both the envelopes were to be opened together and hence, on such
technical grounds rejection could not have been ordered. Effort should have
been made by the respondents to secure lowest offer and hence, financial
bid of petitioner which is lowest, ought to have been looked into. To explain
that the alleged lapses do not constitute violation of essential terms and
conditions of tender, he has invited our attention to a judgment of Hon'ble
Supreme Court reported at (1991) 3 SCC 273 (Poddar Steel
Corporation .vrs. Ganesh Engineering Works and others) and judgment
of Division Bench of this Court dated 05.12.2014 in Writ Petition No.
5919/2014 (Khare and Tarkunde Infrastructure Private Limited .vrs. The
State of Maharashtra and others).
4. "Contractor" as defined in Clause 3[e] of additional general
conditions and specifications includes not only an Individual, but, a Firm or
Company, whether incorporated or not. Learned Senior Counsel in this
background submits that e-tender notice was published on 24.04.2015 and
it was to be downloaded upto 12.05.2015. 3 petitioners entered into a Joint
Venture Agreement and it was submitted for registration to Registrar
functioning under Partnership Act at Aurangabad on 12.05.2015. Necessary
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proof of its submission was enclosed and process of formal registration itself
takes some time. In this position it was not possible to submit Registered
Partnership Deed of Joint Venture, on the date of submission of tender i.e.
14.05.2015. He contends that this compliance was substantial compliance
and looking to the above definition of Contractor, submission of registered
deed of Partnership is only an ancillary condition.
5.
About Self-propelled Mechanical Sprayer ownership, learned
Senior Counsel submits that the petitioners submitted invoice of a sprayer
and consolidated hire agreement regarding it. This also sufficiently satisfied
the stipulation in tender notice. On 3 rd reason, he submitted that the reason
of non-submission of ownership/hire document of Rotavator is
unsustainable and hyper technical. It is a small machine costing about
Rs.85,000/- and used mainly for agricultural purposes. Petitioners had
submitted a document of a better or superior machine known as "Bathching
Plant", which serves the very same purpose of mixing of granules GSB. The
respondents, therefore, could not have declared the Joint Venture of
petitioners disqualified. He has also taken us through the relevant
documents for this purpose. Though learned Senior Counsel also pointed
out how 4th and 5th reason assigned for rejection of tender of petitioners are
incorrect, in view of the acceptance of error in relation to these reasons by
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respondents, it is not necessary for us to consider the said aspect.
6. Shri Dangre, learned Counsel appearing on behalf of respondent
no.5 has invited our attention to the Division Bench judgment of Gujarat
High Court reported at AIR 1986 Guj. 186 (Asia Foundations and
Constructions Ltd. .vrs. State of Gujarat and another), with a view to
demonstrate what is meant by Joint Venture, and how judicially this concept
is understood. According to him, the tender conditions did not require a
partnership deed of a firm registered with the office of the Registrar of Firms
under the Partnership Act. He is placing reliance upon the language of
Clause 3.7 of the tender condition to submit that where Firm is registered
under Partnership Act, the respondent nos. 1 to 4 have insisted for
submission of Firm Registration Certificate. Otherwise, insistence is only on
Registered Partnership Deed i.e. registered agreement between the parties
constituting a Joint Venture, which is executed and registered under Indian
Registration Act, with the Sub-Registrar of Documents. He contends that
petitioners could have registered their agreement within no time and supply
that copy to the respondents. He points out that till the filing of the writ
petition and thereafter, till date petitioners have not pointed out that their
Firm is registered under the Partnership Act.
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7. Inviting attention to Clause 3.7.5 dealing with Equipment
Capability, he submits that as per sub-clause [1] Machines at Sr. Nos. 4 and
5 are separately treated. In respect of Rotavator, at Sr.No.5 tender condition
point out need of one such machine for GSB mixing with further rider that it
may be owned or procured on hire. In relation to all other machines/
equipments, the requirement is of ownership only. He contends that it is
not an error and assurance sought by the respondents about their availability
and document of proof of ownership, make it an essential condition.
8. In case of second reason regarding ownership of Self-propelled
Mechanical Sprayer, ownership documents were must and documents filed
by the petitioners show that such Mechanical Sprayer does not belong to
them, but, is made available by some body else on hire for work at Pune, as
per the agreement dated 09.03.2015, and that agreement continues till
completion of the work as envisaged therein or 6 months from the date of
hire, which ever period expires later. This agreement therefore, cannot be
made use of here to demonstrate ownership of Self-propelled Mechanical
Sprayer.
9. About 3rd reason, learned Counsel states that the petitioners have
not placed any data showing that Bathching Plant with it is superior in
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quality then Rotavator, and it can be used for very same work for which
Rotavator can be employed. He invites attention to assertion in reply-
affidavit that Rotavator is used for spreading and leveling material, where
as batching plant is used for mixing of concrete etc. He contends that
despite this specific averment in its additional submission by respondent
no.5, though petitioners have filed their additional affidavit thereafter, they
have not denied it. He therefore, prays for dismissal of the writ petition.
10. Shri Rao, learned A.G.P. appearing on behalf of respondent nos. 1
to 4, relies upon the arguments of Shri Dangre. He submits that three
petitioners before this Court are themselves artificial persons and on last
date i.e. 12.05.2015, they have submitted alleged Deed of Partnership for
registration under Partnership Act. He contends that thus, they do not have
any registered document to show formation of joint venture before
submission of the tender. No such documents have been placed on record
even thereafter.
11. Shri Dharmadhikari, learned Senior Counsel in reply submits that
Rotavator is used for mixing i.e. the purpose for which batching plant is also
used. He further states that the joint venture must be essentially a
Partnership Firm constituted as per the Partnership Act and registration
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under Section 17 of the Indian Registration Act, is not necessary. He
further states that once the Firm is registered, that registration relates back
to the date of execution of the Partnership Deed. He has invited our
attention to paragraph no.9 of the reply/affidavit filed by the respondent
no.4 to urge that said respondents also accepted registration of a Firm as per
the provisions of Partnership Act only.
12.
Format of agreement of hire of machinery given in Form-II and
forming part of the tender document is pressed into service by him to urge
that the machinery needs to be hired from the date of commencement of
work and the hire agreement has to remain in force till completion of work
or 6 months from the date of hire, which ever period expires later.
Agreement of petitioners in relation to Self-propelled Mechanical Sprayer
satisfied this condition. Our attention is invited to additional affidavit by the
petitioners on 01.07.2016 to show that the hire agreement in relation to
Self-propelled Mechanical Sprayer, is sufficient, to demonstrate that such
machines available to petitioners on hire for completing work of Pune
Division can be used for present work. He contends that this agreement at
Pune shows assured ownership of Mechanical Sprayer and objection raised
by respondents is unsustainable.
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13. The judgment of Hon'ble Supreme Court reported in case of
Poddar Steel Corporation .vrs. Ganesh Engineering Works and others (supra),
shows that as per Clause 6 of the tender notice there, earnest money needed
to be deposited in Cash or by a Demand Draft on State Bank of India.
Appellant before it sent a Cheque of Union Bank of India and not of State
Bank of India. Tender Floating Authority did not accept this and rejected
the tender. Allahabad High Court upheld this reason. Hon'ble Supreme
Court allowed the appeal and in paragraph no.6 of the judgment observed
that literal obedience of Clause 6 was not expected. Thus, there was
sufficient compliance on facts before the Hon'ble Supreme Court as the
instrument was drawn of other Nationalized Bank.
14. Division Bench of this Court on 05.12.2014 while deciding Writ
Petition No.5919/2014, has taken note of the fact that when envelope no.1
was opened on 21.10.2014, petitioner - Khare and Tarkunde Infrastructure
were not informed anything. On 04.11.2014, the reason of rejection
communicated was that said Infrastructure Company did not upload scanned
copy of the Firm Registration Form in original. This Court in paragraph
no.11 took note of the requirement in this respect as contained in tender
notice and then definition of 'Contractor' is reproduced in paragraph no.12.
In paragraph no. 13 a finding is reached that an Individual or a Firm or a
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Company whether incorporated or not, undertaking the work falls within
that definition. In paragraph no.16, it has then proceeded to examine
whether submission of such Firm Registration form in original could have
been construed as an essential condition. In paragraph nos. 17 and 18, it
has attempted to find out purpose behind submission of such document and
concluded that it could not have been constituted as an essential condition.
Petitioner Khare and Tarkunde Infrastructure had described itself in that
matter as Khare and Tarkunde Infrastructure Private Limited, a Company
Registered under the Companies Act, 1956. Thus, it was not a Firm
registered under Partnership Act.
15. In Asia Foundations and Constructions Ltd. .vrs. State of Gujarat
and others (supra), Division Bench of Gujarat High Court has explained what
phrase 'Joint Venture' means. Discussion therein shows that it can be group
of Firms or of different entities. The common law did not recognize
relationship of co-adventures, but, with passage of time, judicial decisions
recognized such adventures, where two or more persons undertake to
combine, their property or labour in conduct of a particular line of Trade or
a joint business for joint profits. Though it may be similar to a partnership,
law courts, do not treat such joint adventure as Firm. In Joint Venture,
there must be community of interest and right to joint control. In present
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matter, where petitioners before this Court have expressly submitted their
agreement for registration to Registrar of Firms under Partnership Act, it is
not necessary for us to go into more details.
16. As per clause 3.6(vii), which reads as under -
"3.6.(vii) Registered Partnership Deed, Memorandum of
Articles of Association, if the renderer is a Partnership Firm,
Joint Stock Company and Power of Attorney and Firm
Registration Certificate, if any"
Thus, a Registered Partnership Deed ought to have been provided. If a Firm
Registration Certificate was available, that also needed to be provided. This
Sub-clause (vii) does not expressly mention joint venture, but, then
petitioners have attempted to constitute a Firm and made effort in that
direction on 12.05.2015. The terms and conditions of tender do not allow
un-registered Partnership Firm to tender. If petitioners wanted to tender as
Joint Venture, they should have placed on record a document duly
registered so as to enable the parties dealing with such Joint Venture to
reach its constituents, if occasion therefor arise. Clause 3.7.10 is about
Joint Venture. In case of a Joint Venture scanned and digitally signed copy
of Registered Partnership Deed is to be placed in envelope no.1. Thus, a
Joint Venture, envisaged by respondent nos. 1 to 4 is also a Partnership.
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Whether registered Partnership Deed of such Joint Venture must be
registered under the Partnership Act or then with Sub Registrar of
Documents under Indian Registration Act, is the issue which need not detain
us. Petitioners themselves have made effort to obtain registration as Firm
under Partnership Act. They have not registered their agreement with any
other authority including the Sub Registrar of Documents.
17.
There are three petitioners before this Court. Petitioner no.1 M/s.
Komal Constructions has described itself to be a Proprietary Firm; Petitioner
no.2 M/s. Dewashish Construction Company has described itself to be a
Proprietary Firm. Petitioner no.3 N.P. Bridge Infrastructure Private Limited
states that it is a Company incorporated under the Indian Companies Act.
Thus, two Proprietary concern and a Private Limited Company attempted to
obtain registration as Firm under Partnership Act on 12.05.2015, which
happened to be the last date of downloading of tender document. The Joint
Venture agreement states that it is made on 08.05.2015. Name of the Joint
Venture appears to be "Komal Constructions Joint Venture" as per Clause 1.
Date on which it comes into effect is not expressly mentioned anywhere.
However, Nitin P. Tapadia, as Director of Petitioner no.3 Private Limited
Company, Rajendra Somani, as Proprietor of Petitioner no.1 and Ashish
Shrinivas Zanwar as Proprietor of petitioner no.2 have signed the
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agreement on 08.05.2015. On last page above three signatories, the terms
and conditions are described as "Memorandum of Association". Apart from
above referred three persons, on next page of this agreement, on a stamp
paper of Rs. 500/-, again Sr. No.3 has been repeated with name M/s.
Dewashish Construction Company, Proprietor Ashish S. Zanwar. Thus, Sr.
No.3 has been repeated twice.
18.
When Clause No. 3.6(vii) reproduced supra is read along with
Clause 3.7.10 dealing with Joint Venture, it is apparent that respondent nos.
1 to 4 have not accepted any un-registered Joint Venture as tenderer for the
purpose of this contract. Sub- clause [i] and [ii] of Clause 3.7.10 reads as
under -
"3.7.10. Joint Venture.
(i) In case of Joint Venture the scanned and
digitally signed copy of registered partnership deed
shall be submitted in Envelope No.1.
(ii) Two or more contractors of any class
may combine and tender for a work costing to the
amounts upto which each individual contractor or the
higher of two limits if they are of different categories
are empowered to tender as per the original
registration provided.
(i) The combination is of the contractor
as a whole and not individual
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partners and,
(ii) They draw a registered partnership
deed and submit a copy thereof to
the authority at the time of purchase
of the tender forms.
Whenever the advantage of such combination of two or
more contractors is to be taken for quoting for a work,
the registered partnership deed should be irrevocable
till the completion of the work for which they have
combined and till all the liabilities there of are
liquidated and the share of contractor of higher
category should not be less than 50%. Further, the
percentage share of the contractor of the lower
category in such a partnership/combination should not
be more than this limit of eligibility to quote for works
divided by the estimated cost of work put to tender (i.e.
when such a percentage is applied to the cost of the
work, his share of cost should not exceed his own
eligibility limit of tendering for works.) The lead
partners shall meet not less than 50% of all qualifying
without like annual turn over, single work, quantities
of items and bid capacity of above. The Joint Venture
must collectively satisfy the criteria of para annual
turn over single work', quantities of items and Bid
capacity above. The experience of the other Joint
partner shall be considered if it is not less than 30% of
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the qualifying criteria like annual turn over, single
work, quantities of items and Bid capacity of above."
Language of this Clause therefore clearly shows that a registered
Partnership Deed is must and a Joint Venture with un-registered Partnership
Deed is not legally recognized. Respondents wanted to be certain that in
case of any legal dispute, Partnership Firm must be registered and therefore,
demanded its registration certificate. In case of a Joint Venture also, to get
rid of the technical lacunae or defences, they envisage that a Partnership
amongst its constituents should be registered. Petitioners before us do not
have registration certificate, either as a Firm or then as a Joint Venture.
They do not have even a registered agreement.
19. This condition of eligibility which has got bearing on relationship
of parties and legal implications flowing therefrom, clearly show that it
cannot be viewed as a ancillary condition. Though contractor has been
defined widely to include even a un-incorporated company, in case of Firm
or Joint Venture, there is insistence on registration of a Firm or of a
agreement. This insistence by the respondents cannot be said to be
misconceived or arbitrary. Petitioners do not satisfy this condition.
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20. Equipments to be made available by petitioners are dealt with in
paragraph no.3.7.5. Chart in that clause contains names of 12
equipments/machineries. In last column number thereof or capacity of such
machine is stipulated. Thereafter in bracket word "own" appears against
column nos. 1 to 4, 6 to 8 and 10 to 12. Against entry no.9, dealing with
Steel centering plate, there is no mention. Words "Own/Hire" are used only
against entry no.5 i.e. Rotavator for GSB Mixing. Thus, when entire chart is
construed in this backdrop, it only permits Rotavator required for GSB
mixing to be hired. Rest of the equipments must be owned by the tenderer.
Clause 3.6 (ix) require tenderer to give list of modern machinery and plants
immediately available with it for use on tendered work as also list of
machinery proposed to be used therefor, but, not immediately available and
manner in which it is proposed to be procured. This therefore shows
precaution taken by the respondents to obtain in different list of
machineries, which can be immediately used by the tenderer.
Simultaneously, he is also obliged to give a list of machineries which he can
make available later on, but, then he has to disclose how he proposes to
procure it. Petitioners, therefore, must show that Self-propelled Mechanical
Sprayer owned by them. It is available to them at Pune and there they have
taken it on hire from M/s. Shree Associates, vide agreement dated
09.03.2015. This does not meet the stipulation in the tender document
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which is an essential condition.
21. In so far as the Rotavator is concerned, though the petitioners
claim that they have offered a better machine, according to the respondents,
said machine i.e. Batching Plant is not substitute for Rotavator. Respondent
no.5 has come up with a specific case in this respect in paragraph no.7. This
assertion on these lines in affidavit are not rebutted by the petitioners. Even
otherwise, burden to show that Batching Plant is a better machine was upon
the petitioners and they have failed to discharge the same.
22. Insistence that Joint Venture must be registered in notice inviting
tender or then insistence upon ownership of machinery is not shown to be
arbitrary. When respondents permit only Rotavator to be made available on
hire, in absence of express challenge to requirement of ownership, the
contention that ownership of other machineries should also be viewed as
only an ancillary requirement, cannot be accepted. Respondents can always
take necessary precaution and prescribe safeguards to protect its own
interest in contract matters. It is in absolute discretion of tender inviting
authority to formulate reasonable terms and conditions in advance, and to
act accordingly uniformly. A tenderer can complain of the deviation,
arbitrariness or discrimination. In this situation, in the light of the
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arguments advanced, we find that the respondent nos. 1 to 4 have rightly
disqualified the petitioners for first three reasons on 29.06.2015. There is no
jurisdictional error or perversity. No case is made out warranting
intervention in writ jurisdiction.
23. Writ petition is, therefore, dismissed. Rule discharged. No costs.
JUDGE JUDGE
Rgd.
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