Jammu & Kashmir High Court

Kamal Nain vs State Of J&K And Others on 24 October, 2024

Author: Sindhu Sharma

Bench: Sindhu Sharma

  HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                  AT JAMMU

                                                    OWP No. 1448/2018 c/w
                                                       OWP No. 967/2018

                                               Pronounced on:      24.10.2024

Kamal Nain                                         .... Petitioner/Appellant(s)

                         Through:-   Mr. Rahul Pant, Sr. Advocate with
                                     Mr. Dhruv Pant, Advocate

                  V/s

State of J&K and others                                     .....Respondent(s)

                         Through:-   Mr. Ravinder Gupta, AAG
                                     Ms. Yashodhan Thakur, Advocate
CORAM: HON'BLE MRS. JUSTICE SINDHU SHARMA, JUDGE
                               JUDGMENT

01. The office of the Executive Engineer, Public Works (R&B)

Division Reasi, invited online tenders vide NIT No. 51 of 2017-08

dated 03.03.2018 (E-tendering), from approved and eligible contractors

registered with the State Government of J&K, CPWD, Railways and

other State/Central Governments, for construction of road from Jij to

Narkote via Chakalwala under CRF [L=13.20 kms], for an estimated

cost of Rs. 1660 lacs.

02. The bid was invited in the NIT in two cover system i.e. technical

bid and financial bid. The petitioner along with the respondent No. 9

and other eligible participants submitted their bid for construction of the

road and same were uploaded through e-tendering system.

03. The technical bid of all the eligible bidders was evaluated and

thereafter, the financial bid of those eligible in the technical bid was

considered. The financial bid of respondent No. 9 being the lowest, the

contract was awarded to him. The petitioner initially filed a writ petition

bearing OWP No. 967/2018, seeking a direction to the respondents not

to allot the contract pertaining to the construction of work of road from

Jij to Narkote via Chakalwala under CRF [L=13.20 kms], pursuant to e-

NIT No. 51 of 2017, and also with a further direction to consider the

claim of the petitioner for allotment of contract pertaining to the said

NIT being the lowest technical bidder.

04. This petition was considered and vide order dated 17.05.2018, in

the interim stage, it was directed that till next date of hearing, the

respondents shall not finalize the NIT in question. Thereafter, the

petitioner approached this Court by way of present writ petition on the

ground that the respondents, without considering the order passed by

this Court, proceeded with allotment of contract in favour of respondent

No. 9 and, as such, the petitioner has assailed the same by way of this

writ petition.

05. Both the petitions are clubbed together and taken up for

consideration.

06. The contention of the petitioner is that the respondent No. 9 had

failed to fulfill the technical qualification prescribed under Clause 4.6 of

the NIT, and therefore, his financial bid could not be considered and

consequently, the contract could not be contracted in his favour.

07. The respondents per contra submit that they were satisfied with the

technical qualification of respondent No. 9 who possessed the requisite

technical qualification, as such, they have considered his financial bid. It

is submitted that respondent No. 9 satisfied the prescribed recruitment

criteria and work came to be allotted to him particularly in view of the

fact that he had quoted the lowest rates among all the eligible bidders and

accordingly, contract was awarded to him.

08. Heard learned counsel for the parties and perused the record.

09. The NIT was issued on 03.03.2018 and the bid was to be

submitted on 06.03.2018. The NIT prescribed a bid in two cover system

i.e. technical bid and financial bid. The technical qualification was

provided in Clause 4.6 of the NIT, which reads as under: -

"4.6) A: To qualify for the award of contract, each bidder should have in the last five years:

(i) Achieved a minimum average financial turnover on execution of Civil Engineering works (defined as billing for works in progress or completed in all classes of Civil Engineer construction works only) during any three out of the last five financial years (2012-13 to 2016-17) not less than 33% of the proposed contract/contracts applied. The information supplied in this connection should be duly certified by a Chartered Accountant and be duly supported by TDS and Income Tax Returns for the last five years.

(ii) Having satisfactorily completed or substantially completed, at least one contract of similar nature of work of any Govt/Semi Govt. department during the last five years (road and/or bridge works as the case may be) of at least 33% of the value of the proposed contract during the last five years. (Certificate to this effect to be issued by an officer not below the rank of Executive Engineer or equivalent). No escalation factor is allowed for similar nature of work.

The work may have been executed by the Applicant as prime contractor or as a member of joint venture. In case a project has been executed by a joint venture, weightage towards experience of the project would be given to each joint venture partner in proportion to their participation in the joint venture.

Substantially completed works means those works which are at least 90% completed as on the date of submission of bid (Le, gross value of work done up to the last date of

submission is 90% or more of the original contract price) and continuing satisfactorily.

For this a certificate from employee shall be submitted along with the application incorporating clearly the name of the work, contract value, billing amount, date of commencement of works, actual date of completion of work, satisfactory performance of the contractor and any other relevant information."

10. The contention of the petitioner is that the respondent No. 9 was

not technically qualified for the award of contract as the respondents

had not achieved the minimum average financial turnover on execution

of Civil Engineering Works during any three out of the last five

financial years (2012-13 to 2016-17) i.e. 33% of the value of proposed

contract. The petitioner submits that since the contract value is Rs.

16.60 crores, as such, the 33% of the same is about Rs. 6 crores, and the

respondent No. 9 did not possess the requisite qualification and did not

fulfill the eligibility criteria.

11. It is submitted that respondent No. 9 had placed on record

certificate issued by the Executive Engineer, PMGSY Division, Ramban

dated 29.08.2012 certifying that M/s Satvir Gupta Fabricators, Jammu,

had completed construction of road under PMGSY Division, Ramban,

amounting to Rs. 6 crores. This certificate does not cover the prescribed

period of last five years, as it is up to year 2011-12 and this certificate

has not been issued in favour of respondent No. 9, i.e., SGF Infra Private

Limited but in favour of M/s Satvir Gupta Fabricators, Jammu.

12. The second eligibility condition of the respondents having not

completed satisfactorily any other work, i.e., one contract of similar

nature during the last five years has also not been fulfilled by

respondent No. 9.

13. The Tender Evaluation Committee despite considering all these

aspects have allotted the work to the respondent No. 9 for extraneous

consideration. The petitioner, thus, challenges the allotment of contract

to the respondent No. 9 on the ground that the members of the Tender

Evaluation Committee have illegally and arbitrarily allotted the contract

to the respondent No. 9, who was not eligible, as he has failed to

achieve the minimum average financial turnover on execution of Civil

Engineering Works during any three out of the last five financial years.

Secondly, that the respondents have refused to provide even the copy of

the allotment order to the petitioner. The allotment of work to the

petitioner is in complete violation of conditions for technical

qualification and the orders passed by this Court. The allotment was

done in a clandestine manner, constituting a malicious exercise of

power by respondents No. 2 to 8. Therefore, the allotment of contract in

favour of the petitioner is, thus, illegal and arbitrary to the respondent

who was not technically qualified.

14. The petitioner submitted a representation to respondent No. 2 that

respondent No. 9 was not qualified for allotment of contract but the

respondents paid no heed to the same. The tender evaluation committee

opened the financial bid and declared the petitioner as L-I for allotment

of work.

15. Perusal of the file and record reveals that the rates quoted by the

petitioner for the execution of work was Rs. 14.84 crores, whereas, bid

submitted by respondent No. 9 was 13.59 crores, thus, the respondent

No. 9 was the L-1 as per the financial bid and was considered for the

allotment of the contract. It is submitted by respondents that respondent

No. 9, on 04.04.2018, had uploaded the completion certificate of the

work „for construction of road from Kilothran to Porabala package No.

JK04-153, Phase-VIII, Stage-1st, issued by Executive Engineer,

PMGSY Division, Thathri, vide letter dated 26.08.2016, which the

petitioner had satisfactorily completed in the last five years of at least

33% of the proposed contract.

16. The next contention raised by the petitioner is that whether the

respondent No. 9 has completed the contract of similar nature during

the last five years or at least 33% of the proposed contract. The

Executive Engineer Thathri had provided a certificate in favour of the

respondent No. 9, regarding satisfactory completion of work of

construction of road from Kilothran to Porabala and, thus, was

technically qualified and eligible for execution of the work. This

certificate was considered by them and this along with turnover

certificate of the Chartered Accountant reveals the financial turnover of

the respondent No. 9 for civil construction works for 2012-13 to 2016-

17. The petitioner had, thus, completed one contract of similar nature

during the past five years and also 33% of the proposed contract work.

The respondent No. 9 fulfill the eligibility prescribed under Clause 4.6

and, as such, had been rightly allotted the contract. The technical

evaluation of bid of respondent No. 9 was considered by the experts and

the same was found responsive and the financial bid was considered.

17. The tendering section has reported that M/S Satvir Gupta

Fabricators has changed their entity as M/S SGF Infra (P) Limited and

same has been accepted by Chief Engineer PMGSY (JKRRDA) Jammu

vide order dated 25.01.2014, and the similar nature of work certificate

was entertained for technical evaluation of bid of the SGF (P) Limited

and was allotted the Stage-I work and the BOQ of the said work had

total 18 items. Accordingly, the certificate of respondent No. 9, SGF (P)

Limited was also considered by the petitioner‟s firm.

18. The rate quoted by the petitioner for the execution of work was

Rs. 14.84 crores, whereas respondent No. 9 submitted a lower rate of

Rs. 13.59 crores, which was Rs. 1.24 crores less than the petitioner‟s

bid, thus, respondent No. 9, being the lowest bidder (L-1), was awarded

the contract.

19. The scope of judicial review in contractual matters is well settled

that it is only to prevent arbitrariness, unreasonableness, bias and not to

check whether choice or decision is sound, as held in 'Jagdish Mandal

vs. State of Orrisa', 2017 (13) SCC 517:

"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private

interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

OR Whether the process adopted or 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 relevant law could have reached";

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."

20. It is well settled that the authority that authors the tender

document is best suited to understand and appreciate its requirements as

held in "Galaxy Transport Agencies, Contractors, Traders,

Transports and Suppliers Vs. New J.K. Roadways, Fleet Owners

and Transport Contractors and others": -

14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., 2016 (16) SCC 818, this Court held:

"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best

person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."

19. Similarly, in Montecarlo Ltd. v. NTPC Ltd., 2016 (15) SCC 272, this Court stated as follows:

"26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third- party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision- making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of

restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints."

21. In "Agmatel India Pvt. Ltd. Vs. Resoursys Telecom and

others", 2022 (5) SCC 362, the Hon‟ble Apex Court has held that: -

"23. Viewed from any angle, interference by the High Court in this matter does not appear justified, particularly when no case of mala fide or bias is alleged. Every decision of the administrative authority which may not appear plausible to the Court cannot, for that reason alone, be called arbitrary or whimsical. The High Court, in the present matter has obviously proceeded with an assumption that the view as being taken by it, in acceptance of the case of the writ petitioner, was required to be substituted in place of the views of the tender inviting authority. That has been an error of law and cannot sustain itself in view of the consistent binding decisions of this Court, including the 3-Judge Bench decision in Galaxy Transport (supra)."

22. The tender evaluation committee has clearly found that eligibility

conditions were satisfied, therefore, in accordance with these

judgments, the decision of the tendering authority cannot be considered

perverse and should not be interfered with.

23. Considering the aforesaid submissions and in view of the law laid

down by the Hon‟ble Apex Court, public interest would be severely

affected if the respondents are not allowed to execute the contract.

There are no allegations of bias or mala fides specifically laid against

the respondents, as no officer has been impleaded as a party by name in

this case, thus, no case of mala fides or bias has been made out.

24. In view of the aforesaid facts and circumstances of the case, there

is no merit in these petitions and the same are accordingly dismissed.