M/S Aeroplast Limited vs Madhya Pradesh State Agro ...
2021 Latest Caselaw 1580 MP

     HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT JABALPUR



 WRIT PETITION NO.                                   19459 /2020
 Parties Name                     M/S AEROPLAST LIMITED
                                           Vs.
                                  MADHYA PRADESH STATE AGRO INDUSTRIES
                                  DEVELOPMENT CORPORATION LIMITED &
                                  OTHERS.
 Bench Constituted                Single Bench
 Judgment delivered By            HON'BLE SHRI JUSTICE VISHAL DHAGAT
 Whether        approved       for YES/NO
 reporting
 Name of counsel for parties      For petitioner: Shri Varun Tankha, Advocate with Shri
                                  Rahul Gupta, Advocate.

                                  For Respondents: Shri P.K. Kaurav, Advocate General

with Shri Aditya Khandekar, Advocate.

 Law laid down                    -
 Significant paragraph number -


                                  (O R D E R)
                                  27/04/2021

Petitioner has filed this writ petition calling in question order dated

02.07.2020 (Annexure-P/7) and order dated 24.07.2020 (Annexure-P/9)

passed by respondent No.1. By said orders, technical bid of petitioner for

registration as supplier of laminated sheets to respondent No.1 i.e. M.P.

Agro Industries Development Corporation Limited was rejected.

2. Respondent No.1 has issued a tender on 09.03.2020 (Annexure-P/3)

inviting technical bids for registration of suppliers for supply of laminated

sheets. Technical qualification which was required as per tender document

was "the manufacturer having valid manufacturing registration certificate

license/acknowledgement EM part II/IEM Udyog Aadhaar issued by

District Trade Industries Centre (DTIC) or Statutory Competent Authority

for manufacturing films with valid PAN and GSTN number". Later on

technical qualification required for registration of suppliers was amended

by corrigendum dated 21.03.2020 (Annexure-P/4). As per amended

technical qualification, manufacturer must have production capacity of

1000 metric tonnes per annum. Last date for submission of bid was

31.03.2020 but due to lock down last date of bid was extended many

times. Finally, by notice dated 18.05.2020, last date for submission of bid

was fixed to 16.06.2020. Petitioner submitted its bid on 15.06.2020.

Petitioner also deposited EMD of Rs.35 lakhs.

3. In compliance of notice, petitioner had submitted manufacturing

Registration Certificate both acknowledgement EM part II and Udyog

Aadhaar Memorandum. Additionally petitioner submitted self certified

letter acknowledging its annual production capacity of 7000 metric tonnes.

4. Respondent No.1 rejected bid of petitioner on 02.07.2020. Technical

bid was rejected on grounds that manufacturing registration certificate

submitted by petitioner did not mention production capacity of petitioner

and authority letter was not supported by board resolution.

5. Petitioner preferred a representation against rejection order on

03.07.2020. Representation preferred by petitioner was rejected vide order

dated 24.07.2020.

6. Counsel appearing for petitioner argued that rejection is illegal,

arbitrary and violative of Article 14 of the Constitution of India. It is

submitted by him that Government of Haryana as per fixed format in form

of acknowledgement. EM part II does not mention production capacity.

There is no mention in the corrigendum that annual production capacity

(hereinafter referred to as APC) should be mentioned in manufacturing

registration certificate/EM II/Udyog Aadhaar memorandum or document

ought to have been issued by Statutory body, therefore, petitioner has filed

self certified APC letter. There was ambiguity in wording of contract and,

therefore, same is to be resolved against party who prepared it. Though

eligibility clause was amended by corrigendum but no such corrigendum

was issued in respect of list of documents to be uploaded/submitted

therefore, ambiguity persisted, as words were not clear therefore, the

intention is to prevail. Documents filed by petitioner along with

representation are not considered. EM part II was no longer valid

document as same was abolished by Ministry of Micro Small and Medium

Enterprises by notification dated 10.01.2017 and UAM has taken its place.

UAM does not reflect production capacity. It was also argued that

Authority letter submitted by petitioner ought to have been accepted.

Though resolution of company was not filed but authority letter was

signed by two directors out of three, therefore, it ought to have been

accepted by respondents. Same was only a technical flaw and respondent

could have asked to submit resolution of company.

7. It is further argued that procedure is only device for justice and same

shall not be used to thought justice. Relying on judgement of Poddar steel

Corporation Vs. Ganesh Engineering Works and Others [(1991) 3 SCC

273], petitioner submitted that eligibility conditions are of two categories:

one essential conditions of eligibility which requires rigid enforcement

and second is ancillary or subsidiary conditions which do not require strict

literal compliance. Dispute was more of form than substance. Defects

were curable and does not affect substance of tender. Rejection was harsh

and oppressive and voilates fundamental rights enshrined in Part III of the

Constitution and Article 30 (9-A) and 41 of Directive Principles of

Constitution of India. Decision not only smacks of mala fide but same was

given only to eliminate petitioner from arena of competition. No ratio was

given in order dated 24.07.2020 and opportunity of hearing was also not

provided while deciding the representation. In view of the same, orders

rejecting technical bid was bad in law and deserves to be quashed.

8. Learned Advocate General appearing for respondent No.1 and 2

submitted that NIT was issued on 09.03.2020 and corrigendum was issued

on 21.3.2020 thereafter repeatedly last date to submit tender document

was extended due to lock down. Last date for submitting tender document

was 16.06.2020. There was three months time for petitioner to comply

with amended condition but same was not done. It was further argued that

there was prescribed format in tender document, therefore, there is no

question of ambiguity. Learned Advocate General appearing for

respondents submitted that matter is covered by order dated 24.08.2020

passed by Division Bench in WP No.26919/2019. A Division Bench

considered case of Poddar Steel Corporation (supra) and dismissed the

petition. It is submitted by the counsel appearing for respondents No.1 and

2 that soundness of decision maybe questioned if it is irrational or

malafide or intended to favour someone or a decision that no responsible

authority acting reasonably and in accordance with relevant law could

have reached. In case of Sanuraga Hosiery Pvt. Ltd. question before

Court was "whether furnishing of "Pradhikar Patra" with stamp duty of

Rs.1000/- was an essential condition of tender or not". This Court held

that whether a term of NIT is essential or not is a decision taken by

employer which should be respected. Even if that time is essential, the

employer has inherent authority to deviate from it provided the deviation

is made applicable to all bidders and potential bidders as held in case of

Ramana Dayaram Shetty Vs. International Airport Authority of India

[(1979) 3 SCC 489]. However, if the term is held by employer to be

ancillary or subsidiary even that decision should be respected. The

lawfulness of that decision can be questioned on very limited grounds, as

mentioned in various decisions discussed above, but soundness of decision

cannot be questioned, otherwise this Court would be taking over function

of tender issuing authority, which it cannot. Relying on aforesaid

judgements, Advocate General appearing for respondent No.1 and 2

prayed for dismissal of writ petition.

9. Heard the counsel for petitioner as well as respondents.

10. Question for consideration before this court is "1. whether order

dated 02.07.2020 and order dated 24.07.2020 suffer from malafide? 2.

Whether said orders suffer from arbitrariness and unreasonableness? 3.

Whether public interest is affected?"

11. From perusal of order dated 02.07.2020, it is clear that out of six

applications received for registration for supplier of laminated films, three

applications were rejected on the ground that copy of board resolution has

not been filed along with authorisation letter and documents were not filed

to state annual production capacity. In case of petitioner, resolution was

not filed and documents which were filed issued by District Industrial

Centre does not mention production capacity. All the builders who were

not having aforesaid qualification, their technical bid for registration was

rejected. It is not a case that petitioner company has been singled out i.e.

case of pick and choose. Other companies who are also not having

aforesaid eligibility suffered rejection therefore, it cannot be said that

action of respondent suffers from malafide.

12. Whether order suffers from unreasonableness and arbitrariness.

Mentioning annual production capacity may have direct nexus with the

quantity of material which is to be supplied to the employer. It was

essential for employer to know the production capacity to ascertain

whether bidder can supply requisite quantity or not, therefore, it cannot be

said that orders suffer from arbitrariness or there is wednesbury

unreasonableness.

13. Said orders also cannot be said to be against public interest.

14. Petitioner has also raised the issue that grounds raised in

representation was not considered and without opportunity of hearing

representation of petitioner was dismissed. It was also submitted that there

was ambiguity in wording and it was not mentioned that annual

production capacity of bidder should be mentioned in manufacturing

registration certificate/EM part II/UAM or document issued by Statutory

Competent Body. Though eligibility was amended by Corrigendum but

list of documents was not amended, therefore, petitioner's self verified

document of annual production capacity ought to have been considered by

respondents. Corrigendum was issued on 21.03.2020 and first condition of

eligibility was amended. Amended corrigendum of eligibility reads as

under:-

"the manufacturer having valid manufacturing registration certificate(license/acknowledgement of EM part ll/IEM Udyog Aadhaar) issued by District Trade Industries Centre or Statutory Competent Authority for manufacturing films with valid pan and GSTN number with a production capacity of 1000 metric tonne per annum."

15. Amended eligibility clearly shows that documents of eligibility must

have mention of production capacity of 1000 metric tonnes per annum. In

view of same, there is no force in argument raised by counsel for

petitioner that there is ambiguity in terms of contract and self certified

annual production letter filed by petitioner ought to have been accepted

and his bid was wrongly rejected by respondents.

16. In view of above, writ petition filed by the petitioner is dismissed.

(VISHAL DHAGAT) JUDGE shabana Digitally signed by SHABANA ANSARI Date: 2021.04.28 11:43:40 +05'30'