Avexa Railone Jv vs Union Of India And 3 Others
2021 Latest Caselaw 1265 Tel

    HIGH COURT FOR THE STATE OF TELANGANA :: HYDERABAD

                                          ***

                              W.P.No.22100 of 2020

Between:


Avexa - Railone JV,
Banjara Hills, Hyderabad

                                                                 .........Petitioner

                                          And


Union of India, rep. by its Principal Secretary,
Ministry of Railways, New Delhi and others.

                                                                .......Respondents

Date of Judgment pronounced on        :         20-04-2021



           HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI


1. Whether Reporters of Local newspapers                     : Yes/No
   May be allowed to see the judgments?

2. Whether the copies of judgment may be marked              : Yes/No
   to Law Reporters/Journals:

3. Whether The Lordship wishes to see the fair copy          : Yes/No
   Of the Judgment?
                                             2                                     AKS,J
                                                                    W.P.No.22100 of 2020




     HIGH COURT FOR THE STATE OF TELANGANA :: HYDERABAD

                                        ***

                              W.P.No.22100 of 2020



%20-04-2021


#Avexa - Railone JV,
Banjara Hills, Hyderaba                                       ....      Petitioner

Versus

$ Union of India, rep. by its Principal Secretary,
Ministry of Railways, New Delhi and others.
                                                              .....     Respondents.


< GIST:

> HEAD NOTE:


!Counsel for the petitioner             :       Sri Kailash Nath P.S.S.

^ Standing Counsel for respondents      :       Sri C.V.Rajeevs Reddy


? Cases referred
1
  2017 SCC Online Del 9426
2
  2019 SCC Online SC 1133
3
  (2006) 11 S.C.C. 548
4
  2018 (3) ALT 516
                                      3                                AKS,J
                                                        W.P.No.22100 of 2020




    HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI

                         W.P.No.22100 of 2020

ORDER:

This Writ Petition is filed seeking a Writ of Mandamus

declaring the action of the respondents in disqualifying the bid

placed by the petitioner in Tender No.52-CAO-C-SC-2020 as illegal

and arbitrary and violative of Indian Railway Standard General

Conditions of Contract (IRSGCC) July 2020 and consequently set

aside the disqualification of the petitioner.

2. Heard Sri Kailash Nath P.S.S., learned counsel for the

petitioner and Sri C.V.Rajeeva Reddy, learned Standing Counsel for

the respondents.

3. It has been contended by the petitioner that it is a Joint

Venture (JV) between M/s.Railone Projects Pvt. Ltd and M/s. Avexa

Corporation Pvt. Ltd., and both the companies have entered into a

Memorandum Of Understanding (MOU) on 25-07-2020 to apply

jointly in pursuance to the tender notification issued by the

respondents. Both the companies are in the construction of projects

and the respondents have issued a tender notification on 01-07-2020

for the proposed Third Line between Balharshah - Kazipet Station in

Secunderabad Division for the proposed construction of RUR box

(cast in situ). The last date for submission of filled in tenders was

28-07-2020. The petitioner participated in pursuance to the said

tender as a joint venture and submitted its technical bids. The 4 AKS,J W.P.No.22100 of 2020

respondents had rejected the technical bid on the ground that the

authorized signatory has not submitted the tender forms. The

petitioner had further contended that as per General Instructions in

the tender documents, it is abundantly made clear that the General

Conditions of Contract governing the performance of the works are

covered by the Indian Railways Standard General Conditions of

Contract (herein after referred to as "IRSGCC" for short). The

relevant clause which reads as follows:

"The General conditions of Contract governing the performance of the works covered by this tender are the Indian Railway Standard General Conditions of Contract (IRSGCC) as amended from time to time up to date. A soft copy of the IRSGCC is uploaded in the attached documents to the tender for reference. Hard coy of IRSGCC (with up-to-date correction slip) may be perused in the office of the Chief Administrative Officer/Construction/South Central Railway/ Secunderabad-500071. The tenderer/s is/are deemed to have kept himself/themselves fully informed of the provisions of the IRSGCC including all corrections and Amendments issued up to date while submission of offer and any claim that he/they is/are not aware of any amendment of correction slip to the IRSGCC shall not be entertained."

4. The petitioner had contended that as per the joint

venture of the petitioner's consortium, the Power of Attorney was

given to one K.Kotireddy to submit tender documents and all the

documents were accordingly signed by the said Kotireddy but

however while submitting the tender application form, one

Jogeswara Rao, one of the partners, has signed. The petitioner had

further contended that the IRSGCC was further amended on 5 AKS,J W.P.No.22100 of 2020

16-07-2020 and as per Clause 17.4 of the amended IRSGCC, the

tender form shall be purchased and submitted only in the name of the

Joint Venture not in the name of any constituent member. The

tender form can however be submitted by JV or any of its constituent

member or any person authorized by Joint venture through Power of

Attorney to submit the tender. General Clause No.1 of the IRSGCC

makes it clear that the tenderers are deemed to have kept themselves

fully informed of the provisions of IRSGCC including all corrections

and amendments issued up to date while submission of offer and any

claim that he/they is/are not aware of any amendment or correction

slip to the IRSGCC shall not be entertained, which should mean that

any amendment made till the submission of tenders are issued, the

new amendments are also to be acted upon. Though the tender

notice was issued on 01-07-2020 and the last date for submission of

the tender was 28-07-2020, there was an amendment on 16-07-2020

wherein as per Clause 17.4, any of its constituent member can also

submit the tender. Accordingly, one of the constituent member i.e.

Jogeswara Rao has submitted the tender though the authorized

person K.Kotireddy has signed all the documents in the tender.

5. Learned counsel for the petitioner has drawn attention

to new IRSGCC proceedings dt.16-07-2020, wherein on receipt of

such number of suggestions from Railways, a few provisions of

General Conditions of Contract have been reviewed to expedite

finalizing of tenders and execution of works and approved new 6 AKS,J W.P.No.22100 of 2020

IRSGCC have been issued on 16-07-2020. The tender document can

be submitted by Joint Venture or any of its constituent member or

any person authorized by joint venture to power of attorney, and

accordingly one Sri Jogeswara Rao, a constituent member, has

submitted the tender and affixed the signature at the time of

submission of tender and the rest of all other documents are

concerned were signed by the authorized signatory K.Kotireddy.

The respondents have rejected the tenders at the technical bid stage

itself on 30-11-2020 on the ground that the tender was submitted by

Jogeswara Rao who is not an authorized signatory and the tender

application of the petitioner was rejected in terms of Clauses 6 (b)

and 17.12 of IRSGCC-2019. Challenging the same, the present Writ

Petition is filed.

6. Learned counsel for the petitioner had contended that

Clause 6 (b) of the IRSGCC reads as follows:

"When work is tendered for by a firm or company, the tender shall be signed by the individual legally authorized to enter into commitments on their behalf."

Clause 17.12 reads as follows:

"Authorized Member - Joint Venture members in the JV MOU shall authorize one of the members of behalf of the Joint Venture to deal with the tender, sign the agreement or enter into contract in respect of the said tender, to receive payment, to witness joint measurement of work done, to sign measurement books and similar such action in respect of the said tender/contract. All notices/correspondences with respect to the 7 AKS,J W.P.No.22100 of 2020

contract would be sent only to this authorized member of the JV."

7. Learned counsel for the petitioner had contended that in

view of the above said Clauses, the case of the petitioner was

rejected erroneously. The respondents have not taken the

amendment to IRSGCC made on 16-07-2020 and as per amended

Clause 17.4 of IRSGCC, the tender form however can be submitted

by Joint Venture or any of its constituent member or any person

authorized by Joint Venture through Power of Attorney to submit the

tender. Had the respondents taken the amended IRSGCC, the

respondents could not have rejected the tender application of the

petitioner. The petitioner has quoted the lowest price but in spite of

the same, the respondents have rejected the application of the

petitioner at the technical bid stage itself. Therefore, the rejection of

the tender application of the petitioner in terms of Clauses 6 (b) and

17.12 of the IRSGCC and without considering the case of the

petitioner in terms of amended IRSGCC on 16-07-2020 is arbitrary,

illegal and total non-application of mind. Therefore, the impugned

order of rejecting the tender application of the petitioner be set aside

and let the respondents be directed to reconsider the case of the

petitioner strictly in accordance with Clause 17.4 of the amended

IRSGCC dt.16-07-2020 and further direct the respondents to open

the financial bid of the petitioner and if the petitioner happens to be

the lowest tenderer, then further direct the respondents to award the

contract work in favour of the petitioner.

                                          8                                AKS,J
                                                            W.P.No.22100 of 2020

8. Learned counsel for the petitioner relied upon the

judgment reported in ABC Beverages Private Limited v. Indian

Railway Catering & Tourism Corporation (IRCTS) Ltd. &

Another1 and contended that the rejection of technical bid based on

evidently curable defect of a missing notarial stamp on some of their

tender documents is thereby untenable and bad in law. In the instant

case also, the defect is too trivial and if only the amended IRSGCC

dt.16-07-2020 are taken into account, as per Clause 17.4 of the

amended IRSGCC, one of the constituent member of the joint

venture can also submit the tenders. Looking from any angle, the

impugned rejection order is liable to be asset aside and let the

respondents be directed to reconsider the case of thee petitioner

afresh in terms of the amended IRSGCC dt.16-07-2020.

9. Per contra, learned Standing Counsel for the

respondents had contended that the petitioner had violated the

IRSGCC and accordingly, the respondents have rejected the case of

the petitioner rightly in terms of Clauses 6 (b) and 17.12 of

IRSGCC-2019. He further contended that this Court cannot sit over

the tender committee and further contended that in catena of

judgments, it has been held that Courts should not sit over the

decision taken by tender committee and to that effect, he has relied

upon Silppi Constructions Contractors v. Union of India and

another2, wherein the Supreme Court held as under:

2017 SCC Online Del 9426

2019 SCC Online SC 1133 9 AKS,J W.P.No.22100 of 2020

"In B.S.N. Joshi & Sons Ltd. V. Nair Coal Services Ltd3, it was held that it is not always necessary that a contract be awarded to the lowest tenderer and it must be kept in mind that the employer is the best judge therefore; the same ordinarily being within its domain. Therefore, the court's interference in such matters should be minimal. The High Court's jurisdiction in such matters being limited, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record."

10. The learned Standing Counsel for the respondents has

further relied upon the judgment of the erstwhile High Court of

Judicature at Hyderabad for the State of Telangana and the State of

Andhra Pradesh in Vasudeva Infra, Hyderabad, rep. by its

Authorized Signatory vs. Union of India, rep. by the General

Manager, South Central Railway, Secunderabad and others4,

wherein it was held:

"It is also required to be noted that as per clause 65.15.3 of the Indian Railways Standard General Conditions of Contract issued by the Engineering Department of Indian Railways in 2014, which is placed on record by the learned Standing Counsel for Railways, the production of copy of Memorandum and Articles of Association of the Company is a mandatory requirement apart from the above mentioned conditions in the present tender notification. Though it is stated in the affidavit filed in support of W.P.No.43663 of 2017 that the petitioner herein was eliminated only to award the contract to only leftover bidder for extraneous reasons, in the considered opinion of this Court, is completely bereft of any foundation. The fact remains that the petitioners herein failed in enclosing the documents which are mandatory in nature and

(2006) 11 S.C.C. 548

2018 (3) ALT 516 10 AKS,J W.P.No.22100 of 2020

obviously the insistence on the production of the said documents is to evaluate the financial capabilities of the tenderers, as such, they are not entitled for any relief from this Court."

11. Learned Standing Counsel for the respondents had

further contended that since the petitioner has violated the terms of

IRSGCC clauses i.e. 6 (b) and 17.12, and the case of the petitioner

was rightly rejected. He further contended that the amended

IRSGCC guidelines dt.16-07-2020 are not applicable to the IRSGCC

guidelines - 2019 and the question of considering the case of the

petitioner in the amended IRSGCC guidelines would not arise.

Therefore, there are no merits in the Writ Petition and therefore the

same is liable to be dismissed.

12. Having regard to the rival submissions made by the

parties, this Court is of the considered view that the respondents have

rejected the tender technical bid of the petitioner vide orders

dt.30-11-2020 without considering the case of the petitioner in terms

of the amended IRSGCC guidelines dt.16-07-2020 and as per the

amended IRSGCC Clauses, i.e. Clause 17.4, which reads as follows:

"The tender form shall be purchased and submitted only in the name of the Joint Venture and not in the name of any constituent member. The tender form can however be submitted by the Joint Venture or any of its constituent member or any person authorized by Joint Venture through Power of Attorney to submit the tender."

13. A perusal of the amended Clause 17.4 of the IRSGCC

guidelines would make it clear that the tender form can however be 11 AKS,J W.P.No.22100 of 2020

submitted by Joint Venture or any of its constituent member or any

person authorized by Joint Venture through Power of Attorney to

submit the tender. When the amended Clause 17.4 makes it

abundantly clear that the three eventualities are possible while

submitting the tender form, which are as follows:

i) Tender form can be submitted by JV; or

ii) Any of its constituent member; or

iii) Any person authorized by JV through Power of Attorney to submit tenders.

One of the eventualities is that the tender can be submitted by any

one of its constituent member, admittedly, in the instant case, the

tender was submitted by Jogeswara Rao who is one of the

constituent member of the Joint Venture, and the rejection of the

petitioner's case on the ground that the tender was submitted by one

of the constituent member would be contrary to the Amended

IRSGCC Clause 17.4. Thereby rejecting technical Bid of the

petitioner on 30-11-2020 is an arbitrary exercise.

14. Further, when the case was being heard, the learned

Standing Counsel for the respondents has produced the decision of

tender committee dt.24-11-2020. A perusal of the same would

disclose that the case of the petitioner was considered in terms of

Clause 17.4 of the amended IRSGCC guidelines. Whereas, the

argument of the learned Standing Counsel that amended IRSGCC

guidelines and Clause 17.4 is not applicable to the petitioner's case is 12 AKS,J W.P.No.22100 of 2020

contrary to the decision taken by the tenders committee and the

decision of tender committee was not even communicated to the

petitioner, and when the respondents have considered the case of the

petitioner in terms of Clause 17.4 of the amended IRSGCC

guidelines, the same ought to have been informed to the petitioner

but the respondents had rejected the tender application of the

petitioner in terms of Clause 6 (b) and 17.12 of the IRSGCC

guidelines without quoting Clause 17.4 of the amended IRSGCC

guidelines in the rejecting orders dt.30-11-2020. Therefore, the

impugned order is liable to be set aside as the rejection of the

technical bid of the petitioner is an arbitrary exercise and the same

was rejected without applying the amended IRSGCC guidelines

dt.16-07-2020 and that the case of the petitioner ought to have been

considered by the respondents in terms of amended Clause 17.4 of

the IRSGCC guidelines. The rejection of the tender form of the

petitioner on the ground that it is not submitted by the authorized

person is a curable defect and if only amended clause 17.4 is made

applicable, the said defect would not even arise and the same issue

was rightly considered by the Delhi High Court in ABC Beverages

Private Limited (1 supra).

15. Accordingly, the Writ Petition is allowed setting aside

the impugned order dt.30-11-2020 in disqualifying the petitioner's

bid placed by it in Tender No.52-CAO-C-SC-2020 and the

respondents are directed to consider the case of the petitioner strictly 13 AKS,J W.P.No.22100 of 2020

in accordance with the amended Clause 17.6 of the IRSGCC

guidelines dt.16-07-2020. No costs.

16. As a sequel, the miscellaneous petitions pending, if any,

shall stand closed.

______________________________________ JUSTICE ABHINAND KUMAR SHAVILI Date: 20-04-2020

Note:-

Mark the L.R. copy.

B/o.

kvr