M/S. Subhanallah Construction ... vs Greater Hyderabad Municipal ...
2021 Latest Caselaw 1877 Tel

        THE HON'BLE SRI JUSTICE A.ABHISHEK REDDY

                WRIT PETITION No. 2440 of 2021

ORDER:

In this writ petition, the petitioner, M/s. Subhanallah

Construction Pvt. Ltd., challenges the action of the respondent

Nos. 1 to 3 in awarding the work order No. SE(P)/

SZ(NIT:13)/GHMC/20-21, dated 31.12.2020 in favour of

respondent No. 4 as arbitrary and illegal and seeks a consequential

direction to direct official respondents to award the said work order

in favour of petitioner-Company being the second lowest bidder.

The case of the petitioner-Company is that it is a Special

Class Civil Contractor and has carried out several civil works with

the respondents-Corporation and other governmental authorities.

In response to the tender notification issued by respondent No. 3,

dated 23.10.2020 for execution of work - construction of RCC

Retaining Wall of 3.45m height with reverse "L" footing for a length

of 250 mts either side of Murki Nala (P) in Reach-II i.e., gap

portions of Nala at A1 Jubail Colony from H. No. 19-4-8/307 to 19-

4-8/660/1 at Hashmabad and A1 Jubail Colony ('tender work'),

the petitioner-Company, respondent No. 4 and others have

participated in the tender process. In the tender process, each

and every bidder was required to comply with the technical

qualifications and eligibility criteria as enumerated in G.O.Ms. No.

94, dated 01.07.2003. In the tender process, the respondent No. 4

emerged as lowest and successful tenderer and the petitioner-

Company stood as second lowest bidder. Inasmuch as the

respondent No. 4 did not meet the requisite technical qualification

and eligibility criteria in order to participate in the tender process,

the petitioner-Company made a representation to the respondent

Nos. 2 and 3 on 01.12.2020. However, by the impugned orders

dated 31.12.2020, the respondent No. 3 has issued the work order

in favour of the respondent No. 4. Again, the petitioner-Company

made another representation, dated 30.01.2021, to the respondent

Nos. 2 and 3 alleging that the respondent No. 4 did not meet the

requisite technical qualification and eligibility criteria. However,

no action has been taken so far.

The learned counsel for the petitioner has contended that

the Solvency Certificate issued by the SBI, Proddatur Main Branch,

Y.S.R. District in favour of respondent No. 4 is a conditional one.

But as per the tender conditions, the proforma given therein is

unconditional solvency and therefore, the Solvency Certificate

uploaded by the respondent No. 4 is not in conformity with the

tender conditions. Secondly, in the C.A. certificate/income tax

returns for the Assessment Year 2019-2020, produced by the

respondent No. 4, although the annual turnover was shown as

Rs.4,32,93,942/-, the gross receipts of respondent No. 4 are

mostly from one Sreenivasulu Reddy, a Civil Contractor, for sum

of Rs.3,60,78,285/-, which gives an indication that experience of

the respondent No. 4 is as a 'Sub-Contractor', and therefore, he

does not fulfil the essential criteria for evaluating the bids

enumerated in G.O.Ms. No. 94, dated 01.07.2003. Hence, on both

the above mentioned grounds, the respondent No. 4 is ineligible to

be awarded with the tender works. Therefore, the learned counsel

submits that accepting the tender of an unqualified person

ignoring the next lowest tender of a qualified tenderer is arbitrary

and violative of Article 14 of the Constitution of India.

The official respondent Nos. 1 to 3 filed a counter affidavit

contending that in pursuance of the tender notification, the

respondent No. 4 had emerged as successful bidder, and was

awarded with the tender work on 31.12.2020 with a condition to

complete the same within six months. It is stated that although

the estimated value of the tender work is only Rs.2,30,89,867/-,

the respondent No. 4 has submitted the Solvency Certificate for

Rs.3.00 crores and there is no irregularity in the said Solvency

Certificate. That the construction of RCC retaining wall and

cleaning of the Nala are all-time bound projects and have to be

completed before the onset of monsoon. There is no irregularity

even with regard to the C.A. certificate submitted by the

respondent No. 4. It is stated that the respondent No. 4 has

already executed the entire tender work and in support thereof,

they filed photographs, dated 12.04.2021.

The respondent No. 4 has filed a counter affidavit denying

the allegations made by the writ petitioner. It is stated that in

pursuance of the qualification/eligibility criteria mentioned in the

tender document, the respondent No. 4 had placed the C.A.

certificate showing the annual turnover as Rs.4,32,93,942/-,

which is to the satisfaction of the bid capacity in terms of the

amendment to annexure of G.O.Ms. No. 130, dated 22.05.2007

and therefore, the ground taken by the petitioner alleging that this

respondent is a Sub-contractor is not tenable in the eye of law.

Further, the Solvency Certificate produced by this respondent has

sufficiently met the requirement of tender conditions and therefore,

the petitioner has no right to question the said Solvency

Certificate. Further, on receipt of award of work order, dated

31.12.2020, this respondent has commenced the work and

completed the same to the satisfaction of the official respondents.

The learned counsel for the respondent No. 4 has relied on the

decisions of the Apex Court reported in Jagdish Mandal v. State

of Orissa1, Meerut Development Authority v. Association of

Management Studies2 and Michigan Rubber (India) Limited v.

State of Karnataka3.

Heard the learned counsel for the parties and perused the

material available on record.

Insofar as tender matters are concerned, the scope of

interference by the Courts while entertaining Writ Petitions filed

under Article 226 of the Constitution of India is limited. This

Court as well as the Apex Court in number of judgments has

repeatedly held that wherever a particular procedure is prescribed,

the same has to be followed. Moreover, as rightly contended by

the learned Standing Counsel for the respondents-Corporation, all

these infrastructure projects are time bound projects and they

cannot be stalled by this Court on flimsy grounds. Admittedly,

the works have already been completed and therefore, whether this

Court exercising the powers under Article 226 of the Constitution

of India can pass orders at this stage is to be seen.

In Silppi Constructions Contractors V. Union of India and

another4, at para 20, the Hon'ble Supreme Court observed as

under:

"The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be

(2007) 14 SCC 517

(2009) 6 SCC 171

(2012) 8 SCC 216

(2019) SCC Online SC 1133

accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity."

(Emphasis added)

In Poddar Steel Corpn. V. Ganesh Engg.Works5, the

Hon'ble Supreme Court at para 6 held as under:

"6. ... The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases."

In B.S.N.Joshi & Sons Ltd. v. Nair Coal Services Ltd6, the

Hon'ble Supreme Court held at para 66 as under:

"(i) if there are essential conditions, the same must be adhered to;

(ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;

(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;

(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the Court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;

(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenders on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with."

(Emphasis added)

In Utkal Suppliers v. Maa Kanak Durga Enterprises and

others7, at para 15, the Hon'ble Supreme Court held as under:

"This Court has repeatedly held that judicial review in these matters is equivalent to judicial restraint in these matters. What is reviewed is not the decision itself but the manner in which it was made. The writ Court does not have the expertise to correct such decisions by substituting its own decision for the decision of the authority. This has clearly been held in the celebrated case of Tata Cellular v. Union of India ((1994) 6 SCC 651), paragraph 94 of which states as follows:

(1991) 3 SCC 273

(2006) 11 SCC 548

(2021) SCC Online SC 301

"94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action.

(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.

(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affect by bias or actuated by mala fides.

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."

Although various contentions have been raised by the

learned counsel for the petitioner and has relied on the decisions

rendered in Central Coalfields Limited v. SLL-SML (Joint

Venture Consortium)8 and Sai Ram Constructions, Warangal

Urban District v. State of Telangana9, but having regard to the

fact that the respondent No. 4 was issued the work order on

31.12.2020, and that tender work has already been completed by

the respondent No. 4, which fact has also been admitted by the

official respondents and also the petitioner, the said decisions are

not applicable to the facts of this case. This Court is also not

inclined to go into the various contentions raised by the learned

counsel for the petitioner as the work has already been executed.

Another important aspect that goes against the petitioner is that

the last date for submission of the bid was 02.11.2020, thereafter

bids were technically evaluated and the bid of the respondent No. 4

was accepted as it was less than the price quoted by the petitioner.

(2016) 8 SCC 622

2019 (2) ALT 157 (S.B.)

The letter of acceptance was furnished by the respondent No.4 on

16.11.2020 and the work order was given in favour of respondent

No.4 on 31.12.2020. But the petitioner, for the reasons best

known to him, has approached this Court only in the first week of

February, 2021, by which time, the work was already commenced

and duly completed by respondent No. 4 by the time the writ

petition is heard and decided finally. If the petitioner had any

grievance with regard to the manner in which the tender was

evaluated by the authorities, he should have approached this

Court at the earliest point of time, but he has not done so. Under

normal circumstances, this Court could have gone into the various

contentions now raised by the petitioner, but not after the contract

is concluded, executed and completed. Once the contractual work

is completed, the prayer sought by the petitioner cannot be granted

and the same has to be rejected. In the peculiar circumstances of

the case, the delay in approaching this Court will have to be

treated as latches on the part of the petitioner and on this ground

also the writ petition is liable to be dismissed.

In the light of the above settled legal position, this Court

does not find any ground to grant the prayer sought by the

petitioner and does not consider the present case to be a fit case

for interference.

Accordingly, the writ petition is dismissed.

The miscellaneous petitions pending, if any, shall stand

closed. There shall be no order as to costs.

________________________ A.ABHISHEK REDDY, J Date:30.06.2021.

Tsr

THE HON'BLE SRI JUSTICE A.ABHISHEK REDDY

WRIT PETITION No. 2440 of 2021

Dated: 30-06-2021

Tsr