Uttarakhand High Court
WPMB/30/2023 on 13 April, 2023
Office Notes,
reports, orders
or proceedings
SL.
Date or directions COURT'S OR JUDGES'S ORDERS
No
and Registrar's
order with
Signatures
13.04.2023 WPMB No. 30 of 2023
WPMB No. 31 of 2023
WPMB No. 32 of 2023
WPMB No. 33 of 2023
Hon'ble Vipin Sanghi, C.J.
Hon'ble Alok Kumar Verma, J.
Mr. Devdatt Kamat, learned Senior Counsel
assisted by Mr. Vikas Bahuguna, learned counsel for
the petitioner.
Issue notice.
Mr. S.S. Chauhan, learned Deputy Advocate
General for the State of Uttarakhand, appears and
accepts notice on behalf of respondent nos. 1 to 3.
Let notice issue to respondent no. 4, returnable
on 16.05.2023, by all permitted modes, including
electronically.
Respondent nos. 1 to 3 should file their counter
affidavits within three weeks, as prayed for.
Rejoinder before the next date.
List on 16.05.2023
The petitioner had participated in the tender
invited by the respondent-department, i.e. the
Irrigation Department of the Government of
Uttarakhand. The petitioner, in compliance of the
requirements laid down in Clause 2.4.2 regarding past
experience and carrying out similar works, had relied
upon the experience certificates issued in the name of
M/s Doon Associates, which is a proprietary firm,
whose proprietor is Shri G.S. Khetwal, who is the major
share holder. Mr. Khetwal holds 90% share in the
petitioner-company. The remaining 10% of the share
holding is by his wife. Thus, the petitioner is the
wholly owned and controlled company of Mr. Khetwal.
The submission of Mr. Kamat, learned senior
counsel for the petitioner is that the respondents had
illegally disqualified the petitioner on the ground that
the petitioner does not have the requisite experience in
the relevant field, despite the fact that the petitioner
had relied on the experience certificate issued in the
favour of M/s Doon Associates, and the share holding
pattern of the petitioner company was also disclosed to
the respondents. He points out that on the basis of the
same experience certificates, the PWD Department of
the respondent-State, as well as the Irrigation
Department, had classified the petitioner-company as a
Class-A contractor, which requires past experience
under the relevant Rules. The petitioner-company was
incorporated only in September, 2022 and, therefore,
there is no way that the petitioner-company could have
earned the experience, to be able to be otherwise
classified as a Class-A contractor.
Reliance is placed by Mr. Kamat on the judgment
of the Supreme Court in New Horizons Limited and
Another v. Union of India and others, (1995) 1
SCC 478, and, in particular, on paragraph no. 23
thereof, which reads as follows :-
"23. Even if it be assumed that the requirement
regarding experience as set out in the advertisement dated
22-4-1993 inviting tenders is a condition about eligibility
for consideration of the tender, though we find no basis for
the same, the said requirement regarding experience
cannot be construed to mean that the said experience
should be of the tenderer in his name only. It is possible to
visualise a situation where a person having past experience
has entered into a partnership and the tender has been
submitted in the name of the partnership firm which may
not have any past experience in its own name. That does
not mean that the earlier experience of one of the partners
of the firm cannot be taken into consideration. Similarly, a
company incorporated under the Companies Act having
past experience may undergo reorganisation as a result of
merger or amalgamation with another company which may
have no such past experience and the tender is submitted
in the name of the reorganised company. It could not be
the purport of the requirement about experience that the
experience of the company which has merged into the
reorganised company cannot be taken into consideration
because the tender has not been submitted in its name and
has been submitted in the name of the reorganised
company which does not have experience in its name.
Conversely there may be a split in a company and persons
looking after a particular field of the business of the
company form a new company after leaving it. The new
company, though having persons with experience in the
field, has no experience in its name while the original
company having experience in its name lacks persons with
experience. The requirement regarding experience does not
mean that the offer of the original company must be
considered because it has experience in its name though it
does not have experienced persons with it and ignore the
offer of the new company because it does not have
experience in its name though it has persons having
experience in the field. While considering the requirement
regarding experience it has to be home in mind that the
said requirement is contained in a document inviting offers
for a commercial transaction. The terms and conditions of
such a document have to be construed from the standpoint
of a prudent businessman. When a businessman enters
into a contract whereunder some work is to be performed
he seeks to assure himself about the credentials of the
person who is to be entrusted with the performance of the
work. Such credentials are to be examined from a
commercial point of view which means that if the contract
is to be entered with a company he will look into the
background of the company and the persons who are in
control of the same and their capacity to execute tile work.
He would go not by the name of the company but by the
persons behind the company. While keeping in view the
past experience he would also take note of the present
state of affairs and the equipment and resources at the
disposal of the company. The same has to be the approach
of the authorities while considering a tender received in
response to the advertisement issued on 22-4-1993. This
would require that first the terms of the offer must be
examined and if they are found satisfactory the next step
would be to consider the credentials of the tenderer and his
ability to perform the work to be entrusted. For judging the
credentials past experience will have to be considered
along with the present state of equipment and resources
available with the tenderer. Past experience may not be of
much help if the machinery arid equipment is outdated.
Conversely lack of experience may be made good by
improved technology arid better equipment. The
advertisement dated 22-4-1993 when read with the notice
for inviting tenders dated 26-4- 1993 does not preclude
adoption of this course of action. If the Tender Evaluation
Committee had adopted this approach and had examined
the tender of NHL in this perspective it would have found
that NHL, being a joint venture, has access to the benefit
of the resources and strength of its parent/owning
companies as well as to the experience in database
management, sales and publishing of its parent group
companies because after reorganisation of the Company in
1992 60% of the share capital of NHL is owned by Indian
group of companies namely, TPI, LMI, WML, etc. and Mr
Aroon Purie and 40% of the share capital is owned by IIPL
a wholly-owned subsidiary of Singapore Telecom which was
established in 1967 and is having long experience in
publishing the Singapore telephone directory with yellow
pages and other directories. Moreover in the tender it was
specifically stated that IIPL will be providing its unique
integrated directory management system along with the
expertise of its managers and that the managers will be
actively involved in the project both out of Singapore and
resident in India.
Prima facie, it appears to us that the action of the
respondents, in disqualifying the petitioner, may be
erroneous, and in the teeth of the judgment of the
Supreme Court in New Horizons Limited (supra).
In these circumstances, we are inclined to stay
the award of the contract to any party, including
respondent no. 4. No action shall be taken for
execution of the work under the award of contract till
the next date.
(Alok Kumar Verma, J.) (Vipin Sanghi, C.J.)
13.04.2023 13.04.2023
Rahul
