Case: Indore Devt. Authority & Another Vs. Arvind Techno Engineering P. Ltd. & Another

1. Heard Mr. Vinod A. Bobde, learned Senior Counsel appearing for the petitioners and Mr. P.S. Patwalia, learned Senior Counsel appearing on behalf of respondent No. 1. 2. Also heard Ms. Meera Mathur, Advocate representing respondent No. 2 who is supporting the petitioner in this case. Does Clause 21.1 of the notice inviting tenders (NIT) for construction of Railway Over Bridge at Western Ring Road, Indore, prohibit two separate companies, that had earlier gone together to constitute a partnership firm from submitting separate bids for the work in question, even though the partnership firm was not a bidder in response to the NIT? That was the question that arose for consideration before the High Court of Madhya Pradesh, Jabalpur, Indore Bench. 3. The brief facts necessary to put the controversy in its proper perspective are as follows:In response to the NIT issued by the petitioner Indore Development Authority seven tenders were received. Two of the bidders were respondent No. l Arvind Techno Engineering Pvt. Ltd. & Ors. and M/s. S.P. Singla Constructions Private Limited. Both respondent No. 1 and M/s. S.P. Singla Constructions Private Limited are separate companies, duly registered under the Indian Companies Act. It is also not denied that the two companies had come together to form a partnership firm in the name and style of M/s. S.P. Singla Constructions Private Ltd. under the Partnership Deed dated June 14, 2003. The partnership firm was formed with the object and purpose inter alia to take contracts of civil constructions and under the deed of partnership the two companies were entitled to profits and liable to losses in the partnership business to the extent of 50% each.4. As noted above, the partnership firm M/s. S.P. Singla Constructions Pvt. Ltd. was not a bidder in response to the NIT but bids were made by its two constituents, that is to say, respondent No. 1 and M/s. S.P. Singla Constructions Private Limited.5. The petitioner held that both the bidders were disqualified in terms of Clause 21.1 and consequently rejected the bids submitted by them.6. Clause 21.1 of the NIT provides as follows:21.1 ONE BID PER BIDDERAs JV/consortium, an individual company shall submit only one bid for the work. An individual company JV/consortium or their partner which submits or participates in more than one bid will cause all the proposals in which bidder has participated will be disqualified.Respondent No. l challenged the petitioner’s decision to reject its bid before the High Court. The High Court allowed its application by judgment and order dated May 15, 2009.7. The High Court held that the clause in question was lacking in sufficient clarity and it did not clearly convey the meaning that members in a partnership firm were barred from participating in the tender process in their individual capacity also making their separate bids even though the partnership firm itself did not submit any bid in response to the NIT. The High Court also held that Clause 21.1 would have been attracted only in case respondent No. l had submitted the bid in addition to the bid submitted by the partnership firm but since the partnership firm was not participating in the tender process the bids submitted by respondent No. l or M/s. S.P. Singla Constructions Private Limited were not liable to be rejected in terms of Clause 21. The relevant portions of the High Court judgment are in paragraphs 14 and 15 which are reproduced below: “It is worth noting that the petitioner as well as M/s. S.P. Singla Constructions Pvt. Ltd. are separate companies registered under the Indian Companies Act and both had submitted one bid each in their individual capacity in the name of their respective company. No bid was submitted by the Partnership Firm “M/s. S.P. Singla Constructions” formed by them. By forming a partnership firm for some other business by a separate name and identity they had lost their entity as company. When the bids were submitted by these two companies in their individual capacity and the partnership firm formed by them was not present before the Indore Development Authority in any capacity, much less in the capacity of bidder, then in such event, the condition of one bid per bidder was satisfied by the petitioner so also by another Company-M/s. S.P. Singla Constructions Pvt. Ltd.If along with the petitioner and M/s. S.P. Singla Constructions Company Pvt. Ltd. the partnership firm had also submitted the bid, then it would have been a case of submission of more than “one bid per bidder”, and in such case, Indore Development Authority would have been justified in disqualifying the petitioner so also other Company on the ground that they had submitted more than one bid i.e. one bid in the name of a company and another in the name of partnership firm. But in the present case, since the partnership firm did not submit any bid, and hence, it cannot be said that the bid submitted by the petitioner was more than one bid.” 8. On hearing the parties at some length, we are satisfied that in the facts and circumstances of the case, the view taken by the High Court does not warrant any interference by this Court in exercise of powers under Article 136 of the Constitution.9. We may mention here that Mr. Bobde tried to submit before us that earlier respondent No. l was given other works but the petitioner’s past experience with respondent No. 1 was not very happy and fully satisfactory. Mr. Patwalia on the other hand had in this regard different story to narrate.10. In this case there is no occasion for us to go into that aspect of the matter. Suffice it to say that the bid submitted by respondent No. 1 shall not be rejected merely on the basis of Clause 21.1 of the NIT but it will be open to the petitioner to appraise the bid of respondent No. 1, along with the other bids in accordance with law in light of the other provisions of the NIT, including its past experience with respondent No. 1.

Decision:
0[ds]8. On hearing the parties at some length, we are satisfied that in the facts and circumstances of the case, the view taken by the High Court does not warrant any interference by this Court in exercise of powers under Article 136 of the Constitution.9. We may mention here that Mr. Bobde tried to submit before us that earlier respondent No. l was given other works but thepast experience with respondent No. 1 was not very happy and fully satisfactory. Mr. Patwalia on the other hand had in this regard different story to narrate.10. In this case there is no occasion for us to go into that aspect of the matter. Suffice it to say that the bid submitted by respondent No. 1 shall not be rejected merely on the basis of Clause 21.1 of the NIT but it will be open to the petitioner to appraise the bid of respondent No. 1, along with the other bids in accordance with law in light of the other provisions of the NIT, including its past experience with respondent No. 1.