»^.,,;, if!=.;>. ^^ IN THE HIGHCOURTOR.rKmCATUREATBILASPUR (CHHATriSGARH) W.P. No, ^&^-L /2003 PETITIONER ti •;^ 1^'. •-- ^^iSC'.- r:<^-^-" ^ ^ <s»~ ^^' RESPONDENTS S^i) SWADESH AGROTECH LUVIITED C -17, Parijat Commercial Complex, E-5, Arera Colony, BHOPAL. /Through: Sanjeev Agrawal, Director, S/o Shri V. K. Gupta, Aged about 39 years, R/o E- 41137, Arera Colony, BHOPAL Vs STATE GOVERNMENT OF C.G. Through : The Principal Secretary & Agricultyral Prod. Commissioner, Deptt. of Animal Husbandry& Dairying, D. K. Bhavan, Mantralaya, Raipur. ' Director, ^ 4) Directorate of Animal Husbandry & Dairying.StateofC.G., G. E. Road, Raipur. M/s Walmik Engineers, 409, Mangalwar Peth, 510, Llyods Ghamber, Block-2, BarneRoad, PUNE. M/s S C A Chemieals tndia Ltd., Plot no. 3& 4, Block 7-B, Nehrunagar (East), BHILAI-400020 PETITION UNDERARTICLE 2267 227^1FCONSTITUTIONOFINDIA 1. Rarticulars of the Petitioner As given in the cause title. 2. Particulars of the respondents: As given in the cause title. !ISM o.; -^,:.a iBa ESI •• tBl ^M .WM y"" HI6H COURT OF JUtSlCATURE ^T BILASPUR. CHHATTIS^RH Writ^®titiorLNo,2Slt^f2003 Swadesh Agrotech Limited - Versus- State (Sovemment of Chhattis9arh suid three others POST FOR OR&ER ONjl4mf6BRUARy, 2005 ^ .ll-I-li w .-<- •i.. .-.. .A HI6M COURT OF JUOICATURE ATBILASPUR, CHHATTIS6ARH / Wnt Petitjon No. 2811 sf 2003 ' Swadesh /'grotech Limited ; , — Versus - State ©ovsmmentof Chhattisqarh and thrss o"rhsrs Presant; - ' Mr. Ravindra Shrivastava, Sr. Advocate For the petitioner. with Mr'. Viyek Shsr'ma, Advaca+s; Mr. N.K. Agrawol, &y. Advoeate ©snsrai: For th®Stats/rsipondents No.l d 2. '• Mr. P.5. Koshy, Advocate; For respondent No.3. B»fors! Honbls Mr. Jus+ie®L.C. Bhadso ^ OR& Eft (Passed on 14th Februar/, 2005) 1. By this writ petition under Article 226/227 of the Constitution of India, the petitionsr has chailenged the decisidn of respondent No-2 in awarding the contpact to respondent No.3 for improvement, design, construc+ion, suopfy, instdllntion and commissioning of &alry Pidints at ftaigarh, Ambikapur, Kor'ea, Kawardha & Jashpur', and Chiiting Centres at Bhdratpur, KuRkur-i d Bagichcon Turkey basis. 2. Brief facts lending to filing of this writ peti+ion ars that resspondents No-1 snd 2 her'ein inyi+ed tenders by no+ification publishad in the newspspers for improvement, design, construction, supply, insTOliation and commissionins of bairy Plcnts sat Fiaigarh, Ambikapur, Korsa, Kawardha & Jashpur, and Chilling Centres at Bhdratpur, Kunkuri & Bagicha on turkey basis. Last date for purchase of the tender form was fixed for 10 Fsbr-uary/20Q3upto 14:00 hours. Last data for submission of tenders was 11.2.2003 by 15:00 hours and ithe -renders - were to be opened on 11.2.20D3 at 16;00 hours. In respon^ to the acad 1 . . notice inviting tender "(NIT), The petitioner herein and ir&spontfenTs t~~ Page 2 of9 ''.1 ^, ^- No.3 A 4 herein, as aiso two more persons filed their- tender documents in time. As per the terms and conditionsof the NIT each of the tenderers was required to submit the tender offer in •Hiree envelopes namely, A, B and C. In Envelope-A the tBnderers were requir^d to submit, (a) A certificate of Registmtion/Incorporation css appr-oved Contractor; (b) List of contracts undertaken; (c) Completion Certificates of the contracts compfeted: (d) Income Tax fteturn: (e) Latest Income Clearance .Certificates; (f) 5ales Tcsx/Commer'cial Tax Clear'ancs Certificate; (g) Copy of Balance Shset for lcst two years; Qi) Bonk's 5olvency Certificate; (i) A CeFtified copy of the partnership deed with certified eopy of tiie Power of Attorney/eertified copy of Resolution passed by 1+ie board of the company; and (k) tSeclara+ion for not invoiving in any liTigation or- iegal proceedings or hiack listed wiTh aw Sovernment/'Psjbiic Sector Oraaniziatior- Jw dause 2 ef Annexwe-A of the tender' fonn it was furthe," made clew thaf tenderers nof submitting the reywsite information afwy with the tendef as 'abovs ths fender will nof be cwisidered and the bid wili be rsjecred. In Envelope-B, The Tenderers were required to submit tender document duiy filled in, terms anci conditions involyin9 fiiiGncial implications, if any, dl technical. detai!s and specifications. drowing, brochures etc. The third envelope (Envelope-C) was to contain cost of the lump sum offer for-1tie projsct. 3. TTie case of the petitioner herein is that respondent No.3 failed To submit bank solvency certificate, experience certificate, list of contrac+s undertaken and the complstion certificate of the contracts completed under turnkey basis which was condition preeedent. As in Enyelope-A the requisite certificates were not there, respondent No.2 was not entitled to open the Enveiope-B of respondent No.3. Mowever, inspjte of The objection raised by rhe petitioner, respondenT No.2 opsnsd Enveiope-B dlso of "espondent No.3. Enveiicpe-B of res^ondent No.3 did not contain the Tender document form du!y filiedjin and Page3 of9 •* ^a, si9ned, which was also a condition precedent, therefore, there was no occasion for respondent No.2 to open Envelope-C. t»ut inspite of tiie objections and after adjournments on various (.latas, Envelops-C of "espondent No.3 was alsoopened. Ther'efore,1+ieTOai!i chailenge of th® petitioner in this writ petition is 1tiat respondent No.3 did not submi? the requisite experience cer'tificate as also the solvency eertificate, In the circumstances, he was not eligibie for consideration for awarding The conTract. Howeyer, in spite of that, respondents No.l and 2 decided to award ths contract to respondsnt No.3. Therefore, the petitioner by way of this writ petition has proyed for issuanee of a writ of mandamus to resoondcnts No.l & 2 to rinaliz®the tender strietly as per the terms and canditibns enumer'ated "n the tender c3ocumen+ Annexure P-2. 4. Retum has been filed on behalf of re.apondents No.l dind 2 in whieh. it has been mentioned that since fhe eiisputed facts are invoived, Therefore, ?he wri? petition is noT maintainable and since The instant writ petition relctes to contractual obligations therefore, the sama is not maintainabie. It has further been mentioned that all tiie tender documents wers olaced for scrut'ny before the tschnicai sxpsri's for their opinion and tiiat it was on ths basis of the opinion receiysd from Technical experfs That a decision was taken to finaiize *he'tenders eysd accordingly, -tiie tenderers wer^ called and' it was found that respondent No.3 was the competent per'son To whom the tender could . "ave been awarded. Respondent No.3 being the bwest tenderer his tsnder document was examined by expert committee as mentionsd in para 9 of the return. The Technicai 'Expert Committee on sonsideration of the document found that if foi" .some reason the participants do not have ail the re^uiremen+s stric+ty as per the MIT, but they have other experiences in similar fields whose specifications are aiso competitlve snd thei'r" ra+es aiso are founa' to be proper, l+ie conditions envisaoed in the" NIT could be r-elaxed omd it was Thersafter Page 4of9 ^ tho.t respondent No.3 was found to be competent. The sum ond substance of the return is that after examining the tender documents, the expert committee reached the conclusion tliat respondent No.3 is the person eligib'e and they also reloxed certain eonditions iooking to ?he overai! competence and performance of respondent No.3. Same is the reply of respondent No.3. 5. Rejoinder has been filsd on behalf of -tfie petitionsr raising the sam® point and mentioned That the expert commi'Ttee of respondents No.l aftd 2 are not entitled to relax the terms and conditions and eiigibiiity criteria of any tenderer. 6. Addltional return has also been filed on behaif of respondents No.l and 2 in which it ha3 been mentioned 1+iot after considerin9 the totaiity of the circumstances, respondent No.3 was found etigible. It hcs been admitred That althouah respondent No.3 had not comple-ted three projects on turnkey basis related wlth Ministry of Anlmai Husbandry and Dairy/Food Processina, Soyernment of India, but he compteted gimiicr naturs of several projects beionging to Mahorcshtra 6overnment and a!so in some other piaces, and on sefutiny by the Technical Committee and Technical experts, respondent No.3 wss found eligible, cnd pursuant thereto his tsnder wos aiao considerea. Moreover, oniy the rates quoted by him were found in accordance with - the estimated cost of ths project. In this connection, ciause 6 of the tender documents at page 27 of -the writ petition, it has been mentioned "No Tender shall be accsptabie ufiless att fhe emelopes U" "B" rf "ii"" <?/-e scparately sea/ed. TendefW shaii nat be allQwed te flll In w seal their tenders at the DAH & D. Tenderers are requested to present the tenders in good time on the stipulcted dsy so as to avoid rush at the closing hours". 7. I haveheard leamed counsetfor the par-ties. |. ^- .1 I: f ;'S'i&':K??'?:'':i":3;^a??^'»;sS'SS'S'sSSS Page 5 of 9 8, Lsarned Senior Advocate Mr. Ravindra Shr'ivastcva argued that sinc® respondent No.3 failed to meet and satisfy.fne eligibiilty criteria, thersfore, the decision of respondsnts No.l.S 2 to award the contract in favour of respondent No.3 is arbitrary asnd irrationdit, because respondents No.l & 2 are not entiTled *o reiax theTerms and coriditions of the tender document uniess they have been giyen any power in the tender document itself regarding relaxation of the terms and conditions of the eliqibiiiTy eriter'ia. 9. On the other hand, learned counsel for respondents No.l to 3 submitt'ed that the expert committee examined the documents and found respondent No.3 e!igible,and they also found ttiat looking to tiie cost value offered by respondent No.3 and his expcr'isnc® in o1+ier fieids he was the most suitable person for award of contract. Therefore, rsspondent No,3 ia cligibi®for the contrcct in questwn and +he writ petition ifi liable to fae dismissed. Howeyer, they have not pressed about the majntainabitiTy of the writ petiTion on Tiie ground of invoivin9 disputsd facts in the pstition or that the matter relatss to contractuai nature, ttierefore, the wr.it petition is not maihtainable. lO.Hwing heard learned counsei for the parTies, I have perused the pleadin9s> tenc'sr foi'n" cf the NIT, tet-ms sand conditions of th®NIT, eiigibility criteriaand other reievant documents. ll.In This connecTion, as has been mentionedabove. the tenderers were rsquirsd tosubmit their tenders 'm three envslopes containino vcrious documents. As per ciouse 6 of the tender doeuments at page 27 of tfie writ pstition, the authorities fixed a tsrm that no tender shall be acceptable unless all ths envelopes A", B" cmd "C are separo.tely sealed and tfie tenderers shail not be aiiowed to fii! in or seai their tender's a+ the &AI-1 &, b. In Clause No.l - Specific Exper'ience/ Expet'Tise at page 32 of the writ peTition ithas beeri preseribed that ^URSISBSSSSBKsSBfillB^^R il N i ->' ;%-i3^?-^."'"L3^ Page 6 of 9 "The specific exper'iehce of designing, cons+ruction, suppty instaltation and commissiQning of at least one dairy piant/miik chitling pianton turnkey basis is essentiai as soecified in the NIT. The Teridsrsrs arsadvised to tnention cleariy experience of constryction as weil as experience of supply tinderection of Ptant and AAnchinery in Oairy PlanT. Contractors should have compieted ct least thr'es projects on turnkey basis related with AAinistry of Animai Husbandry And bairy'ing/Food Processing Industries, fiovernment of India dnd having teGhniealiy quaiified staff in th® field of cwil, mechanical, eiecTronic/etectrical engineering to supervise the work." Ciause 2 of Annexure A gt page 57 of the writ petition mentions that "Tenderers not submitting the reqyisite informtttion alona with the tender as above the tender wiil not be considered ond the bid wiil be r-ejected." 12.1f weexaminethe caseof respondent No.3 in the !igh-i- of the sbove requirement, it i's admitted position that no bank soiyency certificate was submitted by respondent No.3. Eyen the list of contrctcts undertaken was aiso not submiTted. If we examine the minutes of meetingclateci 11.2.2003 of the committee constituted for the purpose of scr'uTinizing the ,tender forms, obou* Enveiope-A it has been mentioned that bank 9uartmte« on requisite stamp paper, so!yency certificate, the cartificate regardin9 instailation and conimissioning, and The experience certificate reaarding The Animai Husbcsndry and bairying/Food Procegsing were not submitted by respondent No.3. Again in respect of Envelops-B, technicdl brochyres and civii designs were not submitted/ and even rhe oriqinal terder form was not returned and condjtional tender wgs submitted by respondent No.3. :ven in the additional return •rtiese fccts have been admitfed by respondents No.l cnd 2 in which it hais been sta+sd that experience regarding execution of three projects on turnkey tiasis was nor submirred dnd The solvencv carflficaTe was also hoT submiTS'ed in the Enyslope-A, But, ths mdin ground which Ilas bsen raised isy •riie !'; lf y :: Page 7 of 9 \">-.' iri respondents ia thdt on over aifexaminationof the tender •for'ms, the Technical committee reached the conciusion thdt on the basis of sxperience of respondent No.3, he was suitabte and consider'ng the totality of thecir'cums+onces respondent No.3 was found eligible. .Now, the question is whether in the circumstdtnas, respondents No.l & 2 are entitled to relax the terms cnd conditions of the contract in spiteOf theabove defectsnoticed in the bid of respondent No.3. In this connectjon, rhe !aw as has been heid by The Apex Court in the matrer of W.B. Stafe Electricity Board v. Patel EnginesriRg Co. Ltd. and othersreported in(2001) 2 SCC 451 ,'is as under'. - "Distr-ibution of State largesse - ©overnmentContracts - Tenders - Ruie of law and constitutionai values, must be adhered to when awarding contract - Ruies (md instructions must be comoiied with seruDuiousfv m order to avoid discrimination, arbitrgri'ness gnd fdyouritism, which are contrary to rule of law and constitutioncj /' <'• votues - fteisxation by State or its agencies of a r-ule or condition in favour of n particuiar hidder, held, not permissibie unless expressly provided for in the rules." Protection of pubiie interest - AdherSnce to the rules, he!d, is •rtie bsst priRciple to be foilowed 'm the public irsterest." , "Principle of awarding controct to lowest tendeper, held appiies when all things are equai. It was -further heid that "where bidciers who fulfil! pre-qualification aione ars invited to bid, adherence to the instpuctions cannot be given a go-by by bnanding it as a pedantic approach, otherwiae it will encour'age and provide'scopefor discrimination, arbitrariness and favouriTism which are totatly oppoSed to 1+ie ruie of law and constitutional yalues. TTie very purpoa of issujnq ruies/iriStructions is to ensure their enforcement lest the "uls of law shouid be a casuaity. Relaxation or waysr 6f druie or conditioh, uniess so provided under the ITB, by •ttie State or JTS agenGles (the appeilant) in favour of one faidder woui^ ereote justifiable doybi-s in •rii^ mihcis <f othec biddw^, would impair 1+ie ruie of tranqwrency and fairness wi^ provid®roorn for manipuiarion To suif The .yvhims of Ws !l— Page8of9 i^.. i! ll: Stcte oaencles ln PICI<1"9 an^ choosing a bidder for awa''ding contracts as in ttie case of distrlbutin9 bounty or charfty. 5uch approaeh should always be avoided. Whers power to retax or waive a ruie or a condition exists under •the rules, it has to be done strictly in cofflplionce with the ruies. Therefore adheren<» to the ITB or rules is the best principle To be foilowed, which is also in -the bsst public interest." 14.In the caae of Ramand &ayarain Shetty v. Intematwnal (Airpsrt Authority af India and others reported in (1979) 3 SCC 489, the Apex Court heid that "Standard of ellgibility laid down in 1rie notice for tenders, hetd, cannot be departed from ar'bitrarily - Such departure from the standard, held, wil! amoun? To deniai nf equality of opportunity to those who felt bound by the stomdard of elSgibility ana theriefore did not submit their tenders. • "Reiaxation of the standard Of eligibility at the time of considering the tenders or appiications, heid, wiii amount to s denial of opportunity to those who considerin9 themselves insli9ib!e did not appiy." 15.Therefore, in view of the above !aw idd down by the Apex Court, respondenTs No.l & 2 were not entitied to relax the terms and conditions of the NIT. The respondents have notcome forward with a plea that in the NIT or terms and conditions of the NIT they hsve power to relax the eligibility criteria or the experience cnd other requirements. Sjnce they have no pouuer' to retcx the terms and conditions of the NIT, the defence of respondents No.l <& 2 that iooking to the rsport of •ine Expert (..omir.ittes, aiso looking to ths financiai bid of respondent No.3, and looking to the totality of thel circumstunces, tliey found respondent No.3 as eligible, is notl sustainable. The said decision of respondents No.l & 2 is arbitrary being irrationai and against the ruieof law, and they are n6T entitled to ii|| take decision a+ their whiins flnd fancy. The S+ate ond it3;|? instrumentttlities deaiing with the publie exchequer are bound to adhet'ej;^ to the ruies anci terms.and conditions fixed by them^lves^ If they do| | -^ ^i^ Page9of9 aa ssss ^"•'^ ^oma no+ foiiow the so.me., thsn cs per W.B. State ESec+riei+y Boord's case (supra) <md Ramanfi &ayaram Sheti-y's ecse (supra), the said decision of the State and its instrumeritalities amounts to discrimination to olher tenderer's and violativa of Ar+icies 14 & 19 (1) (9) o'f 'i'he Constitution of India. 16. As mentioned abov®,admittsdly, respondsnt No.3 did not submit the solvency certificateanci experienca eer'+ificate regarding exacution of three projects of State 0overnmenT or CenTra! Sovernment and also he submitted conditional tender, In Envelooe-6 he did not r-eturned the original tender form also and it was submitf'ed liiereafter', separately. Look'ng to these tcpses, respondents No.l & 2 were noT entitled to consicier 1ns case of respondent No.3, even if his bld was competitive, and they are required to consider other bids, in accordance with iaw. It is not necessary for!tthem t<? aceeptthe. bid of remainina bidders if thev do not find them to be financiailv viable. Thev can taka rurther sTeps in accordance with law. 17.In the rcsult, the petitioncr's writ petition is ailowed and in view of ths a'boye discussion, it is held that respondent No.3 is not entitled for" consideration of the said NIT. Vide order dated 10.9.2003 this Court passed mterii'n ordsr that the rsspondents may procead with completion of procsedings of tender documents, ..but they shail not issue work order, Now, that order stands niodified in the above term. The raspondents can proceed with the process of tender and finaiize the Tender as per The direc-ions above. ^-^^"' Sd/- __- L.C. Bhadoo Judge 'v;'; i ia! '.^; 'Si .111 -..•": s: VKM