1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR : O R D E R : S.B. Civil Writ Petition No.1100/2009. (Shiva Corporation India Ltd. Vs. State of Rajasthan & Others) DATE OF ORDER : April 13th, 2009. P R E S E N T HON’BLE MR. JUSTICE GOPAL KRISHAN VYAS ____________________________________ Reportable : Mr. Sandeep Mehta and Mr. Vineet Jain for the petitioner. Mr. Rajesh Joshi for respondent No.2. Mr. P.K. Lohra for respondent No.3. BY THE COURT : In this writ petition, the petitioner has prayed for direction for quashing award of contract to respondent No.3 and further that the same may be awarded to it. In the alternative, the respondents may be directed to invite fresh bids. The petitioner's case is that the petitioner company is a limited company involved in the business of collecting royalty, sales tax, excavation and other construction related projects which the company undertakes in various parts of the country including moving heavy earth and development of construction sites as per the orders received. The petitioner company is also registered with the Registrar of the companies and is registered as A Class contractor with the Addl. Director, Mines, Udaipur 2 Zone, Udaipur. The company has five Directors viz., Meghraj Singh, Asu Singh, Hari Singh, Manvendra Singh and Ashok Chandak. Respondent No.2 invited tenders for two jobs at Mohangarh group of mines for the works to be carried out at the site which included following : (a) cleaning of bushes, decomposed substances, dumping of waste in systematic manner and stacking of gypsum and loading of R.O.M. Gypsum into trucks at mines by a suitable hydraulic excavator with back hoe attachment; (b) shifting of R.O.M. Gypsum from Mohangarh mines through Thayat to Hamira railway station; and, (c) loading of R.O.M. Gypsum into 'N' or 'T' rake wagons by mechanic loaders at Thayat Hamira railway sidings. As per the petitioner, prior to issuance of the present NIT bearing No.8/08, NIT bearing No.7/08 was issued on 12.08.2008 for this very same job wherein the tenders were invited from the interested parties. The job description, eligibility criteria and other specifications were identical in NIT No.7/08. The said NIT was responded by five parties, one of them being Ashok Chandak & Company, Jaipur, and Ashok Chandak is also one of the Directors in the petitioner company. Since there were certain discrepancies, owing to which, the committee of FAGMIL thought it proper that in view of the problems envisaged by the Area Manager, Mohangarh, the NIT No.7/08 may be cancelled and fresh NIT may be issued which suites the requirement so 3 that the jobs at the mines may be carried out smoothly without any hindrance. After taking the above decision, the present NIT No.8/08 was issued and the petitioner is also interested in the work, therefore, the petitioner company filed its bid as required by the specifications contained in NIT No.8/08 along with the earnest money. As per the terms and conditions of the NIT, the bid was to be submitted in two parts, first, containing the technical bid and, the other, containing the price bid. The technical bid was to be opened on 16.01.2009 at 3.00 P.M. in the office of respondent No.2 and the price bid was to be opened on 06.02.2009 at 3.00 P.M. in the office of respondent No.2. The petitioner company also submitted its bids in two separate envelopes. The petitioner quoted price at Rs.89.07 per metric ton for the contract. Besides the petitioner, five other bids were received by the respondent which were : 1. M/s Shri Mohangarh Construction Company, Jaisalmer, 2. M/s R.K. Carriers India Pvt. Ltd., Udaipur, 3. M/s Ujjwat Granite Pvt. Ltd., Jaipur, 4. M/s Jain Transport Company, Bikaner, and 5. M/s Jain Carrying Corporation, Bikaner. Contention of the petitioner is that the petitioner company has wide experience of the area of work, for which, the tenders were invited. The company has carried out similar nature of work and the petitioner was given contract by Acurite Contractors & Engineers for the work in relation to construction 4 of cross taxi way in Delhi International Airport. Similarly, the petitioner was also given contract for minor mineral sand quarries in Panipat district in Haryana where the petitioner made a bid of Rs.17.50 crores. The petitioner has produced on record document Annex.-7 which was issued to M/s S.S. & Company of which the petitioner is a partner as is evident from the partnership deed Annex.-8. The further contention of the petitioner is that one of its directors is also director of M/s Ashok Chandak & Company and he was also awarded the contract for removal and excavation of gypsum by using hydraulic excavators etc. and loading of same into truck/trolla at Ballar Group of Gypsum Mines, Tehsil Pugal (district Bikaner). That contract was for a quantity of work approximated at 30 lakh metric tones. For evidence thereof, the petitioner has produced on record the letter of accepatance. While narrating the above facts, it is contended by the petitioner company that on 06.02.2009, when the representative of the company appeared at 3.00 P.M. before the respondent No.2 in connection with opening of the price bid, he was denied participation on the ground that since their technical bid has been rejected, they have been ousted from participating in the bidding for the contract. No reason whatsoever was made known for rejection of the technical bid of the petitioner. Thereafter, the contract has been awarded to respondent No.3 who has quoted approximately Rs.106/- per metric ton for the job which is approximately Rs.16/- per metric ton higher than 5 the price quoted by the petitioner. As per contention of the petitioner, for last more than 12 years, respondent No.3 is doing the job at the same site of rspondent No.2 and ousting of the petitioner was clearly with a view to favour respondent No.3 because by rejecting the technical bid, the petitioner has been ousted from participating in the proceedings and though the technical bid was opened on 16.01.2009, but till date, no information or ground of rejection has been supplied to the petitioner. But, as per information of the petitioner, the contract has been awarded to respondent No.3 whereas the petitioner's rate was Rs.89.07 per metric ton. Therefore, as per the petitioner, not only the petitioner has been ousted from participation in the tenders, contract has been awarded on a higher rate than the petitioner's rate, therefore, this action of respondent No.2 is totally illegal and suffers from arbitrariness showing favouritism which causes loss to the public exchequer, therefore, judicial intervention is required in this case. Learned counsel for the petitioner vehemently argues that the action of the respondents is illegal because all the documents show that the petitioner was fully eligible and it has been ousted on the ground of lack of experience which is obviously illegal because it has wide experience in the area of work for which the tenders were invited and similar nature of works have been carried out by the petitioner since long. Further, it is contended on behalf of the petitioner that one of its 6 Directors Shri Ashok Chandak is having the required experience, therefore, the petitioner company cannot be ousted from participation in the tender proceedings. It is submitted by learned counsel for the petitioner that at the time of opening the finance bid when the petitioner appeared before respondent No.2, then, representative of the petitioner was verbally informed that its technical bid has been rejected on the ground of lacking experience in mechanical wagon loading but this reason assigned by respondent No.2 is bereft of any foundation. The petitioner company has already undertaken similar work under the contract granted by RSMML where the petitioner by the use of hydraulic excavator and executed the work. It is contended by learned counsel for the petitioner that non-communication of rejection of technical bid of the petitioner despite time-gap of 20 days is clear indication of the fact that the respondents were acting in a manner so as to prevent the petitioner from causing any hindrance in their endeavour to grant contract to respondent No.3. Further, it is argued that till today no official communication has been received for rejection of the petitioner's technical bid. Learned counsel for the petitioner vehemently argued that the private respondent has been awarded contract for last more than 12 years and is obviously favoured contractor of the respondents and, therefore, the petitioner has been arbitrarily and illegally ousted from the tender proceedings. In support of his argument, learned counsel for the petitioner invited my 7 attention towards recent judgment of the Supreme Court in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd Vs. Union of India & Another, reported in JT 2009 (1) SC 67, in which, as per learned counsel for the petitioner, Hon'ble Supreme Court has held that as per the ratio in the case of New Horizons Ltd. & Another Vs. Union of India & Others, reported in (1995) 1 SCC 478, in similar set of facts, it has been held that High Court was not justified in dismissing the writ petition and direction was given to consider the technical bid in that case. Learned counsel for the petitioner argued that the controversy involved in this case is also of the similar nature because the question of considering experience was originally decided in the case of New Horizons Ltds & Another Vs. Union of India & Others, (1995) 1 SCC 478 and the judgment in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd. is based on the said judgment. Therefore, it is submitted that the reasons for rejection of the technical bid of the petitioner are totally unwarranted and, so also, the petitioner company was also assigned works by the Acurite Contractors and Engineers, which is evident from Annex.-6, therefore, the reasons assigned for rejection of the petitioner's technical bid for lacking experience is totally unfounded and the petitioner has been declared disqualified whereas, as per the condition of the NIT, the petitioner company was having requisite experience of 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years, therefore, this writ 8 petition may be allowed and the relief prayed for by the petitioner may be granted. Per contra, learned counsel for respondent No.2, first of all, vehemently argued that this writ petition is not maintainable on the ground that the petitioner has not impleaded FCI Aravali Gypsum and Minerals India Ltd. (FAGMIL) which is Government of India undertaking and on whose behalf the impugned notice was issued. Neither FAGMIL has been impleaded as party in the array of respondents nor the Chief Engineer, Mines has been impleaded as party who has issued the NIT, therefore, this writ petition deserves to be dismissed on this ground. As per the respondents, the tender notice No.FAGMIL – 8/08 was published in all the important news-papers, so also, was available on the web-site. In the said tender notice, there is eligibility condition at S.No.13 which is as follows : “The offers of only that tenderer may be considered who have executed and completed one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at lest 30% of the quantity proposed in one year in the job specification in any of the immediately preceding Five years” Contention of learned counsel for the respondents is that as per eligibility condition No.13(iii) the offers of only that tenderer may be considered who have executed and completed one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at least 30% of the quantity proposed in one year in the job specification in any of the 9 immediately preceding five years. Admittedly, the petitioner company is not having any experience in its own name. Further, it is argued by learned counsel for the respondents that in the writ petition it is specifically stated by the petitioner company that the company is not having such experience in its own name but one of its Directors Shri Ashok Chandak is having the said experience. Likewise, the petitioner company was given contract of similar nature for the work in relation to construction of cross taxi way in Delhi International Airport, New Delhi; meaning thereby, one of the Directors is having the experience but, as per the terms and conditions of the tender, the company itself should have the experience to execute and complete one assignment/work of similar nature and magnitude in their own name/firm/company/tenderer for at least 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years. It is pointed out that as per the decision, the quantity prescribed is 11,00,000 metric tonne ROM Gypsum. In this view of the matter, at the time of consideration, the pre-requisite eligibility was that the tenderer must possess experience of having executed and completed one assignment/work of similar nature and magnitude in their own name for at least 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years and, as per the petitioner company itself, the company is not having such experience in its own name but one of its Directors Shri Ashok Chandak is having 10 the said experience so also one acurite Contractors & Engineers gave contract of similar nature which is evident from Annex.-6; meaning thereby, in fact, the work was given to the Acurite Contractors & Engineers and the petitioner was allowed to execute all the earth work by the contractor who was assigned the work. In this view of the matter the petitioner has no right to say that the experience of one of its Directors may be considered for satisfaction of the eligibility condition and, so also, the petitioner company cannot claim any right for opening its technical bid because as per the respondents the petitioner was not technically qualified for participating in the technical bid. Learned counsel for the respondents invited my attention towards certain judgments of the Hon'ble Supreme Court and submitted that the respondents are having the jurisdiction to assess the eligibility for participation of the tenderers in the bid proceedings and if it is found that any tenderer is lacking in satisfaction of the eligibility condition, then, proper decision can be taken for the purpose of allowing or not allowing any tenderer for participating in the technical bid. Learned counsel for respondent No.3 pointed out that the petitioner company is a company registered under the Companies Act and Shri Ashok Chandak is one of the Directors of the company and he cannot be treated to be partner of the company, therefore, his personal experience cannot be counted as experience of the petitioner company as experience in its own name. 11 Learned counsel for respondent No.3 invited my attention towards following judgments of the Hon'ble Supreme Court : (1) (1989) 2 SCC 116, (2) (2000) 2 SCC 617, (3) (2001) 2 SCC 451, and (4) (2005) 4 SCC 43. While citing the above judgments, it is vehemently argued by learned counsel for the department as well as learned counsel for respondent No.3 that the allegation of favouritism and accommodation of respondent No.3 are imaginary and, therefore, not tenable. In fact, the petitioner company has failed in the eligibility test for the technical reasons and has ventured to question the validity of acceptance of the tender of the private respondent. The petitioner is registered under the Companies Act and, therefore, it is a legal entity and is separate and distinct from an individual member of the company, therefore, merely because Shri Ashok Chandak is one of the Directors of the petitioner company, any work executed by the other company in which Shri Ashok Chandak is Director cannot be counted as experience of the petitioner company. It is vehemently urged that the respondents considered this aspect of the matter and found that the petitioner company is not possessing eligibility for the technical bid. All the tenders were scrutinized at the stage of the technical bid and the tender committee declared private respondent technically qualified besides the other qualified tenderers while considering the 12 tenders objectively, in which, the petitioner company was not found technically qualified because the petitioner company has failed to produce any documentary evidence for the purpose showing its own experience in terms of the eligibility condition prescribed, therefore, obviously the petitioner company was not eligible to participate in the technical bid as well as price bid. On 06.02.2009, the tender of respondent No.3 was found to be the lowest after opening the technical bid in the price bid, therefore, its tender was accepted and communication dated 07.02.2009 was sent by the answering respondent to respondent No.3 and he was asked to deposit the security amount of Rs.51,79,000/-; and, in response to the letter of intent, respondent No.3 conveyed its acceptance on 09.02.2009 and, thereafter, requisite amount of security was deposited by respondent No.3 and work has also been commenced; meaning thereby, the petitioner has not furnished the correct facts before this Court on 10.02.2009 that the work has already commenced on 09.02.2009 and, before passing order on 09.02.2009, the tender was already finalized. According to the respondents, the award of contract whether it is by a private party or a public body or State is essentially a commercial transaction and for arriving at a commercial decision, the considerations which are paramount are essentially commercial considerations. The State or any public body can choose its own method to arrive at the decision and it can fix its own terms in accordance with law which is not 13 open to judicial scrutiny. Therefore, it is argued that if the grievance of the petitioner company is examined, then, it is clearly revealed that the petitioner company was not eligible to qualify the technical bid by virtue of condition 13 (iii) of the NIT as aforequoted. Upon perusal of the above clause (iii) of condition 13 it is clear that the petitioner company was rightly adjudicated ineligible for the technical bid by the tender committee. If the documents submitted by the petitioner company are scrutinized, then, it will reveal that none of those documents – Annex.-6 to Annex.-9, respectively referred to execution and completion of one assignment of similar nature of 30% of the quantity proposed in one year in the job specification in any of the immediately preceding five years. As per learned counsel for the respondents, Annex.-6 pertains to Acurite Contractors & Engineers and is of different nature and Annex.-9 pertains to Shri Ashok Chandak, therefore, assertion of the petitioner company that it is a limited company registered with the Registrar of the companies clearly reveals that the company is a legal person whereas the word “company” imports an association of persons for some common purpose. Such an association may be incorporated or it may be unincorporated and an incorporated company is a legal person and separate and distinct from the individual members of the company. Therefore, it is obvious that company being a creature of the statute is controlled by the statute. In these circumstances, documents submitted by the petitioner company which is in the 14 name of one of its Directors is of no avail, therefore, the decision of the committee declaring the petitioner company ineligible for the technical bid and, so also, petitioner company has no locus standi to challenge the acceptance of the tender by the tender committee. Learned counsel for the respondents submits that in respect of the nature and magnitude of the work, bidders who fulfill pre-qualification alone are invited to the bid and adherence to instructions cannot be given good-bye by branding it a pedantic approach. In this view of the matter, it is submitted by learned counsel for the respondents that in this writ petition, the petitioner is claiming his right on baseless grounds and, so also, claiming right on the premise of experience acquired by one of its directors should be considered; but, in fact, the experience of one of the Directors of the company as its own. In this view of the matter, the petitioner company has failed to qualify for the technical bid. Therefore, there was no occasion for the representative of the petitioner company to appear before the tender committee on 06.02.2009 at the time of the price bid. Further, It is submitted that all the allegations levelled against the respondents are far from truth and are being made by the petitioner company out of personal vengeance. The rejection of the technical bid of the petitioner company is outcome of its ineligibility because the tender committee after due objective consideration found that the petitioner did not qualify for entertaining its technical bid. In this view of the matter, it is 15 submitted that the petitioner company has no case in its favour and, so also, admittedly the petitioner company itself does not possess the experience but, somehow, the petitioner is claiming right that the experience of one of its directors may be considered for the purpose of eligibility. So also, the petitioner has wrongly prayed before this Court that action of the respondents is illegal and has no foundation to stand before the eye of law. In fact, the matter was finalized in all fairness by the tender committee, so also, the ground of the petitioner is not tenable because at the time of considering the candidature of the tenderer, first of all, pre-eligibility qualification has to be seen because the tender is required to be accepted in two stages, at the first stage technical bid is to be opened and, thereafter, price bid is to be opened. It is the duty of the respondent department to see the eligibility and, then, to allow the tenderer to participate in the price bid. The case of the petitioner company was scrutinized and it was found that the petitioner company is lacking in experience, therefore, if the petitioner company was not allowed to participate in the technical bid, then, there is no question of opening the finance bid. I have considered the rival submissions made by both the parties and learned counsel for respondent No.3 Shri P.K. Lohra. The controversy involved in this case is whether the experience acquired by one of the directors of the petitioner company can be termed as experience of the company. 16 Further, if any work is assigned by Acurite Contractors and Engineers for the works in relation to construction of cross taxi way in Delhi International Airport and work contract for minor mineral sand quarry was given to the petitioner company in Panipat district of Haryana, can the same be considered to be sufficient experience for the purpose of allowing the petitioner company to participate in the tender proceedings or the company was eligible for participation in the technical bid. Undisputedly, the petitioner company is raising voice in this writ petition with regard to experience that one of the directors of the company Shri Ashok Chandak was having experience of the required work and being one of the directors of the petitioner company, petitioner is entitled to have his experience reckoned in respect of the eligibility condition in the tender. For the said purpose, the main emphasis of the petitioner's claim is upon the judgment rendered by the Hon'ble Supreme Court in the case of M/s Ganpati RV-Talleres Alegria Track Pvt. Ltd. Vs. Union of India & Another, reported in JT 2009 (1) SC 67. While citing the said judgment, it has been submitted by learned counsel for the petitioner that in this judgment Hon'ble apex Court has while taking note of para 23 in the judgment in the case of New Horizons Ltd. & Another Vs. Union of India & Others, (1995) 1 SCC 478, held that where a person having past experience has entered into a partnership and the tender has been submitted in the name of the