IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 8TH JULY 2011 / 17TH ASHADHA 1933 WP(C).No. 14166 of 2011(U) -------------------------- PETITIONER(S): ---------------------- M/S.UNIQUE CONSTRUCTIONS, KOTTANATHU BUILDING, KADAYIRUPPU P.O., KOLENCHERRY, ERNAKULAM, REPRESENTED BY ITS MANAGING PARTNER, O.V.GEORGE. BY ADV. SRI.KMV.PANDALAI SMT.S.HEMALATHA RESPONDENT(S): ----------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY, PUBLIC WORKS DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001. 2. THE CHIEF ENGINEER, (HEAD OF DEPARTMENT) PUBLIC WORKS DEPARTMENT, BUILDINGS & LOCAL WORKS, PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM-695014. 3. THE SUPERINTENDING ENGINEER, PWD BUILDINGS, SOUTH CIRCLE, THIRUVANANTHAPURAM-695014. GOVERNMENT PLEADER SMT.RAJASHREE THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.14166/11 APPENDIX PETITIONER'S EXHIBITS EXT.P1: A TRUE COPY OF THE TENDER NOTICE DATED 22.2.11 ISSUED BY THE 3RD RESPONDENT. EXT.P2: A TRUE COPY OF THE CERTIFICATE DATED 27.10.2010 ISSUED BY THE GENERAL MANAGER, HINDUSTAN PREFAB LTD., TRIVANDRUM. EXT.P2(a): A TRUE COPY CERTIFICATE DT 2.4.2011 ISSUED BY THE GENERAL MANAGER, HINDUSTHAN PREFAB LTD., EXT.P2(b): A TRUE COPY OF THE CERTIFICATE DT 24.4.2010 ISSUED BY THE DISTRICT COLLECTOR ERNAKULAM. EXT.P3: A TRUE COPY OF THE AUDITORS' REPROT AND BALANCE SHEET FOR THE YEAR ENDED 31.3.2008. EXT.P3(a): A TRUE COPY OF THE AUDITORS' REPORT AND BALANCE SHEET FOR THE YEAR ENDED 31.3.2009. EXT.P3(b): TRUE COPY OF THE AUDITORS' REPORT AND BALANCE SHEET FOR THE YEAR ENDED 31.3.2010. EXT.P4: TRUE COPY OF THE SOLVENCY CERITIFICATE DT 2.9.2010 ISSUED BY THE FEDERAL BANK LTD., EXT.P4(a): TRUE COPY OF LETTER DT 2.4.2011 ISSUED BY THE FEDERAL BANK LTD., //TRUE COPY// P.A. TO JUDGE Rp ANTONY DOMINIC, J. ================ W.P.(C) NO. 14166 OF 2011 (U) ===================== Dated this the 8th day of July, 2011 J U D G M E N T Ext.P1 is the tender notice issued by the respondents inviting tenders for pre qualification and execution of work of construction of a building for Taluk Hospital, Kanjirappally. The estimated PAC was `3,93,60,962/- and tenders were invited from A Class contractors of Kerala Public Works Department/ Irrigation who have successfully completed atleast one similar work costing more than 40% of the estimate PAC of work during the last five years. 2. In response to Ext.P1, petitioner submitted his tender, which consisted of technical bid and price bid. Along with the technical bid, he submitted Exts.P2 and P2(a) experience certificates. However, on the allegation that he was not pre qualified by the Chief Engineer's Committee, the writ petition was filed with the following prayers:- “i) call for the records leading to the disqualification of the prequalification tender of the petitioner in pursuant to Ext.P1 relating to the construction of a Building for the Taluk Hospital, Kanjirappally and to quash the same by issue of a writ of certiorari; or WPC No. 14166/11 :2 : ii) issue a writ of mandamus directing the 2nd respondent not to finalise the tender proceedings in pursuant to Ext.P1 notice relating to the construction of a building for the Taluk Hospital, Kanjirappally till a final decision is taken regarding the pre tender qualification of the petitioner after affording an opportunity of being heard to the petitioner; and/or iii) declare that the petitioner is qualified to participate in the tender proceedings considering his work experience and capacity.” 3. A statement has been filed on behalf of the respondents. At the outset itself it should be stated that the statement is too vague in answering the averments in the writ petition and therefore is a very unsatisfactory one. 4. Be that as it may, it is stated that Ext.P2 certificate was concerning rennovation work and therefore was not acceptable. This contention on the face of it appears to be factually correct. Therefore, that certificate was rightly excluded from consideration. 5. However, in so far as Ext.P2(a) is concerned, respondents accept that it satisfied their requirements. It is also stated that as against the 40% requirement specified in the tender notice, the value of work certified in Ext.P2 comes to 52.54%. Therefore the minimum bench mark is satisfied with the WPC No. 14166/11 :3 : said certificate. 6. Proceeding further, it is stated that the technical bids were finally considered by the Chief Engineer's Committee and that while assessing the financial status, the petitioner got disqualified. The relevant averments are contained in para 6 and 7, which are extracted below for reference:- “6. As per the norms prescribed for the financial status, the cost of work in hand should not be more than that of 10 times of average annual turnover. Also average annual turn over should not be less than the proposed cost of work to be executed yearly. In this case, the petitioner have works costing upto 8 crores in hand. This comes to 10.59 times of annual average turn over of the petitioner. Also, average annual turn over is below the proposed cost of work to be executed yearly. Average annual turn over worked out based on balance sheet authenticated by Chartered Accountant of petitioner. Considering the experience, the petitioner should have a minimum experience by executing a single work of equal magnitude and similar nature i.e. 70% of the estimate PAC. Here, the petitioner have only 52.54%. This claim has been admitted while scrutinising the PQ. 7. As petitioner special instruction No.4, the petitioner should submit the list of works in progress (balance amount) and it should tally with the amount shown as work in hand. But the firm neglected this part deliberately and gave a singly word stating that they have works amounting to Rs.8 crores in hand. Neither the petitioners annual turn over is supporting this statement nor they have submitted the WPC No. 14166/11 :4 : estimated financial projection for the next two years (9.14g). As per special instruction No.4, any suppression of facts in this regard will lead to disqualifying the firm. Considering all facts coming under norms existing and special instructions, the committee is taken a decision to disqualify Unique construction for the above work.” 7. A reply affidavit has been filed by the petitioner, where the claims in the counter affidavit have been contradicted. 8. In so far as the annual turn over mentioned in the statement is concerned, petitioner has stated thus:- “i. As per the statements of accounts filed by the petitioner along with the tender documents, the annual turnover for the years ended 31.3.2008, 31.3.2009 and 31.3.2010 are `95,36,239, `14534731 and `38281276 respectively. Hence the average annual turnover of the petitioner would be `20784082. Cost of work in hand is admittedly 8 crores. This is much less than 10 times of the average annual turnover (only 3.85 times). Hence the allegation that the work in hand is 10.59 times of the average annual turnover is false and hence denied. ii. Total cost of the proposed work as per Ext.P1 is `3,93,60,962.Thrfore the proposed cost of work to be executed yearly is `19680481 as the time fixed for completion of the proposed work is 24 months. Since the average turnover of the petitioner firm is `20784082, the average annual turnover is not below the proposed cost of work to be executed yearly. Hence the allegation in that respect is also denied as incorrect.” WPC No. 14166/11 :5 : 9. Similarly, as far as the work in progress is concerned also, the petitioner has averred thus:- “In reply to para 7, it is submitted that the work in progress is the cost of work done but not realised and it would find a place in the asset side of the balance sheet. In the balance sheet submitted for the year ended 31.3.2010, the work in progress shown is `13,721810. The work in hand is the work for which the tenders have been accepted but not commenced execution. Hence work in progress and work in hand would not tally. The contention that those two figures should tally is incorrect and hence untenable Petitioner had also submitted `15 crores as the estimated financial projection for the next years. The petitioner had submitted all required documents”. 10. If the materials relied on by the petitioner in the reply affidavit were available before the Chief Engineer's Committee at the time when the technical bids were considered for pre qualification, obviously these materials do not appear to have been considered by the tender committee. In any event, if the decision not to pre qualify the petitioner was taken without reference to these materials, then that decision is vitiated for not taking into account the relevant materials, which were available before the decision maker. In any case, on the facts, I am satisfied that having regard to the claims and counter claims raised, the matter needs reconsideration by the Chief Engineer himself. WPC No. 14166/11 :6 : 11. Therefore, I dispose of this writ petition directing that the petitioner shall produce a copy of this judgment before the 2nd respondent, who on receipt there of, will reconsider the technical bid submitted by the petitioner in the light of the documents produced by him and the conditions of Ext.P1 tender notice and take a decision on the pre-qualification of the petitioner. Such decision shall be taken expeditiously and based on the fresh decision so taken, it will be open to the respondents to proceed with the awarding of the tender. ANTONY DOMINIC, JUDGE Rp