IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.J.B.KOSHY & THE HONOURABLE MR. JUSTICE V.GIRI THURSDAY, THE 26TH FEBRUARY 2009 / 7TH PHALGUNA 1930 WA.No. 273 of 2009() -------------------- {IN WPC.35534/2008 OF THIS COURT} .................... APPELLANT(S): PETITIONER ---------------------------------------------- M/S.CONCORD CONSTRUCTION COMPANY, 35/1469, G1, RATHNA GARDENS, SOUTH JANATHA ROAD, PALARIVATTOM, KOCHI-682025.REP; BY ITS MANAGING PARTNER.P.P.AJITH KUMAR. BY ADV. SRI.M.PATHROSE MATTHAI, SENIOR ADVOCATE SRI.DEEPU LAL MOHAN SRI.MURALI PURUSHOTHAMAN RESPONDENT(S): RESPONDENTS ----------------------------------------------------- 1. THE SUPERINTENDING ENGINEER,PUBLIC WORKS NATIONAL HIGHWAY (CENTRAL)CIRCLE, KOCHI-682019. 2. THE CHIEF ENGINEER'S TENDER COMMITTEE, FOR PREQUALIFICATION OF CONTRACTORS, REP; BY THE CHIEF ENGINEER, PWD, NATIONAL HIGHWARY, THIRUVANANTHAPURAM. 3. STATE OF KERALA,REPRESENTED BY THE SECRETARY TO GOVERNMENT, PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. WA.No. 273 of 2009 :: 2 :: 4. SREE DHANYA CONSTRUCTIONS, REPRESENTED BY ITS MANAGING PARTNER, SASTHAMANGALAM, OPP.INDIRA BHAVAN, THIRUVANANTHAPURAM. R1 TO R3 BY GOVERNMENT PLEADER SMT.MEERA R4 BY ADVS. SRI.A.N.RAJAN BABU FOR R4 & SRI.K.L.VARGHESE THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 26/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B. KOSHY, Ag.C.J. & V.GIRI, J. ------------------------- W.A.No.273 of 2009 ------------------------- Dated this the 26th day of February, 2009. JUDGMENT GIRI, J. The petitioner in W.P.(C)No.35534/08, which was dismissed by the learned single Judge as per the impugned judgment dated 28.1.2009, is the appellant herein. 2. The 1st respondent issued Ext.P5 notice inviting tenders for the work involving improvements to the Alappuzha-Kuravilangad from Thanneermukkam- Kuravilangad. The tender was to be submitted in two sealed covers, one cover for the technical offer and the other for financial offer. The technical bid was to be opened by the Superintending Engineer and to be examined by the Chief Examiner (Tender Committee). Qualified tenderers will be intimated and the financial bids of the pre-qualified bidders alone are to be opened after W.A.No.273 of 2009 :: 2 :: intimating the qualified bidders. Going by the facts as contained in the counter affidavit filed by the 3rd respondent, three bids were received from the petitioner, 4th respondent and one Kerala State Construction Corporation Limited. The 4th respondent alone was pre- qualified and accordingly the financial bid of the 4th respondent was to be opened and considered. In other words, the petitioner was not pre-qualified and it is, therefore, that the writ petition was filed praying for the following reliefs: (a) To issue a writ of mandamus or other appropriate writ, order or direction directing the respondents 1 to 3 to pre-qualify the petitioner for the work covered by Ext.P5 and award the work to the petitioner firm if the petitioner has quoted the lowest bid. (b) To declare that the petitioner firm is entitled to be pre-qualified for the work covered by Ext.P5 in view of the experience certificate produced by one of the partners of the firm. (c) To issue a writ of mandamus or other appropriate writ, order or direction, directing the 1st respondent to open the price bid of W.A.No.273 of 2009 :: 3 :: the petitioner firm and to award the work covered by Ext.P5 to the petitioner firm, if the petitioner firm has quoted the lowest bid. (d) To issue a writ of mandamus or other appropriate writ, order or direction restraining the respondents 1 to 3 from awarding the work covered by Ext.P5 to the 4th respondent. (e) To order the cost of the proceedings under Rule 157 of the Kerala High Court Rules. (f) To issue such other and further reliefs as may be prayed for from time to time. 3. Counter affidavits were filed by respondents 1 and 4. The stand taken by the 1st respondent Superintending Engineer was to the effect that Clause 1.9 (b) of Ext.P5 made it clear that each bidder should have achieved a financial turnover amount of Rs.1565 lakhs in his name and that this necessarily referred to the financial turnover of the tenderer, who is a bidder in the case. The financial statement filed by the petitioner, which is a firm as the bidder, was in relation to one of the partners of the firm. That this did not satisfy the conditions in the tender W.A.No.273 of 2009 :: 4 :: notification and consequently, the petitioner was not qualified. The learned single Judge took note of the fact that the petitioner-bidder was a firm consisting of three partners, one of whom was Sri.T.K.Rajan. The financial statement, as also the experience statement produced by the petitioner was in relation to the turnover achieved by Sri.T.K.Rajan, one of the partners of the firm. The experience certificate produced also related to a partner and not to the bidder firm and this, the learned single Judge concluded, was not sufficient to pre-qualify the petitioner as a bidder. Thus, the stand taken by the respondents in not pre-qualifying the petitioner was upheld by the learned single Judge, who dismissed the writ petition. Hence this writ appeal. 4. We heard Mr.Pathrose Mathai, learned Senior Counsel along with Mr.Murali Purushothaman for the petitioner, learned Government Pleader for the 3rd respondent and Mr.K.L.Varghese for the 4th respondent. W.A.No.273 of 2009 :: 5 :: 5. Learned Senior Counsel for the appellant contended, with reference to the decision of the Supreme Court in New Horisons Limited and another v. Union of India and others {[1995] 1 scc 478} that a partnership firm may claim the experience of the partners who constitute the firm. Therefore, the experience and the turnover achieved by the partners of the firm can be availed of as the requisite experience required of the firm. The experience and turnover of the partners and the firm are synonymous. The learned single Judge distinguished the decision in New Horisons Limited, on the premise that the tender conditions which came up for consideration in New Horisons Limited did not apparently insist on either the requisite financial turnover or the requisite experience in the name of the bidder as one of its conditions, unlike in the present case where there is an insistence on the requisite financial turnover and the experience being related to the bidder itself. W.A.No.273 of 2009 :: 6 :: 6. Learned counsel for the appellant contended that the Supreme Court in the case of New Horisons Limited was concerned with a joint venture corporation and this in essence was the same as that of a firm and that it has been specifically held that the experience and the financial turnover of one of the partners who constitute the firm, which in turn, is a bidder can be availed by the bidder itself for the purpose of contending that it should be treated as pre-qualified. Learned counsel for the appellant may be right in contending so. But acceptance of this proposition as such, may not improve the case of the appellant. What is noteworthy is that the financial turnover and the experience put forward by the appellant/writ petitioner, along with its tender, actually relates to a firm M/s.T.K.Rajan and does not actually relate to one of the partners of the appellant-firm Sri.T.K.Rajan In other words, what has been put forward by the appellant firm, by way of financial turnover and the W.A.No.273 of 2009 :: 7 :: requisite experience in terms of the tender notification is that relatable to M/s.T.K.Rajan, which is a firm, though Sri.T.K.Rajan, one of the partners of the appellant/firm, is the major share holder of the firm M/s.T.K.Rajan. Even assuming that the appellant/firm will be entitled to avail of the financial turnover as also the experience of one of its individual partners, that will not enable the appellant to avail of the financial turnover or the technical experience of M/s.T.K.Rajan (Firm), because the latter obviously is not a partner of the appellant-firm. We also find force in the contention of the learned counsel for the 4th respondent that a firm cannot be a partner of another firm and obviously therefore, since the Firm M/s.T.K.Rajan cannot be a partner of the firm Concord Construction Company-the appellant, the experience or turnover of M/s.T.K.Rajan (Firm) cannot be availed of or made use of by the appellant-firm, for the purpose of pre-qualifying for the work in question. W.A.No.273 of 2009 :: 8 :: 7. We consider it appropriate to refer to the facts pleaded by the appellant in paragraph 6 of the reply affidavit filed in the appeal. The same reads as follows: “It is further submitted that Mr. T.K.Rajan is the major Partner of the firm M/s.T.K.Rajan The other partners are his two sons. Mr. T.K.Rajan holds 60% of the share and his two sons hold 20% each share of the firm. The annual turn over of business of civil contract works executed by Mr. T.K.Rajan, as the major partner going by his 60% share itself come to much more than the cost of the present work for which the tender has been floated. It fully satisfies the tender conditions. Applying the principles of the decision of the Hon'ble Supreme Court in New Horizons case the financial turnover in respect of M/s.T.K.Rajan produced by the appellant for pre- qualification can be constructed as the financial turnover of Mr.T.K.Rajan, partner of the appellant firm to the extent of his 60% share in M/s.T.K.Rajan. Therefore, by virtue of the financial turnover furnished by the appellant, the appellant is qualified to be awarded the work, particularly when the appellant is the lowest bidder. It is understood that the bid of the 4th respondent is Rs.2.5 Crores higher than that of the appellant. Further, as per the norms there should be competitive tenders and as per the inveterate practice in the Department there shall be W.A.No.273 of 2009 :: 9 :: more than one pre-qualified bidder. The averments in paragraph 7 of the counter affidavit that the financial turnover of M/s.T.K.Rajan cannot be reckoned as qualification of the appellant for pre- qualification is incorrect and baseless”. 8. In the light of the specific stand taken by the appellant, as is evident from the above, it is clear that the appellant itself was trying to avail the benefit of the turnover and also the experience of the firm M/s.T.K.Rajan for the purpose of bidding for the work in question. This is impermissible. 9. In the result, we also concur with the view taken by the learned single Judge that the decision of the 1st respondent, not to pre-qualify the appellant/petitioner does not warrant any interference. 10. After hearing the counsel for the appellant at the stage of admission, we had passed an interim order on 5.2.2009 to the following effect: “Respondents want to take instructions. Respondents are directed to open the bid of the petitioner also and inform the court directly the W.A.No.273 of 2009 :: 10 :: amount bid by the petitioner and the respondent for information of the court only and it can be submitted in a sealed cover. Post on 11.2.2009. No agreement shall be executed before 11.2.2009.” 11. Pursuant to the said order, the financial bid of the appellant was also opened and we found that the appellant had quoted a sum of Rs.14,65,59,970/-. We are told by the government pleader that the bid quoted by the 4th respondent was in excess of Rs.17 Crores. It is contended by the learned counsel for the appellant that there is a difference of more than 2.5 crores in the bids quoted by the appellant and the 4th respondent and therefore, acceptance of the bid of the 4th respondent would entail a loss of more Rs.2.5 crores, insofar as the State is concerned. We take note of the fact that the Department is yet to take a decision as to whether the bid quoted by the 4th respondent should be accepted and whether the contract should be awarded in favour of the 4th respondent. But, we take note of the further fact that W.A.No.273 of 2009 :: 11 :: even according to the 1st respondent, there were only three bidders and ultimately only one was pre-qualified. It is up to the Government to take a decision. Our attention was invited to the Government Order, G.O.(MS) No.87/PW & T dated 7.7.1987, wherein it is stipulated that there should be a minimum of four pre-qualified contractors to ensure fair and reasonable competition and in the alternative an open tender system should be resorted to. Respondents 1 to 3 shall consider whether it will be advisable for the Government, in public interest to proceed to accept the bid offered by the 4th respondent, which seems to be significantly higher (difference being Rs.2.5 crores) than the bid quoted by the appellant. It is up to the Government to take note of these facts and then take a further decision as to whether, in the circumstances, it may not be advisable to go in for an open tender especially taking note of that fact that only one among the bidders is pre-qualified. We refrain from W.A.No.273 of 2009 :: 12 :: issuing any specific direction to the Government in this regard in circumstances where the reliefs prayed for by the appellant/petitioner were essentially confined to the decision taken by the respondents not to pre-qualify the appellant. Subject to the above directions, the writ appeal is disposed of. Sd/- (J.B. KOSHY) ACTING CHIEF JUSTICE Sd/- (V.GIRI) JUDGE sk/ //true copy// P.S. to Judge