IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 8TH APRIL 2010 / 18TH CHAITHRA 1932 WP(C).No. 31751 of 2009(L) -------------------------------------- PETITIONER: ------------------- M/S.CHANDRAGIRI CONSTRUCTION COMPANY, 3/402 A, BACKER CHAMBER, V KARAT ROAD,WEST NADAKAVU, KOZHIKODE-673 011, (REPRESENTED BY ITS PARTNER K.M.MOHAMMED SHERIFF, AGED 42 YEARS, S/O.KUNJIMAHIN HAJI, PADHOOR HOUSE, THEKKIL P.O., KASARAGOD). BY MR.M.K.DAMODARAN, SENIOR ADVOCATE, ADVS. MR.B.RAMAN PILLAI, MR.M.NARENDRA KUMAR, SMT.LAYA SIMON MR.R.SUDHIR. RESPONDENTS: ------------------------ 1. STATE OF KERALA, REP.BY THE PRINCIPAL SECRETARY TO GOVERNMENT, PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT, TRIVANDRUM. 2. SUPERINTENDING ENGINEER, OFFICE OF THE S.E.(NORTH CIRCLE) PUBLIC WORKS DEPARTMENT (ROADS & BRIDGES) KOZHIKODE. 3. THE CHIEF ENGINEER, PUBLIC WORKS DEPARTMENT (PWD), TRIVANDRUM. *ADDL. RESPONDENTS 4 & 5 IMPLEADED: 4. K.M. VARKY MASTER, PRESIDENT, MANANTHAWADY GRAMA PANCHAYAT, MANANTHAWADY. W.P.(C). NO.31751/2009-L: 5. O.R. KELU, PRESIDENT, TIRUNELLI GRAMA PANCHAYAT, THIRUNELLI. *ARE IMPLEADED VIDE ORDER DTD. 10/12/09 IN I.A. 15447/2009. **ADDL. R6 IMPLEADED: 6. C. VIJAYAN, S/O. NARAYANAN, CHANNETHODIYIL HOUSE, EDAYOOR NORTH, VALANCHERRY VIA, MALAPPURAM. **IS IMPLEADED VIDE ORDER DATED 25/01/10 IN I.A. 15207/2009. ***ADDL. R7 IMPLEADED: 7. P.T. SREENIVASAN, S/O. P.T. MADHAVAN, AGED 51 YEARS, P.W.D. CONTRACTOR, THAYYIL HOUSE, CHELAVOOR.P.O., KOZHIKODE – 673 571. *** IS IMPLEADED VIDE ORDER DATED 19/02/10 IN I.A. 2298/10. ****ADDL. R8 IMPLEADED: 8. V.P. THRIMATHY, S/O. V.P. CHERIYAPPU HAJI, AGED ABOUT 60 YEARS, GOVERNMENT CONTRACTOR, EDAVANNA, MALAPPURAM DIST. **** IS IMPLEADED VIDE ORDER DATED 19/02/10 IN I.A. NO. 2230/10. R1 TO R3 BY GOVERNMENT PLEADER MR. M.A. AZIF, ADDL.R4 & R5 BY ADV. MR.P.C.SASIDHARAN, ADDL. R6 & R7 BY ADV. MR.T.G.RAJENDRAN, ADDL.R8 BY ADVS. MR.BABU KARUKAPADATH, SMT.M.A.VAHEEDA BABU, MR.JAGAN GEORGE. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/03/2010, ALONG WITH W.P.(C). NO.1546 OF 2010, THE COURT ON 08/04/2010 DELIVERED THE FOLLOWING: W.P.(C). NO.31751/2009-L: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE NOTIFICATION ISSUED BY THE R.2. EXT.P.2.A: COPY OF THE PRE-QUALIFICATION APPLICATIONS -PROVIDING BM AND BC ON SH 38-PUTHIYANGADI ULLIYERI-KUTTIYADI – CHOVVA – BYE PASS ROAD FROM KM. 10/0 TO 20/500 IN KOZHIKODE DISTRICT PAC – 6,84,34,652/-. EXT.P.2.B: COPY OF THE PRE-QUALIFICATION APPLICATIONS – STIMULUS PACKAGE -IMPROVEMENT TO POTTAMMAL PALAZHI ROAD AND PROVIDING BM AND BC IN KOZHIKODE DISTRICT, PAC – 5,15,42,039/-. EXT.P.2.C: COPY OF THE PREQUALIFICATION APPLICATIONS – STIMULUS PACKAGE – PROVIDING BM AND BC TO PAZHIKKAD VANDOOR VADAPPURAM ROAD FROM KM 9/9 TO 22/410IN MALAPPURAM DISTRICT PAC – 16,02/53,843/-. EXT.P.2.D: COPY OF THE PRE-QUALIFICATION APPLICATIONS -STIMULUS PACKAGE – IMPROVEMENTS PROVIDING 50 MM BM AND 25 MM BC TO PALAKKAD PERINTHALMANNA ROAD FROM KM 48/800 TO 58/540 IN MALAPPURAM DISTRICT, PAC -5,30,90263/-. EXT.P.2.E: COPY OF THE PREQUALIFICATION APPLICATIONS -IMPROVEMENTS TO MANANTHAVADY KALPETTA ROAD PROVIDING BM AND BC FROM KM.14/000 TO 19/500 IN WAYANAD DISTRICT PAC -3,03,27,063/-. EXT.P.3: COPY OF THE PROFILE OF THE FIRM TOGETHER WITH ALL RELEVANT DOCUMENTS SUBMITTED ALONG WITH THE PRE-QUALIFICATION APPLICATIONS. EXT.P.4: COPY OF THE MINUTES DTD. 30/10/2009. EXT.P.5: COPY OF THE PRE QUALIFICATION TENDER DOCUMENT ISSUED TO THE PETITIONER. EXT.P.6: COPY OF THE LETTER ISSUED BY THE PETITIONER TO THE SUPERINTENDING ENGINEER. EXT.P.7: COPY OF THE STIMULUS PACKAGES – PROVIDING BM AND BC TO PANDIKKAD-KANDOOR-VADAPURAM ROAD FROM KM.0/000 TO 22/410 IN MALAPPURAM DISTRICT. EXT.P.8: COPY OF THE PROVIDING BM & BC ON SH 38 PUTHIYANGADI – ULLIYERI – KUTTIADY – CHOVVA BY PASS ROAD FROM KM.10/500 T0 20/500. RESPONDENTS' EXHIBITS: EXT.R3.A: COPY OF THE LETTER DTD. 03/11/2009 ISSUED BY THE SUPERINTENDING ENGINEER. EXT.R3.B: COPY OF THE LETTER NO. 7965/D3/08/PWD DTD. 06/10/2009 ISSUED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, PWD TO THE R.3. W.P.(C). NO.31751/2009-L: EXT.R4.A: COPY OF THE DETAILS OF EXPENDITURE INCURRED UPTO 2009. EXT.R4.B: COPY OF THE DETAILS OF EXPENDITURE INCURRED UPTO 2009. EXT.R4.C: COPY OF THE MEMORANDUM OF WORK. EXT.R4.D: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.E: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.F: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.G: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.H: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.I: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.J: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.K: COPY OF THE PHOTOGRAPH OF THE ROAD. EXT.R4.I: COPY OF THE PROGRESS REPORT FURNISHED BY THE SUPERINTENDING ENGINEER, PWD N.H NORTH CIRCLE, KOZHKODE. //TRUE COPY// P.S. TO JUDGE. Prv. T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) Nos. 31751/2009-L & 1546/2010-P - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 8th day of April, 2010. JUDGMENT These two writ petitions are filed by the same petitioner challenging the rejection of the tenders at the pre-qualification stage. The facts necessary for the disposal of the writ petitions are the following: 2. The petitioner in both the writ petitions is the same construction company represented by its partner. Since common questions arise for consideration, they are disposed of by this common judgment. 3. In W.P.(C) No.31751/2009, Ext.P1 is the notification issued by the second respondent dated 13.8.2009 inviting pre-qualification tenders for execution of certain specified works. The petitioner submitted pre- qualification applications for items 4, 6 to 8 and 11 as per Exts.P2(a) to P2 (e). Ext.P3 is the profile of the firm with all necessary documents. 4. Out of the five works, the petitioner was pre-qualified for items 1 and 3 based on the proceedings of the second respondent dated 16.10.2009. What is under challenge in these writ petitions is Ext.P4, copy of the minutes of the Chief Engineers Committee held on 30.10.2009 wherein they decided to disqualify the petitioner for the remaining three works. Ext.P5 wpc 31751/2009 & 1546/10 2 produced in this writ petition is the copy of the pre qualification tender document issued to the petitioner. 5. In W.P.(C) No.1546/2010, the work in question is NH 17 - Improvements to the riding quality of the road from km 63/000 to km 94/000 and the tender notice is Ext.P1. Ext.P3 is the copy of the application for pre-qualification supplied by the third respondent and the petitioner submitted the application, but the petitioner was not pre-qualified and the writ petition was filed before any communication was received by it and later the petitioner was informed by Ext.P8 that the petitioner is not qualified for the work. The same is under challenge in this writ petition. 6. The respondents have filed their counter affidavits and the petitioner has filed reply affidavit in W.P.(C) No.31751/2009. The impleading petitioner has also filed a counter affidavit therein. 7. Heard Shri M.K. Damodaran, learned Senior Counsel appearing for the petitioner in both the writ petitions, Shri M.A. Asif, learned Govt. Pleader and Shri P.C. Sasidharan, learned counsel appearing for the additional respondents 4 and 5. Arguments were heard in detail in respect of W.P.(C) No.31751/2009. 8. It is mainly contended by Shri M.K. Damodaran, learned Senior wpc 31751/2009 & 1546/10 3 Counsel for the petitioner that Ext.P4 in W.P.(C) No.31751/2009, copy of the minutes of the Chief Engineers' Committee will show that the disqualification of the petitioner is on the basis of two reasons which are non existent and therefore the same is arbitrary. It is submitted that both these reasons cannot be supported. With respect to the first one, it is submitted that the reason that the Government is taking steps to black list the petitioner, cannot be one which can be relied upon to disqualify the prequalification bid. What was issued by the Government is only a show cause notice proposing to black list the firm and this Court in the judgment in W.P.(C) No.31712/2009 directed the respondents to issue a notice and to consider the contentions of the petitioner. It is submitted that no final orders have been passed by the Government and therefore that could not have been taken as a ground to disqualify the petitioner. As to the second reason shown in Ext.P4, it is submitted that with regard to Koottikoulam Tholpetty Coorg Road, wherein poor progress is attributed to the petitioner, the department itself has granted sufficient time to complete the work. It is pointed out that the notice itself was issued only on 9.11.2009 by the department, to which the petitioner had duly submitted a reply dated 16.11.2009. It is therefore submitted that as the contract has not been wpc 31751/2009 & 1546/10 4 terminated at all, the same cannot be taken as a ground to disqualify them. It is therefore submitted that as both these grounds are non existing, the disqualification of the petitioner with regard to the three works cannot be supported. Further, it is pointed out that already the petitioner has been treated as qualified in respect of two items of works of the very same notification, the reason subsequently found out, is not having any nexus with the issue in question is concerned and it is a colourable exercise of the power. Learned Senior Counsel Shri M.K. Damodaran relied upon various decisions of the Apex Court and of this Court, viz. Mohinder Singh Gill and another v. The Chief Election commissioner, New Delhi and others (AIR 1978 SC 851), Air India Ltd. v. Cochin International Airport Ltd. and others {(2000) 2 SCC 617}, Reliance Energy Ltd. and another v. Maharashtra State Road Development Corpn. Ltd. and others {(2007) 8 SCC 1}, M/s. Zoom Developers Pvt. Ltd. v. State of Kerala and others (2008 (4) KHC 934) and Nagarjuna Construction Co. Ltd v. Govt. of A.P. and others ( JT 2008 (12) SC 371), in support of the plea. It is contended that the rejection of the tender is arbitrary and in violation of Article 14 of the Constitution of India. The respondents are bound to provide a level playing field and the petitioner has been discriminated wpc 31751/2009 & 1546/10 5 against in that matter. It is submitted that the decision making process is tainted by arbitrariness and the reasons being unsupportable, Ext.P4 is liable to be quashed. 9. The contentions taken by the learned Govt. Pleader, mainly is that a reading of Ext.P4 minutes will show that the petitioner has not furnished the details of their business, financial strength and supporting documents. This is the main reason for rejection of their application. It is submitted that no valid grounds have been urged in the writ petition against this conclusion of the Chief Engineers' Committee. It is pointed out that so many deficiencies were there in the documents produced by the petitioner and therefore the applications were liable to be rejected in the light of clause 9.4 of the instructions to the applicants, contained in the prequalification tender document. It is also submitted that the petitioner has not provided the details regarding the litigations involving them with regard to various items of works which was withheld from the information of the respondents and such non-disclosure is fatal. It is further pointed out that even the E schedule produced along with the documents will show that with respect to various items of work the petitioner has not been able to achieve the target and the same has also considered by the Committee and the decision taken wpc 31751/2009 & 1546/10 6 only promotes public interest. An over all picture of the contractor is crucial in such matters. 10. Shri P.C. Sasidharan, learned counsel for the additional respondents 4 and 5 who are respectively the Presidents of two Panchayats, viz. Mananthavady Grama Panchayat and Thirunelli Grama Panchayat, points out that the various items of works in respect of the petitioner in Wayanad District have not been completed and the progress is so slow and hence the petitioner cannot be said to be a qualified contractor. It is also submitted that the finished works in respect of certain areas within their panchayats, will show that the poor quality of works resulted in the roads remaining in a very poor condition. My attention was invited to various documents produced along with the application for impleading in support of the above plea. Learned counsel for additional respondents 4 and 5 relied upon a decision of the Apex Court in Tata Cellular v. Union of India {(1994) 6 SCC 651} to contend that public interest is involved and this Court under Article 226 of the Constitution of India, should not exercise the discretion in favour of the party who was not successful in completing various works. Learned Govt. Pleader also relied upon a decision of the Apex Court in Raunaq International Ltd. v. I.V.R. wpc 31751/2009 & 1546/10 7 Construction Ltd. and others {(199) 1 SCC 492} in support of various pleas. 11. Ext.P4 is the copy of the minutes of the Chief Engineer's committee held on 30.10.2009 for evaluating the pre qualification of major works. Under Item 2 it is recorded that “all the tenderers except M/s. Chandragiri Construction had furnished the details of their business, financial strength and supporting documents from the Bank to prove their financial strength.” Then, two reasons have been shown for disqualification of the petitioner. In items 3 and 4, it is mentioned that “all the tenderers except M/s. Chandragiri Construction had furnished the details of their business, financial strength and supporting documents from the Bank to prove their financial strength. They are not prequalified for this work for the reason furnished above.” 12. It can be seen that two reasons mentioned already, have been projected in Ext.P4, for disqualification of the petitioner. The first one relates to construction of new road from Kuttipuram to Puduponnani Phase I & II. What is alleged is that it was terminated at the risk and cost and later it was revoked and thereafter only 35% of the work was completed and hence the Government decided to terminate it and further decided to wpc 31751/2009 & 1546/10 8 blacklist the firm and the decision is pending with the Government. 13. As pointed out by the learned Senior Counsel appearing for the petitioner, the issue of blacklisting the firm has not reached a finality. The question is whether in the absence of an order blacklisting the contractor, the same can be taken as a ground to reject the prequalification bid. As regards this aspect, the counter affidavit does not attempt any answer at all. But it is submitted during arguments that the process for blacklisting initiated against the petitioner has not been concluded and it is in progress and in compliance with the procedure under law the petitioner will be issued necessary notice to show cause against the blacklisting and they will be heard in this regard. Evidently, this is a matter which has not become final as on the date on which the committee met on 30.10.2009. Therefore, it cannot be definitely said that the proposal to blacklist the firm has become final. In that view of the matter, learned Senior Counsel is right in submitting that the same ought not have been taken as a reason for disqualification of the petitioner. 14. The second reason stated therein is regarding the work of Kottikoulam Tholpetty Coorg Road. Therein, it is pointed out that the work was awarded to the petitioner by the Government by proceedings dated wpc 31751/2009 & 1546/10 9 19.12.2007. The time of completion was fixed as 18 months. Even after a lapse of nearly two years the petitioner shows very poor progress of this work. Therein also, it is mentioned that the work in K.S.T. Project is also very slow, hence the firm is facing blacklist by the Government. Shri M.K. Damodaran, learned Senior Counsel brought to my notice a letter No.D3- 1490/06 dated 4.1.2010 of the Superintending Engineer, PWD, NH North Circle, Kozhikode, wherein the supplementary agreement for extension of time for completion of work up to 31.3.2010 has been accepted. A copy of the agreement has also been supplied for perusal. Therein the time is extended upto 31.3.2010. It is therefore pointed out by the learned Senior Counsel that the matter was under correspondence at the time when the Chief Engineers' Committee met and there was no final decision in the matter adverse to the petitioner and therefore the same cannot be taken as a ground to disqualify the petitioner. I find force in the above submission also. On Item No.2 also, it is pointed out that the firm is facing blacklisting by the Government. As already noticed, the process of blacklisting has not become final. That was only in contemplation as on 30.10.2009. Therefore, unless the firm is blacklisted by a final order passed by the Government, the mere proposal cannot be taken as a determinative factor as far as acceptance wpc 31751/2009 & 1546/10 10 of a prequalification tender. 15. Herein, learned Govt. Pleader submitted that actually the tender documents produced by the petitioner are silent on various details as is clear from the minutes of the Chief Engineers' Committee and therefore the rejection of the prequalification tender cannot be said to be illegal. It is pointed out that with regard to this aspect, the pleadings are absent and the petitioner has only taken the grounds in the writ petition on the proposal for blacklisting and sufficient grounds have not been raised in the writ petition on these findings of the Committee which disentitles the petitioner from getting any relief in this writ petition. 16. My attention was taken to various records produced by the petitioner which are incorporated in Ext.P3, at the time of submission of the prequalification bid. It is pointed out that the solvency certificate produced from the Federal Bank, Branch Kasaragod is dated 6.3.2008 and the same is not current, as the notification is of the year 2009 only. The document produced as Bank certificate from the same Bank is undated. The certificate produced from the Catholic Syrian Bank produced is two years prior to the date of notification. It is further pointed out that in the affidavit produced along with Exts.P2(a) to P2(e), no details of the pending cases wpc 31751/2009 & 1546/10 11 have been mentioned by the petitioner even though the petitioner themselves admit that there had been various cases pending, in the writ petitions and in the reply affidavit. Thus, vital information has been withheld from the consideration of the Committee. My attention was also invited to Schedule E produced along with Exts.P2(a) to P2(e), showing the details of various works, the period of completion and the schedule of completed work including the percentage. It is submitted that the percentage of works in respect of various items will show that actually the petitioner has not been able to complete major part of the work. Therefore, this is the record which was assessed by the Committee evidently and therefore the same is a factor which the committee can consider while evaluating the applications of the petitioner. It is submitted that in Ext.P5 under the heading “Instructions to the applicants” it is specifically mentioned in para 9.4 that incomplete offers are liable to be rejected. It is also submitted that under para 9.14, the bidders shall provide evidence satisfactory to the Employer, notwithstanding any previously conducted prequalification of potential bidders of their capacity and adequacy of resources effectively to carry out the subject contract. It is pointed out that as per sub-clause © of para 9.14, the details of the experience and past wpc 31751/2009 & 1546/10 12 performance of tenderers on works of similar nature within the past five years and the details of current work in hand and other contractual commitments, have to be submitted. It is submitted that the petitioner has not included various items of work in E schedule as detailed in the counter affidavit wherein the progress is too slow and thus there is a suppression of vital details. It is therefore submitted that Schedule E of Ext.P2 is incomplete which also disentitles the petitioner for consideration. It is submitted that these aspects have been considered by the Committee and the same is evident from their findings under items 2, 3 and 4 in Ext.P4 that all tenderers except the petitioner had furnished the details of their business and certificates to prove their financial strength. 17. Shri M.K. Damodaran, learned Senior Counsel submitted that the Bank documents produced along with the applications are sufficient and satisfactory. The allegation that the letter from Federal Bank is undated, is also denied and the copy of a letter with a date seal of the Bank was made available before me for perusal to contend that the Government Pleader's contention cannot be accepted. It is vehemently submitted that none of these reasons are part of the minutes of Ext.P4 and therefore going by the decision of the Apex Court in Mohinder Singh Gill's case (1978 SC 851), wpc 31751/2009 & 1546/10 13 reasons which are not disclosed in the proceedings, cannot be supplemented by filing counter affidavit. It is therefore submitted that such contentions cannot be accepted and they are fished out only now so as to deny the benefit to the petitioner. 18. It is Ground 'D' of the writ petition that is relevant to consider the above point. Therein, the petitioner has taken the stand that the statement contained in Ext.P4 that all the tenderers except the petitioner, has furnished the details of their business and other supporting documents, is absolutely incorrect. Exts.P2(a) to P2(e) are relied upon to show that the petitioner had complied with all the requirements in the instructions contained in the application for prequalification of tender document. After the filing of the counter affidavit raising various specific instances, the petitioner has filed a reply affidavit. In para 5, it is stated that the petitioner had furnished all details and complied with the requirements mentioned in the Instructions to the Applicants contained in the Prequalification Tender document, Ext.P5. In para 6 it is mentioned that the petitioner had produced Ext.P3 profile of the firm which runs to 82 pages and which contains all relevant and necessary details and information, along with the prequalification application form and therefore the stand taken by the wpc 31751/2009 & 1546/10 14 respondents in the counter affidavit that non furnishing of the required details is the plain reason for disqualification of the petitioner, is clearly unsustainable. This, in sum and substance alone is the plea made by the petitioner in the writ petition and the reply affidavit on this aspect. 19. Learned Govt. Pleader, on direction from the Court, made available the originals of the tender document submitted by the petitioner in the light of the plea raised by learned Senior Counsel Shri M.K. Damodaran that the document submitted from the Bank are sufficient and the dates, etc. are clearly mentioned in the letter issued by the Federal Bank. I have gone through the documents in original. All the documents are identical. In respect of three works to which the petitioner was disqualified now, the petitioner has produced two bank certificates and a solvency certificate from the Federal Bank, Kasaragod Branch and also a certificate from Catholic Syrian Bank. A perusal of the tender document in original shows that one of the bank certificates issued from Federal Bank is undated. The solvency certificate is dated 6.3.2008 and another bank certificate is dated 25.2.2009. The certificate from the Catholic Syrian Bank is dated 12.7.2007. Copy of the Bank document produced in the writ petition available in Ext.P3 at page 121 of the Paper Book does not bear any date. It wpc 31751/2009 & 1546/10 15 is seen that these letters are photo copies. The date of Ext.P1 is 13.8.2009. My attention is also invited by the learned Govt. Pleader, to the prequalification documents of successful bidders whose bank certificates are documents as letters in original. 20. The issue therefore is whether the notings of the Chief Engineer's Committee in Ext.P4 that the various documents have not been produced by the petitioner, could be said to be irrational or unreasonable, warranting interference. 21. That these have been taken as grounds against the petitioner, is clear from Ext.P4 itself, even though under the heading “reason for disqualification”,