*THE HONOURABLE SRI JUSTICE B.PRAKASH RAO + Writ Petition No.16051 of 2004 % Dated: 16-11-2004 Between: #Madhucon –Sinohydro Joint Venture, Madhucon House, 1129/A, Road No.36, Hitec City Road, Jubilee Hills, Hyderabad, Represented by the Vice President Madhucon Projects Ltd., Dr.No.Janakiram, S/o N.V.Suryanarayana Murthy, Resident of Hyderabad. … Petitioner and $ 1.The Government of Andhra Pradesh, Rep. by the Principal Secretary to Government, Irrigation and C.A.D. (PPMU) Department, Secretariat,Hyderabad. 2. The Engineer-in-Chief (Irrigation), Government of Andhra Pradesh, Errummanzil, Hyderabad. … Respondents ! Counsel for petitioners: Mr. T.Jagadish ^ Counsel for respondents: G.P. for irrigation & Command Area Development < GIST: >HEAD NOTE: ?Cases referred: 1.1995 (1) SCC 478 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SIXTEENTH DAY OF NOVEMBER TWO THOUSAND AND FOUR PRESENT THE HON'BLE MR JUSTICE B.PRAKASH RAO WRIT PETITION NO : 16051 of 2004 Between: Madhucon-Sinohydro Joint Venture, Madhucon House, 1129/A, Road No.36, Hitec City Road, Jubilee Hills, Hyderabad. Rep. by the Vice President Madhucon Projects Limited, Dr. N. Janakiram, S/o. N.V. Suryanarayana Murthy, R/o. Hyderabad. ..... PETITIONER AND 1 The Government of Andhra Pradesh, Rep. by the Principal Secretary to Government, Irrigation and C.A.D. (PPMU) Department, Secretariat, Hyderabad. 2 Engineer-in-Chief (Irrigation), Government of Andhra Pradesh, Errummanzil, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ, in the nature of a Writ of Mandamus or any other appropriate Writ, direction or order declaring the action of the 2nd respondent in not recommending the petitioner joint venture for empanelment and the 1st respondent in not empanelling the petitioner joint venture in G.O.Ms. No. 971, Irrigation & CAD (PPMU) Department, dated 13/08/2004 for participation in the procurement of priority irrigation projects under EPC (Turnkey) contract system pursuant to the Tender Notice No.1, dated 27/06/2004 of the Engineer-in-Chief (Irrigation), Errummanzil, Hyderabad, as illegal and void and direct the 1st repsondent to consider the case of the petitioner joint venutre for empanelment. Counsel for the Petitioner:MR.T.JAGDISH Counsel for the Respondent No.: GP FOR IRRIGATION & COMM AREA DEV. The Court made the following: THE HON’BLE SRI JUSTICE B.PRAKASH RAO W.P.No.16051 of 2004 ORDER: The petitioner herein, a Joint Venture Contractor filed this writ petition inter alia seeking a Writ of Mandamus declaring the action of the second respondent in not recommending it for empanelment and consequently not empanelling by the first respondent in G.O.Ms.No.971, Irrigation & CAD (PPMU) Department, dated 13.08.2004 for participation amongst the contractors so selected in the procurement of the priority irrigation project under EPC (Turnkey) contract system, in pursuance of the Tender Notice No.1, Dated 27.06.2004 issued by the second respondent herein and for further directions to consider the petitioner’s case for such empanelment. The petitioner claims in the affidavit given by its Vice President, supporting the writ petition that it is a Special Class Contractor registered with the Government of Andhra Pradesh and had executed various works like Highways, Flyovers, Bridges, Irrigation Dams, and Canals etc. It had entered into a joint venture agreement dated 10.07.2004 with Sinohydro Corporation, a company owned by the State of the Government of People’s Republic of China which itself has a greater expertise and experience in construction works especially the Hydroelectric Projects, Dams, River Valley Projects, Irrigation Projects, Water Supply Projects etc., and had been executing all such works all over the world, having been listed in the top 225 Global Contractors, since the year 1999 with a turnover reaching to above Rs.9900 crore of rupees in the year 2003. The case of the petitioner is that in terms of the aforesaid Tender Notice, dated 27.06.2004 issued by the second respondent inviting offers for pre-qualification tenders for Water Resources Development Projects in Andhra Pradesh, it has obtained pre-qualification documents which contains several conditions and accordingly it had submitted the pre-qualification bid within the time and followed by a written representation on 22.07.2004 made to the second respondent herein pointing out an anomaly in regard to the requirement of special class registration with the Government of Andhra Pradesh by a foreign joint venture partner and therefore requesting that such condition can be complied at a later stage and thus to consider its case. After receipt of the tenders and on the recommendations from the second respondent, ultimately the Government has finally empanelled nine contractors in the impugned proceedings in G.O.Rt.No.971, dated 13.08.2004. However, the petitioner’s name is not found its place amongst the selected contractors. Therefore, the petitioner had filed a detailed representation once again on 18.08.2004 to both the respondents herein for considering its case for empanelment on the ground that it has got all the qualifications and it would also augment healthy competition and provide the best quality of work. Thus aggrieved against such non-inclusion of the petitioner’s joint venture, this writ petition is filed inter alia contending that in spite of compliance of all conditions as per the pre-qualified tenders, the petitioner’s case has not been properly considered. Further in regard to the joint venture, and in spite of the principles by the Supreme Court in New Horizons Limited and another Vs. Union of India and others , the respondents had not given a due and proper consideration to clauses (v) and (vi) of para-h of the tender notice, apart from not keeping in view properly the clauses (ii), (iii) and (iv) also. It is submitted that the compliance of the qualification by one partner is enough to claim the consideration. Therefore, the insistence on the part of the respondents herein for literal compliance of requirement of clauses (v) and (vi) by both the partners in a joint venture is totally illegal and arbitrary. It was further contended that 7 out of 9 empanelled firms do not satisfy clauses (v) and (vi). Further in respect of the petitioner, though it had A.P Special Class Registration, but in regard to the ISO certificate, the same is in the process and it would take about six to eight months, whereas the other partner of the joint venture namely Sinohydro has the ISO certification but not the A.P. registration. Therefore, the non-consideration of the petitioner’s case is totally arbitrary and illegal. Hence, the writ petition. In the counter affidavit filed on behalf of the respondents herein, which is sworn to by the second respondent herein, it is stated that in response to the notice No.1, dated 27.06.2004, no doubt the petitioner has submitted its bid on 12.07.2004 within the time. In all, there were 24 bidders and the same were opened at 4.00 PM on the same day i.e., 12.07.2004 and the names of the bidders were read out informing that after technical evaluation of various bids, the empanelment would be informed to the qualified bidders. On examination and technical evaluation of all the bids, it is found that it had satisfied the conditions in para 1 (h), (i), (ii), (iv), (vii) and (viii). However it was pointed that the petitioner did not satisfy the conditions in para 1 (h) (iii), (v) and (vi). As per clause 1 (h) of the General Conditions one partner of the joint venture should meet the similar work criteria as prescribed in para 1 (c), which contemplate that the bidder should have satisfactorily completed not less than 90% of contract value as a prime contractor of at least one similar work of magnitude not less than Rs.100 crores in the block period preceding five financial years. The nature of similar works has been categorized under clause 1 (d) to mean the works of Dams/Barrage/Canal System including CM & CD works and Hydraulic Tunnels/Lift Irrigation Canal Schemes/Hydro Electric Projects. Therefore, the nature of the works executed by Madhucon do not comply the requirement of not less than Rs.100 crores as specified under Clause 1 (c). Further the works executed by the other partner namely Sinohydro, in fact relate to water supply projects, which do not fall within the prescribed category under Clause 1 (d). Hence, both the partners did not satisfy Clause 1 (h) (iii) and therefore they are not qualified for the pre- qualification bid. It was also pointed out that as required under Clause 1 (h) (v), the ISO certificate was produced from Sinohydro, but no such certificate was produced by Madhucon nor there is any material showing that it has applied for the same. Similarly, as required under Clause 1 (h) (vi), both the partners of the joint venture did not produce registration with the Government of Andhra Pradesh nor placed any material to show that they have applied for the same. Therefore, the petitioner totally stands disqualified. There is no relaxation done by the respondents in regard to the conditions as stipulated in para 1 (h) (v) and (vi), but it is only cases where the bidders who have produced the ISO certificate or registration or at least placed the material to show that they have applied for the same, the said bids were taken into consideration. Whereas in the present case, the petitioner did not produce at least any material to the effect that they have applied for registration or ISO certificate, insofar as Sinohydro is considered, the petitioner had not satisfied the conditions in Clause 1 (h) (iii), and therefore the bid was not taken into consideration. It was also pointed out that the petitioner cannot place himself on par with the other bidders who have been empanelled in the impugned proceedings. It was further pointed out that as per the details furnished by the petitioner, Maducon Project had executed works only to the extent of Rs.22.6 crores as against the specified Rs.100 crores. The other partner Sinohydro Corporation did not file any statement of similar works and the works shown are only that of water supply projects, water system, pumping stations which cannot be equated to the work under consideration. Having thus not satisfied the conditions of pre-qualification bids, the petitioner cannot make any claim. The petitioner did not challenge the empanelment as such done in the impugned proceedings but seeks only inclusion. Having regard to the aforesaid reasons, the question of consideration of any representation filed by the petitioner on 18.08.2004 does not arise. Due to the petitioner’s non-satisfaction as to the pre-qualified terms and conditions, and the non-production of ISO certificate or any material in this regard, the petitioner is not entitled for consideration. The registration of the Madhucon Project Limited, dated 17.07.2004 with the State of Andhra Pradesh was produced only in this court i.e. much later to opening of the bid documents. Therefore, there is no satisfaction in regard to the qualifications on the part of the petitioner and thus the writ petition is liable to be rejected. Initially, Sri E.Manohar, the learned Senior counsel appearing on behalf of the petitioner by taking this Court through the entire material submitted that having regard to the particulars furnished in regard to the similar nature of works, as shown, there is a full satisfaction of the requirement and further the application of the petitioner being pending with the Government itself for the purpose of registration and also in regard to the ISO certificate, the petitioner could not have been discriminated against. Whereas, in the similar circumstances, the persons whose applications for registration and ISO certificate were still pending were empanelled in the impugned proceedings and therefore, the entire impugned action is wholly unsustainable and illegal. Further it is pointed out that once the petitioner fully gets qualified, the non-consideration thereof he would be in the teeth of the norms in the decisions making process and as such liable to be set aside. The learned advocate General appearing on behalf of the respondents herein by taking through the entire terms and conditions and the tender document filed on behalf of the respondents submitted that there is a substantial variation in regard to the contents of the original tender filed by the petitioner and the copies of which are included in the material papers filed in support of the writ petition. In regard to the works mentioned at item nos.9, 10 and 11 as shown in the tender format, which is made part of the material in this writ petition is not found place amongst the works shown by the petitioner in the original tender as filed them nor there is any material or mention in regard to the pendency of any applications by the petitioner for the purpose of registration. Therefore, the petitioner cannot be equated with that of the others who have been empanelled though whose applications have been pending, but the said fact was mentioned in the tender format. After hearing the counsel at length, and having regard to the serious dispute raised by the respondents in regard to the correctness and authenticity of the tender documents as filed by the petitioner, this Court permitted both sides to have an inspection of the records. Subsequent to the inspection, the matter was again taken up and on behalf of the petitioner a reply affidavit was filed by the sworn deponent one Sri M.Chandra Sekhar, Deputy General Manager (Tenders) to the effect that in fact the respondents did not properly understand the nature of similar works executed by the Sinohydro Corporation and whereas the said work do fall well within the requirement and thus cannot be rejected. It was submitted that the petitioner had produced ISO certificate and in regard to the registration with the A.P. Government, the same is being renewed from time to time and at the relevant point of time the Madhucon had submitted a renewal application and the same is in the process. Subsequently, as per the proceedings, dated 17.07.2004, the said registration certificate was issued. It was submitted that along with the tender document, the petitioner submitted acknowledgment of the renewal application though the same was not filed along with the material papers in this court. It was further submitted that if one of the constituent is registered, it would suffice the requirement. Therefore, the petitioner had fulfilled all the requirements as a joint venture and the respondent ought not to have denied the empanelment, which is in violation of Article 14 of the Constitution of India. It was further stated in the reply affidavit that the required document is not filed is not correct. More so, with the experience at its hand, such blunders could not have been committed. It was further submitted that during the course of verification, he found that the entire set of papers pertaining to registration of Madhucon Hydro Limited, could not be seen. Continuing further, it was submitted that the ground on which the petitioner’s tender is sought to be rejected is more trivial and is in respect of a nonessential condition, more so when similar such similar condition has been relaxed in favour of others which itself would amply establish that such a condition is not mandatory nor essential. Continuing further arguments on behalf of the petitioner, Sri T.Jagadish, the learned counsel appearing on behalf of the petitioner submit that the action on the part of the respondents herein is wholly unsustainable and they have not kept the nine distinctions between the essential and nonessential condition. The objections as now raised in regard to the registration etc., are only nonessential, more so, when it was relaxed in favour of others who have been empanelled in the impugned proceedings, it would show that the same is not mandatory and could not have been used against the petitioner which is only arbitrary. The learned Advocate General once again taking through the entire papers submitted that having not fully qualified nor disclosing of the facts including as to the nature of works and the registration, the petitioner cannot claim any indulgence from this court, more so, when such sweeping allegations are sought to be made against the respondents. Further, it was pointed out that in regard to the pre-qualified tenders, there is no question of any such scuttle distinction between the essential and nonessential and it does not exist. Considering the submissions made and on perusal of the material, the question which falls for consideration is as to whether the respondents are justified in their action for not empanelling the petitioner in the impugned proceedings and further whether any distinction can be drawn in between essential and nonessential condition in a pre-qualified bid. There is no dispute to the basic facts that the respondents herein have issued the tender notice on 27.06.2004 inviting offers for prequalification bids for Water Resources Development Projects in Andhra Pradesh and the petitioner is one of such bidders. It is relevant to take note of the conditions contained therein, which reads as follows: “1.0 The notice is issued to apply for consideration to be included in the panel of agencies to be short listed and prescribe the following qualification criteria. a. The bidder/firm/company registered with Government of Andhra Pradesh with valid registrations under special class, civil in terms of the following G.Os. are only eligible for participation i.e., i. G.O.Ms.No.521, I&CAD, Special Class dt.10/12/1984 with ii. G.O.Ms.No.178,I&CAD, specialization dt 27/9/1997 in iii. G.O.Ms.No.132, I&CAD, 1. Earth work dt.11/8/1998 and canal linking 2. Construction of bridges and other structures iv. G.O.Ms.No.94, I&CAD, Special dated 1/7/2004 class Civil works b. Annual Turn over: The bidder/firm/company on his name should have achieved in at least two financial years a minimum annual financial turn over in all class of civil Engineering Works of value not less than Rs.400 crores in block period of preceding five financial years. c. The bidder/firm/company should have satisfactorily completed not less than 90% of contract value as a prime contractor or at least one similar work of magnitude not less than Rs.100 crores in the block period preceding five financial years. d . Similar works are the works of Dams/Barriage/Canal System including CM & CD works & hydraulic tunnels/Lift Irrigation Canal Schemes/Hydro Electric Projects. e. The bidder/firm/company must have a net worth of Rs.1000 crore. f . The bidder/firm/company must have been making a net profit before tax for the last three years. g. The bidder/firm/company must have ISO certification. h. In case if the application is from a joint venture shall not be more than three i. No. of partners in the Joint Venture shall not be more than three. ii. One partner of the Joint Venture should meet the requirement as prescribed at para 1(b) and all partners should meet 25% of the annual turn over as prescribed at para 1 (b) individually. iii. One partner of Joint Venture should meet similar work criteria as prescribed at para 1 (c). iv. One partner of Joint Venture should meet net worth criteria as prescribed at para 1 (e) and the other partners should meet at least 25% of the net worth as prescribed at para 1 (e) individually. v. All partners of Joint Venture should meet ISO certificate as prescribed in para 1 (g). vi. All the Joint Venture partners should have registered with Government of Andhra Pradesh with valid registration under special class, Civil terms of the aforesaid GOs and are only eligible for participation. viii. The joint venture partner of one bidder/firm/company shall not enter into joint venture partnership with another bidder/firm/company for the empanelment. vii. All the joint venture partners should meet the criteria as prescribed at para 1 (f) individually.” The case of the petitioner in brief is that in terms of the bid as made by him, he is fully qualified and therefore his non-inclusion is wholly illegal. Further, it is the case of the petitioner that other partner of the joint venture holds the ISO certificate which is filed at page 228 of the material papers. Though the main partner of Madhucon had applied for, however, the same is yet to be given. Even in regard to the registration with the State Government is concerned, the Madhucons application for renewal of the existing registration which is still pending, and therefore, the petitioner is entitled to be considered. It is the further case that the bidders who in similar circumstances having applied and whose registration is yet to be granted have been considered, whereas the petitioner is being discriminated against. From the tender as stated to have been submitted by the petitioner herein, it is seen that the nature of works as shown there reads as follows: FORM-4 WORKS OF SIMILAR NATURE EXECUTED OVER THE LAST FIVE YEARS Sl.No. Project Name Name of the Employer Description of Work Cont-ract No. Value of Contract (US $ million Date of issue of work order Actual date of Completion 1. Phase II Water supply project from Zhuhai to Macao Head quarter of Zhuhai Water supply Project The project involved engineering, procurement, construction, supply, erection, testing and commissioning of pipeline and associated civil works, pump house, Water Treatment Plant, mechanical, electrical, instrumentation and control equipment. - 60.51 June,1994 July, 1997 2. Transmission and distribution pipe work of distribution pipe work of Hui’an Chenganan Water Treatment Plant Hui’an Chengnan Water Treatment Plant The project involved engineering, procurement, construction, supply, erection, testing and commissioning of pipeline and associated civil works, pump house, Water Treatment Plant, mechanical, electrical, instrumentation and control equipment. - 40.32 September, 1997 October, 1999 3. 4th Dhaka Water Supply Project Dhaka Water supply and Sewerage Authority Water supply project consists large dia of pipeline vary from 1.8 Mtr. To 0.6 Mtr. Total length of pipeline was 38 Kms. - 12.7 19.11.1999 04.04.2002 4. Grade One Pumping Station of Sanmenxia Huaiba Water Supply Project Construction Management Bureau of Sanmenxia Huaiba Water Supply Project The project involved engineering, procurement, construction, supply, erection, testing and commissioning of pump station and all associated civil work, mechanical, electrical, instrumentation and control equipment. - 42.5 October 15, 1996 October 11, 1999 5. No.1,2 and 3 Pumping Station of Queshan Reservoir Jinan Waterworks Company The project consisted 6 axial pumps with design flfow rate of 12.5 cum/sec, diverting water from Yellow River to desanding channel, and then transmit to Pumping Station No.2 by culverts. The project also consisted 5 axial pumps with design flfow rate of 12.1 cum/sec, diverting water from desanding channel to Pumping Station No.3 - 32.9 March 20, 1999 April 18, 2000 6. Southern Main Cannel Stage I pumping Station for Wanjiazhai Yellow River Diversion Project Wanjiazhai Project Construction Management bureau The project is mainly composed of 8 sets of water pumps (flow rate 6.45 cum/sec each0, 4 storage ponds of 120,000 cum each, a substation of 1000,000 KVA and rira; rpad of 27 Km. The total concrete quantity is 75,000 cum., the quantity of fabrication and installation of metal structure is 880 MT. - 28.5 May 15, 1998 May 15, 2001 7. Xiamen Sewage Treatment Plant Project Xiamen Sewage Treatment Plant Construction Management Unit Project consists of earth and rock excavation of 155000 Cum. With structural steel of 5000T and the capacity of Treatment Plant of 300000T per day. - 9.6 March 12, 1994 July 1, 1996 8. Kunming No.4B Sewage Treatment Works Kunming Sewage Treatment Project Management Unit Project consists of earth and rock excavation of 200000 Cum. With structural steel of 7000T and the capacity of Treatment Plant of 350000 T per day. - 15 May 1999 June 2001 9. Finance Design, Construction, Supply, Installation and Commissioning for Taleghan Dam & HPP Project Tehran Regional Water Board It was a Hydroelectric project mainly consist of following items:Power station installed capacity: underground powerhouse, 63KV substation, and all other auxiliaries : 2x8.9MW,High earth rock-fill dam:101m (height)Earth and rock excavation: 5000000m3Dam fill : 16000000m3Power intake water diversion tunnel : 750m long x 8m diaOverflow channelEarth and rock excavation: 2000000m3Design flow : 2500m3/s - 143 March 2002 March 2006 10. Tekeze Hydropower Project – Lots 1B/2/3 Ethiopian Electric Power Corporation It is a EPC contract involving following works: - 224 June 2002 July 2007 One double-arch 180m high Concrete dam Underground power house 90x20x40m Rock excavation 230000m3 Concrete 11. Bakun Hydroelectric Project - Package CW2