Case: Tejas Construction &amp; Infras.Pvt.Ltd Vs. Municipal Council Sendhwa

3. In terms of notice inviting tenders (NIT for short) Municipal Council Sendhwa, in the State of M.P., invited tenders from eligible contractors for the construction of an Integrated Water Supply Scheme at an estimated cost of nearly rupees twenty crores. Clause (1) of the said NIT as amended by addendum dated 23rd March, 2011, stipulated the following essential conditions of eligibility for the intending bidders:1. Registered Contractors have to produce valid Registration certificate in the category of S-V or equivalent in any State/Central Government Department or Government undertaking.  a) Registered Contractors/Firms of Repute/Joint Venture firms have to produce certificate for executing single work of integrated water supply scheme comprising of intake well, raw/clear water pumping main, pumps, OHTS, Distribution system completed and running successfully at present, having value equal to 60% of the cost of the proposed works in last 5 years. This certificate should clearly mention amount of contract, completion period as per Tender and actual completion period. (In case of WPI adjustment for cost of works the same may be furnished along with a certificate of Chartered Accountant). The certificate shall be issued from the officer not below the rank of Executive Engineer or equivalent.  b) Certified copy of audited balance sheet of last 5 years showing annual turnover equal to estimated cost of the work and average net worth equal to 40% of the cost of works4. In response to the above NIT several applications were received by respondent No.1 for purchase of the tender forms. It is common ground that only six out of the said applicants eventually participated in the pre-bid meeting arranged by respondent No.1. It is also not in dispute that out of the said six bidders only four were eventually found to be eligible. These four included the appellant-Tejas Construction & Infrastructure Pvt. Ltd. and respondent No.2-M/s P.C. Snehal Construction Company, Ahmedabad.  5. The tender conditions, inter alia, provided that the bid documents shall comprise three envelopes to be submitted by each of the bidders. Envelope A was to contain the earnest money deposited, Envelope B was to contain the technical bid including qualification documents while Envelope C was to contain the price bid of the bidders. The process of evaluation of the bids started on 7th April, 2011 with the opening of envelopes in the above order. Opening of envelope A was uneventful as all the bidders had furnished the earnest money stipulated under the terms of NIT. The appellants case, however, is that when envelope B was opened a request was made to respondent No.1 to show the technical bid received from respondent No.2 which request was granted. The appellants further case is that upon perusal of the technical bid of respondent No.2, the appellant had raised an objection as to the eligibility of the said to participate in the bid process on the ground that it did not have the requisite experience of executing a single integrated water supply scheme of the requisite value. Respondent No.2 is said to have claimed eligibility to offer a bid on the basis of clubbing of different water supply scheme projects at Vyara and Songadh which was impermissible according to the appellant. The appellant also raised an objection to the effect that respondent No.2 had not submitted certified copies of audited balance-sheets for the last five years and that the net-worth certificate produced from a Chartered Accountant for the financial year 2010-2011, did not according to the appellant, satisfy the said requirement. Despite the objection raised by the appellant, respondent No.1 considered all the bids and accepted the bid offered by respondent No.2. The appellant appears to have approached the concerned authorities in Gujarat and obtained a certificate to the effect that Vyara and Songadh projects were two different projects and not a single integrated water supply scheme and based thereon dispatched a telegram to respondent No.1 asking for rejection of the bid offered by respondent No.2, but to no avail.  6. Aggrieved by the allotment of work in favour of respondent No.2, the appellant filed Writ Petition No.3427 of 2011 before the Indore Bench of the High Court of Madhya Pradesh. The challenge to the eligibility of respondent No.2 and eventually to the allotment of the project work to the said respondent in the Writ Petition was confined to two distinct grounds, namely (1) that respondent No.2 had not filed the requisite certified balance-sheets for five years immediately preceding the issue of tender notice and (2) that respondent No.2 did not have the requisite experience of executing a single integrated water supply scheme of the required value.  7. The Writ Petition was opposed by the respondents who asserted in their respective affidavits that requirement of submission of requisite balance-sheets was substantially complied with inasmuch as certified copies of the balance-sheets for four years had been filed but since the audit for the fifth year i.e. 2010-2011 had not been completed, the certificate issued by the Chartered Accountant for the said year sufficiently complied with the said requirement. It is also asserted that respondent No.2 satisfied the requirement of having executed single integrated water supply scheme for Upleta which included raw water transmission from intake well and transmission of treated clear water from WTP including providing, supplying and laying of pipelines, construction of E.S.R.s, Sumps, Pump houses and providing and erecting pumping machinery. The certificate issued by the Upleta Municipal Council and by the Gujarat Urban Development Mission (GUDM) was relied upon in support of that claim. The High Court has, by the judgment and order under challenge before us, examined both the grounds urged in support of the writ petition and clearly come to the conclusion that respondent No.2 was eligible to offer a bid in as much as it had substantially complied with the requirement of filing the certified copies of audited balance-sheets for the previous period of five years immediately preceding the issue of tender notice and that it had the requisite experience of executing a single integrated water supply project of the requisite value.

Court's reasoning:
18. The High Court has, while examining the question of eligibility of respondent No.2 by reference to the execution of the single integrated water supply scheme, recorded a finding that the nature of the work executed by respondent No.2 for Upleta satisfied the requirement of the tender notice. That finding, in our view, is in no way irrational or absurd. We say so because the certificate relied upon by respondent No.2 sufficiently demonstrates that respondent No.2 had designed, and executed an integrated water supply scheme for Upleta which included raw water transmission from intake wells and transmission of treated clear water from WTP including providing, supplying and laying of pipelines, construction of E.S.R.s, Sumps, Pump houses and providing erecting pumping machinery19. It is also noteworthy that in the matter of evaluation of the bids and determination of the eligibility of the bidders Municipal Council had the advantage of the aid & advice of an empanelled consultant, a technical hand, who could well appreciate the significance of the tender condition regarding the bidder executing the single integrated water supply scheme and fulfilling that condition of tender by reference to the work undertaken by them. We, therefore, see no reason to interfere with the view taken by the High Court of the allotment of work made in favour of respondent No.220. We may while parting point out that out of a total of Rs.19.5 crores representing the estimated value of the contract, respondent No.2 is certified to have already executed work worth Rs.11.50 crores and received a sum of Rs.8.79 crores towards the said work. More importantly the work in question relates to a drinking water supply scheme for the residents of a scarcity stricken municipality. The project is sponsored with the Central Government assistance under its urban infrastructure scheme for small and middle towns. The completion target of the scheme is September 2012. Any interference with the award of the contract at this stage is bound to delay the execution of the work and put the inhabitants of the municipal area to further hardship. Interference with the on-going work is, therefore, not conducive to public interest which can be served only if the scheme is completed as expeditiously as possible giving relief to the thirsting residents of Sendhwa. This is particularly so when the allotment of work in favour of respondent No.2 does not involve any extra cost in comparison to the cost that may be incurred if the contract was allotted to the appellant-company