M/S Gaanesh Kartikey Construction PVT LTD vs. Union Of INDIA And Others

Held

The Court held that the modified pre-qualification criterion for 'Minimum Annual Value of General Construction Work' was not arbitrary or discriminatory. The Court reasoned that the multiplier of 2 was a policy decision by the tendering authority to ensure that bidders had demonstrated substantial experience in executing works of a significant scale, particularly for projects costing up to Rs. 1500 Crores. This was considered a reasonable measure to assess the capacity and capability of contractors for large-scale civil engineering projects. The Court found that the petitioner had failed to meet this stipulated criterion, as their achieved annual value of general construction work, when adjusted by the multiplier, did not meet the required threshold. Therefore, the rejection of the petitioner's bid was deemed justified. The Court did not find any violation of Article 14 of the Constitution. No specific issue was left undecided.

Facts

The petitioner, a contractor, challenged the rejection of its bid for a civil engineering construction work tender. The tender stipulated specific pre-qualification criteria, including financial capacity. The petitioner's bid was rejected for failing to meet the 'Minimum Annual Value of General Construction Work' criterion. The petitioner argued that the modified provision, which required achieved minimum annual value of general construction work calculated by applying a multiplier of 2 for projects up to Rs. 1500 Crores, was arbitrary and discriminatory. The petitioner presented financial data for the last five financial years, showing its gross annual turnover and turnover on civil engineering construction works, along with profit/loss after taxes. The petitioner also provided data on the maximum value of civil engineering works executed in any one year during the last five years, and an updated executed works value at current costing level.

Key Issues

1. Whether the modified pre-qualification criterion for 'Minimum Annual Value of General Construction Work' in the tender, requiring calculation by applying a multiplier of 2 for projects up to Rs. 1500 Crores, is arbitrary, discriminatory, and violative of Article 14 of the Constitution of India, as argued by the petitioner. 2. Whether the rejection of the petitioner's bid based on the aforementioned criterion was justified, considering the petitioner's financial data and past performance. Petitioner's arguments: The petitioner contended that the modified provision was arbitrary and discriminatory, as it imposed an unreasonable burden by requiring a higher threshold for achieved annual construction work. They argued that the multiplier of 2 was excessive and not based on any rational basis, especially when compared to the previous provision or other tender conditions. The petitioner relied on its financial statements and executed work values to demonstrate its capability, suggesting that the criteria unfairly excluded capable bidders. The petitioner also implicitly argued that the rejection was not in line with the spirit of promoting fair competition. Revenue's arguments: The judgment does not explicitly record arguments made by the revenue or the tendering authority. However, the rejection of the bid implies that the revenue or tendering authority considered the petitioner to have failed to meet the stipulated pre-qualification criteria as per the tender document.