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M.A.R. Fabricators INDIA PVT. LTD. vs. State Of Kerala

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WP(C)/15439/2020HC KeralaGSTCNR KLHC01039084202030 October 2020Bench: HONOURABLE SMT. JUSTICE P.V.ASHA14 pages

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE SMT. JUSTICE P.V.ASHA FRIDAY, THE 30TH DAY OF OCTOBER 2020 / 8TH KARTHIKA, 1942 WP(C).No.15439 OF 2020(D) PETITIONER: M.A.R. FABRICATORS INDIA PVT. LTD. HAVING ITS REGISTERED OFFICE AT NEAR TSP LTD, T.B DAM, HOSPET, KARNATAKA 583 225 REPRESENTED BY ITS MANAGING DIRECTOR AND AUTHORISED SIGNATORY, MR. M.A RAHIM BY ADVS. SMT.SIKHA G.NAIR SRI.AJEESH M UMMER RESPONDENTS: 1 STATE OF KERALA REPRESENTED BY ADDITIONAL CHIEF SECRETARY, WATER RESOURCES DEPARTMENT, MAIN BLOCK, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001 2 THE CHIEF ENGINEER, OFFICE OF THE CHIEF ENGINEER, MECHANICAL (IRRIGATION) PUBLIC OFFICE, THIRUVANANTHAPURAM 695 033 3 THE SUPERINTENDING ENGINEER, OFFICE OF THE SUPERINTENDING ENGINEER MECHANICAL IRRIGATION, 3RD FLOOR, CIVIL STATION, KAKKANAD, ERNAKULAM 682 030 4 PRINCIPAL SECRETARY, FINANCE (INDUSTRIES AND PUBLIC WORKS-B) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001 5 THE CHIEF SECRETARY, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM 695 001 OTHER PRESENT: SRI.K.V.MANOJ KUMAR, GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21.10.2020, THE COURT ON 30.10.2020 DELIVERED THE FOLLOWING:

WP(C).No.15439 OF 2020(D) 2 P.V.ASHA J. ------------------------------------ W.P.(C).No.15439 of 2020 ------------------------------------- Dated this the 30th day of October, 2019 J U D G M E N T Petitioner is a Contractor Company. Pursuant to Ext.P2 E-tender notice dated 02.12.2019 of the 3rd respondent, work was awarded to the petitioner accepting the lowest bid submitted by it on 01.01.2020. It is stated that the bid was accepted as per Ext.P3 order on 20.01.2020 for a sum of Rs.2,71,54,053.55/- which was 10.68% below the estimate Probable Amount of Contract (PAC) of Rs.3,04,01,121/-. As per Ext.P3(a) selection notice issued on 30.01.2020 petitioner was directed to execute the agreement within 14 days and to remit a sum of Rs.13,57,800/- being 5% of the contract value towards Performance Guarantee and a sum of Rs.2,06,955/-

towards

additional

Performance Guarantee for unbalanced bids.

WP(C).No.15439 OF 2020(D) 3

2.

As per Ext.P3 it was also informed that all terms

and conditions

of notice

inviting tender/revised PWD manual shall be binding on the contract work. Petitioner points out that at the relevant time Govt. order applicable was Ext.P4- G.O. (P).1/2019/Fin. dated 10.01.2019, according to which the additional Performance Guarantee was to be calculated as (X-10)% of estimated PAC. It is stated that petitioner executed Ext.P5 agreement on 22.02.2020, on grant of extension of time and on payment of fine. Thereafter the 3rd respondent issued Ext.P6 order on 26.02.2020 directing the petitioner to furnish Bank Guarantee for an additional sum of 21,16,625/- calculating the same on the basis of Ext.P7 order issued on 07.12.2019. It is stated that the method of calculation as per Ext.P7 order is different as it provides for individual additional Performance Guarantee for each of the items of work

WP(C).No.15439 OF 2020(D) 4 at the rate of (X-10)% of the estimate amount for the respective items of work. According to petitioner, Ext.P7 order cannot apply to bids invited prior to the issuance of the said order. It is stated that even the respondents had calculated the amount towards the additional Performance Guarantee in accordance with Ext.P4 order. Therefore in the absence of any communication at any time during the date of submission of bid for award of contract, petitioner is not bound to deposit any additional Performance Guarantee as directed in Ext.P6 order. It is stated that though petitioner had by Ext.P8 letter requested the 3rd respondent waive the additional requirement, the 3rd respondent rejected the same as per Ext.P9 and Ext.P10 order was thereafter issued, withholding the amount demanded towards additional Performance Guarantee from the contract bill of the petitioner. This writ petition is filed in the above

WP(C).No.15439 OF 2020(D) 5 circumstances.

3.

According to petitioner there cannot be unilateral amendment of the terms and conditions of the bid. It is also its contention that an order which did not come into force on the date on which tenders were invited cannot be made applicable that too without any communication to the bidders as to its applicability and without incorporating the same in the bid document. According to it Ext.P5 agreement was executed in accordance with Exts.P3 and P3(a) orders of the respondents in which the additional performance guarantee was calculated as per Ext.P4 Govt. Order and therefore it was not liable to be varied in tune with an order which was not enforced as on the date on which tenders were invited.

4.

In the statement filed by the learned Govt. pleader on behalf of the respondents, it is stated that Ext.P2 was an E-tender notice based on standard

WP(C).No.15439 OF 2020(D) 6 bidding document. As per Clause 13.B of Ext.P2 E- tender notice a selected bidder is supposed to submit additional Performance Guarantee in the form of Treasury Fixed Deposit and in the form of bank guarantee. It is stated that the work tendered as per Ext.P2 is rate contract. As per Clause 13.B of Ext.P2, a tenderer who quoted low rates is required to give additional Performance Guarantee. As Ext.P2 relates to a rate contract, the additional performance guarantee is to be worked out based on the rate when unbalanced rates are quoted by the bidders. It is stated that in the standard bidding document, which is a part of E-tender notice in E- Government procurement, those who submitted unbalanced bid are to submit additional Performance Guarantee in respect of the unbalanced items at the rates and petitioner has to submit additional Performance Guarantee as provided in Ann.A Standard

WP(C).No.15439 OF 2020(D) 7 Bidding Document. It is stated that though Additional Performance Guarantee happened to be calculated erroneously in Ext.P3, the petitioner has to remit the same in accordance with the Government Order which was in force as on the last date fixed for receipt of tenders. It is stated that though Ext.P2 notice inviting tender was issued on 02.12.2019, the last date of submission of tender was 01.01.2020 and the selection notice was issued on 30.01.2020. Ext.P7 order came into force even before the date on which the petitioner submitted its bid. It is stated that as soon as the mistake came to the notice of the respondents Ext.P6 demand was made on 26.02.2020 to make deposit in accordance with Ext.P7 Govt. Order which was issued on 07.12.2019. It is pointed out that the calculation of rates of each of the items is calculated as per Ann.B in tune with Ext.P7 Govt. Order. It is also pointed out that in the

WP(C).No.15439 OF 2020(D) 8 representation Ext.P8 petitioner had only requested for a waiver of the demand for remittance of additional PG. It is stated that in Ext.P2 notice itself it was notified that all other existing conditions relating to tender of Kerala Public Works Department/Irrigation Department would be applicable to the tender; that conditions in a standard bidding document are also applicable and that tender conditions may vary as per direction from the Government/Chief Engineer.

5.

The learned Government Pleader points out that each of the notifications, Government Orders, etc., are available in the website and that a contractor is supposed to check the website. Ext.P2 notice inviting tender as well as the standard bidding document provide that tender conditions may vary subject to Govt. Orders/PWD manual, etc., which are binding on the petitioner.

WP(C).No.15439 OF 2020(D) 9

6.

Petitioner has filed a reply affidavit reiterating that there cannot be any unilateral enhancement of charges and the changes made to the tender or Govt. Orders issued subsequent to the tender, which are not made known to the petitioner are not binding on the petitioner. It is also contended that what is notified in Ext.P2 is the applicability of the existing orders; but there was no existing order as on the date of Ext.P2, other than Ext.P4. It is also stated that even the date on which the standard bidding document was notified is not stated anywhere.

7.

Heard the contentions on both sides. The question to be decided is whether the respondents cannot apply the order Ext.P7 issued on 07.12.2019, on a bid submitted on 27.12.2019 subsequent to the issuance of Ext.P7 order, in the absence of a specific intimation regarding the same or in case the

WP(C).No.15439 OF 2020(D) 10 respondents have committed some mistake while issuing Ext P3(a).

8.

Both sides rely on Ext P2 NIT. Relevant provisions in Ext.P2 in last paragraph thereof are the following : xxx All other existing conditions relating to tenders of PWD/Irrigation Department will be applicable in this tender also. xxxxxxxx The terms and conditions in Form 83 will be replaced by the terms and conditions in the Standard Bid Document with effect from the date of approval of the same. Prevailing rules and up to date amendments regarding GST will be applicable to this tender. Tender condition may vary as per the directions from Government/Chief Engineer.

9.

In view of the aforesaid conditions in the notice inviting tender itself the petitioner cannot be heard to contend that Ext.P7 order which came into force on 07.12.2019 within 5 days of Ext.P2 and well before the last date fixed for receipt of tenders cannot be made applicable to the petitioner. The contention that petitioner was bound only by the

WP(C).No.15439 OF 2020(D) 11 “existing orders” as on the date of Ext.P2 cannot also accepted when everything is subjected to the orders to be issued by the Government. Admittedly petitioner has submitted the tender based on Ext.P2 which specifically provides for the applicability of the orders which would be issued by Government. The last date for submission of bid was on 01.01.2020; petitioner submitted the bid on 30.12.2019; selection notice was issued on 20.02.2020. Except on the date on which Ext.P2 notice was issued all other proceedings occurred after the issuance of Ext.P7 order. The erroneous calculation by the officers in Ext.P3(a) notice or the execution of agreement based on such calculation cannot stand in the way of the respondents from enforcing the order Ext.P7 against the bid submitted subsequent to its issuance and in demanding the additional performance guarantee in tune with Ext.P7 order as well as the standard bid

WP(C).No.15439 OF 2020(D) 12 document.

10.

It is also relevant to note clause 8 of Ext.P2 NIT which read as follows: “The tenderer shall examine closely the CPWD Standard specification,

IRC

Specification,

MoRTH specification, and also the standard preliminary specifications contained there in which is available for viewing on the e-GP website and PWD Website before submitting his tender Unit rates shall be for finished work in site. He shall also carefully study the drawings and additional specifications and all the documents which form part of the agreement to be entered in to by the accepted tenderer. The documents connected with the contract such as specifications, plans descriptive specification sheet regarding materials etc., can also be seen during the office days & hours in the Office of the Superintending Engineer, Mechanical, Irrigation, Kakkanad during office hours on working days.”

11.

Petitioner does not have a case that it had verified the website as provided in Clause 8. Petitioner does not dispute the fact that it is a rate contract. Clause 7.5 of Annexure A standard bid document provides for calculation of additional performance guarantee in the case of rate contract for each item of work at the rate of (X-10%) of the estimate amount for that work, if the bidder has

WP(C).No.15439 OF 2020(D) 13 quoted rates below the estimate rate.

12.

It is seen that the respondents have taken action perfectly in tune with Ext.P7 order. The contention of the petitioner that the standard bid document Annexure-A is not applicable since the date of its approval is not stated cannot also be accepted when Ext.P7 order has already come into force and the standard bid document forms part of the agreement. It is also pertinent to note that the request of the petitioner in Ext.P8 was to waive the requirement of deposit towards additional performance guarantee. In the aforesaid circumstances there is nothing illegal on the part of the respondents in withholding the said amount from their bill as per Ext.P10 order. The writ petition is therefore dismissed. P.V.ASHA, JUDGE AS

WP(C).No.15439 OF 2020(D) 14 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 CERTIFIED EXTRACT OF BOARD RESOLUTION OF PETITIONER. EXHIBIT P2OF E-TENDER NOTICE NO. 08/SE/IRRG/MECH/2019-20/S EXHIBIT P3OF ORDER NO.D3-587/2017 OF 3RD RESPONDENT EXHIBIT P3 AOF LETTER NO. D3-587/2017 ISSUED BY 3RD RESPONDENT EXHIBIT P4OF G.O(P) NO. 1/2019/FIN TVM. EXHIBIT P5OF CONTRACT BEARING NO. 08/2019-20/SE/MECH/IRRCH/IRRGN EXHIBIT P6OF ORDER NO. D3-587/2017 ISSUED BY 3RD RESPONDENT EXHIBIT P7OF THE G.O(P) NO. 168/2019/FIN ISSUED BY 4TH RESPONDENT EXHIBIT P8OF LETTER OF THE PETITIONER. EXHIBIT P9OF LETTER BEARING NO. D3- 587/2017(1) ISSUED BY 3RD RESPONDENT. EXHIBIT P10OF ORDER NO. D3-587/2017 ISSUED BY 3RD RESPONDENT. RESPONDENTS' EXHIBITS: ANN.AOF THE RELEVANT PAGE OF STANDARD BIDDING DOCUMENT ANN.BOF THE CALCULATION STATEMENT BASED ON WHICH ADDITIONAL PERFORMANCE GUARANTEE AMOUNT ARRIVED

Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.