C.A.George vs. State Of Kerala

Petitioner is a registered contractor. The 3rd respondent invited bids for the work viz., “CRF 2016-2017 - Improvements to riding quality programme of Rajakkad - Rajakumary - Pooppara Road from km.0/000 to 15/800 in the State of Kerala”. Approximate value of the work was Rs.11,29,06,076/- and bid security was Rs.22,60,000/-. According to the petitioner, petitioner quoted the amount without taxes as provided in Item Rate Bill of Quantities (BoQ) provided to the contractors. Quoted rate of the petitioner was the lowest. Hence, letter of acceptance was issued to the petitioner. However, in Ext.P9 schedule given to the petitioner, the word 'without taxes' was purposefully deleted from Column 53, in order to see that the quoted rate was inclusive of taxes. According to the petitioner, it was an omission, which was pointed out by submitting Exts.P7, P10 and P11. However, no answer was given. Though the petitioner was prepared to undertake the work, executing the agreement based on the Item Rate BoQ provided by the petitioner, the bid was cancelled and it was ordered to re- arrange the work at the risk and cost of the petitioner as per Ext.P13. It is thus challenging Ext.P13 in that background, this writ petition is filed.

Third respondent has filed a counter affidavit refuting the allegations and claims and demands raised by the petitioner. Among other contentions, it is stated that, petitioner is a pre-qualified 'A' class PWD contractor, who undertakes contract works for a considerable period under the Public Works Department. Petitioner is well aware about the fact that the rate to be quoted for the work is inclusive of all the taxes. No queries and disputes were raised by the petitioner with regard to the inclusion of tax in the rate quoted, at the time of bid meeting. Out of the 9 CRF works tendered from the office, including the work on hand, no other contractor has raised any objection with regard to the issue of tax, and they have already executed the agreement and started their respective works.

The BoQ uploaded from the office of the 3rd respondent in the tender publication was the one downloaded from the PRICE software in standard template, generated along with the Technical Sanction, issued for the above work. In Column No.53 of BoQ downloaded, the total amount without taxes is entered as heading. The tax in the BoQ is service tax which is exempted as per the PWD order dated 03.02.2017. The tenderer can enter only the basic rate column in which tax is not at all mentioned.

Furthermore, as per Clause 13.3 of Instructions to Bidders of the Standard bidding document uploaded along with the BoQ for the above work, it is very clearly stated that, all duties, taxes, and other levies payable by the contractor under the contract or for any other cause, shall be included in the rates, prices and total bid price submitted by the bidder. Having participated in the tender process, fully knowing about the aforesaid conditions, petitioner who is a well experienced contractor cannot plead ignorance.

Petitioner has quoted the rate at 29.11% below the estimated PAC. As the rate is more than 25% below, the 2nd respondent requested the petitioner to furnish the rate analysis of each item of quoted rate based on the Government Order dated 29.08.2016 of the Finance Department. As per letter dated 14.08.2017 submitted by the petitioner, the rate

It is also stated that, since on re-tendering, the State will be incurred with substantial loss, the EMD pledged by him has to be forfeited, so as to make good the loss. The work is re-arranged at the risk and cost of the petitioner, for which, the 3rd respondent is entitled to. Therefore, the respondents seek dismissal of the writ petition.

Petitioner has filed a reply affidavit and has produced Ext.P15 along with the same, which is a communication dated 27.10.2017 issued from the office of the Chief Engineer to the Principal Secretary, PWD, Thiruvananthapuram, wherein it is stated that, Selection Notice was issued to the contractor and the contractor had sent a letter stating that the rate quoted by him was without tax and that he will execute the agreement as such. It is true that GST was not announced at the time of uploading the tender and BoQ was issued with a provision to quote the rates without taxes. However, petitioner as per a communication dated 03.10.2017 informed that if his bid for the execution of work is accepted for a contract price of Rs.7,99,99,990/- + 14% Tax i.e. total of Rs.9,58,12,096.10 he is willing to execute the work. However, it is stated thereunder that at the most the Department can allow only 3% statutory recoveries as the rate invited was without tax. 3% is what the Department recovers on payment. But the Department cannot accept 14% or 12% what contractor should pay. Therefore, it is stated that the lowest contractor might not take up the work even at enhanced rate by 3%, and there is no chance for a better offer, it is better to re-tender the work since the surface of the road is getting damaged, and also conveyed to make out the possibilities of conferring the tender on the second lowest tenderer.

Petitioner has also produced Ext.P16 along with an application, which is an order of the Government dated 10.01.2018, wherein it is stated that, as per Circular No.4/3/07 dated 03.03.2007 of the Central Vigilance Commission, in case L-1 backs out, there should be a re- tender. It is observed that the ambiguity is created due to discrepancies occurred in the preparation of tender documents. It is also noted that the firm period expired on 14.08.2017 and consent letter of the contractor for the extension of firm period is not seen furnished. Therefore, it was requested to re-tender the work early as per the prevailing guidelines and due care shall be given to the preparation of tender documents to avoid similar instances in future.

I have heard learned counsel for the petitioner and the learned Government Pleader. Perused the documents on record and the pleadings put forth by the respective parties.

The area of dispute revolves around Exts.P1, P2 and P9. As per Clause 13.3 of Ext.P1 Invitation for Bid, all duties, taxes and other levies payable by the contractor under the contract, or for any other cause shall be included in the rates, prices and total Bid Price submitted by the Bidder. Clause 13.4 further stipulates that, the rates and prices quoted by the bidder shall be fixed for the duration of the contract and shall not be subject to adjustment on any account (For contracts up to 12 months period). It is also stipulated thereunder that escalation not applicable.

Clause 22.1 stipulates that, bidders may modify or withdraw their bids by giving notice in writing before the deadline prescribed under Clause 20 or pursuant to Clause 23. It is also stipulated that, no bid shall be modified after the deadline for submission of Bids except in pursuance of Clause

As per Clause 26.1, during the detailed evaluation of “Technical Bids”, the Employer will determine whether each Bid (a) meets the eligibility criteria defined in Clause 3 and 4; (b) has been properly signed; (c) is accompanied by the required securities and; (d) is substantially responsive to the requirements of the Bidding documents. During the detailed evaluation of the “Financial Bid”, the responsiveness of the bids will be further determined with respect to the remaining bid conditions, i.e. priced bill of quantities, technical specification, and drawings.

Clause 27 deals with correction of errors in Financial Bids, which is to be checked by the Employer for any arithmetic errors and the same will be corrected by the Employer; (a) when there is a discrepancy between the rates in figures and in words, the rate in words will govern; and (b) when there is a discrepancy between the unit rate and the line item total resulting from multiplying the unit rate by the quantity, the unit rate as quoted will govern. It was thereafter as per Clause 31, the Employer awards the contract to the bidder whose Bid has been determined to the substantially responsive to the Bidding documents and who has offered the lowest evaluated Bid Price. It further stipulates that, in no case, the contract shall be awarded to any bidder whose available bid capacity is less than the evaluated bid price, even if the said bid is the lowest evaluated bid. The contract will in such cases be awarded to the next lowest bidder at his evaluated bid price.

Clause 34 deals with Performance Security, in which it is stipulated that, failure of the successful Bidder to comply with the requirements of sub-clause 31.1 shall constitute sufficient ground for cancellation of the award and forfeiture of the Bid Security. After cancelling, steps will be initiated to award the work to next lowest bidder. Clause 34.3 states that, failure of the successful Bidder to comply with the requirements of sub-clause 34.1 shall constitute sufficient grounds for cancellation of the award and forfeiture of the Bid Security. The employer may rearrange the work or get it done departmentally at the risk and cost of the default bidder and loss sustained to the employer will be recovered under the provisions of Revenue Recovery Act or otherwise as stipulated in the Preliminary Agreement. The above discussed provisions are the vital rules of the bid in question.

The case advanced by the petitioner is that, as per Item Rate BoQ under column 53, the stipulation is “total amount without taxes” and the total amount in words. Therefore, According to the petitioner, even though as per Ext.P1, the duties, taxes and other levies payable by the contractor is to be included, there was no column prescribed in Ext.P2 Item Rate BoQ, enabling the petitioner to incorporate the bid with taxes. However, petitioner has produced Ext.P9 Item Rate BoQ, wherein as per column 13, Basic Rate in Figures to be entered by the Bidder, like the one figured in Ext.P2. But, as per column 53 in Ext.P9, the total amount alone is shown, which thus means, the words “without taxes” is not available in Ext.P9. According to the petitioner, in Ext.P9, the total amount “without taxes” is purposely omitted, in order to see that the quoted amount is inclusive of taxes. It is also stated by the petitioner in the writ petition that, petitioner is expected to quote the rate 'without taxes', but, keeping silent on this, Ext.P9 was forwarded to the petitioner scoring the words “without taxes” in column 53. Therefore, according to the petitioner, when Ext.P2 BoQ was provided along with Ext.P1, wherein the column of the price schedule, quantity, estimate rate, total amount etc. are shown, however, the total amount to be included thereunder is “without taxes”, and there is no column for entering the total amount with taxes, and accordingly only Ext.P3 is filled up and submitted.

In my considered opinion, petitioner has admitted that Ext.P9 is put up by the petitioner online. However, the case advanced is that, along with Ext.P1, Ext.P2 alone was served, which did not contain a column inclusive of taxes. The contention so advanced by the petitioner, in my considered opinion, cannot be accepted for the reason that, having stated that Ext.P1 is received by the petitioner, wherein there is a stipulation contained to include all duties, taxes and other levies payable by the contractor under the contract, petitioner cannot turn around and say that petitioner was not aware that he has to quote 'with taxes'. Moreover, as per Ext.P1, a pre- bid meeting was constituted and if the petitioner had any doubt or grievance with respect to Ext.P2, he could have expressed his anxiety over the same and could have clarified any doubt. There is no case for the petitioner that petitioner made any such endeavour in the pre-bid meeting.

That apart, it is an admitted fact that, petitioner is an A-class contractor of PWD, who undertakes works for a very long period and the petitioner is also well aware that the rates are to be quoted inclusive of all taxes. In fact, as per Ext.P13 dated 23.09.2017, it was pointed out to the petitioner that, as per the terms of Ext.P1, since the petitioner has backed out from executing agreement after receiving selection notice, petitioner is liable to suffer consequences in accordance with the stipulations contained under Ext.P1. Petitioner was well aware of the stipulations contained under Ext.P1. The authority under Ext.P1 is vested with ample powers to adjust the EMD in the event of the petitioner failing to execute the agreement after cancelling the award. The respondents are also entitled to award the work to the second lowest bidder at the risk and cost of the petitioner. The said exercise is yet to take place, however, in view of inaction on the part of the petitioner, the award was cancelled and the EMD is already adjusted. It is also well settled that the stipulations contained in the notice to bid is the rule of the game and the parties are liable in accordance with the conditions thereunder.

Taking into account all these aspects, I am of the considered opinion that, petitioner has not made out any case of arbitrariness, illegality or unfairness justifying interference of this Court under Article 226 of the Constitution of India. Resultantly, writ petition fails, accordingly it is dismissed. SHAJI P. CHALY JUDGE St/- 07.02.2018