M/S Vijay Electrical Engineering vs. The State Of Andhra Pradesh - Andhra Pradesh High Court, 03 January 2024

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI HON‟BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON‟BLE MR. JUSTICE R. RAGHUNANDAN RAO WRIT APPEAL No.1222 of 2023 M/s. Vijay Electrical Engineering, Rep. by its Proprietor, R. Bhaskara Rao, Yagnasalapeta, Karamchedu Village and Mandal, Bapatla (old Prakasam) District - 523168 ... Appellant Versus The State of Andhra Pradesh, Rep. by its Principal Secretary, Energy Department, Secretariat, At Velagapudi, Amaravathi, Guntur District and four others. …Respondents Mr. E. Sambasiva Pratap, learned counsel represented by Mr. V. Venugopala Rao, Senior Counsel for the appellant. Government Pleader for Energy, Counsel for respondent No.1 Mr. V. R. Reddy Kovvuri, Counsel for respondent Nos.2 to 4. Mr. A. R. Srinivas Murthi, Counsel for respondent No.5. DATE : 04.01.2024 PER DHIRAJ SINGH THAKUR, CJ: The present writ appeal under clause 15 of the Letters Patent has been preferred against the judgment and order dated 10.10.2023 passed in W.P.No.33999 of 2022. By virtue of judgment Page 2 of 13 HCJ & RRR,J WA_NO_1222_2023 and order impugned, the writ petition filed by the petitioner challenging the action of awarding a contract of operation and maintenance and manning of substations in favour of the respondent No.5 was dismissed. 2. Briefly stated the material facts are as under: The Andhra Pradesh Central Power Distribution Corporation Limited/respondent No.2 in the writ petition invited bids from eligible tenderers vide NIT dated 22.06.2022 for operation and maintenance on contract basis of a group of substations in the areas of Krishna, Guntur, Ongole etc., for a period of two years. The contract was to be allotted to contractors having Grade-A Electrical Licence issued by Chief Electrical Inspector to Government (for short “CEIG”) and were registered with APSPDCL/APCPDCL/APEPDCL. The contractor was also supposed to have one Supervisor and two Wireman permit holders working under him. For facility of reference Clauses 3 and 7 of the tender document are material and are reproduced hereunder: “3. FILLING OF SCHEDULE: The Works Contract will be awarded to all the registered contractors of APSPDCL/ APCPDCL/ APEPDCL, For carrying out the above work with valid Grade-A Electrical Contractor License from the Directorate of Electrical Safety and "CEIG, , valid labour license from Deputy Commissioner of Labour or Page 3 of 13 HCJ & RRR,J WA_NO_1222_2023 Assistant Commissioner of Labour of the concerned region, PAN no, GST registration no, EPF code number and any man power co- operative society as registered for this purpose of manning of electrical installations viz. 33/11KV Sub stations, who are having above qualifications. However the Labour license mentioned above can be submitted at the time of entering into agreement. The tender schedule should be filled in properly and the rates should be quoted for complete works involved i.e., for carrying out Operation and maintenance of the Substations round the clock at the respective 33/11KV SS during the prescribed period, as per the conditions stipulated for guaranteed performance, in sealed cover addressed to the Superintending Engineer/Operation/ APCPDL/ONGOLE as indicated in the Annexure-I. .... 7. Eligibility for Man Power Supply on Out sourcing a) The contractor shall have Grade -A Electrical licence issued by CEIG Office. b) Grade -A Electrical license should have a validity of 6 months. c) Supervision and Wireman permit holder. i) Permit - Copies ii) Permit' - Validity Dates iii) Agreement with the contractor - By permit holder/Appointment Order Copy iv) Supervision and wireman permit original books shall be submitted at the time of the bid. v) Equipment as per the CEIG list shall be produced as and when required. vi) Supply and Work permit holder shall be physically produced as and when required by the concerned department officer. Page 4 of 13 HCJ & RRR,J WA_NO_1222_2023 vii) Validity of license, Supervisor and wireman permit expires, the contractor agreement issued by this office is deemed to be cancelled from that date. viii) Any statutory payment ESI, EPF etc., is failed to pay, on receipt of notice from the concerned authority, the contract agreement cancelled from that date. ....” 3. The case of the petitioner was that even when he possessed Grade-A licence as an Electrical Contractor issued by the Chief Electrical Inspector to Government and even when he has one supervisor and two wireman permit holders working under him, yet his bid was held to be non responsive. Further, it is the case of the petitioner that respondent No.5 was not registered with APSPDCL/APCPDCL/APEPDCL even on the date when the Agreement was executed between the said respondent and the official respondents on 01.10.2022 and was registered later on 07.10.2022. Despite which, it is submitted that the official respondents accepted the bid of respondent No.5. 4. The stand of the official respondents as is reflected from their reply-affidavit is that the petitioner had failed to satisfy the eligibility criteria prescribed under Clause 7 inasmuch as it was found upon verification of the documents submitted by the petitioner along with its bid that one Sri R. Balakrishna, wireman Page 5 of 13 HCJ & RRR,J WA_NO_1222_2023 with permit No.307617 did not have the required validation for the wireman for working as wireman by the CEIG and therefore, was disqualified as not meeting the eligibility criteria. 5. The case of the official respondents with regard to respondent No.5 is that the condition with regard to registration with the APSPDCL/APCPDCL/APEPDCL was not mandatory and was not a part of the eligibility criteria and that the allotment of the maintenance contract in favour of respondent No.5 was therefore legally justified. 6.

The learned single Judge by virtue of judgment and order impugned, after considering the matter upheld the action of the official respondents, by holding in paragraphs 21 and 22 of the judgment as under:

“21. Clause No.3 is titled, „FILLING OF SCHEDULE‟. It says that Works contract will be awarded to all the registered contractors with valid Grade A Electrical Contractor License and other qualifications specified therein. The said clause further contains that Labour license mentioned therein can be submitted at the time of entering into agreement. A bare reading of this provision makes it clear that it does not contain any mandate that registered contractors alone are eligible to submit tender forms. It only says that work contract will be awarded to the registered contractors. Thus, being a registered contractor is not at all essential for submission of the tender and participation in the tender evaluation process. Therefore, clause-3 of the tender specification did not WA_NO_1222_2023

specify any eligibility criteria. As the title given to it, the said clause only contained some instructions to the tenderers for filling of schedule and nothing more. Thus, the contention of the learned counsel for the petitioner that clause-3 also specifies eligibility criteria is far-fetched.

22.

As per clause-7 which deals with Eligibility for Man Power Supply on Out sourcing, the contractor shall have supervision and Wireman permit holders. The material placed on record shows that the wireman permit produced by the petitioner in relation to one R.Bala Krishna stood expired on 14.07.2021 and it was not revalidated as per the procedure. Thus, the authorities have placed the tender of the petitioner out of consideration for non-fulfilment of the essential and mandatory conditions of the tender notification.”

The learned single Judge accordingly dismissed the writ petition by holding that the petitioner failed to produce the documents as were required to meet the eligibility criteria as per Clause 7 of the tender specification and that the decision of the respondents could not be termed as arbitrary, irrational or mala fide or contrary to law.

We had directed the official respondents to produce, for our perusal the relevant records pertained to the allotment of the contract in question, however, relevant record which was most pertinent with regard to the committee‟s report, which is stated to have been submitted on 22.09.2022 was not produced. WA_NO_1222_2023

We have heard learned counsel for the parties and gone through the relevant records.

It appears to us to be quite clear that apart from the eligibility conditions prescribed under Clause 7 of the tender document envisaging the availability of a supervisor and two wireman, the condition with regard to the contractor being registered with APSPDCL/APCPDCL/APEPDCL was also a condition of eligibility which had to be fulfilled by respondent No.5, with a view to make the said respondent eligible in terms of the tender document. A reference to Clause 3 of the tender document would show that it was only the condition of possession of a labour licence from the Deputy Commissioner/Assistant Commissioner of Labour of the Engineering Works1, the Apex Court in paragraph 6 held:

It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank clause 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance with the condition in appropriate cases.”

11.

Services Ltd. and others2, the Apex Court held:

“66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands

1 (1991) 3 SCC 273 2 (2006) 11 SCC 548 WA_NO_1222_2023

now having regard to the principles laid down in the aforementioned decisions may be summarised as under: (i) if there are essential conditions, the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he a was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without juri iction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on b their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with; (vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates C quoted by the lowest tenderer, public interest would be given priority; (vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint.” WA_NO_1222_2023

12.

issues held:

“16. It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous-they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court.”

13.

In our opinion, the condition with regard to registration under Clause 3 was an essential condition and could not have been waived at all and further that there was no such power vested with the authority to relax such a condition, much less could an agreement have been executed with the said respondent No.5 on that account.

14.

The rejection of the bid of the petitioner also appears to us to be unwarranted. The basis for the rejection of the bid of the petitioner is that the certificate of wireman permit in regard to 3 (2020) 17 SCC 577 WA_NO_1222_2023

Sri R. Balakrishna, stood expired on 14.07.2021 and was not revalidated.

15.

On the other hand, it can be seen from the record that form-F issued by the Andhra Pradesh Electrical Licensing Board in favour of Sri R. Balakrishna, that his earlier lapsed permit contained permit No.302766 for which a new permit bearing No.307617 was issued which was revalidated from 14.12.2020 to 13.12.2025. 16. Although, the learned single Judge has observed in the judgment and order impugned that the revalidation was not as per the procedure, yet no reasons have been reflected as to what was the procedure for revalidation, which was not followed before such a validation was affected in favour of Sri R. Balakrishna.

On the other hand, it is not even the case of the official respondents that there was validation but not as per the prescribed procedure.

17.

Be that as it may, we hold that the decision in rejecting the bid of the petitioner as also to allot the contract in favour of respondent No.5 was arbitrary and is, accordingly, set aside. The respondents are directed to consider the bid of the petitioner as responsive and take steps accordingly. WA_NO_1222_2023

18.

The judgment and order impugned is, accordingly, set aside and the writ appeal is allowed. No order as to costs.

Pending miscellaneous applications, if any, shall stand closed.

DHIRAJ SINGH THAKUR, CJ R. RAGHUNANDAN RAO, J

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HON‟BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON‟BLE MR. JUSTICE R. RAGHUNANDAN RAO

WRIT APPEAL No.1222 of 2023 DATE : 04.01.2024

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