Vijay Electrical Engineering vs. The State Of Ap

The case of the petitioner, in brief, is that the 2n' respondent organization has been maintaining 33/11 KV Sub Stations for effective and r eguiar power distribution and supply for which, operation and maintenance work has been entrusted to the registered contractors being licensed agencies through tender process. The works such as recording of readings, recording of all tripping of breakers and other event that occur in ~ZC,9 '14l rp.Xo.33999 of 2022 2 the order of sequences, all operations to be carried out correctly and accurately round the clock duly recording in the log books as instructed by the E.E. and shall observe all safety precautions, shall attend all emergencies etc., during contract period. To carry out such important statutory duties the 2nd respondent authorities are assigning the said work by way of tenders to be executed by the successful tenderers. The petitioner has been participating in the tenders, executing operation and maintenance work through the technically qualified persons as per the work agreement and gained rich experience in operation and maintenance of substation works. It is the further case of the petitioner that he obtained Electrical Contract License Grade-A initially in the year 2011 and the same was renewed time to time vide License No.A/6941, 2-2681 upto 33 KV only, dated 10.06.2021_, being latest one till 14.0 7.2023, of A.P.Electrical Licensing Board. The same was registered with the office of 2nd respondent and valid for a period of five (05) years from the date of registration vide proceedings dated 13.07.2021 and also maintaining Labour License; GST, EPF, ESI, Income Tax etc., uninterruptedly and promptly. The petitioner is the contractor holding LS Agreement! Work agreement vide

The respondent No.4 filed counter affidavit denying the averments of the writ affidavit, inter a/ia contending that, the 2nd respondent called for tenders from the prospective bidders for carrying out manning of sub-stations for Operation and Maintenance works on a contract basis and the last date of tenders was fixed as 13.07.2022, which was later extended to 23.07.2022. As on the date of opening of the tenders on 25.07.2022, bids were received from six (06) prospective bidders. The petitioner, who participated in the tender process has failed to show the valid license permit and appointment order copy approved by the Chief Electrical Inspector to Government (CEIG) as per Clause 7 of the tender document i.e. the eligibility for man power supply on outsourcing. In response to the same, the 4th respondent has addressed a letter dated 18.08.2022 duly informing the petitioner to attend the office to produce all the documents necessary as per clause 7 of the eligibility criteria. Therefore, on 20.08.202.2 the petitioner has appeared the office along with RC,J '14V.rP.No.33999 of 2022 9 necessary documents. As per clause 7 of the eligibility criteria, the tenderer shall have one supervisor and two (02) wiremen permit holders working under him. Upon verification of the documents, it was transpired that the petitioner has shown one R.Bala Krishna as wireman with permit No.307617 who is not having required validation for the wireman by the CEIG to work under him n and thus the petitioner was disqualified as he was not meeting the eligibility criteria as per Clause 7 of the tender notification. Whereas, the respondent No.5 has produced all the required documents as per clause 7 of the tender notification and thus the contract was awarded to the respondent No.

The petitioner did not state as to how the fundamental rights guaranteed to him under Constitution of India were infringed and moreover the petitioner approached this Court with unclean hands by suppressing the true and correct facts. It is further stated that, registration of a contractor under Clause 3 is not mandatory, whereas the eligibility criteria under clause 7 of the tender notification is mandatory to award the work contract. As per the documents submitted by the petitioner; the workman shown by the petitioner is not having required validation by CEIG and as the petitioner failed to get 1:he endorsement of CEIG that the workman is working under 2C,9 W.PS[o.33999 of 2022 10 him, the bid of the petitioner was not taken into consideration, since he failed to meet the requirements of the eligibility criteria as per clause 7 of the tender document. Therefore, the respondent No.5 was declared as the successful bidder and accordingly he was issued a letter of Authorization (LOA) dated 23.09.2022 for carrying out manning of Sub-stations for Operation and Maintenance works on a contract basis. The contention of the petitioner that respondent No.5 is not having valid Grade-A licence is not true, since the respondent No.5 has produced the same before the authorities. Since the petitioner did not meet all the requirements of the eligibility criteria, which is mandatory, his tender was not accepted and the same was awarded to the 5th respondent who met the said eligibility criteria. The writ petition is nothing but an act of mudslinging on the officials. There are no merits in the writ petition and hence prayed to dismiss the writ petition and also to vacate the interim order, dated 30.11.2022 passed in I.A.No.1 of 2022. Tt I stn rp.J.,U ~+ F,ICU r affidavit denying the averments -r. i i iG r 2D vI iu2i iL i i cu . ounter a ~ vrt in s he m n s of the writ petition, inter alia contending that, the petitioner has been working as a contractor of electrical works under- the respondent Nos. 1 to 4 and he possess Grade A License bearing License No.A/12974, dated

The petitioner filed reply affidavit to the counter affidavit filed by the 4th respondent denying the averments made in the counter affidavit, inter alia contending that clause 3 of the tender notification clearly specifies that work order will be awarded to the Registered contractor, however, the authorities, curiously state that the condition imposed by themselves in the tender is not required, since not mandatory. This itself shows that the authorities want to favour the 5th respondent, who is a stranger even without Grade A license as on the date of notification and registration as on the date of work agreement, denying the same to the petitioner, who got Grade A License since 15.07.2011, got registered and ~9 W.4'.No.33999 of 2022 14 gained rich experience with the subject works from 2012-13 onwards. Further, the averment that the petitioner did not comply with clause 7 of tender specifications, since R.Bala Krishna is not holding valid license with valid revalidation is not true and correct. The document enclosed to the counter affidavit of the 4th respondent at page No.11 categoically shows that the competent authority had issued valid permit no.0-307617 on 14.12.2020 which is subsisting till 13.12.2025, whereas tender notification was issued on 22.06.2022 and thus as on the relevant date of the notification the said wireman is holding valid wiremen permit. Expiry of his permit on 14.12.2020 is due to the effect of Covid-19. The respondent No.5 cannot even file tender document as per clause 3 of the terms and conditions of the tender document, since he neither holds Grade A lience nor a registered contractor as on the date of notification. Thus, the respondent No.4 is trying to justify the illegal grant of award to the respondent No.

In response to the notice dated 18.08.2022, the petitioner had prnrii Iran all the documents as required which were acknowledged by the authorities and the acknowledgment at page 119 and check list at page 122 of the material enclosed to the writ petition clearly shows that the petitioner had satisfied clause 7 of the tender specifications and the allegations contra made are only invented to justify the illegality committed by them to favour the 5th respondent. The 4th respondent cannot plead that certain terms and conditions of the tender document are not mandatory. The process of Registration is regulated by C.O.O.Ms.No.35(CDM.P&MM&CIVIL) dated 21.07.2020, which is an enforceable order of the 2' respondent. The said order requires compliance of several conditions to get registration with the department. The registration is ensuring the terms and conditions of Grade A license. It is also regulating several licenses from various departments under paras 13 and 14 of the said order. In view of the same, the 4th respondent, being a statutory authority, cannot ignore and casually plead that registration is not mandatory. Hence, prayed to allow the writ petition, since absolutely there are no valid reasons in the counter affidavit so as to oppose the writ affidavit.

The petitioner also filed reply to the counter affidavit filed by the respondent Xo.5 and while reiterating the contents of the repiy affidavit filed to the counter affidavit filed by the respondent No.4, it is further contended that the petitioner has in specific terms challenged the validity of the experience certificate said to have produced for registration claimed

Heard Sri V.Venugopal Rao, learned senior counsel for Sri Sambasiva Pratap Evana, learned counsel for the petitioner, learned Government Pleader for Energy for respondent No.1, Sri V.R.Reddy Kowuri, learned standing counsel for APCPDCL and Sri A.R.Srinivas Murthi, learned counsel for respondent No.5. 8. Sri V.Venu gopal Rao, learned senior counsel, in elaboration would submit that, except the petitioner all the other tenderers have failed to submit documents as per items 2 to 6 under Para-7 of the tender document and hence the petitioner alone is eligible to be appointed. Further, as per Clause-3 of tender specifications, the work contract will be 2C,9 z4V. P.No.33999 of 2022 17 awarded to the registered contractor with valid Grade-Electrical Contract License. The 5th respondent was not a registered contractor by the last date of submission of tenders on 23.07.2022 and also on the date when LS agreement was awarded on 01.10.2022, since the 5th respondent became a registered contractor on 07.10.2022. Moreover, the 5th respondent is not holding A-Grade licence issued by the competent authority as on the date of notification. Thus, the 5th respondent is neither a registered nor a A- grade licence holder as on the date of notification, however, the authorities have awarded LS agreement to the 5th respondent, contrary to clause-3 of the notification, by falsely justifying their unreasonableness stating that clause-3 is not mandatory, which is impermissible. The learned counsel for the petitioner would further submit that the process of Registration requires compliance of several conditions to get registration with the department and the same ensures the terms and conditions of Grade (A) licence and also regulates several licences from various departments. However, the authorities, in an attempt to award contract to the nth respondent for the reasons best known to them came forward with a contention that clause-3 of the tender specifications is not mandatory.

Before going into the merits of the case, it is relevant here to note that the evaluation crietria for commercial tender primarily involves how the contracting authority will assess which bidder provides the best response to the requirements. The selection creteria are intended to assess the competence of the tendering organization to achieve the required project outcome and are used to rate each of the tenders.

The Hon'ble Supreme Court in Ram and Shyam Company v. State of Haryana and othersx clearly held thus: "The law is well-settled that contracts by the State, its corporations, instrumentaiities and agencies must be normally granted through public auction/ public tender by inviting tenders from eligible persons and the notification of the p u b l i c - a u c t i o n

While inviting tenders, the public authorities have the autonomy to fix their own conditions and may even enter into negotiations before finally deciding to accept one of the offers made to them. They are also free to grant any relaxation, for bona fide reasons, if the tender conditions permit the same. However, in order to ensure fairness of the procurement procedure by the public authorities in India, the Honbie Supreme Court in the matter of B,S.NJoshi & Sons Ltd,, V. Nair Coal Services Ltd2 had laid down certain checks and balances which are as under: "i. If there are essential conditions, the same must be adhered to ii. If there is no power to 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. 2 . (2006) 11 SCC 54$

The Hon'ble Supreme Court has repeatedly held that, what is reviewed is not the decision itself but the matter in which it was made. The writ Court does not have the expertise to correct such decisions by substituting its own decision for the decision of the authority. This has clearly been held in Tata Cellular v, Union ofIndia3 "

The principles deducible from the above are: 3 . (1994) 6 SCC 6S1 I. The modern trend points to judicial restraint in administrative action. ii. The Courts does not sit as a court of appeal but merely reviews the manner in which the decision was made iii. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. iv. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. v. The Government must have freedom of contract, In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides vi. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgetecl expenditure."

In Michigan Rubber (India) Ltd, v State of Karnataka4 the Hon'ble Supreme Court held that if State or its instrumentalities acted reasonably, fairly and in public interest in awarding contract, interference by Court would be very restrictive since no person could claim fundamental right to carry on business with the Government. Therefore, the Courts

(2012) 8 SCC 216

In Afcons Infrastructure ltd. v. Nagpur Metro Rai/ Corpn.Ltd.5, it was held that a mere disagreement with the decision- making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision. The owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It is possible that the owner or employer of a project may give any interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given.

Further the Hon'ble Supreme Court in Siippi Constructions Contractors v. Union oflndia6 held as follows: S . (2016) 16 SCC 818 6 2019(11) SCALE 592

The Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, ma/a fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that Courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today may public sector undertakings compete with the private industry., The contracts entered into between private parties are not subject to scrutiny under writ juri iction. No doubt, the bodies which are state within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ juri iction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the Courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the Courts must given "fair play in the joints" to the government and public sector undertakings in matters of contract. Court must also not interfere where such interference will cause unnecessary loss to the public exchequer."

In M/s, N. G Projects Limited vs. Mis Vinod Kumar Jain & c

Thus, the Hon'ble Supreme Court has consistently opined that judicial intervention in the decisions of the public authorities relating to the award of contracts ought to be limited and contracts entered into between private parties must not be scrutinized by Courts via their writ juri iction. However, given the involvement of public authorities, the courts do leave room for intervention in terms of how a decision, action or process was arrived at. In order for a challenge to the successful, the challenging party would be required to demonstrate that the said decision, action or process of the public authority was (i) arbitrary, irrational, mala fide, whimsical, or contrary to law; (ii) done to favour someone; (c) done with an ulterior purpose; (d) a misuse of statutory powers; or (e) adversely affecting public interest. Added to the above, if the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner,

Keeping in view the above principles laid down by the Hon'ble Supreme Court, the facts of the case are to be analysed.

Perusal of the material would indicate that, the 3rd respondent has issued a tender notification in CGM(0&M)/ APCPDCL/D/No.136/22, dated 22.06.2022 calling for sealed tenders for carrying out manning of sub-station Operation and Maintenance on works Contract basis 07 Nos of sub-stations groups as ONG-09 in Operation Circle, Ongole for a period of two years from 01.09.2022 to 31.08.2024. 20. In view of the contentions and couni:er contentions of learned counsel for the parties, as to which clause of the notification stipulates the eligibility criteria, whether it is clause No.3 or clause No.7 or both, it is relevant to extract clause Nos. 3 & 7 of the terms and conditions of the Tender Specification.

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 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. 33/11/KV Sub stations, who are having above qualifications. However the Labour license mentioned above can be submitted at the time of entering into agreement. Xx>0000000c

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 licence should have a validity of 6 months C) Supervision and Wireman permit holder i) Permit -copies ii) Permit — validity dates iii) Agreement with the contract — 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. Vii) validity of licence, Supervisor and wireman permit expires, the contract agreement issued by this office is deemed to be cancelled from that date

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 riot specify any eligibility criteria. As RC,9 `IN.ce.No.33999 of 2022 32 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.

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-fulfillment of the essential and mandatory conditions of the tender notification.

It is the next contention of the petitioner that the Sth respondent had only produced the experience certificate without any supporting documents such as EPF, ESI and salary certificates. The tender specification does not specify the requirement of production of the documents referred to above and also does not contain any stipulation for production of any experience certificate. In the absence of any such ~RC.9 V cP.No.33999 of 2022 33 stipulation, non production of the said documents would not lead to the inference which invalidates the experience certificate. Thus, the contentions raised by the learned counsel for the petitioner in this regard have no force at all.

In view of the above, since the petitioner failed to produce the documents required to meet the eligibility criteria as per clause-7 of the tender specification, which is essential, his tender was rightly rejected by the authorities. Thus, the action of the respondents cannot be termed as arbitrary, irrational, male fide or contrary to law. No valid and reasonable grounds are either raised or urged in this writ petition warranting interference of this Court. There are no merits in this writ petition and the same deserves dismissal.

Accordingly, the writ petition is dismissed. The interim orders dated 30.11.2022 are hereby vacated. There shall be no order as to costs. As sequel thereto, miscellaneous petition, if any, pending shall stand closed. //// K. TATA RAO DEPUTY REGISTRAR SECTION OFFICER To,