Parik And Company vs. The State Of Bihar
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Parik and Company, a Chartered Accountant firm, filed a writ petition challenging its non-empanelment for a tender issued by the Rural Development Department, Government of Bihar. The petitioner argued that the requirement of a 5-year-old branch office in Bihar was not applicable as of the initial tender submission date. The respondents contended that the Corrigendum did not alter the disqualifying condition. The Notice Inviting Tender (NIT) stipulated that firms with head offices outside Bihar must have a branch office in Bihar for over 5 years, supported by ICAI records, and registered under GST for at least 3 years. A subsequent Corrigendum removed the GST registration requirement but retained the 5-year branch office stipulation. The petitioner submitted proof of their firm's existence since 1961 and GST registration in Bihar from 2019, but failed to provide ICAI records demonstrating a continuous branch office presence in Bihar for over 5 years, instead submitting a certificate for only the past year. The disqualification order dated 06.06.2023 cited the lack of a 5-year Firm Constitution Certificate (FCC) for the branch office in Bihar.
Held
The Court held that the petitioner's firm was disqualified because it failed to meet the stipulated requirement of having a branch office in Bihar for more than 5 years, supported by ICAI records. The NIT, and subsequently the Corrigendum, clearly mandated this condition for firms whose head office was outside Bihar. The petitioner's submission of a Firm Constitution Certificate (FCC) evidencing their presence in Bihar for only the past one year was insufficient to satisfy this requirement. The Court found no reason to entertain the writ petition, as the disqualification was based on a clear failure to adhere to the tender conditions. The ratio decidendi is that tender conditions, when clear and unambiguous, must be strictly adhered to by the bidders, and failure to provide the stipulated documentary evidence for eligibility criteria will lead to disqualification. The Court dismissed the writ petition.
Key Issues
1. Whether the requirement of a branch office in Bihar for more than 5 years, as stipulated in the Notice Inviting Tender (NIT) and its Corrigendum, is a valid ground for disqualifying the petitioner's firm? (Question of law and fact, turning on Clause 6(b) of the NIT and the Corrigendum). Petitioner's Contention: The petitioner argued that the 5-year branch office requirement was not applicable to their case as of the initial tender submission date, and that the Corrigendum, which modified the conditions, did not apply retroactively or in a manner that would disqualify them. They relied on an interim order passed by another Division Bench which directed reconsideration based on this ground. Respondent's Contention: The respondent argued that the Corrigendum did not modify the condition which the petitioner failed to satisfy, and that this failure led to disqualification. They pointed out that the disqualification was based on the petitioner not providing proof of a branch office in Bihar for the last five years as per ICAI records.
Sections Cited
Section 6(b)
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Cause title — parties, addresses and appearances
ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 10 08-05-2024 The petitioner is aggrieved with his non- empanellment, as per a Notice Inviting Tender (for brevity ‘NIT’). The learned counsel for the petitioner also specifically draws our attention to the interim order passed on 08.11.2023 by another Division Bench. As per the interim order, the learned Judges noted that Annexure-1 invited applications from eligible Chartered Accountant Firms and that bids were to be submitted 2/5 with necessary enclosures to reach the Secretary, Rural Development Department, Government of Bihar before 3:00 p.m. on 24.04.2023, whereas Corrigendum-II is dated 27.04.2023. Corrigendum-II is not applicable to the case in hand for reason that as on 24.04.2023 there was no prescription of 5 year certificate, is the contention raised. This was the specific ground on which the Division Bench directed the concerned authority to reconsider the petitioner’s name for empanellement.
The learned counsel for the respondent, however, points out that the Corrigendum did not modify the condition which the petitioner failed to satisfy, which also led to disqualification.
The Notice Inviting Tender is produced as Annexure-1, which was in January 2023. The last date of submission of tenders was on 08.04.2023, which was extended to 08.05.2023. The Corrigendum was issued on 27.04.2023. The specific ground on which the petitioner’s firm has been disqualified is the fact that they have not proved that they had a Branch Office within the State of Bihar for the last 5 years.
We have looked at the NIT which indicates; in the pre-evaluation criteria of empanelment of Chartered Accountant Firms at clause (6)(b) relating to Head Office of CA Firms not 3/5 situated in Bihar. It is specified that if CA Firms applying under the tender has its Head Office out of the State of Bihar, but has a Branch Office in Bihar, such Branch Office must be situated continuously in Bihar since more than 5 years (as per ICAI Records) and such branch must be registered under GST laws in Bihar, for a minimum 3 years i.e. since last 3 financial years on the date of publishing of RFP and TOR and have bank accounts of the firm in Bihar. Such branch must also submit bank statements of 12 months of the bank account of the firm in Bihar, was the stipulation.
The Corrigendum changed the above stipulation with the following modifications, which is extracted hereinbelow:- If CA Firms has its Head Office out of the State of Bihar but have a Branch Office in Bihar since last 5 years continuously without break Such Branch Office muse be situated continuously in Bihar since more than 5 years (As per ICAI Records: Firm Constitution Certificates of each calendar years ) and have Bank Accounts of the firm in Bihar. Such branch must submit sufficient proof of Bank Accounts / Banker certificate or Bank Statements showing existence of Bank Accounts in Bihar since last 12 months as on 01.01.2023. 6. In fact, the modification was beneficial to the tenderers since it did not specify for registration under GST laws in Bihar for minimum 3 years. It only required that the CA 4/5 Firms having Head Office out of the State of Bihar should have a Branch Office in Bihar for the last 5 years continuously without break, as per ICAI Records and that it should submit sufficient proof of bank accounts in existence in Bihar, since the last 12 months as on 01.01.2023. The 5 year period was stipulated in the original NIT as also in the amended Corrigendum.
The petitioner had submitted his tender on the last date, i.e. 08.05.2023. As we noticed even the original NIT contained the stipulation that the branch office should have been working for the last 5 years, so the date of submission of tender is not relevant.
The learned counsel for the petitioner refers to Annexure-P2 to establish that the petitioner was working for 5 years within the State of Bihar. Annexure-P2 indicates the name of the firm and also its Head Office address which is at Guwahati. The year of establishment is said to be on 13.03.1961 and the same is continuing as a partnership firm. The constitution of the firm under GST IAN is said to be 01.01.2019 but specifically with respect to the Head Office. The address of the Branch Office at Patna is also shown in the order but, however, there is nothing to indicate that as per ICAI Records 5/5 the Branch Office was situated continuously in Bihar since more than 5 years.
The learned counsel for the respondent also points out from the counter affidavit that the disqualification is made on 06.06.2023. Annexure-D produced along with Supplementary Counter Affidavit dated 29.11.2023 indicates the specific reason for disqualification of the petitioner who figures at Serial No.
The reason stated is “Proposal has been not evaluated due to last five year FCC has been not attached.” The petitioner obviously had produced a Firm Constitution Certificate evidencing their presence in Bihar for only the past one year. We find absolutely no reason to entertain the writ petition and dismiss the same.
sharun/- (K. Vinod Chandran, CJ) ( Harish Kumar, J) U
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.