M/S J. K. Construction And Company Through Its Partner Khan Jafarkhan Usmankhan vs. The State Of Maharashtra And Others
Original PDF →Facts
The petitioner, M/s J. K. Construction and Co., challenged the allotment of tenders for two construction projects by the Municipal Council, Gangakhed (respondent No. 4) to respondent No. 5. The petitioner was the second lowest bidder, while respondent No. 5 was the lowest. The petitioner alleged that respondent No. 5 failed to submit mandatory documents like the ISO certificate and GST registration certificate, and lacked a required RMC plant. The petitioner contended that the tender was awarded to respondent No. 5 due to political pressure and malafides, despite irregularities. An earlier writ petition filed by respondent No. 5 led to a direction for reconsideration, after which the work order was again issued to respondent No. 5.
Held
The Court held that the petitioner's primary contention regarding the non-submission of the ISO certificate and GST registration certificate was not substantial enough to warrant interference. It was noted that the GST registration certificate was submitted with the bid document. Regarding the ISO certificate, an opportunity was given to respondent No. 5 to submit it, which they did on the same day the deficiency was pointed out, relying on a Government Resolution dated 27.09.2018 that allows for rectification of technical defects. The Court found that the ISO certificate was already available with respondent No. 5. Documents pertaining to the RMC plant were also submitted. Therefore, the Court concluded there was no substantial defect in respondent No. 5's tender. On the procedural issue, the Court noted that while the petitioner relied on Section 93(7) and (8) of the Act of 1965 requiring Standing Committee approval, respondent No. 5 relied on Section 93(2)(c), which allows a directly elected President and Chief Officer to approve contracts within 15 days. The Court found that the tender was accepted with the concurrence of the President and Chief Officer, thus resorting to Section 93(2)(c). The Court reiterated that it would not sit in appeal over the decision of the bid evaluation committee, which comprises experts, and would focus on the decision-making process rather than the decision itself. Since the public exchequer was not burdened, and respondent No. 5 was the lowest bidder, the Court was not inclined to interfere with the allotment.
Key Issues
1. Whether the tender of respondent No. 5 ought to have been rejected for non-submission of mandatory documents, specifically the ISO certificate and GST registration certificate, as required by the tender checklist, thereby violating the principle that essential eligibility conditions must be scrupulously complied with (relying on M/s Promuk Hoffman International Ltd. vs. The State of Goa and others, A 2 Z Maintenance and Engineering vs. The Maharashtra State Electricity Distribution Co. Ltd., and Bakshi Security and Personnel vs. Devkishan Computers Pvt. Ltd.)? 2. Whether the allotment of the tender to respondent No. 5 was in contravention of Section 93(7) and (8) of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, and associated Government Resolutions, specifically regarding the mandatory approval of the Standing Committee? Petitioner's Arguments: The petitioner argued that the non-submission of the ISO and GST certificates by respondent No. 5 was a fatal flaw, necessitating rejection of the bid. They also contended that respondent No. 5 lacked the required RMC plant. Furthermore, the petitioner asserted that the procedure under Section 93(7) and (8) of the Act of 1965, requiring Standing Committee approval, was not followed, and the decision was influenced by political pressure and malafides. They relied on various High Court and Supreme Court judgments emphasizing strict adherence to tender conditions. Respondents' Arguments: The Municipal Council (respondent No. 4) argued that after the previous court order, all documents were re-verified, and no additional documents were needed. They cited Rule 466(4) of the Municipal Account Code, 1965, suggesting that once a technical bid qualifies and the financial bid is opened, disqualification on technical grounds is not permissible. Respondent No. 5 argued that the petitioner lacked locus standi, was estopped from raising objections, and that the GST certificate was submitted. They also claimed the ISO certificate was submitted on the same day it was pointed out as deficient, relying on a Government Resolution allowing rectification of technical defects. They further argued that approval by the directly elected President and Chief Officer was sufficient under Section 93(2)(c) of the Act of 1965, negating the need for Standing Committee approval.
Sections Cited
Section 93(7), Section 93(8), Section 93(2)(c), Rule 466(4)
AI-generated summary — verify with the full judgment below
1 wp 14926.21 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 14926 OF 2021 M/s J. K. Construction and Co. Through its Partners Khan Jafarkhan Usmankhan .. Petitioner Versus The State of Maharashtra and others .. Respondents Shri Pralhad D. Bachate, Advocate for the Petitioner. Shri A. R. Kale, A.G.P. for Respondent Nos. 1 to 3. Shri Subhash V. Mundhe, Advocate for the Respondent No.
Shri Dhiraj R. Jethliya, Advocate for the Respondent No.
AND WRIT PETITION NO. 14927 OF 2021 M/s J. K. Construction and Co. Through its Partners Khan Jafarkhan Usmankhan .. Petitioner Versus The State of Maharashtra and others .. Respondents Shri Pralhad D. Bachate, Advocate for the Petitioner. Shri A. R. Kale, A.G.P. for Respondent Nos. 1 to 3. Shri Subhash V. Mundhe, Advocate for the Respondent No.
Shri Dhiraj R. Jethliya, Advocate for the Respondent No.
CORAM : S. V. GANGAPURWALA AND S. G. DIGE, JJ. CLOSED FOR ORDERS ON : 26.02.2022 ORDER PRONOUNCED ON : 11.03.2022. 2 wp 14926.21 FINAL ORDER (Per S. V. Gangapurwala, J.) :-
. Pursuant to the tender floated by the Municipal Council, Gangakhed/respondent No. 4 for various works, the petitioner and others filled in the tender. The respondent No. 5 in both the writ petitions was found to be lowest bidder and the petitioner was found to be second lowest bidder. The petitioner assails the allotment of tender and the work to the respondent No. 5 i. e. allotment of work for construction of Dr. Babasaheb Ambedkar Road to Dilkash Chowk in Writ Petition No. 14927 of 2021 and construction of Cement road, CC drain, footpath and B. T. road in various wards under Municipal Council in Writ Petition No. 14926 of 2021. Same is assailed in present writ petitions.
The grounds of challenge to the allotment of work to the respondent No. 5 is similar in both the writ petitions, as such are decided together.
According to Mr. Bachate, the learned advocate for the petitioner, the check list appended to the tender very clearly details the documents required to be submitted with the tender, otherwise the tender will be rejected. As per the said check list submission of ISO certificate and GST registration certificate is mandatory. The respondent No. 5 did not submit the GST registration certificate and the ISO certificate along with the tender. On this ground itself the tender ought to have been rejected.
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The learned counsel for petitioner further submits that, the tenderer is required to possess RMC plant. The respondent No. 5 does not possess the RMC plant as required under the terms of the tender, inspite of the same technical bid of the respondent No. 5 is accepted. The petitioner raised an objection to the same. It was only under political pressure and the muscle power exerted by the respondent No. 5, the tender of the respondent No. 5 was accepted contrary to the tender conditions. The petitioner complies with each and every condition of the tender. After appreciating the illegalities and irregularities in the tender of the respondent No. 5, the respondent No. 4 issued a corrigendum and cancelled work order issued in favour of the respondent No.
The respondent No. 5 filed Writ Petition No. 12709 of 2021 before this Court. The petitioner also filed application for intervention. This Court partly allowed the writ petition and directed the respondent No. 4 to issue notice to the respondent No. 5 and to afford an opportunity of hearing. Thereafter, again the work order is restored to the respondent No. 5 only with a view to favour the respondent No.
The learned advocate for the petitioner relies upon the judgment of the Division Bench of this court in a case of M/s Promuk Hoffman further submits that, the procedure as contemplated U/Sec 93(7) and (8) of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 (for the sake of brevity hereinafter referred as to the “Act of 1965”) is also not adhered too. The learned counsel submits that the impugned action on the part of the respondent Nos. 4 and 6 is contrary to the guidelines enumerated by the State Government under the Government Resolutions dated 31.12.2015, 27.09.2018 and 07.03.2019. 6. The learned advocate further submits that, no meeting for evaulation of tenders is held. In haste and under political pressure, the respondent No. 5 is favoured. After the order was passed by this Court on 20th December, 2021, it was expected
5 wp 14926.21 from the respondent No. 6 to issue notice and call explanation from the respondent No. 5 with regard to the deficiencies in the documents. However, without calling the explanation prepared minutes of meeting on 27.12.2021. The petitioner was also not called. The tenders submitted by other bidders consists of more than 500 pages. In view of the judgment of this Court in earlier writ petition dated 20th December, 2021, it was expected from the respondent No. 6 to verify the documents and then to call the explanation with regard to the deficiencies. The minutes of meeting dated 27.12.2021 prepared by the respondent No. 6 by giving total go bye to the tender conditions as well as the findings recorded by this Court. On the same day i. e. 27.12.2021, the respondent No. 6 directed the respondent No. 5 to deposit the EMD amount within three days. The action of the respondent No. 6 smacks of malafides. The respondent No. 6 did not appreciate the deficiencies in the documents of the respondent No.
Admittedly the respondent No. 5 did not submit ISO and GST registration certificates, which is mandatory requirement. The respondent No. 5 does not possess list of machinery as enumerated in condition No. 9 of the tender document. Illegally the work is allotted to the respondent No. 5 under the political pressure of sitting Member of Parliament from ruling party. The standing committee has not approved the work order. The work order deserves to be cancelled.
Mr. Mundhe, the learned advocate for the Municipal Council/respondent No. 4 submits that, after this Court passed the judgment in Writ Petition No. 12709 of 2021, the tender
6 wp 14926.21 committee re-verified all the documents as per the check list and the terms given in the tender notice on 27.12.2021. The tender committee was satisfied with the documents provided by all the tenderers and came to the conclusion that, there was no need to call additional documents, hence no explanation was sought and as such notice was issued to resubmit EMD cost Rs. 1,64,200/-. In the Municipal Account Code, 2013 Rule No. 466(4) Annexure - 3, Point No. 33, it is stated that, where two envelope bid system is followed, the envelope containing financial bid can be opened in respect those bids found to be qualifying in regard to technical bid and once the technical bid is declared to be eligible and financial bid envelope is opened, such bid cannot be disqualified for failure to qualify as per the technical biding required norms. All the decision regarding the tender have been taken unanimously by the tender committee including Chief Officer, City Engineer, Engineer, Junior Engineer, Internal Auditor and Accountant etc. It is incorrect to say that, decision is taken under political pressure or with malafide intention. As per the Government Resolution dated 27.09.2018, the documents were called for. Opportunity was given to submit documents i. e. G.S.T. registration certificate. The respondent No. 5 is lowest bidder. In fact, the political interference is on behalf of the petitioner. The Minister Mr. Dhananjay Mundhe requested the Commissioner and Director of Municipal Administration to declare the present petitioner as lowest bidder. It is further submitted that, the respondent No. 5 is having RMC and transit mixture in running status. The provisions of law are validly followed and no illegality is committed.
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Mr. Jethliya, the learned advocate for the respondent No. 5 submits that, the petitioner has no locus and is not a aggrieved party. The petitioner never raised objection at the time of finalization of tender during the tender process and, therefore, is now estopped from raising any objection with regard to tender conditions. The petitioner was not the lowest bidder. The respondent No. 5 was the L-1. It is only after the work order was issued in favour of the respondent No. 5 frivolous complaints were made by local Ex-M.L.A. and the petitioner was L-2. The GST registration certificate was also submitted along with the bid document. The tendering authority thought it fit to give an opportunity to submit the ISO certificate, which was already available with the respondent and the same was submitted on the same day i. e. 26.10.2021 and after considering the same technical bids were finalized. All the necessary documents with respect to RMC plant were submitted with the tender. The directly elected President and the Chief Officer have the powers to sanction the tender and it is not required to be referred to the standing committee.
We have considered the submissions canvassed by the learned counsel for respective parties.
The Courts are normally slow in the matters challenging the award of contract by the public authorities. The Courts would interfere only if the decision is actuated by the malafides and/or arbitrary and discriminatory and/or same is against the 8 wp 14926.21 public interest.
In the present case, admittedly, the respondent No. 5 was lowest bidder. The petitioner was the second lowest. In awarding contract to the respondent No. 5, the public exchequer is not burdened. On the contrary the tender appears to have been allotted to the most competitive tenderer. The work order was issued to the respondent No. 5, however, because of the political interference the contract awarded to the respondent No. 5 was cancelled. The respondent No. 5 filed writ petition before this Court. This Court set aside the decision of the authority cancelling the work order and directed the respondents to reconsider the the documents placed on record and to re-evaluate the tender. Upon reevaluation again the same is awarded to the respondent No. 5. 12. The prima dona contention appears to be that the tender of the respondent No. 5 was not supported by the documents, such as ISO certificate and GST registration certificate. It appears that, GST registration certificate was submitted along with the bid document. An opportunity was given to submit the ISO certificate relying upon the G. R. dated 27.09.2018. The said G. R. specifies that if there is some technical defect, then opportunity to be given to rectify the defect. In the present case, on the day the authorities pointed out the deficiency of ISO certificate the respondent No. 5 submitted the ISO certificate. From the said certificate, it appears that, the said certificate was already available with the respondent No.
The RMC plant
9 wp 14926.21 documents were also submitted. In view of that, it cannot be said that, there was substantial defect in the tender of the respondent No. 5. 13. The petitioner has much harped upon non adherence to the procedure as contemplated U/Sec. 93(7) and (8) of the Act of 1965. According to the learned counsel for the petitioner, approval of the Standing Committee is mandatory as per Section 93(7) and (8) of the Act of 1965. In the present case, it appears that, the approval of the Standing Committee is not forthcoming. The respondent No. 5 has placed reliance upon Section 93(2)(c) of the Act of 1965, wherein a directly elected President and Chief Officer shall approve such contract within a period of 15 days from its receipt. The President of the respondent No. 4/Municipal Council is directly elected President. According to the learned counsel for the Municipal Council and the learned counsel for the respondent No. 5, the tender of the respondent No. 5 is accepted with the concurrence of the President and the Chief Officer of the Municipal Council. Reliance is placed on the communication dated 27.10.2021. 14. In view of that, the respondents have resorted to Section 92(2)(c) of the Act of 1965. 15. The tender of the respondent No. 5 is lowest. Twice the documents of the respondent No. 5 have been evaluated. Once at the time of issuing initial work order and subsequently again as per the directions of this Court in the earlier writ petition. This 10 wp 14926.21 Court would not sit in appeal over the decision taken by the bid evaluation committee. It would be more concerned with the adherence to the decision making process, than the decision itself. The bid committee consists of experts in the said field and this Court would not substitute its opinion for the opinion of experts.
Moreover, the public exchequer is not affected. The public exchequer is saved in as much as, admittedly, the respondent No. 5 is lowest bidder and the petitioner is second lowest. The work has also commenced and progressed to large extent.
In view of the aforesaid, we are not inclined to interfere with the allotment of work to the respondent No. 5. 18. In the light of the above, the writ petitions are disposed of. No costs. [S. G. DIGE, J.] [S. V. GANGAPURWALA, J.] bsb/March 22
Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.