M/S Siddhiviyanak Construction Company Through Proprietor vs. The State Of Mahrashtra And Others
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The petitioners, M/s Siddhivinayak Construction Company, challenged their disqualification from a composite tender process for executing K.T. Weirs. Seven tenderers participated, and six, including the petitioner, were disqualified based on technical bids. Respondent No. 5 was declared technically qualified. The petitioner was disqualified for not possessing Registration Certificates under the Maharashtra State Professional Tax Rules 1975 and the Employees Provident Fund Organisation Act, 1952, with updated clearance. The petitioner argued these were ancillary, not mandatory, conditions and that the respondents could have sought clarification. The petitioner also challenged the qualification of Respondent No. 5, alleging it lacked a valid registration certificate with the Public Works Department on the date of tender submission. The respondents contended the registration certificates were mandatory.
Held
The Court held that the rejection of the petitioner's tender was justified because the petitioner admittedly did not submit the PTR and PTE registration certificates, which are essential conditions as per Clause 14(d) of the tender document. The phraseology of Clause 14(d) indicates these are imperative conditions, with explicit consequences for non-compliance, leading to outright rejection. Regarding Respondent No. 5, the Court found that its bid of 4.90% above the estimated cost, as the sole qualified bidder, did not permit negotiation under Clause 12.3 of the Government Resolution dated 30.11.2018. This clause mandated a second tender process in such circumstances, not acceptance of a bid exceeding the estimated cost. The Court also noted that on the date of the work order issuance, Respondent No. 5 did not possess a valid PWD registration certificate, as the renewal application did not automatically grant renewed registration. The Court found the respondents' action in entering negotiations with Respondent No. 5 and accepting its tender to be arbitrary and discriminatory, violating fair play. The proceedings pursuant to the negotiations were set aside, and the respondents were directed to proceed with a fresh/second tender. The Court expressly left undecided the specific validity period of Respondent No. 5's PWD registration certificate on the date of tender submission, focusing instead on the procedural impropriety of negotiations and the mandate for a second tender.
Key Issues
1. Whether the disqualification of the petitioner on the ground of not submitting the PTR and PTE registration certificates and EPF clearance/no due certificate was justified, considering the petitioner's contention that these were ancillary and not mandatory conditions, and that clarification could have been sought as per tender provisions (turning on Clause 14(d) of the tender document)? 2. Whether Respondent No. 5 was correctly held technically qualified, given the petitioner's assertion that Respondent No. 5 did not possess a valid registration certificate with the Public Works Department on the relevant date, thus applying a different yardstick to the petitioner and Respondent No. 5? 3. Whether the respondents were justified in entering into negotiations with Respondent No. 5, the sole qualified bidder, when its bid was 4.90% above the estimated cost, or whether a second tender process was mandated under Clause 12.3 of the Government Resolution dated 30.11.2018? Petitioner's arguments: The registration certificates were ancillary, not mandatory. The respondents could have sought clarification. Respondent No. 5 was not possessing a valid PWD registration certificate. Different yardsticks were applied. Clause 12.3 of the GR dated 30.11.2018 mandated a second tender as Respondent No. 5's bid was above the estimated cost. Respondents' arguments: Submission of registration certificates was mandatory as per Clause 14(d) of the tender document. Negotiation was permissible under Clause 21 of the GR dated 30.11.2018, and Respondent No. 5 reduced its rate to the estimated cost after negotiation. Respondent No. 5 possessed a valid registration certificate with the PWD, which was extended and an application for renewal was filed.
Sections Cited
Section 14(d)
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per S.V. Gangapurwala)
Rule. Rule made returnable forthwith. With the consent of the parties, matter is taken up for final disposal at admission stage.
The respondents issued composite tender calling upon the prospective contractors for execution of different K.T. Weirs, Khadakwadi, Waranwadi, Taluka Parner, District Ahmednagar.
Seven tenderers participated in the process. Upon opening the technical bid, six including petitioner were disqualified. Respondent no.5 was held to be qualified in the technical bid. The petitioner assails its disqualification and also the act of the respondents – authorities declaring respondent no.5 as technically qualified.
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Under order dated 19.9.2019, we had directed that if the work order is not issued, the same shall not be issued till next date.
It is submitted that the work order is issued to respondent no.5 on 9.9.2019. According to the learned Counsel for the petitioner the work order alleged to have been issued to respondent no.5 is not yet uploaded on website. The learned A.G.P., on instructions of the Officer present in the Court accepts that the issuance of work order to respondent no.5 is not yet uploaded on the website.
The petitioner is disqualified on two grounds, (i) not possessing the certificate of Registration under Clause (5), Sub-clause (1) of Maharashtra State Professional Tax Rules 1975 and (ii) not submitting copy of letter of Employees Provident Fund Organisation allotting code number under EPF and Miscellaneous Provision Act 1952 with updated clearance/No due certificate. The petitioner is assailing the qualification of respondent no.5 on the ground that respondent no.5 does not possess the registration certificate of the contractor with Public Works Department, Government of Maharashtra.
Mr Gawali, learned Advocate for the petitioner submits that PTE and PTR Registration Certificate is possessed by the petitioner, however, could not upload the same along with the tender document. He further submits that the petitioner has only four employees, as such does not require registration under EPF. The learned Counsel further submits that the conditions of submitting PTE and PTR Registration Certificate, EPF are ancillary conditions and not mandatory. The respondents could have sought clarification from the petitioner as is provided under the tender document under the head “Opening of online tenders Technical bid (Envelope no.1)”. The learned Counsel submits that the petitioner is 3 wp.11481.19 disqualified on the ground that the petitioner has not submitted the aforesaid certificate. However, respondent no.5 though on the relevant date was not possessing the registration certificate with Public Works Department is held to be eligible. Different yardstick is applied to the petitioner and respondent no.
Learned Counsel also relies on Clause 12.3 of Government Resolution dated 30.11.2018 to contend that if single person is technically qualified and if his bid is more than the estimated cost, then the second tender is to be issued. The bid of respondent no.5 was 4.90% above the estimated cost. The respondents had no option but to go for fresh tender process.
The learned A.G.P. submits that the submission of registration certificate is mandatory. The clause in the tender is clear. He relies on Clause 14 (d) of the tender document. The learned A.G.P. further submits that after negotiations, respondent no.5 reduced his rate to that of the estimated cost and as such was allotted the tender. Negotiation is permissible under Clause 21 of Government Resolution dated 30.11.2018. 9. Mr Sapkal, learned Counsel for respondent no.5 submits that the respondent no.5 possessed the registration certificate of the Contractor with Public Works Department. The certificate was valid up to 25.2.2019 As per the Government Resolution dated 20.4.1998, the same was extended up to 24.8.1999 and application for renewal of registration is given on 2.6.2019. On the date of submission of tender, the respondent no.5 possessed the valid registration certificate. Learned Counsel also relies on Clause 21 of the Government Resolution dated 30.11.2018 to contend that negotiation is permissible and after negotiation, the respondent no.5 has reduced the rates to that of the estimated cost and 4 wp.11481.19 the respondent no.5 is entitled for allotment of tender. No illegality has been committed.
We have considered the submissions canvassed by the learned Counsel for the petitioner.
It is matter of record that pursuant to the tender notice, seven bids were received. Upon opening the technical bids, six bidders were held disqualified and only respondent no.5 was held to be qualified. Admittedly, the petitioner did not produce the PTR and PTE registration certificates with clearance/no dues certificate. Clause 14 (d) of the tender document requires the tenderer to submit the Contractor's Valid Registration Certificate, Online payment receipt of tender fee and EMD, Valid GST Registration Certificate, PTR and PTE Registration Certificates with Clearance/No due certificate, EPF Registration Certificate with Clearance/No due certificate, self attested scanned copies of all original documents will have to be submitted with tender form, otherwise tender form will be rejected outright. The phraseology of the said clause leaves no room for doubt that the condition of submitting Registration Certificate as detailed in Clause 14 (d) of the tender document is essential condition. The consequences are provided in the said Clause and when the consequences are provided, the condition is imperative and essential.
In view of the above, admittedly, the petitioner has not submitted PTR and PTE certificates, the rejection of the tender of the petitioner cannot be faulted with.
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It would also appear that after opening the technical bid, only one qualified bidder (respondent no.5) remained in the process. Clause 12 of Government Resolution dated 30.11.2018, issued by respondent no.1 laying down the guidelines for opening of the e-tenders and acceptance of the tenders is relevant. Clause 12.3 is relevant for our consideration. It is in regional language, reads thus : 12.3 rhu fdaok rhuis{kk tkLr fufonk izkIr gksmu ,dp fufonk izk= Bj.ks% izFke ekx.khP;k osGsl ik= fufonk vankti=dh; njkis{kk deh fdaok vankti=dh; njkus vlsy rj rh fufonk fLod`r djkoh vU;Fkk f}rh; ekx.kh djkoh- f}rh; ekx.khuarj iqu'p ,dp ik= fufonk izkIr >kyh rj rh m?kM.;kr ;koh o iq<hy dk;Zokgh djkoh-
Clause 12.3 suggests that at the time of first tender, if the rate quoted by the eligible bidder is at par with the estimated rate or below estimated rate, then same can be accepted otherwise second tender should be issued. In case, even after issuance of second tender, again only one qualified tender is received, then same be opened and further action shall be taken.
In the present case, the rate quoted by respondent no.5, the sole bidder held to be qualified after opening the technical bid was 4.90% above the estimated cost. Clause 12.3 did not give any discretion to authority to accept the said tender. On the contrary, it requires the authority to go for second tender process. Clause 21 of Government Resolution dated 30.11.2018 would not inure to the benefit of the respondents. The said clause deals with negotiations. It says that the one who gives the lowest price, with him, the competent authority can
6 wp.11481.19 enter into negotiation. As only one tender was received, clause 12.3 of Government Resolution dated 30.11.2018 would come into operation. Clause 12.3 does not permit the authority to accept the tender, if the same is above the estimated cost and the only alternative for the respondent-authority is to go for second tender.
The very object and purpose of tender is to invite large number of bids evoking competition so as to receive competitive prices. If the contention of the respondents in interpreting clause 12.3 and 21 of Government Resolution dated 30.11.2018 is accepted, the very condition of competition and essential features of the tender would be rendered superfluous.
On the date of issuance of the work order, respondent no.5 also did not possess the registration certificate. The letter placed on record depicts that the Respondent's registration with the Public Works Department was extended up to 24.8.2019. Reference is made to the notification dated 20.4.1998. It is contended, on 2.6.2019 application for renewal is made. However, the certificate is not yet issued to respondent no.
No deeming provision is pointed out that once the application for renewal is filed, the same has to be construed as renewal of license. The respondent no.5 was also not eligible to compete. His tender also could not have been accepted.
The petitioner is disqualified on the ground that petitioner did not attach PTR and PTE registration certificates along with the tender. Respondent no.5 was also not possessing valid P.W.D. Registration Certificate on the date of issuance of work order. Still, respondent no.5 is held qualified. Such an act is arbitrary and discriminatory. Arbitrariness
7 wp.11481.19 has no room in the society governed by Rule of Law. Arbitrariness is antithesis to the Rule of Law, fair play, equity, justice and good conscience. An arbitrary action deserves to be set aside. The decision of the government body in contractual matter must demonstrate fair play in action. The power of judicial review will apply to the exercise of contractual powers by the government body in order to prevent arbitrariness or favourtism. In administrative decisions, the powers of judicial review are to be sparingly exercised and there are inherent limitations in exercise of the powers of judicial review. At the same time, the Court would not be mute spectator to the manifest illegality. In such matters, this Court shall step in and set aside the arbitrary decisions of the parties. The power under Article 226 of the Constitution shall have to be invoked for setting aside the arbitrary and illegal action smacking favourtism.
In view of the aforesaid circumstances, we hold that the respondents could not have entered into the negotiations with respondent no.
As per Clause 12.3 of the Government Resolution dated 30.11.2018, the respondents-authorities could have only proceeded for the second tender.
In light of above, we hold that the proceedings pursuant to negotiations with respondent no.5 are erroneous and are set aside. The respondents-authorities may proceed with the fresh/second tender.
Writ Petition stands partly allowed. Rule is partly made absolute accordingly. No costs.
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At this stage, Mr Sapkal, learned Counsel for respondent no.5 requests for the stay of this order.
Considering the discussion made, we do not feel that the request of Mr Sapkal is required to be accepted. The request is rejected.
( ANIL S. KILOR, J.) ( S.V. GANGAPURWALA, J.) vvr
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.