Dismissed

Sri Vinayaka Agencies v. The State of Andhra Pradesh

Andhra Pradesh HC15 Sept 2022WP/22494/2021

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging the disqualification of a bidder in a public tender for nutrition kits due to missing documents. The court held that commercial tender evaluations fall within the employer's discretion and found no illegality in the rejection or the subsequent award to another bidder.

What did the court decide?

Writ petition dismissed, interim orders vacated, and pending miscellaneous applications closed.

Sri Vinayaka Agencies Vs The State of… — Public Procurement and Tenders | Andhra Pradesh HC (2022)

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HON’BLE SRI JUSTICE M. GANGA RAO

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WRIT PETITION No.22494 of 2021

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ORDER:

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Heard Sri V. Venugopala Rao, learned Senior Counsel appearing for Sri E. Sambasiva Pratap, learned counsel for the petitioner on record; learned Assistant Government Pleader for Women Development & Child Welfare appearing for the official respondents and Sri R.N. Hemendranath Reddy, learned Senior Counsel appearing for Sri Ch. Madhava Raman, learned counsel on record appearing for the 5^th respondent.

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The case of the petitioner, in brief, is this: Petitioner is in the business of supplying food-grains, ghee, edible oils, pooja items etc., to Hindu Religious Institutions. The 4^th respondent - Project Director, District Women & Child Development Agency, with the permission of the 3^rd respondent – Joint Collector-I & Chairman, District Purchase Committee, Chittoor, issued e-procurement tender notification vide NIT No.554/A1/2021 dated 14.09.2021 for supply of YSR SP nutrition kits to Anganwadi centres under YSR Sampurna Poshana in Chittoor District, for a period of one year from the date of award of the contract. In response to the same, the petitioner submitted its tender as per the tender schedule, on 25.09.2021. As

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per the bid conditions, petitioner submitted demand draft for Rs.35,000/- being non refundable as document fee and banker cheque for Rs.18,22,000/- as EMD. He also produced all the documents such as annual returns, experience certificates, satisfactory completion and execution in supply of similar food commodities etc. On 29.09.2021, the petitioner along with all other participants attended the office of the 3^rd respondent where pre-qualification bid as well as technical bids were opened. They verified all the documents submitted and indicated that by evening the information will be displayed online. On 29.09.2021 at 09:34 PM it is shown that the petitioner was disqualified, without mentioning any reasons therein, for all the items though technically it is a single tender. The petitioner, after downloading the same on 29.09.2021 filed this writ petition on 01.10.2021 stating that disqualifying the petitioner’s bid at technical evaluation, without giving reasons is illegal and arbitrary.

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This Court, on 01.10.2021, while ordering notice before admission, inter alia observing that no reasons have been assigned for rejecting the bid of the petitioner, directed the respondents to consider the financial bid of the petitioner also in the award of the tender, subject to further orders of this Court.

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The 4^th respondent filed vacate stay petition along with

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counter mainly stating that the 4^th respondent with the permission of the 3^rd respondent issued notice inviting tender on 14.09.2021 on e- procurement portal for supply of YSR SP nutrition kits duly fixing the time schedule as under:

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Bid document download start date and time :16.09.2021 : 11:00 AM

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Bid document download end date and time : 27.09.2021 : 10:30 AM

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3.Bid document submission closing date and time: 27.09.2021:11:00 AM

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Pre qualification opening date and time: 27.09.2021 11:10 AM

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Technical bid opening date and time : 27.09.2021 11:20 AM

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Price bid opening date and time: 27.09.2021 : 11:30 AM

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Reverse auction conducted on : 28.09.2021 : 03:30 PM

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Nine bidders participated out of which 6 bidders were qualified

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and 3 bidders including the petitioner were disqualified at the stage of prequalification bid evaluation. Petitioner submitted tender bid on 25.09.2021 along with demand draft for Rs.35,000/- which is nonrefundable as tender fee and Rs.18,22,000/- as EMD but he has not submitted satisfactory certificate for the year 2020-21 from the competent authority i.e., the authority who gave the work order for that period. The petitioner has not submitted certain documents as

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per check list i.e., though the details of the organization was given in the name of the Vinayaka Firm, the same was in the seal and signed by Sumathi Traders; Five years experience letters were submitted but work orders/proceedings in respect of the said works and related supporting documents were not submitted; the petitioner has not submitted the certificate of satisfactory completion of the work executed as a prime contractor for supply of similar food commodities as above with not less than 50% ECV certificate i.e., Rs.9.11 Crore in a single work order in last three years; the bidder should have packing machinery on their own firm’s name. The petitioner has submitted the photos only without the attestation. The packing machinery ownership documents were not produced; the document showing that the bidder had minimum 2500 food items delivery points monthly in last year was not submitted. The above laches on the part of the petitioner are the grounds for rejection of its bid. As the petitioner was disqualified at the prequalification bid evaluation stage, the petitioner’s price bid was not opened and reverse tender process was also completed. In the reverse tender, six bidders participated. One Sri Sai & Company, Tirupathi was declared as L1 tenderer as it quoted the lowest rate per kit @ Rs.234/- whereas the petitioner states that it has quoted Rs.235.15 per kit. As the petitioner was disqualified at the

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prequalification bid stage, it was not allowed to participate in the

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reverse tendering. The writ petition is liable to be dismissed.

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The petitioner filed reply affidavit denying the allegations in the counter. The 4^th respondent filed additional counter. To avoid repetition, the averments of the reply affidavit and the additional counter are dealt with in the submissions made by their respective learned counsel.

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The impleaded 5^th respondent filed counter along with vacate petition mainly contending that it is successful bidder having become L1 tenderer. Pursuant to the same, by proceedings dated 07.12.2021, the 5^th respondent was issued work order. However, in view of the subsequent orders of this Court, whereby this Court stayed all further proceedings of the award of e-procurement tender to any party, the work order given to this respondent was withdrawn by the 2^nd respondent vide proceedings dated 07.01.2022. The petitioner suppressed material facts and approached this Court and obtained interim order. The writ petition is liable to be dismissed.

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In view of the rival contentions, the point that would arise for consideration of this Court is : Whether the disqualification of the petitioner at the prequalification bid evaluation stage is illegal?

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And, if so, whether consequential awarding of the tender to the 5^th respondent is illegal?

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Sri V. Venugopala Rao, learned senior counsel, while reiterating the averments of the writ affidavit and the reply affidavit, would mainly contend that the tender of the petitioner was rejected on the grounds that the experience certificates produced by the petitioner were suspicious and not supported by the purchase order and that the petitioner had not fulfilled the requirement of having executed a similar contract with not less than 50% ECV i.e., Rs.9.11 Crores in single work order for the last three years and that the details of the firm was certified with the stamp of a sister agency. Insofar as the suspicion that the experience certificate is concerned, he has drawn the attention of this Court to Sl.Nos.12 & 13 of the check list and submitted that the said suspicion cannot be sustained as such a suspicion cannot be the basis for rejection of the experience certificates. The said clauses read as under:

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“12. The bidder shall have cumulative turnover of minimum 18.22 Crores during the last three financial years in Ragi Flour, Jaggery, Groundnut, Chikki, Dry dates, jower flour and rice flaks/any similar food types to be supplied in the bidder’s name with supporting certificates (together will also be accepted). A) annual turnover for the year 2018-19; B) Annual turnover for the year 2019-20; C) Annual turnover for the year 2020-21.

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The bidder should have 5 years experience as a contractor in similar food commodities to qualify for the award of the

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contract. (Specified financial years, i.e., they should be immediately preceding the financial year in which tenders are invited).”

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The experience certificates produced by the other tenderers, who have not produced work orders or purchase orders in support of the experience certificates were accepted. With regard to the other ground that the petitioner has not submitted certificate showing that it had executed similar contracts with not less than 50% ECV in a single work order has no significance as other tenderers also have not submitted the same but they were treated as qualified. The 5^th respondent, who was awarded the tender also failed to comply with this requirement and the tender was confirmed based on two different work orders. This Court after taking into consideration of the said aspect, after perusing the record submitted by the respondents had granted the interim order. As regards the ground that the details of the firm was certified with the stamp of a sister agency, initially the details of the firm were attested by using the name of Ms. Sumathi Enterprises which is a sister company of the petitioner and the same was rectified even before final submission of documents. In view of the above disqualifcation of the petitioner at the prequalification bid/technical bid and award of the tender in favour of the 5^th respondent is illegal and arbitrary. Inspite of the initial interim orders dated 01.10.2021, passed by this Court, the petitioner was not

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permitted to participate in the reverse tendering process and the initial offer of Rs.235.15 per kit given by the petitioner was treated as his final offer in the reverse tendering process. In fact, the petitioner was willing to offer a price of Rs.225.15 per kit against the present lowest offer of Rs.234/- per kit in which event the State would have saved Rs.72.00 lakhs.

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On the other hand, learned Government Pleader contended that though the petitioner alleged that the tenders of others who have not produced work orders or purchase orders is accepted, he failed to point out which of the qualified bidder failed to produce such certificates. The certificates submitted by the tenderers are on record. Insofar as the other ground that certain other tenderers, including the 5^th respondent, who was awarded the tender also has not submitted certificate that they supplied similar food commodities as above with not less than 50% ECV i.e., 9.11 Crores in a single work, the requisite certificates of the qualified tenderers in token of their having executed similar contracts with not less 50% ECV are on record. The 5^th respondent, had placed on record the documents submitted by it along with the tender showing that the 5^th respondent made a turnover of gross amount of Rs.9,92,72,325/- under a single work order under 13 proceedings from July, 2020 till July, 2021 vide Ref.No.319/A.1/2020

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for supply of eggs, which is over and above the required maximum turn over of 9.11 Crores to fulfill clause-14 of the tender condition.

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The second work order vide proceedings No.423/A.3/2020 of the Joint Collector & Chairman, Dist.Purchase Committee, Chittoor indicating the experience certificate of the 5^th respondent relates to YSR SP Kits, which is a different item supplied to the same agency, i.e., DW & CDA, Chittoor. Thus, the contention of the petitioner that the tender of the 5^th respondent was confirmed based on two different work orders, is not tenable. The writ petition is devoid of merits and is liable to be dismissed.

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Sri R.N. Hemendranath Reddy, learned Senior Counsel appearing for the 5^th respondent would contend that the prequalification bid was opened on 29.09.2021 in the presence of the participating bidders and committee members by the Joint Collector/Chairman, District Purchase Committee, Chittoor. The nine bidders participated in the e-procurement tender process and six bidders are qualified out of nine bidders and three bidders are disqualified including the petitioner for non submission of required documents. Petitioner is aware of the same. Hence, the question of selecting the petitioner as L1 as it would have quoted less rate of Rs.225/- per kit if the petitioner was allowed to participate in the

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reverse tender process does not arise. The petitioner’s tender bid was disqualified at prequalification bid process as mandatory documents as per the tender conditions were not uploaded. The petitioner failed to substantiate its case by placing necessary documents even before this Court. The petitioner has not challenged the selection of the 5^th respondent as L1 bidder. No amendment was made to main prayer of the writ petition even after filing the counters till this date. The petitioner only made general allegations in support of the writ petition. No mala fides, bias and arbitrariness on the part of the respondents is attributed and proved by the petitioner. Hence, the 5^th respondent’s selection as L1 bidder could not be set aside. As the petitioner failed to upload the required documents along with tender bid, as averred in the counter of the 4^th respondent, the petitioner was rightly disqualified at the prequalification bid process, and the same could not be found fault with. The 5^th respondent was allowed to participate in the reverse tender process and has been selected as L1 as he quoted less rates at Rs.234/- per kit and he was given work order on 07.12.2021; however, the same was withdrawn by the 2^nd respondent on 07.01.2022. Now the petitioner is supplying the kits as he was the previous tenderer, in view of pendency of the writ petition. The petitioner failed to show any ground much less legal ground to set aside its disqualification and allow it to participate in reverse tender

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process, which was already completed. The respondents have not committed any illegality and arbitrariness which warrants interference of this Court in the tender process and call for fresh tender. Hence, the writ petition is liable to be dismissed.

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Having considered the facts and circumstances of the case, submissions of the learned counsel and on perusal of the record, admittedly, the subject tender for supply of YSR SP nutrition kits from the eligible firms/bidders/suppliers was floated by the 4^th respondent with the permission of the 3^rd respondent vide note orders dated 14.09.2021. It is not in dispute that the petitioner along with others submitted its tender in pursuance of the tender notification, along with certain documents. The pre-qualification bid was opened by the 3^rd respondent on 29.09.2021 in the presence of the participated bidders and committee members. Nine bidders including the petitioner and the 5^th respondent participated in the e-procurement tender process. The bidders’ documents, which are uploaded in the e-procurement portal, were downloaded. Each bidder has uploaded more than 500 to 1200 pages. The 2^nd respondent downloaded the tender documents on 29.09.2021. The District Purchase Committee members verified the downloaded documents in the presence of the bidders. After scrutiny of bidders’ documents, which were uploaded in the e-procurement portal, as per the check list of the tender document, the District Purchase Committee members selected six bidders as eligible for technical bid and three bidders are disqualified including the petitioner, as the petitioner has not submitted certain documents as per the check list. The details of the documents said to have not been furnished by the petitioner are referred to supra. For better appreciation, the

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requirement as per the check list and the non-compliance of the said clause as per the respondents are shown as under:

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Check Sl.No.	Particulars (Proofs as per norms)	Respondents version
7.	The address proof of the authorized signatory viz., Telephone bill/copy of pass port/electricity bill/voter ID/Pan Card/Bank statement proof should be submitted along with the application. The address proof in respect of the firm shall be either certificate of registration or certificate of incorporation issued by the concerned authority.	The details of the organization are given but the seal and sign is of Sumathi traders.
13.	The bidder should have 5 years experience as a contractor in similar food commodities to qualify for the award of the contract. (Specified financial years i.e., they should be immediately preceding the financial year in which tenders are invited.	Five years experience letters are submitted but work orders / proceedings and related supporting documents are not submitted.
14.	The bidder should fulfill the condition that ‘satisfactorily completed and executed as a prime contractor for supply similar food commodities as above with not less than 50% ECV i.e 9.11 Crores in a single work order in last three years.	The petitioner has not submitted the same.
19.	The bidder should have packing machinery on their own firm’s name	The petitioner has submitted the photos only without the attestation. The packing machinery ownership documents not produced.
20.	The bidder should have minimum 2500 food items delivery points monthly in last year	The said document is not submitted.

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The petitioner’s bid has been disqualified at the prequalification evaluation stage as it is found shortage of the documents stated above. The rejection of the petitioner’s bid was uploaded in the e- portal on 29.09.2021. However, details are not given. The details will be given on the request of the disqualified tenderer separately on e platform. Thereafter, on 29.09.2021 the price bids of the successful bidders were opened and short listed and they were asked to participate in reverse tender process. In the reverse tender process, six qualified bidders were participated. Sri Sai and Company, Tirupati – 5^th respondent was declared as L1 as it has offered to supply the kit @ Rs.234/-.

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The contentions of learned senior counsel appearing for the petitioner that the disqualification of the petitioner at the level of prequalification evaluation stage by the purchase committee is arbitrary and contrary to the tender conditions; that no reasons are given for disqualifying the petitioner from participating in the finance bid when the petitioner is fully qualified and eligible; that the petitioner participated in the tender process as it fulfilled all the requirements and even Sl.Nos.13 & 14 of the check list were uploaded; that the reasons for disqualification of the petitioner’s bid were not communicated to the petitioner; and that inspite of interim order dated 01.10.2021 the

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petitioner was illegally prevented to participate in financial/price bid, are untenable, in view of the categorical plea of the respondents coupled with documents.

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In commercial contracts, evaluation of the tender bids is left to the discretion of the employer to pick up the suitable bidder for supply of the tender items i.e.,YSR SP Nutrition kits to Anganwadi centres under YSR Sampoorna Poshana in Chittoor District. The Apex Court in the case of Central Coalfields Ltd., v. SLL-SML (Joint Venture Consortium) [(2016)8SCC622] held that the issue of acceptance of a bid must be examined from the point of view of the employer. The bidder has to satisfy all the tender conditions in submission of the document. Those who are qualified in the technical bid and participated in the price bid were called for reverse tendering on 29.09.2021 and 5^th respondent was declared as L1 as it has quoted least rate per kit @ Rs.234/- and work order was given on 07.12.2021. In view of the submission of the respondents with reference to the documents furnished by the 5^th respondent in compliance of Sl.No.14 of the check list, this Court is of the opinion that there is no illegality or irregularity in awarding the subject tender to the 5^th respondent. Further, in view of the interim directions and initiation of contempt proceedings the work order given to the 5^th respondent was withdrawn

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by the 2^nd respondent on 07.01.2022. In view of the pendency of the writ petition, the writ petitioner being existing contractor was continued to supply the tender items. While exercising the power of judicial review in respect of evaluation of the commercial contracts, this Court’s interference should be very minimal and only when there is arbitrariness as held in the case of Tata Cellular v. Union of India [(1994) 6 SCC 651] . In the present case, though it is alleged that the tender was awarded to the 5^th respondent even if it has not satisfied the Sl.No.14 of the check list, this Court has negatived the said contentions and is not of the view that there is any bias or mala fides on the part of the respondents in awarding the tender to the 5^th respondent. The other contention of the petitioner is that the respondents acted in arbitrary manner as its bid was rejected at the prequalification/technical evaluation stage on the ground of not submitting the required documents as per the tender check list is unsustainable. The tender bid is purely commercial contract; it is for the employer to evaluate such tenders and award contracts to the successful bidders as held by the Apex Court in the case of Jagdish Mandal v. State of Orissa [(2007) 14 SCC 517] . The further contentions of the petitioner’s counsel that the respondent authorities lowered qualification requirements as per tender documents and qualified six other bidders, whereas petitioner along with two others,

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were disqualified by adopting strict method of compliance of the tender conditions in the absence of any such power to the tender committee; that extending similar benefit is not extended to the petitioner and disqualifying the petitioner at the prequalification/technical evaluation stage is illegal, arbitrary and liable to be set aside could not be countenanced in view of the decisions of the Apex Court holding that where the contracts are purely in commercial nature and evaluation of the tender process would be given to the discretion of the employer same could not be found fault with, in the absence of any involvement of public interest. The other contention of the petitioner that the price quoted by 5^th respondent as L1 is Rs.234/- per kit whereas the price quoted by petitioner is Rs.235.15 ps per kit in the tender price bid itself and if the petitioner is qualified in the technical bid and allowed to participate in the reverse tendering process it could have supplied the same by reducing Rs.10/- per kit i.e., @ Rs.225.15 ps thereby saving Rs.72.00 lakhs to the public exchequer could not be countenanced as it was disqualified at the prequalification/technical evaluation stage and the employer has not chosen it to allow in the reverse tendering process. Further, in view of the reasons stated for the disqualification of the petitioner’s bid, the ground raised by the petitioner that it would have supplied the kits for lesser price of Rs.10/- compared to L1 bidder saving Rs.72.00 lakhs to the public exchequer could not be taken as a

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public interest and whole tender process could not be set aside exercising power under judicial review. Further, in AIR India Ltd., v.

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Cochin International Airport [(2000)2 SCC 617 , the Apex Court held that i n a commercial transaction of a complex nature what may appear to be better, on the face of it, may not be considered so when an overall view is taken and in such matters the Court cannot substitute it's decision for the decision of the party awarding the contract.

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In view of the above discussions, this Court found that the petitioner had not submitted required documents as per the tender conditions check list i.e., serial nos.7,13,14,19 & 20. The contra contention of the counsel for the petitioner that the respondents have qualified six others including the 5^th respondent in the prequalification bid even though they also submitted similar documents to that of the petitioner and whereas petitioner tender bid was disqualified which amounts to arbitrariness in finalising the tender process could not be countenanced as the petitioner failed to prove the said contention by producing positive evidence in support of the said contention. The petitioner has not attributed any mala fides, bias and favoritism in the tender process in selecting the 5^th respondent as L1 bidder. The

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tender bid is purely commercial contract in nature. This Court is not

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inclined to interfere in the tender process.

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In the result, the Writ Petition is dismissed and the interim orders dated 01.10.2021 and 14.12.2021 stand vacated. There shall be no order as to costs.

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As a sequel, miscellaneous applications pending, if any, shall stand closed.

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______________________ JUSTICE M. GANGA RAO

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15.09.2022 Vjl

Sri Vinayaka Agencies v. The State of Andhra Pradesh

Case brief

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Sri Vinayaka Agencies v. The State of Andhra Pradesh

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