Writ petition filed against tender allotment. Court dismissed writ, upheld exclusion of petitioner's bid. Held separate entities cannot combine finances. Technical bid qualified but price bid rejected due to ownership turnover gap.
Writ petition dismissed. No order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (LODGING) NO.62 OF 2009
K.W. Engineering & Signs Pvt.Ltd. .. Petitioner Vs.
The Executive Director (Engineering) Indian Oil Corporation Limited and another .. Respondents
Mr. Raghavan Sarabhay i/by M/s. Thodur Law Associates for the petitioner.
Mr. P.K. Samdani i/by M/s. DSK Legal for the respondent No.1. Mr. Mandar Goswani for the respondent No.2.
CORAM : SWATANTER KUMAR, C.J. & DR. D.Y. CHANDRACHUD, J.
DATED : 2ND FEBRUARY, 2009
P.C.
We have heard the learned counsel appearing for the
parties. In this petition under Article 226 of the Constitution of India, the petitioner prays for issuance of a direction to the respondents to open the price bid of the petitioner in respect of part A and remaining
part of Part B and to consider the tender of the petitioner in accordance with law. Further prayer is that the respondents be restrained from allotting the tender in favour of any other person. Suffice it to note that the petitioner had responded to the tender notice
issued by the respondents. The tender was to be examined at two different stages viz. the technical bid and price bid and the technical bid of the petitioner is stated to have been qualified. However, the price bid was not opened primarily for the reason that according to the respondents, the petitioner did not satisfy the annual average turn over requirements as contemplated in the qualifying parameters under clause 7 of the notice inviting tenders. According to the learned counsel appearing for the petitioner, the petitioner which is a private limited company was in fact, a successor of a partnership concern. The private limited company had taken over the partnership firm somewhere in April, 2008 and the respondents are expected to consider the collective financial status of both these concerns. The cumulative amount of both the entities should be considered. This was not accepted by the respondents and the respondents vide their letter dated 24th October, 2008 (Exhibit-6 to the reply) informed the petitioner that earlier intimation was canceled and the petitioner was not qualified for the price bid.
company were distinct and separate entities co-existing simultaneously from 4th September, 2006 being the date of incorporation of the petitioner to 3rd April, 2008 being the date of dissolution of Kapoor Welding. It is apparent that for consideration of the price bid, the returns of three years viz. 2005-2006, 2006-2007 and 2007-2008 haD to be considered. Two separate legal entities cannot take advantage of the business of each other. The partnership firm was as a matter of fact dissolved. No merit. Writ petition is dismissed. No order as to costs.
CHIEF JUSTICE
DR. D.Y. CHANDRACHUD, J.
3 issues framed by the court
Whether separate legal entities can combine financial status of a dissolved partnership firm and a private company for tender qualification.
Whether the High Court erred in upholding the respondents' decision to exclude the petitioner's price bid.
Interpretation of annual average turnover requirements when a business transitions from partnership to company status.
K.W. Engineering & Signs Pvt.Ltd.
The Executive Director (Engineering) Indian Oil Corporation Limited
SWATANTER KUMAR
D.Y. CHANDRACHUD
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
