Allowed

Satyendra Kumar Construction Pvt. Ltd. through Its Director Deepak Kumar v. the State of Jharkhand through the Principal Secretary Building Construction Department

Jharkhand HC11 Jul 2018WPC/317/2018

Case brief

AI extract

What is this about?

The High Court set aside the Tender Committee's decision to reject the petitioner's technical bid. The Court held that the impugned rejection was arbitrary as the respondents applied an incorrect reading of the Standard Bid Document and failed to issue a clarification letter for rectifiable defects before dismissing the bid. A direction was issued to allow the financial bid to be opened.

What did the court decide?

Impugned decision to reject technical bid set aside; direction to open petitioner's financial bid and take final decision.

Satyendra Kumar Construction Pvt. Ltd… — Public Procurement and Tenders | Jharkhand HC (2018)

¶1

¶2

IN THE HIGH COURT OF JHARKHAND AT RANCHI

¶3

W.P.(C) No. 317 of 2018

¶4

Saytyendra Kumar Construction Pvt. Ltd., Patna, through its Director, Deepak Kumar ….. Petitioner

¶5

Versus

¶6

The State of Jharkhand, through the Principal Secretary, Building Construction Department, Government of Jharkhand, Ranchi

¶7

The Jharkhand State Building Construction Corporation Ltd., Ranchi

¶8

The Managing Director, the Jharkhand State Building Construction Corporation Ltd., Ranchi

¶9

The Executive Director-cum-Chairman, Tender Committee, the Jharkhand State Building Construction Corporation Ltd., Ranchi

¶10

The General Manager (Project)-cum-Member, Tender Committee, the Jharkhand State Building Construction Corporation Ltd., Ranchi

¶11

The Deputy General Manager (Finance & Account)-cum-Member, Tender Committee, Jharkhand State Building Construction Corporation Ltd., Ranchi

¶12

….. Respondents

¶13

----- CORAM HON’BLE MR. JUSTICE RAJESH SHANKAR

¶14

----For the Petitioner: M/s Prabhat Ranjan Dwivedi, Abhay Prakash, Chandan Kumar For the State: Mr. Srijit Choudhary, Sr. S.C-III -----

¶15

12/11.07.2018 The present writ petition has been filed challenging the decision of the Tender Committee of the Jharkhand State Building Construction Corporation Ltd., Ranchi (in short ‘the Corporation’) dated 08.01.2018 to the extent that the technical bid of the petitioner has been declared as non-responsive on the ground that the experience certificate with regard to electrical work and water supply/sanitary engineering work is not as per the requirement of the Standard Bid Document (SBD).

¶16

The factual background of the case, as stated in the writ petition, is that pursuant to the NIT dated 24.11.2017 which was published on the departmental website on 04.12.2017 through the e-procurement cell of the Corporation, the petitioner applied for the work of Construction of Degree College in Boriyo and Barhet (Sahebganj) Vidhan Sabha Area under Sidhu Kanhu University, Dumka vide Tender Reference No. JSBCCL/190/2017-18. The Departmental Tender Committee vide decision dated 08.01.2018, declared the technical bid of the petitioner as non-responsive on the ground that the experience certificate furnished by the petitioner in connection with the electrical work and water supply/sanitary engineering work is not as per the terms of the SBD.

¶17

¶18

The learned counsel for the petitioner submits that the rejection of the petitioner’s technical bid on the vague ground of non-furnishing the experience certificate in accordance with the requirement of the SBD is misconceived and illegal. As per the requirement of the SBD, the bidder should have work experience of Rs.64,14,641/- in the head of Electrical Work and to the tune of Rs.31,99,179/- under the head of Water Supply/Sanitary Work. The petitioner furnished the experience certificate showing experience of Rs.88,49,427/- under the head of Electrical Work and Rs.52,50,274/- under the head of Water Supply/Sanitary Work in the financial year 2016-17. It is further submitted that there is an express condition in the SBD that one chance will be given to the bidder to clarify the objection. However, the respondent-Corporation failed to comply the said condition and rejected the technical bid of the petitioner without seeking any explanation. Thus, the impugned decision has been taken by the tender committee of the respondent-Corporation in violation of the principles of natural justice.

¶19

The learned counsel for the respondent-Corporation submits that the decision of the Tender Committee regarding technical disqualification of the petitioner has been taken as per the terms and conditions of the SBD of the project. As per Clause 26 of the SBD, the bids which are not substantially responsive to the requirements of the bid documents, are liable to be rejected. There is no provision for serving a notice seeking explanation or giving a chance to a bidder for clarification in relation to the SBD. As per the requirement of Clause 4.5(A) (d) and (e) of the SBD, the bidder were required to furnish necessary documents related to past work experience of similar electrical works in any one work amounting to Rs.64,14,641.00 and similarly for water supply and sanitary engineering works, in any one work amounting to Rs.31,99,179/-. However, the petitioner submitted the document relating to similar electrical work experience of Rs.38,68,951.00 and water supply and sanitary engineering works experience amounting to Rs.20,88,719.00 only and even after applying a multiplying factor of 1.33 to take care of the fact that the work experience

¶20

¶21

shown was three years old, the value of electrical work experience comes to Rs.51,45,704/- and that of water supply and sanitary engineering works comes to Rs.27,77,996.00 only. Thus, the bid of the petitioner was found nonresponsive.

¶22

Heard the learned counsel for the parties and perused the materials placed on record. The power under Article 226 of the Constitution of India is plenary in nature. The High Court has the discretion to exercise such discretion having regard to the facts of each case. However, the High Courts have imposed self-restraints in such exercise of extraordinary jurisdiction to issue a prerogative writ which is normally not to be exercised to the exclusion of other available remedies unless the action of the State or its instrumentality is found arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons for which the writ Court thinks it necessary to exercise the said jurisdiction.

¶23

The Hon’ble Supreme Court in the case of Joshi Technologies

¶24

International Inc. Vs. Union of India & Ors., reported in (2015) 7 SCC 728 , has held as under:-

¶25

“69. The position thus summarised in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. It also follows that under the following circumstances, “normally”, the Court would not exercise such a discretion:

¶26

69.1. The Court may not examine the issue unless the action has some public law character attached to it.

¶27

69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration.

¶28

¶29

69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination.

¶30

69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances.

¶31

70. Further, the legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under:

¶32

70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness.

¶33

70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discrimination. 70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc.

¶34

70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred.

¶35

70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business.

¶36

70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being

¶37

¶38

specifically performed. Otherwise, the party may sue for damages.

¶39

70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice.

¶40

70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction.

¶41

70.9. The distinction between public law and private law element in the contract with the State is getting blurred. However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary. 70.10. Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of nonarbitrariness.

¶42

70.11. The scope of judicial review in respect of disputes falling within the domain of

¶43

¶44

contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes.

¶45

71. Keeping in mind the aforesaid principles and after considering the arguments of the respective parties, we are of the view that on the facts of the present case, it is not a fit case where the High Court should have exercised discretionary jurisdiction under Article 226 of the Constitution. First, the matter is in the realm of pure contract. It is not a case where any statutory contract is awarded.”

¶46

Having gone through the aforesaid judgment of the Hon’ble Supreme Court, it may be construed that there is no absolute bar in entertaining a writ petition in a contractual matter where some disputed questions of facts are involved. However, if the dispute involved in a matter is so complex which can only be determined after a long drawn adjudicatory process by leading evidences, the writ petition should not be entertained. Each and every case is to be dealt with on its own facts. If the materials on record are clearly evincible, the writ Court may exercise the power of judicial review. The present writ petition primarily involves interpretation of relevant provisions of the SBD, which can certainly be looked into under the writ jurisdiction of this Court.

¶47

The thrust of the argument of the learned counsel for the petitioner is that the SBD nowhere mentions that there was requirement for consideration of the work experience of the tenderer for only one work, rather it explicitly provides that the tenderer should have experience valued at Rs.Rs.64,14,641/in electrical work and Rs.31,99,179/- in water supply/sanitary work and the petitioner has duly submitted the experience of more than the required value.

¶48

In the SBD, under the heading of “qualification of Bidder”, it has been provided as under:-

¶49

“4.5 A - To qualify for award of the contract, each bidder in its name should have in the last five years as referred to in Appendix.

¶50

(a) achieved a minimum annual financial turnover (in all classes of civil engineering construction works only) amount indicated in Appendix in any one year (usually not less

¶51

¶52

than one and a half times the estimated cost of the project.

¶53

-----

¶54

(d) The contractor or his identified subcontractor should possess required valid electrical license for executing the building electrification works and should have executed similar electrical works for a minimum amount as indicated in Appendix in any one year.

¶55

(e) The contractor or his identified subcontractor should possess required valid license for executing the water supply/sanitary engineering works and should have executed similar water supply/sanitary engineering works for a minimum amount as indicated in Appendix in any one year.”

¶56

The aforesaid provision does not provide that the tenderer is required to furnish the past work experience of electrical works and water supply and sanitary works in any one work, rather the only requirement is that the tenderer should have experience of the required value in one year, it might be in one work or more than one work. The argument of the learned counsel for the respondents is contrary to the express provisions mentioned in the SBD and thus the same is fit to be rejected.

¶57

The manner of opening of the bid has been provided under Clause 23 of the SBD which reads as follows:-

¶58

“23.4 (i) Subject to confirmation of the bid security by the issuing bank, the bids accompanied with valid security will be taken up for evaluation with respect to the Qualification Information and other information furnished in Part I of the bid pursuant to clause 12.1.

¶59

(ii) After receipt of confirmation of the bid security, the bidder will be asked in writing/email (usually within 10 days of opening of the Technical Bid) to clarify or modify his technical bid, if necessary with respect to any rectifiable defects.

¶60

(iii) The bidders will respond by e-mail in not more than 7 days of issue of the clarifications letter, which will also indicate the date, time and venue of opening of the Financial Bid (usually on the 21^st day of opening of the Technical bid)

¶61

(iv) Immediately (usually within 3 or 4 days), on receipt of these clarifications the Evaluation Committee will finalize the list of responsive bidders whose financial bids are eligible for consideration.”

¶62

¶63

It would thus be evident that once the bid security is confirmed, the tenderer, for any rectifiable defect, is to be issued clarification letter to be responded by tenderer within seven days of its receipt. In the present case, admittedly no such process was followed by the respondent-Corporation before rejecting the technical bid of the petitioner. Had any notice been issued to the petitioner seeking clarification, the present situation would not have arisen. The specific case of the petitioner is that it has requisite experience for doing the work. However, the respondents have rejected the technical bid of the petitioner putting an additional requirement which has not been provided in the SBD. 13. Under the aforesaid facts and circumstances, the decision of the tender committee dated 08.01.2018 to the extent impugned, is set aside. The present writ petition is disposed of with a direction to the respondent-Corporation to open the financial bid of the petitioner and thereafter to take a final decision with regard to Tender Reference No. JSBCCL/190/2017-18.

¶64

(RAJESH SHANKAR, J)

¶65

High Court of Jharkhand, Ranchi Dated 11.07.2018 Satish/A.F.R

Satyendra Kumar Construction Pvt. Ltd. through Its Director Deepak Kumar v. the State of Jharkhand through the Principal Secretary Building Construction Department

Case brief

What is this about?

What did the court decide?

Satyendra Kumar Construction Pvt. Ltd. through Its Director Deepak Kumar v. the State of Jharkhand through the Principal Secretary Building Construction Department

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

Akhileshwar Singh Vs Rural Dev Dept

Syed Mohammad Qaisar Hassan And Anr. Vs Urban Development Department

Abul Kalam Alias Abul Kalam Ansari Vs the State of Jharkhand

Sunil Kumar Vs the State of Jharkhand through Pr Secretary Department of Health

Chas Anchal Matasyajivi Sahyog Samiti Limited Reprr Thr Its Mantri Jaydeo Dhibar Vs the State of Jharkhand through Director Fisheries Department

Chandra Shekhar Prasad Sinha And Anr. Vs The State Of Jharkhand Through Deputy Commissioner And Ors.