Dismissed

Shyam Raj P. v. State of Kerala

Kerala HC11 Aug 2021WP(C)/14171/2021

Case brief

AI extract

What is this about?

This judgment dismisses a writ petition challenging the evaluation of an e-tender. The Court held that the omission to sign a declaration form was not a fatal defect warranting rejection, nor was the incorrect GST rate cited a ground to reject the lowest calculated bid, noting the State may exercise discretion to cure trivial defects.

What did the court decide?

The writ petition seeking a declaration of disqualification of the fourth respondent and direction to award the work to the petitioner was dismissed.

Shyam Raj P. Vs State of Kerala — Company and Corporate | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR WEDNESDAY, THE 11^TH DAY OF AUGUST 2021 / 20TH SRAVANA, 1943

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WP(C) NO. 14171 OF 2021

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PETITIONER:

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SHYAM RAJ P., AGED 57 YEARS S/O. PADMANABHAN, PROPRIETOR, SKILDERZ DEVELOPERS, ARJUNAM, THIRUVAMPADY, ALAPPUZHA-688011.

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BY ADVS. RENJITH B.MARAR LAKSHMI.N.KAIMAL ARUN POOMULLI SURABHI SANTHOSH BIJU VIGNESWAR MEERA M.

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RESPONDENTS:

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1 STATE OF KERALA REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF INDUSTRY AND COMMERCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001.

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2 KERALA MINERAL AND METALS LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, SANKARAMANGALAM, CHAVARA, KOLLAM-691583.

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3 THE MANAGING DIRECTOR, KERALA MINERAL AND METALS LIMITED, SANKARAMANGALAM, CHAVARA, KOLLAM-691583.

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4 B.SUNDARAN, CHAITHANYA, VALLOM, KOTTARAKKARA P.O., KOLLAM-691506.

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BY ADVS. K.ANAND (SR.) V.A.VINOD LATHA ANAND HARIKRISHNAN M.S.

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W.P.(C). No.14171 of 2021

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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P.B.SURESH KUMAR, J.

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W.P.(C) No.14171 of 2021

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Dated this the 11^th day of August, 2021

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JUDGMENT

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The second respondent, a Government of Kerala undertaking invited e-tenders from eligible persons to execute a work of mechanized collection, loading, transportation and supply of mineral sand. Ext.P1 is the tender notice issued by the second respondent in this connection. Both the petitioner as also the fourth respondent submitted e-tenders in response to Ext.P1 notice. In terms of Ext.P1 notice, the tenderers are required to download, among others, the declaration form which is part of the tender document and upload a scanned copy of the same after filling up the same and after affixing the signature of the tenderer. It is alleged by the petitioner that the fourth respondent has not put his signature in the declaration form uploaded by him. According to the petitioner, the tender submitted by the fourth respondent, in the circumstances,

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ought to have been rejected at the threshold by the second respondent. The amount quoted by the petitioner for the work is Rs.3,29,00,000/- with 18% GST, whereas the amount quoted by the fourth respondent is Rs.3,29,90,000/- with 9% GST. It is stated by the petitioner that the applicable rate of GST at the time of submission of tender was 18% and that if the fourth respondent had shown the correct rate of GST in the tender, the rate quoted by him would have been far above the rate quoted by the petitioner. It is also alleged by the petitioner that the fourth respondent has shown the GST rate deliberately as 9% with a view to obtain the work by misleading the second respondent. It is also alleged by the petitioner that despite all that, steps are being taken by the second respondent to award the work to the fourth respondent. The petitioner, in the circumstances, seeks a declaration that the fourth respondent is liable to the disqualified from the tender process, and a declaration that the petitioner is the lowest bidder in the tender process. The petitioner also seeks directions to the second respondent to award the work to him.

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A counter affidavit has been filed by the fourth

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respondent. It is conceded by the fourth respondent in the counter affidavit that the GST rate applicable for the work at the time of submission of the tender was 18% and not 9%. It is however, stated in the counter affidavit that it was on account of inadvertence that the GST rate was shown by him in the tender as 9%. It is also stated in the counter affidavit that insofar as he has offered a discount at 9% on the rate quoted by him, even if GST is applied at 18%, the rate quoted by him would be far less than the rate quoted by the petitioner. It is also stated that a tender cannot be rejected merely on account of the omission on the part of the tenderer to sign the declaration form, and if the omission to sign the declaration form is a ground for rejection of the tender, even the tender submitted by the petitioner could not have been accepted, for the petitioner had initially uploaded declaration form without filling up the same. The fourth respondent has produced along with the counter affidavit a copy of the unfilled declaration form uploaded by the petitioner.

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Heard the learned counsel for the petitioner, the learned counsel for the fourth respondent as also the

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learned Senior Counsel for the second respondent.

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The learned Senior Counsel for the second respondent affirmed that the declaration form uploaded by the petitioner was not duly filled up, as required in the tender notice and on noticing the said defect, the second respondent gave an opportunity to the petitioner to upload the declaration form afresh and the petitioner has accordingly, uploaded the declaration form after entering the particulars. It was pointed out by the learned Senior Counsel that though the declaration form uploaded by the fourth respondent was duly filled up, it was not signed and since the said defect was not noticed by the second respondent, the fourth respondent could not be given an opportunity to cure the said defect as given to the petitioner. Relying on the decision rendered by this Court in Birla International Marketing Corporation v. State of

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Kerala , 2000 KHC 264, the learned Senior Counsel submitted that the omission on the part of the fourth respondent in putting his signature in the declaration form cannot be said to be a fatal one, warranting rejection of the tender at the threshold. As regards the amounts quoted by the tenderers, it

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was pointed out by the learned Senior Counsel that since the fourth respondent has offered a discount of 9% on the rate quoted by him viz, Rs.3,29,90,000/-, the rate quoted by the fourth respondent will work out to be far less than the rate quoted by the petitioner, even if GST is applied at the rate of 18%.

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The learned counsel for the petitioner reiterated the stand of the petitioner that the tender submitted by the fourth respondent ought to have been rejected by the second respondent at the threshold, for the declaration form uploaded by him did not contain his signature. According to the learned counsel, the defect aforesaid in the declaration being a fatal one, the second respondent was not justified at all in ignoring the same. The learned counsel relied on the decision of the Apex Court in Vidarbha Irrigation Development Corporation v. Anoj Kumar Agarwala, 2019 (2) SCJ 493, the decisions rendered by the High Court of Orissia in Nestor

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Pharmaceuticals Ltd. and another v. State of Odisha and another, AIR 2017 Orissa 133 and in Maquet Medical India Pvt. Ltd. and others v. Odisha State Medical

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Corporation Ltd. and others, I (2017) BC 246 (Ori.) and the decision of the High Court of Madras in M.Vennila v. Tamil Nadu Public Service Commission, 2007 (3) CTC 69, in support of the said contention. It was also argued by the learned counsel that insofar as the tender submitted by the fourth respondent was liable to be rejected at the threshold, the rate quoted by him ought not have been taken note of by the second respondent for any purpose whatsoever. Relying on Clause 9.7 in the tender notice, it was also argued by the learned counsel that it was obligatory on the part of the fourth respondent to show the applicable GST rate in the tender and insofar as the fourth respondent has not shown the applicable GST rate in the tender, the same ought not have been accepted, for the tender was not one conforming to the conditions stipulated in the tender notice. It was also argued by the learned counsel that the materials on record would show that the fourth respondent was aware of the fact that the GST rate applicable to the transaction covered by the tender is 18% and he has deliberately shown the GST rate as 9% to make it appear that the amount payable to him would be less

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than the amount payable to others, if the work is awarded to him and to obtain the work by misleading the second respondent.

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6 . I have considered the arguments advanced by the learned counsel for the parties on either side.

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7 . It is now trite that the requirements in a tender notice can be classified into two categories, those which lay down the essential conditions of eligibility, and others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case, the authority issuing the tender may be required to enforce them rigidly, but in the latter case, it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition, in appropriate cases [see Poddar Steel Corporation v. Ganesh Engineering Works, (1991) 3 SCC 273]. The question to be examined in cases of the instant nature therefore, is whether the condition, non-compliance of which is alleged, is an essential term of the tender.

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8 . It is seen that in terms of the tender notice, the tenderers have to download from the portal all pages of

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the tender document and have to upload the scanned copy of the same after duly entering the relevant particulars and affixing the signatures of the tenderer on all pages. The declaration form to be given by the tenderers in terms of the tender notice is part of the tender document. Similarly, in terms of the tender notice, the tenderers have to upload the scanned copies of the required documents signed in all pages. While the tender notice prescribes categorically that the tender will be rejected if the same is submitted without the required documents, there is no provision in the tender notice to the effect that the omission to put signature of the tenderer in one or two pages of the tender document would result in rejection of the tender. The requirement concerning the submission of declaration form is contained in Clause 17 of the tender notice dealing with general conditions. Clause 17.15 of the tender notice provides that all tenderers shall submit the declaration form enclosed therewith, duly filled in, signed and sealed. There is no provision in Clause 17 of the tender notice to the effect that omission to affix signature in the declaration form would result in rejection of the tender. On the other hand, the

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only provision in Clause 17 concerning rejection of the tender is that the second respondent reserves the right to reject any tender document, if it contains statements and notings not relevant to the tend er terms contained in the tender. It is therefore, clear that the scheme of the tender notice is that if the tender submitted by a tenderer is complete in all respects, the second respondent may permit the tenderer to cure the trivial defects, if any, in the tender, in its discretion. In other words, affixing signatures on all pages of the tender document uploaded cannot be said to be an essential condition of the tender in a case of this nature, the non-compliance of which would warrant rejection of the tender at the threshold.

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9 . Reverting to the tender submitted by the fourth respondent, the materials on record indicate that the same was complete in all respects except the omission on the part of the fourth respondent in affixing his signature in the declaration form, the scanned copy of which was uploaded. On an evaluation of the materials on record, I do not find any reason at all to think that the omission aforesaid is deliberate. The materials would only lead to the conclusion that the

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omission is inadvertent. According to me, the second respondent, in the circumstances, was fully within its discretion in ignoring the said defect, especially when it was pointed out on behalf of the second respondent that had they noticed the said defect, they would have certainly permitted the fourth respondent to cure the same by uploading another duly signed declaration form. In almost an identical situation, a Division Bench of this Court has adopted the stand aforesaid in Birla International Marketing Corporation. In that case, the question considered was whether the mistake of non-signing of a document was fatal warranting rejection of the tender. This Court held that insofar as the entire tender documents have been filed, signed and stamped by the tenderer, the intention to comply with the tender condition in all respects is revealed and the tenderer cannot, therefore, be punished for an accidental or inadvertent omission. Paragraph 16 of the judgment in the said case reads thus :

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“In this case, the matter is purely technical and, therefore, the authority should not have rejected the tender. We find great force in this submission made by Mr.P.R. Raman, We are clearly of the opinion that the mistake of non signing of Form No. 14 is

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in relation to a non essential matter, that is, in relation to peripheral or collateral matter. The entire tender documents filed, signed, stamped and attested will clearly reveal that there is every intention to comply with the tender conditions. For an accidental or inadvertent omission, the petitioner cannot be punished.”

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10. I have perused the decisions relied on by the

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learned counsel for the petitioner to contend that the requirement in the tender notice that the tenderer shall affix his signature in the declaration form is fatal, and I do not find that such a ratio could be inferred from the decisions relied on.

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True, in Vidarbha Irrigation Development Corporation, the Apex Court has observed that the words used in the tender document could not be ignored or treated as redundant or superfluous and that they must be given meaning and their necessary significance. But a close reading of the said judgment indicates that the ratio of the said decision is only that the authority considering the tender may not be justified in ignoring an essential condition of the tender. There cannot be any quarrel to the aforesaid proposition.

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In the aforesaid circumstances, I do not find any illegality in the conduct of the second respondent in

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ignoring the omission on the part of the fourth respondent in affixing his signature in the declaration form uploaded by him along with the tender documents. I take this view also for the reason that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding a contract, interference by Court is very restrictive since no person can claim any fundamental right to carry on business with State or its instrumentalities [see Michigan Rubber (India) Ltd. v. State of Karnataka , (2012) 8 SCC 216].

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That apart, even if it is found that the requirement in the tender document that the tenderers have to affix their signatures in the declaration form is an essential requirement, insofar as the tender document submitted by the petitioner also had an identical defect and insofar as the petitioner was permitted by the second respondent to cure the same, it is highly unjust and unfair to exercise the discretionary jurisdiction under Article 226 of the Constitution in favour of the petitioner against the fourth respondent to whom similar treatment was not extended by the second respondent for curing the defect.

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Clauses 9.7 and 9.8 in the tender notice deal

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with the obligations of the tenderer to show the GST rate. The said clauses read thus:

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9.7 The tenderers shall quote basic rate per metric tonne and GST (in percentage) as per the scope of work in price part (BOQ) for the entire scope of work. The tenders submitted without quoting rates for any of the item/items of work are liable to be rejected. The tenderers shall quote basic rate per metric tonne and applicable GST (in percentage) as per the scope of work in price part ( BOQ ) for all the items of work. Applicable GST shall be quoted in percentage. However actual GST prevailing at the time of billing shall be applicable.

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9.8 Taxes, Duties & Levies – Applicable tax and levies, including GST has to be shown separately in the tender. If applicable taxes, levies etc are not shown separately it is presumed that the party submitting the tender is not subjected to tax and no further claim in this regard will be entertained under any circumstances.

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It is evident from the extracted clauses that if a tenderer does not show correctly the applicable taxes in the tender, no further claim can be raised by him at a later stage under any circumstances. In other words, the provision in the tender notice is that if the rate of applicable taxes is shown incorrectly in the tender document, the financial burden arising from the

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same shall be borne by the tenderer. In the light of the said provision, according to me, there is no substance in the argument of the petitioner that the tender submitted by the fourth respondent is liable to be rejected, for he has not shown the GST rate correctly in the tender.

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As rightly pointed out by the learned Senior Counsel for the second respondent, if the discount offered by the fourth respondent on the rate quoted by him is taken into account, the rate quoted by the fourth respondent would be far less than the rate quoted by the petitioner, even if GST is applied at 18%. It is unnecessary to examine the sustainability or otherwise of the argument of the petitioner that the fourth respondent, who is aware of the fact that the applicable GST rate is 18%, has deliberately shown the GST rate as 9% to make it appear that the amount payable to him would be less than the amount payable to others, if the work is awarded to him, for once it is found that the tender submitted by the fourth respondent is in order, the intention behind the offer mad e is irrelevant.

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The writ petition, in the circumstances, is without

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merits and the same is, accordingly, dismissed.

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Sd/P.B.SURESH KUMAR JUDGE

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