Dismissed

Abnco Vie Win Ent. Pvt. Ltd. v. Kerala Irrigation Infrastructure Development Corporation Limited (Kiidc)

Kerala HC17 Jan 2023WP(C)/14535/2022

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed a writ petition challenging the rejection of a technical bid and subsequent award of a desiltation work contract to another bidder. The court held that the employer's interpretation of experience certificates should prevail unless the decision is totally arbitrary, declining to interfere with the tender evaluation.

What did the court decide?

Writ petition dismissed; no interference in the tender award or evaluation criteria.

Abnco Vie Win Ent. Pvt. Ltd. Vs Kerala… — Public Procurement and Tenders | Kerala HC (2023)

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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 V.G.ARUN

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TUESDAY, THE 17^TH DAY OF JANUARY 2023 / 27TH POUSHA, 1944

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WP(C) NO. 14535 OF 2022

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PETITIONER:

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ABNCO VIE WIN ENT. PVT LTD. SHOP NO.15, DHEERAJ REGENCY CHS LTD., NEAR ANNEX MALL BORIVALI (EAST), MUMBAI. REPRESENTED BY ITS AUTHORISED SIGNATORY, PIN - 400066

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BY ADVS. P.SHANES METHAR N.KRISHNA PRASAD

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RESPONDENTS:

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1 KERALA IRRIGATION INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED (KIIDC) PARVATHY, TC 36/1, NH 66 BYEPASS SERVICE ROAD ENCHACKAL JN, CHAKAI.P.O., THIRUVANANTHAPURAM., PIN - 695024

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2 THE MANAGING DIRECTOR KERALA IRRIGATION INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED, PARVATHY, TC 36/1, NH 66 BYEPASS SERVICE ROAD ENCHACKAL JN, CHAKAI.P.O., THIRUVANANTHAPURAM., PIN - 695024

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3 KOOTHRADANS INFRASTRUCTURE LLP VETTIKKUNNU, POOKKOTTUMPADAM, MALAPPURAM. REPRESENTED BY ITS MANAGING PARTNER, PIN - 679332

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BY ADVS. Pirappancode V.S.Sudheer V.S S.SREEKUMAR (SR.) AKASH S.(K/980/2008) A.MEGHA(K/000488/2018) ABIJITH M. B.MOHANLAL

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.10.2022, THE COURT ON 17.01.2023 DELIVERED THE FOLLOWING:

W.P.(C). 14535/2022

JUDGMENT

Dated this the 17^th day of January, 2023

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The Government of Kerala accorded in principle approval to award the work; “Desiltation of Chulliar Dam on Turn-Key Basis'' to the Kerala Irrigation Infrastructure Development Corporation Limited/1st respondent vide G.O.(Rt) No. 21/2021/WRD dated 07.01.2021. The approval was granted subject to the condition that the Irrigation Department should monitor the future progress of the work. Accordingly, the 1st respondent auctioned the work twice, but the tender could not be finalized for want of bidders and non-production of required documents by the participating bidders. Finally, after relaxing some of the tender conditions, the work was re-tendered at an estimated PAC of Rs.37,60,18,437/-, as per tender notice No. KIIDC/Auction/03/2/2021-22 dated 25.01.2022. After evaluation of the technical bid, Ext. P4 e-mail dated 08.04.2022 was issued to the petitioner, informing that its bid had been admitted. Within half an hour, Ext. P5 email was

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W.P.(C). 14535/2022

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issued, intimating that its tender had been rejected, since the marks scored by the petitioner was found to be below the minimum qualifying mark. On further inquiries the petitioner could gather that the rejection was based on the decision taken in the pre-qualification committee meeting held on 24.03.2022, the minutes of which are produced as Ext. P8. Aggrieved by the rejection of its bid, the petitioner has approached this Court seeking the following reliefs:

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A. To issue a writ of certiorari calling for the records leading up to the issuance of Ext. P5 and Ext P8, examine its propriety and legality and quash the same to the extent it disqualifies the bid of the petitioner;

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B. To issue a writ of mandamus or any other writ to declare that Ext P8 to the extent it disqualifies the technical bid of the petitioner is arbitrary and illegal and a further direction commanding the respondents 1 and 2 to pre-qualify the petitioner so as to enable the opening of the financial bid submitted by the petitioner.

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C. That on the financial bid of the petitioner being opened, to award the work consistent with the terms and conditions, laid down in Ext P1;

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D. Any other relief that may be found fit in the facts and circumstances of the case.

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W.P.(C). 14535/2022

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Heard, Senior Advocate S. Ramesh Babu appearing for the petitioner, as instructed by Adv. P. Shanes Mather, Adv. Pirappancode V.S. Sudheer for respondents 1 and 2 and Senior Advocate S. Sreekumar for the 3rd respondent, as instructed by Adv. B. Mohanlal.

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Assailing Exts. P5 and P8, Sr. Adv. Ramesh Babu put forth the following contentions;

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The alleged reason for rejecting the petitioner's technical bid is that petitioner’s failure to secure aggregate minimum 60 marks and the minimum of 15 marks for general dredging experience and specific dredging experience taken together. As the petitioner has more than 20 years of dredging experience it ought to have been awarded 20 marks for general dredging experience. However, no marks were awarded to the petitioner for dredging experience. There is no justification for not reckoning the work executed by the petitioner for the company named Marcator Limited, in spite of producing the experience certificate. The work covered by that certificate is not taken into account on the premise that the

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contract was only for the supply of dredging equipment. The said reasoning is ex facie arbitrary, as would be evident from a reading of the certificate dated 11.10.2019 produced along with the petitioner's bid. Therein, Marcator Ltd. has certified that the dredging works were executed through the petitioner. The marks are awarded based on the amount arrived at by multiplying the number of contracts by the value of the respective contract. Had the work executed for Mercator Limited been into account, the petitioner would have crossed the minimum 60 marks by a comfortable margin. All throughout the attempt was to award the contract to the 3rd respondent. This attempt commenced with the modification of the tender conditions as per Ext. P6. The arbitrariness is highlighted by the manner in which the 3rd respondent was awarded marks. While the petitioner was denied marks on the premise that the agreement authority, from whom clarification was sought regarding the experience of the applicant, had failed to reply within time, the 3rd respondent was awarded marks in spite of the agreement authority having submitted replies after the pre-qualification committee meeting.

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Pertinently, the partnership agreement produced by the 3rd respondent was not registered and the affidavit filed along with the bid document was not signed by an authorised person.

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For answering the allegation of mala fides and arbitrariness, the Standing Counsel for the 1st respondent referred to the following paragraphs of the 1st respondent's counter affidavit;

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“22. Regarding the averments contained in paragraph 19, it is submitted that the petitioner had submitted 4 works of similar nature for pre qualification, which amounts to Rs.27.34 crore. The true copy of the details of the experience dated 11.02.2022, in this regard, submitted by the petitioner is produced herewith and marked as Ext.R1(i).

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It may be noted that the experience certificate submitted by the bidder for prequalification is to be confirmed by the Agreement Authority. So, the confirmation request were sent to all agreement authority with deadline of 5 days. All the works the petitioner have submitted are not directly done by them, but are as the subcontractors The confirmation for the work carried out by the petitioner, as Sub contractor was received on 28.03.2022 for an amount of 9.33 crores only, which is below the qualifying amount of 15 crore. Accordingly, evidenced by Ext.R1(f) minutes, wherein it was stated that the qualifying

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W.P.(C). 14535/2022

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amount is 40% of the Estimated PAC of Rs. 15,40,73,748/GR It therefore follows that the marks were awarded strictly following section III Evaluation and qualification criteria mentioned in the bid document, the company represented by petitioner had scored only 56.83 marks out of 100 which is below the minimum qualifying mark of 60. The true copy of the relevant extract of Section 3 - Evaluation Qualification Criteria is produced herewith and marked as Exhibit R1(j).

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It has been clearly mentioned in the bid document that for General Dredging Experience and specific Dredging & Contract management Experience, for the last ten years taken together a minimum of 15 scores out of 25 is required for the technical bid to be considered for financial opening, which is considered as the crucial part of this bid document. The petitioner had scored only 7.5 marks which is below the minimum marks. That for the work executed by the petitioner, ABNCO, for Mercator limited it is mentioned in the experience certificate that they had supplied grab dredging equipment only. Moreover, all the works the petitioner have submitted are not directly done by them, but are as the subcontractors. True copy of that experience certificate is produced herewith and marked as Ext. R1(k).

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It is submitted that though confirmation request was sent to the Address and mail id provided along with the bid document confirmation was not received within the stipulated time. The true copy of that confirmation request is produced herewith and marked as Exhibit R1(1).”

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W.P.(C). 14535/2022

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For refuting the allegation that a differential consideration was extended to the 3rd respondent, the

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following paragraphs of the counter affidavit were relied on;

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“29. Referring to the averments contained in paragraphs 22 to 24, it submitted that the 3rd respondent, M/s KOOTHRADANS INFRASTRUCTURE LLP had submitted 5 works of similar nature for prequalification which amounts to Rs 35.81 crores. The true copy of the dredging experience provided by the 3rd respondent is produced herewith and marked as Exhibit R1(m).

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It is submitted that the certificate produced by the 3rd respondent for pre qualification is to be confirmed by the agreement authority. So, confirmation request was sent to all agreement authority with deadline of 5 days. As far as the 3rd respondent was concerned, the confirmation was received for the work which amounts to Rs.21.97 crore on March 26, which was executed by them, as prime contractor and which is again above the basic qualifying amount of 15 crores. The true copy of that confirmation received is produced herewith and marked as Exhibit R1(n).

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It is submitted that the 3rd respondent had scored 81 marks out of 100 whereas the minimum qualifying mark is 60 and that for General Dredging Experience and specific Dredging & Contract Management Experience, for the last ten years, taken

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together, a minimum of 15 scores out of 25 was required for the technical bid to be considered for financial opening, which is considered as the crucial part of this bid document and that they had scored 26.189 marks which is above minimum score of 15. It is mentioned in the bid document that, for General Dredging Experience and specific Dredging & Contract Management Experience last ten years taken together a minimum of 15 scores out of 25 is required for the technical bid to be considered for financial opening, which is considered as the crucial part of this bid document (section III and qualification criteria) M/s KOOTHRADANS INFRASTRUCTURE LLP had submitted 5 works of similar nature for prequalification which amounts to Rs 35.81 crores. Moreover they have General Dredging Experience more than 5 years. Ms KOOTHRADANS INFRASTRUCTURE LLP scored 26.189 marks base on the experience certificates of similar works submitted which shows that they had exceeded the criteria of scoring maximum of 2 marks. For Specific Dredging & Contract Management Experience last ten years, if it amounts more than 15 crores 5 marks should be awarded and if it amounts more than 50 crores 7 marks should be awarded. Here M/S KOOTHRADANS INFRASTRUCTURE LLP had submitted 5 works of similar nature for prequalification which amounts to Rs 35.81 crores which is in between 15 crores and 50 crores. Hence by interpolation method the value for 35.81 crore is obtained. Hence PQ committee concluded that they have fulfilled the criteria of Specific Dredging & Contract Management Experience.

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The true copy of the details of the awarding of the marks is produced herewith and marked as Exhibit R1(o).”

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The Standing Counsel contended that, pursuant to the award the third respondent has commenced the work, and completion of the work being in public interest, this Court should not interfere with the award based on vague and frivolous allegations.

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Sr. Adv. S.Sreekumar submitted that the contract was awarded to the 3rd respondent based on its better qualification, which even going by the admitted facts, are far superior to that of the petitioner. It is pointed out that, pursuant to the decision by the pre-qualification committee, the tender was allocated to the 3rd respondent as per order dated 06.05.2022. Thereupon, R3(e) agreement was executed on 18.05.2022 and work at the site commenced from 19.05.2022 onwards. The caution required by the writ courts while considering a challenge against the award of contract is argued with the support of the recent Apex Court decision in

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M/s. N.G. Projects Limited v. M/s. Vinod Kumar Jain and

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W.P.(C). 14535/2022

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Ors. [(2022) 6 SCC 127]it is pointed out that the Apex Court has gone to the extent of holding that, even if the court finds that arbitrariness or mala fides in grant of tender, still the court should refrain from interfering and relegate the aggrieved party to seek damages for the wrongful exclusion, rather than injuncting the execution of the contract.

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Even though much emphasis was laid on Ext. P4 email dated 08.04.2022, by which the petitioner was initially informed that its tender was admitted, that information is obviously wrong, since the pre-qualification committee had rejected the petitioner's tender on 24.3.2022, as evidenced by Ext. P8 minutes. Here, the 1st respondent’s assertion that Ext. P8 minutes was uploaded and exhibited in the e-tender website on 24.3.2022 itself assumes relevance.

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The allegation that the 3rd respondent's bid was accepted, in spite of the documents produced along with its bid being defective and the partnership agreement of the 3rd respondent itself not being registered, cannot be countenanced since no such pleadings are raised in the writ

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petition and there is no prayer against the the award of contract to the 3rd respondent.

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The third and main contention is regarding the manner in which the pre-qualification committee had awarded marks for dredging experience. The challenge is primarily premised on the certificate of experience issued by Mercator Limited. While the petitioner contends that the scope of work awarded by Mercator Ltd. included dredging works, the pre-qualification committee’s understanding is that the contract was confined to supply of grab dredging equipment. The situation gives rise to the question whether this court should accept the interpretation of the bidder or that of the employer. The settled law on the point is that the courts should give precedence to the opinion of the employer, unless the interpretation/decision is totally arbitrary or unreasonable. This is so, since the authority inviting tender is the best judge of its requirements. In this context, it may be apposite to refer to the decision in Tata Cellular v Union of India [(1994) 6 SCC 651], indicating the parameters within which the

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Constitutional Courts should confine the consideration the

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legality of the award of a contract. Being contextually relevant, paragraph 77 of the judgment is extracted hereunder;

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“77. The duty of the court is to confine itself to the question of legality. Its concern should be:

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Whether a decision-making authority exceeded its powers?

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Committed an error of law,

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committed a breach of the rules of natural justice,

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reached a decision which no reasonable tribunal would have reached or,

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abused its powers.

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Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:

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(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decisionmaking power and must give effect to it.

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(ii) Irrationality, namely, Wednesbury unreasonableness.

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(iii) Procedural impropriety.

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The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696], Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, “consider whether something has gone wrong of a nature and degree which requires its intervention”.

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Later, in Afcons Infrastructure Ltd v. Nagpur Metro Rail Corporation Limited and another [(2016) 16 SCC 818], it is held that, even if the interpretation to a tender document given by the owner or employer of the project is not acceptable to the constitutional courts, that by itself is not a ground for interference. Again, in Silppi Constructions Contractors v Union of India and another [(2020) 16 SCC 489], after carefully analysing a plethora of precedents, the Apex Court held as under;

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“19 . This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their

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powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.

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The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State

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instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case.”

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11. Recently, in N.G. Projects Ltd v Vinod Kumar Jain

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(supra), the legal position was further clarified in the following

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manner;

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“23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate

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upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decisionmaking process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.” (emphasis supplied)

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Thus, the scope of judicial review of administrative action is to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. The purpose being to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. Keeping the above principles in mind and upon careful scrutiny of the documents produced, I am of the definite opinion that the rejection of the petitioner's bid, based on the employer's

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understanding of its dredging experience, is not so irrational and unreasonable that it warrants interference in exercise of

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the power of judicial review.

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In the result, the writ petition is dismissed.

Sd/-

V.G.ARUN

JUDGE

W.P.(C). 14535/2022

APPENDIX OF WP(C) 14535/2022

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PETITIONER EXHIBITS

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Exhibit P1	TRUE COPY OF TENDER NO.KIIDC/AUCTION/03-
	2/2021-22 DATED 25.01.2022 PUBLISHED BY THE 1ST RESPONDENT (RELEVANT PAGES)
Exhibit P2	TRUE COPY OF BID SUBMITTED BY THE PETITIONER
Exhibit P3	TRUE COPY OF THE BID SUBMITTED BY THE 3RD RESPONDENT
Exhibit P4	TRUE COPY OF THE EMAIL DATED 8.04.2022 FROM 1ST RESPONDENT (AT 10;56 AM)
Exhibit P5	TRUE COPY OF THE EMAIL DATED 08.04.2022 FROM 1ST RESPONDENT ( AT 11;23 AM)
Exhibit P6	TRUE COPY OF THE CORRIGENDUM
Exhibit P7	TRUE COPY OF THE TENDER SUMMARY REPORT
Exhibit P8	TRUE COPY OF THE MINUTES OF THE PREQUALIFICATION COMMITTEE DATED 24.03.2022
RESPONDENT EXHIBITS
Exhibit R1(b)	True copy of the letter dated 30.10.2021 of the Managing Director, addressed to the Additional Chief Secretary, Water Resources Department
PETITIONER EXHIBITS
Exhibit P9	REPRESENTATION OF THE PETITIONER DATED 11.04.2022
RESPONDENT EXHIBITS
Exhibit R1(c)	True copy of the their letter No.MP2/113/2021-WRD dated 16.12.2021 of the Government

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Exhibit R1(d)	True copy of the minutes of the Technical Sanction Committee meeting held on 27.12.2021
Exhibit R1(e)	True copy of the corrigendum regarding average annual turnover issued on 23.02.2022.
Exhibit R1(f)	True copy of the minutes of the Pre Qualification Committee held on 24.03.2022
Exhibit R(h)	True copy of the Special Power of Attorney, executed by the Managing Director, M/s. Dharti Dredging and Infrastructure Ltd. in favour of Mani Menon
Exhibit R1(g)	True copy of the bid opening summary dated 08.04.2022
Exhibit R1(i)	True copy of the details of the experience dated 11.02.2022, submitted by the petitioner
Exhibit R1(j)	True copy of the relevant extract of Section 3 - Evaluation Qualification Criteria
Exhibit R1(l)	True copy of the confirmation request
Exhibit R1(m)	True copy of the dredging experience provided by the 3rd respondent
Exhibit R1(n)	True copy of the confirmation received
Exhibit R1(o)	True copy of the details of the awarding of the marks
Exhibit R1(k)	True copy of the exprience certificate
Exhibit R1(a)	True copy of the details of the performance report, about the previous works done by the qualified bidders, obtained from the Superintending Engineer, Siruvani Project Circle, Palakkad
Exhibit R3 a	THE TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE REGISTRAR OF COMPANIES TO THE 3RD RESPONDENT

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Exhibit R3 b THE TRUE COPY OF THE COMMUNICATION IN FILE NO KIIDC/95/2021-PE21 DATED 11.4.2022 ISSUED BY THE 2ND RESPONDENT Exhibit R3 c THE TRUE COPY OF THE NEGOTITION PROPOSAL SUBMITTED BY THE 3RD RESPONDENT T EH CHIEF EXECUTIVE OFFICER IN RESPONSE TO EXT R3(B) Exhibit R3 d THE TRUE COPY OF THE ORDER NO KIIDC/95/2021 PE 21 DATED 6.5.2022 ISSUED BY THE 2ND RESPONDENT TO THE 3RD RESPONDENT Exhibit R3 e THE TRUE COPY OF THE AGREEMENT DATED 18.5.2022 ENTERED IN TO BETWEEN THE 3RD RESPONDENT AND THE CHIEF ENGINEER KERALA IRRIGATION INFRASTRUCTURE DEVELOPMENT CORPORATION LTD PETITIONER EXHIBITS Exhibit P12 TRUE COPY OF THE E-MAIL COMMUNICATION DATED 23/03/2022 FROM THE PETITIONER ADDRESSED TO [email protected] Exhibit P13 TRUE COPY OF THE MALAYALA MANORAMA DAILY DATED 16.9.2022 RESPONDENT EXHIBITS Exhibit R3(f) THE TRUE COPY OF THE WORK ORDER ISSUED BY THE 3RD RESPONDENT WITH THE BAPCO INFRASTRUCTURE PRIVATE LIMITED, ALAPPUZHA AS PER COMMUNICATION Exhibit R3(g) THE TRUE COPY OF THE ORDER DATED 02/08/2022 ISSUED BY THE 1ST RESPONDENT TO THE 3RD RESPONDENT. Exhibit R3(h) THE TRUE COPY OF THE PROJECT PROCESS REPORT DATED NIL SUBMITTED BY THE 3RD RESPONDENT TO THE 1ST RESPONDENT.

Abnco Vie Win Ent. Pvt. Ltd. v. Kerala Irrigation Infrastructure Development Corporation Limited (Kiidc)

Case brief

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Abnco Vie Win Ent. Pvt. Ltd. v. Kerala Irrigation Infrastructure Development Corporation Limited (Kiidc)

Case brief

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What did the court decide?

What the court decided

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