The High Court of Punjab and Haryana dismissed a writ petition where the petitioner sought intervention to open his rejected tender for a transport contract. The court held that mandatory EPF documentation requirements applied to his bid despite his claim of being exempt.
Writ petition dismissed with no relief granted to the petitioner.
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.
CWP No.2353 of 2013 (O&M)
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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP No.2353 of 2013(O&M) Date of decision: 02-05-2013
Ram Lal
-----Petitioner
Vs.
Food Corporation of India and another
----Respondents
CORAM:HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE GURMEET SINGH SANDHAWALIA
Present:Mr. Jaspal Singh Maanipur, Advocate for the petitioner.
Mr. H.P.S.Ghuman, Advocate for respondent No.1.
Mr. Gurminder Singh, Advocate for respondent No.2.
Ajay Kumar Mittal,J.
1. The petitioner whose technical bid was not found to be in order has approached this Court through the present writ petition filed under Article 226 of the Constitution of India seeking issuance of a writ of mandamus for directing respondent No.1 – Food Corporation of India to open his price bid which was submitted for transport contract in Food Storage Depot, Badni Kalan in pursuance of the tender notice dated 21.12.2012, Annexure P.1. Direction has also been sought for restraining respondent No.1 to allot the tender to
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respondent No.2.
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that only the tender of respondent No.2 was opened and not his. He enquired about the reason for not opening his tender. He was verbally told by the official of the respondent-department that his tender was incomplete because as per condition No.(g) of the tender notice, certificate from RPFC with regard to deposit of the EPF for the relevant experience had not been attached as his experience certificate was of Labour and Cartage Contractor. The petitioner requested that since he submitted the tender for transport, therefore, copy of EPF Code Number and proof of deposit of EPF was not the condition for him. He prayed for supply of a copy of the order ignoring his tender but having received no response, he has approached this Court through the present writ petition.
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estimated contract value of handling and transport contract was less than rupees five crores, it was not mandatory for tenderer to append the requisite experience certificate. The tenderer could file an undertaking that an additional Performance Guarantee in the form of Bank Guarantee of 10% of the contract value from SBI bank or its associate banks or the other Public Sector Banks would be given, if selected. According to the learned counsel, the experience certificate appended was surplusage and the petitioner could not have been disqualified on that basis. It was urged that the petitioner while submitting the forwarding letter in Clause 5 of Appendix I had specifically stated as under:-
“5. I hereby undertake to furnish an additional performance guarantee in the form of bank guarantee of 10% of the contract value from State Bank of India or any of its associate banks or by any other public sector bank which shall be valid and enforceable till six months after the expiry of the contract period (for tenderers without having the requisite experience) in addition to Security deposit in the form of Bank Draft or Pay order or through ECS and Bank Guarantee.”
In terms of the aforesaid clause, it was also contended that in case of transport contract, no EPF was required to be paid and, therefore, non-filling of the column in the tender notice could not have debarred the petitioner from consideration of his technical and price bid. Learned counsel for the petitioner further contended that the petitioner had applied for transport contract at Badhni Kalan for which no EPF was required to be paid. He urged that respondent No.2
had given the price bid of ` 474/- whereas the price bid of the
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petitioner was 443/- and in such circumstances, it was beneficial for respondent No.1 to have accepted the same. Learned counsel for the petitioner also referred to tender notice (Annexure R.1) to submit that the same specified regarding bank guarantee @ 10% of the contract value of 2,24,70,100/- for Badhnikalan centre, District Moga which was clearly in respect of transport contract and, therefore, contention of respondent No.2 that Clause (III) applied in case of handling and transport contract, was not correct.
“III) Where the estimated contract value of handling and transport contract is less than Rupees Five Crores, Tenderer without the requisite experience as mentioned above may also participate subject to providing an undertaking that an additional Performance Guarantee in the form of Bank Guarantee of 10% of the contract value from SBI Bank or its Associate Banks or the other Public sector Banks will be given, if selected. The format of the Bank Guarantee to be provided in such cases is at Appendix V of Annexure I.”
According to the learned counsel for respondent No.2, the petitioner could not claim benefit of this Clause as he had applied for transport
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contract only and the petitioner was thus, required to file the experience certificate which had been shown in Appendix VI but he had failed to attach any document with regard to EPF Code and payment of outstanding liabilities and No Due certificate from the RPFC. He submitted that Clause (vi) of Note 7 in terms and conditions of notice inviting tenders required the tenderer to file the EPF code Number and proof of deposit of EPF for the relevant experience period.
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W.B.State Electricity Board v. Patel Engineering Co. Limited and
others, (2001) 2 SCC 451 in support of his submission to say that there was no malafide or any error in the decision making process.
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“(vi) Copy of EPF Code Number and proof of deposit of EPF for the relevant experience period, if applicable i.e. No Due Certificate from the concerned RPFC and copies of monthly challans for the experience period is also required to be attached with the tender.”
and had not marked the same. It was not disputed as was apparent from the accounts submitted by the petitioner that he was paying EPF and that there was EPF code. In such circumstances, it was mandatory for the petitioner to have filled the said column. Argument of the counsel for the petitioner that the petitioner had filed an undertaking with regard to the submission of Performance guarantee in the form of bank guarantee of 10% of the contract value from SBI Bank or its associate Banks or the other Public Sector Banks and the filing of the experience certificate was surplusage, would not help the petitioner as Clause III of the Qualification Conditions for tender was not applicable to him being tender for transport contract only. Once the petitioner was depositing the EPF, the mentioning of the relevant code and attaching the relevant documents in support thereof was essential. Clause 10 of the terms and conditions of the tender specifically provided that the tenders which were not accompanied by all the Schedules, annexures intact and duly filled in and signed shall be liable to be rejected. Respondent No.1 had, thus, rightly rejected the technical bid of the petitioner. The technical bid having been rightly rejected, the argument of the learned counsel for the petitioner that the price bid of the petitioner was lower than respondent No.2 does not advance the case of the petitioner.
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CWP No.2353 of 2013 (O&M)
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasiadministrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy
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administrative burden on the administration and lead to increased and unbudgeted expenditure.”
Limited, (2000) 2 SCC 617, law relating to award of contract by State and Public Sector Corporation was discussed. It was held:-
“The award of a contract, whether it is by a private party or by a public body or the State is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State,its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedure laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision-making process and interfere if it is found vitiated by malafides, unreasonableness and arbitrariness.”
contracts in M/s B.S.N. Joshi and Sons Limited v. Nair Coal Services Limited , AIR 2007 SC 437, noticed as under:-
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“67. We are not oblivious of the expansive role of the superior courts on judicial review.
i) If there are essential conditions, the same must be adhered to;
ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing
iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction.
v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were
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laid down, the same may not ordinarily be interfered with.
(vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority.
(vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint.”
Communication Networks Pvt. Limited and another v. Union of India and others , AIR 2009 SC 1204, after analysing the judicial precedents in para 39 had concluded as under:-
“39. On examining the facts and circumstances of the present case, we are of the view that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellants. When the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features have to be considered. A contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bona fide and is in public interest, Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake of argument that there is a procedural lacuna.”
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grievance to establish that the decision making process is faulty and it is vitiated by malafides, unreasonableness or arbitrariness. The award of contract in the case of a private party or by a public body or the State is essentially a commercial transaction for which commercial considerations shall have precedence. It is open to the State to evolve its own methodology for arriving at a decision. The courts shall exercise judicial restraint in such administrative action as they do not sit as a Court of appeal to substitute its own views.
dismissed.
(Ajay Kumar Mittal) Judge May 02, 2013 (Gurmeet Singh Sandhawalia) 'gs' Judge
2 issues framed by the court
Whether a tenderer applying for a transport contract was required to submit proof of EPF deposit despite being in a different category than handling contractors.
Whether the rejection of the petitioner's tender for non-compliance with EPF documentation requirements was arbitrary or in violation of tender conditions.
Colour shows how this judgement treated each authority
M/s M.K. & Company v. Food Corporation of IndiaReferred¶4
M/s M.K. & Company v. Food Corporation of India, CWP No.5838 of 2012
Tata Cellular v. Union of IndiaExplained¶6
Tata Cellular v. Union of India, (1994) 6 SCC 651 · Who else cites this
W.B.State Electricity Board v. Patel and othersExplained¶4
W.B.State Electricity Board v. Patel Engineering Co. Limited and others, (2001) 2 SCC 451 · Who else cites this
Air India Limited v. Cochin International AirportExplained¶7
Air India Limited v. Cochin International Airport Limited, (2000) 2 SCC 617 · Who else cites this
M/s B.S.N. Joshi and Sons Limited v. Nair Coal Services LimitedExplained¶7
M/s B.S.N. Joshi and Sons Limited v. Nair Coal Services Limited, AIR 2007 SC 437 · Who else cites this
Siemens Public Communication Networks Pvt. Limited v. Union of IndiaExplained¶7
Siemens Public Communication Networks Pvt. Limited and another v. Union of India and others, AIR 2009 SC 1204 · Who else cites this
3 provisions across 2 enactments
Ram Lal
Food Corporation of India
Another
Ajay Kumar Mittal
Gurmeet Singh Sandhawalia
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
