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Andhra Pradesh High Court
Judges : A.GANGADHARA RAO
Aga Construction - Appellant
Versus
Cheif Engineer, Municipal Corporation of Hyderabad - Respondent
Decided On : 09-30-81
HYDERABAD MUNICIPAL CORPORATION ACT, 1955 - SECTION 129A - PRE-QUALIFICATION FOR TENDERS - VALIDITY - CONSTITUTIONALITY - PUBLIC INTEREST - REASONABLENESS - FUNDAMENTAL RIGHTS.
Fact of the Case:
The petitioners, contractors, challenged the pre-qualification prescribed for tenders for contract works for over fifty lakhs of Hyderabad municipal corporation. The pre-qualification was introduced to ensure that contractors who were experienced in works of similarly magnitude in the construction work of similar magnitude involving similarly skills and who have the necessary equipment, machinery and men in handling such jobs only will tender for such works so that the taken up are completed in time, according to the specifications, and the Municipal corporation of Hyderabad derives the best result on the investment made on the works.
Finding of the Court:
The court held that the pre-qualification prescribed for tenders for contract works for over fifty lakhs of Hyderabad municipal corporation was valid and constitutional. The court found that the pre-qualification was in the public interest and was reasonable. The court also held that the pre-qualification did not violate the fundamental rights of the petitioners under Articles 14 and 19(1)(g) of the Constitution of India.
Issues: 1. Whether the pre-qualification prescribed for tenders for contract works for over fifty lakhs of Hyderabad municipal corporation was valid and constitutional? 2. Whether the pre-qualification was in the public interest and was reasonable? 3. Whether the pre-qualification violated the fundamental rights of the petitioners under Articles 14 and 19(1)(g) of the Constitution of India?
Ratio Decidendi: 1. The court held that the pre-qualification prescribed for tenders for contract works for over fifty lakhs of Hyderabad municipal corporation was valid and constitutional. The court found that the pre-qualification was in the public interest and was reasonable. The court also held that the pre-qualification did not violate the fundamental rights of the petitioners under Articles 14 and 19(1)(g) of the Constitution of India. 2. The court observed that the pre-qualification was prescribed in order to get the work done by contractors who has the necessary experience, expertise and the resources to carry out the work. The court found that the pre-qualification was not arbitrary or discriminatory and that it was in the public interest to get the work done by the best contractors in the best manner possible and without delay. 3. The court held that the pre-qualification did not violate the fundamental rights of the petitioners under Articles 14 and 19(1)(g) of the Constitution of India. The court observed that no persons has a fundamental rights to carry on business with the Government and that all that he can claims is that the Government should be reasonable and fair in giving its contracts and it must be in the public interest.
Final Decision: The court dismissed the writ petitions filed by the petitioners.
( 1 ) THE pre-qualification prescribed for tenders for contract works for over fifty lakhs of Hyderabad municipal corporation are questioned in this writ petitions. Contract works of the municipal corporation were giving under Ss. 124 to 129 of the Hyderabad municipal corporation Act , 1955 (herein after called the municipal corporation act) and the municipal corporation of Hyderabad tender rules ,1970. From the affidavit of the special officer, municipal corporation of Hyderabad field in this writ petitions , it appears that the past experience of the corporation has shown that whenever tender were called for , contractors of the different status were participating quoting tender and in certain cases contract with out having sufficient experience to tackle the jobs of required magnitude procedure the work and subsequently it was found by the Municipal Corporation of Hyderabad that their experience was much below the expected standard and they spoil the important prestigious project. In order to avoid the unhealthy competition among the contractors propose to have pre-qualification for the contractors and also to get the best result , the corporation proposed to have pre-qualification for the contractors. The object of stipulating pre-qualification for the tendering for the work of large magnitude to estimate to cost rupee fifty and more was to ensure that contractors who were experienced in the works of similarly magnitude in the construction work of similar magnitude involving similarly skills and who have the necessary equipment, machinery and men in handling such jobs only will tender for such works so that the taken up are completed in time, according to the specifications, and the Municipal corporation of Hyderabad derives the best result on the investment made on the works.
( 2 ) THE corporation has undertaken works of large magnitude such has road over bridge at Begumpet , commercial complexes and auditoriums requiring considerable expertise in the relevant field. Therefore on 2-4-1981 the Municipal Corporation of Hyderabad issued a pre-qualification notice stating that they wanted to put up a number of multi-storeyed buildings, commercial complex , auditorium and road over bridge at Hyderabad. Then the salient feature of the schemes were indicated. the approximate cost of each schemes were range from rupees fifty to 160 lakhs. It was stated in that notice that works were to be carried out and the necessary internal water supply, sanitary, electrical fittings, lifts and fire fittings equipment are also be taken up by the same agency. Then the interested agencies were invited to furnish the following date to enable the Chief Engineer. Municipal Corporation of Hyderabad to appraise their qualification for the above works 1. Identification. 2. Financial data 3. Relevant experience or performance 4. Equipment and machinery 5. Any other relevant information 6. The agencies who had carried out such and similar jobs of equal value of each works only can apply. Replies in sealed cover had to be addressed to the Chief Engineer, Municipal Corporation of Hyderabad so as to reach him 20-04-1981. This notice was published in the news papers. In response to that notice 34 persons including the petitioners in all this writ petitions made application giving the necessary particulars regarding their qualifications, experience etc. , subsequent to the receipt of those application with a view to have a benefit of getting an impartial selection of contractors who have the experience and capacity to do the work proposed , the special officer wrote a letter dated 24-4-1981 to the state government to constitute a committee who would scrutinise the replies submitted by various contractors in pursuance of the pre-qualification notice issued by the corporation. Pursuant his letter, the government constituted a tender committee consisting of the Chief Engineer, Municipal Corporation of Hyderabad, Chief Engineer , Pochampadu,
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