Back
2020 Supreme(Bom) 1251
IN THE HIGH COURT OF BOMBAY AT NAGPUR
SUNIL B. SHUKRE, AVINASH G. GHAROTE, JJ.
R.K. Chavan Infrastructure Pvt. Ltd. – Appellant
Versus
The State of Maharashtra Through Secretary Public Works Department, Mantralaya, Mumbai & Others – Respondent
Civil Writ Petition No. 6185 of 2019
Decided On : 28-10-2020
For the Petitioner:M.G. Bhangde, Senior Advocate, V.V. Bhangde, Advocate.
For the Respondents:R1 to R4, N.P. Mehta, A.G.P., R5 & R6, A.D. Mohgaonkar, Chaitanya Mohgaonkar, R7, S.P. Bhandarkar, P.P. Deshmukh, Advocates.
The court held that the TEC's decision was not based on a proper application of mind and was vitiated by malafides and favoritism. The court also found that the respondent no.7 did not satisfy the eligibility criteria and was therefore not entitled to be awarded the contract. The court quashed the entire tender process and directed the respondents to recommence the process, with a word of caution, that no authority, whomsoever, should permit or tolerate any interference in the entire process, from anyone whomsoever, of any nature whatsoever and the eligibility/qualifying criteria should be scrupulously adhered to, in all aspects.
Headnote:
[CATEGORY] [SUB-CATEGORY]
Fact of the Case:
The petitioner, a construction company, submitted a bid for a road improvement project. The respondent no.7, a joint venture (JV), also submitted a bid. The petitioner was declared as L-1 (lowest bidder) and was issued a letter of acceptance. However, the respondent no.7 raised objections to the petitioner's eligibility, which were rejected by the Tender Evaluation Committee (TEC). The respondent no.7 then approached the court, challenging the TEC's decision. The court issued an interim order staying the award of the contract to the petitioner.
Finding of the Court:
The court held that the TEC's decision was not based on a proper application of mind and was vitiated by malafides and favoritism. The court also found that the respondent no.7 did not satisfy the eligibility criteria and was therefore not entitled to be awarded the contract. The court quashed the entire tender process and directed the respondents to recommence the process, with a word of caution, that no authority, whomsoever, should permit or tolerate any interference in the entire process, from anyone whomsoever, of any nature whatsoever and the eligibility/qualifying criteria should be scrupulously adhered to, in all aspects.
Issues: (i) Whether the TEC's decision was based on a proper application of mind and was vitiated by malafides and favoritism. (ii) Whether the respondent no.7 satisfied the eligibility criteria and was therefore entitled to be awarded the contract.
Ratio Decidendi: (i) The court held that the TEC's decision was not based on a proper application of mind and was vitiated by malafides and favoritism because: (a) The TEC failed to maintain a proper record of its proceedings, which made it impossible to ascertain the reasons for its decision. (b) The TEC's decision was based solely on the letter dated 20/8/2019 by Mr. A. B. Gaikwad, which the court found to be illegal and without any effect. (c) The TEC failed to grant a personal hearing to the petitioner before canceling its tender, which was a violation of the principles of natural justice. (ii) The court held that the respondent no.7 did not satisfy the eligibility criteria and was therefore not entitled to be awarded the contract because: (a) The respondent no.7's lead partner did not meet the minimum qualifying criteria for annual turnover and execution of quantities. (b) The respondent no.7's junior partner did not meet the minimum qualifying criteria for execution of quantities and experience in similar work.
Final Decision: The court quashed the entire tender process and directed the respondents to recommence the process, with a word of caution, that no authority, whomsoever, should permit or tolerate any interference in the entire process, from anyone whomsoever, of any nature whatsoever and the eligibility/qualifying criteria should be scrupulously adhered to, in all aspects. The court also directed the initiation of an enquiry into the conduct of Mr. A. B. Gaikwad, the Chief Engineer (NH) of MSRDC, the person issuing the letter dt.20/8/2019 and the certificate dated 27/2/2020 (pg.536-537) in light of what has been stated in this judgment and to submit a report to this Court within a period of one month from today. The enquiry shall be conducted by an officer not below the rank of Secretary in the Ministry of Transport, National Highway Division.
JUDGMENT :
Avinash G. Gharote, J.
1. Heard. Rule. Rule made returnable forthwith. Heard finally with the consent of the learned Counsel for the parties.
2. By the present petition challenge is raised (a) to the communication dated 31/8/2019 issued by the respondent no.4 (the letter by which, the offer of the petitioner, which was initially accepted as L-1 is rejected -Annexure-12/pg.191); (b) the communication dated 20/8/2019 issued by the respondent no.5 (Annexure – 9/pg. 182), whereby the work experience certificate issued in favour of the petitioner by the respondent no.6 was canceled); (c) the communication dated 9/8/2019 (Annexure -24-A/ pg.361-C & D), whereby the objection of the petitioner dated 8/8/2019, to the eligibility of the respondent no.7 has been rejected and (d) a further declaration has been sought that the respondent no.7 does not satisfy the technical eligibility criteria of the subject tender process and is as such disqualified to participate therein.
3. The facts leading to the present petition are as under:-
(a) On 29/6/2009, a notice inviting tender (NIT) was published by the respondent no.4, bearing No.86399 for 2019-20 (second call), in the local newspapers as well as the website of the respondent no.1 inviting offers for the work of “improvement to Chargaon Shirpur Kalmana to Chandrapur District border (Wanoja) in km.182/100 to 204/500, SH-317 (length 16.900 km.) under CRF. Tq. Wani, District : Yavatmal”. Approximate value of the work was Rs.47,56,07,119/-. The bid security amount was Rs.23,79,000/-. The period of completion was 18 calendar months including monsoon. The terms of the tender permitted bids from joint ventures.
(b) On 11/7/2009 the petitioner submitted its bid. The respondent no.7 a Joint Venture comprising of Bajoria Construction Company Pvt. Ltd. (BCCPL), the lead partner and Gughane Infrastructure Pvt. Ltd. (GIPL), the junior partner in the JV, also submitted its bid. One SDPL- SGS (JV), Pune also submitted its bid.
(i) To satisfy the qualifying criteria as contained in Clause 4.4 A (a), the petitioner had submitted the certificate of Govind D. Chevale & Associates Chartered Accountants (pg.153).
(ii) To satisfy the qualifying requirement in Clause 4.4 A (b) and (c), the petitioner had submitted a certificate dated 05/12/2018 issued by the Executive Engineer, MSRDC, Pune (pg.154). As this certificate, is the bone of contention, certain factual position leading to the issuance of this certificate, being material, need to be mentioned here:-
| 1 | 31/03/17 | The MSRDC/respondent no.5, had awarded the work of rehabilitation and upgradation of Khamgaon- Mehkar- Sultanpur- Lonar- Mantha -Vathurphata- Pratur- Mazalgaon- Dharur -Kaij -Kalamb- Barshi- Kurudwadi- Pandharpur- Sangola road connecting NH- 166, to one Madhucon Projects Ltd., a company having its registered office at Madhu Complex, 1-7-70, Jublipura, Khammam-507003, Telengana, under an agreement dated 31/3/2017. The total cost of the project was Rs.173,60,00,000/- and road length was 34.35 kms. |
| 2 | 15/02/18 | Madhucon Projects Ltd. under an MOU (pg.161) sub-contracted 49% of this work valued at Rs.96,13,11,855/- for a length of road measuring 16.835 kms. to the petitioner. |
| 3 | 16/08/18 | Approval to the sub-contracting was granted by the Executive Engineer, MSRDC/ respondent no.6. |
| 4 | 01/10/18 | Work under the sub-contract was commenced by the petitioner. |
| 5 | 12/10/18 | The sub-contracting was approved by the Competent Authority of the MSRDC/ respondent no.5. |
| 6 | 30/11/18 | Work under sub-contracting was completed by the petitioner. |
| 7 | 05/12/18 | Certificate of successful completion of work under sub-contracting was issued by the respondent no.6 to the petitioner. |
(c) On 20/7/2019 in the instant matter, the technical bids of all the three bidders were opened. In the process of ev
