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2022 Supreme(Bom) 483

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Patel, Madhav J. Jamdar, JJ.
Relcon Infraprojects Ltd. – Petitioner
Versus
Life Insurance Corporation of India, Through its Deputy Chief Engineer, Engineering Department and ors. – Respondents
Writ Petition (L) NO. 1817 of 2022
Decided On : 21-02-2022

Advocates:
Advocate Appeared:
For the Petitioner:Mr Sharan Jagtiani, Senior Advocate with Shweta Sangtani, Aditya Udeshi, Mahesh Londhe & Saurabh Deorukhkar i/b M/s Sanjay Udeshi & Co
For the Respondent:Mr Milind Sathe, Senior Advocate with Roop B i/b M/s The Law Point Mr Dushyant Kumar

Headnote:

Constitution of India,1950 - Article 226 - Construction company - Unfairly and illegally disqualified - Tender - Sole Petitioner is a construction company - Over year, on its own or in joint ventures with others, it has undertaken several government and private projects - In this Petition, it says it has been unfairly and illegally disqualified from participating in a tender dated floated by 1st Respondent, Life Insurance Corporation of India - LIC owns a plot of land at Setalvad Lane, Off Nepean Sea Road at Malabar Hill - On this, there stands a residential building called “Jeevan Jyot” - It has a podium and six upper floors with 26 large residential apartments - Building is now six decades - Its condition is said to have deteriorated over time - LIC now proposes a redevelopment of this structure - Tender was specifically for this purpose - Specific challenge in Petition is to two LIC orders or communications dated - By these, LIC said that, having regard to certain tender conditions, Petitioner stood disqualified - Basis for LIC’s decision was that in a separate and unrelated tender contract between Municipal Corporation of Greater Mumbai and Petitioner, Petitioner had not only suffered a black listing that was operative until what is called date of NIT or Notice Inviting Tenders but, more directly related to a specific tender condition, that black listing related to substandard or delayed work done in previous five years - Whether LIC’s disqualification of Petitioner is facially arbitrary, unreasonable or irrational – Held, There can be no quarrel with propositions set out in this judgment - But Court do not believe that Daffodills is an authority for propositions on which rests his case, viz., that even where it is shown that a tendering authority has acted plausibly and reasonably, or, at any rate, that its actions cannot be faulted as being entirely irrational or afoul of Wednesbury unreasonableness, a Court must nonetheless interfere because it might be merely preferable to do so - Daffodills was decided on an issue of a failure of natural justice - This is not a case where Petitioner has been disqualified for some trivial or minor infraction, some irregularities or non-compliance - LIC has taken a conscious decision on a review of records disclosed by Relcon itself and has done so within a reasonable and plausible reading of disqualification clause - Court do not find LIC’s action to be so totally unreasonable, irrational or implausible as to demand or warrant our interference at all - On contrary, Court believe that action is entirely justifiable in facts and circumstances of cases and on basis of documents disclosed by Relcon itself - In Court view there is no merit whatsoever in Petition - It is dismissed - There will be no order as to costs.

JUDGMENT :

GS Patel, J.

1. The sole Petitioner (“Relcon”) is a construction company. Over the year, on its own or in joint ventures with others, it has undertaken several government and private projects. In this Petition, it says it has been unfairly and illegally disqualified from participating in a tender dated 15th June 2021 floated by the 1st Respondent, the Life Insurance Corporation of India (“LIC”).

2. LIC owns a plot of land at Setalvad Lane, Off Nepean Sea Road at Malabar Hill, Mumbai 400 006. On this, there stands a residential building called “Jeevan Jyot”. It has a podium and six upper floors with 26 large residential apartments. The building is now six decades old. Its condition is said to have deteriorated over time. The LIC now proposes a redevelopment of this structure. The tender was specifically for this purpose.

3. The specific challenge in the Petition is to two LIC orders or communications dated 14th December 2021 and 14th January 2022. By these, LIC said that, having regard to certain tender conditions, the Petitioner stood disqualified. The basis for LIC’s decision was that in a separate and unrelated tender contract between the Municipal Corporation of Greater Mumbai (“MCGM”) and the Petitioner, the Petitioner had not only suffered a black listing that was operative until what is called the date of the NIT or Notice Inviting Tenders, 15th June 2021, but, more directly related to a specific tender condition, that black listing related to substandard or delayed work done in the previous five years.

4. We turn straightaway to the tender condition in question, Clause 3(i)(b). We reproduce whole of this clause.

    “3. Disqualification:

i) Even if the Bidder meets the Qualification Criteria, he shall be subject to disqualification if he or any one of the constituent partner/Director is found to have:

(a) Made misleading or false representations in the forms, statements, affidavits and attachments submitted in proof of the qualification requirements and/or

(b) Records of poor performance during the last five years as on the date of NIT, such as abandoning the work, rescission of the contract for reasons which are attributable to non-performance of the contractor, inordinate delays in completion, consistent history of litigation resulting in awards against the Bidder or any of the constituents, or financial failure due to bankruptcy and so on.”

(Emphasis added)

5. Even at first glance, this tells us that Clause 3 overrides, or is an exception to, the Qualification Criteria; a bidder who is otherwise qualified may yet be disqualified if the conditions in (a) or (b) obtain. A correct reading is to join the words “is found to have” in the controlling part with the opening words of the two sub-clauses, thus: “is found to have ... made misleading or false representations…” or “is found to have … records of poor performance…”. Sub-clause (b) has several components. First, there must be a ‘record’. Second, the record must be of ‘poor performance’. Third, this record must be of the past five years, i.e., it cannot relate to something in the more distant past. Fourth, that period of five years is to be reckoned backwards from the date of the Notice Inviting Tenders, or NIT, accepted as 15th June 2021. The rest of sub-clause (b), from the words “such as” to the words “as so on”, is an illustrative descriptor of what the expression ‘poor performance’ is intended to mean. That descriptor phrase is intended to eliminate any ambiguity, but it does not exhaust the universe of what might constitute a ‘record of poor performance’.

6. Mr Jagtiani’s submission for Relcon is really an attempt to inject a certain level of ambiguity into sub-clause (b), when he argues that the five-year period does not qualify ‘record’ but only qualifies ‘poor performance’. There may be a very recent ‘record’, he argues, well within the five-year period, but if it pertains to ‘poor performance’ more than five years before the date of the NIT, then there can be no

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