IN THE HIGH COURT OF KERALA AT ERNAKULAM
V.G. ARUN, J.
M/s. PGCCPL and Aryacon Consortium – Petitioner
Versus
Kerala State Electricity Board Limited – Respondent
W.P. (C) No. 32855 of 2022
Decided On : 09-11-2022
Constitution of India – Article 226 - Probable Amount of Contract – Tender - Petitioners had serious doubts about the third respondent's qualification, the materials submitted by the third respondent in support of its bid was downloaded from the website - Third respondent had failed to comply with Clause of the instructions to the bidders forming part of Notice Inviting Tender - Whether the public interest is affected – Held, In the light of certificates issued by the Chartered Accountant, the award in favour of the third respondent cannot be termed as a decision which no responsible authority, acting reasonably and in accordance with relevant laws, could have reached - Public interest is also in favour of the award - Petition dismissed.
JUDGMENT :
V.G. ARUN, J.
1. The Kerala State Electricity Board Limited/second respondent, invited tenders for the execution of Civil and Hydro Mechanical works of Upper Sengulam Hydro Electric Project vide Ext.P1 e-tender notice dated 3.5.2022, with the Probable Amount of Contract (PAC) fixed at Rs. 1,75,60,70,410/-. The first petitioner and respondents 3 and 4 were pre-qualified in the tender and Ext.P4 Note containing the details of the pre-qualified bidders was published on 7.10.2022. The price bids were opened on 10.10.2022 and the third respondent declared as the lowest bidder, as evidenced by Ext.P6, the BOQ summary details. As the petitioners had serious doubts about the third respondent's qualification, the materials submitted by the third respondent in support of its bid was downloaded from the website. A scrutiny of the documents proved the petitioners' suspicion to be correct. It came to light that the third respondent had failed to comply with Clause 26.2.1(c), Clause 3.1.6 and 27.1 of the instructions to the bidders forming part of Ext.P1 Notice Inviting Tender. Hence, this writ petition seeking the following reliefs:
(b) Declare that the 2nd Respondent cannot entertain the bid submitted by the 3rd Respondent due to lack of pre-qualification and consequently declare the 1st Petitioner as L1 in E-Tender No. CECCS/01/2022-23 dated 03.05.2022 invited by the 2nd Respondent by a writ of mandamus or such other appropriate writ, order or direction.
(c) Stay all further proceedings pursuant to Exhibit P1 E-Tender No. CECCS/01/2022-23 dated 03.05.2022 invited by the 2nd Respondent and Exhibit P4 Note No. CECCS/USHEP/Tender/2022-23 dated 7.10.2022 and Exhibit P5 Note No. CECCS)USDHEP/Tender/2022-23 dated 10.10.2022.
2. Senior Advocate Joseph Kodianthara appearing for the petitioners contended that the third respondent having failed to satisfy the mandatory conditions for pre qualification, respondents 1 and 2 ought to have rejected its bid at the pre-qualification stage. As per Clauses 3.1.6 and 27.1.of Ext.P1, the lead bidder of a joint venture consortium should have a turnover of not less than 30% of the probable amount of contract for the last three years. The PAC being Rs. 1,75,60,70,410/- 30% of the same would come to Rs. 52,68,21,123/-. Going by the balance sheet and profit and loss accounts of M/s. Anchor Structural, Engineers and Contractors, the lead bidder of the third respondent consortium, its turnover for the three financial years preceding the tender is only Rs. 47,77,13,533/-.
3. In a patently illegal and fraudulent attempt to overcome this defect, the third respondent produced Ext.P8 Asset and Business Operation Transfer Agreement where under the lead member of the consortium agreed to acquire certain assets of a proprietorship concern. In an attempt to lend further support to its claim, the third respondent produced Ext.P9 Chartered Accountant's Certificate dated 17.6.2022, wherein the Chartered Accountant included the supposed outcome of Ext.P8 agreement to the turnover of the lead member, so as to make it appear that the lead member had the requisite turnover stipulated in Clause 3.1.6 and 27.1 of Ext.P1.
4. Learned Senior Counsel further contended that as per Clause 27.2, the assessment of the applicant's total turnover for the last three years should be based on the audited annual accounts submitted by the bidder. The Chartered Accountant should issue the certificate in the format prescribed as per Annexure 6 to Ext.P1. As such, there is no provision for producing and accepting a certificate like Ext.P9. Even otherwise, Ext.P8
Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Limited
Jagadish Mandal vs. State of Orissa
N.G. Projects Ltd. vs. Vinod Kumar Jain
National High Speed Rail Corporation Ltd. vs. Montecarlo Limited and Another
Silppi Constructions Contractors vs. Union of India and Another
Tata Cellular vs. Union of India
Vidarbha Irrigation Development Corporation and Others vs. Anoj Kumar Agarwala and Others
Section 187 of Act, 1961 deals with Change in constitution of a firm.
Point of law: Entire process of awarding the contract by respondent No.2 in favour of Respondent No.3 cannot be accepted as valid
Power of judicial review exercised by High Court under Article 226 of Constitution of India is to find out whether decision of State was manifestly arbitrary or unjust.
Tender - Tender conditions are required to be read as provided in the tender document and if there are two views or construction possible than the view of the authority interpreting the tender docume....
Judicial review in tender matters is limited; courts should not interfere unless actions are arbitrary, discriminatory, or biased.
The court's decision emphasized the importance of evaluating technical qualifications in the tender process and the need to address any mala fides or bias.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.