The central legal point established in the judgment is that the condition of inviting tenders only from pre-qualified contractors for works estimated to cost above Rs. 5 crores is essential for judging the capability of the tenderer to perform the work and is in line with commercial considerations.

PRADEEP KANT, G. K. GUPTA, JJ.

( 1 ) THIS petition is filed by M/s. J. S. M. Construction Company through its Proprietor with the prayer for quashing the tender notice dated 14. 5. 2002 and for directing the respondents to finalise the tenders already submitted by the petitioner in pursuance of the tender notice dated 2,4. 2002.

( 2 ) SHORT question involved in the writ petition is that as to whether the Executive Engineer could have invited fresh tenders by means of impugned tender notice by ignoring the condition of "pre-qualification of the contractors" as provided in para 18. 4. 3 of the Central Public Works department, Manual, Volume-II.

( 3 ) THE Executive Engineer, Lucknow Central Division 2 of the Central Public Works department initially invited applications from the contractors to pre-qualify for construction and electrical works for Regional Office Building for NABARD at Gomti Nagar, Lucknow, by means of invitation dated 31st May, 2001. In pursuance of the said invitation, the petitioner along with certain more agencies, total five in number, were selected for submitting the tender as per approval of the Additional Director General (North-Zone), Central Public Works department, New Delhi. After selection of agencies, tenders were invited by the Executive engineer on 27. 12. 2001 and all such short-listed agencies submitted their respective tenders. However, out of the five agencies, the tender submitted by M/s. U. P. Rajkiya Nirman Nigam ltd, was declared to be invalid. Further case is that the petitioners tender was lowest but the same was not accepted. However, the petitioner was again requested to re-submit its bid by 10. 4. 2002, in pursuance of which the petitioner again submitted its bid on 6,4. 2002. Again the bid of the petitioner was lowest after modification. The grievance arose when the petitioner was not awarded the contract and the fresh tender notice impugned in the present petition dated 14. 5. 2002, was issued in which there was no condition of tenders being invited from pre-qualified contractors. The petitioner on the strength of the lowest bid asserted that he is entitled for the grant of contract as the impugned tender notice dated 14. 5. 2002, has not been issued in accordance with the conditions of the Manual Volume II and as such the same cannot be acted upon.

( 4 ) IN response to the aforesaid arguments, the opposite parties have submitted that the petitioner was informed about the rejection of the tenders by the authority competent. The condition of pre-qualification of contractors was not placed in the present tender notice. In paragraph 8 of the counter-affidavit, it has been specifically stated that the tender was rejected by the competent authority in the Board meeting held on 19. 3. 2002, on the ground that NIT conditions should be incorporated in proper manner, so as to avoid any confusion regarding electrical agency who will associate with the civil work and such agency shall belong to appropriate class such as MES and p and T who are eligible to tender for electrical work in CPWD of this magnitude. Thus, the reason given in the counter-affidavit is that because of lack of proper incorporation of the NIT conditions, to avoid any confusion regarding any electrical part of the NIT. the department decided not to accept the tender in totality. Further ground is that the amount of difference between the offers of J. S. M. Company and M/s. UPRNN (lowest tender) remains Rs. 13. 4 lacs and the rejection of the tender was appropriate and with valid reasons. It has also been stated in the counter-affidavit that by issuing fresh tender notification, there is a saving of Rs. 17. 81 lacs.

( 5 ) PARAGRAPH 18. 4. 3 of the Central Public Works Department Manual, Volume II provides as under :

"18. 4. 3. Works estimated to cost above Rs. 5 crores. Tenders shall be invited only from Pre-qualified contractors. Pre-Qualification of contractors : (1) Pre-qualification of contractors shall be resorted to in t

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