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2023 Supreme(Online)(KER) 10101
HIGH COURT OF KERALA
S.MANIKUMAR, CJ, SHAJI P.CHALY, J
M/S. PGCCPL & ARYACON CONSORTIUM
– Appellant
Versus
KERALA STATE ELECTRICITY BOARD LIMITED – Respondent
WA 1716 2022
JOSEPH KODIANTHARA (SR.), ISAAC THOMAS ALEXANDER, JOSEPH MARKOS, SHARAD JOSEPH KODIANTHARA, G.KEERTHIVAS (B/O), C.JOSEPH ANTONY, MAYANKUTTY MATHER K.I, T.K.SREEKALA, S.PARVATHI, KALLIYANI KRISHNA B., JOHN MANJOORAN RAJU JOSEPH (SR.)
Bidders must satisfy financial qualifications based strictly on their audited accounts for the specified financial years without incorporating post-tender merger assets.
Headnote:
Tender - Qualification - Kerala State Electricity Board - Clauses of Notice Inviting Tender - The court held that the financial qualifications of a bidder must be determined based only on the audited accounts of the bid years and cannot include merged assets post-tender agreement.
Fact of the Case:
The appellants challenged the declaration of the third respondent as L1 bidder in a tender for executing Civil and Hydro Mechanical works, arguing that the third respondent failed to meet the pre-qualification criteria outlined in the Notice Inviting Tender.
Finding of the Court:
The court focused on the interpretation of key clauses related to financial capabilities in the tender document, ultimately concluding that the third respondent did not satisfy the required turnover qualifications for the specified financial years.
Issues: The primary issue was whether the lead bidder's financial qualifications could include turnover attributed to a proprietor after a merger agreement executed post the relevant financial years.
Ratio Decidendi: The court ruled that the turnover for the last three financial years must be based solely on the audited accounts of the lead bidder as required by the tender, rejecting the inclusion of assets from merged entities post-tender.
Final Decision: The appeal was allowed, declaring that the third respondent did not qualify for the financial bid.
JUDGMENT
SHAJI P. CHALY, J.
The appeal is filed by the writ petitioners in W.P.(C) No. 32855 of 2022 challenging the judgment of the learned single Judge dated 09.11.2022, whereby the writ petition was dismissed.
2. The first appellant consortium and the 3rd respondent consortium M/s. Anchor-SSIPL-MIPL were participants in a tender invited by the Kerala State Electricity Board Limited, respondent No.1, as per Exhibit P1 dated 03.05.2022 . The writ petition was filed by the appellants being aggrieved by the pre-qualification and the consequent declaration of the third respondent Consortium as L1 bidder as per Exhibits P4 and P5 Notes dated 07.10.2022 and 10.10.2022 respectively. According to the appellants, the third respondent Consortium is not qualified for want of the qualifications prescribed under clauses 3.1.6, 26.1, 27.1, 27.2, 29.1 and 29.2 of Ext.P1; and it was overlooking the rigour of the said qualifications, respondents 1 and 2 had declared that the third respondent consortium had the requisite financial qualification.
3. It is further contended in the writ petition that when clauses 3.1.6 and 27.1 of the instructions to the bidders contained at Exhibit P1 that the last three years’ income to be taken into account, there cannot be any question, under any stretch of imagination, that the alleged infusion of assets which took place pursuant to Exhibit P8 dated 01.04.2022 by and between a proprietor and a partnership can be accounted for that purpose.
4. It is further contended that insofar as clause 26.2.1(c) is concerned, Exhibit P10 certificate dated 01.08.2009 issued by the bidder is not one issued to any of the consortium members of the third respondent and it is only to be assumed that it is not in compliance with the pre-requisite demanded by the said clause.
5. Anyhow, the learned single Judge, after taking into consideration clauses 3.1.6, 27.1 and 27.2 of Exhibit P1 pre- qualification bid document and Exhibit P8 agreement dated 01.04.2022 executed by and between a proprietary concern and a partnership firm, held that the lead bidder is having 30% turnover for the previous 3 assessment years namely 2019-2020, 2020-2021 and 2021-2022; and therefore, the contentions advanced by the appellants were brushed aside and the writ petition was allowed, taking into account the proposition of law laid down by the Apex Court in the decisions inSilpi Constructions Contractors v Union of India and another [ (2020) 16 SCC 489 ], and Tata Cellular v Union of India [ (1994) 6 SCC 651 ]. It is, thus, challenging the legality and correctness of the judgment of the learned single Judge, the appeal is preferred.
6. Shorn of unnecessary details, the basic facts required for the disposal of the writ appeal are as follows:
The Kerala State Electricity Board Limited through the Chief Engineer second respondent, invited tenders for the execution of Civil and Hydro Mechanical works of Upper Sengulam Hydro Electric Project as per Ext.P1 e-tender notice dated 03.05.2022 with the Probable Amount of Contract (PAC) at Rs.175,60,70,410/-. The first appellant namely PGCCPL & ARYACON CONSORTIUM, 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 07.10.2022. The financial bids were opened on 10.10.2022, and the third respondent was declared as the lowest bidder, as is evident from Ext.P6.
7. According to the appellants, they had serious doubts about the third respondent's qualification, and therefore, the materials submitted by the third respondent in support of its bid was downloaded from the website. It is submitted that on scrutiny of the documents, the apprehension with respect to the disqualification of the third respondent was found to be correct. It is also contended that the third respondent had failed to comply with the requirements of clauses of 26.2.1(c), 3.1.6, 27.1 and 27.2 of the instructions to the bidders forming part of Ext.P1 Notice Inviting Te
