High Court
Case Details
WP(C) 4054/2013 BEFORE THE HON’BLE MR. JUSTICE UJJAL BHUYAN Judgment & Order (Oral) This petition, filed under article 226 of the Constitution of India, seeks quash ing of award of contract dated 26.03.2013 in favour of respondent No. 3. 02. essel TS Brahmaputra (CTC) (cid:29). Contract in question, is (cid:28)Renovation and Modification of River V 03. Director of Inland Water Transport, Assam (respondent No. 2), is sued Notice Inviting Tender (NIT) dated 22.02.2013, inviting sealed tenders for the above contract work, the estimated cost of which was Rs.86,74,190.00. Earnes t money fixed was 2% of the quoted value and the period of completion was 60 day s from the date of issue of work order. 04. Petitioner responded to the NIT and submitted tender. Tenders we re opened on 14.03.2013. It was found that out of the 7 bidders, respondent No. 3 was the lowest bidder (L 1) at Rs.72,66,758.00. Respondent No. 4 was the secon d lowest bidder at Rs.82,38,007.00. Bid of the petitioner was the 3rd lowest at Rs.83,50,183.00. Thereafter, by letter dated 26.03.2013, respondent No. 2 awarde d the contract to the respondent No. 3 at his offered bid.
Legal Reasoning
05. Aggrieved by the above, petitioner has filed the present writ pe tition questioning the legality and validity of the aforesaid award of contract dated 26.03.2013. 06. Contention of the petitioner is that as per Clause 3 of the NIT, a tenderer has to submit Income Tax (IT) Returns of last 3 financial years and must have minimum annual turnover of Rs. 1 crore in the last financial year. Ear nest money at the rate of 2% of the total quoted value in the form of NSC/KVP/Ba nk Draft pledged in favour of respondent No. 2 should be submitted. Successful t enderer will have to make security deposit at the rate of 10% of the quoted rate which would include the 2% earnest money deposit. The tenderer should enclose d ocuments in support of previous experience in performing works of similar nature . According to the petitioner, respondent No. 3 did not submit IT Returns for la st 3 financial years and the turnover statement was not authenticated by Charter ed Accountant. Moreover, respondent No. 3 submitted only an experience certifica te without the specification and names of works done. Further, whole earnest mon ey was not pledged in favour of respondent No. 2. After award of contract, petit ioner has not deposited the security money. Therefore, the contract awarded to r espondent No. 3 should be interfered with. 07. Respondent No. 2 in his affidavit stated that Tender Committee constitut ed by the Government after due verification of the tender documents submitted by the tenderers recommended award of contract in favour of respondent No. 3 being the L 1 tenderer. IT Returns for last 3 years were submitted by respondent No. 3. There is no requirement in the NIT that IT Return should be authenticated by Chartered Accountant. Respondent No. 3 was found to be an experienced contractor having executed similar nature of works in the past. Regarding deposit of earne st money, though the entire earnest money was not pledged in favour of responden t No. 2, but as per decision of Tender Committee, respondent No. 3 was allowed t o deposit the balance earnest money before execution of agreement. Accordingly, respondent No. 3 deposited the balance earnest money pledged to respondent No. 2 before execution of agreement. As per work order, respondent No. 3 is requ ired to deposit 10% of the security money, which would be deducted from his su bsequent bills. Tender Committee notified by the Government comprised of followi ng members: - i) Director Inland Water Transport, Assam Ulubari, Guwahati - 07. ii) Deputy Secretary to the Govt. of Assam, Transport Department, Dispur, Ghy - 06. iii) Additional Chief Engineer (Mechanical) Assam, PWD, Guwahati iv) Financial Adviser, Transport Department, Dispur v) Deputy Director (Design) Inland Water Transport, Assam Ulubari, Guwahati - 07. Chairman Member Member Member Member Secretary 08. Tender Committee recommended award of contract with L 1 tenderer , following which contract was awarded. Thus work was allotted to Respondent No. 3 in a transparent manner. Respondent No. 3 has already completed 30% of the wo rk. Quality and progress of work has been found to be satisfactory.
Legal Reasoning
09. Respondent No. 3 has filed affidavit. He has denied the contenti on of the petitioners and has stated that all relevant documents were submitted by him. Regarding earnest money deposit, he has stated that he had deposited NSC for an amount of Rs.90,000/- at the time of submission of tender out of which R s.60,000/- was pledged in favour of respondent No. 2. Respondent No. 3 belongs t o the Scheduled Tribe (Plains) and, therefore, is required to deposit earnest mo ney at the rate of 1% of the quoted amount. Following decision of Tender Committ ee, balance amount of earnest money pledged in favour of respondent No. 2 was de posited prior to execution of agreement. Regarding security deposit, he has stat ed that the balance amount in addition to the earnest money deposited which woul d stand converted as security deposit would be deducted by the authority from hi s bills as per prevailing norms. According to him, there is no requirement of su bmitting tax return authenticated by Chartered Accountant. He has further stated that he has completed more than 50% of the work on the date of filing affidavit i.e. on 10.09.2013. 10. Petitioner has filed separate reply-affidavits to the affidavits filed by respondent Nos. 2 & 3. It is submitted that submission of IT Returns a uthenticated by Chartered Accountant is a statutory requirement under the Income Tax Act and even if it is not specified in the NIT, since it is a statutory req uirement, a tenderer is bound to comply with such requirement. 11. Heard Ms. M Dev, learned counsel for the petitioner and Mr. AK B huyan, learned Standing Counsel, IWT. Also heard Mr. U Rajbongshi, learned Stand ing Counsel, Transport Department appearing for the State respondents and Mr. R De, learned counsel for respondent No. 3. None appears for respondent No. 4 thou gh served. 12. Mr. Bhuyan has also produced the relevant record. 13. Submissions of learned counsel for the parties are more or less on pleaded lines and, therefore, it is considered not necessary to delve into su ch submissions in detail. 14. Petitioner has contended that non submission of IT Returns authe nticated by Chartered Accountant has vitiated the tender of respondent No. 3. Th is is a requirement under section 44AB of the Income Tax Act, 1961. Such require ment is for the purpose of filing return before the Income Tax authority only. I n so far submission of IT Return for the purpose of the NIT is concerned, it is only to ensure that the tenderer is a solvent party financially capable of execu ting the work. Similar is the requirement of earnest money deposit as well as se curity deposit. Such deposits are insisted upon to ensure that non serious parti es are discouraged from participating in the tender process and making reckless bids. As observed by the Hon’ble Apex Court in Global Energy Ltd. Vs. Adani Expo rts Ltd., reported in (2005) 4 SCC 435, the object is that only such parties who are financially sound and are serious in getting the work or contract, should m ake a bid. Otherwise, any number of persons who have no capacity, financial or o therwise, would like to take a chance by making a bid. 15. In Poddar Steel Corporation Vs. Ganesh Engineering Works & Ors., reported in (1991) 3 SCC 273, the Hon’ble Apex Court held that as a matter of g eneral proposition, it cannot be held that an authority inviting tenders is boun d to give effect to every term mentioned in the NIT in meticulous detail. It was held that requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others w hich are merely ancillary or subsidiary to the main object to be achieved. In th e first case, the authority issuing the tender may be required to enforce them r igidly, while in the second case, such rigid enforcement is not insisted upon. In the present case, admittedly, respondent No. 3 was the L 1 te 16. nderer and there was substantial difference in the bid values between respondent No. 3 and petitioner. The high powered Tender Committee had scrutinized the ten der documents of respondent No. 3 and found the same to be valid. A portion of e arnest money deposited not being pledged in favour of respondent No. 2 or deposi ting the remaining earnest money before execution of agreement cannot be said to be such a deviation so as to render the bid of respondent No. 3 invalid. Admitt edly, respondent No. 3 had submitted the required earnest money deposit. In fact , it would be in the public interest if some latitude is shown in favour of resp ondent No. 3 who has, otherwise, been found to be a capable and competent tender er. At this stage, recommendation of the Tender Committee may be seen. Relevant portion of the recommendation of the Tender Committee in favour of respondent No . 3 is as under :- (cid:28)The Committee members examined the papers related to the tenders submitted by t he 7 (seven) Nos. of tenderers against the renovation/repairing works of river v essel TS Brahmaputra (CTC). After threadbare examination of all the documents su bmitted by the tenderers the committee unanimously selected the lowest tenderer namely Sri Rajesh Rabha and suggested with following suggestion:- 1. Solvency regarding financial soundness must be verified in the concerned Bank from where the solvency certificate is issued in favour of the tenderer before awarding the works to the selected tenderer. 2. If the progress of work is not found satisfactory in current year within the financial allocation as awarded, the department will have the authority to cance l the order of the selected tenderer and may offer to any other contractor as pe r decision of the tender committee. 3. Periodical inspection by the Technical Cell must be carried out fortnightly a nd report should be submitted to the Director IWT. 4. The rest amount of earnest money have to be deposited by the selected tendere r at the time of issuing the work order. 5. An undertaking should be obtained from the selected tenderer to the effect th at he will be able to execute the work at his offered price to the best satisfac tion of the Departmental officers. 6. That the Department will not allow any upward revision of rate against the wo rk. (cid:29) 17. Thus, having regard to the above and taking an overall view of t he matter, this Court finds no infirmity in the decision making process relating to the award of contract in favour of respondent No. 3. There is no merit in th e writ petition, which is, accordingly, dismissed. However, there shall be no or der as to costs. 18. returned back. Record produced by Mr. Bhuyan, learned Standing Counsel, IWT is