Orissa High Court
Case Details
ORISSA HIGH COURT: CUTTACK W.P.(C) NO. 32454 OF 2023 In the matter of an application under Articles 226 and 227 of the Constitution of India. --------------- AFR Rabi Narayan Sahoo ..… Petitioner -Versus- State of Odisha and others ….. Opp. Parties For Petitioner : Mr. P.K. Rath, Senior Advocate along with M/s S. Rath, A. Behera, S.K. Behera, S. Das, P.K. Basantia, C. Purohit, R. Rout, and Panigrahi Advocates. A. For Opp. Parties : Mr. P.P. Mohanty, Addl. Government Advocate P R E S E N T: THE HONOURABLE ACTING CHIEF JUSTICE DR. B.R. SARANGI AND THE HON’BLE MR. JUSTICE MURAHARI SRI RAMAN Date of hearing: 06.12.2023 :: Date of judgment:12.12.2023 DR. B.R. SARANGI, J. The petitioner, who is a ‘B’ class contractor and subsequently upgraded to ‘A’ class on Page 1 of 19 04.12.2009, has filed this writ petition seeking to quash the letter no.3376 dated 15.09.2023 under Annexure-1, whereby his technical bid has been rejected by the Chief Construction Engineer, Rural Works Circle, Kendrapara- Jajpur on the ground “disqualified due to insufficient similar nature of work”, and to issue direction to the opposite parties to treat the petitioner’s technical bid as valid and open the financial bid of the petitioner and consider the same along with others. 2. The factual matrix of the case, in brief, is that the petitioner, being upgraded from ‘B’ class to ‘A’ class
Legal Reasoning
contractor on 04.12.2009, constituted a partnership firm in the name and style as “M/s BRS Construction” on 18.10.2013. During 2014-15, vide order dated 21.08.2014, the license of the petitioner was upgraded from ‘A’ class to ‘Special’ class contractor. Subsequent to such up-gradation, the partnership firm, of which the petitioner was a partner, wanted to be a part of the Page 2 of 19 petitioner’s special class license. For the said purpose, the petitioner, as Managing Partner, submitted an application to substitute the name of M/s BRS Construction, in place of the petitioner, as a special class contractor and to issue the license. Accordingly, M/s BRS Construction was issued with special class license with effect from 19.04.2021. Thereafter, the petitioner undertook several construction projects under the license of M/s BRS Construction, in which he is the Managing Partner. 2.1 Partnership is not a justice person unlike a company incorporated under the Companies Act. On the other hand, a partnership is identified through its partners like any other individuals. On account of dispute among the partnership, on 10.04.2022, the petitioner applied for cancellation of license in the name of partnership firm, i.e., M/s BRS Construction. Consequent upon such application, the Engineer-in-Chief (Civil), Works Department, vide order dated 12.05.2022, Page 3 of 19 cancelled the special class license in favour of the partnership firm. After cancellation of license, the petitioner applied for issuance of a ‘B’ class license in his favour, which was issued on 25.11.2022. 2.2 The Chief Construction Engineer, Rural Works Circle, Kendrapara-Jajpur issued e-procurement notice dated 09.08.2023 under Annexure-8 inviting tenders for construction of several projects under it. The said tender call notice was followed by two corrigenda dated 17.08.2023 and 25.08.2023 under Annexures-9 and 10 respectively. Pursuant thereto, the petitioner submitted his bid for the work “Construction and Maintenance of NH-16 to Kantabania via Sabar Sahi Neulpur Road under MMSYTRIP” under R.W. Division-II, Jajpur at Jaraka. As per the conditions stipulated in the Detailed Tender Call Notice (DTCN), under the checklist to be filled up by the bidder at sl.no.6 it was provided that “Works Experience & Annual Turn Over” was to be furnished with reference Page 4 of 19 to clause-14 of the DTCN. The petitioner submitted experience certificate in respect of the work, which was executed during his continuance as the special class contractor, as a partner of M/s BRS Construction, a partnership firm. But, the Chief Construction Engineer, Rural Works Circle, Kendrapara-Jajpur, without assigning any reason and without applying its mind, rejected the bid of the petitioner vide Annexure-1 dated 15.09.2023 on the ground “disqualified due to insufficient similar nature of work”. Hence, this writ petition. 3.
Legal Reasoning
Mr. P.K. Rath, learned Senior Counsel, appearing along with Ms. Aroma Rout, learned counsel for the petitioner, vehemently contended that though the petitioner furnished all information with regard to execution of similar nature of work worth 75% of the estimated cost put to tender during any three financial years taken together of the last preceding five years excluding the current financial year, the Chief Page 5 of 19 Construction Engineer, Rural Works Circle, Kendrapara- Jajpur did not take the same into consideration and rejected the technical bid of the petitioner without applying his mind in proper perspective. It is further contended that technical bid of the petitioner has been rejected on the plea that the petitioner has got work experience from a partnership firm of a special class contractor, which cannot be considered as a ‘B’ class contractor, subsequently upgraded to ‘A’ class contractor. Thereby, the Chief Construction Engineer, Rural Works Circle, Kendrapara-Jajpur has committed gross error in evaluating the technical bid, so far it relates to the petitioner and, as such, the same is arbitrary, unreasonable and contrary to the provisions of law. To substantiate his contention, he has relied upon the judgments of the apex Court in the cases of Ganpati RV- Talleres Alegria Track Private Limited v. Union of India and another, (2009) 1 SCC 589; and Maa Page 6 of 19 Nabadurga Construction v. Saroj Kumar Jena and others, 2015 SCC OnLine SC 1933. 4. Mr. P.P. Mohanty, learned Addl. Government Advocate appearing for the State-opposite parties although admitted the factum of issuance of tender call notice and participation of the petitioner in the tender process, so far as the work in question is concerned, but contended that during evaluation the petitioner did not submit work experience certificate of similar nature of work in his own name. Rather, he has submitted work experience certificate of similar nature of work in the name of M/s BRS Construction, which is a ‘Special Class’ contractor, whereas the tenders were invited from ‘A & B’ class contractors only. It is thus contended that since the petitioner did not submit any experience certificate with regard to execution of similar nature of work in his name, the tender committee decided to disqualify his bid “due to insufficient similar nature of work”. Consequentially, no Page 7 of 19 illegality or irregularity has been committed by the authority in rejecting the technical bid of the petitioner assigning specific reason “disqualified due to insufficient similar nature of work”. It is further contended that after uploading of the list of qualified bidders, the financial bids of the said tender notice were opened on 21.09.2023 at 4.30 P.M. After opening of financial bids, it was found that Satyabrata Jena and Sudam Charan Sethy were qualified as first lowest tenderers in respect of two works, including the work in question and, therefore, the tender committee decided to award the work in favour of them. As such, the tender for the above two works has been ascertained vide office letter no.3735 dated 06.10.2023 and letter no.4335 dated 04.11.2023 respectively and forwarded to the same to the Superintending Engineer, R.W. Division No.2, Jajpur at Jarka for drawal of agreement. But due to pendency of this case, no further progress has been made. Consequentially, he sought for
Decision
dismissal of the writ petition. Page 8 of 19 5. This Court heard Mr. P.K. Rath, learned Senior Counsel appearing along with Ms. Aroma Rout, learned counsel for the petitioner and Mr. P.P. Mohanty, learned Addl. Government Advocate appearing for the State- opposite parties. Since pleadings have been exchanged between the parties, with the consent of learned counsel for the parties this writ petition is being disposed of finally at the stage of admission. 6. For just and proper adjudication of the case, relevant provisions of the Detailed Tender Call Notice are extracted hereunder:- “14. Qualification Criteria on general experience. The Applicant shall meet the following minimum criteria failing which the bid shall be summarily rejected: Eligibility Criteria: The eligibility criteria for participation in this tender are given below. The tenderer (s) should go through these eligibility criteria before purchasing the tender documents. Tenderer (s) not fulfilling the eligibility criteria and submit the tender, can do so at their own risk, as the tendere will summarily rejected. (a) The intending tenderer (s) should have to submit an affidavit regarding correctness of information in schedule. F. Non furnishing of the scanned copy of required affidavit, the bid document will be summarily rejected. The intending tenderer (s) should also have not abandoned Page 9 of 19 any work of similar nature nor should their contract have been rescinded during the last five years and affidavit to that effect is also to been closed as Schedule E. (b) An Undertaking for installation of Hot Mix Plant within 60 km. An undertaking in shape of declaration by the bidder should be uploaded with the bid documents mentioning there in that, he will procure the material mix from the Hot Mix Plant established within 63km from the work site before execution of the work, failing which the bid will be summarily rejected. (c) The intending tenderer(s) should have the valid Registration Certificate as on date, of the required class as mentioned in Col-5 of the Annexure in NIT. (d) The intending tenderer (s) should have up to date, GSTIN Certificate & process PAN CARD, Labour License. No undertaking forwards GSTIN & PAN Card is acceptable. taken together of i. The intending tenderer (s) should have executed similar nature of work worth 75% of the estimated cost put to tender during any three financial years last the preceding the current five years excluding financial year. In case of Contract spanning for more than one financial year, the breakup of execution of work in each of financial year should be furnished A certificate to this effect must been closed from the officer not below the rank of Executive Engineer to be enclosed as Schedule –D. turn over ii. The intending tenderer(s) should have the total respect of Civil financial Engineering works of an amount not less than the amount put to tender during any 3 (three) last financial years preceding five financial years (excluding the together of taken the in Page 10 of 19 current financial year). The financial turn over certificate for Civil Engineering works should be submitted from the Charted Accountant showing clearly the financial turn over financial year wise with UDIN as per schedule – H.” 7. On perusal of the aforementioned provisions, it is made clear that the intending tenderer (s) should have executed similar nature of work worth 75% of the estimated cost put to tender during any three financial years taken together of the last preceding five years excluding the current financial year. But in the said provisions it is nowhere stated that the experience certificate should be in the name of the bidder or in the name of individual. On the other hand, the petitioner has all through been contending that he has got experience of a partnership firm, of which he is the Managing Partner, which fully satisfied the requirement of the tender conditions. More so, the conditions stipulated in the tender documents, do not indicate that the experience of the partnership firm will be excluded from consideration. Rather, the status of the partnership is that of an Page 11 of 19 individual and partnership firm is not a juristic person, so as to have an independent status. Therefore, the experience certificate submitted by the petitioner of a partnership firm, of which he was the Managing Partner, will be counted towards his experience for all practical purposes. The question raised by the opposite parties is that whether the experience certificate of a special class contractor will be considered valid for the tender invited for ‘A’ and ‘B’ class contractor. On perusal of the conditions stipulated in the DTCN, it is revealed that there is no such condition that experience certificate of any particular class of contractor is to be filed. In absence of any such stipulation in the tender notice, the experience of the petitioner, while he was a special class contractor, cannot be rejected on the ground that the experience certificate was not of the similar class of contractor, for which the tender was invited. As such, in absence of any such stipulation in the tender notice, the authority cannot act on the basis of conjectures and Page 12 of 19 surmises, which would amount to re-writing the tender conditions, which is not permissible under law. 8. Though it is admitted fact that there was dispute between the partners, for which the petitioner, on 10.04.2022, applied for cancellation of special class license issued on the name of M/s BRS construction, but on perusal of document, which has been annexed as Annexure-5 to the writ petition, it is made clear that the petitioner applied for cancellation of the special class license and there is nothing available on record to show that the experience gained by the petitioner as Managing Partner of the partnership firm shall not be counted for participating in the bid. Thereby, the petitioner, who furnished the experience certificate, relying upon the experience gained as a special class contractor, for the purpose of participation in the bid, having ‘B’ class license and upgraded to ‘A’ class, that ipso facto cannot deprive the petitioner of the benefit of participating in the bid. Page 13 of 19 9. In Maa Nabadurga Construction (supra), the apex Court, in paragraph-11 of the judgment, held as under:- “11. This court was of the view that the experience of a joint venture is akin to the experience of a partnership and further observed as under: “The expression “Joint venture” is more frequently used in the United States. It connotes a legal entity in the nature of a partnership engaged in the Joint undertaking of a particular transaction for mutual profit or an association of jointly undertaking some persons or companies commercial enterprise wherein all contribute assets and share risk. It requires a community of interest in the performance of the subject-matter, a right to direct and govern the policy in connection therewith, and duty, which may be altered by agreement, to share both in profit and losses.” 10. In New Horizons Limited v. Union of India, (1995) 1 SCC 478, the apex Court held as under:- the considering requirement “While regarding experience it has to be borne in mind that the said requirement is contained in a document inviting offers for a commercial transaction. The terms and conditions of such a document have to be construed from the standpoint of a prudent businessman. When a businessman enters into a contract whereunder some work is to be performed he seeks to assure himself about the credentials of the person who is to be entrusted with the performance of the work. Such credentials are to be examined from a commercial point of view which means that if the contract is to be entered with a company he Page 14 of 19 will look into the background of the company and the persons who are in control of the same and their capacity to execute the work. He would go not by the name of the company but by the persons behind the company. While keeping in view the past experience he would also take note of the present state of affairs and the equipment and resources at the disposal of the company.” 11. In view of the above, there is no iota of doubt that ‘experience’ is something which cannot be an asset of the firm and, therefore, not capable of being attributed to a firm is not correct. It is settled law that a partnership has been held to be a compendious name for its partners and that experience is a human attribute which does not form part of the assets or property of the firm in the usual sense. 12. In Black’s Law Dictionary, the meaning of ‘experience’ has been defined to the following effect:- “Experience- A state, extent, or duration of being engaged in a particular study or work; the real life as contrasted with the ideal or imaginary. A word implying skill, facility, or practical wisdom gained by personal knowledge, feeling and action, and also the course or process by which one attains knowledge or wisdom.” Page 15 of 19 13. In Ganapati RV-Talleres Alegria Track Private Limited (supra), the apex Court, in paragraph-23 of the judgment, held as under:- taken the name “23. Even if it be assumed that the requirement regarding experience as set out in the advertisement dated 22-4-1993 inviting tenders is a condition about eligibility for consideration of the tenders, though we find no basis for the same, the said requirement regarding experience cannot his name only. It is possible to visualize a situation where a person having past experience has entered into a partnership and the if the tenderer has been submitted in partnership firm which may not have any past experience in its own name. That does not mean that the earlier experience of one of the partners of the firm into consideration. Similarly, a cannot be company incorporated under the Companies Act having past experience may undergo reorganization as a result of merger or amalgamation with another company which may have no such past experience and the tender is submitted in the name of the reorganized company. It could not be the purport of the requirement about experience that the experience of the company which has merged into the reorganized company cannot be taken into consideration because the tender has not been submitted in its name and has been submitted in the name of the reorganized company which does not have experience in its name. Conversely there may be a split in a company and persons looking after a particular field of the business of the company form a new company after leaving it. The new company, though having persons with experience in the field, has no experience in the original company having experience in its name lacks persons with experience. The requirement regarding experience does not mean that the original company must be considered because it has experience in its name though its name while the offer of Page 16 of 19 it does not have experienced persons with it and ignore the offer of the new company because it does not have experienced persons with it and ignore the offer of the new company because it does not have experience in its name thought it has persons having experience in the field. While considering the requirement regarding experience it has to be borne in mind that the said requirement is contained in a document inviting offers for a commercial transaction. The terms and conditions of such a document have to be construed from the stand point of a prudent businessman. When a businessman enters into a contract whereunder some work is to be performed he seeks the credentials of the person who is to be entrusted with the performance of the work. Such credentials are to be examined from a commercial point of view which means that if the contract is to be entered with a company he will look means that if the contract is to be entered with a company he will look into the background of the company and the persons who are in control of the same and their capacity to execute work. He would go not by the name of the company but by the persons behind the company. While keeping in view the past experience he would also take note of the present state of affairs and the equipment and resources at the disposal of the company. …..” to assure himself about 14. In view of the law, as discussed above, it is made clear that where a person, having past experience, has entered into partnership and the tender has been submitted in the name of partnership, which may not have any past experience, that does not mean, earlier experience of one of the partners of the firm, cannot be Page 17 of 19 taken into consideration. From the ratio decided by the apex Court, as mentioned supra, it is made clear that the experience gained by the petitioner from the erstwhile special class contractor-M/s BRS Construction, a partnership firm, being remained as Managing Partner, cannot be brushed aside to declare him disqualified from the technical bid. Thereby, the technical evaluation committee has committed gross error apparent on the face of record in rejecting the bid of the petitioner on the ground “disqualified due to insufficient similar nature of work”. If the work undertaken by the petitioner as Managing Partner of the erstwhile special class contractor-M/s BRS Construction had been taken into account for the purpose of determination of his work experience, that would have been more than 75% of the estimated cost of the tender in question, and his bid could not have been declared as “disqualified due to insufficient similar nature of work”. Page 18 of 19 15. In the above view of the matter, the inevitable conclusion is that the view taken by the technical evaluation committee, that the petitioner is disqualified due to insufficient similar nature of work and, therefore, not fulfilled the eligibility criteria, is not correct. Thereby, this Court directs the technical evaluation committee to consider the technical bid of the petitioner and allow him to participate in the financial bid, along with two others who have been selected, and take a final decision thereon. 16. In the result, the writ petition is allowed. However, there shall be no order as to costs. …………….…………..…. DR. B.R. SARANGI, ACTING CHIEF JUSTICE M.S. RAMAN, J. I agree. …………….…………..…. M.S. RAMAN, JUDGE Orissa High Court, Cuttack The 12th December, 2023, Ashok Signature Not Verified Digitally Signed Signed by: ASHOK KUMAR JAGADEB MOHAPATRA Reason: Authentication Location: HIGH COURT OF ORISSA Date: 13-Dec-2023 18:06:50 Page 19 of 19