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M/s Arun Kumar Mishra Construction Pvt. Ltd. District Pakur & Another v/s The State of Jharkhand through Secretary, Water Resource Department & Others

    W.P. (C) No. 4522 of 2016 with W.P. (C) No. 4891 of 2016

    Decided On, 20 October 2016

    At, High Court of Jharkhand


    For the Petitioners: R. Krishna, Prabhat Kumar Sinha, Din Dayal Saha, Advocates. For the Respondents: Ajit Kumar, AAG, Aprajita Bhardwaj, JC. to AAG, Anshuman Kumar, JC. to AG, R5, Anil Kumar Sinha, Senior Advocate, Kumar Harsh, Abhishek Sinha, Advocates.

Judgment Text

1. Heard counsel for the parties.

2. Both the writ petitioners are aggrieved by the decision of the respondent-Chief Engineer, Minor Irrigation, Dumka whereby and where under their bids have been rejected in the matter of award of work for construction of series of Check Dams at Sherpur Joriya, Block Maheshpur, District Pakur for an estimated cost of Rs.1,65,05,690/- under Notice Inviting Tender (NIT) dated 14th May 2016. NIT No.WRD/MID/PAKUR/F2-01/2016-17 is Annexure-2 in both the writ petitions. The impugned order dated 5th July, 2016 is Annexure-3 in both the writ petitions. They have also challenged the award of work to respondent no.5 by letter no. 527 dated 19th July 2016 issued by the respondent no.3-Superintending Engineer, Minor Irrigation Circle, Dumka directing the Executive Engineer, Minor Irrigation, Dumka to enter into an agreement with the private respondent. In the nature of work notified by the NIT (Annexure-2) on-line tenders were invited where interested bidders were to submit their bids through the necessary portal enrolment with their own Digital Signature by 26th May 2016. Terms and conditions are incorporated in the NIT which also specifies that general rules, conditions of contract and special conditions of contract are also available on the website and govern the award of work. Five bidders participated; two petitioners and the private respondent being local of Pakur District and other being outsiders. A comparative chart was prepared by the Divisional Accountant with the observation that all the tenderers had submitted earnest money and each one of them have quoted their rates 10% below the estimated rate. After opinion recorded by the Executive Engineer and the Superintending Engineer, the matter was placed before the Chief Engineer, who is the competent authority as per the value of such nature of work. The Chief Engineer found three of these bidders as local and other two being outsiders. Out of these three bidders, document of petitioner M/s Tarun Infracon Pvt. Ltd. was found to be incorrect. So far as the petitioner M/s Arun Kumar Mishra Construction Pvt. Ltd. in W.P.(C) No.4891/2016 is concerned, it was noted that the said bidder had not uploaded his bid in the name of the firm. As such it could not be considered.

3. Challenge to the impugned decision has been made by the petitioner in W.P.(C) No.4522 of 2016 on the ground that despite the fact that petitioner having a valid registration in the name of the company as per decision of the Water Resources Department contained at Annexure-1/1 dated 24th July, 2015 and upon submission of all relevant documents in the name of the company itself, its bid has been held to be ineligible as it has purportedly applied as a firm.

4. The respondents have, however, in their counter affidavit, chosen to add new grounds beyond what is evident from the order under challenge which is impermissible in law in view of the judgment rendered by the Apex Court in the case of State of Punjab v. Bandeep Singh & Ors. and analogous case reported in (2016) 1 SCC 724.

5. Learned counsel for the petitioner further submitted that the comparative chart prepared by the respondents did not find any infirmity in the bid of the petitioner. The respondent authorities have, however, chosen to favour the private respondent by declaring the other two local bidders as ineligible on frivolous and nonest grounds. In an earlier bid for the same work though the private respondent was allotted work but the same was cancelled as would also be evident from the documents enclosed by the respondents themselves in the counter affidavit as Annexure-D being letter no.523 dated 2nd May, 2016. It is further urged that after the bid of these two petitioners are rendered ineligible on such nonest grounds, the bid of respondent no.5 became a single bid which could not have been processed to allot work to him. The allotment of work and the agreement entered into with him thereafter is wholly impermissible in law also in those circumstances.

6. So far as the petitioner in W.P.(C) No.4891/2016 is concerned, it is submitted that though the comparative chart prepared by the respondents evident from Annexure-3 does not show any infirmity in his papers but respondents on the basis of a flimsy ground have treated his paper to be doubtful in nature and thereby rendered him ineligible for consideration. Learned counsel for the petitioner further submits on the basis of supplementary affidavit dated 7th September 2016 that PAN number and card submitted by the respondent no.5 in his bid document is misleading as would be evident from Annexure-8 to the supplementary affidavit. It would be worthwhile, however, to take note herein that in the comparative chart at Annexure-3 containing the relevant particulars of papers filed by individual bidders including the private respondent, the Income Tax Return and PAN number submitted by the private respondent being BCFPK6253B is matching with the enclosed document in the same supplementary affidavit of this petitioner and is at page-6 thereof. There is no substance so far as this contention is concerned.

7. A submission has also been made that the petitioner has not submitted a valid labour licence. To this contention based on the supplementary affidavit of the petitioner, reply has also been filed on 15th September 2016 enclosing a letter of the Assistant Labour Commissioner, Sahibganj addressed to the Zila Parishad, Sahibganj dated 12th January 2013 wherein it has been indicated that requirement of asking for labour licence without issuance of work order and Form-V to the Contractor is not in accordance with the rules. Learned senior counsel for respondent no.5 contends after allotment of work on furnishing of specific particulars about the requirement and copy of the work order that labour licence is issued for the particular nature of work.

8. Learned counsel for the petitioner in W.P.(C) No.4891/2016 also reiterates the submissions of the petitioner in W.P.(C) No.4522/2016 that after the bid of two petitioners were declared to be ineligible, the tender notice could not be acted upon as it became a case of single bid.

9. Counsel for the respondents-State has, in reply, categorically submitted that there is no ambiguity in the stand of the respondent so far as the impugned order is concerned vis-a-vis their stand made in the counter affidavit. The petitioner M/s Arun Kumar Mishra Construction Pvt. Ltd. participated through a digital signature in the name of the firm and submitted papers of the company in support. It also submitted a certificate which is at Annexure-C being Unique Contractor Account Number Electronic Certificate Slip which shows that his registration under the Water Resources Department has expired on 8th April, 2014. Therefore, this petitioner not only participated as a firm with its digital signature while making a claim on the basis of the certificates in the name of the company but the registration submitted by it was also of the firm which has already expired earlier. The respondent – Chief Engineer taking note of the documents submitted by the respective bidders, therefore, rightly came to a conclusion that this petitioner had not uploaded his bid as a firm though it participated as a firm. Therefore, there is no merit in the case of the petitioner M/s Arun Kumar Mishra Construction Pvt. Ltd.

10. In respect of the petitioner M/s Tarun Infracon Pvt. Ltd., it is pointed out from the enclosed documents through their counter affidavit (Annexure-B series) that a false affidavit dated 23rd May 2016 was submitted by it stating that it had not employed any retired Government servant in his firm. This affidavit is contrary to the true state of facts as is also evident from the certificate of the retirement of the employee Shankar Prasad Saha enclosed to the counter affidavit of respondent no.5 at page-55 issued by the Executive Engineer, Irrigation Division, Dumka dated 31st January, 2014. It clearly indicates that the employee Shankar Prasad Saha, Sub-Divisional Officer, Waterways Sub-Division, Ragalia superannuated on 31st January, 2014 on attaining 60 years of age from the concerned department. The Chief Engineer on noticing the incorrect statements and the doubtful documents submitted by this petitioner rightly rejected its bid. Therefore, the bid of the private respondent who was local amongst three remaining bidders, was allotted the work on preference in terms of the applicable circular and guidelines of the respondent department. It is submitted that the contention of the petitioner that on rejection of the bid of these two petitioners the tender became a case of single bid is not correct as the bid of two outsider bidders was not rendered ineligible. Upon consideration of the bids of three surviving bidders, respondent no.5 being local and having quoted the same 10% below rate than the estimated value, was granted the work which does not suffer from any infirmity. It is submitted that there is no flaw in the decision making process warranting interference by this Court under Article 226 of the Constitution of India.

11. Learned senior counsel for the respondent no.5 has supplemented the arguments of Mr. Ajit Kumar, learned A.A.G. appearing for the State. He has referred to the notification dated 10th September, 2008 published by the Road Construction Department, Government of Jharkhand (Annexure-R5/4) which has notified the Contractors Rules, 2008. It is pointed out that in terms of Rule 14 thereof in case there is a complete change in the legal status of a firm by incorporation as a company, the newly constituted legal entity has to undertake fresh registration. Learned senior counsel points out that the document of registration as a company relied upon by the petitioner Arun Kumar Mishra Construction Pvt. Ltd. (Annexure-1/1) relying upon 2001 Rules is therefore not a valid registration in the eye of law. The registration of the firm could not have been renewed once the entity was itself incorporated as a company. This petitioner otherwise has also participated as a firm while relying upon the documents of company in support of its bid which has rightly been negated by the competent authority/the Chief Engineer by the impugned order. It is submitted that the submission of the counsel for the petitioner that the reason contained in the impugned order have been supplemented and super-added is also not tenable. Moreover, this Court in exercise of the powers of judicial review is required to test the decision making process and not sit over the decision in the nature of an appellate body. On materials before this Court it can be safely concluded that the ultimate decision of the Chief Engineer in rejecting the bid of these two petitioners is not vitiated in the eye of law or on facts to invite any interference by this Court.

12. I have considered the submissions of the parties and gone through the relevant materials on record.

13. From perusal of the records it can be safely concluded that the petitioner M/s Arun Kumar Mishra Construction Pvt. Ltd. professed and participated in the NIT (Annexure-3) as a firm though it had got incorporated as a company. It is undisputed that in the on-line bidding this petitioner participated on the basis of digital signature of the firm and not that of the company. The materials on record and available before the respondent authorities in the decision making process reveal this infirmity. The respondent-Chief Engineer being the competent authority on noticing the infirmity in its bid came to a conclusion that it had not participated as a firm as apparently all its supported papers were that of the company. The preparation of the comparative chart, the opinions of the hierarchy of the officials such as Executive Engineer, Superintending Engineer are stages in the decision making process. They do not constitute the ultimate decision which is to be taken by the competent authority. [See: State of Uttaranchal & Anr. v. Sunil Kumar Vaish & Ors.; (2011) 8 SCC 670]. Though the comparative chart prepared by the lower authority i.e. Divisional Accountant did not reveal the said infirmity, but if perusal of the supporting documents submitted by the petitioner in the on-line bid clearly disclose that it had participated not as company though claiming to have been registered as such vide Annexure-1/1, but as a firm, then the participation of the petitioner cannot be said to be above board and in a transparent manner. Transparency, fairness and non-arbitrariness are sine-qua-non in any such decision making process, specially in a tender process. This petitioner, therefore, cannot improve upon his case any further. The decision of the Chief Engineer to disregard his bid on that count cannot be said to be suffer from any legal or factual infirmity neither is the decision making process vitiated on that count. [See: Siemens Aktiengeselischaft and Siemens Limited v. Delhi Metro Rail Corporation Limited & Ors.; (2014) 11 SCC 288].

14. So far as the petitioner M/s Tarun Infracon Pvt. Ltd. is concerned, it had evidently submitted a document in the nature of an affidavit along with its bid papers which projected that it had not employed any retired employee. However, this statement on affidavit by this petitioner was apparently

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false as the employee Shankar Prasad Saha employed by it had retired from the Water Resources Department itself on 31st January, 2014 as per the certificate enclosed by the respondent no.5 in its counter affidavit at page-55 noted herein above, issued by the Executive Engineer of the Irrigation Division, Dumka. The bids of these two petitioners therefore suffer on the respective counts. The decision of the Chief Engineer to reject their bid, therefore, cannot be said to be suffering from any legal or factual infirmity. Since the bid of the other two bidders who were outsiders, were not rendered ineligible on any such count and that bid of the private respondent was considered on preferential ground being a local, it cannot be said that after rejection of the bids of these two petitioners, the tender process suffered on account of being a single bid surviving. Amongst the three eligible bidders surviving, the case of the respondent no.5 was recommended for allotment of work on preferential basis being a local which is in consonance with the relevant guidelines and circular issued by the respondent-Department. Therefore, allotment of work to the private respondent also does not suffer from any legal or factual infirmity. 15. In the totality of the facts and circumstances and the reasons recorded herein above, this Court does not find any merit in the writ petitions which are accordingly dismissed. The interim order dated 24th August, 2016 is consequently vacated.