Bombay High Court
WP.1653.2011.Judgment.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE
CIVIL WRIT PETITION NO. 1653 OF 2011
Vidarbh Infotech Private Limited
A company incorporated under the
Provisions of the Companies Act, 1956
Having its registered office at
14, “Pushpkunj”, Central Bazaar Road,
Ramdaspeth, Nagpur 440010 : Petitioner
versus
1) Pune Municipal Corporation, Pune
2) Priyatech Solutions (Pune)
Private Limited,
A company incorporated under the
provisions of the Companies Act, 1956,
having its registered office at
203, Shukrawar Peth,
Pune 411002
3) Trimax IT Infrastructure &
Services Limited,
A company incorporated under the
provisions of the Companies Act, 1956,
having its registered office at
2
nd
floor, Universal Mill Building,
Asha Usha Compound, Mehra Estate,
L.B.S. Road, Vikhroli (W), Mumbai : Respondents
Mr. Birendra Saraf, with Ms. Sonal, Mr. Filji Frederick and Ms.
Suvarna Joshi, i/b. M/s. F. F. Associates, for the Petitioner.
Mr. A. P. Kulkarni, for Respondent No. 1.
Mr. A. M. Kulkarni, for Respondent No. 2.
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CORAM: A.M.KHANWILKAR &
MRS. MRIDULA BHATKAR,JJ.
Judgment Reserved on : November 22, 2012
Judgment Pronounced on : January 3, 2013
JUDGMENT : (Per A.M.Khanwilkar, J.)
This Writ Petition, under Article 226 of the Constitution
of India, was filed on 18th February, 2011
praying for setting aside
the decision of Respondent No. 1 holding Respondent No. 2
qualified for Tender No. 1 Recall 2010 and further, direct
Respondent No. 1 to award that contract under Tender No. 1
Recall 2010 to the Petitioner and not to award the contract under
the said tender to Respondent No. 2.
However, as during the
pendency of this Writ Petition, the work order was issued by
Respondent No. 1, in favour of Respondent No. 2,
the Petitioner
has amended this Petition pursuant to liberty given by this Court in
terms of order dated 31st March, 2011, and has additionally asked
for setting aside the said work order dated 5th March, 2011 issued
in favour of Respondent No. 2.
2) It is relevant to note that on 31st March, 2011, the
Court, while granting leave to the Petitioner to amend the Petition,
made it clear that any action taken from that date will be subject
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to the further orders that may be passed by this Court in this
Petition.
3) As aforesaid, before this order came to be passed, the work
order was issued to Respondent No. 2 on 5th March, 2011. Further,
the Respondent No. 2, on the basis of the said work order, has
already commenced the work of computerization of the 38 Octroi
posts and Octroi Departments situated at various locations of the
Municipal limits of Respondent No. 1 Corporation.
4) The Petitioner has, accordingly, challenged the tender
process and also the decision of Respondent No. 1 of issuing the
work order in favour of Respondent No. 2, on three broad counts.
The first is about the non fulfillment of the qualification criteria for
bidders, in terms of Clause 18.5 of the tender document. Second
is about the non fulfillment of qualification criteria in terms of
Clause 7 of the tender document and the third is about non
fulfillment of the qualification criteria specified in Clause 2 of the
tender document. We shall elaborate the grounds of challenge at
the appropriate place.
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5) The Respondents have countered these points by filing
reply affidavit. The Respondents have also relied on documents
which form part of the spiral compilation handed in to the Court in
support of its claim. The Counsel for the Corporation further
contended that the Petitioner cannot be permitted to agitate the
above grounds. For, this challenge is after thought. In that, it has
been raised only after the Petitioner realised that it will not be able
to match the lowest offer given by Respondent No. 2. In addition,
it is submitted that Respondent No. 2 is performing its job to the
fullest satisfaction of the Corporation and that, the Corporation
has been benefited because of the substantially low offer given by
Respondent No. 2 as compared to the offer of the Petitioner i.e., at
the rate of Rs. 5.68 per receipt/post for first order and Rs. 6.78 per
receipt/post for the further two years as against the rate quoted by
the Petitioner of Rs. 14.50 per receipt.
6) We shall turn to the first ground urged before us,
which is about non fulfillment of the qualification criteria in terms
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of Clause 18.5 of the tender document.
Clause 18.5 of the tender document reads thus:
“18.5 Bidder (at least one member in case of consortium) must
have 250 skilled Computer Operator including other technical
staff on his pay role. Necessary proof to this effect should be
attached along with the bid inform of PF and ESIC
acknowledgment Or attach salary certificate from the
concerned bank.”
7) For considering the rival stand, we deem it apposite to
also reproduce
clause 20 of the terms and conditions of the Tender,
which reads thus:
“20 Manpower The contractor is responsible for providing
well trained staff for managing the front end counters and back end (Approximately 250 employees including Data entry operator, Hardware Engineer, Software Engineer, Networking Engineer, Electrical engineer and Generator Operator) at the Naka.
The staff should be trained, must dress in a decent manner, should be polite and offer the services with a smile.
The successful Bidder shall submit an affidavit stating
that the successful bidder or any of his employees will not
claim for employment in PMC on its services rendered in naka
and main office under this contract or any time in future. The
proforma will be provided by PMC at the time signing the
contract.”
8) It is common ground that Respondent No. 2 relied on
the certificate given by the Bank of India, which, according to the
Petitioner, does not fulfill the requirements of Clause 18.5 of the
tender document.
The said certificate dated 28th January, 2011
reads thus:
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“SHV:ADV:RKS Date 28/01/2011
To,
M/s. PMC Octroi Department,
Pune
RL:M/S. Sujata Computers Pvt. Ltd.
CERTIFICATE ABOUT EMPLOYEES
M/S. Sujata Computers Pvt. Ltd. Are our clients and have
been maintaining accounts with us.
2) We may certify that there are around 250 employees on
their payroll. This certificate is issued as per specific request of
M/S. Sujata Computers Pvt. Ltd. This is issued without any
responsibility obligations on the part of BANK or any of it's
officials.
Thanking you
Your's faithfully,
S/d.
CHIEF MANAGER”
9) There is no difficulty in accepting the argument of the
Petitioner that Clause 18.5 is a vital provision, as it concerns the
qualification criteria for bidders. This Clause envisages that the
Bidder must provide proof that he has 250 skilled computer
operators including other technical staff. That proof should be
submitted with the bid, in prescribed form of PF and ESIC
acknowledgement or salary certificate from the concerned Bank.
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Notably, as regards the salary certificate from the concerned Bank,
no form has been prescribed.
10) Be that as it may, Clause 18.5 will have to be read in
conjunction with Clause 20 of the tender document dealing with
the issue of manpower. If so read, it stipulates that the bidder
must in aggregate have not less than 250 employees, consisting of
Data Entry operators, Hardware engineer, Software engineer,
Networking engineer, Electrical engineer and Generator Operator
on its payroll. No hard and fast norm has been prescribed as to
the strength or ratio of employees as computer operators and of
other technical staff. Considering the expression “including”,
occurring in Clause 18.5, by no stretch of imagination, it can be
said that the bidder must have minimum 250 skilled computer
operators. For, it refers to 250 skilled computer operators
“including” other technical staff on the pay roll. A priori, it is not
mandatory for the bidder to have employed minimum 250 skilled
computer operators as such. We are in agreement with this
interpretation put forth by the Respondents.
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11) Having said this, the question is, whether the
certificate given by Bank of India, reproduced above, can be said to
fulfill the requirement of Clause 18.5, in particular. It mentions
that there are around 250 employees on the payroll of Sujata
Computers Private Limited. The Bank, however, does not take
responsibility/obligation on the basis of the later statement
appearing in the certificate issued by the Bank. In this context, it
was vehemently argued by the Petitioner that, such a certificate
will be of no value and more so because it was not a salary
certificate issued by the Bank as such. We are not impressed by
this argument. Clause 18.5 predicates that the bidder must have
specified number of employees and to reassure the claim so made
by the bidder, proof in the form of PF and ESIC acknowledgement
or salary certificate issued by the Bank has been insisted upon.
The Bank certainly cannot take the responsibility or obligation of
the liability of the bidder qua its employees. The certificate, however, is certainly useful to indicate that the bidder has employed around 250 employees on its payroll. Stricto senso it may not be a salary certificate but, it serves the purpose of having submitted proof in support of the statements made by the bidder
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of having employed specified number of employees.
The substance
of the requirement or qualification criteria is that the bidder must
have 250 employees. If such statement is made by the bidder and
there is some dispute or objection regarding the correctness
thereof, that would be a matter of inquiry and of substantiating the
claim in such inquiry by producing proof therefor. It is not as if the
bid submitted does not mention the fact that the bidder has 250
and more employees in his establishment. That is the substance of
the qualification criteria under consideration. The nature of proof
is defined but, if during the verification, this objection were to be
raised, the bidder could have cured the anomaly or could have
produced further material in support of the claim of having
employed more than 250 employees in his establishment. The
subjective satisfaction regarding the ability and capacity of the
concerned bidder is that of the scrutiny committee. Further, it is
not as if the bidder has failed to attach documents referred to in
Clause 18.5 at all. Thus, it is not possible to countenance the
argument that Respondent No.2 did not satisfy the qualification
criteria.
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12) Further, the Respondents have rightly argued that if the
Petitioner had any tittle of doubt about the qualification criteria of
Respondent No. 2, should have taken objection at the time of
scrutiny and verification of the bid documents, after it was opened
on 4
th
February, 2011. Instead, the minutes of 4
th
February, 2011
clearly go to show that the Petitioner as also other bidders did not
raise any objection, whatsoever, regarding nonfulfillment of the
qualification criteria by Respondent No. 2. It is relevant to
mention that it is common ground that Respondent No. 2, along
with the bid documents, had submitted list of 253 employees,
along with their designations and experience. The correctness of
the said disclosure was not put in issue at all. As a matter of fact,
no objection regarding qualification was raised at the time of
scrutiny.
In any case, we have no hesitation in accepting the
submission of the Respondents that Respondent No. 2 had
substantially complied with the requirements of Clause 18.5 and
therefore, no bidder raised any objection to the qualification
criteria of Respondent No. 2 during the scrutiny done in the
meeting on 4th February, 2011. Taking over all view of the matter,
therefore, we find no substance in the first point raised by the
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Petitioner to persuade the Court to quash and set aside the entire
tender process or the work order issued in favour of Respondent
No. 2 on that count.
13) We may now turn to the second ground urged before
us about nonfulfillment of qualification criteria as per Clause 7 of
the tender document.
Clause 7 reads thus:
“7. The Bidder (or any one of consortium members) must
provide at least One references from the two years of
government/semi government client for whom similar type of
services has been performed. For each reference provide …....”
14) The requirement of Clause 7 is that the bidder or any
one of consortium members must provide at least one reference
from the two years of Government/Semi Government client for
whom similar types of services has been performed.
This, indeed, is a qualification criteria.
The Petitioner, relying on the documents
at Page Nos. 71, 76 and 79 to 96 of the additional paper book
(spiral compilation) contended that
Respondent No. 2 had relied
on the reference of Government/Semi Government client of M/s.
Priya Business Machines, which was a proprietary concern and not
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in respect of Respondent No. 2 which is a Private Limited
Company, a different entity and not the member of the consortium.
The Respondent No. 2 was the member of the consortium and not
even one reference from the two years of the Government or Semi
Government client was produced by Respondent No. 2.
No doubt,
the documents referred to by the Petitioner are part of the bid
documents submitted by Respondent No. 2. Further, the same
would indicate that the reference is to M/s. Priya Business
Machines and not Respondent No. 2.
However, the Respondents
have pressed into service other communications, amongst others,
at Page Nos. 70, 78 and 97. These documents are indicative of
references from the Government/Semi Government clients of
Priyatech Solutions Private Limited Respondent No. 2.
The
requirement of Clause 7, is, furnishing at least one reference from
two years of Government/Semi Government client, for whom,
similar services have been performed. This requirement has been
fulfilled by Respondent No.2. Accordingly, even the second
ground, on which the tender process as also challenge to the work
order in favour of Respondent No.2, will have to be stated to be
rejected, being devoid of merits.
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15) The third ground canvased before us by the Petitioner
is in the context of requirement under Clause 2 of the qualification
criteria of the bid document. The same reads thus:
“2. Bidders are allowed to form JV or consortium. Notarized
Stamp Document must be attached. However not more than
Two bidders can join in a single consortium.”
16) On a bare reading of this Clause, it is obvious that the
bidders could form a joint venture of consortium. Further, not
more than two bidders can join a single consortium. The
Petitioner relies on a joint venture agreement between Respondent
No. 2 and Sujata Computers Private Limited, dated 24th December,
2004, in particular Clause 4 thereof, which provides for tenure of
the joint venture upto five years from the date of the said
agreement. Obviously, five years' term specified in this agreement
would expire by efflux of time in December, 2009. It appears that,
an Amendment Articles of Agreement was executed between
Respondent No. 2 and Sujata Computers Private Limited on 21st
February, 2005 Exhibit – 'C' to the Petition. As per the amendment,
the Association of persons constituted under the agreement was
deemed to have commenced from the date of execution of these
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presents and duration of the same was as per conditions
mentioned in PMC tender. According to the Petitioner, the PMC
tender referred to in this Amended Article Deed was not taken
forward. In that sense, the joint venture agreement between
Respondent No. 2 and Sujata Computers Private Limited did not
continue further. The work order is, however, awarded to the
same joint venture, in the year 2011, on the erroneous assumption
that the said joint venture continued until and for the recall tender
in question.
17) This argument is countered by the Respondents by
relying on the Joint Venture Agreement between Respondent No. 2
and Sujata Computers Private Limited, purportedly executed in
December, 2010.
The said JVA reads thus:
“Joint Venture Agreement between
M/s. Priyatech Solutions (Pune) Pvt. Ltd.
A company incorporated and registered under the provisions of
the companies Act, 1956 having its registered office at 203
Shukrawar Peth, Pune 411002.
Through its duly authorized director
Mr. Prafulla Prabhakar Mahajan
Age 39 Occupation Business
Residing at
C4/1 Maniratna Complex, Aranyeshwar, Pune 411009
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And
M/s. Sujata Computers Pvt. Ltd.
A company incorporated and registered under the provisions of
the companies Act, 1956 having its registered office at 66/2
Guru Chhaya Apartment, Nalstop, Karve Road, Pune 411004.
Through its duly authorized director
Mr. Sumatilal Manikchand Lodha
Age 53 years Occupation:Business
Residing at: Gandhali Apartments,
Damale Path,
Law College road,
Pune 411004
Dated 24.12.2004 is hereby extended on similar terms for Pune
Municipal Corporation Octroi Department tender No. 1/2010.
For Priyatech Solutions (Pune) Pvt. Ltd. For Sujata Computers Pvt. Ltd.
S/d. S/d.
Director Director”
(emphasis supplied)
18) Relying on the concluding part of this document, the
Petitioner would contend that the same cannot be treated as
revival of the term of JVA under the joint venture Agreement dated
24th December, 2004. At best, it only predicates that the terms
referred to in the said agreement are extended but there is no
mention about extending the tenure of the agreement which was
limited to five years from the commencement of the joint venture.
No doubt, if this contention of the Petitioner is to be accepted, it
may result in nonfulfillment of requirement under Clause 2 of the
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tender document reproduced above.
However,
we are in
agreement with the submission of the Respondents that the intent
behind the JVA reproduced above was obviously to revive the joint
venture for further period commensurate with the period specified
in the recall tender in question. The above said JVA explicitly
provides that the joint venture is extended on similar terms in
relation to the tender in question, including the recall tender.
Moreover, during the scrutiny, the officials of the Corporation were
satisfied that the requirements of subsisting joint venture or
consortium were fulfilled. Further, no objection regarding validity
of joint venture agreement was put in issue during the scrutiny.
Since the Respondent No.2 had substantially complied with the
requirement of forming joint venture and on that premise, the bid
document submitted by Respondent No.2 was processed, it is too
late in the day to raise that issue for unsettling the tender process
and the work order awarded to Respondent No.2.
Instead, we
agree with the Respondents that the said document will have to be
liberally construed and at this distance of time, the Petitioner
should not be permitted to challenge the tender process on this
count and more so because no public purpose would be served by
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cancelling the tender process or the work order issued in favour of
Respondent No. 2. Indisputably, the Respondent No.2 has given
the lowest offer and also because of substantial price difference
having financial ramifications to the exchequer of the Corporation.
19) The Petitioner has countered this submission on two
counts.
Firstly, because the Petitioner cannot be blamed for not
having taken objection on the date of scrutiny on 4th
February, 2011, as it was impossible to wade through the entire compilation of documents produced by Respondent No. 2, along with bid.
Further, it is seen that the Petitioner immediately raised the objection in writing on 7th February, 2011, addressed to the Municipal Commissioner, vide Exhibit 'I'.
According to the
Petitioner, this objection was taken in writing, much before the
work order was awarded to Respondent No. 2. The Corporation
was duty bound to consider the objection and more particularly
because it was in respect of qualification criteria. On merits of the
objection raised by the Petitioner, we have already negatived the
same. Assuming that the Petitioner was right that the Petitioner
should not be non suited because of having failed to raise any
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objection at the time of scrutiny on 4th February, 2011, even then,
the challenge in this Petition cannot succeed.
20) According to the Petitioner, the Court must lean in
favour of the Petitioner and should not non suit the Petitioner
merely because the work order has already been issued to
Respondent No. 2 as back as on 5th March, 2011 and equally
because Respondent No. 2 incidentally happens to have given offer
much below the offer of the Petitioner.
This defence, contends the
petitioner, cannot stand the test of judicial scrutiny, if the
Respondent No. 2 has failed to fulfill the qualification criteria.
For
the reasons already recorded,
we need not dilate on this contention any further.
Suffice it to observe that we are not at all
impressed by the principal grounds on which the Petitioner expects this Court to interdict the tender process and the work order in question.
It would have been a different matter if the Petitioner
had substantiated at least one ground of non fulfillment of qualification criteria by the Respondent No.2, in which case, the Court could have passed suitable order and moulded the relief, keeping in mind the observation made in order dated 31
st March,
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2011 that, any action taken from the date of passing of the said
order shall be subject to further orders to be passed by this Court.
However, in the fact situation of the present case, no interference
in exercise of writ jurisdiction is warranted.
21) Hence, dismissed with no order as to costs.
(MRS. MRIDULA BHATKAR,J.) (A.M.KHANWILKAR,J.)
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