JUDGMENT
Gyan Sudha Misra, J.
1. The petitioner-Gammon India Ltd. in SBCWP No. 3687/2005 and the petitioner-Subhash Project Marketing Ltd. in SBCWP No. 3574/2005 have challenged the letter of the Respondent-Rajasthan Urban Infrastructure Development Project (for short “RUIDP”) dated 9th May, 2005 as contained in Annexure-P/1 by which the petitioners have been excluded from the list of selected applicants for participating in the pre- qualification bids in pursuance of a notification dated 31.5.2003 which was issued on 6.6.2003 for awarding contract of Jaipur Bisalpur Water Supply Project. They have further challenged the reasons assigned by the RUIDP indicating it to the applicants as to why their application for participating in the bidding process has been rejected. Consequently, the petitioners have prayed for issuance of a writ of certiorari for quashing the letter No. F3(59)/PQ-Cont/BSL/160 dated 9.5.2005 and to further quash the reasons stated in Schedule A to the reply to the Civil Writ Petition No. 3332/2005 for not pre-qualifying the petitioners- Gammon India Ltd. from participating in the bidding process. A writ of mandamus has also been sought for cancelling the pre-qualification bidding process of Jaipur Bisalpur Water Supply Project and directing that the bidding process be initiated after conducting the pre-qualification process in accordance with the norms laid down.
2. Similarly in the case of Subhash Project & Marketing Ltd. the petitioner has challenged the communication dated 9th May, 2005 as contained in Annexure-P/10 assigning reason that the petitioner-Subhash Project & Marketing Ltd. does not qualify in terms of the notice to participate in the bid as the working capital of the company falls short of the criterion which has been fixed by the respondents for participating in the bid.
3. In order to highlight the controversy which is involved in the writ petition, it may be stated in substance that the matter is limited to a very narrow compass as the respondent-RUIDP prior to finalising the tender process for executing the contract in regard to Jaipur-Bisalpur water supply project had invited prequalification bid in order to short list the applicants who could be selected for participating in the final bid. Initially, the respondents simply rejected the application of the petitioners for participating in the prequalification bid for which the petitioner-Gammon India Limited filed a writ petition bearing SBCWP No. 3332/2005 wherein it was contended that the respondents failed to assign any reason for disqualifying the petitioner to participate in the bidding process which was mandatory as per the rules of the Government of Rajasthan-on which a show cause notice was issued to the respondents. The respondents in their wisdom did not think it proper to contest on this aspect and therefore, subsequently, during pendency of this writ petition, assigned reasons by way of a written communication laying down therein that the petitioner-Gammon India Ltd. did not qualify to participate in the bidding process as it falls short of working capital of 18 million US dollar which was a condition precedent fixed by the committee constituted for this purpose. It also indicated that the petitioner had failed to complete the project undertaken which disqualifies it to participate in the bidding process. Since the reason, was subsequently assigned by the respondent-RUIDP, the earlier writ petition bearing SBCWP No. 3332/2005 challenging the action of the respondents regarding non communication of the reason no longer survives and hence this writ petition is dismissed as having become infructuous.
4. The petitioners thereafter have filed these two writ petitions challenging the communication disqualifying the petitioners from participating in the bidding process as referred to hereinabove.
5. Learned counsel for the petitioner while challenging the communication disqualifying the petitioner from participating in the bid first of all invited the attention of this Court regarding the working capital of this company and has also referred to the balance sheet of the petitioner-company annexed at Annexure-P/10 which is the balance sheet of the petitioner- company extracted from its books of account. A perusal of the same indicates that the balance sheet of the petitioner-company after computing its assets and liabilities of Rs. 17169.221 crores (in Indian Rupees) for the financial year 2003-2004 after converting it into American, dollar, would be approximately 20 million US dollars. The working capital of the petitioner-company as per the balance sheet is also Rs. 96.97 crores for the financial year 2003-04 which if converted into US dollar, would be approximately 23 million US dollars. The eligibility of the applicants even as per the committee for participating in the bidding process is 18 million US dollars and therefore, this condition which has been relied upon by the respondents for disqualifying the petitioner-company do not appear to be justified and sustainable even on a prima facie look of the balance sheet of the petitioner-company.
6. In so far as the work experience of the petitioner-company is concerned, it was submitted on behalf of the petitioner- company that it has executed project in the State of Chennai which fulfills the condition and criteria fixed by the committee.
7. Learned counsel for the respondents Mr. Ashok Gaur however argued with zeal and vehemence that the petitioner has rightly been disqualified from participating in the bidding process as the method of accounting which has been adopted by the respondents to assess the working capital and the balance sheet of the company, the liabilities on the company could not have been ignored by the committee while assessing the balance sheet of the petitioner-company as also its working capital. It was contended that the liabilities of the company had to be assessed in terms of the national and international criteria and some complicated procedure which is beyond the comprehension of this Court, is sought to be explained by the counsel for the respondent in order to substantiate the plea that the respondents have taken an objective decision while disqualifying the petitioner-company from participating in the bid.
8. In so far as the petitioner-Subhash Project & Marketing Ltd. in SBCWP No. 3574/2005 is concerned, there is no dispute regarding its work experience even as per the respondents’ version and the only disqualification alleged against the petitioner-Subhash Project & Marketing Ltd. is in regard to its working capital. As per the respondents’ version the working capital of the petitioner-Subhash Project & Marketing Ltd. is less than 18 million US dollar but as per the counsel for the petitioner if the balance sheet of the petitioner-Subhash Project & Marketing Ltd. is perused which is annexed as Annexure-R/4 its working capital as a joint venture of Simplex Concrete Piles the working capital of the petitioner-company is 55 million US dollar and in Indian currency Rs. 250 crores. It was submitted that in addition they have additional banking credit facility of Canara Bank to Rs. 220 crores and therefore, the objection raised by the respondents regarding its working capital is totally a ruse to disqualify the petitioner from participating in the bidding process.
9. It is no doubt true that the respondents while selecting the applicant for awarding the contract of such high magnitude and dimension, has every liberty to short list the applicants while permitting them to participate in the bidding process but at the same time the project which is funded by Asian Development Bank, has also to bear in mind the guidelines of the Asian Development Bank wherein it has clearly laid down pre-qualification criteria of bidders. While laying down the qualification criteria it has specifically stated under Section 3 as follows:
“The criteria adopted must relate to characteristics that are essential to ensure satisfactory execution of the contract, and must be stated in unambiguous terms. In essence, the criteria must be chosen so that only contractors who are well qualified to carry out the contract are permitted to bid. The criteria must also be said so that they neither inhibit competition nor set a pre determine number of firms to be pre qualified. All firms that meet the criteria should be invited to bid.”
10. A perusal of this resolution adopted by the Asian Development Bank thus clearly sets the parameters which is expected to be taken note of by the respondents while laying down the procedure for short listing the applicants to participate in the bid. As already stated, while it may be clearly permissible for the respondents to set certain guidelines for short listing the applicants which certainly can be adopted by the respondents in order to alleviate the in-eligible applicants, it cannot be permitted to “inhibit competition” at the pre-qualification stage.
11. Having heard the counsel for the parties this Court is of the opinion that the respondents while laying down the criteria for allowing the applicants to participate in the bid although may be justified in setting a limit in regard to the working capital of a particular company while allowing it to participate in the bid, the entire process must reflect fairness and transparency avoiding a hyper technical approach which might create an impression that it has set up complicated labarinth of procedure missing the substance by fixing pre-qualification criteria merely to eliminate eligible applicants which do not suit the interests of the committee. In the opinion of this Court the respondents in all fairness while judging the working capital of a particular company should have looked into the balance sheet of the company in order to take an overall view of the capability and financial capacity of the company while permitting them to participate in the bid, but it appears that the respondents although have subjected the petitioners to meticulous scrutiny in regard to their working capital, it is not apparent at all whether the same criteria has been adopted by the respondents for the selected applicants although the counsel for the respondents has insisted that the applicants who have been short listed also have been subjected to the same procedure. Since this Court is not convicted on this vital aspect and have Found that the petitioners infact fulfill the pre-qualification criteria fixed by the committee, it is thought proper to direct the respondents not to disqualify the petitioners from participating in the bid on account of their working capital and if they fulfill all other criterion including their technical qualification they should be held eligible to participate in the bidding process for awarding the contract. In the entire process it is expected of the respondents to enter into a just and fair scrutiny of the matter by avoiding to disqualify the applicants on one pretext or the other which may not really be relevant for completion of the project. Thus, the communications referred to hereinbefore, by which the petitioners have been disqualified to participate in the bid, stands quashed and set aside; consequently, the petitioners shall be permitted to participate in the prequalification bid.
12. Thus, the writ petitions bearing SBCWP No. 3687/2005 and 3574/2005 are allowed and the writ petition bearing SBCWP No. 3332/2005 is dismissed as infructuous as already indicated hereinbefore with no order as to costs.