Posted On by &filed under Gauhati High Court, High Court.


Gauhati High Court
Gautam Bahri vs Psc Engineers Private Ltd. And … on 6 September, 2000
Author: J Sarma
Bench: J Sarma, H Singh


JUDGMENT

J.N. Sarma, J.

1. This Writ Appeal has been filed challenging the legality and validity of the judgment dated 7.7.2000 passed by the learned Single Judge in W.P.(C) No.109 of 2000.

2. The brief facts are as follows:-

On 31st March, 1999 a notice was issued in the Statesman regarding Notice Inviting Tender. It was for supply, erection, testing

and commissioning of 132/33 KV, IX15 M.V.A. Sub-Station at Purba Kanchanbari in North Tripura District. There were three other works mentioned in the Notice, but we are not concerned with that. In the tender notice it was specifically mentioned that tenders are invited from the eligible enlisted contractors/agencies of appropriate class having experience in similar nature of works in the Department of Power, Tripura or under any State Electricity Department in the adjoining States. It was further stated that the tender form will be sold to those only who have got experience in similar nature of Job. ‘Clause 03’ of the tender notice provides as follows:-

“03. Selling of tender form will be subjected to the production of following documents (copies duly attested by Gazetted Officer, to be submitted with the application):-

(i) Income and Sales Tax clearance certificate of current validity.

(ii) Performance certificate from Department of Power, Tripura/ MSEB/ASEB/PGCIL/NEEPCO/CPWD/WBSEB or under any State Electricity Department for similar nature of work of value of at least 25% put to tender.

3. In response to this notice, the present appellant and respondent No. 1 both submitted tenders. Apprehending that the tender submitted by the petitioner may be declared to be informal, the appellant herein as petitioner filed Civil Rule being C.R. No.497 of 1999 before this court. In that writ petition the present respondent was not made a party. But by filing an application (C.M. application No.499/99) the present respondent No. 1 prayed to be impleaded as a party in that writ petition. That matter came up for order before this court and this court on 31.1.2000 passed the following order:-

“31.01.2000…

Mr. Saha has submitted that the concerned departmental authority has decided to declare the tender of the petitioner is formal and as such the petition has become infructuous. Mr. Saha has also produced the connected file being No. 17(B)/EE/TD. The concerned note is found at note (11) dated 19.11.1999 in the said file. Mr. S. Deb, the learned senior counsel for the petitioner has also submitted that the petition has become infructuous as the relief prayed for in this petition has been granted by the authority concerned.

…………..

The submission of Mr. Das is noted but it is cleared that as the matter involved in the writ petition between the petitioner Shri Gautam Bahri and the State of Tripura has become infructuous, this application has also become infructuous but if the applicant has any separate cause of action then it is for the applicant to pursue the matter in accordance with the provisions of law.”

And accordingly, that Civil Rule was disposed of. Thereafter, there was the second round of the litigation with regard to this tender and that was W.P.(C) No.87/2000 and that was filed by the present respondent No.1. In that writ application the present appellant was respondent No.6. The grievance of the petitioner in that writ application was that as the respondent No.6 did not satisfy the conditions regarding the performance etc. as such his tender cannot be considered. This court by order dated 6.3.2000 disposed of the writ application holding that to be premature. The relevant portion of the order reads as follows: –

“The final decision regarding acceptance of the tender has yet to be taken by the Stale respondents. The writ petition at present is premature and hence rejected. When the final decision regarding the acceptance of the tender is taken by the respondents, the petitioner, if so advised, have the liberty to approach this court again.”

4. Thereafter, the tender process was finalised and the present appellant was given the letter of intentment on 7.3.2000. Challenging this, the W.P.(C) No. 109 of 2000 was filed before this court by the present respondent No. 1 and an undertaking was given by the learned Government Advocate that till the matter is finalised no further steps shall be taken in the matter and accordingly, the matter stayed at this stage itself. In that W.P.(C) the present appellant was respondent No. 4. The challenge in the writ application, inter alia, was on the following grounds: –

(1) The State-respondent can make no departure from the premises made by them in the tender notice and cannot waive any of the conditions given in the said tender notice as per their sweet will and in the name of any third unauthorised body i.e. Supply Advisory Board in gross violation of the settled law of the land.

(2) The acceptance of the tender of respondent No. 4 is highly unreasonable and discriminatory in the eye of law. The State-respondent has apparently favoured the respondent No. 4 in a

biased manner, admittedly when he did not fulfil the eligibility criteria so far the Notice Inviting Tender is concerned.

It is basically on these two grounds the challenge was made, though there were some other technical grounds.

5. An affidavit-in-opposition was filed on behalf of the respondent Nos. 1, 2 and 3 and also an affidavit-in-opposition was filed on behalf of the respondent No. 4. In the affidavit-in-opposition filed by the respondent No. 1, 2 and 3 and the affidavit-in-opposition filed on behalf of the respondent No. 4 it was specifically stated that there was no deviation from the conditions mentioned in the notice inviting tender. There was no biasness and/or arbitrariness in giving the work to respondent No. 4 and on that background they prayed that the writ application may be rejected. This matter came up for decision before a Single Judge of this Court and the learned Single Judge of this court by its judgment dated 7.7.2000 allowed the writ application and the letter of intent which was in favour of respondent No. 4 was quashed and the matter was sent back to the respondent authorities to take a decision afresh after keeping in mind the observations made therein before, specially, those in paragraph 28 of the judgment. In order to appreciate the contentions of the parties it will be necessary to quote paragraph 28 of the judgment.

“28. It would, therefore, appear from the discussion above that the SAB/WAB committed the following irregularities:-

(1) The Board has taken into consideration certain documents of performance submitted belatedly in violation of the NIT
specifications;

(2) The decision to award the contract to the respondent-firm has been taken merely because the proprietor of the respondent firm has sufficient experience without undergoing any process of enquiry as to its over-all competence to undertake an important project of this nature;

(3) There has been no comparative evaluation of the technical competence of the petitioner-firm and the respondent-firm;

(4) The decision has been taken in a sweep in the sense that there was no discussion as to how the petitioner-firm, although its offer was techno-commerically acceptable, was discarded;

(5) There is no discussion about the price factor or opinion expressed above the acceptability of the price negotiated with the petitioner-firm.” Hence, this appeal.

6. We have heard Mr. K.N. Bhattacharjee, the learned senior counsel assisted by Mr. S.B. Dutta, learned Advocate for the appellant. Also heard Mr. S.M. Chakraborty, assisted by Mr. D. Dey, Mr. P.P. Bhattacharjee, learned Advocates appearing of the respondent No. 1 and Mr. U.B. Saha, the learned senior Government Advocate assisted by Mr. D.C. Nath, learned Advocate for the State-respondents.

7. At the very beginning, it was made clear to Mr. U.B. Saha, the learned senior Government Advocate that he has no right to challenge the legality and validity of the judgment as the State-respondents did not file any appeal against the judgment of the learned Single Judge. But what he submits is with regard to the record of the case and he with his usual fairness and magnanimity did not challenge the legality and validity of the judgment. He was aware of his limitation.

8. Mr. K.N. Bhattacharjee, the learned senior counsel appearing for the appellant urges the following points:

(a) The finding of the learned Single Judge that the tender submitted by the respondent No.4 in the writ application (the present appellant) is informal as he did not submit the experience certificate along with the tender is wrong in view of the fact that it was not a
term of the NIT.

(b) The appreciation of law as laid down in New Horizon Ltd. v. Union of India, (1995) 1 SCC 478 is not correct inasmuch as in the particular case, the law was laid down that the experience of the person manning of a firm shall be the experience of the firm.

(c) The finding of the learned Single Judge that the respondent No. 4 in the writ is not the lowest tenderer is perverse and patently erroneous in view of the fact that the learned Single Judge did not consider the fact that the SAB was avoiding the loading of interest with the rate quoted by the respondent No. 4.

(d) As the State of Tripura has not filed any appeal against the judgment of the learned Single Judge, the learned Government Advocate shall be heard, but he cannot challenge the finality of the judgment that will be binding on him.

9. Mr. Bhattahcharjee draws our attention to paragraphs 2, 6 and 10 of the judgment as well as to the NIT which is available at page 64 of the paper book and he submits that the learned Single Judge

went astray in holding that there was clause in the NIT which requires the appellant’s-firm (respondent No.4 in Civil Rule) to file any certificate or document of performance from the authorities specified in the NIT. In view of this he submits that the finding of the learned Single Judge in paragraph 28 of the judgment in point No. 1 is absolutely perverse one. We have looked into the NIT and we have quoted above the clauses of the NIT. In the clauses of the NIT there was no requirement to submit any document of performance or experience with the tender. That can be submitted subsequently and that was validly taken into consideration by the authority. So, no fault can be found on that count. Something which was not the condition of the NIT was considered to be a condition in the judgment by the learned Single Judge and as indicated above the learned Single Judge went beyond the NIT in deciding the matter. Regarding the finding of the learned Single Judge that the proprietor of the respondent-firm did not have sufficient experience and that it was accepted without any enquiry as to its over all competence to undertake an important project of this nature. Mr. Bhattacharjee submits that there also learned Single Judge was factually incorrect inasmuch as in paragraph 8 of the writ application. It is stated, inter alia, as follows:-

“That your petitioner most humbly likes to state that in the year 1983 the Managing Director of the petitioners company. Shri G.S. Ahluwalia and the respondent No.4 were the partners of M/s. Projects and Services Centre which was later on taken over by petitioner, a private limited company and incorporated under the Companies Act, 1956 in the year 1989. Thereafter, some disputes and differences cropped up between the Managing Director of the petitioner-company and the respondent No.4 which was ultimately referred for settlement before the Arbitrator wherein a decision was arrived at that there would be a bid and the higher bidder would purchase the shares of other group at such bid value. Pursuant to that decision, a bid was held on 10.3.1998 and the bid called by the Ahluwalia group was higher than the bid called by the respondent No. 4 and thereby the said respondent No.4 left the said company by relinquishing all his rights, title and interest in the said Company in favour of the Ahluwalia group and started a Proprietorship business in the name and style of M/s. Vector Engineers at P-5, Biplabi Rash Behari Basu Road, Calcutta-1.”

10. In the affidavit-in-opposition field on behalf of the respondent No.4 in paragraph 2 it has been stated, inter alia, as follows;-

(a) In or about 1978, defendant No. 4 qualified as an Electrical Engineer from the Jadavpur University at Calcutta in the State of West Bengal. Thereafter, respondent No.4joined a reputed concern inter alia engaged in manufacture, supply, commissioning and execution of diverse electrical equipment and works viz. M/s. Crompton Greaves Ltd. In course of such employment, respondent No.4 was recognised with distinction as a key personnel for execution of the company’s work and as such became an integral part of each and every one of the major contracts of the said company, primarily in the North eastern part of India. However, the answering respondent in or about 1981 decided to set up a concern of his own did so in the name and style of Projects & Services Centre. The said Cormpton Greaves Ltd. in recognition of the expertise and competence of the answering respondent, certified in writing as such. A copy whereof is annexed hereto and marked as Annexure R1.

(b) While carrying on business of electrical contracting as Projects & Services Centre, that was subsequently converted into a Partnership concern along with the present Managing Director of the petitioner-company, the answering respondent executed on a turnkey basis inter alia the following contracts, more fully set out in a table annexed hereto and marked as Annexure R2. The first of such contracts was in the State of Tripura, viz, the 66 KV Sub-Station at Badarghat, the certificate for successful completion whereof was duly awarded by the then Chief Engineer (Electrical) of the respondents. A copy of the said certificate is annexed hereto along with similar certificates from other authorities and marked as Annexure R3.

(c) Thereafter, in or about April 1991, the answering respondent promoted, created and/or formed a body corporate named PSC Engineers Pvt. Ltd. and held 50% shares therein. The said company was formed in co-partnership with the said present Managing Director of the petitioner-company. The said company was primarily and for all intents and purposes controlled and managed by the answering respondent and the said erstwhile colleague.

(d) In course of the association of the answering respondent with the said PSC Engineers Pvt. Ltd., the latter undertook as many as 20 number of projects and/or contracts in inter alia in the State of Tripura. The respondents at all material times recognised the ability and competence of the answering respondent in executing turnkey projects and also certified in writing as such. A table enlisting the various jobs undertaken by the answering respondent during his association with the said P S C Engineers Pvt. Ltd. is annexed hereto and marked as Annexure-R4.

(e) In course of such association and execution of jobs as mentioned hereinabove, various departments of the respondents as also other Government and non-Government organisations, duly certified in writing the exclusive role played by the answering respondent in execution of the said projects. Copies of various certificates issued in this regard have been annexed hereto in Annexure R3.

(f) In or about 1997, disputes and differences arose between the answering respondent and his partner promoter of the said P S C Engineers Pvt. Ltd., which resulted in the answering respondent selling his 50% shareholding and/or interest thereat. The said disputes were resolved in an arbitration proceedings conducted at Calcutta. However, the said erstwhile partner promoter of the said P S C Engineers Pvt. Ltd. in acceptance and in recognition of your petitioner’s wide and vast experience in the field of electrical installations duly certified the same in writing, a copy whereof is annexed hereto and marked as Annexure-5.

(g) Thereafter, in or about April. 1998, the answering respondent started to and continued to cany on the business of electrical installations and contracting in the name and style of Vector Engineers.

(h) In course of such business, the answering respondent was from time to time required by the respondent authorities to execute and complete diverse jobs, including those left incomplete by the said M/s. PSC Engineers Pvt. Ltd., the present petitioner. The said jobs were awarded to the answering respondent, in view of his established and recognize expertise in the field of electrical installation and execution of turnkey electrical contracts. Copies of various work orders dtd. 20th May, 1998 and 22nd May, 1998 issued to your petitioner in this regard are annexed hereto and collectively marked as Annexure R6.”

11. Further, along with affidavit-in-opposition a large number of documents were enclosed to show that this man had adequate experience. These documents are Annexures R1 to R7 and Annexure R3 is a document issued by the Chief Engineer (Electrical), Government of Tripura, Agartala. At that point of time, of course, this man was a partner of the petitioners-firm, but in the document it is specifically mentioned as follows:-

(a) “I am happy to add here that it was an endeavour of Mr. G. Bahri to complete the work including a small transmission line in time. It is successfully commissioned through his own efforts and exercising control over his staff.

(b) All admiration goes to M/s Projects & Services Center and to Mr. Bahri personally.”

12. There is another certificate issued on 21.8.1998 by the Project Manager, AGTPP, NEEPCO, Ramchandranagar, Agartala and that certificate, inter alia, shows as follows:-

“This is to certify that Mr. Gautam Bahri, Joint Managing Director, PSC Engineers Pvt. Ltd. Calcutta, was involved in the entire execution work of 132 KV Switchyard (12 Bays) in Agartala Gas Turbine Power Project, Ramchandranagar, Agartala. After that Mr. Bahri has separated out of PSC Engineers and running his new company Vector Engineers.

I wish him all the success in the work.”

13. Annexure-R/4 is a detailed statement prepared.

14. Annexure-R/5 is a certificate issued by the Managing Director and Chairman of the petitioner-company wherein also a high praise was made for this man and wherein it was stated that he was instrumental in doing of the works of the company. On the face of all these bunch of documents, to term that this man did not have any experience of past work performance is really a pitiable situation. But that is what was found by the learned Single Judge. But learned Single Judge did not take that these things into consideration and he came to the finding in paragraph 23 as follows:-

“23. In the instant case, the proprietor of the respondent firm was undoubtedly an important partner of the petitioner firm playing a key role in its commercial activities. After separation, he has established the respondent-firm and thus the respondent-firm is equipped with his personal knowledge and experience. But that does not means that merely because the proprietor has the personal experience and knowledge and all expertise with him, the firm established by him recently stands superior to the petitioner-firm. The petitioner-firm is also a reputed firm having a countable background and it has commissioned a number of similar projects in the State of Tripura. It has produced a bunch of certificates from different specified authorities to show its experience in similar nature of works. There is nothing on record to show that SAB/WAB after due consideration was of the opinion that after desertion of the petitioner-firm by the proprietor of the respondent-firm, the petitioner-firm has become totally bankrupt and not competent to execute the work: The SAB/WAB in its meeting dated 18.1.2000 while taking a decision to award the

contract to the respondent firm did not make any comparative assessment of technical know-how between the two firms. Nowhere in the proceeding dated 18.1.2000, it has been indicated that after desertion of the petitioner-firm by the owner of the respondent-firm, the former firm has become completely ineffective. The SAB/WAB has not considered other factors like manpower, machinery power and the skill and proficiency of the persons in control of the firm. In fact, there is no discussion on any of these essential requirements so as to relegate the respondent-firm as superior to the petitioner-firm. Unless a decision to this effect is arrived at with adequate reason, the decision taken by this supreme decision making authority to award the contract in favour of the respondent-firm cannot be placed above board. The proceedings of the meeting show that the SAB/ WAB decided to favour the respondent-firm merely because the tender documents of the respondent-firm was declared formal by it in an earlier meeting in blatant disregard to the notes of the Engineers reproduced above.”

So, this finding also has no leg to stand upon.

15. The next question is that whether a writ court can question the decision/views taken/expressed by an expert body. After all, a writ court does not act as appellate court to evaluate them. The writ court, as pointed out by the learned Single Judge himself, is only concerned with the decision making process and not with the decision and in examining/scrutinizing decision making process, the writ court cannot delve in the matter so deeply as to find out any minor deviation in the process and to strike it down. That is not the purpose of a writ court. It should be borne in mind that a writ court is not a horned bull in a china clay shop to put all things topsy-turvy in quashing a decision taken by an administrative body. After all, this is a fight between two private individual regarding the allotment of contract. But the delay that will be caused by quashing the matter and sending it back to the Government will have a prejudicial affect on the public in general because in the meantime, the value of the work will go up and in that process public will suffer.

16. The third submission of Mr. Bhattacharjee is that the finding of the learned Single Judge that the tender value of the respondent No. 4 was lowest is also perverse.

17. In para 25 of the judgment the learned Single Judge took up the job as an expert and having made the calculation here and there he arrived at a finding that the tender value of the writ

petitioner was the lowest one. That also is not a job of a writ court. The authority in its wisdom found that the tender of respondent No. 4 was the lowest, and otherwise also the difference in the value according to the chart produced was only Rs. 1,27,117.80, according to the finding of the learned Single Judge, The court should always bear in mind that the authority is not bound to accept the lowest tender. There may be various reasons for the authority not to accept the lowest tender and mere acceptance of a tender which does not bear the lowest value is not a ground to set aside such acceptance of a tender. Even in the tender notice itself it was stated that the authority is not bound to accept the lowest tender. This tender was scrutinized by some experts and they having scrutinized, the same, they accepted the same and if there was no palpable blatant error on the face of the record or blantant arbitrariness on the face of it or a case of mala fide or bias is made out, the writ court should not touch such a matter. The writ court in such a matter should adopt no touch attitude.

18. Mr. Bhattacharjee, the learned counsel for the appellant relies on the following decisions: (1) (1995) 1 SCC 478 (New Horizons Ltd. and Another appellant v. Union of India and Others, respondents): (2) (2000) 2 SCC 617 (Air India Ltd. appellant v. Cohin International Airport Ltd and others, respondents) wherein the Supreme Court has pointed out as follows:-

“In a commercial transaction of a complex nature what may appear to be better, on the face of it, may not be considered so when an overall view is taken. In such matters the court cannot substitute its decision for the decision of the party awarding the contract.”

(3) (1990) 2 SCC 488 (G.J. Fernandex, appellants v. State of Karnataka and others, respondents): and AIR 1991 SC 1579 (M/s Poddar Steel Corporation, appellant v. M/s Ganesh Engineering Works and others, respondents)

19. On consideration of the materials on records and after hearing learned counsel for the parties, we find that the judgment of the learned Single Judge requires interference which hereby we do. Accordingly, this appeal stands allowed and the judgment of the learned Single Judge as indicated above shall stand quashed. The interim order, if any, stands vacated.

20. At this stage, the learned counsel for the respondents prays for stay of this order. The prayer shall stand rejected.


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