IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 273 of 2009()
1. M/S.CONCORD CONSTRUCTION COMPANY,
... Petitioner
Vs
1. THE SUPERINTENDING ENGINEER,PUBLIC
... Respondent
2. THE CHIEF ENGINEER'S TENDER COMMITTEE,
3. STATE OF KERALA,REPRESENTED BY THE
4. SREE DHANYA CONSTRUCTIONS,REPRESENTED BY
For Petitioner :SRI.M.PATHROSE MATTHAI (SR.)
For Respondent :SRI.A.N.RAJAN BABU
The Hon'ble the Acting Chief Justice MR.J.B.KOSHY
The Hon'ble MR. Justice V.GIRI
Dated :26/02/2009
O R D E R
J.B. KOSHY, Ag.C.J. &
V.GIRI, J.
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W.A.No.273 of 2009
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Dated this the 26th day of February, 2009.
JUDGMENT
GIRI, J.
The petitioner in W.P.(C)No.35534/08, which was
dismissed by the learned single Judge as per the
impugned judgment dated 28.1.2009, is the appellant
herein.
2. The 1st respondent issued Ext.P5 notice
inviting tenders for the work involving improvements to
the Alappuzha-Kuravilangad from Thanneermukkam-
Kuravilangad. The tender was to be submitted in two
sealed covers, one cover for the technical offer and the
other for financial offer. The technical bid was to be
opened by the Superintending Engineer and to be
examined by the Chief Examiner (Tender Committee).
Qualified tenderers will be intimated and the financial bids
of the pre-qualified bidders alone are to be opened after
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intimating the qualified bidders. Going by the facts as
contained in the counter affidavit filed by the 3rd
respondent, three bids were received from the petitioner,
4th respondent and one Kerala State Construction
Corporation Limited. The 4th respondent alone was pre-
qualified and accordingly the financial bid of the 4th
respondent was to be opened and considered. In other
words, the petitioner was not pre-qualified and it is,
therefore, that the writ petition was filed praying for the
following reliefs:
(a) To issue a writ of mandamus or other
appropriate writ, order or direction directing
the respondents 1 to 3 to pre-qualify the
petitioner for the work covered by Ext.P5 and
award the work to the petitioner firm if the
petitioner has quoted the lowest bid.
(b) To declare that the petitioner firm is entitled
to be pre-qualified for the work covered by
Ext.P5 in view of the experience certificate
produced by one of the partners of the firm.
(c) To issue a writ of mandamus or other
appropriate writ, order or direction, directing
the 1st respondent to open the price bid of
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the petitioner firm and to award the work
covered by Ext.P5 to the petitioner firm, if
the petitioner firm has quoted the lowest bid.
(d) To issue a writ of mandamus or other
appropriate writ, order or direction
restraining the respondents 1 to 3 from
awarding the work covered by Ext.P5 to the
4th respondent.
(e) To order the cost of the proceedings under
Rule 157 of the Kerala High Court Rules.
(f) To issue such other and further reliefs as
may be prayed for from time to time.
3. Counter affidavits were filed by respondents 1
and 4. The stand taken by the 1st respondent
Superintending Engineer was to the effect that Clause 1.9
(b) of Ext.P5 made it clear that each bidder should have
achieved a financial turnover amount of Rs.1565 lakhs in
his name and that this necessarily referred to the financial
turnover of the tenderer, who is a bidder in the case. The
financial statement filed by the petitioner, which is a firm
as the bidder, was in relation to one of the partners of the
firm. That this did not satisfy the conditions in the tender
W.A.No.273 of 2009
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notification and consequently, the petitioner was not
qualified. The learned single Judge took note of the fact
that the petitioner-bidder was a firm consisting of three
partners, one of whom was Sri.T.K.Rajan. The financial
statement, as also the experience statement produced by
the petitioner was in relation to the turnover achieved by
Sri.T.K.Rajan, one of the partners of the firm. The
experience certificate produced also related to a partner
and not to the bidder firm and this, the learned single
Judge concluded, was not sufficient to pre-qualify the
petitioner as a bidder. Thus, the stand taken by the
respondents in not pre-qualifying the petitioner was
upheld by the learned single Judge, who dismissed the
writ petition. Hence this writ appeal.
4. We heard Mr.Pathrose Mathai, learned Senior
Counsel along with Mr.Murali Purushothaman for the
petitioner, learned Government Pleader for the 3rd
respondent and Mr.K.L.Varghese for the 4th respondent.
W.A.No.273 of 2009
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5. Learned Senior Counsel for the appellant
contended, with reference to the decision of the Supreme
Court in New Horisons Limited and another v. Union of
India and others {[1995] 1 scc 478} that a partnership
firm may claim the experience of the partners who
constitute the firm. Therefore, the experience and the
turnover achieved by the partners of the firm can be
availed of as the requisite experience required of the firm.
The experience and turnover of the partners and the firm
are synonymous. The learned single Judge distinguished
the decision in New Horisons Limited, on the premise
that the tender conditions which came up for
consideration in New Horisons Limited did not apparently
insist on either the requisite financial turnover or the
requisite experience in the name of the bidder as one of
its conditions, unlike in the present case where there is an
insistence on the requisite financial turnover and the
experience being related to the bidder itself.
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6. Learned counsel for the appellant contended
that the Supreme Court in the case of New Horisons
Limited was concerned with a joint venture corporation
and this in essence was the same as that of a firm and
that it has been specifically held that the experience and
the financial turnover of one of the partners who
constitute the firm, which in turn, is a bidder can be
availed by the bidder itself for the purpose of contending
that it should be treated as pre-qualified. Learned
counsel for the appellant may be right in contending so.
But acceptance of this proposition as such, may not
improve the case of the appellant. What is noteworthy is
that the financial turnover and the experience put forward
by the appellant/writ petitioner, along with its tender,
actually relates to a firm M/s.T.K.Rajan and does not
actually relate to one of the partners of the appellant-firm
Sri.T.K.Rajan In other words, what has been put forward
by the appellant firm, by way of financial turnover and the
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requisite experience in terms of the tender notification is
that relatable to M/s.T.K.Rajan, which is a firm, though
Sri.T.K.Rajan, one of the partners of the appellant/firm, is
the major share holder of the firm M/s.T.K.Rajan. Even
assuming that the appellant/firm will be entitled to avail
of the financial turnover as also the experience of one of
its individual partners, that will not enable the appellant
to avail of the financial turnover or the technical
experience of M/s.T.K.Rajan (Firm), because the latter
obviously is not a partner of the appellant-firm. We also
find force in the contention of the learned counsel for the
4th respondent that a firm cannot be a partner of another
firm and obviously therefore, since the Firm M/s.T.K.Rajan
cannot be a partner of the firm Concord Construction
Company-the appellant, the experience or turnover of
M/s.T.K.Rajan (Firm) cannot be availed of or made use of
by the appellant-firm, for the purpose of pre-qualifying
for the work in question.
W.A.No.273 of 2009
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7. We consider it appropriate to refer to the
facts pleaded by the appellant in paragraph 6 of the reply
affidavit filed in the appeal. The same reads as follows:
“It is further submitted that Mr. T.K.Rajan is the
major Partner of the firm M/s.T.K.Rajan The other
partners are his two sons. Mr. T.K.Rajan holds 60% of
the share and his two sons hold 20% each share of
the firm. The annual turn over of business of civil
contract works executed by Mr. T.K.Rajan, as the
major partner going by his 60% share itself come to
much more than the cost of the present work for
which the tender has been floated. It fully satisfies
the tender conditions. Applying the principles of the
decision of the Hon’ble Supreme Court in New
Horizons case the financial turnover in respect of
M/s.T.K.Rajan produced by the appellant for pre-
qualification can be constructed as the financial
turnover of Mr.T.K.Rajan, partner of the appellant
firm to the extent of his 60% share in M/s.T.K.Rajan.
Therefore, by virtue of the financial turnover
furnished by the appellant, the appellant is qualified
to be awarded the work, particularly when the
appellant is the lowest bidder. It is understood that
the bid of the 4th respondent is Rs.2.5 Crores higher
than that of the appellant. Further, as per the norms
there should be competitive tenders and as per the
inveterate practice in the Department there shall be
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more than one pre-qualified bidder. The averments
in paragraph 7 of the counter affidavit that the
financial turnover of M/s.T.K.Rajan cannot be
reckoned as qualification of the appellant for pre-
qualification is incorrect and baseless”.
8. In the light of the specific stand taken by the
appellant, as is evident from the above, it is clear that the
appellant itself was trying to avail the benefit of the
turnover and also the experience of the firm
M/s.T.K.Rajan for the purpose of bidding for the work in
question. This is impermissible.
9. In the result, we also concur with the view
taken by the learned single Judge that the decision of the
1st respondent, not to pre-qualify the appellant/petitioner
does not warrant any interference.
10. After hearing the counsel for the appellant
at the stage of admission, we had passed an interim order
on 5.2.2009 to the following effect:
“Respondents want to take instructions.
Respondents are directed to open the bid of
the petitioner also and inform the court directly the
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amount bid by the petitioner and the respondent for
information of the court only and it can be
submitted in a sealed cover. Post on 11.2.2009. No
agreement shall be executed before 11.2.2009.”
11. Pursuant to the said order, the financial bid
of the appellant was also opened and we found that the
appellant had quoted a sum of Rs.14,65,59,970/-. We
are told by the government pleader that the bid quoted by
the 4th respondent was in excess of Rs.17 Crores. It is
contended by the learned counsel for the appellant that
there is a difference of more than 2.5 crores in the bids
quoted by the appellant and the 4th respondent and
therefore, acceptance of the bid of the 4th respondent
would entail a loss of more Rs.2.5 crores, insofar as the
State is concerned. We take note of the fact that the
Department is yet to take a decision as to whether the bid
quoted by the 4th respondent should be accepted and
whether the contract should be awarded in favour of the
4th respondent. But, we take note of the further fact that
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even according to the 1st respondent, there were only
three bidders and ultimately only one was pre-qualified.
It is up to the Government to take a decision. Our
attention was invited to the Government Order, G.O.(MS)
No.87/PW & T dated 7.7.1987, wherein it is stipulated
that there should be a minimum of four pre-qualified
contractors to ensure fair and reasonable competition and
in the alternative an open tender system should be
resorted to. Respondents 1 to 3 shall consider whether it
will be advisable for the Government, in public interest to
proceed to accept the bid offered by the 4th respondent,
which seems to be significantly higher (difference being
Rs.2.5 crores) than the bid quoted by the appellant. It is
up to the Government to take note of these facts and then
take a further decision as to whether, in the
circumstances, it may not be advisable to go in for an
open tender especially taking note of that fact that only
one among the bidders is pre-qualified. We refrain from
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issuing any specific direction to the Government in this
regard in circumstances where the reliefs prayed for by
the appellant/petitioner were essentially confined to the
decision taken by the respondents not to pre-qualify the
appellant.
Subject to the above directions, the writ appeal is
disposed of.
Sd/-
(J.B. KOSHY)
ACTING CHIEF JUSTICE
Sd/-
(V.GIRI)
JUDGE
sk/
//true copy//
P.S. to Judge