Kashmir Bombay Carrier vs Food Corporation of India

Hasnain Massodi, J.—General Manager (R), Food Corporation of India - respondent No. 1 in petition, on 9th November 2012, floated a

tender notice, inviting offers from business concerns, satisfying eligibility criteria laid down in notice, for appointment of Road Transport

Contractors to transport stocks by road, amongst other stations from FSD New Godown, Jammu, to FSD Leh and FSD Kargil. The estimated

value of contract for transportation of stocks from FSD New Godown, Jammu, to FSD, Leh, was Rs. 14.95 Crores. An aspirant for the contract

was to deposit Rs. 29.90 Lacs as earnest money, furnish Security of Rs. 74.75 Lacs, and Bank Guarantee of Rs. 224.25 Lacs. The period of

contract was one year. Similarly, in case of transportation of food grains from FSD New Godown, Jammu to FSD Kargil, estimated value of

contract was Rs. 5.82 Crores. A business concern, interested in the contract, was to deposit earnest money of Rs. 11.84 Lacs, Security of Rs.

29.10 Lacs, and Bank Guarantee of Rs. 87.30 Lacs. The tenders were invited under ""two bid system"" - meaning thereby that anyone, responding

to tender notice, was required to submit Technical Bid and Price Bid. In Technical Bid, details of experience with requisite certificates obtained

from Manufacturer/Handling Agency/Government Department/PSU/Public Limited Co., dealing in fertilizers, food grains, cement or similar

products were to be given. It is on strength of these documents that a tenderer was to be held eligible to participate in tendering process. The Price

Bid, obviously, was to detail price quoted by tenderer for transportation of stocks from FSD, New Godown, Jammu, to identified destinations.

Para. 01 of the tender notice titled ""Work Experience"" details the experience required for allotment of contract. In terms of eligibility criteria, a

tenderer was required to have executed in a year, in immediately preceding two years, transport contracts, the total value of which was not less

than 50% of the total value of the contract to be awarded. In case of single contract, the requirement was execution in a year, in immediately

preceding two years contract of the value of not less than 25% of the value of the contract to be awarded.

The respondent No. 1 vide Corrigendum/Addendum dated 15th November 2012 revised the eligibility criteria notified earlier in Tender Notice

dated 09.11.2012. The period within which the experience was required to be gained, was extended from two years to five years. In other words,

a business concern, interested in the contract, was to have executed in a year, in immediately preceding five years transport contracts with the total

value of not less than 50% of the value of the contract to be awarded. In case of single contract, the requirement was execution in a year, in

immediately preceding five years contract with the total value of not less than 25% of the value of the contract to be awarded.

Petitioner is a partnership firm, carrying on its business operations under the name and style of M/s. Kashmir Bombay Carrier with its Head

Office at 388/6, Transport Nagar, Narwal, Jammu. Petitioner firm is dealing in carriage contract business and engaged in carrying food grains,

cement, etc. between different stations in the State. The firm, finding itself eligible for Road Transport Contract in question, responded to the tender

notice and submitted its offers for FSD, New Godown, Jammu, to FSD Leh and FSD Kargil.

The private respondents also responded to tender notice and submitted their tenders for the above destinations.

The tenders were opened on 01.12.2012 in presence of tenderers. The tender notices were sent to Scrutiny Committee alongwith Earnest

Money Deposits (EMDs) to the tune of Rs. 29.90 Lacs and Rs. 11.64 Lacs. The petitioner's bid was rejected on the ground that experience

certificate appended by him to the Technical Bid did not conform to the tender notice. The private respondents, being only other tenderers, bagged

the contract, though at a higher price.

The petitioner firm questions rejection of its Technical Bid through medium of writ petition on hand, on the grounds that work experience

certificate appended by it to the Technical Bid was in accordance with requirements of the Tender Notice and was declared to be so by

respondents while awarding carriage contract pursuant to Tender Notice 16.02.2012. The decision, rejecting petitioner's Technical Bid, it is

insisted, suffers from arbitrariness and is, therefore, violative of Article 14, Constitution of India. Failure on part of authority, issuing work

experience certificate, to mention completion of contract, according to petitioner, is not fatal to the Technical Bid. It is pleaded that satisfactory

execution of the work implies completion of the work. The petitioner, on strength of averments made, seeks following relief:

i) Writ of Mandamus, directing official respondents to open the petitioner's price bid;

ii) Writ of Certiorari, quashing the tender committee decision, rejecting petitioner's Technical Bid conveyed to him on 24th January 2013

iii) Writ of Certiorari, quashing entire process for movement of stocks by road from FSD New Godown Jammu to Leh and Kargil.

Petitioner in supplementary affidavit filed on 15.05.2013 admits that the initial contract awarded by the Hindustan Construction Co. Ltd. (HCC

hereinafter) was to transport only 3,000 metric tons of cement. It is, however, pleaded that the contract/order was only a trial order and it was

subsequently extended vide HCC/TO 15003853 (A) dated 30.06.2009 and that the petitioner after extension of the contract executed work of

the value of Rs. 4,45,85,000/- for HCC between 01.06.2009 to 31.10.2009. It is pointed out that even though the duration of contract was one

year (05.06.2009 to 30.04.2010), the contact work was executed during the period 01.06.2009 to 31.10.2009 as carriage contracts for

Leh/kargil are executed within such time frame, irrespective of period of contract, because of closure of Srinagar - Leh road during winter. It is

insisted that the certificate issued by HCC was earlier approved by the Tender committee vide report dated 09.03.2012 while inviting offers for

appointment of Road Transport Contractor and the respondent-Corporation cannot now take a stand different from one taken by the Tender

Committee on 09.03.2012. Petitioner to reinforce his claim as regards value of the work executed for HCC during 2009-2010 relies upon the

balance sheet attested by the Chartered Account indicating net profit of Rs. 20,79,999/- made by the petitioner-Firm and Rs. 6,42,724/- paid as

Income Tax on the profit earned.

The respondents 1 to 6 oppose writ petition on the grounds that tender notice and Model Tender Form requires a business concern, interested

in the tendered contract, to produce certificates, certifying ""satisfactory execution and completion"" of the contract by such party in any of preceding

five years, of the value of 50% of the contract in case of multiple contracts and 25% of the contract in case of single contract. It is pleaded that

petitioner failed to append necessary certificate fulfilling requirements of the Tender Notice with the technical bid and was, therefore, rightly

excluded from the tendering process. It is pointed out that the certificates relied upon by the petitioner did not certify that the petition had

satisfactorily executed and completed the contract(s) of the value shown in the Tender Notice during any of the preceding five years. ""Satisfactorily

execution and completion of the contract,"" according to the respondents is an essential qualification for eligibility for opening of the price bid and in

view of deficiency in experience the respondents were not under an obligation to open petitioner's price bid and consider the rates quoted by the

petitioner alongside the rates quoted by his competitors.

The respondents 1 to 6 in reply to supplementary affidavit dated 15.05.2013 reiterate that initial contract awarded by HCC to the petitioner on

05.06.2009 for transportation of Cement etc was only for carriage of 3,000 MTs and contract value was Rs. 1.11 crores, while as petitioner

claims to have transported 12050 MTs cement during the period 05.06.2009 to 31.10.2009 and the contract executed to be of the value of Rs.

4.46 crores, without there being any proof of award or execution of such contract. It is pleaded that the contract was for the period 05.06.2009 to

30.04.2010 and the Certificate relied upon by the petitioner related to the work executed till 30.10.2009. The Certificate relied upon by the

petitioner firm according to the respondents 1 to 6 does not, therefore, indicate ""satisfactory execution and completion of the contract"" awarded to

the petitioner by HCC. It is pointed out that the Communication No. HCC/TO 15003853 (A), indicating extension of transportation work from

Jammu to Kargil was not annexed with the technical bid and, therefore, can be of no help to the petitioner to successfully claim eligibility for

participation in the tendering process. It is insisted that the Certificate No. HCC/TO 15003853 (A) dated 30.06.2009 was not in possession of

the petitioner at the time it submitted tender documents and appeared to be antedated. Respondent No. 2 in his affidavit filed in compliance of

order dated 05.06.2013 has reiterated the stand taken by respondents 1 to 6 in their reply to the writ petition and reply to supplementary affidavit

dated 15.05.2013.

The respondents 7 and 8 oppose the writ petition on the grounds similar to the grounds pleaded by respondents 1 to 6 in their reply. It is

reiterated that as the petitioner did not have requisite experience, the respondents 1 to 6 were left with no option but to exclude the petitioner from

tendering process. It is pleaded that the experience certificate issued by HCC to the petitioner certifying execution of a contract awarded by the

Corporation to the petitioner of the value of Rs. 4,45,85,000/- did not conform to the requirements set out in Tender Notice and Model Tender

Form (MTF).

I have gone through the pleadings as well as record available on the file and have heard learned counsel for the parties.

It is admitted case of the parties that a business concern to be eligible to participate in the tendering process was to satisfy eligibility criteria laid

down in the Tender Notice. Para. 1 of Tender Notice dated 09.11.2012 laid down the eligibility criteria as under:-

Eligibility Criteria;

Work Experience (Enclose experience certificate for rake handling and transportation duly obtained from Manufacturer/handling agency/Govt.

Deptt./PSU/Public Limited Co. dealing in fertilizers foodgrains, cement or similar products)

The tenderer should have executed in the immediately preceding two years transport contracts the total values of which is not less than 50% of the

value of the contract to be awarded.

OR

The tenderer should have executed in the immediately preceding two years any single contract the value of which is not less than 25% of the value

of the contract to be awarded......

The Corrigendum/Addendum dated 15.09.2012 enlarged the period within which the contract of given value (50%/25% of the contract value) was

required to be executed from two years to five years. There is no quarrel between the parties as regards essential character of the eligibility criteria.

In other words, parties agree that the requirement as regards execution of a contracts/contract of the value of 50%/25% of the contract value in

any of the preceding five years is an essential condition and an aspirant for the contract is to append 'experience certificate' conforming to

requirements of para. 1 of the Tender Notice with the technical bid.

Petitioner-Firm without disputing aforestated criteria, insists that it satisfies all the essential elements of eligibility criteria as indicated in the

'experience certificate' appended by him with the price bid and it was unjustifiably chased away from the tendering process. The respondents, on

the other hand, deny that the petitioner-Firm even on its own showing satisfied the eligibility criteria and insist that it was rightly excluded from the

tendering process. The controversy against the above backdrop lies in a narrow compass. All that we have to find out is whether the petitioner-

Firm as claimed in the petition fulfilled the eligibility criteria. In case, the petitioner-Firm is found to have fulfilled the eligibility criteria, it would be

entitled to the relief sought in the petition as its exclusion from the tendering process would be unjustified and in conflict with the equality clause of

the Constitution. To arrive at just conclusion we need to analyze the eligibility criteria, identify its distinct components and find out whether all these

components are satisfied in case of petitioner-Firm.

The tenderer in terms of eligibility criteria;

i) should have executed in the immediately in any of the preceding five years transport contracts the total values of which is not less than 50% of the

value of the contract to be awarded.

OR

ii) should have executed in the immediately in any of the preceding five

years transport contracts the total values of which is not less than 50% of the value of the contract to be awarded.

iii) the contract(s) claimed to have been executed should be for rake handling and transportation of fertilizers, foodgrains, cement or similar

products.

iv) should enclose experience certificate duly obtained from the Manufacturer/Handling Agency/Govt. Deptt./PSU/Public Limited Company, that

awarded the contract(s) claimed to have been executed with the price bid.

v) should have enclosed supporting material like Transport Order/Work Order/Agreement or a like document issued/executed by the

Manufacturer etc in its favour in respect of contract reflected in the experience certificate.

vi) should have satisfactorily executed and completed the contract claimed by it to have been executed in any year, immediately preceding five

years.

A close look at the eligibility criteria would reveal that not only should the executed contracts be of the requisite value but the contract(s)

should be of requisite description i.e. rake handling and transportation of fertilizers, food grains, cement or similar products. The last but not the

least the contract(s) should have been awarded by or executed for Manufacturer/Handling Agency/Govt. Deptt./PSU/Public Limited Company.

Non compliance or absence of any of the above components would disentitled a tenderer of the right to participate in the tendering process, even

if, other components of the eligibility criteria are satisfied. To illustrate even where the tenderer has executed rake handling and transportation of the

requisite value but the goods handled and transported are other than fertilizers, foodgrains, cement or similar products, the tenderer would be out

of race. Similarly, even if the goods handled and transported satisfy the description but the contract executed, is not of requisite value, the tenderer

would be ineligible for participation in the tendering process, Again where the party for whom the contract(s) are executed is not a

Manufacturer/Handling Agency/Govt. Dept/PSU/Public Limited Company, the tenderer cannot claim a right to have his price bid opened by the

respondent-Corporation. Last of all, even where the tenderer has executed a transport contract of requisite value and description in favour of the

business concern identified in the Tender Notice but fails to append experience certificate with the technical bid or the experience certificate is

deficient in essential details, he cannot insist on his right to participate in the tendering process.

The petitioner-Firm in the present case aspired for its appointment as Road Transport Contractor for transportation of foodgrains from FSD

New Godown Jammu to FSD Leh and FSD Kargil. The estimated value of two contracts as per the Tender Notice was 14.95 crores and 5.82

crores. The petitioner-Firm to satisfy the eligibility criteria was to show on the strength of the certificate issued by a Manufacturer/Handling

Agency/Govt. Dept./PSU/Public Limited Company that it in any year in immediately preceding five years executed any single transport contract

satisfying requisite description, of the value of not less than 25% of 14.95 crores (3.7375 crores) in case of Jammu-Leh contract and 25% of 5.82

crores (1.455 crores) in case of Jammu Kargil contract or it in any of the years within the same period executed transport contracts of the value of

not less than 50% of 14.95 crores (7.475 crores) in case of Jammu-Leh contract and 50% of 5.82 crores (2.91 crores) in case of Jammu-Kargil

contract.

The petitioner-Firm claimed to have executed transport contract involving carriage of cement from Jammu to Leh during the period

05.06.2009 to 30.04.2010 for Hindustan Construction Co. Ltd. a Public Limited Co. The contract claimed to have been executed by the

petitioner-Firm, therefore, satisfies eligibility criteria as regards goods/material transported and the party for whom it is executed. The only

controversy that remains to be dealt with is as regards value of the transport contract claimed to have been executed by the petitioner-Firm.

Petitioner-Firm in support of its claim to have executed contract of the requisite value in terms of Tender Notice enclosed with its price bid, a

certificate-issued by Vice President - Sourcing and Supply Chain, HCC dated 03.02.2012 where in petitioner-Firm was shown to have

transported 12050 MT cement from Jammu to Kargil between 01.06.2009 to 31.10.2009 and value of the contract so executed was certified to

be Rs. 4,45,85,000,00. The Certificate reads as under:-

It is to certify that M/s. Kashmir Bombay Carriers is our regular Transporter for J & K State and has done transportation of cement filed in 50

Kg. Gunny Bags to our Chutak Hydro Electric Project near Kargil, against Transport Order No. 15003853 dated 5th June 2009, as per details

given below:-

Amt in Rs: Four Crore Fourty Five Lacs Eighty Five thousand only.

The services rendered by M/s. Kashmir Bombay Carriers were to out satisfaction and highly appreciated.

This certificate is being issued on request of M/s. Kashmir Bombay Carriers and is without prejudice.

The certificate makes reference to Transport Order No. 15003853 dated 5th June, 2009. The petitioner-Firm appended copy of the

aforementioned Transport Order with the Technical Bid. The Transport Order indicated that HCC awarded contract for carriage of 3000 MT

cement to the petitioner-Firm and the value of the contract allotted was Rs. 11,100,000,00 and period of if contract as 05.06.2009 to

30.04.2010. The Certificate issued by Hindustan Construction Co. Ltd. therefore, did not correspond to the Transport Order. In other words,

while in terms of Transport Order the petitioner-Firm was to carry 3000 MT cement for HCC from Jammu to Kargil and the contract was of the

value of Rs. 11,100,000,00 the Certificate issued by HCC, certified it to have transported 12050 MT cement from Jammu to Kargil during less

than half of the contract period (01.06.2009 to 31.10.2009) and the contract so executed to have been of the value of Rs. 4,45,85,000,00. The

petitioner-Firm did not produce any documents like Transport Order, Contract, Agreement etc in support of the Certificate to indicate that it was

award contracts of the estimated value of Rs. 4,45,85,000,00.

It is pertinent to point out that in terms of Tender Notice all the documents and supporting material is required to be submitted with the

Technical Bid and not thereafter. Furthermore, the work experience certificate in terms of Tender Notice, it is required to be supported by relevant

documents like Work Orders/Agreements executed with the concern Departments/Agencies. It would be advantageous to extract hereunder

relevant part of the Tender Notice:-

All credentials/documents and copies of certificates/information called for shall have to be furnished alongwith Technical Bid in one stroke as per

tender terms and no additional document shall be accepted after opening of the technical bid. Special attention be given for submitting of

information called under clause (iii)(1) under the heading Technical expertise/Work experience. Necessary work experience certificates should be

supported by relevant work orders/agreements with the department/agencies served without fail.

The Tender Notice, therefore, did not require the tenderer to only annex certificate from Manufacturer/Handling Agency/Government

Department/PSU/Public Limited Co., dealing in fertilizers, food grains, cement or similar products certifying execution of the contract of the

requisite value but also copy of the Transport Order/Work Order/Agreement whereby the contract was allotted to the tenderer. Failure on part of

petitioner-Firm to append Transport Order whereby contract for carriage of 12050 MT cement was allotted to it, with the price bid, in peculiar

facts and circumstances of the case justified rejection of its technical bid. The case set up by the petitioner-Firm that the Transport Order No.

15003853 dated 05.06.2009 was extended vide No. 15003853 (A) dated 30.06.2009 appended to the supplementary affidavit dated

15.05.2013 is of no consequence for the reasons that copy of the Communication was not appended to the technical bid. The copy of said

Communication was not even placed as annexure to the main petition and has been placed on record alongwith the supplementary affidavit filed on

15.05.2013. The respondent-Corporation, in the circumstances, cannot be faulted for rejecting petitioner's technical bid, refusing to open its price

bid and excluded it from the tendering process.

The Model Tender Form For Road Transport Contracts (MTFRTC), placed as Annexure J with the petition is to be read with the Tender

Notice. The document at para. 3 titled Qualification conditions for Bidding reiterates the eligibility criteria, briefly referred to in the Tender Notice.

It reads:-

(I) Tenderer should have experience of Transportation duly obtained from Manufacturer/PSU/Govt. Dept./Public Ltd. Company/Private Limited

Company dealing in the field of Fertilizer, Food grains. Cement, Sugar, Coarse grains or any other commodity. Tenderer should have executed in

any of the immediate preceding five years work of value:

(a) At least 25% of the estimated contract value in one single contract: OR

(b) 50% of the estimated contract value in different contracts:

(II) Experience certificate shall be produced from customers stating proof of satisfactory execution and completion of the contract(s) besides duly

certifying nature, period of contract, and value of work handled.

A closer look at MTFRTC reveals that the tenderer has not only to append a certificate from the Manufacturer etc certifying that he executed

contract(s) of requisite nature and value in any of the preceding five years but also certifying that the contract was satisfactorily executed and

completed, and indicating proof there for. In the present case, not only did, the petitioner-Firm, fail to substantiate that the contract executed by it

for HCC during the year 2009-2010 was of the requisite value but also that the contract was 'satisfactorily executed and completed'. It needs

hardly to be emphasized that 'qualification conditions' laid down in the Tender Notice and MTFRTC are not in the nature of a formality and are not

recommendatory in nature. The eligibility conditions are intended to serve an important purpose. The respondent-Corporation deals in

procurement, storage, transportation and supply of food grains in remote parts of then State. The respondent-Corporation, therefore, is engaged in

task of huge public interest. It can ill afford to entrust transportation of food grains etc to a Road Transport Contractor, ill equipped to execute the

contract and leave people in remote areas without food grains and like essential items. It is to ensure that the transportation contract is allotted to a

trustworthy and reliable Road Transport Contractor with necessary infrastructure and capacity to mobilize resources that the respondent-

Corporation insists on 'satisfactory execution and completion of a contract/contracts' of quarter or half of the value of the contract proposed to be

allotted. The 'qualification conditions' laid down in the Tender Notice and MTFRTC, therefore, are of essential character and non fulfillment of any

of the conditions or components thereof would disentitle the tenderer from participation in the tendering process without any grievance against the

respondent-Corporation.

For the reasons discussed, the writ petition is bereft of any merit and is, therefore, dismissed. Petitioner-Firm because its failure to append-

requisite certificate could not cross the initial barrier and cannot be heard complaining about its exclusion from the tendering process. So viewed, it

cannot maintain the writ petition or seek relief prayed in the petition. Dismissed.