Kewal Krishan Gupta vs State of J. and K. Others

Muzaffar Hussain Attar, J.—The Central Government in its effort to connect all the habitations of the Country with roads has formulated a

scheme called ""Pradhan Mantri Gram Sadak Yojana"" (for short PMGSY). Like other States, the people of State of Jammu and Kashmir are also

beneficiary of the said Scheme. Roads in developing Country like ours constitute life line for the people. Roads guarantee the overall development

of the areas and people. The action of awarding the contracts has to be reasonable, transparent and must conform to the mandate contained in

Article 14 of the Constitution of India, which otherwise, also constitute its 'soul'.

Fresh notice inviting e-Tender dated 27th May, 2012 was issued by the Chief Engineer PMGSY (JKRRDA), Jammu, where-under on behalf of

the Government of J. & K. State, fresh e-Tenders on item rate basis from approved and eligible contractors registered with J. & K. State

Government CPWD, Railways or equivalent were invited for the works which were listed in the said Tender Notice. The Tender Notice at item

No. 4 provided for construction of roads from Rajdhani to Paryali, Block Manjakote, Phase VII (JK 12-103). This road was proposed to be

constructed in Rajouri Division. The estimate cost of the construction, was 459.03 lacs. Twelve months time was provided for completion of the

work. At serial No. 3 of the NIT, it was provided that any information provided on the format other than that prescribed in the Section 3 of

Standard Bidding Documents"" (for short SBD) would not be accepted and the bid would be treated ""non-responsive out rightly"".

Fresh notice inviting e-Tenders was issued on 29-6-2012 and the estimated cost for the aforementioned works, was shown to be Rs. 429.02

lacs.

Petitioner-M/s. Chenab Construction Joint Venture through its proprietor M/s. K.K. Gupta responded to the aforementioned e-Tender Notice.

His technical Bid was rejected and as per the communication dated 16th August, 2012, the petitioner was informed that his Bid has been rejected

during Technical evaluation by the duly constituted committee for the reason that Turnover of the bidder was not as per the requirement of the

SBD and it was found to be ""non-responsive"".

Petitioner feeling aggrieved of the said decision of the respondents has challenged the same in this writ petition.

Respondents have filed objections/reply affidavit.

Mr. Johal, learned Senior Advocate in support of the case of the petitioner referred to the certificate issued by the Chartered Accountant

(Annexure-B) of the writ petition and submitted that in terms of Clause 4.4A of the SBD, petitioner is eligible and his technical bid has been

wrongly rejected. Learned counsel while referring to Clause 4.4A of the SBD submitted that it has been specifically provided, that qualification for

awarding of contracts, the bidder was required to have in any one year of the last five years achieved a minimum financial turnover as certified by

the Chartered Accountant and at least 50% of the turnover must have been earned by the bidder from Civil Engineering Construction works.

Learned counsel submitted that since the bid contract value in this case was 429.02 lacs, as such, 75% of the bid amount was to be calculated at

75% of the bid amount and 50% of same had to be from Civil Engineering works. Learned counsel further submitted that on the basis of this

evaluation 75% amount would work out Rs. 321.76 lacs and 50% of the said amount would work out Rs. 160.05 lacs. Learned counsel, while

referring to the Annexure-B of the writ petition submitted that petitioner in the year 2009-10 had total turnover of Rs. 178.43 lacs, in the year

2007-08 Rs. 281.93 lacs and thus was eligible for consideration of his financial bid. Learned counsel submitted that for the wrong reason and in

order to achieve some hidden agenda, respondents have rejected technical bid of the petitioner. Learned counsel further submitted that in e-

Tendering process the evaluation is made by the computer and the results are also worked out by the computer. Learned counsel submitted that

respondents have failed to evaluate the material submitted by the petitioner along with his tender documents which has resulted in violation of the

legal and constitutional rights of the petitioner. Learned counsel prayed for allowing the writ petition.

Mrs. Seema Shekhar, learned Additional Advocate General submitted that on the terms and conditions of the NTT as also the SBD, the

petitioner was required to produce the documents indicating therein that in any of the previous five years, turnover of his works was 321.95 lacs.

Learned counsel referred to annexure-B of the writ petition as also Page 142 of the Objections which is same certificate which the petitioner has

annexed as Annexure-B with the writ petition and submitted that perusal of the certificate would show that the Chartered Accountant has certified

about the Gross Receipts relating to five business venture viz., Sh. K.K. Gupta, Proprietor Chenab Construction Joint Venture, K.K. Gupta &

Construction Engineers Joint Venture, K.K. Gupta Engineers & Contractors and K.K. Gupta Wine Shop. Learned, counsel submitted that writ

petitioner is Sh. K.K. Gupta, Proprietor of Chenab Construction Joint Venture. Learned counsel referred to tender documents of the petitioner to

indicate that Sh. K.K. Gupta, Proprietor of Chenab Construction Joint Venture alone has responded to the Tender documents and other business

ventures have not responded to the Tender documents, as such, the Gross Receipts shown in Annexure-B of the writ petition read with Page 142

of the objections, do not satisfy the terms and conditions of SBD as also Section 3 of the SBD which relates to ""criteria qualification information"".

Learned counsel also invited attention of the Court to the Profit and Loss accounts which the petitioner had filed along with e-Tender

documents. Learned counsel in this behalf referred to Page 129 of the objections which relates to the Profit and Loss accounts for the ending 31-

3-2011 in which the total amount shown is 23,959,367.00. Likewise, the learned counsel referred to some other Profit and Loss accounts of some

other years of the petitioner. This was done in an effort to show to the Court that in no single year in the previous five years, petitioner has touched

the mark of 75% business turnover. Learned counsel also referred to one of the certificates issued by the same Chartered Accountant enclosed

with Annexure-B of the writ petition read with Page 142 of the Objections to show that in respect of the petitioner while certifying Gross Receipts

of the petitioner company, same Chartered Accountant in his certificate dated 15th October, 2011 has given different figures of Gross Receipts.

Learned counsel more specifically referred to year 2009-10 as reflected in Annexure-B of the writ petitioner wherein Gross Receipts for all

business concerns of the petitioner which include Wine shop, has been certified to be Rs. 178.43 lacs, whereas in the certificate dated 15th

October, 2011, Page 232 of the objections, same Chartered Accountant for the same year 2009-10 in respect of only one petitioner's company

has shown Gross Receipts for an amount of Rs. 352.00 lacs. Learned counsel submitted that the petitioner has filed this certificate along with his

bid documents for seeking allotment of construction work of Loorkote to Kallidub roads.

Learned counsel submitted that how can it be, that same Chartered Accountant, who in the year 2011 issued certificate exclusively in respect

of petitioner's company where the Gross Receipts for the year 2009-10 was certified to be Rs. 352.00 lacs and in respect of more than one

business concern of the same petitioner's companies for the same year Gross Receipts were certified to be Rs. 178.43 lacs. Learned counsel

submitted that a Committee comprising of Chief Engineer PMGSY, Jammu, Technical Officer, Accounts Officer, Head Draftsman evaluated the

technical bid of the petitioner and it was found that same was not as per the requirement of SBD and was declared to be non-responsive. Learned

counsel in this behalf produced Xerox copy of the qualification criteria technical bid in respect of the petitioner. The said document is taken on

record and Registry is directed to tag the same with the writ record. Learned counsel submitted that in the aforementioned backdrop, the technical

bid of the petitioner has been rightly rejected. Learned counsel prayed for dismissal of the writ petition with costs.

Mr. Johal in response to the arguments advanced by Mrs. Shekhar, learned Additional Advocate General submitted that reference to the

certificate issued by the Chartered Accountant dated 15th October, 2011 (Page 232 of the objections), is not remotely connected with the issue

involved in this writ petition. Learned counsel submitted that this document has been produced in respect of works of previous year and the work

has been allotted to the petitioner. Learned counsel submitted that the said document was not enclosed with the Tender document, which is

subject-matter of the writ petition. Mr. Johal also submitted that 50% of the minimum financial turnover in any one year has to be at least 50% in

respect of Civil Engineering Construction works, but other 50% can be earned from other sources. Learned counsel submitted that wine-shop is

one of the 'other sources of income' of the petitioner, as such, the entire Gross Receipts mentioned in Annexure-B of the writ petition have to be

accepted.

In order to appreciate the issues raised at Bar, Clause 4.4A is taken note of:

4.4A: To qualify for award of the Contract, each bidder should have in the last five years:

(a) Achieved in any one year a minimum financial turnover (as certified by Chartered Accountant, and at least 50% of which is from Civil

Engineering construction works) equivalent to amount given below:

(i) 60% of amount put to bid, in case the amount put to bid is Rs. 200 lakhs and less.

(ii) 75% of amount put to bid, in case the amount put to bid is more than Rs. 200 lakhs but less than Rs. 1000 lakhs.

(a-i) 100% amount put to bid in case of amount put to bid is more than 1000 lakhs. The turnover should be for civil engineering works as certified

by Chartered Accountant. ""The amount put to bid above would not include maintenance cost for 5 years and the turnover will be indexed at the

rate of 8% for a year.

If the bidder has executed road works under Pradhan Mantri Gram Sadak Yojana in originally stipulated completion period, the financial turnover

achieved on account of execution of road works under PMGSY shall be counted as 120% for the purpose of this sub-clause.

(b) Satisfactorily completed, as prime Contractor, at least similar work (Earth works, Protection works, Cross Drainage works) equal in value to

one fifth of the estimated cost of work (excluding maintenance cost for five years) for which the bid is invited or such higher amount as may be

specified in the Appendix to ITB. (The requisite certificate should be from the officer not below the rank of Executive Engineer or equivalent). The

value of road work completed by the bidder under Pradhan Mantri Gram Sadak Yojana in originally stipulated period of completion shall be

treated 120% for the purpose of this sub-clause.

Facts which are not in dispute are as under:--

(a) e-Tender in respect of construction of road from Rajdhani to Paryali, Block Manjakote, Phase VII (JK 12-103), which is subject-matter of

writ petition was issued. The estimated cost of the work is Rs. 429.02 lacs.

(b) 75% of the same works out at Rs. 321.76 lacs.

(c) The certificate of the Chartered Accountant Annexure-B of the writ petition read with Page 142 of the objections refers to Gross Receipts

besides of the petitioner company viz., Sh. K.K. Gupta, Proprietor Chenab Construction Joint Venture, as also of K.K. Gupta & Construction

Engineers Joint Venture, K.K. Gupta Engineers & Contractors and K.K. Gupta Wine Shop.

(d) Petitioner in this writ petition alone submitted bid documents.

The only issue which would require to be adjudicated upon is, as to whether, Gross Receipts of all the above-mentioned business concerns are

to be considered for allotment of road construction works or Gross Receipts of petitioner Company alone viz. Chenab Construction Joint Venture

is to be considered.

Paragraph 4.4A of the SBD provides that in order to qualify for the award of contracts, ""each bidder"" should have in any one of the last five

years achieved a minimum financial turnover of 75% of the bid amount and at least 50% of which should have been earned from Civil Engineering

Construction works.

On the plain language of Clause 4.4A of SBD it would appear that bidder should have achieved in any one of last five years financial turnover

of 75% of the bid amount and 50% thereof from Civil Engineering Construction Works. Admittedly, petitioner Company alone is the bidder who

responded to the Tender notice and M/s. K.K. Gupta & Construction Engineers Joint Venture, K.K. Gupta Engineers & Contractors and K.K.

Gupta Wine Shop did not respond to the Tender notice. The Gross Receipts of these business concerns cannot be added upto the Gross income

of the petitioner Company for determining his eligibility. The cause title of the writ petition and his Tender document would show that the petitioner

Company alone is the bidder. His Gross Receipts are to be exclusively considered.

On the terms and conditions of the Tender notice and SBD, it is held that petitioner was not eligible and would not qualify for opening of the

financial bid. The Profit and Loss statements placed on record along with objections to which reference has already been made would also show

that petitioner did not qualify to seek opening of the financial bid. The writ petition is found to be grossly mis-conceived.

The discussion in this case, thus, comes to end. People of the area have to be connected with roads. The writ petition is dismissed. Interim

direction shall stand vacated.

Before parting with the case, it would become necessary to place on record that Sh. Raj Kumar Gupta-Chartered Accountant, has issued two

certificates concerning same year, one referring to some more business concerns and other to one business concern.

The Chartered Accountants have to be fair and honest in discharging their duties. The Chartered Accountants, in whose hands, also, rests the

success or failure of our economy, have to act fairly and honestly. The Chartered Accountant in this case it prima facie appears has not acted fairly.

In order to ensure that such type of omission and commission do not take place in future, the authority responsible to look into such sad and sordid

affairs has to take remedial measures.

The Board of Discipline or Disciplinary Committee of the Institute of Chartered Accountant of India (ICAI) Bhawan, Indraprastha Marg, Post

Box No. 7100, New Delhi 110002, established under The Chartered Accountants Act, 1949, is directed to look into it aforementioned issue in

respect of Chattered Accountant and pass all necessary orders in accordance with law and rules. The competent authority to consider and take

decision preferably within eight weeks from the date copy of the order is served upon it. The delinquent Chartered Accountant shall be provided

opportunity of hearing.

Registry to list index of writ petition along with copy of the writ petition after eight weeks for seeking compliance of the direction.

In these facts and circumstances of the case, it is deemed proper to impose costs on the petitioner. The petitioner is saddled with costs of Rs.

1.00 lac, (one lac) which he shall deposit with Registrar Judicial, High Court of J. & K., Jammu within one week from today. Registrar Judicial is

directed to pay the said amount to a responsible institution which looks after the orphans. Registry to serve the copy of this order on the Board of

Disciplinary Authority.