Patel Engineering Limited vs The State of Jharkhand and Others

S. Chandrashekhar, J.

Aggrieved by communication dated 11.04.2015 whereby, the petitioner''s bid has been rejected, the petitioner has sought a declaration that Clause 2.2.8 of the R.F.Q to the extent it debars a contractor from participating in tender on the ground of termination of contract by any public entity for breach by the contractor, is arbitrary. Further prayers seeking quashing of proceeding of the Tender Committee dated 09.04.2015 and a direction upon the respondent No. 2 to consider the petitioner''s bid by opening the price bid of the petitioner-company have also been made in the writ petition.

Pursuant to notice inviting tender dated 19/21.01.2015 for Strengthening and Widening/Reconstruction of Chattarpur-Japla (MDR-127) Road" the petitioner-company submitted its bid. In connection with NIT dated 16.09.2014 a notice was issued on 09.01.2015 requiring the petitioner to submit its response to Clause 2.2.8 of the Tender Document. It is stated that it was brought to the notice of the respondent-authority that Contract No. BSHP-II/2 (SH-81) dated 12.08.2011 has been terminated by the Bihar State Road Development Corporation Limited. In response to the said notice, the petitioner submitted its reply dated 12.01.2015 stating that the Dispute Resolution Board has passed an order in favour of the petitioner-company. The petitioner apprehending its disqualification in terms of Clause 2.2.8 of the R.F.Q, approached this Court in W.P.(C) No. 453 of 2015 and W.P.(C) No. 562 of 2015 which was withdrawn with liberty to pursue its reply dated 12.01.2015.

Mr. Sunil Kumar, the learned Senior counsel for the petitioner submits that letter dated 11.04.2015 discloses non-consideration of plea taken by the petitioner-company. The communication contained in letter dated 11.04.2015 is cryptic which discloses complete non-application of mind by the Evaluation Committee. It is further submitted that the embargo contained in Clause 2.2.8 of "Request for Qualification" is completely arbitrary in as much as, mere termination of the contract by a public entity has been made a ground for disqualifying a person from consideration. It is submitted that Clause 2.2.8 of the R.F.Q to the extent it disqualifies the petitioner-company from participating in any of the tenders in the State of Jharkhand on the ground of termination of agreement by any public entity, is in the teeth of Article 14, 19(1)(g) and 21 of the Constitution of India and therefore, liable to be quashed. The learned Senior counsel submits that alternatively the petitioner has taken a plea that the expression "nor have it any contract terminated by any public entity for breach by such applicant or member" has to be read in consonance with the earlier part of Clause 2.2.8 otherwise, the condition that the applicant in the last 3 years has failed to perform any contract which should be evidenced by imposition of a penalty by an arbitral or judicial authority or a judicial pronouncement or arbitration award, would be rendered otiose. Since there is no arbitral or judicial pronouncement against the petitioner-company, the restriction contained in Clause 2.2.8 is not attracted in the case of the petitioner.

As against the above, Mr. Ajit Kumar the learned Additional Advocate-General submits that in none of the proceedings initiated by the petitioner-company, notice dated 25.08.2014 by which the agreement with the Bihar State Road Development Corporation Limited was terminated, has been challenged. No Court/Authority has passed an order staying the operation of notice dated 25.08.2014 and therefore, as long as the order of termination contained in notice dated 25.08.2014 remains on record, prohibition contained in Clause 2.2.8 of the R.F.Q operates with full force against the petitioner. Referring to the D.B. decision dated 26.01.2015 and order passed by the Civil Court, the learned Additional Advocate-General submits that notice dated 25.08.2014 has not been challenged by the petitioner and the order passed in T.S. No. 5596 of 2014 is confined to invocation of bank guarantee.

Having considered the rival contentions and after perusing the documents on record, I am of the opinion that the present writ petition requires hearing. Challenge of the petitioner to the validity of Clause 2.2.8 of the R.F.Q to the extent it disqualifies the petitioner on the ground of termination of contract by the Bihar State Road Development Corporation Limited is substantial. From paragraph Nos. 5.17 and 5.18 of the D.B. decision dated 26.01.2015, I find reference of notice of termination issued on 25.08.2014 by the Bihar State Road Development Corporation Limited. It further appears that reference to D.B. was made with the consent of the parties. The learned Senior counsel for the petitioner states that the Bihar State Road Development Corporation Limited has not objected to D.B. decision dated 26.01.2015 by invoking Arbitration Clause. The D.B. decision is binding on both the parties in terms of Clause 20.4. The Dispute Resolution Board has ordered that "employer is directed to pay amount of Rs. 71,50,47,109/- to the contractor." Order dated 27.02.2015 in the writ petitions filed by the petitioner-company records that the reply filed by the petitioner was required to be considered at the time of opening of the technical bid. Letter dated 11.04.2015 recites that the reply dated 12.01.2015 and the representation dated 09.03.2015 were considered by the Evaluation Committee in its meeting held on 11.03.2015 when it was found that the petitioner-company is not eligible in terms of Clause 2.2.8 of the R.F.Q however, the decision dated 11.03.2015 was communicated to the petitioner vide communication dated 11.04.2015 and in the meantime, Tender Committee had taken a decision on the technical bid of the tenderers in the meeting dated 09.04.2015 itself.

Pressing for an interim order directing the respondents to open and consider the financial bid of the petitioner-company, the learned Senior counsel for the petitioner submits that the work in question has not been awarded till date and thus, a direction may be issued to the respondent No. 2 to open the price bid of the petitioner-company. The learned Senior counsel for the petitioner further submits that order dated 09.04.2015 disqualifying the petitioner in the technical bid would attract further disqualification of the petitioner-company in future tenders and therefore, a limited protection permitting the petitioner-company to participate in future tenders may be granted by this Court.

Opposing the prayer for interim relief the learned Additional Advocate-General submits that the price bid has already been opened on 13.04.2015.

Considering the above facts, I am not inclined to issue a direction to the respondent No. 2 to open the price bid of the petitioner-company. I am of the opinion that this Court has no power to extend the time for opening the price bid. However, I am of the opinion that it would serve the ends of justice if order dated 11.04.2015 disqualifying the petitioner-company is kept in abeyance to the extent the petitioner-company is permitted to submit its bid in relation to other tenders. However, this limited protection granted to the petitioner-company shall be in operation till the next date of hearing and is subject to the final outcome of the writ petition.

Post the matter after four weeks. Liberty to mention for early hearing of the writ petition.