Saroj Kumar Jena vs State of Orissa and Others

S.K. Mishra, J.—The Petitioner in this case assails rejection of his technical bid by the Opp. Party No. 3, the Superintending Engineer, Rural Works Circle, Cuttack with respect to construction of model school building at Madhapur under Sukinda Block in the district of Jajpur. Opp. Party No. 5 is the successful bidder, in whose favour contract has been awarded. Opp, Party No. 3 invited tender in the aforesaid work as per tender call notice & the technical bid was opened on 20.03.2012. The finance bid was opened on 26.03.2012. The Petitioner as well as the Opp. Party No. 5 submitted the technical bid & the finance bid on-line. However, his technical bid was rejected & it is alleged that he is not qualified to bid for the aforesaid work.

The Petitioner further submits that the Opp. Party No. 5, which is a partnership firm, has neither any experience nor any turn over has been awarded with the work. It is submitted that the Opp. Party No. 5 has relied upon the work executed by one Managing Partner in his individual capacity, as such the Opp. Party No. 5 is not eligible to submit his technical bid. Therefore, the Petitioner prays to award the technical bid in his favour & to quash the award of work in favour of Opp. Party No. 5.

The Opp. Parties have filed their respective counter affidavits. It is borne out from the counter affidavits that this is a composite work involving civil construction, electrical fittings & P.H. works. As such, as per Clause 8 of the DTCN, a Civil Contractor, who is not having valid electricity contract license, is required to submit a sub-contract with another person. It is further pleaded that the Petitioner has not submitted a sub-contract with another person. It is further pleaded that the Petitioner has not submitted a sub-contract, rather he had submitted a joint venture agreement, which is not accepted as per the DTCN. Hence, the technical bid was rejected.

The specific case of the Opp. Party No. 5 is that it is a partnership firm registered under the Partnership Act. Ramesh Das, one of the partners of the firm, was a ''B'' Class contractor. He has applied to the office of the Engineer-in-Chief, Orissa, Bhubaneswar for upgrading from ''B'' Class to ''A'' class Contractor, which was accepted after following due procedure laid down under the O.P.W.D. Code & declared him as ''A'' Class Contractor. Sri Das forming a partnership deed applied to the Government for registration under the Orissa State, P.W.D. Contractor Rule, after consideration & taking into account past performance of Ramesh Das, the partnership firm named M/s. Maa Nabadurga Construction was granted ''A'' Class Licence vide Regd. No. 8695 in the year 2011-12. It is therefore contended that the Opp. Party No. 5 has the requisite qualification/ experience to bid in the auction & it is further contended that no illegality has been committed by the Opp. Parties 1 to 4 in awarding the contract in his favour.

On the basis of such pleadings; two moot questions arise for determination in this case; firstly, it is to be decided whether the Petitioner, who has not submitted a sub-contract with respect to electrical works, is qualified technically to bid for the aforesaid work, secondly, whether the experience gathered by Sri Ramesh Dash as a partner should be taken into consideration as the work of the partnership firm justifying the award of work in favour of the Opp. Party No. 5 firm.

The Instruction to Bidders (IBT) provides at paragraph 3.1 that the bids from joint ventures are not acceptable. Clause 8 of the Detailed Tender Call Notice (DTCN) provides for the eligibility for the composite tender. It reads as follows:

The companies or individuals registered with State Government & contractors equivalent Grade/class registered with Central Government/ MES/Railways having registration for Civil, Electrical & P.H. works having both legal competency & expertise in Civil, Public Health & Electrical Engineering works need put tenders for this composite work & the documentary evidence under appropriate Act in support of their legal competency & expertise to execute Civil, Electrical & P.H. work invariably should accompany their tender papers. The Civil Contractor in order to take part in the Composite tender should enter into a sub-contract agreement with eligible Registered Electrical contractors having valid L.T./H.T. license (Associate with the subcontractor) & a copy of such agreement after due registration should be attached with the Tender in original & this shall also form a part of the tender. If the Civil Contractor is having registration in Electrical works under the same name & style the question of joint venture does not arise. The tender papers shall bear signature of authorised person of the tender, the letter of authorization should accompany tender papers. The authorization should clearly indicate the name of legal person to sign & enter info agreement & receiving payment & will be responsible for all contractual obligations for execution of work for Civil, P.H. & Electrical items of work to the Engineer-in-Charge.

Clause 8 of the DTCN clearly provides that a Civil Contractor in order to take part in a bid should have entered into a subcontract agreement with the Regd. Electrical Contractor. The plain meaning of the same is that a sub-contract should be executed by the bidder having Civil Contract license with an electrical contractor to make him eligible to submit his tender. It is not disputed that the Petitioner has not entered into a sub-contract, rather relied upon a joint venture, which is distinguished from the sub-contract. Therefore, we are of the opinion that the rejection of the technical bid of the Petitioner is legal & proper & requires no interference.

Acceptance of the technical bid of the Opp. Party No. 5 has been hotly contested in the case. Reliance has been placed on Section 14 of the Partnership Act to argue that the property belonging to a person in absence of a contract to the contrary does not, on the person entering into a partnership with others become the property of the partnership merely because it is used for-the business of the partnership. In this case, reliance has been placed on reported case of Boda Narayana Murthy and Sons Vs. Valluri Venkata Suguna and Others, . The Petitioner has also placed reliance on the unreported case of this Court bearing W.P. (C) No. 28101 of 2011 (Orissa Job. com v. State of Orissa & others) disposed of on 23.12.2011. Learned Counsel for Opp. Party No. 5, on the other hand, placed reliance on the reported case of New Horizons Limited and Another Vs. Union of India (UOI) and Others, . The ratio decided in the earlier two cases is applicable to the case in hand, on the other hand, the ratio decided in the case of New Horizons Limited another v. Union of India & others (supra) is not applicable.

In the reported case of New Horizons Limited another v. Union of India & others, the Appellant had submitted his tender for publication of telephone directory. The terms & conditions of the tender require that the tenderer should have experienced in compiling, printing & supply of telephone directories to the large telephone systems with the capacity of more than 50,000 lines. The tenderer was to substantiate such quotation with documentary proof. He was also required to furnish credentials in this field. The Appellant was a joint venture & the different components of the joint venture have experiences in publishing similar materials. However, their experience were not taken into consideration & their auction was not accepted by the Delhi High Court, against which SLP has been filed before the Supreme Court, wherein the Supreme Court has come to the conclusion that even if it is assumed that the requirement regarding experience as set out in the advertisement dated 22.4.1993 inviting tenders is a condition about eligibility for consideration of the tender, though it found no basis for the same, the said requirement regarding experience cannot be construed to mean that the said experience should be of the tenderer in his name only. It is possible to visualize a situation, where a person having past experience has entered into a partnership agreement & the tender has been submitted in the name of the partnership firm, which may not have any past experience in its own name. The Supreme Court further observed that it does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. Similarly, a company incorporated under the Companies Act having past experience may undergo reorganization as a result of merger or amalgamation with another company which may have no such past experience & the tender is submitted in the name of the reorganized company. In such a case, the Supreme Court ruled that it could hot be the purport of the requirement about experience that the experience of the company which has merged into the reorganized company cannot be taken into consideration because the tender has not been submitted in its name & has been submitted in the name of the reorganized company, which does not have experience in its name.

The distinguishing feature between the reported case of New Horizons Limited & another v. Union of India & others (supra) & the present case is that in the reported case joint stock companies formed a joint venture, to which the Partnership Act is not applicable; whereas in the present case Opp. Party No. 5 is a partnership firm, which is guided under the Partnership Act. Section 14 of the Partnership Act reads as follows:

The property of the firm-Subject to contract between the partners, the property of the firm includes all property & rights & interests in property originally brought into the stock of the firm or acquired by purchase or otherwise, by or for the firm, or for the purposes & in the course of the business of the firm, & includes also the goodwill of the business.

Unless the contrary intention appears, property & rights & interests in property acquired with money belonging to the firm, are deemed to have been acquired for the firm.

A plain reading of the provision leads us to an irrestible conclusion that any property of the individual partner cannot be the property of the partnership firm, unless a contrary intention appears. Experience of one partner namely, Ramesh Das is also an asset & it can be termed as property. So his property cannot be taken to be the property of the partnership firm for the clear-cut provision of Section 14 of Partnership Act. In that view of the matter, Opp. Party No. 5 does not have the requisite experience to be eligible to submit tenders with respect to the work in question. Since the Petitioner & Opp. Party No. 5 are not eligible for different reasons, the entire tender process has to be set aside & direction should be given for re-tender.

In the aforesaid view of the matter, the Writ Petition is allowed in part. The award of contract in favour of Opp. Party No. 5 is hereby set aside. Opp. Parties 1 to 4 are directed to re-tender the process of construction of the aforesaid school as expeditiously as possible.

V. Gopala Gowda, C.J.

I agree.