Sompal Singh Contractor vs State Of Uttarakhand & Others

Ramesh Ranganathan, CJ

Heard Mr. Aditya Singh, learned Advocate for the appellant, Ms. Prabha Naithani, learned Brief Holder for the State of Uttarakhand/respondent no. 1, Mr. Shailendra Singh Chauhan, learned Advocate for respondent no. 2 to 4 and Mr. Jitendra Chaudhary, learned Advocate for respondent no. 5.

This appeal is preferred against the order passed by learned Single Judge in WPMS No. 1414 of 2019 dated 30.05.2019. The appellant herein filed WPMS No. 1414 of 2019 seeking a writ of mandamus commanding the respondents to cancel the bid of the fifth respondent in the light of Clause 4.7 of Section 2 of the bid document; and a writ of mandamus commanding the respondents to allot the bid work, mentioned at Sl. No. 74 of the NIT, for which the petitioner was adjudged as L-2. Pursuant to a notice inviting tenders, both the petitioner and the fifth respondent participated in the bid. As both of them fulfilled the technical eligibility criteria, they were both held to have technically qualified. Thereafter, the financial bid was opened and, while the fifth respondent was declared L-1, the appellant-writ petitioner was declared as L-2. According to Mr. Jitendra Chaudhary, learned counsel for the fifth respondent, the difference in the price quoted by the appellant-writ petitioner and the fifth respondent is around 50 Lacs, with the fifth respondent having quoted a lesser figure than the appellant-writ petitioner.

Even before the contract was awarded in favour of the 5th respondent, the appellant invoked the jurisdiction of this Court contending that, in terms of Clause 4.7(1) of the bidding documents, any misleading or false representation made in the affidavit or in the attachment, submitted as proof of the qualification requirement, would result in disqualification of the bidder. Learned counsel would place reliance on Clause 4.4(A)(a) to contend that the minimum financial turnover, as mentioned in the bid, shall be as certified by Chartered Accountant, of which the bidder should have achieved, at least, 50% thereof in Civil Engineering Construction Works. Reference is made by the appellant-writ petitioner to the profit and loss account of the fifth respondent for the financial year ending 31st March, 2017, and to the Income Tax Return filed by the fifth respondent for the said year, to contend that, while the fifth respondent had disclosed gross receipts from Government contracts for a sum exceeding Rs.13.65 Crores, and 2% thereof is the tax required to be deducted at source, the fifth respondent has, in his Income Tax Return for the financial year 2016-17, only disclosed TDS of Rs.1,86,316/- far less than the 2% TDS required to be deducted from his bills which, on a turnover of Rs.13.65 Crores, would be around Rs.27 lacs.

While the gross receipts from Government contracts, as per the profit and loss account of the fifth respondent for the Financial Year ending 31 st March, 2017, is Rs.13,65,46,860/-, his net profit, as reflected therein, is Rs.12,03,498.62/-. In his Income Tax Return, for the assessment year 2017-18, the fifth respondent disclosed a gross total income Rs.12,46,743 which is more than net profit shown by him in his profit and loss account. While it is true that the TDS, amount reflected in the Income Tax Return, is only Rs.1,86,316, failure on the part of employer to deduct tax at source would not mean that the figures, furnished in the profit and loss account and in the Income Tax Return by the 5th respondent, are misleading. As noted herinabove, in terms of Clause 4.7, it is only if a misleading or a false statement is made, is the financial bid required to be rejected. For short deduction of tax at source by the State Government, the assessee cannot be held responsible; and, as long as he has reflected the correct amount as TDS in his returns, the fault, if any, would be with the employer in not deducting the prescribed percentage as TDS. In any event, the Income Tax Authorities would be entitled to proceed, for short deduction of tax at source, against either the assessee or the employer; and that, by itself, would not mean that the fifth respondent had made any misleading statement in his financial bid.

Clause 12.2(3)(6) of the bidding document requires the bidder to submit an annual turnover certificate from the Chartered Accountant for the last 05 financial years with a break up of the civil works and the total works for each financial year. While the Chartered Accountant Certificate, enclosed along with the writ petition, discloses the annual turnover achieved by the fifth respondent for the last 05 financial years, the said certificate does not contain the break-up of the civil works, and the total works executed by the fifth respondent.

Clause 4.4(A)(a) requires the bidder to have achieved, in one year, the minimum financial turnover as mentioned in the Bid Data Sheet which is stated to be Rs.5.44 Crores. While the fifth respondent appears to have achieved this turnover, the Chartered Accountant Certificate, enclosed along with the writ petition, does not reflect the fifth respondent having achieved 50% of the said turnover from Civil Engineering Construction Works.

Mr. Jitendra Chaudhary, learned counsel for the fifth respondent, would submit that the petitioner has selectively enclosed certain documents, and has not enclosed the Chartered Accountant Certificate in its entirety; the fifth respondent has, in fact, furnished information of having achieved 50% of the minimum financial turnover from Civil Engineering Construction Works; and almost all the works executed by the fifth respondent are road works executed for the respondents herein; and these road works are Civil Engineering Construction Works.

This contention, urged before us by the appellant-writ petitioner for the first time, is not even supported by specific averments in the affidavit filed in support of the writ petition, and all that the writ petitioner has stated therein is that the information supplied by the fifth respondent were false; his bid should have been rejected at the threshold; the respondent agency overlooked the financial credentials of the fifth respondent at the time of examining the bid submitted by him; and they had, thereby, assessed the fifth respondent as L-1. The writ affidavit does not contain any specific averment that the fifth respondent had not furnished details of having achieved 50% of the minimum financial turnover from Civil Engineering Construction Works.

The learned Single Judge has, in the order under appeal, recorded the submission of Mr. S.S. Chauhan, learned counsel for respondent Nos. 2 to 4, that the Tender Committee had called for an explanation from respondent No.5; and, on a certificate of the Chartered Accountant having been produced, they were satisfied that his bid was the lowest. After having noted that the contract had not yet been awarded to the successful bidder, the learned Single Judge opined that no interference was called for at that stage. While dismissing the writ petition, the learned Single Judge granted the appellant-writ petitioner liberty to challenge the contract, once it was awarded.

We are now informed by Mr. Jitendra Chaudhary, learned counsel for respondent No.5, that the contract was awarded in favour of fifth respondent on 03.06.2019, and a bond has been executed thereafter. We consider it appropriate in such circumstances, while leaving it open to the petitioner to institute independent legal proceedings challenging the contract awarded in favour of the fifth respondent, to also direct respondent Nos. 2 to 4 to ascertain whether the fifth respondent had furnished details of the Civil Engineering Construction Works executed by him; and whether the information furnished by him satisfied the requirement of Clause 4.4(A)(a) of the bid document; and, thereafter, take necessary action in accordance with law.

Subject to the aforesaid observations, we see no reason to interfere with the order under appeal. The Special Appeal fails and is, accordingly, dismissed. No costs.