2012 (5) TMI 764 - SC - Indian Laws

Notice inviting tenders (NIT) - challenge to the eligibility of respondent no 2 and allotment of the project work - (1) that respondent No.2 had not filed the requisite certified balance-sheets for five years immediately preceding the issue of tender notice (2) that respondent No.2 did not have the requisite experience of executing a single integrated water supply scheme of the required value. HELD THAT - No legal flaw in the finding or the line of reasoning adopted by the High Court. It is true that the date of submission of tender was initially fixed but the same was extended. That being so 5 years immediately preceding the issue of the tender notice would have included the year 2010- 2011 also for which financial year audit of the company s books accounts and documents had not been completed. Such being the case respondent No.2 could not possibly comply with the requirement of the tender notice or produce certified copy of the audited balance-sheet for the said year. All that it could possibly do was to obtain a certificate based on the relevant books registers records accounts etc. of the company which certificate was indeed produced by the said respondent. The High Court has rightly observed that the appellant had not disputed the correctness of the turnover certified by the Chartered Accountant for the year 2010-2011 nor was it disputed that the same satisfied the requirement of the tender notice. therefore fail and is accordingly rejected. The High Court has while examining the question of eligibility of respondent No.2 by reference to the execution of the single integrated water supply scheme recorded a finding that the nature of the work executed by respondent No.2 for Upleta satisfied the requirement of the tender notice. That finding in our view is in no way irrational or absurd. We say so because the certificate relied upon by respondent No.2 sufficiently demonstrates that respondent No.2 had designed and executed an integrated water supply scheme for Upleta which included raw water transmission from intake wells and transmission of treated clear water from WTP including providing supplying and laying of pipelines construction of E.S.R.s Sumps Pump houses and providing erecting pumping machinery. In the absence of any mala fide or arbitrariness in the process of evaluation of bids and the determination of the eligibility of the bidders we do not consider the present to be a fit case for interference of this Court. This appeal accordingly fails and is hereby dismissed with cost assessed at 25, 000/- .

Summary

Issues Involved:
1. Eligibility of the successful bidder (Respondent No.2) regarding submission of certified balance-sheets for the last five years.
2. Experience of the successful bidder (Respondent No.2) in executing a single integrated water supply scheme of the requisite value.

Detailed Analysis:

1. Eligibility of the Successful Bidder Regarding Submission of Certified Balance-Sheets:

The appellant challenged the eligibility of Respondent No.2 on the grounds that the latter had not filed the requisite certified balance-sheets for the five years immediately preceding the issue of the tender notice. Respondent No.2 had submitted certified copies of audited balance-sheets for four years but provided a Chartered Accountant's certificate for the fifth year (2010-2011), as the audit for that year was not completed. The High Court held that this constituted substantial compliance with the NIT requirements, noting that the appellant did not dispute the correctness of the turnover certified for 2010-2011 or that it met the tender notice requirements. The Supreme Court found no legal flaw in this reasoning, emphasizing that the appellant had not demonstrated any incorrectness in the submitted documents. Thus, the first limb of the challenge was rejected.

2. Experience of the Successful Bidder in Executing a Single Integrated Water Supply Scheme:

The appellant argued that Respondent No.2 lacked the requisite experience, as the works executed at Vyara and Songadh were distinct and did not constitute a single integrated water supply scheme. Furthermore, the appellant contended that the Upleta project executed by Respondent No.2 did not include the construction of intake wells, an essential component of an integrated water supply scheme. The respondents countered that the Upleta project included all necessary components, and the High Court found that the nature of the work executed by Respondent No.2 satisfied the tender notice requirements. The Supreme Court agreed, noting that the Municipal Council had the aid of a technical consultant in evaluating the bids and determining eligibility. The Court found no reason to interfere with the High Court's view, as the evaluation process was neither irrational nor arbitrary.

Public Interest Consideration:

The Supreme Court highlighted that Respondent No.2 had already executed a significant portion of the contract and that interference at this stage would delay the project, adversely affecting the residents of the scarcity-stricken municipality. The project, aimed at providing drinking water, was funded under a Central Government scheme with a completion target of September 2012. The Court emphasized that public interest would be best served by allowing the project to proceed without further delays.

Conclusion:

The Supreme Court concluded that there was no mala fide or arbitrariness in the evaluation process and the determination of eligibility. The appeal was dismissed with costs assessed at Rs. 25,000, emphasizing the need for judicial restraint in administrative actions and the importance of public interest in such cases.