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2024 (3) TMI 1133 - HC - Indian LawsRejection of bid - requirement of uploading annual turnover certificate issued by the Chartered Accountant for the last five financial years bearing UDIN of Institute of Chartered Accountants of India with breakup of civil works and total works in each financial year is mandatory condition of contract and breach thereof - substantially responsive in terms of clause 25.1 of the ITB - submission/uploading of turnover for at least one out of the last five financial years bearing UDIN is substantial compliance of clause 4.2 (III)(a) read with clause 4.4 B(a) III (a) of the ITB and bid submitted by respondent No. 5 or not - HELD THAT - Admittedly, in the instant case, the bid amount is more than Rs.200 lacs and, therefore, the bidder was required to show a minimum financial turnover equivalent to 75% of the amount put to bid. He was further required to show that at least 50% of such financial turnover which is equivalent to 75% of the bid amount is from civil engineering construction works. The bidder was also required to show that he had satisfactorily completed, as prime Contractor or sub-contractor, at least one similar work equal in value to one-third of the estimated cost of work of any Government/Semi Government Department (excluding maintenance cost for five years) for which the bid was invited. The official respondents are fair in admitting before this Court that they did not take into consideration the turnover certificate issued by the Chartered Accountant on 23.12.2022 in respect of five years i.e 2017-18, 2018-19, 2019-20, 2020-21 and 2021-2022. The official respondents have, however, failed to explain by giving any cogent reason as to why and how the certificate dated 23.12.2022 which as per the official respondents was not admissible to be considered, has been relied upon to import the execution of requisite volume of civil work into the tax audit report which they considered to determine bid capacity of the respondent No. 5. The decision of the Technical Evaluation Committee in relying upon a part of annual turnover certificate dated 23.12.2022 issued by the Charted Accountant without bearing UDIN is, on the face of it, illegal, arbitrary and seemingly unfair and biased against the petitioner and in favour respondent No. 5. It is true that to qualify for award of contract, the bidder is required to show that he has achieved in any one of the last five financial years, a minimum financial turnover of which 50% is from civil engineering construction work, equivalent to the amount of 75% of the bid amount where the bid amount is more than 200 lakhs, yet the requirement of submission of annual audit reports of five financial years cannot be dispensed with. The Technical Evaluation Committee was obliged to strictly adhere to clause 25 of the ITB and determine, inter alia, amongst other conditions that the bid submitted by respondent No. 5 was conforming to the eligibility criteria defined in Clauses 3 and 4 of the ITB. This Court finds that the decision taken by the official respondents on 24.12.2022 is not only non-compliant in so far as the mandatory terms and conditions of ITB are concerned, but is otherwise irrational, arbitrary, unfair and in violation of Article 14 of the Constitution - Without entering into this controversy and with a view to doing the complete justice in the matter, this petition is disposed of in the following manner Impugned decision taken on 24.12.2022 by the official respondents is quashed. The respondents are directed to issue fresh e-NIT inviting fresh bids from the eligible bidders for the subject work and proceed to conclude the bidding process strictly in accordance with the terms and conditions of the contract and the legal position stated above without any further waste of time. Keeping the public interest in view and also that the execution of the work is already delayed, it is impressed upon the official respondents to embark upon the exercise of issuing fresh e-NIT at the earliest and conclude the same without any further waste of time.
Issues Involved:
1. Legality of the decision to declare respondent No. 5 as 'responsive' in the revised summary of technical evaluation report. 2. Compliance with the mandatory requirement of submitting annual turnover certificates bearing UDIN. 3. Judicial review of the decision of the Technical Evaluation Committee. Summary: Issue 1: Legality of the Decision to Declare Respondent No. 5 as 'Responsive' The petitioner-firm challenged the decision of the respondents to declare respondent No. 5 as 'responsive' in the revised summary of technical evaluation report dated 24.12.2022, arguing that it was arbitrary, unfair, and violated the mandatory terms and conditions of the e-NIT. Initially, the Technical Evaluation Committee had declared respondent No. 5 as 'non-responsive' due to the absence of UDIN on the annual turnover certificate, a mandatory requirement as per clause 4.4 B(a) III(a) of the Instructions to Bidders (ITB). Issue 2: Compliance with the Mandatory Requirement of Submitting Annual Turnover Certificates Bearing UDIN The petitioner contended that the certificate of five years' turnover submitted by respondent No. 5 did not meet the mandatory requirement of bearing UDIN, as stipulated in clause 4.2 (III)(a) and clause 4.4 B(a) III(a) of the ITB. The court noted that the requirement to submit annual turnover certificates bearing UDIN was reiterated in multiple clauses and was a mandatory condition, breach of which would entail rejection of the bid. The Technical Evaluation Committee's decision to reconsider and declare respondent No. 5 as 'responsive' based on a complaint and a tax audit report bearing UDIN for one year was deemed unfair and arbitrary. Issue 3: Judicial Review of the Decision of the Technical Evaluation Committee The court emphasized that essential conditions of a tender must be strictly complied with, and any deviation from mandatory requirements could not be condoned. The court found that the Technical Evaluation Committee's decision to declare respondent No. 5 as 'responsive' was not in compliance with the mandatory terms and conditions of the ITB, and was therefore irrational, arbitrary, and in violation of Article 14 of the Constitution. Conclusion: The court quashed the impugned decision dated 24.12.2022 and directed the respondents to issue a fresh e-NIT inviting new bids from eligible bidders for the subject work, ensuring strict compliance with the terms and conditions of the contract and the legal position stated. The court also emphasized the need to safeguard public exchequer and directed the respondents to expedite the bidding process to avoid further delays. Parties were left to bear their own costs.
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