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Judgment
Mohit S. Shah, J.—Leave to add the State of Gujarat. Notice to be served through Secretary, Road & Building Department, Sachivalaya, Gandhinagar.
Notice to the newly added party returnable forthwith. Mr. Nikunt Raval, learned APP, waives service of notice for newly added party in SCA No. 5575 of 2009 and Mr. Dushyant Kumar, learned APP, waives service of notice for newly added party in SCA No. 5576 of 2009.
The respondent No. 1 - Junagadh Municipal Corporation [hereinafter referred to as "the Corporation"] invited tenders for 4 projects of paving roads as specified in the Tender Notice. Various parties have submitted their tenders. The Corporation felt that the respondent No. 2 was the only party whose bids were valid because the others, like the petitioners herein, had not submitted EMD of the requisite amount. Accordingly, the Corporation issued work orders to respondent No. 2 for executing 4 projects of paving roads on 19th June, 2009. The decision of the Corporation is under challenge in respect of the project No. 1 for paving road from Majevadi Gate to Khamdhrol Fatak, Divan Chowk to Jagmal Chowk to Sukhnath Chowk, R.T.O. to Majevadi Gate and Diwan Chowk Mandvi Chowk, Jaloropa to Sukhnath Chowk to Railway Station and Geban SA Pir Fulia Hanuman Road & Bhavnath Temple to Prerna dham for which the contract is awarded to respondent No. 2 for the amount of Rs. 1,08,69,372/- and project No. 3 for paving road from Joshipura Railway Crossing to Sardarpura & upto Padar Chowk, Zanzarda Bypass to Village, Gandhi Chowk to Chitakhana Chowk, Dhal Road upto Uperkot, Aughad Nagar Main Road, Chobari Main Road for which the Corporation has given contract to respondent No. 2 for the amount of Rs. 1,02,28,715/-. In these petitions, we are not concerned with project Nos. 2 and 4 for paving other roads.
The petitioners case is that they had not submitted EMD along with tender because they have the certificates issued by the Executing Engineer, R & B Division, Junagadh of Rs. 7,50,000/- each and that these certificates are issued for the purpose of exemption from payment of EMD with each individual tender and that the certificate are valid till 31st December, 2010 in both the cases. It is submitted that by treating the petitioners and another party as disqualified, on the ground of not having submitted the EMD, only the respondent No. 2 and another party remained in the fray with the result that there was no healthy competition and all the 4 projects are awarded to respondent No. 2 at much higher rates than what the Corporation would have otherwise got if the Corporation had acted upon the exemption certificates relied upon by the petitioners. It is also submitted that the very Corporation accepted the exemption certificates as recently as on 8th June, 2009 in case of both the petitioners whose tenders were considered as valid on the basis of the respective exemption certificates. It is also submitted that about 3 months back M/s. Madhuram Construction Company - petitioner in SCA No. 5576 of 2009 was awarded contract of the Junagadh Municipal Corporation itself after treating its tender as valid even though it was accompanied by the exemption certificate and no EMD was paid to the Corporation.
Mr. Anshin Desai, learned advocate for the petitioners, states that the price bid submitted by the petitioners have not been opened. The petitioner in SCA No. 5575 of 2009 had offered to carry out the contract work of project No. 3 for the amount of Rs. 99,04,599/- and the petitioner in SCA No. 5576 of 2009 had offered to carry out the work of project No. 1 for the amount of Rs. 99,79,216/-. Hence, if the petitioners are considered as eligible and contracts offered to the petitioners, there would be gain to the public exchequer. It is also submitted that apart from the non-payment of EMD, there is no other disqualification or objection against the petitioners'' eligibility.
On the other hand, Mr. Dagli, learned advocate for the respondent No. 1 - Junagadh Municipal Corporation submits that the Tender Notice had not provided that those holding exemption certificates will not have to pay EMD and therefore, when objection was raised upon at the time of the opening of the tenders, the Corporation had to go by the terms of the Tender Notice and the Corporation could not have waived the mandatory condition of the payment of EMD through demand draft as regards acceptance of such exemption certificates in the past. It is submitted that on those occasions, the concerned parties may not have raised any objection and therefore, if the exemption certificates were acted upon, the Corporation is not bound to waive the mandatory condition of EMD. It is submitted that the projects in question are required to be carried out immediately.
Mr. Jasani, learned advocate for respondent No. 2, the successful tenderer, has opposed the petitions and submitted that the respondent No. 2 has already received the work orders for all the 3 projects on 19th June, 2009 and the respondent No. 2 has already made arrangement by procuring material and employing labours for carrying out the contract works. Any interference, at this stage, would cause irreparable loss to the respondent No. 2. Mr. Jasani further states under instructions of Mr. Nagarjun Chauhan, a partner of the respondent No. 2 firm, that in order to avoid any further controversy, the respondent No. 2 is ready to carry out the contract work for project No. 1 (Majevadi Gate to Khamdhrol Fatak, Divan Chowk to Jagmal Chowk to Sukhnath Chowk, R.T.O. to Majevadi Gate and Diwan Chowk Mandvi Chowk, Jaloropa to Sukhnath Chowk to Railway Station and Geban SA Pir Fulia Hanuman Road & Bhavnath Temple to Prerna dham) for the amount of Rs. 99,75,000/- and the contract work for project No. 3 (Joshipura Railway Crossing to Sardarpura & upto Padar Chowk, Zanzarda Bypass to Village, Gandhi Chowk to Chitakhana Chowk, Dhal Road upto Uperkot, Aughad Nagar Main Road, Chobari Main Road) for the amount of Rs. 99,00,000/-. He has submitted that this concession is being made in view of the fact that the respondent No. 2 has mobilize its resources both financial and manpower.
At this stage, Mr. Desai, learned advocate for the petitioners, submits that the petitioners are also prepared to reduce their offers from the amounts as indicated above and that since the respondent No. 2 is getting the opportunity to reduce the amount, the petitioners may also be afforded that opportunity.
Having heard learned Counsel for the parties, it appears to the Court that though the object of issuance of certificate by the Executive Engineer of the R & B Department appears to facilitate the contractors by not requiring them to pay EMD while submitting each individual tender, there is nothing on record to indicate that such certificates are issued only for the Government contracts, but also for the purpose of the contracts of Municipal Corporation, Municipalties, Panchayat and other semi Government organizations. It would, therefore, be in the fitness of things if the State Government, R & B Department issues necessary clarification as expeditiously as possible, and in any case within one month from today so as to avoid such controversy in future and so also to enable the Corporations and other local bodies as well as the semi Government organizations to decide whether the employers are bound to dispense with the requirement of taking EMD from the contractors who have obtained such exemption certificates to the extent of the amount certified by the Executive Engineer.
Having made the above observations, it appears to the Court that since the Tender Notice did not contain any such specific clarification whether the holders of the exemption certificates will not be required to submit the EMDs, there might have been other contractors holding exemption certificates who did not submit their tender in response to the Tender Notice in question and therefore, to direct the Corporation to consider the petitioners'' tender as valid would create unnecessary complications which ought to be avoided. Moreover, entertaining the petitions at this stage would result into delaying execution of the public projects of paving roads in the city of Junagadh.
Since we have already held that in absence of any mention in the Tender Notice that those holding exemption certificates will not be required to submit EMDs, the decision of the respondent Corporation cannot be castigated as illegal or arbitrary. There would not be question of allowing the petitioners to participate in the tender process by allowing him to reduce their price bids.
Reliance placed by the petitioners on the decision in the M/s. Poddar Steel Corporation Vs. M/s. Ganesh Engineering Works and others, and Master Marine Services Pvt. Ltd. Vs. Metcalfe and Hodgkinson Pvt. Ltd. and Another, do not take petitioners'' case any further because in both the decisions, the concerned authorities have waived conditions in the tender by treating them as not mandatory. In the instant case, the respondent Corporation has not waived these conditions. The petitioners are praying for writ of mandamus to direct the Corporation to waive the condition which is considered by the Corporation as mandatory.
In view of the above discussion, after recording the statement that the respondent No. 2 has reduced its bid price of contract work for project No. 1 (Majevadi Gate to Khamdhrol Fatak, Divan Chowk to Jagmal Chowk to Sukhnath Chowk, R.T.O. to Majevadi Gate and Diwan Chowk Mandvi Chowk, Jaloropa to Sukhnath Chowk to Railway Station and Geban SA Pir Fulia Hanuman Road & Bhavnath Temple to Prerna dham) to Rs. 99,75,000/- and contract work for project No. 3 (Joshipura Railway Crossing to Sardarpura & upto Padar Chowk, Zanzarda Bypass to Village, Gandhi Chowk to Chitakhana Chowk, Dhal Road upto Uperkot, Aughad Nagar Main Road, Chobari Main Road) to Rs. 99,00,000/- and the statement of Mr. Dagli, learned advocate for the respondent Corporation, that the terms of the work order and the contract would be revised accordingly, we dismiss these petitions. We direct the Corporation as well as the respondent No. 2 to act on the basis of the above statement within 10 days from today. The respondent No. 2 who is carrying on the execution of the contracted works shall be subject to acting upon the aforesaid statement. The petitions are, accordingly, dismissed.