SIMPLEX INFRASTRUCTURES LTD. Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is a company incorporated in the year 1924 under the provisions of the Companies Act, 1913, and has its registered office at Calcutta and a branch office at Chennai. The petitioner is an engineering company, said to be engaged in the execution of piling, civil and structural works and has claimed to have executed numerous projects in India and abroad. The grievance of the petitioner is with regard to the impugned action taken by the 1st respondent in cancelling the petitioner's bid on administrative reasons as per the impugned Ext.P-18 proceedings, after having admitted its bid, as the lowest tender (L1), in the matter of award of the construction contract, as per Ext.P-15. The petitioner would also raise a consequential grievance against the impugned Ext.P-21 revised tender notification.

(2.) The brief facts of the case are that the 1st respondent Kerala State Industrial Development Corporation (KSIDC), which is a Government company owned fully by the 1st respondent Government of Kerala, had earlier published Ext.P-1 e-tender notification on 2.10.2015 inviting tenders from interested persons for the "construction of Innovation cum Incubation Tower and allied works for the Life Science Park, Thonnakkal, Thiruvananthapuram" The estimated value of the contract is mentioned as Rs.129,67,13,495 (Rupees one hundred and twenty nine crores, sixty seven lakhs, thirteen thousand four hundred and ninety five only). The last date of the submission of the said tender was extended twice. The petitioner, as discernible from Ext.P-8, had submitted the e-tender on 20.11.2015. That out of the total 7 bidders, the petitioner and 5 other (thus totalling to 6) were declared as pre-qualified on the opening of the technical bids.

(3.) The 1st respondent KSIDC has resisted the pleas of the petitioner by filing a counter affidavit dated 20.5.2016. Therein it is contended that by merely submitting tenders, only offers are made by the bidders and until and unless tender bid/offer is accepted by the competent authority by issuing letter of acceptance/letter of intent, the bidders do not acquire any right at all in respect of the work and that the 2nd respondent has not accepted any tender and that the petitioner cannot seek to compel the 2nd respondent to enter into a contract for construction of the building and allied works with the petitioner. That the petition is not maintainable under Art.226 of the Constitution of India. Further it is stated that pursuant to Ext.P-1 e-tender, 7 bids were submitted, out of which 6 had pre-qualified after the technical evaluation of the bids and the financial bids of the pre-qualified bidders were also opened and were published in the e-tender website. Further it is averred in para 6 thereof that bill of quantities (BOQ) mentioned in the tender form was based on the design and drawing of the architects and of the soil investigation survey conducted by a technical institution, viz., M/s.LBS Centre for Science & Technology and that according to M/s.LBS centre, pile foundation was to be fixed at 50 metres on hard rock and the quantities for rates for piling was estimated on the basis of pile length of 50 metres. The IIT Madras was also consulted regarding the piling and structural design of the building and according to them, the depth of the pile required for the building was to be only 35 metres and substantial difference in the depth of the piles between 50 and 35 metres and the estimate of the buildings was referred to M/s.KITCO, which is an institute with technical expertise in building construction. That M/s.KITCO after detailed examination of the whole aspects, advised that the required depth of the piles for the building to be 35 metres instead of 50 metres and thereafter meetings were convened with M/s.KITCO and the architects and it was decided to revise the estimate according to the advice of M/s.KITCO. That it was decided to rework the estimate based on the comments pointed out by M/s.KITCO and substantial alternations were made in the design of the piles and reduction in the bill of quantities as well as in the rates and due to changes in quantities and rates, the cost estimate had to be reduced to Rs.1,21,49,20,821/-from the original estimate of Rs.1,29,67,13,495/- and out of the differential amount of Rs.8,17,92,674/-, the amount due to change of BOQ is Rs.7,05,24,170/- and the amount attributable to change in rates is Rs.1,12,68,504/-. It is further stated in para 7 thereof that the 2nd respondent being a Government company, any capital expenditure exceeding Rs.35 crores must be reserved for the decision of the Governor and, only according to the decision of the Governor, the expenditure for any works as in this case can be made and the said requirement is made as per the Articles of Association of the 2nd respondent company, which provide the said mandatory requirement. That, in accordance with the said mandatory norm, a Project Implementation Committee (PIC) has been constituted by the Government with the Principal Secretary (Industries) as Chairman, the Managing Director of the 2nd respondent Corporation and other officers and the proceedings relating to the tender of the above work and all records were placed before the PIC for approval and the PIC at its meeting held on 1.3.2016 had considered the entire matter and found that the structural design of Innovation cum Incubation Centre, was submitted to IIT, Madras at the time when the tender proceedings were initiated. It was noted by the PIC that the cost estimate of the building excluding mechanical, electrical and plumbing as estimated by the architect would work out to Rs.129.67 crores and the work was tendered through e-tender portal on 2.10.2015 and the financial bids of the 6 pre-qualified bidders, were opened on 4.12.2015. That in the meanwhile IIT, Madras, had submitted vetted structural design containing substantial difference in the measurements and quantity estimate as against the BOQ published vide the tender documents. It was noted that the BOQ and cost estimate were reviewed by M/s.KITCO and it was found that the cost estimate was on the higher side as stated previously and required to be revised, whereby the cost estimate was reworked at Rs.121.49 crores in the place of the original estimate of Rs.129.67 crores and the total reduction in estimate is Rs.8.18 crores and based on the deliberations and considering all relevant aspects, the PIC observed that in the given situation the right step to be taken is to cancel Ext.P-1 tender and initiate tendering procedure afresh on reasons of procedural compliance and transparency and it was therefore decided to cancel the earlier tender and re-tender the work with a probable amount of contract (PAC) for Rs.121.49 crores by providing ample publicity through national level dailies and local vernacular dailies, etc. The true copy of the minutes of the proceedings of the PIC held on 1.3.2016 has been produced as Ext.R-4(a) along with the said counter affidavit. It is thus pointed out that the impugned Ext.P-18 proceedings dated 2.3.2016 were issued on the basis of the decision taken by the PIC as reflected in Ext.R-4(a) and that consequently, the impugned Ext.P-21 re-tender notification dated 4.3.2016 was issued. It is further stated in para 13 thereof that since there was large reductions in quantities in several items and increase in quantities of other items and changes in rates of several items of work, fresh tender was to be made, whereby equal opportunity will be offered to all the eligible bidders including the petitioner, subject to their eligibility conditions and that it is improper and unfair to award the work to the petitioner without inviting fresh tenders, etc. Further it is contended in para 17 that the petitioner, after having downloaded the revised tender and made pre-bid queries by Exts.P-23 and P-24, is estopped from challenging the impugned Ext.P-21 re-tender proceedings. Further that the stand of the petitioner to direct the 2nd respondent to consider the offer of the petitioner to execute the work with proposed variations and reduced value at the same bid percentage offered by them and to issue the necessary work order in their favour will be most unfair and impermissible, etc. Various other submissions and contentions are raised in the counter affidavit in respect of the various other averments and contentions raised in the Writ Petition.