2018 (5) TMI 365 – KERLA HIGH COURT – TMI – Supply of 8M and 9M Pre Stressed Concrete Poles (PSC Poles) to the Electrical Circles – submission of tenders – it was the case of petitioner that the 3rd respondent has blatantly violated the conditions stipulated in the tender document – adjustment of the GST incurred by the petitioner at the time of purchase of the raw-materials towards GST payable at the time of sale of Poles – as per the petitioner, the 3rd respondent has violated the conditions, by submitting a certificate along with pre-qualification documents, stating that the effect of GST credit to be availed has been taken into account in the quoted price.
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Held that: – even if Ext.P7 is issued by the 3rd respondent, that will not have any bearing or implication with respect to the terms and conditions of the contract, and respondents 1 and 2 are entitled to overlook the same and consider the bid submitted by the respective parties.
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Clause 14 of Section-A stipulated tha
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with the conditions incorporated thereunder.
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The impracticability of Clause B.20 regarding tax, put forth by the petitioners cannot be legally sustained since a clear method is worked out in the special conditions of contract.
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The petitioners could not make out any case of arbitrariness, illegality, malafides or unfairness so blatant and patent, so as to interfere with the evaluation made by the 1st and 2nd respondents with respect to the successful bidder, under Article 226 of the Constitution of India – Moreover, it is a commercial contract and the master of the contract is at liberty to enjoy reasonable flexibility in choosing its partner, taking also into account the price bid in the larger public interest, which may not in any manner interferes with the fundamental rights guaranteed under Part III of the Constitution.
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Petition dismissed – decided against petitioner. – W.P.(C) Nos.1112, 2221, 2450 & 4034 of 2018 Dated:- 6-4-2018 – MR. SHAJI P.CHALY J. BY ADVS.S
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itted their E-tender, petitioner could gather from the E-tender submitted by the 3rd respondent that it has blatantly violated the conditions stipulated in the tender document. Pursuant to the notification, a pre-bid meeting was convened on 10.10.2017. Before the pre-bid meeting, petitioner issued a communication to the 2nd respondent dated 07.10.2017, evident from Ext.P2. In Ext.P2, petitioner brought to the notice of the authorities that there is an anomaly with respect to clause B.20 Taxes in the special conditions of contract. The Special Conditions of Contract is produced as Ext.P3. It is also brought to the notice of respondents 1 and 2 that, if the said clause is not varied, it may create hurdle on bill processing, for the reason that, for the manufacture of pre stress concrete poles, the rawmaterials required are cement, steel, coarse aggregates and fine aggregates. When the petitioner sells the PSC Poles to the Board, then GST is imposed, which is known as output GST. When the
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, the same shall be rejected. Therefore, it is trite law that the executing authority who issues the tender notification must rigorously follow the same and scrupulously observe both standards, and if there is violation of any such condition, it would invite the wrath of Article 14 of the Constitution of India. 4. After submission of the E-tender by the 3rd respondent, petitioner could gather that 3rd respondent has violated the conditions stipulated in the tender document. Thereupon, petitioner has submitted a representation to respondents 1 and 2 on 10.11.2017, bringing to the notice of the authorities about the violation made by the 3rd respondent, evident from Ext.P6. In Ext.P6, petitioner has stated that, there is violation of the general conditions of contract and special conditions of contract. It is also the case of the petitioner that, the 3rd respondent has submitted documents which were not called for in the tender notice, and therefore, there is a clear violation. 5. Petiti
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pursuant to Ext.P1 notification. iii) Issue a writ of certiorari or other appropriate writ order or direction quashing the original of Ext.P9 in so far as pre-qualifies the 3rd respondent pursuant to Ext.P1 tender notice. iv) To grant such other relief which this Hon'ble Court may deem fit under these circumstances. 6. Petitioner has also produced additional documents along with I.A.No.952 of 2018 to show that the 3rd respondent is qualified by the respondents in spite of the illegalities committed by the 3rd respondent. 7. A detailed counter affidavit is filed by respondents 1 and 2, refuting the allegations and claims and demands raised by the petitioners. Among other contentions, it is stated that, the writ petition is not maintainable, since as per the special conditions of contract, petitioner has agreed to approach the civil courts at Thiruvananthapuram in the event of disputes arising pertaining to the contract. Therefore, according to the said respondents, the writ petitio
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at he is required to quote the prices after considering all the input tax credit available to him. The said methodology is the correct one in the present GST regime. Therefore, there is no ambiguity in the tender provisions and the petitioner is trying to create confusion, whereas in reality, the provisions are clear and unambiguous. It is also stated that, by agreeing to the bid conditions that the benefit of input tax credit will be passed on to the respondents, the 3rd respondent has not committed any violation of the tender formalities and averments to the contrary in the writ petition are all denied. 8. It is also submitted that, the price bids were opened on 11.01.2018 as per the tender conditions, evident from Ext. R1(a). From Ext. R1(a), it is evident that, in respect of 8m poles except for the Electrical Circle, Kattakkada, 3rd respondent is the lowest one. As far as 9m poles are concerned, except for Electrical Circles, Kollam, Kattakkada and Kottarakkara, the rate quoted by
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and demands raised by the respondents and have also produced Exts.P11 to P16. Apart from reiterating the stand adopted in the writ petition, it is also submitted that, after the invitation of the tender, the price of the raw-materials have changed considerably, and so also the GST rate of PSC Poles is reduced from 28% to 18% and these things will definitely establish that the GST rate could not be followed correctly at the time of submission of the bids, and therefore, Clause B.20 of the special conditions of contract is totally illegal and is detrimental to the tender conditions. 10. I have heard Sri. Ramesh Chander M., learned Senior Counsel appearing for the petitioners in W.P.(C) No.1112 of 2018 and Shri. K. Jaju Babu, learned Senior Counsel for the petitioner in W.P.(C) No.2450 of 2018 and the other Advocates appearing for the petitioners in the other writ petitions, Sri. Raju Joseph, learned Senior Counsel appearing for respondents 1 and 2 and also the learned counsel appearing f
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clause B.20 of tender, section-B of special conditions of contract, it is clearly mentioned that the benefit of input tax credit will be passed on to KSEB Ltd., as per Sec.171 of CGST Act. Even though clarification was sought on the said matter, the Chief Engineer has clarified vide the corrigendum referred to above, and it is specified that, there is no change in the tender documents. However, according to the learned Senior Counsel, the 3rd respondent has violated the said conditions, by submitting a certificate along with pre-qualification documents, stating that the effect of GST credit to be availed has been taken into account in the quoted price. 12. It is also pointed out that, as per clause 14 of Section-A (Bid specifications Part-II, Instruction to Bidders), the indication of price anywhere else other than in price bid (BOQ) will render the tender invalid and will be liable to be rejected. Therefore, according to the learned Senior Counsel, Ext.P7 enclosure produced along with
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the Electrical Circle concerned and therefore, the same is violative of clause B.04 of Section-B of special conditions of contract. 15. On the other hand, learned Senior Counsel appearing for respondents 1 and 2 submitted that, the imperative conditions in the notice inviting bid as well as the general conditions of contract and special conditions of contract are not violated by the 3rd respondent. The instructions were issued for quoting the price in accordance with the terms and conditions of the notice inviting tender. It was specifically mentioned that the price cannot be quoted anywhere else other than in the specified place of the bid document. It is also submitted that, there is no contention for the petitioners that the 3rd respondent has violated the special conditions of contract and the only contention is that, they have added Ext.P7 along with the bid document, which is in no way causing any manner of prejudice to the petitioners or violating the terms and conditions conta
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spect of alteration is in the bid form or schedule or specifications annexed thereto. Clause 13 stipulates that: Special conditions, if any mentioned in the offer of the bidder or in any other communication from him will not be applicable to the contract unless they are expressly accepted in writing by the purchaser . This clause shows that, even if any communication is issued by any of the bidders over and above the bid document, the same will not be applicable to the contract, which thus also means, respondents 1 and 2 are entitled to ignore any communication so issued by any bidder. Therefore, it is clear that, even if Ext.P7 is issued by the 3rd respondent, that will not have any bearing or implication with respect to the terms and conditions of the contract, and respondents 1 and 2 are entitled to overlook the same and consider the bid submitted by the respective parties. 18. Clause 14 of Section-A stipulated that: The indication of price anywhere else other than in the price bid
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he Electrical Circle concerned. Necessary casting beds, structures, moulds, curing tanks, testing yard etc. shall also be made available in the pole casting yard. All facilities shall be provided by the contractor at his cost. The construction, operation and maintenance of the yard are to be managed and executed by the contractor. The capacity of the yard shall be designed in accordance with the requirement of poles. All the facilities required for pre-tensioning, casting, de-tensioning, curing and lifting operations should be provided at the yard . Other conditions are also incorporated thereunder. 20. Clause B.20 deals with Taxes, which read thus: All Taxes which KSEBL specifically agrees to bear will be admitted at the rates applicable at the time of delivery, on the basis of an undertaking on Kerala Government stamp paper worth ₹ 500/- from the supplier in the following format: P.O. No………………………..dated …………….(Name & address of firm) hereby
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at, already the 3rd respondent is making arrangements for the yard within the Electrical Circle concerned, and moreover, it is a subject matter to be considered after the award of the bid. So far as Clause B.20 in respect of tax is concerned, the contention advanced is that, due to variation of GST rate, the said condition can never be put into practice. However, under Clause B.42 of the Special Conditions, Price Variation is dealt with, which read thus: B.42 PRICE VARIATION. Prices will be re-fixed every month, starting from the actual date of commencement of supply of poles, provided there is a variation in the average cost of cement, sand, coarse aggregate and diesel and average values of Whole Sale Price Index Number for Manufacture of Basic Metals (published by IEEMA) and Consumer Price Index Number (published by the Department of Economics and Statistics) during the month under consideration, from its values on the due date of tender. Price variation will be given for the poles s
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ticability of Clause B.20 regarding tax, put forth by the petitioners cannot be legally sustained since a clear method is worked out in the special conditions of contract. 22. Learned Senior Counsel appearing for the petitioners invited my attention to Clause 7(b) of General Conditions of Contract, which stipulates that: Tenders not stipulating period of firmness and tenders with price variation clause and/or subject to prior sale conditions are liable to be rejected . Learned counsel has also invited my attention to Clause 7(c), which stipulates that: Tenders subject to conditions will not be considered. They are liable to be rejected on that sole ground . In my considered opinion, the General Conditions of Contract will have to be taken into account and read along with the special conditions of contract. First of all, there is no price variation clause put forth by the 3rd respondent. As I pointed out earlier, in Ext.P7, the 3rd respondent has specified an aspect with respect to the
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more than ₹ 7 crores, even though the same is disputed by the petitioners. However, there is no case for the petitioners that, the 3rd respondent is not the lowest bidder with respect to certain regions. 24. Taking into account the sum and substance of the contentions made above, the various provisions of the Instructions, Special Conditions and the General Conditions of contract, I am of the considered opinion that, petitioners could not make out any case of arbitrariness, illegality, malafides or unfairness so blatant and patent, so as to interfere with the evaluation made by the 1st and 2nd respondents with respect to the successful bidder, under Article 226 of the Constitution of India. This is also a very settled legal position. Moreover, it is a commercial contract and the master of the contract is at liberty to enjoy reasonable flexibility in choosing its partner, taking also into account the price bid in the larger public interest, which may not in any manner interferes
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