Case Note & Summary
The petitioner, James Electricals, a sole proprietorship concern of Mr. James Andrade, is a Class I electrical contractor enlisted with the respondents (State of Goa and its Public Works Department officers) for the last 10 years. The Executive Engineer issued a tender notice dated 12.10.2009 for upgradation of electrical distribution work at Goa Engineering College, Farmagudi, with an estimated cost of Rs.92,24,564/- and a completion period of 150 days. Conditions 9 and 10 of the tender required the agency to produce a solvency certificate of Rs.35 lakhs from a scheduled bank in the prescribed form B of CPWD Manual 2007, and to have successfully completed at least one similar work costing over Rs.73.75 lakhs (80% of estimated cost) or two works costing over Rs.55.25 lakhs each (60% of estimated cost) during the last seven years. The petitioner challenged these conditions as arbitrary, unreasonable, and contrary to the CPWD Works Manual, 2003, which governs such tenders. The court examined the CPWD Works Manual, 2003, and found that it does not prescribe such high solvency or experience requirements for Class I contractors. The court held that the conditions were ultra vires the manual and violative of Article 14 of the Constitution, as they were arbitrary and unreasonable. The court quashed the tender notice dated 12.10.2009 and directed the respondents to issue a fresh tender in accordance with the CPWD Works Manual, 2003. The writ petition was allowed with no order as to costs.
Headnote
A) Constitutional Law - Tender Conditions - Arbitrariness - Article 14 of the Constitution of India - Conditions in tender notice requiring solvency certificate of Rs.35 lakhs and work experience of similar nature costing over 73.75 lakhs were challenged as arbitrary and unreasonable - Court held that conditions must be reasonable and non-arbitrary, and that the impugned conditions were ultra vires the CPWD Works Manual, 2003, which did not prescribe such high thresholds for Class I contractors - Held that the conditions were arbitrary and liable to be quashed (Paras 2-10). B) Administrative Law - Tender Process - Ultra Vires - CPWD Works Manual, 2003 - The tender conditions requiring solvency certificate and work experience were found to be contrary to the CPWD Works Manual, 2003, which governs such tenders - The manual did not mandate such high solvency or experience requirements for Class I contractors - Held that the conditions were ultra vires the manual and therefore invalid (Paras 5-10).
Issue of Consideration
Whether conditions 9 and 10 of the tender notice requiring solvency certificate of Rs.35 lakhs and work experience of similar nature costing over 73.75 lakhs are arbitrary, unreasonable, and contrary to the CPWD Works Manual, 2003.
Final Decision
The court allowed the writ petition, quashed the tender notice dated 12/10/2009, and directed the respondents to issue a fresh tender in accordance with the CPWD Works Manual, 2003. No order as to costs.
Law Points
- Tender conditions must be reasonable
- non-arbitrary
- and not ultra vires the governing manual
- conditions requiring work experience and solvency certificate beyond the manual's stipulations are invalid
- Article 14 of the Constitution applies to state actions in tendering.
