J. KRISHNA KUMAR Vs. FAHIM TRADING COMPANY
LAWS(CAL)-2012-1-95
HIGH COURT OF CALCUTTA
Decided on January 09,2012

J. Krishna Kumar Appellant
VERSUS
Fahim Trading Company Respondents

JUDGEMENT

TAPAN KUMAR DUTT, J. - (1.) THIS Court has heard the learned advocates for the respective parties in the aforesaid three appeals. All the aforesaid three appeals arise out of one and the same judgment dated 25th November, 2011, passed by a learned Single Judge of this Court in W.P.No. 1232 of 2011 and all the aforesaid three appeals have been taken up for hearing together. It has already been noted by the learned Single Judge in the judgment under appeal itself that the subject controversy relates to a tender process in respect of a catering contract on board. It will further appear that one M. Mohd. Saleh was a listed contractor under the Administration to cater to various inter -islands boats/ships. The said Mohd. Saleh was doing such catering business in the name of his sole proprietorship firm i.e. M/s Mohd. Saleh. At one point of time, the authority awarded the catering contract in favour of the said Mohd. Saleh in respect of the vessel M.V. Chowra. During the subsistence of such contract, the said Mohd. Saleh wrote a letter dated 3rd August, 2010 to the authority concerned, wherein he stated that due to his domestic/personal/old age and having diabetic problem, he was unable to take care of his business properly and he could not visit/sail, monitor the day -today affairs of the ship due to which he had to incorporate partners in his business to run the business in a smooth way. The said Mohd. Saleh in the said letter requested the authority to consider the prayer and permit him to change the proprietorship firm and the name of such firm. It appears that the authority concerned by a letter dated 26.08.2010, informed the said Mohd. Saleh that the Directorate has no objection on the request made by him, subject to the condition that all contractual obligations of the said Mohd. Saleh 's firm in terms of the contract concerned should be fulfilled by the succeeding company/firm. It appears that the said Mohd. Saleh was allowed to convert the said sole proprietorship firm into a partnership firm and such partnership firm was named as M/s Fahim Trading Company.
(2.) IT appears, subsequently the authority concerned issued a tender notice dated 2nd April, 2011, whereby sealed tenders in two bids system were invited from reputed firms/owners having two years experience in the field of catering for running catering canteen on board the Mainland Island vessels viz. M.V. Swaraj Dweep, M.V. Nancowry, M.V. Nicobar, M.V. Akbar and M.V. Harshavardhana. It was further notified that the period of contract will be for one year from the date of acceptance of tender. In response to such tender notice, the appellants in FMA 013 of 2011 and MAT 046 of 2011 and also the writ petitioner/respondent participated in such tender process and submitted their respective technical and financial bids. It appears that the appellants in FMA 013 of 2011 and MAT 046 of 2011 were declared successful and they were awarded their respective contracts in respect of their respective vessels, but the writ petitioner i.e. said M/s Fahim Trading Company was found to be ineligible and not qualified enough to be awarded the catering contract. The writ petitioner was disqualified on the technical bid itself and its financial bid remains unopened. Challenging such tender process, the writ petitioner filed the aforesaid writ petition being W.P.(AN) No. 1232 of 2011. It appears that by order dated 12th September, 2011, a learned Single Judge of this Court was pleased to observe that, there was no scope to pass any interim order at that stage, as the work order had been issued on 6th September, 2011, and the writ petition was filed on 8th September, 2011. However, the said learned Single Judge was pleased to observe that the work order issued will abide by the result of the writ petition. The writ petition ultimately came up for hearing and a learned Single Judge of this Court by the aforesaid judgment dated 25th November, 2011 has been pleased to dispose of the writ petition by holding inter -alia, that the selection of the successful tenderers in respect of the tender, where the writ petitioner was disqualified in the technical bid, be set aside and the authority concerned has been directed to consider the financial bid of the writ petitioner along with other eligible tenderers on the basis of their tenders already submitted. His Lordship has been further pleased to hold that, upon consideration, in case the writ petitioner succeeds to get any of the contracts then in that event the writ petitioner should be allowed to perform the same for the balance period and it would be entitled to sue the Administration for compensation for the period in respect of which the writ petitioner would not be in a position to perform. His Lordship was further pleased to observe that, in case, the writ petitioner does not succeed in the financial bid, the existing contractors would continue and so long the tender process was not considered afresh in terms of the direction given by His Lordship, the contractors who have been performing would continue to do so by way of an interim measure. Challenging the aforesaid judgment of the learned Single Judge, M/s Ansar and Company, the respondent no.9 in the writ petition, has filed an appeal being FMA 013 of 2011. It may be noted that the said respondent no.9 has been awarded the contract for running the canteen on board M.V. Swaraj Dweep. The respondent no.8 in the writ petition i.e. Shri J. Krishna Kumar has filed MAT 046 of 2011, challenging the said judgment of the learned Single Judge. It may be noted that the said respondent no.8 has been awarded the contract for running the canteen on board M.V. Nicobar. MAT 049 of 2011 has been filed by the Administration concerned challenging the aforesaid judgment of the learned Single Judge. It appears from the judgment under appeal that the learned Single Judge was pleased to rely much upon the case reported at 1995(1)SCC478 (New Horizons Ltd. and Another -vs - Union of India and Others). Even though the learned Single Judge was pleased to observe in His Lordship 's judgment that the said Mohd. Saleh was admittedly having experience to compete for the tender, it appears that there is a dispute between the parties with regard to the question as to whether or not the said Mohd. Saleh had sufficient experience in running a catering business i.e. running the canteen on board/ship which is plying between Mainland and the Islands. The vessel M.V. Chowra in respect of which the contract was awarded in favour of Mohd. Saleh was a vessel, which was running in between the Islands, and the contract which was awarded in favour of Mohd. Saleh in respect of such vessel was not in respect of any catering service for a vessel which was plying between these Islands and the Mainland.
(3.) THE learned Single Judge was pleased to observe that once the writ petitioner was allowed to continue as a contractor, the authority concerned was not entitled to refuse the writ petitioner such contract when it submitted tender for the future years. The learned Single Judge was pleased to observe that the authority did not make any distinction as to whether the said Mohd. Saleh had the requisite experience for mainland ship. It appears that it was argued before the learned Single Judge on behalf of the present appellant that since the said Mohd. Saleh would not be able to be personally present on board to run the catering business such catering contract should not be awarded in favour of Mohd. Saleh. The learned Single Judge was pleased to observe that the respondents concerned in the writ petition was unable to show any clause in the terms and conditions to the effect that a successful tenderer must be personally present on board while performing the contract. His Lordship was pleased to come to a conclusion that the said Mohd. Saleh was having requisite experience and he was entitled to compete for the next tender and he was also allowed by the authority to convert his proprietorship firm into a partnership firm and bring in new partners and thus the writ petitioner was not a stranger to the Administration and it was created with the knowledge and consent of the Administration. His Lordship was further pleased to observe that the writ petitioner performed the rest part of the contract in respect of M.V.Chowra and hence His Lordship did not find any reason as to why the writ petitioner should be denied to participate in the financial bid, if it was otherwise eligible to do the same and the ratio decided in the said M/s New Horizons Ltd 's case would squarely apply in the instant case. His Lordship was further pleased to hold that the authority concerned committed illegality in not allowing M/s Fahim Trading Company (writ petitioner) to participate in the financial bid and the process of selection, by exclusion of the writ petitioner, was improper and illegal. The learned advocate appearing on behalf of the respondent no.9 in the writ petition submitted that the case reported at 1995(1) SCC 478 is distinguishable as the facts and circumstances involved in the said reports were quite different from the facts and circumstances of the present case. He submitted that the said Mohd. Saleh expressed his inability by writing the said letter dated 3rd August, 2010, as already indicated above. He has submitted that the writ petitioner M/s Fahim Trading Company has three partners namely, M. Mohd. Saleh, Mr. Adil Arif and Mr. Areez Azeem and there is nothing on record to show that the said Mr. Adil Arif and Mr. Areez Azeem have any experience with regard to any catering business at all. He has submitted that in view of the admitted position that the said Mohd. Saleh is unable to take care of his business and is also unable to even monitor the day -to -day affairs of the ship, the question of awarding any catering contract in favour of the writ petitioner does not arise, particularly, in view of the fact that other two partners of the writ petitioner firm do not possess any experience whatsoever with regard to any catering business - - - atleast, there is nothing on record to prove such experience. The said learned advocate referred to the decision in the said New Horizons Ltd 's case (Supra) and submitted that the said reports cannot be of any assistance to the writ petitioner in the present case. It appears from the said reports that the subject matter of controversy in the said reports was in respect of a tender process connected with printing and publishing of a telephone directory as the contract for printing and publishing the telephone directory is normally awarded by inviting tenders and selecting the best offer from amongst the tenders, which are so received. In the said reports, the printing and publishing of the telephone directory for Hyderabad was involved. Five persons including M/s New Horizons Ltd and M/s M&N Publications Ltd (which was respondent no.4 before the Hon 'ble Court) submitted the tenders and the offers were considered by the Tender Evaluation Committee. The offer of said M/s M&N Publications Ltd was accepted but the offer of M/s New Horizons Ltd was rejected. The M/Section New Horizons Ltd had filed a writ petition for quashing of the award of contract in favour of the said M/s M&N Publications Ltd for printing, binding and supply of telephone directory of Hyderabad and also for issuance of writ in the nature of mandamus for accepting the tender offer of the said M/s New Horizons Ltd. It appears that the respondent authorities in their affidavit had disclosed the reasons for non8 consideration of the offer of M/s New Horizons Ltd which was not considered because the New Horizons Ltd did not submit any evidence to show that they have undertaken compiling, printing and supply of telephone directories for large telephone systems with the capacity of more than 50,000 lines. It appears that the said M/s New Horizons Ltd had mentioned in their tender offer that the said M/s New Horizons Ltd is a joint venture company established by Thomson Press(India) Limited (TPI) , Living Media (India) Limited ( LMI), World Media Limited(WML) and Integrated Information Pvt. Ltd (IIPL), a wholly -owned subsidiary of Singapore Telecom wherein 60% of share are held by Mr. Aroon Purie, TPI, LMI, WML and other companies in the same group and 40% of shares are held by IIPL and that such joint venture was approved by the Government of India and has been in operation. It further appears that it was mentioned in the said tender offer that the said M/s New Horizons Ltd was established as an information and database management company with expertise in database processing, publishing, sales/marketing and the dissemination of related information and the said New Horizons Ltd has access to the benefit of the complete resources and strength of its parent/owning companies, each of which is a recognized market leader. In paragraph 25 of the said reports, the Hon 'ble Court considered the status of the said M/s New Horizons Ltd and found that the said M/s New Horizons Ltd has stated that it is a joint venture company established by TPI, LMI and WML and IIPL, wherein TPI, LMI and WML and other companies in the same group as well as Mr. Aroon Purie own 60% shares and IIPL own 40% shares. The Hon 'ble Court was pleased to observe that the Indian group of companies (TPI, LMI and WML) and the Singapore -based company (IIPL) have pooled together their resources in the sense that TPI, LMI and WML have made available their equipment and organization at various places in the country while IIPL has made available its wide experience in the field as well as the expertise of its managerial staff. The Hon 'ble Court was pleased to note that all the constituents of M/s New Horizons Ltd have thus contributed to the resources of the M/s New Horizons Ltd and this shows that the M/s New Horizons Ltd is an association of companies jointly undertaking commercial enterprises wherein they will all contribute assets and will share risks and have a community of interest. The Hon 'ble Court in paragraph 26 of the said reports was pleased to hold that once it is held that M/s New Horizons Ltd is a joint venture, the experience of its various constituents namely, TPI, LMI and WML as well as IIPL had to be taken into consideration, if the Tender Evaluation Committee had adopted the approach of a prudent businessman. In such factual background, the Hon 'ble court in paragraph 23 of the said reports was pleased to observe inter -alia that the requirement regarding experience cannot be construed to mean that the said experience should be of the tenderer in his name only and it is possible to visualize the situation where a person having past experience has entered into a partnership and the tender has been submitted in the name of the partnership firm which may not have any past experience in its own name. The Hon 'ble Court was pleased to observe that this does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. The Hon 'ble Court was pleased to further observe that, similarly, a company incorporated under the Companies Act having past experience may undergo reorganization as a result of merger or amalgamation with another company which may have no such past experience and the tender is submitted in the name of the reorganized company and in such circumstances, it could not be the purport of the requirement about the experience that the experience of the company which has merged into the reorganized company cannot be taken into consideration because the tender has not been submitted in its name and has been submitted in the name of the reorganized company, which does not have experience in its name. It, thus, appears that the facts and circumstances involved in the said reports were different from the facts and circumstances of the present case. In the said reports, the constituents of M/s New Horizons Ltd appeared to have the necessary expertise in the field concerned. In the present case apart from Mohd. Saleh, there is nothing on record to show that the other two partners of the writ petitioner have any sufficient experience with regard to catering business particularly on board/ship. Mohd. Saleh has expressed his difficulties in his letter dated 3rd August, 2010, wherein, he has clearly stated that he cannot even monitor the day -to -day affairs of the ship. Thus, it appears that the facts and circumstances of the present case are distinguishable from the facts and circumstances involved in the said reports. Learned advocate, Mr. Ajit Prasad also relied upon the decision reported at (2006) 11 SCC 548, in support of his submission that since public interest is involved in the catering service on board/ship plying between these Islands and the Mainland and the authority concerned has already taken decision purely on such public interest, the writ court should ordinarily exercise judicial restraint. ;


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