TaxTMI 
TaxTMI 
2016 (7) TMI 1720
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....r, Advocate h/f Shri S. U. Choudhari, Advocate for the Intervenor. JUDGMENT PER S. V. GANGAPURWALA, J. The Maharashtra State Warehousing Corporation invited online tenders for allotment of work for transportation of food grains from Jalgaon Railway Station to various godowns of the respondent No. 1 in M.I.D.C. The tenders of all these petitioners are rejected. The tenders of writ petitioners in Writ Petition No. 3393 of 2016, Writ Petition No. 3578 of 2016 and Writ Petition No. 3787 of 2016 are rejected on the ground that, they have formed cartel and the tender of writ petitioner in Writ Petition No. 4349 of 2016 is rejected on the ground that, the petitioner has produced incorrect and false certificate about experience. The work order pursuant to the tender is allotted to the respondent No. 4. The petitioners in all these writ petitions have challenged the rejection of their tender, the issuance of show cause notice to petitioners as to why their E.M.D. should not be forfeited and also have challenged the work order issued in favour of the respondent No. 4. As all these petitions are assailing the same work order issued in favour of the ....
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....senior advocate relies on the judgment of the Apex Court in the case of Union of India and others Vs. Hindustan Development Corporation and others reported in (1993) 3 SCC 499. (iii) The decision making process was malafide and arbitrary and is conducted in a manner to favour the respondent No. 4. The tender conditions No. 2 and 3 along with its note was sufficient to disqualify Vikram Transport Agency as it failed to give Chartered Accountant's certificate of the financial turn over of three years, which is mandatory. In spite of mandatory condition being not complied, the tender of Vikram Transport Agency was accepted so that three tenders remained in contest and the respondent No. 4 can be given work order. The same State Warehousing Corporation in a tender process of Latur in February, 2006 had rejected the tender of M/s Sun Roadways on the very said ground. The hearing on the objection of the respondent No. 4 is taken on 05.02.2016, whereas hearing in respect of five tenderers whom the respondent/corporation wanted to reject were taken on 02.02.2016. The decision making process for allotment of tender was arbitrary and the same deserves to be s....
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....mployee in favour of the M/s Joshi Freight Carrier. 03. Mr. P. M. Shah, the learned senior advocate appearing for the petitioner in Writ Petition No. 3578 of 2016 submits as under : A. The rejection of tender of the petitioner on the ground of formation of cartel is per-se erroneous. The S. K. Translines Pvt. Ltd. owns P.C.O. from, number of years. The said P.C.O provides services to the customers giving I.T. solutions and charging for the same, which are not gratuitous. The tender was filled in from the said public P.C.O., which was uploaded using a pen drive after following complete secrecy. The fact that, the petitioner filled in the tender from the same P.C.O. owned by S. K. Translines Pvt. Ltd. cannot be a ground to form a suspicion of forming a cartel. Purchasing stamp and sending the same representative to purchase stamp from the same vendor also cannot be a sufficient ground to infer formation of cartel. By mistake one truck number was mentioned wrongly, which was owned by S. K. Translines Pvt. Ltd. Only on this basis the inference was drawn of petitioner forming a cartel and rejecting the tender of petitioner. The same is absolutely erroneous and does not ....
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....4) Mh. L. J. 370. E. It is further submitted that, show cause notice is issued to the petitioner to reply as to why E.M.D. should not be cancelled for formation of cartel. In case the petitioner satisfies the respondent/corporation pursuant to the said show cause notice that there is no formation of cartel, still the petitioner already stands disqualified from participating in the tender on the ground of cartel. The said decision rejecting the tender of the petitioner on the ground of cartel is too premature. F. The learned senior advocate further contends that, the respondent No. 4 could not have been awarded the tender. The partnership firm in the name of the respondent No. 4 was constituted in the year 2006 vide partnership deed dated 08.08.2006. The said partnership deed did not contain a clause to the contrary as is required U/Sec. 42(c) of the Partnership Act i. e. it does not contain a clause that on the death of one of the partners, the partnership firm would continue. One of the partner having died in the year 2013, the firm stood dissolved by operation of Sec. 42(c) of the Partnership Act with effect from 06.08.2013 on account of death of partn....
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....kram Transport, though it has not submitted the Chartered Accountant's certificate thereby certifying turnover for last three financial years, yet his tender was accepted. As such, the decision making process of the respondent/corporation itself is arbitrary. 04. Mr. Hon, the learned senior advocate for the writ petitioner in Writ Petition No. 3787 of 2016 submits that, the rejection of the tender of the petitioner on the ground of formation of cartel is absolutely erroneous and does not stand to any reason. The petitioner is not concerned with other two petitioners in whatsoever manner. The said objection is only with a view to deprive the petitioner of the participation in the tender process. The petitioner has availed the services of P.C.O. provided by M/s S. K. Transline Pvt. Ltd. and many individuals have taken benefit of the services provided by the said P.C.O. The same cannot be a ground to conclude that the petitioner has formed a cartel. Even the allegations that, the bond paper has been purchased from the same vendor is incorrect. The petitioner had purchased the bond paper at Dondaicha and has also filled in at Dondaicha. The petitioner could not have been di....
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....mpany for transporting cement both, on trade and non-trade works. For the works undertaken on trade work basis, the payments were released by the company, whereas for the non-trade works or the works on ex-factory basis, the payments were released directly by the customers. The certificate issued by the Manager Logistic dated 23.11.2015 filed along with the bid document shows eligibility in terms of experience. The certificate including the payments made by Orient Cement Company to the tune of Rs. 04 crores as well as various dealers/consumers (Ex-work basis) to the tune of Rs. 08 crores. 07. Considering the illegalities committed by respondents, the petitioner approached the Chief Operations Officer of the Orient Cement to provide true and correct statement of facts with regard to the payments received by the petitioner. The Chief Operations Officer gave letter dated 22.02.2016 that the company had made payment of Rs. 04 crores, whereas, rest of the payment was received by the petitioner on Ex-works basis for 75532 tonnes of cement. Despite such a clear statement the corporation chose to ignore the same. As a matter of fact, it is nowhere challenged that the peti....
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.... contract given to the respondent No. 4. 10. According to the learned counsel, the respondent No. 4 also did not comply the tender condition stipulated in Clause 12(viii) and 12(ix) which are incorporated from Government Resolution dated 26.11.2012. The respondent No. 4 has mentioned the list of trucks to be used for transportation. The same vehicles are mentioned in another bid submitted for tender contract for distribution of free books to the under privileged by the Director of Education. The learned counsel further submits that, the respondent No. 4 has formed the cartel with the petitioners of Writ Petition No. 3393 of 2016 and Writ Petition No. 3578 of 2016, so also Writ Petition No. 3787 of 2016. The petitioners of other three writ petitions and the respondent No. 4 had formed a firm known as Vayudut Partnership Firm. The said partnership firm is nodal entity of the Bhutada group, Mantri Group and Holani group. Vayudut Partnership firm consists of three partners, namely, Madusudhan Purushottam Bhutada, Sunil Ramnarayan Mantri and Ujjwal Kothari, as is evident from the partnership deed dated 16.01.2014 of the Vayudut Partnership Firm....
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....tood dissolved and the tender is filled in on behalf of the respondent No. 4 by the dissolved firm. As per Clause 2(B) of the tender document, even if there is slightest of change in the partnership deed and there is any reconstitution of the partnership firm, then prior permission of warehousing corporation is essential in order to make bid. Despite death of partner, no permission is sought, in that regard from the corporation. The same is in absolute breach of mandate of the tender condition. The respondent No. 4 is guilty of filing false affidavit before the High Court in Writ Petition No. 12057 of 2015. The same was filed by Mr. Ganesh Ramchandra Mundada, who was not even partner of the firm. Filing false affidavit in judicial proceedings in the Court of law ought to be treated as contempt and perjury. The learned counsel relies on the judgment of the Apex Court in the case of Dhananjay Sharma Vs. State of Haryana and others reported in (1995) 3 SCC 757. Because of the illegalities committed by the Bhutada group, Mantri group, Holani group and formation of cartel loss of nearly Rs. 100 crore is caused to the Government Exchequer. The same is due to collusion....
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....heir tenders from the same I. P. address in immediate succession of each other, which clearly raises a sufficient suspicion between the Kothari family and the petitioner of Writ Petition No. 3787 of 2016 that, there is an undisclosed agreement between them. The learned senior advocate places reliance on the judgment of the Apex Court in the case of Techno Precision Engineers Pvt. Ltd. and another Vs. M/s Western Coalfields Limited and another referred to supra. It is further submitted that, all the tenders were filled in same handwriting. The said averment was made in affidavit dated 02nd April, 2016 of the respondent/corporation. The same is not denied by petitioners in all these three writ petitions. The petitioner of Writ Petition No. 3393 of 2016 has come with a case that he is carrying business of inter-net service provider to the public at large. However, he has not produced requisite documents to show that the said petitioner is carrying the business of inter-net service provider to the public at large. The stamp papers which were submitted along with the tender were purchased in the name of same person in respect of three petitioners. The learned senior advocate s....
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....2.02.2016 to the petitioner in Writ Petition No. 4349 of 2016, once again confirms the contents of letters dated 21.01.2016 and 28.01.2016. The said letters also state that the petitioner in the 04th petition has rendered services for an amount of Rs. 04 crores approximately. The said letter also records that, the Orient Cement cannot comment on the payment made by the customers directly to the petitioner of the 4th petition. The petitioner of Writ Petition No. 4349 of 2016 knowingly obtained fabricated documents from the unauthorized person of Orient Cement. The said petitioner was admittedly aware that the contents of letter dated 23rd November, 2015 are incorrect and false. The learned senior counsel further submits that, the condition No. 3 of the tender document is for verifying financial condition of the tenderer, whereas the condition No. 11 is an experience certificate, which is required to be issued by the third party certifying the experience of the tenderer in terms of clause 14. Therefore, the documents submitted under condition No. 3 cannot fulfill the requirement of document required under condition No. 11. The documents annexed to t....
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....ange died on 16.08.2013, the partnership continued its business and a partnership deed was again executed on 16.01.2016. Clause 3 of the partnership deed dated 16th January, 2016 specifically refers that, continuation of work contract given in favour of the respondent No. 4/partnership firm to continue as it is. As such, it is clear that, an agreement existed amongst the partners contrary to Sec. 42(c) of the Indian Partnership Act. Vide partnership deed dated 16.01.2016, son of Ashok Dhulange was taken as a partner with 9% share. The partnership deed distributes the responsibility of carrying out the business of the firm, which remains with the family of Purushottam Bhutada. On 01st February, 2016 notice/application U/Sec. 63 of the Indian Partnership Act for recording of changes in M/s Raj Transport, Latur is made to the Assistant Registrar of Firms at Aurangabad along with a fees of Rs. 1,200/-. The Registrar of Firms accepted the penalty and recorded the changes in the record of Registrar of Firms as per deed dated 16.01.2016. In the records of Registrar of Firms, Raj Transport, Latur registered under the Registration No. ABD/1371 still continues with the changes....
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....nger cannot contend that the respondent No. 4 stood dissolved on 06th August, 2013. The learned senior advocate further submits that, false averments are made in the writ petitions, as such writ petitions deserve to be dismissed at the threshold. The learned counsel relies on the judgments of the Apex Court in the case of S. P. Chengalvarya Naidu Vs. Jagannath reported in (1994) 1 SCC 1 and in the case of Krishna Kumar @ Siyaram Vs. State of U. P. reported in (2010) 2 SCC 114. 22. We have considered submissions canvassed by learned counsel for respective parties. There cannot be any dispute with the proposition that in the matters of tender, the powers of judicial review are to be sparingly exercised. In such case, the power of judicial review is not to be exercised like an appellate authority in an appeal from the decision. The Apex Court in the case of Tata Cellular Vs. Union of India referred to supra has laid down the guidelines with regard to the exercise of powers of judicial review in contractual matters, which can be culled out as under : "(1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a co....
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....d its outcome or the report is not placed on record. 25. The following dates and events are not disputed. Sr. No. Date Events 1 12/03/15 The respondent No. 1 invited tenders online for allotment of tender work for transportation of food grains from Jalgaon Railway Station to various godowns of the respondent No. 1 in M.I.D.C. 2 28/12/15 The last date for filing online tender. 3 01/01/16 S. K. Transline objected to the tender filed by M/s Joshi Freight Carriers. S. K. Transline Pvt. Ltd. also filed objections to the tender of Jalgaon Golden Transport Pvt. Ltd. 4 01/02/16 S. P. Jaysinghani filed objections challenging the tender of Jalgaon Golden Transport Pvt. Ltd. 5 01/11/16 Joshi Freight Carriers filed objection to the tenders of S. K. Transline Pvt. Ltd., Skyrail Logistic Pvt. Ltd and S. P. Jaysinghani. 6 01/11/16 Date of opening of technical bid. 7 01/11/16 Technical bids opened by the respondent No. 1 at its head office at Pune. The respondent No. 1 received in all ten bids i.e. (1) S. K. Translines, (2) M/s Joshi Freight Carriers, (3) Skyrail Logistics Pvt. Ltd., (4) Jalgaon Golden Transport Ltd., (5) V....
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....ondent No. 1 and why its EMD of Rs. 50 Lacs should not be forfeited 14 02/09/16 Work order was issued in favour of Raj Transport. The work under the said order was to commence on 15th February, 2016. 15 02/09/16 Joshi Freight Carriers addressed a letter to the Hon'ble Chief Minister alleging corruption and making a grievance that it's bid has been wrongly rejected. 16 02/09/16 The Hon'ble Chief Minister issued handwritten directions to the Secretary asking him to look into the matter personally and also stayed the tender process. 17 02/11/16 The respondent No. 1 issued a letter to Raj Transport informing that until further orders and pending enquiry, the work order issued in favour of Raj Transport is stayed. 18 March 2016 - Writ Petition No. 3192 of 2016 filed by the respondent No. 4 before the Principal Seat at Bombay assailing the stay granted by the Hon'ble Chief Minister. 19 23/03/16 The Writ Petition No. 3192 of 2016 is withdrawn by the respondent No. 4. 20 23/03/16 Work order issued to the respondent No. 4 by the respondent No. 1. 26. Although, one of the grounds agitated by the petitioners is,....
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....ons of the Apex Court, subsequent grounds taken up in the affidavit before the Court may not be considered for the first time in writ petition. 28. The tenders of petitioners in Writ Petition No. 3393 of 2016, Writ Petition No. 3578 of 2016 and Writ Petition No. 3887 of 2016 were rejected on the ground of cartelling and show cause notice is issued to them informing them that prima facie evidence indicates that above named parties had formed a cartel and asking them to show cause as to why their EMDs of Rs. 50 Lacs each ought not be forfeited. The said impression of the respondent/corporation is formed by following facts. (1) The petitioners in these three writ petitions have uploaded their tenders from the same I. P. address in immediate succession to each other. (2) Kothari family has controlling authority over petitioners in Writ Petition No. 3393 of 2016 and Writ Petition No. 3578 of 2016. (3) The stamp papers are purchased in the name of same person. 29. The term cartel is defined under the Competition Act 2002. The said definition reads as under : THE COMPETITION ACT, 2002 1. ........... 2. .......
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....mselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular industry or commodity. In other words, it amounts to an unfair trade practice, which is not in public interest. The intention to acquire monopoly power can be spelt out from formation of such cartel by some of the producers. However, the determination, whether such agreement unreasonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same. It was further observed in the said judgment that, whether in a given case there was formation of cartel by some of the manufacturers, which amounts to unfair trade practice depends upon the available evidence and the surrounding circumstances. In the said case, the tender committee formed an opinion that, three big manufacturers formed a cartel on the ground that, the price initially quoted by them was identical and was only a cartel price. The Apex Court held that, though the attitude of these three manufacturers gave rise to a suspicion that they formed cartel, but there is not enough mate....
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.... or understanding or action in concert,-- (i) whether or not, such arrangement, understanding or action is formal or in writing; or (ii) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings; 36. The word 'agreement' is couched in a language in the said definition having a wide connotation. The phraseology in the definition of "agreement" includes arrangement, understanding or action in concert and whether such arrangement, understanding or action is formal or in writing. The definition of the cartel and anti-competitive agreement is also wide. As such even from the circumstances on record, it can be viewed and concluded as to whether understanding is reached between the parties regarding formation of a cartel. 37. It is a matter of fact that, the commercial/financial bids of these petitioners were never opened and they were disqualified at the time of opening of technical bid. The contention of the petitioners is that, these petitioners could not have been disqualified on the ground of formation of cartel without opening financial bid, as without opening financial bid, it would not come to the kn....
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....r process on the ground of cartel a long drawn enquiry and investigation would not be contemplated as it is not a judicial or quasi judicial process, but an administrative function. The authority is required to be satisfied subjectively based on objective assessment of all the circumstances and facts before it. Merely a singular instance of a party filling in the tender from the same I. P. address as the other tenders would be too slender a consideration to come to a conclusion of the said person forming a cartel. It is a fact that the petitioner in the said Writ Petition No. 3787 of 2016 is resident of Dondiacha and has filled in tender from Jalgaon I. P. address. That fact alone would be stretching too far for coming to the conclusion of the said petitioner forming a cartel and thus disqualifying him. 39. In view of aforesaid discussion, as far as tender of the petitioner in Writ Petition No. 3787 of 2016 i. e. S. P. Jaisingani is concerned, it would not be acceptable that, there was reasonable suspicion in forming an opinion that, the said petitioner had entered into a cartel with other two petitioners. However, in the writ petition by way of affidavit, the responde....
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....n action involving further consequences is to be taken, such as forfeiting of E.M.D. which is the consequence of disqualifying the said person from entering into any contract with the corporation for further years, a deeper probe would be necessary. 40. As far as the petitioner in Writ Petition No. 4349 of 2016 is concerned, his tender is rejected on the ground of submission of a false experience certificate. It is the contention of the petitioner that he has submitted 900 pages documents showing the details of the quantum of transportation done and the same have not been considered. There was a controversy with regard to the certificate issued by the Orient Cement Company. The contention of the petitioner is that, the copies of the documents relied on by the corporation to negate the experience certificate issued by the Manager (Logistic) were not given to the petitioner. The said petitioner had approached the Hon'ble Chief Minister, wherein stay was granted to the further proceedings and enquiry was directed to be conducted. Thus in said back-drop we are considering the present case, however, as observed above, pursuant to the stay granted and the enquiry directed, th....
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.... however, report was already submitted on 12.02.2016. The documents submitted by the petitioner are not before this Court. As such, it would be appropriate for the respondent/corporation to reconsider the same. 42. All the petitioners have assailed the work order given to the respondent No. 4 on the ground that, the respondent No. 4 partnership firm which was constituted in the year 2006 stood dissolved on the death of one of its partner on 16.08.2013 and there is no clause in the partnership deed dated 08.08.2006, that, in case of death of one of the partner, the firm would continue and would not stand dissolved. Sec. 42(c) of the Indian Partnership Act lays down that subject to contract between the partners a firm is dissolved by the death of a partner. It is a fact that, in the partnership deed dated 08.08.2006, the clause does not exist with regard to continuation of the partnership business, on death of one of the partners. The judgments relied on by the respective parties stating that, unless there is a contract to the contrary, the firm stands dissolved on the death of partner, does not require any debate. The same is settled proposition of law. The petitioners ....