Case Law Details
Parik and Company Vs State of Bihar (Patna High Court)
Introduction: The Patna High Court recently dismissed a petition filed by Parik and Company, a Chartered Accountant (CA) firm, challenging their non-empanelment by the State of Bihar. The firm argued that their exclusion was unjust, primarily due to the stipulations outlined in a Notice Inviting Tender (NIT). The court’s decision hinged on the firm’s non-compliance with specific conditions regarding the continuous presence of a branch office in Bihar.
Background and Grounds of the Petition: Parik and Company filed the petition, feeling aggrieved by their non-empanelment as per the NIT issued by the Rural Development Department of Bihar. The NIT, initially released in January 2023, invited applications from eligible CA firms, with the final submission date extended to May 8, 2023. A key requirement was for firms headquartered outside Bihar to maintain a branch office within the state continuously for at least five years, a condition modified slightly by a corrigendum issued on April 27, 2023.
Contentions of the Petitioner: The petitioner argued that the corrigendum, dated after the initial submission deadline, should not retroactively apply to their bid. They contended that, as of April 24, 2023, there was no specific requirement for a five-year certificate, and thus their non-empanelment was unjust. The interim order from another division bench had initially directed the authorities to reconsider the firm’s application based on these arguments.
Respondent’s Defense and Court’s Observations: The respondents maintained that the corrigendum did not alter the critical condition which the petitioner failed to meet: proof of the branch office’s continuous existence in Bihar for five years. The court noted that the original NIT included this requirement and that the corrigendum merely provided clarity, not additional burdens. The petitioner failed to submit the necessary Firm Constitution Certificate (FCC) proving their branch office’s five-year tenure, leading to their disqualification.
Key Points from the Judgment: In its judgment, the court highlighted several key points. Firstly, it underscored the significance of the pre-evaluation criteria set forth in the NIT, specifically the requirement for a branch office in Bihar for a minimum of five years. This criterion aimed at ensuring the firm’s established presence and reliability within the state. Secondly, the court noted the impact of the April 2023 corrigendum, which simplified certain requirements but did not negate the essential five-year presence condition that the petitioner either misunderstood or failed to comply with. Thirdly, despite the petitioner’s submission of evidence indicating their presence in Bihar for only one year, well short of the stipulated duration, the court found no merit in their arguments asserting unfairness or retroactive application of conditions.
Conclusion: The Patna High Court’s dismissal of Parik and Company’s petition underscores the importance of strict adherence to tender conditions for CA firms. The judgment highlights that compliance with all stipulated requirements, including continuous operational presence and proper documentation, is crucial for empanelment in government contracts. Firms must meticulously review and fulfill all tender criteria to avoid disqualification.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The petitioner is aggrieved with his non empanellment, as per a Notice Inviting Tender (for brevity ‘NIT’). The learned counsel for the petitioner also specifically draws our attention to the interim order passed on 08.11.2023 by another Division Bench. As per the interim order, the learned Judges noted that Annexure- 1 invited applications from eligible Chartered Accountant Firms and that bids were to be submitted with necessary enclosures to reach the Secretary, Rural Development Department, Government of Bihar before 3:00 p.m. on 24.04.2023, whereas Corrigendum-II is dated 27.04.2023. Corrigendum-II is not applicable to the case in hand for reason that as on 24.04.2023 there was no prescription of 5 year certificate, is the contention raised. This was the specific ground on which the Division Bench directed the concerned authority to reconsider the petitioner’s name for empanellement.
2. The learned counsel for the respondent, however, points out that the Corrigendum did not modify the condition which the petitioner failed to satisfy, which also led to disqualification.
3. The Notice Inviting Tender is produced as Annexure-1, which was in January 2023. The last date of submission of tenders was on 08.04.2023, which was extended to 08.05.2023. The Corrigendum was issued on 27.04.2023. The specific ground on which the petitioner’s firm has been disqualified is the fact that they have not proved that they had a Branch Office within the State of Bihar for the last 5 years.
4. We have looked at the NIT which indicates; in the pre-evaluation criteria of empanelment of Chartered Accountant Firms at clause (6)(b) relating to Head Office of CA Firms not situated in Bihar. It is specified that if CA Firms applying under the tender has its Head Office out of the State of Bihar, but has a Branch Office in Bihar, such Branch Office must be situated continuously in Bihar since more than 5 years (as per ICAI Records) and such branch must be registered under GST laws in Bihar, for a minimum 3 years i.e. since last 3 financial years on the date of publishing of RFP and TOR and have bank accounts of the firm in Bihar. Such branch must also submit bank statements of 12 months of the bank account of the firm in Bihar, was the stipulation.
5. The Corrigendum changed the above stipulation with the following modifications, which is extracted hereinbelow: –
If CA Firms has its Head Office out of the State of Bihar but have a Branch Office in Bihar since last 5 years continuously without break
Such Branch Office muse be situated continuously in Bihar since more than 5 years (As per ICAI Records: Firm Constitution Certificates of each calendar years ) and have Bank Accounts of the firm in Bihar. Such branch must submit sufficient proof of Bank Accounts / Banker certificate or Bank Statements showing existence of Bank Accounts in Bihar since last 12 months as on 01.01.2023.
6. In fact, the modification was beneficial to the tenderers since it did not specify for registration under GST laws in Bihar for minimum 3 years. It only required that the CA Firms having Head Office out of the State of Bihar should have a Branch Office in Bihar for the last 5 years continuously without break, as per ICAI Records and that it should submit sufficient proof of bank accounts in existence in Bihar, since the last 12 months as on 01.01.2023. The 5 year period was stipulated in the original NIT as also in the amended Corrigendum.
7. The petitioner had submitted his tender on the last date, i.e. 08.05.2023. As we noticed even the original NIT contained the stipulation that the branch office should have been working for the last 5 years, so the date of submission of tender is not relevant.
8. The learned counsel for the petitioner refers to Annexure-P2 to establish that the petitioner was working for 5 years within the State of Bihar. Annexure-P2 indicates the name of the firm and also its Head Office address which is at The year of establishment is said to be on 13.03.1961 and the same is continuing as a partnership firm. The constitution of the firm under GST IAN is said to be 01.01.2019 but specifically with respect to the Head Office. The address of the Branch Office at Patna is also shown in the order but, however, there is nothing to indicate that as per ICAI Records the Branch Office was situated continuously in Bihar since more than 5 years.
9. The learned counsel for the respondent also points out from the counter affidavit that the disqualification is made on 06.06.2023. Annexure-D produced along with Supplementary Counter Affidavit dated 29.11.2023 indicates the specific reason for disqualification of the petitioner who figures at Serial No.94. The reason stated is “Proposal has been not evaluated due to last five year FCC has been not attached.” The petitioner obviously had produced a Firm Constitution Certificate evidencing their presence in Bihar for only the past one year. We find absolutely no reason to entertain the writ petition and dismiss the same.
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