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Whether the experience gained/acquired by a partnership firm, could be construed as experience of a partner, in his individual/independent capacity; or could he claim the work experience of the firm even in proportion to the share he held ?
Whether the experience gained/acquired by a partnership firm, could be construed as experience of a partner, in his individual/independent capacity; or could he claim the work experience of the firm even in proportion to the share he held ?
Tender - Whether the experience gained/acquired by a partnership firm, could be construed as experience of a partner, in his individual/independent capacity; or could he claim the work experience of the firm even in proportion to the share he held ? – Plea that as per the tender conditions, the requisite experience, in terms of the qualifying criteria, was required to be possessed by the appropriate class of approved contractors and not by or in the name of the firm, and for the proprietor of the petitioner concern possessed the requisite experience, he was eligible to compete in the tender process - Though, the so called experience of a firm, in reality, is nothing but the experience of the partners who compose it, such experience of a firm is not in its entirety attributable to each individual partner, but attributable only to the collective effort of all partners concerned - The benefit of the experience of a firm understood as an inextricably synthesised synergism of the individual efforts of all partners cannot therefore, be extended to a single partner in his individual capacity merely because he might have been actively involved in producing the jointly created final output - Therefore, given the nature of experience, it could have been identifiable, and could be quantified (quantitatively and/or qualitatively) only if it was claimed by the firm itself or its partners jointly.
2021 PLRonline 011 (2021-1) PLR 825 M/S. A.G. CONSTRUCTION CO. v. FOOD CORPORATION OF INDIA
Facts, the petitioner A.G., is a proprietorship concern of AKG - Bid submitted by the petitioner, was rejected being non-responsive - Mandamus prayed for, commanding the respondent-authorities to reckon the experience the sole proprietor, AKG (of the petitioner concern A.G.) had acquired, while being a partner in B.G. (partnership firm)
The experience gained by the erstwhile firm was acquired owing to combined, collective and integrated labour and resources of its partners, and hence, was so inseparably interwoven that it was neither divisible nor could it be apportioned amongst its partners. Unlike a joint holding where a co-sharer has a right to seek partition of his defined share.
Argument that because the sole proprietor of the petitioner concern happened to be a partner and held 50% share in M/s B.G. (erstwhile partnership firm), he was entitled to claim proportionate work experience, equal to half the value of the project, hold that it lacks conviction and cannot be countenanced either.
Ex facie, the experience gained by M/s B.G. (erstwhile partnership firm), upon execution of the project/work, was acquired by the combined, collective and integrated labour of its partners, who, apart from their individual investments, had pooled in their respective resources, skill, knowledge, experience, ideas and information. And, were, thus, supplemental to each other. Quite naturally, the experience certificate certifies the performance, capacity and capabilities of the firm (M/s B.G.), that had executed the project and not of any partner individually. It is true that from the same subject of experience, more than one can gain experience, however, that must not by itself evince the conclusion that each person gaining ‘experience’ (limited to their contribution) in the output jointly created by them, is entitled to the benefit of the output in its entirety. Though, the so called experience of a firm, in reality, is nothing but the experience of the partners who compose it, such experience of a firm is not in its entirety attributable to each individual partner, but attributable only to the collective effort of all partners concerned. The benefit of the experience of a firm understood as an inextricably synthesised synergism of the individual efforts of all partners cannot therefore, be extended to a single partner in his individual capacity merely because he might have been actively involved in producing the jointly created final output. Therefore, given the nature of experience, it could have been identifiable, and could be quantified (quantitatively and/or qualitatively) only if it was claimed by the firm itself or its partners jointly. But, we must pause for a moment to point out that we are not unmindful of a situation, which, perhaps, could be viewed differently subject, of course, to its circumstantial landscape and the specific terms/conditions of the tender enquiry, where a partner is able to conclusively show by producing tangible material that he was the one tasked in his individual/independent capacity with looking after the project he claims experience for and that in doing so, he acquired/gained that experience which is germane to the tender’s requirement.
The petitioner herein having applied independently without any partners, consortium or joint venture, cannot rely upon the technical qualifications of a third party (erstwhile firm) to claim eligibility. As long as a person or entity cannot in law, validly claim experience that exists in the name of a third-party, that third-party remains a stranger to the subject tender.
M/s New Horizons Limited v. Union of India, 1995 (1) SCC 478 , distinguished. [Para 24, 25], P.K. Delicacies Pvt. Ltd. v. Union of India, 122 (2005) DLT 685, distinguished. [Para 26], Samruddha Buildcon Pvt. Ltd. v. Indore Development Authority, (CWP No. 4448 of 2015, MP) , distinguished. [Para 27], Comptroller and Auditor General v. Kamlesh Vadilal Mehta 2003(2) SCC 349, distinguished. . [Para 28]
2021 PLRonline 011 (2021-1) PLR 825 M/S. A.G. CONSTRUCTION CO. v. FOOD CORPORATION OF INDIA
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.
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.
It is possible to visualise a 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. That does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. Similarly, a company incorporated under the Companies Act having past experience may undergo reorganisation 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 reorganised company. It could not be the purport of therequirement about experience that the experience of the company which has merged into the reorganised 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 reorganised company which does not have experience in its name. Conversely there may be a split in a company and persons looking after a particular field of the business of the company form a new company after leaving it. The new company, though having persons with experience in the field, has no experience in its name while the original company having experience in its name lacks persons with experience. The requirement regarding experience does not mean that the offer of the original company must be considered because it has experience in its name though it does not have experienced persons with it and ignore the offer of the new company because it does not have experience in its name though it has persons having experience in the field.
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Moreover in the tender it was specifically stated that IIPL will be providing its unique integrated directory management system along with the expertise of its managers and that the managers will be actively involved in the project both out of Singapore and resident in India.
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28. Once it is held that NHL is a joint venture, as claimed by it in the tender, 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.
M/s New Horizons Limited v. Union of India, 1995 (1) SCC 478
Samruddha Buildcon Pvt. Ltd. v. Indore Development Authority and others, (CWP No. 4448 of 2015)
. Indore Development Authority had invited tenders for construction of swimming pool complex of International standard. The petitioner-Samruddha Buildcon Pvt. Ltd. (private limited company) was aggrieved, for its technical bid was rejected by the authority. Shri Mahesh Hassanandani, who was one of the directors of the company, also happened to be a partner in M/s Jethanand Arjundas & Sons. However, owing to a family settlement, he retired from the partnership of the firm and formed the petitioner Co. Post split from the partnership firm, he applied for Class-A Contractor Registration Certificate, in terms of Government circular dated 29.03.2011, from the Government of M.P. Significantly, as per clause 3 of the said circular, the petitioner was entitled to use the financial and experience credentials equal to his proportionate share (33.33%) in the firm. Accordingly, the petitioner company was granted Class-A certificate w.e.f. 06.02.2013. The petitioner, along with its bid, submitted the experience certificate issued by the principal contractor in the year 2013, as per which the partnership firm M/s Jethan and Arjundas & sons had executed the civil construction work valuing Rs.45.40 crores. Therefore, Mahesh Hassanandani, who held 33.33% share in the firm, claimed 1/3rd of the said work experience, which would come to Rs.15.13 crores. Whereas, the qualifying work experience had to be equal to the value of tender i.e. Rs.11.87 crores. Vide declaration appended with the bid, it was notified that pursuant to the order of the Government dated 29.03.2011, the petitioner was entitled to use financial and experience credentials proportionate to his share in the erstwhile firm. Further, the case of the petitioner was that in the response submitted by the department, it was nowhere stated that circular dated 29.03.2011, issued by the Government, was not being followed. And, in terms of clause 4 of NIT, the Committee of IDA was competent to take a decision to accept or reject the technical bid, whereas a novel method was adopted by the authority by referring the matter to a Chartered Accountant for financial appraisal report for PQBD and on the basis of the said report, the technical bid of the petitioner was rejected. In these circumstances, it was concluded that decision making process by which the petitioner was excluded was not reasonable and rational under Article 14 of the Constitution of India.
P.K. Delicacies Pvt. Ltd. v. Union of India, 122 (2005) DLT 685
Indian Railway Catering and Tourism Corporation had invited tenders for providing catering services in certain trains that were being plied by the Corporation. The technical bid of the petitioner, i.e. P.K. Delicacies Private Limited, was rejected, for, it failed to meet the eligibility criteria of at least 5 years past experience in catering/hospitality industries. The tenders by way of publication were invited in the months of March and April 2005. Whereas, the company itself was incorporated on 07.04.2005, but with the object and purpose to take over the business of a partnership firm M/s Pee Kay Associates along with its assets and liabilities. Concededly, both the partners of the firm, namely Mr. Prem Taneja and Mr. Ashu Taneja, were the only directors of the petitioner-company. And, in these circumstances, the past experience of 20 years of M/s Pee Kay Associates was being claimed as experience of the petitioner company. Therefore, in reference to the decision in New Horizons Limited (supra), the High Court held that requirement regarding past experience had to be considered from the standpoint of the prudent businessman and commercial point of view. Thus, the corporate veil was required to be lifted to find out the persons who were in actual control and behind the company.
There was a complete takeover of the firm (M/S Pee Kay Associates) along with its assets and liabilities; no portion or remnants of the experiential contribution that created the experience of the erstwhile firm was lost or left behind on its transition from being a firm to becoming a company insofar as the conglomerate of individuals behind the veil remained the same.
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