A.P. Joseph & Co. v. State of Kerala & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR** ## **THURSDAY, THE 21ST JANUARY 2010 / 1ST MAGHA 1931** ## **WP(C).No. 1712 of 2010(L)** **------------------------------------** ## **PETITIONER(S):** **------------------------** **A.P.JOSEPH & CO., REPRESENTED BY ITS MANAGING PARTNER, JOEMON JOSEPH, EDATHALA HOUSE, EDATHALA BUILDINGS, NEELEESWARAM, KALADY, ERNAKULAM DISTRICT.** **BY ADVS.MR.MURALI PURUSHOTHAMAN MR.DEEPU LAL MOHAN** ## **RESPONDENT(S):** **------------------------** **1. STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.** **2. THE CHIEF ENGINEER, PUBLIC WORKS DEPARTMENT (ROADS & BRIDGES), THIRUVANANTHAPURAM.** **3. THE SUPERINTENDING ENGINEER, PUBLIC WORKS DEPARTMENT (ROADS & BRIDGES) CENTRAL CIRCLE, ALUVA.** **4. KERALA STATE CONSTRUCTION CORPORATION LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, ADMINISTRATIVE OFFICE, III-FLOOR, CARMEL CENTRE, BANERJI ROAD, KOCHI-682 018.** - **R1 TO R3 BY GOVT. PLEADER MR.P.NARAYANAN 4 BY ADV. MR.M.V.THAMBAN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **tss** ## **T.R. Ramachandran Nair, J.** **- - - - - - - - - - - - - - - - - - - - - - - -** ## **W.P.(C) No. 1712 of 2010-L** **- - - - -- - - - - - - - - - - - - - - - - - - - -** ## **Dated this the 21st day of January, 2010.** ## **JUDGMENT** The petitioner is aggrieved by the non acceptance of the tender submitted by the petitioner pursuant to the tender notification Ext.P2 issued by the third respondent. 2. The matter is in a short compass. Ext.P2 is the tender notification and the work is in relation to Tender serial No.19, viz. PQ 47/SECCA/200910, “Budget work 2009-10 improvements to Athirappally - Malakkappara Road Km.32/500 to 60/000. The estimated probable amount of contract of the subject work is Rs.30 crores. The time of completion of the work is stipulated as 18 months. 3. According to the petitioner, the firm is an experienced one having successfully completed several similar works. Accordingly, the petitioner submitted the tender for the work. The third respondent informed to them that the price bid would be opened on 16.1.2010. Five contractors participated in the pre qualification proceedings including the petitioner and the 4[th] respondent company. One among the five was found to be unqualified. Thereafter, the price bids were opened on 16.1.2010 at 11 a.m. wpc 1712 /2010 2 The petitioner quoted the estimate rate, whereas the 4[th] respondent quoted 4.93% above the estimate rate. Thus, the petitioner's tender is the lowest one. Invoking the clause providing for 10% price preference over the lowest quoted rate, it was announced that the 4[th] respondent is awarded the work. This is under challenge in this writ petition. 4. Mainly it is contended that the tender notification did not indicate any preference to the 4[th] respondent over the lowest quoted rate. The petitioner has produced Ext.P6 Government Order whereby the 4[th] respondent is granted a price preference of 10% over the lowest quoted rate. 5. It is the contention of the petitioner that in the absence of any such condition provided in the tender notification with regard to the applicability of Ext.P6, the same cannot be enforced. 6. Heard learned counsel for the petitioner Shri Murali Purushothaman, Shri M.V. Thamban, learned counsel appearing for the 4[th] respondent and Shri P. Naryanan, learned Govt. Pleader for respondents 1 to 3. 7. It is explained by the learned Govt. Pleader and learned Standing Counsel appearing for the 4[th] respondent that it is provided in Ext.P2 itself that all conditions prevailing in the department regarding tenders for prequalification are applicable to this tender also. It is therefore submitted that wpc 1712 /2010 3 the argument raised by the learned counsel for the petitioner cannot be accepted. 8. Learned counsel for the petitioner relied upon the decisions of the Apex Court in **Harminder Singh Arora v. Union of India and others** {(1986) 3 SCC 247) and **Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd. and others** {(1997) 1 SCC 53} in support of his plea. It is contended that in the absence of any particular clause providing for price preference in the tender Ext.P2, the same could not have been applied. In **Harminder Singh Arora's case** (supra), a similar issue was considered. It was held in para 21 that “if the terms and conditions of the tender have been incorporated in the tender notice itself and that did not indicate giving of 10% price preference to Government undertaking, the authority concerned acted arbitrarily in allowing such preference to respondent No.4.” Relying upon these findings, it was contended that the action taken herein is arbitrary. In the later decision in **Dutta Associates Pvt. Ltd.'s case** (supra), it was held in para 7 as follows: “Whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in the tender notice. The consideration of the tenders received and the procedure to be followed in the matter of acceptance of a tender should be wpc 1712 /2010 4 transparent, fair and open. While a bona fide error or error of judgment would not certainly matter, any abuse of power for extraneous reasons would expose the authorities concerned, whether it is the Minister for Excise or the Commissioner of Excise, to appropriate penalties at the hands of the courts.” 9. A close reading of the relevant facts of the case in **Harminder Singh Arora's case** (supra), shows that therein the tender condition did not provide to effect a price preference. A general order passed by the Government was relied upon which is evident from para 24 of the judgment. The Government Order therein showing the policy of the Government to provide preference to State Government agencies, is dated 13.8.1985. The tender notice was dated 16.7.1985. It was held therein that the notification dated August 13, 1985 is of no avail to the respondents in so far as the acceptance of tender of the 4[th] respondent is concerned. It is in these circumstances, it was held that “the tenders were to be adjudged on their own intrinsic merits in accordance with the terms and conditions of the tender notice.” Hence, in the said case obviously a situation like the one herein was not available. Herein, we may have to consider the question in the light of Ext.P6 which reflects the policy of the Government providing for a price preference of 10% of the PAC to the 4[th] respondent Corporation. That the policy as such contained in Ext.P6 is not under challenge in this wpc 1712 /2010 5 writ petition and the petitioner has not therefore sought for quashing Ext.P6, 10. True that Article 14 insists that there should be a level playing field while considering various tenders. The tender conditions herein do not provide for a 10% price preference for the 4[th] respondent. What is enforced is Ext.P6 Govt. Order. There cannot be any dispute that Ext.P6 is applicable to the department herein. The Government Order Ext.P6 has got universal application as far as the departmental works are concerned. The tender conditions itself provided that “all conditions prevailing in this department regarding tenders for prequalification are applicable to this tender also. Further details if required can be had from this office during working hours.” There cannot be any dispute that this clause provided in Ext.P2 was within the knowledge of the petitioner. Learned Standing Counsel for the 4[th] respondent contended that if the petitioner wanted further details with regard to any other conditions like applicability of Ext.6, that would have been provided, going by the above said stipulation. 11. The question therefore arises only whether Ext.P6 should have found a place in Ext.P2 tender conditions for its applicability. Since Ext.P6 provides a Government policy in the matter, it cannot be said that the absence of the details of the said Govt. Order in Ext.P2 will deprive the wpc 1712 /2010 6 respondents from implementing Ext.P6 itself. Unlike the two cases considered by the Apex Court above, herein Ext.P6 order had been in force and even prior to that Exts.P4 and P5 were also in force. In that view of the matter, the implementation of the provisions of the Govt. Orders cannot be said to be arbitrary. The same is permissible in the light of the clause contained in Ext.P2 quoted above. 12. It is pointed out by the learned Govt. Pleader and learned Standing Counsel appearing for the 4[th] respondent Corporation that the petitioner was having prior knowledge about the effect of Exts.P5 and P6 as it is evident from the fact that they have produced the same in the writ petition and also due to the fact that the petitioner had been submitting similar tenders with the department even prior to the present one, wherein the 4[th] respondent was also involved. Whatever that be, while considering the merit of the contentions, it is clear that the respondents were only implementing the Government policy as per Ext.P6. In that view of the matter, the writ petition fails and the same is dismissed. No costs. ## **(T.R. Ramachandran Nair, Judge.)** wpc 1712 /2010 7 ## **kav/**